What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-05 compared with 2021-10-29 · 204 added, 386 removed, 171 unchanged (78% of the section changed)

3 unchanged sentences

All statements other than statements of historical fact, business and industry prospects or future results of operations or financial position, made in this Quarterly Report on Form 10-Q are forward-looking.

Words such as "anticipate," "believe," "could," "driving," "estimate," "expect," "goal," "intend," "may," "plan," "project," "seek," "should," "will," "would," "considering" and similar expressions are intended to further identify any of these forward-looking statements.

Words such as "anticipate," "believe," "considering," "could," "driving," "estimate," "expect," "goal," "intend," "may," "plan," "project," "seek," "should," "will," "would," and similar expressions are intended to further identify any of these forward-looking statements.

Forward-looking statements reflect management's current expectations but they are based on judgments and are inherently uncertain.

Furthermore, they are subject to risks, uncertainties and other factors that could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements.

Examples of these risks, uncertainties and other factors include, but are not limited to, those discussed in this Quarterly Report on Form 10-Q and, in particular, the risks discussed under the caption "Risk Factors" in Part II., Item 1A.

All forward-looking statements made in this Quarterly Report on Form 10-Q speak only as of the date of this filing.

3 unchanged sentences

• a review of our financial presentation, including discussion of certain operational and financial metrics we utilize to assist us in managing our business;

• a discussion of our results of operations for the quarter and nine months ended September 30, 2021, compared to the same periods in 2020;

• a discussion of our results of operations for the quarter ended March 31, 2022, compared to the same period in 2021;

• a discussion of our business outlook;

• a discussion of our liquidity and capital resources, including our future capital and contractual commitments and potential funding sources.

Critical Accounting Policies

For a discussion of our critical accounting policies, refer to Item 7.

Critical Accounting Policies and Estimates

For a discussion of our critical accounting policies and estimates, refer to Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations within our Annual Report on Form 10-K for the year ended December 31, 2021.

Historically, our revenues are seasonal based on demand for cruises.

Our revenues are seasonal based on demand for cruises.

Demand has historically been strongest for cruises during the Northern Hemisphere’s summer months and holidays.

In order to mitigate the impact of the winter weather in the Northern Hemisphere and to capitalize on the summer season in the Southern Hemisphere, our brands have focused on deployment to the Caribbean, Asia and Australia during that period.

Financial Presentation

Description of Certain Line Items

Our revenues are comprised of the following:

• Passenger ticket revenues , which consist of revenue recognized from the sale of passenger tickets and the sale of air transportation to and from our ships;

• Onboard and other revenues , which consist primarily of revenues from the sale of goods and/or services onboard our ships not included in passenger ticket prices, cancellation fees, sales of vacation protection insurance, pre- and post-cruise tours and fees for operating certain port facilities.

Onboard and other revenues also include revenues we receive from independent third party concessionaires that pay us a percentage of their revenues in exchange for the right to provide selected goods and/or services onboard our ships, as well as revenues received for our bareboat charter, procurement and management related services we perform on behalf of our unconsolidated affiliates and third parties.

Cruise Operating Expenses

Our cruise operating expenses are comprised of the following:

• Commissions, transportation and other expenses , which consist of those costs directly associated with passenger ticket revenues, including travel agent commissions, air and other transportation expenses, port costs that vary with passenger head counts and related credit card fees;

• Onboard and other expenses , which consist of the direct costs associated with onboard and other revenues, including the costs of products sold onboard our ships, vacation protection insurance premiums, costs associated with pre- and post-cruise tours and related credit card fees, as well as the minimal costs associated with concession revenues, as the costs are mostly incurred by third-party concessionaires, and costs incurred for the procurement and management related services we perform on behalf of our unconsolidated affiliates;

• Payroll and related expenses , which consist of costs for shipboard personnel (costs associated with our shoreside personnel are included in Marketing, selling and administrative expenses );

• Food expenses , which include food costs for both guests and crew;

• Fuel expenses , which include fuel and related delivery, storage and emission consumable costs and the financial impact of fuel swap agreements;

• Other operating expenses , which consist primarily of operating costs such as repairs and maintenance, port costs that do not vary with passenger head counts, vessel related insurance, entertainment and gains and/or losses related to the sale of our ships, if any.

We do not allocate payroll and related expenses, food expenses, fuel expenses or other operating expenses to the expense categories attributable to passenger ticket revenues or onboard and other revenues since they are incurred to provide the total cruise vacation experience.

Selected Operational and Financial Metrics

We utilize a variety of operational and financial metrics which are defined below to evaluate our performance and financial condition.

As discussed in more detail herein, certain of these metrics are non-GAAP financial measures.

These non-GAAP financial measures are provided along with the related GAAP financial measures as we believe they provide useful

information to investors as a supplement to our consolidated financial statements, which are prepared and presented in accordance with GAAP.

The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Adjusted Loss per Share ("Adjusted EPS") represents Adjusted Net Loss attributable to Royal Caribbean Cruises Ltd.

(as defined below) divided by weighted average shares outstanding or by diluted weighted average shares outstanding, as applicable.

We believe that this non-GAAP measure is meaningful when assessing our performance on a comparative basis.

Adjusted Net Loss attributable to Royal Caribbean Cruises Ltd.

represents net loss less net income attributable to noncontrolling interest excluding certain items that we believe adjusting for is meaningful when assessing our performance on a comparative basis.

For the periods presented, these items included (i) gain or loss on the extinguishment of debt;

(ii) the amortization of non-cash debt discount on our convertible notes;

(iii) the estimated cash refund expected to be paid to Pullmantur guests and other expenses incurred as part of the Pullmantur reorganization;

(iv) impairment and credit losses recognized as a result of the impact of COVID-19;

(v) equity investment asset impairments;

(vi) net insurance recoveries related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas;

(vii) restructuring charges incurred in relation to the reduction in our U.S.

workforce and other initiative expenses;

(viii) the change in the fair value in the Silversea Cruises contingent consideration and the amortization of the Silversea Cruises intangible assets resulting from our acquisition of a 66.7% interest in Silversea Cruises in 2018;

(ix) the noncontrolling interest adjustment to exclude the impact of the contractual accretion requirements associated with the put option held by Heritage Cruise Holding Ltd.'s (previously known as Silversea Cruises Group Ltd.) noncontrolling interest in Silversea Cruises, which noncontrolling interest we acquired on July 9, 2020;

(x) the net gain recognized in the first quarter of 2021 in relation to the sale of the Azamara brand;

and (xi) currency translation losses recognized during the second quarter of 2020, in connection with the ships classified as assets held-for-sale that were previously chartered to Pullmantur.

Available Passenger Cruise Days ( “APCD” ) is our measurement of capacity and represents double occupancy per cabin multiplied by the number of cruise days for the period, which excludes canceled cruise days and cabins not available for sale.

We use this measure to perform capacity and rate analysis to identify our main non-capacity drivers that cause our cruise revenue and expenses to vary.

Occupancy ("Load Factor") , in accordance with cruise vacation industry practice, is calculated by dividing Passenger Cruise Days (as defined below) by APCD.

A percentage in excess of 100% indicates that three or more passengers occupied some cabins.

Passenger Cruise Days represent the number of passengers carried for the period multiplied by the number of days of their respective cruises.

Although discussed in previous periods, we do not disclose or reconcile in this report our Gross Yields, Net Yields, Gross Cruise Costs, Net Cruise Costs and Net Cruise Costs Excluding Fuel, as defined in our Annual Report on Form 10-K for the year ended December 31, 2019.

Historically, we have utilized these financial metrics to measure relevant rate comparisons to other periods.

However, our 2020 and 2021 reduction in capacity and revenues and the shift in the nature of our running costs, due to the impact of the COVID-19 pandemic on our operations, do not allow for a meaningful analysis and comparison of these metrics and as such these metrics have been excluded from this report.

In order to mitigate the impact of the winter weather in the Northern Hemisphere and to capitalize on the summer season in the Southern Hemisphere, our brands have historically focused on deployment to the Caribbean, Asia and Australia during that period.

This seasonal trend was disrupted with the voluntary suspension of our global cruise operations effective March 2020 in response to the COVID-19 outbreak and through the gradual resumption of global cruise operations commencing in the second half of 2021.

Recent Developments

Return to Healthy Sailing

Our voluntary suspension of our global cruise operations commenced in March 2020 in response to the COVID-19 outbreak.

We have restarted our global cruise operations in a phased manner, following the requirements and recommendations of regulatory agencies, with reduced guest occupancy, modified itineraries and enhanced health, safety and vaccination protocols.

By the end of September 2021, we operated 38 of our Global and Partner Brand ships, representing 63% of our fleet, and sailed over 500,000 passengers since we resumed operations.

We expect to operate approximately 80% of our fleet and anticipate serving over 1 million passengers by December 31, 2021.

Uncertainties remain as to the specifics, timing and costs of administering and implementing our health and safety measures, some of which may be significant.

Based on our assessment of these requirements and recommendations, the status of COVID-19 infection and/or vaccination rates in the U.S.

or globally or for other reasons, we may determine it necessary to cancel or modify certain of our Global Brands’ cruise sailings.

We believe the impact to our global bookings resulting from COVID-19 will continue to have a material negative impact on our results of operations and liquidity, which may be prolonged beyond containment of the disease and its variants.

During 2021, we 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.

Since then, we have steadily increased the number of ships that have returned to service.

