Filing Compare · Belmond Ltd.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K



(Mark One)



x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, ~~2017~~2018



OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-16017

BELMOND LTD.

(Exact name of registrant as specified in its charter)



Bermuda		98-0223493
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

22 Victoria Street,

Hamilton HM 12, Bermuda

(Address of principal executive offices)

Registrant’s telephone number, including area code: (441) 295-2244

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:



Title of each class		Name of each exchange on which registered
Class A Common Shares, $0.01 par value each		New York Stock Exchange
Preferred Share Purchase Rights		New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate website, if any,~~ every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. (Not applicable. See third paragraph under Item 1—Business.)

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Act. (Check one):



Large Accelerated Filer x		Accelerated Filer o
Non-Accelerated Filer o		Smaller reporting company o
(Do not check if a smaller reporting company)		Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

The aggregate market value of the class A common shares held by non-affiliates of the registrant computed by reference to the closing price on June 30, ~~2017~~2018 (the last business day of the registrant’s second fiscal quarter in ~~2017~~2018) was approximately $1,~~335~~121,000,000.

As of February 15, ~~2018~~2019, ~~102~~103,~~394~~081,~~570~~652 class A common shares and 18,044,478 class B common shares of the registrant were outstanding. All of the class B shares are owned by a subsidiary of the registrant (see Note 1819(c) to the Financial Statements (Item 8)).

DOCUMENTS INCORPORATED BY REFERENCE: None

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			Page
PART I	Item 1	Business	4
	Item 1A	Risk Factors	18
	Item 1B	Unresolved Staff Comments	3031
	Item 2	Properties	3031
	Item 3	Legal Proceedings	3031
	Item 4	Mine Safety Disclosures	3335
PART II	Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3436
	Item 6	Selected Financial Data	3536
	Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3739
	Item 7A	Quantitative and Qualitative Disclosures About Market Risk	6167
	Item 8	Financial Statements and Supplementary Data	6369
	Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	~~127~~135
	Item 9A	Controls and Procedures	~~127~~135
	Item 9B	Other Information	~~130~~138
PART III	Item 10	Directors, Executive Officers and Corporate Governance	~~131~~139
	Item 11	Executive Compensation	~~135~~143
	Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~139~~147
	Item 13	Certain Relationships and Related Transactions, and Director Independence	~~143~~152
	Item 14	Principal Accounting Fees and Services	~~144~~153
PART IV	Item 15	Exhibits and Financial Statement Schedules	~~145~~154
		Signatures	~~147~~158
		Exhibit Index	~~149~~155

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FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains statements that constitute "Forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements are any statements other than of historical fact, including statements regarding the intent, belief or current expectations of Belmond Ltd. and/or any of its directors or officers with respect to the matters discussed in this Annual Report. In some cases, forward-looking statements can be identified by the use of words such as “may,” “potential,” “anticipate,” “target,” “expect,” “estimate,” “intend,” “should,” “plan,” “goal,” “believe,” or other words of similar meaning. Such forward-looking statements appear in several places in this Annual Report, including but not limited to Item 1—Business, Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations, and Item 7A—Quantitative and Qualitative Disclosures about Market Risk.

All forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those discussed in, or implied by, the forward-looking statements.

Actual results could differ materially from those anticipated in the forward-looking statements due to a number of factors, including but not limited to those described in Item 1A—Risk Factors.

Investors are cautioned not to place undue reliance on any forward-looking statements made in this Annual Report which are based on currently available operational, financial, and competitive information and as such, are not guarantees of future performance. Instead, these forward-looking statements reflect management's opinion, expectation or belief only as of the date on which they are made. Except as otherwise required by law, Belmond Ltd. undertakes no obligation to update or revise publicly any forward-looking statement, whether as a result of new information, future events or otherwise. Investors are advised to consult any future disclosures the Company makes on related subjects as may be detailed in its other filings from time to time with the Securities and Exchange Commission.

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PART I

ITEM 1. Business

Belmond Ltd. is incorporated in the Islands of Bermuda and is a “foreign private issuer” as defined in Rule 3b-4 promulgated by the U.S. Securities and Exchange Commission (“SEC”) under the U.S. Securities Exchange Act of 1934 (the “1934 Act”) and in Rule 405 under the U.S. Securities Act of 1933. As a result, it is eligible to file its annual reports pursuant to Section 13 of the 1934 Act on Form 20-F (in lieu of Form 10-K) and to file its interim reports on Form 6-K (in lieu of Forms 10-Q and 8-K). However, the Company has elected to file its annual and interim reports on Forms 10-K, 10-Q and 8-K, including any instructions therein that relate specifically to foreign private issuers. The class A common shares of the Company are listed on the New York Stock Exchange (“NYSE”).

The terms "Belmond," ~~and~~ the "Company," "we," and "our" are used in this report to refer to Belmond Ltd. and Belmond Ltd. and its subsidiaries, unless otherwise stated.

These reports and any amendments ~~to them~~ are available free of charge on the ~~Internet~~internet website of the Company as soon as reasonably practicable after they are filed electronically with the SEC. The Company's principal ~~Internet~~internet website address is belmond.com. They may also be found on the SEC's website at www.sec.gov. Unless specifically noted, information on the Belmond website is not incorporated by reference into this Form 10-K annual report.

Pursuant to Rule 3a12-3 under the 1934 Act regarding foreign private issuers, the proxy solicitations of the Company are not subject to the disclosure and procedural requirements of Regulation 14A under the 1934 Act, and transactions in the Company’s equity securities by its officers, directors and significant shareholders are exempt from the reporting and liability provisions of Section 16 of the 1934 Act.

Introduction

Belmond is a leading luxury hotel company and sophisticated adventure travel operator with exposure to both mature and emerging national economies. The Company’s predecessor began acquiring hotels in 1976 and organized the Company in 1994. Belmond currently owns, partially-owns and/or operates 46 properties (excluding one additional business scheduled for a future opening, the Belmond Cadogan Hotel in London, England), consisting of 36 highly individual deluxe hotels, one stand-alone restaurant, seven tourist trains and two river/canal cruise businesses. This portfolio includes one long-term leased hotel in Bali, Indonesia where the owner dispossessed Belmond from operation of the hotel in November 2013 (see Item 3—Legal Proceedings). The locations of Belmond's 46 properties operating in 24 countries are shown in the map on the preceding page. Belmond acquires, leases or manages only distinctive properties in areas of outstanding cultural, historic or recreational interest in order to provide luxury lifestyle experiences for the discerning traveler. Overview

~~Revenue,~~Belmond ~~earnings~~is a leading luxury hotel company and ~~identifiable~~sophisticated ~~assets~~adventure oftravel ~~Belmond~~operator with exposure to both mature and emerging national economies. The Company’s predecessor began acquiring hotels in ~~2017~~1976 and organized the Company in 1994. Belmond currently owns, ~~2016~~partially-owns and/or ~~2015~~operates ~~for~~46 properties (including the Belmond's ~~business~~Cadogan ~~segments~~Hotel in London, England, which opened on February 28, 2019), consisting of 36 highly individual deluxe hotels, one stand-alone restaurant, seven tourist trains and ~~geographic~~two ~~areas~~river/canal ~~are~~cruise ~~presented~~businesses. This portfolio includes one long-term leased hotel in ~~Note~~Bali, 24Indonesia towhere the ~~Financial~~owner ~~Statements~~dispossessed Belmond from operation of the hotel in November 2013 (see Item 83—Legal Proceedings). The locations of Belmond's 46 properties operating ~~segments~~in 24 countries are ~~aggregated~~shown ~~into~~in ~~six~~the ~~reportable~~map ~~segments~~on the preceding page. Belmond acquires, ~~namely~~leases ~~owned~~and/or ~~hotels~~manages only distinctive properties in ~~each~~areas of ~~Europe~~outstanding cultural, ~~North~~historic ~~America~~or ~~and~~recreational ~~Rest~~interest ofin ~~World,~~order ~~owned~~to ~~trains~~provide ~~and~~luxury ~~cruises,~~lifestyle ~~part-owned/managed~~experiences ~~hotels,~~for ~~and~~the ~~part-owned/managed~~discerning ~~trains~~traveler.

~~Belmond~~Revenue, ~~revised~~earnings ~~the~~and ~~order~~identifiable ofassets ~~the presentation~~ of ~~these~~Belmond ~~segments~~ in ~~the~~2018, ~~year~~2017 ~~ended~~and ~~December~~2016 ~~31,~~for ~~2016~~Belmond's ~~and~~business ~~included~~segments aand ~~new~~geographic ~~sub-total~~areas toare ~~show~~presented ~~management~~in ~~fees~~Note ~~earned~~25 byto the ~~Company.~~Financial InStatements ~~addition,~~(Item 8). Belmond's ~~reclassified~~operating ~~certain~~segments ~~expenses~~are ~~associated~~aggregated ~~with~~into ~~the~~six ~~Company’s~~reportable ~~development~~segments, ~~team~~namely ~~from the Part-~~owned~~/managed~~ hotels ~~segment~~in toeach ~~central~~of ~~costs.~~Europe, ~~Prior~~North ~~periods~~America ~~have~~and ~~been~~Rest ~~re-presented~~of toWorld, ~~reflect~~owned ~~the~~trains ~~current~~and ~~period~~cruises, ~~presentation.~~part-owned/managed ~~There~~hotels, ~~has~~and ~~not~~part-owned/managed ~~been a material impact on the consolidated financial statements~~trains.

Hotels represent the largest part of Belmond’s business, contributing 86% of revenue in ~~2017~~2018, 8786% of revenue in ~~2016~~2017 and 87% in ~~2015~~2016. Trains and cruises accounted for 1314% of revenue in ~~2017~~2018, 13% of revenue in ~~2016~~2017 and 13% in ~~2015~~2016. Approximately 8087% of Belmond’s customer revenue in ~~2017~~2018 was from leisure travelers, with approximately 4443% originating from North America, 4137% from Europe and the remaining 1520% from elsewhere in the world.

Belmond’s worldwide portfolio of hotels currently in operation consists of 3,~~203~~183 individual guest rooms and multiple-room suites, each known as a “key”.” Hotels owned by Belmond in ~~2017~~2018 achieved an average daily room rate (“ADR”) of $~~510~~534 (~~2016~~2017 - $~~490~~510; ~~2015~~2016 - $~~481~~490) and a revenue per available room (“RevPAR”) of $~~309~~326 (~~2016~~2017 - $~~298~~309; ~~2015~~2016 - $~~295~~298).

InRecent ~~recent~~Developments ~~years,~~– ~~Belmond~~Sale ~~has sold~~ to third parties a number of properties not considered key to Belmond’s portfolio of unique, high-valued properties. In March 2014, Belmond sold Inn at Perry Cabin by Belmond on the eastern shore of Maryland, with Belmond continuing to manage the hotel under a ten-year management agreement (that permits termination on the fifth anniversary LVMH

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~~of the agreement~~Sub") ~~with the new owner. In May 2015~~, ~~Belmond,~~pursuant ~~together~~to ~~with its joint venture partner, each sold its 50% ownership interest in the entity~~ which ~~owned~~LVMH ~~the~~will ~~Hotel~~acquire ~~Ritz by Belmond in Madrid, Spain and Belmond ended its agreement to manage~~ the ~~hotel~~Company. ~~See~~Under ~~Note 7 to~~ the ~~Financial~~Merger ~~Statements. On November 6~~Agreement, ~~2017,~~ the ~~entity~~sale ~~that~~to ~~leased~~LVMH ~~Belmond~~will ~~Orcaella~~be ~~provided~~effected ~~notice~~by way of ~~termination~~a tomerger ~~the owner in respect~~ of ~~its~~Merger ~~charter~~Sub ~~agreement~~with and oninto ~~November~~the 2Company, ~~2017,~~with ~~Belmond~~the ~~sold~~Company ~~its~~being ~~interest in~~ the ~~entity~~surviving ~~which~~company ~~wholly~~in ~~owned~~the ~~Belmond~~merger ~~Northern~~and ~~Belle.~~becoming ~~See~~a ~~Note~~subsidiary 5of ~~to the Financial Statements~~Holding.

OnThe ~~February~~completion ~~23,~~of ~~2014~~the merger, which is expected to occur in the ~~Company~~first ~~(formerly~~half ~~known~~of as2019, ~~Orient-Express~~is ~~Hotels~~subject ~~Ltd.)~~to ~~announced~~the ~~that~~satisfaction ~~its~~or ~~board~~waiver of ~~directors~~certain ~~had~~conditions, ~~approved~~including athe ~~proposal~~receipt toof ~~operate~~antitrust approvals in certain foreign jurisdictions and the absence of any law or governmental order prohibiting the merger. The Company's ~~portfolio~~held a special general meeting of ~~luxury~~its ~~hotels~~shareholders ~~and~~on ~~travel~~February ~~experiences~~14, ~~under~~2019 aat ~~new~~which ~~brand~~time ~~name—"~~Belmond~~"—from~~'s ~~March~~shareholders ~~10,~~approved ~~2014,~~the Merger Agreement and tothe ~~change~~merger. ~~its~~At ~~principal~~the ~~Internet~~effective ~~website~~time ~~address~~of tothe ~~belmond.com.~~merger, ~~Belmond~~each ~~has~~issued ~~retained~~and ~~its~~outstanding ~~long-term~~class ~~license~~A ~~agreement~~common ~~with~~share, ~~SNCF~~par value $0.01 per share, of the ~~French~~Company, ~~transportation~~other ~~company~~than class A common shares that ~~owns~~are held by the ~~"Orient-Express"~~Company ~~trademark~~in treasury or that are owned by LVMH, ~~for~~Holding ~~the~~or ~~Venice~~Merger ~~Simplon-Orient-Express~~Sub ~~train.~~or ~~With~~by ~~the~~any ~~decision~~other todirect ~~introduce~~or ~~the~~indirect ~~"Belmond"~~subsidiary ~~brand~~of LVMH or the Company, ~~Belmond~~will ~~also~~be ~~entered~~converted ~~into~~automatically anand ~~agreement~~without ~~with~~any ~~SNCF~~action toby ~~terminate~~the ~~(with~~holder ~~effect~~of ~~from~~the ~~December~~class ~~31,~~A ~~2014)~~common shares into the ~~"Orient-Express"~~right ~~license~~to ~~for~~receive ~~hotel~~$25.00 ~~use~~per share in cash, without interest (and less any ~~cost~~applicable orwithholding ~~penalty~~taxes). AtIf the ~~2014~~merger ~~Annual~~is ~~General~~completed, ~~Meeting~~the ofCompany ~~Shareholders,~~will ~~shareholders~~cease ~~approved~~to be a ~~change~~publicly intraded ~~Belmond's~~company ~~corporate~~and ~~name~~will ~~from~~become ~~Orient-Express~~a ~~Hotels~~subsidiary ~~Ltd.~~of toHolding ~~Belmond~~and ~~Ltd~~an indirect subsidiary of LVMH. inFor ~~order~~further toinformation ~~align~~on ~~Belmond's~~the ~~corporate~~risks ~~identity~~relating ~~with that~~to the sale of ~~its~~the ~~primary~~Company, ~~luxury~~see ~~brand~~Part 1—Item 1A—Risk Factors—Risks Related to the Sale of the Company. OnAdditional ~~July~~information 28about the sale, ~~2014~~the Merger Agreement and the merger, ~~Belmond~~including ~~changed~~circumstances under which the ~~ticker~~Merger ~~symbol~~Agreement ofcan ~~its~~be ~~class~~terminated, Aas ~~common~~well ~~shares~~as ~~listed~~other onterms and conditions, are set forth in the ~~New~~Company's ~~York~~Current ~~Stock~~Report ~~Exchange~~on ~~from~~Form ~~OEH~~8-K tofiled ~~BEL~~with the SEC on December 14, 2018.

OnRecent March 21, 2014, Belmond entered into a $657,000,000 senior secured credit facility, consisting of a $552,000,000 seven-year term loan and a $105,000,000 five-year, dual-currency revolving credit facility. The term loan comprised a $345,000,000 U.S. dollar-denominated tranche and a €150,000,000 euro-denominated tranche ($207,000,000 as of the completion date). Belmond used the proceeds from the term loan to refinance substantially all of the funded debt of Belmond (other than the debt of Belmond Charleston Place, a consolidated variable interest entity with separate non-recourse financing). On June 2, 2015, Belmond entered into an amendment to its senior secured credit facility to reduce the interest rate on the euro-denominated tranche to EURIBOR plus a 3.00% margin from EURIBOR plus a 3.00% margin. The Company amended and restated its senior secured credit facility on July 3, 2017 to increase the term loan, extend the maturity dates on the revolving credit facility and the term loan to July 3, 2022 and July 3, 2024, respectively, and decrease the interest rates imposed on borrowings. The amended and restated credit agreement consists of a $603,434,000 seven-year term loan and a $100,000,000 five-year, multi-currency revolving credit facility. The term loan consists of a $400,000,000 U.S. dollar-denominated tranche and a €179,000,000 million euro-denominated tranche ($203,434,000 as of the completion date). See Note 11 to the Financial Statements.History

InOn ~~August~~February 23, 2014, ~~Charleston~~the ~~Center~~Company ~~LLC~~(formerly ~~entered~~known ~~into~~as anOrient-Express ~~$86,000,000~~Hotels ~~loan~~Ltd.) ~~secured~~announced onthat its ~~real~~board ~~and~~of ~~personal~~directors ~~property. This loan~~ had noapproved ~~amortization~~a ~~and~~proposal ~~is non-recourse~~ to ~~Belmond.~~operate ~~This~~the ~~loan~~Company's ~~had~~portfolio anof ~~August~~luxury ~~2019~~hotels ~~maturity~~ and antravel ~~interest~~experiences ~~rate~~under ofa ~~LIBOR~~new ~~plus~~brand ~~2.12%~~name—"Belmond"—from ~~per~~March ~~annum.~~10, In2014, ~~June~~and ~~2016,~~to ~~Charleston~~change ~~Center~~its ~~LLC~~principal ~~refinanced~~internet ~~this~~website ~~loan~~address ~~with~~to abelmond.com. ~~$112,000,000~~Belmond ~~new~~has ~~loan~~retained ~~with~~its ~~the~~long-term ~~same~~license ~~August~~agreement ~~2019~~with ~~maturity.~~SNCF, ~~The~~the ~~interest~~French ~~rate~~transportation oncompany that owns the ~~new~~"Orient-Express" ~~loan~~trademark, isfor ~~LIBOR~~the ~~plus~~Venice 2Simplon-Orient-Express train.~~35%~~ ~~per~~With ~~annum,~~the ~~has~~decision noto ~~amortization~~introduce ~~and~~the is"Belmond" ~~non-recourse~~brand, to Belmond. ~~The~~also ~~additional~~entered ~~proceeds~~into ~~were~~an ~~used~~agreement towith ~~repay~~SNCF ato ~~1984~~terminate ~~development~~(with ~~loan~~effect from aDecember ~~municipal~~31, ~~agency~~2014) in the ~~principal~~"Orient-Express" ~~amount~~license offor ~~$10~~hotel use,~~000,000~~ ~~and~~without ~~accrued~~any ~~interest~~cost ofor ~~$16,819,000~~penalty. InAt ~~connection~~the ~~with~~2014 ~~the~~Annual ~~early~~General ~~repayment~~Meeting of ~~the loan~~Shareholders, ~~Belmond~~shareholders ~~negotiated~~approved a ~~discount~~change ~~that resulted~~ in aBelmond's ~~net~~corporate ~~gain,~~name ~~reported~~from inOrient-Express ~~the~~Hotels ~~statements~~Ltd. ofto ~~consolidated~~Belmond ~~operations~~Ltd. ~~during~~in ~~the~~order ~~year~~to ~~ended~~align ~~December~~Belmond's ~~31,~~corporate ~~2016,~~identity with that of ~~$1,200,000~~its ~~upon~~primary ~~the~~luxury ~~extinguishment~~brand. ofOn ~~the~~July ~~debt~~28, ~~including~~2014, ~~the~~Belmond ~~payment~~changed ofthe aticker ~~tax~~symbol ~~indemnity to our partners in respect~~ of ~~their~~its ~~allocation~~class ofA ~~income~~common ~~from~~shares ~~the~~listed ~~discount arising~~ on the ~~cancellation~~New ofYork ~~indebtedness.~~Stock ~~See~~Exchange ~~Note~~from 11OEH to ~~the Financial Statements~~BEL.

On ~~July~~March 821, 2014, Belmond ~~announced~~entered ~~the~~into ~~execution~~a $657,000,000 senior secured credit facility, consisting of a ~~management~~$552,000,000 ~~agreement~~seven-year ~~with~~term ~~Cadogan~~loan ~~Hotel~~and ~~Partners~~a ~~Limited~~$105,000,000 tofive-year, ~~operate~~dual-currency ~~Belmond~~revolving ~~Cadogan~~credit ~~Hotel~~facility. The term loan comprised a $345,000,000 U.S. dollar-denominated tranche and a 64€150,000,000 euro-~~key~~denominated ~~hotel~~tranche in($207,000,000 as of the ~~Knightsbridge~~completion ~~area~~date). Belmond used the proceeds from the term loan to refinance substantially all of ~~London~~the funded debt of Belmond (other than the debt of Belmond Charleston Place, ~~England.~~a ~~The~~consolidated ~~127~~variable interest entity with separate non-~~year~~recourse ~~old~~financing). ~~hotel~~On ~~closed~~June at2, 2015, Belmond entered into an amendment to its senior secured credit facility to reduce the ~~end~~interest ofrate ~~July~~on ~~2014~~the euro-denominated tranche to ~~undergo~~EURIBOR plus a ~~$48,000,000~~3.00% ~~investment~~margin ~~project~~from EURIBOR plus a 3.00% margin. The ~~fully~~Company ~~renovated~~amended and ~~re-conceptualized~~restated ~~Belmond~~its ~~Cadogan~~senior ~~Hotel~~secured iscredit ~~expected~~facility on July 3, 2017 to ~~open~~increase atthe term loan, extend the ~~end~~maturity ofdates ~~2018~~on ~~with~~the ~~refurbished~~revolving ~~public~~credit ~~areas~~facility and the ~~reconfiguration~~term ~~reduced~~loan to 54July ~~keys~~3, in2022 ~~order~~and toJuly ~~accommodate~~3, ~~demand~~2024, ~~from~~respectively, ~~luxury~~and ~~travelers~~decrease ~~for~~the ~~larger~~interest ~~junior~~rates ~~suites~~imposed on borrowings. The amended and ~~suites~~restated credit agreement consists of a $603,434,000 seven-year term loan and a $100,000,000 five-year, multi-currency revolving credit facility. The term loan consists of a $400,000,000 U.S. dollar-denominated tranche and a €179,000,000 million euro-denominated tranche ($203,434,000 as of the completion date). See Note 12 to the Financial Statements.

OnIn August 302014, ~~2016~~Charleston Center LLC entered into an $86,000,000 ~~the~~loan ~~Company~~secured ~~commenced~~on ~~operations~~its ofreal and personal property. This loan had no amortization and is non-recourse to Belmond. ~~Grand~~This ~~Hibernian,~~loan ~~the~~had ~~first~~an ~~overnight~~August ~~luxury~~2019 ~~rail~~maturity ~~experience~~and an interest rate of ~~its~~LIBOR ~~kind~~plus in2.12% ~~Ireland~~per annum. In June 2016, Charleston Center LLC refinanced this loan with a $112,000,000 new loan with the same August 2019 maturity. The ~~luxury~~interest ~~sleeper~~rate ~~train~~on ~~accommodates~~the upnew toloan 40is ~~guests~~LIBOR inplus 202.35% enper annum, has no amortization and is non-~~suite~~recourse ~~cabins.~~to Belmond. ~~Grand~~The ~~Hibernian~~additional ~~builds~~proceeds onwere ~~the~~used ~~Company's~~to ~~expertise~~repay ina ~~operating~~1984 development loan from a ~~stable~~municipal ofagency in the ~~world's~~principal ~~most~~amount ~~famous~~of ~~trains~~$10,000,000 ~~including~~and accrued interest of $16,819,000. In connection with the early repayment of the loan, Belmond ~~Royal~~negotiated ~~Scotsman~~a discount that resulted in a net gain, ~~currently~~reported in the ~~U.K.'s~~statements ~~only~~of ~~luxury~~consolidated ~~touring~~operations ~~sleeper~~during ~~train~~the year ended December 31, ~~and~~2016, of $1,200,000 upon the ~~legendary~~extinguishment ~~Venice~~of ~~Simplon-Orient-Express~~the ~~and~~debt, ~~Hiram~~including ~~Bingham~~the payment of a tax indemnity to our partners in ~~Peru~~respect of their allocation of income from the discount arising on the cancellation of indebtedness. See Note 12 to the Financial Statements.

On ~~April~~July 78, ~~2017~~2014, Belmond announced the ~~Company~~execution ~~and~~of ~~its~~a ~~joint~~management ~~venture~~agreement ~~partner~~with ~~acquired~~Cadogan ~~Las~~Hotel ~~Casitas~~Partners Limited to operate Belmond Cadogan Hotel, a 2064-key ~~resort~~hotel ~~located~~ in ~~Colca~~the ~~Canyon~~Knightsbridge inarea ~~southern~~of ~~Peru~~London, England. ItThe is127-year ~~located~~old onhotel aclosed 24at ~~hectare~~the ~~site~~end ~~with~~of 20July ~~luxury~~2014 ~~individual~~to ~~bungalows~~undergo a $48,000,000 investment project. AThe ~~soft~~fully ~~goods~~renovated ~~renovation~~and ~~was~~re-conceptualized ~~completed~~Belmond inCadogan ~~2017~~Hotel opened on February 28, ~~during~~2019 ~~which~~with ~~time~~refurbished public areas and the ~~property~~reconfiguration ~~remained~~reduced ~~open.~~to 54 keys in order to accommodate demand from luxury travelers for larger junior suites and suites.

On May 4, 2017, PeruRail commenced operations of Belmond Andean Explorer, a luxury sleeper train running through the Peruvian Highlands from Cusco to Lake Titicaca and Arequipa, accommodating up to 68 passengers. It consists of 21 carriages, which

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On August 30, 2016, the Company commenced operations of Belmond ~~owned~~Grand ~~and~~Hibernian, ~~operated~~the infirst ~~Australia~~overnight ~~through~~luxury ~~2003~~rail ~~and~~experience ~~sold~~of toits ~~PeruRail~~kind in ~~2016~~Ireland. The ~~train~~luxury ~~was~~sleeper ~~shipped~~train ~~from~~accommodates ~~Australia~~up to ~~Peru~~40 ~~and~~guests ~~underwent~~in ~~renovations~~20 toen-suite ~~its~~cabins. ~~interiors~~Belmond toGrand Hibernian builds on the Company's expertise in operating a ~~luxury~~stable ~~standard~~of the world's most famous trains, including Belmond Royal Scotsman, currently the U.K.'s only luxury touring sleeper train, and the legendary Venice Simplon-Orient-Express and Hiram Bingham in Peru.

On ~~May~~April 267, 2017, the Company and its joint venture partner acquired ~~Cap~~Las ~~Juluca~~Casitas, a 9620-key ~~luxury~~ resort onlocated ~~the~~in ~~Caribbean~~Colca ~~Island~~Canyon ofin ~~Anguilla,~~southern ~~British West Indies~~Peru. AtIt ~~the~~is ~~same~~located ~~time,~~on ~~the Company also entered into~~ a ~~125-year~~24 ~~ground~~hectare ~~lease~~site with ~~the~~20 ~~Government~~luxury ofindividual ~~Anguilla for property that comprises approximately 167 acres, including approximately 250,000 square feet of additional developable beachfront land~~bungalows. ~~See~~A ~~Note~~soft 4goods torenovation ~~the~~was ~~Financial~~completed ~~Statements. The resort is currently undergoing reconstruction and renovations following its acquisition and the impact of Hurricanes Irma and Jose~~ in ~~September~~ 2017., ~~See~~during ~~Note~~which 8time to the ~~Financial~~property ~~Statements~~remained open.

On ~~February~~May 84, ~~2018~~2017, ~~the~~PeruRail ~~Company~~commenced ~~acquired~~operations ~~Castello~~of diBelmond ~~Casole~~Andean ~~resort~~Explorer, ~~and~~a ~~estate,~~luxury ~~which~~sleeper ~~comprise~~train ~~the~~running ~~39-key~~through ~~Castello~~the diPeruvian ~~Casole~~Highlands ~~hotel,~~from ~~together~~Cusco ~~with~~to ~~high-quality~~Lake ~~vineyards~~Titicaca and ~~olive groves~~Arequipa, ~~extensive~~accommodating ~~wooded~~up ~~Tuscan~~to ~~countryside,~~70 ~~and~~passengers. 48It ~~residential~~consists ~~plots,~~ of ~~which~~21 16carriages, ~~remain~~which ~~for~~Belmond ~~sale,~~owned ~~with~~and ~~three~~operated ~~subject~~in toAustralia ~~non-binding~~through ~~reservation~~2003 ~~letters~~and ofsold ~~intent~~ to ~~purchase~~PeruRail ~~and~~in ~~two~~2016. ~~expected~~The totrain bewas ~~converted~~shipped ~~into~~from ~~new~~Australia ~~villas~~to asPeru ~~part~~and ofunderwent ~~the~~renovations ~~hotel~~to ~~inventory.~~its ~~See~~interiors ~~Note 26~~ to ~~the~~a ~~Financial~~luxury ~~Statements~~standard.

On May 26, 2017, the Company acquired Cap Juluca, a 96-key luxury resort on the Caribbean Island of Anguilla, British West Indies. At the same time, the Company also entered into a 125-year ground lease with the Government of Anguilla for property that comprises approximately 167 acres, including approximately 250,000 square feet of additional developable beachfront land. See Note 5 to the Financial Statements. The resort underwent reconstruction and renovations following its acquisition and the impact of Hurricanes Irma and Jose in September 2017 and opened in December 2018. See Note 9 to the Financial Statements.

On February 8, 2018, the Company acquired Castello di Casole resort and estate, which comprise the 39-key Castello di Casole hotel, together with high-quality vineyards and olive groves, extensive wooded Tuscan countryside, and 48 residential plots, of which 15 remain unsold, with one subject to a binding sale contract, and one subject to a non-binding reservation letter of intent to purchase. It is expected that two of the remaining 13 residential plots will be converted into new villas as part of the hotel inventory. See Note 5 to the Financial Statements.

In recent years, Belmond has sold to third parties a number of properties not considered core to Belmond’s portfolio of unique, high-valued properties. On November 2, 2017, Belmond sold its interest in the entity which wholly owned Belmond Northern Belle, a passenger day train operating in Northern Ireland. On November 6, 2017, the entity that leased Belmond Orcaella provided notice of termination to the owner in respect of its charter agreement, which resulted in a dispute that the parties resolved under a settlement agreement dated January 22, 2019. The owner of Inn at Perry Cabin notified the Company on April 27, 2017 that it was exercising its special right to any early termination of the management agreement under which Belmond was managing the hotel effective as of the end of 2018.

Owned Hotels—Europe

Italy

Belmond Hotel Cipriani—96 keys—in Venice was built for the most part in the 1950s and is located on about five acres (part on long-term lease) on Giudecca Island across from the Piazza San Marco which is accessible by a free private boat service. Most of the rooms have views overlooking the Venetian lagoon. Features include fine cuisine in three indoor and outdoor restaurants -- one of which gained a Michelin star, the Oro Restaurant -- gardens and terraces encompassing an Olympic-sized swimming pool, a tennis court, a spa and fitness center, and a large banquet and meeting facility situated in an historic refurbished warehouse. In 2016, 15 rooms in the Palazzo Vendramin and Palazzetto were refurbished. In 2017, the library was refurbished and converted into a new junior suite, along with the refurbishment of three existing keys, the addition of four cabanas in the pool area, and the creation of a casual trattoria restaurant, the Giudecca 10 within the existing breakfast room. During the 2017/2018 closure, the Cip's Club restaurant ~~will~~was be renovated and the Oro Restaurant Terrace refurbished.

Belmond Hotel Splendido and Belmond Splendido Mare—8386 keys—overlook picturesque Portofino harbor on the Italian Riviera. Set on four acres, the main hotel was built in 1901 and is surrounded by gardens and terraces which include a swimming pool, spa and tennis court. There are two restaurants each with open-air dining as well as banquet/meeting rooms, and a shuttle service linking the main hotel with the smaller Belmond Splendido Mare on the harbor below. In 2016, ten suites and guest rooms were refurbished at Belmond Hotel Splendido and a further ten guest rooms were refurbished in 2017. Also in 2017, the facade of Belmond Hotel Splendido was restored and balconies added to 12 guest rooms. During the 2017/2018 closure, ten guest rooms ~~will~~were be refurbished and the Ginepro meeting room ~~will~~was be converted into two suites and one junior suite. During the 2018/2019 closure,

Belmond Villa San Michele—45 keys—is located in Fiesole, a short distance from Florence. Originally built as a monastery in the 15th century with a façade attributed to Michelangelo, it has stunning views over historic Florence and the Arno River Valley. Belmond has remodeled and expanded the guest accommodation to luxury standards in recent years including the addition of a swimming pool. A shuttle service is provided into the UNESCO World Heritage listed center of Florence. The property occupies ten acres. In 2016, the property created a new function facility to cater to the popular wedding and celebrations market. In 2017, four keys were refurbished, one key was added by converting the Kid's Club into a guestroom, a new outdoor bar within the Italian garden was added, and the ground floor public areas were refurbished.

Belmond Hotel Caruso—50 keys—in Ravello is located on three hill-top acres overlooking the Amalfi coast near Naples and ancient Roman and Greek archeological sites such as Pompeii and Paestum. The Amalfi coast, the city of Naples and the archeological sites have been designated UNESCO World Heritage sites. Once a nobleman’s palace, parts of the building date to the 11th century. Operated as a hotel for many years, Belmond rebuilt the property after acquiring it and reopened it in 2005. Amenities include two restaurants, a swimming pool, spa and extensive gardens. In 2017, 15 keys were refurbished and one junior suite was added in an underused public area. During the 2017/2018 closure, a junior suite will be added, along with a new hair salon. In addition, a staff dining room will be relocated to allow for the addition of a new spa and fitness center will be added. The adjacent Villa Margarita was purchased in 2017 and will be converted into a guest house with two bedrooms.

Belmond Grand Hotel Timeo—70 keys—in Taormina, Sicily was purchased in January 2010 and renovated during winter closure periods since then. With panoramic views of Mount Etna (a UNESCO World Heritage site) and the Gulf of Naxos from its main terrace, this hotel is widely considered the most luxurious hotel in Taormina and is situated in the city center next to the second century Greek Theater. Built in 1873 on a total site of about ten acres, the hotel features a restaurant serving regional specialties, a spa and fitness center, swimming pool, and separate banqueting and conference facilities, all surrounded by six acres of parkland. In 2017, 25 keys were renovated in the main hotel building and the public areas of Villa Flora were renovated.

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~~Belmond~~a ~~Villa~~mock-up ~~Sant’Andrea—69~~room ~~keys—was~~will ~~purchased~~be ~~and~~constructed ~~renovated~~for ~~at the same time as~~ Belmond ~~Grand~~Splendido ~~Hotel~~Mare ~~Timeo.~~and ~~Built in 1830 on Taormina's Bay of Mazzarò with its own beach,~~ the hotel ~~has~~expects ~~the~~to ~~atmosphere~~refurbish ~~of a private villa set in lush gardens, a total site of about two acres, with many of~~ the ~~guest~~remaining rooms ~~and~~during the ~~hotel’s seafood restaurant and swimming pool looking onto the Calabrian coast. Belmond completed construction in May 2014 of six poolside suites. During the 2015~~2019/162020 ~~winter~~ closure~~, four new units were built (three junior suites and one double room) in a prime location on the pool side of the property with stunning views of the Bay~~. In 2017, 26 keys were refurbished and improvements were made to the outdoor restaurant and bar. During the 2017/2018 closure, the existing banquet room will be converted into three junior suites with the added flexibility to use one of the suites as a meeting room, an additional 26 keys will be refurbished, and a new outdoor lightweight structure will be added for banqueting. Belmond Grand Hotel Timeo and Belmond Villa Sant'Andrea are linked by a shuttle service so that guests may enjoy the facilities at both hotels.

~~Castello~~Belmond diVilla ~~Casole~~San Michele—3945 keys—is located ~~within~~in ~~easy~~Fiesole, ~~access~~a ofshort ~~both~~distance ~~Florence~~from ~~and Sienna~~Florence. AOriginally ~~historic~~built ~~castle~~as ~~dating~~a ~~from~~monastery in the ~~10th~~15th century, ~~the~~with ~~resort~~a ~~and~~façade ~~estate~~attributed ~~span~~to 1Michelangelo,~~500~~ ~~hectares~~it ~~and~~has ~~comprise~~stunning ~~the~~views ~~Castello~~over dihistoric ~~Casole~~Florence ~~hotel,~~and ~~together~~the ~~with~~Arno ~~high-quality~~River ~~vineyards~~Valley. Belmond has remodeled and ~~olive~~expanded ~~groves,~~the ~~extensive~~guest ~~wooded~~accommodation ~~Tuscan~~to ~~countryside,~~luxury ~~and~~standards 48in ~~residential~~recent ~~plots,~~years including the addition of ~~which~~a 16swimming ~~remain~~pool. A ~~for~~shuttle ~~sale,~~service ~~with~~is ~~three~~provided ~~subject~~into tothe ~~non-binding~~UNESCO ~~reservation~~World ~~letters~~Heritage oflisted ~~intent~~center toof ~~purchase~~Florence. ~~Starting~~The inproperty ~~2018,~~occupies ~~the~~ten ~~Company~~acres. ~~expects~~In to2016, ~~invest~~the ~~$9.0~~property ~~million~~created in a ~~phased~~new ~~refurbishment~~function offacility ~~the~~to ~~hotel~~cater ~~over~~to ~~four~~the ~~years,~~popular ~~including~~wedding ~~the~~and ~~addition~~celebrations ofmarket. ~~two~~In ~~new~~2017, ~~villas~~four onkeys ~~two~~were ~~residential~~refurbished, ~~plots~~one ~~that~~key ~~will~~was beadded ~~retained,~~by ~~bringing~~converting the ~~resort~~Kid's ~~total~~Club ~~key~~into ~~count~~a toguest ~~41.~~room, ~~The~~a ~~resort~~new ~~and~~outdoor ~~estate~~bar ~~will~~within bethe ~~rebranded~~Italian ~~upon~~garden was added, and the ~~Company~~ground ~~assuming~~floor ~~management~~public ofareas ~~the~~were ~~property~~refurbished.

Belmond Hotel Caruso—52 keys—in Ravello is located on three hill-top acres overlooking the Amalfi coast near Naples and ancient Roman and Greek archeological sites such as Pompeii and Paestum. The Amalfi coast, the city of Naples and the archeological sites have been designated UNESCO World Heritage sites. Once a nobleman’s palace, parts of the building date to the 11th century. Operated as a hotel for many years, Belmond rebuilt the property after acquiring it and reopened it in 2005. Amenities include two restaurants, a swimming pool, spa and extensive gardens. In 2017, 15 keys were refurbished and one junior suite was added in an underused public area. During the 2017/2018 closure, a junior suite was added, along with a new hair salon. In addition, a staff dining room was relocated to allow for the addition of a new spa and fitness center. The adjacent Villa Margarita was purchased in 2017 and was converted into two villas.

Belmond Grand Hotel Timeo—71 keys—in Taormina, Sicily was purchased in January 2010 and renovated during winter closure periods since then. With panoramic views of Mount Etna (a UNESCO World Heritage site) and the Gulf of Naxos from its main terrace, this hotel is widely considered the most luxurious hotel in Taormina and is situated in the city center next to the second century Greek Theater. Built in 1873 on a total site of about ten acres, the hotel features a restaurant serving regional specialties, a spa and fitness center, swimming pool, and separate banqueting and conference facilities, all surrounded by six acres of parkland. In 2017, 25 keys were renovated in the main hotel building and the public areas of Villa Flora were renovated.

Belmond Villa Sant’Andrea—72 keys—was purchased and renovated at the same time as Belmond Grand Hotel Timeo. Built in 1830 on Taormina's Bay of Mazzarò with its own beach, the hotel has the atmosphere of a private villa set in lush gardens, a total site of about two acres, with many of the guest rooms and the hotel’s seafood restaurant and swimming pool looking onto the Calabrian coast. Belmond completed construction in May 2014 of six poolside suites. During the 2015/16 winter closure, four new units were built (three junior suites and one double room) in a prime location on the pool side of the property with stunning views of the Bay. In 2017, 26 keys were refurbished and improvements were made to the outdoor restaurant and bar. During the 2017/2018 closure, the existing banquet room was converted into three junior suites with the added flexibility to use one of the suites as a meeting room, an additional five keys were refurbished, and a new outdoor lightweight structure was added for banqueting. During the current off-season closure, two suites are being refurbished and balconies are expected to be added to six keys. Belmond Grand Hotel Timeo and Belmond Villa Sant'Andrea are linked by a shuttle service so that guests may enjoy the facilities at both hotels.

Castello di Casole—39 keys—is located within easy access of both Florence and Sienna. A historic castle dating from the 10th century, the resort and estate span 1,500 hectares and comprise the Castello di Casole hotel, together with high-quality vineyards and olive groves, extensive wooded Tuscan countryside, and 48 residential plots, of which 15 remain unsold, with one subject to a binding sale contract, and one subject to a non-binding reservation letter of intent to purchase. It is expected that two of the remaining 13 residential plots will be converted into new villas as part of the hotel inventory.

All of these Italian properties operate seasonally, closing for varying periods during the winter.

Spain

Belmond La Residencia—7472 keys including a separate villa—is located in the charming village of Deià on the rugged northwest coast of the island of Mallorca with panoramic views of the Tramuntana Mountains, a UNESCO World Heritage site. The core of Belmond La Residencia was originally created from two adjoining 16th and 17th century country houses set on an owned hillside site of 30 acres. The hotel features two restaurants, including the gastronomic El Olivo, meeting rooms for up to 100 guests, two large swimming pools, tennis courts and a spa and fitness center with an indoor pool. In 2015, the property refurbished 12 junior suites and created a new bar. During the 2015/16 winter closure, the property commenced the first phase of the construction of six new suites and the units were added to the hotel inventory in the spring of 2017. During the 2017/2018 closure, 15 rooms ~~will~~were be renovated to create 12 guest rooms and one designer suite.

Portugal

Belmond Reid’s Palace—158 keys—is a famous hotel on the island of Madeira, situated on ten acres of semitropical gardens on a cliff top above the sea and the bay of Funchal, the main port city. Opened in 1891, the hotel has five seasonal restaurants and banquet/meeting facilities. Leisure and sports amenities include fresh and sea water swimming pools, a third tide-filled pool, tennis courts, ocean water sports, a spa and fitness center and access to two championship golf courses. It has year-round appeal, serving both winter escapes to the sun and regular summer holidays. In 2017, renovations were completed in the main building with the relocation of the reception and main entrance, the breakfast room was converted into meeting rooms, and the Pool Restaurant and Bar were renovated.

United Kingdom

Belmond Le Manoir aux Quat’Saisons—32 keys—is located in a picturesque village in Oxfordshire, England about an hour’s drive west of London. The main part of the hotel is a 16th century manor house set in 27 acres of gardens. Each suite has an entirely individual design. The property was developed by Raymond Blanc, one of Britain’s most famous chef-patrons, and the hotel’s restaurant has two stars in the Michelin Guide. Mr. Blanc has a four-year commitment that commenced January 2015 to remain the chef-patron at the hotel. The hotel recently expanded its event and meeting space to increase its appeal to social and corporate groups. In 2016, the La Bourgogne private dining room was renovated.

Belmond Cadogan —54 keys—is a 127-year old hotel located in the heart of London on Sloane Street. When it opens, as currently expected by year-end 2018, the Belmond Cadogan will reflect a thorough renovation that will bring contemporary classic design to this historic collection of buildings. The scope of the renovation includes the complete refurbishment of all public areas and the reconfiguration of 64 keys to 54 to create larger junior suites and suites. Built in 1887 in the Queen Anne style, the hotel has played an integral role in the social history of the Kensington and Chelsea areas. Belmond will operate the hotel under a third-party hotel management agreement.

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United Kingdom

Belmond Le Manoir aux Quat’Saisons—32 keys—is located in a picturesque village in Oxfordshire, England about an hour’s drive west of London. The main part of the hotel is a 16th century manor house set in 27 acres of gardens. Each suite has an entirely individual design. The property was developed by Raymond Blanc, one of Britain’s most famous chef-patrons, and the hotel’s restaurant has two stars in the Michelin Guide. Mr. Blanc has a six-year commitment that commenced January 2015 to remain the chef-patron at the hotel. The hotel recently expanded its event and meeting space to increase its appeal to social and corporate groups. In 2016, the La Bourgogne private dining room was renovated.

Belmond Cadogan —54 keys—is a 127-year old hotel located in the heart of London on Sloane Street. The Belmond Cadogan opened February 28, 2019 and reflects a thorough renovation that brings contemporary classic design to this historic collection of buildings. The scope of the renovation includes the complete refurbishment of all public areas and the reconfiguration of 64 keys to 54 to create larger junior suites and suites. Built in 1887 in the Queen Anne style, the hotel has played an integral role in the social history of the Kensington and Chelsea areas. Belmond operates the hotel under a third-party hotel management agreement.

Russia

Belmond Grand Hotel Europe—266 keys—in St. Petersburg was originally built in 1875. The hotel occupies one side of an entire city block on the fashionable Nevsky Prospect in the UNESCO World heritage listed heart of the city near the Russian Museum, Philharmonic Society, Mikhailovsky Theater and other tourist and cultural attractions as well as the commercial center. There are three restaurants on the premises, as well as a grand ballroom, meeting facilities, a spa and fitness center, and several retail shops. Luxury historic suites reflect the rich history of the hotel and city, named after famous guests like Pavarotti, Stravinsky and the Romanov tsars. The City of St. Petersburg owns a 6.546% minority interest in the hotel building and it and the Company jointly hold the ground lease which expires in 2054. Recent improvements include six ultra-luxury suites that opened in July 2014, a new concept restaurant by a top designer, and improved meeting and banqueting rooms. In 2016, the property commenced renovations to its famous Krysha ballroom, which were completed in 2017. In 2017, renovation work commenced on the replacement of seven elevators with a planned completion at the end of 2019, along with the refurbishment of 114 guest rooms including upgrades to the heating, ventilation, and air conditioning systems~~, and renovations to the Mezzanine Café to be completed in mid-2018~~.

Owned Hotels—North America

United States

Belmond Charleston Place—434 keys—is located in the heart of historic Charleston, South Carolina, a popular destination for tourists and business meetings. Opened in 1986, the hotel has two restaurants, extensive banqueting and conference space including a grand ballroom, a spa, fitness center and rooftop swimming pool, and a shopping arcade of 22 retail outlets leased by third parties. The hotel also owns the adjacent historic Riviera Theater remodeled as additional conference space and retail shops. In December 2015, the property completed a three-year phased refurbishment of all of its guest rooms. In 2016, the property refurbished a retail outlet space, converting it into an upscale sports bar with direct access to Market Street, a busy main street in Charleston. Other upgrades in 2016 included the addition of an outdoor Roof Terrace & Bar, the renovation and expansion of the Thoroughbred Bar increasing capacity by 40%, and the completion of the renovation of the ballroom and conference facilities. In 2017, the reception and spa were renovated and in December 2017, the property commenced the renovation of the Charleston Grill, ~~with~~which anwas ~~expected~~completed ~~completion~~in ~~planned for early~~ 2018.

While Belmond has a 19.9% equity interest in Belmond Charleston Place, Belmond manages the property under an exclusive long-term contract and has a number of outstanding loans to the hotel. On evaluating its various interests in the hotel, Belmond has concluded that it is the primary beneficiary of this variable interest entity and, accordingly, consolidates the assets and liabilities of the hotel in Belmond’s balance sheets and consolidates the hotel’s results in Belmond’s statements of operations, comprehensive income and cash flows. See Note 67 to the Financial Statements.

Belmond El Encanto—92 keys—in Santa Barbara, California is located in the hills above the city center, with views over the Pacific Ocean. Dating from 1913, it sits in seven-acre landscaped gardens with heritage features and mature trees. Guest rooms are in authentic, California Rivera-style bungalows spread throughout the grounds. Belmond reopened the resort in 2013 following extensive renovation and it now includes an acclaimed restaurant, infinity-edge swimming pool, a destination spa and fitness center. Belmond El Encanto is Santa Barbara's only Forbes Five Star hotel.

‘21’ Club is Belmond's stand-alone restaurant, a famous landmark at 21 West 52nd Street in midtown Manhattan near the Broadway theater district and many top tourist attractions. Originally a speakeasy during Prohibition in the 1920s, this restaurant is open to the public, occupies three brownstone buildings and features fine American cuisine. It serves à la carte meals in the original bar restaurant and a separate dining room upstairs, and also has ten banqueting rooms used for receptions and events, including the famous secret wine cellar. Belmond added Bar ‘21’ on the restaurant’s ground floor lobby and reconfigured and expanded two event spaces on the first floor for private receptions.

Caribbean

Belmond Cap Juluca—96 keys—is located on the island of Anguilla in the British West Indies. It is set amid 179 acres of stunning tropical landscape and inland waterways overlooking the nearby St. Maarten mountains. Belmond Cap Juluca is an exclusive luxury hotel built in Greco-Moorish style on a white sandy beach. The Company acquired the property in May 2017 and also entered into a 125-year ground lease for property that comprises approximately 167 acres, including approximately 250,000 square feet of additional developable land. The property is undergoing a full renovation following its acquisition and the impact of Hurricanes Irma and Jose in September 2017, the renovations to include the addition of 20 new keys and two new-build casitas, a new spa and fitness center, outdoor pool, beach bar, meeting space and the renovation of two existing restaurants and bar. The property is currently expected to reopen in November 2018. See Notes 4 and 8 to the financial statements.

