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We have restarted our global cruise operations in a phased manner, following the requirements and recommendations of regulatory agencies, with reduced guest occupancy, modified itineraries and enhanced health, safety and vaccination protocols.
−Removed: There is no assurance that our plan to resume operations will be successful and without material setbacks, including our ability to conduct sailings in consideration the requirements and recommendations of regulatory agencies.
+Added: There is no assurance that our plan to resume operations will be successful and without material setbacks, including our ability to conduct sailings in consideration of the requirements and recommendations of regulatory agencies.
It is possible that future COVID-19 outbreaks could occur onboard and, even if controlled and contained, it is uncertain as to whether we will need to suspend additional sailings and to what extent in such event.
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media attention.
−Removed: In addition, we may face challenges in executing our return to service plans from new homeports as a result of new and evolving operating protocols, including the impact of state regulations and litigation regarding proof of passenger vaccination, and possible changes in regulations in the countries in which we operate and plan to operate.
+Added: In addition, we may face challenges in executing our return to service plans as a result of new and evolving operating protocols, including the impact of state regulations and litigation regarding proof of passenger vaccination, and possible changes in regulations in the countries in which we operate and plan to operate.
Uncertainties remain as to the specifics, timing and costs of administering and implementing our health and safety measures, some of which may be significant.
+Added: These measures also may negatively impact guest satisfaction.
Based on our assessment of these requirements and recommendations, the status of COVID-19 infection and/or vaccination rates in the U.S.
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We also have taken actions to monitor and mitigate changes in our supply chain, and port destination availability, which may strain relationships with our vendors and port partners.
−Removed: If we are unable to satisfy the guidance and recommendations of the Conditional Order, our operations may be negatively impacted and we could be exposed to reputational and legal risks.
−Removed: Due to the unprecedented and uncertain nature of the COVID-19 pandemic and CDC or Department of State guidance, it is difficult to predict the impact of further disruptions and their magnitude.
−Removed: The impact of further disruptions may depend on how they coincide with the timing of when we seek to continue to resume sailing.
+Added: If we are unable to satisfy the safety standards applicable to our sailings, our operations may be negatively impacted and we could be exposed to reputational and legal risks.
+Added: Due to the unprecedented and uncertain nature of the COVID-19 pandemic and related regulatory guidance, it is difficult to predict the impact of further disruptions and their magnitude.
In addition, we had never previously experienced a complete cessation of our cruising operations, and as a consequence, our ability to predict the impact of such a cessation on our brands and future prospects is limited and such impact is uncertain.
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Additionally, any future profitability will be impacted by increased debt service costs as a result of our liquidity actions.
−Removed: The suspension of our sailings and the reduction in demand for future cruising has adversely impacted our liquidity as we have experienced a significant increase in refunds of customer deposits while cash inflows from new or existing bookings on future sailings has reduced sharply compared to pre-pandemic levels.
−Removed: As a result, we have taken actions to increase our liquidity through a combination of capital and operating expense reductions and financing activities.
+Added: The suspension of our sailings and the reduction in demand for future cruising has adversely impacted our liquidity as we experienced a significant increase in refunds of customer deposits while cash inflows from new or existing bookings on future sailings was reduced sharply compared to pre-pandemic levels.
+Added: As a result, we have taken actions to increase our liquidity through a combination of operating expense reductions during 2020, capital expense reductions and and financing activities.
Refer to Note 7 .
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Thereafter, in the event we declare a dividend or engage in stock repurchases we will need to repay the amounts deferred under our export credit facilities.
−Removed: On February 25, 2021, S&P Global downgraded our senior unsecured rating from B+ to B, which had no financial impact, and downgraded our $3.32 billion Senior Secured Notes and Silversea Notes , which were fully repaid in June 2021 with the proceeds from the $650 million Unsecured Notes, from BB to BB-.
+Added: On February 25, 2021, S&P Global downgraded our senior unsecured rating from B+ to B, which had no financial impact, and downgraded our $3.32 billion Secured Notes and Silversea Notes, which were fully repaid in June 2021 with the proceeds from the $650 million June Unsecured Notes, from BB to BB-.
