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What changed in Royal Caribbean Group's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Royal Caribbean Group's 2022 and 2023 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 2023 report.

+378 added−493 removedSource: 10-K (2024-02-21) vs 10-K (2023-02-23)

Top changes in Royal Caribbean Group's 2023 10-K

378 paragraphs added · 493 removed · 287 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

137 edited+29 added−26 removed83 unchanged
Biggest changeShip Year Ship Built Year ship entered service / will enter service Approximate Berths Royal Caribbean International 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 9 Ship Year Ship Built Year ship entered service / will enter service Approximate Berths 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 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 Nova 2023 2023 730 Silver Endeavour 2021 2022 200 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 250 Silver Cloud 1994 1994 250 10 Ship Year Ship Built Year ship entered service / will enter service Approximate Berths Silver Explorer 1989 2008 150 TUI Cruises 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 Mein Schiff 3 2014 2014 2,500 Mein Schiff Herz 1997 2011 1,900 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 159,585 _________________________________________________________________ (1) Icon of the Seas is expected to be delivered in the fourth quarter of 2023 and is expected to commence cruise revenue operations in the first quarter of 2024.
Biggest changeShip 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.
During the five year period from 2015 through 2019, industry market penetration rates (computed based on the number of annual cruise guests as a percentage of the total population) grew from 3.36% to 3.89% for North America, from 1.25% to 1.41% for Europe, and from 0.08% to 0.20% for Asia/Pacific.
Industry market penetration rates (computed based on the number of annual cruise guests as a percentage of the total population) grew from 3.36% to 3.89% for North America, from 1.25% to 1.41% for Europe, and from 0.08% to 0.20% for Asia/Pacific during the five year period from 2015 through 2019.
Liabilities, costs and expenses for illness and injury to crew, guest injury, pollution and other third-party claims in connection with our cruise activities are covered by our P&I clubs, subject to the clubs’ rules and the limits of coverage determined by the IG.
Liabilities, costs and expenses for illness and injury to crew and guest, pollution and other third-party claims in connection with our cruise activities are covered by our P&I clubs, subject to the clubs’ rules and the limits of coverage determined by the IG.
To that end, we pay special attention to identifying high performing potential leaders and developing bench strength so these leaders can assume leadership roles throughout the organization. 6 We strive to maintain a work environment that reinforces collaboration, motivation and innovation, and believe that maintaining a strong employee-focused culture is beneficial to the growth and expansion of our business.
To that end, we pay special attention to identifying high performing potential leaders and developing bench strength so these leaders can assume leadership roles throughout the organization. We strive to maintain a work environment that reinforces collaboration, motivation and innovation, and believe that maintaining a strong employee-focused culture is beneficial to the growth and expansion of our business.
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.
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.
We continuously work with travel advisors to sell upgrades and add-ons such as air and pre-cruise purchases to improve the retention and profitability 8 of the channel. We provide brand dedicated sales representatives who serve as consultants to our travel partners. We also provide trained customer service representatives, call centers and online training tools.
We continuously work with travel advisors to sell upgrades and add-ons such as air and pre-cruise purchases to improve the retention and profitability of the channel. We provide brand dedicated sales representatives who serve as consultants to our travel partners. We also provide trained customer service representatives, call centers and online training tools.
Our U.K. income from non-shipping activities which do not qualify under the U.K. tonnage tax regime and which are not considered significant, remain subject to regular U.K. corporate income tax. Other Taxation We and certain of our subsidiaries are subject to value-added and other indirect taxes most of which are reclaimable, zero-rated or exempt.
Our U.K. income from non-shipping activities which do not qualify under the U.K. tonnage tax regime and which are not considered significant, remain subject to regular U.K. corporate income tax. Other We and certain of our subsidiaries are subject to value-added and other indirect taxes most of which are reclaimable, zero-rated or exempt.
Our ships offer a wide selection of itineraries that call on over 1,000 destinations in over 120 countries, spanning across all seven continents. We are focused on maximizing long-term shareholder returns by operating in established 7 markets while growing our presence in developing markets.
Our ships offer a wide selection of itineraries that call on over 1,000 destinations in over 120 countries, spanning across all seven continents. We are focused on maximizing long-term shareholder returns by operating in established markets while growing our presence in developing markets.
Additionally, we continue to advance our e-commerce capabilities and the vacation shopping experience for our guests. In addition to offering a simplified booking experience, we leverage the mobile application for onboard experiences such as WiFi, beverages, shore excursions, and specialty dining – enabling guests to book their vacation end-to-end.
Additionally, we continue to advance our e-commerce capabilities and the vacation shopping experience for our guests. In addition to offering a simplified booking experience, we leverage the 8 mobile application for onboard experiences such as WiFi, beverages, shore excursions, and specialty dining – enabling guests to book their vacation end-to-end.
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.
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.
The Cruise Vessel Security and Safety Act of 2010, which applies to passenger vessels which embark or include port stops within the United States, requires the implementation of certain safety design features as well as the establishment of 16 practices for the reporting of and dealing with allegations of crime.
The Cruise Vessel Security and Safety Act of 2010, which applies to passenger vessels which embark or include port stops within the United States, requires the implementation of certain safety design features as well as the establishment of practices for the reporting of and dealing with allegations of crime.
Liberty served as Senior Vice President, Strategy and Finance from 2012 through 2013; as Vice President of Corporate and Revenue Planning from 2010 through 2012; and as Vice President of Corporate 20 and Strategic Planning from 2008 to 2010. Before joining Royal Caribbean, Mr. Liberty was a Senior Manager at the international public accounting firm of KPMG LLP. Mr.
