What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2024-04-25 compared with 2023-10-26 · 203 added, 371 removed, 600 unchanged (49% of the section changed)

2 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

in thousands, except per share data)

Quarter Ended September 30,

in millions, except per share data)

Quarter Ended March 31,

Passenger ticket revenues $ 2,542 $ 1,897

5 unchanged sentences

Payroll and related 318 310

Food 211,709 194,966

Fuel 272,408 316,214

Other operating 522 420

9 unchanged sentences

( 386 ) ( 320 )

Net Income 1,010,678 32,968

Net Income attributable to noncontrolling interest 1,602 —

Net Income attributable to Royal Caribbean Cruises Ltd.

$ 1,009,076 $ 32,968

Earnings per Share:

Basic $ 3.94 $ 0.13

Diluted $ 3.65 $ 0.13

Weighted-Average Shares Outstanding:

Basic 256,188 255,071

Diluted 281,876 255,378

Comprehensive Income (Loss)

Net Income $ 1,010,678 $ 32,968

Other comprehensive income (loss):

Foreign currency translation adjustments 11,495 11,498

Change in defined benefit plans 3,972 7,226

Gain (loss) on cash flow derivative hedges 19,561 ( 259,949 )

Total other comprehensive income (loss) 35,028 ( 241,225 )

Comprehensive Income (Loss) 1,045,706 ( 208,257 )

Comprehensive Income attributable to noncontrolling interest 1,602 —

Comprehensive Income (Loss) attributable to Royal Caribbean Cruises Ltd.

$ 1,044,104 $ ( 208,257 )

The accompanying notes are an integral part of these consolidated financial statements

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

in thousands, except per share data)

Nine Months Ended September 30,

Passenger ticket revenues $ 7,281,503 $ 4,091,035

Onboard and other revenues 3,287,078 2,145,513

Total revenues 10,568,581 6,236,548

Cruise operating expenses:

Commissions, transportation and other 1,551,012 964,256

Onboard and other 640,175 450,225

Payroll and related 887,999 981,128

Food 613,795 450,376

Fuel 849,839 779,873

Other operating 1,341,821 1,205,452

Total cruise operating expenses 5,884,641 4,831,310

Marketing, selling and administrative expenses 1,288,719 1,138,571

Depreciation and amortization expenses 1,086,923 1,046,094

Operating Income (Loss) 2,308,298 ( 779,427 )

Other income (expense):

Interest income 31,863 21,765

Interest expense, net of interest capitalized ( 1,055,519 ) ( 932,552 )

Equity investment income 149,112 29,759

Other (expense) income ( 8,676 ) 4,699

( 883,220 ) ( 876,329 )

Net Income (Loss) 364 ( 48 )

13 unchanged sentences

Change in defined benefit plans 9 4

Loss on cash flow derivative hedges ( 7,148 ) ( 148,541 )

Total other comprehensive loss ( 1,762 ) ( 81,592 )

Gain (loss) on cash flow derivative hedges 44 ( 32 )

Total other comprehensive income (loss) 57 ( 35 )

Comprehensive Income (Loss) 421 ( 83 )

5 unchanged sentences

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

September 30, December 31,

(in millions, except share data)

March 31, December 31,

Current assets

Cash and cash equivalents $ 437 $ 497

Trade and other receivables, net of allowances of $ 7,899 and $ 11,612 at September 30, 2023 and December 31, 2022, respectively

360,151 531,066

Trade and other receivables, net of allowances of $ 9 and $ 7 at March 31, 2024 and December 31, 2023, respectively

Inventories 236 248

5 unchanged sentences

Goodwill 809 809

Other assets, net of allowances of $ 62,777 and $ 71,614 at September 30, 2023 and December 31, 2022, respectively

1,794,412 1,678,074

Other assets, net of allowances of $ 43 at March 31, 2024 and December 31, 2023.

Total assets $ 35,190 $ 35,131

18 unchanged sentences

500,000,000 shares authorized;

284,483,109 and 283,257,102 shares issued, September 30, 2023 and December 31, 2022, respectively)

285,814,489 and 284,672,386 shares issued, March 31, 2024 and December 31, 2023, respectively)

Paid-in capital 7,496 7,474

Accumulated deficit ( 287,502 ) ( 1,707,429 )

Retained earnings (accumulated deficit) 350 ( 10 )

Accumulated other comprehensive loss ( 617 ) ( 674 )

Treasury stock ( 28,248,125 and 28,018,385 common shares at cost, September 30, 2023 and December 31, 2022, respectively)

Treasury stock ( 28,468,430 and 28,248,125 common shares at cost, March 31, 2024 and December 31, 2023, respectively)

( 2,081 ) ( 2,069 )

Total shareholders’ equity attributable to Royal Caribbean Cruises Ltd.

4,422,976 2,868,812

Noncontrolling Interests 174 175

4 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

Nine Months Ended September 30,

(unaudited, in millions)

Three Months Ended March 31,

Operating Activities

2 unchanged sentences

Net deferred income tax benefit — ( 11 )

Loss on derivative instruments not designated as hedges 30,904 175,686

Gain (loss) on derivative instruments not designated as hedges 35 ( 3 )

Share-based compensation expense 45 26

3 unchanged sentences

Changes in operating assets and liabilities:

Decrease (increase) in trade and other receivables, net 131,199 ( 173,555 )

Increase in inventories, net ( 17,506 ) ( 86,962 )

(Increase) decrease in trade and other receivables, net ( 57 ) 123

Decrease in inventories 12 3

Increase in prepaid expenses and other assets ( 80 ) ( 78 )

Increase in accounts payable trade 78 57

(Decrease) increase in accrued expenses and other liabilities ( 247,065 ) 3,080

Decrease in accrued expenses and other liabilities ( 238 ) ( 261 )

Increase in customer deposits 729 1,103

Other, net ( 48 ) 16

Net cash provided by (used in) operating activities 3,361,005 ( 94,741 )

Net cash provided by operating activities 1,328 1,310

Investing Activities

10 unchanged sentences

Repayments of debt ( 3,107 ) ( 2,664 )

Premium on repayment of debt ( 104 ) —

Proceeds from sale of noncontrolling interest — 209

Other, net ( 40 ) ( 7 )

Net cash (used in) provided by financing activities ( 3,345,434 ) 1,832,900

Net cash used in financing activities ( 1,091 ) ( 1,784 )

Effect of exchange rate changes on cash and cash equivalents ( 1 ) —

5 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

Nine Months Ended September 30,

(unaudited, in millions)

Three Months Ended March 31,

Supplemental Disclosure

3 unchanged sentences

Purchase of property and equipment included in accounts payable and accrued expenses and other liabilities $ 44 $ 19

Acquisition of property and equipment from assumed debt $ — $ 275,000

Non-cash Financing Activity

Debt related to purchase of property and equipment $ — $ 275,000

The accompanying notes are an integral part of these consolidated financial statements

1 unchanged sentence

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

in thousands)

Common Stock Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Treasury Stock Noncontrolling Interest Total Shareholders' Equity

Balance at July 1, 2023 $ 2,844 $ 7,406,818 $ ( 1,296,578 ) $ ( 680,004 ) $ ( 2,069,432 ) $ 177,434 $ 3,541,082

Activity related to employee stock plans 1 14,479 — — — — 14,480

Changes related to cash flow derivative hedges — — — 19,561 — — 19,561

Change in defined benefit plans — — — 3,972 — — 3,972

Foreign currency translation adjustments — — — 11,495 — — 11,495

Sale of noncontrolling interest — 744 — — — — 744

Noncontrolling interest — — — — — 2,179 2,179

Dividends from noncontrolling interest — — — — — ( 6,400 ) ( 6,400 )

Net Income attributable to Royal Caribbean Cruises Ltd.

— — 1,009,076 — — — 1,009,076

Balance at September 30, 2023 $ 2,845 $ 7,422,041 $ ( 287,502 ) $ ( 644,976 ) $ ( 2,069,432 ) $ 173,213 $ 4,596,189

Common Stock Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Treasury Stock Noncontrolling Interest Total Shareholders' Equity

Common Stock Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Loss Treasury Stock Noncontrolling Interest Total Shareholders' Equity

Balance at January 1, 2024 $ 3 $ 7,474 $ ( 10 ) $ ( 674 ) $ ( 2,069 ) 175 $ 4,899

Activity related to employee stock plans — 22 — — — — 22

Convertible notes settlement 4 12,185 — — — — 12,189

Changes related to cash flow derivative hedges — — — 44 — — 44

2 unchanged sentences

Purchase of treasury stock — — — — ( 12 ) — ( 12 )

Sale of noncontrolling interest — 46,042 — — — 173,803 219,845

Noncontrolling interest — — — — — 5,810 5,810

Dividends to noncontrolling interest — — — — — ( 6,400 ) ( 6,400 )

Net Income attributable to noncontrolling interest — — — — — 4 4

Dividends from noncontrolling interest — — — — — ( 5 ) ( 5 )

Net Income attributable to Royal Caribbean Cruises Ltd.