As of March 31, 2022, we operated 54 of our Global and Partner Brand ships, representing close to 90% of our worldwide capacity.

We expect that the rest of the fleet will return to operations before the summer season.

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.

Uncertainties remain as to the continuing effects COVID-19 will have on our operations, including potential increases in infection rates, new variants, and renewed governmental action to slow the spread of COVID-19, which may lead us to cancel or modify certain of our Global Brands’ cruise sailings.

Additionally, there is uncertainty surrounding consumer behavior and demand for cruising.

The continuing effects of COVID-19 on our resumption of guest cruise operations and the increased uncertainty given the current war in Ukraine, including its effect on the price of fuel and food, are collectively having a material negative impact on our business, including our liquidity, financial position and results of operations.

Continued Fleet Ramp-up

We anticipate load factors on core itineraries to increase to 65-70% during the fourth quarter of 2021.

We anticipate 6.9 million APCDs for the fourth quarter of 2021 with overall load factors of 60-65% and expect that all ships on core itineraries in the fourth quarter of 2021 will be cash flow accretive, even when including start-up costs.

Core itineraries exclude sailings during our early resumption of operations of up to four weeks and also exclude specialized itineraries that were implemented during the COVID-19 period (e.g.

Singapore, Cyprus).

By the end of the year, we expect that 50 of our 61 Global Brand ships will have returned to service, representing almost 100% of core itinerary capacity and approximately 80% of worldwide capacity.

Our remaining Global Brand ships are expected to return to service by the spring of 2022 and we expect to return to historical load factors in the third quarter of 2022.

Mainland China is expected to resume in the spring and we have assumed lower load factors as this important long term market ramps-up.

On October 25, 2021, the U.S.

Centers for Disease Control and Prevention (“CDC”) issued a temporary extension and modification of the Conditional Sail Order (“Conditional Order”) effective November 1, 2021 through January 15, 2022, and expressed its intention to transition to a voluntary program thereafter, in coordination with interested cruise ship operators.

We plan to continue to operate under the Conditional Order where required, and to voluntarily comply with the Conditional Order for ships home ported or calling in Florida ports.

Also on October 25, 2021, the U.S.

President issued a proclamation effective on November 8, 2021 that rescinds all previous proclamations suspending entry into the U.S.

of non-citizen non-immigrants.

We expect these recent developments to support our return to service and anticipated load factors.

Wonder of the Seas and Celebrity Beyond were delivered and commenced operations in the first quarter and second quarter, respectively, which expanded our total fleet size, including our Partner Brands, to 63 ships.

We are currently offering cruise itineraries in the majority of our destinations.

Australia, one of the last remaining countries to re-open, has announced the resumption of cruising effective April 2022.

We expect to return to Australia for the local summer season during the fourth quarter of 2022.

China remains closed to cruising, resulting in the redeployment of ships planned for China to other markets.

Operating Costs

As we resume our return to service, we are experiencing inflationary and supply chain challenges, mainly related to fuel and food costs, as well as transitory costs related to our health and safety protocols.

We expect these challenges to have an adverse impact to our 2022 operating costs.

Update on Bookings

Booking volumes have improved significantly since the slowdown this summer due to the Delta variant (the "Delta Dip").

We attracted more bookings in the third quarter compared to the second quarter.

September was particularly strong, with new bookings for 2022 sailings more than 60% higher than the monthly average during the second quarter of 2021.

Sailings for the full year 2022 are booked within historical ranges and at higher prices than 2019.

Sailings further out are experiencing more normalized booking trends than sailings closer in.

As such, load factors for sailings in the first quarter of 2022 are lower than historical levels;

are improving but still below average in the second quarter of 2022;

and are solidly within historical levels in the second half of 2022.

Pricing remains strong throughout 2022, with or without future cruise credits ("FCC").

As of September 30, 2021, we had $2.8 billion in customer deposits, which represents an improvement by $0.4 billion from the June 30, 2021 balance despite the $300 million of revenue that was recognized during the quarter.

Approximately 35% of the customer deposit balance is related to FCCs.

This has dropped from 40% in the prior quarter, indicating net new demand.

Customer deposits for cruises taking place in the second quarter of 2022 and onward are higher than customer deposits on the same three brands for cruises taking place in the same time horizon as of September 30, 2019.

Booking volumes in the first quarter of 2022 have improved consistently week-over-week and reached typical, peak booking season ("Wave") levels at the end of the quarter.

Bookings have now been surpassing comparable 2019 levels for the last two months, with particularly strong trends for North America based itineraries.

Additionally, the elevated cancellations experienced earlier in the year attributable to the Omicron variant returned to pre-Omicron levels as COVID-19 cases subsided in February 2022.

While load factors for sailings in the second half of 2022 are currently slightly below historical levels, consumers are booking their cruises closer to sailing and we are capitalizing on the close-in demand to improve load factors.

Bookings for Europe sailings improved throughout the first quarter but softened due to the war in Ukraine, with a bigger impact on Baltic itineraries.

While bookings for Europe are now exceeding 2019 levels for the same period, the situation in Ukraine is expected to weigh on load factors in Europe this summer.

As of March 31, 2022 we had $3.6 billion in customer d eposits.

Approximately 27% of the customer deposit balance as of March 31, 2022 is related to FCCs compared to 32% of the customer deposit balance as of December 31, 2021, a positive trend indicating new demand.

Update on Recent Liquidity Actions and Ongoing Uses of Cash

As of September 30, 2021, we had liquidity of $4.1 billion, including $0.1 billion of undrawn revolving credit facility capacity, $3.3 billion in cash and cash equivalents, and a $0.7 billion commitment for a 364-day term loan facility available to draw on at any time prior to August 12, 2022.

Our revolving credit facilities were mostly utilized through a combination of amounts drawn and letters of credit issued under the facilities as of September 30, 2021.

We continue to prioritize and bolster liquidity while taking steps to improve our balance sheet and reduce its interest costs to be well positioned for recovery.

Reduced Operating Expenses

We took significant actions in early 2020 to reduce operating expenses during the suspension of our global cruise operations.

In particular, we:

• significantly reduced ship operating expenses, including crew payroll, food, fuel, insurance and port charges;

• further reduced operating expenses as the Company’s ships are currently transitioning into various levels of layup with several ships in the fleet transitioning into cold layup;

• significantly reduced marketing and selling expenses;

• reduced and furloughed our workforce, with approximately 23% of our US shoreside employee base being impacted in 2020;

• suspended travel for shoreside employees and instituted a hiring freeze across the organization.

During our ramp up of operations, we have incurred and will continue to incur incremental spend related to bringing ships back to operating status, returning crew members to ships and implementing enhanced health and safety protocols.

We also collected and will continue to collect deposits related to those sailings and for future cruises.

The decision to bring ships back into service considers many variables, including deployment opportunities, commercial potential, cost of operations and cash flow.

Refer to Funding Needs and Sources for discussion regarding our recent liquidity actions and ongoing uses of cash.

Capital Expenditures

COVID-19 has impacted shipyard operations, which have and may continue to result in delays of our previously contracted ship deliveries.

As of September 30, 2021, we anticipate that overall full year capital expenditures, based on our existing ships on order, will be approximately $2.1 billion for 2021.

This amount does not include any ships on order by our Partner Brands.

We took delivery of Odyssey of the Seas during the first quarter of 2021 and expect delivery of Silver Dawn during the fourth quarter of 2021.

For 2022, we have two ship deliveries scheduled:

Wonder of the Seas and Celebrity Beyond .

Excluding newbuild deliveries, our capital expenditures for 2022 will depend on our schedule to return to service.

Refer to Future Capital Commitments for discussion on capital expenditures.

Debt Maturities, New Financings and Other Liquidity Actions

During the nine months ended September 30, 2021, the Company continued to take actions to further improve its liquidity position and manage cash flow.

During the quarter ended March 31, 2022, we continued to take actions to further improve our liquidity position and manage cash flow.

In particular, we:

• extended the maturity date or termination date, as applicable, of certain of the advances and commitments held by consenting lenders under our $1.0 billion unsecured loan due April 2022 and our $1.55 billion unsecured revolving credit facility due October 2022, each by 18 months to October 2023 and April 2024, respectively;

• extended the period during which we may draw upon our binding commitment for a $700.0 million 364-day term loan facility by one year, which is now available for draw at any time prior to August 12, 2022;

• issued $1.5 billion of 5.5% senior unsecured notes due in 2028 for net proceeds of approximately $1.48 billion;

• issued $650.0 million of 4.25% senior unsecured notes due in 2026 for net proceeds of approximately $640.6 million, which were used to fully repay the Silversea Notes, in the amount of $619.8 million, and to pay the related call premiums, accrued interest and fees;

• issued $1.0 billion of 5.50% senior notes due in 2026 for net proceeds of approximately $986.0 million which were used to replenish our capital as a result of the redemption of a portion of the 11.50% senior secured notes due 2025 in the amount of $928.0 million, and to pay the related call premiums and accrued interest;

• amended the credit agreements for the unsecured financings of our first and second Evolution-class ships, increasing their maximum loan amounts by €175.6 million in the aggregate to finance ship design modifications that incorporate innovative sustainability features and additional premium cabins;

• issued 16.9 million shares of common stock for approximately $1.5 billion;

• amended $4.9 billion of our non-export-credit facilities and certain of our credit card processing agreements to extend the waiver of the financial covenants through and including the third quarter of 2022 and to implement modified covenants for the period starting fourth quarter of 2022 and extending through and including the fourth quarter of 2023;

• amended $6.3 billion of our export-credit facilities to extend the waiver of the financial covenants through and including the fourth quarter of 2022 and defer $1.15 billion of principal payments due between April 2021 and April 2022.

