What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-28 compared with 2025-07-29 · 85 added, 77 removed, 362 unchanged (31% of the section changed)

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• a review of our financial presentation, including discussion of certain operational and financial metrics we utilize to assist us in managing our business;

• a discussion of our results of operations for the quarter and six months ended June 30, 2025, compared to the same period in 2024;

• a discussion of our results of operations for the quarter and nine months ended September 30, 2025, compared to the same period in 2024;

• a discussion of our liquidity and capital resources, including our future capital and material cash requirements and potential funding sources.

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Adjusted EBITDA is a non-GAAP measure that represents EBITDA (as defined below) excluding certain items that we believe adjusting for is meaningful whe n assessing our profitability on a comparative basis.

For the periods presented , these items included (i) other income, (ii) equity investment impairment, recovery of losses, and other, (iii) restructuring charges and other initiative expenses, and (iv) impairment losses.

For the periods presented , these items included (i) other expense (income), (ii) equity investment impairment, recovery of losses, and other, (iii) restructuring charges and other initiative expenses, and (iv) impairment losses.

A reconciliation of Net Income attributable to Royal Caribbean Cruises Ltd.

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Adjusted Net Income attributable to Royal Caribbean Cruises Ltd.

is a non-GAAP measure that represents net income less net income attributable to noncontrolling interest, excluding certain items that we believe adjusting for is meaningful when assessing our performance on a comparative basis.

For the periods presented, these items included (i) loss on extinguishment of debt and inducement expense, (ii) the amortization of the Silversea Cruises intangible assets resulting from the Silversea Cruises acquisition, (iii) restructuring charges and other initiative expenses, (iv) equity investments impairment, recovery of losses, and other, (v) impairment losses, and (vi) gain on sale of noncontrolling interest.

is a non-GAAP measure that represents Net Income attributable to Royal Caribbean Cruises Ltd., excluding certain items that we believe adjusting for is meaningful when assessing our performance on a comparative basis.

For the periods presented, these items included (i) loss on extinguishment of debt and inducement expense, (ii) the amortization of the Silversea intangible assets resulting from the Silversea acquisition, (iii) restructuring charges and other initiative expenses, (iv) equity investments impairment, recovery of losses, and other, (v) impairment losses, (vi) gain on sale of noncontrolling interest, and (vii) tax on the sale of PortMiami noncontrolling interest.

A reconciliation of Net Income attributable to Royal Caribbean Cruises Ltd.

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A reconciliation of Gross Cruise Costs to Net Cruise Costs and Net Cruise Costs Excluding Fuel is provided below under Results of Operations.

For the periods presented, Net Cruise Costs and Net Cruise Costs Excluding Fuel excludes impairment losses, and restructuring charges and other initiative expenses .

For the periods presented, Net Cruise Costs and Net Cruise Costs Excluding Fuel excludes (i) restructuring charges and other initiative expenses, and (ii) impairment losses .

Net Yields represent Adjusted Gross Margin per APCD.

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and Adjusted Net Income attributable to Royal Caribbean Cruises Ltd.

for the second quarter of 2025 was $1.21 billion and $1.20 billion, compared to Net Income and Adjusted Net Income of $854 million and $882 million, respectively, for the second quarter of 2024.

for the third quarter of 2025 was $1.6 billion, respectively, compared to Net Income and Adjusted Net Income of $1.1 billion and $1.4 billion, respectively, for the third quarter of 2024.

Net Income attributable to Royal Caribbean Cruises Ltd.

and Adjusted Net Income attributable to Royal Caribbean Cruises Ltd.

for the six months ended June 30, 2025 was $1.94 billion and $1.95 billion, compared to Net Income and Adjusted Net Income of $1.2 billion and $1.4 billion, respectively, for the six months ended June 30, 2024.

Significant items for the quarter and six months ended June 30, 2025 include:

• Total revenues increased $428 million and $699 million for the quarter and six months ended June 30, 2025 as compared to the same periods in 2024.

for the nine months ended September 30, 2025 was $3.5 billion, respectively, compared to Net Income and Adjusted Net Income of $2.3 billion and $2.8 billion, respectively, for the nine months ended September 30, 2024.

Significant items for the quarter and nine months ended September 30, 2025 include:

• Total revenues increased $253 million and $952 million for the quarter and nine months ended September 30, 2025 as compared to the same periods in 2024.

The increase was primarily due to an increase in capacity, ticket prices and onboard spending in 2025, compared to same period in 2024.

• Total cruise operating expenses, increased $131 million and $153 million for the quarter and six months ended June 30, 2025 as compared to the same periods in 2024.

• Total cruise operating expenses, increased $88 million and $241 million for the quarter and nine months ended September 30, 2025 as compared to the same periods in 2024.

The increase was primarily due to an increase in capacity in 2025 compared to the same periods in 2024.

• In February 2025, TUI Cruises, our 50% joint venture, took delivery of Mein Schiff Relax .

• In March 2025, we completed privately negotiated exchange with certain holders of 6.00% Convertible Senior Notes due 2025 to exchange approximately $213 million in aggregate principal amount for approximately 3 million shares of common stock and $214 million in cash.

• In March 2025, we completed a privately negotiated exchange with certain holders of 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.

• 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.

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

• In July 2025, we closed on our acquisition of the Port of Costa Maya and adjacent land in Mahahual, Mexico.

The final purchase price was $294 million.

• In August 2025, the remaining $106 million of our 6.00% Convertible Senior Notes matured.

The notes and accrued interest were settled using a combination of $109 million in cash, and the issuance of approximately 1.8 million shares of common stock.

For further information regarding the debt transactions discussed above, refer to Note 7 .

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Financial Statements .

Operating results for the quarters and six months ended June 30, 2025 compared to the same periods in 2024 are shown in the following tables (in millions, except per share data):

Quarter Ended June 30,

Operating results for the quarters and nine months ended September 30, 2025 compared to the same periods in 2024 are shown in the following tables (in millions, except per share data):

Quarter Ended September 30,

Revenues % of Total

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Diluted Earnings per Share $ 5.74 $ 4.21

Six Months Ended June 30,

Nine Months Ended September 30,

Revenues % of Total

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Diluted Earnings per Share $ 12.83 $ 8.91

We reported Net Income attributable to Royal Caribbean Cruises Ltd., Adjusted Net Income attributable to Royal Caribbean Cruises Ltd., Earnings per Share and Adjusted Earnings per Share as shown in the following table (in millions, except per share data.

We reported Net Income attributable to Royal Caribbean Cruises Ltd., Adjusted Net Income attributable to Royal Caribbean Cruises Ltd., Earning per Share and Adjusted Earnings per Share as shown in the following table (in millions, except per share data.

Certain amounts may not add due to use of rounded numbers):

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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Loss on extinguishment of debt and inducement expense (1) — 323 10 456

Amortization of Silversea Cruises intangible assets resulting from the Silversea Cruises acquisition (2) 2 2 3 3

Amortization of Silversea intangible assets resulting from the Silversea acquisition (2) 2 2 5 5

Restructuring charges and other initiative expenses (3) 1 2 7 5

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Gain on sale of noncontrolling interest (5) — — (11) —

PortMiami tax on sale of noncontrolling interest (6) — (3) — (3)

Adjusted Net Income attributable to Royal Caribbean Cruises Ltd.

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Diluted 274 264 275 280

(1) For 2025, includes $10 million of inducement expense related to the partial settlement of our 6.00% convertible notes due 2025.

(1) For 2025 and for 2024, includes $10 million and $119 million, respectively, of inducement expense related to the partial settlement of our 6.00% convertible notes due 2025.