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Belmond LaEl ~~Samanna~~Encanto—9192 keys—in ~~including~~Santa ~~eight~~Barbara, ~~villas—~~California is located onin the ~~island~~hills ofabove ~~St. Martin in~~ the ~~French~~city ~~West~~center, ~~Indies. Built~~with inviews ~~1973,~~over the ~~hotel~~Pacific ~~consists of several buildings on 16 acres of owned land along a 4,000-foot beach~~Ocean. ~~Amenities~~Dating ~~include~~from ~~two restaurants~~1913, ~~two~~it ~~swimming~~sits ~~pools,~~in aseven-acre ~~spa,~~landscaped ~~tennis~~gardens ~~courts,~~with ~~fitness~~heritage ~~and~~features ~~conference centers, boating~~ and ~~ocean~~mature ~~water sports, and extensive gardens~~trees. ~~The~~Guest ~~hotel~~rooms isare ~~open~~in ~~most of the year~~authentic, ~~seasonally~~California ~~closing~~Rivera-style ~~during~~bungalows ~~the~~spread ~~autumn~~throughout ~~months. In recent years, Belmond has renovated many of~~ the ~~guest rooms and the main restaurant, bar and lobby area~~grounds. ~~The eight luxury villas located on part of the 35 acres of owned vacant land adjoining~~ Belmond Lareopened ~~Samanna provide additional villa-suite room stock for~~ the ~~hotel.~~resort ~~The remaining land is available for future expansion. The hotel suffered damage from Hurricanes Irma and Jose~~ in ~~September~~2013 ~~2017~~following ~~during~~extensive ~~the hotel's annual closure. The~~ renovation ~~of ten keys had commenced~~ and ~~remedial~~it ~~works~~now ~~were~~includes ~~also~~an ~~underway~~acclaimed ~~for~~restaurant, ainfinity-edge ~~cliff~~swimming ~~stabilization~~pool, ~~project. The cliff stabilization project has been completed and the Company is currently contemplating~~ a ~~substantial~~destination ~~reconstruction~~spa and ~~renovation~~fitness ~~program~~center. Belmond ~~conditioned~~El onEncanto ais ~~significant~~Santa ~~restructuring~~Barbara's ofonly ~~the~~Forbes ~~cost~~Five ~~structure~~Star ~~of the~~ hotel. ~~If the Company proceeds with the reconstruction and renovation program, the expected re-opening would be in December 2018. See Note 8 to the financial statements.~~

Caribbean

Belmond Cap Juluca—108 keys—is located on the island of Anguilla in the British West Indies. It is set amid 179 acres of stunning tropical landscape and inland waterways overlooking the nearby St. Maarten mountains. Belmond Cap Juluca is an exclusive luxury hotel built in Greco-Moorish style on a white sandy beach. The Company acquired the property in May 2017 and also entered into a 125-year ground lease for property that comprises approximately 167 acres, including approximately 250,000 square feet of additional developable land. The property underwent a full renovation following its acquisition and the impact of Hurricanes Irma and Jose in September 2017, with the renovations including the addition of 20 new keys and two new-build casitas, a new spa and fitness center, outdoor pool, beach bar, meeting space and the renovation of two existing restaurants and bar. The property opened in December 2018. See Notes 5 and 9 to the financial statements.

Belmond La Samanna—91 keys including eight villas—is located on the island of St. Martin in the French West Indies. Built in 1973, the hotel consists of several buildings on 16 acres of owned land along a 4,000-foot beach. Amenities include two restaurants, two swimming pools, a spa, tennis courts, fitness and conference centers, boating and ocean water sports, and extensive gardens. The hotel is open most of the year, seasonally closing during the autumn months. The eight luxury villas located on part of the 35 acres of owned vacant land adjoining Belmond La Samanna provide additional villa-suite room stock for the hotel. The remaining land is available for future expansion. The hotel suffered damage from Hurricanes Irma and Jose in September 2017 during the hotel's annual closure. The renovation of ten keys had commenced and remedial works were also underway for a cliff stabilization project. The cliff stabilization project has been completed and the Company completed a substantial reconstruction and renovation program in 2017 and 2018 which had been conditioned on a significant restructuring of the cost structure of the hotel. The hotel reopened in December 2018. See Note 9 to the financial statements.

Mexico

Belmond Maroma Resort and Spa—63 keys—is on Mexico’s Riviera Maya on the Caribbean coast of the Yucatan Peninsula, about 30 miles south of Cancun. The resort opened in 1995 and is set in 25 owned acres of verdant jungle along a 1,000-foot beach. The Cozumel barrier reef is offshore where guests may fish, snorkel and scuba-dive. Important Mayan archeological sites are nearby. Rooms are arranged in low-rise villas and there are three restaurants, three swimming pools, tennis courts and spacious spa facilities. The hotel purchased a beach concession on an adjacent piece of land in 2016. Belmond also owns a 28-acre tract adjacent to Belmond Maroma Resort and Spa for hotel expansion or construction of other improvements. Phase 1 planning efforts commenced in 2017 in advance of a planned renovation in 2019 to include the addition of ten keys and two new event palapas, along with upgrades to infrastructure and landscaping.

Belmond Casa de Sierra Nevada—37 keys—is a luxury resort in the colonial town of San Miguel de Allende, a UNESCO World Heritage site. Opened in 1952, the hotel consists of nine owned Spanish colonial buildings built in the 16th and 18th centuries. ~~Belmond has renovated the hotel, including its restaurant, and has built new suites as well as a swimming pool, spa and garden area.~~ The total site is approximately two acres. Belmond also owns a nearby cooking school and retail shop operated in conjunction with the hotel. In 2017 and 2018, a phased ~~guestroom~~overall renovation of all 37 keys and public areas was completed, along with the addition of a spa and fitness center~~, commenced while the hotel remained open with completion scheduled for early 2018~~.

Owned Hotels—Rest of World

South America

Belmond Copacabana Palace—239 keys—was built in the 1920s on a three-acre owned site facing Copacabana Beach near the central business district of Rio de Janeiro, Brazil. It is a famous hotel in South America and features two fine-dining restaurants, 13 function rooms hosting up to 1,300 guests, including the hotel’s refurbished former casino rooms, a 25 meter-long swimming pool, spa and fitness center, and a roof-top tennis court and a private roof-top plunge pool for the penthouses. In December 2012, Belmond completed a two-year phased refurbishment of the guest rooms in the main building including an expanded and restyled lobby and, in early 2014, converted one of the hotel's bars into a new pan-Asian restaurant. Upgrades in 2017 included the renovation of the Pergula Restaurant, which is the main three-meal restaurant for the hotel located on the ground level with seating overlooking the pool, upgrades to the pool area, and a new energy management system. Third parties own a less than 2% minority interest in the hotel.

Belmond Hotel das Cataratas—187 keys—is located beside the famous Iguassu Falls in Brazil on the border with Argentina, a UNESCO World Heritage site. Belmond was awarded in 2007 a 20-year lease of the hotel from the government. It is the only hotel in the national park on the Brazilian side of the falls. First opened in 1958 on about four acres, the hotel has two restaurants, two bars, conference facilities, a swimming pool, spa, fitness center and tennis court, and tropical gardens looking onto the falls. In 2017, the hotel completed the renovation of 23 keys. Belmond had applied in 2009 to the Brazilian Ministry of Planning, Budget and Management for an amendment of the lease, but the Secretary of the Ministry denied the application in September 2014. Belmond thereafter claimed against the Federal Government for breach of the lease and received interlocutory relief at the trial court in the form of a 25% lease reduction and an injunction on the Federal Government from taking any action inconsistent with the court's decision, which was affirmed twice on appeal. The Federal Court subsequently issued a preliminary decision in October 2017 denying in part the Company's claim for modification of the lease concession and ordering the Company to pay the stated rent in the lease. This ruling has also been affirmed on appeal. See "Item 3—Legal Proceedings."

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~~with~~Owned ~~refreshed~~Hotels—Rest guest accommodations, conference facilities and public areas. The hotel features two restaurants, large banqueting and meeting rooms and an exclusive lounge for guests staying on the upper floors. Leisure facilities include a spa, gym and rooftop swimming pool with ocean views. During 2016, the property converted former office space on its third floor into eight executive guest rooms. In 2017, planning commenced for the renovation of ~~the lobby and three garden suites, scheduled to be completed in 2018. See also "Item 3—Legal Proceedings."~~World

South America

Belmond Copacabana Palace—239 keys—was built in the 1920s on a three-acre owned site facing Copacabana Beach near the central business district of Rio de Janeiro, Brazil. It is a famous hotel in South America and features two fine-dining restaurants, 13 function rooms hosting up to 1,300 guests, including the hotel’s refurbished former casino rooms, a 25 meter-long swimming pool, spa and fitness center, and a roof-top tennis court and a private roof-top plunge pool for the penthouses. In December 2012, Belmond completed a two-year phased refurbishment of the guest rooms in the main building including an expanded and restyled lobby and, in early 2014, converted one of the hotel's bars into a new pan-Asian restaurant. Upgrades in 2017 included the renovation of the Pérgula Restaurant, which is the main three-meal restaurant for the hotel located on the ground level with seating overlooking the pool, upgrades to the pool area, and a new energy management system. Third parties own a less than 2% minority interest in the hotel.

Belmond Hotel das Cataratas—187 keys—is located beside the famous Iguassu Falls in Brazil on the border with Argentina, a UNESCO World Heritage site. Belmond was awarded in 2007 a 20-year lease of the hotel from the government. It is the only hotel in the national park on the Brazilian side of the falls. First opened in 1958 on about four acres, the hotel has two restaurants, two bars, conference facilities, a swimming pool, spa, fitness center and tennis court, and tropical gardens looking onto the falls. In 2017, the hotel completed the renovation of 23 keys. Belmond had applied in 2009 to the Brazilian Ministry of Planning, Budget and Management for an amendment of the lease, but the Secretary of the Ministry denied the application in September 2014. Belmond thereafter claimed against the Federal Government for breach of the lease and received interlocutory relief at the trial court in the form of a 25% lease reduction and an injunction on the Federal Government from taking any action inconsistent with the court's decision, which was affirmed twice on appeal. The Federal Court subsequently issued a preliminary decision in October 2017 denying in part the Company's claim for modification of the lease concession and ordering the Company to pay the stated rent in the lease, which was affirmed on appeal. On April 25, 2018, the Federal Superior Court reversed the decision in Belmond's favor on all counts, so that the injunction against the Federal Government remains in place and the rent reduction was reinstated on a prospective basis. See Item 3—Legal Proceedings.

Belmond Miraflores Park—89 keys—is located in the fashionable Miraflores residential district of Lima, Peru. This all-suite owned hotel, occupying about an acre of land, faces the Pacific Ocean and is conveniently located to the city's commercial and cultural centers. Following a five-month closure for a $7,500,000 renovation project, Belmond reopened the hotel in April 2014 with refreshed guest accommodations, conference facilities and public areas. The hotel features two restaurants, large banqueting and meeting rooms and an exclusive lounge for guests staying on the upper floors. Leisure facilities include a spa, gym and rooftop swimming pool with ocean views. During 2016, the property converted former office space on its third floor into eight executive guest rooms. In 2018, the Company completed a design for the full renovation of the lobby and the renovation is expected to be completed in 2019. See also Item 3—Legal Proceedings.

Africa

Belmond Mount Nelson Hotel—198 keys—in Cape Town, South Africa is a famous historic property opened in 1899. With beautiful gardens and pools, it stands just below Table Mountain and is within walking distance of the main business, civic and cultural center of the city. The hotel has two restaurants, a ballroom, two swimming pools, tennis courts, a spa and fitness center, and a business center with meeting rooms, all situated on ten acres of owned grounds. In 2012, Belmond renovated 30 guest rooms and the restaurant overlooking the main swimming pool and gardens and, in 2013, refurbished an additional 36 guest rooms. In 2014, Belmond refurbished eight junior suites and 18 suites, including its eight garden cottages. In 2015, the hotel's original ballroom and three conference rooms were renovated and in 2016, 48 keys in the main building were upgraded and refurbished. In 2017, significant upgrades were made to the entry drive, porte cochere, reception lobby, and Tea Lounge and Bar. In 2018, two one-bedroom cottages were converted into a two-bedroom suite. The hotel has expansion potential through conversion of adjacent owned residential properties.

Belmond Khwai River Lodge, Belmond Eagle Island Lodge and Belmond Savute Elephant Lodge—39 keys in total—comprise Belmond’s African safari experience in Botswana consisting of three separate game-viewing lodges. Established in 1971, Belmond holds leases to the lodge sites in the Okavango River delta and nearby game reserves, where African wildlife can be observed from open safari vehicles or boats. The leases expire between ~~2021~~2020 and ~~2041~~2042. Botswana's Okavango Delta was added to the UNESCO World Heritage list in June 2014. Each camp has 12 or 15 luxury one bedroom tents under thatched roofs, and guests travel between the camps by light aircraft. Boating, fishing, hiking and swimming are offered at the various sites. In 2015, Belmond closed Belmond Eagle Island Lodge to undertake a full refurbishment of the property and ~~re-opened~~reopened it in November 2015. ~~Conde Nast Traveller included~~ Belmond ~~Eagle Island Lodge on its 2016 Hotlist and the property received an award from International Property & Travel in 2016. Belmond~~ Savute Elephant Lodge closed in November 2017 for a full renovation and isreopened ~~expected to open~~ in May 2018. The renovation ~~includes upgrades to the infrastructure, enhancements to finishes, new food and beverage outlets including outdoor dining, a swimming pool, and the addition of a spa tent.~~

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included upgrades to the infrastructure, enhancements to finishes, new food and beverage outlets including outdoor dining, a swimming pool, and the addition of a spa tent.

Asia

Belmond Napasai—68 keys including 14 private villas—is located on its own beach on the north side of Koh Samui island of Thailand in the Gulf of Siam. It originally opened in 2004 and features two restaurants, tennis courts, a swimming pool, a spa and water sports such as sailing, diving and snorkeling in the nearby coral reef. The guest rooms and garden cottages are arranged in sea view on a total site of about 40 owned acres, which includes vacant land for future expansion. The villas, most of which are owned by third parties, are available for rent by hotel guests.

Belmond Jimbaran Puri—64 keys including 22 villas—is on the island of Bali in Indonesia and occupies seven beachfront acres under long-term lease through 2050 on the south coast of the island. Guest rooms are situated in cottages, and there are two restaurants, a spa, swimming pool and ocean water sports. Each villa has its own private plunge pool.

Ubud Hanging Gardens—38 keys—also on Bali is located on terraces on about seven steep hillside acres above the Ayung River gorge in the rain forest interior of the island. This long-term leased hotel opened in 2005 and offers two restaurants, a swimming pool and spa, and a free shuttle bus to the nearby town of Ubud, a cultural and arts center. Each key has its own private plunge pool.

As previously reported, following an unannounced dispossession of Belmond from Ubud Hanging Gardens by the third-party owner in November 2013, Belmond was unable to continue operating the hotel. Belmond believed this action by the owner was unlawful and in breach of its long-term lease arrangement and constituted a wrongful dispossession. Accordingly, Belmond has taken appropriate legal steps to protect its interests and is currently seeking to enforce its Singapore arbitral award for $8.5 million against the owner in Indonesia. See Item 3—Legal Proceedings.

Belmond La Résidence d’Angkor—59 keys—opened in 2002 and is situated in walled gardens in Siem Reap, Cambodia. The hotel occupies a site of about two acres under long-term lease until 2066. The ancient Temples of Angkor Wat, a UNESCO World Heritage site and the principal tourist attraction in the area, are nearby. The hotel has two indoor/outdoor restaurants, swimming pool, and a spa and fitness center. The property completed a full renovation of its guest rooms and added a pool suite by combining two keys overlooking the pool in 2016.

10Belmond Governor’s Residence—49 keys—was built in the 1920s in the embassy district of Yangon, Myanmar (Burma) originally as the official home of one of the Burmese state governors and near the great Shwedagon pagoda in the city. The building is a two-story teak mansion surrounded by verandas overlooking lotus gardens on a site of about two acres leased until 2066. Belmond Governor's Residence opened as a hotel in 1997. It includes two restaurants and swimming pool.

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Belmond Governor’s Residence—49 keys—was built in the 1920s in the embassy district of Yangon, Myanmar (Burma) originally as the official home of one of the Burmese state governors and near the great Shwedagon pagoda in the city. The building is a two-story teak mansion surrounded by verandas overlooking lotus gardens on a site of about two acres leased until 2067. Belmond Governor's Residence opened as a hotel in 1997. It includes two restaurants and swimming pool.

Belmond La Résidence Phou Vao—34 keys—is in Luang Prabang, the ancient capital of Laos and a UNESCO World Heritage site. Belmond owns a 69% interest in the entity which owns the property. The hotel opened in 2001 and occupies about eight hillside acres under long-term lease until 2028. Guest rooms are in four two-story buildings surrounded by lush gardens that include a restaurant, spa and swimming pool.

Part-Owned/Managed Hotels

United States

Inn at Perry Cabin by Belmond—78 keys—was built in 1812 as a country inn located in St. Michaels, Maryland on the eastern shore of Chesapeake Bay. Set on 25 waterfront acres, it is an attractive conference and vacation destination, particularly for guests from the Washington, D.C., Baltimore and Philadelphia areas. During its ownership, Belmond expanded the hotel by adding guest rooms, a conference facility, a swimming pool and spa.

As noted in the "Introduction" above, Belmond completed the sale of Inn at Perry Cabin in March 2014 for gross proceeds of $39,700,000 and at the same time, entered into a ten-year management agreement (that permits termination on the fifth anniversary of the agreement) with the owner under which Belmond operates the property as Inn at Perry Cabin by Belmond. As part of the management agreement, Belmond funded $3,000,000 of key money to be used for agreed capital enhancements.

Peru

Belmond has a 50%/50% joint venture with local investors in Peru which operates the following ~~four~~five hotels under Belmond’s exclusive management.

Belmond Hotel Monasterio—122 keys—is located in the ancient Inca capital of Cusco, an important tourist destination in Peru and a UNESCO World Heritage site. The hotel was originally built as a Spanish monastery in the 16th century, converted to hotel use in 1965, and has been upgraded since then. The guest rooms and two restaurants are arranged around open-air cloisters. Many of the guest rooms are specially oxygenated due to Cusco's high altitude. In 2015, Belmond completed a three-year phased renovation of guest rooms and bathrooms. The site measures approximately three acres under long-term lease until ~~2037~~2047, with options to renew until 2067. In ~~2017~~2018, ~~we commenced~~ the ~~first~~design ~~phase of planning~~ for ~~the~~a soft goods renovation of the lobby bar and two restaurants, ~~which~~was completed and construction is expected to becommence ~~completed~~ in ~~2018~~the second half of 2019.

Belmond Palacio Nazarenas—55 keys—is located adjacent to Belmond Hotel Monasterio in Cusco and is a former palace and convent which the joint venture has rebuilt as a separate hotel and opened in June 2012. This is an all-suite hotel arranged around courtyards and features oxygenated guest rooms, an outdoor heated swimming pool, spa, and poolside restaurant and bar. During construction, archeologists discovered Incan artifacts and foundations which have been preserved and displayed in the hotel. The property is subject to a lease until 2042, with an option to renew until 2067. In 2017, the joint venture commenced the first phase of planning to upgrade the main restaurant, which is expected to be completed in 2018.

Belmond Sanctuary Lodge—31 keys—is the only hotel at the famous mountaintop Inca ruins at Machu Picchu, a UNESCO World Heritage site. All of the rooms have been refurbished to a high standard. In 2016, the joint venture completed a three-year phased renovation of all guest rooms and suites, as well as the hotel's reception and public areas. In 2017, the Tinkuy buffet restaurant was refurbished. The joint venture leases the hotel as well as seven acres for possible future expansion at the foot of the ruins, close to the town on the Urubamba River where tourists arrive by train. The lease has been extended to 2025. See Item 3 — Legal Proceedings.

Belmond Hotel Rio Sagrado—23 keys including two villas—is owned by Belmond's Peru hotel joint venture and is located in the Sacred Valley of the Incas between Cusco and Machu Picchu. Opened in 2009, this rustic hotel has a spa with indoor plunge pool and extensive gardens beside the Urubamba River on a site of about six acres set against an imposing mountain backdrop. The Sacred Valley is a popular part of holiday itineraries in Peru, and a station on Belmond’s PeruRail train service is a short distance from the hotel. During 2013, the joint venture refurbished the guest rooms, enlarged the spa and installed an outdoor heated swimming pool. In 2014, the property enhanced the main entry arrival with a new entry drive and landscape improvements and added a train platform/lounge to accommodate Hiram Bingham train guests stopping at the hotel. In 2015, the joint venture

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~~acquired~~construction, anarcheologists ~~adjacent~~discovered ~~parcel~~Incan ofartifacts ~~land~~and offoundations ~~approximately~~which ~~two~~have been preserved and displayed in the hotel. The property is subject to a ~~half~~lease ~~acres~~until on2035, ~~which~~with options to renew until 2042. In 2018, the joint venture iscompleted ~~contemplating~~an ~~further~~upgrade ~~development~~of its main restaurant.

Belmond Las Casitas—20 keys—is located in Colca Canyon, a river canyon in southern Peru famed for being one of the world's deepest and a habitat for the giant Andean condor and having pre-Inca roots. It is located on a 24 hectare estate with 20 luxury individual bungalows, each with a private terrace, plunge pool, fireplace, indoor and outdoor shower, and hot tub. The resort includes a library, outdoor pool, spa, and restaurant and bar, with an on-property farm that provides organic produce for the restaurant. The Company acquired the property through its 50%/50% joint venture in Peruvian hotels in May 2017 and a soft goods renovation was completed in 2017.

Owned Trains and Cruises

Venice Simplon-Orient-Express comprises 18 historic railway cars, all of which have been refurbished in original 1920s/1930s décor and meet modern safety standards. It operates once or twice weekly principally between multiple cities and Venice from March to November each year via Paris, Zurich and Innsbruck on a scenic route through the Alps. The journey from London to Venice departs from London Victoria station on the Belmond British Pullman train; passengers then cross the English Channel by coach on the Eurotunnel shuttle train. Occasional trips are also made to Vienna, Prague, Berlin, Copenhagen, Stockholm, Budapest and Istanbul. During 2015, the bar was completely refurbished and in 2016 and 2017 respectively, air conditioning and Wi-Fi were added throughout the train. During the 2017/2018 winter closure, one carriage ~~will~~was be converted into three grand suites with en-suite showers. Venice-Simplon-Orient-Express is made up of three dining cars, one bar car and sleeper cars carrying up to ~~182~~178 passengers in 85 double and 12 single cabins. Venice Simplon-Orient-Express is also available for charter by private groups.

Belmond British Pullman consists of 11 Pullman dining cars in Britain which operate ~~all~~from ~~year~~February through December originating out of London on short excursions to places of historic, scenic or sporting interest in southern England, including some weekend trips when passengers stay at local hotels. Full fine dining is offered on every departure. One carriage of the train undergoes interior refurbishment and a full maintenance overhaul annually.

Belmond Royal Scotsman is a luxury sleeper train owned by Belmond and comprises nine Edwardian-style cars, including five sleeping cars (each compartment with private bathroom), two dining cars and a bar/observation car, and accommodates up to 40 passengers. In 2017, the bar/observation car was renovated and a spa car with two treatment rooms was added. Operating from April to October, the train travels on itineraries of up to seven nights through the Scottish countryside affording passengers the opportunity to visit clan castles, historic battlegrounds, famous Scotch whiskey distilleries and other points of interest. A soft goods renovation of the public areas was completed in 2017. In 2019, a soft refurbishment of all sleeper carriages on the train is expected to be completed.

Belmond Grand Hibernian is a luxury sleeper train owned by Belmond and was launched in 2016 and comprises ten Georgian-styled railway cars, including five sleeping cars (each compartment with a private bathroom), two dining cars, a bar/observation car and accommodates up to 40 passengers. It operates from April to October and travels on three itineraries through the Irish countryside affording passengers the opportunity to visit castles, lakes, towns, whiskey distilleries and other places of interest. ~~This train commenced service in August 2016 through mid-October 2016 and began its 2017 season in April.~~

Belmond Road to Mandalay is a luxury river cruise ship on the Ayeyarwady (Irrawaddy) River in central Myanmar. The ship was a Rhine River cruiser built in 1964 that Belmond bought and refurbished. It has 43 air conditioned cabins with private bathrooms, spacious restaurant and lounge areas, and a canopied sun deck with a swimming pool. The ship travels between Mandalay and Bagan up to eight times each month and carries up to 82 passengers who may enjoy sightseeing along the river and guided shore excursions to places of cultural interest. Three- to 11-night itineraries are offered. The ship does not operate in the summer months and occasionally when the water level of the river falls too low due to lack of rainfall. During 2015, the top deck barbeque and bar venues were refurbished.

Belmond Afloat in France consists of five luxury river and canal boats (called péniche-hôtels) owned by Belmond and operates in Burgundy, Provence and other rural regions of France. They accommodate between four and 12 passengers each in double berth compartments with private bathrooms, and some have small plunge pools on deck. They operate seasonally between April and October on three- to six-night itineraries with guests dining on board or in nearby restaurants. Shore excursions are organized each day. It is anticipated that during 2018, two additional canal boats accommodating eight passengers each will be added to the fleet, which are expected to operate in the Champagne, Alsace and other regions of France.

Belmond Northern Belle and Belmond Orcaella—As noted in the "Introduction" above and in Note 5 to the Financial Statements, on November 2, 2017, Belmond sold its interest in the entity that owned Belmond Northern Belle and on November 6, 2017, the entity that leased Belmond Orcaella provided notice of termination to the owner in respect of its charter agreement.

All Belmond trains and cruises are available for private charter.

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Belmond Afloat in France consists of seven luxury river and canal boats (called péniche-hôtels) owned by Belmond and operates in Burgundy, Provence and other rural regions of France. They accommodate between four and 12 passengers each in double berth compartments with private bathrooms, and some have small plunge pools on deck. They operate seasonally between April and October on three- to six-night itineraries with guests dining on board or in nearby restaurants. Shore excursions are organized each day. In 2018, two additional canal boats accommodating eight passengers each were added to the fleet for a total of seven river and canal boats.

All Belmond trains and cruises are available for private charter.

Part-Owned/Managed Trains

PeruRail: Belmond and local Peruvian investors formed two 50%/50% joint venture companies (PeruRail S.A. ("PeruRail") and Ferrocarril Transandino S.A. ("FTSA")). FTSA was awarded in 1999 a 30-year concession to operate the track and other infrastructure of the state-owned railways in southern and southeastern Peru. The concession had an initial term of 30 years from 1999 with the option to apply for six 5-year extensions. In December 2017, FTSA received a denial of its third extension request. As a result, FTSA can no longer conclude that the remaining three extensions are probable and has therefore reduced its expectation of the total expected life of the concession to the contracted term of 35 years of which 1716 years are remaining as of December 31, ~~2017~~2018. This triggered an impairment test of the assets within the joint venture and the shorter time period over which to recover the carrying value of the assets has led to an impairment charge being recorded in the year ended December 31, 2017. The life of the concession is now expected to expire in 2034. See Note 78 to the Financial Statements.

PeruRail operates passenger and freight services in southern and southeastern Peru. The 70-mile Cusco-Machu Picchu line, carrying mainly tourists as well as local passenger traffic, is the principal means of access to the famous Inca ruins at Machu Picchu because there is no convenient road. Another carrier operates on this line in competition with PeruRail. A second rail line runs from Cusco to Matarani on the Pacific Ocean (via Arequipa) and to Puno on Lake Titicaca, and principally serves freight traffic under contract, an activity PeruRail has expanded by hauling the output of local copper mines in southern Peru to the Pacific port for export. See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations—Segment Performance—Part-owned/managed trains—Year ended December 31, ~~2017~~2018 compared to year ended December 31, ~~2016~~2017 and year ended December 31, ~~2016~~2017 compared to year ended December 31, ~~2015—Part-Owned/Managed trains,~~ 2016 ~~compared to 2015"~~. PeruRail can continue to run trains on the track after the conclusion of FTSA's concession. PeruRail, along with other third-party operators, pays a track access fee to FTSA and FTSA pays the Peruvian government fees related to traffic levels and the use of rail infrastructure, locomotives and rolling stock.

The Cusco-Machu Picchu line connects four of Belmond’s Peruvian hotels, allowing inclusive tours served by the Belmond Hiram Bingham luxury daytime tourist train comprising two dining cars and a bar/observation car with capacity up to 84 passengers. PeruRail also operates a daytime tourist train that runs on the Cusco-Puno route through the High Andes mountains. In 2017, a new luxury sleeper train was launched under the name Belmond Andean Explorer, which runs through the Peruvian Highlands from Cusco to Lake Titicaca and Arequipa. This train consists of 21 carriages, which Belmond owned and operated in Australia until 2003 and sold to PeruRail in 2016. The train was shipped from Australia to Peru where it underwent a full renovation. It carries 6870 passengers in 3435 en-suite cabins, with two dining cars, a lounge car, and an observation car.

Eastern & Oriental Express: During its operating season from September to April, the Eastern & Oriental Express offers a round trip each week between Singapore, Kuala Lumpur and Bangkok. The journey includes two or three nights on board and side trips to Kuala Kangsar in Malaysia and the River Kwai in Thailand. Some overnight trips are also made from Bangkok to Chiang Mai and elsewhere in Thailand and to Vientiane, Laos. Longer itineraries, up to six nights on board, are offered to places of historic, scenic and cultural interest in the region. Originally built in 1970, the 24 cars were substantially refurbished in an elegant Asian décor and fitted with modern facilities such as air conditioning and private bathrooms. The train is made up of sleeping cars, three restaurant cars, a bar car and an open-air observation car and carries up to 82 passengers. The Eastern & Oriental Express is available for charter by private groups. Belmond manages the train and has a 25% shareholding in the owning company.

Management Strategies

As the foregoing indicates, Belmond has a global mix of luxury hotel and travel products that are geographically diverse and appeal to both high-end individual travelers as well as prominent meeting, incentive, and social groups. Individual travelers in 2017 made up approximately 72% of total hotel room nights, with meeting, social, and incentive groups accounting for the remaining 28%. Belmond’s properties are distinctive as well as luxurious and tend to attract guests prepared to pay higher rates for the travel experiences and high-quality service Belmond offers compared to its competitors.

Belmond benefits from long-term trends and developments favorably impacting the global hotel, travel and leisure markets, including growth trends in the luxury hotel market in many parts of the world, increased travel and leisure spending by consumers, favorable demographic trends in relevant age and income brackets of U.S., European and other populations, and increased online travel bookings.

Belmond’s aim is to continue to be the consummate luxury experiential travel company, providing guests with a window into authentic, 'one-of-a-kind' experiences in some of the most inspiring destinations in the world. In 2016, Belmond announced a strategic growth plan intended to grow its business by focusing on three key areas:

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Management Strategies

As the foregoing indicates, Belmond has a global mix of luxury hotel and travel products that are geographically diverse and appeal to both high-end individual travelers as well as prominent meeting, incentive, and social groups. Individual travelers in 2018 made up approximately 72% of total hotel room nights, with meeting, social, and incentive groups accounting for the remaining 28%. Belmond’s properties are distinctive as well as luxurious and tend to attract guests prepared to pay higher rates for the travel experiences and high-quality service Belmond offers compared to its competitors.

Under the Merger Agreement with LVMH, the Company is restricted from taking certain actions without LVMH's consent while the sale to LVMH is pending, including, among others, from making certain investments or acquisitions and selling certain assets, engaging in certain capital expenditures, and incurring certain indebtedness.

Subject to the constraints imposed by the Merger Agreement, Belmond’s aim is to continue to be the consummate luxury experiential travel company, providing guests with a window into authentic, 'one-of-a-kind' experiences in some of the most inspiring destinations in the world. In 2016, Belmond announced a strategic growth plan intended to grow its business by focusing on three key areas:

•

Driving top-line growth and bottom-line results at the Company's existing businesses -- Belmond plans to continue owning or part-owning and operating most of its existing properties, which allows Belmond to develop each product's distinctive local character and to benefit from current cash flow and potential future gains on sale. Belmond considers its combined owner/operator role as efficient and consistent with the long-term nature of its assets. Self-management or management with equity interest has enabled Belmond to capture the economic benefits otherwise shared with a third-party manager, to control the operations, quality and expansion of the hotels, and to use its experience with market adjustments, price changes, expansions and renovations to improve cash flow and enhance asset values. The Company continues to emphasize increasing revenue and earnings at its established and recently opened properties, with a particular focus on:


◦	maximizing RevPAR while controlling costs associated with incremental revenue;


◦	upgrading core systems to drive greater demand, improve customer relationships and increase website conversion ratios;


◦	investing in capital improvements at existing hotels and expanding where land or space is available, in both cases when potential investment returns are relatively high and operating costs are low;


◦	putting a greater emphasis on margin improvements; and


◦	increasing the utilization of its trains and cruises by adding departures and, for PeruRail, expanding its contracted freight business.

•

Continuing the Company's efforts to build brand awareness -- Many of Belmond’s individual properties, such as Belmond Hotel Cipriani, Belmond Grand Hotel Europe, Belmond Copacabana Palace and Belmond Mount Nelson Hotel, have distinctive local character and strong brand identities. Prior to introducing the Belmond brand in 2014, the Company promoted its individual hotel properties and the Venice Simplon-Orient-Express train through the “Orient-Express" sub-brand. In 2014, the Company elected to migrate to more of a "hard-brand" strategy and now markets its collection under the Belmond brand. At the same time, the Company retained its long-term license agreement with SNCF, the French transportation company that owns the "Orient-Express" trademark for the Venice Simplon-Orient-Express train. With the decision to introduce the Belmond brand, the Company also entered into an agreement with SNCF to terminate (with effect from December 14, 2014) the "Orient-Express" license for hotel use, without any cost or penalty.

The revised brand and marketing strategy is intended to increase consumer recognition of the broad scope of the Company's unique collection of luxury hotels and travel experiences, thereby increasing repeat and multi-property visits and enhancing revenue growth, and to heighten awareness of the entire portfolio of individual properties among existing and potential new guests. Management also expects this approach will make Belmond more attractive to third-party owners thereby facilitating the strategy of expanding into third-party management of properties that complement Belmond's existing portfolio.

The Company has made important progress on increasing consumer and industry awareness of the Belmond brand in the approximately ~~four~~five years since its launch. Management believes that there is additional scope for expanding awareness and is focused on building the brand and gaining more market share within the luxury leisure brand landscape. In particular, the Company is focused on making Belmond "the brand of choice" for its specific niche by expanding brand training for employees in order to bring the brand to life for guests while on property, identifying and introducing signature programming that differentiates the Company from its competitors, and utilizing public relations and media opportunities to introduce new experiences while at the same time reinforcing the Belmond brand. In 2017, the Company launched a new global brand campaign and fully re-designed consumer website to support and help centralize these collective brand objectives.

• Expanding the Company's global footprint -- As part of the strategic plan that the Company unveiled in 2016, Belmond identified global footprint expansion as a meaningful driver of the Company's long-term growth and value. Footprint expansion includes growing the Company's international portfolio through any or all of the following: acquisitions, long-term leases, management agreements -- with or without a related investment, franchise agreements, and construction or acquisition of new train or cruise businesses. Factors in Belmond's evaluation of a potential acquisition, lease, management or franchise opportunity include the property's fit within the Belmond brand and the Company's target geographic markets, as well as an assessment against certain Company's defined financial criteria, with a focus on maintaining conservative debt and leverage levels. In keeping with this conservative approach, the Company intends to partially finance larger acquisitions through the sale of selected assets while generally seeking to retain long-term management of any disposed asset.

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~~standards~~ and tois ~~align~~focused ~~Belmond's~~on ~~interest~~building asthe anbrand ~~operator~~and ~~with~~gaining more market share within the ~~owner.~~luxury ~~Management~~leisure ~~agreements~~brand ~~are~~landscape. ~~desirable~~In toparticular, the Company inis ~~that~~focused ~~they~~on ~~would~~making ~~typically~~Belmond be"the abrand ~~less-capital-intensive~~of ~~manner~~choice" offor ~~facilitating~~its ~~entry~~specific ~~into~~niche ~~new~~by ~~markets~~expanding brand training for ~~Belmond.~~employees Asin ~~owner~~order ofto ~~many~~bring ~~unique~~the brand to life for guests while on property, identifying and ~~luxury~~introducing ~~properties~~signature programming that ~~Belmond~~differentiates ~~operates~~the ~~itself~~Company from its competitors, and utilizing public relations and media opportunities to introduce new experiences while at the same time reinforcing the Belmond ~~believes~~brand. itIn is2017, ~~well~~the ~~positioned~~Company launched a new global brand campaign and fully re-designed consumer website to ~~manage~~support ~~comparable~~and ~~hotels~~help ~~for~~centralize ~~others~~these collective brand objectives.

• ~~Other~~Expanding ~~strategic~~the ~~considerations~~Company's global footprint -- InAs ~~recent~~part ~~years,~~of ~~management~~the ~~executed~~strategic onplan athat ~~strategy~~the toCompany ~~reduce~~unveiled ~~Belmond’s~~in ~~long-term~~2016, ~~debt~~Belmond ~~position.~~identified Aglobal ~~number~~footprint ofexpansion ~~assets~~as ~~not~~a ~~considered~~meaningful ~~key~~driver toof ~~Belmond’~~the Company's ~~portfolio~~long-term ofgrowth ~~unique,~~and ~~high-valued~~value. ~~properties~~Footprint ~~were~~expansion ~~identified~~includes ~~and~~growing ~~sold~~the ~~with~~Company's ~~proceeds~~international ~~being~~portfolio ~~used~~through toany ~~reduce~~or ~~debt,~~all ~~re-invest~~of inthe ~~other~~following: ~~properties~~acquisitions, ~~and~~long-term ~~more~~leases, ~~recently~~management toagreements ~~repurchase~~-- ~~the~~with ~~Company's~~or ~~class~~without Aa ~~common~~related ~~shares.~~investment, Infranchise ~~the~~agreements, ~~last~~and ~~four~~construction ~~years,~~or ~~Belmond~~acquisition ~~sold~~of ~~its~~new ~~50%~~train ~~ownership~~or incruise ~~the~~businesses. ~~entity~~Factors ~~which~~in ~~owned~~Belmond's ~~Hotel~~evaluation ~~Ritz~~of bya ~~Belmond,~~potential ~~Madrid~~acquisition, ~~Spain~~lease, ~~the~~management ~~Inn~~or atfranchise ~~Perry~~opportunity ~~Cabin~~include bythe ~~Belmond~~property's infit ~~Maryland,~~within ~~and~~the Belmond ~~Northern~~brand ~~Belle~~and inthe ~~England~~Company's ~~for~~target ~~combined~~geographic ~~total~~markets, ~~proceeds~~as ofwell ~~$87,489,000,~~as ~~and~~an ~~removed~~assessment ~~any~~against ~~debt~~certain orCompany's ~~guarantees~~defined ~~related~~financial tocriteria, ~~these~~with ~~properties~~a ~~from~~focus ~~its~~on ~~consolidated~~maintaining ~~balance~~conservative ~~sheets.~~debt ~~See~~and ~~Note~~leverage 5levels. toIn ~~the~~keeping ~~Financial~~with ~~Statements.~~this ~~Management~~conservative ~~continues~~approach, tothe ~~review~~Company ~~Belmond's~~intends ~~portfolio~~ to ~~identify~~partially ~~additional~~finance ~~non-core~~larger ~~assets~~acquisitions ~~and~~through ~~expects~~the ~~that~~sale ~~any~~of ~~future~~selected ~~asset~~assets ~~sales~~while ~~would~~generally beseeking ~~encumbered~~to byretain long-term management ~~agreements for Belmond. See Item 7—Management’s Discussion and Analysis~~ of ~~Financial~~any ~~Condition~~disposed ~~and Results of Operations~~asset.

As a sizeable part of its footprint expansion strategy, the Company plans to pursue long-term contracts to manage distinctive luxury hotels owned by others principally on a fee basis. These contractual arrangements may include cash, loan or other investment, including key money, by Belmond in connection with renovating or converting a property to meet Belmond's standards and to align Belmond's interest as an operator with the owner. Management agreements are desirable to the Company in that they would typically be a less-capital-intensive manner of facilitating entry into new markets for Belmond. As owner of many unique and luxury properties that Belmond operates itself, Belmond believes it is well positioned to manage comparable hotels for others.

•

Other strategic considerations -- In recent years, management executed on a strategy to reduce Belmond’s long-term debt position. A number of assets not considered key to Belmond’s portfolio of unique, high-valued properties were identified and sold with proceeds being used to reduce debt, re-invest in other properties, and more recently to repurchase the Company's class A common shares. In the last four years, Belmond sold its 50% ownership in the entity which owned Hotel Ritz by Belmond, Madrid, Spain, the Inn at Perry Cabin by Belmond in Maryland, and Belmond Northern Belle in England for combined total proceeds of $87,489,000, and removed any debt or guarantees related to these properties from its consolidated balance sheets. See Note 6 to the Financial Statements. Management continues to review Belmond's portfolio to identify additional non-core assets and expects that any future asset sales would be encumbered by long-term management agreements for Belmond. See Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Marketing, Sales and Public Relations

Belmond invested $3,000,000 in enhanced promotional and marketing initiatives in ~~2017~~2018.

Belmond’s sales and marketing function is primarily based upon direct sales to consumers of travel (prioritizing strategic third-party travel agents, sales representatives and tour operators, and electronic channels such as the ~~Internet~~internet and digital marketing), cross-selling and up-selling to existing customers, and public relations. Belmond has its own global sales force located in 1817 cities in the U.S., Brazil, Mexico, various European countries, Australia and Japan, and has appointed third-party sales representatives in ten additional cities in Asia and the Middle East. Belmond also has local sales staff responsible for the properties where they are based.

Belmond’s sales staff identify and train preferred travel industry and distribution partners, engage with group and corporate account representatives, and conduct marketing initiatives such as direct mailings, e-commerce, trade show participation and event sponsorship. Revenue is managed using sophisticated room rate and inventory tools. Belmond participates in a number of luxury travel partner programs, such as the “Fine Hotels & Resorts" and "Centurion Hotel Program", both operated by American Express, and the “Virtuoso” travel agent consortium. Belmond offers its top travel agents and other industry partners "by invitation only" participation in Belmond’s “Bellini Club” providing training courses, special commissions and sales support for all Belmond products worldwide.

Consumer advertising, websites and digital marketing are important direct sales and marketing tools for Belmond. Through its principal website (belmond.com), Belmond provides extensive descriptions and images of the products and guest activities in English and five other languages, in addition to bookings and brand wide promotions. The belmond.com website was fully rebuilt and re-branded in 2017, in anticipation of the launch of a global brand campaign and to support the business objective to increase bookings and revenues through online commerce. Belmond operates other Internet special interest travel portals that direct customers to Belmond’s properties, and works with other selected electronic distribution channels. Social media such as Facebook, Twitter, YouTube, Instagram and Pinterest are increasingly significant marketing tools, particularly as the brand looks to reach new markets and to target new customer demographics, including millennials.

Because repeat customers appreciate the consistent quality of Belmond’s hotels, trains and cruises, an important part of Belmond’s strategy is to promote Belmond properties through various cross-selling efforts to engage with Belmond's loyal customer base. These include gifts cards, customer relationship management systems and other customer recognition programs, worldwide preferred travel agent programs, and direct communications with customers. In 2018, the Company will continue to invest in business intelligence systems to further enhance the effectiveness of its marketing and communication strategy to ensure content is tailored, targeted and personalized in accordance with individual customer preferences.

Belmond’s marketing strategy also focuses on public relations, which management believes is a highly cost-effective marketing tool for luxury properties. Because of the unique nature of Belmond’s portfolio, guests often hear about Belmond’s hotels and other travel products through word-of-mouth or published articles. Belmond has an in-house public relations office in London and representatives in 11 countries worldwide, including third-party public relations firms under contract, to promote its properties through targeted newspapers, general interest and travel magazines, and broadcast, online and other media.

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English and seven other languages, in addition to bookings and brand wide promotions. The belmond.com website was fully rebuilt and re-branded in 2017, in anticipation of the launch of a global brand campaign and to support the business objective to increase bookings and revenues through online commerce. Belmond operates other internet special interest travel portals that direct customers to Belmond’s properties, and works with other selected electronic distribution channels. Social media such as Facebook, Twitter, YouTube, Instagram and Pinterest are increasingly significant marketing tools, particularly as the brand looks to reach new markets and to target new customer demographics, including millennials.

Because repeat customers appreciate the consistent quality of Belmond’s hotels, trains and cruises, an important part of Belmond’s strategy is to promote Belmond properties through various cross-selling efforts to engage with Belmond's loyal customer base. These include gifts cards, customer relationship management systems and other customer recognition programs, worldwide preferred travel agent programs, and direct communications with customers. In 2019, the Company will continue to invest in the roll-out of a business intelligence system to further enhance the effectiveness of its marketing and communication strategy to ensure content is tailored, targeted and personalized in accordance with individual customer preferences.

Belmond’s marketing strategy also focuses on public relations, which management believes is a highly cost-effective marketing tool for luxury properties. Because of the unique nature of Belmond’s portfolio, guests often hear about Belmond’s hotels and other travel products through word-of-mouth or published articles. Belmond has an in-house public relations office in London and representatives in 14 countries worldwide, including third-party public relations firms under contract, to promote its properties through targeted newspapers, general interest and travel magazines, and broadcast, online and other media.

Corporate Social Responsibility

Belmond is committed to the implementation of responsible business practices furthering the sustainability of tourism and seeks to ensure that its properties and corporate offices engage with their local communities and environments in a positive manner through their ongoing activities. Examples of these are as follows:

• Belmond ~~has~~is ~~continued~~a ~~its~~member ~~association~~of ~~with~~ the Sustainable Restaurant Association. ~~The food~~ and ~~beverage~~will ~~operations~~continue ofto ~~all~~be ofadvised ~~Belmond's~~by ~~properties~~its ~~will~~food besustainability, ~~assessed~~environmental inresponsibility ~~2018~~and toethical ~~measure~~sourcing ~~and~~standards ~~benchmark~~during ~~their~~the ~~sustainability~~coming ~~credentials~~year. ~~Belmond~~In isaddition, the ~~first~~food ~~global~~and ~~luxury~~beverage ~~hospitality~~operations ~~brand~~of toBelmond ~~have~~Le ~~undertaken~~Manoir ~~this~~aux ~~third~~Quat'Saisons ~~party~~will ~~testing.~~continue ~~This~~to ~~testing~~be ~~will~~fully ~~continue~~assessed toin ~~inform~~2019 ~~Belmond's~~to ~~minimum~~measure ~~food~~and benchmark sustainability, ~~environmental~~credentials. ~~responsibility~~The ~~and~~UK ~~ethical~~hotel ~~sourcing~~continues ~~standards~~to ~~during~~support the ~~coming~~local ~~year~~community, source local food wherever possible, and compost waste.

• In ~~London~~Myanmar, ~~Belmond~~the ~~received~~ship adoctor ~~Certificate~~ of ~~Recognition~~Belmond ~~from~~Road ~~Mayor~~to ~~Sadiq~~Mandalay ~~Khan~~has ~~for~~run ~~its~~community ~~"exemplary~~activities ~~contribution~~along ~~to volunteering" in~~ the ~~city's~~Ayeyarwady ~~Team~~River ~~London awards. Activities~~ in ~~2017~~a ~~included~~program ~~volunteering~~dating ~~with~~back ato ~~local~~1995. ~~learning~~These ~~disabilities~~include ~~team, introducing~~ a ~~reading~~free ~~and~~clinic ~~math~~that ~~mentoring~~treats ~~program~~an ~~for~~average ~~disadvantaged~~of ~~children~~2,000 ~~and~~people ~~taking~~per ~~part~~month. inAmong ~~several~~other ~~local~~ community ~~initiatives~~activities ~~that~~are ~~contributed~~the toconstruction ~~the~~and ~~London~~long-term ~~corporate~~support ~~office's~~of ~~neighborhood~~25 ~~being~~schools, ~~awarded~~and airrigation ~~Britain~~and solar power projects in ~~Bloom~~remote ~~award~~villages.

• InOur ~~the~~diverse ~~U.K.,~~activities ~~Belmond~~in ~~Manoir~~southeast ~~aux~~Asia ~~Quat'Saisons~~include ~~supports~~supporting ~~local~~a ~~community~~turtle ~~organizations~~conservation foundation, ~~schools~~beach cleaning, and anagricultural, ~~animal~~water ~~sanctuary.~~purification Itand isrecycling anprograms ~~active~~in ~~member~~Bali. ofWe ~~the~~support ~~Sustainable~~an ~~Restaurant~~orphanage ~~Association~~in ~~and~~Laos, istrain ~~committed~~students toof ~~sourcing~~a ~~local~~hospitality ~~food~~school ~~wherever~~in ~~possible,~~Cambodia ~~nuturing~~ and ~~expanding~~recycle ~~its~~retired ~~organic~~linens ~~gardens,~~to ~~composting~~those ~~waste,~~in ~~and~~need ~~caring~~near ~~for~~several ~~the~~of ~~environment~~our ~~by,~~hotels. ~~among~~Belmond ~~other~~Napasi ~~things,~~in ~~collecting~~Koh ~~waste~~Samui ~~kitchen~~has ~~oils~~received ~~and~~a ~~fats~~Silver ~~and~~G-Green ~~delivering~~Award ~~them~~from toThailand's aDepartment ~~recyling~~of ~~plant~~Environmental toQuality be& ~~converted into biofuel~~Promotion.

• In ~~Myanmar~~Russia, ~~the~~Belmond ~~ship~~Grand ~~doctor~~Hotel ofEurope ~~Belmond~~works ~~Road~~with tolocal ~~Mandalay~~orphanages ~~has~~and ~~run~~youth ~~community~~organizations ~~activities~~to ~~along~~support ~~the~~those ~~Ayeyarwady River~~ in aneed. ~~program~~The ~~dating~~hotel ~~back~~supports toa ~~1995.~~house ~~These~~in ~~include~~the aSOS ~~free~~children's ~~clinic~~village ~~that~~outside ~~treats~~of anSt. ~~average~~Petersburg offor ~~2,000~~young people ~~per~~without ~~month~~families, ~~with~~where ~~plans~~five tochildren ~~open~~aged abetween ~~new~~12 ~~operating~~and ~~theater~~15 toyears beold ~~staffed~~are bycurrently abeing ~~volunteer~~cared ~~surgeon~~for. ~~Among~~The ~~other~~hotel ~~community~~has ~~activities~~also ~~are~~introduced ~~the~~a ~~construction~~greenhouse ~~and~~program ~~long-term~~to ~~support~~educate ofchildren 25in ~~schools~~growing, and ~~irrigation~~the ~~and~~importance ~~solar~~of ~~power~~fresh ~~projects~~organic ~~in remote villages~~vegetables.

• ~~Our~~In ~~many~~the ~~diverse~~U.S., ~~activities~~Belmond Charleston Place created and coordinates the Charleston Chefs’ “Feed the Need” Program in ~~southeast~~which ~~Asia~~local ~~include~~hotels, ~~supporting~~restaurants and caterers provide weekly meals in food shelters for up to 500 persons. The hotel also introduced a ~~turtle~~"Teach ~~conservation~~the ~~foundation~~Need" program, ~~beach~~teaching ~~cleaning,~~hospitality ~~and~~skills ~~water~~to ~~purification~~at-risk high school students and ~~recycling~~helping ~~programs~~them infind ~~Bali~~employment. A new program, ~~supporting~~"Ben's anFriends," ~~orphanage~~helps those in ~~Laos,~~the hospitality industry overcome drug- and ~~supporting~~alcohol-related problems. In addition, every Christmas, the hotel organizes a ~~water~~luncheon ~~conservation~~for ~~project~~2,000 ~~involving~~disadvantage ~~dam~~local ~~construction~~people, inalong ~~Koh~~with ~~Samui~~providing gifts such as winter coats. In 2018, ~~Thailand~~the hotel raised over $500,000 to help fund these endeavors.

