What changed in this filing

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Item 1. Business

2024-02-21 compared with 2023-02-23 · 195 added, 191 removed, 505 unchanged (43% of the section changed)

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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.

We compete principally by operating valued brands that offer exceptional service provided by our crew and on the basis of innovation and quality of ships, variety of itineraries, choice of destinations and price.

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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.

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

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

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

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

Although each of our Global Brands has its own marketing style, as well as ships and crews of various sizes, the nature of the products sold and services delivered by our Global Brands share a common base (i.e., the sale and provision of cruise vacations).

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

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.

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, we strategically manage our Global Brands as a single business with the ultimate objective of maximizing long-term shareholder value.

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

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

The brand competes in both the contemporary family market and premium segments of the cruise vacation industry appealing to both families with children of all ages and older and younger couples.

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

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

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.

Additionally, as of December 31, 2023, Royal Caribbean International had three ships on order with an aggregate capacity of approximately 16,900 berths.

The ships on order include two Icon-class ships, Star of the Seas and the third Icon-class ship, which are expected to be delivered in 2025 and 2026, respectively, and our sixth Oasis-class ship, Utopia of the Seas, which is expected to be delivered in 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, culinary excellence, world-class service, luxurious spaces and accommodations, and holistic wellness experiences.

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

Celebrity Cruises’ strategy is to target consumers by delivering a destination-rich experience on upscale ships that offer, among other things, excellent food and drink, elevated hospitality, world-class spaces and accommodations, and live entertainment.

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 three to 18 nights.

Celebrity Cruises operates 16 ships with an aggregate capacity of approximately 35,715 berths.

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.

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, if certain conditions are met.

Additionally, as of December 31, 2023, Celebrity Cruises had one Edge-class ship on order, Celebrity Xcel, with an aggregate capacity of approximately 3,250 berths, which is expected to be delivered in 2025.

Silversea Cruises

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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 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.

Silversea Cruises operates 11 ships, with an aggregate capacity of approximately 4,770 berths.

As of December 31, 2023, Silversea Cruises had on order one Evolution-class ship, Silver Ray , with an aggregate capacity of approximately 730 berths, which is expected to be delivered in 2024.

Our Partner Brands

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

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

Additionally, as of December 31, 2022, TUI Cruises had three ships on order with an aggregate capacity of approximately 11,100 berths, that are expected to be delivered in the second quarter of 2024, the fourth quarter of 2024 and the second quarter of 2026, respectively.

TUI Cruises operates six ships, with an aggregate capacity of approximately 15,800 berths.

Additionally, as of December 31, 2023, TUI Cruises had three ships on order with an aggregate capacity of approximately 11,100 berths, two of these ships are expected to be delivered in 2024, the third ship is expected to be delivered in 2026.

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

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Refer to Note 7.

Other Assets to our consolidated financial statements under Item 8.

Investments and Other Assets to our consolidated financial statements under Item 8.

Financial Statements and Supplementary Data for further details.

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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 a result, comparative information regarding market penetration is 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 long-term growth and a potential for increased profitability.

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 during the five year period from 2015 through 2019.

During 2023, industry market penetration rates were 3.55% for North America, 1.07% for Europe, and 0.04% for Asia/Pacific.

The penetration rates in 2023 show the recovery and growth potential in the markets most served by the industry.

The cruise industry was served by a fleet with a weighted average of approximately 650,000 berths during 2023 with approximately 361 ships at the end of 2023.

As of December 31, 2023, there were approximately 51 ships on order with an estimated 110,000 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 and 2022 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 percentage of North American, European and Asia/Pacific cruise guests for 2022 and for each of the five years from 2015 through 2019:

The global cruise industry carried approximately 21 million guests in 2023, 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 percentage of North American, European and Asia/Pacific cruise guests for 2023, 2022 and for each of the five years from 2015 through 2019 (in thousands, except berth data):

Supply of Berths

Industry Cruise Guests

Weighted-Average

Royal Caribbean Group Total Berths (3)

North American Cruise Guests (2)(4)

European Cruise Guests (2)(5)

Asia/Pacific Cruise Guests (2)(6)

Other Cruise Guests (2)

Global Supply (2)

Royal Caribbean Group (3)

North American (2)(4)

Europe (2)(5)

Asia/Pacific (2)(6)

2015 469,000 112,700 23,000 52% 29% 14% 5%

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2023 650,000 157,575 21,200 63% 27% 6% 4%

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

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

(3) Total berths include our berths related to our Global Brands and Partner Brands.

