What changed in this filing

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Item 1. Business

2023-02-23 compared with 2022-03-01 · 189 added, 269 removed, 507 unchanged (47% of the section changed)

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

We control and operate three global cruise brands:

We own and operate three global cruise brands:

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

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

Together, our Global Brands and our Partner Brands operate a combined total of 61 ships in the cruise vacation industry with an aggregate capacity of approximately 140,855 berths as of December 31, 2021.

Our ships operate on a selection of worldwide itineraries that call on approximately 1,000 destinations on all seven continents.

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

We account for our investments in our Partner Brands under the equity method of accounting.

Together, our Global Brands and our Partner Brands have a combined fleet of 64 ships in the cruise vacation industry with an aggregate capacity of approximately 150,005 berths as of December 31, 2022.

Our ships offer a selection of worldwide itineraries that call on more than 1,000 destinations on all seven continents.

In addition to our headquarters in Miami, Florida, we have offices and a network of international representatives around the world, which primarily focus on sales and market development.

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

Return to Healthy Sailing

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

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

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

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

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

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

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

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

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

COVID-19, and Note 1.

General to our consolidated financial statements under Item 8.

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

As a result of the global pandemic impact of COVID-19, we paused our guest cruise operations in March 2020 and began resuming guest cruise operations in 2021, with our full fleet in service by June 2022.

We continue to prioritize our financial recovery and the further enhancement of our financial results and liquidity.

Our Global Brands

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

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

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

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

We believe that the quality of the Royal Caribbean

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

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

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

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

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Royal Caribbean International operates 26 ships with an aggregate capacity of approximately 94,100 berths.

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

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

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

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

Risk Factors for further discussion on the impact of COVID-19 on shipyard operations.

Additionally, as of December 31, 2022, Royal Caribbean International had four ships on order with an aggregate capacity of approximately 22,500 berths.

The ships on order include the first three ships of a new generation of vessels, known as the Icon-class, and our sixth Oasis-class ship, Utopia of the Seas .

The first Icon-class ship, Icon of the Seas, is expected to be delivered in the fourth quarter of 2023 and enter service in the first quarter of 2024, and the second and third Icon-class ships, are expected to be delivered in the second quarters of 2025 and 2026, respectively.

Utopia of the Seas is expected to be delivered in the second quarter of 2024.

Celebrity Cruises

Celebrity Cruises is positioned within the luxury segment of the cruise vacation industry.

Celebrity Cruises’ strategy is to target affluent consumers by delivering a destination-rich experience on upscale ships that offer, among other things, luxurious accommodations, refined design-forward spaces, world-class service and culinary excellence.

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

Celebrity Cruises’ strategy is to target affluent consumers by delivering a destination-rich experience on upscale ships that offer, among other things, culinary excellence, world-class service, luxurious spaces and accommodations, and holistic wellness experiences.

Celebrity Cruises operates 15 ships with an aggregate capacity of approximately 32,465 berths.

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

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

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

Additionally, as of December 31, 2022, Celebrity Cruises had one Edge-class ship on order with an aggregate capacity of approximately 3,250 berths.

This ship, Celebrity Ascent , is expected to be delivered in the fourth quarter of 2023.

Silversea Cruises

Silversea Cruise Holding Ltd.

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

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

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

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

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

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

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

Silversea Cruises operates 11 ships, with an aggregate capacity of approximately 4,150 berths, including the brand's newest ship, Silver Endeavour , which was acquired in the third quarter of 2022 and commenced operations in the fourth quarter of 2022.

Additionally, as of December 31, 2022, Silversea Cruises had on order two ships of a new generation, known as the Evolution-class, with an aggregate capacity of approximately 1,460 berths, which are expected to be delivered in the second quarters of 2023 and 2024, respectively.

The expected delivery dates for all of our ships on order are subject to change in the event of shipyard construction delays or in the event we agree to scope changes which impact the delivery timelines.

Risk Factors for further discussion on shipyard operations.