• InAlso ~~Russia~~in the U.S., Belmond ~~Grand~~El ~~Hotel~~Encanto ~~Europe~~is ~~works~~pursuing ~~with~~a ~~local~~number ~~orphanages~~of ~~and~~community ~~youth~~initiatives ~~organizations~~such toas support ~~those~~of inlow-income ~~need~~families and local shelters. ~~The~~It ~~hotel~~fundraises ~~supports~~for aand ~~house~~organizes volunteering in ~~the~~support ~~SOS~~of ~~children's~~Youth ~~village~~Interactive ~~outside~~and ofGirls StInc., ~~Petersburg~~charities for underserved young people. ~~without~~The ~~families,~~hotel ~~where~~supports ~~five~~a ~~children~~range ~~aged~~of ~~between~~eco 12initiatives ~~and~~at 15an ~~years~~island ~~old~~national ~~are~~park ~~currently~~including ~~being~~habitat ~~cared~~restoration ~~for~~and education. The hotel's ~~has~~Sustainability ~~also~~Committee ~~introduced~~spearheads along-term ~~greenhouse~~environmental ~~program to educate children in growing~~initiatives, ~~and the importance of. fresh organic vegetables.~~

• In the U.S., Belmond Charleston Place created and coordinates the Charleston Chefs’ “Feed the Need” Program in which local hotels, restaurants and caterers provide weekly meals in food shelters for up to 500 persons. The hotel also introduced a "Teach the Need" program, teaching hospitality skills to at-risk high school students and helping them find employment. A new program, "Ben's Friends," helps those in the hospitality industry overcome drug- and alcohol-related problems. In addition, every Christmas, the hotel organizes a luncheon for 2,000 disadvantage local people, along with providing gifts such as winter coats.

• Also in the U.S., Belmond El Encanto is pursuing a number of community initiatives such as donating clothing, toys and other items to low-income families and local shelters. In addition, staff participate in charity races and volunteer as stewards. The hotel has sponsored disadvantaged children to travel to an island national park to learn about its ecosystem. The hotel's Sustainability Committee spearheads long-term environmental initiatives, which include water conservation through faucet aerators, laundry reduction, eco cleaning products and the introduction of moisture-resistant plants to its famous gardens.

• In Brazil, Belmond Copacabana Palace has continued to develop the sustainability and community programs it initiated in 2009 and the long-standing community programs it formalized in 2012. It now recycles more than 50% of its waste, uses 100% renewable energy, recycles 100% of its plastic bottles, donates retired linen and clothing to local charities, works with sustainable food and flower suppliers, and supports Solar Meninos de Luz, a local children's philanthropic organization.

• Also in Brazil, Belmond Hotel das Cataratas is committed to environmental conservation programs including Projeto Carnivoros do Iguaçu, which has overseen a substantial rise in numbers of endangered animals such as pumas and jaguars

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~~within~~which ~~the~~include ~~surrounding~~water ~~national~~conservation ~~park.~~through ~~The~~faucet ~~hotel~~aerators, ~~also~~laundry ~~sponsors~~reduction, aeco ~~local~~cleaning ~~young~~products ~~people's training program offering youth apprenticeships~~ and ~~work placements for disadvantaged young people. The hotel is committed to environmental conservation and ecological operating programs and was~~ the ~~first~~introduction ~~South~~of ~~American~~moisture-resistant ~~hotel~~plants to beits ~~certified~~famous ~~for ISO14001– Sustainability and SA8000–Social Responsibility~~gardens.

• ~~Our~~In ~~Peru~~Brazil, ~~hotels~~Belmond ~~and~~Copacabana ~~trains~~Palace ~~undertake~~has acontinued ~~wide~~to ~~range~~develop ofthe ~~community and~~ sustainability ~~initiatives. These include support of local artisans~~ and ~~farmers~~community ~~who~~programs ~~receive~~it ~~help~~initiated toin ~~create~~2009 ~~products~~ and ~~grow~~the ~~crops~~long-standing ~~that~~community ~~our~~programs ~~Peru~~it ~~hotels~~formalized ~~and~~in ~~trains purchase at fair trade prices~~2012. ~~Belmond~~It ~~Palacio~~now ~~Nazarenas~~recycles ~~has~~more ~~developed~~than an50% ~~edible~~of ~~herb~~its ~~garden~~waste, ~~Belmond~~uses ~~Hotel~~100% ~~Rio~~renewable ~~Sagrado a small orchard~~energy, ~~and~~recycles ~~Belmond~~100% ~~Sanctuary Lodge a small greenhouse – all~~ of ~~which~~its ~~supply~~plastic ~~their~~bottles, ~~kitchens.~~donates ~~PeruRail~~retired ~~supports~~linen ~~community alpaca breeding~~ and ~~wool~~clothing ~~weaving projects and donates blankets~~ to local ~~communities.~~charities, ~~Additional~~works ~~community~~with ~~programs~~sustainable ~~range~~food ~~from planting thousands of trees to clearing waste from riverbanks~~ and ~~beaches.~~flower ~~Cultural initiatives include the provision of free train travel for disadvantaged children to Machu Picchu~~suppliers, ~~community~~and ~~initiatives~~supports toSolar ~~improve~~Meninos ~~safety~~de ~~along the train tracks~~Luz, ~~and~~ a ~~film-making program that records~~ local ~~people~~children's ~~sharing~~philanthropic ~~local traditions and memories~~organization. One particular program, Cconamuro, helps train villagers in hospitality skills, enabling them to welcome our guests on cultural day visits that include lunch and the chance to discover aspects of local life.

•

Also in Brazil, Belmond Hotel das Cataratas is committed to environmental conservation programs including Projeto Carnivoros do Iguaçu, which has overseen a substantial rise in numbers of endangered animals such as pumas and jaguars within the surrounding national park. The hotel also sponsors a local young people's training program offering youth apprenticeships and work placements for disadvantaged young people. The hotel is committed to environmental conservation and ecological operating programs, recycling water, soap, uniforms, mattresses and other items. It was the first South American hotel to be certified for ISO14001– Sustainability and SA8000–Social Responsibility.

•

Our Peru hotels and trains undertake a wide range of community and sustainability initiatives. These include support of local artisans and farmers who receive help to create products and grow crops that our Peru hotels and trains purchase at fair trade prices. Belmond Palacio Nazarenas has developed an edible herb garden, Belmond Hotel Rio Sagrado a small orchard, and Belmond Sanctuary Lodge a small greenhouse – all of which supply their kitchens. PeruRail supports community alpaca breeding and wool weaving projects and donates blankets to local communities. Additional community programs range from planting thousands of trees to clearing waste from riverbanks and beaches. Cultural initiatives include the provision of free train travel for disadvantaged children to Machu Picchu, community initiatives to improve safety along the train tracks, helping villagers to set up local businesses, and a film-making program that records local people sharing local traditions and memories. One particular program, Cconamuro, trains villagers in hospitality skills, enabling them to welcome our guests on cultural day visits that include lunch and the chance to discover aspects of local life.

•

Our Italian hotels are active in a range of sustainability and community initiatives. Our two hotels in Sicily have implemented water-saving initiatives including rainwater tanks that help sustain a new Chef's Garden, have joined local children in the annual clean-up of nearby Isola Bella beach, and helped raise funds for a local hospital. Belmond Villa San Michele hosts an annual "dinner in the dark" in support of the Italian Union of the Blind and Partially Sighted, whose students serve guests. In addition, staff from the hotel volunteered with Angeli del Bello, a civic volunteer organization, to clean a public park in Florence. Belmond Hotel Cipriani continued its support of the Senegal village from which its Night Concierge hails. Staff raise funds for the village and also shipped a sea container of mattresses, appliances and other goods no longer needed by the hotel to the village.

• In Mexico, Belmond Maroma Resort & Spa plants approximately 850 sapling trees monthly for reforestration, recycles retired clothing and linen to the Red Cross, and takes part in community projects supporting local fauna including sea turtles, melipona bees and sharks.

Industry Awards

Belmond has gained a worldwide reputation for quality and service in the luxury segment of the leisure and business travel markets. Over the years, Belmond’s properties have won numerous national and international awards given by consumer or trade publications such as Condé Nast Traveller, Travel + Leisure, The Times and The Sunday Times (UK) and Forbes.com and by private subscription newsletters such as Andrew Harper’s Hideaway Report, or industry bodies such as TripAdvisor. Among the Company's awards in ~~2017~~2018, Belmond Le Manoir aux Quat'Saisons was awarded "Best Worldwide Hotel" at The Times and Sunday Times Reader Awards, Venice Simplon-Orient-Express won a number of ~~the~~design ~~Year~~awards including "Best Specialty Award" at the Gold Key Awards (New York) and "~~Rural~~Best ~~Hotel~~Suite" at AHEAD Europe awards. At the brand level, in 2018 Belmond was voted "Best Rail Operator of the Year" byat ~~Food~~The &Telegraph Travel ~~magazine,~~Awards ~~Belmond~~for ~~Eagle~~the ~~Island~~second ~~Lodge~~year ~~won~~running, aand ~~design~~No.1 ~~award~~"Most ~~for~~Excellent" ~~best~~Small ~~creativity~~Hotel Chain category on TripAdvisor, ~~innovation~~as ~~and~~voted ~~excellence~~by inreaders; ~~the~~won "~~Lodge~~Travel &Brand ~~Tented~~of ~~Camps~~the Year" (£25-100 million revenue category) at the ~~AHEAD~~TTG ~~MEA~~Travel ~~Design~~Marketing ~~Conference,~~Awards ~~and~~2018; ~~Belmond~~ranked ~~Andean~~one ~~Explorer~~of ~~received~~ the ~~award~~"Best ~~for~~Luxury ~~excellence~~Hotel Brands in ~~hospitality~~the ~~design~~World at(4th) ~~the~~by ~~New~~Luxury ~~York~~Travel ~~City~~Intelligence; ~~Gold~~and ~~Key~~was ~~Excellence~~named in"British Luxury Brand of the ~~Hospitality~~Year" ~~Design~~at ~~award~~the ~~ceremony~~Walpole British Luxury Awards. The awards are based on opinion polls of the publications’ readers or the professional opinions of journalists or panels of experts. The awards are believed to influence consumer choice and are therefore highly prized.

Competition

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Some of Belmond’s properties are located in areas with numerous competitors. Competition for guests in the hospitality industry is based generally on reputation and name recognition, the convenience of location, the quality of the property and services offered, room rates and menu prices, the range and quality of food services and amenities offered, and types of cuisine.

Belmond’s strategy is to acquire, invest or manage only hotels which have special locations and distinctive character, offering unique travel experiences. Many are in areas with interesting local history or high entry barriers because of zoning restrictions. Belmond builds its competitive advantage by offering high quality service and cuisine, usually with a local flavor. Typically, therefore, Belmond competes by providing a special combination of location, character, cuisine, service and experiential activities rather than relying on price competition.

Belmond’s luxury tourist trains have no direct competitors at present. Other passenger trains operate on the same or similar routes, including the Cusco-Machu Picchu line of PeruRail, but management believes Belmond’s trains and onboard service are unique and of such superior quality that guests consider a Belmond train journey more of a luxury experience and an end in itself than merely a means of transport.

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Employees

Belmond currently employs approximately 9,~~100~~300 full-time-equivalent persons. Approximately 6,~~300~~450 persons are employed in the hotels, 2,700 in the trains and cruises business, and ~~131~~130 in central administration, sales and marketing and other activities. Management believes that Belmond’s ongoing labor relations are satisfactory. Through its various training and other human resources programs, Belmond seeks to attract, develop and retain top employees providing authentic local experiences to guests and to promote internal candidates for leadership positions.

Government Regulation

Belmond and its properties are subject to numerous laws and government regulations such as those relating to the preparation and sale of food and beverages, liquor service, health and safety of premises and employees, development and construction, customer and employee data privacy, employee relationships and welfare, environmental matters, waste and hazardous substance handling and disposal, and planning and zoning rules.

ITEM 1A. Risk Factors

Belmond’s business is subject to various risks, including those described below. Investors should carefully consider the “Risk Factors” below. These are separated into three general groups:


•	risks related to the proposed sale of the Company to LVMH Moët Hennessy—Louis Vuitton SE ("LVMH"), Palladio Overseas Holding Limited and Fenice Ltd.,


•	risks of Belmond’s business,

• risks ~~relating~~related to Belmond’s financial condition and results of operations, and


•	risks of investing in class A common shares.

The risks described below are those that management considers to be the most significant for purposes of Item 503(c) of Regulation S-K.

If any of these risks occurs, Belmond’s business, prospects, financial condition, results of operations and/or cash flows could be materially adversely affected. When Belmond states below that a risk may have a material adverse effect, this means the risk may have one or more of these effects. In that case, the market price of the class A common shares could decline.

Risks Related to the Sale of the Company

There can be no assurance that the Company's proposed sale to LVMH will be consummated in the time frame or manner currently anticipated, or at all, which could materially adversely affect our business, results of operations and/or share price.

The Company's proposed sale to LVMH remains subject to various customary closing conditions, including the receipt of regulatory approvals in certain foreign jurisdictions, none of which are within the Company's control. If any condition to the closing of the

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sale is not satisfied or, if permissible, waived, the sale cannot be completed. In addition, satisfying the conditions to the closing of the sale may take longer than we expect. There can be no assurance that the remaining conditions to closing will be satisfied, or that other events will not intervene to delay or result in the failure to consummate the sale. Any delay in completing or failure to complete the proposed sale to LVMH, including any delay in receiving or failure to timely receive required regulatory approvals, may cause uncertainty and other negative consequences that could adversely affect our business, financial position and results of operations.

The Company can give no assurance that the sale to LVMH will be completed, in which case the Company's shareholders would not realize the anticipated benefits from the sale, and investor confidence may decline, which may adversely affect our share price. See also Risks of Investing in Class A Common Shares—The price of the class A common shares may fluctuate significantly, which may make it difficult for shareholders to sell the class A common shares when they want or at desired prices. Under the terms of the Merger Agreement, if the Merger Agreement is terminated under certain circumstances, we will be required to pay to LVMH a termination of $92,261,000. If triggered, the payment of the termination fee may negatively impact our results of operations, financial condition and cash flow.

While the proposed sale to LVMH is pending, the Company will be subject to business uncertainties that could materially adversely affect the Company's financial condition and results of operations as well as the future of the Company's business.

Uncertainty about the effect of the sale to LVMH on the Company's key personnel, vendors, partners and/or guests may negatively impact the Company's business. Whether or not the sale to LVMH is ultimately consummated, the Company's employees may experience uncertainty about their future roles, which might adversely affect the Company's ability to retain, hire and motivate key personnel and other employees. In addition, uncertainty relating to the pending sale may cause the Company to lose guests and the Company's vendors, partners and other parties with which the Company maintains business relationships may seek to alter or terminate their relationships with the Company. These factors, individually or collectively, may negatively impact the Company's financial performance and business, and any delay in completing the proposed sale to LVMH may further increase these uncertainties and the adverse effects related thereto.

Disruption of management's attention from the Company's ongoing business operations due to the pending sale to LVMH may adversely affect the Company's business and results of operations.

The Company has expended, and will continue to expend, significant management resources in an effort to complete the proposed sale to LVMH. Management's attention may be diverted away from the day-to-day operations of the Company's business and execution of its existing business plan in its efforts to complete the sale. This diversion of management resources could disrupt operations and have an adverse effect on the Company's operating results and business.

The Merger Agreement restricts the conduct of the Company's business prior to the completion of the sale to LVMH and limits the Company's ability to pursue strategic alternatives, which could negatively impact the Company's business and results of operations.

Under the Merger Agreement, the Company is restricted from taking certain actions without LVMH's consent while the sale to LVMH is pending, including, among other matters, from making certain investments or acquisitions and selling certain assets, engaging in certain capital expenditures, and incurring certain indebtedness. These restrictions may prevent the Company from pursuing otherwise attractive business opportunities or exercising its business strategy pending the closing of the sale, which could have an adverse effect on the Company's business, financial condition or results of operations.

In addition, subject to certain exceptions, the Merger Agreement prohibits the Company from soliciting or engaging in discussion with respect to certain alternative acquisition transactions and, in certain circumstances, the Company will be required to pay a termination fee of $92,261,000 to LVMH in order to terminate the Merger Agreement and pursue such an alternative transaction. These provisions may discourage third parties from pursuing business opportunities with the Company and limit the Company's ability to pursue opportunities that could result in greater value to the Company's shareholders.

Risks of Belmond’s Business

Belmond’s operations are subject to adverse factors generally encountered in the international lodging, hospitality and travel industries.

In addition to the specific conditions, risks and uncertainties discussed in the risk factors below and under Item 7—Management's Discussion and Analysis, these adverse factors include:

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•	cyclical downturns arising from changes in economic conditions and general business activities in the United States and European and other countries which impact consumer confidence, levels of travel and demand for travel products,


•	rising travel costs such as increased air travel fares and higher fuel costs, and reduced capacities of airlines and other transport services to specific destinations,


•	political instability of the governments of some countries where Belmond’s properties are located, resulting in depressed demand,


•	less disposable income of consumers and the traveling public,


•	dependence on varying levels of tourism, business travel and corporate entertainment,


•	changes in popular travel patterns,


•	competition from other hotels, trains, cruises and leisure time activities,

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•	periodic local oversupply of guest accommodation in specific locations, which may adversely affect occupancy and actual room rates achieved,


•	increases in operating costs at Belmond’s properties due to inflation and other factors which may not be offset by increased revenues,


•	economic and political conditions affecting market demand for travel products, including recessions, civil disorder, diplomatic relations, and acts or threats of terrorism,


•	foreign exchange rate movements causing fluctuations in reported revenues, costs and earnings and impacting demand for Belmond's properties,


•	failure to comply with applicable anti-corruption laws or trade sanctions, potentially exposing Belmond to claims for damages, financial penalties and reputational harm,


•	restrictive changes in laws and regulations applicable to zoning and land use, labor and employment, health, safety and the environment, and related governmental and regulatory action,


•	costs and administrative burdens associated with compliance with applicable laws and regulations relating to privacy and customer and employee personal data protection, licensing, labor and employment, and other operating matters,


•	changing national and local governmental tax laws and regulations, which may increase the taxes Belmond is required to pay,


•	expropriation or nationalization of properties by foreign governments of countries where our hotels and other properties are located, and limitations on repatriation of local earnings or withdrawal of local investment,


•	availability and cost of capital to fund construction, renovations and investments,


•	adverse weather conditions such as severe storms that may temporarily impact demand, destructive forces like fire or flooding that may result in temporary closure of properties, water levels that may impact the Company's cruise operations, or landslides or engineering works that may impact train operations,


•	reduction in domestic or international travel and demand for Belmond’s properties due to actual or threatened acts of terrorism or war, or actual or threatened outbreak of contagious disease, and heightened travel security measures and restrictions instituted in response to these events,


•	interference with customer travel due to accidents or industrial action, increased transportation and fuel costs, and natural disasters,

• with regard to Belmond's hotel management agreements, compliance by Belmond as manager with its contractual performance and financial obligations, maintenance of satisfactory relationships between Belmond as manager and the ~~property owner, and the property owner's ability to meet financial requirements in the contracts such as necessary capital expenditure,~~

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property owner, and the property owner's ability to meet financial requirements in the contracts such as necessary capital expenditure,


•	seasonality, in that many of Belmond’s hotels and tourist trains are located in the northern hemisphere where they operate at low revenue or close during the winter months, and


•	reliance on third parties to haul the Belmond owned carriages comprising the Company's luxury train businesses.

The effects of many of these factors vary among Belmond’s hotels and other properties because of their geographic diversity and the laws and regulations of the particular countries in which these hotels and other properties are located. The global economic downturn in 2008 and 2009 preceded by the shock of terrorist attacks and resulting public concerns about travel safety, continued terrorist attacks, regional conflicts in Iraq, Afghanistan, Ukraine and Crimea, as well as in Thailand, Myanmar and other parts of the world, the threatened flu and Ebola epidemics and the outbreak of the Zika virus, and political instability in Brazil, had and may continue to have, varying adverse effects on Belmond's results of operations. In addition, natural disasters, including weather events, such as Hurricanes Irma and Jose in 2017, which impacted both Belmond Cap Juluca on the island of Anguilla in the British West Indies and Belmond La Samanna on St. Martin in the French West Indies, can materially ~~effect~~affect the Company's results of operations.

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If revenue decreases at Belmond’s properties, its expenses may not decrease at the same rate, thereby adversely affecting Belmond’s profitability and cash flow.

Ownership and operation of Belmond’s properties involve many relatively fixed expenses such as personnel costs, interest, rent, property taxes, insurance and utilities. If revenue declines when demand weakens, Belmond may not be able to reduce these expenses to the same degree to preserve profitability.

The hospitality industry is highly competitive, both for customers and for acquisitions of new properties.

Some of Belmond’s properties are located in areas where there are numerous competitors seeking to attract customers, particularly in city centers and resort locations. Competitive factors in the hospitality industry include:


•	reputation and name recognition,


•	convenience of location,


•	the quality of the physical property and services offered,


•	room rates and menu prices,


•	the range and quality of food services and amenities offered, and


•	types of cuisine.

New or existing competitors could significantly lower rates or offer greater conveniences, services or amenities, or significantly expand, improve or introduce new facilities and amenities in the markets where Belmond operates, thereby adversely affecting profitability. Also, demographic, geographic or other changes in one or more of Belmond’s markets could impact the convenience or desirability of its hotels and so could adversely affect their operations and Belmond's local market share.

Belmond competes for hotel acquisition and management agreement opportunities with others such as real estate investors and hotel operators. These competitors may be prepared to accept lower levels of financial return or a higher level of financial risk than Belmond can prudently manage. This competition may have the effect of reducing the number of suitable acquisition, lease and management agreement opportunities offered to Belmond or on which it could successfully bid, and the effect of increasing Belmond's costs or reducing its operating margins because the bargaining power of property owners seeking to sell or to enter into management agreements is increased.

The hospitality industry is heavily regulated, including with respect to food and beverage sales, employee relations and welfare, health and safety of premises and employees, development and construction, customer and employee data privacy, and environmental matters, and compliance with these laws and regulations and with future changes to them could reduce profitability of properties that Belmond owns, leases or manages.

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Belmond’s various properties are subject to numerous laws and government regulations, including those relating to the preparation and sale of food and beverages, liquor service, health and safety of premises, development and construction, and the protection of customers' and employees' personal data. The properties are also subject to laws governing Belmond’s relationship with employees in such areas as minimum wage and maximum working hours, overtime, working conditions, health and safety, hiring and firing employees and work permits.

The success of renovating and expanding existing properties depends upon obtaining necessary construction permits, approvals or zoning variances from local authorities. Failure to obtain or delay in obtaining these permits could adversely affect Belmond’s strategy of increasing revenues and earnings through renovation and expansion of existing properties.

Belmond is also subject to laws and regulations relating to the environment and the handling of hazardous substances that may impose or create significant potential environmental liabilities, even in situations where the environmental problem or violation occurred at a property before Belmond acquired it or without Belmond’s knowledge. Environmental laws may also impose liability for improper handling or disposal of hazardous substances or improper management of certain hazardous material which might be present at Belmond properties, such as asbestos or lead-based paint. Belmond’s trains and cruises must comply with environmental regulation of air emissions, wastewater discharges and fueling. Existing environmental laws and regulations may be revised or new laws and regulations related to global climate change, air quality, hazardous substances, wastes, or other environmental and health concerns may be adopted or become applicable to Belmond.

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Although Belmond does not currently anticipate that the costs of complying with environmental laws will materially adversely affect its businesses, Belmond cannot assure that it will not incur material costs or liabilities in the future, due to the discovery of new facts or conditions, the occurrence of new releases of hazardous materials, or a change in environmental laws.

Belmond could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act and similar anti-corruption laws.

Belmond's business operations are subject to anti-corruption laws and regulations, including the U.S. Foreign Corrupt Practices Act (“FCPA”) and the U.K. Bribery Act ("UKBA"). The FCPA, UKBA and other anti-corruption laws in other jurisdictions prohibit companies and their intermediaries from making improper payments to government officials and others for the purpose of obtaining or retaining business. Belmond operates in many parts of the world that have experienced governmental corruption to some degree, which could reduce the Company's ability to compete successfully in those jurisdictions while remaining in compliance with the FCPA, UKBA and local laws. Belmond trains its employees in its Code of Conduct and Anti-Corruption Policy and Procedures and also requires its third-party business partners and agents and others who work with Belmond or on its behalf to comply with Belmond's anti-corruption policies. Belmond also has procedures and controls in place to monitor internal and external compliance. Belmond cannot provide assurance, however, that its internal controls and procedures will adequately protect against reckless or criminal acts committed by employees or third parties with whom Belmond works. If Belmond found, or it was alleged, that Belmond's employees or third parties with whom it works had engaged in such acts, Belmond's business could be disrupted and Belmond could be subject to criminal or civil penalties which could have a material adverse effect on Belmond's results of operations, financial condition and cash flows.

Belmond’s acquisition, expansion and development strategy may be less successful than expected and, therefore, Belmond's growth may be limited.

Subject to the constraints imposed by the Merger Agreement, Belmond intends to increase its revenues and earnings in the long term by acquiring new properties, managing additional properties under contract, and expanding existing properties. The ability to pursue new growth opportunities successfully will depend on management’s ability to:


•	identify properties suitable for acquisition, management and expansion,


•	negotiate purchases or construction on commercially reasonable terms or successfully negotiate management agreements of properties Belmond does not own or in which it has only a non-controlling interest,


•	obtain the necessary financing and government permits or approvals,


•	build on schedule and with minimum disruption to guests, and


•	integrate new properties into Belmond’s operations.

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Also, the acquisition and/or management of properties in new locations may present operating and marketing challenges that are different from those experienced at Belmond’s existing locations. Belmond can provide no assurance that management will succeed in this growth strategy.

Successful new project development and major expansions depend on timely completion within budget and on satisfactory market conditions. Risks that could affect a project include:


•	construction delays or cost overruns that may increase project costs,


•	delay or denial of zoning, occupancy and other required government permits and authorizations,


•	write-off of development costs incurred for projects that are not pursued to completion,


•	natural disasters such as earthquakes, hurricanes, floods or fires,


•	defects in design or construction that may result in additional costs to remedy, or that require all or a portion of a property to be closed during the period needed to rectify the situation,


•	inability to raise capital to fund a project because of poor economic or financial conditions,

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•	claims and disputes between Belmond and other contracting parties resulting in delay, monetary loss or project termination,


•	governmental restrictions on the nature or size of a project or timing of completion,


•	labor shortages of qualified trades people or labor disputes,


•	changes in market conditions such as oversupply that may affect a project's profitability, and


•	discovery or identification of environmental conditions that could require unanticipated studies, cleanups, approvals, increased costs, time delays or even project termination.

Occurrence of any of these events could adversely affect the profitability of planned expansions and new developments.

Belmond may be unable to obtain the necessary additional capital to finance the growth of its business.

The acquisition, expansion and development of luxury assets, as well as the ongoing renovations, refurbishments and improvements required to maintain or upgrade newly acquired, expanded or existing properties, are capital intensive. The availability of internally generated cash flow, future borrowings and access to equity capital markets to fund these acquisitions, expansions and projects depend on prevailing market conditions and the acceptability of available financing terms. Belmond can give no assurance that future borrowings, asset disposition or other capital raising opportunities will be available to Belmond, or available on acceptable terms, in an amount sufficient to fund its needs. In addition, the restrictions imposed by the Merger Agreement prior to the completion of the acquisition of the Company by LVMH may have an affect on the Company's ability to invest in its operations. Failure to make investments necessary to maintain or improve Belmond's properties could adversely affect the performance of Belmond's properties. See also Risks Related to the Sale of the Company—The Merger Agreement restricts the conduct of the Company's business prior to the completion of the sale to LVMH and limits the Company's ability to pursue strategic alternatives, which could negatively impact the Company's business and results of operations.

Future equity financings may be dilutive to the existing holders of common shares. Future debt financings may require restrictive covenants that would limit Belmond’s flexibility in operating its business. See also “Risks Relating to Belmond’s Financial Condition and Results of Operations” and "Risks of Investing in Class A Common Shares" below. See also Risks Related to the Sale of the Company.

Belmond’s operations may be adversely affected by extreme weather conditions and the impact of natural disasters, and insurance may not fully cover these and other risks.

Belmond operates properties in many locations, each of which is subject to local weather patterns affecting the properties and customer travel. As Belmond’s revenues and operating performance are dependent on the revenues and performance of individual properties, extreme weather or other environmental conditions from time to time can have a major adverse impact upon individual properties or particular regions, resulting in temporary loss of revenue or even closure while repairs are made. Furthermore, depending on the location and configuration of certain Belmond properties, such as along coasts, lagoons or rivers, they may be subject to possible adverse consequences of global climate change, including water levels or increased extreme weather patterns.

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properties or particular regions, resulting in temporary loss of revenue or even closure while repairs are made. Furthermore, depending on the location and configuration of certain Belmond properties, such as along coasts, lagoons or rivers, they may be subject to possible adverse consequences of global climate change, including water levels or increased extreme weather patterns.

Belmond carries property, liability, hotel business interruption and other kinds of insurance in amounts management deems reasonably adequate, but claims may exceed the insurance limits or be outside the scope of coverage. Also, insurance against some risks may not be available to Belmond on commercially reasonable terms, or available at all, requiring Belmond to self-insure against possible loss. Losses from natural catastrophes may reduce the number of insurance carriers and products in the affected market and can increase insurance premiums for these products.

If the relationships between Belmond and its employees were to deteriorate, Belmond may be faced with labor shortages or stoppages, which would adversely affect the ability to operate its properties and could cause reputational harm to Belmond.

Belmond’s relations with its employees in various countries could deteriorate due to disputes related to, among other things, wage or benefit levels, working conditions or management’s response to changes in government regulation of workers and the workplace. Operations rely heavily on employees to provide a high level of personal service, and any labor shortage or stoppage caused by poor relations with employees, including unionized labor, could adversely affect the ability to provide those services, which could reduce occupancy and revenue and damage Belmond’s reputation.

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Belmond’s owned hotels are subject to risks generally incidental to the ownership and operation of commercial real estate and often beyond Belmond's control.

These include:


•	fluctuating values of commercial real estate and potential asset value impairments due to operating performance falling short of expectation or other triggering events,


•	changes in national, regional and local economic and political conditions,


•	changes in interest rates and the availability, cost and terms of financing,


•	the impact of present or future government legislation and regulation (including environmental and eminent domain laws),


•	the ongoing need for capital improvements to maintain or upgrade properties,


•	potential discovery of environmental conditions associated with prior or present operations on site or nearby, and proper management and disposal of wastes and hazardous substances,


•	changes in property taxes and operating expenses,


•	the potential for uninsured or underinsured losses, and


•	limited ability to reduce the relatively high fixed costs of operating owned commercial real estate if revenue declines.

Belmond continues to review its portfolio to identify properties that are non-core to its business and expects any future asset sales would be encumbered by long-term management agreements for Belmond. In an unfavorable commercial real estate market, Belmond may be unable to sell properties at values it is seeking, particularly during an economic downturn and weakness in credit markets, or sell them at the pace Belmond had planned, or encumbered by the long-term management agreements it is seeking.

Loss, dilution or infringement of Belmond’s existing brand names or the failure to develop successful new brand names could adversely affect Belmond's business.

In the competitive hotel and leisure industry in which Belmond operates, trademarks and brand names are important in the marketing, promotion and revenue generation of Belmond’s properties. Belmond has a large number of trademarks and brand names and expends resources each year on their surveillance, registration and protection in an increasing number of jurisdictions. Belmond may also introduce new brand names in the future. Belmond’s future growth is dependent in part on increasing and developing its brand identities and customers' acceptance of those brands. From time to time, Belmond incurs costs in seeking to protect its intellectual property and in doing so, runs the risk that a court may not uphold its rights. The loss, dilution or infringement of any of Belmond’s brand identities or individual country trademark registrations, including any material losses or infringements of its current rights to the "Cipriani" brand, could have an adverse effect on its business, results of operations and financial condition.

~~Belmond operates the Venice Simplon-Orient-Express train under a license of that trademark from SNCF. Termination of that license could have an adverse impact on Belmond's business.~~ 24

Failures in Belmond’s information technology systems or in protecting the integrity of customer, employee and business data could reduce revenue and earnings and result in loss or in reputational harm.

Belmond's business involves the processing, use, storage and transmission of personal information regarding customers, employees and business partners for various business purposes, including marketing and promotions. Belmond is subject to numerous laws and regulations designed to protect personal financial and other information relating to customers, employees and the business, and has established policies and procedures to help protect the privacy and security of this information. These laws and regulations are complex and evolving and may, on occasion, be inconsistent from one jurisdiction to another. Compliance may increase Belmond's operating costs or limit Belmond's ability to market its properties and services. The EU General Data Protection Regulation will become law in May 2018, increasing certain obligations on, and limiting certain uses by, businesses of the personal data of their customers, employees and business partners. The penalties for violation of this new law have increased significantly, with a maximum fine of 4% of group revenue or €20 million, whichever is higher, for the most serious breaches. The impact of Brexit (see "Risks Relating to Belmond's Financial Condition and Results of Operations—Economic downturns and disruptions

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intellectual property and in doing so, runs the ~~financial~~risk ~~markets~~that ~~could~~a ~~adversely~~court ~~affect~~may ~~Belmond's~~not ~~financial~~uphold ~~condition~~its ~~and~~rights. ~~results~~The ofloss, ~~operations"~~dilution ~~below)~~or ~~could~~infringement ~~increase~~of ~~the~~any ~~Company'~~of Belmond’s ~~regulatory~~brand ~~obligations~~identities ~~and/~~or ~~require~~individual ~~the~~country ~~Company~~trademark toregistrations, ~~amend~~including ~~its~~any ~~processes~~material ~~and~~losses ~~controls~~or ~~for~~infringements of its current rights to the ~~use~~"Cipriani" brand, ~~transfer~~could ~~and~~have ~~processing~~an adverse effect on its business, results of ~~personal~~operations ~~data~~and financial condition.

Belmond ~~depends~~operates ~~on its own and third party information technology networks and systems to process, transmit and store company and personal information, and to communicate among its various locations around~~ the ~~world,~~Venice ~~including reservation systems, property management systems, customer and employee databases, administrative systems, and third~~Simplon-~~party~~Orient-Express ~~vendor~~train ~~systems.~~under ~~While~~a ~~Belmond~~license ~~relies on the security~~ of these networks and systems to protect the personal and business information of the Company, customers, employees and business partners, they may be vulnerable to threats such as system, network or Internet failures, security breaches, computer hacking or business disruption, viruses or malicious software programs, employee error, negligence, fraud or misuse, or other unauthorized attempts to access, modify or delete Belmond's company and personal information. Although Belmond has taken steps to address these concerns by implementing network security and internal controls, there can be no assurance that atrademark ~~system~~from ~~failure, unauthorized access, or other compromise will not occur~~SNCF. ~~While~~Termination ~~from time to time third parties attempt to access the Company's network, we are not aware~~ of ~~any~~that ~~instance~~license incould ~~which these attempts~~ have ~~resulted~~an inadverse ~~any~~impact ~~material~~on ~~release of information, degradation or disruption to the Company~~Belmond's ~~network and information systems~~business.

Failures in Belmond’s or its suppliers' information technology systems or in protecting the integrity of customer, employee and business data could reduce revenue and earnings and result in loss or in reputational harm.

Belmond's business involves the processing, use, storage and transmission of personal information regarding customers, employees and business partners for various business purposes, including marketing and promotions. Belmond is subject to numerous laws and regulations designed to protect personal financial and other information relating to customers, employees and the business, and has established policies and procedures to help protect the privacy and security of this information. These laws and regulations are complex and evolving and may, on occasion, be inconsistent from one jurisdiction to another. Compliance may increase Belmond's operating costs or limit Belmond's ability to market its properties and services. The EU General Data Protection Regulation, which became effective in May 2018, increases certain obligations on, and limits certain uses by, businesses of the personal data of their customers, employees and business partners. The penalties for violation of this new law have increased significantly, with a maximum fine of 4% of group revenue or €20 million, whichever is higher, for the most serious breaches. The impact of Brexit (see Risks Relating to Belmond's Financial Condition and Results of Operations—Economic downturns and disruptions in the financial markets could adversely affect Belmond's financial condition and results of operations) could increase the Company's regulatory obligations and/or require the Company to amend its processes and controls and contracts with third parties for the use, transfer and processing of personal data; it may also need to change or supplement its processes for the management and response to any data breach.

Belmond depends on its own and third party information technology networks and systems to process, transmit and store company and personal information, and to communicate among its various locations around the world, including reservation systems, property management systems, customer and employee databases, administrative systems, accounting and payment systems, and third-party vendor systems. While Belmond relies on the security of these networks and systems to protect the personal and business information of the Company, customers, employees and business partners, they may be vulnerable to threats such as system, network or internet failures, security breaches, computer hacking or business disruption, viruses or malicious software programs, employee error, negligence, fraud or misuse, or other unauthorized attempts to access, modify or delete Belmond's company and personal information. Although Belmond has taken steps to address these concerns by implementing network security and internal controls, there can be no assurance that a system failure, unauthorized access, or other compromise will not occur. While from time to time third parties attempt to access the Company's network, we are not aware of any instance in which these attempts have resulted in any material release of information, degradation or disruption to the Company's network and information systems.

Any compromise of Belmond's networks or systems, public disclosure or loss of company or personal information, non-compliance with legal or contractual obligations regarding personal information, or a violation of a privacy or security policy pertaining to personal information could result in disruption to Belmond's operations; loss of revenue or property; damage to Belmond's reputation and loss of confidence of customers, employees and business partners; legal claims or proceedings, including securities class action lawsuits, liability under laws that protect personal information, regulatory penalties, monetary damages, regulatory enforcement actions, fines, and/or criminal or civil prosecution in one or more jurisdictions; decline in Belmond's stock price; and could result in subjecting Belmond to additional regulatory scrutiny, or additional costs and liabilities which could have a material adverse effect Belmond's business, operations or financial condition.

Some Belmond properties are geographically concentrated in countries where national economic downturns, political events or other changing conditions beyond Belmond’s control could disproportionately affect Belmond’s business.

While Belmond’s geographic diversification in 24 countries lessens the dependence of its results of operations on any particular region, Belmond owns seven hotels in Italy and one hotel in Peru and its 50%/50% joint ventures in Peru operate a further five hotels as well as PeruRail. Due to this concentration of properties in these two countries, Belmond’s performance and profitability are more exposed to national or regional events or conditions in Italy and Peru than other countries where Belmond operates, such as:


•	changing local economic and competitive conditions,


•	weakening local currencies compared to the U.S. dollar,

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•	natural and other disasters,


•	new government laws and regulations, and


•	political instability and/or changes in government administrations.

Changing economic, political and regulatory developments in any of the countries in which the Company operates, including in the U.K. in respect of its expected withdrawal from the EU (commonly referred to as "Brexit") and in the U.S. in respect of its evolving trade and immigration policies and the Tax Cut and Jobs Act of 2017, along with the evolving political situation in Ukraine, Brazil and Peru and regional events in Myanmar, could adversely affect the Company's business and results of operations.

Belmond may be unable to manage effectively the risks associated with its joint venture investments, which may adversely impact the operations and profitability of those joint ventures.

Five of Belmond’s hotels and two of its train operations are owned by joint venture companies in which Belmond has an investment of 50% or less and shares control of at least some significant aspects of their businesses, such as expenditure for capital improvements. These joint venture investments of Belmond involve risks different from 100% ownership and control because Belmond’s partners:


•	may be unable to meet their financial obligations to the joint venture,

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•	may have business interests inconsistent with those of Belmond or act contrary to Belmond’s objectives and policies,


•	may cause properties to incur unplanned liabilities or commitments, or


•	may take actions binding on the joint venture without Belmond’s consent or that otherwise may impair Belmond’s operation of the business.

If any of these events occurs, the joint ventures may be subjected to additional risk, and Belmond’s operations could be adversely affected because it may have limited ability to rectify resulting problems within the joint venture and even to dispose of its joint venture investment. Also, disputes with joint venture partners may result in litigation costly to Belmond.

Risks ~~Relating~~Related to Belmond’s Financial Condition and Results of Operations

Economic downturns and disruption in the financial markets could adversely affect Belmond’s financial condition and results of operations.

Financial markets in the United States, Europe and Asia experienced significant disruption in 2008 and 2009, including volatility in securities prices and diminished liquidity and credit availability. In addition, the economic slowdown during this period in the United States and other countries weakened consumer confidence and led to significant reductions in the amounts persons and businesses spent on travel, hotels, dining and entertainment. Largely as a result, Belmond experienced pressure on pricing, reduced occupancy at its properties, and fewer customers from traditional markets for Belmond’s hotels and other travel products. Belmond’s consolidated revenue and earnings from continuing operations declined. Although revenue has since increased, Belmond incurred losses or reduced earnings in 2010 and later years due mainly to higher costs and impairment charges.

While the global economy has improved since the 2008-2009 recession, if the global economic recovery slows or adverse economic conditions recur in any of the jurisdictions in which Belmond conducts business, Belmond’s future revenue, profitability and cash flow from operations could decrease and its liquidity and financial condition, including Belmond’s ability to comply with financial covenants in its loan facilities, could be adversely impacted and its future growth plans curtailed.

Belmond has ~~nine~~ten hotels, the Venice Simplon-Orient-Express train and the Belmond Afloat in France cruise business in Continental Europe and the Belmond Grand Hibernian train based in the Republic of Ireland. If uncertainty regarding euro-zone debt recurs and measures taken by European governments contribute to weakness of national economies, financial markets could experience disruption and consumer confidence could decline, resulting in less demand for these properties and negatively impacting Belmond's results of operations and financial condition.

On March 29, 2019, the U.K. will cease to be a member of the European Union. Negotiations have commenced between the British Government and the EU to agree the terms of the U.K.'s departure and those to govern its future relationship with the EU member states. Although it is unknown what the final Brexit terms will be, it is possible that there will be increased regulatory complexities ~~and an impact on exchange rates~~, which may adversely affect our operations and financial results. In addition, while we believe it is too early to assess the full impact on the Company of the U.K.'s decision to leave the EU, a weaker pound or British economy could impact the travel preferences of the Company's guests who originate from the U.K. and could affect the operations and financial results at those properties that have a significant proportion of British visitors, such as Belmond Reid's Palace, Belmond La Residencia, the Italian properties and the Company's U.K. businesses. If as a consequence of Brexit, visas are introduced as a requirement for EU nationals to work in the U.K. (or for U.K. nationals to work in the EU), this could adversely affect the Company's ability to attract and retain high-caliber staff. In the U.S., evolving trade and immigration policies and the U.S. Tax Cuts and Jobs Act of 2017 could adversely affect the Company's business and results of operations.

Financial uncertainty and economic weakness identified in the previous risk factor could adversely impact Belmond’s liquidity and financial condition, in particular Belmond’s ability to refinance debt or raise additional funds for its cash requirements for working capital, commitments and debt service.26

During the year ending December 31, 2018, Belmond will have $6,407,000 of scheduled debt repayments including capital lease payments and debt held by consolidated variable interest entities. In 2019, Belmond will have $118,428,000 of scheduled debt repayments including capital lease payments and debt held by consolidated variable interest entities. Belmond’s capital commitments at December 31, 2017 amounted to $19,464,000.

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~~Management’~~an impact on exchange rates, an impact of the Company's ~~Discussion~~tax arrangements and ~~Analysis~~increased ofcosts ~~Financial~~for ~~Condition~~the supply to the U.K. of goods and ~~Results~~services, each of ~~Operations.~~which ~~Belmond~~may ~~can~~adversely ~~give~~affect noour ~~assurance,~~operations ~~however~~and financial results. In addition, ~~that~~while ~~additional~~we ~~sources~~believe ofit ~~financing~~is ~~for~~too ~~its~~early ~~unfunded~~to ~~commitments~~assess ~~will~~the befull ~~available~~impact on ~~commercially~~the ~~acceptable~~Company ~~terms~~of the U.K.'s decision to leave the EU, ora ~~available~~weaker atpound ~~all~~or British economy, or ~~that~~the ~~Belmond~~imposition ~~will~~of berestrictions ~~able~~on travel by U.K. guests to ~~refinance~~the ~~maturing~~EU ~~debt~~(such oras a requirement to ~~reschedule~~obtain ~~loan~~a ~~repayments~~visa), orcould ~~capital~~impact ~~commitments,~~the ~~dispose~~travel preferences of ~~non-core~~the ~~assets~~Company's orguests who originate from the U.K. and could affect the operations and financial results at those properties that ~~other~~have ~~cash-saving~~a ~~steps~~significant ~~management~~proportion ~~may~~of ~~take~~British tovisitors, ~~enhance~~such as Belmond’ Reid's ~~liquidity~~Palace, ~~and~~Belmond ~~capital~~La ~~position~~Residencia, ~~will~~the ~~bridge~~Italian ~~any~~properties ~~shortfall~~and the Company's U. IfK. ~~additional~~businesses; ~~sources~~the operations of ~~financing~~the ~~are~~Belmond ~~unavailable~~Grand Hibernian, ~~including~~which ~~because~~currently operates both in the Republic of ~~possible~~Ireland ~~future~~(a ~~breach~~member of ~~loan~~the ~~financial~~EU) ~~covenants,~~and ~~Belmond~~Northern ~~may~~Ireland (part of the U.K.) could also be ~~unable~~impacted. If as a consequence of Brexit, visas are introduced as a requirement for EU nationals to ~~fund~~work ~~its~~in ~~cash~~the ~~requirements~~U.K. (or for ~~working~~U.K. ~~capital~~nationals to work in the EU), ~~commitments~~this could adversely affect the Company's ability to attract and ~~debt~~retain ~~service~~high-caliber staff. In the U.S., evolving trade and immigration policies and the U.S. Tax Cuts and Jobs Act of 2017 could adversely affect the Company's business and results of operations.

During the year ending December 31, 2019, Belmond will have $6,332,000 of scheduled debt repayments including capital lease payments and debt held by consolidated variable interest entities. In 2020, Belmond will have $6,386,000 of scheduled debt repayments including capital lease payments and debt held by consolidated variable interest entities. Belmond’s capital commitments at December 31, 2018 amounted to $21,197,000.

Belmond expects to fund its working capital requirements, debt service and capital expenditure commitments for the foreseeable future from operating cash flow, available committed borrowing facilities, issuing new debt or equity securities, rescheduling loan repayments or capital commitments, and disposing of non-core assets. See Liquidity and Capital Resources in Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations. Belmond can give no assurance, however, that additional sources of financing for its unfunded commitments will be available on commercially acceptable terms, or available at all, or that Belmond will be able to refinance maturing debt or to reschedule loan repayments or capital commitments, dispose of non-core assets or that other cash-saving steps management may take to enhance Belmond’s liquidity and capital position will bridge any shortfall. If additional sources of financing are unavailable, including because of possible future breach of loan financial covenants, Belmond may be unable to fund its cash requirements for working capital, commitments and debt service.

Covenants in Belmond’s financing agreements could be breached or could limit management’s discretion in operating Belmond’s businesses, causing Belmond to make less advantageous business decisions.

Belmond recognizes the risk that a property-specific or group consolidated loan covenant could be breached. Belmond regularly prepares cash flow projections which are used to forecast covenant compliance under all loan facilities. If there appears to be a likelihood of potential non-compliance with a covenant, Belmond would as a general rule meet with the lenders to seek an amendment to, or a waiver of, the financial covenant at risk. Obtaining an amendment or waiver may result in an increase in bank fees or borrowing costs, or may not be obtainable at all. If a covenant breach occurred in a material loan facility and Belmond were to be unable to agree with its lenders as to how the particular financial covenant should be amended or how the breach could be cured or waived, Belmond’s liquidity would be materially adversely affected. The Amended and Restated Credit Agreement, dated July 3, 2017, between Belmond and its senior secured lenders governing the $703,434,000 credit facility described above (the "Amended and Restated Credit Agreement") contains a consolidated net leverage covenant in respect of the revolving credit facility. Under the Amended and Restated Credit Agreement, the term loan portion of the credit facility is subject to cross-acceleration with the revolving credit facility. Therefore, if the Company were to breach this consolidated net leverage covenant, the entire credit facility could be accelerated and the lenders could foreclose on substantially all of the Company's assets. In addition, the negative covenants in the Amended and Restated Credit Agreement place restrictions on the Company's ability to incur additional debt, to effect mergers and assets sales, and to pay dividends or repurchase shares. These covenants may limit the options available should management determine that the Company has insufficient liquidity.

Belmond’s substantial indebtedness could adversely affect its financial condition.

Belmond has a large amount of debt in its capital structure and may incur additional debt from time to time. As of December 31, ~~2017~~2018, Belmond’s consolidated long-term indebtedness was $~~724~~773,~~230~~616,000 (including the current portion and the long-term indebtedness of Belmond’s consolidated variable interest entities of $~~112~~160,~~857~~602,000). This substantial indebtedness could:


•	require Belmond to dedicate much of its cash flow from operations to debt service payments, and so reduce the availability of cash flow to fund working capital, capital expenditures, product and service development and other general corporate purposes,

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•	limit Belmond’s ability to obtain additional financing for its business or to repay or refinance its existing indebtedness on satisfactory terms,


•	increase Belmond’s vulnerability to adverse economic and industry conditions, including the seasonality of some of Belmond’s activities,


•	limit Belmond’s flexibility in planning for, or reacting to, changes in its business and industry as well as the economy generally, or


•	limit Belmond's ability to plan for, or advance, its strategic growth plan.

Belmond’s failure to repay indebtedness when due may result in a default under that indebtedness and cause cross-defaults under other Belmond indebtedness. See the risk factor immediately above.

Increases in interest rates may increase Belmond’s interest payment obligations under its existing floating rate debt, and refinanced debt may have higher interest rates than the debt refinanced.

After taking into account Belmond’s fixed interest rate swaps, approximately 5250% of Belmond’s consolidated long-term debt at December 31, ~~2017~~2018 bears interest that fluctuates with prevailing interest rates, so that any rate increases may increase Belmond’s interest payment obligations. From time to time, Belmond enters into hedging transactions in order to manage its floating interest rate exposure, but Belmond can give no assurance that those hedges will lessen the impact on Belmond of rising interest rates. Also, as Belmond refinances its long-term debt with new debt, the interest payable on the new debt may be at a higher rate than the debt refinanced.