(3) Total berths include our berths related to our Global Brands and Partner Brands as of December 31, 2023.

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

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

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

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

China and Japan), South Asia (most notably:

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Australia and New Zealand) regions.

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;

The decrease in Asia/Pacific cruise guests from 2019 to 2023 is partly driven by China remaining closed given its COVID-19 restrictions through the first half 2023.

We compete with a number of cruise lines as well as land-based vacation alternatives for consumers’ leisure time.

These include resorts (including all-inclusive resorts), hotels, internet-based alternative lodging sites, theme parks, sports, nature and sightseeing destinations.

Our principal cruise 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;

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

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

and Virgin Voyages.

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

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 mission is to deliver the best vacation experiences responsibly.

We continue to prioritize operating strategies that support this mission 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 strategies are as follows:

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

• deliver the best vacation experiences responsibly;

• deliver a lifetime of vacations to our customers;

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

• 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;

• deepen our customer relationships in order to increase frequency and repeat booking rates;

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

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

• 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;

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

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

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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.

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 place a strong focus on delivering a lifetime of vacations and priceless memories for our guests by identifying and creating product features and innovations that our customers value.

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 projects on our ships that we believe drive marketability, profitability and improve the guest experience.

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

We rely upon and continue to invest in various programs and technologies during the cruise-planning, cruising and after-cruise periods aimed at increasing revenues and occupancy.

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

In addition, we are focused on enhancing our vacation ecosystem by investing in a new travel platform, our loyalty programs and e-commerce capabilities.

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 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.

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 ("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, social and governance aspects of our business that we believe are most significant to our organization and stakeholders.

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

For example, during 2023, we amended our revolving credit facility with our key relationship banks to ensure adequate liquidity on a going-forward basis and additionally, we repaid approximately $4.0 billion of debt.

We believe these strategies together with our continued focus on increasing operating income and margin, as well as disciplined capital allocation, enhance our ability to achieve our overall goal of maximizing our return on invested capital and long-term shareholder value.

Protect the environment and communities in which we operate

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

SEA the Future is our commitment to sustain the planet, energize the communities we visit, and accelerate innovation to improve our planet.

Key programs include our Destination Net Zero strategy and Save the Waves Program.

Destination Net Zero is our decarbonization strategy that focuses on achieving net zero emissions by 2050 and delivering a net zero capable ship by 2035.

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

Destination Net Zero’s four-pronged approach includes:

• Modernizing our fleet with new energy-efficient and alternatively fueled vessels;

• Continued investment in energy efficiency programs;

• Development of alternative fuel and alternative power solutions;

• Optimized deployment and integration of strategic shore-based supply chains.

While we continue to refine our roadmap to Destination Net Zero, we know our strategy will require new fuels and technologies that are not available today.

Collaboration is imperative to reaching our decarbonization goals.

as such, we are partnering with governments, fuel suppliers, shipyards, and technology stakeholders to build and test a safe and reliable supply of alternative energy sources.

Another example of our commitment to sustaining our planet with key partners is our decades-long Save the Waves program, which focuses on waste management techniques and technologies, along with reuse and recycling programs, to reduce the amount of waste produced on our ships and divert the remaining waste from landfills.

We also have a long-term partnership with the World Wildlife Fund to evaluate ship operations, sustainable sourcing of food supplies, waste management, sustainable destinations and guest education on ocean conservation.

We also believe in transparent reporting on our environmental and sustainability stewardship, as well as our social and governance efforts.