Liberty served as Senior Vice President, Strategy and Finance from 2012 through 2013; as Vice President of Corporate and Revenue Planning from 2010 through 2012; and as Vice President of Corporate and Strategic Planning from 2008 to 2010. Before joining Royal Caribbean, Mr. Liberty was a Senior Manager at the international public accounting firm of KPMG LLP. Mr.
Our principal 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 4 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; and Virgin Voyages.
(2) Source: The estimates of the number of global cruise guests and the weighted-average supply of berths marketed globally are based on a combination of data that we obtain from various publicly available cruise industry trade information sources.
(2) The estimates of the number of global cruise guests and the weighted-average supply of berths marketed globally are based on a combination of data that we obtain from various publicly available cruise industry trade information sources.
For the years ended December 31, 2020, 2019, and 2018, 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 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.
Our primary war risk coverage is provided by a Norwegian war risk insurance association and our excess war risk insurance is provided by our four P&I clubs. Consistent with most marine war risk policies, our coverage is subject to cancellation in the event of a change in risk.
Our primary war risk coverage is provided by a Norwegian war risk insurance association and our excess war risk insurance is provided by our four P&I clubs. Consistent with most marine war risk policies, our coverage is subject to cancellation in 14 the event of a change in risk.
(2) Due to the three-month reporting lag effective through September 30, 2021, we include Silversea Cruises' metrics from October 1, 2019 through September 30, 2020 in the year ended December 31, 2020, from October 1, 2018 through September 30, 2019 in the year ended December 31, 2019, and from August 1, 2018 through September 30, 2018 in the year ended December 31, 2018.
(2) Due to the three-month reporting lag effective through September 30, 2021, we include Silversea Cruises' metrics from October 1, 2019 through September 30, 2020 in the year ended December 31, 2020, and from October 1, 2018 through September 30, 2019 in the year ended December 31, 2019.
In addition, our Global 13 Brands have historically sourced passengers from similar markets around the world and operated in similar economic environments with a significant degree of commercial overlap.
In addition, 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.
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, 2022, 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, 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.
Each of these vessels will represent the latest hardware for their respective brands and both Icon of the Seas and Silver Nova are the first vessels of a new class.
Each of these vessels represent the latest hardware for their respective brands and both Icon of the Seas and Silver Nova are the first vessels of a new class.
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 19 nights.
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.
In exchange for our involvement, we generally secure preferential berthing rights for our ships. Technological capabilities Technology is a pervasive part of virtually every business process we use to support our operating strategies and provide a quality experience to our customers before, during and after their cruise.
In exchange for our involvement, we generally secure preferential berthing rights for our ships. Technological capabilities Technology is a pervasive part of virtually every business process we use to support our operating strategies and provide a quality experience to our customers before, during and after their vacation.
(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 (pre-2022, 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, 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.
Environmental Regulations We are subject to various international and national laws and regulations relating to environmental protection. Under such laws and regulations, we are generally prohibited from discharging materials other than food waste into the waterways. We have made, and will continue to make, capital and other expenditures to comply with environmental laws and regulations.
Environmental Regulations We are subject to various international and national laws and regulations relating to environmental protection. Under such laws and regulations, we are generally prohibited from discharging materials other than food waste and treated effluents into the waterways. We have made, and will continue to make, capital and other expenditures to comply with environmental laws and regulations.
Examples of the benefits available under our loyalty programs include, but are not limited to, priority ship embarkation, priority waitlist for shore excursions, complimentary laundry service, complimentary internet, digital discount vouchers, upgraded bathroom amenities, private 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 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.
In concert with our destination focus, our island technology solutions are now enabling our guests to remain connected with WiFi access, order 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 as well as take advantage of all the island based activities with the same ease as onboard our ships.
We use data obtained from Seatrade Insider, Cruise Industry News and company press releases to estimate weighted-average supply of berths and CLIA and G.P. Wild to estimate cruise guest information. For 2022, cruise guest information includes data through the third quarter of 2022.
We use data obtained from Seatrade Insider, Cruise Industry News and company press releases to estimate weighted-average supply of berths and CLIA and G.P. Wild to estimate cruise guest information. For 2023, cruise guest information includes data through the third quarter of 2023.
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, 2022. Refer to Note 7 . 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. 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.
The portability of our ships allows us to deploy our ships to meet demand within our existing and new cruise markets. We make deployment decisions generally 18 to 28 months in advance, with the goal of optimizing the overall profitability of our portfolio.
The portability of our ships allows us to deploy our ships to meet demand within our existing and new cruise markets. We make deployment decisions generally 18 to 32 months in advance, with the goal of optimizing the overall profitability of our portfolio.
Our newer vessels traditionally generate higher revenue yield premiums and are more efficient and environmentally friendly to operate than older vessels. In 2023, we will introduce 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 International’s new flagship – Icon of the Seas , Celebrity Cruises – Celebrity Ascent , and Silversea Cruises – Silver Nova .
Lake served as Assistant General Counsel at America Online Latin America, Inc. and practiced as a corporate lawyer in leading law firms in New York and Miami. 21
Lake served as Assistant General Counsel at America Online Latin America, Inc. and practiced as a corporate lawyer in leading law firms in New York and Miami. 20
The Company and other industry participants voluntarily suspended operations in March of 2020 and gradually resumed full operations starting in the second half of 2021 through the first half of 2022. As a result, comparative information regarding market penetration and other indicators are not meaningful for 2020, 2021, and 2022.
