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Item 2. Management’s Discussion and Analysis

2026-04-30 compared with 2025-10-28 · 103 added, 204 removed, 243 unchanged (56% 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 nine months ended September 30, 2025, compared to the same period in 2024;

• a discussion of our results of operations for the quarter ended March 31, 2026, compared to the same period in 2025;

• 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 expense (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 income;

and (ii) restructuring charges and other initiative expenses.

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

to Adjusted EBITDA is provided below under Results of Operations.

Adjusted Gross Margin represents Gross Margin, adjusted for payroll and related, food, fuel, other operating, and depreciation and amortization expense.

Adjusted EBITDA Margin is a non-GAAP measure that represents Adjusted EBITDA (as defined above) divided by total revenues.

Adjusted Gross Margin represents Gross Margin, adjusted for payroll and related, food, fuel, other operating, and depreciation and amortization expenses.

Gross Margin is calculated pursuant to GAAP as total revenues less total cruise operating expenses, and depreciation and amortization.

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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.

For the periods presented, these items included (i) loss on extinguishment of debt and inducement expense;

(ii) restructuring charges and other initiatives expenses;

and (iii) the amortization of the Silversea intangible assets resulting from the Silversea acquisition.

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

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is provided below under Results of Operations.

Adjusted Operating Income represents operating income including income from equity investments and income taxes but excluding certain items for which we believe adjusting for is meaningful when assessing our operating performance on a comparative basis.

We use this non-GAAP measure to calculate ROIC (as defined below).

Available Passenger Cruise Days ( “APCD” ) is our measurement of capacity and represents double occupancy per cabin multiplied by the number of cruise days for the period, which excludes canceled cruise days and cabins not available for sale.

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For this reason, we also monitor our revenues and expenses in "Constant Currency" - i.e., as if the current period's currency exchange rates had remained constant with the comparable prior period's rates.

For the 2025 period presented, we calculate "Constant Currency" by applying the average for 2024 period exchange rates for each of the corresponding months, so as to calculate what the results would have been had exchange rates been the same throughout both periods.

We calculate "Constant Currency" by applying the average of the prior period exchange rates for each of the corresponding months, so as to calculate what the results would have been had exchange rates been the same throughout both periods.

We do not make predictions about future exchange rates and use current exchange rates for calculations of future periods.

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(iii) depreciation and amortization expenses;

and (iv) income tax expense.

and (iv) provision for income taxes.

We believe that this non-GAAP measure is meaningful when assessing our operating performance on a comparative basis.

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Gross Cruise Costs represent the sum of total cruise operating expenses plus marketing, selling and administrative expenses.

Gross Margin Yields represent Gross Margin per APCD.

Invested Capital represents the most recent five-quarter average of total debt (i.e., Current portion of long-term debt plus Long-term debt) plus the most recent five-quarter average of Total shareholders' equity.

We use this measure to calculate ROIC (as defined below).

Gross Margin Yield represent Gross Margin per APCD.

Net Cruise Costs and Net C ruise Costs excluding Fuel are non-GAAP measures that represent Gross Cruise Costs excluding commissions, transportation and other expenses, and onboard and other expenses and, in the case of Net Cruise Costs excluding Fuel, fuel expenses (each of which is described above under the Description of Certain Line Items heading).

In measuring our ability to control costs in a manner that positively impacts net income, we believe changes in Net Cruise Costs and Net Cruise Costs Excluding Fuel to be the most relevant indicators of our performance.

In measuring our ability to control costs in a manner that positively impacts net income, we believe changes in Net Cruise Costs and Net Cruise Costs excluding Fuel to be the most relevant indicators of our cost performance.

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 (i) restructuring charges and other initiative expenses, and (ii) impairment losses .

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

Net Yields represent Adjusted Gross Margin per APCD.

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Passenger Cruise Days ("PCD") represent the number of passengers carried for the period multiplied by the number of days of their respective cruises.

Perfecta Program refers to the multi-year Adjusted EPS and ROIC goals we are seeking to achieve by end of 2027.

Under our Perfecta Program, we are targeting 20% compound annual growth rate in Adjusted EPS compared to 2024 and ROIC of 17% or higher by the end of 2027.