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Fluctuations in foreign currency exchange rates may have a material adverse effect on Belmond’s financial condition and operating results.

Substantial portions of Belmond’s revenue and expenses are denominated in non-U.S. currencies such as European euros, British pounds sterling, Russian rubles, South African rand, Peruvian nuevos soles, Botswana pula, Brazilian reals, Mexican pesos and various Southeast Asian currencies. In addition, Belmond buys assets and incurs liabilities in these foreign currencies. Foreign exchange rate fluctuations may have a material adverse effect on Belmond’s financial statements. Belmond’s financial statements are presented in U.S. dollars and can be impacted by foreign exchange fluctuations through both:


•	translation risk, which is the risk that the financial statements for a particular period or as of a certain date depend on the prevailing exchange rates of the various currencies against the U.S. dollar,


•	transaction risk, which is the risk associated with changes in exchange rates between the time when a transaction is initially recorded and when it is ultimately settled, and


•	economic risk, which is the risk that the currency of costs and liabilities does not move in line with the currency of revenue and assets, which fluctuations may adversely affect Belmond’s operating margins.

Belmond is subject to accounting regulations and uses certain accounting estimates and judgments that may differ significantly from actual results.

Implementation of existing and future accounting standards and rules of the U.S. Financial Accounting Standards Board (“FASB”) or other regulatory bodies could affect the presentation of Belmond’s financial statements and related disclosures. Future regulatory requirements could significantly change Belmond’s current accounting practices and disclosures. These changes in the presentation of Belmond’s financial statements and related disclosures could change an investor’s interpretation or perception of Belmond’s financial position and results of operations. See Note 2 to the Financial Statements.

Belmond uses many methods, estimates and judgments in applying its accounting policies. By their nature, these are subject to substantial risks, uncertainties and assumptions, and factors may arise over time that lead Belmond to change its methods, estimates and judgments which could significantly affect the presentation of Belmond’s financial condition and/or results of operations.

As an example of these estimates and judgments, Belmond evaluates goodwill for impairment at least annually, or when triggering events or changes in circumstances, such as adverse changes in the industry or economic trends or an underperformance relative to historical or projected future operating results, indicate the carrying value may not be recoverable. The Company recorded a goodwill impairment charge in 2017 and the Company continues to monitor goodwill balances for future potential impairment (see Note 9 to the Financial Statements). Belmond’s impairment analysis under U.S. GAAP incorporates various assumptions and uncertainties that management believes are reasonable and supportable considering all available evidence, such as the future cash flows of the business, future growth rates and the related discount rates. However, these assumptions and uncertainties are, by their very nature, highly judgmental. Belmond cannot guarantee that its business will achieve the forecasted results which have been included in its impairment analysis. If Belmond is unable to meet these assumptions in future reporting periods, it may be required to record a charge for goodwill impairment losses.

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number of goodwill, fixed assets and other intangible impairment charges in 2018 and the Company continues to monitor its balances for future potential impairment (see Note 10 to the Financial Statements). Belmond’s impairment analysis under U.S. GAAP incorporates various assumptions and uncertainties that management believes are reasonable and supportable considering all available evidence, such as the future cash flows of the business, future growth rates and the related discount rates. However, these assumptions and uncertainties are, by their very nature, highly judgmental. Belmond cannot guarantee that its business will achieve the forecasted results which have been included in its impairment analysis. If Belmond is unable to meet these assumptions in future reporting periods, it may be required to record a charge for goodwill impairment losses.

Risks of Investing in Class A Common Shares

The price of the class A common shares may fluctuate significantly, which may make it difficult for shareholders to sell the class A common shares when they want or at desired prices.

The price of the class A shares trading on the NYSE constantly fluctuates, and Belmond management expects that the market price of the class A shares will continue to do so. Holders of class A shares will be subject to the risk of volatility and depressed prices.

The price of class A common shares can fluctuate as a result of a variety of factors, many of which are beyond Belmond’s control. These factors include:


•	quarterly variations in operating results,


•	operating results that vary from the expectations of management, securities analysts and investors,

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•	changes in expectations as to future financial performance, including financial estimates by securities analysts and investors,


•	developments generally affecting Belmond’s business or the hospitality industry,

• market speculation about athe ~~potential~~ acquisition of Belmond orby ~~all~~LVMH, orincluding ~~part~~but not limited to, the impact on the share price of ~~its~~the ~~business~~Company's class A common shares in the event the transaction is not completed,


•	announcements by Belmond or its competitors of significant contracts, acquisitions, joint ventures or capital commitments,


•	announcements of significant claims or proceedings against Belmond,

• future sales of equity or equity-linked securities including by holders of large positions in the outstanding class A common shares, and


•	general domestic and international economic and political conditions.

In addition, the stock market in general can experience volatility that is often unrelated to the operating performance of a particular company. This volatility can arise, for example, because of disruption in capital markets and contraction of credit availability, and can be significant. These broad market fluctuations may adversely affect the market price of the class A shares.

~~The~~Future ~~Company~~sales isor ~~not~~issuances ~~restricted~~of ~~from issuing additional~~ class A or class B common shares, ~~and any sales~~ could negatively affect the trading price and book value of the class A common shares outstanding and dilute the ownership of class A shareholders.

The Company may in its discretion sell newly issued class A or B common shares from time to time in the future, subject to compliance with certain procedural requirements of the NYSE relating to the class A common shares, ~~and~~ applicable securities laws, and restrictions on the Company's ability to issue class A and B common shares under the Merger Agreement during the pendency of the sale to LMVH. There can be no assurance that the Company will not make significant sales of class A or B common shares in public offerings or private placements to raise capital, for funding future acquisitions, in employee equity compensation programs or for other corporate purposes. Any sales could materially and adversely affect the trading price of the class A common shares ~~outstanding~~and or could result in dilution of the ownership interests of existing shareholders.

A subsidiary of the Company, which has two Company directors on its board of directors, may control the outcome of most matters submitted to a vote of the Company’s shareholders.

A wholly-owned subsidiary of the Company, Belmond Holdings 1 Ltd. (“Holdings”), currently holds all 18,044,478 outstanding class B common shares in the Company representing about 64% of the combined voting power of outstanding class A and B common shares for most matters submitted to a vote of shareholders, and the directors and officers of the Company hold class A shares representing an additional approximate 0.5% of the combined voting power. In general, holders of class A common shares and holders of class B common shares vote together as a single class, with holders of class A shares having one-tenth of one vote per share and holders of class B shares having one vote per share. Therefore, as long as the number of outstanding class B shares exceeds one-tenth the number of outstanding class A shares, Holdings could control the outcome of most matters submitted to a vote of the shareholders.29

Under Bermuda law, common shares of the Company owned by Holdings are outstanding and may be voted by Holdings. The manner in which Holdings votes its shares is determined by the four directors of Holdings, two of whom, Harsha Agadi and Mitchell C. Hochberg, are also directors of the Company, consistent with the exercise by those directors of their fiduciary duties to Holdings. Those directors, should they choose to act together, will be able to control substantially all matters affecting the Company, and to block a number of matters relating to any potential change of control of the Company. See Item 12—Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Certain institutional shareholders representing two hedge fund groups challenged the Company’s corporate governance structure as it relates to the ownership and voting of class B common shares, including by proposing shareholder resolutions to amend the Company’s bye-laws to treat the class B shares as “treasury shares” with no voting rights and to cancel the class B shares. Those resolutions were rejected at a special general meeting of shareholders of the Company in October 2008 by a majority of the votes of the outstanding class A and class B common shares, voting together as a single class. Following the defeat of the resolutions at the special general meeting, these shareholders filed a petition in the Supreme Court of Bermuda in January 2009 against the Company, Holdings and certain of the Company’s directors seeking similar and related relief, including a declaration that the Company holding or voting class B shares, directly or indirectly, was unlawful and an order restraining Holdings from exercising its voting rights attached to the class B shares. After a trial on preliminary issues relating to the legality of the holding of class B shares in the Company by Holdings, the Court ruled in June 2010 that it is lawful for Holdings to hold and exercise voting rights

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inA ~~respect~~wholly-owned subsidiary of ~~class~~the Company, Belmond Holdings 1 Ltd. (“Belmond Holdings”), currently holds all 18,044,478 outstanding class B common shares in the Company ~~held~~representing byabout ~~Holdings~~63.7% of the combined voting power of outstanding class A and ~~struck~~B ~~out~~common ~~the~~shares ~~petition~~for inmost ~~its~~matters ~~entirety.~~submitted ~~The~~to ~~Court~~a ~~also~~vote ~~awarded~~of ~~the~~shareholders, ~~respondents~~and ~~their~~the ~~defense~~directors ~~costs~~and ~~incurred~~officers inof the ~~proceedings.~~Company hold class ~~The~~A ~~foregoing~~shares ~~description~~representing an additional approximate 0.8% of the ~~Court’s~~combined ~~judgment~~voting ~~does~~power. ~~not~~In ~~purport~~general, toholders beof ~~complete~~class A common shares and isholders ~~qualified~~of inclass B ~~its~~common ~~entirety~~shares byvote ~~reference~~together toas ~~the~~a ~~judgment~~single class, ~~which~~with ~~the~~holders ~~Company~~of ~~filed~~class A asshares ~~Exhibit~~having 99one-tenth of one vote per share and holders of class B shares having one vote per share.1 Therefore, toas ~~its~~long ~~Current~~as ~~Report~~the onnumber ~~Form~~of outstanding class 8B shares exceeds one-Ktenth ~~dated~~the ~~June~~number of outstanding class 1A shares, ~~2010~~Belmond ~~and~~Holdings iscould ~~incorporated~~control ~~herein~~the byoutcome ~~reference~~of most matters submitted to a vote of the shareholders.

~~The~~Under ~~corporate~~Bermuda ~~governance~~law, ~~structure~~common shares of the Company, ~~with~~owned ~~dual~~by ~~class~~Belmond AHoldings ~~and~~are Boutstanding ~~common shares~~ and ~~ownership~~may ~~and~~be ~~voting~~voted ofby ~~the~~Belmond ~~class~~Holdings. The Bmanner ~~shares~~in bywhich Belmond Holdings, ~~has~~votes ~~been~~its ~~analyzed~~shares byis ~~legal~~determined ~~counsel,~~by ~~and~~ the ~~Company’s~~four ~~board~~directors of ~~directors~~Belmond ~~and~~Holdings, ~~management~~two ~~believe~~of ~~that~~whom, ~~the~~Harsha ~~structure~~Agadi isand ~~valid~~Mitchell ~~under~~C. ~~Bermuda~~Hochberg, ~~law. The~~are ~~judgment~~also directors of the ~~Bermuda~~Company, ~~Supreme~~consistent ~~Court~~with inthe ~~June 2010~~exercise ~~confirms~~by ~~this~~those ~~belief. The~~directors ~~structure~~of ~~enables~~their ~~Belmond~~fiduciary duties to ~~oppose~~Belmond ~~any~~Holdings. Those ~~proposal~~directors, ~~that~~should ~~Belmond~~they ~~believes~~choose ~~is contrary~~ to ~~the~~act ~~best interests of the Company and its shareholders~~together, ~~including~~will abe ~~coercive~~able orto ~~unfair~~control ~~offer~~substantially toall ~~acquire~~matters affecting the Company, and ~~thus~~to ~~preserve~~block ~~the~~a ~~value~~number of ~~Belmond~~matters ~~for~~relating ~~all~~to ~~shareholders. The~~any ~~structure~~potential ~~has~~change ~~been~~of incontrol ~~place~~of ~~since~~ the Company’s. ~~initial~~See ~~public~~Item ~~offering~~12—Security inOwnership ~~2000,~~of ~~and~~Certain ~~has~~Beneficial ~~been~~Owners ~~fully~~and ~~described~~Management ~~in the Company’s public filings~~ and ~~clearly~~Related ~~disclosed~~Stockholder ~~to investors considering buying the class A common shares~~Matters.

Certain institutional shareholders representing two hedge fund groups challenged the Company’s corporate governance structure as it relates to the ownership and voting of class B common shares, including by proposing shareholder resolutions to amend the Company’s bye-laws to treat the class B shares as “treasury shares” with no voting rights and to cancel the class B shares. Those resolutions were rejected at a special general meeting of shareholders of the Company in October 2008 by a majority of the votes of the outstanding class A and class B common shares, voting together as a single class. Following the defeat of the resolutions at the special general meeting, these shareholders filed a petition in the Supreme Court of Bermuda in January 2009 against the Company, Belmond Holdings and certain of the Company’s directors seeking similar and related relief, including a declaration that the Company holding or voting class B shares, directly or indirectly, was unlawful and an order restraining Belmond Holdings from exercising its voting rights attached to the class B shares. After a trial on preliminary issues relating to the legality of the holding of class B shares in the Company by Belmond Holdings, the Court ruled in June 2010 that it is lawful for Belmond Holdings to hold and exercise voting rights in respect of class B shares in the Company held by Belmond Holdings and struck out the petition in its entirety. The Court also awarded the respondents their defense costs incurred in the proceedings. The foregoing description of the Court’s judgment does not purport to be complete and is qualified in its entirety by reference to the judgment, which the Company filed as Exhibit 99.1 to its Current Report on Form 8-K dated June 1, 2010 and is incorporated herein by reference.

The corporate governance structure of the Company, with dual class A and B common shares and ownership and voting of the class B shares by Belmond Holdings, has been analyzed by legal counsel, and the Company’s board of directors and management believe that the structure is valid under Bermuda law. The judgment of the Bermuda Supreme Court in June 2010 confirms this belief. The structure enables Belmond to oppose any proposal that Belmond believes is contrary to the best interests of the Company and its shareholders, including a coercive or unfair offer to acquire the Company, and thus preserve the value of Belmond for all shareholders. The structure has been in place since the Company’s initial public offering in 2000, and has been fully described in the Company’s public filings and clearly disclosed to investors considering buying the class A common shares.

However, new litigation against the Company involving its corporate governance structure or other future challenges may occur, the outcome of which may be uncertain. Furthermore, new litigation or future challenges may cause the Company to incur costs, such as legal expenses, to defend its corporate governance structure and these costs may be substantial in amount.

Provisions in the Company’s charter documents, and the preferred share purchase rights currently attached to the class A and class B common shares, may discourage a potential acquisition of Belmond, even one that the holders of a majority of the class A common shares might favor.

This risk factor should be read in conjunction with Item 1A—Risks Related to the Sale of the Company—The Merger Agreement restricts the conduct of the Company's business prior to the completion of the sale to LVMH and limits the Company's ability to pursue strategic alternatives, which could negatively impact the Company's business and results of operations.

The Company’s memorandum of association and bye-laws contain provisions that could make it more difficult for a third party to acquire Belmond or to engage in another form of transaction involving a change of control of the Company without the consent of the Company’s board of directors. These provisions include:


•	a supermajority shareholder voting provision for the removal of directors from office with or without cause,


•	a supermajority shareholder voting provision for “business combination” transactions with beneficial owners of shares carrying 15% or more of the votes which may be cast at any general meeting of shareholders, and

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•	limitations on the voting rights of such 15% beneficial owners.

Also, the Company’s board of directors has the right under Bermuda law to issue preferred shares without shareholder approval, which could be done to dilute the share ownership of a potential hostile acquirer. Although management believes these provisions provide the shareholders an opportunity to receive a higher price by requiring potential acquirers to negotiate with the Company’s board of directors, these provisions apply even if the offer is favored by shareholders holding a majority of the Company’s equity.

The Company has in place a shareholder rights agreement providing for rights to purchase series A junior participating preferred shares of the Company. ~~The~~upon ~~rights~~the ~~are~~occurrence ~~not~~of ~~currently~~certain ~~exercisable~~events, ~~and~~including ~~they~~the ~~are~~acquisition ~~attached~~by toany ~~and~~person(s) ~~transferable~~of ~~with~~beneficial ownership of 15% or more of the outstanding class A ~~and~~or class B common shares onor the commencement of a ~~one-to-one~~tender ~~basis~~or exchange offer for 30% or more of the outstanding class A or class B common shares. These rights may ~~have~~therefore ~~anti-takeover~~deter ~~effects~~potential onacquirers. aThe ~~potential~~rights ~~acquirer~~are ~~holding~~not ~~15%~~currently orexercisable, ~~more~~and will not become exercisable in connection with the consummation of the ~~outstanding~~transactions ~~class A~~contemplated by the Merger Agreement or the support agreement. Under the support agreement, Belmond Holdings has agreed to not to sell or transfer any of its class B common shares and to vote all against any competing acquisition proposal to the sale to LVMH) (the "Support Agreement"). If the merger is completed, the rights will expire and cease to exist immediately prior to the effective time of the merger.

These anti-takeover provisions are in addition to the ability of Belmond Holdings and directors and officers of the Company to vote shares representing a significant majority of the total voting power of the Company’s common shares, subject to the obligations of Belmond Holdings under the Support Agreement to vote against certain competing proposals. See the risk factor immediately above and Item 12—Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters—Voting Control of the Company; Changes in Control.

A judgment of a United States court for liabilities under the U.S. securities laws might not be enforceable in Bermuda, or an original action might not be brought in Bermuda against the Company for liabilities under U.S. securities laws.

The Company is incorporated in Bermuda, a majority of its directors or executive officers are not U.S. citizens or residents, and most of its assets and the assets of its directors and officers are located outside the United States. As a result, it may be difficult for shareholders to:


•	effect service of process within the United States upon the Company or its directors and officers, or


•	enforce judgments obtained in United States courts against the Company or its directors and officers based upon the civil liability provisions of the United States federal securities laws.

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Belmond has been advised by its Bermuda legal counsel that there is doubt as to:


•	whether a judgment of a United States court based solely upon the civil liability provisions of the United States federal securities laws would be enforceable in Bermuda against the Company or its directors and officers, and


•	whether an original action could be brought in Bermuda against the Company or its directors and officers to enforce liabilities based solely upon the United States federal securities laws.

ITEM 1B. Unresolved Staff Comments

None.

ITEM 2. Properties

As described in Item 1—Business, Belmond owns, partially-owns and/or operates 46 properties, consisting of 36 highly individual deluxe hotels, 30 of which are owned, four European tourist trains, one cruise ship in Myanmar, one French canal cruise business consisting of ~~five~~seven small canal boats, and one stand-alone restaurant in the United States. Belmond also owns interests of 50% or less in five hotels in Peru (including three under long-term lease), its Southeast Asian train and PeruRail (including the Belmond Andean Explorer train in Peru). ~~It also operates under management contract but has no ownership interest in one hotel in the United States.~~ The corporate office and regional sales, marketing and operating offices of the hotels, trains and cruise businesses are occupied under operating leases. ~~The Company has one property scheduled for future opening, the Belmond Cadogan Hotel in London, England.~~

ITEM 3. Legal Proceedings

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Except as described below, there are no material legal proceedings, other than ordinary routine litigation incidental to Belmond’s business, to which the Company or any of its subsidiaries is a party or to which any of their property is subject.

Belmond Copacabana Palace

As previously reported, in February 2013, the State of Rio de Janeiro Court of Justice affirmed a 2011 decision of a Rio state trial court against Sea Containers Ltd (“SCL”) in lawsuits brought against SCL by minority shareholders in Companhia Hoteis Palace (“CHP”), the company that owns the Copacabana Palace, relating to the recapitalization of CHP in 1995, but reduced the total award against SCL to approximately $27,000,000. SCL further appealed the judgments during the second quarter of 2013 to the Superior Court of Justice in Brasilia. SCL sold its shares in CHP to the Company in 2000. Years later, in 2006, SCL entered insolvency proceedings in the U.S. and Bermuda that are continuing in Bermuda. Possible claims could be asserted against the Company or CHP in connection with this Brazilian litigation, although no claims have been asserted to date.

As a precautionary measure to defend the hotel, CHP commenced a declaratory lawsuit in the Rio state court in December 2013 seeking judicial declarations that no fraud was committed against the SCL plaintiffs when the shares in CHP were sold to the Company in 2000 and that the sale of the shares did not render SCL insolvent. Pending rulings on those declarations, the court granted CHP an injunction preventing the SCL plaintiffs from provisionally enforcing their 2011 judgments against CHP, which judgment was subsequently reversed on appeal in May 2014. In September 2014, CHP sought reconsideration from the appellate court of this decision, but the court dismissed its request, resulting in the return of the declaratory lawsuit proceedings to the Rio State Court.

Management cannot estimate the range of possible loss if the SCL plaintiffs assert claims against the Company or CHP, and Belmond has made no reserves in respect of this matter. If any such claims were brought, Belmond would continue to defend its interests vigorously. See Note 2021 to the Financial Statements (Item 8).

Ubud Hanging Gardens

In November 2013, the third-party owner of Ubud Hanging Gardens in Bali, Indonesia dispossessed Belmond from the hotel under long-term lease without prior notice. As a result, Belmond was unable to continue operating the hotel and, accordingly, to prevent any confusion to its guests, Belmond ceased referring to the property in its sales and marketing materials, including all electronic marketing.

Belmond believed that the owner's actions were unlawful and in breach of the lease arrangement and constituted a wrongful dispossession. Belmond pursued its legal remedies through arbitration proceedings required under the lease. In June 2015, a Singapore arbitration panel issued its final award in favor of Belmond, holding that the owner had breached Indonesian law and the lease, and granting monetary damages and costs to the Company in an amount equal to approximately $8,500,000. Since its receipt of the arbitral award, Belmond has been engaged in the process of enforcing this arbitral award in the Indonesian courts. Starting in April 2014, the Indonesian trial courts have dismissed eight separate actions filed by the owner for lack of jurisdiction due to the arbitration clause in the parties’ lease. The owner has appealed five of these decisions, all of which plead variations on the same facts, of which four have been affirmed by the Appellate Court with two of those affirmed by the Indonesian Supreme Court and the other two await a decision by the Indonesian Supreme Court. The fifth case was reversed in favor of the owner on appeal in October 2014 and affirmed by the Indonesian Supreme Court in December 2016. Belmond has sought review for reconsideration by the Supreme Court. In the meantime, Belmond filed with the Central Jakarta District Court in October 2017, as further support for the enforcement of Belmond’s arbitral claim, the decisions of four Indonesian trial courts enforcing the arbitration provision under the lease and ruling that the Indonesian courts had no jurisdiction over the parties’ 2013 dispute, along with four affirming decisions from the appellate courts and the two from the Indonesian Supreme Court.

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Singapore arbitration panel issued its final award in favor of Belmond, holding that the owner had breached Indonesian law and the lease, and granting monetary damages and costs to the Company in an amount equal to approximately $8,500,000. Since its receipt of the arbitral award, Belmond has been engaged in the process of enforcing this arbitral award in the Indonesian courts. Starting in April 2014, the Indonesian trial courts have dismissed eight separate actions filed by the owner for lack of jurisdiction due to the arbitration clause in the parties’ lease. The owner has appealed five of these decisions, all of which plead variations on the same facts, of which four have been affirmed by the Appellate Court with two of those affirmed by the Indonesian Supreme Court and the other two await a decision by the Indonesian Supreme Court. The fifth case was reversed in favor of the owner on appeal in October 2014 and affirmed by the Indonesian Supreme Court in December 2016. Belmond has sought review for reconsideration by the Supreme Court. In the meantime, Belmond filed with the Central Jakarta District Court in October 2017, as further support for the enforcement of Belmond’s arbitral claim, the decisions of four Indonesian trial courts enforcing the arbitration provision under the lease and ruling that the Indonesian courts had no jurisdiction over the parties’ 2013 dispute, along with four affirming decisions from the appellate courts and the two from the Indonesian Supreme Court.

Belmond does not believe there is any merit in the owner’s outstanding Indonesian actions and is vigorously defending its rights while it seeks to enforce the Singapore arbitral award. While the Company can give no assurances, it believes that it should ultimately be able to enforce its arbitral award. Given the uncertainty involved in this litigation, Belmond recorded in the year ended December 31, 2013, a non-cash impairment charge in the amount of $7,031,000 relating to long-lived assets and goodwill of Ubud Hanging Gardens and has not booked a receivable in respect of the award.

As supplemental proceedings to its arbitration claim, Belmond commenced contempt proceedings in the High Court in London, England, where the owner resided, for pursuing the Indonesian proceedings contrary to an earlier High Court injunction, and obtained against the owner in July 2014 a contempt order, which subsequently resulted in the court issuing a committal order of imprisonment for 120 days. The owner left England before the court order was issued and has not yet served the sentence. See Notes 56 and 2021 to the Financial Statements.

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Belmond Hotel das Cataratas

In September 2014, the Brazilian Ministry of Planning, Budget and Management notified the Company that it was denying the Company's application to extend the term or reduce the rent under the lease for Belmond Hotel das Cataratas, which was entered into in 2007. Belmond had applied for the amendment in 2009 based on its claim that it suffered additional unanticipated and/or unforeseeable costs in performing the refurbishment of the hotel as required by the lease and related tender documentation in order to raise the standard of the property to a five star luxury standard.

Prior to August 2014, with the agreement of the Ministry, the Company had been paying the base annual rent without an annual adjustment for inflation as provided for in the lease, pending resolution of Belmond’s application. Throughout this period, the Company had expensed the full rental amount and has fully accrued the difference between the rental charge and the amount actually paid. Based on the Ministry’s decision denying any relief, the Ministry directed the Company that it would henceforth assess rent at the contractual rate, which has been included in the table of future rental payments as at December 31, ~~2016~~2018, and that it was required to pay the difference between the contractual rent and the rent that had been actually paid. On March 20, 2015, the Ministry provided notice to the hotel that an aggregate amount of approximately R$17,000,000 ($54,~~139~~387,000) was due on March 31, 2015 as a result of its rejection of any relief sought by Belmond.

The Company appealed to the Ministry to reconsider its decision on both procedural and substantive grounds. Pending this requested reconsideration and exhaustion of administrative remedies, the Company did not pay to the Ministry the amount claimed. The Company filed a lawsuit in the Federal Court in Paraná State in August 2016 against the Government of Brazil regarding the Ministry’s failure to properly consider and modify the lease concession for Belmond Hotel das Cataratas. The Federal Court granted the Company’s request for an injunction against the Government enforcing its claim and granted the Company’s request for a 25% preliminary reduction in rent, pending a decision on the merits, which the Superior Court upheld on appeal in a decision rendered in September 2016. The Government appealed to a three-judge panel of the Superior Court, which upheld the decision of the Federal Court in favor of the Company in a judgment rendered in January 2017.

OnIn October ~~17,~~ 2017, the Federal Court issued a decision on the merits denying in part the Company’s claim for modification of the lease concession. The Court ruled although the lease is an administration agreement rather than a simple commercial lease, the Company had not overcome its burden of proof to show that a modification was justified. The Court further ordered that the Company must pay the stated rent in the lease rather than the reduced rent set by the Federal Court in September 2016. The Court also revoked the injunction issued in September 2016 that had been subsequently affirmed on appeal prohibiting the Federal Government from pursuing a claim against the Company to recover the difference between the stated lease rent and the amounts the Company actually paid during the period from 2009 to 2014. The Company appealed this decision and requested injunctive relief enjoining the Government from enforcing the decision of the Federal Court pending a hearing on the appeal. OnIn December 2017, the Federal Superior Court denied the Company's request for an injunction and affirmed the lower court's partial decision of the merits.

On April 25, 2018, a Federal Superior Court panel of three judges reversed the prior Superior Court’s decision in Belmond’s favor on all counts, so that the injunction against the Federal Government remains in place and the rent reduction was reinstated on a prospective basis. As a result, the Federal Government cannot seek to enforce its claim for the allegedly unpaid lease obligations. Nonetheless, the Company has reserved against this claim, and this accrual as at December 31, 2018 totaled R$29,272,000 ($7,554,000). The Company intends to continue to vigorously contest this litigation, which has been remanded to the first instance court for a trial on the merits.

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22, 2017, the Federal Superior Court denied the Company's request for an injunction and affirmed the lower court's partial decision of the merits. As a result, the Federal Government could seek immediately to enforce its claim for allegedly unpaid lease obligations. The Company has reserved against this claim, and this accrual as at December 31, 2017 totaled R$25,174,000 ($7,610,000). The Company does not believe that any loss above the amounts accrued is likely. The Company intends to vigorously contest the remaining issues in front of the Federal Court, particularly the matter of proving that a modification of the lease concession is warranted under the circumstances.

Belmond Miraflores Park Hotel

The Company is contesting a claim against Belmond Miraflores Park Hotel (“BMP”) by the municipality of Miraflores in Lima, Peru, where BMP is located. The municipality alleges that BMP has generated noise and vibrations in violation of municipal nuisance ordinances resulting in the disturbance of certain apartment owners in an adjoining residential building. The local administrative court ruled in favor of the municipality, and levied a nominal fine and issued an order for injunctive relief that included the potential closure of BMP pending the elimination of the noise and vibrations. In March 2016, after the administrative court’s ruling was affirmed at the trial court and subsequently, the appellate court level, BMP appealed to the Supreme Court of Peru. Enforcement of the ruling of the appellate court has been stayed pending the Supreme Court appeal. OnIn June ~~29,~~ 2017, the Supreme Court issued a decision accepting BMP’s appeal rather than, as BMP had expected, summarily affirming the appellate court decision. ~~Consequently,~~On ~~BMP~~November ~~expects~~14, ~~that~~2018, the Supreme Court ~~will~~decided ~~issue~~the ~~its~~appeal ~~opinion~~in BMP's favor on ~~this~~the ~~matter~~basis inthat municipal ordinances may be impermissibly vague and remanded the ~~latter~~case ~~half~~to ofthe ~~2018~~administrative court. Management believes that the ~~risk~~administrative ofcourt ~~closure~~is oflikely ~~BMP~~to isfind ~~remote~~that ~~because~~ BMP ~~will~~could ~~have~~not ~~completed~~properly ~~its~~be ~~remediation~~found byin ~~the~~violation ~~time~~of the ~~Supreme~~ordinances ~~Court~~and ~~issues~~dismiss ~~its~~the ~~decision~~case; ~~and~~however, ~~expects~~even toif bethe inadministrative ~~compliance~~court ~~with~~reiterates ~~municipal~~its ~~nuisance~~prior ~~ordinances~~ruling at that ~~time.~~ BMP has ~~other~~violated ~~alternatives~~the ~~that~~ordinances, itthe ~~could~~Company ~~pursue~~believes tothat ~~resolve~~risk ~~this~~of ~~matter~~closure ifof BMP is ~~not~~remote ~~compliant~~because byBMP ~~the~~will ~~time~~have ofcompleted ~~the~~its ~~Supreme~~planned ~~Court~~remediation ~~decision.~~by ~~Accordingly,~~the ~~management~~time ~~does~~of ~~not~~any ~~believe~~such ~~that~~ruling ~~a material loss is probable~~ and noexpects ~~accrual~~to ~~has~~be ~~been made~~ in ~~respect of this matter.~~

~~Cupecoy Village Development N.V. ("Cupecoy")~~33

InTable ~~July 2015, Cupecoy Village Development N.V. (“Cupecoy”) received notification from the tax authorities in Sint Maarten~~ of an intention to issue tax assessments for periods 2007-2010 in respect of wages taxes, social security, turnover tax and penalties, which Belmond believed indicated a maximum possible loss of $16,500,000. Belmond believed that the report received from the tax authorities contained a number of material miscalculations and misinterpretations of fact and law. The Company had provided a written response to the tax authorities disputing their assessment and expected the resolution of this dispute to result in only an immaterial cost. However, the tax authorities consistently failed to respond or otherwise engage with Belmond or Cupecoy and therefore the Company gave the tax authorities notice that it intended to wind up Cupecoy, which the Company did after receiving no response from the authorities to this notice. In October 2016, following our application to the court, Cupecoy was declared technically insolvent in light of the 2015 tax claim, at which point the Company determined that any liability in respect of Cupecoy was effectively discharged. A final bankruptcy declaration was issued in the first quarter of 2017. Contents

compliance with municipal nuisance ordinances to the extent that they are applicable at that time. BMP has other alternatives that it could pursue to resolve this matter if BMP is not compliant by the time of the Supreme Court decision. Accordingly, management does not believe that a material loss is probable and no accrual has been made in respect of this matter.

"Cipriani" Trademark

In May 2010, after prevailing in litigation at the trial and appellate court levels, Belmond settled litigation in the United Kingdom for infringement of its U.K. and Community (European wide) registrations for the “Cipriani” trademark. Defendants paid the amount of $3,947,000 to Belmond in March 2010 with the balance of $9,833,000 being payable in installments over five years with interest. Belmond received the final payment in the amount of $1,178,000 in June 2015.

Subsequent to Belmond’s success before the U.K. courts, there have arisen a number of European trademark opposition and infringement cases relating to Belmond "Cipriani" and "Hotel Cipriani" Community trademarks. These include an ongoing invalidity action filed by Arrigo Cipriani and related family companies (the "Family Parties") in the European Trade Mark Office against Belmond’s "Cipriani" Community trademark. To date, Belmond has successfully rebutted this challenge at every level of administrative appeal, including before the EU General Court in Luxembourg which issued a decision onin June ~~29,~~ 2017 dismissing the ~~Arrigo~~Family ~~Cipriani~~Parties' appeal and ordering that appellant pay the costs of the court and the Company, and most recently in a decision on March 1, 2018, the EU General Court denied the Family Parties’ right to register a “Cipriani” Community trademark in the trademark class for drinks and beverages due to its likelihood to lead to confusion with Belmond’s registered “Cipriani” Community trademarks in the trademark class for hotels and restaurants. Belmond has also recently been successful in securing the cancellation in Portugal of a trademark application filed by ana ~~affiliated~~Family ~~company~~Party ~~of the Cipriani family~~ for “Cipriani”. In addition, Belmond has ~~also~~ been successful in obtaining cancellations of "Cipriani" trademark applications made by a Family Party in Russia, although the ~~Cipriani~~Family ~~family'~~Party has recently commenced another action opposing Belmond’s ~~corporate~~“Cipriani” ~~entity~~trademarks in Russia., which the Company intends to vigorously defend.

In addition, there are a number of ongoing trademark disputes with the ~~Cipriani~~Family ~~family~~Parties in Italy: in January 2015, the Cipriani family and affiliated entities commenced proceedings against Belmond in the Court of Venice, asserting that a 1967 agreement pursuant to which the family sold their interest in the Hotel Cipriani constituted a coexistence agreement allowing both the Company to use “Hotel Cipriani”, and the Cipriani family to use “Cipriani”. In November 2017, the Court rejected the family's complaint and awarded costs to the Company. This decision was not subsequently appealed. In August 2015, pursuant to a separate claim filed by the Cipriani family, the Court of Venice ruled in favor of the Cipriani family, determining that its use of the full name (rather than just an initial with the family's surname), would not constitute infringement of the Company’s registered trademark. This ruling was overturned on appeal in favor of the Company in November 2017. The Cipriani family appealed this decision before the Italian Supreme Court, and in a separate filing to the appellate court requested the reconsideration of that court's decision. At the same time, the Company requested reconsideration of the dismissal by the appellate court of the Company's request that Italian trademarks relating to restaurant services filed by the Cipriani family be revoked for non-use. On November 13, 2018, the appellate court denied the Company's request and on January 5, 2019, it denied the Cipriani family's appeal. While Belmond intends to appeal the decision before the Supreme Court and believes it has a meritorious case, Belmond cannot estimate the range of possible additional loss if it should not prevail in this matter and Belmond has made no accruals in respect of the matter. Separate proceedings brought by Belmond in Spain to defend Belmond’s marks against a use by the Cipriani family and its affiliated entities of “Cipriani” to promote a restaurant have been stayed pending the outcome of the Venice appeal.

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This ruling was overturned on appeal in favor of the Company on November 30, 2017. The Cipriani family has appealed this decision before the Italian Supreme Court, and in a separate filing to the appellate court has requested the reconsideration of that court's decision. While Belmond believes it has a meritorious case, Belmond cannot estimate the range of possible additional loss if it should not prevail in this matter and Belmond has made no accruals in respect of the matter. Separate proceedings brought by Belmond in Spain to defend Belmond’s marks against a use by the Cipriani family and its affiliated entities of “Cipriani” to promote a restaurant have been stayed pending the outcome of the Venice appeal.

Belmond Sanctuary Lodge

On November 28, 2017, Peru Belmond Hotels S.A., the Peruvian hotel joint venture in which the Company holds a 50% interest ("PBH"), received notification of a complaint filed with the Court of Cusco by the Regional Government of Cusco seeking the annulment of the ten-year extension of the Belmond Sanctuary Lodge concession that commenced in May 2015. The Regional Government alleges that the President of the Region at the time of the execution of the extension did not have the sole authority to bind the Regional Government. This lawsuit is substantially similar to a complaint filed by the Regional Government against PBH in January 2015 that was dismissed by the Court of Cusco and, upon appeal by the Regional Government, was affirmed by the Superior Court of Cusco in favor of PBH in June 2016. The Company does not believe that there is any merit to the Regional Government's complaint.

The Company and certain of its subsidiaries are parties to various legal proceedings arising in the normal course of business. These proceedings generally include matters relating to labor disputes, tax claims, personal injury cases, lease negotiations and ownership disputes. The outcome of each of these matters cannot be determined with certainty, and the liability that the relevant parties may ultimately incur with respect to any one of these matters in the event of a negative outcome may be in excess of amounts currently accrued for with respect to these matters. Where a reasonable estimate can be made, the additional losses or range of loss that may be incurred in excess of the amount recognized from the various legal proceedings arising in the normal course of business are disclosed separately for each claim, including a reference to where it is disclosed. However, for certain of the legal proceedings, management is unable to estimate the loss or range of loss that may result from these claims due to the highly complex nature or early stage of the legal proceedings. Other

~~Belmond~~The ~~has~~Company ~~granted~~and tocertain ~~James Sherwood, a former director~~ of ~~the~~its ~~Company,~~subsidiaries aare ~~right~~parties ~~of first refusal~~ to ~~purchase~~various ~~the~~legal ~~Belmond~~proceedings ~~Hotel~~arising ~~Cipriani~~ in ~~Venice, Italy in~~ the ~~event~~normal ~~Belmond~~course ~~proposes~~of ~~to sell it~~business. These ~~The~~proceedings ~~purchase~~generally ~~price~~include ~~would~~matters berelating ~~the~~to ~~offered~~labor ~~sale~~disputes, ~~price~~tax inclaims, ~~the~~personal ~~case~~injury ofcases, alease ~~cash~~negotiations ~~sale~~and orownership ~~the~~disputes. ~~fair~~The ~~market~~outcome ~~value~~ of ~~the~~each ~~hotel, as determined by an independent valuer, in the case~~ of athese ~~non-cash~~matters ~~sale.~~cannot ~~Mr. Sherwood~~be ~~has~~determined ~~also~~with ~~been~~certainty, ~~granted~~and ~~an option to purchase~~ the ~~hotel~~liability atthat ~~fair market value if a change in control of~~ the ~~Company~~relevant ~~occurs.~~parties ~~Mr. Sherwood~~ may ~~elect~~ultimately toincur ~~pay~~with ~~80%~~respect ofto ~~the~~any ~~purchase~~one ~~price if he exercises his right~~ of ~~first~~these ~~refusal,~~matters orin ~~100% of~~ the ~~purchase~~event ~~price~~of ~~if he exercises his purchase option, by~~ a ~~non-recourse~~negative ~~promissory~~outcome ~~note~~may ~~secured~~be ~~by the hotel payable~~ in ~~ten~~excess ~~equal annual installments with interest at LIBOR. This right~~ of ~~first~~amounts ~~refusal~~currently ~~and~~accrued ~~purchase~~for ~~option~~with ~~are~~respect ~~not assignable and expire one year after Mr. Sherwood’s death. These agreements relating~~ to ~~Belmond~~these ~~Hotel Cipriani between Mr~~matters. ~~Sherwood~~ ~~and~~Where ~~Belmond~~a ~~and~~reasonable ~~its~~estimate ~~predecessor~~can ~~companies~~be ~~have~~made, ~~been~~the inadditional ~~place~~losses ~~since~~or ~~1983 and were last amended and restated in 2005.~~

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range of loss that may be incurred in excess of the amount recognized from the various legal proceedings arising in the normal course of business are disclosed separately for each claim, including a reference to where it is disclosed. However, for certain of the legal proceedings, management is unable to estimate the loss or range of loss that may result from these claims due to the highly complex nature or early stage of the legal proceedings.

ITEM 4. Mine Safety Disclosures

None.

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PART II

ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The class A common shares of the Company are traded on the New York Stock Exchange under the symbol ~~Belmond~~BEL. All of the class B common shares of the Company are owned by a subsidiary of the Company and are not listed. See Item 12—Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. ~~The following table presents the quarterly high and low sales prices of a class A common share in 2017 and 2016 as reported for New York Stock Exchange composite transactions:~~

	2017				2016
	High		Low		High		Low
First quarter	$	14.45	$	11.70	$	10.04	$	7.31
Second quarter	13.65		11.00		10.00		8.69
Third quarter	13.95		12.05		12.86		9.60
Fourth quarter	14.20		11.68		14.05		11.50

The Company paid no cash dividends in 2017 and 2016 and has no present intention to pay dividends in the future.

The Islands of Bermuda where the Company is incorporated have no applicable government fiscal or monetary laws, decrees or regulations which restrict the export or import of capital or affect the payment of dividends or other distributions specifically to nonresident holders of the class A and B common shares of the Company or which subject United States holders to taxes. The Company's ability to pay dividends is limited by its credit agreement.

At February 15, ~~2018~~2019, there were 75183 record holders of the class A common shares of the Company.

During ~~2017~~2018, the Company made no offering of securities including its class A common shares that was not registered in the United States.

Information responding to Item 201(e) of SEC Regulation S-K is omitted because the Company is a “foreign private issuer” as defined in SEC Rule 3b-4 under the 1934 Act.

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ITEM 6. Selected Financial Data

Belmond Ltd. and Subsidiaries

	2017		2016		2015		2014		2013
	2018		2017		2016		2015		2014
	$’000		$’000		$’000		$’000		$’000
Revenue	~~560~~576,~~999~~836		~~549~~560,~~824~~999		~~551~~549,~~385~~824		~~585~~551,~~715~~385		~~594~~585,~~081~~715
Impairments(1)	(139,~~716~~650	)	(113,~~007~~716	)	(91,~~796~~007	)	(19,~~211~~796	)	(361,~~430~~211	)
(Loss)/gain on disposal of property, plant and equipment and equity method investments(2)	(153	)	938		20,275		4,128		—
Gain/(loss) on disposal of property, plant and equipment and equity method investments(2)	750		(153	)	938		20,275		4,128
(Losses)/earnings from unconsolidated companies, net of tax (3)	(10,213	)	11,013		9,075		9,484		6,442
Earnings/(losses) from unconsolidated companies, net of tax (3)	9,355		(10,213	)	11,013		9,075		9,484
(Losses)/earnings from continuing operations	(4528,~~070~~242	)	35(45,~~401~~070	)	1735,~~388~~401		217,~~047~~388		~~(26~~2,~~178~~047	)
Net earnings/(losses) from discontinued operations, net of tax(4)	122		1,032		(1,534	)	(3,782	)	(5,318	)
Net (losses)/earnings from discontinued operations, net of tax(4)	(10	)	122		1,032		(1,534	)	(3,782	)
Net (losses)/earnings	(4428,~~948~~252	)	36(44,~~433~~948	)	1536,~~854~~433		(115,~~735~~854	)	(311,~~496~~735	)
Net (earnings)/losses attributable to non-controlling interests	(87204	)	(~~109~~87	)	~~411~~(109	)	~~(145~~411	)	(63145	)
Net (losses)/earnings attributable to Belmond Ltd.	(4528,~~035~~456	)	36(45,~~324~~035	)	1636,~~265~~324		(116,~~880~~265	)	(311,~~559~~880	)

	2017		2016	2015		2014		2013
	$		$	$		$		$
Basic earnings per share:
(Losses)/earnings from continuing operations	(0.44	)	0.35	0.17		0.02		(0.25	)
Net earnings/(losses) from discontinued operations	—		0.01	(0.01	)	(0.04	)	(0.05	)
Basic net (losses)/earnings per share attributable to Belmond Ltd.	(0.44	)	0.36	0.16		(0.02	)	(0.31	)
Diluted earnings per share:
(Losses)/earnings from continuing operations	(0.44	)	0.34	0.17		0.02		(0.25	)
Net earnings/(losses) from discontinued operations	—		0.01	(0.01	)	(0.04	)	(0.05	)
Diluted net (losses)/earnings per share attributable to Belmond Ltd.	(0.44	)	0.35	0.16		(0.02	)	(0.31	)
Dividends per share	—		—	—		—		—

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	2017		2016		2015	2014		2013
	2018		2017		2016	2015		2014
	$’000		$’000		$’000	$’000		$’000
	$		$		$	$		$
Total assets	1,653,637		1,524,068		1,509,475	1,655,223		1,879,866
Basic earnings per share:
Total long-term debt and obligations under capital leases	707,159		591,052		582,892	604,689		628,651
(Losses)/earnings from continuing operations	(0.27	)	(0.44	)	0.35	0.17		0.02
Total shareholders’ equity	698,546		686,450		658,064	761,186		908,222
Net earnings/(losses) from discontinued operations	—		—		0.01	(0.01	)	(0.04	)
Basic net (losses)/earnings per share attributable to Belmond Ltd.	(0.28	)	(0.44	)	0.36	0.16		(0.02	)
Diluted earnings per share:
(Losses)/earnings from continuing operations	(0.27	)	(0.44	)	0.34	0.17		0.02
Net earnings/(losses) from discontinued operations	—		—		0.01	(0.01	)	(0.04	)
Diluted net (losses)/earnings per share attributable to Belmond Ltd.	(0.28	)	(0.44	)	0.35	0.16		(0.02	)
Dividends per share	—		—		—	—		—



	2018	2017	2016	2015	2014
	$’000	$’000	$’000	$’000	$’000

Total assets	1,675,808	1,653,637	1,524,068	1,509,475	1,655,223

Total long-term debt and obligations under capital leases	759,978	707,159	591,052	582,892	604,689

Total shareholders’ equity	639,512	698,546	686,450	658,064	761,186

The above selected financial data should be read in conjunction with the information set forth under Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and related notes (Item 8).

(1) The ~~impairment~~impairments in ~~2017~~2018 consisted of impairment of property, plant and equipment of $72,~~124~~291,000 at Belmond Road to Mandalay and $12,~~092~~484,000 at Belmond ~~Northern~~Governor's ~~Belle~~Residence, ~~and~~ impairment of goodwill of $52,~~500~~195,000 at Belmond ~~Cap~~Governor's ~~Juluca~~Residence, $1,548,000 at Belmond La Résidence d’Angkor, $819,000 at Belmond Villa San Michele and $157,000 at Belmond Castello di Casole, and a favorable lease asset impairment of $156,000 at Belmond Governor’s Residence.

The impairment in 2017 consisted of impairment of property, plant and equipment of $7,124,000 at Belmond Road to Mandalay and $1,092,000 at Belmond Northern Belle and impairment of goodwill of $5,500,000 at Belmond Cap Juluca.

The impairment in 2016 consisted of impairment of property, plant and equipment of $1,007,000 at Belmond Orcaella.

The impairment in 2015 consisted of impairment of goodwill of $4,098,000 at Belmond Grand Hotel Europe, $3,581,000 at Belmond Jimbaran Puri, $1,455,000 at Belmond La Résidence Phou Vao and $662,000 at Belmond Northern Belle.

The impairment in 2014 consisted of impairment of property, plant and equipment of $1,211,000 relating to the write-down to fair value of train carriages of Belmond's former Great South Pacific Express train, which were held in Australia and were not in service.

(2) The ~~impairments~~2018 ingain ~~2013~~was ~~consisted~~related ofto ~~impairment~~the recognition of ~~property,~~the ~~plant~~deferred ~~and~~gain ~~equipment~~in atrelation ~~Belmond~~to Lathe ~~Samanna~~sale of ~~$35,680,000~~Inn ~~and~~at ~~impairment~~Perry ofCabin ~~property,~~by ~~plant and equipment at~~ Belmond ~~Grand~~in ~~Hotel~~March ~~Europe of $750,000~~2014.

~~(2) The 2017 loss was related to the sale of the shares in Northern Belle Limited offset by the recognition of the deferred gain in relation to the sale of Inn at Perry Cabin by Belmond in March 2014.~~37

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The 2017 loss was related to the sale of the shares in Northern Belle Limited offset by the recognition of the deferred gain in relation to the sale of Inn at Perry Cabin by Belmond in March 2014.

The 2016 gain was related to the gain on sale of the spa building at Belmond Casa de Sierra Nevada and the recognition of the deferred gain in relation to the sale of Inn at Perry Cabin by Belmond in March 2014.

The 2015 gain was related to the sale of Belmond's 50% ownership in Hotel Ritz by Belmond in May 2015 and the recognition of the deferred gain in relation to the sale of Inn at Perry Cabin by Belmond in March 2014.

The 2014 gain was related to the sale of the property and operations of Inn at Perry Cabin by Belmond in March 2014. Due to Belmond's continuing involvement in managing the hotel, its results are presented within continuing operations.

(3) The ~~2017~~2018 losses from unconsolidated companies, net of tax, include an$2,074,000, ~~impairment~~Belmond's ~~charge~~equity share of ~~$29.3~~an ~~million~~impairment charge recorded in ~~Ferrocarril~~Belmond ~~Transandino~~Las ~~S.A.~~Casitas ~~("FTSA")~~del Colca, ~~the~~one ~~Company's~~of ~~joint venture that has a concession from~~ the ~~Government~~five ofhotels ~~Peru~~owned toby ~~operate~~PBH, the ~~track~~Peruvian ~~network~~joint ~~in the southern and southeastern Peru~~venture.

~~(4)~~ The ~~results~~2017 losses from unconsolidated companies, net of ~~Ubud~~tax, ~~Hanging~~include ~~Gardens~~$29,266,000, ~~Porto~~Belmond's ~~Cupecoy~~equity share of an impairment charge recorded in Ferrocarril Transandino S.A. ("FTSA"), ~~The~~the ~~Westcliff~~Company's ~~and~~joint ~~Keswick~~venture ~~Hall~~that ~~have~~has ~~been~~a ~~presented~~concession asfrom ~~discontinued~~the ~~operations~~Government ~~for~~of ~~all~~Peru ~~periods~~to ~~presented~~operate the track network in southern and southeastern Peru.

~~Included in the earnings/~~(~~losses~~4) ~~from~~The ~~discontinued~~results ~~operations in 2013 are impairment losses~~ of ~~$7,031,000 related to~~ Ubud Hanging Gardens and ~~the~~Porto ~~gain~~Cupecoy onhave ~~sale~~been ofpresented ~~Porto~~as ~~Cupecoy~~discontinued ofoperations ~~$439,000~~for all periods presented.