This downgrade had no impact on the terms of the notes.
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We have a substantial amount of debt and significant debt service obligations.
−Removed: As of June 30, 2021, we had total debt of $21.0 billion.
−Removed: Our substantial debt could have important negative consequences for us.
−Removed: For example, our substantial debt could require us to dedicate a large portion of our cash flow from operations to service debt and fund repayments on our debt, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;
+Added: As of September 30, 2021, we had total debt of $20.8 billion.
+Added: Our substantial debt could have negative consequences for us.
+Added: For example, our substantial debt could require us to dedicate a large portion of our cash flows from operations to service debt and fund repayments on our debt, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes;
increase our vulnerability to adverse general economic or industry conditions;
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We may incur substantial additional debt in the future.
−Removed: Except for the restrictions under the indentures governing our Secured Notes (as defined below) and our 9.125% Senior Guaranteed Notes due in 2023 (the “Unsecured Notes”) and certain of our other debt instruments, including our unsecured bank and export credit facilities, we are not restricted under the terms of our debt instruments from incurring additional debt.
+Added: Except for the restrictions under the indentures governing our Secured Notes and our 9.125% senior guaranteed notes due in 2023 (the “Unsecured Notes”) and certain of our other debt instruments, including our unsecured bank and export credit facilities, we are not restricted under the terms of our debt instruments from incurring additional debt.
Although the indentures governing the Secured Notes, the Unsecured Notes, and certain of our other debt instruments, including our unsecured bank and export credit facilities, contain restrictions on the incurrence of additional debt, these restrictions are subject to a number of significant qualifications and exceptions, and under certain circumstances the amount of debt that could be incurred in compliance with these restrictions could be substantial.
Our debt instruments also do not and will not prevent us from incurring liabilities that do not constitute “Indebtedness” as defined therein.
−Removed: In the event that we execute and borrow under the $700 million commitment expiring on August 12, 2022 for a 364-day term loan facility, the credit agreement that would govern such term loan facility would impose substantially similar restrictions (including the related qualifications and exceptions) as are set forth in the indenture governing the Unsecured Notes.
+Added: In the event that we execute and borrow under the $700 million commitment available to draw on at any time prior to August 12, 2022 for a 364-day term loan facility, the credit agreement that would govern such term loan facility would impose substantially similar restrictions (including the related qualifications and exceptions) as are set forth in the indenture governing the Unsecured Notes.
If new debt is added to our existing debt levels, the related risks that we now face would increase.
−Removed: As of June 30, 2021, we have commitments for approximately $10.5 billion of debt to finance the purchase of 10 ships on order by our Royal Caribbean International, Celebrity Cruises and Silversea Cruises brands, nine of which are guaranteed by the export credit agencies in the countries in which the ships are being built.
+Added: As of September 30, 2021, we have commitments for approximately $10.3 billion of debt to finance the purchase of 10 ships on order by our Royal Caribbean International, Celebrity Cruises and Silversea Cruises brands, ten of which are guaranteed by the export credit agencies in the countries in which the ships are being built.
The ultimate size of each facility will depend on the final contract price (including change orders and owner’s supply) as well as fluctuations in the EUR/USD exchange rate.
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If we elect to settle conversions of our convertible notes, if any, in shares of our common stock or a combination of common stock and cash, conversions of our convertible notes may result in significant dilution to our shareholders.
−Removed: We did not declare dividends on our common stock in the quarter ended June 30, 2021 and do not expect to pay dividends on our common stock for the foreseeable future.
−Removed: No cash dividends were declared on our common stock during the five consecutive quarters ended June 30, 2021.
+Added: We did not declare dividends on our common stock in the quarter ended September 30, 2021 and do not expect to pay dividends on our common stock for the foreseeable future.
+Added: No cash dividends were declared on our common stock during the six consecutive quarters ended September 30, 2021.
We expect that any income received from operations will be devoted to our future operations and recovery.
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As a result, an increase in market interest rates would increase our interest expense and our debt service obligations.
−Removed: As of June 30, 2021, we had approximately $7.0 billion of indebtedness that bears interest at variable rates.