Return on Invested Capital ("ROIC") represents Adjusted Operating Income divided by Invested Capital.

We believe ROIC is a meaningful measure because it quantifies how efficiently we generated operating income relative to the capital we have invested in the business.

The use of certain significant n on-GAAP measures, such as Net Yields, Net Cruise Costs and Net Cruise Costs excluding Fuel, allows us to perform capacity and rate analysis to separate the impact of known capacity changes from other less predictable changes which affect our business.

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and Adjusted Net Income attributable to Royal Caribbean Cruises Ltd.

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.

for the first quarter of 2026 was $941 million and $975 million, respectively, compared to Net Income attributable to Royal Caribbean Cruises Ltd.

and Adjusted Net Income attributable to Royal Caribbean Cruises Ltd.

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 $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 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.

of $730 million and $744 million, respectively, for the first quarter of 2025.

Significant items for the quarter ended March 31, 2026 include:

• Total revenues increased $453 million for the quarter ended March 31, 2026 as compared to the same period in 2025.

The increase was primarily due to an increase in capacity and yield growth as a result of higher pricing in 2026 compared to the same period in 2025.

• Total cruise operating expenses increased $168 million for the quarter ended March 31, 2026 as compared to the same period in 2025.

The increase was primarily due to an increase in capacity in 2026 compared to the same period in 2025.

• In February 2026, we issued $1.25 billion of senior notes due in 2033 and $1.25 billion of senior notes due in 2038 for net proceeds of approximately $2.5 billion.

For further information regarding the debt transactions discussed above, refer to Note 6.

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Financial Statements .

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

Passenger ticket revenues $ 3,637 70.8 % $ 3,471 71.0 %

Onboard and other revenues 1,502 29.2 % 1,415 29.0 %

Total revenues 5,139 100.0 % 4,886 100.0 %

Cruise operating expenses:

Commissions, transportation and other 696 13.5 % 688 14.1 %

Onboard and other 312 6.1 % 289 5.9 %

Payroll and related 342 6.7 % 328 6.7 %

Food 264 5.1 % 251 5.1 %

Fuel 297 5.8 % 290 5.9 %

Other operating 569 11.1 % 545 11.2 %

Total cruise operating expenses 2,479 48.2 % 2,391 48.9 %

Marketing, selling and administrative expenses 522 10.2 % 451 9.2 %

Depreciation and amortization expenses 435 8.5 % 410 8.4 %

Operating Income 1,702 33.1 % 1,634 33.4 %

Other income (expense):

Interest income 3 0.1 % 4 0.1 %

Interest expense, net of interest capitalized (248) (4.8) % (603) (12.3) %

Equity investment income 158 3.1 % 106 2.2 %

Other expense (36) (0.7) % (26) (0.5) %

(123) (2.4) % (519) (10.6) %

Net Income 1,579 30.7 % 1,115 22.8 %

Net Income attributable to noncontrolling interest 4 0.1 % 4 0.1 %

Net Income attributable to Royal Caribbean Cruises Ltd.

$ 1,575 30.6 % $ 1,111 22.7 %

Diluted Earnings per Share $ 5.74 $ 4.21

Nine Months Ended September 30,

Operating results for the quarter ended March 31, 2026 compared to the same period in 2025 are shown in the following table (in millions, except per share data):

Quarter Ended March 31,

Revenues % of Total

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Equity investment income 84 1.9 % 48 1.2 %

Other expense (54) (0.4) % (37) (0.3) %

(448) (3.3) % (1,145) (9.0) %

Other income 2 — % 5 0.1 %

Income before income taxes 976 21.9 % 751 18.8 %

Provision for income taxes (26) (0.6) % (16) (0.4) %

Net Income 950 21.3 % 736 18.4 %

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$ 941 21.1 % $ 730 18.3 %

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., 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 September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Adjusted Net Income attributable to Royal Caribbean Cruises Ltd., and Adjusted Earnings per Share are calculated as follows (in millions, except per share data.

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

Quarter Ended March 31,

Net Income attributable to Royal Caribbean Cruises Ltd.