Our Partner Brands

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

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

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

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

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

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

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

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

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

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

North America (2)(3)

Europe (2)(4)

Asia/Pacific (2)(5)

2015 3.36% 1.25% 0.08%

2016 3.43% 1.23% 0.11%

2017 3.56% 1.28% 0.15%

2018 3.87% 1.38% 0.16%

2019 3.89% 1.41% 0.20%

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

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

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

In addition, our estimates incorporate our own analysis utilizing the same publicly available cruise industry data as a base.

(3) Our estimates include the United States and Canada.

(4) Our estimates include European countries relevant to the industry (most notably:

the Nordics, Germany, France, Italy, Spain and the United Kingdom).

(5) Our estimates include Southeast Asia (most notably:

Singapore, Thailand and the Philippines), East Asia (most notably:

China and Japan), South Asia (most notably:

India) and Oceania (most notably:

Australia and New Zealand) regions.

We believe that cruising will continue to be a popular vacation choice due to its inherent value, extensive itineraries and variety of shipboard and shoreside activities.

The Company and other industry participants voluntarily suspended operations in March of 2020 and gradually resumed full operations starting in the second half of 2021 through the first half of 2022.

As a result, comparative information regarding market penetration and other indicators are not meaningful for 2020, 2021, and 2022.

For the five year period prior to 2020, industry data indicated that market penetration rates were still low and that a significant portion of cruise

guests carried in those years were first-time cruisers.

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

During the five year period from 2015 through 2019, industry market penetration rates (computed based on the number of annual cruise guests as a percentage of the total population) grew from 3.36% to 3.89% for North America, from 1.25% to 1.41% for Europe, and from 0.08% to 0.20% for Asia/Pacific.

The increased penetration shows the continued growth potential in the markets most served by the industry.

The global cruise fleet was served by a weighted average of approximately 634,000 berths during 2022 with approximately 359 ships at the end of 2022.

As of December 31, 2022, there were approximately 63 ships on order with an estimated 143,000 berths that are expected to be placed in service in the global cruise market through 2028, not taking into account ships taken out of service or ordered during these periods.

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

The global cruise industry carried approximately 30 million cruise guests in 2019 and approximately 28.5 million in 2018.

The following table details the growth in global weighted average berths and the global, North American, European and Asia/Pacific cruise guests for the five years prior to the impact of COVID-19 in 2020 (in thousands, except berth data):

The following table details the growth in global weighted average berths and the percentage of North American, European and Asia/Pacific cruise guests for 2022 and for each of the five years from 2015 through 2019:

Weighted-Average

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Asia/Pacific Cruise Guests (2)(6)

Other Cruise Guests (2)

2015 469,000 112,700 52% 29% 14% 5%

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2022 634,000 150,005 65% 28% 2% 5%

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

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

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(1) Historically, we have reported annual information for comparability across periods.

The 2020 suspension of global cruise operations as a result of COVID-19 and the gradual resumption of full operations starting in the second half of 2021 through the first half of 2022 do not allow for a meaningful comparison to prior years' information and, as such, 2020 and 2021 data has been excluded from this table.

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

We use data obtained from Seatrade Insider, Cruise Industry News and company press releases to estimate weighted-average supply of berths and CLIA and G.P.

Wild to estimate cruise guest information.

For 2022, cruise guest information includes data through the third quarter of 2022.

In addition, our estimates incorporate our own analysis utilizing the same publicly available cruise industry data as a base.

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(6) Our estimates include Southeast Asia (most notably:

Singapore, Thailand and the Philippines), East Asia (most notably:

Singapore, Thailand and the Philippines), East Asia (pre-2022, most notably:

China and Japan), South Asia (most notably:

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Australia and New Zealand) regions.

North America

Industry cruise guests have been primarily sourced from North America, which represented approximately 47% of global cruise guests in 2019.

The compound annual growth rate in cruise guests sourced from this market was approximately 4% from 2015 to 2019.

Industry cruise guests sourced from Europe represented approximately 25% of global cruise guests in 2019.

The compound annual growth rate in cruise guests sourced from this market was approximately 3% from 2015 to 2019.

Industry cruise guests sourced from the Asia/Pacific region represented approximately 24% of global cruise guests in 2019.

The compound annual growth rate in cruise guests sourced from this market was approximately 24% from 2015 to 2019.

We compete with a number of cruise lines.

The decrease in Asia/Pacific cruise guests from 2019 to 2022 is partly driven by China remaining closed given its continued COVID-19 restrictions.

We compete with a number of cruise lines and other land-based vacations.

Our principal competitors are Carnival Corporation & plc, which owns, among other brands, Aida Cruises, Carnival Cruise Line, Costa Cruises, Cunard Line, Holland America Line, P&O Cruises, Princess Cruises and Seabourn;

Disney Cruise Line;

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

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

and Virgin Voyages.

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

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

Operating Focus

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

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

Operating Strategies

Our mission is to deliver the best vacation experiences to our guests, responsibly.

We continue to prioritize operating strategies that support this mission as well as operating strategies that support our financial recovery and the further enhancement of our financial results and liquidity.

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

Our Company's operating focus is as follows:

• deliver outstanding vacation experiences to our guests;

Our Company's operating strategies are as follows:

• deliver the best vacation experiences to our guests, responsibly;

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

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

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

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

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

• deepen our customer relationships in order to enhance our revenues;

• focus on cost efficiency, adequate cash and liquidity, and strengthen our balance sheet, with the overall goals of maximizing our return on invested capital and shareholder value;

• protect the environment in which our vessels and organization operate, with a focus on decarbonization;

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

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

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

Safety and health policies

• maintain strong relationships with travel advisors, while enhancing our consumer outreach and e-commerce programs

Safety, security and health policies

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

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

overseen by the Safety,

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

We also have a dedicated committee of our Board of Directors, the Safety, Environment, Sustainability and Health Committee, which is responsible for reviewing and monitoring our overall strategies, policies and programs that impact the safety and health of our guests and crew.

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

Support the healthy return of cruising

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

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

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

Waters section below for further information.

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

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

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

Consumer engagement

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

For example, in early 2023, we extended our revolving credit facility with our key relationship banks to ensure adequate liquidity on a going-forward basis.

We believe these strategies enhance our ability to achieve our overall goal of maximizing our return on invested capital and long-term shareholder value.

Protect the environment

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

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

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

This includes our Destination Net Zero strategy, and our partnership with the World Wildlife Fund, which together aim to reduce our carbon footprint, raise awareness about ocean conservation among guests and crew, and support ocean conservation projects around the world.

Destination Net Zero is our decarbonization strategy that focuses on how to achieve net zero emissions by 2050 and deliver a net zero capable ship by 2035.

This strategy also includes achieving reductions on our carbon intensity by double digits by 2025, compared to 2019.

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

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

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

While we continue to develop our roadmap to Destination Net Zero, it is already clear that our strategy will require new fuels and technologies that are not available today.

Refer to Item 1A.

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

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

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

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

To achieve our carbon intensity goals, we have invested and plan to continue investing in energy and carbon efficient technologies included in the design of our new vessels, our ongoing fleet energy management program and other technologies.

These investments include installation costs related to advanced emissions purification systems ("AEP") and other technologies that are expected to reduce fuel consumption and carbon footprint.

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

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

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

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

In addition to providing an overview on our sustainability efforts, the report references the guidelines of the Global Reporting Initiative and is aligned with the Sustainable Accounting Standards Boards Industry Standards for Cruise Lines.

We continue to work on an initial report following the recommendations of the Task Force on Climate Related Financial Disclosures (TCFD), which we plan to file in 2023.

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

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Our ability to attract, engage, and retain key employees has been and will remain critical to our success.

Our Talent and Compensation Committee of our Board of Directors oversees the Company's human capital management strategies, including initiatives for talent diversity, equity and inclusion, talent management, and corporate culture.

We focus on providing our employees with a competitive compensation structure, development opportunities, and other personal and professional growth opportunities in order to strengthen and support our human capital.

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Global awareness and market penetration

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

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

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

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

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

Refer to Item 1A.

