What changed in this filing

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Item 1. Business

2022-03-01 compared with 2021-02-26 · 263 added, 320 removed, 513 unchanged (53% of the section changed)

We are a global cruise company.

We control and operate four global cruise brands:

Royal Caribbean International, Celebrity Cruises, Azamara and Silversea Cruises (collectively, our "Global Brands").

We are one of the leading cruise companies in the world.

We control and operate three global cruise brands:

Royal Caribbean International, Celebrity Cruises and Silversea Cruises (collectively, our "Global Brands").

We also own a 50% joint venture interest in TUI Cruises GmbH ("TUIC"), that operates the German brands TUI Cruises and Hapag-Lloyd Cruises (collectively, our "Partner Brands").

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We believe that our commitment to build state-of-the-art ships and to invest in the maintenance and upgrade of our fleet to, among other things, incorporate many of our latest signature innovations, allows us to continue to attract new and loyal repeat guests.

On January 19, 2021, we announced that we entered into a definitive agreement to sell the Azamara brand, including its three-ship fleet and associated intellectual property, to Sycamore Partners for $201 million.

The transaction is subject to customary conditions and is expected to close in the first quarter of 2021.

Royal Caribbean was founded in 1968 as a partnership.

Its corporate structure has evolved over the years and, the current parent corporation, Royal Caribbean Cruises Ltd., was incorporated on July 23, 1985 in the Republic of Liberia under the Business Corporation Act of Liberia.

The disruptions to our operations resulting from the COVID-19 pandemic (“COVID-19”) have had, and continue to have, a material negative impact on our financial condition and results of operations.

The global efforts to contain the spread of the disease have resulted in travel restrictions and created significant uncertainty regarding worldwide port closures and availability.

As part of the global containment effort, we implemented a voluntary suspension of our Global Brands' cruise operations beginning March 13, 2020, which has been extended through at least April 30, 2021, for most of our cruise operations.

As of February 23, 2021, four of our ships were operating with guests onboard.

On and effective as of October 30, 2020, the U.S.

Centers for Disease Control and Prevention ("CDC") issued a Framework for Conditional Sailing Order (the “Conditional Order”) that will conditionally permit cruise ship passenger operations in U.S.

waters under certain conditions and using a phased approach.

The Conditional Order will remain in effect until the earlier of (1) the expiration of the Secretary of Health and Human Services’ declaration that COVID-19 constitutes a public health emergency, (2) the rescission or modification by the CDC Director of the Conditional Order based on specific public health or other considerations, or (3) November 1, 2021.

See Business - Regulation for further details on the Conditional Order.

Our resumption of operations will include a staggered return of the fleet to service, which will include:

• Bringing the fleet from layup status to fully operational;

• Bringing crew back to an appropriate staffing level and expected reduced load factors for a period of time;

• Implementing health and safety protocols on ships as they resume operations and while protocols are required.

We are working with both the CDC and the Healthy Sail Panel ("HSP"), formed in June 2020 by us and Norwegian Cruise Line Holdings Ltd.

and composed of leading experts in relevant fields, including epidemiology, infectious diseases, public policy and regulation, engineering and general health safety, to prepare and develop our plan to meet the framework for the Conditional Order.

While the Conditional Order represents an important step in our return to service, many uncertainties remain as to the specifics, timing and costs of administering and implementing the requirements of the Conditional Order, some of which may be significant.

Further, the Conditional Order contemplates that the CDC may issue additional requirements through technical instructions or orders as needed and that the phases described above will be further determined based on public health considerations, including the trajectory of the pandemic and the ability of cruise ship operators to successfully employ measures that mitigate the risk of COVID-19.

Based on our assessment of these conditions or for other reasons, we may determine it necessary to further extend our voluntary suspension of our Global Brands’ cruise sailings which currently extends through at least April 30, 2021, for most of our cruise operations.

We have undertaken several proactive measures to mitigate the financial and operational impacts of COVID-19, including significant reduction of capital expenditures and operating expenses as well as the issuance of debt and shares of our common stock.

Given the current environment, we intend to continue to prioritize and bolster liquidity through cash conservation and additional financing sources, which may include the issuance of new debt (including convertible debt), refinancing of existing debt, amortization deferrals under our export-credit backed debt facilities and issuance of common stock, to ensure that we are well positioned for recovery.

Additionally, we agreed with certain of our lenders that we will not pay dividends or engage in stock repurchases until the end of the third quarter of 2022.

Management's Discussion and Analysis - Critical Accounting Policies and Recent Developments:

Return to Healthy Sailing

We have restarted our global cruise operations in a phased manner, following our voluntary suspension of global cruise operations that commenced in March of 2020 in response to the COVID-19 pandemic.

By the end of December 2021, we operated 50 of our Global and Partner Brand ships, representing over 85% of our capacity, and we have carried approximately 1.3 million guests since we resumed operations.

Our return to service efforts incorporate our enhanced health and safety protocols, and the requirements of regulatory agencies, which has resulted in reduced guest occupancy, modified itineraries and vaccination protocols.

We experienced service disruptions and cancelled several sailings in the first quarter of 2022 due to the impact from the Omicron variant ("Omicron").

Service disruptions have abated as COVID-19 cases have declined.

Despite the service disruptions and cancellations, we believe the overall trajectory of our return to service remains unchanged.

We expect that by the end of the first quarter of 2022, 53 out of 62 ships, including Wonder of the Seas, which was delivered in January 2022, will have been brought back to service.

Additionally, we expect that the rest of the fleet will return to operations before the summer season.

Management's Discussion and Analysis - Critical Accounting Policies and Estimates and Recent Developments:

COVID-19, and Note 1.

General to our consolidated financial statements under Item 8.

Financial Statements for further details on the impact of COVID-19 on our financial condition and results of operations.

Financial Statements and Supplementary Data for further details on the impact of COVID-19 on our financial condition and results of operations.

Our Global Brands

Our Global Brands include Royal Caribbean International, Celebrity Cruises, Azamara, and Silversea Cruises.

Our Global Brands include Royal Caribbean International, Celebrity Cruises, and Silversea Cruises.

We believe our Global Brands possess the versatility to enter multiple cruise market segments within the cruise vacation industry.

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Our Global Brands also offer similar itineraries as well as similar cost and revenue components.

The itineraries of Global Brands are subject to resumption of our operations and local restrictions.

The itineraries of our Global Brands are subject to the phased resumption of our operations and local restrictions.

In addition, our Global Brands have historically sourced passengers from similar markets around the world and operated in similar economic environments with a significant degree of commercial overlap.

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Royal Caribbean International

Royal Caribbean International is positioned to compete in both the contemporary and premium segments of the cruise vacation industry.

The brand appeals to families with children of all ages, as well as both older and younger couples, providing cruises that generally feature a casual ambiance, as well as a variety of activities and entertainment venues.

We believe that the quality of the Royal Caribbean International brand allows it to achieve market coverage that is among the broadest of any of the major cruise brands in the cruise vacation industry.

Royal Caribbean International’s strategy is to attract an array of vacationing guests by offering a wide variety of itineraries to destinations worldwide, including Alaska, Asia, Australia, Bahamas, Bermuda, Canada, the Caribbean, Europe, the Panama Canal and New Zealand, with cruise lengths ranging from two to 24 nights.

Royal Caribbean International is the world's largest cruise brand.

The brand competes in both the contemporary and premium segments of the cruise vacation industry and appeals to families with children of all ages, as well as both older and younger couples.

Royal Caribbean International offers cruises and land destinations that generally feature a casual ambiance, as well as a variety of activities and entertainment venues.

We believe that the quality of the Royal Caribbean

International brand allows it to achieve market coverage that is among the broadest of any of the major cruise brands in the cruise vacation industry.

Royal Caribbean International’s strategy is to attract an array of vacationing guests by offering a wide variety of itineraries to destinations worldwide, including Alaska, Asia, Australia, the Bahamas, Bermuda, Canada, the Caribbean, Europe, the Panama Canal and New Zealand, with cruise lengths generally ranging from one to 25 nights.

Royal Caribbean International offers multiple innovative options for onboard dining, entertainment and other onboard activities.

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Royal Caribbean International operates 25 ships with an aggregate capacity of approximately 88,400 berths.

Additionally, as of December 31, 2020, Royal Caribbean International has six ships on order with an aggregate capacity of approximately 32,400 berths.

These ships consist Odyssey of the Seas , which is expected to be delivered in early 2021, Wonder of the Seas and our sixth Oasis-class ship, which are expected to be delivered in the first quarter of 2022 and the second quarter of 2024, respectively, and the first three ships of a new generation, known as our Icon-class, which are expected to be delivered in the third quarter of 2023, and the second quarters of 2025 and 2026, respectively.

Additionally, as of December 31, 2021, Royal Caribbean International had five ships on order with an aggregate capacity of approximately 28,200 berths, which consisted of two Oasis-class ships and the first three ships of a new generation, known as the Icon-class ships.

The two Oasis-class ships include Wonder of the Seas , which was delivered in January of 2022, and our sixth Oasis-class ship, which is expected to be delivered in the second quarter of 2024.

The Icon-class ships include Icon of the Seas, which is expected to be delivered in the third quarter of 2023, and the second and third Icon-class ships, which are expected to be delivered in the second quarters of 2025 and 2026, respectively.

The expected delivery dates for all of our ships on order are subject to change in the event of shipyard construction delays.

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Celebrity Cruises offers a range of itineraries to destinations, including Alaska, Asia, Australia, Bermuda, Canada, the Caribbean, Europe, the Galapagos Islands, Hawaii, New Zealand, the Panama Canal and South America, with cruise lengths ranging from two to 18 nights.

Celebrity Cruises operates 14 ships with an aggregate capacity of approximately 29,220 berths, including the brand's newest ship Celebrity Apex , which was delivered in the first quarter of 2020.

Additionally, as of December 31, 2020, we have two ships on order with an aggregate capacity of approximately 6,500 berths.

These ships consist of two Edge-class ships, including Celebrity Beyond and a fourth ship in the class, which are expected to be delivered in the second quarter of 2022 and in the fourth quarter of 2023, respectively.

In addition, as of December 31, 2020, we have an agreement in place with Chantiers de l’Atlantique to build an additional Edge-class ship with capacity of approximately 3,250 berths, estimated for delivery in 2025, which is contingent upon completion of certain conditions precedent and financing.

Celebrity Cruises operates 14 ships with an aggregate capacity of approximately 29,215 berths.

Additionally, as of December 31, 2021, Celebrity Cruises had two ships on order with an aggregate capacity of approximately 6,500 berths.

These ships include two Edge-class ships, Celebrity Beyond and Celebrity Ascent , which are expected to be delivered in the second quarter of 2022 and in the fourth quarter of 2023, respectively.

In addition, we have an agreement in place with Chantiers de l’Atlantique to build an additional Edge-class ship with capacity of approximately 3,250 berths, estimated for delivery in 2025, which is contingent upon completion of certain conditions precedent and financing.

Silversea Cruises

Silversea Cruise Holding Ltd.

("Silversea Cruises") is an ultra-luxury and expedition cruise line.

On July 9, 2020, we acquired the remaining 33.3% interest in Silversea Cruises that we did not already own (the "noncontrolling interest") from Heritage Cruise Holding Ltd.

("Heritage").

As a result of the acquisition of the noncontrolling interest, Silversea Cruises is now a wholly owned cruise brand.

Silversea Cruises, formed in the early 1990s, is positioned as an ultra-luxury cruise line with smaller ships, high standards of accommodations, fine dining, personalized service and exotic itineraries.

Silversea Cruises delivers distinctive destination experiences by visiting unique and remote destinations, including the Galapagos Islands, Antarctica and the Arctic with cruise itineraries generally ranging from six to 24 nights.

Silversea Cruises operates nine ships, with an aggregate capacity of approximately 3,350 berths, including the brand's newest ships Silver Origin and Silver Moon , which were delivered in the second and fourth quarters of 2020, respectively.

As of December 31, 2020, Silversea Cruises has three ships on order with an aggregate capacity of approximately 1,750 berths.

The ships are expected to be delivered in the fourth quarter of 2021, and in the first quarters of 2023 and 2024, respectively.

On January 19, 2021, we announced that we entered into a definitive agreement to sell the Azamara brand, including its three-ship fleet with an aggregate capacity of approximately 2,100 berths and associated intellectual property, to Sycamore Partners for $201 million.

The transaction is subject to customary conditions and is expected to close in the first quarter of 2021.

("Silversea Cruises") is an ultra-luxury and expedition cruise line with smaller ships, high standards of accommodations, fine dining, personalized service and exotic itineraries.

Silversea Cruises operates ten ships, with an aggregate capacity of approximately 3,950 berths, including the brand's newest ship, Silver Dawn , which was delivered in the fourth quarter of 2021 and is expected to commence revenue generating voyages in the second quarter of 2022.

Additionally, as of December 31, 2021, Silversea Cruises had two ships on order with an aggregate capacity of approximately 1,460 berths.

The Evolution-class ships are expected to be delivered in the second quarters of 2023 and 2024, respectively.

Effective March 19, 2021, we sold our wholly-owned brand, Azamara Cruises ("Azamara"), including its three-ship fleet and associated intellectual property, to Sycamore Partners for $201 million, before closing adjustments.

The sale of Azamara does not represent a strategic shift that will have a major effect on our operations and financial results, as we continue to provide similar itineraries to and source passengers from the markets served by the Azamara business.

Our Partner Brands

Our Global Brands are complemented by our interest in TUIC, our 50%-owned joint venture that operates the German brands TUI Cruises and Hapag-Lloyd Cruises (collectively, our "Partner Brands").

TUIC is a joint venture owned 50% by us and 50% by TUI AG, a German tourism company, which is designed to serve the contemporary and premium segments of the German cruise market by offering products tailored for German guests.

All onboard activities, services, shore excursions and menu offerings are designed to suit the preferences of this target market.

TUI Cruises operates seven ships, with an aggregate capacity of approximately 17,700 berths as of December 31, 2020.

Additionally, TUI Cruises has three ships on order with an aggregate capacity of approximately 11,100 berths, that are expected to be delivered in the second quarter of 2023, the third quarter of 2024 and the first quarter of 2026, respectively.

On June 30, 2020, TUIC acquired Hapag-Lloyd Cruises, a luxury and expedition brand for German-speaking guests, from TUI AG for approximately €1.2 billion, or $1.3 billion, as of the purchase date.

Hapag-Lloyd Cruises operates two luxury liners and two smaller expedition ships, with an aggregate capacity of approximately 1,360 berths as of December 31, 2020.

TUI Cruises operates seven ships, with an aggregate capacity of approximately 17,700 berths.

Additionally, as of December 31, 2021, TUI Cruises had three ships on order with an aggregate capacity of approximately 11,100 berths, that are expected to be delivered in the second quarter of 2024, the fourth quarter of 2024 and the second quarter of 2026, respectively.

Hapag-Lloyd Cruises operates two luxury liners and three smaller expedition ships, with an aggregate capacity of approximately 1,590 berths.

Hapag-Lloyd Cruises did not have any ships on order as of December 31, 2021.

Refer to Note 7 .

General and Note 8 .

Other Assets to our consolidated financial statements under Item 8.

Financial Statements and Supplementary Data for further details.

Pullmantur Holdings S.L ("Pullmantur Holdings") is a joint venture owned 49% by us and 51% by Cruises Investment Holdings S.A., an affiliate of Springwater Capital LLC.

In 2020, Pullmantur Holdings and certain of its subsidiaries filed for reorganization under the terms of the Spanish insolvency laws due to the negative impact of the COVID-19 pandemic on the companies.

Refer to Note 8 .

Other Assets to our consolidated financial statements under Item 8.

Financial Statements and Supplementary Data for further information regarding Pullmantur's reorganization filing and its impact to the Company.

The cruising industry has been considered a well-established vacation sector in the North American, European and Australian markets and a developing sector in several other emerging markets.

Although the industry is currently experiencing challenges brought on by the COVID-19 pandemic, we believe that cruising will continue to be a popular vacation choice in the long-term due to its inherent value, extensive itineraries and variety of shipboard and shoreside activities.

As part of the global effort to contain the spread of COVID-19, the Company and other industry participants voluntarily suspended operations in March 2020, resulting in a limited number of cruises being taken in the past year.

As a result, representative information of market penetration and other indicators are not available for 2020.

As the industry proceeds with its resumption of operations, we believe that cruising will continue to be a popular vacation choice in the long-term due to its inherent value, extensive itineraries and variety of shipboard and shoreside activities.

The Company and other industry participants voluntarily suspended operations in March of 2020 and gradually resumed operations in the second half of 2021, resulting in a limited number of operated cruises in 2020 and 2021.

As a result, representative information of market penetration and other indicators are not meaningful for 2020 and 2021.

For the five year period prior to 2020, industry data indicated that market penetration rates were still low and that a significant portion of cruise guests carried in those years were first-time cruisers.

We believe this presents an opportunity for operational and financial recovery and long-term growth for the industry when it resumes operations.

The following table details industry market penetration rates for North America, Europe and Asia/Pacific for the five years prior to 2020 computed based on the number of annual cruise guests as a percentage of the total population:

We believe this presents an opportunity for operational and financial recovery and long-term growth for the industry as it continues to resume operations.

The following table details industry market penetration rates for North America, Europe and Asia/Pacific for the five years prior to the impact of COVID-19 in 2020, computed based on the number of annual cruise guests as a percentage of the total population:

North America (2)(3)

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(1) Historically, we have reported annual comparable information for relevant comparisons to other periods.

The 2020 suspension of global cruise operations as a result of COVID-19 does not allow for a meaningful comparison to prior years' information and as such the 2020 data has been excluded from this table.

The 2020 suspension of global cruise operations as a result of COVID-19 and the gradual resumption of operations in 2021 do not allow for a meaningful comparison to prior years' information and as such the 2020 and 2021 data has been excluded from this table.

Our estimates are based on a combination of data obtained from publicly available sources including the International Monetary Fund, United Nations, Department of Economic and Social Affairs, Cruise Lines International Association ("CLIA") and G.P.

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The global cruise fleet was served by a weighted average of approximately 579,000 berths during 2019 with approximately 354 ships at the end of 2019.

As of December 31, 2019, there were approximately 67 ships with an estimated 159,000 berths that were expected to be placed in service in the global cruise market through 2024, not taking into account ships taken out of service or ordered during these periods.

We believe that, starting in 2020, cruise ships in the industry were taken out of service at an accelerated rate and new ship orders were deferred due to global cruise operation restrictions resulting from the COVID-19 pandemic.

As of December 31, 2021, there were approximately 78 ships on order with an estimated 183,000 berths that are expected to be placed in service in the global cruise market through 2027, not taking into account ships taken out of service or ordered during these periods.

Cruise ships in the industry were taken out of service at an accelerated rate and new ship orders were deferred due to global cruise operation restrictions in 2020 and limited sailings in 2021 resulting from the COVID-19 pandemic.

The global cruise industry carried approximately 30.0 million cruise guests in 2019 and approximately 28.5 million in 2018.

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(1) Historically, we have reported annual comparable information for relevant comparisons to other periods.

Our estimates of the number of global cruise guests and the weighted-average supply of berths marketed globally are based on a combination of data that we obtain from various publicly available cruise industry trade information sources.

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Disney Cruise Line;

and Norwegian Cruise Line Holdings Ltd, which owns Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises.

Norwegian Cruise Line Holdings Ltd, which owns Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises;

and Virgin Voyages.

Cruise lines also compete with other vacation alternatives such as land-based resort hotels, internet-based alternative lodging sites and sightseeing destinations for consumers’ leisure time.

The COVID-19 pandemic, related restrictions and general economic conditions have significantly affected companies within the vacation market which may result in a changed competitive landscape by the time we return to service.

The COVID-19 pandemic-related restrictions and general economic conditions have significantly affected companies within the vacation market which may result in a changed competitive landscape as we continue to return to service.

Operating Focus

Our principal operating strategies remain consistent with our historical strategies, yet have been affected by the vast impact that the COVID-19 pandemic has had, and will continue to have, on our Company's operations.

While our cruise operations remain suspended, we have and will continue to prioritize those operating strategies that reduce our capital and operating expenditures, enhance our liquidity and support the healthy and safe return to cruising globally for guests, crew and the communities visited, including for some time after we resume cruise operations.

Our principal operating strategies remain consistent with our historical strategies, yet have been affected by the impact that the COVID-19 pandemic has had, and continues to have, on our Company's operations.

We continue to prioritize operating strategies that support the return of our full fleet into operations, the delivery of memorable vacation experiences to our guests, the healthy and safe return of global cruising for guests, crew and the communities visited, and the enhancement of our financial results and liquidity.

We strive to execute these strategies in a socially and environmentally responsible manner, working with our various business and community partners as we build toward a more sustainable cruise industry.