Our SEA the Future commitment and annual sustainability report, both of which are accessible on our corporate website, highlight our commitment and progress made 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.

We continue to advance our reporting following the recommendations of the Task Force on Climate Related Financial Disclosures (TCFD).

Our corporate website contains the current version of our reports which provide information about our environmental performance goals and sustainability initiatives.

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

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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, 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.

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

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

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

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

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

Refer to Item 1A.

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

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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.

In 2023, we introduced 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 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.

For Celebrity Cruises, Celebrity Ascent represents an evolution of Celebrity Beyond and builds on the innovation that the Edge series of ships have brought to market.

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

As of December 31, 2023, our Global Brands and Partner Brands have 8 ships on order.

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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.

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.

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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.

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.

Our Perfect Day Island Collection represents our initiative to develop a series of private island destinations in

The first island in the collection, Perfect Day at CocoCay, 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.

In January 2024, we completed the expansion of Perfect Day at CocoCay with the delivery of Hideaway Beach, an adults-only experience.

Additionally, our Royal Beach Club will offer an exclusive and branded experience at high volume ports.

The first Royal Beach Club is expected to open in 2025 in Nassau, Bahamas.

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

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, and reduction of our environmental impacts.

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.

For instance, in March 2023 we closed a partnership agreement with iCON Infrastructure Partners VI, L.P.

This partnership will own, develop, and manage cruise terminal facilities and infrastructure in key ports of call, initially including several development projects in Italy and Spain.

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 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.

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 vacation.

We continue to develop tools that enhance our commercial capabilities and support our goal of deepening our customer relationships.

We are focused on enhancing our guests' digital experience and growing onboard revenue, by making it easier for our guests to plan and maximize their next vacation through our websites and mobile applications.

For example, we recently enabled booking a cruise in our mobile applications, built a loyalty hub to provide easy to view status, benefits and ways to earn rewards and a video library to showcase our family of brands.

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

We have also 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, charge 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.

Refer to Item 1A.

Risk Factors - “ We are exposed to cyber security attacks and data breaches and the risks and costs associated with protecting our systems and maintaining data integrity and security” for a discussion of the risks associated with cyber security.

Travel advisor support, consumer outreach, and e-commerce

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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.

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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.

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

We 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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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.

The loyalty programs provide tiers of membership benefits which entitle guests to upgraded experiences and recognition relative to the status achieved once 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, 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.

Examples of the benefits available under our loyalty programs include, but are not limited to, priority waitlist for shore excursions, complimentary laundry service, complimentary internet, digital discount vouchers, upgraded bathroom amenities, reserved 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.

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Royal Caribbean International

Utopia of the Seas 2024 2024 5,700

Icon of the Seas (1)

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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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Navigator of the Seas 2002 2002 3,400

Ship Year Ship

Built Year ship entered service / will enter service Approximate

Brilliance of the Seas 2002 2002 2,150

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Silversea Cruises

Silver Ray 2024 2024 730

Silver Nova 2023 2023 730

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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 Relax 2024 2025 4,100

Mein Schiff 7 2024 2024 2,900

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Mein Schiff 1 2018 2018 2,900

Ship Year Ship

Built Year ship entered service / will enter service Approximate

Mein Schiff 6 2017 2017 2,500

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Mein Schiff 4 2015 2015 2,500

Mein Schiff Herz 1997 2011 1,900

Mein Schiff 3 2014 2014 2,500

Hanseatic Spirit 2021 2021 230

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______________________________________________________________

(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, 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:

(1) Icon of the Seas was delivered in 2023 and commenced cruise revenue operations in January 2024.

As of December 31, 2023, our Global Brands and our Partner Brands have eight ships on order.

The table below sets forth, as of December 31, 2023, the dates that the ships on order are expected to be delivered, and their approximate berths.

The expected delivery dates for all of our ships on order are subject to change due to events such as shipyard construction delays or agreed upon scope changes which impact the delivery timelines.

Risk Factors for further discussion on shipyard operations.