— — 360 — — — 360

Balance at September 30, 2023 $ 2,845 $ 7,422,041 $ ( 287,502 ) $ ( 644,976 ) $ ( 2,069,432 ) $ 173,213 $ 4,596,189

The accompanying notes are an integral part of these consolidated financial statements

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

in thousands)

Common Stock Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Loss Treasury Stock Total Shareholders' Equity

Balance at July 1, 2022 $ 2,831 $ 7,254,939 $ ( 1,240,191 ) $ ( 551,252 ) $ ( 2,068,229 ) $ 3,398,098

Activity related to employee stock plans 1 15,582 — — — 15,583

Changes related to cash flow derivative hedges — — — ( 259,949 ) — ( 259,949 )

Change in defined benefit plans — — — 7,226 — 7,226

Foreign currency translation adjustments — — — 11,498 — 11,498

Net Income — — 32,968 — — 32,968

Balance at September 30, 2022 $ 2,832 $ 7,270,521 $ ( 1,207,223 ) $ ( 792,477 ) $ ( 2,068,229 ) $ 3,205,424

Common Stock Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Loss Treasury Stock Total Shareholders' Equity

Balance at March 31, 2024 $ 3 $ 7,496 $ 350 $ ( 617 ) $ ( 2,081 ) $ 174 $ 5,325

Common Stock Paid-in Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Loss Treasury Stock Noncontrolling Interest Total Shareholders' Equity

Balance at January 1, 2023 $ 3 $ 7,285 $ ( 1,707 ) $ ( 643 ) $ ( 2,068 ) $ — $ 2,870

Activity related to employee stock plans — 21 — — — — 21

Cumulative effect of adoption of Accounting Standards Update 2020-06 — ( 307,640 ) 146,220 — — ( 161,420 )

Changes related to cash flow derivative hedges — — — ( 32 ) — — ( 32 )

2 unchanged sentences

Purchase of treasury stock — — — — ( 1 ) — ( 1 )

Sale of noncontrolling interest — 45 — — — 174 219

Net Loss — — ( 48 ) — — — ( 48 )

Balance at September 30, 2022 $ 2,832 $ 7,270,521 $ ( 1,207,223 ) $ ( 792,477 ) $ ( 2,068,229 ) $ 3,205,424

Balance at March 31, 2023 $ 3 $ 7,351 $ ( 1,755 ) $ ( 678 ) $ ( 2,069 ) $ 174 $ 3,026

The accompanying notes are an integral part of these consolidated financial statements

15 unchanged sentences

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 as of September 30, 2023.

Together, our Global Brands and our Partner Brands have a combined fleet of 65 ships as of March 31, 2024.

Our ships offer a selection of worldwide itineraries that call on more than 1,000 destinations in over 120 countries on all seven continents.

As of September 30, 2023, we had liquidity of $ 3.3 billion, including $ 2.7 billion of undrawn revolving credit facility capacity, and $ 0.6 billion in cash and cash equivalents.

We believe that we have sufficient liquidity to fund our obligations for at least the next twelve months from the issuance of these financial statements.

Refer to Note 6 .

Debt for further information regarding refinancing transactions and our applicable financial covenants.

We will continue to pursue, as appropriate, various opportunities to raise capital to fund obligations associated with future debt maturities and/or to extend the maturity dates associated with our existing indebtedness or facilities.

Basis for Preparation of Consolidated Financial Statements

7 unchanged sentences

Summary of Significant Accounting Policies in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of our significant accounting policies.

The Company has changed its presentation from thousands to millions and, as a result, any necessary rounding adjustments have been made to prior period disclosed amounts.

All significant intercompany accounts and transactions are eliminated in consolidation.

4 unchanged sentences

Summary of Significant Accounting Policies

Adoption of Accounting Pronouncements

In September 2022, the FASB issued ASU No.

2022-04, Liabilities-Supplier Finance Programs (Subtopic 405-50) - Disclosure of Supplier Finance Program Obligations.

This ASU requires that a buyer in a supplier finance program disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude.

This ASU is expected to improve financial reporting by requiring new disclosures about the programs, thereby allowing financial statement users to better consider the effect of the programs on an entity’s working capital, liquidity, and cash flows.

This ASU is effective for fiscal years beginning after December 15, 2022, except for the amendment on roll forward information which is effective for fiscal years beginning after December 15, 2023.

We adopted ASU No.

2022-04 effective January 1, 2023.

The adoption did not have a material impact to our consolidated financial statements and related disclosures.

Recent Accounting Pronouncements

5 unchanged sentences

This ASU is effective for joint venture entities with a formation date on or after January 1, 2025 on a prospective basis.

Early adoption is permitted, and joint ventures formed prior to the adoption date may elect to apply the new guidance retrospectively back to their original formation date.

Early adoption is permitted, and joint ventures formed prior to the adoption date

may elect to apply the new guidance retrospectively back to their original formation date.

We are currently evaluating the impact of the new guidance on our consolidated financial statements.

Reclassifications

For the quarter and nine months ended September 30, 2023, we no longer separately present Impairments and Credit losses in our consolidated statements of comprehensive income (loss).

As a result, amounts presented in prior periods were reclassified to Other Operating to conform to the current year presentation.

For the nine months ended September 30, 2023, we no longer separately present Accrued interest in our consolidated balance sheets.

As a result, amounts presented in prior periods were reclassified to Accrued expenses and other liabilities to conform to the current year presentation.

For the nine months ended September 30, 2023, we no longer separately present Amortization of debt discounts and premiums;

(Decrease) increase in accrued interest;

and Impairments and Credit losses in our cash flows from Operating Activities within our consolidated statements of cash flows.

As a result, amounts presented in prior periods were reclassified to Amortization of debt issuance costs, discounts and premiums;

( Decrease) increase in accrued expenses and other liabilities;

and Other, net, respectively, within Operating Activities to conform to the current year presentation.

Additionally, we no longer separately present Proceeds from the sale of property and equipment and other assets in our cash flows from Investing Activities within our consolidated statements of cash flows.

As a result, amounts presented in prior periods were reclassified to Other, net within Investing Activities to conform to the current year presentation.

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures.

This ASU requires enhanced disclosures about significant segment expenses and other segment items and requires companies to disclose all annual disclosures about segments in interim periods.

This ASU also requires public entities with a single reportable segment to provide all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 280.

The amendments in this ASU are intended to improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses.

The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted and the amendments should be applied retrospectively to all periods presented.

We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.

The new guidance is intended to enhance the transparency and decision usefulness of income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

This ASU is effective for annual periods beginning after December 15, 2024 on a prospective basis.

Early adoption and retrospective application is permitted.

We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures.

Revenue Recognition

2 unchanged sentences

Our performance obligation under these contracts is to provide a cruise vacation in exchange for the ticket price.

We satisfy this performance obligation and recognize revenue over the duration of each cruise, which generally ranges from two to 23 nights.

We receive payment before we satisfy this performance obligation and recognize revenue over the duration of each cruise, which generally ranges from three to 28 nights.

Passenger ticket revenues include charges to our guests for port costs that vary with passenger head counts.

These type of port costs, along with port costs that do not vary by passenger head counts, are included in our cruise operating expenses.

The amounts of port costs charged to our guests and included within Passenger ticket revenues on a gross basis were $ 252.3 million and $ 210.2 million for the quarters ended September 30, 2023 and 2022, respectively, and $ 0.7 billion and $ 446.3 million for the nine months ended September 30, 2023 and 2022, respectively.

These types of port costs, along with port costs that do not vary by passenger head counts, are included in our cruise operating expenses.

The amounts of port costs charged to our guests and included within Passenger ticket revenues on a gross basis were $ 242 million and $ 203 million for the quarters ended March 31, 2024 and 2023, respectively.

Our total revenues also include Onboard and other revenues , which consist primarily of revenues from the sale of goods and services onboard our ships that are not included in passenger ticket prices.

2 unchanged sentences

Disaggregated Revenues

The following table disaggregates our total revenues by geographic regions where we provide cruise itineraries (in thousands):

Quarter Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

The following table disaggregates our total revenues by geographic regions where we provide cruise itineraries (in millions):

Quarter Ended March 31,

Revenues by itinerary

1 unchanged sentence

Asia/Pacific 506 333

Europe 1,375,478 1,002,936 2,272,277 1,531,495

Other regions (2) 322 214

9 unchanged sentences

Passenger ticket revenues are attributed to geographic areas based on where the reservation originates.

For the quarter and nine months ended September 30, 2023 and 2022, our guests were sourced from the following areas:

Quarter Ended September 30,

Passenger ticket revenues:

United States 72 % 71 %

United Kingdom 10 % 11 %

All other countries (1) 18 % 18 %

Nine Months Ended September 30,

For the quarters ended March 31, 2024 and 2023, our guests were sourced from the following areas:

Quarter Ended March 31,

Passenger ticket revenues:

1 unchanged sentence

All other countries (1) 27 % 24 %

(1) No other individual country's revenue exceeded 10% for the quarter and nine months ended September 30, 2023 and 2022.

(1) No other individual country's revenue exceeded 10% for the quarters ended March 31, 2024 and 2023.

Customer Deposits and Contract Liabilities

1 unchanged sentence

Deposits received on sales of passenger cruises are initially recorded as Customer deposits in our consolidated balance sheets and subsequently recognized as passenger ticket revenues or onboard revenues during the duration of the cruise.

Revenues from Contracts with Customers , defines a “contract liability” as an entity’s obligation to transfer goods or services to a customer for which the entity has received consideration from the customer.

ASC 606, Revenues from Contracts with Customers , defines a “contract liability” as an entity’s obligation to transfer goods or services to a customer for which the entity has received consideration from the customer.

We do not consider customer deposits to be a contract liability until the customer no longer retains the unilateral right, resulting from the passage of time, to cancel such customer's reservation and receive a full refund.

Customer deposits presented in our consolidated balance sheets include contract liabilities of $ 2.2 billion and $ 1.8 billion as of September 30, 2023 and December 31, 2022, respectively.

During the pandemic we provided flexibility to guests with bookings on sailings cancelled due to COVID-19 by allowing guests to receive future cruise credits (“FCCs”).

As of September 30, 2023, our customer deposit balance includes approximately $ 0.4 billion of unredeemed FCCs.

Customer deposits presented in our consolidated balance sheets include contract liabilities of $ 2.9 billion and $ 2.6 billion as of March 31, 2024 and December 31, 2023, respectively.

During the pandemic we provided flexibility to guests with bookings on sailings that were cancelled by allowing guests to receive future cruise credits (“FCCs”).

As of March 31, 2024, our customer deposit balance includes approximately $ 317 million of unredeemed FCCs.

Our FCCs are not refundable and do not have expiration dates.

Based upon our analysis of historical redemption experience, we believe a portion of our FCCs are not probable of being used in future periods.

Based on our current estimates, we recognized an immaterial amount of FCC breakage revenue during the quarter ended September 30, 2023.

Based on our current estimates, we recognized an immaterial amount of FCC breakage revenue during the quarter ended March 31, 2024.

We will continue to monitor changes in redemption behavior and estimate and record revenue associated with breakage when the likelihood of the customer exercising their remaining rights becomes remote.

6 unchanged sentences

Our credit card processors agreements require us, under certain circumstances, to maintain a reserve that can be satisfied by posting collateral.

As of September 30, 2023, none of our credit card processors required us to maintain a reserve.

As of March 31, 2024, none of our credit card processors required us to maintain a reserve.

We have contract assets that are conditional rights to consideration for satisfying the construction services performance obligations under a service concession arrangement.

As of September 30, 2023 and December 31, 2022, our contract assets were $ 168.1 million and $ 167.9 million, respectively, and were included within Other assets in our consolidated balance sheets.

As of March 31, 2024 and December 31, 2023, our contract assets were $ 166 million and $ 167 million, respectively, and were included within Other assets in our consolidated balance sheets.

Given the short duration of our cruises and our collection terms, we do not have any other significant contract assets.

1 unchanged sentence

Prepaid travel advisor commissions and prepaid credit and debit card fees are an incremental cost of obtaining contracts with customers that we recognize as an asset and include within Prepaid expenses and other assets in our consolidated balance sheets.

Prepaid travel advisor commissions and prepaid credit and debit card fees were $ 230.5 million as of September 30, 2023 and $ 177.5 million as of December 31, 2022.

Prepaid travel advisor commissions and prepaid credit and debit card fees were $ 293 million as of March 31, 2024 and $ 257 million as of December 31, 2023.

Our prepaid travel advisor commissions and prepaid credit and debit card fees are recognized at the time of revenue recognition or at the time of voyage cancellation, and are reported primarily within Commissions, transportation and other in our consolidated statements of comprehensive income (loss).

Earnings (Loss) Per Share

Basic and diluted earnings (loss) per share is as follows (in thousands, except per share data):

Quarter Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Basic and diluted earnings (loss) per share is as follows (in millions, except per share data):

Quarter Ended March 31,

Net Income (Loss) attributable to Royal Caribbean Cruises Ltd.

9 unchanged sentences

Diluted earnings (loss) per share $ 1.35 $ ( 0.19 )

Basic earnings (loss) per share is computed by dividing Net Income (Loss) by the weighted-average number of common stock outstanding during each period.

Diluted earnings (loss) per share incorporates the incremental shares issuable upon the assumed exercise of stock options and conversion of potentially dilutive securities.

We use the if-converted method to calculate the impact of our convertible notes that may be settled in cash or shares.

To the extent dilutive, shares related to our convertible notes are assumed to be converted into common stock at the beginning of the reporting period, and we add back the interest expense to the numerator.

If we have a net loss for the period, all potential common shares will be considered antidilutive, resulting in the same basic and diluted net loss per share amounts for those periods.

T here were no antidilutive shares for the quarter and nine months ended September 30, 2023, compared to 30,532,145 and 31,085,736 antidilutive shares from our stock-based awards and convertible notes for the quarter and nine months ended September 30, 2022, respectively.

T here were no antidilutive shares for the quarter ended March 31, 2024, compared to 30,994,718 antidilutive shares from our stock-based awards and convertible notes for the quarter ended March 31, 2023 .

Investments and Other Assets

6 unchanged sentences

We account for the majority of these investments as either an equity method investment or a controlled subsidiary.

Effective March 31, 2023, we closed on the previously announced partnership agreement with iCON Infrastructure Partners VI, L.P.

Effective March 31, 2023, we closed on the 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.

As part of the transaction with iCON we also sold 80 % of the entity which owns our terminal at PortMiami to the partnership.

As part of the transaction with iCON we also sold 80 % of the entity which owns our terminal at PortMiami.

Refer below to equity method investments and controlled subsidiarie s for further information on the transaction.

In addition, the partnership has plans to pursue additional port infrastructure developments, including future plans to own, develop, and manage an infrastructure project in the U.S.

In addition, the partnership will pursue additional port infrastructure developments, including future plans to own, develop, and manage an infrastructure project in the U.S.

Virgin Islands.

5 unchanged sentences

Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting.

As of September 30, 2023, the net book value of our investment in TUIC was $ 586.7 million, primarily consisting of $ 498.5 million in equity and a loan of € 75.3 million, or approximately $ 79.7 million based on the exchange rate at September 30, 2023.

As of March 31, 2024, the net book value of our investment in TUIC was $ 678 million, primarily consisting of $ 594 million in equity and a loan of € 67 million, or approximately $ 73 million based on the exchange rate at March 31, 2024.

As of December 31, 2023, the net book value of our investment in TUIC was $ 657 million, primarily consisting of $ 566 million in equity and a loan of € 71 million, or approximately $ 79 million based on the exchange rate at December 31, 2023.

1 unchanged sentence

This loan is 50 % guaranteed by TUI AG and is secured by a first priority mortgage on the ship.

TUIC has various ship construction and financing agreements which include certain restrictions on each of our and TUI AG’s ability to reduce our current ownership interest in TUI Cruises below 37.55 % through May 2033.

Our investment amount and outstanding term loan are subs tantially our maximum exposure to loss in connection with our investment in TUIC.

5 unchanged sentences

Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting.

During the second half of 2023, we formed a 50 %-owned joint venture with the other 40 % shareholder of Grand Bahama to operate Floating Docks S.

(“Floating Docks”).

Floating Docks will construct two floating drydocks, with delivery dates expected in 2025 and 2026, that will be leased to Grand Bahama and allow it to service the entire range of cruise ships in operation and under construction, as well as much of the world’s commercial shipping fleet.

We and our joint venture partner have each guaranteed 50 % of certain installment payments payable by Floating Docks under the drydock and related construction contracts, which are contingent on the achievement of certain construction milestones, bringing our total payment guarantees to $ 59 million as of March 31, 2024.

Our investment in Floating Docks, including loans, is immaterial to our consolidated financial statements as of March 31, 2024.

We have determined that Floating Docks is a VIE.

We have determined that we are not the primary beneficiary of Floating Docks since we believe that the power to direct the activities that most significantly impact Floating Docks' economic performance is shared between ourselves and our joint venture partner.

All the significant operating and financial decisions of Floating Docks require the consent of both parties which we believe creates shared power over Floating Docks.

Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting.

As part of the transaction with iCON, we sold our controlling interest in two Italian entities for an immaterial amount of net proceeds and recognized an immaterial gain on the sale.

3 unchanged sentences

Accordingly, we do not consolidate these entities and account for these investments under the equity method of accounting.

For further information on the measurements used to estimate the fair value of our equity method investments, refer to Note 11 .

Fair Value Measurements and Derivative Instruments .

The following tables set forth information regarding our investments accounted for under the equity method of accounting, including the entities discussed above (in thousands):

Quarter Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

The following tables set forth information regarding our investments accounted for under the equity method of accounting, including the entities discussed above (in millions):

Quarter Ended March 31,

Share of equity income from investments $ 41 $ 20

Dividends received (1) $ 628 $ — $ 4,455 $ 986

(1) Represents dividends received net of tax withholdings during the quarters and nine months ended September 30, 2023 and September 30, 2022.