As of the date of this report, there are no scheduled debt maturities for the remainder of 2021, and scheduled debt maturities of $2.2 billion for 2022.

• issued $1.0 billion of senior notes (the "January 2022 Unsecured Notes") due in 2027 for net proceeds of approximately $990.0 million.

Interest accrues on the January 2022 Unsecured Notes at a fixed rate of 5.375% per annum and is payable semi-annually in arrears;

• entered into certain agreements with Morgan Stanley & Co., LLC (“MS”) where MS agrees to provide backstop committed financing to refinance, repurchase and/or repay in whole or in part our existing and outstanding 10.875% Senior Secured Notes due 2023, 9.125% Senior Priority Guaranteed Notes due 2023 (the "Priority Guaranteed Notes"), and 4.25% Convertible Notes due 2023.

We may, at our sole option, issue and sell to MS (subject to the satisfaction of certain conditions) five-year senior unsecured notes with gross proceeds of up to $3.15 billion at any time between April 1, 2023 and June 29, 2023, to refinance the aforementioned notes.

Expected debt maturities for the remainder of 2022 are $2.2 billion and $5.7 billion for 2023.

We continue to identify and evaluate further actions to enhance our liquidity and support our recovery.

These include and are not limited to further reductions in capital expenditures, operating expenses and administrative costs and additional financings and refinancings.

These include and are not limited to further reductions in capital expenditures, operating expenses and administrative costs and additional financings.

Results of Operations

Net Loss attributable to Royal Caribbean Cruises Ltd.

and Adjusted Net Loss attributable to Royal Caribbean Cruises Ltd.

for the third quarter of 2021 were $(1.4) billion and $(1.2) billion, or $(5.59) and $(4.91) per share on a diluted basis, respectively, reflecting the ramp up of our return to operations, and increased sales and marketing expenses during the quarter, compared to Net Loss attributable to Royal Caribbean Cruises Ltd.

and Adjusted Net Loss attributable Royal Caribbean Cruises Ltd.

of $(1.3) billion and $(1.2) billion, or $(6.29) and $(5.62) per share on a diluted basis, respectively, for the third quarter of 2020.

Net Loss attributable to Royal Caribbean Cruises Ltd.

and Adjusted Net Loss attributable to Royal Caribbean Cruises Ltd.

for the nine months ended September 30, 2021 were $(3.9) billion and $(3.6) billion, or $(15.56) and $(14.41) per share on a diluted basis, respectively, compared to Net Loss attributable to Royal Caribbean Cruises Ltd.

and Adjusted Net Loss attributable Royal Caribbean Cruises Ltd.

of $(4.4) billion and $(2.8) billion, or $(21.01) and $(13.26) per share on a diluted basis, respectively, for the nine months ended September 30, 2020.

Significant items for the quarter and nine months ended September 30, 2021 include:

• Total revenues, excluding the effect of changes in foreign currency exchange rates, increased $487.0 million and decreased $1,633.5 million, respectively, for the quarter and nine months ended September 30, 2021, as compared to the same periods in 2020.

The increase in total revenues in the third quarter of 2021 reflects the ramp up in our return to operations compared to the third quarter of 2020, during which we continued to observe our global cruise suspension.

For the nine months ended September 30, 2021, the decrease in total revenues reflects a 41.1% capacity decrease compared to the same period in 2020 reflecting the lay-up of the majority of our fleet during the first half of 2021, compared to the operation of the majority of our fleet up through our global suspension in March of 2020.

• The effect of changes in foreign currency exchange rates related to our passenger ticket and onboard and other revenue transactions, denominated in currencies other than the United States dollar, resulted in an increase in total revenues of $3.6 million and $8.7 million for the quarter and nine months ended September 30, 2021, respectively, compared to the same periods in 2020.

• Total cruise operating expenses, excluding the effect of changes in foreign currency exchange rates, increased $503.3 million and decreased $987.6 million for the quarter and nine months ended September 30, 2021, respectively, as compared to the same periods in 2020.

The increase in total cruise operating expenses in the third quarter of 2021 reflects the ramp up of our operations compared to our suspension of cruise operations in 2020.

The decrease during the nine months ended September 30, 2021 compared to the same period in 2020 reflects the capacity decrease mentioned above.

• The effect of changes in foreign currency exchange rates related to our cruise operating expenses, denominated in currencies other than the U.S.

dollar, resulted in an increase in total operating expenses of $1.8 million and $9.7 million, respectively, for the quarter and nine months ended September 30, 2021, compared to the same periods in 2020.

• Our consolidated results of operations include Silversea Cruises’ results of operations on a three-month reporting lag for April, May and June 2021, for the quarter ended September 30, 2021, and from October 1, 2020 through June 30, 2021 for the nine months ended September 30, 2021.

• In March 2021, we extended the maturity date or termination date of certain of the advances and commitments, as applicable, held by consenting lenders under our $1.0 billion unsecured loan due April 2022 and our $1.55 billion unsecured revolving credit facility due October 2022, by 18 months to October 2023 and April 2024, respectively.

• In March 2021, we extended our binding commitment for a $700.0 million 364-day term loan facility by one year which is currently available for draw at any time prior to August 12, 2022.

• In March 2021, we issued $1.5 billion of senior unsecured notes due in 2028.

Interest on the senior notes accrues at 5.5% and is payable semi-annually.

• In March 2021, we issued 16.9 million shares of common stock, par value $0.01 per share, at an average price of $91.00 per share for net proceeds of $1.5 billion.

• In March 2021, we amended $4.9 million of our non-export-credit facilities and certain of our credit card processing agreements to extend the waiver of the financial covenants through and including the third quarter of 2022.

• In March 2021, we amended $6.3 million of our export-credit facilities to extend the waiver of the financial covenants through and including the third quarter of 2022, and subsequently in the third quarter of 2021, we entered into a letter agreement to extend the waiver period to the end of the fourth quarter of 2022;

including the deferral of up to $1.15 billion of principal payments due between April 2021 and April 2022.

• In March 2021, we entered into amendments to our drawn and undrawn ECA facilities to provide for the issuance of guarantees in satisfaction of existing obligations under these facilities.

• In March 2021, we took delivery of Odyssey of the Seas.

• In June 2021, we issued $650.0 million of senior unsecured notes due in 2026 for net proceeds of approximately $640.6 million, which were used to fully repay the Silversea Notes in the amount of $619.8 million and to pay the related call premiums, accrued interest and fees.

Interests on the Silversea Notes accrued at 7.25% per annum and was payable semi-annually.

• In June 2021, Hapag-Lloyd took delivery of Hanseatic Spirit.

• In August 2021, we issued $1.0 billion of 5.50% senior unsecured notes due in 2026 for net proceeds of approximately $986.0 million, which we used to replenish capital as a result of the redemption of a portion of the 11.50% senior secured notes due 2025, in the amount of $928.0 million plus call premiums, accrued interest, and fees.

Operating results for the quarter and nine months ended September 30, 2021 compared to the same periods in 2020 are shown in the following tables (in thousands, except per share data):

Quarter Ended September 30,

Net Loss and Adjusted Net Loss for the first quarter of 2022 were $(1.17) billion and $(1.16) billion, or $(4.58) and $(4.57) per share on a diluted basis, respectively, reflecting the ramp up of our return to operations, and increased sales and marketing expenses, compared to Net Loss and Adjusted Net Loss of $(1.13) billion and $(1.08) billion, or $(4.66) and $(4.44) per share on a diluted basis, respectively, for the first quarter of 2021.

Significant items for the quarter ended March 31, 2022 include:

• Total revenues, excluding the effect of changes in foreign currency exchange rates, increased $1.0 billion for the quarter ended March 31, 2022 as compared to the same period in 2021, The increase reflects the ramp up in our return to operations in 2022 compared to 2021 when the suspension of our global cruise operations was in effect.

APCDs for the first quarter ended March 31, 2022 were 7,692,906 compared to 384,224 in the same period in 2021.

• Total cruise operating expenses, excluding the effect of changes in foreign currency exchange rates, increased $0.9 billion for the quarter ended March 31, 2022 as compared to the same period in 2021.

The increase reflects the ramp up in our return to operations in 2022 compared to 2021 when the suspension of our global cruise operations was in effect.

• In January 2022, we took delivery of Wonder of the Seas.

• In January 2022, we issued the January 2022 Unsecured Notes.

Refer to Note 6.

Debt to our consolidated financial statements under Part I.

Financial Statements for further information regarding this transaction.

• In February 2022, we entered into certain agreements with MS where MS agrees to provide backstop committed financing.

Refer to Note 6.

Debt to our consolidated financial statements under Part I.

Financial Statements for further information regarding this transaction.

Operating results for the quarter ended March 31, 2022 compared to the same period in 2021 are shown in the following table (in thousands, except per share data):

Quarter Ended March 31,

Revenues % of Total

18 unchanged sentences

Equity investment loss (31,059) (2.9) % (59,871) (142.5) %

Other income (expense) 37,230 8.1 % (10,853) 32.2 %

Other (expense) income (2,538) (0.2) % 5,033 12.0 %

(307,934) (29.1) % (322,491) (767.6) %

Net Loss (1,167,142) (110.2) % (1,131,722) (2,693.7) %

Net Income attributable to noncontrolling interest — — % 7,444 (22.1) %

Net Loss attributable to Royal Caribbean Cruises Ltd.