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ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

Belmond currently owns, partially-owns or manages 46 properties (~~excluding~~including ~~one additional business scheduled for a future opening,~~ the Belmond Cadogan Hotel in London, England, which opened on February 28, 2019).

Belmond has six reportable segments: owned hotels in (1) Europe, (2) North America (including one stand-alone restaurant) and (3) Rest of world, (4) Owned trains and cruises, (5) Part-owned/ managed hotels and (6) Part-owned/ managed trains.

~~Belmond~~Hotels ~~revised~~represent the ~~order~~largest ofpart ~~the presentation~~ of ~~these~~Belmond’s ~~segments~~business inwith the ~~year~~vast ~~ended~~majority ~~December 31,~~of ~~2016 and included a new sub-total to show management fees earned by~~ the Company's ~~from~~revenues ~~its~~in ~~part-owned/managed~~2018, ~~operations.~~2017, Inand ~~addition~~2016, ~~Belmond~~respectively, ~~reclassified~~derived ~~certain~~primarily ~~expenses associated with the Company’s development team~~ from the ~~Part-owned/managed~~Europe, ~~hotels~~North ~~segment~~America toand ~~central~~Rest ~~costs.~~of ~~Prior~~world ~~periods have been re-presented to reflect the current period presentation~~segments. ~~There has not been a material impact on the consolidated financial statements.~~

Hotels ~~represent~~consists ~~the~~of ~~largest~~30 ~~part~~deluxe ofhotels ~~Belmond’s~~which ~~business~~were ~~with~~wholly ~~the~~or ~~vast~~ majority ofowned ~~the~~by ~~Company's~~Belmond ~~revenues~~or, in ~~2017~~the ,case ~~2016~~of ~~and~~Belmond ~~2015,~~Charleston ~~respectively~~Place, ~~derived~~owned ~~primarily~~by ~~from~~a consolidated variable interest entity. Twelve of the owned hotels are located in Europe, six in North America and ~~Rest~~twelve in the rest of the world. ~~segments~~In addition, Belmond owns and operates the stand-alone restaurant ‘21’ Club in New York which is included within the North America owned hotels segment. In May 2017, the Company acquired Cap Juluca, now rebranded

Hotels consists of 30 deluxe hotels which were wholly or majority owned by Belmond or, in the case of Belmond Charleston Place, owned by a consolidated variable interest entity. Twelve of the owned hotels are located in Europe, six in North America and twelve in the rest of the world. In addition, Belmond owns and operates the stand-alone restaurant ‘21’ Club in New York which is included within the North America owned hotels segment. In May 2017, the Company acquired Cap Juluca, now rebranded as Belmond Cap Juluca, a 96108-key resort on the Caribbean island of Anguilla, British West Indies. In February 2018, the Company acquired the Castello di Casole resort and estate in Tuscany, Italy. See ~~Notes~~Note 45 ~~and 26~~ to the Financial Statements.

Belmond's part-owned/managed segment consists of six hotels which Belmond operates under management contracts in Peru and the United States. Belmond has unconsolidated equity interests in five of the managed hotels. In April 2017, the Company acquired ~~Las Casitas del Colca, a 20-key hotel in Colca Canyon, Peru, through Peru Belmond Hotels ("PBH").~~

Las Casitas del Colca, a 20-key hotel in Colca Canyon, Peru, through Peru Belmond Hotels ("PBH").

In recent years, Belmond has sold to third parties a number of properties not considered key to Belmond’s portfolio of unique, high-valued properties as part of management's long-term strategy to reduce leverage and redeploy the capital in properties with higher potential returns.

Belmond's owned trains and cruises segment consists of four European tourist trains, one river cruise ship in Myanmar and one French canal cruise business. In ~~May~~August ~~2015~~2016, the Company commenced the operations of Belmond ~~completed~~Grand Hibernian, the ~~sale~~first luxury overnight train traveling throughout the island of ~~Hotel~~Ireland. ~~Ritz~~On byNovember ~~Belmond~~2, ~~Madrid~~2017, ~~Spain.~~Belmond ~~The~~sold ~~gain~~its oninterest ~~sale~~in ~~was~~the ~~reported~~entity ~~within~~that ~~gain~~wholly owned Belmond Northern Belle and on ~~disposal~~November of6, ~~property~~2017, ~~plant~~the ~~and~~entity ~~equipment~~that ~~and~~leased ~~equity~~Belmond ~~method~~Orcaella ~~investments~~provided innotice of termination to the ~~statements~~owner in respect of ~~consolidated~~its ~~operations~~charter agreement, which resulted in a dispute that the ~~relevant~~parties ~~periods.~~resolved under a settlement agreement dated January 22, 2019.

Belmond's part-owned/managed trains ~~and cruises~~ segment consists of ~~four~~three ~~European~~train ~~tourist~~businesses ~~trains,~~in ~~one~~Southeast ~~river~~Asia ~~cruise ship~~and inPeru ~~Myanmar~~which ~~and~~Belmond ~~one~~operates ~~French~~under ~~canal~~management ~~cruise business~~contracts. InBelmond ~~August~~has ~~2016,~~unconsolidated ~~the~~equity ~~Company~~interests ~~commenced~~in ~~the~~each ~~operations~~ of ~~Belmond~~these ~~Grand Hibernian, the first luxury overnight~~ train ~~traveling throughout the island of Ireland~~businesses. OnIn ~~November~~May 2, 2017, ~~Belmond sold its interest in~~ the ~~entity~~Company ~~that~~launched, ~~wholly~~through ~~owned~~Peru ~~Belmond Northern Belle and on November 6~~Rail, ~~2017,~~ the ~~entity that leased~~ Belmond ~~Orcaella~~Andean ~~provided~~Explorer ~~notice~~luxury ofsleeper ~~termination~~train, tolocated ~~the owner~~ in ~~respect of its charter agreement~~Peru.

~~Belmond's~~Sale ~~part-owned/~~to managed trains segment consists of three train businesses in Southeast Asia and Peru which Belmond operates under management contracts. Belmond has unconsolidated equity interests in each of these train businesses. In May 2017, the Company launched, through PBH, the Belmond Andean Explorer luxury sleeper train, located in Peru.LVMH

On December 14, 2018, the Company announced that it had entered into an Agreement and Plan of Merger dated December 13, 2018 (the "Merger Agreement") with LVMH Moët Hennessy—Louis Vuitton SE ("LVMH"), Palladio Overseas Holding Limited, an indirect, wholly-owned subsidiary of LVMH ("Holding"), and Fenice Ltd., a wholly-owned subsidiary of Holding ("Merger Sub"), pursuant to which LVMH will acquire the Company. Under the Merger Agreement, the sale to LVMH will be effected by way of a merger of Merger Sub with and into the Company, with the Company being the surviving company in the merger and becoming a subsidiary of Holding.

The completion of the merger, which is expected to occur in the first half of 2019, is subject to the satisfaction or waiver of certain conditions, including the receipt of antitrust approvals in certain foreign jurisdictions and the absence of any law or governmental order prohibiting the merger. The Company held a special general meeting of its shareholders on February 14, 2019 at which time Belmond's shareholders approved the Merger Agreement and the merger. At the effective time of the merger, each issued and outstanding class A common share, par value $0.01 per share, of the Company, other than class A common shares that are held by the Company in treasury or that are owned by LVMH, Holding or Merger Sub or by any other direct or indirect subsidiary of LVMH or the Company, will be converted automatically and without any action by the holder of the class A common shares into the right to receive $25.00 per share in cash, without interest (and less any applicable withholding taxes). If the merger is completed, the Company will cease to be a publicly traded company and will become a subsidiary of Holding and an indirect subsidiary of LVMH. For further information on the risks relating to the sale of the Company, see Part 1—Item 1A—Risk Factors—Risks Related to the Sale of the Company. Additional information about the sale, the Merger Agreement and the merger, including

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circumstances under which the Merger Agreement can be terminated, as well as other terms and conditions, are set forth in the Company's Current Report on Form 8-K filed with the SEC on December 14, 2018.

Hotel RevPAR, ADR and occupancy

Revenue per available room (“RevPAR”) is calculated by dividing room revenue by room nights available for the period. Same store RevPAR is a comparison of RevPAR based on the operations of the same units in each period, by excluding the effect of any hotel acquisitions in the period or major refurbishment where a property is closed for a month or longer. The comparison also excludes the effect of dispositions (including discontinued operations) or closures. Management uses RevPAR and same store RevPAR to identify trend information with respect to room revenue and to evaluate the performance of a specific hotel or group of hotels in a given period.

Average daily rate ("ADR") is calculated by dividing room revenue by total rooms sold for the period. Management uses ADR to measure the level of pricing achieved by a specific hotel or group of hotels in a given period.

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Occupancy is calculated by dividing total rooms sold by total rooms available for the period. Occupancy measures the utilization of a hotel’s available capacity. Management uses occupancy to measure demand at a specific hotel or group of hotels in a given period.

ADR and RevPAR are measures for a point in time (a day, month or year) and are most often compared across like time periods. Current ADR and RevPAR are not necessarily indicators of future performance.

In ~~2017~~2018, same store RevPAR increased by 5% in U.S. dollars and 15% in constant currency. Average occupancy was 61% and ADR was $~~510~~534. In ~~2016~~2017, same store RevPAR increased by 15% in U.S. dollars and 31% when measured in constant currency. Average occupancy was 61% and ADR was $~~490~~510.

Business strategy

Subject to the constraints imposed by the Merger Agreement, Belmond plans to grow the business in the long term by:

• driving top- and bottom-line growth at the Company's existing businesses,

• ~~stepping~~continuing up the Company's efforts to ~~continue to~~ build brand awareness, and


•	positioning the Company for footprint expansion.

For additional information, see "Management Strategies" in Item 1—Business.

Revenue and expenses

Belmond derives revenue from owned hotel operations primarily from the sale of rooms and the provision of food and beverages. The main factors for analyzing rooms revenue are the number of room nights sold, or occupancy, ADR, and RevPAR, referred to above which is a measure of both these factors.

The revenue from the owned trains and cruises segment primarily comprises tickets sold for travel and food and beverage sales.

Revenue from part-owned/ managed hotels and trains includes fees received under management contracts, which are typically based upon a combination of a percentage of the revenue from operations and operating earnings calculated before specified fixed charges.

Cost of services includes labor, repairs and maintenance, energy and the costs of food and beverages sold to customers in respect of owned hotels, trains and cruises.

Selling, general and administrative expenses include travel agents’ commissions, the salaries and related costs of the sales teams, advertising and public relations costs, and the salaries and related costs of management.

Depreciation and amortization includes depreciation of owned hotels, trains and cruises.

~~Impact of foreign currency exchange rate movements~~40

As reported below in the comparisons of the 2017, 2016 and 2015 financial years under “Results of Operations”, Belmond has exposure arising from the impact of translating its global foreign currency earnings and expenses into U.S. dollars. Twelve of Belmond’s owned properties in 2017 operated in European euro territories, two in Brazilian real, one in South African rand, four in British pounds sterling, three in Botswana pula, two in Mexican peso, one in Peruvian nuevo sol, one in Russian ruble and six in various Southeast Asian currencies. Revenue derived by Venice Simplon-Orient-Express was recorded primarily in British pounds sterling, but its operating costs were mainly denominated in euros. Revenue derived by Belmond Maroma Resort and Spa, Belmond La Samanna and Belmond Miraflores Park was recorded in U.S. dollars, but the majority of the hotels’ expenses were denominated in Mexican pesos, European euros and Peruvian nuevo soles, respectively. Both revenue and the majority of expenses for Belmond Cap Juluca, Belmond Governor's Residence, Belmond La Résidence D'Angkor and Belmond Road to Mandalay were recorded in U.S. dollars.

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Impact of foreign currency exchange rate movements

As reported below in the comparisons of the 2018, 2017 and 2016 financial years under “Results of Operations”, Belmond has exposure arising from the impact of translating its global foreign currency earnings and expenses into U.S. dollars. Twelve of Belmond’s owned properties in 2018 operated in European euro territories, two in Brazilian real, one in South African rand, four in British pounds sterling, three in Botswana pula, two in Mexican peso, one in Peruvian nuevo sol, one in Russian ruble and six in various Southeast Asian currencies. Revenue derived by Venice Simplon-Orient-Express was recorded primarily in British pounds sterling, but its operating costs were mainly denominated in euros. Revenue derived by Belmond Maroma Resort and Spa, Belmond La Samanna and Belmond Miraflores Park was recorded in U.S. dollars, but the majority of the hotels’ expenses were denominated in Mexican pesos, European euros and Peruvian nuevo soles, respectively. Both revenue and the majority of expenses for Belmond Cap Juluca, Belmond Governor's Residence, Belmond La Résidence D'Angkor and Belmond Road to Mandalay were recorded in U.S. dollars.

Except for the specific instances described above, Belmond’s properties match foreign currency earnings and costs as far as possible to provide a natural hedge against currency movements. The reporting of Belmond’s revenue and costs translated into U.S. dollars, however, can be materially affected by foreign exchange rate fluctuations from period to period.

Constant currency

Belmond analyzes certain key financial measures on a constant currency basis as this helps identify underlying business trends, without distortion from the effects of currency movements. Measurement on a constant currency basis means the results exclude the effect of foreign currency translation and are calculated by translating prior year results at current year exchange rates.

Market capitalization

The Company’s class A common share price increased during ~~2017~~2018 to $~~12.~~25.03 at December 31, ~~2017~~2018, from $1312.3525 at December 31, ~~2016~~2017 and Belmond’s market capitalization ~~decreased~~increased to $12.2558 billion at December 31, ~~2017~~2018, from $1.3625 billion at December 31, ~~2016~~2017.

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Results of Operations

Operating information for Belmond’s owned hotels for the years ended December 31, ~~2017~~2018, ~~2016~~2017 and ~~2015~~2016 is as follows:

Year ended December 31,	~~2017~~2018	~~2016~~2017	~~2015~~2016
Rooms Available
Europe	~~273~~288,~~756~~519	~~271~~273,~~963~~756	~~273~~271,~~052~~963
North America	~~255~~231,~~862~~875	~~256~~255,~~726~~862	~~255~~256,~~216~~726
Rest of world	~~374~~372,~~478~~678	~~376~~374,~~952~~478	~~371~~376,~~207~~952
Worldwide	~~904~~893,~~096~~072	~~905~~904,~~641~~096	~~899~~905,~~475~~641
Rooms Sold
Europe	~~176~~181,~~129~~465	~~175~~176,~~060~~129	~~169~~175,~~371~~060
North America	~~171~~160,~~906~~267	171,~~392~~906	171,~~828~~392
Rest of world	~~200~~204,~~537~~013	~~204~~200,~~944~~537	~~211~~204,~~059~~944
Worldwide	~~548~~545,~~572~~745	~~551~~548,~~396~~572	~~552~~551,~~258~~396
Occupancy (percentage)
Europe	6463	64	6264
North America	6769	67	67
Rest of world	5455	54	5754
Worldwide	61	61	61
Average daily rate (in U.S. dollars)
Europe	~~740~~812	~~676~~740	~~689~~676
North America	~~426~~430	~~421~~426	~~429~~421
Rest of world	~~380~~368	~~388~~380	~~356~~388
Worldwide	~~510~~534	~~490~~510	~~481~~490
RevPAR (in U.S. dollars)
Europe	~~476~~511	~~435~~476	~~427~~435
North America	~~286~~297	~~281~~286	~~289~~281
Rest of world	~~203~~201	~~211~~203	~~202~~211
Worldwide	~~309~~326	~~298~~309	~~295~~298

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2018 compared to 2017



			Change %
Year ended December 31,	2018	2017	Dollars		Constant currency

Same Store RevPAR (in U.S. dollars)
Europe	510	476	7	%	4	%
North America	286	272	5	%	5	%
Rest of world	200	203	(1	)%	4	%
Worldwide	321	307	5	%	5	%

Same store RevPAR data for 2018 and 2017 excludes the operations of Belmond Castello di Casole, Tuscany, Italy that was acquired in February 2018. Its operations are included in the Europe segment. It also excludes the operations of Belmond Cap Juluca, Anguilla, British West Indies, which was acquired in May 2017 and Belmond La Samanna, St Martin, French West Indies, which were both closed for refurbishment following Hurricanes Irma and Jose in September 2017. Both of these operations are included in the North America segment. In addition, same store RevPAR data excludes the operations of Belmond Savute Elephant Lodge, Chobe Reserve, Botswana, which was closed for refurbishment from November 2017 to June 2018. Its operations are included in the Rest of world segment.

2017 compared to 2016



			Change %
Year ended December 31,	2017	2016	Dollars		Constant currency

Same Store RevPAR (in U.S. dollars)
Europe	476	435	9	%	6	%
North America	272	254	7	%	7	%
Rest of world	207	218	(5	)%	(11	)%
Worldwide	311	297	5	%	1	%

Same store RevPAR data for 2017 and 2016 excludes the operations of Belmond Cap Juluca, which was acquired in May 2017 and Belmond La Samanna, ~~St Martin, French West Indies~~ which is closed for refurbishment following Hurricanes Irma and Jose in September 2017. Both of these operations are included in the North America segment. It also excludes the operations of Belmond Savute Elephant Lodge, ~~Chobe Reserve, Botswana,~~ which closed for refurbishment in November 2017 and Belmond La Résidence d’Angkor, Siem Riep, Cambodia, which closed for refurbishment in May 2016 and ~~re-opened~~reopened in November 2016. Both of these operations are included in the Rest of world segment.

~~2016 compared to 2015~~ 43

			Change %
Year ended December 31,	2016	2015	Dollars		Constant currency
Same Store RevPAR (in U.S. dollars)
Europe	435	427	2	%	4	%
North America	281	289	(3	)%	(2	)%
Rest of world	216	207	4	%	9	%
Worldwide	303	299	1	%	3	%

Same store RevPAR data for 2016 and 2015 exclude the operations of Belmond Eagle Island Lodge, Okavango Delta, Botswana, which was closed for refurbishment from January through November 2015, and Belmond La Residence d'Angkor, which closed for refurbishment in May 2016 and re-opened in November 2016. Both of these operations are included in the Rest of world segment.

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Revenue

	2017	2016	2015
	2018	2017	2016
Year ended December 31,	$ millions	$ millions	$ millions
Revenue:
Owned hotels:
Europe	~~212~~238.4	~~199~~212.14	~~200~~199.01
North America	~~149~~132.3	~~145~~149.93	~~148~~145.19
Rest of world	~~124~~122.2	~~130~~124.32	~~124~~130.43
Total owned hotels	~~485~~492.9	~~475~~485.39	~~472~~475.53
Owned trains & cruises	6370.28	5963.32	6559.53
Part-owned/managed hotels	12.03	41.40	54.24
Part-owned/managed trains	10.98	10.89	810.28
Total management fees	1113.91	1511.29	1315.42
Revenue	~~561~~576.08	~~549~~561.80	~~551~~549.48

2018 compared to 2017

Revenue was $576.8 million for the year ended December 31, 2018, an increase of $15.8 million or 3%, from $561.0 million for the year ended December 31, 2017. In constant currency, revenue for the year ended December 31, 2018 increased $14.8 million from the year ended December 31, 2017. Owned hotels revenue was $492.9 million for the year ended December 31, 2018, an increase of $7.0 million, or 1%, from $485.9 million for the year ended December 31, 2017. In constant currency, revenue for owned hotels for the year ended December 31, 2018 increased $8.0 million or 2% from the year ended December 31, 2017. The increase in owned hotels revenue was primarily due to a $16.4 million increase across Belmond's Italian portfolio, excluding Belmond Hotel Cipriani, Venice, Italy, which faced a non-Biennale year, and predominantly driven by the introduction of Belmond Castello di Casole, the hotel that was acquired in the first quarter of 2018 and opened under the Belmond flag in May 2018. There was also a $5.9 million increase at Belmond Hotel das Cataratas, Iguassu Falls, Brazil, following positive media coverage of the destination and the benefit of reduced visa restrictions in the country, a $3.6 million increase at Belmond Grand Hotel Europe, St. Petersburg, Russia, which benefited from recent capital investments and the football World Cup in July 2018, and a $2.5 million increase at Belmond Charleston Place, South Carolina, which continues to benefit from the popularity of the destination and enhanced revenue management strategies. This increase was offset by a decline in revenue of $14.8 million at Belmond La Samanna which was closed for refurbishment for the majority of the twelve months ended December 31, 2018 following damage sustained from the 2017 hurricanes that hit the region, and an $8.0 million decrease in revenue for ‘21’ Club, New York, which was closed for more than half of the twelve months ended December 31, 2018 following water damage from burst pipes in January 2018. Revenue from owned trains and cruises was $70.8 million for the year ended December 31, 2018, an increase of $7.6 million, or 12%, from $63.2 million for the year ended December 31, 2017. In constant currency, revenue for owned trains and cruises for the year ended December 31, 2018 increased $5.5 million or 8% from the year ended December 31, 2017 primarily due to a $9.3 million rise in revenue for the Venice Simplon-Orient-Express, which reported a strong year as it benefited from enhanced revenue management activities, media exposure and recent capital improvements. This increase was offset by the sale of the Belmond Northern Belle in November 2017, which contributed revenue of $4.2 million in the twelve months ended December 31, 2017.

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2017 compared to 2016

Revenue was $561.0 million for the year ended December 31, 2017, an increase of $11.2 million ~~or 2%~~, from $549.8 million for the year ended December 31, 2016. In constant currency, revenue for the year ended December 31, 2017 decreased $0.6 million from the year ended December 31, 2016. Owned hotels revenue was $485.9 million for the year ended December 31, 2017, an increase of $10.6 million, or 2%, from $475.3 million for the year ended December 31, 2016. In constant currency, revenue for owned hotels for the year ended December 31, 2017 decreased $3.6 million or 1% from the year ended December 31, 2016. The decrease in owned hotels revenue was primarily due to a $20.4 million or 28% decrease in revenue for the Company's two Brazilian properties due to a combination of the impact in the year ended December 31, 2017 of political and economic instability in the country and exceptionally high revenue in the year ended December 31, 2016 due to the 2016 Summer Olympic Games held in Rio de Janeiro. This was offset in part by a $2.8 million or 8% revenue increase at Belmond Hotel Cipriani, ~~Venice, Italy~~ and ~~and~~ a $2.6 million or 10% revenue increase at Belmond Grand Hotel Europe~~, St~~. ~~Petersburg, Russia.~~ Additionally, Belmond Charleston Place, ~~Charleston,~~recorded ~~South Carolina saw~~ revenue growth of $6.0 million or 8% and Belmond Mount Nelson Hotel, Cape Town, South Africa increased revenue by $3.2 million or 18%. Belmond Hotel Cipriani benefited from the Biennale Arts Festival which takes place every other year in Venice, and Belmond Grand Hotel Europe's year-over-year growth was primarily due to increased revenue during the annual St. Petersburg International Economic Forum and the 2017 FIFA Confederations Cup. Belmond Charleston Place increased food and beverage revenue as a result of a new high-end sports pub that commenced operations in July 2016 and also an increase in group business. Belmond Mount Nelson Hotel increased occupancy and average room rate following refurbishment of the property that took place in 2016 and 2017. Revenue from owned trains and cruises was $63.2 million for the year ended December 31, 2017, an increase of $3.9 million, or 7%, from $59.3 million for the year ended December 31, 2016. In constant currency, revenue for owned trains and cruises for the year ended December 31, 2017 increased $6.2 million or 11% from the year ended December 31, 2016 due to a revenue increase of $4.0 million for Belmond Grand Hibernian, Ireland, as it commenced its first full year of operations and the Belmond Royal Scotsman train which grew revenue by $2.2 million or 39% as a result of generating higher-revenue charter business and the addition of a spa car and four new berths. Additionally, the Venice Simplon-Orient-Express train ~~saw~~reported revenue increases of $2.0 million driven by promotional activity surrounding the release of the Hollywood movie 'Murder on the Orient Express' and Belmond British Pullman, London, England saw revenue increase by $1.4 million due to a higher number of charters operated in the year ended December 31, 2017. This was offset by a combined revenue decrease of $3.4 million at Belmond Road to Mandalay and Belmond Orcaella, the Company's two river cruise ships in Myanmar, as a result of decreased demand for tourism in the destination.

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2016 compared to 2015

Revenue was $549.8 million for the year ended December 31, 2016, a decrease of $1.6 million, from $551.4 million for the year ended December 31, 2015. In constant currency, revenue for the year ended December 31, 2016 increased $15.0 million or 3% from the year ended December 31, 2015. Owned hotels revenue was $475.3 million for the year ended December 31, 2016, an increase of $2.8 million, or 1%, from $472.5 million for the year ended December 31, 2015. In constant currency, revenue for owned hotels for the year ended December 31, 2016 increased $13.5 million or 3% from the year ended December 31, 2015. The increase in owned hotels revenue was largely due to a revenue increase of $6.9 million at Belmond Copacabana Palace, Rio de Janeiro, Brazil due to the 2016 Summer Olympic Games that took place in Rio de Janeiro and a revenue increase of $3.4 million in Belmond Safaris, Botswana, following the reopening of Belmond Eagle Island Lodge, which was closed from January to November 2015 for a complete renovation. In addition, Belmond Reid's Palace, Madeira, Portugal increased revenue by $2.5 million due to a 18% increase in occupancy, which largely resulted from the Company's strategic decision to focus on driving wholesale business in order to gain market share during the destination's slow season. Revenue from owned trains and cruises was $59.3 million in the year ended December 31, 2016, a decrease of $6.2 million, or 9%, from $65.5 million in the year ended December 31, 2015. In constant currency, revenue for owned trains and cruises for the year ended December 31, 2016 decreased $0.3 million or 1% from the year ended December 31, 2015, primarily as a result of revenue declines at the Company's two river cruise ships in Myanmar and Belmond Northern Belle, offset in part by Belmond Grand Hibernian as it commenced operations in August 2016.

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Segment performance

Segment performance is evaluated by the chief operating decision maker based upon adjusted EBITDA, which excludes gains/(losses) on disposal, impairments, restructuring and other special items, interest income, interest expense, foreign currency, tax (including tax on earnings from unconsolidated companies), depreciation and amortization and gains/(losses) on extinguishment of debt. Segment performance for the years ~~2017~~2018, ~~2016~~2017 and ~~2015~~2016 is analyzed as follows:

	2017		2016		2015
	2018		2017		2016
Year ended December 31,	$ millions		$ millions		$ millions
Adjusted EBITDA:
Owned hotels:
Europe	7379.70		6773.67		6667.46
North America	2938.81		29.48		3129.84
Rest of world	24.56		3324.15		3133.31
Total owned hotels	~~128~~141.07		~~130~~128.10		~~129~~130.51
Owned trains and cruises	413.45		4.34		74.23
Part-owned/managed hotels	67.86		6.38		76.13
Part-owned/managed trains	2426.06		2524.90		1925.89
Total adjusted share of earnings from unconsolidated companies and management fees	3034.82		3230.28		2632.92
Unallocated corporate costs:
Central costs	(3336.45	)	(3033.84	)	(3430.48	)
Share-based compensation	(56.80	)	(75.68	)	(9.7.6	)
Adjusted EBITDA	~~124~~146.09		~~128~~124.20		~~119~~128.52
Reconciliation from (losses)/earnings from continuing operations to adjusted EBITDA:
(Losses)/earnings from continuing operations	(45.1	)	35.4		17.4
Depreciation and amortization	62.9		52.4		50.5
Gain on extinguishment of debt	—		(1.2	)	—
Interest income	(1.1	)	(0.9	)	(0.9	)
Interest expense	32.5		29.2		32.1
Foreign currency, net	3.0		(9.2	)	5.0
Provision for income taxes	6.6		16.4		17.0
Share of (benefit from)/provision for income taxes of unconsolidated companies	(4.5	)	5.7		1.5
	54.3		127.7		122.6
Restructuring and other special items (1)	11.7		0.4		7.4
Acquisition-related costs (2)	14.0		—		—
Loss/(gain) on disposal of property, plant and equipment	0.2		(0.9	)	(20.3	)
Impairment of goodwill and property, plant and equipment	13.7		1.0		9.8
Impairment of assets in unconsolidated companies	30.1		—		—
Adjusted EBITDA	124.0		128.2		119.5
(1) Represents adjustments for insurance deductibles and losses while Belmond Cap Juluca and Belmond La Samanna are closed following the impact of Hurricanes Irma and Jose, restructuring, severance and redundancy costs, pre-opening costs and other items, net.
(2) Represents professional fees incurred in preliminary design and planning, structuring, assessment of financing opportunities, legal, tax, accounting and engineering due diligence and the negotiation of the purchase and sale agreements, and other ancillary documents, with the principal owner and leaseholder, together with three owners of villas and separate subleases, as well as a memorandum of understanding and ground lease with the Government of Anguilla.

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Year ended December 31,	2017		2016		2015
	2018		2017		2016
Rooms Available	273,756		271,963		273,052
Year ended December 31,	$ millions		$ millions		$ millions
Rooms Sold	176,129		175,060		169,371
Reconciliation from (losses)/earnings from continuing operations to adjusted EBITDA:
Occupancy (percentage)	64		64		62
(Losses)/earnings from continuing operations	(28.2	)	(45.1	)	35.4
Average daily rate (in U.S. dollars)	740		676		689
Depreciation and amortization	61.3		62.9		52.4
RevPAR (in U.S. dollars)	476		435		427
Gain on extinguishment of debt	—		—		(1.2	)
Interest income	(1.3	)	(1.1	)	(0.9	)
Interest expense	33.0		32.5		29.2
Foreign currency, net	3.8		3.0		(9.2	)
Provision for income taxes	14.0		6.6		16.4
Share of provision for/(benefit from) income taxes of unconsolidated companies	7.1		(4.5	)	5.7
	89.7		54.3		127.7
Insurance gains and deductibles	(11.6	)	1.5
Labor restructuring cost (1)	13.9		—		—
Net operating losses at two Caribbean properties while closed	15.0		3.8		—
Cost to terminate right of first refusal and purchase option (2)	13.0		—		—
Strategic review costs (3)	8.5		—		—
Other restructuring and special items (4)	6.4		6.4		0.4
Acquisition-related costs (5)	0.9		14.0		—
(Gain)/loss on disposal of property, plant and equipment	(0.8	)	0.2		(0.9	)
Loss on disposal of property, plant and equipment in unconsolidated companies	0.2		—		—
Impairment of goodwill, property, plant and equipment and other assets(6)	9.7		13.7		1.0
Impairment of assets in unconsolidated companies (7)	2.1		30.1		—
Adjusted EBITDA	146.9		124.0		128.2
(1) Represents charges for employee termination costs and other associated costs to restructure the Company’s labor force at Belmond La Samanna.
(2) Represents estimated costs to terminate purchase rights previously held by Mr. James Sherwood, a former director of the Company, in respect of the Belmond Hotel Cipriani. See Note 23 to the Financial Statements.
(3) Represents legal, professional and other internal costs in relation to the Company's strategic review.
(4) Represents costs in relation to restructuring, severance and redundancy costs, pre-opening costs, and other items, net.
(5) Represents acquisition fees in relation to the purchase of Castello di Casole in February 2018 and Cap Juluca in May 2017.
(6) Represents an impairment charge at five, three and one owned properties in the years ended 31 December 2018, 2017 and 2016, respectively.
(7) Represents an impairment charge at one of the Company's Peru unconsolidated hotels and PeruRail unconsolidated company in the years ended December 2018 and 2017, respectively.

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Owned hotels - Europe



Year ended December 31,	2018	2017	2016

Rooms Available	288,519	273,756	271,963
Rooms Sold	181,465	176,129	175,060
Occupancy (percentage)	63	64	64
Average daily rate (in U.S. dollars)	812	740	676
RevPAR (in U.S. dollars)	511	476	435

			Change %
Year ended December 31,	2016	2015	Dollars		Constant currency
Same Store RevPAR (in U.S. dollars)	435	427	2	%	4	%

2018 compared to 2017

Revenue was $238.4 million for the year ended December 31, 2018, an increase of $26.0 million, or 12%, from $212.4 million for the year ended December 31, 2017. In constant currency, revenue for the region for the year ended December 31, 2018 increased $19.6 million, or 9%, due to growth across the portfolio, with the exception of Belmond Hotel Cipriani, which is in a non-biennale year. This growth was led by increases of $8.8 million at Belmond Castello di Casole, which was acquired in the first quarter of 2018 and was opened under the Belmond flag in May, $4.1 million at Belmond Grand Hotel Timeo, Taormina, Sicily which remained open for the full year ended December 31, 2018 for the first time to capitalize on a strong season, and $3.6 million at Belmond Grand Hotel Europe which benefited from recent capital investments and the football World Cup in July. ADR in U.S. dollar terms for the European owned hotels segment increased to $812 in the year ended December 31, 2018 from $740 in the year ended December 31, 2017. Occupancy decreased to 63% in the year ended December 31, 2018 from 64% in the year ended December 31, 2017. Same store RevPAR increased by 7% in U.S. dollars, to $510 in the year ended December 31, 2018 from $476 in the year ended December 31, 2017, an increase of 4% on a constant currency basis.

Adjusted EBITDA for the region for the year ended December 31, 2018 of $79.0 million represented an increase of $5.3 million, or 7%, from adjusted EBITDA of $73.7 million for the year ended December 31, 2017. In constant currency, adjusted EBITDA for the region for the year ended December 31, 2018 increased $3.0 million or 4% from the year ended December 31, 2017. This was driven by an adjusted EBITDA increase of $1.9 million at Belmond Grand Hotel Timeo, a $1.4 million increase at Belmond Grand Hotel Europe, and a $0.8 million increase at Belmond Le Manoir aux Quat’Saisons, Oxfordshire, United Kingdom, due to an improved rate strategy and cost control, offset by a $1.2 million decrease at Belmond Hotel Cipriani. As a percentage of European owned hotels revenue, adjusted EBITDA was 33% for the year ended December 31, 2018 compared to 35% for the year ended December 31, 2017.

2017 compared to 2016

Revenue was $212.4 million for the year ended December 31, 2017, an increase of $13.3 million, ~~or 7%,~~ from $199.1 million for the year ended December 31, 2016. In constant currency, revenue for the region for the year ended December 31, 2017 increased $8.1 million, or 4%, primarily due to a $5.6 million or 5% revenue increase for the Company's Italian hotels and a $2.6 million or 10% increase at Belmond Grand Hotel Europe. Revenue growth for the Company's Italian hotels was largely driven by the performance of Belmond Hotel Cipriani which benefited from the Biennale Arts Festival, which takes place every other year in Venice, and Belmond Hotel Splendido, Portofino, Italy which saw an increase in rates year-over-year following the addition of balconies to twelve of its rooms in March 2017. At Belmond Grand Hotel Europe, revenue increased during the annual St. Petersburg International Economic Forum and the 2017 FIFA Confederations Cup. ADR in U.S. dollar terms for the European owned hotels segment increased to $740 in the year ended December 31, 2017 from $676 in the year ended December 31, 2016. Occupancy remained flat at 64% in the ~~years~~year ended December 31, 2017 and December 31, 2016. Same store RevPAR increased by 9% in U.S. dollars, to $476 in the year ended December 31, 2017 from $435 in the year ended December 31, 2016~~, an increase of 6% on a constant currency basis~~.

Adjusted EBITDA for the region for the year ended December 31, 2017 of $73.7 million represented an increase of $6.1 million, or 9%, from adjusted EBITDA of $67.6 million for the year ended December 31, 2016. In constant currency, adjusted EBITDA for the region for the year ended December 31, 2017 increased $4.4 million or 6% from the year ended December 31, 2016 primarily due to increases in adjusted EBITDA of $2.2 million or 32% at Belmond Grand Hotel Europe and $1.2 million or 11% at Belmond Hotel Cipriani. As a percentage of European owned hotels revenue, adjusted EBITDA was 35% for the year ended December 31, 2017 compared to 34% for the year ended December 31, 2016.48

2016 compared to 2015

Revenue was $199.1 million for the year ended December 31, 2016, a decrease of $0.9 million from $200.0 million for the year ended December 31, 2015. In constant currency, revenue for the region for the year ended December 31, 2016 increased $4.2 million or 2% from the year ended December 31, 2015, primarily due to an increase in revenue of $2.5 million or 15% at Belmond Reid's Palace as a result of the Company's strategic decision to focus on driving wholesale business in order to gain market share during the destination's slow season, resulting in an 18% increase in occupancy. Revenue for the Italian hotels excluding Belmond Hotel Cipriani for the year ended December 31, 2016 was up $3.2 million compared to the year ended December 31, 2015, mainly as a result of leveraging strong demand to drive higher rates. In addition, revenue at Belmond Grand Hotel Europe and Belmond La Residencia, Mallorca, Spain increased $1.5 million and $1.3 million respectively. This was offset by a revenue decrease of $4.8 million or 13% at Belmond Hotel Cipriani due to a challenging comparative period in 2015, when the hotel benefited from the Biennale Arts Festival and the World Expo 2015 in Milan, both of which generated increased visitation to Venice. ADR in U.S. dollar terms for the European owned hotels segment decreased to $676 in the year ended December 31, 2016 from $689 in

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Adjusted EBITDA for the region for the year ended December 31, ~~2015~~2017 of $73.7 ~~Occupancy~~million ~~increased~~represented toan 64increase of $6.1 million, or 9%, infrom adjusted EBITDA of $67.6 million for the year ended December 31, 2016. ~~from~~In 62constant currency, adjusted EBITDA for the region for the year ended December 31, 2017 increased $4.4 million or 6% infrom the from the year ended December 31, ~~2015~~2016 primarily due to increases in adjusted EBITDA of $2.2 ~~Same~~million ~~store~~or ~~RevPAR~~32% ~~increased~~at byBelmond Grand Hotel Europe and $1.2 million or 11% inat UBelmond Hotel Cipriani.S. ~~dollars~~As a percentage of European owned hotels revenue, adjusted EBITDA increased slightly to ~~$435~~35% infor the year ended December 31, ~~2016~~2017 ~~from~~compared ~~$427~~to in34% for the year ended December 31, ~~2015~~2016.

Adjusted EBITDA for the region for the year ended December 31, 2016 of $67.6 million represented an increase of $1.2 million, or 2%, from adjusted EBITDA of $66.4 million for the year ended December 31, 2015. In constant currency, adjusted EBITDA for the region for the year ended December 31, 2016 increased $2.6 million or 4% from the from the year ended December 31, 2015 mainly due to a $1.6 million or 37% increase in adjusted EBITDA at Belmond Reid's Palace and a $1.1 million or 25% increase in adjusted EBITDA at Belmond La Residencia. As a percentage of European owned hotels revenue, adjusted EBITDA increased slightly to 34% for the year ended December 31, 2016 compared to 33% for the year ended December 31, 2015.

Owned hotels - North America

Year ended December 31,	~~2017~~2018	~~2016~~2017	~~2015~~2016
Rooms Available	~~255~~231,~~862~~875	~~256~~255,~~726~~862	~~255~~256,~~216~~726
Rooms Sold	~~171~~160,~~906~~267	171,~~392~~906	171,~~828~~392
Occupancy (percentage)	6769	67	67
Average daily rate (in U.S. dollars)	~~426~~430	~~421~~426	~~429~~421
RevPAR (in U.S. dollars)	~~286~~297	~~281~~286	~~289~~281

			Change %
Year ended December 31,	2016	2015	Dollars		Constant currency
Same Store RevPAR (in U.S. dollars)	281	289	(3	)%	(2	)%

2018 compared to 2017

Revenue was $132.3 million for the year ended December 31, 2018, a decrease of $17.0 million, or 11%, from $149.3 million for the year ended December 31, 2017. ~~compared~~In constant currency, revenue for the region for the year ended December 31, 2018 decreased $16.9 million or 11% from the year ended December 31, 2017. The decrease is attributable to ~~2016~~a $14.8 million fall in revenue at Belmond La Samanna, which was closed for the majority of the twelve months ended December 31, 2018 following damage sustained from the 2017 hurricanes that hit the region, and an $8.0 fall in revenue at '21' Club after it was closed for more than half of the twelve months ended December 31, 2018 following water damage from burst pipes in January. This decline was offset by improvements in the twelve months ended December 31, 2018 of $2.5 million Belmond Charleston Place, which benefited from an increased ADR following enhanced revenue management activities and the positive effects of recent capital investment in the property, and $ 2.1 million at Belmond El Encanto, Santa Barbara, which faced reduced competition as two competitor hotels were closed for refurbishment after the December 2017 mudslides that occurred in the area. ADR for the North American owned hotels segment increased to $430 in the year ended December 31, 2018 from $426 in the year ended December 31, 2017. Occupancy increased to 69% in the year ended December 31, 2018 from 67% in the year ended December 31, 2017. Same store RevPAR (which excludes the operations of Belmond Cap Juluca, Anguilla, British West Indies and Belmond La Samanna) increased by 5% to $286 in the year ended December 31, 2018 from $272 in the year ended December 31, 2017.

~~Revenue~~Adjusted ~~was~~EBITDA ~~$149.3~~for ~~million~~the region for the year ended December 31, ~~2017,~~2018 of $38.1 million represented an increase of $38.43 million, or 228%, from $~~145~~29.98 million for the year ended December 31, ~~2016~~2017. In constant currency, ~~revenue~~adjusted EBITDA for the region for the year ended December 31, ~~2017~~2018 also increased $38.42 million ~~or 2%~~ from the year ended December 31, ~~2016~~2017, ~~primarily~~driven ~~due~~by toimprovements ~~revenue growth~~ of $63.09 million ~~or 8%~~ at Belmond Charleston Place, ~~where food and beverage revenue increased as a result of a new sports bar that commenced operations in July 2016 and an increase in group business~~$2.5 ~~Additionally,~~million ~~the~~at ~~newly acquired~~ Belmond Cap Juluca, ~~contributed~~and $21.47 million inat ~~revenue~~Belmond ~~prior~~El toEncanto. ~~its~~Operating ~~closure~~losses ~~for renovation at the end~~ of ~~August~~$8.7 ~~2017~~million ~~and~~at ~~'21' Club by~~ Belmond, ~~New~~La ~~York~~Samanna ~~saw~~and a $16.53 million orat 9%Belmond ~~increase~~Cap inJuluca ~~revenue~~have inbeen ~~response~~added back to ~~marketing~~adjusted ~~campaigns~~EBITDA ~~and~~for ~~property~~the ~~improvements~~year inended ~~2017.~~December 31, ~~Growth~~2018 ~~for~~while ~~these~~the properties ~~was~~were ~~offset~~closed byfor arenovation ~~$7.6~~for ~~million~~the ormajority ~~32%~~of ~~decrease~~2018. inAlso ~~revenue~~added atback ~~Belmond~~to Laadjusted ~~Samanna,~~EBITDA ~~which~~for ~~was~~the ~~negatively~~twelve ~~impacted~~months byended aDecember 31, ~~decline~~2018 inis ~~visitation~~a ~~and~~$1.2 ~~subsequent~~million ~~closure~~deductible ~~for~~related ~~refurbishment~~to ~~following~~ the ~~impact~~insurance ofcover ~~Hurricanes~~at ~~Irma~~Belmond ~~and~~Charleston ~~Jose in September 2017~~Place. ~~ADR~~Excluded ~~for~~from ~~the~~adjusted ~~North~~EBITDA ~~American owned hotels segment increased to $426~~ in the year ended December 31, ~~2017~~2018 ~~from~~is ~~$421~~a ~~in the year ended December 31, 2016~~$1.6 ~~Occupancy~~million ~~remained~~gain ~~flat~~related atto ~~67% in~~ the ~~years~~receipt ~~ended~~of ~~December 31,~~insurance ~~2017~~proceeds ~~and~~at ~~2016.~~'21' ~~Same~~Club ~~store~~following ~~RevPAR~~water ~~(which~~damage ~~excludes~~in the ~~operations~~first quarter of ~~Belmond~~2018. ~~Cap~~As ~~Juluca~~a ~~and~~percentage ~~Belmond~~of Larevenue, ~~Samanna)~~adjusted EBITDA increased byto 729% tofor ~~$272 in~~ the year ended December 31, ~~2017~~2018 from 20% ~~$254 in~~ the year ended December 31, ~~2016~~2017.

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~~Adjusted EBITDA for the region for the year ended December 31,~~ 2017 ofcompared $29.8 million represented an increase of $0.4 million, or 1%, from $29.4 million for the year ended December 31, 2016. In constant currency, adjusted EBITDA for the region for the year ended December 31, 2017 increased $0.4 million or 1% from the year ended December 31, 2016, primarily as a result of a $2.9 million or 13% increase in adjusted EBITDA at Belmond Charleston Place offset by a $1.1 million decrease in adjusted EBITDA at Belmond El Encanto, Santa Barbara, California. Belmond El Encanto saw a decrease in adjusted EBITDA following the closure of the hotel for nearly three weeks during the Thomas Fire in Santa Barbara in December 2017. Operating losses of $1.4 million at Belmond La Samanna and $2.4 million at Belmond Cap Juluca have been added back to adjusted EBITDA while the properties are closed for renovation following the hurricanes. As a percentage of revenue, adjusted EBITDA remained 20% for the year ended December 31, 2017 and the year ended December 31, 2016.

Revenue was $149.3 million for the year ended December 31, 2017, an increase of $3.4 million, or 2%, from $145.9 million for the year ended December 31, 2016. ~~compared~~In constant currency, revenue for the region for the year ended December 31, 2017 increased $3.4 million or 2% from the year ended December 31, 2016, primarily due to ~~2015~~revenue growth of $6.0 million or 8% at Belmond Charleston Place, where food and beverage revenue increased as a result of a new sports bar that commenced operations in July 2016 and an increase in group business. Additionally, the newly acquired Belmond Cap Juluca contributed $2.4 million in revenue prior to its closure for renovation at the end of August 2017, and '21' Club saw a $1.5 million or 9% increase in revenue in response to marketing campaigns and property improvements in 2017. Growth for these properties was offset by a $7.6 million or 32% decrease in revenue at Belmond La Samanna, which was negatively impacted by a decline in visitation and subsequent closure for refurbishment following the impact of Hurricanes Irma and Jose in September 2017. ADR for the North American owned hotels segment increased to $426 in the year ended December 31, 2017 from $421 in the year ended December 31, 2016. Occupancy remained flat at 67% in the years ended December 31, 2017 and 2016. Same store RevPAR (which excludes the operations of Belmond Cap Juluca and Belmond La Samanna) increased by 7% to $272 in the year ended December 31, 2017 from $254 in the year ended December 31, 2016.

~~Revenue~~Adjusted ~~was~~EBITDA ~~$145.9~~for ~~million~~the region for the year ended December 31, ~~2016,~~2017 aof ~~decrease~~$29.8 million represented an increase of $20.24 million, or 1%, from $~~148~~29.14 million for the year ended December 31, ~~2015~~2016. In constant currency, ~~revenue~~adjusted EBITDA for the region for the year ended December 31, ~~2016~~2017 ~~decreased~~increased $10.84 million or 1% from the year ended December 31, ~~2015.~~2016, ~~This~~primarily ~~decrease~~as ~~was~~a ~~largely~~result ~~attributable~~of to a $12.9 million ~~revenue~~or ~~decline~~13% increase in adjusted EBITDA at Belmond ~~Maroma~~Charleston ~~Resort~~Place &offset ~~Spa~~by ~~and~~ a $1.21 million ~~decline~~decrease in ~~revenue~~adjusted EBITDA at ~~‘21’ Club by~~ Belmond. ~~Belmond~~El ~~Maroma~~Encanto, ~~Resort~~which &saw ~~Spa~~a ~~was~~decrease ~~impacted~~in byadjusted ~~increased~~EBITDA ~~local~~following ~~competition and~~ the ~~re-opening~~closure of ~~renovated hotels in~~ the ~~Los~~hotel ~~Cabos~~for ~~resort~~nearly ~~area~~three ofweeks ~~Mexico.~~during ~~‘21’~~the ~~Club~~Thomas byFire ~~Belmond~~in ~~was~~Santa ~~negatively~~Barbara ~~impacted by both uncertainty~~ in ~~the~~December ~~financial~~2017. ~~markets~~Operating ~~due~~losses ~~to a significant portion~~ of ~~its clientele having a tie to the financial services sector and disruption caused by construction noise from neighboring buildings. This decrease was partially offset by a~~ $1.64 million ~~revenue increase~~ at Belmond ~~Charleston~~La ~~Place.~~Samanna ~~The hotel increased food~~ and ~~beverage~~$2.4 ~~revenue~~million ~~largely~~at asBelmond aCap ~~result~~Juluca ofhave abeen ~~new~~added ~~sports~~back ~~bar~~to ~~that~~adjusted ~~commenced~~EBITDA ~~operations~~while inthe ~~July~~properties ~~2016~~are ~~and~~closed ~~also~~for ~~continued~~renovation ~~to benefit from improved room product~~ following the ~~Company's three-year rooms renovation project that was completed in December 2015~~hurricanes. ~~ADR~~As ~~for~~a ~~the~~percentage of North American owned hotels ~~segment decreased to $421 in the year ended December 31~~revenue, ~~2016~~adjusted ~~from~~EBITDA ~~$429 in the year ended December 31, 2015. Occupancy~~ remained ~~flat~~ at 6720% infor the ~~years~~year ended December 31, ~~2016~~2017 and ~~2015. Same store RevPAR decreased by 3% to $281 in~~ the year ended December 31, 2016 ~~from $289 in the year ended December 31, 2015~~.

Adjusted EBITDA for the region for the year ended December 31, 2016 of $29.4 million represented a decrease of $2.4 million, or 8%, from $31.8 million for the year ended December 31, 2015. In constant currency, adjusted EBITDA for the region for the year ended December 31, 2016 decreased $2.4 million or 8% from the year ended December 31, 2015 primarily as a result of a $0.6 million or 14% decrease in adjusted EBITDA at Belmond Maroma Resort & Spa, a $0.7 million decrease in adjusted EBITDA at Belmond La Samanna due to reduced visitation and a $0.7 million or 31% decrease in adjusted EBITDA at '21' Club by Belmond. As a percentage of North American owned hotels revenue, adjusted EBITDA decreased to 20% for the year ended December 31, 2016 from 21% for the year ended December 31, 2015.