Ship Shipyard Expected Delivery Approximate

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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

Star of the Seas Meyer Turku Oy 2nd Quarter 2025 5,600

Unnamed Meyer Turku Oy 2nd Quarter 2026 5,600

Celebrity Cruises —

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

Celebrity Xcel Chantiers de l’Atlantique 4th Quarter 2025 3,250

Silversea Cruises —

Evolution-class:

Silver Nova Meyer Werft 2nd Quarter 2023 730

Silver Ray Meyer Werft 2nd Quarter 2024 730

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

Unnamed Fincantieri 4th Quarter 2024 4,100

Mein Schiff Relax Fincantieri 4th Quarter 2024 4,100

Unnamed Fincantieri 2nd Quarter 2026 4,100

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__________________________________________________________________

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

In addition, in February 2024, we entered into an agreement with Chantiers de l’Atlantique to build an additional Oasis class ship for delivery in 2028, which is contingent upon completion of certain conditions precedent including financing.

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

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Year Ended December 31,

2022 2021 (1)(3) 2020 (2) 2019 (2) 2018 (2)

Passengers Carried 7,646,203 5,536,335 1,030,403 1,295,144 6,553,865

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

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

Refer to Note 1 .

General to our consolidated financial statements under Item 8.

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

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

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

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

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Our cruise ticket prices include accommodations and a wide variety of activities and amenities, including meals and entertainment.

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

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.

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

Our cruises are generally available for sale at least one year in advance and often more than two years in advance of sailing.

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

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

Passenger ticket revenues accounted for approximately 69%, 66% and 61% of total revenues in 2023, 2022 and 2021, respectively.

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

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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Our shoreside workforce, including private destinations, consisted of approximately 9,500 full time and 100 part-time employees.

Our shipboard workforce consisted of 94,300 employees, and as of December 31, 2022, approximately 88% were covered by collective bargaining agreements.

Our shipboard workforce consisted of approximately, 88,700 employees, and as of December 31, 2023, approximately 88% were covered by collective bargaining agreements.

The following table details the distribution of our workforce by employee type and region as of December 31, 2023:

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shoreside workforce is ethnically diverse with approximately 57% comprised of non-White ethnic groups.

Shoreside Representation by Ethnicity % of Total U.S.

Shoreside Representation by Ethnicity

% of Total U.S.

Shoreside Population

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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 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.

This includes additional tools to assist our employees with managing their career development within Royal Caribbean Group.

In 2023, our workforce invested approximately 2.5 million hours in learning programs across a variety of areas ranging from Ethics, Compliance, Business Software and Tools, Finance/Accounting, Professional development, Project Management, Cyber Security, Leadership and Safety/Security among others.

In total, our workforce completed approximately 2.9 million courses within our learning management systems.

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In 2023, our shoreside employee engagement scores remained high and above most global industry benchmarks.

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

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

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

The duration of trademark registrations varies from country to country.

However, trademarks are generally valid and may be renewed indefinitely as long as they are in use and/or their registrations are properly maintained.

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

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We are members of four Protection and Indemnity ("P&I") clubs, which are part of a worldwide group of 12 P&I clubs, known as the International Group of P&I Clubs (the “IG”).

Liabilities, costs and expenses for illness and injury to crew, guest injury, pollution and other third-party claims in connection with our cruise activities are covered by our P&I clubs, subject to the clubs’ rules and the limits of coverage determined by the IG.

Liabilities, costs and expenses for illness and injury to crew and guest, pollution and other third-party claims in connection with our cruise activities are covered by our P&I clubs, subject to the clubs’ rules and the limits of coverage determined by the IG.

P&I coverage provided by the clubs is on a mutual basis and we are subject to additional premium calls in the event of a catastrophic loss incurred by any member of the 12 P&I clubs, whereby the reinsurance limits purchased by the IG are exhausted.

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Our primary war risk coverage is provided by a Norwegian war risk insurance association and our excess war risk insurance is provided by our four P&I clubs.

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

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.

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

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

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

The duration of trademark registrations varies from country to country.

However, trademarks are generally valid and may be renewed indefinitely as long as they are in use and/or their registrations are properly maintained.