$ (1,424,554) (311.7) % $ (1,346,756) 3,997.7 %

Diluted Loss per Share $ (4.58) $ (4.66)

Nine Months Ended September 30,

Revenues % of Total

Passenger ticket revenues $ 323,782 58.9 % $ 1,487,077 68.4 %

Onboard and other revenues 226,104 41.1 % 687,590 31.6 %

Total revenues 549,886 100.0 % 2,174,667 100.0 %

Cruise operating expenses:

Commissions, transportation and other 72,917 13.3 % 342,632 15.8 %

Onboard and other 55,782 10.1 % 151,333 7.0 %

Payroll and related 530,250 96.4 % 693,480 31.9 %

Food 74,618 13.6 % 154,439 7.1 %

Fuel 219,058 39.8 % 327,275 15.0 %

Other operating 569,383 103.5 % 830,689 38.2 %

Total cruise operating expenses 1,522,008 276.8 % 2,499,848 115.0 %

Marketing, selling and administrative expenses 867,021 157.7 % 944,087 43.4 %

Depreciation and amortization expenses 959,512 174.5 % 961,226 44.2 %

Impairment and credit losses 39,934 7.3 % 1,354,514 62.3 %

Operating Loss (2,838,589) (516.2) % (3,585,008) (164.9) %

Other income (expense):

Interest income 13,317 2.4 % 15,757 0.7 %

Interest expense, net of interest capitalized (1,007,986) (183.3) % (571,149) (26.3) %

Equity investment loss (137,044) (24.9) % (140,258) (6.4) %

Other income (expense) 66,771 12.1 % (127,537) (5.9) %

(1,064,942) (193.7) % (823,187) (37.9) %

Adjusted Net Loss and Adjusted Loss per Share were calculated as follows (in thousands, except per share data):

Quarter Ended March 31,

Net Loss $ (1,167,142) $ (1,131,722)

Net Income attributable to noncontrolling interest — — % 22,332 1.0 %

Net Loss attributable to Royal Caribbean Cruises Ltd.

$ (3,903,531) (709.9) % $ (4,430,527) (203.7) %

Diluted Loss per Share $ (15.56) $ (21.01)

Adjusted Net Loss attributable to Royal Caribbean Cruises Ltd.

and Adjusted Loss per Share attributable to Royal Caribbean Cruises Ltd.

were calculated as follows (in thousands, except per share data):

Quarter Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

Net Loss attributable to Royal Caribbean Cruises Ltd.

$ (1,424,554) $ (1,346,756) $ (3,903,531) $ (4,430,527)

Adjusted Net Loss attributable to Royal Caribbean Cruises Ltd.

(1,249,701) (1,204,350) (3,615,102) (2,797,335)

Net Adjustments to Net Loss attributable to Royal Caribbean Cruises Ltd.

$ 174,853 $ 142,406 $ 288,429 $ 1,633,192

Adjustments to Net Loss attributable to Royal Caribbean Cruises Ltd.:

Loss on extinguishment of debt (1)

$ 141,915 $ 774 $ 138,759 41,109

Adjusted Net Loss (1,164,373) (1,078,279)

Net Adjustments to Net Loss $ 2,769 $ 53,443

Adjustments to Net Loss:

Impairment and credit losses (recoveries) $ 173 $ (449)

Restructuring charges and other initiatives expense 973 1,317

Amortization of Silversea Cruises intangible assets related to Silversea Cruises acquisition 1,623 1,623

Convertible debt amortization of debt discount (1)

26,073 17,750 78,219 21,934

Pullmantur reorganization settlement (2)

5,242 — 10,242 21,637

Impairment and credit losses (4)

(237) 89,899 39,934 1,354,514

Equity investment impairments (5)

— — 26,042 39,735

Oasis of the Seas incident, Grand Bahama's drydock write-off and other incidental expenses (6)

— — (6,584) (1,938)

Restructuring charges and other initiatives expense (7)

74 5,720 1,721 50,745

Change in the fair value of contingent consideration and amortization of Silversea Cruises intangible assets related to Silversea Cruises acquisition (8)

1,623 2,548 4,869 (35,919)

Noncontrolling interest adjustment (9)

— 25,715 — 72,331

Loss on extinguishment of debt — 1,314

Equity investment impairment (3)

Oasis of the Seas incident (4)

Net gain related to the sale of the Azamara brand — (6,156)

163 — (4,773) —

Currency translation adjustment losses (11)

Net Adjustments to Net Loss attributable to Royal Caribbean Cruises Ltd.

$ 174,853 $ 142,406 $ 288,429 $ 1,633,192

Net Adjustments to Net Loss $ 2,769 $ 53,443

Loss per Share $ (4.58) $ (4.66)

5 unchanged sentences

Diluted 254,821 243,004

(1) For the three months ended September 30, 2021, represents the net loss on the partial repayment of the 11.50% senior secured notes due 2025 in the amount of $928.0 million.

For the nine months ended September 30, 2021, represents the net loss on the partial repayment of the 11.50% senior secured notes due 2025, the second quarter 2021 net gain on the full repayment of the Silversea Notes and the first quarter 2021 loss on the partial repayment of the $1.55 billion unsecured revolving credit facility.

For the nine months ended September 30, 2020, represents a loss on the extinguishment of the $2.2 billion Senior Secured Term Loan.

(1) Represents the amortization of non-cash debt discount on our convertible notes.

(3) Represents estimated cash refunds expected to be paid to Pullmantur guests and other expenses incurred as part of the Pullmantur reorganization.

(4) In 2021 and 2020, represents asset impairment and credit losses as a result of the impact of COVID-19.

In 2021, amounts are net of the recovery of credit losses recognized in 2020.

(5) Represent equity investment asset impairments, primarily for our investments in TUI Cruises GmbH in 2021 and Grand Bahama Shipyard in 2020, as a result of the impact of COVID-19.

(6) Amounts include net insurance recoveries related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas.

(7) Represents primarily restructuring charges incurred in relation to the reduction in our U.S.

workforce and other initiatives expenses.

Refer to Note 13.

Restructuring Charges to our consolidated financial statements under Item 1.

Financial Statements for further information on the restructuring activities.

(8) Related to the Silversea Cruises acquisition.

(9) Adjustment made to exclude the impact of the contractual accretion requirements associated with the put option held by Heritage Cruise Holding Ltd.'s (previously known as Silversea Cruises Group Ltd.) noncontrolling interest, which noncontrolling interest we acquired on July 9, 2020.

(10) Represents the net gain recognized in the first quarter of 2021 in relation to the sale of the Azamara brand.

(11) Represents currency translation losses recognized during the second quarter of 2020, in connection with the ships classified as assets held-for-sale that were previously chartered to Pullmantur.

For further information regarding the adoption of ASU 2020-06 as of January 1, 2022, which impacts the accounting of the non-cash debt discount on convertible notes, refer to Note 2.

S ummary of Significant Accounting Policies to our consolidated financial statements.

(2) Represents estimated cash refunds expected to be paid to Pullmantur guests as part of the Pullmantur S.A.

reorganization.

(3) Represents equity investment asset impairments primarily for TUI Cruises GmbH in 2021 as a result of the impact of COVID-19.

(4) Represents net insurance recoveries related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas.

Selected statistical information is shown in the following table:

Quarter Ended September 30, Nine Months Ended September 30,

Quarter Ended March 31,

2022 (1) 2021 (2)

3 unchanged sentences

Occupancy 57.4 % 37.7 %

(1) Due to the three-month reporting lag, we include Silversea Cruises' results of operations from April 1 through June 30 for the quarters ended September 30, 2021 and 2020 and from October 1 through June 30 for the nine months ended September 30, 2021 and 2020.

Refer to Note 1 .

General to our consolidated financial statements for more information on the three-month reporting lag.

The Company’s operations are still impacted by the magnitude, duration, speed and geographic reach of COVID-19 and its related variants.

As a consequence, we cannot reasonably estimate the impact of COVID-19 on our business, financial condition or near or longer-term financial or operational results.

(1) Due to the elimination of the Silversea Cruises three-month reporting lag in October 2021, we included Silversea Cruises' metrics from January 1, 2022 through March 31, 2022 in the quarter ended March 31, 2022.

(2) Due to the three-month reporting lag, we included Silversea Cruises' metrics from October 1, 2020 through December 31, 2020 in the quarter ended March 31, 2021.

The Company’s operations are still impacted by COVID-19 and its related variants.

The adverse impact of the COVID-19 pandemic on our revenues, consolidated results of operations, cash flows and financial condition has been and will continue to be material in 2022.

We expect to incur a net loss on both a U.S.

GAAP and adjusted basis for our fourth quarter and our 2021 fiscal year, the extent of which will depend on many factors including the timing and extent of our return to service.

See Recent Developments:

COVID-19 – Continued Fleet Ramp-Up and Update on Bookings for further indications on our resumption of operations and the booking environment.

Quarter Ended September 30, 2021 Compared to Quarter Ended September 30, 2020

In this section, references to 2021 refer to the quarter ended September 30, 2021 and references to 2020 refer to the quarter ended September 30, 2020.

Total revenues for 2021 increased $490.6 million, or 1,456.4%, to $457.0 million from $(33.7) million in 2020.

GAAP and adjusted basis for our second quarter of 2022 and a return to profitability for the second half of 2022.

See Recent Developments– Continued Fleet Ramp-Up and Update on Bookings for further indication on our resumption of operations and the booking environment.

Financial Presentation

Description of Certain Line Items

Our revenues are comprised of the following:

• Passenger ticket revenues , which consist of revenue recognized from the sale of passenger tickets and the sale of air transportation to and from our ships;

Onboard and other revenues also include revenues we receive from independent third-party concessionaires that pay us a percentage of their revenues in exchange for the right to provide selected goods and/or services onboard our ships, as well as revenues received for procurement and management related services we perform on behalf of our unconsolidated affiliates.

Cruise Operating Expenses

Our cruise operating expenses are comprised of the following:

• Payroll and related expenses , which consist of costs for shipboard personnel (costs associated with our shoreside personnel are included in Marketing, selling and administrative expenses );

• Food expenses , which include food costs for both guests and crew;

• Fuel expenses , which include fuel and related delivery, storage and emission consumable costs and the financial impact of fuel swap agreements;

Selected Operational and Financial Metrics

We utilize a variety of operational and financial metrics which are defined below to evaluate our performance and financial condition.

As discussed in more detail herein, certain of these metrics are non-GAAP financial measures.

These non-GAAP financial measures are provided along with the related GAAP financial measures as we believe they provide useful information to investors as a supplement to our consolidated financial statements, which are prepared and presented in accordance with GAAP.

Adjusted Loss per Share ("Adjusted EPS") represents Adjusted Net Loss (as defined below) divided by weighted average shares outstanding or by diluted weighted average shares outstanding, as applicable.

We believe that this non-GAAP measure is meaningful when assessing our performance on a comparative basis.

Adjusted Net Loss represents net loss excluding certain items that we believe adjusting for is meaningful when assessing our performance on a comparative basis.

For the periods presented, these items included (i) impairment and credit losses (recoveries);

(ii) restructuring charges and other initiative expenses;

(iii) the amortization of the Silversea Cruises intangible assets resulting from the Silversea Cruises acquisition in 2018;

(iv) the amortization of non-cash debt discount on our convertible notes;

(v) the estimated cash refunds expected to be paid to Pullmantur guests as part of the Pullmantur S.A.

reorganization in 2020;

(vi) loss on the extinguishment of debt;

(vii) equity investment asset impairments;

(viii) net insurance recoveries related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas ;

and (ix) the net gain recognized in the first quarter of 2021 in relation to the sale of the Azamara brand.

We use this measure to perform capacity and rate analysis to identify our main non-capacity drivers that cause our cruise revenue and expenses to vary.

Occupancy ("Load Factor") , in accordance with cruise vacation industry practice, occupancy is calculated by dividing Passenger Cruise Days (as defined below) by APCD.

A percentage in excess of 100% indicates that three or more passengers occupied some cabins.

Passenger Cruise Days represent the number of passengers carried for the period multiplied by the number of days of their respective cruises.

Although discussed in previous periods, we did not disclose or reconcile in this report our Gross Yields, Net Yields, Gross Cruise Costs, Net Cruise Costs and Net Cruise Costs Excluding Fuel, as defined in our Annual Report on Form 10-K for the year ended December 31, 2019.

Historically, we have utilized these financial metrics to measure relevant rate comparisons to other periods.

However, our 2022 and 2021 reduction in capacity and revenues and the shift in the nature of our running costs, due to the impact of the COVID-19 pandemic on our operations, do not allow for a meaningful analysis and comparison of these metrics and as such these metrics have been excluded from this report.

Quarter Ended March 31, 2022 Compared to Quarter Ended March 31, 2021

In this section, references to 2022 refer to the quarter ended March 31, 2022 and references to 2021 refer to the quarter ended March 31, 2021.

Total revenues for 2022 increased $1.0 billion to $1.1 billion from $42.0 million in 2021.

Passenger ticket revenues comprised 61.5% of our 2022 total revenues.

Passenger ticket revenues for 2021 increased by $276.9 million to $280.2 million from $3.2 million in 2020.

The increase in Passenger ticket revenues in the third quarter of 2021 reflects the expansion of our global return to service compared to our continued suspension of cruise operations in the third quarter of 2020.

Favorable movements in foreign currency exchange rates related to our revenue transactions denominated in currencies other than the United States dollar increased Passenger ticket revenues by $3.0 million.

The remaining 38.7% of 2021 total revenues was comprised of Onboard and other revenues , which increased $213.7 million, or 579.3%, to $176.8 million in 2021 from $(36.9) million in 2020.

The increase in Onboard and other revenues was due to the ramp up of our return to service noted above.

Onboard and other revenues for the quarter ended September 30, 2020 includes a charge of $67.9 million to correct cancellation revenue, for certain immaterial bookings, that was incorrectly recognized during the six months ended June 30, 2020.

The charge is offsetting cancellation and other revenue recognized during the quarter ended September 30, 2020 and is considered immaterial to our financial statements.

Passenger ticket revenues for 2022 increased by $0.6 billion to $0.7 billion from $20.8 million in 2021, and were partially offset by unfavorable movements in foreign currency exchange rates related to our revenue transactions denominated in currencies other than the United States dollar of $1.9 million.

The remaining 38.5% of 2022 total revenues was comprised of Onboard and other revenues , which increased $386.2 million to $407.4 million in 2022 from $21.2 million in 2021, and was partially offset by unfavorable movements in foreign currency exchange rates related to our revenue transactions denominated in currencies other than the United States dollar of $0.7 million.

The increase in revenues was due to the return of operations in 2022, in which the majority of our fleet was in service, compared to 2021, when the suspension of our global cruise operations was in effect.

Occupancy in 2022 was 57.4% compared to 37.7% in 2021.

Onboard and other revenues included concession revenues of $48.4 million in 2022 and $0.7 million in 2021.

Cruise Operating Expenses

Total Cruise operating expenses for 2021 increased $505.1 million, or 163.7%, to $813.7 million from $308.6 million in 2020.

Total Cruise operating expenses for 2022 increased $0.9 billion to $1.2 billion from $283.5 million in 2021.

The increase was primarily due to:

• a $145.9 million increase in Other operating expenses primarily due to increased hotel and vessel maintenance and consumables;

• a $253.0 million increase in Payroll and related ;

• a $147.4 million increase in Commissions, transportation and other expenses;

• a $64.3 million increase in Fuel expenses ;

• a $43.3 million increase in Food expenses;

• a $146.7 million increase in Fuel expense ;

• a $91.7 million increase in Food expense ;

• a $70.0 million increase in Onboard and other expenses.

The increase in operating expenses noted above was driven by the return to operations in 2022, with the majority of our fleet in service, compared to 2021, when the suspension of our global cruise operations was in effect.

The 2022 operating expenses include the overhead costs associated with bringing our ships back to service and our crew back on board our ships.

Additionally, as discussed above in Recent Developments , high inflation has impacted our operating costs, especially in fuel and food expense.

Our cost of fuel (net of the financial impact of fuel swap agreements) for 2022 increased 55% per metric ton compared to 2021 mainly due to fuel price increase.

The increase in Cruise operating expenses was partially offset by the favorable effect of changes in foreign currency exchange rates related to our cruise operating expenses denominated in currencies other than the United States dollar of $4.9 million.

Marketing, Selling and Administrative Expenses

Marketing, selling and administrative expenses for 2022 increased $136.0 million, or 52.7%, to $394.0 million from $258.0 million in 2021.

The increase in 2021 was primarily due to increases in marketing and sales activities related to our return to service.

The increase was primarily due to the ramp up of our global sales and marketing efforts starting in the second half of 2021 as we commenced our resumption of operations.

Depreciation and Amortization Expenses

Depreciation and amortization expenses for 2021 increased by $8.8 million, or 2.8%, to $325.9 million from $317.1 million in 2020 primarily due to the addition of Odyssey of the Seas to our fleet during the first quarter of 2021.

Impairment and Credit Losses

Impairment and credit losses for 2021 decreased by $90.1 million compared to impairment losses of $83.9 million recognized during the quarter ended September 30, 2020 due to the impact of COVID-19 on our operations and cash flows primarily related to our Property and equipment, net .

Additionally, credit losses of $6.0 million were recognized during the third quarter of 2020 related to our notes receivable.

Depreciation and amortization expenses for 2022 increased $29.3 million, or 9.4%, to $339.5 million from $310.2 million in 2021.

The increase was primarily due to the addition of Wonder of the Seas to our fleet in January 2022 and a full quarter of depreciation for Odyssey of the Seas and Silver Dawn , which were delivered in March 2021 and November 2021, respectively.

Impairment and Credit Losses (Recoveries)

There were no significant Impairment and credit losses (recoveries) for 2022 and 2021.

Other Income (Expense)

Interest expense, net of interest capitalized for 2022 increased $5.1 million, or 1.9%, to $277.7 million from $272.5 million in 2021.

The increase was primarily due to a debt extinguishment loss of $141.9 million recognized in the third quarter of 2021 associated with the partial repayment of the 11.50% senior secured notes due 2025.

Refer to Note 7.

Debt to our consolidated financial statements for further information.

Additionally, a higher average cost of debt compared to 2020 contributed to the 2021 increase in Interest expense, net of interest capitalized .

Equity investment loss in 2021 decreased by $48.9 million, to $29.1 million from $78.0 million in 2020 primarily due to a reduction in losses for TUI Cruises, one of our equity investments, during the third quarter of 2021 compared to 2020.

Other income (expense) was $37.2 million in 2021, compared to $(10.9) million in 2020.

The $48.1 million increase in income was primarily due to a $22.0 million tax benefit recognized in 2021, a $12.4 million decrease in expense compared to 2020 related to the change in fair value of fuel swap derivative instruments with no hedge accounting, and a decrease of $8.0 million in foreign exchange losses from the remeasurement of monetary assets and liabilities denominated in foreign currency compared to 2020.

Other Comprehensive (Loss) Income

Other comprehensive loss in 2021 was $11.9 million compared to Other comprehensive income of $82.1 million in 2020.

The decrease in income of $94.0 million was primarily due to our recognition of a Loss on cash flow derivative hedges of $13.3 million in 2021 compared to a Gain on cash flow derivative hedges of $66.1 million in 2020, primarily due to a decrease in the fair value of our foreign currency forwards in 2021 compared to an increase in 2020.

Nine Months Ended September 30, 2021 Compared to Nine Months Ended September 30, 2020

In this section, references to 2021 refer to the nine months ended September 30, 2021 and references to 2020 refer to the nine months ended September 30, 2020.

Total revenues for 2021 decreased $1.6 billion, or 74.7%, to $549.9 million from $2.2 billion in 2020.

Passenger ticket revenues comprised 58.9% of our 2021 total revenues.

Passenger ticket revenues for 2021 decreased by $1.2 billion, or 78.2%, to $0.3 billion in 2021 from $1.5 billion in 2020.

The decrease in Passenger ticket revenues was due to a 41.1% decrease in capacity driven by the lay-up of the majority of our fleet during the first half of 2021 compared to the operation of the majority of our fleet up through our global suspension in March of 2020.

Our results of operations for the nine months ended September 30, 2020 include Silversea Cruises' fourth quarter 2019 and first and second quarter 2020 sailings, reported on a one quarter lag.

The remaining 41.1% of 2021 total revenues was comprised of Onboard and other revenues , which decreased $461.5 million, or 67.1%, to $226.1 million in 2021 from $687.6 million in 2020.

The decrease in Onboard and other revenues was primarily due to the decrease in capacity noted above and offset by the favorable effect of changes in foreign currency exchange rates related to our onboard and other revenues denominated in currencies other than the United States dollar of $4.5 million.

Onboard and other revenues for the nine months ended September 30, 2020 also includes a charge of $67.9 million recorded in the quarter ended September 30, 2020 to correct cancellation revenue, for certain immaterial bookings, which was incorrectly recognized during the six months ended June 30, 2020.

The charge is considered immaterial to our financial statements.

Onboard and other revenues included concession revenue of $25.3 million in 2021 and $75.1 million in 2020.

Cruise Operating Expenses

Total cruise operating expenses for 2021 decreased $1.0 billion, or 39.1%, to $1.5 billion from $2.5 billion in 2020.

The decrease was primarily due to:

• a $269.7 million decrease in Commissions, transportation and other expenses ;

• a $261.3 million decrease in Other operating expenses;

• a $163.2 million decrease in Payroll and related expense;

• a $108.2 million decrease in Fuel expenses;

• a $95.6 million decrease in Onboard and other expenses;

• a $79.8 million decrease in Food expenses;

• the unfavorable effect of changes in foreign currency exchange rates related to our expense transactions denominated in currencies other than the United States dollar of $9.7 million.

Marketing, Selling and Administrative Expenses

Marketing, selling and administrative expenses decreased $77.1 million, or 8.2%, to $867.0 million from $944.1 million in 2020.

The decrease was due to the reduction and deferral of general and administrative and global sales and marketing activities primarily during the first half of 2021 due to the impact of COVID-19 on our operations and a reduction in payroll and benefits as a result of our April 2020 reduction in workforce.

Depreciation and Amortization Expenses

Depreciation and amortization expenses for 2021 remained in line with 2020 with a decrease of $1.7 million, or 0.2%.

Impairment and Credit Losses

Impairment and credit losses for 2021 decreased by $1.3 billion compared to charges recorded during the nine months ended September 30, 2020 due to the impact of COVID-19 on our operations and cash flows, which impacted our long-lived assets related to goodwill, intangibles, vessels and operating lease right-of-use asset, and resulted in credit losses.

Other Income (Expense)

Interest expense, net of interest capitalized for 2021 increased $436.8 million, or 76.5%, to $1.0 billion from $571.1 million in 2020.

The increase was primarily due to new debt issuances after the first quarter of 2021 and through the first quarter of 2022, partially offset by the lower cost of debt in 2022 attributable to the partial repayment of the 11.50% Senior Secured Notes due 2025 during the third quarter of 2021 and the decrease in interest expense associated with the adoption of ASU 2020-06.

Refer to Note 2 .

Debt to our consolidated financial statements for further information.

Additionally, a higher average debt level compared to 2020 related to new debt issuances in 2020 and 2021 coupled with a higher average cost of debt contributed to the 2021 increase in Interest expense, net of interest capitalized .

Equity investment loss decreased $3.2 million, or 2.3%, to a loss of $137.0 million in 2021 from a loss of $140.3 million in 2020 mainly as a result of a 2021 $26.0 million impairment charge of our investee's long-lived assets, compared to a $39.7 million impairment charge of equity investments in 2020 primarily for our investment in Grand Bahama Shipyard.

Other income (expense) was $66.8 million in 2021, compared to $(127.5) million in 2020.

The $194.3 million change was primarily due to a $127.4 million year-over-year increase in the fair value of fuel swaps with no hedge accounting.

Additionally, we recorded a deferred currency translation adjustment loss of $69.0 million in the quarter ended June 30, 2020 related to the 2016 sale of our majority interest in the Pullmantur brand.

We recognized the deferred currency translation loss as we no longer have significant involvement in Pullmantur's operations.

In June 2020, we terminated the agreements chartering our ships to the Pullmantur brand as a result of its reorganization filing under Spanish law.

We also recognized $20.0 million of expense during the second quarter of 2020, approximating the estimated total cash refund expected to be paid to Pullmantur guests and other expenses incurred as part of a settlement agreement with our joint venture partner as part of the brand's reorganization.

The increases in Other income were partially offset by income reported in 2020 of $45.1 million for the change in contingent consideration payable to Heritage in 2020, which did not recur in 2021.

Summary of Significant Accounting Policies to our consolidated financial statements for further information on ASU 2020-06.

Equity investment loss decreased by $28.8 million, or 48.1%, to $31.1 million from $59.9 million primarily due to a reduction in losses for TUI Cruises, one of our equity investments, in 2022 compared to 2021.

Other (expense) income.

We recognized Other (expense) of $2.5 million in 2022, compared to Other incom e of $5.0 million in 2021.

The $7.6 million increase in expense was primarily due to the 2021 recognition of a $13.4 million gain related to the change in fair value of our fuel swap derivative instruments with no hedge accounting, which did not recur in 2022, which was partially offset by an increase of $9.3 million in foreign exchange gain on remeasurement of our monetary assets, net of hedging.

Other Comprehensive Income (Loss)

Other comprehensive income in 2021 was $63.5 million compared to Other comprehensive loss of $71.4 million in 2020.

The change of $134.9 million, or 189.0%, was primarily due to a Gain on cash flow derivative hedges in 2021 of $48.5 million, compared to a Loss on cash flow derivative hedges of $110.1 million in 2020 primarily due to an increase in the fair value of our fuel swaps in 2021 compared to a decrease in 2020.

Other comprehensive income for 2022 increased $185.8 million or 609.4%, to $216.3 million from $30.5 million in 2021.

The increase was primarily due to a Gain on cash flow derivative hedges in 2022 of $195.9 million compared to $10.3 million in 2021, mostly as a result of a significant increase in the fair value of our fuel swaps in 2022 compared to 2021.

Future Application of Accounting Standards

3 unchanged sentences

Sources and Uses of Cash

Net cash used in operating activities decreased $1.2 billion to $1.7 billion for the nine months ended September 30, 2021 compared to Net cash used in operating activities of $2.9 billion for the same period in 2020.

Our gradual resumption of operations in 2021 and our announcement for the resumption of future operations has generated increased guest ticket collections, resulting in an increase of customer deposits of $1.0 billion during the nine months ended September 30, 2021, compared to a decrease of customer deposits of $(1.6) billion during the nine months ended September 30, 2020, while our global operations were suspended.

The increase in customer deposits was offset by increased service expenses for certain ships in our fleet during the nine months ended September 30, 2021, reflecting our resumption of cruise operations globally and preparations for our announced sailings in the near term.

Net cash used in investing activities decreased $0.2 billion to $1.6 billion for the nine months ended September 30, 2021, compared to $1.8 billion for the same period in 2020.

The decrease was primarily attributable to an increase in proceeds from the sale of property and equipment and other assets of $175.4 million during the nine months ended September 30, 2021 compared to 2020 and a decrease in cash paid on settlement of derivative financial instruments of $85.0 million, partially offset by an increase in capital expenditures of $81.0 million during the nine months ended September 30, 2021 compared to the same period in 2020.

Net cash provided by financing activities were $2.8 billion for the nine months ended September 30, 2021, compared to $7.5 billion for the same period in 2020.

The decrease of $4.6 billion was primarily attributable to higher debt proceeds and issuance of commercial paper notes of $15.3 billion, during the nine months ended September 30, 2020, compared to the same period in 2021, offset by higher debt and commercial paper repayments of $8.6 billion during the nine months ended September 30, 2020, compared to the same period in 2021.

Additionally during the nine months ended September 30, 2021, we received $1.6 billion in proceeds from common stock issuances compared to none during the same period in 2020.

Net cash used by operating activities decreased $280.3 million to cash used of $0.5 billion for the first quarter of 2022 compared to cash used of $0.8 billion for the same period in 2021.

Our continued resumption of cruise operations in 2022 has generated an increase in guest ticket collections, resulting in an increase in customer deposits of $406.5 million during the first three months in 2022, compared to an increase of $95.9 million during the same period in 2021, when our global operations were suspended.

The increase in customer deposits was partially offset by an increase in cruise operating expenses during the three months ended March 31, 2022, reflecting the associated costs of returning our fleet to service.

Net cash used in investing activities increased $475.6 million to cash used of $1.4 billion for the first three months in 2022, compared to cash used of $1.0 billion for the same period in 2021.

The increase was primarily attributable to an increase in capital expenditures of $301.4 million during the first quarter of 2022, compared to the same period in 2021, and a decrease in proceeds from the sale of property and equipment and other assets of $175.4 million during the first quarter of 2021, which did not recur in 2022.

Net cash provided by financing activities was $1.2 billion for the first quarter of 2022, compared to cash provided of $3.2 billion for the same period in 2021.

The decrease of $1.9 billion was primarily attributable to $1.6 billion of proceeds from common stock issuances during the three months ended March 31, 2021, which did not recur during the three months ended March 31, 2022, and higher repayments of debt of $0.6 billion during the first quarter of 2022, compared to the same period in 2021.

These decreases were partially offset by repayments of commercial paper notes of $414.6 million during the first quarter of 2021, which did not recur in 2022.

Future Capital Commitments

Capital Expenditures

COVID-19 has impacted shipyard operations, which has resulted and may continue to result in delays of our previously contracted ship deliveries.

As of September 30, 2021, the dates that the ships on order by our Global and Partner Brands are expected to be delivered, subject to change in the event of construction delays, and their approximate berths are as follows:

COVID-19 has impacted shipyard operations which have and may continue to result in delays of our previously contracted ship deliveries.

As of March 31, 2022, the dates that the ships on order by our Global and Partner Brands are expected to be delivered, subject to change in the event of construction delays, and their approximate berths are as follows:

Ship Shipyard Expected Delivery Date Approximate

Royal Caribbean International —

Wonder of the Seas Chantiers de l'Atlantique 1st Quarter 2022 5,700

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

Utopia of the Seas Chantiers de l'Atlantique 2nd Quarter 2024 5,700

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

Evolution Class:

Unnamed Meyer Werft 2nd Quarter 2023 730

Silver Nova Meyer Werft 2nd Quarter 2023 730

Unnamed Meyer Werft 2nd Quarter 2024 730

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Total Berths 41,560

In April 2019, we entered into an agreement with Chantiers de l’Atlantique to build the fifth Edge-class ship for Celebrity Cruises.

The ship is expected to have an aggregate capacity of approximately 3,250 berths and is expected to enter service in the fourth quarter of 2025.

The order with Chantiers de l’Atlantique is contingent upon completion of conditions precedent and financing.

In September 2021, we amended the credit agreements for the first and second Evolution-class ships to increase their maximum loan amounts by €175.6 million on an aggregate basis, or approximately $203.5 million based on the exchange rate at September 30, 2021.

The increase in the loan amounts will finance ship design modifications that incorporate innovative sustainability features and additional premium cabins, increasing the capacity for each ship to 730 berths.

At our election, interest on the incremental portion of Evolution 1 and Evolution 2 will accrue either (1) at a fixed rate of 4.34% and 4.38%, respectively (inclusive of the applicable margin) or (2) at a floating rate equal to LIBOR plus 0.99% and 1.03%, respectively.

We took delivery of Celebrity Beyond in April of 2022.

In addition, as of March 31, 2022, we have an agreement in place with Chantiers de l’Atlantique to build an additional fifth Edge-class ship with capacity of approximately 3,250, estimated for delivery in 2025, which is contingent upon completion of conditions precedent and financing.

Our future capital commitments consist primarily of new ship orders.

As of September 30, 2021, the aggregate cost of our ships on order presented in the table above, excluding any ships on order by our Partner Brands, was $12.8 billion, of which we had deposited $784.8 million.

Approximately 62.5% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at September 30, 2021.

Decreased demand for cruising as a result of concerns regarding COVID-19 has had, and is expected to continue to have, a material impact on our cash flows, liquidity and financial position.

In order to preserve liquidity throughout the COVID-19 pandemic, we deferred a significant portion of our planned 2020 and 2021 capital expenditures.

As of September 30, 2021, we anticipate overall full year capital expenditures, based on our existing ships on order, will be approximately $2.1 billion for 2021.

As of March 31, 2022, the aggregate expected cost of our ships on order presented in the table above, excluding any ships on order by our Partner Brands, was $10.7 billion, of which we had deposited $0.6 billion.

Approximately 61.8% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at March 31, 2022.

The continuing effects of COVID-19, including uncertainties related to demand for cruising, has had, and is expected to continue to have, a material impact on our cash flows, liquidity and financial position.

In order to preserve liquidity throughout the suspension of our global cruise operations and gradual resumption of operations, we deferred a significant portion of our planned 2020, 2021 and 2022 capital expenditures.

As of March 31, 2022, we anticipate overall full year capital expenditures, based on our existing ships on order, will be approximately $3.0 billion for 2022.

This amount does not include any ships on order by our Partner Brands.

Contractual Obligations

As of September 30, 2021, our contractual obligations were as follows (in thousands):

Material Cash Requirements

As of March 31, 2022, our material cash requirements were as follows (in thousands):

Payments due by period

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(2) Long-term debt obligations mature at various dates through fiscal year 2034 and bear interest at fixed and variable rates.

Interest on variable-rate debt is calculated based on forecasted debt balances, including the impact of interest rate swap agreements using the applicable rate at September 30, 2021.

Debt denominated in other currencies is calculated based on the applicable exchange rate at September 30, 2021.

Interest on variable-rate debt is calculated based on forecasted debt balances, including the impact of interest rate swap agreements using the applicable rate at March 31, 2022.

Debt denominated in other currencies is calculated based on the applicable exchange rate at March 31, 2022.

(3) Amounts primarily represent future commitments with remaining terms in excess of one year to pay for our usage of certain port facilities, marine consumables, services and maintenance contracts.

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Included in these figures are $6.5 billion in final contractual installments, which have committed financing.

COVID-19 has impacted shipyard operations, which has resulted and may continue to result in delays of our previously contracted ship deliveries.

COVID-19 has impacted shipyard operations which have and may result in delays for our previously contracted ship deliveries.

Amounts do not include potential obligations which remain subject to cancellation at our sole discretion or any agreements entered for ships on order that remain contingent upon completion of conditions precedent.

Additionally, amounts do not include activity related to Silversea Cruises, including ships placed on order, if any, during the three-month reporting lag period.

(5) Amounts represent debt obligations with initial terms in excess of one year.

Debt denominated in other currencies is calculated based on the applicable exchange rate at September 30, 2021.

In addition, debt obligations presented above are net of debt issuance costs of $359.1 million as of September 30, 2021.

(6) Amounts represent finance lease obligations with initial terms in excess of one year, net of imputed interest.

(5) Debt denominated in other currencies is calculated based on the applicable exchange rate at March 31, 2022.

In addition, debt obligations presented above are net of debt issuance costs of $416.9 million as of March 31, 2022.

(6) Amounts represent finance lease obligations with initial terms in excess of one year.

(7) Amounts represent fees payable to sovereign guarantors in connection with certain of our export credit debt facilities and facility fees on our revolving credit facilities.

Please refer to Funding Needs and Sources for discussion on the planned funding of the above contractual obligations.

Please refer to Funding Needs and Sources for discussion on the planned funding of the above material cash requirements.

As a normal part of our business, depending on market conditions, pricing and our overall growth strategy, we continuously consider opportunities to enter into contracts for the building of additional ships.

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These contingencies generally relate to changes in taxes, increased lender capital costs and other similar costs.

The indemnification clauses are often standard contractual terms and are entered into in the normal course of business.

The indemnification clauses are often standard contractual terms and are entered into in the normal course

There are no stated or notional amounts included in the indemnification clauses and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses.

We have not been required to make any payments under such indemnification clauses in the past and, under current circumstances, we do not believe an indemnification obligation is probable.

In June of 2021, we exercised our option under our operating lease with SMBC Leasing and Finance, Inc (the "Lessor") to purchase Terminal A at PortMiami in July 2021 for the pre-agreed purchase price of $220.0 million.

Upon purchase of the terminal lease in July 2021, the underlying asset was recorded as a leasehold improvement within Property and equipment, net.

Our July 2021 purchase of the Port of Miami terminal eliminated the residual value guarantee and a requirement under the lease to post $181.1 million of cash collateral on or before July 18, 2021.

On February 25, 2021, S&P Global downgraded our senior unsecured rating from B+ to B, which had no financial impact, and downgraded our $3.32 billion Secured Notes and Silversea Notes, which were fully repaid in June 2021 with a portion of the proceeds from the $650 million June Unsecured Notes, from BB to BB-.

This downgrade had no impact on the terms of the notes.

Certain of our surety agreements with third party providers for the benefit of certain agencies and associations that provide travel related bonds, allow the sureties to request collateral.

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These agreements allow the credit card processors to require us, under certain circumstances, including breach of the financial covenants, the existence of other material adverse changes, excessive chargebacks, and other triggering events, to maintain a reserve that can be satisfied by posting collateral.

As of September 30, 2021, we have posted letters of credit as collateral with our sureties and credit card processors under our revolving credit facilities in the amount of $162.3 million.

As of March 31, 2022, we have posted letters of credit as collateral with our sureties and credit card processors under our revolving credit facilities in the amount of $117.2 million.

Executed amendments are in place for the majority of our credit card processors, waiving reserve requirements tied to breach of our financial covenants through at least September 30, 2022, with modified covenants thereafter, and as such, we do not anticipate any incremental collateral requirements for the processors covered by these waivers in the next 12 months.

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The maximum projected exposure with the processor, including amounts currently withheld and reported in Trade and other receivables , is approximately $293.9 million.

The amount and timing are dependent on future factors that are uncertain, such as the pace of resumption of our cruise operations, the volume of future deposits and whether we transfer our business to other processors.

The amount and timing are dependent on future factors that are uncertain, such as pace of resumption of our cruise operations, the volume of future deposits and whether we transfer our business to other processors.

If we require additional waivers on the credit card processing agreements and are not able to obtain them, this could lead to the termination of these agreements or the trigger of reserve requirements.

As of September 30, 2021, other than the items described above, we are not party to any other off-balance sheet arrangements, including guarantee contracts, retained or contingent interest, certain derivative instruments and variable interest entities, that either have, or are reasonably likely to have, a current or future material effect on our financial position.

As of March 31, 2022, other than the items described above, we are not party to any other off-balance sheet arrangements, including guarantee contracts, retained or contingent interest, certain derivative instruments and variable interest entities, that either have, or are reasonably likely to have, a current or future material effect on our financial position.

Funding Needs and Sources

Historically, we relied on a combination of cash flows provided by operations, drawdowns under our available credit facilities, the incurrence of additional debt and/or the refinancing of our existing debt and the issuance of additional shares of equity securities to fund our obligations.

The impact of COVID-19 has resulted in our voluntary suspension of global cruise operations from March 2020 up to our recent gradual resumption of operations.

Historically, we relied on a combination of cash flows provided by operations, draw-downs under our available credit facilities, the incurrence of additional debt and/or the refinancing of our existing debt and the issuance of additional shares of equity securities to fund our obligations.

COVID-19 resulted in our voluntary suspension of global cruise operations from March 2020 up to our gradual resumption of operations commencing in 2021.

The suspension of operations strained our sources of cash flow and liquidity, causing us to take actions resulting in reductions in our operating expenses, reductions in our capital expenses and new financings and other liquidity actions.

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We have significant contractual obligations of which our debt service obligations and the capital expenditures associated with our ship purchases represent our largest funding needs.

As of September 30, 2021, we had 10.3 billion of committed financing for final delivery installments on our ships on order.

As of September 30, 2021, we had $4.7 billion in contractual obligations due through September 30, 2022, of which approximately $0.9 billion relates to debt maturities, $0.9 billion relates to interest on debt and $2.7 billion relates to progress

payments on our ship orders and the final installments payable due upon the delivery of Silver Dawn, Wonder of the Seas and Celebrity Beyond .

Our revolving credit facilities were mostly utilized through a combination of amounts drawn and letters of credit issued under the facilities as of September 30, 2021.

We have agreed with certain of our lenders not to pay dividends or engage in stock repurchases.

Refer to Note 10 .

Shareholders' Equity to our consolidated financial statements for further information.

As of March 31, 2022, we had $8.4 billion of committed financing for our ships on order.

As of March 31, 2022, we had $5.6 billion in contractual obligations due through March 31, 2023, of which approximately $2.5 billion relates to debt maturities, $1.5 billion relates to interest on debt and $1.2 billion relates to progress payments on our ship orders and the final installment payable due upon the delivery of Celebrity Beyond.

As of March 31, 2022, we had liquidity of $3.8 billion, in the form of cash and cash equivalents of $2.0 billion, $1.1 billion of undrawn revolving credit facility capacity, and a $0.7 billion commitment for a 364-day term loan facility available to draw on at any time prior to August 12, 2022.

Our revolving credit facilities were partially utilized through a combination of amounts drawn and letters of credit issued under the facilities as of March 31, 2022.

Beyond the next 12 months, in June of 2023, approximately $3.2 billion of long- term debt will become due.

Accordingly, in addition to our $3.8 billion liquidity as of March 31, 2022, in February 2022 we entered into certain agreements with MS where MS agrees to provide backstop committed financing to refinance, repurchase and/or repay in whole or in part our existing and outstanding 10.875% Senior Secured Notes due 2023, the Priority Guaranteed Notes, and 4.25% Convertible Notes due 2023.

Pursuant to the agreements, we may, at our sole option, issue and sell to MS (subject to the satisfaction of certain conditions) five-year senior unsecured notes with gross proceeds of up to $3.15 billion at any time between April 1, 2023 and June 29, 2023, to refinance the aforementioned notes.

If any person acquires ownership of more than 50% of our common stock or, subject to certain exceptions, during any 24-month period, a majority of our board of directors is no longer comprised of individuals who were members of our board of directors on the first day of such period, we may be obligated to prepay indebtedness outstanding under our credit facilities, which we may be unable to replace on similar terms.

Our public debt securities also contain change of control provisions that would be triggered by a third-party acquisition of greater than 50% of our common stock coupled with a ratings downgrade.

Our debt securities also contain change of control provisions that would be triggered by a third-party acquisition of greater than 50% of our common stock coupled with a ratings downgrade.

If this were to occur, it would have an adverse impact on our liquidity and operations.

Based on our assumptions and estimates and our financial condition, we believe that the liquidity resulting from the actions mentioned above will be sufficient to fund our liquidity requirements over at least the next twelve months.

However, there is no assurance that our assumptions and estimates are accurate due to possible unknown variables related to this unprecedented suspension of our operations and, as such, there is inherent uncertainty in our ability to predict future liquidity requirements.

However, there is no assurance that our assumptions and estimates are accurate due to possible unknown variables related to this unprecedented suspension and gradual ramp up of our operations and, as such, there is inherent uncertainty in our ability to predict future liquidity requirements.

Refer to Note 1 .

General, Management’s Plan and Liquidity, to our consolidated financial statements under Part I.

Financial Statements for further information.

Debt Covenants

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During the first quarter of 2021, we amended $4.9 billion of our non-export credit facilities and $6.3 billion of our export credit facilities, and certain credit card processing agreements, to extend the waiver of our financial covenants through and including at least the third quarter of 2022, and subsequently in the third quarter of 2021, we entered into a letter agreement to extend the waiver period for our export credit facilities to the end of the fourth quarter of 2022.

During the fourth quarter of 2021, we amended $7.3 billion of outstanding export-credit facilities plus committed export-credit facilities to modify financial covenant levels for 2023 and 2024, following the waiver period through and including the fourth quarter of 2022.

In addition, pursuant to the amendments for the non-export credit facilities, we have modified the manner in which such covenants are calculated, temporarily in certain cases and permanently in others, as well as the levels at which our net debt to capitalization covenant will be tested during the period commencing immediately following the end of the waiver period and continuing through the end of 2023.

The amendments impose a monthly-tested minimum liquidity covenant of $350 million.

The amendments impose a monthly-tested minimum liquidity covenant of $350 million, which in the case of the non-export credit facilities terminates at the end of the waiver period and in the case of the export credit facilities terminates either in July 2025, or when we pay off all deferred amounts, whichever is earlier.

In addition, the amendments to the non-export credit facilities place restrictions on paying cash dividends and effectuating share repurchases through the end of the third quarter of 2022, while the export credit facility amendments require us to prepay any deferred amounts if we elect to issue dividends or complete share repurchases.

As of September 30, 2021, we were in compliance with the applicable minimum liquidity covenant and we estimate that we will be in compliance for at least the next twelve months.

As of March 31, 2022, we were in compliance with our financial covenants and we estimate that we will be in compliance for at least the next twelve months.

Any further covenant waivers may lead to increased costs, increased interest rates, additional restrictive covenants and other available lender protections as may be agreed with our lenders.

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If we require additional waivers and are not able to obtain them or repay the debt facilities, this would lead to an event of default and potential acceleration of amounts due under all of our outstanding debt and derivative contracts.

During the first quarter of 2020, we declared a cash dividend on our common stock of $0.78 per share, which was paid in April 2020.

During the first quarter of 2020, we also paid a cash dividend on our common stock of $0.78 per share, which was declared during the fourth quarter of 2019.

During the second quarter of 2020, we agreed with certain of our lenders not to pay dividends or engage in common stock repurchases for so long as our debt covenant waivers are in effect.

In addition, 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.

Accordingly, we did not declare a dividend during the six consecutive quarters ending September 30, 2021.

Accordingly, we did not declare a dividend during the eight consecutive quarters ended March 31, 2022.

Pursuant to amendments made to these agreements during the first quarter of 2021, the restrictions on paying cash dividends and effectuating share repurchases were extended through and including the third quarter of 2022.

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Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the year ended December 31, 2021.

T here have been no significant developments or material changes since the date of our 2020 Annual Report.

T here have been no material changes to our exposure to market risks since the date of our 2021 Annual Report.

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-Q

Item 2. Management’s Discussion and Analysis