What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-04-29 compared with 2024-10-29 · 192 added, 325 removed, 601 unchanged (46% of the section changed)

3 unchanged sentences

in millions, except per share data)

Quarter Ended September 30,

Passenger ticket revenues $ 3,471 $ 2,941

Onboard and other revenues 1,415 1,219

Total revenues 4,886 4,160

Cruise operating expenses:

Commissions, transportation and other 688 632

Onboard and other 289 261

Payroll and related 328 294

Other operating 545 466

Total cruise operating expenses 2,391 2,137

Marketing, selling and administrative expenses 451 393

Depreciation and amortization expenses 410 365

Operating Income 1,634 1,265

Other income (expense):

Interest income 4 7

Interest expense, net of interest capitalized ( 603 ) ( 340 )

Equity investment income 106 87

Other expense ( 26 ) ( 8 )

( 519 ) ( 254 )

Net Income 1,115 1,011

Net Income attributable to noncontrolling interest 4 2

Net Income attributable to Royal Caribbean Cruises Ltd.

$ 1,111 $ 1,009

Earnings per Share:

Basic $ 4.22 $ 3.94

Diluted $ 4.21 $ 3.65

Weighted-Average Shares Outstanding:

Basic 263 256

Diluted 264 282

Comprehensive Income (Loss)

Net Income $ 1,115 $ 1,011

Other comprehensive income (loss):

Foreign currency translation adjustments ( 10 ) 11

Change in defined benefit plans 6 5

(Loss) gain on cash flow derivative hedges ( 95 ) 20

Total other comprehensive (loss) income ( 99 ) 36

Comprehensive Income 1,016 1,047

Comprehensive Income attributable to noncontrolling interest 4 2

Comprehensive Income attributable to Royal Caribbean Cruises Ltd.

$ 1,012 $ 1,045

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

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

in millions, except per share data)

Nine Months Ended September 30,

Quarter Ended March 31,

Passenger ticket revenues $ 2,744 $ 2,542

19 unchanged sentences

Net Income attributable to Royal Caribbean Cruises Ltd.

$ 2,325 $ 1,420

Earnings per Share:

9 unchanged sentences

Change in defined benefit plans ( 4 ) 9

Loss on cash flow derivative hedges ( 82 ) ( 7 )

Total other comprehensive loss ( 79 ) ( 1 )

Gain on cash flow derivative hedges 128 44

Total other comprehensive income 107 57

Comprehensive Income 842 421

2 unchanged sentences

____________________________________________________________

Certain amounts may not add due to use of rounded numbers.

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

2 unchanged sentences

(in millions, except share data)

September 30, December 31,

March 31, December 31,

Current assets

Cash and cash equivalents $ 386 $ 388

Trade and other receivables, net of allowances of $ 8 and $ 7 at September 30, 2024 and December 31, 2023, respectively

Trade and other receivables, net 427 371

Inventories 256 265

5 unchanged sentences

Goodwill 808 808

Other assets, net of allowances of $ 42 and $ 43 at September 30, 2024 and December 31, 2023, respectively

Other assets 2,251 2,049

Total assets $ 37,452 $ 37,070

18 unchanged sentences

500,000,000 shares authorized;

297,343,264 and 284,672,386 shares issued, September 30, 2024 and December 31, 2023, respectively)

301,130,805 and 297,368,235 shares issued, March 31, 2025 and December 31, 2024, respectively)

Paid-in capital 7,846 7,831

Retained earnings (accumulated deficit) 2,207 ( 10 )

Retained earnings 3,139 2,612

Accumulated other comprehensive loss ( 695 ) ( 802 )

Treasury stock ( 28,468,430 and 28,248,125 common shares at cost, September 30, 2024 and December 31, 2023, respectively)

Treasury stock ( 29,575,028 and 28,468,430 common shares at cost, March 31, 2025 and December 31, 2024, respectively)

( 2,333 ) ( 2,081 )

7 unchanged sentences

(unaudited, in millions)

Nine Months Ended September 30,

Three Months Ended March 31,

Operating Activities

1 unchanged sentence

Depreciation and amortization 412 387

Net deferred income tax expense (benefit) 15 ( 3 )

Loss on derivative instruments not designated as hedges 8 31

Net deferred income tax benefit ( 1 ) —

(Gain) loss on derivative instruments not designated as hedges ( 2 ) 35

Share-based compensation expense 53 45

3 unchanged sentences

Changes in operating assets and liabilities:

(Increase) decrease in trade and other receivables, net ( 13 ) 131

Increase in inventories, net ( 17 ) ( 18 )

Increase in trade and other receivables, net ( 77 ) ( 57 )

Decrease in inventories 9 12

Increase in prepaid expenses and other assets ( 112 ) ( 80 )

6 unchanged sentences

Purchases of property and equipment ( 428 ) ( 242 )

Cash received on settlement of derivative financial instruments 14 23

Cash paid on settlement of derivative financial instruments ( 2 ) ( 35 )

8 unchanged sentences

Premium on repayment of debt ( 2 ) ( 104 )

Proceeds from sale of noncontrolling interest — 209

Repurchase of common stock ( 241 ) —

Dividends paid ( 148 ) —

Other, net ( 56 ) ( 40 )

8 unchanged sentences

(unaudited, in millions)

Nine Months Ended September 30,

Three Months Ended March 31,

Supplemental Disclosure

8 unchanged sentences

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

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

Balance at July 1, 2024 $ 3 $ 7,536 $ 1,204 $ ( 654 ) $ ( 2,081 ) $ 174 $ 6,182

Activity related to employee stock plans — 29 — — — — 29

Common stock dividends, $ 0.40 per share

— — ( 108 ) — — — ( 108 )

Convertible notes settlement — 104 — — — — 104

Changes related to cash flow derivative hedges — — — ( 95 ) — — ( 95 )

Change in defined benefit plans — — — 6 — — 6

Foreign currency translation adjustments — — — ( 10 ) — — ( 10 )

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

Other activity attributable to noncontrolling interest — — — — — 1 1

Net Income attributable to Royal Caribbean Cruises Ltd.