$ 1,575 $ 1,111 $ 3,514 $ 2,325

Loss on extinguishment of debt and inducement expense (1) 29 10

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

Restructuring charges and other initiative expenses (2) 3 2

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

Impairment losses (4) — — — 6

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

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

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

Adjusted Net Income attributable to Royal Caribbean Cruises Ltd.

$ 1,577 $ 1,435 $ 3,523 $ 2,794

Earnings per Share $ 3.49 $ 2.71

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Diluted 271 276

(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).

(1) For 2026, includes the loss on extinguishment of debt associated with redemptions of the senior notes maturing in 2026.

Refer to Note 6.

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Financial Statements for further information.

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

For 2025, includes $10 million of inducement expense related to the settlements of the 2025 6.00% convertible notes.

These amounts are included in Interest expense, net of interest capitalized 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).

(4) For 2024, represents property and equipment impairment charges related to certain construction in progress assets which we determined would no longer be completed.

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

(5) Represents gain on sale of noncontrolling interest of Floating Docks and Grand Bahama Shipyard.

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

(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.

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

(4) For 2025, Diluted EPS includes the add-back of dilutive inducement and interest expense related to our convertible notes of $15 million for the quarter ended March 31, 2025.

Refer to Note 4 .

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Financial Statements for further information.

(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.

(5) For 2025, Adjusted Diluted EPS includes the add-back of dilutive interest expense related to our convertible notes of $5 million for the quarter ended March 31, 2025.

Selected statistical information is shown in the following table:

Quarter Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Quarter Ended March 31,

Passengers Carried 2,509,672 2,241,673

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Occupancy 108.5 % 108.8 %

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin were calculated as follows (in millions, except APCD and per APCD data.

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

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

Quarter Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are calculated as follows (in millions, except APCD and per APCD data.

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

Quarter Ended March 31,

Net Income attributable to Royal Caribbean Cruises Ltd.

$ 1,575 $ 1,111 $ 3,514 $ 2,325

Interest income (5) (2)

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Depreciation and amortization expenses 461 412

Income tax expense (1) 34 23 67 46

Provision for income taxes 26 16

EBITDA 1,701 1,405

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

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

Other income (2) (5)

Restructuring charges and other initiative expenses (1) 3 2

Impairment losses (4) — — — 6

Adjusted EBITDA $ 1,702 $ 1,402

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Adjusted EBITDA Margin 38.2 % 35.1 %

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

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

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

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

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

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

Gross Margin Yields and Net Yields were calculated by dividing Gross Margin and Adjusted Gross Margin by APCD as follows (in millions, except APCD and Yields.

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

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

Quarter Ended September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Total revenue $ 5,139 $ 4,886 $ 13,676 $ 12,724

Gross Margin Yields and Net Yields are calculated as follows (in millions, except APCD and Yields.

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

Quarter Ended March 31,

Total revenues $ 4,452 $ 3,999

Cruise operating expenses 2,247 2,079

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Payroll and related 400 340

Food 264 251 750 697

Fuel 297 290 854 876

Other operating 542 500

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Net Yields $ 268.23 $ 258.83

Gross Cruise Costs, Net Cruise Costs and Net Cruise Costs excluding Fuel were calculated as follows (in millions, except APCD and costs per APCD.

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

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 September 30, Nine Months Ended September 30,

2025 2024 2025 2024

Gross Cruise Costs, Net Cruise Costs and Net Cruise Costs excluding Fuel are calculated as follows (in millions, except APCD and costs per APCD.

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

Quarter Ended March 31,

Total cruise operating expenses $ 2,247 $ 2,079

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Net Cruise Costs including other costs 2,053 1,919

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

Impairment losses (2) — — — 6

Restructuring charges and other initiatives expenses (1) 3 2

Net Cruise Costs 2,050 1,917

Fuel 297 290 854 876

Net Cruise Costs excluding Fuel $ 1,786 $ 1,640

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(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).

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.

Passenger ticket revenues comprised 70.8% of our 2025 total revenues.

Passenger ticket revenues for 2025 increased by $166 million, or 4.8% to $3.6 billion from $3.5 billion in 2024.

The increase was primarily due to:

• $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:

• $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

Total Cruise operating expenses for 2025 increased $88 million to $2.5 billion from $2.4 billion in 2024.

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 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.