The Company and other industry participants voluntarily suspended operations in March of 2020 and gradually resumed full operations starting in the second half of 2021 through the first half of 2022. As a result, comparative information regarding market penetration is not meaningful for 2020, 2021, and 2022.
Our marketing strategies include the use of travel advisors, traditional media, mobile and digital media as well as social media, influencers and brand websites. Our brands engage past and potential guests by collaborating with travel partners and through call centers, international offices and international representatives.
Our marketing strategies include the use of travel advisors, traditional media, mobile and digital media as well as social media, influencers, our websites, and sponsorships. Our brands also engage past and potential guests by collaborating with travel partners and through call centers, international offices and international representatives.
Liberty currently serves on the Board of Directors of WNS Holdings. Naftali Holtz has served as Chief Financial Officer since January 2022. In his role as Chief Financial Officer, Mr. Holtz is responsible for overseeing the company’s financial planning and analysis, corporate strategy, treasury, corporate tax matters, investor relations, investments, internal audit, accounting and financial reporting.
Liberty currently serves on the Board of Directors of WNS Holdings. Naftali Holtz has served as Chief Financial Officer since January 2022. In his role as Chief Financial Officer, Mr. Holtz is responsible for overseeing the Company’s financial planning and analysis, supply chain, risk management, corporate strategy, treasury, corporate tax matters, investor relations, investments, internal audit, accounting and financial reporting.
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, which was reduced from 3.5%.
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.
The following table presents summary information concerning ships that we expect will be in our fleet in 2023 under our Global Brands and Partner Brands.
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.
Our Company's operating strategies are as follows: • deliver the best vacation experiences to our guests, responsibly; • protect the health, safety and security of our guests and employees; • deepen our customer relationships in order to enhance our revenues; • focus on cost efficiency, adequate cash and liquidity, and strengthen our balance sheet, with the overall goals of maximizing our return on invested capital and shareholder value; • protect the environment 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 that enhance employee satisfaction; 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.
Our 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.
There are four established ECAs and one additional ECA being established beginning in May of 2025 that restrict sulfur emissions: the Baltic Sea, the North Sea/English Channel, certain waters surrounding the North American coast, and the waters surrounding Puerto Rico and the U.S. Virgin Islands (the "Caribbean ECA") and the Mediterranean Sea.
There are four established ECAs and one additional ECA being established beginning in May of 2025 that restrict sulfur emissions: the Baltic Sea, the North Sea/English Channel, certain waters surrounding the North American coast, and the waters surrounding Puerto Rico and the U.S. Virgin Islands (the "US Caribbean ECA") and the Mediterranean Sea ECA coming into force in May 2025.
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, 2022, we operated 15 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, 2023, we operated 14 ships under the United Kingdom tonnage tax regime (“U.K. tonnage tax”).
Onboard and other revenues accounted for approximately 34%, 39%, and 32% of total revenues in 2022, 2021, and 2020, respectively. Segment Reporting We believe our brands possess the versatility to enter multiple cruise market segments within the cruise vacation industry.
Onboard and other revenues accounted for approximately 31%, 34%, and 39% of total revenues in 2023, 2022, and 2021, respectively. Segment Reporting We believe our brands possess the versatility to enter multiple cruise market segments within the cruise vacation industry.
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. (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, 2023. (4) Our estimates include the United States and Canada.
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 £154 million during the peak season. Additionally, we are required by the Civil Aviation Authority to provide performance bonds totaling £35 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 £183 million during the peak season. Additionally, we are required by the Civil Aviation Authority to provide performance bonds totaling £25 million.
Prior to his role as Chief Financial Officer, Mr. Holtz served as Senior Vice President of Finance, responsible for financial planning and analysis, risk management and treasury. Mr. Holtz worked for Goldman Sachs as a Managing Director and Head of Lodging and Leisure Investment Banking before joining Royal Caribbean Group in 2019. Mr.
Prior to his role as Chief Financial Officer, Mr. Holtz served as Senior Vice President of Finance, responsible for financial planning and analysis, risk management and treasury. Mr. Holtz worked for Goldman Sachs as a Managing Director and Head of Lodging and Leisure Investment Banking before joining the Company in 2019. Mr.
Passenger ticket revenues accounted for approximately 66%, 61% and 68% of total revenues in 2022, 2021 and 2020, respectively. Onboard Activities and Other Revenues Our cruise brands offer modern fleets with a wide array of onboard services, amenities and activities which vary by brand and ship.
Passenger ticket revenues accounted for approximately 69%, 66% and 61% of total revenues in 2023, 2022 and 2021, respectively. 12 Onboard Activities and Other Revenues Our cruise brands offer modern fleets with a wide array of onboard services, amenities and activities which vary by brand and ship.
As of December 31, 2022, there were approximately 63 ships on order with an estimated 143,000 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, 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.
We review our human capital metrics and our diversity equity and inclusion (DEI) program with the Talent and Compensation Committee of our Board of Directors on a regular basis. As of December 31, 2022, our three global cruise brands employed approximately 102,500 employees spanning across our shipboard fleet and shoreside locations.
We review our human capital metrics and our diversity equity and inclusion (DEI) program with the Talent and Compensation Committee of our Board of Directors on a regular basis. As of December 31, 2023, our three global cruise brands employed approximately 98,200 employees spanning across our shipboard fleet and shoreside locations.