Owned hotels - Rest of world

Year ended December 31,	~~2017~~2018	~~2016~~2017	~~2015~~2016
Rooms Available	~~374~~372,~~478~~678	~~376~~374,~~952~~478	~~371~~376,~~207~~952
Rooms Sold	~~200~~204,~~537~~013	~~204~~200,~~944~~537	~~211~~204,~~059~~944
Occupancy (percentage)	5455	54	5754
Average daily rate (in U.S. dollars)	~~380~~368	~~388~~380	~~356~~388
RevPAR (in U.S. dollars)	~~203~~201	~~211~~203	~~202~~211



			Change %
Year ended December 31,	2017	2016	Dollars		Constant currency

Same Store RevPAR (in U.S. dollars)	207	218	(5	)%	(11	)%

			Change %
Year ended December 31,	2016	2015	Dollars		Constant currency
Same Store RevPAR (in U.S. dollars)	216	207	4	%	9	%

Table of Contents

2018 compared to 2017

Revenue was $122.2 million for the year ended December 31, 2018, a decrease of $2.0 million, or 2%, from $124.2 million in the year ended December 31, 2017. In constant currency, revenue for the year ended December 31, 2018 increased $5.4 million or 5% from the year ended December 31, 2017. This is principally as a result of a $5.9 million increase in revenue at Belmond Hotel das Cataratas, following positive media coverage of the destination and a relaxing of visa restrictions in the country, and $1.4 million at Belmond Copacabana Palace, Rio de Janeiro, Brazil due to increased group revenue and the strong performance of its recently renovated "Pérgula" restaurant. These increases were offset by decreases of $1.4 million at Belmond Governor's Residence, Yangon, Myanmar as it faced increased competition and reduced visitor arrivals, and $1.1 million at Belmond Mount Nelson, which has been impacted by the adverse media coverage around the potential water crisis in Cape Town. ADR in U.S. dollar terms for the Rest of world segment decreased by 3% to $368 for the year ended December 31, 2018 from $380 in the year ended December 31, 2017. Occupancy increased to 55% in the year ended December 31, 2018 from 54% in the year ended December 31, 2017. Same store RevPAR in U.S. dollars (which excludes Belmond Savute Elephant Lodge) decreased by 1% to $200 for the year ended December 31, 2018 from $203 in the year ended December 31, 2017, an increase of 4% on a constant currency basis.

Adjusted EBITDA for the region for the year ended December 31, 2018 of $24.6 million represented an increase of $0.1 million, from $24.5 million for the year ended December 31, 2017. In constant currency, adjusted EBITDA for the region increased $1.0 million or 4% from the year ended December 31, 2017, primarily as a result of a $2.6 million increase in adjusted EBITDA at Belmond Hotel das Cataratas, offset by a decrease in adjusted EBITDA of $1.5 million at Belmond Mount Nelson. As a percentage of Rest of world owned hotels revenue, adjusted EBITDA was 20% for both the years ended December 31, 2018 and 2017.

2017 compared to 2016

Revenue was $124.2 million for the year ended December 31, 2017, a decrease of $6.1 million, or 5%, from $130.3 million infor the year ended December 31, 2016. In constant currency, revenue for the year ended December 31, 2017 decreased $15.1 million or 11% from the year ended December 31, 2016, primarily due to a $20.4 million or 28% decrease in revenue for the Company's two Brazilian properties due to a combination of the impact in the year ended December 31, 2017 of political and economic instability in the country and exceptionally high revenue in the year ended December 31, 2016 due to the 2016 Summer Olympic Games held in Rio de Janeiro. Partially offsetting this decrease was revenue growth of $3.2 million or 18% at Belmond Mount Nelson Hotel, $1.6 million or 20% at Belmond Safaris, and $1.4 million or 49% at Belmond La Résidence d'Angkor, Siem Riep, Cambodia, all of which have benefited from the Company's project capital expenditure in recent years. Belmond La Résidence d'Angkor also saw high revenue growth compared to 2016 when it was closed for refurbishment from May to November. ADR in U.S. dollar terms for the Rest of world segment decreased by 2% to $380 for the year ended December 31, 2017 from $388 in the year ended December 31, 2016. Occupancy remained flat at 54% in the ~~years~~year ended December 31, 2017 and December 31, 2016. Same store RevPAR ~~in U.S. dollars~~ (which excludes Belmond Savute Elephant Lodge and Belmond La Résidence d'Angkor) decreased by 5% to $207 ~~for~~in the year ended December 31, 2017 from $218 in the year ended December 31, 2016, a decrease of 11% on a constant currency basis.

Adjusted EBITDA for the region for the year ended December 31, 2017 of $24.5 million represented a decrease of $8.6 million, or 26%, from $33.1 million for the year ended December 31, 2016. In constant currency, adjusted EBITDA for the region decreased $11.1 million or 31% from the year ended December 31, 2016, largely as a result of a combined $13.2 million adjusted EBITDA decrease for the Company's two Brazilian hotels, offset by increases in adjusted EBITDA of $2.0 million or 29% at Belmond Mount Nelson Hotel, $1.1 million or 85% at Belmond Safaris and $0.6 million at Belmond La Résidence d'Angkor. As a percentage of Rest of world owned hotels revenue, adjusted EBITDA was 20% for the year ended December 31, 2017 compared to 25% for the year ended December 31, 2016.

2016 compared to 2015

Revenue was $130.3 million for the year ended December 31, 2016, an increase of $5.9 million, or 5%, from $124.4 million for the year ended December 31, 2015. In constant currency, revenue for the year ended December 31, 2016 increased $11.2 million or 9% from the year ended December 31, 2015, primarily due to revenue growth of $6.9 million or 15% at Belmond Copacabana Palace and revenue growth of $3.4 million or 80% at Belmond Safaris. At Belmond Copacabana Palace, the Company successfully capitalized on the 2016 Summer Olympic Games, driving year-over-year ADR and food and beverage revenue growth. Belmond Safaris benefited from being fully operational in 2016, as Belmond Eagle Island Lodge re-opened in December 2015 having been closed from January to November 2015 for a complete renovation. This was partially offset by a revenue decrease of $1.6 million at Belmond La Résidence d'Angkor, which was closed for refurbishment in May 2016 and re-opened in November 2016. ADR in U.S. dollar terms for the Rest of world segment increased by 9% to $388 for the year ended December 31, 2016 from $356 in the year ended December 31, 2015. Occupancy decreased to 54% in the year ended December 31, 2016 from 57% in the year ended December 31, 2015. Same store RevPAR (which excludes Belmond Eagle Island Lodge and Belmond La Résidence d'Angkor) increased by 4% to $216 in the year ended December 31, 2016 from $207 in the year ended December 31, 2015, an increase of 9% on a constant currency basis.

Adjusted EBITDA for the region for the year ended December 31, 2016 of $33.1 million represented an increase of $1.8 million, or 6%, from $31.3 million for the year ended December 31, 2015. In constant currency, adjusted EBITDA for the region for the year ended December 31, 2016 increased $3.2 million or 11% from the year ended December 31, 2015, primarily as a result of a $3.0 million or 22% increase in adjusted EBITDA at Belmond Copacabana Palace and a $1.8 million increase in adjusted EBITDA at Belmond Safaris. This was offset by a decrease in adjusted EBITDA of $1.1 million at Belmond La Résidence d'Angkor. As a percentage of Rest of world owned hotels revenue, adjusted EBITDA remained flat at 25% for the years ended December 31, 2016 and 2015.

Owned trains and cruises

~~2017~~2018 compared to ~~2016~~2017

Revenue was $6370.28 million in the year ended December 31, ~~2017~~2018, an increase of $37.96 million, or 712%, from $5963.32 million in the year ended December 31, ~~2016~~2017. In constant currency, revenue increased $65.25 million or 118% primarily asdriven aby ~~result~~an ofincrease ~~the~~in ~~Belmond~~revenue ~~Grand~~of ~~Hibernian~~$9.3 ~~train,~~million ~~which~~for ~~commenced~~the ~~its~~Venice ~~first~~Simplon-Orient-Express ~~full~~which ~~year~~has ofcontinued ~~operations~~a instrong ~~2017~~year ~~and~~as ~~contributed~~it anbenefits ~~increase~~from ofrecent ~~$4.0~~capital ~~million for the year ended December 31~~improvements, ~~2017.~~enhanced ~~The~~revenue ~~Belmond~~management ~~Royal~~activities ~~Scotsman~~and ~~train~~media ~~grew revenue by $2~~exposure.2 ~~million~~This orincrease ~~39%~~was ~~year-over-year~~offset ~~primarily~~by asthe asale ~~result~~ of ~~generating~~the ~~higher-revenue~~Belmond ~~charter~~Northern ~~business~~Belle and the ~~addition~~termination of athe ~~spa~~lease ~~car~~for ~~and~~Belmond ~~four~~Orcaella ~~new~~in ~~berths. Additionally,~~ the ~~Venice~~previous ~~Simplon-Orient-Express~~year, ~~train~~which ~~saw~~contributed revenue ~~increases~~ of $24.02 million ~~driven~~and by$1.1 ~~promotional~~million, ~~activity~~respectively, ~~surrounding~~in the twelve months ended December 31, 2017.

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~~release~~Owned oftrains ~~the~~and ~~Hollywood~~cruises ~~movie~~reported ~~'Murder~~adjusted onEBITDA ~~the~~of ~~Orient~~$13.5 ~~Express'~~million ~~and~~for the ~~Belmond~~year ~~British~~ended ~~Pullman~~December 31, ~~train~~2018, ~~saw~~an ~~revenue~~ increase byof $9.1 million, from $4.4 million ~~due~~for tothe ayear ~~higher~~ended ~~number~~December 31, of2017. ~~charters~~In ~~operated~~constant incurrency, adjusted EBITDA increased $8.8 million from the year ended December 31, 2017., ~~This~~largely ~~was~~due ~~offset~~to byan aincrease ~~combined revenue decrease~~ of $36.4 million at ~~Belmond~~Venice ~~Road~~Simplon-Orient-Express, ~~to Mandalay~~ and ~~Belmond Orcaella,~~ the ~~Company's~~termination ~~two~~of ~~river~~the ~~cruise~~lease ~~ships~~for inBelmond ~~Myanmar~~Orcaella, aswhich acontributed ~~result~~losses of ~~decreased~~$1.0 ~~demand~~million ~~for~~in ~~tourism~~the year ended December 31, 2017.

2017 compared to 2016

Revenue was $63.2 million in the year ended December 31, 2017, an increase of $3.9 million, or 7%, from $59.3 million in the year ended December 31, 2016. In constant currency, revenue increased $6.2 million or 11% primarily as a result of the Belmond Grand Hibernian train, which commenced its first full year of operations in 2017 and contributed an increase of $4.0 million for the year ended December 31, 2017. The Belmond Royal Scotsman train grew revenue by $2.2 million or 39% year-over-year primarily as a result of generating higher-revenue charter business and the addition of a spa car and four new berths. Additionally, the Venice Simplon-Orient-Express train saw revenue increases of $2.0 million driven by promotional activity surrounding the release of the Hollywood movie 'Murder on the Orient Express' and the Belmond British Pullman train saw revenue increase by $1.4 million due to a higher number of charters operated in the year ended December 31, 2017. This was offset by a combined revenue decrease of $3.4 million at Belmond Road to Mandalay and Belmond Orcaella, the Company's two river cruise ships in Myanmar, as a result of decreased demand for tourism in the destination.

Owned trains and cruises reported adjusted EBITDA of $4.4 million for the year ended December 31, 2017, an increase of $0.1 million, or 2%, from $4.3 million for the year ended December 31, 2016. In constant currency, adjusted EBITDA increased $0.3 million or 7% from the year ended December 31, 2016, largely due to a $1.1 million increase in adjusted EBITDA for the Belmond Royal Scotsman, offset by a $0.8 million decrease for Belmond Road to Mandalay, Ayeyarwady River, Myanmar due to decreased demand.

~~2016~~Part-owned/managed hotels ~~compared to 2015~~

~~Revenue~~2018 ~~was~~compared $59.3 million in the year ended December 31, 2016, a decrease of $6.2 million, or 9%, from $65.5 million in the year ended December 31, 2015. In constant currency, revenue decreased $0.3 million or 1% due to a $1.2 million combined revenue decrease at Belmond Road to Mandalay and Belmond Orcaella, the Company’s two river cruise ships in Myanmar, as a result of increased local competition. This was offset by revenue from Belmond Grand Hibernian, which commenced operations in August 2016 and generated revenue of $1.7 million in the year ended December 31, 2016.2017

~~Owned~~Revenue ~~trains~~was ~~and cruises reported adjusted EBITDA of~~ $42.3 million ~~for~~in the year ended December 31, ~~2016~~2018, ~~compared~~an toincrease of $71.23 million, ~~for~~from $1.0 million in the year ended December 31, ~~2015~~2017. In constant currency, ~~adjusted~~revenue ~~EBITDA~~ for ~~the~~Part-owned/managed ~~year~~hotels ~~ended~~increased ~~December 31~~$1.4 million, ~~2016~~due ~~decreased~~to ~~$2.3~~a ~~million~~larger orprovision ~~35%~~made ~~from~~in the prior-year ~~ended~~against ~~December 31,~~management ~~2015~~and ~~due~~reservation tofees aat ~~$1.0~~Inn ~~million~~at ~~combined~~Perry ~~decrease~~Cabin by Belmond, St Michaels, Maryland in ~~adjusted~~respect ~~EBITDA~~of ~~for~~an ~~the~~agreement ~~Company's~~entered ~~two~~into ~~river~~on ~~cruise~~April ~~ships~~7, in2017 ~~Myanmar~~pursuant ~~and~~to awhich ~~$0.5~~Belmond ~~million~~agreed ~~decrease~~to inguarantee ~~adjusted~~specified budgeted EBITDA atlevels ~~Venice-Simplon-Orient-Express~~earned by the property for each of the 2017 and 2018 fiscal years.

Adjusted EBITDA for Part-owned/ managed hotels for the year ended December 31, 2018 of $7.6 million represented an increase of $0.8 million or 12% from earnings of $6.8 million for the year ended December 31, 2017. In constant currency, adjusted EBITDA for Part-owned/ managed hotels increased $0.9 million or 13%, due to occupancy-driven growth and improved performance at the Peruvian hotel joint venture of $1.0 million.

2017 compared to 2016

Revenue was $1.0 million in the year ended December 31, 2017, a decrease of $3.4 million, or 77%, from $4.4 million in the year ended December 31, 2016. In constant currency, revenue for Part-owned/managed hotels decreased $3.4 million or 76%, largely due to a provision made against management and reservation fees at Inn at Perry Cabin by Belmond, ~~St Michaels, Maryland~~ in respect of an agreement entered into on April 7, 2017 pursuant to which Belmond agreed to guarantee specified budgeted EBITDA levels earned by the ~~owner~~property for each of the 2017 and 2018 fiscal years.

Adjusted EBITDA for Part-owned/managed hotels for the year ended December 31, 2017 of $6.8 million represented an increase of $0.5 million or 8% from earnings of $6.3 million for the year ended December 31, 2016. In constant currency, adjusted EBITDA for Part-owned/ managed hotels increased $0.5 million or 8%, primarily as a result of an increase in occupancy at the joint venture's two hotels in Cusco.

2016 compared to 2015

Revenue was $4.4 million in the year ended December 31, 2016, a decrease of $0.8 million, or 15%, from $5.2 million in the year ended December 31, 2015. In constant currency, revenue for Part-owned/managed hotels decreased $0.8 million or 15%, primarily due to the May 2015 sale of Hotel Ritz by Belmond, which had produced revenues of $0.3 million for the year ended December 31, 2015, and a decline in revenue for PBH, the Company's Peru hotels joint venture primarily as a result of a year-over-year decrease in group business at the joint venture’s two hotels in Cusco.

Adjusted EBITDA for Part-owned/managed hotels for the year ended December 31, 2016 of $6.3 million represented a decrease of $0.8 million or 11% for the year ended December 31, 2015. In constant currency, adjusted EBITDA for Part-owned/ managed hotels decreased $0.8 million or 11% as a result of a $1.1 million or 16% decline in adjusted EBITDA for PBH.

Part-owned/managed trains

~~2017~~2018 compared to ~~2016~~2017

Revenue was $10.98 million in the year ended December 31, ~~2017~~2018, ana ~~increase~~decrease of $0.1 million, or 1%, from $10.89 million in the year ended December 31, ~~2016~~2017. In constant currency, revenue for Part-owned/managed trains ~~increased~~also decreased $0.1 million ~~or 1%~~.

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Adjusted EBITDA for Part-owned/managed trains for the year ended December 31, 2018 of $26.6 million represented an increase of $2.6 million or 11% from $24.0 million for the year ended December 31, 2017. In constant currency, adjusted EBITDA for Part-owned/managed trains increased $2.7 million, due to an adjusted EBITDA increase of $2.5 million or 10% for the Company's Peruvian train joint venture, PeruRail, due to an insurance recovery and improved operating performance.

2017 compared to 2016

Revenue was $10.9 million in the year ended December 31, 2017, an increase of $0.1 million, or 1%, from $10.8 million in the year ended December 31, 2016. In constant currency, revenue for Part-owned/managed trains also increased $0.1 million or 1%.

Adjusted EBITDA for Part-owned/managed trains for the year ended December 31, 2017 of $24.0 million represented a decrease of $1.9 million or 7% from $25.9 million for the year ended December 31, 2016. In constant currency, adjusted EBITDA for Part-owned/managed trains decreased $1.9 million or 7%, due to an adjusted EBITDA decrease of $2.0 million or 8% for the Company's Peruvian train joint venture, PeruRail, as a result of increases in fuel costs and other operating expenses.

2016 compared to 2015

Revenue was $10.8 million in the year ended December 31, 2016, an increase of $2.6 million, or 32%, from $8.2 million in the year ended December 31, 2015. In constant currency, revenue for Part-owned/managed trains increased $2.6 million or 32%, resulting from the Company's PeruRail joint venture which commenced transport of copper concentrate from the Las Bambas mine.

In June 2015, PeruRail entered into an agreement for a period of 15 years with a Peruvian subsidiary of MMG Limited, a minerals and mining company that is publicly traded on the Hong Kong stock exchange, to transport copper concentrate from the Las Bambas mine. In connection with this project, PeruRail obtained non-recourse financing of $131 million in February 2016. PeruRail commenced transport of the copper concentrate in January 2016.

Adjusted EBITDA for Part-owned/managed trains for the year ended December 31, 2016 of $25.9 million represented an increase of $6.1 million or 31% from $19.8 million for the year ended December 31, 2015. In constant currency, adjusted EBITDA for Part-owned/managed trains increased $6.1 million or 31%, resulting from the Company's PeruRail joint venture which commenced transport of copper concentrate from the Las Bambas mine.

Unallocated corporate costs

2018 compared to 2017

Adjusted central costs were $42.5 million for the year ended December 31, 2018 (including $6.0 million of non-cash share-based compensation expense), an increase of $3.3 million, or 8%, from $39.2 million in the year ended December 31, 2017 (including $5.8 million of non-cash share-based compensation expense). In constant currency, adjusted central costs increased $2.3 million,

mainly due to increased development and other corporate headcount to support the strategic growth plan. As a percentage of revenue, adjusted central costs were 7% for both the year ended December 31, 2018 and the year ended December 31, 2017.

2017 compared to 2016

Adjusted central costs were $39.2 million for the year ended December 31, 2017 (including $5.8 million of non-cash share-based compensation expense), ana ~~increase~~decrease of $0.8 million, or 2%, from $38.4 million infor the year ended December 31, 2016 (including $7.6 million of non-cash share-based compensation expense). In constant currency, adjusted central costs increased $1.5 million or 4%, mainly due to increased development and other corporate headcount to support the strategic growth plan. As a percentage of revenue, adjusted central costs were 7% for both the year ended December 31, 2017 and the year ended December 31, 2016.

2016 compared to 2015

Adjusted central costs were $38.4 million for the year ended December 31, 2016 (including $7.6 million of non-cash share-based compensation expense), a decrease of $5.7 million, or 13%, from $44.1 million for the year ended December 31, 2015 (including $9.7 million of non-cash share-based compensation expense). In constant currency, adjusted central costs decreased $3.5 million or 8%, primarily due to lower legal and professional expenses. As a percentage of revenue, adjusted central costs decreased slightly to 7% of revenue for the year ended December 31, 2016 from 8% for the year ended December 31, 2015.

Depreciation and amortization

2018 compared to 2017

Depreciation and amortization was $61.3 million for the year ended December 31, 2018, a decrease of $1.6 million, or 3%, from $62.9 million in the year ended December 31, 2017. Depreciation and amortization as a percentage of revenue remained flat at 11% for the years ended December 31, 2018 and 2017.

2017 compared to 2016

Depreciation and amortization was $62.9 million ~~for~~in the year ended December 31, 2017, an increase of $10.5 million, or 20%, from $52.4 million in the year ended December 31, 2016, primarily as a result of the completion of several capital projects and accelerated depreciation charge to write off assets that are expected to be replaced. Depreciation and amortization as a percentage of revenue increased to 11% for the year ended December 31, 2017 from 10% for the year ended December 31, 2016.

~~2016~~Impairment ~~compared~~of ~~to 2015~~goodwill

~~Depreciation~~2018 ~~and~~compared amortization was $52.4 million in the year ended December 31, 2016, an increase of $1.9 million, or 4% from $50.5 million in the year ended December 31, 2015. Depreciation and amortization as a percentage of revenue increased to 10% for the year ended December 31, 2016 and from 9% for the year ended December 31, 2015. This is primarily due to a $1.3 million accelerated depreciation charge on assets as part of the renovation project at Belmond La Residence d'Angkor.2017

49A goodwill impairment charge of $4.7 million was recorded in the year ended December 31, 2018. This consisted of $2.2 million at Belmond Governor’s Residence as a result of the fall in tourist arrivals in Myanmar due to negative perceptions of the country related to the Rohingya crisis, $1.5 million at Belmond La Résidence d’Angkor due to slower than anticipated growth, $0.8 million at Belmond Villa San Michele, Florence, Italy as a result of lower than anticipated performance and a reduction in group business, and $0.2 million at Belmond Castello di Casole due to lower than anticipated cash flows. A goodwill impairment charge of $5.5 million was recorded in the year ended December 31, 2017 at Belmond Cap Juluca due to a significant adverse change in the use and physical condition of the hotel following Hurricanes Irma and Jose in September 2017. See Note 10 to the Financial Statements.

Table of Contents

2017 compared to 2016

A goodwill impairment charge of $5.5 million was recorded in the year ended December 31, 2017 at Belmond Cap Juluca due to a significant adverse change in the use and physical condition of the hotel following Hurricanes Irma and Jose in September 2017. There were no impairments of goodwill in the year ended December 31, 2016.

Impairment of property, plant and equipment and other assets

2018 compared to 2017

There was a $4.9 million impairment charge of property, plant and equipment and other assets in the year ended December 31, 2018. This consisted of $2.5 million at Belmond Governor’s Residence and $2.3 at Belmond Road to Mandalay as a result of a fall in tourist arrivals in Myanmar due to negative perceptions of the country. There was also a non-cash favorable lease asset impairment of $0.2 million at Belmond Governor’s Residence. There was a $8.2 million impairment of property, plant and equipment in the year ended December 31, 2017. This consisted of $7.1 million at Belmond Road to Mandalay as a result of increased competition and anticipated lower occupancy levels and $1.1 million at Belmond Northern Belle due to forecasted lower demand. See Note 9 to the Financial Statements.

2017 compared to 2016

There was a $8.2 million impairment charge of property, plant and equipment in the year ended December 31, 2017. This consisted of $7.1 million at Belmond Road to Mandalay as a result of increased competition and anticipated lower occupancy levels and $1.1 million at Belmond Northern Belle due to forecasted lower demand. There was a $1.0 million impairment of property, plant and equipment in the year ended December 31, 2016 which related to Belmond Orcaella.

Other operating income

2018 compared to 2017

Other operating income was $16.9 million for the year ended December 31, 2018, an increase from $Nil in the year ended December 31, 2017. The income relates to a business interruption gain of $11.2 million at Belmond La Samanna following lost profits as a result of Hurricanes Irma and Jose, $2.7 million in relation to the insurance gain at '21' Club following water damage from burst pipes in January 2018, $1.2 million at Belmond Castello di Casole due to the change in fair value of contingent consideration recognized on the acquisition, and Belmond El Encanto, Belmond Charleston Place and Belmond’s three safari camps in Botswana also recorded income from combined business interruption insurance gains of $1.8 million.

2017 compared to 2016

Other operating income was $Nil for both years ended December 31, 2017 and 2016.

Gain on extinguishment of debt

2018 compared to 2017

For the years ended December 31, 2018 and 2017, there was no gain on extinguishment of debt.

2017 compared to 2016

For the year ended December 31, 2017, there was no gain on extinguishment of debt. For the year ended December 31, 2016, there was a gain on extinguishment of debt of $1.2 million. In June 2016, Charleston Center LLC amended its secured loan of $86.0 million increasing the amount of the loan to $112.0 million. The additional proceeds were used to repay a 1984 development loan from a municipal agency in the principal amount of $10.0 million and accrued interest of $16.8 million. In connection with the early repayment of the loan, Belmond negotiated a discount that resulted in a net gain, reported in the statements of consolidated operations during the year ended December 31, 2016, of $1.2 million upon extinguishment of debt, including the payment of a tax indemnity to its partners in respect of their allocation of income from the discount arising on the cancellation of indebtedness.

~~2016 compared to 2015~~54

~~For~~Table ~~the year ended December 31, 2016, there was a gain on extinguishment~~ of debt of $1.2 million. In June 2016, Charleston Center LLC amended its secured loan of $86.0 million increasing the amount of the loan to $112.0 million. The additional proceeds were used to repay a 1984 development loan from a municipal agency in the principal amount of $10.0 million and accrued interest of $16.8 million. In connection with the early repayment of the loan, Belmond negotiated a discount that resulted in a net gain, reported in the statements of consolidated operations during the year ended December 31, 2016, of $1.2 million upon extinguishment of debt, including the payment of a tax indemnity to its partners in respect of their allocation of income from the discount arising on the cancellation of indebtedness. For the year ended December 31, 2015, there was no gain on extinguishment of debt.Contents

Interest income, interest expense and foreign currency, net

2018 compared to 2017

Interest income, interest expense and foreign currency, net was an expense of $35.5 million for the year ended December 31, 2018, an increase of $1.1 million, or 3%, from an expense of $34.4 million for the year ended December 31, 2017. The increase in net expense was primarily due to a $0.7 million increase in the foreign exchange loss for the year ended December 31, 2018 compared to the year ended December 31, 2017 due to the depreciation of the Russian rouble and Brazilian real against the U.S. dollar.

2017 compared to 2016

Interest income, interest expense and foreign currency, net was an expense of $34.4 million for the year ended December 31, 2017, an increase of $15.3 million, or 80%, from an expense of $19.1 million for the year ended December 31, 2016. The increase in net expense was primarily due to a foreign exchange loss of $3.0 million that was recognized in the year ended December 31, ~~2017~~2018 compared to a foreign exchange gain of $9.2 million in the year ended December 31, ~~2016~~2017 as a result of volatility in the British pound foreign exchange rate against the U.S. dollar over the last two years.

2016 compared to 2015

Interest income, interest expense and foreign currency, net was an expense of $19.1 million for the year ended December 31, 2016, a decrease of $17.1 million, or 47%, from an expense of $36.2 million for the year ended December 31, 2015. In the year ended December 31, 2016 there was a foreign exchange gain recognized of $9.2 million compared with a loss of $5.0 million recognized in the year ended December 31, 2015.

Provision for income taxes

2018 compared to 2017

The provision for income taxes was $14.0 million in the year ended December 31, 2018, an increase of $7.4 million, from a provision for income taxes of $6.6 million in the year ended December 31, 2017. The increase in tax provision is mainly as a result of net tax credits in the U.S. in the year ended December 31, 2017 of $10.2 million, which included a deferred tax benefit of $19.8 million, following a reduction in the U.S. corporate tax rate from 35 to 21 per cent, effective January 1, 2018.

2017 compared to 2016

The provision for income taxes was $6.6 million in the year ended December 31, 2017, a decrease of $9.8 million, or 60%, from a provision for income taxes of $16.4 million in the year ended December 31, 2016. This was mainly as a result of a decrease in deferred tax liabilities of $19.8 million following a reduction in the corporate tax rate in the U.S. from 35 to 21 percent effective January 1, 2018, following enactment of the Tax Cuts and Jobs Act of 2017. The tax charge for the year ended December 31, 2016 included a benefit of $3.4m4 million in respect of uncertain tax positions following settlements agreed in October 2016. See Note 1415 to the Financial Statements.

~~2016~~Gain/(loss) ~~compared~~on todisposal ~~2015~~of property, plant and equipment

~~The~~2018 ~~provision~~compared ~~for~~to income taxes was $16.4 million in the year ended December 31, 2016, a decrease of $0.6 million, or 4%, from $17.0 million in the year ended December 31, 2015. The decrease in tax charge in the year ended December 31, 2016 was mainly as a result of a reduction in provision for uncertain tax position of $3.4 million following settlements agreed in October 2016, which was partially offset by an increase in earnings before income taxes in the United States, Italy, Brazil and other territories. The effective tax rate is higher than the UK statutory tax rate mainly because the Company operates in a number of territories that have higher statutory tax rates than the UK. 2017

50A gain on disposal of $0.8 million was recognized in the year ended December 31, 2018 compared with a $0.2 million loss in the year ended December 31, 2017. The gain in the year ended December 31, 2018 relates to the recognition of the deferred gain following the March 2014 sale of Inn at Perry Cabin by Belmond, which Belmond managed under a management contract. On April 27, 2018, the owner of Inn at Perry Cabin by Belmond notified the Company that the owner was exercising its special right to an early termination under the hotel's management agreement, which was effective as of the end of 2018. Under this provision, the owner is entitled to an early termination of the ten year management agreement at December 31, 2018 without cause, conditioned solely upon it repaying all remaining unamortized key money to Belmond. On December 31, 2018, Belmond made a single net payment of $0.2 million to the owner of Inn at Perry Cabin by Belmond in full settlement of any remaining unamortized key money owed to Belmond and Belmond's guarantee to the owner of specified budgeted EBITDA levels earned by the property.

2017 compared to 2016

A loss on disposal of $0.2 million was recognized in the year ended December 31, 2017 compared with a $0.9 million gain in the year ended December 31, 2016. The loss in the year ended December 31, 2017 relates to the sale of Belmond Northern Belle in November 2017, offset by the recognition of the $0.6 million deferred gain following the March 2014 sale of Inn at Perry Cabin by Belmond, which Belmond managed under a management contract. The gain in the year ended December 31, 2016 relates to the deferred gain following the sale of Inn at Perry Cabin by Belmond, with the remainder relating to the gain on sale of the spa building at Belmond Casa de Sierra Nevada, Mexico in September 2016.

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Earnings/(~~Loss~~losses)~~/gain~~ onfrom ~~disposal~~unconsolidated ~~of property~~companies, ~~plant~~net ~~and~~of ~~equipment~~ tax

2018 compared to 2017

Earnings from unconsolidated companies, net of tax were $9.4 million in the year ended December 31, 2018, an increase of $19.6 million from losses of $10.2 million in the year ended December 31, 2017. This is due to Belmond's share of impairment charge in the Company's FTSA joint venture of $29.3 million, offset by the corresponding decrease in deferred tax liabilities of $8.6 million in the year ended December 31, 2017. See below for further information. Additionally, there was an insurance recovery at the Company's PeruRail joint venture and improved operating performance at both PeruRail and Peru hotel joint ventures.

2017 compared to 2016

ALosses ~~loss~~from onunconsolidated ~~disposal~~companies, net of tax were $010.2 million ~~was recognized~~ in the year ended December 31, 2017, ~~compared~~a ~~with~~decrease aof $021.92 million ~~gain~~from earnings of $11.0 million in the year ended December 31, 2016. ~~The~~An ~~loss~~impairment charge of $58.5 million was recorded in FTSA, the ~~year~~Company's ~~ended~~joint ~~December 31,~~venture ~~2017~~that ~~relates~~has toa concession from the ~~sale~~Government of Peru to operate the track network in the southern and southeastern Peru. Belmond's ~~Northern~~equity ~~Belle~~share of this impairment was $29.3 million which is recorded in ~~November~~share of earnings from unconsolidated companies and was added back to adjusted EBITDA. The concession had an initial term of 30 years from 1999 with the option to apply for six 5-year extensions. In December 2017 the joint venture received a denial of its third extension request. As a result, ~~offset~~the byjoint venture could no longer conclude that the ~~recognition~~remaining three extensions are probable and therefore reduced its expectation of the ~~$0.6~~total ~~million~~expected ~~deferred~~life ~~gain~~of ~~following~~the concession to the ~~March~~contracted ~~2014~~term ~~sale~~of 35 years of ~~Inn~~which at17 ~~Perry~~years ~~Cabin~~were byremaining ~~Belmond~~as of December 31, ~~which~~2017. ~~Belmond~~This ~~has~~triggered ~~continued~~an impairment test of the assets within the joint venture and the shorter time period over which to ~~manage~~recover ~~under~~the acarrying ~~management~~value ~~contract.~~of ~~The~~the ~~gain~~assets led to the impairment charge being recorded in the year ended December 31, ~~2016~~2017. ~~relates~~The tolife of the ~~deferred~~concession ~~gain~~is ~~following~~now ~~the~~expected ~~sale~~to expire in 2034. The Company is also a 50% owner of ~~Inn~~the atPeruRail ~~Perry~~joint ~~Cabin~~venture, bywhich ~~Belmond~~operates and manages rolling stock, ~~with~~including the ~~remainder~~Belmond ~~relating~~Andean Explorer and Belmond Hiram Bingham, and is not anticipated to be impacted by the ~~gain~~shortening of the expected FTSA concession life as it can continue to run trains on ~~sale~~the oftrack after the ~~spa~~conclusion ~~building~~of atFTSA's ~~Belmond~~concession. ~~Casa~~The deimpairment ~~Sierra~~resulted ~~Nevada~~in a deferred tax benefit of $17.3 million, ~~Mexico~~of inwhich ~~September~~Belmond’s ~~2016~~equity share represents $8.6 million and as such deferred tax liabilities are reduced by this amount.

~~2016~~Net ~~compared~~(losses)/earnings tofrom ~~2015~~discontinued operations

A2018 ~~gain on disposal of $0.9 million was recognized in the year ended December 31, 2016~~ compared ~~with a $20.3 million gain in the year ended December 31, 2015. $19.7 million of the gain recorded in 2015 relates~~ to the sale of Hotel Ritz by Belmond, the Company’s hotel joint venture in Spain, in May 2015, with the remainder relating to the recognition of the deferred gain following the 2014 sale of Inn at Perry Cabin by Belmond.2017

~~Impairment~~Net losses from discontinued operations for the year ended December 31, 2018 were nil, compared to net earnings of ~~property~~$0.1 million for the year ended December 31, ~~plant~~2017. Net earnings from discontinued operations for the year ended December 31, 2017 consist largely of the reimbursement of legal fees in relation to Ubud Hanging Gardens, as Belmond is pursuing legal remedies following its dispossession by the owner in November 2013. See Notes 6 and ~~equipment~~21 to the Financial Statements.

2017 compared to 2016

~~There~~Net ~~was~~earnings anfrom ~~$8.2~~discontinued ~~million~~operations ~~impairment~~for ~~charge of property, plant and equipment in~~ the year ended December 31, 2017. ~~This~~were ~~consisted of~~ $70.1 million, atcompared ~~Belmond Road~~ to ~~Mandalay~~net asearnings ~~a result~~ of ~~increased~~$1.0 ~~competition~~million ~~and~~for ~~anticipated~~the ~~lower~~year ~~occupancy~~ended ~~levels~~December 31, ~~and $1~~2016.1 ~~million~~Net atearnings ~~Belmond~~from ~~Northern~~discontinued ~~Belle~~operations ~~due~~for tothe ~~forecasted~~year ~~lower~~ended ~~demand.~~December 31, ~~There~~2017 ~~was~~consist alargely ~~$1.0~~of ~~million~~the ~~impairment~~reimbursement of ~~property,~~legal ~~plant~~fees ~~and equipment~~ in ~~the~~relation ~~year~~to ~~ended~~Ubud ~~December 31~~Hanging Gardens, ~~2016~~Bali ~~which~~as ~~related to~~ Belmond ~~Orcaella.~~is ~~See~~pursuing ~~Note~~legal 8remedies tofollowing ~~the~~its ~~Financial~~dispossession ~~Statements~~by ~~for~~the ~~consideration~~owner ofin ~~potential~~November ~~impairment triggers~~2013.

Net earnings from discontinued operations for the year ended December 31, 2016 ~~compared~~comprised of the reimbursement of legal fees in relation to ~~2015~~Ubud Hanging Gardens and residual operating losses from Porto Cupecoy which was sold in January 2013. See Notes 6 and 21 to the Financial Statements.

~~There~~Net was a $1.0 million impairment charge of property, plant and equipment in the year ended December 31, 2016. This consisted of the write-down to fair value of property, plant and equipment at Belmond Orcaella, one of the Company's river cruises in Myanmar. There were no impairments of property, plant and equipment in the year ended December 31, 2015.(losses)/earnings

~~(Losses)/earnings~~2018 ~~from~~compared ~~unconsolidated~~to ~~companies,~~2017 ~~net of tax~~

~~2017~~The net losses attributable to Belmond Ltd. for the year ended December 31, 2018 were $28.5 million ($0.28 per common share) on revenue of $576.8 million, compared with net losses of $45.0 million ($0.44 per common share) on revenue of $561.0 million in the year ended December 31, 2017. The decrease in net losses is due to ~~2016~~a 3% increase in revenue for the Company, a $19.6 million increase in earnings from unconsolidated companies, net of tax, as a result of the impairment charge at the Company's FTSA joint venture recorded in the year ended December 31, 2017, and a $16.9 million increase in other operating income from insurance gains mainly from Belmond La Samanna, '21' Club and Belmond Charleston Place. This growth is offset by an increase of $7.4 million in the tax provision for the Company, a one-off charge of $13.9 million to restructure the Company’s labor force

Losses from unconsolidated companies, net of tax were $10.2 million in the year ended December 31, 2017, a decrease of $21.2 million from earnings of $11.0 million in the year ended December 31, 2016. An impairment charge of $58.5 million was recorded in FTSA, the Company's joint venture that has a concession from the Government of Peru to operate the track network in the southern and southeastern Peru. Belmond's equity share of this impairment is $29.3 million which is recorded in share of earnings from unconsolidated companies and has been added back to adjusted EBITDA. The concession had an initial term of 30 years from 1999 with the option to apply for six 5-year extensions. In December 2017 the joint venture received a denial of its third extension request. As a result, the joint venture can no longer conclude that the remaining three extensions are probable and has therefore reduced its expectation of the total expected life of the concession to the contracted term of 35 years of which 17 years are remaining as of December 31, 2017. This triggered an impairment test of the assets within the joint venture and the shorter time period over which to recover the carrying value of the assets has led to the impairment charge being recorded in the year ended December 31, 2017. The life of the concession is now expected to expire in 2034. The Company is also a 50% owner of the PeruRail joint venture, which operates and manages rolling stock, including the Belmond Andean Explorer and Belmond Hiram Bingham, and is not anticipated to be impacted by the shortening of the expected FTSA concession life as it can continue to run trains on the track after the conclusion of FTSA's concession. The impairment resulted in a deferred tax benefit of $17.3 million, of which Belmond’s equity share represents $8.6 million and as such deferred tax liabilities are reduced by this amount.56

2016 compared to 2015

Earnings from unconsolidated companies, net of tax were $11.0 million in the year ended December 31, 2016, an increase of $1.9 million, or 21%, from $9.1 million in the year ended December 31, 2015. This was largely due to increased net profits achieved at the Company’s PeruRail joint venture.

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~~Net~~at ~~earnings/(losses)~~Belmond ~~from~~La ~~discontinued~~Samanna, ~~operations~~and $8.5 million of expenses and fees for professional services related to the board's review of strategic alternatives for the year ended December 31, 2018.

2017 compared to 2016

Net earnings from discontinued operations for the year ended December 31, 2017 were $0.1 million, compared to net earnings of $1.0 million for the year ended December 31, 2016. Net earnings from discontinued operations for the year ended December 31, 2017 consist largely of the reimbursement of legal fees in relation to Ubud Hanging Gardens, as Belmond is pursuing legal remedies following its dispossession by the owner in November 2013 (see Notes 5 and 20 to the Financial Statements).

Net earnings from discontinued operations for the year ended December 31, 2016 comprised of the reimbursement of legal fees in relation to Ubud Hanging Gardens and residual operating losses from Porto Cupecoy which was sold in January 2013. See Note 20 to the Financial Statements.

2016 compared to 2015

Net earnings from discontinued operations for the year ended December 31, 2016 were $1.0 million, compared to net losses of $1.5 million for the year ended December 31, 2015.

Net earnings from discontinued operations for the year ended December 31, 2016 comprised of the reimbursement of legal fees in relation to Ubud Hanging Gardens, as Belmond is pursuing legal remedies following the wrongful dispossession by the owner in November 2013 (see Notes 5 and 20 to the Financial Statements) and residual operating losses from Porto Cupecoy which was sold in January 2013. In addition, the results of discontinued operations for the year ended December 31, 2016 included earnings of $1.0 million at Porto Cupecoy due to the release of a provision in respect of tax claims that Belmond believes it is now effectively discharged from. See Note 20 to the Financial Statements.

Net losses from discontinued operations for the year ended December 31, 2015 included legal fees of $0.6 million in relation to Ubud Hanging Gardens, as Belmond is pursuing legal remedies following the wrongful dispossession by the owner in November 2013 and residual operating losses of $0.9 million at Porto Cupecoy.

Net (losses)/earnings

2017 compared to 2016

The net losses attributable to Belmond Ltd. for the year ended December 31, 2017 were $45.0 million ($0.44 per common share) on revenue of $561.0 million, compared with net earnings of $36.3 million ($0.36 per common share) on revenue of $549.8 million in the year ended December 31, 2016. The decrease in net earnings was largely attributable to $14.0 million of acquisition-related costs associated with Cap Juluca, Belmond's equity share of the $58.5 million impairment in FTSA, and an impairment charge of $8.2 million in relation to Belmond Road to Mandalay and Belmond Northern Belle. Acquisition-related costs for Cap Juluca represent professional fees incurred in preliminary design and planning, structuring, assessment of financing opportunities, legal, tax, accounting and engineering due diligence and the negotiation of the purchase and sale agreements, and other ancillary documents, with the principal owner and leaseholder, together with three owners of villas and separate subleases, as well as a memorandum of understanding and ground lease with the Government of Anguilla. Additionally, the net loss was a result of a foreign exchange loss of $3.0 million recognized in the year ended December 31, 2017, compared to a foreign exchange gain of $9.2 million in the year ended December 31, 2016. There was also a gain on extinguishment of debt of $1.2 million recognized in the year ended December 31, 2016 in connection with the early repayment of the development loan at Charleston Center LLC, compared with no gain on extinguishment of debt in the year ended December 31, 2017.

2016 compared to 2015

The net earnings attributable to Belmond Ltd. for the year ended December 31, 2016 were $36.3 million ($0.36 per common share) on revenue of $549.8 million, compared with net earnings of $16.3 million ($0.16 per common share) on revenue of $551.4 million in the year ended December 31, 2015. The increase in net earnings was partially due to an increase in earnings of $6.6 million from the Company's PeruRail joint venture which commenced transport of copper concentrate from the Las Bambas mine. This was complemented by an increase in earnings at Belmond Copacabana Palace as a result of the 2016 Summer Olympic Games that took place in Rio de Janeiro and the reopening of the Belmond Eagle Island Lodge as well as strong year-over-year growth for the remaining hotels in Europe. These increases were partially offset by the gain on sale of Hotel Ritz by Belmond in Madrid of $19.7 million which was recorded in the year ended December 31, 2015 and which did not reoccur. In addition, the Company benefited from a decrease in central costs due to lower legal and professional fees and payroll savings related to a weaker British

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pound than in the year ended December 31, 2015. In the year ended year ended December 31, 2015, the Company also recorded a goodwill impairment charge of $9.8 million ($1.0 million impairment charge of property, plant and equipment related in the year ended December 31, 2016). In addition, the company benefited from a foreign exchange gain of $9.2 million that was recognized in the year ended December 31, 2016, compared to a foreign exchange loss of $5.0 million in the year ended December 31, 2015.

Other comprehensive income: Foreign currency translation adjustments, net

2018 compared to 2017

Foreign currency translation adjustments for the year ended December 31, 2018 were a loss of $39.9 million compared to a gain of $48.8 million for the year ended December 31, 2017 primarily due to the retranslation of Belmond’s net investment in subsidiary accounts denominated in foreign currencies into the Company’s reporting currency of U.S. dollars.

The loss in the year ended December 31, 2018 was due to the depreciation of all of Belmond's operating currencies against the U.S. dollar from the rates at December 31, 2017. In particular, the 17%, 15%, 6% and 4% depreciation of the Russian ruble, Brazilian real, British pound and euro against the U.S. dollar, respectively, negatively impacted the carrying value of Belmond's net investments denominated in those currencies.

2017 compared to 2016

Foreign currency translation adjustments for the year ended December 31, 2017 were a gain of $48.8 million compared to a loss of $11.0 million for the year ended December 31, 2016 primarily due to the retranslation of Belmond’s net investment in subsidiary accounts denominated in foreign currencies into the Company’s reporting currency of U.S. dollars.

The gain in the year ended December 31, 2017 was primarily due to the majority of Belmond's operating currencies appreciating against the U.S. dollar from the rate at December 31, 2016. In particular, the 14%, 11%, 10% and 5% appreciation of the euro, South African rand, British pound and Russian ruble against the U.S. dollar, respectively, positively impacted the carrying value of Belmond's net investments denominated in those currencies.

2016 compared to 2015

Foreign currency translation adjustments for the year ended December 31, 2016 were a loss of $11.0 million compared to a loss of $88.2 million for the year ended December 31, 2015. The loss in the year ended December 31, 2016 was driven by a 3% and 17% depreciation of the euro and the British pound against the U.S. dollar from the rate at December 31, 2015, negatively impacting the carrying value of Belmond's net investments denominated in those currencies.

The loss in the year ended December 31, 2016 was primarily due to the majority of Belmond's operating currencies appreciating against the U.S. dollar from the rate at December 31, 2015. In particular, the 20%, 20% and 13% appreciation of the Brazilian real, Russian ruble and the South African rand against the U.S. dollar, respectively, positively impacted the carrying value of Belmond’s net investments denominated in those currencies.

Liquidity and Capital Resources

Overview

Belmond's primary short-term cash needs include payment of compensation, general business expenses, capital commitments and contractual payment obligations, which include principal and interest payment on its debt facilities. Long-term liquidity needs may include existing and ongoing property refurbishments, potential investment in strategic acquisitions, and the repayment of long-term debt. At December 31, ~~2017~~2018, total debt and obligations under capital leases, including debt of consolidated variable interest entities, amounted to $~~724~~773.26 million (~~2016~~2017 - $~~602~~724.12 million), including a current portion of $6.43 million (~~2016~~2017 - $56.34 million). See Note 1112 to the Financial Statements. Additionally, Belmond had capital commitments at December 31, ~~2017~~2018 amounting to $1921.52 million (~~2016~~2017 - $719.85 million).

Belmond had cash and cash equivalents of $~~180~~108.24 million at December 31, ~~2017~~2018, compared to $~~153~~180.42 million at December 31, ~~2016~~2017. In addition, Belmond had restricted cash balances of $3.94 million, of which $3.1.9 million is classified as restricted cash on the balance sheet and $01.85 million is classified in other assets (~~2016~~2017 - $23.69 million, of which $13.81 million is classified as restricted cash and $0.8 million is classified in other assets). At December 31, ~~2017~~2018, there were undrawn amounts available to Belmond under committed short-term lines of credit of $100.6 million (2016 - $105.5 million), bringing total cash availability at December 31, 2017 to $280.8 million (2016 - $258.9 million), excluding restricted cash. When assessing liquidity, Belmond management considers the availability of those cash resources held within local business units to meet the strategic needs of Belmond.

At December 31, 2017, Belmond had $6.4 million of scheduled debt repayments due within one year. Belmond expects to meet these repayments and fund working capital and capital expenditure commitments for the foreseeable future from cash resources, operating cash flow and available committed borrowing.57

In order to ensure that Belmond has sufficient liquidity for the future, Belmond’s cash flow projections and available funds are reviewed with the Company’s board of directors on a regular basis.

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under committed short-term lines of credit of $83.4 million (2017 - $100.6 million), bringing total cash availability at December 31, 2018 to $191.8 million (2017 - $280.8 million), excluding restricted cash. When assessing liquidity, Belmond management considers the availability of those cash resources held within local business units to meet the strategic needs of Belmond.

At December 31, 2018, Belmond had $6.3 million of scheduled debt repayments due within one year. Belmond expects to meet these repayments and fund working capital and capital expenditure commitments for the foreseeable future from cash resources, operating cash flow and available committed borrowing.

In order to ensure that Belmond has sufficient liquidity for the future, Belmond’s cash flow projections and available funds are reviewed with the Company’s board of directors on a regular basis.

Recent Events Affecting Belmond's Liquidity and Capital Resources

On ~~July~~December 314, ~~2017~~2018, ~~Belmond~~the ~~entered~~Company ~~into~~announced anthat ~~Amended~~it ~~and~~had ~~Restated~~entered ~~Credit~~into an Agreement, ~~between~~and ~~Belmond~~Plan ~~and~~of ~~its~~Merger ~~senior~~dated ~~secured~~December ~~lenders~~13, 2018 (the "~~Amended~~Merger ~~and Restated Credit~~ Agreement"). ~~The Amended and Restated Credit Agreement provides the Company~~ with ~~(i)~~LVMH aMoët ~~seven-year~~Hennessy—Louis ~~$603.4~~Vuitton ~~million~~SE ~~secured term loan~~ (~~the~~ "~~Term Loan Facility~~LVMH"), ~~that~~Palladio ~~matures~~Overseas onHolding ~~July 3~~Limited, ~~2024~~an ~~and~~indirect, ~~(ii)~~wholly-owned asubsidiary ~~$100.0~~of ~~million~~LVMH ~~revolving credit facility~~ (~~the~~ "~~Revolving Credit Facility~~Holding"), ~~that~~and ~~matures~~Fenice onLtd., ~~July~~a 3,wholly-owned ~~2022~~subsidiary ~~(together~~of ~~the~~Holding ("~~Secured~~Merger ~~Credit Facilities~~Sub")., ~~The~~pursuant ~~proceeds from the Term Loan Facility were recognized as cash and used~~ to ~~repay~~which ~~all~~LVMH ~~outstanding~~will ~~funded~~acquire ~~debt including~~ the ~~$45~~Company.0 ~~million~~Under ~~that had been drawn under~~ the ~~prior~~Merger ~~revolving credit facility~~Agreement, ~~but not~~ the ~~debt~~sale ofto ~~Charleston~~LVMH ~~Centre~~will ~~LLC,~~be aeffected ~~consolidated~~by ~~VIE,~~way ~~or the debt~~ of ~~Belmond’s~~a ~~unconsolidated~~merger ~~joint venture companies. A loss on modification~~ of ~~debt~~Merger ofSub ~~$0.7~~with ~~million~~and ~~(2016~~into ~~- $Nil) was recognized in~~ the ~~year ended December 31~~Company, ~~2017.~~with ~~The~~the ~~loss~~Company ~~consisted~~being ofthe ~~unamortized~~surviving ~~debt~~company ~~issuance~~in ~~costs relating to~~ the ~~Amended~~merger and ~~Restated~~becoming ~~Credit~~a ~~Agreement~~subsidiary of Holding.

OnThe ~~May~~completion 26of the merger, ~~2017~~which is expected to occur in the first half of 2019, ~~Belmond~~is ~~acquired~~subject ~~Cap~~to ~~Juluca~~the satisfaction or waiver of certain conditions, including the receipt of antitrust approvals in certain foreign jurisdictions and the absence of any law or governmental order prohibiting the merger. The Company held a ~~96-key~~special ~~luxury~~general ~~resort~~meeting of its shareholders on February 14, 2019 at which time Belmond's shareholders approved the ~~Caribbean~~Merger ~~island~~Agreement and the merger. At the effective time of ~~Anguilla~~the merger, ~~British~~each ~~West~~issued ~~Indies for~~and aoutstanding ~~total~~class ~~transaction~~A ~~value~~common ofshare, par value $840.801 ~~million~~per share, ~~including~~of anthe ~~aggregate~~Company, ~~cash~~other ~~purchase~~than ~~price~~class A common shares that are held by the Company in treasury or that are owned by LVMH, Holding or Merger Sub or by any other direct or indirect subsidiary of ~~$68.7~~LVMH ~~million~~or the Company, will be converted automatically and ~~acquisition-related~~without ~~costs~~any action by the holder of the class A common shares into the right to receive $1425.000 ~~million~~per share in cash, ~~but~~without ~~excluding~~interest a(and ~~working~~less ~~capital~~any ~~credit~~applicable ofwithholding $2taxes).1 ~~million.~~If ~~The~~the ~~acquisition~~merger ~~was~~is ~~funded~~completed, ~~from~~the ~~existing~~Company ~~cash~~will ~~reserves~~cease to be a publicly traded company and ~~$45~~will become a subsidiary of Holding and an indirect subsidiary of LVMH.0 ~~million~~For further information on the risks relating to the sale of ~~borrowings~~the ~~under~~Company, see Part 1—Item 1A—Risk Factors—Risks Related to the Sale of the Company’s. ~~prior~~Additional ~~revolving~~information ~~credit~~about ~~facility~~the sale, ~~which~~the ~~was~~Merger ~~repaid~~Agreement ~~under~~and the ~~Amended~~merger, ~~and~~including ~~Restated~~circumstances ~~Credit~~under which the Merger Agreement. ~~See~~can ~~Notes~~be 4terminated, as well as other terms and 11conditions, toare set forth in the ~~Financial~~Company's ~~Statements~~Current Report on Form 8-K filed with the SEC on December 14, 2018.

InUnder ~~March~~the ~~2015~~Merger Agreement, ~~Belmond’s board of directors approved a program enabling~~ the Company tois ~~repurchase~~restricted ~~its~~from ~~shares~~taking ofcertain ~~class~~actions Awithout ~~common~~LVMH's ~~stock~~consent upwhile to the ~~value~~sale ofto ~~$75.0~~LVMH ~~million.~~is ~~There were no shares repurchased or retired during the year ended December 31~~pending, ~~2017. During the year ended December 31~~including, ~~2016,~~among ~~Belmond~~other ~~repurchased and retired 233~~matters,~~393~~ ~~shares~~from ofmaking ~~class~~certain Ainvestments ~~common~~or ~~stock~~acquisitions ~~at a weighted average price of $8.54 per share~~ and anselling ~~aggregate~~certain ~~purchase~~assets, ~~price~~engaging ofin ~~approximately~~certain ~~$2.0~~capital ~~million. The shares repurchased represented approximately 0.2% of the Company's total shares of class A common stock outstanding prior to the repurchase. To date the Company has acquired 3~~expenditures,~~574,667~~ ~~shares~~and ofincurring ~~class~~certain ~~A common stock for consideration of $40~~indebtedness.0 ~~million.~~

During the year ended December 31, 2018, expenses and fees for professional services related to the board's review of strategic alternatives of $8.5 million were recognized within selling, general and administrative expenses in the statements of consolidated operations. If the Merger is consummated, the Company expects to incur additional costs related to the board's review of strategic alternatives which may be material. If the Merger Agreement is terminated under certain specified circumstances, Belmond may be required to pay to LVMH a termination fee equal to $92.3 million under the terms of the Merger Agreement.

On June 22, 2018, Charleston Center LLC amended its secured loan of $112.0 million increasing the amount of the loan to $160.0 million and extending its maturity from August 27, 2019 to June 22, 2021. The amended loan continues to bear interest at a rate of LIBOR plus 2.35% per annum. The loan has no amortization and is non-recourse to Belmond.

In March 2018, Belmond made drawdowns totaling $38.9 million on its revolving credit facility (the “Revolving Credit Facility”). In May 2018, Belmond repaid $1.2 million and in July 2018, all outstanding borrowings under the Revolving Credit Facility were repaid. In December 2018, Belmond made drawdowns of €15.0 million (equivalent to $17.2 million as at December 31, 2018) on its Revolving Credit Facility leaving an undrawn balance of $82.8 million.

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On July 3, 2017 Belmond entered into an Amended and Restated Credit Agreement, between Belmond and its senior secured lenders, (the "Amended and Restated Credit Agreement"). The Amended and Restated Credit Agreement provides the Company with (i) a seven-year $603.4 million secured term loan (the "Term Loan Facility") that matures on July 3, 2024 and (ii) a $100.0 million Revolving Credit Facility that matures on July 3, 2022 (together the "Secured Credit Facilities"). The proceeds from the Term Loan Facility were recognized as cash and used to repay all outstanding funded debt including the $45.0 million that had been drawn under the prior revolving credit facility, but not the debt of Charleston Centre LLC, a consolidated VIE, or the debt of Belmond’s unconsolidated joint venture companies. A loss on modification of debt of $0.7 million was recognized in the year ended December 31, 2017. The loss consisted of unamortized debt issuance costs relating to the Amended and Restated Credit Agreement.

On February 7, 2018, Belmond acquired Castello di Casole, a 39-key resort and estate in Tuscany, Italy for a total transaction

value of €40.2 million (equivalent to $49.3 million at February 7, 2018), including a cash purchase price of €38.3 million ($46.9 million), contingent consideration of €1.0 million ($1.2 million) and acquisition-related costs of €0.9 million ($1.1 million). The acquisition was funded from existing cash reserves. See Note 5 to the Financial Statements.

On May 26, 2017, Belmond acquired Cap Juluca, a 96-key luxury resort on the Caribbean island of Anguilla, British West Indies for a total transaction value of $84.8 million, including an aggregate cash purchase price of $68.7 million and acquisition-related costs of $14.0 million, but excluding a working capital credit of $2.1 million. The acquisition was funded from existing cash reserves and $45.0 million of borrowings under the Company’s prior revolving credit facility, which was repaid under the Amended and Restated Credit Agreement. See Notes 5 and 12 to the Financial Statements.

In March 2015, Belmond’s board of directors approved a program enabling the Company to repurchase its shares of class A common shares up to the value of $75.0 million. There were no shares repurchased or retired during the years ended December 31, 2018 and 2017. During the year ended December 31, 2016, Belmond repurchased and retired 233,393 shares of class A common shares at a weighted average price of $8.54 per share and an aggregate purchase price of approximately $2.0 million. The shares repurchased represented approximately 0.2% of the Company's total shares of class A common stock outstanding prior to the repurchase. To date the Company has acquired 3,574,667 shares of class A common stock for consideration of $40.0 million.

Covenant Compliance

At December 31, ~~2017~~2018, Belmond was financed with a $~~610~~595.08 million Term Loan Facility and a $100.0 million Revolving Credit Facility which is undrawn. The Amended and Restated Credit Agreement limits Belmond’s ability to incur additional debt unless a covenant is met. The covenant is measured on the performance of the consolidated group. The Amended and Restated Credit Agreement removed a minimum interest coverage ratio covenant that had previously applied to the Company and increased the net leverage ratio permitted in the covenant test. The maximum net leverage test is measured quarterly based on Belmond’s trailing 12 months results. In addition, there is third party bank debt held by consolidated variable interest entities of $~~112~~160.96 million relating to Charleston Center LLC. ~~One~~This ofloan ~~the loans ($112.0 million)~~ contains two financial covenants, a minimum interest cover test and minimum debt service ratio, both measured quarterly based on the trailing 12 months results of Charleston Center LLC. Belmond was in compliance with its covenants as at 31 December 2018.

If Belmond does not comply with its financial covenant and the banks that provide the Revolving Credit Facility declare a default and accelerate the repayment of their debt, this will permit the lenders under the Term Loan Facility to cross accelerate their loans under the Amended and Restated Credit Agreement.

Belmond regularly monitors projected covenant compliance, and if there was a likely prospective non-compliance with a covenant, Belmond would as a general rule meet with the agent or lending bank or banks of the relevant facility to seek an amendment or waiver. If such an amendment or waiver is available, obtaining it may result in additional bank fees or an increase in the interest cost.

Based on its current financial forecasts, Belmond believes it will comply with all of the financial covenants in its loan facilities.

Working Capital

Current assets less current liabilities, including the current portion of long-term debt, resulted in a working capital surplus of $~~132~~19.34 million at December 31, ~~2017~~2018 (December 31, ~~2016~~2017 - $~~107~~132.43 million).

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Cash Flow - Sources and Uses of Cash

At December 31, ~~2017~~2018 and ~~2016~~2017, Belmond had cash and cash equivalents of $~~180~~108.24 million and $~~153~~180.42 million, respectively. In addition, Belmond had restricted cash balances of $3.94 million (of which $3.1.9 million is classified as current restricted cash on the consolidated balance sheet and $01.85 million is classified in other assets) and $23.69 million (of which $13.81 million is classified as current restricted cash on the consolidated balance sheet and $0.8 million is classified in other assets) as of December 31, ~~2017~~2018 and December 31, ~~2016~~2017, respectively.

Operating Activities. Net cash provided by operating activities for the year ended December 31, ~~2017~~2018 was $5079.7 million compared to $6152.50 million for the year ended December 31, ~~2016~~2017 and $6760.98 million for the year ended December 31, ~~2015~~2016.

The primary driver of operating cash flows is the result for the period, adjusted for any non-cash components. Net losses from continuing operations were $4528.12 million for the year ended December 31, ~~2017~~2018, aan ~~decrease~~improvement of $8016.59 million compared to ~~earnings~~losses of $3545.41 million for the year ended December 31, ~~2016.~~2017 ~~Non-cash~~primarily ~~items~~due ~~affecting~~to ~~the~~other ~~calculation~~operating income of ~~net~~$16.9 ~~cash~~million ~~provided~~recorded byin ~~operating~~the ~~activities~~year ~~included~~ended anDecember 31, ~~impairment~~2018 ofwhich ~~property~~mostly related to insurance. In addition, ~~plant~~earnings ~~and~~from ~~equipment~~unconsolidated ofcompanies were $89.24 million ~~relating~~for tothe ~~Belmond~~year ~~Road~~ended December 31, 2018, compared to ~~Mandalay~~losses ~~and~~from ~~Belmond~~unconsolidated ~~Northern~~companies ~~Belle~~of ~~recorded~~$10.2 ~~during~~million for the year ended December 31, 2017, ~~compared~~largely toas a ~~$1.0~~result ~~million~~of a large impairment charge recorded in one of ~~property,~~the ~~plant~~Company's ~~and~~unconsolidated ~~equipment~~companies in the year ended December 31, ~~2016 related to Belmond Orcaella~~2017. InSee ~~addition,~~Note ~~there~~8 ~~was~~to anthe ~~impairment~~Financial ~~of goodwill of $5~~Statements.5 ~~million~~The ~~related~~provision tofor ~~Belmond~~income ~~Cap~~taxes ~~Juluca~~in ~~during~~ the year ended December 31, ~~2017~~2018 was $14.0 million, compared to no$6.6 ~~goodwill~~million ~~impairment charge~~ in the year ended December 31, ~~2016~~2017. ~~There~~Non-cash ~~was~~items aaffecting ~~$1.2~~the ~~million~~calculation ~~gain~~of onnet ~~extinguishment~~cash ofprovided ~~debt~~by ~~and~~operating aactivities ~~$14.3~~included ~~million~~the ~~cash~~impairment ~~outflow~~of toproperty, ~~settle~~plant ~~accrued~~and ~~interest~~equipment onand ~~Charleston~~other ~~Center~~assets ~~LLC’~~of $4.9 million relating to Belmond Governor's ~~1984~~Residence ~~development~~and ~~loan~~Belmond ~~from~~Road aTo ~~municipal~~Mandalay ~~agency~~recorded induring the year ended December 31, ~~2016~~2018, ~~which~~compared ~~did~~to ~~recur~~an $8.2 million impairment of property, plant and equipment in the year ended December 31, 2017. ~~See~~related ~~Note~~to 11Belmond Road to ~~the~~Mandalay ~~Financial~~and ~~Statements~~Belmond Northern Belle. InThere ~~addition,~~was ~~losses~~an ~~from~~impairment ~~unconsolidated~~of ~~companies~~goodwill ~~were~~of $104.27 million ~~for~~related ~~the~~to ~~year~~Belmond ~~ended~~Governor's ~~December 31~~Residence, ~~2017~~Belmond La Résidence d'Angkor, ~~compared~~Belmond toVilla ~~earnings~~San ~~from~~Michele ~~unconsolidated~~and ~~companies~~Belmond ofCastello ~~$11.0~~di ~~million~~Casole ~~for~~during the year ended December 31, ~~2016~~2018, ~~largely~~compared asto aan ~~result~~impairment of angoodwill ~~impairment~~of ~~charge~~$5.5 ~~recorded~~million in ~~one of~~ the ~~Company's~~year ~~unconsolidated~~ended ~~companies.~~December 31, ~~See~~2017 ~~Note~~related 7 to ~~the~~Belmond ~~Financial~~Cap ~~Statements~~Juluca. ~~Lastly,~~Operating ~~operating~~ cash flows were also affected by ~~the~~insurance ~~fact~~proceeds ~~that~~relating ~~net~~to business interruption losses ~~from~~that ~~continuing~~totaled ~~operations~~$16.4 ~~for~~million in the year ended December 31, ~~2017,~~2018 ~~included a non-cash loss from foreign currency translation of $3.0 million,~~ compared to ~~a non-cash gain from foreign currency translation of~~ $91.25 million ~~for~~in the year ended December 31, ~~2016~~2017.

Net ~~earnings~~losses from continuing operations were $3545.41 million for the year ended December 31, ~~2016~~2017, ana ~~improvement~~decrease of $1880.05 million compared to earnings of $1735.4 million for the year ended December 31, ~~2015~~2016. InNon-cash ~~addition,~~items ~~there~~affecting ~~was~~the acalculation ~~$1.2~~of ~~million~~net ~~gain~~cash onprovided ~~extinguishment~~by operating activities included an impairment of ~~debt~~property, plant and aequipment of $148.32 million ~~cash~~relating ~~outflow~~to Belmond Road to ~~settle~~Mandalay ~~accrued~~and ~~interest~~Belmond onNorthern ~~Charleston~~Belle ~~Center~~recorded ~~LLC’s~~during ~~1984~~the ~~development~~year ~~loan~~ended ~~from~~December 31, 2017 compared to a ~~municipal~~$1.0 ~~agency~~million impairment of property, plant and equipment in the year ended December 31, 2016. ~~See~~related ~~Note 11~~ to ~~the~~Belmond ~~Financial Statements~~Orcaella. In addition, there was an impairment of goodwill of $5.5 million related to Belmond Cap Juluca during the year ended December 31, ~~2015~~2017, compared to no goodwill impairment charge in the ~~Company~~year ~~recorded~~ended December 31, 2016. There was a ~~non-cash~~$1.2 million gain on ~~disposal~~extinguishment of debt and a $1914.73 million incash ~~relation~~outflow to ~~the~~settle ~~sale~~accrued ofinterest ~~Belmond's~~on ~~equity~~Charleston ~~method~~Center ~~investment~~LLC’s in1984 ~~Hotel~~development ~~Ritz~~loan byfrom ~~Belmond~~a ~~and~~municipal ~~goodwill~~agency ~~impairments~~in ~~totaling~~the ~~$9.8~~year ~~million~~ended inDecember 31, ~~relation~~2016, towhich ~~the~~did ~~goodwill~~recur ofin ~~Belmond~~the ~~Grand~~year ~~Hotel~~ended ~~Europe~~December 31, ~~Belmond~~2017. ~~Jimbaran~~In ~~Puri~~addition, ~~Belmond~~losses Lafrom ~~Résidence~~unconsolidated ~~Phou~~companies ~~Vao~~were ~~and~~$10.2 ~~Belmond~~million ~~Northern~~for ~~Belle,~~the ~~non-cash~~year ~~items~~ended ~~affecting~~December 31, ~~net~~2017, ~~cash~~compared ~~used~~to inearnings ~~operating~~from ~~activities~~unconsolidated ~~which~~companies ~~did~~of ~~not~~$11.0 ~~recur~~million infor the year ended December 31, 2016, largely as a result of an impairment charge recorded in one of the Company's unconsolidated companies. See Note 8 to the Financial Statements. Lastly, operating cash flows were affected by the fact that net ~~earnings~~losses from continuing operations for the year ended December 31, ~~2016~~2017, included a non-cash ~~gain~~loss from foreign currency translation of $93.20 million, compared to a non-cash ~~loss~~gain from foreign currency translation of $59.02 million for the year ended December 31, ~~2015~~2016.

Investing Activities. Net cash used in investing activities for the year ended December 31, ~~2017~~2018 was $~~120~~207.92 million compared to $52120.48 million for the year ended December 31, ~~2016~~2017 and $1752.4 million for the year ended December 31, ~~2015~~2016.

During the year ended December 31, 2018, $45.4 million, net of cash acquired, was used for the acquisition of Belmond Castello di Casole. During the year ended December 31, 2017, $68.6 million, net of cash acquired, was used for the acquisition of Cap Juluca. See Note 45 to the Financial Statements. There were no acquisitions during the year ended December 31, 2016. In addition, proceeds from insurance settlements relating to property damage totaled $7.3 million in the year ended December 31, 2018, compared to $13.6 million in the year ended December 31, 2017 and did not occur in the year ended December 31, 2016.

Capital expenditure of $67166.81 million during the year ended December 31, ~~2017~~2018 included $693.3 million on the refurbishment atof Belmond Cap Juluca, $518.8 million ~~at Belmond Copacabana Palace million~~ on the ~~full~~ refurbishment of ~~the~~Belmond ~~Pergula~~La ~~Restaurant~~Samanna, $45.75 million aton ~~Belmond~~the ~~Grand~~refurbishment ~~Hotel~~and ~~Europe~~addition ~~for~~of ~~the~~new ~~refurbishment~~suites ofat ~~the~~Belmond ~~hotel's~~Hotel ~~ballroom~~Splendido, ~~improvements~~$5.1 tomillion ~~the~~at ~~hotel's~~Belmond ~~heating~~Grand ~~and~~Hotel ~~air~~Europe, ~~conditioning~~primarily ~~system~~for ~~and~~ renovation of its deluxe rooms, $45.60 million on ~~corporate projects, which include~~ the ~~Company's~~full ~~new~~refurbishment ~~enterprise~~of ~~resource~~Belmond ~~planning~~Savute ~~system~~Elephant ~~and website~~Lodge, $43.57 million onat ~~the~~Belmond ~~Venice~~Afloat ~~Simplon-Orient-Express~~in ~~related~~France tofor ~~statutory~~the ~~maintenance~~addition ~~works~~of two new barges and $32.7 million onfor the ~~acquisition~~refurbishment of an'21' ~~additional~~Club ~~villa~~following atwater ~~Belmond~~damage ~~Hotel~~from ~~Caruso,~~burst ~~with~~pipes ~~the~~earlier ~~balance being for routine capital expenditures.~~

Capital expenditure of $55.1 million during the year ended December 31, 2016 included $8.1 million at Belmond Charleston Place related to the cost of adding a new high-end sports pub which opened in July 2016 as well as for roof replacement works, $5.3 million on the Venice Simplon-Orient-Express related to statutory maintenance works and the phased installation of air-conditioning, $5.2 million at Belmond La Residence d’Angkor primarily for a rooms renovation project, $5.2 million at Belmond 60

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~~Mount~~in ~~Nelson~~the ~~Hotel~~year, ~~for~~with the ~~renovation~~balance ofbeing ~~rooms~~for inroutine ~~the~~capital ~~hotel's~~expenditures. ~~main~~Capital ~~building,~~expenditure to acquire intangible assets of $43.50 million onduring the ~~Belmond~~year ~~Grand~~ended ~~Hibernian~~December 31, ~~luxury~~2018 ~~sleeper~~related ~~train~~to ~~which~~the ~~commenced~~Company's ~~operations~~new inenterprise ~~August~~resource ~~2016,~~planning ~~with~~and ~~the~~customer ~~balance~~relationship ~~being~~management ~~for routine capital expenditures~~systems.

Capital expenditure of $5667.48 million during the year ended December 31, ~~2015~~2017 included $106.53 million aton ~~Belmond Charleston Place primarily for~~ the ~~hotel's~~refurbishment ~~rooms~~at Belmond ~~renovation~~Cap ~~project~~Juluca, $65.08 million at Belmond ~~Safaris~~Copacabana ~~primarily~~Palace ~~for~~on the ~~renovation~~full ofrefurbishment ~~Belmond Eagle Island Lodge, $5.5 million for construction~~ of the ~~Belmond~~Pérgula ~~Grand Hibernian luxury sleeper train~~Restaurant, $4.37 million at Belmond Grand Hotel Europe ~~primarily~~ for the ~~renovation~~refurbishment of the hotel's ~~main kitchen and new restaurant~~ballroom, ~~$4.1~~improvements ~~million on the Venice Simplon-Orient-Express and Belmond British Pullman primarily related~~ to ~~statutory safety works, $3.5 million at Belmond Hotel Cipriani primarily for~~ the ~~renovation of 16 rooms in the~~ hotel's ~~main~~heating ~~building,~~and ~~$2.9~~air ~~million~~conditioning atsystem ~~Belmond~~and ~~Mount Nelson Hotel primarily for the~~ renovation of ~~banqueting~~its ~~and~~deluxe ~~meeting~~ rooms, $24.26 million aton ~~Belmond~~corporate Laprojects, ~~Residencia~~which ~~primarily~~include ~~for~~the aCompany's new ~~bar~~enterprise ~~and~~resource ~~refurbishment~~planning ofsystem 12and ~~junior suites~~website, $24.15 million aton ~~Belmond Hotel Splendido primarily for~~ the ~~refurbishment~~Venice ofSimplon-Orient-Express ~~ten~~related ~~rooms,~~to ~~$2.1~~statutory ~~million~~maintenance atworks ~~Belmond Villa San Michele primarily for a new function facility~~ and $23.17 million aton ~~Belmond~~the ~~Villa~~acquisition ~~Sant'~~of ~~Andrea primarily to purchase~~ an ~~adjacent~~additional ~~property~~villa ~~and~~at ~~beach~~Belmond ~~concession~~Hotel Caruso, with the balance being for routine capital expenditures.

InCapital ~~addition,~~expenditure of $55.1 million during the year ended December 31, ~~2017,~~2016 ~~disposal~~included of$8.1 million at Belmond Charleston Place related to the ~~shares~~cost of adding a new high-end sports pub which opened in ~~Northern~~July ~~Belle~~2016 ~~Limited,~~as ~~the~~well ~~wholly~~as ~~owned~~for ~~subsidiary~~roof ~~that~~replacement ~~owned~~works, $5.3 million on the ~~rolling~~Venice ~~stock~~Simplon-Orient-Express ~~resulted~~related into ~~net~~statutory ~~cash~~maintenance ~~proceeds~~works and the phased installation of air-conditioning, $25.12 million. ~~The~~at ~~disposal~~Belmond ~~resulted~~La inResidence d’Angkor primarily for a ~~loss~~rooms renovation project, $05.82 million, ~~which~~at ~~was~~Belmond ~~recognized~~Mount onNelson ~~completion~~Hotel ~~and~~for itthe isrenovation ~~reported~~of ~~within~~rooms ~~loss~~in the hotel's main building, $4.5 million on ~~sale~~the ~~from~~Belmond ~~property~~Grand Hibernian luxury sleeper train which commenced operations in August 2016, ~~plant~~with ~~and~~the ~~equipment~~balance ~~and~~being ~~equity~~for ~~method~~routine ~~investments.~~capital expenditures.

During the year ended December 31, 2017, disposal of the shares in Northern Belle Limited, the wholly owned subsidiary that owned the rolling stock resulted in net cash proceeds of $2.1 million. The disposal resulted in a loss $0.8 million, which was recognized on completion and it is reported within loss on sale from property, plant and equipment and equity method investments. There was no equivalent disposal in the year ended December 31, 2018.

During the year ended December 31, 2016, disposal of the trains and carriages that were formerly operated as the Great South Pacific Express and a spa building at Belmond Casa de Sierra Nevada resulted in net cash proceeds of $2.7 million. The disposal of the spa building resulted in a gain of $0.3 million, which was recognized on completion and is reported within gain on sale from property, plant and equipment and equity method investments. No gain or loss arose on disposal of the train carriages.

~~During~~Financing ~~the~~Activities. ~~year~~Net ~~ended~~cash ~~December 31,~~provided ~~2015,~~by ~~disposal~~financing ofactivities ~~Belmond's~~for ~~equity~~the ~~method~~year ~~investment~~ended inDecember 31, ~~Hotel~~2018 ~~Ritz~~was ~~by Belmond resulted in net cash proceeds of~~ $4358.76 million. ~~The~~compared ~~disposal~~to ~~resulted~~cash inprovided aby ~~gain~~financing activities of $1989.78 million, ~~which~~for ~~was~~the ~~recognized~~year onended ~~completion~~December 31, 2017 and iscash ~~reported~~provided ~~within~~by ~~gain~~financing onactivities ~~sale~~of ~~from~~$9.6 ~~property,~~million ~~plant~~for ~~and~~the ~~equipment~~year ~~and~~ended ~~equity~~December 31, ~~method investments~~2016.

~~Release~~During ~~of restricted cash was $Nil for~~ the year ended December 31, ~~2016~~2018, ~~compared~~Belmond to made drawdowns totaling $57.0 million on its Revolving Credit Facility and Charleston Center LLC amended its secured loan of $112.50 million, ~~for~~increasing the ~~year~~amount ~~ended~~of ~~December 31~~the loan to $160.0 million and extending its maturity from August 27, ~~2015~~2019 to June 22, 2021. The proceeds from the additional borrowing were used to repay the outstanding balance on the Revolving Credit Facility in July 2018. See Note 12 to the Financial Statements.

Financing Activities. Net cash provided by financing activities for the year ended December 31, 2017 was $89.8 million compared to cash provided by financing activities of $9.6 million for the year ended December 31, 2016 and cash used in financing activities of $43.8 million for the year ended December 31, 2015.

On July 3, 2017, Belmond entered into an Amended and Restated Credit Agreement, which had previously consisted of (a) a seven-year $552.0 million term loan facility consisting of a $345.0 million U.S. dollar tranche and a €150.0 million euro-denominated tranche (equivalent to $207.0 million at drawdown), scheduled to mature on March 21, 2021; and (b) a $105.0 million revolving credit facility scheduled to mature on March 21, 2019.

The Amended and Restated Credit Agreement provides the Company with (i) a seven-year $603.4 million Term Loan Facility that matures on July 3, 2024 and (ii) a $100.0 million Revolving Credit Facility that matures on July 3, 2022. The proceeds from the Term Loan Facility were recognized as cash and used to repay all outstanding funded debt including the $45.0 million that had been drawn during the year ended December 31, 2017 under the prior revolving credit facility, but not the debt of Charleston Center LLC, a consolidated VIE, or the debt of Belmond’s unconsolidated joint venture companies. ~~The net cash proceeds at closing under the Amended and Restated Credit Agreement was therefore $104.7 million.~~

During the year ended December 31, 2016, Charleston Center LLC amended its secured loan of $86.0 million increasing the amount of the loan to $112.0 million. The additional proceeds of $26.0 million were used to repay a 1984 development loan from a municipal agency and associated accrued interest.

Principal repayments under long-term debt were $545.73 million in the year ended December 31, ~~2017~~2018 compared to $135.97 million in the year ended December 31, ~~2016~~2017 and $513.49 million in the year ended December 31, ~~2015~~2016.

The year ended December 31, 2016 included a cash outflow of $2.0 million in relation to the repurchases of Belmond's shares of class A common stock~~, compared to $37~~.~~6 million in the year ended December 31, 2015.~~

Cash Flows from Discontinued Operations. The results of Ubud Hanging Gardens and Porto Cupecoy, have been presented as discontinued operations for all periods presented. See Notes 5 and 20 to the Financial Statements.61

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~~Net~~Cash ~~cash~~Flows ~~provided by/(used in) operating activities comprises the results of operations for the discontinued operations noted above and the movement in their assets and liabilities. Earnings~~ from ~~discontinued~~Discontinued ~~operations were $0~~Operations.1 ~~million~~The ~~for~~results ~~the year ended December 31, 2017, compared to earnings~~ of ~~$1.0~~Ubud ~~million~~Hanging ~~for~~Gardens ~~the year ended December 31, 2016~~ and ~~losses~~Porto ~~of $1.5 million for the year ended December 31~~Cupecoy, ~~2015.~~have ~~The~~been ~~earnings~~presented ~~from~~as discontinued operations for ~~the~~all ~~year~~periods ~~ended December 31, 2016 largely relate to the release of a provision at Porto Cupecoy in respect of tax claims that Belmond believes it is now effectively discharged from~~presented. See ~~Note~~Notes ~~20. The results of discontinued operations for the year ended December 31, 2015 includes legal fees of $0.~~6 ~~million~~and in21 ~~relation~~ to ~~Ubud Hanging Gardens, as Belmond is pursuing legal remedies following its wrongful dispossession by~~ the ~~owner.~~Financial Statements.

Net cash (used in)/provided by operating activities comprises the results of operations for the discontinued operations noted above and the movement in their assets and liabilities. Losses from discontinued operations were $Nil for the year ended December 31, 2018, compared to earnings of $0.1 million for the year ended December 31, 2017 and earnings of $1.0 million for the year ended December 31, 2016. The earnings from discontinued operations for the year ended December 31, 2016 largely relate to the release of a provision at Porto Cupecoy in respect of tax claims that Belmond believes it is now effectively discharged from.

Capital Commitments

Belmond routinely makes capital expenditures to enhance its business. These capital expenditures relate to maintenance, improvements to existing properties and investment in new properties. These capital commitments are expected to be funded through current cash balances, cash flows from operations, existing debt facilities.

There were $1921.52 million of capital commitments outstanding at December 31, ~~2017~~2018 (~~2016~~2017 - $719.85 million) relating to project developments and refurbishment for existing properties.

Other Commitments

At Belmond La Samanna as a restructuring plan was agreed with the Works Council at the property and approved by the labor authorities in St Martin, the Company met the criteria to recognize a liability for restructuring costs. During the year ended December 31, 2018, restructuring costs at Belmond La Samanna of $14.9 million were recognized within costs of services and selling, general and administrative expenses in the statements of consolidated operations. There were $2.1 million of accrued liabilities relating to the Belmond La Samanna restructuring plan at December 31, 2018. The expected completion date for the workforce restructuring is August 2019. See Note 21 to the Financial Statements.

On July 6, 2018, the Company entered into an agreement with Mr. James Sherwood, the founder, Chairman Emeritus and a former director of the Company to terminate certain purchase rights of Mr. Sherwood in respect of the Belmond Hotel Cipriani. Specifically, Mr. Sherwood’s right of first refusal in the case of a sale of the hotel and his purchase option in the event of a change in control of the Company were terminated under the agreement in exchange for a cash payment of $3.0 million, payable over a period of two years in three installments. Moreover, in the event of a sale of the hotel or a change in control of the Company within a ten year period following execution of the agreement, the Company would pay to Mr. Sherwood $10.0 million if such an event happens within a year of the agreement, stepping down by $1.0 million a year to zero after ten years. Mr. Sherwood would also receive a payment of $25.0 million, less any payments already made under the agreement and with no additional payments due to him thereafter under the agreement, in the event of either (1) a public offer for the Company being made within six months after the execution of the agreement and the closing of a change of control transaction for the Company occurring within six months after such offer was made or (2) a sale of the hotel within one year after the execution of the agreement. See Note 21 to the Financial Statements.

Indebtedness

At December 31, ~~2017~~2018, Belmond had $~~724~~773.26 million (~~2016~~2017 - $~~602~~724.12 million) of consolidated debt and obligations under capital leases, including the current portion and including debt held by consolidated variable interest entities. Total debt on the consolidated balance sheets at December 31, ~~2017~~2018 of $~~707~~760.10 million (~~2016~~2017 - $~~591~~707.1 million) is net of the unamortized original issue discount of $32.16 million (~~2016~~2017 - $13.51 million) and unamortized debt issuance costs of $1411.0 million (~~2016~~2017 - $914.50 million), both of which will be amortized through interest expense over the term of the loans.

On July 3, 2017, Belmond amended and restated its credit agreement. The Amended and Restated Credit Agreement provides the Company with (i) a seven-year $603.4 million Term Loan Facility that matures on July 3, 2024 and (ii) a $100.0 million Revolving Credit Facility that matures on July 3, 2022.

AtThe ~~December 31,~~Term ~~2017,~~Loan ~~Belmond~~Facility ~~was~~has ~~financed~~two ~~with~~tranches, a U.S. dollar tranche ($~~610~~394.0 million ~~Term~~currently ~~Loan~~outstanding) ~~Facility~~ and a euro-denominated tranche (€176.3 million currently outstanding, equivalent to $~~100~~201.08 million ~~Revolving~~as ~~Credit~~at ~~Facility~~December 31, ~~which~~2018). The dollar tranche bears interest at a rate of LIBOR plus 2.75% per annum, and the euro tranche bears interest at a rate of EURIBOR plus 3% per annum. Both tranches are subject to a 0% interest rate floor. The annual mandatory amortization is ~~undrawn~~1% of the principal amount.

The ~~Term~~Revolving ~~Loan~~Credit Facility has ~~two tranches,~~ a ~~U.S.~~maturity ~~dollar~~of ~~tranche~~five ~~($398.0~~years ~~million currently outstanding)~~ and ~~a euro-denominated tranche (€178.1 million currently outstanding, equivalent to $213.4 million as at December 31, 2017). The dollar tranche~~ bears interest at a rate of LIBOR plus 2.7550% per annum, ~~and~~with ~~the euro tranche bears interest at~~ a ~~rate~~commitment fee of ~~EURIBOR plus 3~~0.4% ~~per~~paid ~~annum.~~on ~~Both~~the ~~tranches~~undrawn ~~are subject to a 0% interest rate floor~~amount. ~~The~~In ~~annual~~December ~~mandatory~~2018, ~~amortization~~Belmond ismade 1%drawdowns of ~~the~~€15.0 ~~principal~~million ~~amount.~~(equivalent

The Revolving Credit Facility has a maturity of five years and bears interest at a rate of LIBOR plus 2.50% per annum, with a commitment fee of 0.4% paid on the undrawn amount. At December 31, 2017 the facility was undrawn and including other working capital facilities, the Company has $100.6 million available to draw.62

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to $17.2 million as at December 31, 2018) on its Revolving Credit Facility leaving an undrawn balance of $82.8 million. At December 31, 2018, including other working capital facilities, the Company has $83.4 million available to draw.

The Secured Credit Facilities are secured by pledges of shares in certain Company subsidiaries and by security interests in tangible and intangible personal property. There are no mortgages over real estate.

~~The~~On ~~weighted~~June ~~average~~22, ~~duration~~2018, Charleston Center LLC amended its secured loan of ~~Belmond’s~~$112.0 ~~debt,~~million ~~including~~increasing ~~debt~~the ~~held~~amount byof ~~consolidated~~the ~~variable~~loan ~~interest~~to ~~entities~~$160.0 million and extending its maturity from August 27, is2019 ~~5.6~~to ~~years~~June 22, ~~and~~2021. Proceeds from the ~~weighted~~additional ~~average~~borrowing ~~interest~~were ~~rate~~used isto 4repay the outstanding balance on the Revolving Credit Facility in July 2018.~~11%,~~ ~~which~~The ~~incorporates~~amended ~~derivatives~~loan ~~used~~continues to ~~mitigate~~bear interest at a rate ~~risk. See~~of ~~Note~~LIBOR 11plus to2.35% ~~the~~per ~~Financial~~annum. ~~Statements~~The ~~regarding~~loan ~~the~~has ~~maturity~~no ofamortization ~~long~~and is non-~~term~~recourse ~~debt~~to Belmond.

~~Debt~~The ofweighted ~~consolidated~~average ~~variable~~duration ~~interest~~of ~~entities~~Belmond’s ~~at December 31~~debt, ~~2017~~including ~~included~~debt ~~above~~held ~~comprised~~by ~~$112.9~~consolidated ~~million~~variable ~~(2016~~interest -entities, ~~$113~~is 4.17 ~~million)~~years, ~~including~~and the ~~current~~weighted ~~portion~~average ~~but~~interest ~~before~~rate ~~deduction~~is ~~of unamortized debt issuance costs~~4.41%, ofwhich ~~debt~~incorporates ~~obligations~~derivatives ofused ~~Charleston~~to ~~Center~~mitigate ~~LLC,~~interest ~~owner~~rate ofrisk. See ~~Belmond~~Note ~~Charleston~~12 ~~Place~~to inthe ~~which~~Financial ~~Belmond~~Statements ~~has~~regarding athe ~~19.9%~~maturity ~~equity~~of ~~investment.~~long-term debt.

InDebt ~~June~~of ~~2016,~~consolidated ~~Charleston~~variable ~~Center~~interest ~~LLC~~entities ~~amended~~at ~~its~~December 31, ~~secured~~2018 ~~loan~~included ofabove comprised $86160.06 million ~~increasing~~(2017 ~~the~~- ~~amount of the loan to~~ $112.09 million), ~~but~~including ~~retaining~~ the ~~2019~~current ~~maturity.~~portion ~~The~~but ~~interest~~before ~~rate~~deduction onof ~~the~~unamortized ~~new~~debt ~~loan~~issuance iscosts, ~~LIBOR~~of ~~plus~~debt ~~2.35%~~obligations ~~per~~of ~~annum,~~Charleston ~~has~~Center noLLC, ~~amortization~~owner ~~and~~of ~~is non-recourse to~~ Belmond. ~~The~~Charleston ~~additional~~Place ~~proceeds~~in ~~were~~which ~~used~~Belmond tohas ~~repay~~ a ~~1984~~19.9% ~~development~~equity ~~loan from a municipal agency and associated accrued interest~~investment.

Including debt of consolidated variable entities, approximately 2928% of the outstanding principal was drawn in euros and the balance in U.S. dollars. At December 31, ~~2017~~2018, 5250% of borrowings of Belmond were subject to floating interest rates.

57Belmond has contingently guaranteed debt obligations of certain of its joint ventures. The following table summarizes these commitments at December 31, 2018:



	Contingent guarantee	Duration
December 31, 2018	$ millions

PeruRail joint venture:
Concession performance	11.6	through May 2019
Peru hotel joint venture:
Debt obligations	14.0	through 2021

Total	25.6

Belmond has contingently guaranteed, through 2021, $14.0 million of debt obligations of the joint venture in Peru that operates five hotels. Belmond has also contingently guaranteed the FTSA joint venture’s obligations relating to the performance of its governmental rail concessions, currently in the amount of $11.6 million, through May 2019. The contingent guarantees for each Peruvian joint venture may only be enforced in the event there is a change in control of the relevant joint venture, which would occur only if Belmond's ownership of the economic and voting interests in the joint venture falls below 50%, an event which has not occurred and is not expected to occur.

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Belmond has contingently guaranteed debt obligations of certain of its joint ventures. The following table summarizes these commitments at December 31, 2017:

	Contingent guarantee	Duration
December 31, 2017	$ millions
PeruRail joint venture:
Concession performance	9.9	through May 2018
Peru hotel joint venture:
Debt obligations	15.9	through 2021
Total	25.8

Belmond has contingently guaranteed, through 2021, $15.9 million of debt obligations of the joint venture in Peru that operates five hotels. Belmond has also contingently guaranteed the FTSA joint venture’s obligations relating to the performance of its governmental rail concessions, currently in the amount of $9.9 million, through May 2018. The contingent guarantees for each Peruvian joint venture may only be enforced in the event there is a change in control of the relevant joint venture, which would occur only if Belmond's ownership of the economic and voting interests in the joint venture falls below 50%, an event which has not occurred and is not expected to occur.

Contractual Obligations Summary

The following table summarizes Belmond’s (excluding joint ventures) material known contractual obligations in ~~2018~~2019 and later years as of December 31, ~~2017~~2018, excluding accounts payable and accrued liabilities:

	2018	2019-2020	2021-2022	Thereafter	Total
	2019	2020-2021	2022-2023	Thereafter	Total
Year ended December 31,	$ millions	$ millions	$ millions	$ millions	$ millions
Total long-term debt and obligations under capital leases, before deduction of discount on secured term loan and debt issuance costs	6.43	~~124~~172.85	1229.43	~~580~~565.65	~~724~~773.26
Operating leases	1211.10	2122.85	2018.78	~~141~~129.86	~~196~~181.49
Capital commitments	19.5	—	—	—	19.5
Other derivative instrument	—	0.8	—	—	0.8
Interest payments	29.1	51.4	46.9	30.2	157.6
Capital commitments	21.2	—	—	—	21.2
Pension obligations	0.4	0.8	0.8	6.3	8.3
Interest payments	33.4	60.9	49.7	10.8	154.8
	67.5	198.8	80.8	758.9	1,106.0
Pension obligations	0.4	0.7	0.7	5.4	7.2
	72.3	257.4	98.5	711.3	1,139.5

Interest payments have been calculated using the amortization profile of the debt outstanding at December 31, ~~2017~~2018, taking into account the fixed rate paid under interest rate swaps and the prevailing floating rates of interest at the year end.

At December 31, ~~2017~~2018, Belmond has a provision of $0.56 million in respect of its uncertain tax positions in accordance with Accounting Standards Codification 740, Income Taxes. Belmond is unable to estimate with any certainty when, or if, these liabilities will fall due. Accordingly, they are excluded from the contractual obligations table.

Off-Balance Sheet Arrangements

Belmond had no material off-balance sheet arrangements at December 31, ~~2017~~2018 other than those involving its equity investees reported in Notes 67, 78 and 2526 to the Financial Statements, and those described in commitments and contingencies in Note 2021 to the Financial Statements.

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Critical Accounting Policies and Estimates

The preceding discussion and analysis of Belmond’s financial condition and results of operations is based on its consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires Belmond management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, Belmond management evaluates these estimates. Management bases its estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the result of which form the basis for judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Critical accounting policies are those that reflect significant judgments or uncertainties, and potentially result in materially different results under different assumptions and conditions. Belmond management believes the following are Belmond’s most critical accounting policies and estimates.

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Long-lived assets and goodwill

Belmond management periodically evaluates the recoverability of long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. These evaluations include analyses based on the undiscounted cash flows generated by the underlying assets, profitability information including estimated future operating results, trends or other determinants of fair value, estimated future capital expenditure and receipt of any insurance proceeds. The determination of fair value incorporates various assumptions and uncertainties, including future cash flows of the business and future growth rates, that Belmond believes are reasonable and supportable but are, however, by their nature, highly judgmental. If the value of the asset determined by these evaluations is less than its carrying amount, a loss, if any, is recognized for the difference between the fair value and the carrying value of the asset. Future adverse changes in market conditions or poor operating results of the related business may indicate an inability to recover the carrying value of the asset, thereby possibly requiring an impairment charge in the future.

Belmond recorded a combined non-cash property, plant and equipment impairment charge of $4.8 million in the year ended December 31, 2018. This consisted of $2.5 million at Belmond Governor's Residence and $2.3 million at Belmond Road to Mandalay. There was an $8.2 million impairment of property, plant and equipment in the year ended December 31, 2017. This consisted of $7.1 million at Belmond Road to Mandalay and $1.1 million at Belmond Northern Belle. There was a $1.0 million impairment of property, plant and equipment in the year ended December 31, 2016 which related to Belmond Orcaella. See Notes 2 and 89 to the Financial Statements for discussion of assumptions used in calculating these charges and sensitivity to changes in these estimates. ~~There were no impairments to property, plant and equipment in the year ended December 31, 2015.~~

Goodwill is evaluated at least annually for impairment, or more frequently if events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value. Belmond’s goodwill impairment testing is performed in two steps, first, the determination of impairment based upon the fair value of each reporting unit as compared with its carrying value and, second, if there is an implied impairment, the measurement of the amount of the impairment loss is determined by comparing the implied fair value of goodwill with the carrying value of the goodwill. Prior to January 1, 2017, if the carrying value of the reporting unit’s goodwill exceeded its implied fair value, the goodwill was deemed to be impaired and was written down by the extent of the difference. In January 1, 2017, Belmond early adopted the new guidance to simplify the accounting for goodwill impairment by removing the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. A goodwill impairment charge is now measured as the amount by which a reporting unit’s carrying value exceeds its fair value, however the impairment charge is not to exceed the carrying amount of goodwill allocated to that reporting unit.

The determination of impairment incorporates various assumptions and uncertainties that Belmond believes are reasonable and supportable considering all available evidence. The determination of future cash flows of the business is based on various assumptions including future ADR and occupancy levels, operating margins and economic and market conditions. Other key assumptions include terminal capitalization rates, future growth rates and the related discount rates, which are affected by assumptions including equity yield, loan to value ratios and amortization terms and interest rates. These assumptions and uncertainties are, by their very nature, highly judgmental. If the assumptions are not met, Belmond may be required to recognize additional goodwill impairment losses.

Belmond recorded a goodwill impairment charge of $54.57 million ~~at Belmond Cap Juluca~~ in the year ended December 31, ~~2017~~2018. ~~Belmond~~This ~~recorded~~consisted noof ~~goodwill~~$2.2 ~~impairment~~million ~~charges~~at ~~during~~Belmond ~~the~~Governor's ~~year~~Residence, ~~ended~~$1.5 ~~December~~million 31at Belmond La Résidence d'Angkor, ~~2016~~$0.8 million at Belmond Villa San Michele and $0.2 million at Belmond Castello di Casole. Belmond recorded a goodwill impairment ~~charges~~charge of $95.85 million at Belmond Cap Juluca in the year ended December 31, ~~2015~~2017. ~~relating to~~ Belmond ~~Jimbaran~~recorded ~~Puri,~~no ~~Belmond~~goodwill Laimpairment ~~Résidence~~charges ~~Phou~~during ~~Vao,~~the ~~Belmond~~year ~~Northern~~ended ~~Belle~~December ~~and~~31, ~~Belmond Grand Hotel Europe~~2016. See Notes 2 and 910 to the Financial Statements for discussion of estimates used in calculating these charges and sensitivity to changes in these estimates.

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Other intangible assets with indefinite useful lives are also reviewed annually for impairment, or more frequently if events or changes in circumstances indicate that the asset may be impaired. Belmond uses internally developed discounted future cash flow models in determining the fair value of indefinite-lived intangible assets.

Belmond recorded an impairment of other intangible assets of $0.2 million in the year ended December 31, 2018 relating to Belmond Governor's Residence. There were no impairments of other intangible assets in the ~~year~~years ended December 31, 2017, ~~2016~~ and ~~2015~~2016. See ~~Note~~Notes 102 and 11 to the Financial Statements for discussion of estimates used in calculating these charges and sensitivity to changes in these estimates.

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Depreciation

Real estate and other fixed assets are recorded at cost and are depreciated over their estimated useful lives by the straight-line method. The depreciation rates on freehold buildings are up to 60 years with a 10% residual value, on trains are up to 75 years, and on machinery and other remaining assets range from 3 to 25 years. Leasehold improvements are depreciated over the shorter of the estimated useful life or the respective lease terms including lease extensions that are reasonably assured. Belmond management periodically evaluates useful lives to ensure they remain appropriate and in line with estimated usage.

Income Taxes

Belmond’s income tax expense, deferred tax assets and liabilities and reserves for unrecognized tax benefits reflect management’s best assessment of estimated future taxes to be paid. Significant judgments and estimates are required in determining the consolidated income tax expense.

Deferred income taxes arise from temporary differences between the carrying value of assets and liabilities, and their tax basis. In evaluating Belmond’s ability to recover deferred tax assets within the jurisdiction from which they arise, Belmond considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. In projecting future taxable income, Belmond begins with historical results adjusted for the results of discontinued operations and changes in accounting policies and incorporates assumptions including the amount of future state, federal and foreign pretax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates Belmond is using to manage the underlying businesses. In evaluating the objective evidence that historical results provide, Belmond considers three years of cumulative operating income or loss. Belmond maintains a valuation allowance to reduce its deferred tax assets to reflect the amount, based upon Belmond’s estimates that would more likely than not be realized. If Belmond’s future operations differed from those in the estimates, Belmond may need to increase or decrease the valuation allowance, which could affect its reported results.

The calculation of Belmond’s tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations in a multitude of jurisdictions across its global operations. ASC 740 addresses accounting for uncertainty in income taxes recognized in the financial statements. ASC 740 provides that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits. This interpretation also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. Belmond recognizes tax liabilities in accordance with ASC 740 and Belmond adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from Belmond’s current estimate of the tax liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which they are determined.

Fair value measurements

Guidance on fair value measurements and disclosures (i) applies to certain assets and liabilities that are being measured and reported on a fair value basis, (ii) defines fair value, establishes a framework for measuring fair value in accordance with U.S. GAAP, and expands disclosure about fair value measurements and (iii) enables the reader of the financial statements to assess the inputs to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values.

Guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of three categories, namely quoted market prices in active markets for identical assets or liabilities (Level 1), observable market-based inputs or unobservable inputs that are corroborated by market data (Level 2), and unobservable inputs that are not corroborated by market data (Level 3).

Belmond reviews its fair value hierarchy classifications quarterly. Changes in significant observable valuation inputs identified during these reviews may trigger reclassification of fair value hierarchy levels of financial assets and liabilities. These reclassifications are reported as transfers in Level 3 at their fair values at the beginning of the period in which the change occurs and as transfers out at their fair values at the end of the period.

