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Item 1. Financial Statements

2025-07-29 compared with 2025-04-29 · 251 added, 126 removed, 667 unchanged (36% of the section changed)

3 unchanged sentences

in millions, except per share data)

Quarter Ended March 31,

Quarter Ended June 30,

Passenger ticket revenues $ 3,199 $ 2,887

19 unchanged sentences

Net Income attributable to Royal Caribbean Cruises Ltd.

$ 1,210 $ 854

Earnings per Share:

9 unchanged sentences

Change in defined benefit plans 4 ( 12 )

Gain (loss) on cash flow derivative hedges 181 ( 31 )

Total other comprehensive income (loss) 176 ( 37 )

Comprehensive Income 1,391 821

Comprehensive Income attributable to noncontrolling interest 5 4

Comprehensive Income attributable to Royal Caribbean Cruises Ltd.

$ 1,386 $ 817

____________________________________________________________

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

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)

Six Months Ended June 30,

Passenger ticket revenues $ 5,942 $ 5,429

Onboard and other revenues 2,595 2,409

Total revenues 8,537 7,838

Cruise operating expenses:

Commissions, transportation and other 1,128 1,070

Onboard and other 463 437

Payroll and related 669 631

Other operating 1,061 1,039

Total cruise operating expenses 4,362 4,209

Marketing, selling and administrative expenses 1,071 1,001

Depreciation and amortization expenses 829 780

Operating Income 2,275 1,848

Other income (expense):

Interest income 15 9

Interest expense, net of interest capitalized ( 477 ) ( 721 )

Equity investment income 155 97

Other expense ( 17 ) ( 11 )

( 325 ) ( 626 )

Net Income 1,950 1,222

Net Income attributable to noncontrolling interest 10 8

Net Income attributable to Royal Caribbean Cruises Ltd.

$ 1,940 $ 1,214

Earnings per Share:

Basic $ 7.17 $ 4.72

Diluted $ 7.10 $ 4.46

Weighted-Average Shares Outstanding:

Basic 270 257

Diluted 275 281

Comprehensive Income (Loss)

Net Income $ 1,950 $ 1,222

Other comprehensive income (loss):

Foreign currency translation adjustments ( 26 ) 10

Change in defined benefit plans — ( 3 )

Gain on cash flow derivative hedges 309 13

4 unchanged sentences

$ 2,222 $ 1,234

____________________________________________________________

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

3 unchanged sentences

(in millions, except share data)

March 31, December 31,

June 30, December 31,

Current assets

29 unchanged sentences

500,000,000 shares authorized;

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

301,198,157 and 297,368,235 shares issued, June 30, 2025 and December 31, 2024, respectively)

Paid-in capital 7,874 7,831

1 unchanged sentence

Accumulated other comprehensive loss ( 519 ) ( 802 )

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

Treasury stock ( 29,575,028 and 28,468,430 common shares at cost, June 30, 2025 and December 31, 2024, respectively)

( 2,333 ) ( 2,081 )

7 unchanged sentences

(unaudited, in millions)

Three Months Ended March 31,

Six Months Ended June 30,

Operating Activities

1 unchanged sentence

Depreciation and amortization 829 780

Net deferred income tax benefit ( 1 ) —

Net deferred income tax expense 4 5

(Gain) loss on derivative instruments not designated as hedges ( 56 ) 40

14 unchanged sentences

Purchases of property and equipment ( 1,264 ) ( 2,382 )

Cash received on settlement of derivative financial instruments 111 12

Cash paid on settlement of derivative financial instruments ( 11 ) ( 92 )

1 unchanged sentence

Cash received on loans from unconsolidated affiliates 70 9

Proceeds from sale of unconsolidated affiliates 15 —

Other, net 10 ( 21 )

10 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents 7 ( 2 )

Net decrease in cash and cash equivalents ( 2 ) ( 60 )

Net increase (decrease) in cash and cash equivalents 347 ( 106 )

Cash and cash equivalents at beginning of period 388 497

4 unchanged sentences

(unaudited, in millions)

Three Months Ended March 31,

Six Months Ended June 30,

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 April 1, 2025 $ 3 $ 7,846 $ 3,139 $ ( 695 ) $ ( 2,333 ) $ 182 $ 8,142

Activity related to employee stock plans — 42 — — — — 42

Common stock dividends, $ 0.75 per share

— — ( 205 ) — — — ( 205 )

Convertible notes settlements — ( 14 ) — — — — ( 14 )

Changes related to cash flow derivative hedges — — — 181 — — 181

Change in defined benefit plans — — — 4 — — 4

Foreign currency translation adjustments — — — ( 9 ) — — ( 9 )

Net Income attributable to noncontrolling interest — — — — — 5 5

Other activity attributable to

noncontrolling interest — — — — — 4 4

Net Income attributable to Royal Caribbean Cruises Ltd.

— — 1,210 — — — 1,210

Balance at June 30, 2025 $ 3 $ 7,874 $ 4,144 $ ( 519 ) $ ( 2,333 ) $ 191 $ 9,360

Common Stock Paid-in Capital

6 unchanged sentences

Changes related to cash flow derivative hedges — — — 309 — — 309

Change in defined benefit plans — — — ( 4 ) — — ( 4 )

Foreign currency translation adjustments — — — ( 26 ) — — ( 26 )

5 unchanged sentences

— — 1,940 — — — 1,940

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

Balance at June 30, 2025 $ 3 $ 7,874 $ 4,144 $ ( 519 ) $ ( 2,333 ) $ 191 $ 9,360

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

Balance at April 1, 2024 $ 3 $ 7,496 $ 350 $ ( 617 ) $ ( 2,081 ) $ 174 $ 5,325

Activity related to employee stock plans — 40 — — — — 40

Changes related to cash flow derivative hedges — — — ( 31 ) — — ( 31 )

Change in defined benefit plans — — — ( 12 ) — — ( 12 )

Foreign currency translation adjustments — — — 6 — — 6

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

Other activity attributable to noncontrolling interest — — — — — ( 4 ) ( 4 )

Net Income attributable to Royal Caribbean Cruises Ltd.

— — 854 — — — 854

Balance at June 30, 2024 3 7,536 1,204 ( 654 ) ( 2,081 ) 174 6,182

Common Stock Paid-in Capital (Accumulated Deficit)

7 unchanged sentences

Net Income attributable to noncontrolling interest — — — — — 8 8

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

Other activity attributable to noncontrolling interest — — — — — ( 9 ) ( 9 )

Net Income attributable to Royal Caribbean Cruises Ltd.

— — 1,214 — — — 1,214

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

Balance at June 30, 2024 $ 3 $ 7,536 $ 1,204 $ ( 654 ) $ ( 2,081 ) $ 174 $ 6,182

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 operated a combined fleet of 67 ships as of March 31, 2025.

Together, our Global Brands and our Partner Brands operated a combined fleet of 67 ships as of June 30, 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.

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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.

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

In November 2024, the FASB issued ASU No.

4 unchanged sentences

Early adoption and retrospective application is permitted.

We are 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 disclosures to our consolidated financial statements .

Revenue Recognition

2 unchanged sentences

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

We receive payment before we satisfy this performance obligation and recognize revenue over the duration of each cruise, which generally ranges from three to 14 nights.

We receive payment before we satisfy this performance obligation and recognize revenue over the duration of each cruise, with the majority of sailings ranging from three to 14 nights.

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 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.

The amounts of port costs charged to our guests and included within Passenger ticket revenues on a gross basis were $ 318 million and $ 266 million for the quarters ended June 30, 2025 and 2024, respectively, and $ 594 million and $ 509 million for the six months ended June 30, 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 March 31,

Quarter Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Revenues by itinerary

1 unchanged sentence

Asia/Pacific 326 235 972 741

Europe 943 841 980 863

Other regions (2) 210 278 469 600

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

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

Quarter Ended March 31,

For the quarters and six months ended June 30, 2025 and 2024, our guests were sourced from the following areas:

Quarter Ended June 30,

Passenger ticket revenues:

1 unchanged sentence

All other countries (1) 23 % 21 %

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

Six Months Ended June 30,

Passenger ticket revenues:

United States 76 % 76 %

All other countries (1) 24 % 24 %

(1) No other individual country's revenue exceeded 10% for the quarters and six months ended June 30, 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 $ 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.

Customer deposits presented in our consolidated balance sheets include contract liabilities of $ 3.5 billion and $ 2.8 billion as of June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025, our customer deposit balance includes approximately $ 139 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 ended March 31, 2025.

Based on our current estimates, we recognized an immaterial amount of FCC breakage revenue during the quarters and six months ended June 30, 2025, and June 30, 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 processing agreements require us, under certain circumstances, to maintain a reserve that can be satisfied by posting collateral.

As of March 31, 2025, none of our credit card processors required us to maintain a reserve.

As of June 30, 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 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.

As of June 30, 2025 and December 31, 2024, our contract assets were $ 169 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 $ 296 million and $ 252 million as of March 31, 2025 and December 31, 2024, respectively.

Prepaid travel advisor commissions and prepaid credit and debit card fees were $ 304 million and $ 252 million as of June 30, 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 March 31,

Quarter Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net Income attributable to Royal Caribbean Cruises Ltd.

8 unchanged sentences

Basic earnings per share (1)

$ 4.45 $ 3.32 $ 7.17 $ 4.72

Diluted earnings per share (1)

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

$ 4.41 $ 3.11 $ 7.10 $ 4.46

(1) Per share amounts may not calculate due to the use of rounded numbers.

T here were no antidilutive shares for the quarters and six months ended June 30, 2025, and 2024, respectively, from our stock-based awards and convertible notes.

Investments and Other Assets

16 unchanged sentences

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

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 June 30, 2025, the net book value of our investment in TUIC was $ 1.0 billion, primarily consisting of $ 983 million in equity and a loan of € 47 million, or approximately $ 55 million based on the exchange rate at June 30, 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 scheduled to mature in April 2026.

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.

2 unchanged sentences

We have determined that Grand Bahama Shipyard Ltd.

("Grand Bahama"), a ship repair and maintenance facility in which we have a 49 % noncontrolling interest, is a VIE.

("Grand Bahama"), a ship repair and maintenance facility in which we have approximately 33 % noncontrolling interest, is a VIE.

This facility serves cruise and cargo ships, oil and gas tankers and offshore units.

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.

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.

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 $ 20 million as of March 31, 2025.

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

(“Floating Docks”), our approximately 33 %-owned joint venture with the other shareholders of Grand Bahama, will construct two floating drydocks, the first was delivered in June 2025 and the second is expected to be delivered in early 2026.

These floating drydocks will be novated 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 partners have each guaranteed 33 % of certain installment payments payable by Floating Docks under the drydock and related construction contracts, which have been and continue to be contingent on the achievement of certain construction milestones, resulting in our remaining payment guarantees being immaterial as of June 30, 2025.

Our investment in Floating Docks, including loans, is $ 102 million as of June 30, 2025.

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.

All the significant operating and financial decisions of Floating Docks require the consent of all 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.

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.

In June 2025, we sold one-third of our ownership interests in both Grand Bahama and Floating Docks.

Our noncontrolling interests in Grand Bahama and Floating Docks were reduced from 49 % and 50 %, respectively, at March 31, 2025 to approximately 33 % of each as of June 30, 2025.

The sale did 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 March 31,

Quarter Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Share of equity income from investments $ 107 $ 56 $ 155 $ 97

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

As of June 30, 2025 As of December 31, 2024

Total notes receivable due from equity investments $ 158 $ 138

8 unchanged sentences

Weighted Average Rate (1)

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

Maturities Through As of June 30, 2025 As of December 31, 2024

Fixed rate debt:

8 unchanged sentences

2028 / 2030 — 340

USD unsecured term loan

USD unsecured term loans

2026 - 2037 2,046 2,227

8 unchanged sentences

Long-term portion $ 17,612 $ 18,473

(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 March 31, 2025, the interest rate under the unsecured credit facilities was 5.52 %.

(1) Weighted average interest rates are based on outstanding loan balance as of June 30, 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 an interest rate margin of 1.10 %.

Based on applicable Term SOFR rates, as of June 30, 2025, the interest rate under the unsecured credit facilities was 5.42 %.

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

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

(3) At June 30, 2025 and December 31, 2024, the weighted average interest rate for total debt was 4.64 % and 5.03 %, respectively .

Unsecured revolving credit facilities

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.

In May 2025, we amended our two revolving credit facilities, bringing our aggregate revolving credit capacity to $ 6.4 billion, and extended the termination date of one of the revolving credit facilities from October 2026 to October 2030.

The commitments are split evenly between the two facilities and are scheduled to mature in October 2028 and October 2030.

As of June 30, 2025, our unsecured revolving credit facilities were undrawn.

Convertible Notes due 2025

1 unchanged sentence

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.

The convertible notes exchange resulted in an immaterial induced conversion expense.

Export credit facilities and agency guarantees

In July 2025, we took delivery of Star of the Seas .

To finance the delivery, we borrowed a total of $ 1.6 billion under the committed financing agreement, resulting in an unsecured term loan which is 95 % guaranteed by Finnvera plc.

The unsecured term loan amortizes semi-annually over 12 years and bears interest primarily at a fixed rate of 3.76 % per annum.

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.

For the majority of the loans as of June 30, 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 through interest expense 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.

Prior to the loan being drawn, we present these fees within Other assets in our consolidated balance sheets.

the loan being drawn, we present these fees within Other assets in our consolidated balance sheets.

Once the loan is drawn, such fees are classified as a discount to the related loan, or contra-liability account, within Current portion of long-term debt or long-term debt .

Debt covenants

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.

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.

As of June 30, 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)

The following is a schedule of annual maturities on our total debt, including finance leases, as of June 30, 2025 for each of the next five years (in millions):

Year As of June 30, 2025 (1)

Remainder of 2025 $ 755

Thereafter 9,111

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

(1) Debt denominated in other currencies is calculated based on the applicable exchange rate at June 30, 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 March 31, 2025 and December 31, 2024.

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 $ 168 million as of March 31, 2025 and December 31, 2024, respectively.

The aggregate amount of the operating lease liabilities recorded for this berthing agreement was $ 168 million as of June 30, 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.

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

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 March 31, 2025 and December 31, 2024.

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 .

2 unchanged sentences

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 as of March 31, 2025 and December 31, 2024, respectively.

The total aggregate amount of the finance lease liabilities recorded for this Master Lease was $ 107 million as of June 30, 2025 and $ 106 million as of 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.

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

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

Consolidated Statement of Comprehensive Income (Loss) Classification Quarter Ended June 30, 2025 Six Months Ended June 30, 2025

Operating lease costs Commission, transportation and other $ 46 $ 111

5 unchanged sentences

Total lease costs $ 57 $ 132

Consolidated Statement of Comprehensive Income (Loss) Classification Quarter Ended June 30, 2024 Six Months Ended June 30, 2024

Operating lease costs Commission, transportation and other $ 42 $ 113

Operating lease costs Other operating expenses 4 7

Operating lease costs Marketing, selling and administrative expenses 5 9

Financial lease costs:

Amortization of right-of-use-assets Depreciation and amortization expenses 3 7

Interest on lease liabilities Interest expense, net of interest capitalized 7 14

Total lease costs $ 61 $ 150

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

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.

During the quarter and six months ended June 30, 2025, we had $ 27 million and $ 86 million of variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive income (loss), respectively, compared to $ 28 million and $ 79 million of variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive income (loss) during the quarter and six months ended June 30, 2024, 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 March 31, 2025 As of December 31, 2024

As of June 30, 2025 As of December 31, 2024

Weighted average of the remaining lease term in years

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

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

Six Months Ended June 30, 2025 Six Months Ended June 30, 2024

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

2 unchanged sentences

Financing cash flows from finance leases $ 3 $ 13

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

As of June 30, 2025, maturities related to lease liabilities were as follows (in millions):

Year Operating Leases Finance Leases

6 unchanged sentences

Ship Purchase Obligations

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

As of June 30, 2025, our Global Brands and our Partner Brands have the following ships on order:

Ship Shipyard Expected delivery Approximate

1 unchanged sentence

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

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

Star of the Seas (1)

Meyer Turku Oy 3rd Quarter 2025 5,600

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

Unnamed Meyer Turku Oy 3rd Quarter 2027 5,600

Celebrity Cruises —

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

Unnamed Chantiers de l'Atlantique 4th Quarter 2028 3,250

Mein Schiff —

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Total Berths 33,100

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.

(1) In July 2025, we took delivery of Star of the Seas.

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

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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 maximum loan amount under the facility is not to exceed the United States dollar equivalent of € 1.7 billion, or approximately $ 2.0 billion based on the exchange rate at June 30, 2025.

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

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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.

In May 2025, we amended the credit agreement for the third Icon-class ship, Legend of the Seas , to increase the maximum loan amount by € 334 million or $ 392 million based on the exchange rate at June 30, 2025.

Interest on the incremental portion of the loan will accrue at a floating rate equal to Term SOFR plus 0.90 %.

In May 2025, the conditions for effectiveness including financing on our agreement with Meyer Turku Oy to build a fourth Icon-class ship for delivery in 2027 became effective.

In June 2025, we entered into a credit agreement for the unsecured financing of the sixth Edge-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, 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 € 1.0 billion, or approximately $ 1.2 billion based on the exchange rate at June 30, 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 plus 0.85 % per annum.

The sixth Edge-class ship will have a capacity of approximately 3,250 berths.

As of June 30, 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 $ 12.1 billion, of which we had deposited $ 1.4 billion.

Refer to Note 11 .

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

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

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

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.

In July 2025, we closed on our acquisition of the Port of Costa Maya and adjacent land in Mahahual, Mexico for approximately $ 292 million.

The majority of the fair value was allocated to land, net of assumed liabilities.

Shareholders' Equity

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.

During both first and second quarter of 2025, we declared a cash dividend on our common stock of $ 0.75 per share, which was paid in April 2025 and July 2025, respectively.

During the first quarter of 2025, we also paid a cash dividend on our 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.

In February 2025, our board of directors (the "Board") 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.

During the six months ended June 30, 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 June 30, 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 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

The following table presents the changes in accumulated other comprehensive loss by component for the six months ended June 30, 2025 and 2024 (in millions):

Accumulated Other Comprehensive Loss for the Six Months Ended June 30, 2025 Accumulated Other Comprehensive Loss for the Six Months Ended June 30, 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

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Ending balance $ ( 514 ) $ 10 $ ( 15 ) $ ( 519 ) $ ( 653 ) $ ( 5 ) $ 4 $ ( 654 )

The following table presents reclassifications out of accumulated other comprehensive loss for the quarters ended March 31, 2025 and 2024 (in millions):

The following table presents reclassifications out of accumulated other comprehensive loss for the quarters and six months ended June 30, 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 March 31, 2025 Quarter Ended March 31, 2024 Affected Line Item in Statements of

Details About Accumulated Other Comprehensive Loss Components Quarter Ended June 30, 2025 Quarter Ended June 30, 2024 Six Months Ended June 30, 2025 Six Months Ended June 30, 2024 Affected Line Item in Statements of

Comprehensive Income (Loss)

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Foreign currency forward contracts ( 6 ) ( 6 ) ( 12 ) ( 11 ) Depreciation and amortization expenses

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

Fuel swaps — — — — Other (expense) income

Fuel swaps ( 4 ) 11 — 15 Fuel

$ ( 4 ) $ 17 $ 1 $ 29

Fair Value Measurements and Derivative Instruments

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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, 2025 Fair Value Measurements at December 31, 2024

Fair Value Measurements at June 30, 2025 Fair Value Measurements at December 31, 2024

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

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(3) Inputs that are unobservable.

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

The Company did not use any Level 3 inputs as of June 30, 2025 and December 31, 2024.

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

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Other Financial Instruments

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

The carrying amounts of accounts receivable, accounts payable, and accrued expenses approximate fair value as of June 30, 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 March 31, 2025 Fair Value Measurements at December 31, 2024

Fair Value Measurements at June 30, 2025 Fair Value Measurements at December 31, 2024

Description Total Level 1 (1)

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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 March 31, 2025 and December 31, 2024.

No Level 1 inputs were used in fair value measurements of other financial instruments as of June 30, 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.

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(3) Inputs that are unobservable.

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

No Level 3 inputs were used in fair value measurements of other financial instruments as of June 30, 2025 and December 31, 2024.

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

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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 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.

Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of June 30, 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 March 31, 2025 or December 31, 2024.

There were no material nonfinancial instruments recorded at fair value as of June 30, 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 March 31, 2025 As of December 31, 2024

As of June 30, 2025 As of December 31, 2024

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

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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 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.

As of June 30, 2025, we had counterparty credit risk exposure under our derivative instruments of $ 227 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.

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

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.

At June 30, 2025 and December 31, 2024, approximately 93.9 % 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.

At June 30, 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 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

At June 30, 2025 and December 31, 2024, we maintained interest rate swap agreements on the following floating-rate debt instruments:

Debt Instrument Swap Notional as of June 30, 2025 (in millions) Maturity Debt Floating Rate

Spread All-in Fixed Rate as of June 30, 2025

Quantum of the Seas term loan

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(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 March 31, 2025.

Amount presented is based on the exchange rate as of June 30, 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 March 31, 2025 and December 31, 2024 was $ 1.2 billion, respectively.

The notional amount of interest rate swap agreements related to outstanding debt as of June 30, 2025 and December 31, 2024 was $ 1.1 billion and $ 1.2 billion, respectively.

Foreign Currency Exchange Rate Risk

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

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.

As of June 30, 2025, the aggregate cost of our ships on order was $ 12.1 billion, of which we had deposited $ 1.4 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 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.

At June 30, 2025 and December 31, 2024, approximately 50.2 % 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 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.

During the second quarter of 2025 and 2024 the average notional amount of foreign currency forward contracts was approximately $ 1.1 billion and $ 964 million, respectively.

These instruments are not designated as hedging instruments.

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).

For the quarters ended June 30, 2025 and 2024, changes in the fair value of the foreign currency forward contracts resulted in gain (losses) of $ 53 million and $( 5 ) million, respectively, which offset (losses) gains arising from the remeasurement of monetary assets and liabilities denominated in foreign currencies in those same periods of $( 58 ) million and $ 4 million, respectively.

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 March 31, 2025 and December 31, 2024 was $ 3.2 billion and $ 2.7 billion, respectively.

For the six months ended June 30, 2025 and 2024, changes in the fair value of the foreign currency forward contracts resulted in gains (losses) of $ 55 million and $( 40 ) million, respectively, which offset (losses) gains arising from the remeasurement of monetary assets and liabilities denominated in foreign currencies in those same periods of $( 62 ) million

and $ 34 million, respectively.

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 June 30, 2025 and December 31, 2024 was $ 3.5 billion and $ 2.7 billion respectively.

Non-Derivative Instruments

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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 in TUI Cruises of € 940 million, or approximately $ 1.0 billion, as of March 31, 2025.

We had designated debt as a hedge of our net investments in TUI Cruises of € 688 million, or approximately $ 808 million, as of June 30, 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 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:

For the quarters ended June 30, 2025 and 2024, we did not discontinue cash flow hedge accounting on any material amount of our fuel swap agreements.

At June 30, 2025, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2028.

As of June 30, 2025 and December 31, 2024, we had the following outstanding fuel swap agreements designated as hedging instruments:

Fuel Swap Agreements

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

As of June 30, 2025 As of December 31, 2024

Designated as hedges:

5 unchanged sentences

Fuel Swap Agreements

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

As of June 30, 2025 As of December 31, 2024

Designated hedges as a % of projected fuel purchases:

2 unchanged sentences

2027 47 % 20 %

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.

2028 16 % — %

As of June 30, 2025 and December 31, 2024, the 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 was immaterial.

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

Balance Sheet Location As of June 30, 2025 As of December 31, 2024 Balance Sheet Location As of June 30, 2025 As of December 31, 2024

Fair Value Fair Value Fair Value Fair Value

6 unchanged sentences

Total derivatives designated as hedging instruments under 815-20 $ 256 $ 71 $ 73 $ 139

Derivatives not designated as hedging instruments under ASC 815-20

Foreign currency forward contracts Derivative financial instruments $ 33 $ — Derivative financial instruments $ 15 $ —

Fuel swaps Derivative financial instruments 1 — Derivative financial instruments — —

Total derivatives not designated as hedging instruments under 815-20 34 — 15 —

Total derivatives $ 290 $ 71 $ 88 $ 139

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

2 unchanged sentences

Non-derivative instrument designated as

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

hedging instrument under ASC 815-20 Balance Sheet Location As of June 30, 2025 As of December 31, 2024

Foreign currency debt Current portion of long-term debt $ 69 $ 60

Foreign currency debt Long-term debt 739 860

$ 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 March 31, 2025 Quarter Ended March 31, 2024

Quarter Ended June 30, 2025 Quarter Ended June 30, 2024 Six Months Ended June 30, 2025 Six Months Ended June 30, 2024

Interest rate swaps $ ( 3 ) $ 8 $ ( 8 ) $ 29

1 unchanged sentence

Fuel swaps ( 58 ) 9 ( 37 ) 115

$ 177 $ ( 14 ) $ 310 $ 42

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 March 31, 2025 Quarter Ended March 31, 2024

Investment Hedging Relationships Quarter Ended June 30, 2025 Quarter Ended June 30, 2024 Six Months Ended June 30, 2025 Six Months Ended June 30, 2024

Foreign Currency Debt $ ( 66 ) $ 6 $ ( 109 ) $ 22

5 unchanged sentences

Gain (Loss) Recognized in

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

Income on Derivatives Quarter Ended June 30, 2025 Quarter Ended June 30, 2024 Six Months Ended June 30, 2025 Six Months Ended June 30, 2024

Foreign currency forward contracts Other income (expense) $ 53 $ ( 5 ) $ 55 $ ( 40 )

Fuel swaps Other income (expense) 2 — 2 —

$ 55 $ ( 5 ) $ 57 $ ( 40 )

Credit Related Contingent Features

3 unchanged sentences

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 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;

As of June 30, 2025, our senior unsecured debt credit rating was BBB- by Standard & Poor's and Baa3 by Moody's.

As of June 30, 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