These amounts are included in Interest expense, net of interest capitalized within our consolidated statements of comprehensive income (loss).

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Financial Statements for further information.

(2) Represents the amortization of the Silversea Cruises intangible assets resulting from the 2018 Silversea Cruises acquisition.

(2) Represents the amortization of the Silversea intangible assets resulting from the 2018 Silversea acquisition.

(3) These amounts are included in Marketing, selling and administrative expenses within our consolidated statements of comprehensive income (loss).

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These amounts are included in Other income within our consolidated statements of comprehensive income (loss).

(6) Diluted EPS includes the add-back of dilutive inducement and interest expense related to our convertible notes of $1 million and $16 million for the quarter and for the six months ended June 30, 2025, respectively, and $19 million and $38 million for the quarter and six months ended June 30, 2024, respectively.

(6) For 2024, represents adjustments to tax impacts on the 2023 PortMiami sale of noncontrolling interest.

These amounts are included in Other expense in our consolidated statements of comprehensive income (loss).

(7) Diluted EPS includes the add-back of dilutive inducement and interest expense related to our convertible notes of $16 million and $169 million for the nine months ended September 30, 2025, and 2024, respectively.

Refer to Note 4 .

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Financial Statements for further information.

(7) Adjusted Diluted EPS includes the add-back of dilutive interest expense related to our convertible notes of $1 million and $6 million for the quarter and six months ended June 30, 2025, respectively, and $19 million and $38 million for the quarter and six months ended June 30, 2024, respectively.

(8) Adjusted Diluted EPS includes the add-back of dilutive interest expense related to our convertible notes of $6 million for the nine months ended September 30, 2025, and $13 million and $51 million for the quarter and nine months ended September 30, 2024, respectively.

Selected statistical information is shown in the following table:

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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reported EBITDA, Adjusted EBITDA, and per APCD and Margin amounts are calculated from the underlying dollar amounts):

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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EBITDA 2,289 2,143 5,553 4,872

Other income (2) (11) (14) (15) (12)

Other expense (income) (2) 2 3 (13) (9)

Equity investments impairment, recovery of losses, and other — — (1) —

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(1) These amounts are included in Other expense within our consolidated statements of comprehensive income (loss).

(2) Represents net non-operating income.

(2) Represents net non-operating expense (income).

The amount excludes income tax expense, included in the EBITDA calculation above.

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reported Adjusted Gross Margin and Yields are calculated from the underlying dollar amounts):

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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reported Gross Cruise Costs, Net Cruise Costs, Net Cruise Costs excluding Fuel, and per APCD amounts are calculated from the underlying dollar amounts):

Quarter Ended June 30, Six Months Ended June 30,

Quarter Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

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Net Cruise Costs including other costs 1,993 1,865 5,836 5,568

Impairment losses (1) — 6 — 6

Restructuring charges and other initiative expenses (1) 1 2 7 5

Impairment losses (2) — — — 6

Net Cruise Costs 1,992 1,863 5,829 5,557

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Net Cruise Costs Excluding Fuel per APCD $ 123.75 $ 118.12 $ 126.61 $ 123.73

(1) These amounts are included in Marketing, selling and administrative expenses within our consolidated statements of comprehensive income (loss).

(2) For 2024, represents property and equipment impairment charges related to certain construction in progress assets.

This amount is included in Other operating within our consolidated statements of comprehensive income (loss).

(2) These amounts are included in Marketing, selling and administrative expenses within our consolidated statements of comprehensive income (loss).

Quarter Ended June 30, 2025 Compared to Quarter Ended June 30, 2024

In this section, references to 2025 refer to the quarter ended June 30, 2025 and references to 2024 refer to the quarter ended June 30, 2024.

Quarter Ended September 30, 2025 Compared to Quarter Ended September 30, 2024

In this section, references to 2025 refer to the quarter ended September 30, 2025 and references to 2024 refer to the quarter ended September 30, 2024.