60The fair value of Belmond’s derivative financial instruments is computed based on an income approach using appropriate valuation techniques including discounting future cash flows and other methods that are consistent with accepted economic methodologies for pricing financial instruments. Where credit value adjustments exceeded 10% of the fair value of the derivatives, Level 3 inputs are assumed to have a significant impact on the fair value of the derivatives in their entirety and the valuation has been included in the Level 3 category. See Note 22 to the Financial Statements.

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reclassifications are reported as transfers in Level 3 at their fair values at the beginning of the period in which the change occurs and as transfers out at their fair values at the end of the period.

The fair value of Belmond’s derivative financial instruments is computed based on an income approach using appropriate valuation techniques including discounting future cash flows and other methods that are consistent with accepted economic methodologies for pricing financial instruments. Where credit value adjustments exceeded 10% of the fair value of the derivatives, Level 3 inputs are assumed to have a significant impact on the fair value of the derivatives in their entirety and the valuation has been included in the Level 3 category. See Note 21 to the Financial Statements.

Belmond uses fair value measurements that are based on observable inputs wherever possible. Its valuation approaches are consistently applied and the assumptions used are reasonable in management's judgment.

Belmond uses third-party valuation specialists to estimate fair value of some of its financial assets and liabilities. These specialists are primarily used to estimate the fair value for debt and derivatives, as well as for asset valuation. Management performs various reviews and validation procedures prior to utilizing these fair values in Belmond's reporting process. Based on its due diligence discussions with these specialists, Belmond maintains a current understanding of the valuation processes and related assumptions and inputs that these specialists use in developing fair values. If Belmond determines that a fair value provided is outside established parameters, management will further examine the fair value including having follow-up discussions with the specialists. All of these procedures are executed before Belmond uses the valuations in preparing its financial statements.

Recent Accounting Pronouncements

As of December 31, ~~2017~~2018, Belmond had adopted all relevant accounting guidance, as reported in Note 2 to the Financial Statements. Accounting pronouncements to be adopted are also reported in Note 2 to the Financial Statements.

ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk

Belmond is exposed to market risk from changes in interest rates and foreign currency exchange rates. These exposures are monitored and managed as part of its overall risk management program, which recognizes the unpredictability of financial markets and seeks to mitigate material adverse effects on consolidated earnings and cash flow. Belmond does not hold market rate sensitive financial instruments for trading purposes.

The market risk relating to interest rates arises mainly from the financing activities of Belmond. Earnings are affected by changes in interest rates on floating rate borrowings, principally based on U.S. dollar LIBOR and EURIBOR. Belmond management assesses market risk based on changes in interest rates using a sensitivity analysis. If the rate paid by Belmond increased by 100 basis points with all other variables held constant and after taking into account the 0% floor on the corporate term loan, annual net finance costs of Belmond would have increased by approximately $3.79 million based on borrowings outstanding at December 31, ~~2017~~2018.

The market risk relating to foreign currencies arises from holding assets, buying, selling and financing in currencies other than the U.S. dollar, principally the euro, British pound, South African rand, Russian ruble and Brazilian real. Some non-U.S. subsidiaries of the Company borrow in local currencies, and Belmond may in the future enter into forward exchange contracts relating to purchases denominated in foreign currencies.

Twelve of Belmond’s owned properties in ~~2017~~2018 operated in European euro territories, two in Brazilian real, one in South African rand, four in British pounds sterling, three in Botswana pula, two in Mexican peso, one in Peruvian nuevo sol, one in Russian ruble and six in various Southeast Asian currencies. Revenue derived by Venice Simplon-Orient-Express was recorded primarily in British pounds sterling, but its operating costs were mainly denominated in euros. Revenue derived by Belmond Maroma Resort and Spa, Belmond La Samanna and Belmond Miraflores Park was recorded in U.S. dollars, but the majority of the hotels’ expenses were denominated in Mexican pesos, European euros and Peruvian nuevo soles, respectively. Both revenue and the majority of expenses for Belmond Cap Juluca, Belmond Governor's Residence, Belmond La Résidence D'Angkor and Belmond Road to Mandalay were recorded in U.S. dollars.

Except for the specific instances described above, Belmond's properties seek to match foreign currency earnings and costs as far as possible to provide a natural hedge against currency movements. The extent to which such a match is possible depends on the property, its guest base and the currency of the majority of its costs. Belmond hedges the U.S. dollar value of its euro denominated net assets by drawing part of its debt in euros and designating that debt as a net investment hedge. In addition, a significant proportion of the guests at Belmond hotels located outside of the United States originate from the United States. When a foreign currency in which Belmond operates depreciates against the U.S. dollar, Belmond has some flexibility to increase prices in local currency, or vice versa. Management believes that when these factors are combined, Belmond does not face a material exposure to its net earnings from currency movements, although the reporting of Belmond's revenue and costs translated into U.S. dollars can, from period to period, be materially affected.

61Belmond management uses a sensitivity analysis to assess the potential impact on net earnings of changes in foreign currency financial instruments from hypothetical changes in the foreign currency exchange rates. The primary assumption used in this model is a hypothetical 10% weakening or strengthening of the foreign currencies against the U.S. dollar. However, because Belmond does not have at December 31, 2018 any significant financial instruments in a currency other than the functional currency of the operation concerned, apart from the euro-denominated indebtedness designated as a net investment hedge discussed in Note

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~~currency~~23, orthere ~~vice~~is ~~versa.~~no ~~Management believes that when these factors are combined, Belmond does not face a~~ material ~~exposure~~potential toimpact ~~its~~on net earnings ~~from~~at ~~currency movements~~December 31, ~~although~~2018 ~~the~~as ~~reporting~~a result of ~~Belmond's~~hypothetical ~~revenue~~changes ~~and~~in ~~costs~~the ~~translated~~foreign ~~into~~currency ~~U.S.~~exchange ~~dollars can, from period to period, be materially affected~~rates.

~~Belmond~~Disclosure ~~management~~for uses a sensitivity analysis to assess the potential impact on net earnings of changes in foreign currency financial instruments from hypothetical changes in the foreign currency exchange rates. The primary assumption used in this model is a hypothetical 10% weakening or strengthening of the foreign currencies against the U.S. ~~dollar. However,~~Dollar because Belmond does not have at December 31, 2017 any significant financial instruments in a currency other than the functional currency of the operation concerned, apart from the euro-denominated indebtedness designated as a net investment hedge discussed in Note 22, there is no material potential impact on net earnings at December 31, 2017 as a result of hypothetical changes in the foreign currency exchange rates.LIBOR

62In July 2017, the Financial Conduct Authority (the authority that regulates LIBOR) announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. The Alternative Reference Rates Committee ("ARRC") has proposed that the Secured Overnight Financing Rate ("SOFR") is the rate that represents best practice as the alternative to U.S. dollar LIBOR ("USD-LIBOR") interest metrics for use in derivatives and other financial contracts that are currently indexed to USD-LIBOR. ARRC has proposed a paced market transition plan to SOFR from USD-LIBOR and organizations are currently working on industry wide and company specific transition plans as it relates to derivatives and cash markets exposed to USD-LIBOR. The Company has material contracts that are indexed to USD-LIBOR and is monitoring this activity and evaluating the related risks.

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ITEM 8. Financial Statements and Supplementary Data

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of

Belmond Ltd.

Hamilton, Bermuda

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Belmond Ltd. and subsidiaries (the “Company”) as of December 31, ~~2017~~2018 and ~~2016~~2017, the related consolidated statements of ~~operations~~income (loss), comprehensive income (loss), cash flows, and changes in total equity, (deficit) for each of the three years in the period ended December 31, ~~2017~~2018, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "“financial statements"”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2017~~2018 and ~~2016~~2017, and the results of its operations and ~~its~~ cash flows for each of the three years in the period ended December 31, ~~2017~~2018, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, ~~2017~~2018, based on the criteria established in Internal Control— - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated ~~March~~February 128, ~~2018~~2019, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company'’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Deloitte LLP London, England ~~March~~February 128, ~~2018~~2019

We have served as the Company's auditor since 2005.

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Belmond Ltd. and Subsidiaries

Consolidated Balance Sheet

	2017		2016
	2018		2017
December 31,	$’000		$’000
Assets
Cash and cash equivalents	~~180~~108,~~153~~441		~~153~~180,~~425~~153
Restricted cash	31,~~121~~937		13,~~830~~121
Accounts receivable, net of allowances of $544 and $420	34,373		25,775
Accounts receivable, net of allowances of $539 and $544	37,722		34,373
Due from unconsolidated companies	1210,~~762~~292		12,~~165~~762
Prepaid expenses and other	13,~~327~~340		1213,~~262~~327
Inventories	2321,~~092~~201		23,~~931~~092
Total current assets	~~266~~192,~~828~~933		~~229~~266,~~388~~828
Property, plant and equipment, net of accumulated depreciation of $417,738 and $368,939	1,168,044		1,074,676
Property, plant and equipment, net of accumulated depreciation of $439,767 and $417,738	1,261,932		1,168,044
Investments in unconsolidated companies	6469,~~644~~184		7964,~~327~~644
Goodwill	~~120~~111,~~220~~072		~~113~~120,~~343~~220
Other intangible assets	1927,~~778~~141		1319,~~877~~778
Other assets	14,123		13,457
Pension assets	187		—
Total assets (1)	1,653,637		1,524,068
Other assets	13,359		14,123
Total assets (1)	1,675,808		1,653,637
Liabilities and Equity
Accounts payable	1523,~~815~~004		1615,~~366~~815
Accrued liabilities	79103,~~455~~923		6979,~~046~~455
Deferred revenue	3240,~~786~~232		3132,~~350~~786
Current portion of long-term debt and obligations under capital leases	6,~~407~~332		56,~~284~~407
Total current liabilities	~~134~~173,~~463~~491		~~122~~134,~~046~~463
Long-term debt and obligations under capital leases	~~700~~753,~~752~~646		~~585~~700,~~768~~752
Liability for pension benefit	~~650~~—		~~1,447~~650
Other liabilities	3,~~023~~905		53,~~366~~023
Deferred income taxes	~~115~~103,~~381~~952		~~122~~115,~~291~~381
Liability for uncertain tax positions	~~532~~553		~~318~~532
Total liabilities (1)	~~954~~1,~~801~~035,547		~~837~~954,~~236~~801
Commitments and contingencies (Note 20)
Commitments and contingencies (Note 21)
Equity:
Shareholders’ equity:
Preferred shares $0.01 par value (30,000,000 shares authorized, issued Nil)	—		—
Class A common shares $0.01 par value (240,000,000 shares authorized):
Issued — 102,365,933 (2016 - 101,793,829)	1,024		1,018
Issued — 103,064,785 (2017 - 102,365,933)	1,031		1,024
Class B common shares $0.01 par value (120,000,000 shares authorized):
Issued — 18,044,478 (2016 - 18,044,478)	181		181
Issued — 18,044,478 (2017 - 18,044,478)	181		181
Additional paid-in capital	~~985~~990,~~566~~930		~~979~~985,~~458~~566
Retained earnings	13(14,~~278~~230	)	5213,~~751~~278
Accumulated other comprehensive loss	(~~301~~338,~~322~~219	)	(~~346~~301,~~777~~322	)
Less: Reduction due to class B common shares owned by a subsidiary — 18,044,478 (2016 - 18,044,478)	(181	)	(181	)
Less: Reduction due to class B common shares owned by a subsidiary — 18,044,478 (2017 - 18,044,478)	(181	)	(181	)
Total shareholders’ equity	~~698~~639,~~546~~512		~~686~~698,~~450~~546
Non-controlling interests	~~290~~749		~~382~~290
Total equity	~~698~~640,~~836~~261		~~686~~698,~~832~~836
Total liabilities and equity	1,~~653~~675,~~637~~808		1,~~524~~653,~~068~~637

Belmond Ltd. and Subsidiaries

Consolidated Balance Sheets (continued)

(1) Included in Belmond Ltd.’s consolidated assets and liabilities are assets of consolidated variable interest entities (“consolidated VIEs”) that can only be used to settle obligations of the consolidated VIEs and liabilities of consolidated VIEs whose creditors have no recourse to Belmond Ltd. The Company’s only consolidated VIE at December 31, ~~2017~~2018 and December 31, ~~2016~~2017 is Charleston Center LLC. These assets and liabilities at December 31, ~~2017~~2018 and December 31, ~~2016~~2017 are as follows:

	December 31, 2017	December 31, 2016
	December 31, 2018	December 31, 2017
	$’000	$’000
Assets
Cash and cash equivalents	14,~~530~~081	21,~~233~~530
Accounts receivable, net of allowances of $Nil and $Nil	3,~~623~~088	3,~~066~~623
Prepaid expenses and other	~~935~~1,435	~~365~~935
Inventories	1,~~360~~551	1,~~296~~360
Total current assets	710,~~448~~155	67,~~960~~448
Property, plant and equipment, net of accumulated depreciation of $42,676 and $35,902	197,369	201,861
Property, plant and equipment, net of accumulated depreciation of $48,852 and $42,676	192,712	197,369
Other assets	1,~~450~~995	1,~~455~~450
Total assets	~~206~~204,~~267~~862	~~210~~206,~~276~~267
Liabilities
Accounts payable	4,~~518~~875	4,~~558~~518
Accrued liabilities	3,~~291~~926	3,~~099~~291
Deferred revenue	2,~~835~~589	12,~~714~~835
Current portion of long-term debt and obligations under capital leases	~~255~~269	~~242~~255
Total current liabilities	1011,~~899~~659	910,~~613~~899
Long-term debt and obligations under capital leases	~~112~~159,~~069~~354	~~111~~112,~~968~~069
Other liabilities	—	40
Total liabilities	171,013	122,968
Total liabilities	122,968	121,621

See further description in Note 67, Variable interest entities.

See notes to consolidated financial statements.

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Belmond Ltd. and Subsidiaries

Statements of Consolidated Operations

	2017		2016		2015
	2018		2017		2016
Year ended December 31,	$’000		$’000		$’000
Revenue (1)	~~560~~576,~~999~~836		~~549~~560,~~824~~999		~~551~~549,~~385~~824
Expenses:
Cost of services	~~239~~254,~~850~~157		~~240~~239,~~097~~850		~~243~~240,~~609~~097
Selling, general and administrative	~~238~~257,~~300~~498		~~198~~238,~~590~~300		~~206~~198,~~197~~590
Depreciation and amortization	6261,~~852~~278		5262,~~396~~852		5052,~~513~~396
Impairment of goodwill	54,~~500~~719		—5,500		~~9,796~~—
Impairment of property, plant and equipment	8,216		1,007		—
Impairment of property, plant and equipment and other assets	4,931		8,216		1,007
Total operating costs and expenses	~~554~~582,~~718~~583		~~492~~554,~~090~~718		~~510~~492,~~115~~090
(Loss)/gain on disposal of property, plant and equipment and equity method investments	(153	)	938		20,275
Gain/(loss) on disposal of property, plant and equipment and equity method investments	750		(153	)	938
Earnings from operations	6,128		58,672		61,545
Other operating income	16,907		—		—
Gain on extinguishment of debt	—		1,200		—
Earnings from operations	11,910		6,128		58,672
Interest income (2)	1,058		853		926
Gain on extinguishment of debt	—		—		1,200
Interest expense	(32,455	)	(29,155	)	(32,101	)
Interest income	1,270		1,058		853
Foreign currency, net	(3,034	)	9,186		(5,016	)
Interest expense	(33,042	)	(32,455	)	(29,155	)
(Losses)/earnings before income taxes and earnings from unconsolidated companies, net of tax	(28,303	)	40,756		25,354
Foreign currency, net	(3,752	)	(3,034	)	9,186
Provision for income taxes	(6,554	)	(16,368	)	(17,041	)
(Losses)/earnings before income taxes and earnings from unconsolidated companies, net of tax	(23,614	)	(28,303	)	40,756
(Losses)/earnings before earnings from unconsolidated companies, net of tax	(34,857	)	24,388		8,313
Provision for income taxes	(13,983	)	(6,554	)	(16,368	)
(Losses)/earnings from unconsolidated companies, net of tax (benefit)/provision of $(4,451), $5,650 and $1,466	(10,213	)	11,013		9,075
(Losses)/earnings before earnings from unconsolidated companies, net of tax	(37,597	)	(34,857	)	24,388
(Losses)/earnings from continuing operations	(45,070	)	35,401		17,388
Earnings/(losses) from unconsolidated companies, net of tax provision/(benefit) of $7,132, $(4,451) and $5,650	9,355		(10,213	)	11,013
Net earnings/(losses) from discontinued operations, net of tax provision of $Nil, $Nil and $Nil	122		1,032		(1,534	)
(Losses)/earnings from continuing operations	(28,242	)	(45,070	)	35,401
Net (losses)/earnings	(44,948	)	36,433		15,854
Net (losses)/earnings from discontinued operations, net of tax provision of $Nil, $Nil and $Nil	(10	)	122		1,032
Net (earnings)/losses attributable to non-controlling interests	(87	)	(109	)	411
Net (losses)/earnings	(28,252	)	(44,948	)	36,433
Net (losses)/earnings attributable to Belmond Ltd.	(45,035	)	36,324		16,265
Net earnings attributable to non-controlling interests	(204	)	(87	)	(109	)
(1) Includes revenue from related parties of $15,449,000, $15,458,000 and $13,123,000, respectively
Net (losses)/earnings attributable to Belmond Ltd.	(28,456	)	(45,035	)	36,324
(2) Includes interest income from related parties of $Nil, $Nil and $301,000, respectively
(1) Includes revenue from related parties of $15,783,000, $15,668,000 and $15,458,000, respectively

See notes to consolidated financial statements.

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Statements of Consolidated Operations (continued)

	2017		2016		2015
	2018		2017		2016
Year ended December 31,	$		$		$
Basic earnings per share
Net earnings/(losses) from continuing operations	(0.4427	)	(0.3544	)	0.1735
Net earnings/(losses) from discontinued operations	—		~~0.01~~—		(0.01	)
Basic net earnings/(losses) per share attributable to Belmond Ltd.	(0.4428	)	(0.3644	)	0.1636
Diluted earnings per share
Net earnings/(losses) from continuing operations	(0.4427	)	(0.3444	)	0.1734
Net earnings/(losses) from discontinued operations	—		~~0.01~~—		(0.01	)
Diluted net earnings/(losses) per share attributable to Belmond Ltd.	(0.4428	)	(0.3544	)	0.1635

See notes to consolidated financial statements.

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Statements of Consolidated Comprehensive Income

	2017		2016		2015
	2018		2017		2016
Year ended December 31,	$’000		$’000		$’000
Net (losses)/earnings	(4428,~~948~~252	)	36(44,~~433~~948	)	1536,~~854~~433
Other comprehensive income/(losses), net of tax:
Other comprehensive (losses)/income, net of tax:
Foreign currency translation adjustments, net of tax (benefit)/provision of $Nil, $(809) and $Nil	48,754		(10,848	)	(88,457	)
Foreign currency translation adjustments, net of tax provision/(benefit) of $Nil, $Nil and $(809)	(39,620	)	48,754		(10,848	)
Change in fair value of derivatives, net of tax provision/(benefit) of $810, $222 and $(352)	1,920		867		(522	)
Change in fair value of derivatives, net of tax provision of $Nil, $810 and $222	2,289		1,920		867
Change in pension liability, net of tax provision/(benefit) of $73, $(530) and $147	310		(2,119	)	580
Change in pension liability, net of tax provision/(benefit) of $Nil, $73 and $(530)	689		310		(2,119	)
Total other comprehensive losses, net of tax	50,984		(12,100	)	(88,399	)
Total other comprehensive (losses)/income, net of tax	(36,642	)	50,984		(12,100	)
Total comprehensive income/(losses)	6,036		24,333		(72,545	)
Total comprehensive (losses)/income	(64,894	)	6,036		24,333
Comprehensive (income)/losses attributable to non-controlling interests	(54	)	(244	)	688
Comprehensive income attributable to non-controlling interests	(459	)	(54	)	(244	)
Comprehensive income/(losses) attributable to Belmond Ltd.	5,982		24,089		(71,857	)
Comprehensive (losses)/income attributable to Belmond Ltd.	(65,353	)	5,982		24,089

See notes to consolidated financial statements.

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Statements of Consolidated Cash Flows

	2017		2016		2015
	2018		2017		2016
Year ended December 31,	$'000		$'000		$'000
Cash flows from operating activities:
Net (losses)/earnings	(4428,~~948~~252	)	36(44,~~433~~948	)	1536,~~854~~433
Less: Net earnings/(losses) from discontinued operations, net of tax	122		1,032		(1,534	)
Less: Net (losses)/earnings from discontinued operations, net of tax	(10	)	122		1,032
Net (losses)/earnings from continuing operations	(4528,~~070~~242	)	35(45,~~401~~070	)	1735,~~388~~401
Adjustments to reconcile net earnings to net cash provided by operating activities:
Adjustments to reconcile net (losses)/earnings to net cash provided by operating activities:
Depreciation and amortization	6261,~~852~~278		5262,~~396~~852		5052,~~513~~396
Impairment of goodwill	54,~~500~~719		—5,500		~~9,796~~—
Impairment of property, plant and equipment	8,216		1,007		—
Impairment of property, plant and equipment and other assets	4,931		8,216		1,007
(Loss)/gain on disposal of property, plant and equipment and equity method investments	153		(938	)	(20,275	)
(Gain)/loss on disposal of property, plant and equipment and equity method investments	(750	)	153		(938	)
(Gain) on extinguishment of debt	—		(1,200	)	—
Gain on extinguishment of debt	—		—		(1,200	)
Losses/(earnings) from unconsolidated companies, net of tax	10,213		(11,013	)	(9,075	)
Insurance gain recorded in other operating income	(15,710	)	—		—
Amortization of debt issuance costs and discount on secured term loan	3,682		3,044		2,903
(Earnings)/losses from unconsolidated companies, net of tax	(9,355	)	10,213		(11,013	)
Share-based compensation	5,809		6,272		6,707
Amortization of debt issuance costs and discount on secured term loan	3,003		3,682		3,044
Change in provisions for uncertain tax positions	160		(3,350	)	279
Share-based compensation	5,364		5,809		6,272
Benefit from deferred income tax	(13,641	)	(305	)	(124	)
Change in provisions for uncertain tax positions	46		160		(3,350	)
Other non-cash movements	1,596		567		(1,076	)
Benefit from deferred income tax	(6,219	)	(13,641	)	(305	)
Effect of exchange rates on net (losses)/earnings	2,215		(12,258	)	896
Other non-cash movements	3,671		1,596		567
Effect of exchange rates on net (losses)/earnings	1,121		2,424		(12,617	)
Change in assets and liabilities, net of effects from acquisitions:
Accounts receivable	(~~633~~5,420	)	~~1,961~~(633	)	~~(536~~1,961	)
Due from unconsolidated companies	~~(419~~2,292	)	(~~788~~419	)	~~1,167~~(788	)
Prepaid expense and other	(~~349~~1,275	)	~~668~~(349	)	~~(725~~668	)
Inventories	~~2,539~~724		~~(504~~2,539	)	~~1,962~~(504	)
Escrow and prepaid customer deposits	(1,082	)	379		(1,284	)
Accounts payable	6,989		(2,488	)	877
Accounts payable	(2,488	)	877		(5,703	)
Accrued liabilities	21,381		12,805		245
Accrued liabilities	12,805		245		10,127
Deferred revenue	8,500		(489	)	(1,434	)
Deferred revenue	(489	)	(1,434	)	5,877
Other liabilities	707		(5,633	)	(14,121	)
Other liabilities	(5,633	)	(14,121	)	—
Other, net	928		927		148
Other, net	927		148		(3,008	)
Other cash movements:
Dividends from equity method investees	4,~~440~~290		4,~~449~~440		34,~~649~~449
Proceeds from insurance settlements	116,~~462~~405		—1,462		—
Payment of swap termination costs	(2,145	)	—		—
Proceeds from swap termination	359		—		—
Net cash provided by operating activities from continuing operations	50,620		61,503		69,458
Payment of swap termination costs	—		(2,145	)	—
Net cash provided by/(used in) operating activities from discontinued operations	87		38		(1,534	)
Net cash provided by operating activities from continuing operations	79,737		51,911		60,765
Net cash provided by operating activities	50,707		61,541		67,924
Net cash (used in)/provided by operating activities from discontinued operations	(10	)	87		38
Net cash provided by operating activities	79,727		51,998		60,803

See notes to consolidated financial statements.

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Belmond Ltd. and Subsidiaries

Statements of Consolidated Cash Flows (continued)

	2017		2016		2015
	2018		2017		2016
Year ended December 31,	$'000		$'000		$'000
Cash flows from investing activities:
Capital expenditure to acquire property, plant and equipment	(67166,~~830~~080	)	(5567,~~104~~830	)	(5655,~~395~~104	)
Capital expenditure to acquire intangible assets	—(3,015	)	—		~~(714~~—	)
Acquisitions, net of cash acquired	(6845,~~632~~406	)	—(68,632	)	—
Investments in unconsolidated companies	—		—		(4,061	)
Proceeds from sale of business	—		2,070		—
Increase in restricted cash	(46	)	(6	)	—
Proceeds from insurance settlements	7,327		13,588		—
Release of restricted cash	—		—		519
Proceeds from sale of property, plant and equipment and equity method investments	—		—		2,746
Change in deferred revenue for asset sale deposits	—		—		(500	)
Net cash used in investing activities from continuing operations	(207,174	)	(120,804	)	(52,358	)
Proceeds from sale of business	2,070		—		—
Proceeds from insurance settlements	13,588		—		—
Proceeds from sale of property, plant and equipment and equity method investments	—		2,746		43,742
Net cash used in investing activities from continuing operations	(120,850	)	(52,364	)	(17,409	)
Net cash provided by investing activities from discontinued operations	—		—		—
Net cash used in investing activities	(~~120~~207,~~850~~174	)	(52120,~~364~~804	)	(1752,~~409~~358	)
Cash flows from financing activities:
Repurchase of shares	—		~~(1,992~~—	)	(371,~~565~~992	)
Exercised stock options and vested share awards	~~305~~7		17305		3517
Dividend to non-controlling interest	—(16	)	~~(15~~—	)	(2015	)
Issuance of long-term debt	~~104~~105,~~739~~082		26104,~~000~~739		—26,000
Debt issuance costs	(91,~~639~~175	)	(~~465~~9,639	)	(~~856~~465	)
Principal payments under long-term debt	(545,~~654~~278	)	(135,~~904~~654	)	(513,~~432~~904	)
Net cash provided by/(used in) financing activities from continuing operations	89,751		9,641		(43,838	)
Net cash provided by financing activities from continuing operations	58,620		89,751		9,641
Net cash provided by financing activities from discontinued operations	—		—		—
Net cash provided by/(used in) financing activities	89,751		9,641		(43,838	)
Net cash provided by financing activities	58,620		89,751		9,641
Effect of exchange rate changes on cash and cash equivalents	7,120		(992	)	(6,196	)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(3,364	)	7,120		(992	)
Net increase in cash and cash equivalents	26,728		17,826		481
Net (decrease)/increase in cash, cash equivalents and restricted cash	(72,191	)	28,065		17,094
Cash and cash equivalents at beginning of period (includes $Nil, $Nil and $Nil of cash presented within assets held for sale)	153,425		135,599		135,118
Cash, cash equivalents and restricted cash at beginning of period (includes $Nil, $Nil and $Nil of cash presented within assets held for sale)	184,075		156,010		138,916
Cash and cash equivalents at end of period (includes $Nil, $Nil, $Nil of cash presented within assets held for sale)	180,153		153,425		135,599
Cash, cash equivalents and restricted cash at end of period (includes $Nil, $Nil, $Nil of cash presented within assets held for sale)	111,884		184,075		156,010

See notes to consolidated financial statements.

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Statements of Consolidated Total Equity

	Preferredshares atpar value$’000	Class Acommonshares atpar value$’000		Class Bcommonshares atpar value$’000	Additionalpaid-incapital$’000		Retainedearnings$’000		Accumulatedothercomprehensiveloss$’000		Class Bcommonshares held bya subsidiary$’000		Non-controllinginterests$’000		Total$’000
Balance, January 1, 2015	—	1,040		181	1,000,803		5,763		(246,420	)	(181	)	1,075		762,261
Balance, January 1, 2016	—	1,015		181	975,419		21,734		(340,104	)	(181	)	361		658,425
Correction of prior period misstatement	—	—		—	—		5,562		(5,562	)	—		—		—
Restated balance at January 1, 2015	—	1,040		181	1,000,803		11,325		(251,982	)	(181	)	1,075		762,261
Share-based compensation	—	—		—	6,707		—		—		—		—		6,707
Exercised stock options and vested share awards	—	8		—	27		—		—		—		—		35
Repurchase of shares	—	(33	)		(32,118	)	(5,856	)	—		—		—		(38,007	)
Dividend to non-controlling interest	—	—		—	—		—		—		—		(26	)	(26	)
Comprehensive loss:
Net earnings attributable to common shares	—	—		—	—		16,265		—		—		(411	)	15,854
Other comprehensive loss	—	—		—	—		—		(88,122	)	—		(277	)	(88,399	)
Balance, December 31, 2015	—	1,015		181	975,419		21,734		(340,104	)	(181	)	361		658,425
Share-based compensation	—	—		—	6,272		—		—		—		—		6,272
Exercised stock options and vested share awards	—	5		—	12		—		—		—		—		17
Repurchase of shares	—	(2	)	—	(2,245	)	255		—		—		—		(1,992	)
Dividend to non-controlling interest	—	—		—	—		—		—		—		(223	)	(223	)
Comprehensive income:
Net earnings attributable to common shares	—	—		—	—		36,324		—		—		109		36,433
Other comprehensive loss	—	—		—	—		—		(12,235	)	—		135		(12,100	)
Balance at December 31, 2016	—	1,018		181	979,458		58,313		(352,339	)	(181	)	382		686,832
Balance, December 31, 2016	—	1,018		181	979,458		58,313		(352,339	)	(181	)	382		686,832
Share-based compensation	—	—		—	5,809		—		—		—		—		5,809
Exercised stock options and vested share awards	—	6		—	299		—		—		—		—		305
Repurchase of shares	—	—		—	—		—		—		—		—		—
Dividend to non-controlling interest	—	—		—	—		—		—		—		(146	)	(146	)
Comprehensive income:
Net losses attributable to common shares	—	—		—	—		(45,035	)	—		—		87		(44,948	)
Other comprehensive income	—	—		—	—		—		51,017		—		(33	)	50,984
Balance at December 31, 2017	—	1,024		181	985,566		13,278		(301,322	)	(181	)	290		698,836
Change in accounting principle (See Note 2)	—	—		—	—		948		—		—		—		948
Restated balance December 31, 2017	—	1,024		181	985,566		14,226		(301,322	)	(181	)	290		699,784
Share-based compensation	—	—		—	5,364		—		—		—		—		5,364
Exercised stock options and vested share awards	—	7		—	—		—		—		—		—		7
Comprehensive loss:
Net losses attributable to common shares	—	—		—	—		(28,456	)	—		—		204		(28,252	)
Other comprehensive loss	—	—		—	—		—		(36,897	)	—		255		(36,642	)
Balance at December 31, 2018	—	1,031		181	990,930		(14,230	)	(338,219	)	(181	)	749		640,261

See notes to consolidated financial statements.

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Net losses attributable to common shares	—	—	—	—	(45,035	)	—		—		87		(44,948	)
Other comprehensive income	—	—	—	—	—		51,017		—		(33	)	50,984
Balance at December 31, 2017	—	1,024	181	985,566	13,278		(301,322	)	(181	)	290		698,836

See notes to consolidated financial statements.

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Belmond Ltd. and Subsidiaries

Notes to Consolidated Financial Statements

1. Basis of financial statement presentation

Business

In this report ~~Belmond Ltd.~~the isterms ~~referred~~"Belmond," ~~to as~~ the “Company”," "we," and ~~the~~"our" ~~Company~~are used to refer to Belmond Ltd. and Belmond Ltd. and its consolidated subsidiaries, ~~are~~unless ~~referred~~otherwise ~~to collectively as “Belmond”~~stated.

At December 31, ~~2017~~2018, Belmond owned, invested in or managed 36 deluxe hotels and resort properties (including the Belmond Cadogan Hotel that opened on February 28, 2019) operating in the United States, Mexico, Caribbean, Europe, Southern Africa, South America, and Southeast Asia, one stand-alone restaurant in New York, seven tourist trains in Europe, Southeast Asia and Peru, one river cruise business in Myanmar (Burma) and one canal boat business in France. In addition, there is one hotel scheduled for a future opening, the Belmond Cadogan Hotel in London, England. Subsequent to the balance sheet date, the Company announced that through indirect subsidiaries it had acquired the Castello di Casole resort and estate in Tuscany, Italy, in February 2018. See Note 26.

Agreement and Plan of Merger

Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and reflect the results of operations, financial position and cash flows of the Company and all its majority-owned subsidiaries and variable interest entities in which Belmond is the primary beneficiary. The consolidated financial statements have been prepared using the historical basis in the assets and liabilities and the historical results of operations directly attributable to Belmond, and all intercompany accounts and transactions between the Company and its subsidiaries have been eliminated. For entities where the Company does not have a controlling financial interest, the investments in those entities are accounted for using the equity or cost method, as appropriate.

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Reclassifications

During the year ended December 31, 2017 the Company corrected a prior period misstatement to reclassify an immaterial deferred tax entry related to a change of functional currency at the Company's Brazilian subsidiaries in 2014. As a result, opening Retained Earnings increased by $5,562,000 and opening Accumulated and Other Comprehensive Income decreased by $5,562,000, with no net change in Total Equity. There is no impact on net earnings, EPS or cash flows in any period presented.

Discontinued operations and assets and liabilities held for sale were reclassified in the consolidated financial statements for all periods presented. See Note 5 for a summary of the results of discontinued operations and assets and liabilities held for sale.

2. Summary of significant accounting policies

“FASB” means Financial Accounting Standards Board. “ASC” means the Accounting Standards Codification of the FASB and “ASU” means an Accounting Standards Update of the FASB.

Cash and cash equivalents

Cash and cash equivalents include all cash balances and highly-liquid investments having original maturities of three months or less.

Restricted cash

Restricted cash is the carrying amount of cash and cash equivalents which are bindingly restricted as to withdrawal or usage. These include deposits held as compensating balances against borrowing arrangements or under contracts entered into with others, but exclude compensating balance arrangements that do not legally restrict the use of cash amounts shown on the balance sheet.

Concentration of credit risk

Due to the nature of the leisure industry, concentration of credit risk with respect to trade receivables is limited. Belmond’s customer base consists of numerous customers across different geographic areas.

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Inventories

Inventories include food, beverages, certain operating stocks and retail goods. Inventories are valued at the lower of cost or market value under the weighted average method.

Assets held for sale and discontinued operations

Assets held for sale represent assets of an operating entity that are to be disposed of, together as a group in a single transaction, and liabilities directly associated with the assets that will be transferred in the transaction. Belmond considers properties to be assets held for sale when management approves and commits to a formal plan actively to market a property for sale and Belmond has a signed sales contract and received a significant non-refundable deposit. Upon designation as an asset held for sale, Belmond records the carrying value of each property at the lower of its carrying value which includes allocable segment goodwill or its estimated fair value, less estimated costs to sell, and Belmond stops recording depreciation expense. Where there is no significant ongoing involvement, the gain from the sale is recorded at the date of sale.

The results of operations of an entity that either has been disposed of or is classified as held for sale are reported in discontinued operations where the sale represents a strategic shift that has or will have a major effect on our operations and financial results ~~following the adoption of new guidance as of January 1, 2015~~.

Property, plant and equipment

Property, plant and equipment is stated at cost less accumulated depreciation. The cost of significant renewals and betterments is capitalized and depreciated, while expenditures for normal maintenance and repairs are expensed as incurred.

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Depreciation expense is computed using the straight-line method over the following estimated useful lives:



Description		Useful lives
Buildings		Up to 60 years and 10% residual value
Trains		Up to 75 years
River cruise ship and canal boats		25 years
Furniture, fixtures and equipment		3 to 25 years
Equipment under capital lease and leasehold improvements		Lesser of initial lease term or economic life

Land and certain art and antiques are not depreciated.

Impairment of long-lived assets

Belmond management evaluates the carrying value of long-lived assets for impairment by comparing the expected undiscounted future cash flows of the assets to the net book value of the assets if certain trigger events occur. If the expected undiscounted future cash flows are less than the net book value of the assets, the excess of the net book value over the estimated fair value is charged to current earnings. Fair value is based upon discounted cash flows of the assets at a rate deemed reasonable for the type of asset and prevailing market conditions, sales of similar assets, appraisals and, if appropriate, current estimated net sales proceeds from pending offers. Belmond evaluates the carrying value of long-lived assets based on its plans, at the time, for those assets and such qualitative factors as future development in the surrounding area, status of expected local competition and projected incremental income from renovations. Changes to Belmond’s plans, including a decision to dispose of or change the intended use of an asset, can have a material impact on the carrying value of the asset.

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Investments

Investments include equity interests in and advances to unconsolidated companies and are accounted for under the equity method of accounting when Belmond has a 20% to 50% ownership interest or exercises significant influence over the investee. Under the equity method, the investment in the equity method investee or joint venture is initially recognized in the consolidated balance sheet at cost and adjusted thereafter to recognize Belmond’s share of net earnings or losses and other comprehensive income or loss of the investee. Belmond continues to report losses up to its investment carrying amount, including any additional financial support made or committed to by Belmond. Belmond’s share of earnings or losses is included in the determination of net earnings, and net investment in investees and joint ventures is included within investments in unconsolidated companies in the consolidated balance sheets.

Investments accounted for using the equity method are considered impaired when a loss in the value of the equity method investment is other than temporary. Evidence of a loss in value might include, but would not necessarily be limited to, absence of an ability to recover the carrying amount of the investment or inability of the investee to sustain its earnings capacity that would justify the carrying amount of the investment. If Belmond determines that the decline in value of its investment is other than temporary, the carrying amount of the investment is written down to its fair value through earnings.

Goodwill

Goodwill is not amortized but is tested for impairment at least annually or more frequently if events or circumstances indicate that it is more likely than not that the fair value of a reporting unit is less than its carrying value. Belmond's annual goodwill impairment testing date is October 1. To test goodwill for impairment, Belmond first compares the carrying value of each reporting unit to its fair value to determine if an impairment is indicated. The fair value of reporting units is determined using internally developed discounted future cash flow models, which incorporate third party appraisals and industry/market data (to the extent available). Prior to January 1, 2017, if an impairment was indicated, Belmond compared the implied fair value of the reporting unit's goodwill to its carrying amount. An impairment loss was measured as the excess of the carrying value of a reporting unit's goodwill over its implied fair value. On January 1, 2017 Belmond early adopted the new guidance to simplify the accounting for goodwill impairment by removing the requirement to compare the implied fair value of goodwill with its carrying amount as part of step 2 of the goodwill impairment test. A goodwill impairment charge is now measured as the amount by which a reporting unit’s carrying value exceeds its fair value, however the impairment charge is not to exceed the carrying amount of goodwill allocated to that reporting unit.

When determining the fair value of a reporting unit, Belmond is required to make significant judgments that Belmond believes are reasonable and supportable considering all available internal and external evidence at the time. However, these estimates and assumptions are, by their nature, highly judgmental. Fair value determinations are sensitive to changes in the underlying assumptions and factors including those relating to estimating future operating cash flows to be generated from the reporting unit which are dependent upon internal forecasts and projections developed as part of Belmond’s routine, long-term planning process, available industry/market data (to the extent available), Belmond’s strategic plans, estimates of long-term growth rates taking into account Belmond’s assessment of the current economic environment and the timing and degree of any economic recovery, estimation of the useful life over which the cash flows will occur, and market participant assumptions. The assumptions with the most significant impact to the fair value of the reporting unit are those related to future operating cash flows which are forecast for a five-year period from management’s budget and planning process, the terminal value which is included for the period beyond five years from the balance sheet date based on the estimated cash flow in the fifth year and a terminal growth rate ranging from 2.2% to 6.5% (December 31, 2016 - 1.2% to 4.9%), and pre-tax discount rates which for the year ended December 31, 2017 range from 9.9% to 19.3% (December 31, 2016 - 7.5% to 16.7%).

Examples of events or circumstances that could reasonably be expected to negatively affect the underlying key assumptions and ultimately impact the estimated fair values of Belmond’s reporting units may include such items as (i) a prolonged weakness in the general economic conditions in which the reporting units operate and therefore negatively impacting occupancy and room rates, (ii) an economic recovery that significantly differs from Belmond’s assumptions in timing and/or degree, (iii) volatility in the equity and debt markets which could result in a higher discount rate, (iv) shifts or changes in future travel patterns from Belmond’s significant demographic markets that have not been anticipated, (v) changes in competitive supply, (vi) political and security instability in countries where Belmond operates and (vii) deterioration of local economies due to the uncertainty over currencies or currency unions and other factors which could lead to changes in projected cash flows of Belmond’s properties as customers reduce their discretionary spending. If the assumptions used in the impairment analysis are not met or materially change, Belmond may be required to recognize additional goodwill impairment losses which may be material to the financial statements.79

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assumptions are, by their nature, highly judgmental. Fair value determinations are sensitive to changes in the underlying assumptions and factors including those relating to estimating future operating cash flows to be generated from the reporting unit which are dependent upon internal forecasts and projections developed as part of Belmond’s routine, long-term planning process, available industry/market data (to the extent available), Belmond’s strategic plans, estimates of long-term growth rates taking into account Belmond’s assessment of the current economic environment and the timing and degree of any economic recovery, estimation of the useful life over which the cash flows will occur, and market participant assumptions. The assumptions with the most significant impact to the fair value of the reporting unit are those related to future operating cash flows which are forecast for a four-year period from management’s budget and planning process, the terminal value which is included for the period beyond four years from the balance sheet date based on the estimated cash flow in the fourth year and a terminal growth rate ranging from 2.0% to 6.5% (December 31, 2017 - 2.2% to 6.5%), and pre-tax discount rates which for the year ended December 31, 2018 range from 10.1% to 20.1% (December 31, 2017 - 9.9% to 19.3%).

Other intangible assets

Trade names have an indefinite life and therefore are not amortized, but are assessed for impairment annually or when events indicate that impairment may have occurred. Other intangible assets with definite useful lives are tested for impairment if events or changes in circumstances indicate that the asset may be impaired. Belmond uses internally developed discounted future cash flow models in determining the fair value of indefinite-lived intangible assets.

Favorable lease intangible assets are amortized over the terms of the leases, which are between 19 and 60 years. Internet sites are amortized over a period of five to ten years. Software is amortized over a period of ten years.

Variable interest entities

Belmond analyzes its variable interests, including loans, guarantees and equity investments, to determine if an entity is a variable interest entity (“VIE”). In that assessment, Belmond's analysis includes both quantitative and qualitative considerations. Belmond bases its quantitative analysis on the forecast cash flows of the entity, and its qualitative analysis on a review of the design of the entity, organizational structure including decision-making ability, and relevant financial agreements. Belmond also uses its quantitative and qualitative analysis to determine if Belmond is the primary beneficiary and would therefore be required to consolidate the VIE.

Fair value measurements

Assets and liabilities carried at fair value are required to be classified and disclosed in one of three categories: Level 1 — Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date, Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, and Level 3 — unobservable inputs for the asset or liability. Belmond reviews its fair value hierarchy classifications quarterly. Changes in significant observable valuation inputs identified during these reviews may trigger reclassification of fair value hierarchy levels of financial assets and liabilities. These reclassifications are reported as transfers at their fair values at the beginning of the period in which the change occurs and as transfers out at their fair values at the end of the period.

Derivatives are recorded in the consolidated balance sheets at fair value. The fair value of Belmond’s derivative financial instruments is computed based on an income approach using appropriate valuation techniques including discounting future cash flows and other methods that are consistent with accepted economic methodologies for pricing financial instruments. The valuation process for the derivatives uses observable market data provided by third-party sources. Interest rate swaps are valued by using yield curves derived from observable interest rates to project future swap cash flows and then these cash flows are discounted back to present values. Interest rate caps are valued using a model that projects the probability of various levels of interest rates occurring in the future using observable volatilities.

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In the determination of fair value of derivative instruments, a credit valuation adjustment is applied to Belmond’s derivative exposures to take into account the risk of the counterparty defaulting with the derivative in an asset position and, when the derivative is in a liability position, the risk that Belmond may default. The credit valuation adjustment is calculated by determining the total expected exposure of the derivatives (incorporating both the current and potential future exposure) and then applying each counterparty’s credit spread to the applicable exposure. For interest rate swaps, Belmond’s own credit spread is applied to the counterparty’s exposure to Belmond and the counterparties credit spread is applied to Belmond’s exposure to the counterparty, and then the net credit valuation adjustment is reflected in the determination of the fair value of the derivative instrument. The credit spreads used as inputs in the fair value calculations represent implied credit default swaps obtained from a third-party credit data provider. Some of the inputs into the credit valuation adjustment are not observable and, therefore, they are considered to be Level 3 inputs. Where the credit valuation adjustment exceeds 10% of the fair value of the derivatives, Level 3 inputs are assumed to have a significant impact on the fair value of the derivatives in their entirety and the derivative is classified as Level 3.

Derivative financial instruments

Derivative instruments are recorded on the consolidated balance sheets at fair value. The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in other comprehensive income/(loss) and is subsequently reclassified into earnings in the period that the hedged forecast transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. If a derivative instrument is not designated as a hedge for accounting purposes, the fluctuations in the fair value of the derivative are recorded in earnings.

Belmond management formally documents all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking various hedge transactions. Belmond links all hedges that are designated as fair value hedges to specific assets or liabilities on the consolidated balance sheets or to specific firm commitments. Belmond links all hedges that are designated as cash flow hedges to forecasted transactions or to floating rate liabilities on the balance sheets. Belmond management also assesses, both at the inception of the hedge and on an ongoing basis, whether the derivatives that are designated in hedging relationships are highly effective in offsetting changes in fair values or cash flows of hedged items. Belmond discontinues hedge accounting prospectively when the derivative is not highly effective as a hedge, the underlying hedged transaction is no longer probable, or the hedging instrument expires, is terminated, or exercised.

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as fair value hedges to specific assets or liabilities on the consolidated balance sheets or to specific firm commitments. Belmond links all hedges that are designated as cash flow hedges to forecasted transactions or to floating rate liabilities on the balance sheets. Belmond management also assesses, both at the inception of the hedge and on an ongoing basis, whether the derivatives that are designated in hedging relationships are highly effective in offsetting changes in fair values or cash flows of hedged items. Belmond discontinues hedge accounting prospectively when the derivative is not highly effective as a hedge, the underlying hedged transaction is no longer probable, or the hedging instrument expires, is terminated, or exercised.

Belmond is exposed to interest rate risk on its floating rate debt and management uses derivatives to manage the impact of interest rate changes on earnings and cash flows. Belmond’s objective in using interest rate derivatives is to add certainty and stability to its interest expense. To accomplish this objective, Belmond primarily uses interest rate swaps as part of its interest rate risk management strategy. These swaps effectively convert the floating rate interest payments on a portion of the outstanding debt into fixed payments.

Hedges of net investments in foreign operations are accounted for similarly to cash flow hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recorded in other comprehensive income/(loss) within foreign currency translation adjustment. The gain or loss relating to the ineffective portion will be recognized immediately in earnings within foreign currency, net. Gains and losses deferred in accumulated other comprehensive income/(loss) are recognized in earnings upon disposal of the foreign operation. Belmond links all hedges that are designated as net investment hedges to specifically identified net investments in foreign subsidiaries.

Belmond has net assets denominated in a variety of currencies. It hedges the U.S. dollar value of euro net assets by using net investment hedges.

Pensions

Belmond’s primary defined benefit pension plan is accounted for using actuarial valuations. Net funded status is recognized on the consolidated balance sheets and any unrecognized prior service costs or actuarial gains and losses are reported as a component of other comprehensive income/(loss) in shareholders’ equity.

In determining the expected long-term rate of return on assets, management has reviewed anticipated future long-term performance of individual asset classes and the appropriate asset allocation strategy given the anticipated requirements of the plan to determine the average rate of earnings expected on the funds invested. The projected returns are based on broad equity and bond indices, including fixed interest rate gilts (United Kingdom Government issued securities) of long-term duration since the plan operates in the U.K.

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Management continues to monitor and evaluate the level of pension contributions based on various factors that include investment performance, actuarial valuation and tax deductibility.

Share-based compensation

Equity-settled transactions

The cost of equity-settled transactions with employees is measured by reference to the fair value at the date on which equity instruments are granted and is recognized as an expense over the vesting period, which ends on the date on which the relevant employees become fully entitled to the award.

Estimates of the grant date fair value of share options and the fair value of deferred shares and restricted shares without performance criteria on the grant date were made using the Black-Scholes option pricing model~~, and estimates of the grant date fair value of deferred shares with performance criteria and market conditions were made using the Monte Carlo valuation model~~.

For awards with ~~market conditions, the conditions are incorporated into the fair value measurement and the compensation value is not adjusted if the conditions are not met. For awards with~~ performance conditions, compensation expense is recognized when it becomes probable that the performance criteria specified in the awards will be achieved and, accordingly, the compensation value is adjusted following the changes in the estimates of shares likely to vest based on the performance criteria.

Expected volatilities are based on historical volatility of the Company’s class A common share price and other factors. The risk-free rate for periods within the expected life is based on the U.S. Treasury yield curve in effect at the time of grant. The expected life represents the period that share-based awards are expected to be outstanding and was determined using historical experience, giving consideration to the contractual terms of the share-based awards and vesting schedules.

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At each balance sheet date before the share-based award vests, the cumulative expense is calculated, representing the extent to which the vesting period has expired and management’s best estimate of the achievement or otherwise of non-market conditions and the number of equity instruments that will ultimately vest or, in the case of an instrument subject to a market condition, be treated as vesting as described above. The movement in cumulative expense since the previous balance sheet date is recognized in the consolidated statements of operations, with a corresponding entry in equity.

Previously recognized compensation cost is not reversed if an employee share option for which the requisite service has been rendered expires unexercised (or unconverted). If stock options are forfeited, then the compensation expense accrued is reversed. Prior to December 31, 2016, Belmond did not estimate a future forfeitures rate and did not incorporate it into the grant value on issue of the awards on the grounds of materiality. As of December 31, 2016, Belmond adopted new guidance and made an accounting policy election to allow the recognition of the effects of forfeitures in compensation cost when they occur.

Estimates

Belmond bases its estimates on historical experience and also on assumptions that Belmond believes are reasonable based on the relevant facts and circumstances of the estimate. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and e

Year ended December 31,

Constant currency

Same Store RevPAR (in U.S. dollars)