As of September 30, 2023 As of December 31, 2022

As of March 31, 2024 As of December 31, 2023

Total notes receivable due from equity investments $ 107 $ 105

7 unchanged sentences

We have determined that both of these entities are VIEs, and we are the primary beneficiary as we have the power to direct the activities that most significantly impact the facility’s economic performance.

Accordingly, we will continue to consolidate both entities.

Accordingly, we continue to consolidate both entities.

The cash consideration received for the sale of the PortMiami terminal company, net of transaction costs, was allocated between paid-in capital and noncontrolling interest using the net book value of our investment in the PortMiami terminal, as presented in the statement of shareholders' equity.

Credit Losses

We reviewed our notes receivable for credit losses in connection with the preparation of our financial statements for the quarter ended September 30, 2023.

We reviewed our receivables for credit losses in connection with the preparation of our financial statements for the quarter ended March 31, 2024.

In evaluating the allowance, management considered factors such as historical loss experience, the types of loans and the amount of loans in the loan portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, peer group information and prevailing economic conditions.

Our credit loss allowance beginning and ending balances as of September 30, 2023 and 2022 primarily relate to credit losses recognized on notes receivable for the previous sale of certain property and equipment of $ 81.6 million.

The notes receivable associated with previous sale of our property and equipment are related to loans that were originated in 2015 and 2020.

The following table summarizes our credit loss allowance related to receivables (in thousands):

Nine Months Ended September 30,

Our credit loss allowance as of March 31, 2024 and 2023 primarily relates to credit losses recognized on notes receivable for the previous sale of certain property and equipment of $ 43 million and $ 63 million, respectively, which were originated in 2015 and 2020.

The following table summarizes our credit loss allowance related to receivables (in millions):

Three Months Ended March 31,

Balance, beginning of period $ 49 $ 83

2 unchanged sentences

Balance, end of period $ 51 $ 74

Debt consists of the following (in thousands):

Debt consists of the following (in millions):

Interest Rate (1)

Maturities Through As of September 30, 2023 As of December 31, 2022

Maturities Through As of March 31, 2024 As of December 31, 2023

Fixed rate debt:

1 unchanged sentence

2026 - 2032 $ 7,898 $ 7,899

Secured senior notes 8.25 % to 11.50 %

Secured senior notes 8.25 %

2029 1,000 1,000

1 unchanged sentence

2027 - 2035 6,420 6,569

Convertible notes 2.88 % to 6.00 %

Convertible notes 6.00 %

2025 1,150 1,150

16 unchanged sentences

Long-term portion $ 18,876 $ 19,732

(1) Interest rates based on outstanding loans as of September 30, 2023, and for variable rate debt include either LIBOR, EURIBOR or Term SOFR plus the applicable margin.

(2) During the quarter ended June 30, 2023, we completed our transition from LIBOR to Term SOFR rates for substantially all of our variable rate facilities, with such transition to take effect at the next respective interest reset date for each such facility.

(3) Advances under our $ 1.9 billion facility accrue interest at Term SOFR plus an interest rate margin ranging from 1.30 % to 2.05 %.

Advances under our $ 1.1 billion facility accrue interest at Term SOFR plus an interest rate margin ranging from 1.70 % to 2.05 %.

Based on applicable Term SOFR rates, as of September 30, 2023, the maximum interest rates under the $ 1.9 billion facility and the $ 1.1 billion facility was 7.47 %.

We also pay a facility fee for each facility ranging from 0.20 % to 0.30 % of the total commitments under such facility.

(4) At September 30, 2023 and December 31, 2022, the weighted average interest rate for total debt was 6.40 % and 6.23 %, respectively .

(1) Interest rates based on outstanding loan balance as of March 31, 2024, and for variable rate debt include either EURIBOR or Term SOFR plus the applicable margin.

(2) Advances under our unsecured revolving credit facilities accrue interest at Term SOFR plus a 0.10 % credit adjustment spread plus an interest rate margin primarily at 1.33 %.

Based on applicable Term SOFR rates, as of March 31, 2024, the maximum interest rate under the unsecured credit facilities was 6.76 %.

We also pay a facility fee primarily at 0.17 % of the total commitments under such facility.

(3) At March 31, 2024 and December 31, 2023, the weighted average interest rate for total debt was 5.75 % and 6.06 %, respectively .

Unsecured revolving credit facilities

In January 2023, we amended and extended our two unsecured revolving credit facilities.

The amendments extended the maturities of $ 2.3 billion of the $ 3.0 billion aggregate revolving credit capacity by one year to April 2025, with the remainder maturing in April 2024.

As of September 30, 2023, we had undrawn capacity of $ 2.7 billion under our unsecured revolving credit facilities.

In October 2023, we refinanced both unsecured revolving credit facilities as well as the $ 501.6 million unsecured term loan scheduled to fully mature in October 2024.

Following this refinancing, our aggregate revolving credit commitments are $ 3.5 billion.

Of this amount, $ 1.6 billion is scheduled to mature in October 2028, $ 1.6 billion is scheduled to mature in October 2026, $ 242.5 million is scheduled to mature in April 2025 and the remaining balance is scheduled to mature in April 2024.

Convertible Notes

In June 2023, $ 350 million of our 4.25 % Convertible Senior Notes matured.

The notes were settled using a combination of $ 337.8 million in cash, and the issuance of approximately 374,000 shares of common stock.

The issuance of equity increased additional paid-in capital by $ 12.2 million.

In August 2023, we notified the holders of our 2.875 % Convertible Senior Notes due November 15, 2023 of our irrevocable election to settle notes to which holders elect to convert with a combination of cash and shares of our common stock.

Debt financing transactions

In February 2023, we issued $ 700 million aggregate principal amount of 7.25 % senior guaranteed notes due January 2030 (" 7.25 % Priority Guaranteed Notes").

Upon closing, we terminated our commitment for the $ 700 million 364 -day term loan facility.

In addition, the remaining $ 350 million backstop committed financing was also terminated upon closing, which resulted in an immaterial loss on extinguishment of debt.

In June 2023, we took delivery of Silver Nova .

To finance the delivery, we borrowed a total of $ 503.2 million under the committed financing agreement, resulting in an unsecured term loan which is 95 % guaranteed by Euler Hermes.

The unsecured loan amortizes semi-annually over 12 years and bears interest at a fixed rate of 4.21 % per annum.

In June 2023, we repaid $ 392.0 million of our 11.50 % secured senior notes due in June 2025, which resulted in a total loss on extinguishment of debt of $ 30.2 million that was recognized within Interest expense, net of interest capitalized within our consolidated statements of comprehensive income (loss) for the nine months ended September 30, 2023.

During the third quarter of 2023, we repaid an additional $ 500 million of these notes due in June 2025, resulting in a total loss on extinguishment of debt of $ 37.9 million that was recognized within Interest expense, net of interest capitalized within our consolidated statements of comprehensive income (loss) for the quarter and nine months ended September 30, 2023.

In October 2023, we issued an irrevocable notice to redeem in early November 2023 the remaining $ 500 million balance of our 11.50 % senior secured notes due June 2025.

This redemption will be funded with existing liquidity.

As of March 31, 2024 our aggregate revolving credit capacity is $ 3.6 billion of which $ 1.8 billion of the commitments are scheduled to mature in October 2026, $ 1.8 billion of the commitments are scheduled to mature in October 2028, and the remaining $ 77 million of commitments are scheduled to mature in April 2025.

As of March 31, 2024, we had undrawn capacity of $ 3.3 billion under our unsecured revolving credit facilities.

In March 2024, we issued $ 1.25 billion of senior unsecured notes (the "notes") due in 2032 for net proceeds of approximately $ 1.24 billion.

Interest accrues on the notes at a fixed rate of 6.25 % per annum and is payable semi-annually in arrears.

The proceeds from this notes issuance, together with cash on hand, were used to redeem all of the outstanding $ 1.25 billion aggregate principal amount of 11.625 % Senior Notes due 2027.

The repayment resulted in a loss on extinguishment of debt of $ 116 million that was recognized within Interest expense, net of interest capitalized within our consolidated statements of comprehensive income (loss) for the quarter ended March 31, 2024.

Export credit agency guarantees

Except for the term loans we incurred to acquire Celebrity Flora and Silver Moon, all of our unsecured ship financing term loans are guaranteed by the export credit agency in the respective country in which the ship is constructed.

As of September 30, 2023, we pay to the applicable export credit agency, depending on the financing agreement, an upfront fee of 2.35 % to 5.48 % of the maximum loan amount in consideration for these guarantees.

We amortize the fees that are paid upfront over the life of the loan.

For the majority of the loans as of March 31, 2024, we pay to the applicable export credit agency, depending on the financing agreement, an upfront fee of 2.35 % to 5.48 % of the maximum loan amount in consideration for these guarantees.

the fees that are paid upfront over the life of the loan.