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

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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.

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

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We are subject to various international and national laws and regulations relating to environmental protection.

Under such laws and regulations, we are generally prohibited from discharging materials other than food waste into the waterways.

Under such laws and regulations, we are generally prohibited from discharging materials other than food waste and treated effluents into the waterways.

We have made, and will continue to make, capital and other expenditures to comply with environmental laws and regulations.

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We have obtained the relevant international compliance certificates relating to oil, sewage, air pollution prevention and ballast water for all of our ships.

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

We do not expect 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;

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.

Compliance with this limitation has not and is not expected 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.

This includes 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.

In addition, the majority of our ships on order are being delivered with Liquified Natural Gas ("LNG") technology that meet all sulfur requirements without the need for an AEP system.

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

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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") and the Mediterranean Sea.

Virgin Islands (the "US Caribbean ECA") and the Mediterranean Sea ECA coming into force in May 2025.

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.

Caribbean Sea ECA that began construction on or after January 1, 2016, and North and Baltic Sea ships constructed on or after January 1, 2021 are required to meet more stringent nitrogen oxide emission limits.

We comply with these rules for those relevant ships in service.

As an added measure, all of our ships under construction are being built to comply with these rules.

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

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.

Caribbean Sea ECA that began construction on or after January 1, 2016 and ships operating in the North and Baltic Sea ECA constructed on or after January 1, 2021 are required to meet more stringent nitrogen oxide emission limits.

In order to ensure deployment flexibility, all of our ships under construction are being built to comply with these nitrogen oxide emission rules.

Compliance with these MARPOL requirements has not had and is not expected to have, a material impact on our results of operations due to the mitigating steps described above.

The European Union (EU) and IMO implemented legislations that require ships to monitor and report their carbon emissions.

These legislations contemplated the enactment of further obligations and restrictions focused on reducing carbon emissions from ships.

In 2022, the EU proposed a series of carbon reforms under its Fit for 55 package designed to meet its 2030 emission goals of reducing its GHG emissions by 55% from 1990 levels.

As part of this package, during 2023, the EU adopted and published the Emission Trading System (ETS) and the FuelEU Maritime regulation.

The ETS program 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% in 2026.

The impact of the EU ETS regulation is not expected to have a material impact on our 2024 results of operations.

The impact of the regulation on future periods is uncertain as the costs of ETS allowances will depend on future markets as well as future deployments.

Based on current deployment plans and current prices of ETS allowances, we do not expect the regulation to have a material impact on our 2025 and 2026 results of operations.

The FuelEU Maritime regulation will require ships to reduce GHG intensity in the fuels they consume by 2% as of 2025, and periodically reducing the intensity to 80% by 2050, compared to the 2020 average.

All passenger ships will additionally be obligated to connect to shore power when at berth in a Trans-European Transport Network ("TEN-T") port by 2030 and all EU ports by 2035.

When fully implemented, the FuelEU Maritime and the remaining 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.

In January 2023, the IMO amendments to the MARPOL convention went into effect combining a technical and an operational measure (Energy Efficiency Existing Ship Index ("EEXI") and Carbon Intensity Indicator ("CII")).

These regulations aim to reduce international shipping carbon intensity in line with the ambition of the initial IMO GHG Strategy of 40% by 2030, as compared to 2008.

Compliance with the EEXI has not had a material impact on our operations.

The impact of CII is still uncertain as the IMO is expected to review the CII framework in 2026, which could result in requirements that 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 in 2023 revised its initial GHG Strategy to include check points in 2030 and 2040 to seek reductions in absolute GHG emissions from international shipping by at least 20% and 70%, respectively, compared to 2008.

The revised IMO strategy also considers various other measures, including a possible fuel standard and a global market-based measure, such as a fuel levy or carbon taxes, with the intent to 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 CII regulation and various other potential measures within the IMO's revised strategy could have a material impact on our results of operations due to increased compliance costs.

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.

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

Refer to Item 1A.