Risk Factors - “ Conducting business globally may result in increased costs and other risks” for a discussion of the risks associated with our international operations.

Fleet upgrade and maintenance

We place a strong focus on innovation, which we seek to achieve by introducing new concepts on our new ships and continuously making improvements to our fleet through modernization projects and key technological improvements.

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

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

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

More recently, with the introduction of Celebrity Edge , we introduced the "Magic Carpet" (a cantilevered, floating platform that reaches a height of 13 stories above sea level and can serve as a dining venue, full bar and platform for live music) and newly designed staterooms with an "Infinite Veranda" where, with the touch of a button, the veranda becomes part of the entire living space.

As part of the newbuild and modernization programs, we also seek to bring innovations in the areas of safety, reliability and energy efficiency to our fleet.

Risk Factors - “ Conducting business globally results in increased costs and other risks” for a discussion of the risks associated with our international operations.

Delivery of state-of-the-art cruise ships, and fleet upgrade and maintenance

We place a strong focus on innovation, which we seek to achieve by introducing new concepts on our new ships and continuously making improvements to our existing fleet, such as large-scale atriums, double hulls for increased safety, and advanced steel structures.

We are expanding our innovation efforts to cover multiple fronts, including naval and architectural design, guest facing features, energy efficiency, sustainability, and safety.

We are committed to building state-of-the-art ships at a moderate growth rate and we believe our success in this area provides us with a competitive advantage.

Our newer vessels traditionally generate higher revenue yield premiums and are more efficient to operate than older vessels.

Our newer vessels traditionally generate higher revenue yield premiums and are more efficient and environmentally friendly to operate than older vessels.

In 2023, we will introduce three new vessels to our fleet, including Royal Caribbean International’s new flagship – Icon of the Seas , Celebrity Cruises – Celebrity Ascent , and Silversea Cruises – Silver Nova .

Each of these vessels will represent the latest hardware for their respective brands and both Icon of the Seas and Silver Nova are the first vessels of a new class.

For Royal Caribbean International, new features on Icon of the Seas include a dedicated family neighborhood called “Surfside”, a pool deck featuring the largest swimming pool and waterpark at sea, and the “Aquadome” showcasing the tallest waterfall at sea in an 82-foot-tall dome.

For Celebrity Cruises, Celebrity Ascent will represent an evolution of Celebrity Beyond and will build on the success that the Edge series of ships has brought to market.

For Silversea, Silver Nova will be amongst our most environmentally friendly and energy efficient ships to date.

As of December 31, 2022, our Global Brands and Partner Brands have 10 ships on order.

Refer to the Operations section below for further information on our ships on order.

As we further develop our Newbuild program, we continue to utilize each vessel as an opportunity to pilot new technology towards Destination Net Zero.

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

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

Azamara Journey, Azamara Quest and Azamara Pursuit .

Markets and itineraries

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

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

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

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

Our brands have expanded their mix of itineraries while strengthening our ability to further penetrate the Asian and Australian markets.

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

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

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

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

We are focused on maximizing long-term shareholder returns by operating in established

markets while growing our presence in developing markets.

New capacity has allowed our brands to expand into new markets and itineraries in an effort to address changes in market demand.

Destination experiences and port facilities

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

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

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

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

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

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

We are also reassessing our investment in other destinations.

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

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

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

In 2023, we plan to expand Perfect Day at CocoCay with the delivery of Hideaway Beach, an elevated, adults-only experience.

Additionally, we are planning to introduce a new product, our Royal Beach Club offering, which will offer an exclusive and branded experience at high volume ports.

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

We continue to evaluate opportunities to develop additional destinations across the globe.

For instance, in November 2022, we opened in Galveston, Texas our new Net Zero homeport cruise terminal, the first cruise terminal facility to generate 100% of its needed energy through on-site solar panels.

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

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Technological capabilities

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

Technology also plays a critical role in the

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

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

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

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

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

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

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

In concert with our destination focus, our island technology solutions are now enabling our guests to remain connected with WiFi access, order food and beverage as well as take advantage of all the island based activities with the same ease as onboard our ships.