We classify these fees within Amortization of debt issuance costs, discounts and premiums in our consolidated statements of cash flows.

3 unchanged sentences

Our revolving credit facilities, the majority of our term loans, and certain of our credit card processing agreements, contain covenants that require us, among other things, to maintain a fixed charge coverage ratio, limit our net debt-to-capital ratio, maintain minimum liquidity, and under certain facilities, to maintain a minimum stockholders' equity.

As of September 30, 2023, we were in compliance with our debt covenants and we estimate we will be in compliance for the next twelve months.

The following is a schedule of annual maturities on our total debt, including finance leases, as of September 30, 2023 for each of the next five years (in thousands):

Year As of September 30, 2023 (1)

As of March 31, 2024, our credit facility amendments require us to prepay outstanding deferred amounts of $ 839 million, if we elect to pay dividends or complete share repurchases.

As of March 31, 2024, we were in compliance with our debt covenants and we estimate we will be in compliance for the next twelve months.

The following is a schedule of annual maturities on our total debt, including finance leases, as of March 31, 2024 for each of the next five years (in millions):

Year As of March 31, 2024 (1)

Remainder of 2024 $ 1,390

2024 2,308,807

2025 2,828,609

2026 2,797,022

2027 3,534,356

Thereafter 8,203

(1) Debt denominated in other currencies is calculated based on the applicable exchange rate at September 30, 2023.

(1) Debt denominated in other currencies is calculated based on the applicable exchange rate at March 31, 2024.

Operating Leases

Our operating leases primarily relate to preferred berthing arrangements, real estate and shipboard equipment, and are included within Operating lease right-of-use assets , and Long-term operating lease liabilities with the current portion of the liability included within Current portion of operating lease liabilities in our consolidated balance sheets as of September 30, 2023 and December 31, 2022.

Leases with an initial term of 12 months or less are not recorded on our consolidated balance sheet.

Our operating leases primarily relate to preferred berthing arrangements, real estate, and shipboard equipment which are included within Operating lease right-of-use assets , and Long-term operating lease liabilities with the current portion of the liability included within Current portion of operating lease liabilities in our consolidated balance sheets as of March 31, 2024 and December 31, 2023.

Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet.

We recognize lease expense for these leases on a straight-line basis over the lease term.

Our operating leases include Silver Explorer , operated by Silversea Cruises.

The operating lease for Silver Explorer will expire in the fourth quarter of 2023 and Silversea Cruises does not intend to renew the lease.

The company's preferred berthing agreement with Miami-Dade County ("County") includes the development plans for the County to finance the construction of a new and improved cruise Terminal G at PortMiami.

The aggregate amount of the operating lease liabilities recorded for this berthing agreement was $ 167 million as of March 31, 2024 and December 31, 2023.

There will be future remeasurements as the County completes several construction milestones throughout the term of the extended lease.

The most significant of which will be for Terminal G, which will include a remeasurement of the operating lease in 2027 or later, when the County satisfies substantial completion, as the minimum lease payments will increase to approximately $ 55 million per year, with expected 3 % annual increases thereafter.

For some of our real estate leases and berthing agreements, we do have the option to extend our current lease term.

For those lease agreements with renewal options, the renewal periods for real estate leases range from one to 10 years and the renewal periods for berthing agreements range from one to 20 years.

For those lease agreements with renewal options, the renewal periods for real estate leases primarily range from one to 10 years and the renewal periods for berthing agreements primarily range from one to 20 years.

Generally, we do not include renewal options as a component of our present value calculation for berthing agreements.

6 unchanged sentences

Finance Leases

Our finance leases primarily relate to buildings and surrounding land located at our Miami headquarters and our lease for the Silver Dawn ship.

Finance leases are included within Property and Equipment , net and Long-term debt with the current portion of the liability included within Current portion of long-term debt in our consolidated balance sheets as of September 30, 2023 and December 31, 2022.

Our finance leases primarily relate to buildings and surrounding land located at our Miami headquarters and our lease for Silver Dawn .

The Company's master lease agreement (“Master Lease”) with Miami-Dade County related to the buildings and surrounding land located at our Miami headquarters is classified as a finance lease in accordance with ASC 842, Leases .

The Master Lease includes two five-year options to extend the lease, which we are reasonably certain to exercise.

The total aggregate amount of the finance lease liabilities recorded for this Master Lease was $ 56.8 million and $ 55.5 million as of September 30, 2023 and December 31, 2022, respectively.

In November 2023, we executed a modification to the Master Lease agreement to extend its expiration from 2076 to 2077 after coming to an agreement with Miami-Dade County on the financing plans to finalize the development of the buildings and land.

The modification of the Master Lease did not change the classification of the lease.

The total aggregate amount of the finance lease liabilities recorded for this Master Lease was $ 105 million and $ 104 million as of March 31, 2024 and December 31, 2023, respectively.

The development of the new campus buildings are expected to be completed in 2026, and the lease components will be recorded within our consolidated financial statements upon commencement.

Silversea Cruises operates Silver Dawn under a sale-leaseback agreement with a bargain purchase option at the end of the 15-year lease term.

1 unchanged sentence

The lease includes other purchase options beginning in year three, none of which are reasonably certain of being exercised at this time.

The total aggregate amount of finance lease liabilities recorded for this ship was $ 250.6 million and $ 264.8 million as of September 30, 2023 and December 31, 2022, respectively.

The aggregate amount of finance lease liabilities recorded for this ship was $ 241 million and $ 246 million as of March 31, 2024 and December 31, 2023, respectively.

The lease payments on the Silver Dawn are subject to adjustments based on the Term SOFR rate.

The components of lease expense were as follows (in thousands):

Consolidated Statement of Comprehensive Income (Loss) Classification Quarter Ended September 30, 2023 Nine Months Ended September 30, 2023

Operating lease costs Commission, transportation and other $ 32,925 $ 127,897

Operating lease costs Other operating expenses 5,545 16,636

Operating lease costs Marketing, selling and administrative expenses 5,350 16,354

Financial lease costs:

Amortization of right-of-use-assets Depreciation and amortization expenses 5,792 17,374

Interest on lease liabilities Interest expense, net of interest capitalized 7,658 22,386

Total lease costs $ 57,270 $ 200,647

Consolidated Statement of Comprehensive Income (Loss) Classification Quarter Ended September 30, 2022 Nine Months Ended September 30, 2022

The components of lease expense were as follows (in millions):

Consolidated Statement of Comprehensive Income (Loss) Classification Quarter Ended March 31, 2024 Quarter Ended March 31, 2023

Operating lease costs Commission, transportation and other $ 71 $ 55

6 unchanged sentences

In addition, certain of our berthing agreements include variable lease costs based on the number of passengers berthed.

During the quarter and nine months ended September 30, 2023, we had $ 13.2 million and $ 72.1 million of variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive income (loss), respectively, compared to $ 12.6 million and $ 32.0 million of variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive income (loss) during the quarter and nine months ended September 30, 2022, respectively.

During the quarters ended March 31, 2024, and 2023 we had $ 51 million and $ 38 million of variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive income (loss), respectively.

These variable lease costs are included within the balances presented above.

The weighted average of the remaining lease terms and weighted average discount rates are as follows:

As of September 30, 2023 As of December 31, 2022

As of March 31, 2024 As of December 31, 2023

Weighted average of the remaining lease term in years

4 unchanged sentences

Finance leases 5.84 % 5.83 %

Supplemental cash flow information related to leases is as follows (in thousands):

Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022

Supplemental cash flow information related to leases is as follows (in millions):

Three Months Ended March 31, 2024 Three Months Ended March 31, 2023

Cash paid for amounts included in the measurement of lease liabilities:

2 unchanged sentences

Financing cash flows from finance leases $ 6 $ 14

As of September 30, 2023, maturities related to lease liabilities were as follows (in thousands):

As of March 31, 2024, maturities related to lease liabilities were as follows (in millions):

Year Operating Leases Finance Leases

Remainder of 2024 $ 84 $ 35

2024 116,417 45,318

2025 108,407 44,827

2026 96,260 38,838

2027 76,559 37,358

Thereafter 1,062 684

5 unchanged sentences

Our future capital commitments consist primarily of new ship orders.

As of September 30, 2023, the dates that the ships on order by our Global and Partner Brands are expected to be delivered, subject to change in the event of construction delays, and their approximate berths are as follows:

As of March 31, 2024, the dates that the ships on order by our Global and Partner Brands are expected to be delivered, subject to change in the event of construction delays, and their approximate berths are as follows:

Ship Shipyard Expected delivery Approximate

1 unchanged sentence

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

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

Star of the Seas Meyer Turku Oy 3rd 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

Unnamed Chantiers de l'Atlantique 4th Quarter 2025 3,250

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

Silversea Cruises —

6 unchanged sentences

Total Berths 31,980

During the quarter ended June 30, 2023, we received commitments for the unsecured financing of the fifth Edge-class ship for up to 80 % of the ship’s contract price and our building contract with Chantiers de l'Atlantique became effective.

Bpifrance Assurance Export, the official French export credit agency, has agreed to guarantee to the lenders 100 % of the financing.

In June 2023, we amended the credit agreement for Celebrity Ascent, to increase the maximum loan amount by € 32.1 million or $ 34.0 million based on the exchange rate at September 30, 2023.

Interest on the incremental portion of the loan will accrue at a floating rate equal to Term SOFR plus 1.45 %.

In September 2023, we amended the credit agreement for Icon of the Seas , to increase the maximum loan amount by € 96.8 million or $ 102.5 million based on the exchange rate at September 30, 2023.

Interest on the incremental portion of the loan will accrue at a floating rate equal to Term SOFR plus 1.10 %.

In October 2023, we amended the credit agreement for Silver Ray , to increase the maximum loan amount by € 30.3 million or $ 32.1 million based on the exchange rate at September 30, 2023 At our election, interest on the incremental portion will accrue either (1) at a fixed rate of 6.77 % (inclusive of the applicable margin) or (2) at a floating rate equal to Term SOFR plus 1.40 %.

As of September 30, 2023, the aggregate cost of our ships on order presented in the table above, not including any ships on order by our Partner Brands, was approximately $ 10.9 billion, of which we had deposited $ 1.1 billion as of such date.

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.

As of March 31, 2024, the aggregate cost of our ships on order presented in the table above, not including any ships on order by our Partner Brands, was approximately $ 8.1 billion, of which we had deposited $ 748 million as of such date.

Refer to Note 11 .

1 unchanged sentence

As previously reported, a lawsuit was filed against us in August 2019 in the U.S.

District Court for the Southern District of Florida (the "Court") under Title III of the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton

The complaint filed by Havana Docks Corporation alleges it holds an interest in the Havana Cruise Port Terminal, which was expropriated by the Cuban government.

District Court for the Southern District of Florida (the "Court") under Title III of the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act.

The complaint filed by Havana Docks Corporation ("Havana Docks Action") alleges it holds an interest in the Havana Cruise Port Terminal, was expropriated by the Cuban government.

The complaint further alleges that we trafficked in the terminal by embarking and disembarking passengers at these facilities.

16 unchanged sentences

Shareholders' Equity

We did not declare any dividends during the nine months ended September 30, 2023 and 2022.

We did not declare any dividends during the quarters ended March 31, 2024 and 2023.

We were previously restricted under certain of our credit facilities from paying dividends while waivers to the financial covenants within such facilities were in effect.

While the waivers have now expired, in the event we declare a dividend, we will need to repay the principal amounts deferred under our export credit facilities.

Noncontrolling Interests

Effective March 31, 2023, we closed the previously announced partnership with iCON.

We sold 80 % of the entity which owns our terminal at PortMiami for $ 208.9 million and retained a 20 % minority interest.

The cash consideration received, net of transaction costs, was allocated between paid-in capital and noncontrolling interest in the accompanying consolidated statement of shareholders' equity for the nine months ended September 30, 2023.

Refer to Note 5 .

Investments and Other Assets for further information on the transaction.

Changes in Accumulated Other Comprehensive Loss

The following table presents the changes in accumulated other comprehensive loss by component for the nine months ended September 30, 2023 and 2022 (in thousands):

Accumulated Other Comprehensive Loss for the Nine Months Ended September 30, 2023 Accumulated Other Comprehensive Loss for the Nine Months Ended September 30, 2022

The following table presents the changes in accumulated other comprehensive loss by component for the quarters ended March 31, 2024 and 2023 (in millions):

Accumulated Other Comprehensive Loss for the Three Months Ended March 31, 2024 Accumulated Other Comprehensive Loss for the Three Months Ended March 31, 2023

Changes related to cash flow derivative hedges Changes in defined benefit plans Foreign currency translation adjustments Accumulated other comprehensive loss Changes related to cash flow derivative hedges Changes in defined benefit plans Foreign currency translation adjustments Accumulated other comprehensive loss

4 unchanged sentences

Ending balance $ ( 622 ) $ 7 $ ( 2 ) $ ( 617 ) $ ( 670 ) $ ( 4 ) $ ( 4 ) $ ( 678 )

The following table presents reclassifications out of accumulated other comprehensive loss for the quarters and nine months ended September 30, 2023 and 2022 (in thousands):

The following table presents reclassifications out of accumulated other comprehensive loss for the quarters ended March 31, 2024 and 2023 (in millions):

Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income

Details About Accumulated Other Comprehensive Loss Components Quarter Ended September 30, 2023 Quarter Ended September 30, 2022 Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Affected Line Item in Statements of

Details About Accumulated Other Comprehensive Loss Components Quarter Ended March 31, 2024 Quarter Ended March 31, 2023 Affected Line Item in Statements of

Comprehensive Income (Loss)

5 unchanged sentences

Fuel swaps 4 ( 4 ) Fuel

27,057 34,482 13,021 130,480

Amortization of defined benefit plans:

Actuarial loss — ( 829 ) ( 690 ) ( 2,487 ) Payroll and related

— ( 829 ) ( 690 ) ( 2,487 )

Total reclassifications for the period $ 27,057 $ 33,653 $ 12,331 $ 127,993

Fair Value Measurements and Derivative Instruments

Fair Value Measurements

The estimated fair value of our financial instruments that are not measured at fair value, categorized based upon the fair value hierarchy, are as follows (in thousands):

Fair Value Measurements at September 30, 2023 Fair Value Measurements at December 31, 2022

The estimated fair value of our financial instruments that are not measured at fair value, categorized based upon the fair value hierarchy, are as follows (in millions):

Fair Value Measurements at March 31, 2024 Fair Value Measurements at December 31, 2023

Description Total Carrying Amount Total Fair Value Level 1 (1)

6 unchanged sentences

Total Liabilities $ 20,156 $ 22,768 $ — $ 22,768 $ — $ 21,083 $ 23,700 $ — $ 23,700 $ —

(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets that we have the ability to access.

(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access.

Valuation of these items does not entail a significant amount of judgment.

6 unchanged sentences

(3) Inputs that are unobservable.

The Company did not use any Level 3 inputs as of September 30, 2023 and December 31, 2022.

The Company did not use any Level 3 inputs as of March 31, 2024 and December 31, 2023.

(4) Consists of cash and marketable securities with original maturities of less than 90 days.

2 unchanged sentences

Other Financial Instruments

The carrying amounts of accounts receivable, accounts payable, accrued interest and accrued expenses approximate fair value at September 30, 2023 and December 31, 2022.

The carrying amounts of accounts receivable, accounts payable, accrued interest and accrued expenses approximate fair value as of March 31, 2024 and December 31, 2023.

Assets and liabilities that are recorded at fair value have been categorized based upon the fair value hierarchy.

The following table presents information about the Company’s financial instruments recorded at fair value on a recurring basis (in thousands):

Fair Value Measurements at September 30, 2023 Fair Value Measurements at December 31, 2022

The following table presents information about the Company’s financial instruments recorded at fair value on a recurring basis (in millions):

Fair Value Measurements at March 31, 2024 Fair Value Measurements at December 31, 2023

Description Total Level 1 (1)

8 unchanged sentences

Valuation of these items does not entail a significant amount of judgment.

No Level 1 inputs were used in fair value measurements of other financial instruments as of September 30, 2023 and December 31, 2022.

No Level 1 inputs were used in fair value measurements of other financial instruments as of March 31, 2024 and December 31, 2023.

(2) Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

3 unchanged sentences

(3) Inputs that are unobservable.

No Level 3 inputs were used in fair value measurements of other financial instruments as of September 30, 2023 and December 31, 2022.

No Level 3 inputs were used in fair value measurements of other financial instruments as of March 31, 2024 and December 31, 2023.

(4) Consists of foreign currency forward contracts, interest rate and fuel swaps.

1 unchanged sentence

The reported fair values are based on a variety of factors and assumptions.

Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of September 30, 2023 or December 31, 2022, or that will be realized in the future, and do not include expenses that could be incurred in an actual sale or settlement.

Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of March 31, 2024 or December 31, 2023, or that will be realized in the future, and do not include expenses that could be incurred in an actual sale or settlement.

Nonfinancial Instruments Recorded at Fair Value on a Nonrecurring Basis

Nonfinancial instruments include items such as goodwill, indefinite-lived intangible assets, long-lived assets, right-of-use assets and equity method investments that are measured at fair value on a nonrecurring basis when events and circumstances indicate the carrying value is not recoverable.

There were no nonfinancial instruments recorded at fair value as of September 30, 2023.

There were no material nonfinancial instruments recorded at fair value as of March 31, 2024.

Master Netting Agreements

4 unchanged sentences

See Credit Related Contingent Features for further discussion on contingent collateral requirements for our derivative instruments.

The following table presents information about the Company’s offsetting of financial assets and liabilities under master netting agreements with derivative counterparties (in thousands):

The following table presents information about the Company’s offsetting of financial assets and liabilities under master netting agreements with derivative counterparties (in millions):

Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements

As of September 30, 2023 As of December 31, 2022

As of March 31, 2024 As of December 31, 2023

Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting

19 unchanged sentences

Credit risk, including, but not limited to, counterparty nonperformance under derivative instruments, our credit facilities and new ship progress payment guarantees, is not considered significant, as we primarily conduct business with large, well-established financial institutions, insurance companies and export credit agencies many of which we have long-term relationships with and which have credit risks acceptable to us or where the credit risk is spread out among a large number of counterparties.

As of September 30, 2023, we had counterparty credit risk exposure under our derivative instruments of $ 110.9 million, which was limited to the cost of replacing the contracts in the event of non-performance by the counterparties to the contracts, the majority of which are currently our lending banks.

As of March 31, 2024, we had counterparty credit risk exposure under our derivative instruments of $ 149 million, which was limited to the cost of replacing the contracts in the event of non-performance by the counterparties to the contracts, the majority of which are currently our lending banks.

We do not anticipate nonperformance by any of our significant counterparties.

32 unchanged sentences

Our exposure to market risk for changes in interest rates primarily relates to our debt obligations, including future interest payments.

At September 30, 2023 and December 31, 2022, approximately 85 % and 75 %, respectively, of our debt was effectively fixed-rate debt, which is net of our interest rate swap agreements.

At March 31, 2024 and December 31, 2023, approximately 86.3 % and 83.2 %, respectively, of our debt was effectively fixed-rate debt, which is net of our interest rate swap agreements.

We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense.

Market risk associated with our fixed-rate debt is the potential increase in fair value resulting from a decrease in interest rates.

We use interest rate swap agreements that effectively convert a portion of our fixed-rate debt to a floating-rate basis to manage this risk.

At September 30, 2023 and December 31, 2022 , there were no interest rate swap agreements for fixed-rate debt instruments.

We use interest rate swap agreements that effectively convert a portion of our floating-rate debt to a fixed-rate basis to manage the market risk of increasing interest rates.

At September 30, 2023 and December 31, 2022, we maintained interest rate swap agreements on the following floating-rate debt instruments:

Debt Instrument Swap Notional as of September 30, 2023 (in thousands) Maturity Debt Floating Rate (3)

All-in Swap Fixed Rate as of September 30, 2023

At March 31, 2024 and December 31, 2023, we maintained interest rate swap agreements on the following floating-rate debt instruments:

Debt Instrument Swap Notional as of March 31, 2024 (in millions) Maturity Debt Floating Rate

All-in Fixed Rate as of March 31, 2024

Celebrity Reflection term loan

$ 81,813 October 2024 LIBOR plus 0.40 % 2.85 %

$ 55 October 2024 Term SOFR plus 0.40 % 2.88 %

Quantum of the Seas term loan

214,375 October 2026 LIBOR plus 1.30 % 3.74 %

184 October 2026 Term SOFR plus 1.30 % 3.78 %

Anthem of the Seas term loan

241,667 April 2027 LIBOR plus 1.30 % 3.86 %

211 April 2027 Term SOFR plus 1.30 % 3.90 %

Ovation of the Seas term loan

345,833 April 2028 LIBOR plus 1.00 % 3.16 %

311 April 2028 Term SOFR plus 1.00 % 3.20 %

Harmony of the Seas term loan (1)

1 unchanged sentence

Odyssey of the Seas term loan (2)

364,167 October 2032 LIBOR plus 0.96 % 3.21 %

345 October 2032 Term SOFR plus 0.96 % 3.28 %

Odyssey of the Seas term loan (2)

182,083 October 2032 LIBOR plus 0.96 % 2.84 %

173 October 2032 Term SOFR plus 0.96 % 2.91 %

(1) Interest rate swap agreements hedging the Euro-denominated term loan for Harmony of the Seas include EURIBOR zero-floors matching the hedged debt EURIBOR zero-floor.

Amount presented is based on the exchange rate as of September 30, 2023.

(2) Interest rate swap agreements hedging the term loan of Odyssey of the Seas include LIBOR zero-floors matching the debt LIBOR zero-floor.

(3) During the quarter ended June 30, 2023, we completed our transition from LIBOR to Term SOFR rates for substantially all of our Interest rate swap agreements, with such transition to take effect at the next respective interest reset date for each such agreement.

Amount presented is based on the exchange rate as of March 31, 2024.

(2) Interest rate swap agreements hedging the term loan of Odyssey of the Seas include Term SOFR zero-floors, Term SOFR with no floors, and Overnight SOFR.

These interest rate swap agreements are accounted for as cash flow hedges.

The notional amount of interest rate swap agreements related to outstanding debt as of September 30, 2023 and December 31, 2022 was $ 1.7 billion and $ 1.9 billion, respectively.

The notional amount of interest rate swap agreements related to outstanding debt as of March 31, 2024 and December 31, 2023 was $ 1.6 billion.

Foreign Currency Exchange Rate Risk

2 unchanged sentences

We enter into foreign currency forward contracts to manage portions of the exposure to movements in foreign currency exchange rates.

As of September 30, 2023, the aggregate cost of our ships on order was $ 10.9 billion, of which we had deposited $ 1.1 billion as of such date.

As of March 31, 2024, the aggregate cost of our ships on order was $ 8.1 billion, of which we had deposited $ 748 million as of such date.

These amounts do not include any ships placed on order that are contingent upon completion of conditions precedent and/or financing and any ships on order by our Partner Brands.

1 unchanged sentence

Commitments and Contingencies , for further information on our ships on order.

At September 30, 2023 and December 31, 2022, approximately 40.1 % and 52.3 %, respectively, of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate.

At March 31, 2024 and December 31, 2023, approximately 44.1 % and 43.5 %, respectively, of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate.

Our foreign currency forward contract agreements are accounted for as cash flow or net investment hedges depending on the designation of the related hedge.

On a regular basis, we enter into foreign currency forward contracts and, from time to time, we utilize cross-currency swap agreements and collar options to minimize the volatility resulting from the remeasurement of net monetary assets and liabilities denominated in a currency other than our functional currency or the functional currencies of our foreign subsidiaries.

During the third quarter of 2023 and 2022 the average notional amount of foreign currency forward contracts was approximately $ 1.4 billion and $ 1.2 billion, respectively.

During the first quarter of 2024 and 2023 the average notional amount of foreign currency forward contracts was approximately $ 1.1 billion and $ 1.2 billion, respectively.

These instruments are not designated as hedging instruments.

For the quarters ended September 30, 2023 and 2022, changes in the fair value of the foreign currency forward contracts resulted in losses of $ 42.8 million and $ 88.4 million, respectively, which offset gains arising from the remeasurement of monetary assets and liabilities denominated in foreign currencies in those same periods of $ 38.5 million and $ 84.0 million, respectively.

These amounts were recognized in earnings within Other (expense) income in our consolidated statements of comprehensive income (loss).

For the nine months ended September 30, 2023 and 2022, changes in the fair value of the foreign currency forward contracts resulted in losses of $ 30.4 million and $ 176.3 million, respectively, which offset gains arising from the remeasurement of monetary assets and liabilities denominated in foreign currencies in those same periods of $ 11.2 million and $ 169.7 million, respectively.

For the quarters ended March 31, 2024 and 2023, changes in the fair value of the foreign currency forward contracts resulted in (losses) gain of $( 35 ) million and $ 4 million, respectively, which offset gains (losses) arising from the remeasurement of monetary assets and liabilities denominated in foreign currencies in those same periods of $ 30 million and $( 11 ) million, respectively.

These amounts were recognized in earnings within Other (expense) income in our consolidated statements of comprehensive income (loss).

The notional amount of outstanding foreign exchange contracts, excluding the forward contracts entered into to minimize remeasurement volatility, as of September 30, 2023 and December 31, 2022 was $ 4.0 billion and $ 2.9 billion, respectively.

The notional amount of outstanding foreign exchange contracts, excluding the forward contracts entered into to minimize remeasurement volatility, as of March 31, 2024 and December 31, 2023 was $ 2.9 billion.

Non-Derivative Instruments

We consider our investment in our foreign operations to be denominated in relatively stable currencies and to be of a long-term nature.

We consider our investments in our foreign operations to be denominated in relatively stable currencies and to be of a long-term nature.

We address the exposure of our investments in foreign operations by denominating a portion of our debt in our subsidiaries’ and investments’ functional currencies and designating it as a hedge of these subsidiaries and investments.

We had designated debt as a hedge of our net investments primarily in TUI Cruises of € 554.8 million, or approximately $ 587.3 million, as of September 30, 2023.

We had designated debt as a hedge of our net investments primarily in TUI Cruises of € 659 million, or approximately $ 712 million, as of March 31, 2024.

As of December 31, 2023, we had designated debt as a hedge of our net investments primarily in TUI Cruises of € 648 million, or approximately $ 716 million.

3 unchanged sentences

Our fuel swap agreements are generally accounted for as cash flow hedges.