— — 1,111 — — — 1,111

Balance at September 30, 2024 $ 3 $ 7,669 $ 2,207 $ ( 753 ) $ ( 2,081 ) $ 179 $ 7,224

Common Stock Paid-in Capital (Accumulated Deficit)

Common Stock Paid-in Capital

Retained Earnings Accumulated Other Comprehensive Loss Treasury Stock Noncontrolling Interest Total Shareholders' Equity

3 unchanged sentences

— — ( 203 ) — — — ( 203 )

Convertible notes settlement — 104 — — — — 104

Changes related to cash flow derivative hedges — — — ( 82 ) — — ( 82 )

Change in defined benefit plans — — — 3 — — 3

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

Net Income attributable to noncontrolling interest — — — — — 12 12

Other activity attributable to noncontrolling interest — — — — — ( 8 ) ( 8 )

Net Income attributable to Royal Caribbean Cruises Ltd.

— — 2,325 — — — 2,325

Balance at September 30, 2024 $ 3 $ 7,669 $ 2,207 $ ( 753 ) $ ( 2,081 ) $ 179 $ 7,224

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

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

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

Balance at July 1, 2023 $ 3 $ 7,407 $ ( 1,296 ) $ ( 680 ) $ ( 2,069 ) $ 177 $ 3,542

Activity related to employee stock plans — 14 — — — — 14

Convertible notes settlements — 7 — — — — 7

Changes related to cash flow derivative hedges — — — 128 — — 128

1 unchanged sentence

Foreign currency translation adjustments — — — ( 17 ) — — ( 17 )

Sale of noncontrolling interest — 1 — — — — 1

Repurchase of common stock — — — — ( 252 ) — ( 252 )

Net Income attributable to noncontrolling interest — — — — — 6 6

Other activity attributable to

noncontrolling interest — — — — — 4 4

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

Net Income attributable to Royal Caribbean Cruises Ltd.

— — 730 — — — 730

Balance at September 30, 2023 $ 3 $ 7,422 $ ( 287 ) $ ( 644 ) $ ( 2,069 ) $ 174 $ 4,599

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

Balance at March 31, 2025 $ 3 $ 7,846 $ 3,139 $ ( 695 ) $ ( 2,333 ) $ 182 $ 8,142

Common Stock Paid-in Capital (Accumulated Deficit)

Retained Earnings 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 — 12 — — — — 12

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

1 unchanged sentence

Foreign currency translation adjustments — — — 4 — — 4

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

Sale of noncontrolling interest — 46 — — — 174 220

Noncontrolling interest — — — — — 6 6

Repurchase of common stock — — — — ( 12 ) — ( 12 )

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

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

1 unchanged sentence

— — 360 — — — 360

Balance at September 30, 2023 $ 3 $ 7,422 $ ( 287 ) $ ( 644 ) $ ( 2,069 ) $ 174 $ 4,599

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

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

3 unchanged sentences

and, depending on the context, Royal Caribbean Cruises Ltd.’s consolidated subsidiaries and/or affiliates.

The terms “Royal Caribbean International,” “Celebrity Cruises,” and "Silversea Cruises" refer to our wholly owned global cruise brands.

Throughout this Quarterly Report on Form 10-Q, we also refer to our partner brands in which we hold an ownership interest, including “TUI Cruises” and "Hapag-Lloyd Cruises." However , because these partner brands are unconsolidated investments, our operating results and other disclosures herein do not include these brands unless otherwise specified.

The terms “Royal Caribbean,” “Celebrity Cruises,” and "Silversea Cruises" refer to our wholly owned global cruise brands.

Throughout this Quarterly Report on Form 10-Q, we also refer to our partner brands in which we hold an ownership interest, including “Mein Schiff” and "Hapag-Lloyd Cruises." However , because these partner brands are unconsolidated investments, our operating results and other disclosures herein do not include these brands unless otherwise specified.

In accordance with cruise vacation industry practice, the term “berths” is determined based on double occupancy per cabin even though many cabins can accommodate three or more passengers.

5 unchanged sentences

We own and operate three global cruise brands:

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

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

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

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

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

Together, our Global Brands and our Partner Brands have a combined fleet of 68 ships as of September 30, 2024.

Together, our Global Brands and our Partner Brands operated a combined fleet of 67 ships as of March 31, 2025.

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

8 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, 2024 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

Recent Accounting Pronouncements

Adoption of Accounting Pronouncements

In August 2023, the FASB issued ASU No.

5 unchanged sentences

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.

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 these amendments on our disclosures, but this standard update will not impact our financial condition and results of operations.

We adopted the new guidance effective for the fiscal year beginning January 1, 2025.

The adoption of this guidance did not have a material impact to our consolidated financial statements or disclosures.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU No.

2 unchanged sentences

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.

This ASU is effective for annual periods beginning after December 15, 2024 on a prospective basis with the option to apply retrospectively.

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

In November 2024, the FASB issued ASU No.

2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which requires disclosures about certain categories of expenses (including purchases of inventory, employee compensation, depreciation and intangible asset amortization) that are included in the expense captions presented on the face of the income statement, as well as disclosures about selling expenses.

This new guidance is intended to provide investors with more detailed expense information in order to better understand an entity's cost structure and forecast future cash flows.

This ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027 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.

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

Revenue Recognition

4 unchanged sentences

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

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 $ 313 million and $ 252 million for the quarters ended September 30, 2024 and 2023, respectively, and $ 822 million and $ 682 million for the nine months ended September 30, 2024 and 2023, respectively.