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. Celebrity Cruises operates 15 ships with an aggregate capacity of approximately 32,465 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 ranging from three to 18 nights. 2 Celebrity Cruises operates 16 ships with an aggregate capacity of approximately 35,715 berths.
As our business has grown globally, our sale arrangements with travel advisors may vary. For instance, although our direct business has historically grown at a rapid pace, sale arrangements through travel advisor charter and group sales are proportionately higher in the China market than in our other markets which are primarily through retail agency and direct sales.
For instance, although our direct business has historically grown at a rapid pace, sale arrangements through travel advisor charter and group sales are proportionately higher in the China market than in our other markets which are primarily through retail agency and direct sales.
For the five year period prior to 2020, industry data indicated that market penetration rates were still low and that a significant portion of cruise 3 guests carried in those years were first-time cruisers. We believe this presents an opportunity for operational and financial recovery and long-term growth for the industry.
For the five year period prior to 2020, industry data indicated that market penetration rates were still low and that a significant portion of cruise guests carried in those years were first-time cruisers. We believe this presents an opportunity for long-term growth and a potential for increased profitability.
We foster diversity and inclusion among our broad employee base. Refer to the Human Capital section below for further information. 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.
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.
Together, our Global Brands and our Partner Brands have a combined fleet of 64 ships in the cruise vacation industry with an aggregate capacity of approximately 150,005 berths as of December 31, 2022. 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 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.
Although each of our Global Brands has its own marketing style, as well as ships and crews of various sizes, the nature of the products sold and services delivered by our Global Brands share a common base (i.e., the sale and provision of cruise vacations). Our Global Brands also offer similar itineraries as well as similar cost and revenue components.
Although each of our Global Brands has its own marketing style, as well as ships and crews of various sizes, the nature of the products sold and services delivered by our Global Brands share a common base (i.e., the sale and provision of cruise vacations).
Silversea Cruises Ltd. and our United Kingdom tonnage tax company are classified as disregarded entities, or divisions for U.S. federal income tax purposes that may earn U.S. source income.
Silversea Cruises Ltd. and our United Ki ngdom tonnage tax companies are classified as disregarded entities, or divisions for U.S. federal income tax purposes that may earn U.S. source income.
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, (3) 2022 2021 (1)(3) 2020 (2) 2019 (2) 2018 (2) Passengers Carried 5,536,335 1,030,403 1,295,144 6,553,865 6,084,201 Passenger Cruise Days 35,051,935 5,802,582 8,697,893 44,803,953 41,853,052 Available Passenger Cruise Days (APCD) 41,197,650 11,767,441 8,539,903 41,432,451 38,425,304 Occupancy 85.1% 49.3% 101.9% 108.1% 108.9% ___________________________________________________________________ 12 (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 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.
We have continued to integrate digital capabilities into our operations and have increased our focus in bringing in data analytics and artificial intelligence into our processes to provide better insights on how to model our maintenance or operational actions.
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.
Consumer engagement We place a strong focus on identifying the needs of our guests and creating product features and innovations that our customers value. We are focused on targeting and acquiring high-value guests by better understanding consumer data and insights to create communication strategies that resonate with our target audiences.
Consumer engagement We place a strong focus on delivering a lifetime of vacations and priceless memories for our guests by identifying and creating product features and innovations that our customers value. We are focused on targeting and acquiring high-value guests by better understanding consumer data and insights to create communication strategies that resonate with our target audiences.
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 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.
Based Employees International Employees Shoreside Operations (1) 4,100 3,000 Shipboard Employees — 94,300 Private Destinations (2) — 1,100 (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) 4,050 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.
Our shoreside workforce, including private destinations, consisted of approximately 8,100 full time and 100 part-time employees. Our shipboard workforce consisted of 94,300 employees, and as of December 31, 2022, approximately 88% were covered by collective bargaining agreements. The following table details the distribution of our workforce by employee type and region as of December 31, 2022: Employee Type U.S.
Our shoreside workforce, including private destinations, consisted of approximately 9,500 full time and 100 part-time employees. Our shipboard workforce consisted of approximately, 88,700 employees, and as of December 31, 2023, approximately 88% were covered by collective bargaining agreements. The following table details the distribution of our workforce by employee type and region as of December 31, 2023: Employee Type U.S.
In addition, 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.
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.
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 23, 2023, our executive officers are: Name Age Position Jason T. Liberty 47 President and Chief Executive Officer Naftali Holtz 45 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. 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.
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.
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.
Members are awarded points or credits in proportion to the 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 the guests have accumulated the number of cruise points or credits specified for each tier.
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.
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.
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.
The following table details the growth in global weighted average berths and the percentage of North American, European and Asia/Pacific cruise guests for 2022 and for each of the five years from 2015 through 2019: Year (1) Weighted-Average Supply of Berths Marketed Globally (2) Royal Caribbean Group Total Berths (3) North American Cruise Guests (2)(4) European Cruise Guests (2)(5) Asia/Pacific Cruise Guests (2)(6) Other Cruise Guests (2) 2015 469,000 112,700 52% 29% 14% 5% 2016 493,000 123,270 51% 27% 19% 3% 2017 515,000 124,070 48% 25% 20% 7% 2018 546,000 135,520 49% 26% 20% 5% 2019 579,000 141,570 47% 25% 24% 4% 2022 634,000 150,005 65% 28% 2% 5% ___________________________________________________________________ (1) Historically, we have reported annual information for comparability across periods.