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

Technology also plays a critical role in the measures and protocols that we have developed and will continue operating on our cruise ships.

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

We have continued to integrate digital capabilities into our operations and have increased our focus in bringing in data analytics and artificial intelligence into our processes to provide better insights on how to model our maintenance or operational actions.

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

At the same time, we partnered with SpaceX to launch Starlink, the next generation in shipboard connectivity, unlocking an improved guest experience.

In concert with our destination focus, our island technology solutions are now enabling our guests to remain connected with WiFi access, order food and beverages as well as take advantage of all the island based activities with the same ease as onboard our ships.

Investments in our core platforms, as well as the trade and direct distribution channels, are delivering the benefit of more modernized solutions with scalability and faster self-service response times while also deploying new features such as flight packages and additional promotional offer capabilities.

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

Travel advisor support and consumer outreach

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

Travel advisor support, consumer outreach, and e-commerce

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

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

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

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

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

of the channel.

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

We also provide trained customer service representatives, call centers and online training tools.

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

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

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

In addition, we maintain and invest in our websites, including mobile applications and mobile websites.

We continue to operate our Consumer Outreach department, which provides consumers 24-hour access to our vacation planners and customer service agents in our call centers, as well as invest in our websites, including mobile applications and mobile websites.

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

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

Additionally, we continue to advance our e-commerce capabilities and the vacation shopping experience for our guests.

In addition to offering a simplified booking experience, we leverage the mobile application for onboard experiences such as WiFi, beverages, shore excursions, and specialty dining – enabling guests to book their vacation end-to-end.

Guest Services

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

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

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

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Captain’s Club and Venetian Society have approximately 5.4 million members combined worldwide.

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

Members are awarded points or credits in proportion to the number of cruise days and stateroom category.

The loyalty programs provide tiers of membership benefits which entitle guests to upgraded experiences and recognition relative to the status achieved once the guests have accumulated the number of cruise points or credits specified for each tier.

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

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

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

In addition, upon achieving a certain level of cruise points or credits, the Crown & Anchor Society and Captain’s Club members benefit from reciprocal membership benefits between the loyalty programs.

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

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

Cruise Ships and Itineraries

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

As of December 31, 2022, our Global Brands and Partner Brands collectively operated 64 ships with a selection of worldwide itineraries that call on more than 1,000 destinations in over 120 countries.

The following table presents summary information concerning ships that we expect will be in our fleet in 2023 under our Global Brands and Partner Brands.

Ship Year Ship

Built Year Ship

In Service or Delivered, if after 2021 (1)

Built Year ship entered service / will enter service Approximate

Royal Caribbean International

Icon of the Seas (1)

2023 2024 5,600

Wonder of the Seas 2022 2022 5,700

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Independence of the Seas 2008 2008 3,850

Ship Year Ship

Built Year ship entered service / will enter service Approximate

Liberty of the Seas 2007 2007 3,800

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Celebrity Cruises

Celebrity Ascent 2023 2023 3,250

Celebrity Beyond 2022 2022 3,250

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Celebrity Reflection 2012 2012 3,050

Ship Year Ship

Built Year Ship

In Service or Delivered, if after 2021 (1)

Celebrity Silhouette 2011 2011 2,900

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Silversea Cruises

Silver Nova 2023 2023 730

Silver Endeavour 2021 2022 200

Silver Dawn 2021 2022 600

2021 2022 600

Silver Origin 2020 2020 100

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Silver Cloud 1994 1994 250

Ship Year Ship

Built Year ship entered service / will enter service Approximate

Silver Explorer 1989 2008 150

Mein Schiff 2 2019 2019 2,900

2019 2019 2,900

Mein Schiff 1 2018 2018 2,900

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(1) The year a ship entered service refers to the year in which the ship commenced cruise revenue operations for the brand.

If after 2021, the date reflects the year of expected delivery into the brand.

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

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

(1) Icon of the Seas is expected to be delivered in the fourth quarter of 2023 and is expected to commence cruise revenue operations in the first quarter of 2024.

As of December 31, 2022, our Global Brands and our Partner Brands have 10 ships on order.

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

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

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

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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

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

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

Icon of the Seas Meyer Turku Oy 4th Quarter 2023 5,600

Unnamed Meyer Turku Oy 2nd Quarter 2025 5,600

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Celebrity Cruises —

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

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

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Silver Nova Meyer Werft 2nd Quarter 2023 730

Unnamed Meyer Werft 2nd Quarter 2024 730

Silver Ray Meyer Werft 2nd Quarter 2024 730

TUI Cruises (50% joint venture) —

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

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

Year Ended December 31, (3)

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

For the years ended December 31, 2020, 2019, and 2018, we include the full year of operations for Azamara Cruises.

Cruise Pricing

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

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

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

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

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Segment Reporting

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

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

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

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Our brands also have similar itineraries as well as similar cost and revenue components.

In addition, our brands source passengers from similar markets around the world and operate in similar economic environments with a significant degree of commercial overlap.

In addition, our Global

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

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

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

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

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

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

As of December 31, 2022, our three global cruise brands employed approximately 102,500 employees spanning across our shipboard fleet and shoreside locations.

Our shoreside workforce, including private destinations, consisted of approximately 8,100 full time and 100 part-time employees.

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The following table details the distribution of our workforce by employee type and region as of December 31, 2022:

Employee Type (1)

Employee Type U.S.

Based Employees International Employees

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Our shoreside workforce is gender diverse with 58% female representation.

Our shipboard workforce is comprised of employees from 130 plus countries.

Our shipboard workforce is comprised of employees from approximately 139 countries.

The majority of our shipboard workforce comes from the Philippines (30%), Indonesia (18%) and India (14%).

Our shoreside workforce is primarily based out of the U.S.

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

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

(57%), Philippines (21%), Mexico (7%), and U.K.

The following table details the gender distribution of our workforce by employee location as of December 31, 2022:

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Shipboard 78% 22%

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

shoreside workforce is ethnically diverse with approximately 55% comprised of non-White ethnic groups.

Shoreside Representation by Ethnicity % of Total U.S.

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African American 9%

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

(1) No other individual category is greater than 1%.

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

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

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

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

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

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

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

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

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

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

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

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

In 2022, our workforce invested approximately 2.5 million hours in learning programs across a variety of areas ranging from Ethics, Compliance, Data Analysis, Business Software and Tools, Finance/Accounting, Professional development, Project Management skills, Cyber Security, Leadership and Safety/Security.

In total, our workforce completed approximately 1.2 million courses within our learning management systems.

We run our employee pulse surveys periodically to understand and positively impact our employees’ experience.

In 2022, our shoreside employee engagement scores remained high and above most global industry benchmarks.

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

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

notice and our excess policies terminate immediately.

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

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

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Our ships are regulated by various international, national, state and local laws, regulations and treaties in force in the jurisdictions in which they operate.

In addition, our ships are registered in the Bahamas, Malta or in the case of our ships operating in the Galapagos Islands, Ecuador.

In addition, our ships are registered in the Bahamas, Cyprus, Malta or in the case of our ships operating in the Galapagos Islands, Ecuador.

Each ship is subject to regulations issued by its country of registry, including regulations issued pursuant to international treaties governing the safety of our ships, guests and crew as well as environmental protection.

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

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

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

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

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

waters subject to certain conditions and safety protocols.

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

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

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

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

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

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

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

Safety and Security Regulations

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All of our operations and ships are regularly audited by various national authorities, and we are required to maintain the relevant certificates of compliance with the ISM Code.

Additionally, we are required to meet, and we fully comply with, the provisions outlined in the Standards of Training, Certification, and Watchkeeping for Seafarers (STCW).

This convention sets the training and competency standards for all our crew who are responsible for operating the vessels or who have designated roles in ensuring the safety of our guests and crew during an emergency.

Regulatory bodies routinely check that our crews’ training credentials are up-to-date and assess competency by observing safety and emergency drills.

As amendments are made to STCW, we ensure that our crew training is updated accordingly.

Our ships are subject to various security requirements, including the International Ship and Port Facility Security Code (“ISPS Code”), which is part of SOLAS, and the U.S.

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The security plans for all of our ships have been submitted to and approved by the Recognized Security Organization on behalf of the ships' flag state and are in compliance with the ISPS Code and the MTSA.

The Cruise Vessel Security and Safety Act of 2010, which applies to passenger vessels which embark or include port stops within the United States, requires the implementation of certain safety design features as well as the establishment of practices for the reporting of and dealing with allegations of crime.

practices for the reporting of and dealing with allegations of crime.

The cruise industry supported this legislation and we believe that our internal standards are generally as strict or stricter than the law requires.

Some provisions of the act call for regulations which have not been finalized.

We do not expect the pending regulations will have a material impact to our operations.

We do not expect the pending regulations to have a material impact to our operations.

Environmental Regulations

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

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

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

There are four established ECAs that restrict sulfur emissions:

We do not expect for this increased limitation to have a material impact to our results of operations largely due to a number of mitigating steps we have taken over the last several years, including equipping all of our new ships delivered since 2014 with Advanced Emissions Purification ("AEP") systems covering all engines and actively developing and installing AEP systems on the majority of our remaining fleet;

resulting in 70% of our fleet being equipped with AEP systems.

In addition, the majority of our ships on order are being delivered with Liquified Natural Gas ("LNG") technology that meet all sulfur requirements.

These efforts will provide us with additional operational and deployment flexibility.

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

There are four established ECAs and one additional ECA being established beginning in May of 2025 that restrict sulfur emissions:

the Baltic Sea, the North Sea/English Channel, certain waters surrounding the North American coast, and the waters surrounding Puerto Rico and the U.S.

Virgin Islands (the "Caribbean ECA").

Ships operating in these sulfur ECAs have been required to

reduce their emissions sulfur content to 0.1%.

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

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

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

Virgin Islands (the "Caribbean ECA") and the Mediterranean Sea.

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

This reduction has not, and with the addition of the new ECA will not, have a significant impact on our results of operations to date due to the mitigating steps described above.

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

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

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

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

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

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

Additionally, in 2019, the IMO's monitoring and reporting system (IMO data and collection system), which is applicable to all ship itineraries, entered into force.

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

Beginning in 2018 and 2019, respectively, the European Union (EU) and IMO both implemented requirements for ships to monitor and report their carbon emissions.

Compliance with these regulations have not materially impacted our costs or results of operations.

However, the legislations contemplate the enactment of further obligations and restrictions focused on reducing carbon emissions from ships.

The EU has proposed a series of significant carbon reforms under its Fit for 55 package designed to meet its 2030 emission goals, which would require us, among other things, to increase the use of low carbon fuel onboard our vessels, connectivity to shore power, and to purchase carbon allowances.

The Fit for 55 Package includes proposals for the EU Emission Trading System (ETS), and the FuelEU Maritime initiative.

The ETS’s current proposed structure will subject ship operators to the program, and will impose requirements to purchase carbon emission allowances beginning in 2024 for 40% of our emissions within Europe, growing to 70% in 2025, and to 100% by 2026.

The FuelEU Maritime initiative, still under development, currently proposes requirements on fuel mix of 2-6% lower carbon fuels beginning in 2024 to 2026 and connecting to shore power by 2030.

If enacted, the Fit for 55 proposals could individually and collectively have a material adverse effect on our business and results of operations due to increased costs

associated with compliance and modified itineraries in the affected regions.

The impact of the regulation is uncertain as elements of the proposals have not been finalized and the costs of ETS allowances will depend on future markets.

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

The approved framework for the EEXI and CII amendments are not expected to have a material impact on our operations, however IMO is expected to review the CII framework in 2026, which could result in further requirements which could lead to changes to our itinerary flexibility for some of our ships depending on the final operational measures needed to comply.

Furthermore, the IMO is also considering various other measures, including a possible fuel standard or a global market-based measures, such as carbon taxes, that would reduce greenhouse gas emissions even further.