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

The amounts of port costs charged to our guests and included within Passenger ticket revenues on a gross basis were $ 275 million and $ 242 million for the quarters ended March 31, 2025 and 2024, 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.

3 unchanged sentences

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

Quarter Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Quarter Ended March 31,

Revenues by itinerary

1 unchanged sentence

Asia/Pacific 624 506

Europe 1,435 1,375 2,298 2,272

Other regions (2) 318 343

3 unchanged sentences

(1) Includes the United States, Canada, Mexico and the Caribbean.

(2) Includes seasonality impacted itineraries primarily in South and Latin American countries.

(2) Includes seasonality impacted itineraries primarily in South American countries and Antarctica.

(3) Includes revenues primarily related to cancellation fees, vacation protection insurance, pre- and post-cruise tours, and fees for operating certain port facilities.

3 unchanged sentences

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

For the quarters and nine months ended September 30, 2024 and 2023, our guests were sourced from the following areas:

Quarter Ended September 30,

Passenger ticket revenues:

United States 74 % 72 %

United Kingdom 8 % 10 %

All other countries (1) 18 % 18 %

Nine Months Ended September 30,

For the quarters ended March 31, 2025 and 2024, our guests were sourced from the following areas:

Quarter Ended March 31,

Passenger ticket revenues:

1 unchanged sentence

All other countries (1) 26 % 27 %

(1) No other individual country's revenue exceeded 10% for the quarters and nine months ended September 30, 2024 and 2023.

(1) No other individual country's revenue exceeded 10% for the quarters ended March 31, 2025 and 2024.

Customer Deposits and Contract Liabilities

3 unchanged sentences

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 $ 2.6 billion as of September 30, 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 September 30, 2024, our customer deposit balance includes approximately

$ 253 million of unredeemed FCCs.

Customer deposits presented in our consolidated balance sheets include contract liabilities of $ 3.3 billion and $ 2.8 billion as of March 31, 2025 and December 31, 2024, respectively.

As of March 31, 2025, our customer deposit balance includes approximately $ 169 million of unredeemed future cruise credits ("FCCs"), which were mostly held by guests with bookings on sailings that were cancelled during our suspension of global cruise operations.

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 and nine months ended September 30, 2024.

Based on our current estimates, we recognized an immaterial amount of FCC breakage revenue during the quarter ended March 31, 2025.

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 processing agreements require us, under certain circumstances, to maintain a reserve that can be satisfied by posting collateral.

As of September 30, 2024, none of our credit card processors required us to maintain a reserve.

As of March 31, 2025, 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, 2024 and December 31, 2023, our contract assets were $ 162 million and $ 167 million, respectively, and were included within Other assets in our consolidated balance sheets.

As of March 31, 2025 and December 31, 2024, our contract assets were $ 159 million and $ 161 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 $ 263 million as of September 30, 2024 and $ 257 million as of December 31, 2023.

Prepaid travel advisor commissions and prepaid credit and debit card fees were $ 296 million and $ 252 million as of March 31, 2025 and December 31, 2024, respectively.

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).

1 unchanged sentence

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

Quarter Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Quarter Ended March 31,

Net Income attributable to Royal Caribbean Cruises Ltd.

9 unchanged sentences

Diluted earnings per share $ 2.70 $ 1.35

T here were no antidilutive shares for the quarter ended September 30, 2023, and nine months ended September 30, 2024 and 2023, compared to 14,706,077 antidilutive shares from our convertible notes for the quarter ended September 30, 2024.

T here were no antidilutive shares for the quarter ended March 31, 2025, and 2024, respectively, from our stock-based awards and convertible notes.

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.

In 2023, we closed on the partnership agreement with iCON Infrastructure Partners VI, L.P.

This partnership owns, develops, and manages 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.

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

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.

Our partnership with iCON Infrastructure Partners VI, L.P.

("iCON"), owns, develops, and manages cruise terminal facilities and infrastructure in key ports of call, initially including several development projects in Italy and Spain.

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

Virgin Islands.

Unconsolidated investments ("equity method investments")

We have determined that TUI Cruises GmbH ("TUIC"), our 50 %-owned joint venture, which operates the brands TUI Cruises and Hapag-Lloyd Cruises, is a VIE.

We have determined that TUI Cruises ("TUIC"), our 50 %-owned joint venture, which operates the brands Mein Schiff and Hapag-Lloyd Cruises, is a VIE.

We have determined that we are not the primary beneficiary of TUIC.

2 unchanged sentences

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

As of September 30, 2024, the net book value of our investment in TUIC was $ 820 million, primarily consisting of $ 744 million in equity and a loan of € 59 million, or approximately $ 66 million based on the exchange rate at September 30, 2024.

As of March 31, 2025, the net book value of our investment in TUIC was $ 892 million, primarily consisting of $ 832 million in equity and a loan of € 51 million, or approximately $ 55 million based on the exchange rate at March 31, 2025.

As of December 31, 2024, the net book value of our investment in TUIC was $ 814 million, primarily consisting of $ 749 million in equity and a loan of € 55 million, or approximately $ 57 million based on the exchange rate at December 31, 2024.

The loan, which was made in connection with the sale of Splendour of the Seas in April 2016, accrues interest at a rate of 6.25 % per annum and is payable over 10 years.

The loan, which was made in connection with the sale of Splendour of the Seas in April 2016, accrues interest at a rate of 6.25 % per annum and is scheduled to mature in April 2026.

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

5 unchanged sentences

We utilize this facility, among other ship repair facilities, for our regularly scheduled drydocks and certain emergency repairs as may be required.

We have determined that we are not the primary beneficiary of this facility as we do not have the power to direct the activities that most significantly impact the facility’s economic performance.

We have determined that we are not the primary beneficiary of this facility as we do not have the

power to direct the activities that most significantly impact the facility’s economic performance.