Our Company's operating focus is as follows:

• deliver outstanding vacation experiences to our guests;

• protect the health, safety and security of our guests and employees;

• support the healthy return of cruising globally along with our industry partners, including national and local governments and regulators, the communities in which we operate, other cruise companies, shipyards, our guests and trade partners;

• focus on cost control and efficiency, ensure adequate cash and liquidity, manage our capital expenditures and our balance sheet, with the overall goals of sustaining our operations and being well positioned for recovery, and, in the long-term, maximizing our return on invested capital and shareholder value,

• strengthen our consumer engagement in order to enhance our revenues;

• focus on cost efficiency, adequate cash and liquidity, and manage our balance sheet, with the overall goals of sustaining our operations and being well positioned during our recovery, and, in the long-term, maximizing our return on invested capital and shareholder value;

• protect the environment in which our vessels and organization operate;

• invest in our workforce in order to better serve our global guest base and grow our business, and promote gender equality, diversity and inclusion;

• strengthen our consumer engagement in order to enhance our revenues,

• increase the awareness and market penetration of our brands globally;

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• provide extraordinary destination experiences and state-of-the-art port facilities to our guests;

• continue to integrate digital technological capabilities, data analytics and artificial intelligence into our operations to service customer preferences and expectations in an innovative manner, create efficiencies and enhance employee satisfaction, and

• maintain strong relationships with travel agencies, which continue to be the principal industry distribution channel, while enhancing our consumer outreach programs.

• continue to deploy technology capabilities and advanced uses of data and analytics to deliver innovative customer experiences as well as to create operational efficiencies that enhance employee satisfaction;

• maintain strong relationships with travel advisors, which continue to be the principal industry distribution channel, while enhancing our consumer outreach programs.

Safety and health policies

We are committed to protecting the health, safety and security of our guests, employees and others working on our behalf.

Our efforts in these areas are managed by our dedicated Safety, Security, Environment, Medical and Public Health Department which is responsible for all of our maritime safety, global security, environmental stewardship and medical/public health activities;

overseen by the Safety, Environment and Health Committee of our board of directors and informed by a Maritime Advisory Board of experts.

Our efforts in these areas are managed by several departments within the Company that are responsible for maritime safety, global security, environmental stewardship and medical/public health activities;

overseen by the Safety,

Environment, Sustainability and Health Committee of our board of directors and informed by a Maritime Advisory Board of experts.

Refer to the Regulation - Safety and Security Regulations section below for further information.

Support the healthy return of cruising

We continue to work and collaborate with the Healthy Sail Panel, epidemiological and policy experts, health authorities and various governments around the globe to ensure a healthy and safe return to cruising for guests, crew and the communities visited.

We work in close partnership and communication with our contracted shipyards to carefully address our newbuild delivery delays and work towards a safe and effective shipyard working environment in the midst of COVID-19.

We continue to work and collaborate with epidemiological and policy experts, health authorities and various governments around the globe to drive a healthy and safe return to cruising for guests, crew and the communities visited.

We work in close partnership and communication with our contracted shipyards to work towards a safe and effective shipyard working environment in the midst of COVID-19.

Refer to the Regulation - CDC COVID-19 Program for Cruise Ships Operating in U.S.

Waters section below for further information.

We have established flexible cruise pricing and booking programs (e.g.

Cruise with Confidence, Best Price Guarantee and all-inclusive pricing) that present our guests with options and value as we anticipate our return to service.

The travel agency community has been a vital partner in our success, and we are committed to assist the industry during this challenging time with essential financial relief (e.g., the RCL CARES program).

Focus on cost control and efficiency, capital expenditure reductions, adequate cash and liquidity and managing of our balance sheet

We have taken significant actions to reduce operating and capital expenses during the suspension of our global cruise operations.

Given the current environment, we continue to prioritize and bolster liquidity through cash conservation and additional financing sources while managing our balance sheet to ensure that we are well positioned for recovery.

We are focused on leveraging our scale and shifting our resources behind our Royal Caribbean International, Celebrity Cruises and Silversea brands.

Cruise with Confidence, Best Price Guarantee, COVID Protection Policy, and all-inclusive pricing) that present our guests with options and value as we continue our return to service.

The travel advisor community has been a vital partner in our success, and we are committed to assist travel advisors during this challenging time with essential financial relief (e.g., the RCL CARES program).

Consumer engagement

We place a strong focus on identifying the needs of our guests and creating product features and innovations that our customers value.

We are focused on the acquisition and targeting of high-value guests by better understanding consumer data and insights to create communication strategies that resonate with our target audiences.

We target customers at important consumer decision points and identify underlying needs for which guests are willing to pay a premium.

We rely on various programs and technologies during the cruise-planning, cruising and after-cruise periods aimed at increasing ticket prices, onboard revenues and occupancy.

We have and expect to strategically invest in onboard projects on our ships that we believe drive marketability, profitability and improve the guest experience.

Focus on cost efficiency, capital allocation, adequate cash and liquidity and managing of our balance sheet

We are focused on improving our cost structure to best position us during our recovery.

We are leveraging our scale and shifting our resources behind our Royal Caribbean International, Celebrity Cruises and Silversea brands.

We continue to focus on liquidity through cash flow optimization and additional financing sources while managing our balance sheet, with the goal of being well positioned during our recovery.

Additionally, we agreed with certain of our lenders that we will not pay dividends or engage in stock repurchases until the end of the third quarter of 2022.

We are focused on maintaining a strong liquidity position, a balanced debt maturity profile, and returning to investment grade credit metrics.

In the event we declare a dividend or engage in share repurchases, we will need to repay the amounts deferred under our export credit facilities.

We are focused on maintaining a strong liquidity position and a balanced debt maturity profile, while making progress on achieving an unsecured balance sheet, lowering interest expense, and reducing leverage.

We believe these strategies enhance our ability to achieve our overall goal of maximizing our long-term shareholder value.

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We are focused on the environmental health of the marine environment and communities in which we operate.

This includes reducing our carbon footprint through the energy and carbon efficiencies included in the design of our new capacity, our ongoing energy management program on our existing fleet and the development of new technologies.

Our long-term partnership with the World Wildlife Fund focuses on greenhouse gas reduction strategies, sustainable food supplies, sustainable destinations and guest education on ocean conservation issues, including climate change, which supports onboard conservation efforts such as our reduced use of plastics and increased sourcing of sustainable seafood.

We are also committed to water quality and management projects onboard and in the communities in which we operate.

We believe in transparent reporting on our environmental and sustainability stewardship, as well as our corporate governance efforts, and annually publish a Sustainability Report.

This report, which is accessible on our corporate website, highlights our progress with regards to those environmental and social aspects of our business that we believe are most significant to our organization and stakeholders.

In addition to providing an overview, the report complies with the guidelines of the Global Reporting Initiative to ensure the report is as complete and accurate as possible.

This includes reducing our carbon footprint through our Destination Net Zero strategy, our energy and carbon efficiencies included in the design of our new capacity, our ongoing energy management program on our existing fleet and the development of new technologies.

Destination Net Zero is our decarbonization strategy that focuses on how to achieve net zero emissions by 2050 and assessing the feasibility of establishing Science-Based Targets.

Destination Net Zero’s four-pronged approach includes the modernization of our global brands fleet through the introduction of new energy-efficient and alternatively fueled vessels, continued investment in energy efficiency programs, development of alternative fuel and alternative power solutions, and optimized deployment and integration of strategic shore-based supply chains.

We are in the early stages of developing our roadmap to achieve these goals.

It is already clear that such a strategy will require new fuels that are not available today.

Refer to Item 1A.

Risk Factors - “ Our sustainability activities, including environmental, social and governance (ESG) matters, could result in reputational risks, increased costs and other risks ” for a discussion of the risks associated with our environmental initiatives.

Our long-term partnership with the World Wildlife Fund focuses on greenhouse gas reduction strategies, sustainable sourcing of food supplies, waste management, sustainable destinations and guest education on ocean conservation issues, which supports onboard conservation efforts such as our reduced use of plastics.

We are also committed to assessing and managing potential impacts related to our operations in the communities in which we operate.

We believe in transparent reporting on our environmental and sustainability stewardship, as well as our social and governance efforts, and have annually published a Sustainability Report since 2008.

This report, the current version of which is accessible on our corporate website, highlights our progress with regards to those environmental and social aspects of our business that we believe are most significant to our organization and stakeholders.

In addition to providing an overview, the report complies with the guidelines of the Global Reporting Initiative and the Sustainable Accounting Standards Board.

Our corporate website also provides information about our environmental performance goals and sustainability initiatives.

The foregoing information contained on our website is not part of any of these reports and is not incorporated by reference herein or in any other report or document we file with the Securities and Exchange Commission.

Investing in our workforce and promoting gender equality, diversity and inclusion

Refer to the Regulation - Environmental Regulations section below for further information.

Investing in our workforce and promoting equality, diversity and inclusion

We believe that our employees, both shipboard and shoreside, are a critical success factor for our business.

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We strive to maintain a work environment that reinforces collaboration, motivation and innovation, and believe that maintaining a strong employee-focused culture is beneficial to the growth and expansion of our business.

We support the equal representation of women in all levels.

We foster diversity and inclusion among our broad employee base.

Refer to the Human Capital section below for further information.

Consumer engagement

We place a strong focus on identifying the needs of our guests and creating product features and innovations that our customers value.

We are focused on targeting high-value guests by better understanding consumer data and insights to create communication strategies that resonate with our target audiences.

We target customers across all touch points and identify underlying needs for which guests are willing to pay a premium.

We rely on various programs and technologies during the cruise-planning, cruising and after-cruise periods aimed at increasing ticket prices, onboard revenues and occupancy.

We have and expect to strategically invest in onboard projects on our ships that we believe drive marketability, profitability and improve the guest experience.

Global awareness and market penetration

We increase brand awareness and market penetration of our cruise brands in various ways, including the use of communication strategies and marketing campaigns designed to emphasize the qualities of each brand and to broaden the awareness of the brand, especially among target groups.

Our marketing strategies include the use of travel agencies, traditional media, mobile and digital media as well as social media, influencers and brand websites.

Our marketing strategies include the use of travel advisors, traditional media, mobile and digital media as well as social media, influencers and brand websites.

Our brands engage past and potential guests by collaborating with travel partners and through call centers, international offices and international representatives.

In addition, our Global Brands target repeat guests with exclusive benefits offered through their respective loyalty programs.

We sell and market our Global Brands, Royal Caribbean International, Celebrity Cruises, Azamara and Silversea Cruises, to guests outside of the United States and Canada through the combined efforts of internationally focused internal resources and a network of independent international representatives located throughout the world.

Historically, our focus has been to primarily source guests for our Global Brands from North America.

We will continue to expand our focus on selling and marketing our cruise brands to guests in countries outside of North America by tailoring itineraries and onboard product offerings to the cultural characteristics and preferences of our international guests.

We sell and market our Global Brands to guests outside of the United States and Canada through the combined efforts of internationally focused internal resources and a network of independent international representatives located throughout the world.

While the majority of our guests for our Global Brands come from North America, we also sell and market our cruise brands to guests in countries outside of North America by tailoring itineraries and onboard product offerings to the cultural characteristics and preferences of our international guests.

In addition, we explore opportunities that may arise to acquire or develop brands tailored to specific markets.

Passenger ticket revenues generated by sales originating in countries outside of the United States were approximately 35% of total passenger ticket revenues in 2019, and 39% in 2018.

Prior to the impact of COVID-19 in 2020, passenger ticket revenues generated by sales originating in countries outside of the United States were approximately 35% of total passenger ticket revenues in 2019, and 39% in 2018.

International guests have grown from approximately 2.5 million in 2015 to approximately 2.6 million in 2019.

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Several of these innovations have become signature elements of our brands.

For the Royal Caribbean International brand,

we introduced the “Royal Promenade” (a boulevard with shopping, dining and entertainment venues) and interior balconies on the Oasis class ships and a two-level family suite on Symphony of the Seas .

For the Royal Caribbean International brand, we introduced the “Royal Promenade” (a boulevard with shopping, dining and entertainment venues) and interior balconies on the Oasis class ships and a two-level family suite on Symphony of the Seas .

For the Celebrity Cruises brand, we enhanced many of the brand's design features through the introduction of the Solstice class ships.

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In addition, we regularly evaluate opportunities to order new ships, purchase existing ships or sell ships in our current fleet while ensuring that we remain focused on the returns we generate on invested capital and maintaining a high level of discipline on capital spending and operating leverage.

We have undertaken measures to mitigate the financial and operational impacts of COVID-19, such as the reduction of our capital expenditures by delaying or deferring newbuild deliveries and the modernization of our ships.

The expected capital expenditures for 2021 are $2.1 billion and are mostly related to newbuild projects which have committed financing.

During 2021, the Company expects the delivery of Odyssey of the Seas and Silver Dawn during the first and fourth quarter, respectively.

In 2022, the Company has two ship deliveries scheduled, both with committed financing:

W onder of the Seas and Celebrity Beyond .

Excluding the newbuilds, the capital expenditures for 2022 will depend on the Company’s schedule to return to operation.

Moreover, COVID-19 has impacted shipyard operations which has resulted in delivery delays for newbuilds.

The exact duration of the ship delivery delays is currently under discussion with the impacted shipyards.

During 2020, we disposed of Celebrity Xperience, Majesty of the Seas and Empress of the Seas.

Additionally, we entered into a definitive agreement to sell the Azamara brand which includes three vessels:

During 2021, we sold the Azamara brand, which included three vessels:

Azamara Journey, Azamara Quest and Azamara Pursuit .

These six ships represent approximately 5.2% of our 2019 capacity.

During 2020, we also disposed of the following ships which were previously chartered to Pullmantur:

Zenith , Monarch, Horizon, Sovereign.

Markets and itineraries

In an effort to penetrate untapped markets, diversify our consumer base and respond to changing economic and geopolitical market conditions, we continue to seek opportunities to deploy ships to new and stronger markets and itineraries throughout the world.

The portability of our ships allows us to deploy our ships to meet demand within our existing cruise markets.

The portability of our ships allows us to deploy our ships to meet demand within our existing and new cruise markets.

We make deployment decisions generally 18 to 28 months in advance, with the goal of optimizing the overall profitability of our portfolio.

Additionally, the infrastructure investments we have made to create a flexible global sourcing model have made our brands relevant in a number of markets around the world, which allows us to be opportunistic and source the highest yielding guests for our itineraries.

Our ships offer a wide selection of itineraries that call on more than 1,000 destinations in 126 countries, spanning all seven continents.

We are focused on obtaining the best possible long-term shareholder returns by operating in established markets while growing our presence in developing markets.

Our ships offer a wide selection of itineraries that call on approximately 1,000 destinations in 120 countries, spanning all seven continents.

We are focused on maximizing long-term shareholder returns by operating in established markets while growing our presence in developing markets.

New capacity has allowed us to expand into new markets and itineraries.

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The acquisition of Silversea Cruises added more than 500 new destinations allowing us to expand and enhance our selection of exotic itineraries.

As we plan for our brands' return to service, we are developing new and attractive itineraries that will allow us to resume our operations on a staggered basis.

We have developed new and attractive itineraries that have allowed us to resume our operations on a staggered basis and in consideration of local restrictions.

We are also responding quickly to changes in market demand, as observed in our new bookings.

Destination experiences and port facilities

Additionally, in order to provide unique destination experiences to our guests, we have invested in our private land destinations.

For instance, in 2018, we announced Perfect Day Island Collection, an initiative to develop a series of private island destinations around the world.

The first island in the collection, Perfect Day at CocoCay, opened in Spring 2019 and includes a wide range of attractions, such as a water park, zip line and wave and freshwater pool.

As a result of the operational disruptions caused by the COVID-19 pandemic and in an effort to bolster our liquidity, we have delayed previously announced Perfect Day site openings and are reassessing their timing as well as the timing of our complementary Royal Beach Club offering portfolio.

In order to provide unique destination experiences to our guests, we have invested in our private land destinations.

In 2018, we announced Perfect Day Island Collection, an initiative to develop a series of private island destinations around the world.

The first island in the collection, Perfect Day at CocoCay, opened in Spring 2019 and includes a wide range of attractions, such as a full water park, zip line course, freshwater pools, helium balloon ride, splash pads and a beach club.

We are also reassessing our investment in other destinations.

In an effort to secure desirable berthing facilities for our ships, and to provide new or enhanced cruise destinations for our guests, we have actively assisted or invested in the development or enhancement of certain port facilities and infrastructure, including mixed-use commercial properties, located in strategic ports of call.

For instance, a new homeport cruise terminal of approximately 170,000 square feet was completed at PortMiami in Miami, Florida in 2018.

We have delayed the expected completion of our new homeport cruise terminal in Galveston, Texas until 2022.

For instance, a new homeport cruise terminal of approximately 170,000 square feet was completed at Port Miami in Miami, Florida in 2018.

We expect that our new homeport cruise terminal in Galveston, Texas will be completed in 2022.

Generally, we collaborate with local, private or governmental entities by providing management and/or financial assistance and often enter into long-term port usage arrangements.

Our participation in these efforts is generally accomplished via investments with the relevant government authority and/or various other strategic partnerships established to develop and/or operate the port facilities, by providing direct development and management expertise or in certain limited circumstances, by providing direct or indirect financial support.

Our participation in these efforts is most often accomplished via investments with the relevant government authority and/or various other strategic partnerships established to develop and/or operate the port facilities, by providing direct development and management expertise or in certain limited circumstances, by providing direct or indirect financial support.

In exchange for our involvement, we generally secure preferential berthing rights for our ships.

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Technology is a pervasive part of virtually every business process we use to support our strategic focus and provide a quality experience to our customers before, during and after their cruise.

Technology also plays a critical role in the measures and protocols that we have developed and will continue to develop to mitigate COVID-19 on our cruise ships.

Technology also plays a critical role in the

measures and protocols that we have developed and will continue to develop to mitigate COVID-19 on our cruise ships.

For example, through the deployment of our innovative electronic safety drill ("Muster 2.0") program, we have added convenience, allowed for physical distancing, and improved our guests experience regarding the mandatory safety briefing.

Additionally, through the in-app messaging technology we are enhancing guest check-in to support education, testing and screening information prior to embarkation, and to support onboard detection contingency scenarios and protocols, and most importantly promote the health and safety of guests and crew.

In past years, we have continued to integrate digital capabilities into our operations and have increased our focus in bringing in data analytics and artificial intelligence into our processes.

For example, we have continued the deployment of our innovative guest journey solutions across our fleet from online check-in to port embarkation to onboard cruise experience.

We have continued to integrate digital capabilities into our operations and have increased our focus in bringing in data analytics and artificial intelligence into our processes.

For example, we continue to develop tools to enhance our guests' digital experience and grow onboard revenue, by making it easier for our guests to plan and maximize their next vacation through our apps.

Also, we have continued the deployment of our innovative guest journey solutions across our fleet from online check-in to port embarkation to onboard cruise experience.

At the same time, we are investing in shipboard operational technology to facilitate casino play, hotel maintenance, as well as the optimization of marine maintenance.

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Cyber security and data privacy are an ongoing focus, and we have made and will continue to make investments to protect our customer data, intellectual property and global operations.

Travel agency support and consumer outreach

Travel agencies continue to be the primary source of ticket sales for our ships.

Travel advisor support and consumer outreach

Travel advisors continue to be a significant sourcing channel of ticket sales for our ships.

We believe in the value of this distribution channel and invest in maintaining strong relationships with our travel partners.

To accomplish this goal, we seek to ensure that our commission rates and incentive structures remain competitive with the marketplace.

We continuously work with travel agencies to sell upgrades and add-ons such as air and pre-cruise purchases to improve the retention and profitability of the channel.

To accomplish this goal, we seek to maintain competitive commission rates and incentive structures with the marketplace.

We continuously work with travel advisors to sell upgrades and add-ons such as air and pre-cruise purchases to improve the retention and profitability of the channel.

We provide brand dedicated sales representatives who serve as consultants to our travel partners.

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At the onset of the COVID-19 pandemic, we launched the RCL CARES program which provided dedicated financial guidance as travel advisors navigated government relief benefits, including small business loans and the Paycheck Protection Program.

During December 2020, we announced the Pay it Forward program which made available $40 million in the form of interest free commercial loans for qualifying travel agencies to begin their recovery efforts.

Our Pay it Forward program launched in February 2021.

As part of the RCL Cares program, we also launched our Pay it Forward program in February 2021, which made available interest free commercial loans for qualifying travel advisors to begin their recovery efforts.

In addition, we continue to operate our Consumer Outreach department, which provides consumers 24-hour access to our vacation planners and customer service agents in our call centers.

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We enable our guests to communicate and book with us through various channels such as phone, web, chat, text message, and/or email.

We also have an Onboard Cruise Sales department to help guests to book their next cruise vacations while onboard our ships.

We also have an Onboard Cruise Sales department to help guests book their next cruise vacations while onboard our ships.

Guest Services

We offer to handle virtually all travel aspects related to guest reservations and transportation, including arranging

guest pre- and post-hotel stay arrangements and air transportation.

Royal Caribbean International, Celebrity Cruises, Azamara and Silversea Cruises offer recognition and status upgrades to their guests through their loyalty programs, Crown & Anchor Society, Captain’s Club, Le Club Voyage and Venetian Society, respectively, to encourage repeat business.

We offer to handle virtually all travel aspects related to guest reservations and transportation, including arranging guest pre- and post-hotel stay arrangements and air transportation.

Royal Caribbean International, Celebrity Cruises and Silversea Cruises offer recognition and status upgrades to their guests through their loyalty programs, Crown & Anchor Society, Captain’s Club, and Venetian Society, respectively, to encourage repeat business.

Crown & Anchor Society has approximately 16.5 million members worldwide.

Captain’s Club, Le Club Voyage and Venetian Society have approximately 5.2 million members combined worldwide.

Captain’s Club and Venetian Society have approximately 5.1 million members combined worldwide.

Members are recognized through increasing membership status by accumulating cruise points or credits, depending on the brand, which may be redeemed on future sailings.

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In addition, upon achieving a certain level of cruise points or credits, members benefit from reciprocal membership benefits across all of our loyalty programs.

Examples of the benefits available under our loyalty programs include, but are not limited to, priority ship embarkation, priority waitlist for shore excursions, complimentary laundry service, complimentary Internet, booklets with onboard discount offers, upgraded bathroom amenities, private seating on the pool deck, ship tours and, in the case of our most loyal guests who have achieved the highest levels of cruise points or credits, complimentary cruise days.

Examples of the benefits available under our loyalty programs include, but are not limited to, priority ship embarkation, priority waitlist for shore excursions, complimentary laundry service,

complimentary Internet, booklets with onboard discount offers, upgraded bathroom amenities, private seating on the pool deck, ship tours and, in the case of our most loyal guests who have achieved the highest levels of cruise points or credits, complimentary cruise days.

We regularly work to enhance each of our loyalty programs by adding new features and amenities in order to reward our repeat guests.

Cruise Ships and Itineraries

As of December 31, 2020, our Global Brands and Partner Brands collectively operated 61 ships with a selection of worldwide itineraries that call on more than 1,000 destinations.

As of December 31, 2021, our Global Brands and Partner Brands collectively operated 61 ships with a selection of worldwide itineraries that call on approximately 1,000 destinations.

The following table presents summary information concerning ships that we expect will be in our fleet in 2022 under our Global Brands and Partner Brands.

The Azamara Pursuit, Azamara Quest and Azamara Journey are not listed due to the definitive agreement to sell the Azamara brand, announced on January 19, 2021 and expected to close in the first quarter of 2021.

Ship Year Ship

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Royal Caribbean International

Wonder of the Seas 2022 2022 5,700

Odyssey of the Seas 2021 2021 4,200

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Celebrity Cruises

Celebrity Beyond 2022 2022 3,250

Celebrity Apex 2020 2020 2,900

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Celebrity Reflection 2012 2012 3,050

Celebrity Silhouette 2011 2011 2,900

Ship Year Ship

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In Service or Delivered, if after 2021 (1)

Celebrity Silhouette 2011 2011 2,900

Celebrity Eclipse 2010 2010 2,850

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Silver Dawn (3)

2021 2022 600

Silver Origin 2020 2020 100

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(2) TUI Cruises' newbuild entered service as Mein Schiff 2 in February 2019 and the existing Mein Schiff 2 was renamed Mein Schiff Herz .

(3) Silver Dawn was delivered in 2021 and is expected to commence cruise revenue operations in the second quarter of 2022

As of December 31, 2021, our Global Brands and our Partner Brands have 12 ships on order.

Three ships on order are being built in Germany by Meyer Werft GmbH, four are being built in Finland by Meyer Turku shipyard, four are being built in France by Chantiers de l’Atlantique, three are being built in Italy by Fincantieri and one is being built in Norway by Vard Fincateieri.

COVID-19 has impacted shipyard operations which have and will continue to result in delays of our

previously contracted ship deliveries.

Two ships on order are being built in Germany by Meyer Werft GmbH, four are being built in Finland by Meyer Turku shipyard, four are being built in France by Chantiers de l’Atlantique and two are being built in Italy by Fincantieri.

As of December 31, 2021, the dates that the ships on order are expected to be delivered, subject to change in the event of construction delays, and their approximate berths are as follows:

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Unnamed Chantiers de l’Atlantique 2nd Quarter 2024 5,700

Quantum-class:

Odyssey of the Seas Meyer Werft 1st Quarter 2021 4,200

Unnamed Meyer Turku Oy 3rd Quarter 2023 5,600

Icon of the Seas Meyer Turku Oy 3rd Quarter 2023 5,600

Unnamed Meyer Turku Oy 2nd Quarter 2025 5,600

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Celebrity Beyond Chantiers de l’Atlantique 2nd Quarter 2022 3,250

Unnamed Chantiers de l’Atlantique 4th Quarter 2023 3,250

Celebrity Ascent Chantiers de l’Atlantique 4th Quarter 2023 3,250

Silversea Cruises —

Silver Dawn Fincantieri 4th Quarter 2021 550

Evolution-class:

Unnamed Meyer Werft 1st Quarter 2022 600

Unnamed Meyer Werft 1st Quarter 2023 600

Silver Nova Meyer Werft 2nd Quarter 2023 730

Unnamed Meyer Werft 2nd Quarter 2024 730

TUI Cruises (50% joint venture) —

Mein Schiff 7 Meyer Turku Oy 2nd Quarter 2024 2,900

Unnamed Fincantieri 3rd Quarter 2024 4,100

Unnamed Fincantieri 1st Quarter 2026 4,100

Hapag-Lloyd Cruises (50% joint venture) —

Hanseatic Spirit Vard Fincantieri

2nd Quarter 2021 230

Unnamed Fincantieri 4th Quarter 2024 4,100

Unnamed Fincantieri 2nd Quarter 2026 4,100

Total Berths 47,260

__________________________________________________________________

(1) The revenue impact from Silversea Cruises' new ships will be recognized on a three month reporting lag from when the ships enter service.

Refer to Note 1 .

General to our consolidated financial statements under Item 8.

Financial Statements and Supplementary Data for further information.

In addition, as of December 31, 2020, we have an agreement in place with Chantiers de l’Atlantique to build an additional Edge-class ship for delivery in 2025, which is contingent upon completion of conditions precedent and financing.

In addition, we have an agreement in place with Chantiers de l’Atlantique to build an additional Edge-class ship for delivery in 2025, which is contingent upon completion of conditions precedent and financing.

Our revenues have historically been seasonal based on the demand for cruises.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations , for definitions).

Passengers Carried, Passenger Cruise Days, Available Passenger Cruise Days and Occupancy reflect the impact of our 2020 suspension of operations due to the COVID-19

Passengers Carried, Passenger Cruise Days, Available Passenger Cruise Days and Occupancy reflect the impact of our suspension of operations during parts of 2020 and 2021 due to the COVID-19 pandemic and the gradual resumption of operations during the second half of 2021:

Year Ended December 31, (3)

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___________________________________________________________________

(1) As a result of the three-month reporting lag, we included Silversea Cruises' results of operations from October 1, 2019 through September 30, 2020 for the twelve months ended December 31, 2020, and from October 1, 2018 through September 30, 2019 for the twelve months ended December 31, 2019, respectively.

(1) Due to the elimination of the Silversea Cruises three-month reporting lag in October of 2021, we include Silversea Cruises' metrics from October 1, 2020 through June 30, 2021 and October 1 through December 31, 2021 in the year ended December 31, 2021.

The year ended December 31, 2021 does not include July, August, and September 2021 statistics as Silversea Cruises' results of operations for those months are included within Other (expense) income in our consolidated statements of comprehensive loss for the year ended December 31, 2021.

Refer to Note 1.

General and Note 11 .

Redeemable Noncontrolling Interest to our consolidated financial statements under Item 8.

Financial Statements and Supplementary Data for more information on the three-month reporting lag and the Silversea Cruises acquisition.

(2) We acquired a controlling interest in Silversea Cruises on July 31, 2018 and report their results on a three-month reporting lag.

As a result, these amounts include only August and September 2018 amounts for Silversea Cruises.

General to our consolidated financial statements under Item 8.

Financial Statements and Supplementary Data for more information on the three-month reporting lag.

(2) Due to the three-month reporting lag effective through September 30, 2021, we include Silversea Cruises' metrics from October 1, 2019 through September 30, 2020 in the year ended December 31, 2020, from October 1, 2018 through September 30, 2019 in the year ended December 31, 2019, and from August 1, 2018 through September 30, 2018 in the year ended December 31, 2018.

(3) For the year ended December, 31, 2021, we include Azamara Cruises' metrics through March 19, 2021, the effective sale date of the brand.

Refer to Note 1.

General and Note 11 .

Redeemable Noncontrolling Interest to our consolidated financial statements under Item 8.

Financial Statements and Supplementary Data for more information on the three-month reporting lag and the Silversea Cruises acquisition.

(3) These amounts do not include November and December 2015 amounts for Pullmantur as the net Pullmantur result for those months was included within Other expense in our consolidated statements of comprehensive income (loss) for the year ended December 31, 2016, as a result of the elimination of the Pullmantur two-month reporting lag, and did not affect Gross Yields, Net Yields, Gross Cruise Costs, Net Cruise Costs and Net Cruise Costs Excluding Fuel.

Additionally, effective August 2016, following the sale of our 51% interest in Pullmantur Holdings, we no longer include Pullmantur in these amounts.

General to our consolidated financial statements under Item 8.

Financial Statements and Supplementary Data for more information on the sale of the Azamara Cruises brand.

Cruise Pricing

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Prices vary depending on many factors including the destination, cruise length, stateroom category selected and the time of year the cruise takes place.

Soon after our initial suspension of operations due to the occurrence of COVID-19, we established flexible cruise pricing programs (i.e.

Cruise with Confidence, Best Price Guarantee and all-inclusive pricing) that present our guests with options and value as we anticipate our return to service.

In response to COVID-19, we established flexible cruise pricing programs (i.e.

Cruise with Confidence, Best Price Guarantee and all-inclusive pricing) that present our guests with options and value.

Although we grant credit terms in select markets mainly outside of the United States, our payment terms generally require an upfront deposit to confirm a reservation, with the balance due prior to the sailing.

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During the selling period of a cruise, we continually monitor and adjust our cruise ticket prices for available guest staterooms based on demand, with the objective of maximizing net yields.

As our business has grown globally, our sale arrangements with travel agents may vary.

For instance, although our direct business has historically grown at a rapid pace, sale arrangements through travel agent charter and group sales are proportionately higher in the China market than in our other markets which are primarily through retail agency and direct sales.

As our business has grown globally, our sale arrangements with travel advisors may vary.

For instance, although our direct business has historically grown at a rapid pace, sale arrangements through travel advisor charter and group sales are proportionately higher in the China market than in our other markets which are primarily through retail agency and direct sales.

We have developed and implemented enhancements to our reservations system that provide us and our travel partners with additional capabilities, making it easier to do business with us.

For example, we offer air transportation to our guests through our air transportation program available in major cities around the world.

Passenger ticket revenues accounted for approximately 68% of total revenues in 2020, and 72% of total revenues in 2019 and 2018.

Passenger ticket revenues accounted for approximately 61%, 68% and 72% of total revenues in 2021, 2020 and 2019, respectively.

Onboard Activities and Other Revenues

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The all-inclusive pricing programs that we offer currently, add some of these onboard activity and other services to the base price of the cruise.

In conjunction with our cruise vacations, we offer pre- and post-cruise hotel packages to our Royal Caribbean International, Celebrity Cruises, Azamara and Silversea Cruises guests.

In conjunction with our cruise vacations, we offer pre- and post-cruise hotel packages to our Royal Caribbean International, Celebrity Cruises and Silversea Cruises guests.

We also offer cruise vacation protection coverage to guests in a number of markets, which provides guests with coverage for trip cancellation, medical protection and baggage protection.

Onboard and other revenues accounted for approximately 32% of total revenues in 2020, and 28% of total revenues in 2019 and 2018.

Onboard and other revenues accounted for approximately 39%, 32% and 28% of total revenues in 2021, 2020 and 2019, respectively.

Segment Reporting

We control and operate four cruise brands, Royal Caribbean International, Celebrity Cruises, Azamara, and Silversea Cruises.

We control and operate three cruise brands, Royal Caribbean International, Celebrity Cruises, and Silversea Cruises.

In addition, we have a 50% joint venture interest in TUIC, our 50%-owned joint venture that operates the German brands TUI Cruises and Hapag-Lloyd Cruises.

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As a result, our brands have been aggregated as a single reportable segment based on the similarity of their economic characteristics, types of consumers, regulatory environment, maintenance requirements, supporting systems and processes as well as products and services provided.

Our Chairman and Chief Executive Officer has been identified as the chief operating decision-maker and all significant operating decisions including the allocation of resources are based upon the analyses of the Company as one segment.

Our President and Chief Executive Officer has been identified as the chief operating decision-maker and all significant operating decisions including the allocation of resources are based upon the analyses of the Company as one segment.

( For financial information, see Item 8.

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Human Capital

Our human capital strategies are continually evolving to provide a rewarding and fulfilling employee experience.

Our human capital strategy focuses on attracting, developing and retaining the best talent in the industry.

Some key elements of these strategies include:

assessing current and future talent needs;

a diverse and inclusive workforce;

opportunities for employee growth and development;

robust opportunities for employee growth and development;

support for health and well-being;

and an active listening strategy to make sure voices are heard in order to facilitate continuous improvement.

As of December 31, 2020, our four global cruise brands, Royal Caribbean International, Celebrity Cruises, Azamara, and Silversea Cruises, employed approximately 85,000 employees.

Our shoreside workforce, including employees who work at our private destinations, consisted of approximately 6,900 full time and 100 part-time employees.

Our shipboard workforce consisted of 78,000 employees, and as of December 31, 2020, approximately 89% of our shipboard employees were covered by collective bargaining agreements.

Due to the pause in our cruise operations in 2020, we repatriated the majority of our shipboard employees to their home countries, and as a result, we ended the year with approximately 87% less employees onboard our ships compared with 2019.

and an active listening strategy to make sure voices are heard and continuous improvement occurs.

We review our human capital metrics and our diversity equity and inclusion (DEI) program with the Talent and Compensation Committee of our Board of Directors on an annual basis.

As of December 31, 2021, our three global cruise brands, Royal Caribbean International, Celebrity Cruises, and Silversea Cruises, employed approximately 85,000 employees spanning across our shipboard fleet and shoreside locations.

Our shoreside workforce, including private destinations, consisted of approximately 7,600 full time and 100 part-time employees.

Our shipboard workforce consisted of 77,000 employees, and as of December 31, 2021, approximately 86% were covered by collective bargaining agreements.

The following table details the distribution of our workforce by employee type and region as of December 31, 2021:

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(2) Private Destinations includes Coco Cay, Labadee and Galapagos based employees.

As a global operation, we take great pride in the broad diversity of our workforce and the value that it brings to our company.

As a global operation, we take great pride in the broad diversity of our workforce and the value it brings to our company.

Our shoreside workforce is gender diverse with 53% female representation.

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(62%), Philippines (17%), U.K.

(5%) and China (4%).

(5%), Mexico (5%), and China (3%).

The following table details the gender distribution of our workforce by employee location as of December 31, 2021:

Employee Location Male Female Unidentified

Employee Location Male Female

Shoreside - U.S.

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Shipboard 78% 22%

shoreside workforce is ethnically diverse with 54% of our employees comprised of non-White ethnic groups.

shoreside workforce is ethnically diverse with 54% comprised of non-White ethnic groups.

Shoreside Representation by Ethnicity % of Total U.S.

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African American 11%

(1) American Indians and Pacific Islanders make up approximately 1% of our U.S.

shoreside population.

In addition, we offer a variety of learning and development programs to our workforce which includes a combination of instructor led (classroom and virtual) and web based (self-learning) courses.

In 2020, our workforce spent approximately 1 million hours in training across a variety of areas ranging from Ethics, Compliance, Data Analysis, Business Software and Tools, Finance/Accounting, Professional Development, Project Management Skills, Leadership and Safety/Security.

(1) Others category is greater than 0% but less than 1%.

We offer a variety of learning and development programs to our workforce which includes a combination of instructor led (classroom and virtual) and web based (self-learning) courses.

In 2021, our workforce invested approximately 620,000 hours in learning programs across a variety of areas ranging from Ethics, Compliance, Data Analysis, Business Software and Tools, Finance/Accounting, Professional development, Project Management skills, Leadership and Safety/Security.

In total, our workforce completed over 400,000 courses within our learning management systems.

The Company has created a 24/7 care platform provided at no-cost that allows for employees and their families to get confidential assistance with stress management, relationships, financial concerns or legal concerns.

Through this assistance program, we offer:

• Short-term Professional Counseling - providing support for personal and emotional issues through telephone, video or in-person sessions.

• Family Support Services - connecting our employees with advisors that can provide them resources to assist with family planning, parenting, childcare, eldercare, home care support and more.

• Legal Support Services - providing general guidance and referrals to professionals to answer legal questions surrounding divorce, custody, adoption, real estate, debt, bankruptcy, landlord/tenant issues, and more.

• Financial Support Services - providing general guidance and referrals to professionals to answer financial questions about budgeting, debt management, tax issues, and more.

• LifeWorks Digital Wellbeing Website - granting access to an online platform containing hundreds of articles, resources, webinars and tools to help employees better manage overall well-being.

Further, our Disaster Relief program provides emergency funding to employees who have been directly impacted by natural disasters.

All shipboard and shoreside employees are eligible for assistance from this fund.

Finally, COVID-19 has had and continues to have a tremendous impact on our business.

During 2020, our offices closed and our crew were repatriated off our ships to their home countries.

In response, we ramped up our listening strategy through frequent pulse surveys to understand our employees' needs and concerns and help them navigate the crisis.

We continue to run our pulse surveys every quarter to understand and positively impact our employees’ experience.

In 2020, our shoreside employee engagement scores remained high and were higher than the prior 3-year average.

During 2021, we also coached over 500 leaders across our shipboard and shoreside populations (421 Shipboard;

110 Shoreside), as part of our plans for a healthy return to service.

During 2021, we focused on our global healthy return to sailing and on bringing our crew back on board our ships.

As part of our healthy return to sailing, we determined to establish a highly vaccinated environment.

We returned 37,000 crew from various countries and made vaccines available to all returning crew members through partnerships with various world governments.

By the end of 2021, we operated 85% of our fleet's capacity, with 100% vaccinated crew back on board.

In the third quarter of 2021, we welcomed our shoreside employees back to our headquarters in Miami and other locations around the world.

Employees returned to our offices with robust protocols that promote their health and safety.

We continue to run our employee pulse surveys every quarter to understand and positively impact our employees’ experience.

In 2021, our shoreside employee engagement scores remained high and above most global industry benchmarks.

We maintain insurance on the hull and machinery of our ships, with insured values generally equal to the net book value of each ship.

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Consistent with most marine war risk policies, our coverage is subject to cancellation in the event of a change in risk.

In the event of a war between major powers, our primary policies terminate after thirty days’ notice and our excess policies terminate immediately.

In the event of a war between major powers, our primary policies terminate after thirty days’

notice and our excess policies terminate immediately.

Our excess policies are also subject to cancellation after a notice period of seven days in the event of other changes in risk.

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No assurance can be given that affordable and secure insurance markets will be available to us in the future, particularly for war risk insurance.

We own a number of registered trademarks related to the Royal Caribbean International, Celebrity Cruises, Azamara and Silversea Cruises cruise brands.

The registered trademarks include the name “Royal Caribbean International” and its crown and anchor logo, the name “Celebrity Cruises” and its “X” logo, the name “Azamara” and its "open world" and "star logo", the name “Silversea Cruises” and its logo, and the names of various cruise ships, ship venues and other marketing programs.

We own a number of registered trademarks related to the Royal Caribbean International, Celebrity Cruises and Silversea Cruises cruise brands.

The registered trademarks include the name “Royal Caribbean International” and its crown and anchor logo, the name “Celebrity Cruises” and its “X” logo, the name “Silversea Cruises” and its logo, and the names of various cruise ships, ship venues and other marketing programs.

We believe our largest brands' trademarks are widely recognized throughout the world and have considerable value.

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Health, safety, security, environmental and financial responsibility issues are, and we believe will continue to be, an area of focus by the relevant government authorities in the United States and internationally.

From time to time, various regulatory and legislative changes may be proposed that could impact our operations and subject us to increasing compliance costs in the future.

CDC Framework for Conditional Sailing Order

On and effective as of October 30, 2020, the CDC issued a Framework for Conditional Sailing Order (the “Conditional Order”) that will conditionally permit cruise ship passenger operations in U.S.

waters under certain conditions and using a phased approach.

All phases listed below are outlined in the Conditional Order;

however, only the first phase listed is detailed in the Conditional Order.

The remaining phases are currently pending approval by the CDC for distribution to all cruise lines prior to being detailed in the CDC's Phase 2 Technical Instructions.

• Establishment of laboratory testing of crew and guests onboard cruise ships in U.S.

waters and upon embarkation and disembarkation;

• Simulated voyages designed to test a cruise ship operators’ ability to mitigate COVID-19 on cruise ships;

• Meeting and maintaining requirements for a Conditional Sailing Certificate, which include, among other things, implementing the required testing protocols, a prohibition on offering itineraries longer than seven days, and the demonstration at each port where a ship intends to dock of approval with U.S.

port and local health authorities, which requires medical care agreements addressing evacuation to onshore hospitals, housing agreements with onshore facilities for isolation and quarantine of COVID-19 cases, and port agreements to limit the number of cruise ships at any single port;

• A return to passenger voyages in a manner that mitigates the risk of COVID-19 introduction, transmission, or spread among passengers and crew onboard ships and ashore to communities.

We are working with both the CDC and the HSP, to implement the requirements of the Conditional Order and establish a comprehensive set of health and safety measures at every step of the guest journey with rigorous protocols.

We are also designing itineraries where we will be able to control the vacation experience in compliance with the health and safety protocols contained in the Conditional Order.

Further, the Conditional Order contemplates that the CDC may issue additional requirements through technical instructions or orders as needed and that the phases described above will be further determined based on public health considerations, including the trajectory of the pandemic and the ability of cruise ships operators to successfully employ measures that mitigate the risk of COVID-19.

Our resumption of operations will include a staggered return of the fleet to service which will include:

• Bringing the fleet from layup status to fully operational;

• Bringing crew back to an appropriate staffing level and expected reduced load factors for a period of time;

• Implementation of the health and safety protocols on ships as they resume operations.

We are also reviewing and assessing the uncertainties relating to the Conditional Order’s requirements.

Based on our assessment of these conditions or for other reasons, we may determine it necessary to further extend our voluntary suspension of our Global Brands’ cruise sailings.

From time to time, various regulatory and legislative changes may be implemented that could impact our operations and subject us to increasing compliance costs in the future.

CDC COVID-19 Program for Cruise Ships Operating in U.S.

Beginning in October 2020, our ships home porting or calling in U.S.

ports operated under a Framework for Conditional Sailing Order (“CSO”) issued by the U.S.

Centers for Disease Control and Prevention ("CDC") that permitted cruise ship passenger operations in U.S.

waters subject to certain conditions and safety protocols.

The CSO, which had been modified over time, expired on January 15, 2022.

On February 9, 2022, the CDC published a COVID-19 program (the “Program”) for cruise vessels sailing in U.S.

Under the Program, persons traveling on cruise ships designated as “Highly Vaccinated” do not have to wear a mask in any areas onboard and are not subject to physical distancing protocols.

Cruise lines may opt into the Program on a voluntary basis Cruise lines may also opt out at any time.

We have voluntarily opted-in to the CDC’s Program beginning with sailings departing on or after February 25, 2022, and have designated all ships across our brands as “Highly Vaccinated” vessels.

Going forward, the CDC may issue additional recommendations or requirements through technical instructions to the Program.

We plan to continue to monitor and evaluate any further CDC guidance based on our assessment of then-current epidemiological conditions, and applicable health and safety protocols.

Safety and Security Regulations

Our ships are required to comply with international safety standards defined in the International Convention for Safety of Life at Sea (“SOLAS”), which, among other things, establishes requirements for ship design, structural features, materials, construction, lifesaving equipment and safe management and operation of ships to ensure guest and crew safety.

Our ships are required to comply with international safety standards defined in the International Convention for Safety of Life at Sea (“SOLAS”), which, among other things, establish requirements for ship design, structural features, materials, construction, lifesaving equipment and safe management and operation of ships for guest and crew safety.

The SOLAS standards are revised from time to time and incorporated in our ship design and operation, as applicable.

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The MARPOL Regulations imposed reduced global limitations on the sulfur content of emissions emitted by ships operating worldwide to 0.5% as of January 1, 2020, which was reduced from 3.5%.

We do not expect that this increased limitation will have a material impact to our results of operations largely due to a number of mitigating steps we have taken over the last several years, including equipping all of our new ships delivered during or after 2014 with advanced emissions purification ("AEP") systems covering all engines and actively developing and installing AEP systems on the majority of our remaining fleet.

As we continue our gradual resumption of operations, we do not expect for this increased limitation to have a material impact to our results of operations largely due to a number of mitigating steps we have taken over the last several years, including equipping all of our new ships delivered during or after 2014 with Advanced Emissions Purification ("AEP") systems covering all engines and actively developing and installing AEP systems on the majority of our remaining fleet resulting in 70% of our fleet being equipped with AEP systems.

The MARPOL Regulations also establish special Emission Control Areas ("ECAs") with additional stringent limitations on sulfur emissions in these areas.

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Virgin Islands (the "Caribbean ECA").

Ships operating in these sulfur ECAs have been required to reduce their emissions sulfur content to 0.1%.

Ships operating in these sulfur ECAs have been required to

reduce their emissions sulfur content to 0.1%.

This reduction has not had a significant impact on our results of operations to date due to the mitigating steps described above.

We continue to implement our AEP system strategy for both our ships on order and our existing fleet.

As our new ships are delivered and additional existing ships are retrofitted with AEP systems, they will provide us with additional operational and deployment flexibility.

As our new ships are delivered with AEP systems, or other mitigating technologies (Liquified Natural Gas ("LNG") fuels, fuel cells, etc.), and additional existing ships are retrofitted with AEP systems, they will provide us with additional operational and deployment flexibility.

Additionally, all new ships operating within the North American and U.S.

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The rules have not had and are not expected to have a significant impact to our operations or costs.

Recently IMO approved draft amendments to the MARPOL convention that will require ships to combine a technical and an operational approach (Energy Efficiency Existing Ship Index and Carbon Intensity Indicator) to reduce their carbon intensity in line with the ambition of the Initial IMO GHG Strategy, which aims to reduce carbon intensity of international shipping by 40% by 2030, compared to 2008.

While there is still a considerable amount of work ahead before these amendments can be implemented, we believe the amendments could have a material impact depending on the technical and operational approaches used (such as speed optimization, engine power reduction, etc.).

In November of 2020, IMO approved amendments to the MARPOL convention that will require ships, beginning in 2023, to combine a technical and an operational approach (Energy Efficiency Existing Ship Index ("EEXI") and Carbon Intensity Indicator ("CII")) to reduce their carbon intensity in line with the ambition of the Initial IMO GHG Strategy which aims to reduce carbon intensity of international shipping by 40% by 2030, compared to 2008.

While there is still work to be completed ahead of these amendments being implemented, the approved framework for the EEXI amendment is not expected to have a material impact on our operations.

However, the framework for CII could have a negative impact on our itinerary flexibility for certain of our ships depending on the final operational measures needed to comply.

Effective July 1, 2015, the European Commission adopted legislation that requires cruise ship operators with ships visiting ports in the European Union to monitor and report on the ship’s annual carbon dioxide emissions starting in 2018.

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While compliance with these regulations did not materially impact our costs or results of operations, the legislations contemplate further obligations and restrictions which could ultimately result in additional costs or charges associated with carbon dioxide emissions.

The IMO Ballast Water Management Convention, which came in effect in 2017, requires ships that carry and discharge ballast water to meet specific discharge standards by installing Ballast Water Treatment Systems by 2023.

The IMO Ballast Water Management Convention, which came into effect in 2017, requires ships that carry and discharge ballast water to meet specific discharge standards by installing Ballast Water Treatment Systems by 2023.

Compliance with this regulation has not had a material effect on our results of operations and we do not expect the continuing compliance with this regulation to have a material effect on our results of operations.

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In addition to or instead of income taxation, virtually all jurisdictions where our ships call impose some tax or fee, or both, based on guest headcount, tonnage or some other measure.

We also collect and remit value added tax (VAT) or sales tax in many jurisdictions where we operate.

We also collect and remit value added tax (VAT) or sales tax in many jurisdictions where

Our consolidated operations are primarily foreign corporations engaged in the owning and operating of passenger cruise ships in international transportation.

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Application of Section 883 of the Internal Revenue Code

We, Celebrity Cruises, Inc.

Royal Caribbean Cruises Ltd., Celebrity Cruises, Inc.

and Silversea Cruises Ltd.

are engaged in a trade or business in the United States, and many of our ship-owning subsidiaries, depending upon the itineraries of their ships, receive income from sources within the United States.

Additionally, our United Kingdom tonnage tax company is a ship-operating company classified as a disregarded entity for U.S.

Silversea Cruises Ltd.

and our United Kingdom tonnage tax company are classified as disregarded entities, or divisions for U.S.

federal income tax purposes that may earn U.S.

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(1) the foreign country in which the foreign corporation is organized grants an equivalent exemption to corporations organized in the United States;

and (2) the stock of the corporation (or the direct or indirect corporate parent thereof) is “primarily and regularly traded on an

established securities market” in the United States.

and (2) the stock of the corporation (or the direct or indirect corporate parent thereof) is “primarily and regularly traded on an established securities market” in the United States.

In the opinion of our U.S.

tax counsel, Faegre Drinker Biddle & Reath LLP, based on the representations and assumptions set forth in that opinion, we, Celebrity Cruises Inc., Silversea Cruises Ltd.

and relevant ship-owning subsidiaries with U.S.

source shipping income qualify for the benefits of Section 883 because we and each of those subsidiaries are incorporated in Liberia or Bahamas, which are qualifying countries, and our common stock is primarily and regularly traded on an established securities market in the United States (i.e., we are a "publicly traded" corporation).

If, in the future, (1) Liberia or Bahamas no longer qualify as equivalent exemption jurisdictions, and we do not reincorporate in a jurisdiction that does qualify for the exemption, or (2) we fail to qualify as a publicly traded corporation, we and all of our ship-owning or operating subsidiaries that rely on Section 883 to exclude qualifying income from gross income would be subject to U.S.

tax counsel, Faegre Drinker Biddle & Reath LLP, based on the representations and assumptions set forth in that opinion, Royal Caribbean Cruises Ltd., including Silversea Cruises Ltd., Celebrity Cruises Inc., and relevant ship-owning subsidiaries with U.S.

source shipping income qualify for the benefits of Section 883 because Royal Caribbean Cruises Ltd.

and each of those subsidiaries are incorporated in Liberia, which is a qualifying country, and our common stock is primarily and regularly traded on an established securities market in the United States (i.e., we are a “publicly traded” corporation).

If, in the future, (1) Liberia no longer qualifies as an equivalent exemption jurisdiction, and we do not reincorporate in a jurisdiction that does qualify for the exemption, or (2) we fail to qualify as a publicly traded corporation, we and all of our ship-owning or operating subsidiaries that rely on Section 883 to exclude qualifying income from gross income would be subject to U.S.

federal income tax on their U.S.

source shipping income and income from activities incidental thereto.

We believe that most of our income and the income of our ship-owning subsidiaries, including our U.K.

tonnage tax company which is considered a division for U.S.

tax purposes, is derived from or incidental to the international operation of a ship or ships and, therefore, is exempt from taxation under Section 883.

We believe that most of our income and the income of our ship-owning subsidiaries, is derived from or incidental to the international operation of a ship or ships and, therefore, is exempt from taxation under Section 883.

Regulations under Section 883 list activities that are not considered by the Internal Revenue Service to be incidental to the international operation of ships including the sale of air and land transportation, shore excursions and pre- and post-cruise tours.

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Taxation in the Absence of an Exemption Under Section 883

If we, the operator of our vessels, Celebrity Cruises Inc., Silversea Cruises Ltd., or our ship-owning subsidiaries were to fail to meet the requirements of Section 883 of the Internal Revenue Code, or if the provision was repealed, then, as explained below, such companies would be subject to U.S.

If Royal Caribbean Cruises Ltd., the operator of our vessels, Celebrity Cruises Inc., or our ship-owning subsidiaries were to fail to meet the requirements of Section 883 of the Internal Revenue Code, or if the provision was repealed, then, as explained below, such companies would be subject to U.S.

income taxation on a portion of their income derived from or incidental to the international operation of our ships.

Because we, Celebrity Cruises Inc.

and Silversea Cruises Ltd.

conduct a trade or business in the United States, we, Celebrity Cruises Inc.

and Silversea Cruises Ltd.

Because Royal Caribbean Cruises Ltd.

and Celebrity Cruises Inc.

conduct a trade or business in the United States, Royal Caribbean Cruises Ltd., including Silversea Cruises Ltd., and Celebrity Cruises Inc.

would be taxable at regular corporate rates on our separate company taxable income (i.e., without regard to the income of our ship-owning subsidiaries) on income which is effectively connected with our U.S.

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trade or business, those withdrawn amounts would be subject to a “branch profits” tax at the rate of 30%.

We, Celebrity Cruises Inc.

and Silversea Cruises Ltd.

Royal Caribbean Cruises Ltd., which includes Silversea Cruises Ltd.

for tax purposes, and Celebrity Cruises Inc.

would also be potentially subject to tax on portions of certain interest paid by us at rates of up to 30%.

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Other United States Taxation

We, Celebrity Cruises Inc.

and Silversea Cruises Ltd.

Royal Caribbean Cruises Ltd., which includes Silversea Cruises Ltd., and Celebrity Cruises Inc.

source income from activities not considered incidental to international shipping.

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State Taxation

We, Celebrity Cruises Inc., Silversea Cruises Ltd.

and certain of our subsidiaries are subject to various U.S.

Royal Caribbean Cruises Ltd., Celebrity Cruises Inc., and certain of our subsidiaries are subject to various U.S.

state income taxes which are generally imposed on each state’s portion of the U.S.

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This did not have a material impact to our results of operations for all years presented.

Maltese and Spanish Income Taxation

Effective July 31, 2016, we sold 51% of our interest in Pullmantur Holdings S.L.

("Pullmantur Holdings"), the parent company of the Pullmantur brand.

We account for our retained investment under the equity method of accounting.

There was no tax impact to us as a result of this sale transaction.

The Pullmantur group continues to be subject to the tax laws of Spain and Malta, among others.

Under the sale agreement, we remain responsible for pre-sale tax matters with respect to years that are still open under the statute of limitations.

United Kingdom Income Taxation

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corporate income tax.

Chinese Taxation

tonnage tax company operates ships in international transportation in China.

The income earned from this operation is exempt from taxation in China under the U.K./China double tax treaty and other circulars addressing indirect taxes.

Changes to or failure to qualify for the treaty or circular could cause us to lose the benefits provided which would have a material impact on our results of operations.

Our Chinese income from non-shipping activities or from shipping activities not qualifying for treaty or circular protection and which are considered insignificant, remain subject to Chinese taxation.

Other Taxation

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Website Access to Reports

We make available, free of charge, access to our Annual Reports, all quarterly and current reports and all amendments to those reports, as soon as reasonably practicable after such reports are electronically filed with or furnished to the Securities and Exchange Commission through our website at www.rclcorporate.com .

The information contained on our website is not a part of any of these reports and is not incorporated by reference herein.

Information About our Executive Officers

As of February 26, 2021, our executive officers are:

As of March 1, 2022, our executive officers are:

Name Age Position

Fain 73 Chairman, Chief Executive Officer and Director

Liberty 45 Executive Vice President, Chief Financial Officer

Liberty 46 President and Chief Executive Officer

Naftali Holtz 44 Chief Financial Officer

Bayley 63 President and Chief Executive Officer, Royal Caribbean International

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Kulovaara 69 Executive Vice President, Maritime

Stein 65 Senior Vice President, General Counsel, Chief Compliance Officer

Laura Hodges Bethge 47 Executive Vice President, Shared Services Operations

Alexander Lake 50 Senior Vice President, Chief Legal Officer and Secretary

Pujol 54 Senior Vice President, Chief Accounting Officer

Naftali Holtz 43 Senior Vice President, Finance

Fain has served as a director since 1981 and as our Chairman and Chief Executive Officer since 1988.

Fain is a recognized industry leader, having participated in shipping for over 40 years and having held a number of prominent industry positions, such as Chairman of the Cruise Lines International Association (CLIA), the largest cruise industry trade association.

He currently serves on the University of Miami Board of Trustees as well as the National Board of the Posse Foundation.

He is former chairman of the University of Miami Board of Trustees, Miami Business Forum, the Greater Miami Convention and Visitors Bureau, and the United Way of Miami-Dade.

Liberty has been employed by the Company since 2005 and has served as Executive Vice President and Chief Financial Officer since February 2017.

From May 2013 to February 2017, he served as Senior Vice President and Chief Financial Officer.

Since February 2017, Mr.

Liberty has overseen the Company’s Treasury, Accounting, Corporate, Strategic and Revenue Planning, Corporate Development, Deployment, Internal Audit and Investor Relations

Since May 2018, in addition to the above functions, he has also overseen the Company’s Information Technology, Supply Chain, Risk Management, Legal and Port Operations functions.

Liberty has overseen our Silversea Cruises investment since 2019.

Prior to his role as Chief Financial Officer, Mr.

Liberty served as Senior Vice President, Strategy and Finance from September 2012 through May 2013, overseeing the Company’s Corporate and Strategic Planning, Treasury, Investor Relations and Deployment functions.

Prior to this, Mr.

Liberty served, from 2010 through 2012, as Vice President of Corporate and Revenue Planning and, from 2008 to 2010, as Vice President of Corporate and Strategic Planning.

Liberty has served as President and Chief Executive Officer since January 2022.

Liberty has held several roles since joining the Company in 2005.

Most recently, Mr.

Liberty served as Executive Vice President and Chief Financial Officer since 2017 and, prior to that, as Senior Vice President and Chief Financial Officer since 2013.

Before his role as Chief Financial Officer, Mr.

Liberty served as Senior Vice President, Strategy and Finance from 2012 through 2013;

as Vice President of Corporate and Revenue Planning from 2010 through 2012;

and as Vice President of Corporate and Strategic Planning from 2008 to 2010.

Before joining Royal Caribbean, Mr.

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Liberty currently serves on the Board of Directors of WNS Holdings.

Naftali Holtz has served as Chief Financial Officer since January 2022.

In his role as Chief Financial Officer, Mr.

Holtz is responsible for overseeing the company’s financial planning and analysis, corporate strategy, treasury, corporate tax matters, investor relations, investments, internal audit, accounting and financial reporting.

Prior to his role as Chief Financial Officer, Mr.

Holtz served as senior vice president of finance, responsible for financial planning and analysis, risk management and treasury.

Holtz worked for Goldman Sachs as a managing director and head of lodging and leisure investment banking before joining Royal Caribbean Group in 2019.

Holtz is also a veteran of the Israeli Air Force.

Bayley has served as President and Chief Executive Officer of Royal Caribbean International since December 2014.

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Kulovaara is a naval architect and engineer.

Stein has served as General Counsel and Corporate Secretary of the Company since 2006.

He has also served as Senior Vice President and Chief Compliance Officer of the Company since February 2009 and February 2011, respectively.

Stein has been with Royal Caribbean since 1992.

Before joining Royal Caribbean, Mr.

Stein worked in private practice in New York and Miami.

Laura Hodges Bethge has served as Executive Vice President of Shared Services Operations since February 2022, where she is responsible for overseeing the Company’s safety, security and environment, risk management, supply chain, port operations, travel services, workplace solutions, and crew movement teams.

She joined the Company in 2000 to lead the fleet accessibility program for Royal Caribbean and Celebrity Cruises, and she has since held several leadership roles within various areas of the business.

Most recently, she served as Senior Vice President of Shared Services Operations from December 2020 to February 2022.

Prior to that role, she served as Senior Vice President of Product Development for Royal Caribbean International from February 2020 to December 2020;

Vice President of Customer Experience from April 2017 to February 2020;

and Vice President of Market Development for China from October 2016 to April 2017.

Alexander Lake has served as Chief Legal Officer and Secretary of the Company since June 2021, in which role he has global responsibility for the Company's legal and compliance functions.

Lake joined the Company from World Fuel Services Corporation, a global energy services company, where he spent over 17 years leading the legal, regulatory and compliance areas, serving most recently as Executive Vice President, Chief Legal Officer and Corporate Secretary from 2017 to 2021.

Prior to World Fuel Services, Mr.

Lake served as Assistant General Counsel at America Online Latin America, Inc.

and practiced as a corporate lawyer in leading law firms in New York and Miami.

Pujol has served as Senior Vice President, Chief Accounting Officer of the Company since May 2013.

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Pujol was a Senior Manager at the international public accounting firm of KPMG LLP.

Naftali Holtz has served as Senior Vice President, Finance of the Royal Caribbean since 2019.

Before joining Royal Caribbean, Mr.

Holtz worked in investment banking at Goldman Sachs and was most recently Managing Director, Head of Lodging and Leisure Investment Banking.

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.

What changed 10-K

Item 1. Business