While the exact impact is uncertain at this time as the proposals have yet to be finalized, the global nature of the regulation could result in increased compliance costs.

We will continue to monitor and be engaged in the discussions.

Ballast Water

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

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As a condition to obtaining the required certificates, we generally arrange through our insurers for the provision of surety for our ship-operating companies.

The required amount is currently $32.0 million per operator and is subject to additional consumer price index based adjustments.

We are also required by the United Kingdom, Norway, Finland and the Baltics to establish our financial responsibility for any liability resulting from the non-performance of our obligations to guests from these jurisdictions.

In the United Kingdom we are currently required by the Association of British Travel Agents to provide performance bonds totaling approximately £124 million.

Additionally, we were required by the Civil Aviation Authority to provide performance bonds totaling £18.5 million.

The Norwegian Travel Guarantee Fund requires us to maintain performance bonds in varying amounts during the course of the year to cover our financial responsibility in Norway, Finland and the Baltics.

The required amount of the surety bonds for non-performance of obligations to guests is currently $32 million per operator and is subject to additional consumer price index based adjustments.

We are also required by the United Kingdom, Norway, Finland, Iceland and the Baltics to establish our financial responsibility for any liability resulting from the non-performance of our obligations to guests from these jurisdictions.

In the United Kingdom we are currently required by the Association of British Travel Agents to provide performance bonds in varying amounts during the course of the year, up to £154 million during the peak season.

Additionally, we are required by the Civil Aviation Authority to provide performance bonds totaling £35 million.

We maintain with the Norwegian Travel Guarantee Fund performance bonds in varying amounts during the course of the year to cover our financial responsibility in Norway, Finland, Iceland and the Baltics.

Certain other jurisdictions also require that we establish financial responsibility to our guests resulting from the non-performance of our obligations;

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

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

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

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

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We and certain of our subsidiaries are subject to value-added and other indirect taxes most of which are reclaimable, zero-rated or exempt.

In December 2022, the European Union announced it would implement the Organization for Economic Co-operation Development’s (OECD’s) 15% Global Minimum Tax initiative (known as “Pillar 2”).

If enacted, these rules generally impose a 15% corporate minimum tax on large multi-national companies, and we expect to be in scope of the rules beginning in 2025.

The OECD model rules provide an exclusion for “International Shipping Income,” and certain ancillary income, for which certain of our earnings may be eligible.

We are still pending final guidance on several material open technical issues and assessing the impact on our financial statements.

Website Access to Reports

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Information About our Executive Officers

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

As of February 23, 2023, our executive officers are:

Name Age Position

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Lisa Lutoff-Perlo 65 President and Chief Executive Officer, Celebrity Cruises

Roberto Martinoli 69 President and Chief Executive Officer, Silversea Cruises

Kulovaara 70 Executive Vice President, Maritime

Laura Hodges Bethge 47 Executive Vice President, Shared Services Operations

Alexander Lake 51 Senior Vice President, Chief Legal Officer and Secretary

Pujol 54 Senior Vice President, Chief Accounting Officer

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

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

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

and as Vice President of Corporate

and Strategic Planning from 2008 to 2010.

Before joining Royal Caribbean, Mr.

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Lutoff-Perlo currently serves on the Board of Directors of AutoNation and is Vice Chair for United Way of Broward County.

Roberto Martinoli has served as President and Chief Executive Officer of Silversea Cruises since 2016.

Before joining Silversea, Mr.

Martinoli was the Chairman and Chief Executive Officer of Grandi Navi Veloci from 2010 to 2016, President and Chief Operating Officer of Norwegian Cruise Line from 2007 to 2010, Executive Vice President of Operations at Carnival Cruise Lines from 2000 to 2007 and Senior Vice President at Costa Crociere from 1997 to 2000.

Kulovaara has served as Executive Vice President, Maritime since January 2005.

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Kulovaara is a naval architect and engineer.

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

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

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

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

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

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

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

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

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

Pujol originally joined Royal Caribbean in 2004 as Assistant Controller and was promoted to Corporate Controller in May 2007.

Before joining Royal Caribbean, Mr.

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

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business