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

Other comprehensive income (loss)

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.

Quarter Ended March 31, 2026 Compared to Quarter Ended March 31, 2025

In this section, references to 2026 refer to the quarter ended March 31, 2026 and references to 2025 refer to the quarter ended March 31, 2025.

Total revenues increased $0.5 billion, or 11.3%, to $4.5 billion in 2026 from $4 billion in 2025.

Passenger ticket revenues comprised 68% of our 2026 total revenues.

Passenger ticket revenues for 2025 increased by $0.7 billion, or 7.6% to $9.6 billion from $8.9 billion in 2024.

Passenger ticket revenues increased by $277 million, or 10.1% to $3 billion in 2026 from $2.7 billion in 2025.

The increase was primarily due to:

• 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.

• $226 million driven by 8.3% capacity growth as a result of the addition of Star of the Seas and Celebrity Xcel as well as existing hardware compared to the same period in 2025;

• $51 million driven by yield growth as a result of higher pricing compared to the same period in 2025.

The remaining 32% of 2026 total revenues was comprised of Onboard and other revenues , which increased $176 million, or 14% to $1.4 billion in 2026 from $1.3 billion in 2025.

The increase was primarily due to:

• 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.

• $104 million driven by 8.3% capacity growth as a result of the addition of Star of the Seas and Celebrity Xcel compared to the same period in 2025;

• $72 million driven by yield growth as a result of higher onboard spending on a per passenger basis in 2026 compared to the same period in 2025.

Cruise Operating Expenses

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.

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 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 $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.

Other comprehensive income (loss)

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 .

Total Cruise operating expenses increased by $168 million, or 8.1%, to $2.2 billion in 2026 from $2.1 billion in 2025.

The increase was primarily due to the capacity growth which increased cruise operating expenses in 2026 compared to the same period in 2025.

Other comprehensive income

Other comprehensive income for 2026 increased by $113 million, or 105.6%, to $220 million in 2026 from $106.8 million in 2025 .

The increase was primarily due to Gain on cash flow derivative hedges of $221 million in 2026 compared to $128 million in 2025, mostly as a result of a significant increase in the fair value of our fuel swaps in 2026 compared to 2025, partially offset by a significant decrease in the fair value of our FX forward swaps in 2026 compared to 2025.

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 $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 $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.

Net cash provided by operating activities was $1.8 billion for the three months ended March 31, 2026, compared to $1.6 billion in 2025.

Net cash used in investing activities increased by $89 million to $0.5 billion for the three months ended March 31, 2026, compared to $0.4 billion in 2025.

The change of $89 million was primarily attributable to increased capital expenditures in 2026 compared to 2025.

Net cash used in financing activities increased by $0.4 billion to $1.6 billion for three months ended March 31, 2026, compared to $1.2 billion in 2025.

The change of $0.4 billion was primarily attributable to an increase in debt proceeds of $2.3 billion related to the issuance of senior notes, offset by repayment of debt of $1.9 billion in 2026 compared to the same period in 2025.

Additionally, an increase of $0.6 billion in repurchase of common stock in 2026 part of the previously authorized share repurchase program compared to the same period in 2025, an increase of $0.1 billion on dividend payments, and an increase of $0.1 billion related to payments of withholding tax on stock awards in 2026 compared to the same period in 2025.

Future Capital Commitments

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Our future capital commitments consist primarily of new ship orders.

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

As of March 31, 2026, 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 Dates Approximate

Royal Caribbean

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

Unnamed Meyer Turku Oy 3rd Quarter 2027 5,600

Hero of the Seas Meyer Turku Oy 3rd Quarter 2027 5,600

Unnamed Meyer Turku Oy 2nd Quarter 2028 5,600

Discovery-class:

Unnamed Chantiers de l'Atlantique 4th Quarter 2029 4,300

Unnamed Chantiers de l'Atlantique 2nd Quarter 2032 4,300

Celebrity Cruises

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

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

Mein Schiff —

Celebrity River Cruises:

Celebrity Compass TeamCo Shipyard 2nd Quarter 2027 170

Celebrity Seeker TeamCo Shipyard 3rd Quarter 2027 170

Unnamed TeamCo Shipyard 1st Quarter 2028 170

Unnamed TeamCo Shipyard 2nd Quarter 2028 170

Mein Schiff Flow Fincantieri 2nd Quarter 2026 4,100

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Our future capital commitments consist primarily of new ship orders.