The global cruise industry carried approximately 21 million guests in 2023, 30 million cruise guests in 2019 and approximately 28.5 million in 2018. 3 The following table details the growth in global weighted average berths and the percentage of North American, European and Asia/Pacific cruise guests for 2023, 2022 and for each of the five years from 2015 through 2019 (in thousands, except berth data): Supply of Berths Industry Cruise Guests Year (1) Weighted-Average Global Supply (2) Royal Caribbean Group (3) Global (2) North American (2)(4) Europe (2)(5) Asia/Pacific (2)(6) Other (2) 2015 469,000 112,700 23,000 52% 29% 14% 5% 2016 493,000 123,270 24,000 51% 27% 19% 3% 2017 515,000 124,070 26,700 48% 25% 20% 7% 2018 546,000 135,520 28,500 49% 26% 20% 5% 2019 579,000 141,570 30,000 47% 25% 24% 4% 2022 634,000 150,005 13,100 65% 29% 2% 4% 2023 650,000 157,575 21,200 63% 27% 6% 4% ___________________________________________________________________ (1) Historically, we have reported annual information for comparability across periods.
If enacted, the Fit for 55 proposals could individually and collectively have a material adverse effect on our business and results of operations due to increased costs 17 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.
The expected delivery dates for all of our ships on order are subject to change in the event of shipyard construction delays or in the event we agree to scope changes which impact the delivery timelines. See Part I. Item 1A. Risk Factors for further discussion on shipyard operations.
The expected delivery dates for all of our ships on order are subject to change due to events such as shipyard construction delays or agreed upon scope changes which impact the delivery timelines. See Part I. Item 1A. Risk Factors for further discussion on shipyard operations.
We also have a dedicated committee of our Board of Directors, the Safety, Environment, Sustainability and Health Committee, which is responsible for reviewing and monitoring our overall strategies, policies and programs that impact the safety and health of our guests and crew. Refer to the Regulation - Safety and Security Regulations section below for further information.
We also have a dedicated committee of our Board of Directors, the Safety, Environment, Sustainability and Health Committee, which is responsible for reviewing and monitoring our overall strategies, policies and programs that impact the safety and health of our guests and crew.
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.
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.
We will continue to monitor and be engaged in the discussions. Ballast Water The IMO Ballast Water Management Convention, which came into effect in 2017, requires ships that carry and discharge ballast water to meet specific discharge standards by installing Ballast Water Treatment Systems by 2023.
Ballast Water The IMO Ballast Water Management Convention, which came into effect in 2017, requires ships that carry and discharge ballast water to meet specific discharge standards by installing Ballast Water Treatment Systems.
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 through our website at www.rclinvestor.com .
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 .
In order to mitigate the impact of the winter weather in the Northern Hemisphere and to capitalize on the summer season in the Southern Hemisphere, our brands have focused on deployment in the Caribbean, Asia and Australia during that period.
Demand is typically strongest for cruises during the Northern Hemisphere’s summer months and holidays. In order to mitigate the impact of the winter weather in the Northern Hemisphere and to capitalize on the summer season in the Southern Hemisphere, our brands have focused on deployment in the Caribbean, Asia and Australia during that period.
As of December 31, 2022, our Global Brands and Partner Brands have 10 ships on order. Refer to the Operations section below for further information on our ships on order. As we further develop our Newbuild program, we continue to utilize each vessel as an opportunity to pilot new technology towards Destination Net Zero.
Refer to the Operations section below for further information on our ships on order. As we further develop our Newbuild program, we continue to utilize each vessel as an opportunity to pilot new technology towards Destination Net Zero.
Shoreside Population White 42% Hispanic 40% African American 9% Asian 5% 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 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.
All of the foregoing is subject to change, and any such change could affect the accuracy of this discussion. 18 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, receive income from sources within the United States.
We target customers at important consumer decision points and identify underlying needs for which guests are willing to pay a premium. We rely on various programs and technologies during the cruise-planning, cruising and after-cruise periods aimed at increasing ticket prices, onboard revenues and occupancy.
We target customers at important consumer decision points throughout their vacation journey and identify underlying needs for which guests value and are willing to pay a premium. We rely upon and continue to invest in various programs and technologies during the cruise-planning, cruising and after-cruise periods aimed at increasing revenues and occupancy.
Royal Caribbean International operates 26 ships with an aggregate capacity of approximately 94,100 berths. Additionally, as of December 31, 2022, Royal Caribbean International had four ships on order with an aggregate capacity of approximately 22,500 berths.
Royal Caribbean International operates 26 ships with an aggregate capacity of approximately 94,100 berths. Additionally, as of December 31, 2023, Royal Caribbean International had three ships on order with an aggregate capacity of approximately 16,900 berths.
Caribbean Sea ECA that began construction on or after January 1, 2016, and North and Baltic Sea ships constructed on or after January 1, 2021 are required to meet more stringent nitrogen oxide emission limits. We comply with these rules for those relevant ships in service.
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.
The tax on such income is not material to our results of operation for all years presented. 19 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., 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.
Liberty has held several roles since joining the Company in 2005. Most recently, Mr. Liberty served as Executive Vice President and Chief Financial Officer since 2017 and, prior to that, as Senior Vice President and Chief Financial Officer since 2013. Before his role as Chief Financial Officer, Mr.