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

In 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 $ 41 million as of September 30, 2024.

Our investment in Floating Docks, including loans, is immaterial to our consolidated financial statements as of September 30, 2024.

Floating Docks S.

(“Floating Docks”), our 50 %-owned joint venture with the other 49 % shareholder of Grand Bahama, 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.

Our investment in Floating Docks is $ 105 million as of March 31, 2025.

We have determined that Floating Docks is a VIE.

2 unchanged sentences

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

In 2023, 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.

We have determined that the partnership and both Italian

entities are VIE's.

These entities in Italy represent development projects to own, develop, and manage cruise terminal facilities in key ports of call.

We have determined that we are not the primary beneficiary for either of these entities as we do not have the power to direct the activities that most significantly impact the economic performance.

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

In 2024, we entered into an agreement to sell one-third of our ownership interests in both Grand Bahama and Floating Docks.

The transaction is expected to close in 2025, subject to regulatory approval and customary closing conditions.

If approved, the sale will not have a material impact to our consolidated financial statements.

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 September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Quarter Ended March 31,

Share of equity income from investments $ 48 $ 41

As of September 30, 2024 As of December 31, 2023

As of March 31, 2025 As of December 31, 2024

Total notes receivable due from equity investments $ 161 $ 138

4 unchanged sentences

Consolidated investments ("controlled subsidiaries")

As part of the transaction with iCON, we sold an 80 % interest in the entity which owns our terminal at PortMiami for $ 209 million and retained a 20 % minority interest, effective March 31, 2023.

We also sold a noncontrolling interest in another entity which is developing a port project in Spain for an immaterial amount.

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 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

In evaluating our credit loss 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 as of September 30, 2024 and 2023 primarily relates to credit losses recognized on notes receivable for the previous sale of certain property and equipment of $ 42 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):

Nine Months Ended September 30,

Balance, beginning of period $ 49 $ 83

Credit loss (recovery), net 1 ( 10 )

Write-offs — ( 3 )

Balance, end of period $ 50 $ 70

As described above, we hold equity interests in ventures related to our cruise operations.

We account for these investments as a controlled subsidiary when we determine we are the primary beneficiary.

Debt consists of the following (in millions):

Weighted Average Rate (1)

Maturities Through As of September 30, 2024 As of December 31, 2023

Maturities Through As of March 31, 2025 As of December 31, 2024

Fixed rate debt:

1 unchanged sentence

2026 - 2033 $ 9,699 $ 9,699

Secured senior notes — %

Unsecured term loans

1 unchanged sentence

Convertible notes 6.00 %

2025 323 1,150

Total fixed rate debt 17,386 17,708

13 unchanged sentences

Long-term portion $ 17,993 $ 18,473

(1) Weighted average interest rates are based on outstanding loan balance as of September 30, 2024, and for variable rate debt include either EURIBOR or Term SOFR plus the applicable margin.

(1) Weighted average interest rates are based on outstanding loan balance as of March 31, 2025, 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 of 1.10 %.

Based on applicable Term SOFR rates, as of September 30, 2024, the interest rate under the unsecured credit facilities was 6.28 %.

Based on applicable Term SOFR rates, as of March 31, 2025, the interest rate under the unsecured credit facilities was 5.52 %.

We also pay a facility fee of 0.15 % of the total commitments under such facility.

(3) At September 30, 2024 and December 31, 2023, the weighted average interest rate for total debt was 5.27 % and 6.06 %, respectively .

(3) At March 31, 2025 and December 31, 2024, the weighted average interest rate for total debt was 4.99 % and 5.03 %, respectively .

Unsecured revolving credit facilities

As of September 30, 2024 our aggregate revolving credit capacity is $ 3.7 billion of which $ 1.86 billion of the commitments are scheduled to mature in October 2026 and $ 1.86 billion of the commitments are scheduled to mature in October 2028.

As of September 30, 2024, we had undrawn capacity of $ 3.5 billion under our unsecured revolving credit facilities.

Debt financing transactions

In March 2024, we issued $ 1.25 billion of senior unsecured 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 nine months ended September 30, 2024.

In August 2024, we issued $ 2.0 billion of senior unsecured notes due in 2033 for net proceeds of approximately $ 1.98 billion.

Interest accrues on the notes at a fixed rate of 6.00 % per annum and is payable semi-annually in arrears.

The proceeds from this notes issuance were used to redeem all of our outstanding $ 1.0 billion aggregate principal of 9.25 % Senior Notes due 2029 and all of our outstanding $ 1.0 billion aggregate principal amount of 8.25 % Senior secured notes due 2029.

repayment resulted in a loss on extinguishment of debt of $ 142 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, 2024.

In August 2024, we completed a privately negotiated exchange with a limited number of holders of the 6.00 % Convertible Senior Notes due 2025.

The holders exchanged approximately $ 827 million in aggregate principal amount for approximately 11.4 million shares of common stock and $ 827 million in cash, including accrued and unpaid interest.

The convertible notes exchange resulted in an induced conversion expense of $ 119 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, 2024.

In September 2024, we issued $ 1.5 billion of senior unsecured notes due in 2031 for net proceeds of approximately $ 1.49 billion in order to repay indebtedness.

Interest accrues on the notes at a fixed rate 5.63 % per annum and is a payable semi-annually in arrears.

Concurrently, we redeemed all of our outstanding $ 700 million aggregate principal amount of our 7.25 % Senior Notes due 2030.

The repayment resulted in a loss on extinguishment of debt of $ 61 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, 2024.

As of March 31, 2025 our aggregate revolving credit capacity is $ 4.1 billion of which $ 2 billion of the commitments are scheduled to mature in October 2026 and $ 2 billion of the commitments are scheduled to mature in October 2028.

As of March 31, 2025, our unsecured revolving credit facilities were undrawn.