In the case that our hedged forecasted fuel consumption is not probable of occurring, hedge accounting will be discontinued and the related accumulated other comprehensive gain or loss will be reclassified to Other income (expense) immediately.

comprehensive gain or loss until the underlying hedged transactions are recognized in earnings or the related hedged forecasted fuel consumption is deemed probable of not occurring.

For hedged forecasted fuel consumption that remains possible of occurring, hedge accounting will be discontinued and the related accumulated other comprehensive gain or loss will remain in accumulated other comprehensive gain or loss until the underlying hedged transactions are recognized in earnings or the related hedged forecasted fuel consumption is deemed probable of not occurring.

Changes in the fair value of fuel swaps for which cash flow hedge accounting was discontinued are currently recognized in Other (expense) income for each reporting period through the maturity dates of the fuel swaps.

For the quarter ended September 30, 2023, we discontinued cash flow hedge accounting on certain fuel swap agreements, which resulted in an immaterial gain.

For the quarter ended September 30, 2022, we did not discontinue cash flow hedge accounting on any of our fuel swap agreements.

At September 30, 2023, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2024 and 2025.

As of September 30, 2023 and December 31, 2022, we had the following outstanding fuel swap agreements:

For the quarters ended March 31, 2024 and March 31, 2023, we did not discontinue cash flow hedge accounting on any of our fuel swap agreements.

At March 31, 2024, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2026.

As of March 31, 2024 and December 31, 2023, we had the following outstanding fuel swap agreements:

Fuel Swap Agreements

As of September 30, 2023 As of December 31, 2022

As of March 31, 2024 As of December 31, 2023

Designated as hedges:

4 unchanged sentences

Fuel Swap Agreements

As of September 30, 2023 As of December 31, 2022

As of March 31, 2024 As of December 31, 2023

Designated hedges as a % of projected fuel purchases:

2 unchanged sentences

2026 15 % 3 %

As of September 30, 2023, there was $ 55.6 million of estimated unrealized net gain associated with our cash flow hedges pertaining to fuel swap agreements that is expected to be reclassified to earnings from Accumulated other comprehensive loss within the next twelve months when compared to $ 7.9 million of estimated unrealized net loss at December 31, 2022.

As of March 31, 2024, there was $ 39 million of estimated unrealized net gain associated with our cash flow hedges pertaining to fuel swap agreements that is expected to be reclassified to earnings from Accumulated other comprehensive loss within the next twelve months when compared to $ 21 million of estimated unrealized net loss at December 31, 2023.

Reclassification is expected to occur as the result of fuel consumption associated with our hedged forecasted fuel purchases.

The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets were as follows (in thousands):

The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets were as follows (in millions):

Fair Value of Derivative Instruments

Asset Derivatives Liability Derivatives

Balance Sheet Location As of September 30, 2023 As of December 31, 2022 Balance Sheet Location As of September 30, 2023 As of December 31, 2022

Balance Sheet Location As of March 31, 2024 As of December 31, 2023 Balance Sheet Location As of March 31, 2024 As of December 31, 2023

Fair Value Fair Value Fair Value Fair Value

Derivatives designated as hedging instruments under ASC 815-20 (1)

Interest rate-swaps Derivative financial instruments $ — 1 Derivative financial instruments $ — $ —

Interest rate swaps Other assets 83 75 Other long-term liabilities — —

4 unchanged sentences

Total derivatives designated as hedging instruments under 815-20 $ 173 $ 144 $ 58 $ 66

Derivatives not designated as hedging instruments under ASC 815-20

Fuel swaps Other Assets 1,584 — Other long-term liabilities — —

Total derivatives not designated as hedging instruments under 815-20 1,584 — — —

Total derivatives $ 217,881 $ 203,802 $ 172,948 $ 135,608

(1) Subtopic 815-20 “ Hedging-General ” under ASC 815.

The carrying value and line item caption of non-derivative instruments designated as hedging instruments recorded within our consolidated balance sheets were as follows (in thousands):

The carrying value and line item caption of non-derivative instruments designated as hedging instruments recorded within our consolidated balance sheets were as follows (in millions):

Carrying Value

Non-derivative instrument designated as

hedging instrument under ASC 815-20 Balance Sheet Location As of September 30, 2023 As of December 31, 2022

hedging instrument under ASC 815-20 Balance Sheet Location As of March 31, 2024 As of December 31, 2023

Foreign currency debt Current portion of long-term debt $ 63 $ 65

Foreign currency debt Long-term debt 649 523

$ 587,256 $ 461,859

The effect of derivative instruments qualifying and designated as hedging instruments and the related hedged items in fair value hedges on the consolidated statements of comprehensive income (loss) was as follows (in thousands):

Derivatives and Related Hedged Items under ASC 815-20 Fair Value Hedging Relationships Location of Gain (Loss) Recognized in Income on Derivative and Hedged Item Amount of Gain (Loss)

Recognized in

Income on Derivative Amount of Gain (Loss)

Recognized in

Income on Hedged Item

Quarter Ended September 30, 2023 Quarter Ended September 30, 2022 Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 Quarter Ended September 30, 2023 Quarter Ended September 30, 2022 Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022

Interest rate swaps Interest expense, net of interest capitalized $ — $ 966 $ — $ ( 3,569 ) $ — $ ( 4,417 ) $ — $ 4,534

$ — $ 966 $ — $ ( 3,569 ) $ — $ ( 4,417 ) $ — $ 4,534

The effect of derivative instruments qualifying and designated as cash flow hedging instruments on the consolidated financial statements was as follows (in thousands):

The effect of derivative instruments qualifying and designated as cash flow hedging instruments on the consolidated financial statements was as follows (in millions):

Derivatives under ASC 815-20 Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in

1 unchanged sentence

Comprehensive Loss on Derivatives

Quarter Ended September 30, 2023 Quarter Ended September 30, 2022 Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022

Quarter Ended March 31, 2024 Quarter Ended March 31, 2023

Interest rate swaps $ 21 $ ( 11 )

2 unchanged sentences

$ 56 $ ( 31 )

The effect of non-derivative instruments qualifying and designated as net investment hedging instruments on the consolidated financial statements was as follows (in thousands):

The effect of non-derivative instruments qualifying and designated as net investment hedging instruments on the consolidated financial statements was as follows (in millions):

Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss)

Non-derivative instruments under ASC 815-20 Net

Investment Hedging Relationships Quarter Ended September 30, 2023 Quarter Ended September 30, 2022 Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022

Investment Hedging Relationships Quarter Ended March 31, 2024 Quarter Ended March 31, 2023

Foreign Currency Debt $ 16 $ ( 9 )

$ 18,262 $ 22,464 $ 7,024 $ 42,023

The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as follows (in thousands):

The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as follows (in millions):

Amount of (Loss) Gain Recognized in Income on Derivatives

2 unchanged sentences

Gain (Loss) Recognized in

Income on Derivatives Quarter Ended September 30, 2023 Quarter Ended September 30, 2022 Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022

Income on Derivatives Quarter Ended March 31, 2024 Quarter Ended March 31, 2023

Foreign currency forward contracts Other (expense) income $ ( 35 ) $ 4

Fuel swaps Other (expense) income 592 ( 230 ) 592 36

$ ( 42,194 ) $ ( 88,670 ) $ ( 29,822 ) $ ( 176,286 )

Credit Related Contingent Features

Our current interest rate derivative instruments require us to post collateral if our Standard & Poor’s and Moody’s credit ratings fall below specified levels.

Specifically, under most of our agreements, if on the fifth anniversary of executing a derivative instrument, or on any succeeding fifth-year anniversary, our credit ratings for our senior unsecured debt is rated below BBB- by Standard & Poor’s and Baa3 by Moody’s, then the counterparty will periodically have the right to demand that we post collateral in an amount equal to the difference between (i) the net market value of all derivative transactions with such counterparty that have reached their fifth year anniversary, to the extent negative, and (ii) the applicable minimum call amount.

between (i) the net market value of all derivative transactions with such counterparty that have reached their fifth year anniversary, to the extent negative, and (ii) the applicable minimum call amount.

The amount of collateral required to be posted will change as, and to the extent, our net liability position increases or decreases by more than the applicable minimum call amount.

If our credit rating for our senior unsecured debt is subsequently equal to or above BBB- by Standard & Poor’s or Baa3 by Moody’s, then any collateral posted at such time will be released to us and we will no longer be required to post collateral unless we meet the collateral trigger requirement, generally, at the next fifth-year anniversary.

As of September 30, 2023, our senior unsecured debt credit rating was BB- by Standard & Poor's and B1 by Moody's.

As of September 30, 2023, five of our interest rate derivative hedges had reached their fifth-year anniversary;

As of March 31, 2024, our senior unsecured debt credit rating was BB+ by Standard & Poor's and Ba2 by Moody's.

As of March 31, 2024, five of our ship debt interest rate derivative hedges had reached their fifth-year anniversary;

however, the net market value for these derivative hedges were in a net asset position, and accordingly, we were not required to post any collateral as of such date.

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

What changed 10-Q

Item 1. Financial Statements