Risk Factors - "Environmental, labor, health and safety, financial responsibility and other maritime regulations could affect operations and increase costs" for further discussion of the risks associated with the regulations discussed above .

Risk Factors - "Factors associated with climate change, including an increasing global regulatory focus, could adversely affect our business", and "Labor, health and safety, financial responsibility and other maritime regulations and measures could affect operations and increase operating costs" for further discussion of the risks associated with the regulations discussed above .

Consumer Financial Responsibility Regulations

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The following is a summary of our principal taxes, exemptions and special regimes.

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.

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

tonnage or some other measure.

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

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Silversea Cruises Ltd.

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

and our United Ki ngdom tonnage tax companies are classified as disregarded entities, or divisions for U.S.

federal income tax purposes that may earn U.S.

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corporate income tax.

Other Taxation

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 Organization for Economic Co-operation and Development (OECD) has issued Pillar Two model rules introducing a new global minimum tax of 15% with certain aspects of Pillar 2 effective January 1, 2024 and other aspects effective January 1, 2025 .

The UK and EU member countries have agreed to adopt these provisions and many countries have implemented these rules for 2024.

Our parent company is incorporated in Liberia.

Liberia has not announced plans to revise its local corporate income tax laws as part of the Pillar 2 proposal.

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.

The Pillar Two rules will become effective for a portion of our earnings in 2024 and 2025, but we believe the impact will be immaterial.

These rules will apply to a majority of our earnings starting in 2026.

We are continuing to evaluate the impact of these proposed and enacted legislative changes, which continue to evolve.

We are evaluating mitigation strategies that we believe we can execute to minimize the impact of these provisions to an immaterial amount.

Refer to Item 1A.

Risk Factors - "A change in our tax status under the U.S.

Internal Revenue Code, or other jurisdictions, may have adverse effects on our results of operations."

Website Access to Reports

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

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

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Bayley 65 President and Chief Executive Officer, Royal Caribbean International

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

Laura Hodges Bethge

48 President, Celebrity Cruises

Kulovaara 71 Executive Vice President, Maritime

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

Alexander Lake 52 Chief Legal Officer and Secretary

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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In his role as Chief Financial Officer, Mr.

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

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

Prior to his role as Chief Financial Officer, Mr.

Holtz served as Senior Vice President of Finance, responsible for financial planning and analysis, risk management and treasury.

Holtz worked for Goldman Sachs as a Managing Director and Head of Lodging and Leisure Investment Banking before joining Royal Caribbean Group in 2019.

Holtz worked for Goldman Sachs as a Managing Director and Head of Lodging and Leisure Investment Banking before joining the Company in 2019.

Holtz is also a veteran of the Israeli Air Force.

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and Chairman and Managing Director of Island Cruises.

Lisa Lutoff-Perlo has served as President and Chief Executive Officer of Celebrity Cruises since December 2014 and has been with the company since 1985.

She also leads the Company’s Global Marine Organization.

Lutoff-Perlo was the Executive Vice President, Operations of Royal Caribbean International from 2012 to 2014;

Senior Vice President, Hotel Operations of Celebrity Cruises from 2007 to 2012;

and Vice President, Onboard Revenue of Celebrity Cruises from 2005 to 2007.

Lutoff-Perlo held various senior positions in sales and marketing with Royal Caribbean International from 1985 to 2005.

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

Laura Hodges Bethge has served as President of Celebrity Cruises since May 2023.

Hodges Bethge’s joined the Company in 2000 and she has since held several leadership roles within various areas of the business, including hotel and marine operations, sales, marketing, product innovation and investor relations.

Most recently, she served as Executive Vice President of Shared Services Operations since February 2022, responsible for Royal Caribbean Group’s safety, security and environment, risk management and crew movement teams.

Prior to that role, she served as Senior Vice President of Shared Services Operations from December 2020 to February 2022;

Senior Vice President of Product Development for Royal Caribbean International from February 2020 to December 2020;

and Vice President of Customer Experience from April 2017 to February 2020.

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

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

What changed 10-K

Item 1. Business