Most recently, Mr. Liberty served as Executive Vice President and Chief Financial Officer since 2017 and, prior to that, as Senior Vice President and Chief Financial Officer since 2013. Before his role as Chief Financial Officer, Mr.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks associated with our development and operation of key land-based destination projects may adversely impact our business or results of operations. We have invested, either directly or indirectly through joint ventures and partnerships, in a growing portfolio of key land-based projects including port and terminal facilities, private destinations and multi-brand destination projects.
Biggest changeWe have also invested, either directly or indirectly through joint ventures and partnerships, in a growing portfolio of key land-based projects including port and terminal facilities, private destinations and multi-brand destination projects. These investments can increase our exposure to certain key risks depending on the scope, location, and the ownership and management structure of these projects.
These problems have impacted and may in the future impact the timely delivery or cost of new ships or the ability of shipyards to repair and upgrade our fleet in accordance with our needs or expectations. In addition, delays, mechanical faults and/or unforeseen incidents may result in cancellation of cruises or delays of new ship orders or necessitate unscheduled drydocks.
These problems have impacted and may in the future impact the timely delivery or cost of new ships or the ability of shipyards to repair and upgrade our fleet in accordance with our needs or expectations. In addition, mechanical faults and/or unforeseen incidents may result in cancellation of cruises or delays of new ship orders or necessitate unscheduled drydocks.
In addition, any operating or health protocols that we may develop or that may be required by law in the future in response to infectious diseases may be costly to develop and implement and may be less effective than we expected in reducing the risk of infection and spread of such disease on our cruise ships, all of which will negatively impact our operations and expose us to reputational and legal risks.
In addition, any operating or health protocols that we may develop or that may be required by law in the future in response to infectious diseases may be costly to develop and difficult to implement and may be less effective than we expected in reducing the risk of infection and spread of such disease on our cruise ships, all of which will negatively impact our operations and expose us to reputational and legal risks.
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, our recovery and 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 rating downgrades, our financial performance, the recovery and performance of our industry in general and the size, scope and timing of our financial needs.
Material increases in commodity and raw material prices, and other cost pressures impacting the construction of a new ship, such as the cost of labor and financing, could adversely impact the shipyard’s ability to build the ship on a cost-effective basis.
Material increases in commodity and raw material prices, and other cost pressures impacting the construction of a new ship, such as the cost or availability of labor and financing, could adversely impact the shipyard’s ability to build the ship on a cost-effective basis.
In addition, we may be subject to increased concerns 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.
In 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.
While we have resumed our global cruise operations, there is no assurance that our cruise operations will continue uninterrupted. 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.
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.
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, including those caused by the COVID-19 pandemic.
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.
Cruise ships, private destinations, port facilities and shore excursions operated and/or offered by us and third parties may be susceptible to the risk of accidents, illnesses, mechanical failures, environmental incidents and other incidents which could bring into question safety, health, security and vacation satisfaction and negatively impact our sales, operations and reputation.
Cruise ships, private destinations, port facilities and shore excursions operated and/or offered by us and third parties may be susceptible to the risk of accidents, illnesses, mechanical failures, environmental incidents, inappropriate crew or passenger behavior, and other incidents which could bring into question safety, health, security and vacation satisfaction of our guests and negatively impact our sales, operations and reputation.
Our reputation and our business could also be damaged by continued or additional negative publicity regarding the cruise industry in general, including publicity regarding the spread of contagious disease such as COVID-19, over-tourism in key ports and destinations and the potentially adverse environmental impacts of cruising.
Our reputation and our business could also be damaged by continued or additional negative publicity regarding the cruise industry in general, including publicity regarding the spread of contagious disease, over-tourism in key ports and destinations and the potentially adverse environmental impacts of cruising.
We operate in the vacation market and cruising is one of many alternatives for people choosing a vacation. We, therefore, risk losing business not only to other cruise lines, but also to other vacation operators, which provide other leisure options, including hotels, resorts, internet-based alternative lodging sites and package holidays and tours.
We operate in the vacation market and cruising is one of many alternatives for people choosing a vacation. We, therefore, risk losing business not only to other cruise lines, but also to other vacation operators, which provide other leisure options, including hotels, resorts (including all-inclusive resorts), internet-based alternative lodging sites, theme parks, sightseeing destinations, package holidays and tours.
Disease outbreaks and increased concern related to illness when traveling to, from, and on our ships such as COVID-19 could cause a drop in demand for cruises, guest cancellations, travel restrictions, an unavailability of ports and/or destinations, cruise cancellations, ship redeployments and an inability to source our crew, provisions or supplies from certain places.
Disease outbreaks and increased concern related to illness when traveling to, from, and on our ships, could cause a decrease in demand for cruises, guest cancellations, travel restrictions, an unavailability of ports and/or destinations, cruise cancellations, ship redeployments and an inability to source our crew, provisions or supplies from certain places.
As of December 31, 2022, we have commitments for approximately $7.1 billion of debt to finance the purchase of 7 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.
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.
We are often forced to alter itineraries and occasionally cancel a cruise or a series of cruises or to redeploy our ships due to these types of events, which could have an adverse effect on our sales, operating costs and profitability in the current and future periods.
We may be required to alter itineraries and cancel a cruise or a series of cruises or to redeploy our ships due to these types of events, which could have an adverse effect on our sales, operating costs and profitability in the current and future periods.
We may be impacted if shipyards, their subcontractors, and/or our suppliers encounter financial difficulties, supply chain, technical or design problems when building or repairing a ship.