Total revenues for 2025 increased $253 million to $5.1 billion from $4.9 billion in 2024.

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The increase was primarily due to:

• $167 million driven by 5.8% capacity growth as a result of the additions of Utopia of the Seas and Silver Ray compared to same period in 2024, and

• $144 million driven by yield growth as a result of higher load factors and higher pricing on both existing ships and new hardware in 2025 compared to the same period in 2024.

• $100 million driven by 2.9% capacity growth as a result of the addition of Star of the Seas (which began revenue sailings in August 2025) and addition of Utopia of the Seas (which began revenue sailings in July 2024) compared to the same period in 2024, and

• $66 million driven by yield growth as a result of higher load factors and higher pricing on both existing ships and new ships in 2025 compared to the same period in 2024.

The remaining 29.2% of 2025 total revenues was comprised of Onboard and other revenues , which increased $87 million, or 6.2% to $1.5 billion in 2025 from $1.4 billion in 2024.

The increase was primarily due to:

• $71 million driven by 5.8% capacity growth as a result of the additions of Utopia of the Seas and Silver Ray compared to same period in 2024;

• $45 million driven by yield growth as a result of higher load factors and higher pricing on both existing ships and new hardware in 2025 compared to the same period in 2024.

• $47 million driven by yield growth as a result of higher load factors and higher pricing on both existing ships and new ships in 2025 compared to the same period in 2024;

• $41 million driven by 2.9% capacity growth as a result of the addition of Star of the Seas compared to the same period in 2024.

Cruise Operating Expenses

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The increase was primarily due to the 2.9% increase in capacity noted above which increased cruise operating expenses by $69 million in 2025 compared to the same period in 2024.

Marketing, Selling and Administrative Expenses

Marketing, selling and administrative expenses for 2025 increased $71 million, or 15.8%, to $522 million from $451 million in 2024.

The increase was primarily due to an increase in payroll and benefits expense driven by an increase in headcount, and higher spending on marketing in 2025 compared to the same period in 2024.

Other Income (Expense)

Interest expense, net of interest capitalized for 2025 decreased $355 million, to $248 million from $603 million in 2024.

The decrease was primarily due lower interest expense resulting from the extinguishment and refinancing of certain indebtedness at lower rates compared to the same period in 2024.

Additionally, loss on extinguishment of debt of $17 million in 2024 compared to none in during the same period in 2025.

The decrease was primarily due to loss on extinguishment of debt and inducement expense of $323 million in 2024 that did not recur during the same period in 2025.

Equity investment incom e for 2025 increased $52 million, to $158 million from $106 million in 2024.

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Other comprehensive income (loss)

Other comprehensive income (loss) was $176 million in 2025 compared to a loss of $(37) million for the same period in 2024 .

The increase of $213 million was primarily due to a Gain on cash flow derivative hedges of $181 million in 2025 compared to loss of $(31) million in 2024, mostly as a result of a significant increase in the fair value of our FX forward swaps in 2025 compared to 2024 .

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

In this section, references to 2025 refer to the six months ended June 30, 2025 and references to 2024 refer to the six months ended June 30, 2024.

Other comprehensive (loss) was $(9) million in 2025 compared to a loss of $(99) million for the same period in 2024 .

The decrease on loss of $90 million was primarily due to Loss on cash flow derivative hedges of $(5) million in 2025 compared to loss of $(95) million in 2024, mostly as a result of a significant increase in the fair value of our fuel swaps in 2025 compared to 2024 .

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

In this section, references to 2025 refer to the nine months ended September 30, 2025 and references to 2024 refer to the nine months ended September 30, 2024.

Total revenues for 2025 increased $1.0 billion to $13.7 billion from $12.7 billion in 2024.

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The increase was primarily due to:

• an increase of $274 million driven by yield growth as a result of higher load factors and higher pricing on both existing ships as well as the benefit of new ships, compared to the same period in 2024;

• an increase of $239 million driven by 4.4% capacity growth as a result of the additions of Utopia of the Seas and Silver Ray compared to the same period in 2024.

• an increase of $344 million driven by 3.9% capacity growth as a result of the addition of Star of the Seas during the third quarter of 2025, and nine months of operations of Utopia of the Seas and Silver Ray compared to the same period in 2024;

• an increase of $335 million driven by yield growth as a result of higher load factors and higher pricing on both existing ships and new ships in 2025 compared to the same period in 2024.

The remaining 30.0% of 2025 total revenues was comprised of Onboard and other revenues , which increased $273 million, or 7.1% to $4.1 billion in 2025 from $3.8 billion in 2024.

The increase was primarily due to:

• a $106 million increase driven by an 4.4% capacity growth as a result of the additions of new ships noted above compared to the same period in 2024;

• a $148 million increase driven by a 3.9% capacity growth as a result of the additions of new ships noted above compared to the same period in 2024;

• a $125 million increase driven by yield growth as a result of higher load factors and higher pricing on both existing ships and new ships in 2025 compared to the same period in 2024.

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Total Cruise operating expenses for 2025 increased $241 million to $6.8 billion from $6.6 billion in 2024.

The increase was primarily due to:

• the increase in capacity noted above increased cruise operating expenses by $186 million, offset by:

• a decrease of $29 million reduced fuel expenses in 2025 compared to the same period in 2024.

The increase was primarily due to the increase in capacity noted above.

Marketing, Selling and Administrative Expenses

Marketing, selling and administrative expenses for 2025 increased $141 million, or 10%, to $1.6 billion from $1.5 billion in 2024.

This increase primarily relates to an increase in payroll and benefits expense driven by increased headcount and higher spending on marketing in 2025 compared to the same period in 2024.

This increase primarily relates to an increase in payroll and benefits expense driven by increased headcount in 2025 compared to the same period in 2024.

Depreciation and Amortization Expenses

Depreciation and amortization expenses for 2025 increased $75 million, or 6.3%, to $1.3 billion from $1.2 billion in 2024.

The increase was primarily due to the addition of Star of the Seas in 2025 and nine months of depreciation of Utopia of the Seas and Silver Ray compared to the same period in 2024.

Other Income (Expense)

Interest expense, net of interest capitalized for 2025 decreased $599 million, to $0.7 billion from $1.3 billion in 2024.

The decrease was primarily due to the $133 million loss on extinguishment of debt in 2024 compared to an immaterial amount during the same period in 2025.

Additionally, lower interest expense resulting from extinguishment and refinancing of certain indebtedness at lower rates compared to the same period in 2024.

The decrease was primarily due to the $456 million loss on extinguishment of debt and inducement expense in 2024 compared to an immaterial amount during the same period in 2025.

The remaining decrease was due to the refinancing of certain indebtedness at lower rates compared to the same period in 2024.

Equity investment incom e for 2025 increased $110 million, to $313 million from $203 million in 2024.

The increase in income was primarily due to an increase in income from TUI Cruises, one of our equity investments.

Depreciation and Amortization Expenses

Depreciation and amortization expenses for 2025 increased $49 million, or 6.3%, to $829 million from $780 million in 2024.

The increase was primarily due to the additions of Utopia of the Seas and Silver Ray compared to the same period in 2024.

Other comprehensive income (loss)

Other comprehensive income was $283 million in 2025 compared to $20 million for the same period in 2024 .

The increase of $263 million , was primarily due to a Gain on cash flow derivative hedges of $309 million in 2025 compared to $13 million in 2024 , mostly as a result of a significant increase in the fair value of our FX forward swaps in 2025 compared to 2024 .

Other comprehensive income was $274 million in 2025 compared to Other comprehensive loss of $(79) million for the same period in 2024 .

The increase of $353 million in income was primarily due to a g ain on cash flow derivative hedges of $304 million in 2025 compared to loss on cash flow derivative hedges of $(82) million in 2024 , mostly as a result of a significant increase in the fair value of our FX forward swaps in 2025 compared to 2024 .

Future Application of Accounting Standards

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Cash flow generated from operations provides us with a significant source of liquidity.

Net cash provided by operating activities was $3.4 billion and $2.9 billion for the six months ended June 30, 2025, and 2024, respectively.

Net cash provided by operating activities was $4.8 billion and $3.8 billion for the nine months ended September 30, 2025, and 2024, respectively.

Cash flows from operating activities increased $1.0 billion primarily driven by an increase in operating income.

Net cash used in investing activities was $1.1 billion for the six months ended June 30, 2025, compared to $2.5 billion for the same period in 2024.

The decrease of $1.3 billion in Cash flows used in investing activities was primarily attributable capital expenditures related to the delivery of Utopia of the Seas and Silver Ray in 2024, compared to no ship deliveries during the same period in 2025.

Net cash used in financing activities was $1.9 billion for the six months ended June 30, 2025, compared to $0.5 billion for the same period in 2024.

The change of $1.4 billion was primarily attributable to a net decrease in debt proceeds of $939 million, and $589 million related to payment of dividends and purchase of treasury stock, offset by a decrease of $102 million of premium on repayments of debt in 2025 compared to the same period in 2024.

Net cash used in investing activities was $3.5 billion for the nine months ended September 30, 2025, compared to $2.8 billion for the same period in 2024.

The increase of $0.7 billion in Cash flows used in investing activities was primarily attributable to capital expenditures related to the delivery of Star of the Seas and the acquisition of the Port of Costa Maya in 2025 compared to the delivery of Utopia of the Seas and Silver Ray in 2024.

Net cash used in financing activities was $1.3 billion for the nine months ended September 30, 2025, compared to $1.1 billion for the same period in 2024.

The change of $0.2 billion was primarily attributable to a net decrease in repayment of debt of $0.7 billion and a decrease of $288 million of premium on repayments of debt, offset by $655 million repurchase of common stock and $552 million dividend payment in 2025 compared to the same period in 2024.

Future Capital Commitments

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Our future capital commitments consist primarily of new ship orders.

As of June 30, 2025, the dates that the ships on order by our Global and Partner Brands are expected to be delivered, and their approximate berths are as follows:

As of September 30, 2025, the dates that the ships on order by our Global and Partner Brands are expected to be delivered, and their approximate berths are as follows:

Ship Shipyard Expected delivery Approximate

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

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

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

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

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

Mein Schiff —

Mein Schiff Flow Fincantieri 2nd Quarter 2026 4,100

Unnamed Fincantieri 1st Quarter 2031 4,100

Unnamed Fincantieri 4th Quarter 2032 4,100

Total Berths 35,700

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

Our future capital commitments consist primarily of new ship orders.

As of June 30, 2025, the aggregate expected cost of our ships on order presented in the table above, excluding any ships on order by our Partner Brands, was $12.1 billion, of which we had deposited $1.4 billion.

Approximately 50.2% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at June 30, 2025.

As of September 30, 2025, the aggregate expected cost of our ships on order presented in the table above, excluding any ships on order by our Partner Brands, was $9.7 billion, of which we had deposited $1.0 billion.

Approximately 60.0% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at September 30, 2025.

Refer to Note 9.

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Financial Statements for further information.

As of June 30, 2025, we anticipate overall 2025 capital expenditures of approximately $5 billion, primarily related to our existing ships on order, and land-based destination initiatives.

As of September 30, 2025, we anticipate overall 2025 capital expenditures of approximately $5 billion, primarily related to our existing ships on order, and land-based destination initiatives.

This amount does not include any ships on order by our Partner Brands.

Material Cash Requirements

As of June 30, 2025, our material cash requirements were as follows (in millions):

As of September 30, 2025, our material cash requirements were as follows (in millions):

2025 2026 2027 2028 2029 Thereafter Total

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(1) Long-term debt obligations mature at various dates through fiscal year 2042 and bear interest at fixed and variable rates.

Interest on variable-rate debt is calculated based on forecasted debt balances, including the impact of interest rate swap agreements, using the applicable rate at June 30, 2025.

Debt denominated in other currencies is calculated based on the applicable exchange rate at June 30, 2025.

Interest on variable-rate debt is calculated based on forecasted debt balances, including the impact of interest rate swap agreements, using the applicable rate at September 30, 2025.

Debt denominated in other currencies is calculated based on the applicable exchange rate at September 30, 2025.

(2) Amounts primarily represent future commitments with remaining terms in excess of one year to pay for our usage of certain port facilities, marine consumables, services and maintenance contracts.

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Financial Statements for other agreements.

As of June 30, 2025, other than the items described above, we are not party to any other off-balance sheet arrangements, including guarantee contracts, retained or contingent interest, certain derivative instruments and variable interest entities, that either have, or are reasonably likely to have, a current or future material effect on our financial position.

As of September 30, 2025, other than the items described above, we are not party to any other off-balance sheet arrangements, including guarantee contracts, retained or contingent interest, certain derivative instruments and variable interest entities, that either have, or are reasonably likely to have, a current or future material effect on our financial position.

Funding Needs and Sources

We have significant contractual obligations of which our debt service obligations and the capital expenditures associated with our ship purchases represent our largest funding needs.

As of June 30, 2025, we had $7.8 billion of committed financing for our ships on order.

As of June 30, 2025, our obligations due through June 30, 2026 primarily consisted of $938 million related to debt maturities, $887 million related to interest on debt and $4.6 billion related to progress payments on our ship orders and, based on the expected delivery date, the final installments payable due upon the delivery of Star of the Seas and Celebrity Xcel .

As of September 30, 2025, we had $8.8 billion of committed financing for our ships on order.

As of September 30, 2025, our obligations due through September 30, 2026 primarily consisted of $3.1 billion related to debt maturities, $936 million related to interest on debt and $2.9 billion related to progress payments on our ship orders and, based on the expected delivery date, the final installments payable due upon the delivery of Celebrity Xcel and Legend of the Seas .

W e have historically relied on a combination of cash flows provided by operations, draw-downs under our available credit facilities, the incurrence of additional debt and/or the refinancing of our existing debt and the issuance of additional shares of equity securities to fund our obligations.

As of June 30, 2025, we had liquidity of $7.1 billion, including cash and cash equivalents of $0.7 billion, and $6.4 billion of undrawn revolving credit facility capacity.

As of September 30, 2025, we had liquidity of $6.8 billion, including cash and cash equivalents of $0.4 billion, and $6.4 billion of undrawn revolving credit facility capacity.

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.

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Our export credit facilities and our non-export credit facilities, and certain of our credit card processing agreements contain covenants that require us, among other things, to maintain a fixed charge coverage ratio, and limit our net debt-to-capital ratio.

As of June 30, 2025, we were in compliance with our financial covenants and we estimate that we will be in compliance for at least the next twelve months.

As of September 30, 2025, we were in compliance with our financial covenants and we estimate that we will be in compliance for at least the next twelve months.

The declaration of dividends shall at all times be subject to the final determination of our Board of Directors that a dividend is prudent at that time in consideration of the needs of the business.

During the quarter ended June 30, 2025, our Board of Directors declared a cash dividend on our common stock of $0.75 per share, which was paid in July 2025.

During the quarter ended September 30, 2025, our Board of Directors declared a cash dividend on our common stock of $1.00 per share, which was paid in October 2025.

Quantitative and Qualitative Disclosures About Market Risk

3 unchanged sentences

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 2. Management’s Discussion and Analysis