Convertible Notes due 2025

In March 2025, we completed a privately negotiated exchange with a limited number of holders of the 6.00 % Convertible Senior Notes due 2025.

The holders exchanged approximately $ 213 million in aggregate principal amount for approximately 3 million shares of common stock and $ 214 million in cash, including accrued interest.

The convertible notes exchange resulted in an induced conversion expense of $ 10 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, 2025.

Export credit facilities and agency guarantees

In May 2024, we took delivery of Silver Ray .

To finance the delivery, we borrowed $ 507 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 4.33 % per annum.

In June 2024, we took delivery of Utopia of the Seas .

To finance the delivery, we borrowed a total of $ 1.5 billion under the committed financing agreement, resulting in an unsecured term loan which is 100 % guaranteed by BpiFrance Assurance Export.

The unsecured term loan amortizes semi-annually over 12 years and bears interest primarily at a fixed rate of 3.00 % per annum.

During the second quarter of 2024, we repaid $ 839 million of outstanding deferred amounts under our export credit facilities.

These repayments included both scheduled payments and an early repayment of the amortization deferral obtained on our export credit facilities in 2020 and 2021, which resulted in an immaterial loss on extinguishment of debt 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, 2024.

Except for the term loan we incurred to acquire 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.

For the majority of the loans as of September 30, 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.

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.

For the majority of the loans as of March 31, 2025, 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.

4 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, and to maintain minimum liquidity.

In July 2024, we amended all of our export credit facilities to eliminate the contractual requirement for us to maintain a minimum level of stockholders' equity.

As of September 30, 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 September 30, 2024 for each of the next five years (in millions):

Year As of September 30, 2024 (1)

As of March 31, 2025, we were in compliance with our debt covenants and we estimate we will be in compliance for the next twelve months.

Annual maturities

The following is a schedule of annual maturities on our total debt, including finance leases, as of March 31, 2025 for each of the next five years (in millions):

Year As of March 31, 2025 (1)

Remainder of 2025 $ 1,208

Thereafter 9,088

(1) Debt denominated in other currencies is calculated based on the applicable exchange rate at September 30, 2024.

(1) Debt denominated in other currencies is calculated based on the applicable exchange rate at March 31, 2025.

Operating leases

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 September 30, 2024 and December 31, 2023.

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

1 unchanged sentence

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 September 30, 2024 and December 31, 2023.

The aggregate amount of the operating lease liabilities recorded for this berthing agreement was $ 168 million as of March 31, 2025 and December 31, 2024, respectively.

There will be future remeasurements of the operating lease as the County completes several construction milestones throughout the term of the extended lease, including an expected remeasurement in 2027 or later, when the County satisfies substantial completion of Terminal G, as the minimum lease payments will increase at such time to approximately $ 55 million per year, with expected 3 % annual increases thereafter.

9 unchanged sentences

Finance leases

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

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, 2024 and December 31, 2023.

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 .

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

The Company's master lease agreement (“Master Lease”) with the 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.

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.

Additionally, we previously executed a modification to the Master Lease agreement to extend its expiration from 2076 to 2077 after coming to an agreement with the 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 $ 106 million and $ 104 million as of September 30, 2024 and December 31, 2023, respectively.

The total aggregate amount of the finance lease liabilities recorded for this Master Lease was $ 106 million as of March 31, 2025 and December 31, 2024, 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.

Due to the bargain purchase option at the end of the lease term in 2036, whereby Silversea Cruises is reasonably certain of obtaining ownership of the ship, Silver Dawn is accounted for as a finance lease.

On September 26, 2024, we submitted an irrevocable notice to execute the bargain purchase option and pay in full all of the outstanding aggregate principal amount of the Silver Dawn finance lease for approximately $ 232 million, which is scheduled for November 25, 2024.

The aggregate amount of finance lease liabilities recorded for this ship was $ 232 million and $ 246 million as of September 30, 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 millions):

Consolidated Statement of Comprehensive Income (Loss) Classification Quarter Ended September 30, 2024 Nine Months Ended September 30, 2024

Operating lease costs Commission, transportation and other $ 38 $ 151

Operating lease costs Other operating expenses 4 11

Operating lease costs Marketing, selling and administrative expenses 5 14

Financial lease costs:

Amortization of right-of-use-assets Depreciation and amortization expenses 3 10

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

Total lease costs $ 57 $ 208

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

Consolidated Statement of Comprehensive Income (Loss) Classification Quarter Ended March 31, 2025 Quarter Ended March 31, 2024

Operating lease costs Commission, transportation and other $ 65 $ 71

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, 2024, we had $ 13 million and $ 92 million of variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive income (loss), respectively, compared to $ 13 million and $ 72 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, 2023, respectively.

During the quarters ended March 31, 2025, and 2024 we had $ 60 million and $ 51 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, 2024 As of December 31, 2023

As of March 31, 2025 As of December 31, 2024

Weighted average of the remaining lease term in years

5 unchanged sentences

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

Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

Three Months Ended March 31, 2025 Three Months Ended March 31, 2024

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

2 unchanged sentences

Financing cash flows from finance leases $ 1 $ 6

As of September 30, 2024, maturities related to lease liabilities were as follows (in millions):

As of March 31, 2025, maturities related to lease liabilities were as follows (in millions):

Year Operating Leases Finance Leases

6 unchanged sentences

Ship Purchase Obligations

Our future capital commitments consist primarily of new ship orders.