We may be impacted if shipyards, their subcontractors, and/or our suppliers encounter "force majeure events", insolvencies or other financial difficulties, supply chain, technical or design problems when building or repairing a ship.
As of December 31, 2022, a total of 63 new ships with approximately 143,000 berths were on order for delivery through 2028 in the cruise industry, including 10 ships currently scheduled to be delivered to our Global and Partner Brands.
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 such, any disruptions affecting the newbuild or fleet modernization supply chain will adversely impact our business as there are limited substitutes.
As such, any disruptions affecting the shipyard supply chain will adversely impact our business as there are limited substitutes.
Incidents involving cruise ships, and, in particular the safety, health and security of guests and crew and the media coverage thereof, including those related to the COVID-19 pandemic, have impacted and could continue to impact demand for our cruises and pricing in the industry.
Incidents involving cruise ships, and, in particular the safety, health and security of guests and crew and the media coverage thereof, have impacted and could impact demand for our cruises and pricing in the industry.
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.
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.
We have a substantial amount of debt and significant debt service obligations. As of December 31, 2022, we had total debt of $23.4 billion.
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.
Although the indentures governing the Secured Notes, the Priority Guaranteed Notes, and certain of our other debt instruments, including our unsecured bank and 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.
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.
Suspensions and/or slowdowns of work at shipyards, have impacted and could continue to impact our ability to construct new ships as planned, our ability to timely and cost-effectively procure new capacity, and our ability to execute scheduled drydocks and/or fleet modernizations.
In addition, suspensions and/or slowdowns of work at shipyards, have impacted and could continue to impact our ability to construct new ships as planned, our ability to timely and cost-effectively procure new capacity, and our ability to execute scheduled drydocks and/or fleet modernizations. Building, repairing, maintaining and/or upgrading a ship is sophisticated work that involves significant risks.
Accordingly, we are not protected against all risks and cannot be certain that our coverage will be adequate for liabilities actually incurred which could result in an unexpected decrease in our revenue and results of operations in the event of an incident We are members of four Protection and Indemnity (“P&I”) clubs, which are part of a worldwide group of 12 P&I clubs, known as the International Group of P&I Clubs (the “IG”).
Accordingly, we are not protected against all risks and cannot be certain that our coverage will be adequate for liabilities actually incurred which could result in an unexpected decrease in our revenue and results of operations in the event of an incident.
In addition, the travel advisor community is sensitive to economic conditions that impact discretionary income of consumers.
Our reliance on third-party sellers is particularly pronounced in certain markets. In addition, the travel advisor community is sensitive to economic conditions that impact discretionary income of consumers.
Significant disruptions, such as those caused by the COVID-19 pandemic, or contractions in the industry could reduce the number of travel advisors available for us to market and sell our cruises, which could have an adverse impact on our financial condition and results of operations.
Significant disruptions or contractions in the industry could reduce the number of travel advisors available for us to market and sell our cruises, which could have an adverse impact on our financial condition and results of operations. Business activities that involve our co-investments with third parties may subject us to additional risks.
If we fail to offer competitive compensation packages or fail to maintain our relationships, these agencies may be incentivized to sell cruises offered by our competitors, which could adversely impact our operating results. Our reliance on third-party sellers is particularly pronounced in certain markets.
We rely on travel advisors to generate bookings for our global brands. Accordingly, we must maintain competitive commission rates and incentive structures. If we fail to offer competitive compensation packages or fail to maintain our relationships, these agencies may be incentivized to sell cruises offered by our competitors, which could adversely impact our operating results.
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, such as the disruption caused by the COVID-19 pandemic.
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.
These risks include susceptibility to weather events, exposure to local political/regulatory developments and policies, logistical challenges and human resource and labor risks and safety, environmental, and health risks, including challenges posed by the COVID-19 pandemic and its effects locally where we have these projects and relationships.
These risks include susceptibility to weather events, exposure to local political/regulatory developments and policies, logistical challenges and human resource and labor risks and safety, environmental, and health risks. Our reliance on travel advisors to sell and market our cruises exposes us to certain risks which could adversely impact our business.
For example, our ownership and operation of older tonnage, in particular during the business disruption caused by COVID-19, has resulted in impaired asset values due to expected returns less than the carrying value of the assets. Our attempts to expand our business into new markets and new ventures may not be successful.
Investments in older tonnage, in particular, run the risk of not meeting expected returns and diluting related asset values. Our expansion into new markets and investments in new ventures and land-based destination projects may not be successful.
Removed
Increases in these operating costs have affected, and may continue to adversely affect, our future profitability. In particular, increases in fuel prices have and could continue to materially and adversely affect our business as fuel prices impact not only our fuel costs, but also some of our other expenses, such as crew travel, freight, and commodity prices.
Added
We are members of four Protection and Indemnity (“P&I”) clubs, which are part of a worldwide group of 12 P&I clubs, known as the International Group of P&I Clubs (the “IG”).
Removed
Mandatory fuel restrictions may also create uncertainty related to the price and availability of certain fuel types potentially impacting operating costs.
Added
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
For instance, the effects of the COVID-19 pandemic on the shipyards, their subcontractors, and our suppliers have resulted in delays in our previously scheduled ship deliveries. Variations from our plan could have a significant negative impact on our business operations and financial condition. Building, repairing, maintaining and/or upgrading a ship is sophisticated work that involves significant risks.
Removed
These investments can increase our exposure to certain key risks depending on the scope, location, and the ownership and management structure of these projects.