+Added: As of September 30, 2021, we had approximately $7.0 billion of indebtedness that bears interest at variable rates.
This amount represented approximately 32.5% of our total indebtedness.
−Removed: As of June 30, 2021, a hypothetical 1% increase in prevailing interest rates would increase our forecasted 2021 interest expense by approximately $29.3 million.
+Added: As of September 30, 2021, a hypothetical 1% increase in prevailing interest rates would increase our forecasted 2021 interest expense by approximately $16.4 million.
In addition, on July 27, 2017, the United Kingdom’s Financial Conduct Authority ("FCA"), which regulates the London Interbank Offered Rate (“LIBOR”), announced that it will no longer persuade or compel banks to submit LIBOR rates after 2021.
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A challenging operating environment, such as is currently being experienced under the impact of COVID-19, impacts affecting consumer demand or spending, the deterioration of general macroeconomic conditions, or other factors, could result in a change to the future cash flows we expect to derive from our operations.
−Removed: Reductions of cash flows used in the valuation analyses may result in the recording of an impairment charge to a reporting unit’s goodwill.
−Removed: Price increases for commercial airline service for our guests or major changes or reduction in commercial airline service and/or availability could adversely impact the demand for cruises and undermine our ability to provide reasonably priced vacation packages to our guests.
+Added: Reductions of cash flows used in the valuation analyses may result in the recording of impairments, which could adversely affect our financial condition and operating results.
+Added: Price increases for commercial airline service for our guests or major changes or reductions in commercial airline service and/or availability could adversely impact the demand for cruises and undermine our ability to provide reasonably priced vacation packages to our guests.
Many of our guests depend on scheduled commercial airline services to transport them to or from the ports where our cruises embark or disembark.
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For example, local governments may establish their own set of rules for self-quarantines and/or require proof of individuals health status or vaccination prior to or upon visiting.
−Removed: These effects may extend beyond any resolution of the current COVID-19 pandemic through the distribution and roll-out of a vaccine or effective therapeutic treatment, and the impact of any of these factors could have a material adverse effect on our business and results of operations.
−Removed: In addition, the new operating protocols we are developing and any other health protocol we may develop or that may be required by law in the future in response to COVID-19, and related variants, or other infectious diseases may be costly to implement and less effective than we expected in reducing the risk of infection and spread of such disease on our cruise ships, which will negatively impact our operations and expose us to reputational and legal risks.
+Added: These effects may extend beyond any resolution of the current COVID-19 pandemic through the distribution and roll-out of vaccines or effective therapeutic treatments, and the impact of any of these factors could have a material adverse effect on our business and results of operations.
+Added: In addition, the new operating protocols we are developing and any other health protocols we may develop or that may be required by law in the future in response to COVID-19, and related variants, or other infectious diseases may be costly to develop and implement and may be less effective than we expected in reducing the risk of infection and spread of such disease on our cruise ships, which will negatively impact our operations and expose us to reputational and legal risks.
Incidents on ships, at port facilities, land destinations and/or affecting the cruise vacation industry in general, and the associated negative media coverage and publicity, have affected and could continue to affect our reputation and impact our sales and results of operations.
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Significant weather, climate events and/or natural disasters could adversely impact our business and results from operations.
−Removed: Natural disasters (e.g., earthquakes, volcanos, wild fires), weather and/or climate events (including hurricanes and typhoons) could impact our source markets and operations resulting in travel restrictions, guest cancellations, an inability to source our crew or our provisions and supplies from certain places.
+Added: Natural disasters (e.g., earthquakes, volcanos, wildfires), weather and/or climate events (including hurricanes and typhoons) could impact our source markets and operations resulting in travel restrictions, guest cancellations, an inability to source our crew or our provisions and supplies from certain places.
We are often forced to alter itineraries and occasionally cancel a cruise or a series of cruises or to redeploy our ships due to these types of events, which could have an adverse effect on our sales, operating costs and profitability in the current and future periods.
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Building, repairing, maintaining and/or upgrading a ship is sophisticated work that involves significant risks.