As of September 30, 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:

As of March 31, 2025, our Global Brands and our Partner Brands have the following ships on order:

Ship Shipyard Expected delivery Approximate

Royal Caribbean International —

Royal Caribbean —

Unnamed Chantiers de l'Atlantique 2nd Quarter 2028 5,700

Star of the Seas Meyer Turku Oy 3rd Quarter 2025 5,600

Unnamed Meyer Turku Oy 2nd Quarter 2026 5,600

Legend of the Seas Meyer Turku Oy 2nd Quarter 2026 5,600

Celebrity Cruises —

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

TUI Cruises (50% joint venture) —

Mein Schiff Relax Fincantieri 1st Quarter 2025 4,100

Unnamed Fincantieri 2nd Quarter 2026 4,100

Mein Schiff —

Mein Schiff Flow Fincantieri 2nd Quarter 2026 4,100

Total Berths 24,250

In addition, during 2024, we entered into an agreement with Meyer Turku Oy and Chantiers de l' Atlantique to build a fourth Icon class ship and a seventh Oasis class ship for delivery 2027 and 2028, respectively.

Both agreements are contingent upon completion of certain conditions precedent including financing.

As of September 30, 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 $ 5.9 billion, of which we had deposited $ 619 million as of such date.

During 2024, we entered into an agreement with Meyer Turku Oy and Chantiers de l'Atlantique to build a fourth Icon-class ship for delivery in 2027 and a sixth Edge-class ship for delivery in 2028.

The agreements are contingent upon completion of certain conditions precedent including financing.

In January 2025, we announced the launch of Celebrity River Cruises, a premium river cruise vacation.

We entered into agreements for the commitment to an initial order of 10 ships with plans to sail in 2027.

In March 2025, we entered into a credit agreement for the unsecured financing of the seventh Oasis-class ship for approximately 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.

The maximum loan amount under the facility is not to exceed the United States dollar equivalent of € 1.7 billion, or approximately $ 1.8 billion based on the exchange rate at March 31, 2025.

The loan will amortize semi-annually and will mature 12 years following delivery of the ship.

Interest on the loan will accrue at a floating rate equal to Term SOFR + 0.85 %.

The seventh Oasis-class ship will have a capacity of approximately 5,700 berths.

As of March 31, 2025, 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 $ 7.9 billion, of which we had deposited $ 1.0 billion.

Refer to Note 11 .

2 unchanged sentences

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 that was expropriated by the Cuban government.

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.

The plaintiff seeks all available statutory remedies, including the value of the expropriated property, plus interest, treble damages, attorneys’ fees and costs.

The plaintiffs seek all available statutory remedies, including the value of the expropriated property, plus interest, treble damages, attorneys’ fees and costs.

The Court entered final judgment in December 2022 in favor of the plaintiff and awarded damages and attorneys' fees to the plaintiff in the aggregate amount of approximately $ 112 million.

We appealed the judgment to the United States Court of Appeals for the 11th Circuit.

On October 22, 2024, the 11th Circuit issued an opinion that overturned the lower court’s judgment.

The plaintiff has the right to petition for a rehearing by the full 11th Circuit or to appeal to the United States Supreme Court.

During the fourth quarter of 2022, we recorded a charge of approximately $ 130.0 million to Other expense within our consolidated statements of comprehensive income (loss) related to the Havana Docks Action, including post-judgment interest and related legal defense costs and bonding fees.

We then appealed the judgment to the United States Court of Appeals for the 11th Circuit.

On October 22, 2024, the 11th Circuit issued an opinion reversing the lower court’s judgment.

The plaintiff's petition for a rehearing by the full 11th Circuit was subsequently denied.

The plaintiff has petitioned the United States Supreme Court for a writ of certiorari.

During the fourth quarter of 2022, we recorded a charge of approximately $ 130 million to Other (expense) income within our consolidated statements of comprehensive income (loss) related to the Havana Docks Action, including post-judgment interest and related legal defense costs and bonding fees.

Following the 11th Circuit's denial of the rehearing petition, we released approximately $ 124 million of the previously recorded loss contingency for the year ended December 31, 2024, recognized within Other (expense) income within our consolidated statements of comprehensive income (loss).

In addition, we are routinely involved in claims typical within the cruise vacation industry.

7 unchanged sentences

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

Our public debt securities also contain change of control provisions that

would be triggered by a third-party acquisition of greater than 50 % of our common stock coupled with a ratings downgrade.

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

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

In September 2024, we entered into agreements to acquire the Port of Costa Maya and adjacent land in Mahahual, Mexico for approximately $ 292 million.

The transaction is expected to close in the first half of 2025, subject to regulatory approval and customary closing conditions.

In 2024, we entered into agreements to acquire the Port of Costa Maya and adjacent land in Mahahual, Mexico for approximately $ 292 million.

The transaction is expected to close in 2025, subject to regulatory approval and customary closing conditions.

Shareholders' Equity

During the quarter ended September 30, 2024, we declared a cash dividend on our common stock of $ 0.40 per share, which was paid on October 11, 2024.

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

We were previously restricted under our export credit facilities from paying dividends.

During the second quarter of 2024, we repaid the principal amounts deferred under our export credit facilities, which eliminated the restriction on dividends and share repurchases.

Refer to Note 6 .

Debt for further information on the transaction.

In February 2025, we declared a cash dividend on our common stock of $ 0.75 per share, which was paid in April 2025.

During the first quarter of 2025, we also paid a cash dividend on common stock of $ 0.55 per share, which was declared during the fourth quarter of 2024.

Common Stock Repurchase Program

In February 2025, our board of directors authorized a 12-month common stock repurchase program for up to $ 1.0 billion.

The timing and number of shares to be repurchased will depend on a variety of factors including price and market conditions.

Repurchases under the program may be made at management's discretion from time to time on the open market or through privately negotiated transactions.

During the quarter ended March 31, 2025 we repurchased 1.0 million shares of our common stock under this program, for a total of $ 241 million in open market transactions that were recorded within Treasury stock in

our consolidated balance sheets.

As of March 31, 2025, we have $ 759 million that remains available for future stock repurchase transactions under our Board authorized program.

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, 2024 and 2023 (in millions):

Accumulated Other Comprehensive Loss for the Nine Months Ended September 30, 2024 Accumulated Other Comprehensive Loss for the Nine Months Ended September 30, 2023

The following table presents the changes in accumulated other comprehensive loss by component for the quarters ended March 31, 2025 and 2024 (in millions):

Accumulated Other Comprehensive Loss for the Three Months Ended March 31, 2025 Accumulated Other Comprehensive Loss for the Three Months Ended March 31, 2024

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 $ ( 695 ) $ 6 $ ( 6 ) $ ( 695 ) $ ( 622 ) $ 7 $ ( 2 ) $ ( 617 )

The following table presents reclassifications out of accumulated other comprehensive loss for the quarters and nine months ended September 30, 2024 and 2023 (in millions):

The following table presents reclassifications out of accumulated other comprehensive loss for the quarters ended March 31, 2025 and 2024 (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, 2024 Quarter Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023 Affected Line Item in Statements of

Details About Accumulated Other Comprehensive Loss Components Quarter Ended March 31, 2025 Quarter Ended March 31, 2024 Affected Line Item in Statements of

Comprehensive Income (Loss)

2 unchanged sentences

Foreign currency forward contracts ( 6 ) ( 6 ) Depreciation and amortization expenses

Foreign currency forward contracts — — — ( 10 ) Other (expense) income

Fuel swaps 4 4 Fuel

$ 8 $ 27 $ 36 $ 13

Fair Value Measurements and Derivative Instruments

1 unchanged sentence

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 September 30, 2024 Fair Value Measurements at December 31, 2023

Fair Value Measurements at March 31, 2025 Fair Value Measurements at December 31, 2024

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

15 unchanged sentences

(3) Inputs that are unobservable.

The Company did not use any Level 3 inputs as of September 30, 2024 and December 31, 2023.

The Company did not use any Level 3 inputs as of March 31, 2025 and December 31, 2024.

(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 as of September 30, 2024 and December 31, 2023.

The carrying amounts of accounts receivable, accounts payable, and accrued expenses approximate fair value as of March 31, 2025 and December 31, 2024.

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 millions):

Fair Value Measurements at September 30, 2024 Fair Value Measurements at December 31, 2023

Fair Value Measurements at March 31, 2025 Fair Value Measurements at December 31, 2024

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, 2024 and December 31, 2023.

No Level 1 inputs were used in fair value measurements of other financial instruments as of March 31, 2025 and December 31, 2024.

(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, 2024 and December 31, 2023.

No Level 3 inputs were used in fair value measurements of other financial instruments as of March 31, 2025 and December 31, 2024.

(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, 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.

Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of March 31, 2025 or December 31, 2024, 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 material nonfinancial instruments recorded at fair value as of September 30, 2024 or December 31, 2023.

There were no material nonfinancial instruments recorded at fair value as of March 31, 2025 or December 31, 2024.

Master Netting Agreements

6 unchanged sentences

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

As of September 30, 2024 As of December 31, 2023

As of March 31, 2025 As of December 31, 2024

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, 2024, we had counterparty credit risk exposure under our derivative instruments of $ 95 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, 2025, we had counterparty credit risk exposure under our derivative instruments of $ 78 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.

16 unchanged sentences

The foreign currency transaction gain or loss of our non-derivative financial instruments and the changes in the fair value of derivatives designated as hedges of our net investment in foreign operations and investments are recognized as a component of Accumulated other comprehensive loss along with the associated foreign currency translation adjustment of the foreign operation or investment.

In certain hedges of our net investment in foreign operations and investments, we exclude forward points from the assessment of hedge effectiveness and we amortize the related amounts directly into earnings.

In certain hedges of our net investment in foreign operations and investments, we exclude forward points from the assessment of hedge effectiveness and amortize the related amounts directly into earnings.

On an ongoing basis, we assess whether derivatives used in hedging transactions are "highly effective" in offsetting changes in the fair value or cash flow of hedged items.

5 unchanged sentences

If it is determined that a derivative is not highly effective as a hedge or hedge accounting is discontinued, any change in fair value of the derivative since the last date at which it was determined to be highly effective is recognized in earnings.

We consider the classification of the underlying hedged item’s cash flows in determining the classification for the designated derivative instrument’s cash flows.

Cash flows from derivative instruments that are designated as fair value or cash flow hedges are classified in the same category as the cash flows from the underlying hedged items.

1 unchanged sentence

Cash flows from derivative instruments not designated as hedging instruments are classified as investing activities.

We consider the classification of the underlying hedged item’s cash flows in determining the classification for the designated derivative instrument’s cash flows.

We classify derivative instrument cash flows from hedges of benchmark interest rate or hedges of fuel expense as operating activities due to the nature of the hedged item.

For example, we classify derivative instrument cash flows from hedges of benchmark interest rate or hedges of fuel expense as operating activities due to the nature of the hedged item.

Likewise, we classify derivative instrument cash flows from hedges of foreign currency risk on our newbuild ship payments as investing activities.

1 unchanged sentence

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

At September 30, 2024 and December 31, 2023, approximately 91.4 % and 83.2 %, respectively, of our debt was effectively fixed-rate debt, which is net of our interest rate swap agreements.

At March 31, 2025 and December 31, 2024, approximately 94 % and 92.3 %, 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.

AtMarch 31, 2025, 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, 2024 and December 31, 2023, we maintained interest rate swap agreements on the following floating-rate debt instruments:

Debt Instrument Swap Notional as of September 30, 2024 (in millions) Maturity Debt Floating Rate

All-in Fixed Rate as of September 30, 2024

Celebrity Reflection term loan

$ 27 October 2024 Term SOFR plus 0.40 % 2.88 %

At March 31, 2025 and December 31, 2024, we maintained interest rate swap agreements on the following floating-rate debt instruments:

Debt Instrument Swap Notional as of March 31, 2025 (in millions) Maturity Debt Floating Rate

Spread All-in Fixed Rate as of March 31, 2025

Quantum of the Seas term loan

11 unchanged sentences

(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, 2024.

Amount presented is based on the exchange rate as of March 31, 2025.

(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, 2024 and December 31, 2023 was $ 1.4 billion and $ 1.6 billion, respectively.

The notional amount of interest rate swap agreements related to outstanding debt as of March 31, 2025 and December 31, 2024 was $ 1.2 billion, respectively.

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, 2024, the aggregate cost of our ships on order was $ 5.9 billion, of which we had deposited $ 619 million as of such date.

As of March 31, 2025, the aggregate cost of our ships on order was $ 7.9 billion, of which we had deposited $ 1.0 billion 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, 2024 and December 31, 2023, approximately 39.6 % and 43.5 %, respectively, of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate.

At March 31, 2025 and December 31, 2024, approximately 36.5 % and 43.4 %, 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 2024 and 2023 the average notional amount of foreign currency forward contracts was approximately $ 989 million and $ 1.4 billion, respectively.

During the first quarter of 2025 and 2024 the average notional amount of foreign currency forward contracts was approximately $ 1.3 billion and $ 1.1 billion, respectively.

These instruments are not designated as hedging instruments.

For the quarters and nine months ended September 30, 2024 and 2023, changes in the fair value of the foreign currency forward contracts, and the remeasurement of monetary assets and liabilities denominated in foreign currencies resulted in immaterial gain (losses).

For the quarters ended March 31, 2025 and 2024, changes in the fair value of the foreign currency forward contracts, and the remeasurement of monetary assets and liabilities denominated in foreign currencies resulted in immaterial gains (losses).

These amounts were recognized in earnings within Other expense 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, 2024 and December 31, 2023 was $ 2.1 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, 2025 and December 31, 2024 was $ 3.2 billion and $ 2.7 billion, respectively.

Non-Derivative Instruments

1 unchanged sentence

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 € 791 million, or approximately $ 883 million, as of September 30, 2024.

We had designated debt as a hedge of our net investments in TUI Cruises of € 940 million, or approximately $ 1.0 billion, as of March 31, 2025.

As of December 31, 2024, we had designated debt as a hedge of our net investments primarily in TUI Cruises of € 889 million, or approximately $ 921 million.

6 unchanged sentences

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

For the quarters ended September 30, 2024 and September 30, 2023, we did not discontinue cash flow hedge accounting on any of our fuel swap agreements.

At September 30, 2024, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2027.

As of September 30, 2024 and December 31, 2023, we had the following outstanding fuel swap agreements:

For the quarters ended March 31, 2025 and March 31, 2024, we did not discontinue cash flow hedge accounting on any of our fuel swap agreements.

At March 31, 2025, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2028.

As of March 31, 2025 and December 31, 2024, we had the following outstanding fuel swap agreements:

Fuel Swap Agreements

As of September 30, 2024 As of December 31, 2023

As of March 31, 2025 As of December 31, 2024

Designated as hedges:

5 unchanged sentences

Fuel Swap Agreements

As of September 30, 2024 As of December 31, 2023

As of March 31, 2025 As of December 31, 2024

Designated hedges as a % of projected fuel purchases:

2 unchanged sentences

2027 40 % 20 %

2027 10 % — %

As of September 30, 2024, there was $ 38 million of estimated unrealized net loss 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.

As of March 31, 2025, there was $ 2 million of estimated unrealized net loss 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 $ 9 million of estimated unrealized net loss at December 31, 2024.

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

2 unchanged sentences

Asset Derivatives Liability Derivatives

Balance Sheet Location As of September 30, 2024 As of December 31, 2023 Balance Sheet Location As of September 30, 2024 As of December 31, 2023

Balance Sheet Location As of March 31, 2025 As of December 31, 2024 Balance Sheet Location As of March 31, 2025 As of December 31, 2024

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 44 58 Other long-term liabilities — —

8 unchanged sentences

Non-derivative instrument designated as

hedging instrument under ASC 815-20 Balance Sheet Location As of September 30, 2024 As of December 31, 2023

hedging instrument under ASC 815-20 Balance Sheet Location As of March 31, 2025 As of December 31, 2024

Foreign currency debt Current portion of long-term debt $ 63 $ 60

Foreign currency debt Long-term debt 952 860

$ 1,015 $ 920

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

2 unchanged sentences

Comprehensive Loss on Derivatives

Quarter Ended September 30, 2024 Quarter Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

Quarter Ended March 31, 2025 Quarter Ended March 31, 2024

Interest rate swaps $ ( 5 ) $ 21

1 unchanged sentence

Fuel swaps 21 106

$ ( 86 ) $ 47 $ ( 46 ) $ 6

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

1 unchanged sentence

Non-derivative instruments under ASC 815-20 Net

Investment Hedging Relationships Quarter Ended September 30, 2024 Quarter Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

Investment Hedging Relationships Quarter Ended March 31, 2025 Quarter Ended March 31, 2024

Foreign Currency Debt $ ( 44 ) $ 16

5 unchanged sentences

Gain (Loss) Recognized in

Income on Derivatives Quarter Ended September 30, 2024 Quarter Ended September 30, 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

Income on Derivatives Quarter Ended March 31, 2025 Quarter Ended March 31, 2024

Foreign currency forward contracts Other income (expense) $ 2 $ ( 35 )

Fuel swaps Other income (expense) — 1 — 1

$ 33 $ ( 42 ) $ ( 8 ) $ ( 29 )

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.

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.

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.

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

As of September 30, 2024, six of our ship debt interest rate derivative hedges had reached their fifth-year anniversary;

As of March 31, 2025, our senior unsecured debt credit rating was BBB- by Standard & Poor's and Ba1 by Moody's.

As of March 31, 2025, six 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