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.

As of March 31, 2026, the aggregate expected cost of our ships on order presented in the table above, excluding any ships on order by our Partner Brands, was approximately $16.2 billion, of which we had deposited $1.3 billion.

Approximately 52.9% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at March 31, 2026.

Refer to Note 8 .

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Financial Statements for further information.

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.

As of March 31, 2026, we anticipate overall full year capital expenditures, based on our existing ships on order, will be approximately $5 billion for 2026 .

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

Material Cash Requirements

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

As of March 31, 2026, our material cash requirements were as follows (in millions):

2026 2027 2028 2029 2030 Thereafter Total

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Interest on debt (1)

Other(2) 107 370 179 140 127 1,099 2,022

$ 659 $ 956 $ 787 $ 698 $ 660 $ 2,398 $ 6,158

299 200 105 89 79 850 1,622

Investing Activities:

Ship purchase obligations (3)

2,326 2,159 4,591 1,761 158 1,682 12,677

Total $ 3,284 $ 3,315 $ 5,483 $ 2,548 $ 897 $ 4,930 $ 20,457

(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 September 30, 2025.

Debt denominated in other currencies is calculated based on the applicable exchange rate at September 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 March 31, 2026.

Debt denominated in other currencies is calculated based on the applicable exchange rate at March 31, 2026.

(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.

(3) Amounts are based on contractual installment and delivery dates for our ships on order.

Included in these figures are $6.7 billion in final contractual installments, which have committed financing with sovereign guarantees covering approximately 80% of the cost of the ships on order for our Global Brands.

Included in these figures are $10.8 billion in final contractual installments, which have committed financing covering approximately 80% of the cost of the ships on order for our Global Brands, all of which include sovereign financing guarantees, excluding ships on order for Celebrity River Cruises.

Amounts do not include potential obligations which remain subject to cancellation at our sole discretion or any agreements entered for ships on order that remain contingent upon completion of conditions precedent.

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Financial Statements for maturities related to lease liabilities.

Refer to Funding Needs and Sources for discussion on the planned funding of the above material cash requirements.

Refer to Funding Needs and Sources below for discussion on the planned funding of the above material cash requirements.

As a normal part of our business, depending on market conditions, pricing and our overall growth strategy, we continuously consider opportunities to enter into contracts for the building of additional ships.

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Refer to Note 6.

Revenue to our consolidated financial statements under Item 1.

Financial Statements for credit card processor agreements for export credit agency guarantees.

Debt to our consolidated financial statements under Item 1.

Financial Statements for export credit agency guarantees.

Refer to Note 8 .

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Financial Statements for other agreements.

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.

As of March 31, 2026, 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 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 .

As of March 31, 2026, we had approximately $14.0 billion of committed financing for our ships on order, which excludes ships on order for Celebrity River Cruises.

As of March 31, 2026 , our obligations due through March 31, 2027 primarily consisted of $1.4 billion related to debt maturities, $1.0 billion related to interest on debt and $2.4 billion related to progress payments on our ship orders, including the final installments payable due upon the delivery of Legend of the Seas given the expected delivery date in 2026 .

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 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.

As of March 31, 2026, we had liquidity of $6.9 billion, including cash and cash equivalents of $0.5 billion, and $6.4 billion of undrawn revolving credit facility capacity.

We may be obligated to prepay indebtedness outstanding under our credit facilities 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 is made up of persons who were not (i) members of the Board on the first day of such period, (ii) nominated by persons who were members of the Board on the first day of such period, or (iii) nominated by directors who themselves were nominated under clauses (i) or (ii) above.

If prepayment is triggered, we may be unable to replace our credit facilities on similar terms.

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

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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 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 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.

As of March 31, 2026, 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 that a dividend is prudent at that time in consideration of the needs of the business.

During the quarter ended March 31, 2026, our Board declared a dividend of $1.50 per share, which was paid in April 2026.

Quantitative and Qualitative Disclosures About Market Risk

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis