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What changed in Royal Caribbean Group's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Royal Caribbean Group's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+456 added−367 removedSource: 10-K (2025-02-14) vs 10-K (2024-02-21)

Top changes in Royal Caribbean Group's 2024 10-K

456 paragraphs added · 367 removed · 295 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

148 edited+27 added−13 removed88 unchanged
Biggest changeOur Company's operating strategies are as follows: • deliver the best vacation experiences responsibly; • deliver a lifetime of vacations to our customers; 4 • protect the health, safety and security of our guests and employees; • deepen our customer relationships in order to increase frequency and repeat booking rates; • focus on cost efficiency, adequate cash and liquidity, and strong balance sheet, with the overall goals of maximizing our return on invested capital and shareholder value; • protect the environment and communities in which our vessels and organization operate, with a focus on decarbonization; • invest in our workforce in order to better serve our global guest base and grow our business, and promote gender equality, diversity and inclusion; • increase the awareness and market penetration of our brands globally; • strategically invest in our fleet through the upgrade and maintenance of existing ships and the transfer of key innovations, while prudently expanding our fleet with new state-of-the-art cruise ships; • capitalize on the portability and flexibility of our ships by deploying them into those markets and itineraries that provide opportunities to optimize returns, while continuing our focus on existing key markets; • provide extraordinary destination experiences and state-of-the-art port facilities to our guests; • continue to deploy technology capabilities and advanced uses of data and analytics to deliver innovative customer experiences as well as to create operational efficiencies; and • maintain strong relationships with travel advisors, while enhancing our consumer outreach and e-commerce programs Safety, security and health policies We are committed to protecting the health, safety and security of our guests, employees and others working on our behalf.
Biggest changeOur Company's operating strategies are as follows: • deliver a lifetime of vacations to our customers; • protect the health, safety and security of our guests and employees; • deepen our customer relationships in order to increase frequency and repeat booking rates; 4 • protect the environment and communities in which our vessels and organization operate, with a focus on decarbonization; • invest in our workforce in order to better serve our global guest base and grow our business, and nurture a culture that values the contribution of individual talents; • increase the awareness and market penetration of our brands globally; • focus on cost efficiency, capital allocation and liquidity, with the overall goals of maximizing our return on invested capital and long-term shareholder value; • strategically invest in our fleet through the upgrade and maintenance of existing ships and the transfer of key innovations, while prudently expanding our fleet with new state-of-the-art cruise ships; • capitalize on the portability and flexibility of our ships by deploying them into those markets and itineraries that provide opportunities to optimize returns, while continuing our focus on existing key markets; • provide extraordinary destination experiences and state-of-the-art port facilities to our guests; • continue to deploy technology capabilities and advanced uses of data and analytics to deliver innovative customer experiences as well as to create operational efficiencies; and • maintain strong relationships with travel advisors, while enhancing our consumer outreach and e-commerce programs.
We have obtained the relevant international compliance certificates relating to oil, sewage, air pollution prevention and ballast water for all of our ships. Emissions The MARPOL Regulations imposed reduced global limitations on the sulfur content of emissions emitted by ships operating worldwide to 0.5% as of January 1, 2020.
We have obtained the relevant international compliance certificates relating to oil, sewage, air pollution prevention and ballast water for all of our ships. International Regulations: Sulfur Emissions The MARPOL Regulations imposed reduced global limitations on the sulfur content of emissions emitted by ships operating worldwide to 0.5% as of January 1, 2020.
Risk Factors - "Factors associated with climate change, including an increasing global regulatory focus, could adversely affect our business", and "Labor, health and safety, financial responsibility and other maritime regulations and measures could affect operations and increase operating costs" for further discussion of the risks associated with the regulations discussed above .
Risk Factors - "Factors associated with climate change, including an increasing global regulatory focus, could adversely affect our business", and "Labor, health and safety, financial responsibility, maritime and other regulations and measures could affect operations and increase operating costs" for further discussion of the risks associated with the regulations discussed above .
Bayley has held include Executive Vice President, International from May 2010 until February 2012; Senior Vice President, International from December 2007 to May 2010; Senior Vice President, Hotel Operations for Royal Caribbean International; and Chairman and Managing Director of Island Cruises. Laura Hodges Bethge has served as President of Celebrity Cruises since May 2023. Ms.
Bayley has held include Executive Vice President, International from May 2010 until February 2012; Senior Vice President, International from December 2007 to May 2010; Senior Vice President, Hotel Operations for Royal Caribbean; and Chairman and Managing Director of Island Cruises. Laura Hodges Bethge has served as President of Celebrity Cruises since May 2023. Ms.
Taxation in the Absence of an Exemption Under Section 883 If Royal Caribbean Cruises Ltd., the operator of our vessels, Celebrity Cruises Inc., or our ship-owning subsidiaries were to fail to meet the requirements of Section 883 of the Internal Revenue Code, or if the provision was repealed, then, as explained below, such companies would be subject to U.S. income taxation on a portion of their income derived from or incidental to the international operation of our ships.
Taxation in the Absence of an Exemption Under Section 883 If Royal Caribbean Cruises Ltd., the operator of our vessels, Celebrity Cruises Inc., Silversea Cruises Ltd., or our ship-owning subsidiaries were to fail to meet the requirements of Section 883 of the Internal Revenue Code, or if the provision was repealed, then, as explained below, such companies would be subject to U.S. income taxation on a portion of their income derived from or incidental to the international operation of our ships.
Royal Caribbean International offers multiple innovative options for onboard dining, entertainment and other onboard activities. Because of the brand’s ability to deliver extensive and innovative product offerings at an excellent value to consumers, we believe Royal Caribbean International is well positioned to attract new consumers to cruising and to continue to bring loyal repeat guests back for their next vacation.
Royal Caribbean offers multiple innovative options for onboard dining, entertainment and other onboard activities. Because of the brand’s ability to deliver extensive and innovative product offerings at an excellent value to consumers, we believe Royal Caribbean is well positioned to attract new consumers to cruising and to continue to bring loyal repeat guests back for their next vacation.
As amendments are made to STCW, we ensure that our crew training is updated accordingly. 15 Our ships are subject to various security requirements, including the International Ship and Port Facility Security Code (“ISPS Code”), which is part of SOLAS, and the U.S. Maritime Transportation Security Act of 2002 (“MTSA”), which applies to ships that operate in U.S. ports.
As amendments are made to STCW, we ensure that our crew training is updated accordingly. Our ships are subject to various security requirements, including the International Ship and Port Facility Security Code (“ISPS Code”), which is part of SOLAS, and the U.S. Maritime Transportation Security Act of 2002 (“MTSA”), which applies to ships that operate in U.S. ports.
In order to ensure deployment flexibility, all of our ships under construction are being built to comply with these nitrogen oxide emission rules. Compliance with these MARPOL requirements has not had and is not expected to have, a material impact on our results of operations due to the mitigating steps described above.
In order to ensure deployment flexibility, all of our ships under construction are being built to comply with 16 these nitrogen oxide emission rules. Compliance with these MARPOL requirements has not had and is not expected to have, a material impact on our results of operations due to the mitigating steps described above.
A foreign corporation will qualify for the benefits of Section 883 if, in relevant part: (1) the foreign country in which the foreign corporation is organized grants an equivalent exemption to corporations organized in the United States; and (2) the stock of the corporation (or the direct or indirect corporate parent thereof) is “primarily and regularly traded on an established securities market” in the United States.
A foreign corporation will qualify for the benefits of Section 883 if, in relevant part: (1) the foreign country in which the foreign corporation is organized grants an equivalent exemption to corporations organized in the United States; and (2) the stock of the corporation (or the direct or indirect corporate parent thereof) is “primarily and regularly traded on an 18 established securities market” in the United States.
Our Perfect Day Island Collection represents our initiative to develop a series of private island destinations in 7 key markets. The first island in the collection, Perfect Day at CocoCay, includes a wide range of attractions, such as a full water park, zip line course, freshwater pools, helium balloon ride, splash pads and a beach club.
Our Perfect Day Collection represents our initiative to develop a series of private destinations in key markets. The first island in the collection, Perfect Day at CocoCay, includes a wide range of attractions, such as a full water park, zip line course, freshwater pools, helium balloon ride, splash pads and a beach club.
Travel advisor support, consumer outreach, and e-commerce Travel advisors continue to be a significant sourcing channel of revenues for our ships. We believe in the value of this distribution channel and invest in maintaining strong relationships with our travel partners. To accomplish this goal, we seek to maintain competitive commission rates and incentive structures with the marketplace.
Travel advisor relationships, consumer outreach, and e-commerce Travel advisors continue to be a significant sourcing channel of revenues for our ships. We believe in the value of this distribution channel and invest in maintaining strong relationships with our travel partners. To accomplish this goal, we seek to maintain competitive commission rates and incentive structures with the marketplace.
This convention sets the training and competency standards for all our crew who are responsible for operating the vessels or who have designated roles in ensuring the safety of our guests and crew during an emergency. Regulatory bodies routinely check that our crews’ training credentials are up-to-date and assess competency by observing safety and emergency drills.
This convention sets the training and competency standards for all our crew who are responsible for operating the vessels or who have designated roles in ensuring the safety of our guests and crew during an emergency. Regulatory bodies routinely check that our crews’ training credentials are up-to-date and 15 assess competency by observing safety and emergency drills.
In addition to providing an overview on our sustainability efforts, the report references the guidelines of the Global Reporting Initiative and is aligned with the Sustainable Accounting Standards Boards Industry Standards for Cruise Lines. We continue to advance our reporting following the recommendations of the Task Force on Climate Related Financial Disclosures (TCFD).
In addition to providing an overview on our sustainability efforts, the report references the guidelines of the Global Reporting Initiative and is aligned with the Sustainability Accounting Standards Boards Industry Standards for Cruise Lines. We continue to advance our reporting following the recommendations of the Task Force on Climate Related Financial Disclosures (TCFD).
The requirements for a company to qualify for the U.K. tonnage tax regime include being subject to U.K. corporate income tax, operating qualifying ships, which are strategically and commercially managed in the United Kingdom, and fulfilling a seafarer training requirement. Relevant shipping profits include income from the operation of qualifying ships and from shipping related activities.
The requirements for a company to qualify for the U.K. tonnage tax regime include being subject to U.K. corporate income tax, operating qualifying ships, which are strategically and commercially managed in the United Kingdom, and fulfilling a seafarer training requirement. 19 Relevant shipping profits include income from the operation of qualifying ships and from shipping related activities.
In addition to or instead of income taxation, virtually all jurisdictions where our ships call impose some tax or fee, or both, based on guest headcount, 17 tonnage or some other measure. We also collect and remit value added tax (VAT) or sales tax in many jurisdictions where we operate.
In addition to or instead of income taxation, virtually all jurisdictions where our ships call impose some tax or fee, or both, based on guest headcount, tonnage or some other measure. We also collect and remit value added tax (VAT) or sales tax in many jurisdictions where we operate.
Our principal cruise competitors are Carnival Corporation & plc, which owns, among other brands, Aida Cruises, Carnival Cruise Line, Costa Cruises, Cunard Line, Holland America Line, P&O Cruises, Princess Cruises and Seabourn; Disney Cruise Line; MSC Cruises; Norwegian Cruise Line Holdings Ltd, which owns Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises; and Virgin Voyages.
Our principal cruise competitors are Carnival Corporation & plc, which owns, among other brands, Aida Cruises, Carnival Cruise Line, Costa Cruises, Cunard Line, Holland America Line, P&O Cruises, Princess Cruises and Seabourn; Disney Cruise Line; MSC Cruises; Norwegian Cruise Line Holdings Ltd, which owns Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises; Viking, and Virgin Voyages.
Its corporate structure has evolved over the years and, the current parent corporation, Royal Caribbean Cruises Ltd., was incorporated on July 23, 1985 in the Republic of Liberia under the Business Corporation Act of Liberia. Our Global Brands Our Global Brands include Royal Caribbean International, Celebrity Cruises, and Silversea Cruises.
Its corporate structure has evolved over the years and, the current parent corporation, Royal Caribbean Cruises Ltd., was incorporated on July 23, 1985 in the Republic of Liberia under the Business Corporation Act of Liberia. Our Global Brands Our Global Brands include Royal Caribbean, Celebrity Cruises, and Silversea Cruises.
In concert with our destination focus, our island technology solutions are now enabling our guests to remain connected with WiFi access, charge food and beverages as well as take advantage of all the island based activities with the same ease as onboard our ships.
In concert with our destination focus, our island technology solutions are now enabling our guests to remain connected with WiFi access, charge food and beverages, and take advantage of all the island based activities with the same ease as onboard our ships.
State Taxation Royal Caribbean Cruises Ltd., Celebrity Cruises Inc., and certain of our subsidiaries are subject to various U.S. state income taxes which are generally imposed on each state’s portion of the U.S. source income subject to federal income taxes.
State Taxation Royal Caribbean Cruises Ltd., Celebrity Cruises Inc., Silversea Cruises Ltd., and certain of our subsidiaries are subject to various U.S. state income taxes which are generally imposed on each state’s portion of the U.S. source income subject to federal income taxes.
Item 1. Business. General We are one of the leading cruise companies in the world. We own and operate three global cruise brands: Royal Caribbean International, Celebrity Cruises and Silversea Cruises (collectively, our "Global Brands").
Item 1. Business General We are one of the leading cruise companies in the world. We own and operate three global cruise brands: Royal Caribbean, Celebrity Cruises and Silversea Cruises (collectively, our "Global Brands").
We believe that the quality of the Royal Caribbean International brand allows it to achieve market coverage that is among the broadest of any of the major cruise brands in the cruise vacation industry.
We believe that the quality of the Royal Caribbean brand allows it to achieve market coverage that is among the broadest of any of the major cruise brands in the cruise vacation industry.
Because Royal Caribbean Cruises Ltd. and Celebrity Cruises Inc. conduct a trade or business in the United States, Royal Caribbean Cruises Ltd., including Silversea Cruises Ltd., and Celebrity Cruises Inc. would be taxable at regular corporate rates on our separate company taxable income (i.e., without regard to the income of our ship-owning subsidiaries) on income which is effectively connected with our U.S. trade or business (generally only income from U.S. sources).
Celebrity Cruises Inc., and Silversea Cruises Ltd., conduct a trade or business in the United States, Royal Caribbean Cruises Ltd., Celebrity Cruises Inc., and Silversea Cruises Ltd., would be taxable at regular corporate rates on our separate company taxable income (i.e., without regard to the income of our ship-owning subsidiaries) on income which is effectively connected with our U.S. trade or business (generally only income from U.S. sources).
Our Global Brands have historically sourced passengers from similar markets around the world and operated in similar economic environments with a significant degree of commercial overlap. As a result, we strategically manage our Global Brands as a single business with the ultimate objective of maximizing long-term shareholder value. Royal Caribbean International Royal Caribbean International is the world's largest cruise brand.
Our Global Brands have historically sourced passengers from similar markets around the world and operated in similar economic environments with a significant degree of commercial overlap. As a result, we strategically manage our Global Brands as a single business with the ultimate objective of maximizing long-term shareholder value. Royal Caribbean Royal Caribbean is the world's largest cruise vacation brand.
The UK and EU member countries have agreed to adopt these provisions and many countries have implemented these rules for 2024. Our parent company is incorporated in Liberia. Liberia has not announced plans to revise its local corporate income tax laws as part of the Pillar 2 proposal.
The UK and EU member countries have agreed to adopt these provisions and many countries implemented these rules for 2024. Our parent company is incorporated in Liberia. Liberia has not announced plans to revise its local corporate income tax laws as part of the Pillar Two proposal.
Application of Section 883 of the Internal Revenue Code Royal Caribbean Cruises Ltd., Celebrity Cruises, Inc. and Silversea Cruises Ltd. are engaged in a trade or business in the United States, and many of our ship-owning subsidiaries, depending upon the itineraries of their ships, receive income from sources within the United States.
Application of Section 883 of the Internal Revenue Code Royal Caribbean Cruises Ltd., Celebrity Cruises, Inc. and Silversea Cruises Ltd. are engaged in a trade or business in the United States, and many of our ship-owning subsidiaries, depending upon the itineraries of their ships, generate income from sources within the United States.
Other United States Taxation Royal Caribbean Cruises Ltd., which includes Silversea Cruises Ltd., and Celebrity Cruises Inc. earn U.S. source income from activities not considered incidental to international shipping. The tax on such income is not material to our results of operation for all years presented.
Other United States Taxation Royal Caribbean Cruises Ltd., Celebrity Cruises Inc., and Silversea Cruises Ltd., earn U.S. source income from activities not considered incidental to international shipping. The tax on such income is not material to our results of operation for all years presented.
Our participation in these efforts is most often accomplished via investments with the relevant government authority and/or various other strategic partnerships established to develop and/or operate the port facilities, by providing direct development and management expertise or in certain limited circumstances, by providing direct or indirect financial support.
Our participation in these efforts is most often accomplished via investments with the relevant government authority and/or various other strategic partnerships established to develop and/or operate the port facilities, by providing direct development and management expertise or in certain limited circumstances, by providing direct or indirect investments.
Trademarks We own a number of registered trademarks related to the Royal Caribbean International, Celebrity Cruises and Silversea Cruises cruise brands.
Trademarks We own a number of registered trademarks related to the Royal Caribbean, Celebrity Cruises and Silversea Cruises cruise brands.
In addition, our estimates incorporate our own analysis utilizing the same publicly available cruise industry data as a base. (3) Total berths include our berths related to our Global Brands and Partner Brands as of December 31, 2023. (4) Our estimates include the United States and Canada.
In addition, our estimates incorporate our own analysis utilizing the same publicly available cruise industry data as a base. (3) Total berths include our berths related to our Global Brands and Partner Brands as of December 31, 2024. (4) Our estimates include the United States and Canada.
We have continued to integrate digital capabilities into our operations and have increased our focus in bringing data analytics and artificial intelligence into our processes to provide better insights for revenue management as well as in how to model our maintenance or operational actions.
We have continued to expand digital capabilities into our operations and have increased our focus in bringing data analytics and artificial intelligence into our processes to provide better insights for revenue management as well as in how to model our maintenance or operational actions.
In the United Kingdom we are currently required by the Association of British Travel Agents to provide performance bonds in varying amounts during the course of the year, up to £183 million during the peak season. Additionally, we are required by the Civil Aviation Authority to provide performance bonds totaling £25 million.
In the United Kingdom we are currently required by the Association of British Travel Agents to provide performance bonds in varying amounts during the course of the year, up to £162 million during the peak season. Additionally, we are required by the Civil Aviation Authority to provide performance bonds totaling £25 million.
This includes equipping all of our new ships delivered since 2014 with Advanced Emissions Purification ("AEP") systems covering all engines and actively developing and installing AEP systems on the majority of our remaining fleet; resulting in 70% of our fleet being equipped with AEP systems.
This includes equipping all of our new ships delivered since 2014 with Advanced Emissions Purification ("AEP") systems covering all engines and actively developing and installing AEP systems on the majority of our remaining fleet; resulting in 72% of our fleet being equipped with AEP systems.
The Organization for Economic Co-operation and Development (OECD) has issued Pillar Two model rules introducing a new global minimum tax of 15% with certain aspects of Pillar 2 effective January 1, 2024 and other aspects effective January 1, 2025 .
Global Minimum Tax The Organization for Economic Co-operation and Development (OECD) issued Pillar Two model rules ("Global Minimum Tax") introducing a new global minimum tax of 15% with certain aspects of Pillar Two effective January 1, 2024 and other aspects effective January 1, 2025 .
For the years ended December 31, 2020, and 2019, we include the full year of operations for Azamara Cruises. Cruise Pricing Our cruise ticket prices include accommodations and a wide variety of activities and amenities, including meals and entertainment.
For the year ended December 31, 2020, we include the full year of operations for Azamara Cruises. Cruise Pricing Our cruise ticket prices include accommodations and a wide variety of activities and amenities, including meals and entertainment.
The 2020 suspension of global cruise operations as a result of COVID-19 and the gradual resumption of full operations starting in the second half of 2021 through the first half of 2022 do not allow for a meaningful comparison to prior years' information and, as such, 2020 and 2021 data has been excluded from this table.
The 2020 suspension of global cruise operations and the gradual resumption of full operations starting in the second half of 2021 through the first half of 2022 do not allow for a meaningful comparison to prior years' information and, as such, 2020 and 2021 data has been excluded from this table.
This includes additional tools to assist our employees with managing their career development within Royal Caribbean Group. In 2023, our workforce invested approximately 2.5 million hours in learning programs across a variety of areas ranging from Ethics, Compliance, Business Software and Tools, Finance/Accounting, Professional development, Project Management, Cyber Security, Leadership and Safety/Security among others.
This includes additional tools to assist our employees with managing their career development within Royal Caribbean Group. In 2024, our workforce invested approximately 3.2 million hours in learning programs across a variety of areas ranging from Ethics, Compliance, Business Software and Tools, Finance/Accounting, Professional development, Project Management, Cyber Security, Leadership and Safety/Security among others.
Investments in our core platforms, as well as the trade and direct distribution channels, are delivering the benefit of more modernized solutions with scalability and faster self-service response times while also deploying new features such as flight packages and additional promotional offer capabilities.
Investments in our core platforms, as well as the trade and direct distribution channels, are delivering the benefit of more modernized solutions with scalability and faster self-service response times while also deploying new features and additional promotional offer capabilities.
We regularly work to enhance each of our loyalty programs by adding new features and amenities in order to reward our repeat guests. Operations Cruise Ships and Itineraries As of December 31, 2023, our Global Brands and Partner Brands collectively operated 64 ships with a selection of worldwide itineraries that call on more than 1,000 destinations in over 120 countries.
We regularly work to enhance each of our loyalty programs by adding new features and amenities in order to reward our repeat guests. Operations Cruise Ships and Itineraries As of December 31, 2024, our Global Brands and Partner Brands collectively operated 68 ships with a selection of worldwide itineraries that call on more than 1,000 destinations in over 120 countries.
(5) Our estimates include European countries relevant to the industry (most notably: the Nordics, Germany, France, Italy, Spain and the United Kingdom). (6) Our estimates include Southeast Asia (most notably: Singapore, Thailand and the Philippines), East Asia (most notably: China and Japan), South Asia (most notably: India) and Oceania (most notably: Australia and New Zealand) regions.
(5) Our estimates include European countries relevant to the industry (most notably: the Nordics, Germany, France, Italy, Spain and the United Kingdom). (6) Our estimates include Southeast Asia (most notably: Singapore and Malaysia), East Asia (most notably: China and Japan), South Asia (most notably: India) and Oceania (most notably: Australia and New Zealand) regions.
Refer to the Regulation - Environmental Regulations section below for further information. Investing in our workforce and promoting equality, diversity and inclusion We believe that our employees, both shipboard and shoreside, are a critical success factor for our business. We strive to identify, hire, develop, motivate and retain the best employees, who provide our guests with extraordinary vacations.
Refer to the Regulation - Environmental Regulations section below for further information. Investing in our workforce We believe that our employees, both shipboard and shoreside, are a critical success factor for our business. We strive to identify, hire, develop, motivate and retain the best employees, who provide our guests with extraordinary vacations.
The following table presents summary information concerning ships that we expect will be in our fleet in 2024 under our Global Brands and Partner Brands.
The following table presents summary information concerning ships that we expect will be in our fleet in 2025 under our Global Brands and Partner Brands.
Examples of the benefits available under our loyalty programs include, but are not limited to, priority waitlist for shore excursions, complimentary laundry service, complimentary internet, digital discount vouchers, upgraded bathroom amenities, reserved seating on the pool deck, ship tours and, in the case of our most loyal guests who have achieved the highest levels of cruise points or credits, complimentary cruises.
Examples of the benefits available under our loyalty programs include, but are not limited to, priority waitlist for shore excursions, complimentary laundry service, complimentary internet, digital discount vouchers, upgraded bathroom amenities, reserved seating in entertainment venues, ship tours and, in the case of our most loyal guests who have achieved the highest levels of cruise points or credits, complimentary cruises.
In the opinion of our U.S. tax counsel, Faegre Drinker Biddle & Reath LLP, based on the representations and assumptions set forth in that opinion, Royal Caribbean Cruises Ltd., including Silversea Cruises Ltd., Celebrity Cruises Inc., and relevant ship-owning subsidiaries with U.S. source shipping income qualify for the benefits of Section 883 because Royal Caribbean Cruises Ltd. and each of those subsidiaries are incorporated in Liberia, which is a qualifying country, and our common stock is primarily and regularly traded on an established securities market in the United States (i.e., we are a “publicly traded” corporation).
In the opinion of our U.S. tax counsel, Faegre Drinker Biddle & Reath LLP, based upon and subject to the representations, assumptions, legal authorities and limitations set forth in that opinion, Royal Caribbean Cruises Ltd., Celebrity Cruises Inc., Silversea Cruises Ltd., and relevant ship-owning subsidiaries with U.S. source shipping income qualify for the benefits of Section 883 because Royal Caribbean Cruises Ltd. and each of those subsidiaries are incorporated in Liberia, which is a qualifying country, and our common stock is primarily and regularly traded on an established securities market in the United States (i.e., we are a “publicly traded” corporation).
Our newer vessels traditionally generate higher revenue yield premiums and are more efficient and environmentally friendly to operate than older vessels. In 2023, we introduced three new vessels to our fleet, including Royal Caribbean International’s new flagship – Icon of the Seas , Celebrity Cruises – Celebrity Ascent , and Silversea Cruises – Silver Nova .
Our newer vessels traditionally generate higher revenue yield premiums and are more efficient and environmentally friendly to operate than older vessels. In 2023, we introduced three new vessels to our fleet, including Royal Caribbean’s new flagship – Icon of the Seas , Celebrity Cruises – Celebrity Ascent , and Silversea Cruises's – Silver Nova .
Celebrity Cruises offers a range of itineraries to destinations, including Alaska, Asia, Australia, Bermuda, Canada, the Caribbean, Europe, the Galapagos Islands, Hawaii, New Zealand, the Panama Canal and South America, with cruise lengths ranging from three to 18 nights. 2 Celebrity Cruises operates 16 ships with an aggregate capacity of approximately 35,715 berths.
Celebrity Cruises offers a range of itineraries to destinations, including Alaska, Asia, Australia, Bermuda, Canada, the Caribbean, Europe, the Galapagos Islands, Hawaii, New Zealand, the Panama Canal and South America, with cruise lengths generally ranging from three to 18 nights. 2 Celebrity Cruises operates 14 ships with an aggregate capacity of approximately 35,650 berths.
This did not have a material impact to our results of operations for all years presented. United Kingdom Income Taxation During the year ended December 31, 2023, we operated 14 ships under the United Kingdom tonnage tax regime (“U.K. tonnage tax”).
This did not have a material impact to our results of operations for all years presented. United Kingdom Income Taxation During the year ended December 31, 2024, we operated 16 ships under the United Kingdom tonnage tax regime (“U.K. tonnage tax”).
The FuelEU Maritime regulation will require ships to reduce GHG intensity in the fuels they consume by 2% as of 2025, and periodically reducing the intensity to 80% by 2050, compared to the 2020 average.
The FuelEU Maritime regulation will require ships to reduce GHG intensity in the fuels they consume by 2% as of 2025, and gradually reduce the intensity to 80% by 2050, compared to the 2020 average.
Our SEA the Future commitment and annual sustainability report, both of which are accessible on our corporate website, highlight our commitment and progress made with regards to those environmental, social and governance aspects of our business that we believe are most significant to our organization and stakeholders.
Our SEA the Future commitment and annual sustainability report, both of which are accessible on our corporate website, highlight our commitment and progress made with regards to those corporate responsibility aspects of our business that we believe are most significant to our organization and stakeholders.
The registered trademarks include the name “Royal Caribbean International” and its crown and anchor logo, the name “Celebrity Cruises” and its “X” logo, the name “Silversea Cruises” and its logo, and the names of various cruise ships, ship venues and other marketing programs. We believe our largest brands' trademarks are widely recognized throughout the world and have considerable value.
The registered trademarks include the name “Royal Caribbean” and its crown and anchor logo, the name “Celebrity Cruises” and its “X” logo, the name “Silversea Cruises” and its logo, and the names of various cruise ships, ship venues, private destinations, and other marketing programs. We believe our largest brands' trademarks are widely recognized throughout the world and have considerable value.
Royal Caribbean International’s strategy is to attract an array of vacationing guests by offering a wide variety of itineraries to destinations worldwide, including Alaska, Asia, Australia, the Bahamas, Bermuda, Canada, the Caribbean, Europe, the Panama Canal and New Zealand, with cruise lengths generally ranging from two to 18 nights.
Royal Caribbean's strategy is to attract an array of vacationing guests by offering a wide variety of itineraries to destinations worldwide, including Alaska, Asia, Australia, the Bahamas, Bermuda, Canada, the Caribbean, Europe, the Panama Canal and New Zealand, with cruise lengths generally ranging from three to 14 nights.
Operating Strategies Our mission is to deliver the best vacation experiences responsibly. We continue to prioritize operating strategies that support this mission in a socially and environmentally responsible manner, working with our various business and community partners as we build toward a more sustainable cruise industry.
Operating Strategies Our mission is to deliver the best vacation experiences responsibly. We continue to prioritize operating strategies that support this mission, working with our various business and community partners as we build toward a more sustainable cruise industry.
The brand competes in both the contemporary family market and premium segments of the cruise vacation industry appealing to both families with children of all ages and older and younger couples. Royal Caribbean International offers cruises and land destinations that generally feature a casual ambiance, as well as a variety of activities and entertainment venues.
The brand competes in both the contemporary family market and premium segments of the vacation industry appealing to both families with children of all ages and older and younger couples. Royal Caribbean offers vacation experiences that generally feature a casual ambiance, as well as a variety of activities and entertainment venues.
Industry The cruising industry has been considered a well-established vacation sector in the North American, European and Australian markets and a developing sector in several other emerging markets. We believe that cruising will continue to be a popular vacation choice due to its inherent value, extensive itineraries and variety of shipboard and shoreside activities.
Industry The cruising industry is a well-established vacation sector in the North American, European and Australian markets and a developing sector in several other emerging markets. We believe that cruising will continue to be a popular vacation choice due to its inherent value, extensive itineraries, private destinations, and variety of shipboard and shoreside activities.
In total, our workforce completed approximately 2.9 million courses within our learning management systems. We run our employee pulse surveys periodically to understand and positively impact our employees’ experience. In 2023, our shoreside employee engagement scores remained high and above most global industry benchmarks.
In total, our workforce completed approximately 4.1 million courses within our learning management systems. We run our employee pulse surveys periodically to understand and positively impact our employees’ experience. In 2024, our shoreside employee engagement scores remained high and above most global industry benchmarks.
Compliance with this limitation has not and is not expected to have a material impact to our results of operations, largely due to a number of mitigating steps we have taken over the last several years.
Compliance with the MARPOL sulfur regulations has not and is not expected to have a material impact to our results of operations, largely due to a number of mitigating steps we have taken over the last several years.
Caribbean Sea ECA that began construction on or after January 1, 2016 and ships operating in the North and Baltic Sea ECA constructed on or after January 1, 2021 are required to meet more stringent nitrogen oxide emission limits.
All new ships operating within the North American and U.S. Caribbean Sea ECA that began construction on or after January 1, 2016 and ships operating in the North and Baltic Sea ECA constructed on or after January 1, 2021 are required to meet more stringent nitrogen oxide emission limits.
Together, our Global Brands and our Partner Brands have a combined fleet of 65 ships in the cruise vacation industry with an aggregate capacity of approximately 157,575 berths as of December 31, 2023. Our ships offer a selection of worldwide itineraries that call on more than 1,000 destinations on all seven continents.
Together, our Global Brands and our Partner Brands have a combined fleet of 68 ships in the cruise vacation industry with an aggregate capacity of approximately 166,900 berths as of December 31, 2024. Our ships offer a selection of worldwide itineraries that call on more than 1,000 destinations on all seven continents.
As of December 31, 2023, there were approximately 51 ships on order with an estimated 110,000 berths that are expected to be placed in service in the global cruise market through 2028, not taking into account ships taken out of service or ordered during these periods.
As of December 31, 2024, there were approximately 50 ships on order with an estimated 116,500 berths that are expected to be placed in service in the global cruise market through 2028, not taking into account ships taken out of service or ordered during these periods.
In addition, the majority of our ships on order are being delivered with Liquified Natural Gas ("LNG") technology that meet all sulfur requirements without the need for an AEP system. These efforts will provide us with additional operational and deployment flexibility.
In addition, the majority of our ships on order are being delivered with Liquified Natural Gas ("LNG") technology that meet all sulfur requirements without the need for an AEP system. These efforts will provide us with additional operational and deployment flexibility. Nitrogen Oxides Emissions The MARPOL Regulations also impose limitations on Nitrogen Oxides.
Ship Year Ship Built Year ship entered service / will enter service Approximate Berths Royal Caribbean International Utopia of the Seas 2024 2024 5,700 Icon of the Seas (1) 2023 2024 5,600 Wonder of the Seas 2022 2022 5,700 Odyssey of the Seas 2021 2021 4,200 Spectrum of the Seas 2019 2019 4,150 Symphony of the Seas 2018 2018 5,500 Harmony of the Seas 2016 2016 5,500 Ovation of the Seas 2016 2016 4,150 Anthem of the Seas 2015 2015 4,150 Quantum of the Seas 2014 2014 4,150 Allure of the Seas 2010 2010 5,500 Oasis of the Seas 2009 2009 5,600 Independence of the Seas 2008 2008 3,850 Liberty of the Seas 2007 2007 3,800 Freedom of the Seas 2006 2006 3,950 Jewel of the Seas 2004 2004 2,200 Mariner of the Seas 2003 2003 3,350 Serenade of the Seas 2003 2003 2,150 Navigator of the Seas 2002 2002 3,400 9 Ship Year Ship Built Year ship entered service / will enter service Approximate Berths Brilliance of the Seas 2002 2002 2,150 Adventure of the Seas 2001 2001 3,350 Radiance of the Seas 2001 2001 2,150 Explorer of the Seas 2000 2000 3,300 Voyager of the Seas 1999 1999 3,450 Vision of the Seas 1998 1998 2,050 Enchantment of the Seas 1997 1997 2,300 Rhapsody of the Seas 1997 1997 2,050 Grandeur of the Seas 1996 1996 2,000 Celebrity Cruises Celebrity Ascent 2023 2023 3,250 Celebrity Beyond 2022 2022 3,250 Celebrity Apex 2020 2020 2,900 Celebrity Flora 2019 2019 100 Celebrity Edge 2018 2018 2,900 Celebrity Reflection 2012 2012 3,050 Celebrity Silhouette 2011 2011 2,900 Celebrity Eclipse 2010 2010 2,850 Celebrity Equinox 2009 2009 2,850 Celebrity Solstice 2008 2008 2,850 Celebrity Xploration 2007 2016 15 Celebrity Constellation 2002 2002 2,200 Celebrity Summit 2001 2001 2,200 Celebrity Infinity 2001 2001 2,150 Celebrity Xpedition 2001 2004 50 Celebrity Millennium 2000 2000 2,200 Silversea Cruises Silver Ray 2024 2024 730 Silver Nova 2023 2023 730 Silver Endeavour 2021 2022 220 Silver Dawn 2021 2022 600 Silver Origin 2020 2020 100 Silver Moon 2020 2020 600 Silver Muse 2017 2017 600 Silver Spirit 2009 2009 600 Silver Whisper 2001 2001 400 Silver Shadow 2000 2000 400 Silver Wind 1995 1995 270 Silver Cloud 1994 1994 250 TUI Cruises Mein Schiff Relax 2024 2025 4,100 Mein Schiff 7 2024 2024 2,900 Mein Schiff 2 2019 2019 2,900 Mein Schiff 1 2018 2018 2,900 10 Ship Year Ship Built Year ship entered service / will enter service Approximate Berths Mein Schiff 6 2017 2017 2,500 Mein Schiff 5 2016 2016 2,500 Mein Schiff 4 2015 2015 2,500 Mein Schiff 3 2014 2014 2,500 Hapag-Lloyd Hanseatic Spirit 2021 2021 230 Hanseatic Inspiration 2019 2019 230 Hanseatic Nature 2019 2019 230 Europa 2 2013 2013 500 Europa 1999 1999 400 Total 171,005 ______________________________________________________________ (1) Icon of the Seas was delivered in 2023 and commenced cruise revenue operations in January 2024.
Ship Year Ship Built Year ship entered service / will enter service Approximate Berths Royal Caribbean Star of the Seas 2025 2025 5,600 Utopia of the Seas 2024 2024 5,700 Icon of the Seas 2023 2024 5,600 Wonder of the Seas 2022 2022 5,700 Odyssey of the Seas 2021 2021 4,200 Spectrum of the Seas 2019 2019 4,150 Symphony of the Seas 2018 2018 5,500 Harmony of the Seas 2016 2016 5,500 Ovation of the Seas 2016 2016 4,150 Anthem of the Seas 2015 2015 4,150 Quantum of the Seas 2014 2014 4,150 Allure of the Seas 2010 2010 5,500 Oasis of the Seas 2009 2009 5,600 Independence of the Seas 2008 2008 3,850 Liberty of the Seas 2007 2007 3,800 Freedom of the Seas 2006 2006 3,950 Jewel of the Seas 2004 2004 2,200 Mariner of the Seas 2003 2003 3,350 Serenade of the Seas 2003 2003 2,150 Navigator of the Seas 2002 2002 3,400 Brilliance of the Seas 2002 2002 2,150 9 Ship Year Ship Built Year ship entered service / will enter service Approximate Berths Adventure of the Seas 2001 2001 3,350 Radiance of the Seas 2001 2001 2,150 Explorer of the Seas 2000 2000 3,300 Voyager of the Seas 1999 1999 3,450 Vision of the Seas 1998 1998 2,050 Enchantment of the Seas 1997 1997 2,300 Rhapsody of the Seas 1997 1997 2,050 Grandeur of the Seas 1996 1996 2,000 Celebrity Cruises Celebrity Xcel 2025 2025 3,250 Celebrity Ascent 2023 2023 3,250 Celebrity Beyond 2022 2022 3,250 Celebrity Apex 2020 2020 2,900 Celebrity Flora 2019 2019 100 Celebrity Edge 2018 2018 2,900 Celebrity Reflection 2012 2012 3,050 Celebrity Silhouette 2011 2011 2,900 Celebrity Eclipse 2010 2010 2,850 Celebrity Equinox 2009 2009 2,850 Celebrity Solstice 2008 2008 2,850 Celebrity Constellation 2002 2002 2,200 Celebrity Summit 2001 2001 2,200 Celebrity Infinity 2001 2001 2,150 Celebrity Millennium 2000 2000 2,200 Silversea Cruises Silver Ray 2024 2024 730 Silver Nova 2023 2023 730 Silver Endeavour 2021 2022 220 Silver Dawn 2021 2022 600 Silver Origin 2020 2020 100 Silver Moon 2020 2020 600 Silver Muse 2017 2017 600 Silver Spirit 2009 2009 600 Silver Whisper 2001 2001 400 Silver Shadow 2000 2000 400 Silver Wind 1995 1995 270 Silver Cloud 1994 1994 250 TUI Cruises Mein Schiff Relax 2025 2025 4,100 Mein Schiff 7 2024 2024 2,900 Mein Schiff 2 2019 2019 2,900 Mein Schiff 1 2018 2018 2,900 Mein Schiff 6 2017 2017 2,500 Mein Schiff 5 2016 2016 2,500 Mein Schiff 4 2015 2015 2,500 10 Ship Year Ship Built Year ship entered service / will enter service Approximate Berths Mein Schiff 3 2014 2014 2,500 Hapag-Lloyd Hanseatic Spirit 2021 2021 230 Hanseatic Inspiration 2019 2019 230 Hanseatic Nature 2019 2019 230 Europa 2 2013 2013 500 Europa 1999 1999 400 Total 179,790 ______________________________________________________________ As of December 31, 2024, our Global Brands and our Partner Brands have the following ships on order.
Passengers Carried, Passenger Cruise Days, Available Passenger Cruise Days and Occupancy reflect the impact of our suspension of operations during parts of 2020 and 2021 due to the COVID-19 pandemic and the gradual resumption of full operations starting the second half of 2021 through the first half of 2022: Year Ended December 31, 2023 2022 2021 (1)(3) 2020 (2) 2019 (2) Passengers Carried 7,646,203 5,536,335 1,030,403 1,295,144 6,553,865 Passenger Cruise Days 49,549,127 35,051,935 5,802,582 8,697,893 44,803,953 Available Passenger Cruise Days (APCD) 46,916,259 41,197,650 11,767,441 8,539,903 41,432,451 Occupancy 105.6% 85.1% 49.3% 101.9% 108.1% ___________________________________________________________________ (1) Due to the elimination of the Silversea Cruises three-month reporting lag in October of 2021, we include Silversea Cruises' metrics from October 1, 2020 through June 30, 2021 and October 1 through December 31, 2021 in the year ended December 31, 2021.
Passengers Carried, Passenger Cruise Days, Available Passenger Cruise Days and Occupancy reflect the impact of our suspension of operations during parts of 2020 and 2021 and the gradual resumption of full operations starting the second half of 2021 through the first half of 2022: Year Ended December 31, 2024 2023 2022 2021 (1)(3) 2020 (2) Passengers Carried 8,564,272 7,646,203 5,536,335 1,030,403 1,295,144 Passenger Cruise Days 54,844,780 49,549,127 35,051,935 5,802,582 8,697,893 Available Passenger Cruise Days (APCD) 50,552,731 46,916,259 41,197,650 11,767,441 8,539,903 Occupancy 108.5% 105.6% 85.1% 49.3% 101.9% ___________________________________________________________________ (1) Due to the elimination of the Silversea Cruises three-month reporting lag in October of 2021, we include Silversea Cruises' metrics from October 1, 2020 through June 30, 2021 and October 1 through December 31, 2021 in the year ended December 31, 2021.
Bayley 65 President and Chief Executive Officer, Royal Caribbean International Laura Hodges Bethge 48 President, Celebrity Cruises Harri U. Kulovaara 71 Executive Vice President, Maritime R. Alexander Lake 52 Chief Legal Officer and Secretary Jason T. Liberty has served as President and Chief Executive Officer since January 2022. Mr. Liberty has held several roles since joining the Company in 2005.
Bayley 66 President and Chief Executive Officer, Royal Caribbean Laura Hodges Bethge 49 President, Celebrity Cruises Harri U. Kulovaara 72 Executive Vice President, Maritime R. Alexander Lake 53 Chief Legal Officer and Secretary Jason T. Liberty has served as President and Chief Executive Officer since January 2022. Mr. Liberty has held several roles since joining the Company in 2005.
For Royal Caribbean International, new features on Icon of the Seas include a dedicated family neighborhood called “Surfside”, a pool deck featuring the largest swimming pool and waterpark at sea, and the “Aquadome” showcasing the tallest waterfall at sea in an 82-foot-tall dome.
Both Icon of the Seas and Silver Nova are the first vessels of a new class. For Royal Caribbean, new features on Icon of the Seas include a dedicated family neighborhood called “Surfside”, a pool deck featuring the largest swimming pool and waterpark at sea, and the “Aquadome” showcasing the tallest waterfall at sea in an 82-foot-tall dome.
The information contained on our website is not a part of any of these reports and is not incorporated by reference herein. 19 Information About our Executive Officers As of February 21, 2024, our executive officers are: Name Age Position Jason T. Liberty 48 President and Chief Executive Officer Naftali Holtz 46 Chief Financial Officer Michael W.
The information contained on our website is not a part of any of these reports and is not incorporated by reference herein. Information About our Executive Officers As of February 14, 2025, our executive officers are: Name Age Position Jason T. Liberty 49 President and Chief Executive Officer Naftali Holtz 47 Chief Financial Officer Michael W.
Kulovaara has served as Executive Vice President, Maritime since January 2005. Mr. Kulovaara is responsible for fleet design and newbuild operations. Mr. Kulovaara also chairs our Maritime Safety Advisory Board. Mr. Kulovaara has been employed with Royal Caribbean since 1995 in a variety of positions, including Senior Vice President, Marine Operations, and Senior Vice President, Quality Assurance. Mr.
Mr. Kulovaara is responsible for fleet design and newbuild operations. Mr. Kulovaara also chairs our Maritime Safety Advisory Board. Mr. Kulovaara has been employed with Royal Caribbean since 1995 in a variety of positions, including Senior Vice President, Marine Operations, and Senior Vice President, Quality Assurance. Mr. Kulovaara is a naval architect and engineer. R.
Hapag-Lloyd Cruises operates two luxury liners and three smaller expedition ships, with an aggregate capacity of approximately 1,590 berths. Hapag-Lloyd Cruises did not have any ships on order as of December 31, 2023. Refer to Note 7. Investments and Other Assets to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further details.
Hapag-Lloyd Cruises operates two luxury liners and three smaller expedition ships, with an aggregate capacity of approximately 1,590 berths. Refer to Note 7. Investments and Other Assets to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further details.
The year ended December 31, 2021 does not include July, August, and September 2021 statistics as Silversea Cruises' results of operations for those months are included within Other (expense) income in our consolidated statements of comprehensive loss for the year ended December 31, 2021.Refer to Note 1 . General to our consolidated financial statements under Item 8.
The year ended December 31, 2021 does not include July, August, and September 2021 statistics as Silversea Cruises' results of operations for those months are included within Other (expense) income in our consolidated statements of comprehensive income (loss) for the year ended December 31, 2021.
The OECD model rules provide an exclusion for “International Shipping Income,” and certain ancillary income, for which certain of our earnings may be eligible. The Pillar Two rules will become effective for a portion of our earnings in 2024 and 2025, but we believe the impact will be immaterial.
The OECD model rules provide an exclusion for “International Shipping Income,” and certain ancillary income, for which certain of our earnings may be eligible. The Pillar Two rules became effective for a portion of our earnings in 2024 and will also be effective for a portion of our earnings in 2025.
Prior to that role, she served as Senior Vice President of Shared Services Operations from December 2020 to February 2022; Senior Vice President of Product Development for Royal Caribbean International from February 2020 to December 2020; and Vice President of Customer Experience from April 2017 to February 2020. Harri U.
Prior to that role, she served as Senior Vice President of Shared Services Operations from December 2020 to February 2022; Senior Vice President of Product Development for Royal Caribbean from February 2020 to December 2020; and Vice President of Customer Experience from April 2017 to February 2020. Harri U. Kulovaara has served as Executive Vice President, Maritime since January 2005.
Kulovaara is a naval architect and engineer. R. Alexander Lake has served as Chief Legal Officer and Secretary of the Company since June 2021, in which role he has global responsibility for the Company's legal and compliance functions. Mr.
Alexander Lake has served as Chief Legal Officer and Secretary of the Company since June 2021, in which role he has global responsibility for the Company's legal and compliance functions. Mr.
Based Employees International Employees Shoreside Operations (1) 4,050 3,900 Shipboard Employees — 88,700 Private Destinations (2) — 1,550 (1) Includes full time and part-time employees. (2) Private Destinations includes Coco Cay, Labadee and Galapagos based employees. As a global operation, we take great pride in the broad diversity of our workforce and the value it brings to our company.
Based Employees International Employees Shoreside Operations (1) 4,250 4,850 Shipboard Employees — 95,150 Private Destinations (2) — 1,750 (1) Includes full time and part-time employees. (2) Private Destinations includes Coco Cay, Labadee and Galapagos based employees. As a global operation, we take great pride in the broad diversity of our workforce and the value it brings to our company.
We also have a long-term partnership with the World Wildlife Fund to evaluate ship operations, sustainable sourcing of food supplies, waste management, sustainable destinations and guest education on ocean conservation. We also believe in transparent reporting on our environmental and sustainability stewardship, as well as our social and governance efforts.
We also have a long-term partnership with the World Wildlife Fund to evaluate ship operations, sustainable sourcing of food supplies, waste management, sustainable destinations and guest education on ocean conservation. We also believe in transparent reporting around our corporate responsibility efforts.
When fully implemented, the FuelEU Maritime and the remaining Fit for 55 proposals could individually and collectively have a material adverse effect on our business and results of operations due to increased costs associated with compliance and modified itineraries in the affected regions.
When fully implemented, the FuelEU Maritime and the remaining Fit for 55 proposals could individually and collectively have a material adverse effect on our business and results of operations due to increased costs associated with compliance and modified itineraries in the affected regions. US. Federal and State Regulations: The Clean Water Act (“CWA”) provides the U.S.
Refer to the Human Capital section below for further information. 6 Global awareness and market penetration We increase brand awareness and market penetration of our cruise brands in various ways, including the use of communication strategies and marketing campaigns designed to emphasize the qualities of each brand, especially among target groups.
Global awareness and market penetration We increase brand awareness and market penetration of our cruise brands in various ways, including the use of communication strategies and marketing campaigns designed to emphasize the qualities of each brand, especially among target groups.
The loyalty programs provide tiers of membership benefits which entitle guests to upgraded experiences and recognition relative to the status achieved once guests have accumulated the number of cruise points or credits specified for each tier.
Members are awarded points or credits in proportion to their number of cruise days and stateroom category. The loyalty programs provide tiers of membership benefits which entitle guests to upgraded experiences and recognition relative to the status achieved once guests have accumulated the number of cruise points or credits specified for each tier.
Shoreside Representation by Ethnicity % of Total U.S. Shoreside Population White 39% Hispanic 43% African American 8% Asian 6% Others (1) 4% (1) No other individual category is greater than 1%. We offer a variety of learning and development programs to our workforce, which includes a combination of instructor led (classroom and virtual) and web based (self-learning) courses.
Shoreside Population White 37% Hispanic 44% African American 8% Asian 6% Others (1) 5% (1) No other individual category is greater than 1%. We offer a variety of learning and development programs to our workforce, which includes a combination of instructor led (classroom and virtual) and web based (self-learning) courses.
Silversea Cruises delivers distinctive destination experiences by visiting unique and remote destinations, including the Galapagos Islands, Antarctica and the Arctic with cruise itineraries generally ranging from five to 24 nights. Silversea Cruises operates 11 ships, with an aggregate capacity of approximately 4,770 berths.
Silversea Cruises delivers distinctive destination experiences by visiting unique and remote destinations, including the Galapagos Islands, Antarctica and the Arctic with cruise itineraries generally ranging from six to 25 nights. Silversea Cruises operates 12 ships, with an aggregate capacity of approximately 5,500 berths.
Internal Revenue Code, or other jurisdictions, may have adverse effects on our results of operations." Website Access to Reports We make available, free of charge, access to our Annual Reports, all quarterly and current reports and all amendments to those reports, as soon as reasonably practicable after such reports are electronically filed with or furnished to the Securities and Exchange Commission and through our website at www.rclinvestor.com .
Website Access to Reports We make available, free of charge, access to our Annual Reports, all quarterly and current reports and all amendments to those reports, as soon as reasonably practicable after such reports are electronically filed with or furnished to the Securities and Exchange Commission and through our website at www.rclinvestor.com .
The cruise industry was served by a fleet with a weighted average of approximately 650,000 berths during 2023 with approximately 361 ships at the end of 2023.
The cruise industry was served by a fleet with a weighted average of approximately 706,000 berths during 2024 with approximately 432 ships at the end of 2024.
The decrease in Asia/Pacific cruise guests from 2019 to 2023 is partly driven by China remaining closed given its COVID-19 restrictions through the first half 2023. Competition We compete with a number of cruise lines as well as land-based vacation alternatives for consumers’ leisure time.
The decrease in Asia/Pacific cruise guests from 2019 to 2024 is partly driven by lack of cruise supply and itineraries in China through the first half 2023. Competition We compete with a number of cruise lines as well as land-based vacation alternatives for consumers’ leisure time.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

18 edited+89 added−15 removed86 unchanged
Biggest changeIn addition, we may be subject to consumer perception that cruises are more susceptible than other vacation alternatives to the spread of infectious diseases. For example, the unprecedented responses by governments and other authorities to control and contain the COVID-19 outbreak, including related variants, led to our voluntary suspension of our global cruise operations starting in March 2020.
Biggest changeIn addition, we may be subject to consumer perception that cruises are more susceptible than other vacation alternatives to the spread of infectious diseases.
If our ESG practices or disclosures do not meet stakeholders' evolving expectations and standards, our customer and employee retention, our access to certain types of capital, including export credit financing, and our brands and reputation may be negatively impacted, which could affect our business operations and financial condition.
If our practices or disclosures do not meet stakeholders' evolving expectations and standards, our customer and employee retention, our access to certain types of capital, including export credit financing, and our brands and reputation may be negatively impacted, which could affect our business operations and financial condition.
Increases in the frequency, severity or duration of these types of events could exacerbate their impact and disrupt our operations or make certain destinations less desirable or unavailable impacting our revenues and profitability further. Any of the foregoing could have an adverse impact on our results of operations and on industry performance.
Increases in the frequency, severity or duration of these types of events would exacerbate their impact and could disrupt our operations or make certain destinations less desirable or unavailable impacting our revenues and profitability further. Any of the foregoing could have an adverse impact on our results of operations and on industry performance.
We face significant competition from other cruise lines on the basis of cruise pricing, travel advisor preference and also in terms of the nature of ships, services and destinations that we offer to guests.
We also face competition from other cruise lines on the basis of cruise pricing, travel advisor preference and also in terms of the nature of ships, services and destinations that we offer to guests.
Our ability to access additional funding as and when needed, our ability to timely refinance and/or replace our outstanding debt securities and credit facilities on acceptable terms and our cost of funding will depend upon numerous factors including, but not limited to, the strength of the financial markets, global market conditions, including inflationary pressures, interest rate fluctuations, credit rating downgrades, our financial performance, the recovery and performance of our industry in general and the size, scope and timing of our financial needs.
Our ability to access additional funding as and when needed, our ability to timely refinance and/or replace our outstanding debt securities and credit facilities on acceptable terms and our cost of funding will depend upon numerous factors including, but not limited to, the strength of the financial markets, global market conditions, including inflationary pressures, interest rate fluctuations, credit ratings, our financial performance, the performance of our industry in general and the size, scope and timing of our financial needs.
In the event that we do not effectively market or differentiate our cruise brands from our competitors or otherwise compete effectively with other vacation alternatives and new or existing cruise companies, our results of operations and financial position could be adversely affected.
In the event that we do not effectively market or differentiate our cruise brands from our competitors or otherwise compete effectively with other vacation alternatives, our results of operations and financial position could be adversely affected.
We could also incur additional costs and require additional resources to monitor, report and comply with various ESG practices, which could increase our operating costs and affect our results of operations and financial condition. In addition, from time to time, we communicate certain initiatives regarding climate change and other ESG matters.
We could also incur additional costs and require additional resources to monitor, report and comply with various sustainability activities, which could increase our operating costs and affect our results of operations and financial condition. In addition, from time to time, we communicate certain initiatives regarding climate change and other sustainability activities.
Events impacting our supply chain could be caused by factors beyond the control of our suppliers or us, including inclement weather, natural disasters, new laws and regulations, labor actions, increased demand, problems in production or distribution, cybersecurity events, and/or disruptions in third-party logistics or transportation systems.
Events impacting our supply chain could be caused by factors beyond the control of our suppliers or us, including inclement weather, natural disasters, labor actions, increased demand, problems in production or distribution, cybersecurity events, and/or disruptions in third-party logistics or transportation systems. Our supply chain can also be impacted by new laws and regulations, such as tariffs and trade sanctions.
Our operating costs, including fuel, food, payroll and benefits, airfare, taxes, insurance, and security costs, can be and have been subject to increases due to market forces and economic or geopolitical conditions or other factors beyond our control, including global inflationary pressures, which have increased our operating costs.
Our operating costs, including fuel, food, payroll and benefits, airfare, taxes, insurance, and security costs, can be and have been subject to increases due to market forces and economic or geopolitical conditions or other factors beyond our control, including global inflationary pressures. Increases in these operating costs could adversely affect our future profitability.
As of December 31, 2023, a total of 51 new ships with approximately 110,000 berths were on order for delivery through 2028 in the cruise industry, including eight ships currently scheduled to be delivered to our Global and Partner Brands.
As of December 31, 2024, a total of 50 new ships with approximately 116,500 berths were on order for delivery through 2028 in the cruise industry, including six ships currently scheduled to be delivered to our Global and Partner Brands.
Increases in these operating costs have affected, and may continue to adversely affect, our future profitability. Price increases for commercial airline services for our guests or major changes or reduction in commercial airline services and/or availability could adversely impact the demand for cruises and undermine our ability to provide reasonably priced vacation packages to our guests.
Price increases for commercial airline services for our guests or major changes or reduction in commercial airline services and/or availability could adversely impact the demand for cruises and undermine our ability to provide reasonably priced vacation packages to our guests.
Any such interruptions to our supply chain could increase our costs and could limit the availability of products critical to our operations. In addition, increased regulation or stakeholder expectations regarding sourcing practices, or supplier conduct that does not meet such standards, could cause our operating costs to increase or result in publicity that negatively affects our reputation.
In addition, increased regulation or stakeholder expectations regarding sourcing practices, or supplier conduct that does not meet such standards, could cause our operating costs to increase or result in publicity that negatively affects our reputation.
Our sustainability activities, including environmental, social and governance (ESG) matters, could result in reputational risks, increased costs and other risks. Customers, investors, lenders, regulators and other industry stakeholders have placed increasing importance on corporate ESG practices and on the implications and social cost of their investments, which could cause us to incur additional costs and changes to our operations.
Customers, investors, lenders, regulators and other industry stakeholders have placed increasing importance on responsible and sustainable corporate practices and on the implications and social cost of their investments, which could cause us to incur additional costs and changes to our operations.
While we have resumed our global cruise operations, there is no assurance that our cruise operations will not be interrupted. In response to disease outbreaks, our industry, including our passengers and crew, may be subject to enhanced health and safety requirements in the future which may be costly and take a significant amount of time to implement across our fleet.
In response to disease outbreaks, our industry, including our passengers and crew, may be subject to enhanced health and safety requirements in the future which may be costly and take a significant amount of time to implement across our fleet.
If we are not able to achieve these goals, the price of our common stock and reputation may be negatively affected. Financial Risks We may not be able to obtain sufficient financing or capital for our needs or may not be able to do so on terms that are acceptable or consistent with our expectations.
Financial Risks We may not be able to obtain sufficient financing or capital for our needs or may not be able to do so on terms that are acceptable or consistent with our expectations.
Wilhelmsen AS and Cruise Associates and their permitted transferees, from acquiring beneficial ownership of more than 4.9% of our outstanding shares without the consent of our board of directors. We may not be able to achieve our fiscal 2025 financial and climate-related performance goals.
Wilhelmsen AS and Cruise Associates and their permitted transferees, from acquiring beneficial ownership of more than 4.9% of our outstanding shares without the consent of our board of directors.
If any of the foregoing occurs for a prolonged period of time it will have a long-term negative impact on our cash flows and our ability to meet our financial obligations. Our substantial debt requires a significant amount of cash to service and could adversely affect our financial condition.
If any of the foregoing occurs for a prolonged period of time it will have a long-term negative impact on our cash flows, our ability to meet our financial obligations, our results of operations and our financial condition. Our liquidity could be adversely impacted if we are unable to satisfy the covenants required by our credit facilities.
Although we believe we can access sufficient liquidity to fund our operations, investments and obligations as expected, there can be no assurances to that effect.
Any circumstance or event which leads to a decrease in consumer cruise spending, such as worsening global economic conditions or significant incidents impacting the cruise industry, could negatively affect our operating cash flows. Although we believe we can access sufficient liquidity to fund our operations, investments and obligations as expected, there can be no assurances to that effect.
Removed
In November 2022, we announced that we are targeting certain financial and climate-related performance goals for fiscal 2025. Our ability to achieve these goals is dependent on a number of factors, including the other risk factors described in this section.
Added
Our sustainability activities, including initiatives to sustain our planet, energize communities and accelerate innovation, could result in reputational risks, increased costs and other risks.
Removed
We have a substantial amount of debt and significant debt service obligations. As of December 31, 2023, we had total debt of $21.5 billion.
Added
For example, the imposition by the U.S. government of tariffs on products imported from certain countries and trade sanctions against certain countries have introduced greater uncertainty with respect to policies affecting trade between the United States and other countries.
Removed
Our substantial debt has required us to dedicate a large portion of our cash flow from operations to service debt and fund repayments on our debt, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate expenses.
Added
Major developments in trade relations, including the imposition of new or increased tariffs by the United States and/or other countries, could have a material adverse effect on our business, financial condition and results of operations. Any interruptions to our supply chain could increase our costs and could limit the availability of products critical to our operations.
Removed
Our ability to make future scheduled payments on our debt service obligations or refinance our debt depends on our future operating and financial performance and ability to generate cash. This will be affected by our ability to successfully implement our business strategy, as well as general economic, financial, competitive, regulatory and other factors beyond our control.
Added
Failure to comply with the terms of these debt facilities could result in an event of default. Generally, if an event of default under any debt agreement occurs, then pursuant to cross default acceleration clauses, our outstanding debt and derivative contract payables could become due and/or terminated.
Removed
If we cannot generate sufficient cash to meet our debt service obligations or fund our other business needs, we may, among other things, need to refinance all or a portion of our debt, obtain additional financing, delay planned capital expenditures or sell assets. We cannot assure that we will be able to generate sufficient cash through any of the foregoing.
Added
In addition, in such events, our credit card processors could hold back payments to create a reserve. We cannot provide assurances that we would have sufficient liquidity to repay, or the ability to refinance the debt if such amounts were accelerated upon an event of default .
Removed
If we are not able to refinance any of our debt, obtain additional financing or sell assets on commercially reasonable terms or at all, we may not be able to satisfy our obligations with respect to our debt. Our substantial debt could also result in other negative consequences for us.
Added
Our dividend policy may change without notice and any payment of dividends in the future is subject to the discretion of our Board of Directors. Although we currently pay a quarterly cash dividend to holders of our common stock, we may change our dividend policy at any time.
Removed
For example, it could increase our vulnerability to adverse general economic or industry conditions; limit our flexibility in planning for, or reacting to, changes in our business or the industry in which we operate; place us at a competitive disadvantage compared to our competitors that have less debt; make us more vulnerable to downturns in our business, the economy or the industry in which we operate; limit our ability to raise additional debt or equity capital in the future to satisfy our requirements relating to working capital, capital expenditures, development projects, strategic initiatives or other purposes; restrict us from making strategic acquisitions, introducing new technologies or exploiting business opportunities; limit or restrict our ability to obtain and maintain performance bonds to cover our financial responsibility requirements in various jurisdictions for non-performance of guest travel, casualty and personal injury; make it difficult for us to satisfy our obligations with respect to our debt; and increase our exposure to the risk of increased interest rates as certain of our borrowings are (and may in the future be) at a variable rate of interest.
Added
The decision to declare and pay dividends on our common stock will be made at the discretion of our Board of Directors and will depend on a number of factors, including our profitability at the time, cash available for those dividends, and other factors as our board of directors may consider relevant.
Removed
Despite our leverage, we may incur more debt. Although certain of our debt instruments, including our export credit facilities, contain restrictions on the incurrence of additional debt, these restrictions are subject to a number of significant qualifications and exceptions, and under certain circumstances the amount of debt that could be incurred in compliance with these restrictions could be substantial.
Added
Compliance and Regulatory Risks Changes in U.S. or other countries’ foreign travel policy have affected, and may continue to affect our results of operations.
Removed
If new debt is added to our existing debt levels, the related risks that we now face would increase. Additionally, there is no guarantee that financing will be available in the future or that such financing will be available with similar terms or terms that are commercially acceptable to us.
Added
Changes in U.S. and other countries' foreign policy have in the past and could in the future result in the imposition of travel restrictions or travel bans on persons to certain countries or result in the imposition of travel advisories, warnings, rules, regulations or legislation exposing us to penalties or claims of monetary damages.
Removed
As of December 31, 2023, we have commitments for approximately $5.5 billion of debt to finance the purchase of five ships on order by our Royal Caribbean International, Celebrity Cruises and Silversea Cruises brands, all of which are guaranteed by the export credit agencies in the countries in which the ships are being built.
Added
In addition, some countries have previously adopted restrictions against U.S. travelers. The timing and scope of these changes and regulations can be unpredictable, and they could cause us to cancel scheduled sailings, possibly on short notice, or could result in litigation against us. This, in turn, could decrease our revenue, increase our operating costs and otherwise impair our profitability.
Removed
The ultimate size of each facility will depend on the final contract price (including change orders and owner’s supply) as well as fluctuations in the EUR/USD exchange rate. Refer to Note 8 . Debt to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information regarding our "Secured Notes" and "Priority Guaranteed Notes".
Added
Factors associated with climate change, including an increasing global regulatory focus, could adversely affect our business. There is increasing global regulatory focus on climate change, greenhouse gas and other emissions, and new laws and regulations are expanding mandatory disclosure, reporting and diligence requirements.
Removed
We are subject to restrictive debt covenants that may limit our ability to finance our future operations and capital needs and to pursue business opportunities and activities. In addition, if we fail to comply with any of these restrictions, it could have a material adverse effect on us.
Added
These regulatory efforts, both internationally, regionally and nationally, are still developing, including the international alignment of such efforts, and we cannot yet determine what the final regulatory programs or their impact will be on our business.
Removed
Certain of our debt instruments, including our indentures and our unsecured bank and export credit facilities, limit our flexibility in operating our business.
Added
However, such climate change-related regulatory activity in the future may adversely affect our business and financial results by requiring us to reduce our emissions, pay for our emissions, modify our itineraries and may increase our exposure, if any, to climate change-related litigation. Such activity may also impact us by increasing our operating costs, including fuel costs.
Removed
For example, certain of our loan agreements and indentures restrict or limit our and our subsidiaries’ ability to, among other things, incur or guarantee additional indebtedness; pay dividends or distributions on, or redeem or repurchase capital stock and make other restricted payments; make investments; consummate certain asset sales; engage in certain transactions with affiliates; grant or assume certain liens; and consolidate, merge or transfer all or substantially all of our assets.
Added
For example, the European Union has enacted parts of a series of significant carbon reforms under its Fit for 55 package designed to meet its 2030 emission goals, which would require us, among other things, to purchase emission allowances, increase the use of low carbon fuel onboard our vessels as well as connectivity to shore power.
Removed
In addition, both our export credit facilities and our non-export credit facilities contain covenants that require us, among other things, to maintain a minimum liquidity, a specified minimum fixed charge coverage ratio, and limit our net debt-to-capital ratio. In addition, our ECA facilities also require us to maintain a minimum stockholders' equity. Refer to Note 8 .
Added
In addition, various state, regional and foreign government or regulatory agencies have enacted, or may enact, environmental regulations or policies, such as requiring the use of low sulfur fuels (e.g., IMO Sulfur Limit) or the carbon intensity indicator regulation ("CII"), that have or could increase our direct cost to operate in certain markets, increase our cost of fuel, limit the supply of compliant fuel, cause us to incur significant expenses to purchase and/or develop new equipment and adversely impact the cruise vacation industry.
Added
If enacted, these regulations may individually or collectively have a material adverse effect on our business and results of operations due to increased costs associated with compliance and modified itineraries in the affected regions.
Added
There has also been growing environmental scrutiny of the environmental impact of the cruise vacation industry, and some environmental groups are advocating for more stringent regulation of ship emissions at berth and at sea.
Added
This negative publicity of the cruise industry and any related measures may lead to changes in consumer preferences, such as methods or frequency of travel, which could adversely impact our operations and financial results and subject us to reputational impacts and costs.
Added
Labor, health and safety, financial responsibility, maritime and other regulations and measures could affect operations and increase operating costs.
Added
We are subject to various international, national, state and local laws, regulations and treaties that govern, among other things, discharge from our ships, safety standards applicable to our ships, treatment of disabled persons, health and sanitary standards applicable to our guests, security standards on board our ships and at the ship/port interface areas, financial responsibilities to our guests, and our advertising and pricing practices.
Added
These issues are, and we believe will continue to be, an area of focus by the relevant authorities throughout the world, which may result in the enactment of more stringent regulations.
Added
In addition to potential damage to our reputation and brand, failure by us to comply with these various applicable laws and regulations, as well as changes in laws and regulations or the manner in which they are interpreted or applied, may result in litigation, civil and criminal liability, damages, fines and penalties, increased cost of regulatory compliance and may have an adverse impact on our business and financial results.
Added
A change in our tax status under the U.S. Internal Revenue Code, or other jurisdictions, may have adverse effects on our results of operations. Royal Caribbean Cruises Ltd. and a number of our subsidiaries are foreign corporations that derive income from a U.S. trade or business and/or from sources within the U.S.
Added
We have received an opinion from U.S. tax counsel, based upon and subject to certain representations, assumptions, legal authorities, and limitations set forth in such opinion, to the effect that this income, to the extent derived from or incidental to the international operation of a ship or ships, is excluded from gross income for U.S. federal income tax purposes pursuant to Section 883 of the Internal Revenue Code.
Added
We believe that most of our income (including that of our subsidiaries) is derived from or incidental to the international operation of ships. Our ability to rely on Section 883 could be challenged or could change in the future. Provisions of the Internal Revenue Code, including Section 883, are subject to legislative change at any time.
Added
Moreover, changes could occur in the future with respect to the identity, residence or holdings of our direct or indirect shareholders, trading volume or trading frequency of our shares, or relevant foreign tax laws of Liberia, such that it no longer qualifies as an equivalent exemption jurisdiction, that could affect our eligibility for the Section 883 exemption.
Added
Accordingly, there can be no assurance that we will continue to be exempt from U.S. income tax on U.S. source shipping income in the future.
Added
If we were not entitled to the benefit of Section 883, we and our subsidiaries would be subject to U.S. taxation on a portion of the income derived from or incidental to the international operation of our ships, which would reduce our net income.
Added
Additionally, portions of our business are operated by companies that are within the United Kingdom tonnage tax regime. Further, some of our operations are conducted in jurisdictions where we rely on tax treaties to provide exemption from taxation.
Added
To the extent the United Kingdom tonnage tax laws change or we do not continue to meet the applicable qualification requirements or if tax treaties are changed or revoked, we may be required to pay higher income tax in these jurisdictions, adversely impacting our results of operations.
Added
The Organization for Economic Co-operation and Development (OECD) issued Pillar Two model rules (“Global Minimum Tax”) introducing a new global minimum tax of 15%, which may materially impact us starting in 2026. While we are currently pursuing mitigation strategies, there can be no guarantee they will be successful and the impact to our financial statements could be material.
Added
In addition, as budgetary constraints may adversely impact fiscal policy in the jurisdictions in which we operate, we may be subject to changes in our existing tax treatment or other tax reform, as well as increased tax audits.
Added
We are not a U.S. corporation and, as a result, our shareholders may be subject to the uncertainties of a foreign legal system in protecting their interests. Our corporate affairs are governed by our Articles of Incorporation and By-Laws and by the Business Corporation Act of Liberia.
Added
The provisions of the Business Corporation Act of Liberia resemble provisions of the corporation laws of a number of states in the U.S. However, there are very few judicial cases in Liberia interpreting the Business Corporation Act.
Added
While the Business Corporation Act provides that it is to be applied and construed to make the laws of Liberia, with respect of the subject matter of the Business Corporation Act, harmonious with the laws of the State of Delaware, we cannot predict whether Liberian courts would reach the same conclusions as Delaware courts.
Added
In cases when the laws of Liberia are silent, the Business Corporation Act adopts, when applicable, the non-statutory corporation law of Delaware with substantially similar legislative provisions insofar as it does not conflict with any other provisions of the Business Corporation Act or decisions of the courts of Liberia, and provides that the courts of Liberia may apply such non-statutory corporation law in resolving any issues before such courts.
Added
We cannot predict to what extent or in what manner the courts of Liberia will apply the non-statutory corporation law of Delaware. The right of shareholders to bring a derivative action in Liberian courts may be more limited than in U.S. jurisdictions.
Added
There may also be practical difficulties for shareholders attempting to bring suit in Liberia, and Liberian courts may or may not recognize and enforce foreign judgments. Thus, our shareholders may have more difficulty challenging actions taken by management, directors or controlling shareholders than would shareholders of a corporation incorporated in a U.S. jurisdiction.
Added
General Risk Factors Conducting business globally results in increased regulatory, financial, and other risks.
Added
We operate our business globally, which exposes us to a number of risks, including increased exposure to a wider range of regional and local economic conditions, volatile local political conditions, potential changes in duties and taxes, including port costs that vary with passenger head counts, fixed port costs, changing and/or uncertain interpretations of existing tax laws and regulations, required compliance with additional laws and policies affecting cruising, vacation or maritime businesses or governing the operations of foreign-based companies, currency fluctuations, interest rate movements, difficulties in operating under local business environments, port quality and availability in certain regions, U.S. and global anti-bribery laws and regulations, imposition of trade barriers and restrictions on repatriation of earnings.
Added
Our future growth strategies depend on the sustained profitability of international markets. Factors that will be critical to our success in these markets include our ability to continue to raise awareness of our products and our ability to adapt our offerings to best suit rapidly evolving consumer demands.
Added
The execution of our planned growth strategies is dependent on meeting the governmental and regulatory measures and policies in each of these markets. Our ability to realize our future growth strategy is highly dependent on our ability to satisfy country-specific policies and requirements, as well as meet the needs of region-specific consumer preferences.
Added
These factors may cause us to reevaluate some of our international business strategies. Operating globally also exposes us to numerous and sometimes conflicting legal, regulatory and tax requirements. In many parts of the world, including countries in which we operate, practices in the local business communities might not conform to international business standards.
Added
We cannot guarantee consistent interpretation, application, and enforcement of newly issued rules and regulations, which could place limits on our operations or increase our costs, as well as negatively impact our future growth strategies in our key growth markets. We must adhere to policies designed to promote legal and regulatory compliance as well as applicable laws and regulations.
Added
However, we might not be successful in ensuring that our employees, agents, representatives and other third parties with whom we associate properly adhere to applicable laws and regulations. In addition, we may be exposed to the risk of penalties and other liabilities if we fail to comply with all applicable legal and regulatory requirements.
Added
Failure by us, our employees or any of these third parties to adhere to our policies or applicable laws or regulations could result in penalties, sanctions, damage to our reputation and related costs, which in turn could negatively affect our results of operations and cash flows.
Added
As a global operator, our business also may be impacted by changes in U.S. policy or priorities in areas such as trade, immigration and/or environmental or labor regulations, among others. Depending on the nature and scope of any such changes, they could impact our domestic and international business operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+1 added−1 removed12 unchanged
Biggest changeGiven the complexity and evolving nature of cybersecurity threats, we leverage both internal cyber analytics and external sources of threat intelligence (including assessors, consultants, and other third parties) to evaluate our cyber risks and to properly adjust our risk mitigation approach. We also maintain controls and procedures that are designed to evaluate cyber risks on an ongoing basis.
Biggest changeThis assessment includes an evaluation of the Company’s processes to identify and respond to cyber risks and the effectiveness of the Company’s lines of defense. Given the complexity and evolving nature of cybersecurity threats, we leverage both internal cyber analytics and external sources of threat intelligence to evaluate our cyber risks and to properly adjust our risk mitigation approach.
Our cybersecurity program is based on recognized best practices and standards for cybersecurity, such as the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework. We conduct regular third-party assessments of our cyber risk management program. We also conduct a periodic assessment of cybersecurity risk as part of broader enterprise risk management (ERM).
Our cybersecurity program is based on recognized best practices and standards for cybersecurity, such as the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework. We conduct regular third-party assessments of our cyber risk management program, and also conduct a periodic assessment of cybersecurity risk as part of broader enterprise risk management (ERM).
They are supported by Information Security Officers who work closely with our operational teams. Our CIO and CISO have more than 35 years of collective experience in the cybersecurity field. The CISO reports to the CIO and is generally responsible for management of cybersecurity risk and the protection and defense of our networks and systems.
They are supported by Information Security Officers who work closely with our operational teams. Our CIO and CISO have more than 35 years of collective experience in the cybersecurity field. The CISO reports to the CIO and is generally responsible for management of cybersecurity risk and the protection and defense of our networks, systems, and data.
These processes include prompt communication of certain cybersecurity incidents to the Company’s executives, internal committees and the Board as needed, so that any needed external reporting can be made by management and the Board in a timely manner. Our policies require each of our employees to contribute to our data security efforts.
These processes include prompt communication of certain cybersecurity incidents to the Company’s executives, internal committees and the Board as needed, so that any needed external reporting can be made by management and the Board in a timely manner. Our policies require each of our employees and crew members to contribute to our data security efforts.
This also helps ensure that the highest levels of management are kept abreast of our cybersecurity posture and potential risks. 22 Our Board, in coordination with the Audit Committee, is actively engaged in reviewing management's processes for assessing and managing cybersecurity risks. The Board reviews cybersecurity at least annually. The Audit Committee directly oversees the Company’s management of cybersecurity risks.
Our Board, in coordination with the Audit Committee, is actively engaged in reviewing management's processes for assessing and managing cybersecurity risks. The Board reviews cybersecurity at least annually. The Audit Committee directly oversees the Company’s management of cybersecurity risks.
The CISO regularly informs our internal Disclosure Committee, Chief Financial Officer, and our President and Chief Executive Officer of cybersecurity risks and incidents as per our internal cyber risk framework.
The CISO regularly informs our internal Disclosure Committee, Chief Financial Officer, and our President and Chief Executive Officer of cybersecurity risks and incidents as per our internal cyber risk 23 framework. This also helps ensure that the highest levels of management are kept abreast of our cybersecurity posture and potential risks.
Removed
This assessment includes an evaluation of the Company’s processes to identify and respond to cyber risks and the effectiveness of the Company’s lines of defense.
Added
We engage third parties to perform periodic assessment of our cyber program maturity against the NIST framework, to perform penetration testing, and to audit our capabilities from time to time. We also maintain controls and procedures that are designed to evaluate cyber risks on an ongoing basis.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed3 unchanged
Biggest changeItem 2. Properties Information about our cruise ships, including their size, may be found within the Operating Strategies - Delivery of state-of-the-art cruise ships, and fleet upgrade and maintenance section and the Operations - Ships and Itineraries section in Item 1 . Business .
Biggest changeItem 2. Properties Information about our cruise ships, including their size, may be found within the Operating Strategies - Delivery of state-of-the-art cruise ships, and fleet upgrade and maintenance section and the Operations - Cruise Ships and Itineraries section in Item 1 . Business .

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+2 added−1 removed3 unchanged
Biggest changeDuring the fourth quarter of 2022, we recorded a charge of approximately $130.0 million to Other (expense) income within our consolidated statements of comprehensive income (loss) related to the Havana Docks Action, including post-judgment interest and related legal defense costs and bonding fees. In addition, we are routinely involved in claims typical within the cruise vacation industry.
Biggest changeThe plaintiff has the right to petition the United States Supreme Court for a writ of certiorari. During the fourth quarter of 2022, we recorded a charge of approximately $130 million to Other income (expense) within our consolidated statements of comprehensive income (loss) related to the Havana Docks Action, including post-judgment interest and related legal defense costs and bonding fees.
The majority of these claims are covered by insurance. We believe the outcome of such claims, net of expected insurance recoveries, will not have a material adverse impact on our financial condition or results of operations and cash flows. Item 4. Mine Safety Disclosures None. 23 PART II
The majority of these claims are covered by insurance. We believe the outcome of such claims, net of expected insurance recoveries, will not have a material adverse impact on our financial condition or results of operations and cash flows.
Removed
We have appealed the judgment to the United States Court of Appeals for the 11th Circuit. We believe we have meritorious grounds for and intend to vigorously pursue our appeal.
Added
We then appealed the judgment to the United States Court of Appeals for the 11th Circuit. On October 22, 2024, the 11th Circuit issued an opinion reversing the lower court’s judgment. The plaintiff's petition for a rehearing by the full 11th Circuit was subsequently denied.
Added
Following the 11th Circuit's denial of the rehearing petition, we released approximately $124 million of the previously recorded loss contingency for the year ended December 31, 2024, recognized within Other income (expense) within our consolidated statements of comprehensive income (loss). In addition, we are routinely involved in claims typical within the cruise vacation industry.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

97 edited+42 added−41 removed73 unchanged
Biggest change(7) Represents net insurance recoveries related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas. 41 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): Year Ended December 31, 2023 2022 2021 Total revenues $ 13,900 $ 8,840 $ 1,532 Less: Cruise operating expenses 7,775 6,616 2,739 Depreciation and amortization expenses 1,455 1,407 1,293 Gross Margin 4,670 817 (2,500) Add: Payroll and related 1,197 1,288 838 Food 819 653 164 Fuel 1,150 1,073 385 Other operating 1,799 1,648 1,027 Depreciation and amortization expenses 1,455 1,407 1,293 Adjusted Gross Margin $ 11,090 $ 6,886 $ 1,207 APCD 46,916,259 41,197,650 11,767,441 Gross Margin Yields $ 99.54 $ 19.83 $ (212.45) Net Yields $ 236.38 $ 167.15 $ 102.57 Year Ended December 31, 2023 2023 On a Constant Currency Basis 2019 Total revenues $ 13,900 $ — $ 10,951 Less: Cruise operating expenses 7,775 — 6,063 Depreciation and amortization expenses 1,455 — 1,246 Gross Margin 4,670 4,699 3,642 Add: Payroll and related 1,197 — 1,079 Food 819 — 584 Fuel 1,150 — 698 Other operating 1,799 — 1,406 Depreciation and amortization expenses 1,455 — 1,246 Adjusted Gross Margin $ 11,090 $ 11,123 $ 8,655 APCD 46,916,259 46,916,259 41,432,451 Gross Margin Yields $ 99.54 $ 100.16 $ 87.90 Net Yields $ 236.38 $ 237.08 $ 208.89 42 Gross Cruise Costs, Net Cruise Costs and Net Cruise Costs excluding Fuel were calculated as follows (in millions, except APCD and costs per APCD): Year Ended December 31, 2023 2022 2021 Total cruise operating expenses $ 7,775 $ 6,616 $ 2,739 Marketing, selling and administrative expenses 1,792 1,583 1,370 Gross Cruise Costs 9,567 8,199 4,109 Less: Commissions, transportation and other 2,001 1,357 208 Onboard and other 809 597 117 Net Cruise Costs including other costs 6,757 6,245 3,784 Less: Gain on sale of controlling interests (1) (3) — — Impairment and credit losses (2) 8 1 82 Restructuring charges and other initiatives expense (3) 5 12 2 Net Cruise Costs 6,747 6,232 3,700 Less: Fuel 1,150 1,073 385 Net Cruise Costs excluding Fuel $ 5,597 $ 5,159 $ 3,315 APCD 46,916,259 41,197,650 11,767,441 Gross Cruise Costs per APCD $ 203.92 $ 199.02 $ 349.18 Net Cruise Costs per APCD $ 143.81 $ 151.27 $ 314.43 Net Cruise Costs excluding Fuel per APCD $ 119.30 $ 125.23 $ 281.71 (1) Represents gain on sale of controlling interest in cruise terminal facilities in Italy.
Biggest changeCertain amounts may not add due to use of rounded numbers; reported Yields and per PCD amounts are calculated from the underlying dollar amounts): Year Ended December 31, 2024 2024 On a Constant Currency Basis 2023 2022 Total revenues $ 16,484 $ 16,494 $ 13,900 $ 8,840 Less: Cruise operating expenses 8,652 8,655 7,775 6,616 Depreciation and amortization expenses 1,600 1,600 1,455 1,407 Gross Margin 6,231 6,239 4,670 817 Add: Payroll and related 1,301 1,302 1,197 1,288 Food 934 934 819 653 Fuel 1,160 1,160 1,150 1,073 Other operating 2,098 2,099 1,799 1,648 Depreciation and amortization expenses 1,600 1,600 1,455 1,407 Adjusted Gross Margin $ 13,325 $ 13,333 $ 11,090 $ 6,886 APCD 50,552,731 50,552,731 46,916,259 41,197,650 Passenger Cruise Days 54,844,780 54,844,780 49,549,127 35,051,935 Gross Margin Yields $ 123.27 $ 123.41 $ 99.54 $ 19.83 Net Yields $ 263.59 $ 263.75 $ 236.38 $ 167.15 Adjusted Gross Margin per PCD $ 242.96 $ 243.11 $ 223.81 $ 196.45 41 Gross Cruise Costs, Net Cruise Costs and Net Cruise Costs excluding Fuel were calculated as follows (in millions, except APCD and costs per APCD.
EBITDA is a non-GAAP measure that represents of Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. excluding (i) interest income; (ii) interest expense, net of interest capitalized; (iii) depreciation and amortization expenses; and (iv) income tax benefit or expense. We believe that this non-GAAP measure is meaningful when assessing our operating performance on a comparative basis.
EBITDA is a non-GAAP measure that represents Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. excluding (i) interest income; (ii) interest expense, net of interest capitalized; (iii) depreciation and amortization expenses; and (iv) income tax benefit or expense. We believe that this non-GAAP measure is meaningful when assessing our operating performance on a comparative basis.
Financial Presentation Description of Certain Line Items Revenues Our revenues are comprised of the following: • Passenger ticket revenues , which consist of revenue recognized from the sale of passenger tickets and the sale of air transportation to and from our ships; and • Onboard and other revenues , which consist primarily of revenues from the sale of goods and/or services onboard our ships not included in passenger ticket prices, casino operations, cancellation fees, sales of vacation protection insurance, pre- and post-cruise tours and fees for operating certain port facilities.
Financial Presentation Description of Certain Line Items Revenues Our revenues are comprised of the following: • Passenger ticket revenues , which consist of revenue recognized from the sale of passenger tickets and the sale of air transportation to and from our ships; and 32 • Onboard and other revenues , which consist primarily of revenues from the sale of goods and/or services onboard our ships not included in passenger ticket prices, casino operations, cancellation fees, sales of vacation protection insurance, pre- and post-cruise tours and fees for operating certain port facilities.
Onboard and other revenues also include revenues we receive from independent third party concessionaires that pay us a percentage of their 31 revenues in exchange for the right to provide selected goods and/or services onboard our ships, as well as revenues received for procurement and management related services we perform on behalf of our unconsolidated affiliates.
Onboard and other revenues also include revenues we receive from independent third party concessionaires that pay us a percentage of their revenues in exchange for the right to provide selected goods and/or services onboard our ships, as well as revenues received for procurement and management related services we perform on behalf of our unconsolidated affiliates.
The use of certain non-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.
The use of certain significant non-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.
As of December 31, 2023, 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. 47 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 December 31, 2024, 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. 47 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.
The estimated cost and accumulated depreciation of replaced or refurbished ship components are written off and any resulting losses are recognized within Cruise operating expenses in our Consolidated Statements of Comprehensive Loss.
The estimated cost and accumulated depreciation of replaced or refurbished ship components are written off and any resulting losses are recognized within Cruise operating expenses in our Consolidated Statements of Comprehensive Income (Loss).
Overview The discussion and analysis of our financial condition and results of operations is organized to present the following: • a review of our critical accounting policies and estimates and 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 year ended December 31, 2023 compared to the same period in 2022; and • a discussion of our liquidity and capital resources, including our future capital and material cash requirements and potential funding sources.
Overview The discussion and analysis of our financial condition and results of operations is organized to present the following: • a review of our critical accounting policies and estimates and 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 year ended December 31, 2024 compared to the same period in 2023; and • a discussion of our liquidity and capital resources, including our future capital and material cash requirements and potential funding sources.
The principal assumptions used in the discounted cash flow model for our 2023 impairment assessment consisted of: • Forecasted revenues per available passenger cruise day; • Occupancy rates from existing vessels; • Vessel operating expenses; • Terminal growth rate; and • Weighted average cost of capital (i.e., discount rate).
The principal assumptions used in the discounted cash flow model for our 2024 impairment assessment consisted of: • Forecasted revenues per available passenger cruise day; • Occupancy rates from existing vessels; • Vessel operating expenses; • Terminal growth rate; and • Weighted average cost of capital (i.e., discount rate).
Goodwill to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information on goodwill. The impairment review for indefinite-life intangible assets can be performed using a qualitative or quantitative impairment assessment. The quantitative assessment consists of a comparison of the fair value of the asset with its carrying value.
Goodwill to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information on goodwill. The impairment review for indefinite-lived intangible assets can be performed using a qualitative or quantitative impairment assessment. The quantitative assessment consists of a comparison of the fair value of the asset with its carrying value.
The principal assumptions used in the discounted cash flow model for our 2023 impairment assessment consisted of: • Forecasted revenues per available passenger cruise day; • Occupancy rates from existing vessels ; • Terminal growth rate; • Royalty rate; and • Weighted average cost of capital (i.e., discount rate).
The principal assumptions used in the discounted cash flow model for our 2024 impairment assessment consisted of: • Forecasted revenues per available passenger cruise day; • Occupancy rates from existing vessels; • Terminal growth rate; • Royalty rate; and • Weighted average cost of capital (i.e., discount rate).
If circumstances cause us to change our assumptions in making determinations as to whether ship 28 improvements should be capitalized, the amounts we expense each year as repairs and maintenance costs could increase, partially offset by a decrease in depreciation expense.
If circumstances cause us to change our assumptions in making determinations as to whether ship 29 improvements should be capitalized, the amounts we expense each year as repairs and maintenance costs could increase, partially offset by a decrease in depreciation expense.
We estimate the fair value of these assets using a discounted cash flow model and various valuation methods depending on the nature of the intangible asset, such as the relief-from-royalty method, for trademarks and trade names.
We estimate the fair value of these assets using a probability weighted discounted cash flow model and various valuation methods depending on the nature of the intangible asset, such as the relief-from-royalty method, for trademarks and trade names.
As of November 30, 2023, and November 30, 2022, the fair value of the Silversea Cruises reporting unit was determined using a probability weighted discounted cash flow model in combination with a market-based valuation approach.
As of November 30, 2024, and November 30, 2023, the fair value of the Silversea Cruises reporting unit was determined using a probability weighted discounted cash flow model in combination with a market-based valuation approach.
The carrying value of goodwill attributable to our Silversea Cruises reporting unit was $509 million as of December 31, 2023 and 2022. During the fourth quarters of 2023 and 2022, we performed our annual impairment reviews of the Silversea Cruises trade name.
The carrying value of goodwill attributable to our Silversea Cruises reporting unit was $509 million as of December 31, 2024 and 2023. During the fourth quarters of 2024 and 2023, we performed our annual impairment reviews of the Silversea Cruises trade name.
A discussion of our results of operations, and sources and uses of cash for the year ended December 31, 2022 compared to the year ended December 31, 2021 is included in Part II. Item 7.
A discussion of our results of operations, and sources and uses of cash for the year ended December 31, 2023 compared to the year ended December 31, 2022 is included in Part II. Item 7.
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 December 31, 2023. Debt denominated in other currencies is calculated based on the applicable exchange rate at December 31, 2023.
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 December 31, 2024. Debt denominated in other currencies is calculated based on the applicable exchange rate at December 31, 2024.
As a result of the tests, we determined the fair value of the Silversea Cruises reporting unit exceeded its carrying value by approximately 63% and 26% as of November 30, 2023 and 2022, respectively, resulting in no impairment to Silversea Cruises' goodwill.
As a result of the tests, we determined the fair value of the Silversea Cruises reporting unit exceeded its carrying value by approximately 63%, as of November 30, 2024 and 2023, respectively, resulting in no impairment to Silversea Cruises' goodwill.
Intangible Assets to 29 our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information on indefinite-life and finite-life intangible assets.
Intangible Assets to 30 our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information on indefinite-life and finite-life intangible assets.
Financial Statements and Supplementary Data for further information on Recent Accounting Pronouncements . Liquidity and Capital Resources Sources and Uses of Cash Net cash provided by operating activities increased by $4.0 billion to cash provided of $4.5 billion for the year ended December 31, 2023, compared to cash provided of $0.5 billion for the same period in 2022.
Financial Statements and Supplementary Data for further information on Recent Accounting Pronouncements . Liquidity and Capital Resources Sources and Uses of Cash Net cash provided by operating activities increased by $0.8 billion to $5.3 billion for the year ended December 31, 2024, compared to cash provided of $4.5 billion for the same period in 2023.
Included in these figures are $4.5 billion in final contractual installments, which have committed financing covering 80% of the cost of the ships on order for our Global Brands, all of which include sovereign financing guarantees.
Included in these figures are $4.9 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.
Business-Operations for further information on our ships on order. We have committed financing arrangements in place covering 80% of the cost of the ship for the five ships on order for our Global Brands, all of which include sovereign financing guarantees.
Business-Operations for further information on our ships on order. We have committed financing arrangements in place covering approximately 80% of the cost of the ship for the four ships on order for our Global Brands, all of which include sovereign financing guarantees.
As a result of the quantitative tests, we determined that the fair value of the Silversea Cruises' trade name exceeded its carrying value by approximately 62% and 25%, as of November 30, 2023 and November 30, 2022, respectively, resulting in no impairment to Silversea Cruises' tr ade name.
As a result of the quantitative tests, we determined that the fair value of the Silversea Cruises' trade name exceeded its carrying value by approximately 66% and 62%, as of November 30, 2024 and November 30, 2023, respectively, resulting in no impairment to Silversea Cruises' tr ade name.
Debt Covenants 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, limit our net debt-to-capital ratio, and maintain a minimum liquidity, and under certain facilities, to maintain a minimum level of shareholders' equity.
Debt Covenants 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, limit our net debt-to-capital ratio, and to maintain a minimum liquidity.
We did not perform interim impairment evaluations of Royal Caribbean International's goodwill during 2023 and 2022, as no triggering events were identified. Silversea Cruises Reporting Unit During the fourth quarters of 2023 and 2022, we performed a quantitative analysis as part of our annual impairment review of the Silversea Cruises reporting unit.
We did not perform interim impairment evaluations of Royal Caribbean's goodwill during 2024 and 2023, as no triggering events were identified. Silversea Cruises Reporting Unit During the fourth quarters of 2024 and 2023, we performed a quantitative analysis as part of our annual impairment review of the Silversea Cruises reporting unit.
Accordingly, we estimate the fair value of a reporting unit and an indefinite-life intangible asset using an expected present value technique. Royal Caribbean International Reporting Unit During the fourth quarter of 2023, we performed a quantitative analysis as part of our annual impairment review of the Royal Caribbean International reporting unit.
Accordingly, we estimate the fair value of a reporting unit and an indefinite-life intangible asset using an expected present value technique. Royal Caribbean Reporting Unit During the fourth quarter of 2024, we performed a qualitative analysis as part of our annual impairment review of the Royal Caribbean reporting unit.
Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 2022 , filed with the SEC on February 23, 2023 and is incorporated by reference into this Form 10-K. 27 Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").
Management's Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year ended December 31, 202 3 , filed with the SEC on February 21, 2024 and is incorporated by reference into this Form 10-K. 28 Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").
If we had reduced our estimated average ship useful life by one year, depreciation expense for 2023 would have increased by approximately $100 million. If our ships were estimated to have no residual value, depreciation expense for 2023 would have increased by approximately $345 million.
If we had reduced our estimated average ship useful life by one year, depreciation expense for 2024 would have increased by approximately $166 million. If our ships were estimated to have no residual value, depreciation expense for 2024 would have increased by approximately $452 million.
Financial Statements and Supplementary Data for credit card processor agreements for export credit agency guarantees. Refer to Note 7. Investments and Other Assets to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for ownership restrictions related to TUI Cruises. Refer to Note 17. Commitments and Contingencies to our consolidated financial statements under Item 8.
Refer to Note 7. Investments and Other Assets to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for ownership restrictions related to TUI Cruises. Refer to Note 17. Commitments and Contingencies to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for other agreements.
The strength in revenue and improved cash flow, combined with our margin expansion efforts allowed us to accelerate debt repayment, improving our debt maturity profile. Cruise operating expenses increased from $6.1 billion in 2019 to $7.8 billion in 2023. Gross Cruise Costs per APCD increased 10.9% as-reported and 11.3% in Constant Currency, compared to 2019.
The strength in revenue and improved cash flow, combined with our margin expansion efforts allowed us to accelerate debt repayment, improving our debt maturity profile and strengthening our balance sheet. Cruise operating expenses increased from $7.8 billion in 2023 to $8.7 billion in 2024. Gross Cruise Costs per APCD increased 4.6% as-reported and 4.6% in Constant Currency, compared to 2023.
If any of these were to occur, they would be financed through the incurrence of additional indebtedness, the issuance of additional shares of equity securities or through cash flows from operations. Off-Balance Sheet Arrangements . Refer to Note 3 . Revenue to our consolidated financial statements under Item 8.
If any of these were to occur, they would be financed through the incurrence of additional indebtedness, the issuance of additional shares of equity securities or through cash flows from operations. Off-Balance Sheet Arrangements . Refer to Note 8 . Debt to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for export credit agency guarantees.
As of December 31, 2023, our obligations due through December 31, 2024 primarily consisted of $1.7 billion related to debt maturities, $1.2 billion related to interest on debt and $2.0 billion related to progress payments on our ship orders and, based on expected delivery date, the final installments payable due upon the delivery of Utopia of the Seas, and Silver Ray .
As of December 31, 2024, our obligations due through December 31, 2025 primarily consisted of $1.6 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 and, based on expected delivery date, the final installments payable due upon the delivery of Star of the Seas and Celebrity Xcel .
Total revenues in 2023 were $13.9 billion, exceeding the previous record of $11.0 billion in 2019 driven by strong ticket revenue and onboard revenue performance, inclusive of capacity growth. As a result of this, Gross Margin Yields increased 13.2% as-reported, and Net Yields increased 13.5% in Constant-Currency, both compared to 2019.
Total revenues in 2024 were $16.5 billion compared to $13.9 billion in 2023 driven by strong ticket revenue and onboard revenue performance, inclusive of capacity growth. As a result of this, Gross Margin Yields increased 23.8% as-reported, and Net Yields increased 11.5% as-reported (11.6% in Constant-Currency), both compared to 2023.
Additionally, for 2023 includes an $11 million impairment related to ceasing the use of certain real estate assets in our shoreside operations. This amount is included in Marketing, selling and administrative expenses within our consolidated statements of comprehensive income (loss).
Additionally, for 2023, includes an $11 million impairment related to ceasing the use of certain real 40 estate assets in our shoreside operations. This amount is included in Marketing, selling and administrative expenses within our consolidated statements of comprehensive income (loss). (4) Represents gain on sale of controlling interest in cruise terminal facilities in Italy.
For the 2023 period presented, Net Cruise Costs and Net Cruise Costs Excluding Fuel excludes (i) gain on sale of controlling interest; (ii) impairment and credit losses; and (iii) restructuring and other initiative expenses. 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) impairment and credit losses; (ii) restructuring charges and other 34 initiatives expense; and (iii) the gain on sale of controlling interests. A reconciliation of Gross Cruise Costs to Net Cruise Costs and Net Cruise Costs Excluding Fuel is provided below under Results of Operations.
Based on our qualitative assessment, we concluded that it was more-likely-than-not that the estimated fair value of the reporting unit exceeded its carrying value and thus, we did not proceed to the goodwill impairment test. As of December 31, 2023 and 2022, the carrying amount of goodwill attributable to our Royal Caribbean reporting unit was $296.4 million.
Based on our qualitative assessment, we concluded that it was more-likely-than-not that the estimated fair value of the Royal Caribbean reporting unit exceeded its carrying value and thus, we did not proceed to the two-step goodwill impairment test.
We typically estimate the fair value of our reporting units using a discounted cash flow model, which may also include a combination of a market-based valuation approach.
We typically estimate the fair value of our reporting units using a probability weighted discounted cash flow model in combination with a market-based valuation approach.
Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. for 2023 was $1.8 billion, or $6.77 per diluted share, compared to Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. of $2.0 billion, or $9.54 per diluted share in 2019. 2023 Adjusted EBITDA was $4.5 billion, compared to Adjusted EBITDA of $3.6 billion in 2019.
Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. for 2024 was $3.2 billion, or $11.80 per diluted share, compared to Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. of $1.8 billion, or $6.77 per diluted share in 2023.
As of December 31, 2023, we had approximately $6.0 billion of committed financing for our ships on order.
As of December 31, 2024, we had approximately $5.9 billion of committed financing for our ships on order.
A reconciliation of Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. to EBITDA is provided below under Results of Operations. Gross Cruise Costs represent the sum of total cruise operating expenses plus marketing, selling and administrative expenses. Carbon Intensity is our measurement of carbon dioxide emissions per gross tonne nautical mile (well-to-wake).
A reconciliation of Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. to EBITDA is provided below under Results of Operations. Gross Cruise Costs represent the sum of total cruise operating expenses plus marketing, selling and administrative expenses. Gross Margin Yield represent Gross Margin per APCD.
ROIC is also used as a key metric in our long-term incentive compensation program for our executive officers. 33 Occupancy ("Load factor") , in accordance with cruise vacation industry practice, is calculated by dividing Passenger Cruise Days (as defined below) by APCD. A percentage in excess of 100% indicates that three or more passengers occupied some cabins.
Occupancy ("Load factor") , in accordance with cruise vacation industry practice, is calculated by dividing Passenger Cruise Days (as defined below) by APCD. A percentage in excess of 100% indicates that three or more passengers occupied some cabins.
Revenues Total revenues increased $5.1 billion, or 57.2%, to $13.9 billion in 2023 from $8.8 billion in 2022. Passenger ticket revenues comprised 68.8% of our 2023 total revenues. Passenger ticket revenues increased by $3.8 billion, or 65.2% to $9.6 billion in 2023 from $5.8 billion in 2022.
Passenger ticket revenues comprised 69.8% of our 2024 total revenues. Passenger ticket revenues increased by $1.9 billion, or 20.2% to $11.5 billion in 2024 from $9.6 billion in 2023.
The following table presents operating results as a percentage of total revenues for the last three years: Year Ended December 31, 2023 2022 2021 Passenger ticket revenues 68.8 % 65.5 % 61.4 % Onboard and other revenues 31.2 % 34.5 % 38.6 % Total revenues 100.0 % 100.0 % 100.0 % Cruise operating expenses: Commissions, transportation and other 14.4 % 15.4 % 13.6 % Onboard and other 5.8 % 6.8 % 7.6 % Payroll and related 8.6 % 14.6 % 54.7 % Food 5.9 % 7.4 % 10.7 % Fuel 8.3 % 12.1 % 25.1 % Other operating 12.9 % 18.6 % 67.0 % Total cruise operating expenses 55.9 % 74.8 % 178.8 % Marketing, selling and administrative expenses 12.9 % 17.9 % 89.4 % Depreciation and amortization expenses 10.5 % 15.9 % 84.4 % Operating Income (Loss) 20.7 % (8.7) % (252.6) % Other income (expense): Interest income 0.3 % 0.4 % 1.1 % Interest expense, net of interest capitalized (10.1) % (15.4) % (84.3) % Equity investment income (loss) 1.4 % 0.6 % (8.8) % Other (expense) income (0.1) % (1.3) % 1.3 % (8.4) % (15.7) % (90.7) % Net Income (Loss) 12.3 % (24.4) % (343.3) % Less: Net Income attributable to noncontrolling interest 0.1 % — % — % Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. 12.2 % (24.4) % (343.3) % 39 Selected statistical information is shown in the following table: Year Ended December 31, 2023 2022 2021(1)(2) Passengers Carried 7,646,203 5,536,335 1,030,403 Passenger Cruise Days 49,549,127 35,051,935 5,802,582 APCD 46,916,259 41,197,650 11,767,441 Occupancy 105.6 % 85.1 % 49.3 % ___________________________________________________________________ (1) Due to the elimination of the Silversea Cruises three-month reporting lag in October of 2021, we include Silversea Cruises' metrics from October 1, 2020 through June 30, 2021 and October 1 through December 31, 2021 in the year ended December 31, 2021.
The following table presents operating results as a percentage of total revenues for the last three years: Year Ended December 31, 2024 2023 2022 Passenger ticket revenues 69.8 % 68.8 % 65.5 % Onboard and other revenues 30.2 % 31.2 % 34.5 % Total revenues 100.0 % 100.0 % 100.0 % Cruise operating expenses: Commissions, transportation and other 13.6 % 14.4 % 15.4 % Onboard and other 5.5 % 5.8 % 6.8 % Payroll and related 7.9 % 8.6 % 14.6 % Food 5.7 % 5.9 % 7.4 % Fuel 7.0 % 8.3 % 12.1 % Other operating 12.7 % 12.9 % 18.6 % Total cruise operating expenses 52.5 % 55.9 % 74.8 % Marketing, selling and administrative expenses 12.9 % 12.9 % 17.9 % Depreciation and amortization expenses 9.7 % 10.5 % 15.9 % Operating Income (Loss) 24.9 % 20.7 % (8.7) % Other income (expense): Interest income 0.1 % 0.3 % 0.4 % Interest expense, net of interest capitalized (9.6) % (10.1) % (15.4) % Equity investment income 1.6 % 1.4 % 0.6 % Other income (expense) 0.6 % (0.1) % (1.3) % (7.3) % (8.4) % (15.7) % Net Income (Loss) 17.6 % 12.3 % (24.4) % Less: Net Income attributable to noncontrolling interest 0.1 % 0.1 % — % Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. 17.5 % 12.2 % (24.4) % 39 Selected statistical information is shown in the following table: Year Ended December 31, 2024 2023 2022 Passengers Carried 8,564,272 7,646,203 5,536,335 Passenger Cruise Days 54,844,780 49,549,127 35,051,935 APCD 50,552,731 46,916,259 41,197,650 Occupancy 108.5 % 105.6 % 85.1 % EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin were calculated as follows (in millions, except APCD and per APCD data.
The increase was primarily attributable to higher occupancy and bookings in 2023 compared to the same period in 2022. Net cash used in investing activities increased by $0.9 billion to cash used of $3.9 billion for the year ended December 31, 2023, compared to cash used of $3.0 billion for the same period in 2022.
The increase was primarily driven by higher operating income in 2024 compared to the same period in 2023. Net cash used in investing activities decreased by $0.5 billion to $3.4 billion for the year ended December 31, 2024, compared to cash used of $3.9 billion for the same period in 2023.
(3) Represents the release of the deferred tax liability subsequent to the execution of the bargain purchase option for the Silver Whisper. These amounts are included in Other (expense) income within our consolidated statements of comprehensive income (loss). (4) Represents asset impairments and credit loss recoveries for notes receivables for which credit losses were previously recorded.
These amounts are included in Other income (expense) in our consolidated statements of comprehensive income (loss). (6) Represents the release of the deferred tax liability subsequent to the execution of the bargain purchase option for the Silver Whisper. These amounts are included in Other (expense) income within our consolidated statements of comprehensive income (loss).
Our 2023 Net Income attributable to Royal Caribbean Cruises Ltd. was $1.7 billion, or $6.31 per diluted share, compared to Net Income attributable to Royal Caribbean Cruises Ltd. of $1.9 billion, or $8.95 per diluted share in 2019, the most recent year of normalized operations.
Our 2024 Net Income attributable to Royal Caribbean Cruises Ltd. was $2.9 billion, or $10.94 per diluted share, compared to Net Income attributable to Royal Caribbean Cruises Ltd. of $1.7 billion, or $6.31 per diluted share in 2023.
These amounts are included in Other operating within our consolidated statements of comprehensive income (loss). Additionally, for 2023 includes an $11 million impairment related to ceasing the use of certain real estate assets in our shoreside operations. This amount is included in Marketing, selling and administrative expenses within our consolidated statements of comprehensive income (loss).
For 2023, represents asset impairments and credit losses recoveries for notes receivables for which credit losses were previously recorded. These amounts are included in Other operating within our consolidated statements of comprehensive income (loss). Additionally, for 2023, includes an $11 million impairment related to ceasing the use of certain real estate assets in our shoreside operations.
As of December 31, 2023, we have one Oasis-class ship, and two ships of a new generation, known as our Icon-class, on order for our Royal Caribbean International brand with an aggregate capacity of approximately 16,900 berths.
As of December 31, 2024, we have two Icon-class ships and one Oasis-class ship on order for our Royal Caribbean brand with an aggregate capacity of approximately 16,900 berths. In addition, as of December 31, 2024, we have one Edge-class ship on order for our Celebrity Cruises brand, with a capacity of approximately 3,250 berths. Refer to Item 1.
As of November 30, 2023, the fair value of the Royal Caribbean International reporting unit was determined using a discounted cash flow model in combination with a market-based valuation approach.
During the fourth quarter of 2023, we performed a quantitative analysis as part of our annual impairment review of the Royal Caribbean reporting unit. The fair value of the reporting unit was determined using a discounted cash flow model in combination with a market-based valuation approach.
In 2024, we expect our capacity to increase by 8.5% compared to 2023, with the addition of Silver Ray and Utopia of the Seas and a full year of operations for Silver Nova , Celebrity Ascent , and Icon of the Seas (which began revenue sailings in January 2024).
In 2025, we expect our capacity to increase by 5.4% compared to 2024, with the addition of Star of the Seas in late summer and Celebrity Xcel in late 2025, and a full year of operations for Utopia of the Seas and Silver Ray .
Other Income (Expense) Equity investment income (loss) increased $143 million, or 250.9%, to $200 million in 2023 from $57 million in 2022. The increase in income was primarily due to an increase of income from TUI Cruises, one of our equity investments, in 2023 compared to 2022.
The increase in income was primarily due to income from TUI Cruises, one of our equity method investments, in 2024 compared to 2023. 44 Other income (expense) increased $111 million, to other income in 2024, from other expense of $(8) million in 2023.
These amounts are included in Other operating within our consolidated statements of comprehensive income (loss). (2) Represents tax on the PortMiami sale of noncontrolling interest. These amounts are included in Other (expense) income in our consolidated statements of comprehensive income (loss).
(7) Represents gain on sale of controlling interest in cruise terminal facilities in Italy. These amounts are included in Other operating within our consolidated statements of comprehensive income (loss).
For the periods presented, these items included (i) loss on extinguishment of debt; (ii) gain on sale of controlling interest; (iii) tax on the sale of PortMiami noncontrolling interest; (iv) 32 Silver Whisper deferred tax liability release; (v) impairment and credit losses; (vi) the amortization of the Silversea Cruises intangible assets resulting from the Silversea Cruises acquisition in 2018; (vii) restructuring charges and other initiative expenses; (viii) equity investments impairment and recovery of losses; (ix) loss contingency recorded in 2022 in connection with the ongoing Havana Docks litigation inclusive of related legal fees and costs; (x) convertible debt amortization of debt discount; (xi) the 2021 Pullmantur reorganization settlement; (xii) net insurance recoveries related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas incident; (xiii) the net gain recognized in 2021 in relation to the sale of the Azamara brand; and (xiv) the net loss recognized in 2021 related to the elimination of the three-month reporting lag for Silversea Cruises.
For the periods presented, these items included (i) loss on extinguishment of debt; (ii) litigation loss contingency, which includes the 2024 release of the loss contingency recorded in 2022 in connection with the Havana Docks litigation inclusive of related legal fees and costs; (iii) impairment and credit losses; (iv) equity investment impairment, recovery of losses and other; (v) restructuring charges and other initiatives expense; (vi) the amortization of the Silversea Cruises intangible assets resulting from the Silversea Cruises acquisition in 2018; (vii) tax on the sale of PortMiami noncontrolling interest; (viii) Silver Whisper deferred tax liability release; and (ix) gain on sale of controlling interest.
Financial Statements and Supplementary Data for further information on our 2023 financing activity . 36 We reported Net Income (Loss) attributable to Royal Caribbean Cruises Ltd., Adjusted Net Income (Loss) attributable to Royal Caribbean Cruises Ltd., Earnings (Loss) per Share and Adjusted Earnings (Loss) per Share as shown in the following table (in millions, except per share data): Year Ended December 31, 2023 2022 2021 Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. $ 1,697 $ (2,156) $ (5,260) Loss on extinguishment of debt 121 94 139 Gain on sale of controlling interest (1) (3) — — PortMiami tax on sale of noncontrolling interest (2) 7 — — Silver Whisper deferred tax liability release (3) (26) — — Impairment and credit losses (4) 8 1 82 Amortization of Silversea Cruises intangible assets resulting from the Silversea Cruises acquisition (5) 6 6 6 Restructuring charges and other initiatives expense 5 12 2 Equity investment impairment and recovery of losses (6) 12 — 31 Litigation loss contingency (7) — 130 — Convertible debt amortization of debt discount (8) — — 104 Pullmantur reorganization settlement (9) — — 10 Oasis of the Seas incident (10) — — (7) Net gain related to the sale of Azamara brand (11) — — (3) Net loss related to the elimination of the Silversea Cruises reporting lag (12) — — 63 Adjusted Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. $ 1,827 $ (1,913) $ (4,833) Basic: Earnings (Loss) per Share $ 6.63 $ (8.45) $ (20.89) Adjusted Earnings (Loss) per Share $ 7.14 $ (7.50) $ (19.19) Diluted: Earnings (Loss) per Share (13) $ 6.31 $ (8.45) $ (20.89) Adjusted Earnings (Loss) per Share (13) $ 6.77 $ (7.50) $ (19.19) Weighted-Average Shares Outstanding: Basic 256 255 252 Diluted 283 255 252 (1) Represents gain on sale of controlling interest in cruise terminal facilities in Italy.
Certain amounts may not add due to use of rounded numbers): Year Ended December 31, 2024 2023 2022 Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. $ 2,877 $ 1,697 $ (2,156) Loss on extinguishment of debt (1) 463 121 94 Litigation loss contingency (2) (124) — 130 Impairment and credit losses (3) 9 8 1 Equity investment impairment, recovery of losses and other (1) 12 — Restructuring charges and other initiatives expense 10 5 12 Amortization of Silversea Cruises intangible assets resulting from the Silversea Cruises acquisition (4) 6 6 6 PortMiami tax on sale of noncontrolling interest (5) (3) 7 — Silver Whisper deferred tax liability release (6) — (26) — Gain on sale of controlling interest (7) — (3) — Adjusted Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. $ 3,237 $ 1,827 $ (1,913) Basic: Earnings (Loss) per Share $ 11.00 $ 6.63 $ (8.45) Adjusted Earnings (Loss) per Share $ 12.38 $ 7.14 $ (7.50) Diluted: Earnings (Loss) per Share (8) $ 10.94 $ 6.31 $ (8.45) Adjusted Earnings (Loss) per Share (9) $ 11.80 $ 6.77 $ (7.50) Weighted-Average Shares Outstanding: Basic 261 256 255 Diluted 279 283 255 (1) For 2024, includes $119 million of inducement expense related to the partial settlement of our 6.00% convertible notes due 2025.
Passenger Cruise Days represent the number of passengers carried for the period multiplied by the number of days of their respective cruises.
Passenger Cruise Days ("PCD") represent the number of passengers carried for the period multiplied by the number of days of their respective cruises. Return on Invested Capital ("ROIC") represents Adjusted Operating Income (Loss) divided by Invested Capital.
This amount does not include any ships on order by our Partner Brands. 46 Material Cash Requirements As of December 31, 2023, our material cash requirements were as follows (in millions): Payments due by period 2024 2025 2026 2027 2028 Thereafter Total Operating Activities: Interest on debt (1) $ 1,222 $ 1,141 $ 1,004 $ 834 $ 512 $ 1,104 $ 5,817 Other (2) 157 149 173 141 116 925 1,661 Investing Activities: Ship purchase obligations (3) 1,967 2,211 1,303 — — — 5,481 Total $ 3,346 $ 3,501 $ 2,480 $ 975 $ 628 $ 2,029 $ 12,959 _____________________________________________________________________________________________ (1) Long-term debt obligations mature at various dates through fiscal year 2037 and bear interest at fixed and variable rates.
This amount does not include any ships on order by our Partner Brands. 46 Material Cash Requirements As of December 31, 2024, our material cash requirements were as follows (in millions): Payments due by period 2025 2026 2027 2028 2029 Thereafter Total Operating Activities: Interest on debt (1) $ 954 $ 890 $ 753 $ 581 $ 477 $ 1,630 $ 5,285 Other (2) 178 188 167 124 118 797 1,572 Investing Activities: Ship purchase obligations (3) 2,421 1,689 141 1,427 — — 5,678 Total $ 3,553 $ 2,767 $ 1,061 $ 2,132 $ 595 $ 2,427 $ 12,535 _____________________________________________________________________________________________ (1) Long-term debt obligations mature at various dates through fiscal year 2037 and bear interest at fixed and variable rates.
These amounts are included in Other operating within our consolidated statements of comprehensive income (loss). (2) Represents asset impairments and credit loss recoveries for notes receivables for which credit losses were previously recorded. These amounts are included in Other operating within our consolidated statements of comprehensive income (loss).
(3) For 2024, primarily represents property and equipment impairment charges related to certain construction in progress assets, which we determined would no longer be completed. For 2023, represents asset impairments and credit losses recoveries for notes receivables for which credit losses were previously recorded. These amounts are included in Other operating within our consolidated statements of comprehensive income (loss).
Gross Margin Yield represent Gross Margin per APCD. Adjusted Gross Margin represent 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. Net Yields represent Adjusted Gross Margin per APCD.
Gross Margin is calculated pursuant to GAAP as total revenues less total cruise operating expenses, and depreciation and amortization.
As of December 31, 2023 and 2022 , the carrying value of indefinite-life intangible assets was $321 million, which primarily relates to the Silversea Cruises trade name. We did not perform interim impairment evaluations of Silversea Cruises' goodwill or trade names during 2023 and 2022, as no triggering events were identified.
As of December 31, 2024 and 2023 , the carrying value of indefinite-life intangible assets was $321 million, which primarily relates to the Silversea Cruises trade name.
The increase was primarily attributable to a increase in capital expenditures of $1.2 billion during 2023, compared to the same period in 2022 due to the increased cost associated with taking delivery of Silver Nova, Celebrity Ascent and Icon of the Seas in 2023, compared to the delivery of Wonder of the Seas, Celebrity Beyond, and Silver Endeavour during the same period in 2022.
The decrease of $0.5 billion was primarily attributable to increased capital expenditures associated with taking delivery of Icon of the Seas, Celebrity Ascent, and Silver Nova in 2023 compared to Utopia of the Seas and Silver Ray in 2024.
The increase was partially offset by a decrease in cash paid on settlement of derivative financial instruments of $270 million during 2022 compared to 2023. Net cash (used in) provided by financing activities was $(2) billion for the year ended December 31, 2023, compared to cash provided of $1.7 billion for the same period in 2022.
Net cash (used in) provided by financing activities was $(1.9) billion for the year ended December 31, 2024, compared to cash used of $(2.0) billion for the same period in 2023.
Return on Invested Capital ("ROIC") represents Adjusted Operating Income (Loss) 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.
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. Trifecta refers to the multi-year Adjusted EBITDA per APCD, Adjusted EPS and ROIC goals we publicly announced in November 2022.
For further information regarding the debt transactions discussed above, refer to Note 8 . Debt to our consolidated financial statements under Item 8.
Debt, and Note 9 . Leases to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information.
As a result of the test, we determined the fair value of the Royal Caribbean International reporting unit exceeded its carrying value by more than 100% as of November 30, 2023, resulting in no impairment to Royal Caribbean International's goodwill. During the fourth quarter of 2022, we performed a qualitative assessment of the Royal Caribbean International reporting unit.
As a result of the quantitative test, we determined that the fair value of the reporting unit exceeded its carrying value by more than 100%, resulting in no impairment to Royal Caribbean's goodwill. As of December 31, 2024 and 2023, the carrying amount of goodwill attributable to our Royal Caribbean reporting unit was $296 million.
During 2024, we are expected to have 20 ships in drydock, due to our growing fleet combined with the timing of restarting our entire fleet, and we plan to continue investing in newbuilds and retrofitting our existing fleet with technology to help reach our long-term goals to reduce carbon intensity. 35 Results of Operations In addition to the items discussed above under "Executive Overview," significant items for 2023 include: • Net Income attributable to Royal Caribbean Cruises Ltd. and Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. for the year ended December 31, 2023 was $1.7 billion and $1.8 billion, or $6.31 and $6.77 per share on a diluted basis, respectively, compared to Net Loss attributable to Royal Caribbean Cruises Ltd. and Adjusted Net Loss attributable to Royal Caribbean Cruises Ltd. of $(2.2) billion and $(1.9) billion, or $(8.45) and $(7.50) per share on a diluted basis, respectively, for the year ended December 31, 2022. • Total revenues increased by $5.1 billion for the year ended December 31, 2023 as compared to the same period in 2022.
Our new ships, optimized deployment, continued load factor growth and enhanced onboard offerings are expected to drive growth in Net Yields and Total Revenues. 36 Results of Operations In addition to the items discussed above under "Executive Overview," significant items for 2024 include: • Net Income attributable to Royal Caribbean Cruises Ltd. and Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. for the year ended December 31, 2024 was $2.9 billion and $3.2 billion, or $10.94 and $11.80 per share on a diluted basis, respectively, compared to Net Income attributable to Royal Caribbean Cruises Ltd. and Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. of $1.7 billion and $1.8 billion, or $6.31 and $6.77 per share on a diluted basis, respectively, for the year ended December 31, 2023. • Total revenues increased by $2.6 billion for the year ended December 31, 2024 as compared to the same period in 2023.
Adjusted Earnings (Loss) per Share ("Adjusted EPS") is a non-GAAP measure that represents Adjusted Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. (as defined below) divided by weighted average shares outstanding or by diluted weighted average shares outstanding, as applicable. We believe that this non-GAAP measure is meaningful when assessing our performance on a comparative basis.
(as defined below) divided by weighted average shares outstanding or by diluted weighted average shares outstanding, as applicable. We believe that this non-GAAP measure is meaningful when assessing our performance on a comparative basis. 33 Adjusted Gross Margin represents Gross Margin, adjusted for payroll and related, food, fuel, other operating, and depreciation and amortization expenses.
We also use non-derivative financial instruments designated as hedges of our net investment in our foreign operations and investments. Although some of our derivative financial instruments do not qualify for hedge accounting or are not accounted for under hedge accounting, we do not hold or issue derivative financial instruments for trading or other speculative purposes.
Although some of our derivative financial instruments do not qualify for hedge accounting or are not accounted for under hedge accounting, we do not hold or issue derivative financial instruments for trading or other speculative purposes. We account for derivative financial instruments in accordance with authoritative guidance. Refer to Note 2 . Summary of Significant Accounting Policies and Note 16.
On a regular basis, we enter into foreign currency forward contracts, interest rate swaps, fuel swaps and options with third-party institutions in over-the-counter markets.
Fair Value Measurements and Derivative Instruments to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for more information on related authoritative guidance, the Company's hedging programs and derivative financial instruments. On a regular basis, we enter into foreign currency forward contracts, interest rate swaps, fuel swaps and options with third-party institutions in over-the-counter markets.
We believe these non-GAAP measures provide expanded insight to measure revenue and cost performance in addition to the standard GAAP based financial measures. There are no specific rules or regulations for determining non-GAAP measures, and as such, they may not be comparable to other companies within the industry.
There are no specific rules or regulations for determining non-GAAP measures, and as such, they may not be comparable to other companies within the industry. 35 Executive Overview 2024 performance was exceptionally strong and significantly exceeded our expectations.
We use this measure to perform capacity and rate analysis to identify our main non-capacity drivers that cause our cruise revenue and expenses to vary.
We use this measure to perform capacity and rate analysis to identify our main non-capacity drivers that cause our cruise revenue and expenses to vary. Constant Currency is a significant measure for our revenues and expenses, which are denominated in currencies other than the U.S. Dollar. Because our reporting currency is the U.S.
Utopia of the Seas will be the first Oasis class ship focused on short Caribbean itineraries, and we also return to China for the first time since 2019 with Spectrum of the Seas. In addition, we will continue the construction of the first Royal Beach Club at Paradise Island, Bahamas, set to open in 2025.
In addition, the first Royal Beach Club, at Paradise Island in the Bahamas, is set to open towards the end of the year, and Wonder of the Seas will join Utopia of the Seas focused on short Caribbean itineraries.
The increase was primarily driven by a 20.5% higher occupancy, 13.9% increase in capacity, and higher ticket prices in 2023, compared to the same period in 2022. The remaining 31.2% of total revenues was comprised of Onboard and other revenues , which increased $1.3 billion, or 42.2% to $4.3 billion in 2023 from $3.0 billion in 2022.
The remaining 30.2% of total revenues was comprised of Onboard and other revenues , which increased $0.7 billion, or 15.1% to $5.0 billion in 2024 from $4.3 billion in 2023.
The increase was primarily driven by our full operations at higher occupancy, capacity, and ticket prices in 2023 , compared to partial to full operations during the first half and second half of 2022, respectively, at lower occupancy and capacity rates. • Total cruise operating expenses increased by $1.2 billion for the year ended December 31, 2023 compared to the same period in 2022.
The increase was primarily due to an increase in capacity, ticket prices and onboard spending in 2024 , compared to the same period in 2023. • Total cruise operating expenses increased by $0.9 billion for the year ended December 31, 2024 compared to the same period in 2023.
The decrease of $97 million was primarily due a Loss on cash flow derivative hedges in 2023 of 27 million compared to a Gain on cash flow derivative hedges of $8 million in 2022, and a decrease of $43 million in change in defined benefit plans in 2023 compared to 2022. 45 Future Application of Accounting Standards Refer to Note. 2 Summary of Significant Accounting Policies to our consolidated financial statements under Item 8.
The increase was primarily due to the release of the loss contingency of $124 million recorded in 2022 in connection with the Havana Docks litigation. 45 Future Application of Accounting Standards Refer to Note 2 . Summary of Significant Accounting Policies to our consolidated financial statements under Item 8.
As of December 31, 2023, we anticipate overall full year capital expenditures, based on our existing ships on order, will be approximately $3.3 billion for 2024.
Fair Value Measurements and Derivative Instruments and Note 17. Commitments and Contingencies to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data . As of December 31, 2024, we anticipate overall full year capital expenditures, based on our existing ships on order, will be approximately $5 billion for 2025.
Our minimum stockholders' equity and maximum net debt-to-capital calculations exclude the impact of Accumulated other comprehensive loss on Total shareholders’ equity . As of December 31, 2023, we were in compliance with our financial covenants and we estimate that we will be in compliance for at least the next twelve months.
In July 2024, we amended all of our export credit facilities to eliminate the contractual requirement for us to maintain a minimum level of stockholders' equity. As of December 31, 2024, we were in compliance with our financial covenants and we estimate that we will be in compliance for at least the next twelve months.
(2) Represents net non-operating expense. For 2022, primarily represents our loss contingency recorded in connection with the ongoing Havana Docks litigation inclusive of related legal fees and costs. For 2021 primarily relates to changes in the fair value of fuel swaps for which cash flow hedge accounting was discontinued.
(2) Represents net non-operating (income) expense. For 2024, primarily represents the release of the loss contingency recorded in 2022 in connection with the Havana Docks litigation inclusive of related legal fees and costs. The amount excludes income tax expense, included in the EBITDA calculation above.
For the p eriods presented, these items included (i) Other expense, which includes the loss contingency in connection with the ongoing Havana Docks litigation recorded in other expenses in 2022; (ii) gain on sale of controlling interest; (iii) impa irment and credit losses; (iv) restru cturing charges and other initiative expense; (v) equity investment impairment and recovery of losses; (vi) Pullmantur reorganization settlement; (vii) net insurance recoveries or costs related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas ; and (viii) the net gain recognized in 2021 in relation to the sale of the Azamara brand; A reconciliation of Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. to Adjusted EBITDA is provided below under Results of Operations.
For the p eriods presented, these items included (i) Other (income) expense, which includes the 2024 release of the loss contingency recorded in 2022 in connection with the Havana Docks litigation inclusive of related legal fees and costs; (ii) impa irment and credit losses ; (iii) equity investment impairment, recovery of losses and other; (iv) restru cturing charges and other initiatives expense; and (v) gain on sale of controlling interest .
Financial Statements and Supplementary Data for more information on the sale of the Azamara Cruises brand. 40 EBITDA and Adjusted EBITDA were calculated as follows (in millions): Year Ended December 31, 2023 2022 2021 Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. $ 1,697 $ (2,156) $ (5,260) Interest income (36) (36) (17) Interest expense, net of interest capitalized 1,402 1,364 1,292 Depreciation and amortization expenses 1,455 1,407 1,293 Income tax expense (benefit) (1) 6 4 (47) EBITDA 4,524 583 (2,739) Other expense (2) 2 115 27 Gain on sale of controlling interest (3) (3) — — Impairment and credit losses (4) 8 1 82 Restructuring charges and other initiatives expense 5 12 2 Equity investment impairment and recovery of losses (5) 8 — 31 Pullmantur reorganization settlement (6) — — 5 Oasis of the Seas incident (7) — — (7) Net gain related to the sale of Azamara brand — — (3) Adjusted EBITDA $ 4,544 $ 711 $ (2,602) (1) These amounts are included in Other (expense) income within our consolidated statements of comprehensive income (loss).
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): Year Ended December 31, 2024 2023 2022 Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. $ 2,877 $ 1,697 $ (2,156) Interest income (16) (36) (36) Interest expense, net of interest capitalized 1,590 1,402 1,364 Depreciation and amortization expenses 1,600 1,455 1,407 Income tax expense (1) 46 6 4 EBITDA 6,097 4,524 583 Other (income) expense (2) (149) 2 115 Impairment and credit losses (3) 9 8 1 Equity investment impairment, recovery of losses and other 4 8 — Restructuring charges and other initiatives expense 10 5 12 Gain on sale of controlling interest (4) — (3) — Adjusted EBITDA $ 5,971 $ 4,544 $ 711 Total revenues 16,484 13,900 8,840 APCD 50,552,731 46,916,259 41,197,650 Net Income (Loss) per APCD $ 56.92 $ 36.17 $ (52.33) Adjusted EBITDA per APCD $ 118.13 $ 96.85 $ 17.26 Adjusted EBITDA Margin 36.2 % 32.7 % 8.0 % (1) These amounts are included in Other income (expense) within our consolidated statements of comprehensive income (loss).
(7) Represents the 2022 loss contingency recorded in connection with the ongoing Havana Docks litigation inclusive of post-judgment interest and related legal fees and costs. This amount is included in Other (expense) income within our consolidated statements of comprehensive income (loss). (8) Represents the amortization of non-cash debt discount on our convertible notes.
(2) For 2024, represents the release of the loss contingency recorded in 2022, in connection with the Havana Docks litigation inclusive of related legal fees and costs. These amounts are included in Other income (expense) within our consolidated statements of comprehensive income (loss). Refer to Note 17. Commitments and Contingencies to our consolidated financial statements under Item 8.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeAt December 31, 2023, we maintained interest rate swap agreements on the following floating-rate debt instruments: Debt Instrument Swap Notional as of December 31, 2023 (In millions) Maturity Debt Floating Rate (3) All-in Fixed Rate Celebrity Reflection term loan $ 55 October 2024 Term SOFR 0.40% 2.88% Quantum of the Seas term loan 184 October 2026 Term SOFR 1.30% 3.78% Anthem of the Seas term loan 211 April 2027 Term SOFR 1.30% 3.9% Ovation of the Seas term loan 311 April 2028 Term SOFR 1.00% 3.2% Harmony of the Seas term loan (1) 287 May 2028 EURIBOR plus 1.15% 2.26% Odyssey of the Seas term loan (2) 345 October 2032 Term SOFR 0.96% 3.28% Odyssey of the Seas term loan (2) 173 October 2032 Term SOFR 0.96% 2.91% $ 1,566 ___________________________________________________________________ (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.
Biggest changeAt December 31, 2024, we maintained interest rate swap agreements on the following floating-rate debt instruments: Debt Instrument Swap Notional as of December 31, 2024 (In millions) Maturity Debt Floating Rate Spread All-in Fixed Rate Quantum of the Seas term loan 123 October 2026 Term SOFR plus 1.30% 3.78% Anthem of the Seas term loan 151 April 2027 Term SOFR plus 1.30% 3.9% Ovation of the Seas term loan 242 April 2028 Term SOFR plus 1.00% 3.2% Harmony of the Seas term loan (1) 209 May 2028 EURIBOR plus 1.15% 2.26% Odyssey of the Seas term loan (2) 307 October 2032 Term SOFR plus 0.96% 3.28% Odyssey of the Seas term loan (2) 153 October 2032 Term SOFR plus 0.96% 2.91% $ 1,185 ___________________________________________________________________ (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.
These changes were recognized in earnings within Other (expense) income in our consolidated statements of comprehensive income (loss). Fuel Price Risk Our exposure to market risk for changes in fuel prices relates primarily to the consumption of fuel on our ships.
These changes were recognized in earnings within Other income (expense) in our consolidated statements of comprehensive income (loss). Fuel Price Risk Our exposure to market risk for changes in fuel prices relates primarily to the consumption of fuel on our ships.
Fair Value Measurements and Derivative Instruments to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data. Interest Rate Risk Our exposure to market risk for changes in interest rates relates to our long-term debt obligations including future interest payments.
Fair Value Measurements and Derivative Instruments to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data. Interest Rate Risk Our exposure to market risk for changes in interest rates primarily relates to our debt obligations including future interest payments.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Financial Instruments and Other General We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates and fuel prices.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk Financial Instruments and Other General We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates, fuel prices, and carbon emission allowances.
A hypothetical 10% strengthening of the Euro as of December 31, 2023, assuming no changes in comparative interest rates, would result in a $346 million increase in the United States dollar cost of the foreign currency denominated ship construction contracts exposed to fluctuations in the Euro exchange rate.
A hypothetical 10% strengthening of the Euro as of December 31, 2024, assuming no changes in comparative interest rates, would result in a $337 million increase in the United States dollar cost of the foreign currency denominated ship construction contracts exposed to fluctuations in the Euro exchange rate.
For the years ended December 31, 2023, 2022 and 2021 changes in the fair value of the foreign currency forward contracts resulted in gain (losses) of approximately $19 million, $(102) million and $(31) million, respectively, which offset gains (losses) arising from the remeasurement of monetary assets and liabilities denominated in foreign currencies in those same years of $(43) million, $93 million and $24 million, respectively.
For the years ended December 31, 2024, 2023 and 2022 changes in the fair value of the foreign currency forward contracts resulted in (losses) gain of approximately $(77) million, $19 million and $(102) million, respectively, which offset gains (losses) arising from the remeasurement of monetary assets and liabilities denominated in foreign currencies in those same years of $65 million, $(43) million and $93 million, respectively.
We have included net gains of approximately $41 million and $64 million of foreign-currency transaction remeasurement and changes in the fair value of derivatives in the foreign currency translation adjustment component of Accumulated other comprehensive loss at December 31, 2023 and 2022, respectively.
We have included net gains of approximately $96 million and $41 million of foreign-currency transaction remeasurement and changes in the fair value of derivatives in the foreign currency translation adjustment component of Accumulated other comprehensive loss at December 31, 2024 and 2023, respectively.
We estimate that a hypothetical 10% increase in our weighted-average fuel price from that experienced during the year ended December 31, 2023 would increase our forecasted 2024 fuel cost by approximately $58 million, net of the impact of fuel swap agreements. Item 8.
We estimate that a hypothetical 10% increase in our weighted-average fuel price from that experienced during the year ended December 31, 2024 would increase our forecasted 2025 fuel cost by approximately $60 million, net of the impact of fuel swap agreements. 50 Item 8.
We use interest rate swap agreements that effectively convert a portion of our floating-rate debt to a fixed-rate basis to manage this risk. A hypothetical one percentage point increase in interest rates would increase our forecasted 2024 interest expense by approximately $25.5 million, assuming no change in foreign currency exchange rates.
We use interest rate swap agreements that effectively convert a portion of our floating-rate debt to a fixed-rate basis to manage this risk. A hypothetical one percentage point increase in interest rates would increase our forecasted 2025 interest expense by approximately $14.8 million, assuming no change in foreign currency exchange rates.
During 2023, we maintained an average of approximately $1.3 billion of these foreign currency forward contracts. These instruments are not designated as hedging instruments.
During 2024, we maintained an average of approximately $1.1 billion of these foreign currency forward contracts. These instruments are not designated as hedging instruments.
Fuel cost, net of the financial impact of fuel swap agreements, as a percentage of our total revenues, was approximately 8.3% in 2023, 12.1% in 2022 and 25.1% in 2021. We use fuel swap agreements to mitigate the financial impact of fluctuations in fuel prices.
Fuel cost, net of the financial impact of fuel swap agreements, as a percentage of our total revenues, was approximately 7.0% in 2024, 8.3% in 2023 and 12.1% in 2022. We use fuel swap agreements to mitigate the financial impact of fluctuations in fuel prices.
Approximately 43.5% and 52.3% of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate at December 31, 2023 and 2022, respectively.
Approximately 43.4% and 43.5% of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate at December 31, 2024 and 2023, respectively.
As of December 31, 2023, the aggregate cost of our ships on order, not including ships on order by our Partner Brands, was approximately $7.9 billion, of which we had deposited $698 million as of such date.
As of December 31, 2024, the aggregate cost of our ships on order, not including ships on order by our Partner Brands, was approximately $7.8 billion, of which we had deposited $815 million as of such date.
The estimated fair value of our fuel swap agreements at December 31, 2023 was estimated to be a liability of $48 million.
The estimated fair value of our fuel swap agreements at December 31, 2024 was estimated to be a liability of $33 million.
A hypothetical one percentage point decrease in interest rates at December 31, 2023 would increase the fair value of our hedged and unhedged long-term fixed-rate debt by approximately $2.1 billion. Market risk associated with our long-term floating-rate debt is the potential increase in interest expense from an increase in interest rates.
A hypothetical one percentage point decrease in interest rates at December 31, 2024 would increase the fair value of our hedged and unhedged fixed-rate debt by approximately $701 million. Market risk associated with our floating-rate debt is the potential increase in interest expense from an increase in interest rates.
The estimated fair value of our long-term fixed-rate debt at December 31, 2023 was $15.9 billion, using quoted market prices, where available, or using the present value of expected future cash flows which incorporates risk profile.
The estimated fair value of our fixed-rate debt at December 31, 2024 was $18.4 billion, using quoted market prices, where available, or using the present value of expected future cash flows which incorporates risk profile.
We had designated debt as a hedge of our net investments primarily in TUI Cruises of approximately €648 million, or approximately $716 million, through December 31, 2023. As of December 31, 2022, we had designated debt as a hedge of our net investments primarily in TUI Cruises of approximately €433.0 million, or approximately $462 million.
We had designated debt as a hedge of our net investments primarily in TUI Cruises of approximately €889 million, or approximately $921 million, through December 31, 2024. As of December 31, 2023, we had designated debt as a hedge of our net investments primarily in TUI Cruises of approximately €648 million, or approximately $716 million.
The estimated fair value, as of December 31, 2023, of our Euro-denominated forward contracts associated with our ship construction contracts was an asset of $51 million, based on the present value of expected future cash flows.
The estimated fair value, as of December 31, 2024, of our Euro-denominated forward contracts associated with our ship construction contracts was a liability of $92 million, based on the present value of expected future cash flows.
Amount presented is based on the exchange rate as of December 31, 2023. (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.
Amount presented is based on the exchange rate as of December 31, 2024. (2) Interest rate swap agreements hedging the term loan of Odyssey of the Seas include Term SOFR zero-floors, Term SOFR with no floors, and Overnight SOFR. These interest rate swap agreements are accounted for as cash flow hedges.
As of December 31, 2023, we had fuel swap agreements to pay fixed prices for fuel with an aggregate notional amount of approximately $899 million, maturing through 2026. These fuel swap agreements are generally accounted for as cash flow hedges. The fuel swap agreements designated as hedges of projected fuel purchases represented 61% of our projected 2024 fuel 50 requirements.
As of December 31, 2024, we had fuel swap agreements to pay fixed prices for fuel with an aggregate notional amount of approximately $1.0 billion, maturing through 2027. These fuel swap agreements are generally accounted for as cash flow hedges. The fuel swap agreements designated as hedges of projected fuel purchases represented 60% of our projected 2025 fuel requirements.
The fair value of our floating to fixed interest rate swap agreements was estimated to be an asset of $87 million as of December 31, 2023 based on the present value of expected future cash flows. These interest rate swap agreements are accounted for as cash flow hedges.
The fair value of our floating to fixed interest rate swap agreements was estimated to be an asset of $64 million as of December 31, 2024 based on the present value of expected future cash flows.
Foreign Currency Exchange Rate Risk Our primary exposure to foreign currency exchange rate risk relates to our ship construction contracts denominated in Euros, our foreign currency denominated debt and our international business operations.
These interest rate swap agreements are accounted for as cash flow hedges. 49 Foreign Currency Exchange Rate Risk Our primary exposure to foreign currency exchange rate risk relates to our ship construction contracts denominated in Euros, our foreign currency denominated debt and our international business operations.
At December 31, 2023, approximately 83% of our long-term debt was effectively fixed as compared to 75.0% as of December 31, 2022. We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense.
At December 31, 2024 and 2023, approximately 92.3% and 83.2%, respectively, of our debt was effectively fixed-rate debt, which is net of our interest rate swap agreements. We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense.
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(3) During the year ended December 31, 2023, we completed our transition from LIBOR to Term SOFR rates for substantially all of our Interest rate swap agreements. 49 These interest rate swap agreements are accounted for as cash flow hedges.

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