−Removed: In addition, the prices of labor and/or various commodities that are used in the construction of ships can be subject to volatile price changes, including the impact of fluctuations in foreign exchange rates.
+Added: Material increases in commodity and raw material prices, such as the recent escalation in steel pricing, and other cost pressures impacting the construction of a new ship, such as the cost of labor and financing, could adversely impact the shipyard’s ability to build the ship on a cost-effective basis.
Shipyards, their subcontractors, and/or our suppliers may encounter financial, technical or design problems when doing these jobs.
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Although our ships can be redeployed, cruise sales and/or pricing may be impacted by the introduction of new ships into the marketplace, reductions in cruise capacity, overall market growth and deployment decisions of ourselves and our competitors.
−Removed: As of June 30, 2021, a total of 91 new ships with approximately 198,186 berths were on order for delivery through 2027 in the cruise industry, including 13 ships currently scheduled to be delivered to us.
+Added: As of September 30, 2021, a total of 92 new ships with approximately 200,000 berths were on order for delivery through 2027 in the cruise industry, including 13 ships currently scheduled to be delivered to us.
The further net growth in capacity from these new ships and future orders, without an increase in the cruise industry’s demand and/or share of the vacation market, could depress cruise prices and impede our ability to achieve yield improvement.
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Our reliance on travel agencies to sell and market our cruises exposes us to certain risks which, if realized, could adversely impact our business.
−Removed: We rely on travel agencies to generate the majority of bookings for our ships.
+Added: We rely on travel agencies to generate bookings for our ships.
Accordingly, we must ensure that our commission rates and incentive structures remain competitive.
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Any event impacting a vendor’s ability to deliver goods of the expected quality at the location and time needed could negatively impact our ability to deliver our cruise experience.
−Removed: Events impacting our supply chain could be caused by factors beyond the control of our suppliers or us, including inclement weather, natural disasters, increased demand, problems in production or distribution and/or disruptions in third-party logistics or transportation systems, including those caused by the COVID-19 pandemic.
+Added: Events impacting our supply chain could be caused by factors beyond the control of our suppliers or us, including inclement weather, natural disasters, new laws and regulations, labor actions, increased demand, problems in production or distribution and/or disruptions in third-party logistics, information technology or transportation systems, including those caused by the COVID-19 pandemic.
Any such interruptions to our supply chain could increase our costs and could limit the availability of products critical to our operations.
−Removed: In order to achieve cost and operational efficiencies, we outsource to third-party vendors certain services that are integral to the operations of our global businesses, such as our onboard concessionaires, certain of our call center operations and operation of a large part of our information technology systems, which are also affected by the COVID-19 pandemic.
+Added: In order to achieve cost and operational efficiencies, we outsource to third-party vendors certain services that are integral to the operations of our global businesses, such as our onboard concessionaires, certain of our call center operations, guest port services, logistics distribution and operation of a large part of our information technology systems, which are also affected by the COVID-19 pandemic.
We are subject to the risk that certain decisions are subject to the control of our third-party service providers and that these decisions may adversely affect our activities.
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Some environmental groups also have generated negative publicity about the environmental impact of the cruise vacation industry and are advocating for more stringent regulation of ship emissions at berth and at sea.
−Removed: Growing environmental scrutiny of the cruise industry and any related measures could adversely impact our operations and financial results and subject us to increasing compliance costs.
+Added: Growing environmental scrutiny of the cruise industry and any related measures could adversely impact our operations and financial results and subject us to reputational impacts and costs.
A change in our tax status under the U.S.
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In addition, we may experience difficulties in recruiting and retaining qualified personnel if we reduce the levels of fixed or variable compensation that we offer (including equity compensation impacted by the trading price of our equity), whether in response to the impacts of COVID-19 or otherwise.
−Removed: For the quarter ended March 31, 2021, approximately 89% of our shipboard employees were covered by collective bargaining agreements.
+Added: For the quarter ended September 30, 2021, approximately 88% of our shipboard employees were covered by collective bargaining agreements.
A dispute under our collective bargaining agreements could result in a work stoppage of those employees covered by the agreements.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.