Removed
Our reliance on travel advisors to sell and market our cruises exposes us to certain risks which could adversely impact our business. We rely on travel advisors to generate bookings for our ships. Accordingly, we must maintain competitive commission rates and incentive structures.
Removed
Additionally, the strength of our recovery from suspended operations could be delayed if we are not aligned and partnered with key travel advisors. Business activities that involve our co-investments with third parties may subject us to additional risks.
Removed
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, such as the COVID-19 pandemic, negatively affects our operating cash flows.
Removed
As result of the COVID-19 pandemic and the resulting suspension of our operations, we have experienced credit rating downgrades, which have reduced our ability to incur secured indebtedness by reducing the amount of indebtedness that we are permitted to secure, and may negatively impact our access to, and cost of, debt financing.
Removed
Additionally, our ability to raise additional financing, whether or not secured, could be limited if our credit rating is further downgraded, and/or if we fail to comply with applicable covenants governing our outstanding indebtedness, and/or if overall financial market conditions worsen.
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.
Removed
Despite our leverage, we may incur more debt, which could adversely affect our business. We may incur substantial additional debt in the future.
Removed
Except for the restrictions under the indentures governing our Secured Notes, our Priority Guaranteed Notes, and certain of our other debt instruments, including our unsecured bank and export credit facilities, we are not restricted under the terms of our debt instruments from incurring additional debt.
Removed
Debt to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further discussion on our covenants and existing waivers. All of these limitations are subject to significant exceptions and qualifications.
Removed
Despite these exceptions and qualifications, we cannot assure you that the operating and financial restrictions and covenants in certain of our debt instruments will not adversely affect our ability to finance our future operations or capital needs or engage in other business activities that may be in our interest.
Removed
Any future indebtedness may include similar or other restrictive terms and we may be required to further encumber our assets. In addition, our ability to comply with these covenants and restrictions may be affected by events beyond our control. These include prevailing economic, financial and industry conditions.
Removed
If we breach any of these covenants or restrictions, we could be in default under such indebtedness and certain of our other debt instruments, and the relevant debt holders or lenders could elect to declare the debt, together with accrued and unpaid interest and other fees, if any, immediately due and payable and proceed against any collateral securing that debt.
Removed
If the debt under certain of our debt instruments that we enter into were to be accelerated, our liquid assets may be insufficient to repay in full such indebtedness. Borrowings under other debt instruments that contain cross-default provisions also may be accelerated or become payable on demand.
Removed
In these circumstances, our assets may not be sufficient to repay in full that indebtedness and our other indebtedness then outstanding. In addition, our ability to maintain our credit facilities may also be impacted by changes in our ownership base.
Removed
More specifically, we may be required to prepay our non-ECA and ECA facilities if any person acquires ownership of more than 50% of our common stock or, subject to certain exceptions, during any 24-month period, a majority of our board of directors is no longer comprised of individuals who were members of our board of directors on the first day of such period.
Removed
Our debt securities also contain change of control provisions that would be triggered by a third-party acquisition of greater than 50% of our common stock coupled with a ratings downgrade, which would require us to offer to repurchase our debt securities in the event of such change of control.
Removed
If we elect to settle conversions of our convertible notes in shares of our common stock or a combination of cash and shares of our common stock, conversions of our convertible notes will result in dilution for our existing shareholders. Furthermore, new equity or convertible debt issuances will also result in dilution for our existing shareholders.
Removed
We have an aggregate principal amount of $1.7 billion in convertible notes outstanding. If note holders elect to convert, the notes will be converted into our shares of common stock, cash, or a combination of common stock and cash, at our discretion.
Removed
Prior to March 15, 2023, August 15, 2023, and May 15, 2025, our convertible notes issued in June 2020, October 2020, and August 2022, respectively, will be convertible at the option of holders during certain periods only upon satisfaction of certain conditions.
Removed
Beyond those dates, the convertible notes will be convertible at any time until the close of business on the second scheduled trading day immediately preceding their maturity date. Conversions of our convertible notes into shares of our common stock or a combination of common stock and cash, will result in dilution to our shareholders.
Removed
Additionally, if we raise additional funds through equity or convertible debt issuances, our shareholders could experience dilution of their ownership interest, and these equity or convertible debt securities could have rights, preferences, and privileges that are superior to that of holders of our common stock.
Removed
We did not declare quarterly dividends on our common stock in the quarter ended December 31, 2022 and do not expect to pay dividends on our common stock for the foreseeable future. We have not declared a dividend since the first quarter of 2020.
Removed
We expect that any income received from operations will be devoted to our future operations and recovery. We do not expect to pay cash dividends on our common stock for the foreseeable future. In addition, in the event we thereafter declare a dividend, we will need to repay our amounts deferred under the export credit facilities.
Removed
Payment of dividends would, in any case, depend upon our profitability at the time, cash available for those dividends, and other factors as our board of directors may consider relevant. Increased regulatory oversight, and the phasing out of LIBOR may adversely affect the value of a portion of our indebtedness.
Removed
The publication of certain LIBOR settings ceased after December 31, 2021, and uncertainty regarding alternative reference rates remains as many market participants await a wider adoption of replacement products prior to the cessation of the remaining USD LIBOR tenors (currently scheduled for June 30, 2023).
Removed
When LIBOR ceases to exist, the level of interest payments on the portion of our indebtedness that bears interest at variable rates might be affected if we, the agent, and/or the lenders holding a majority of the outstanding loans or commitments under such indebtedness fail to amend such indebtedness to implement a replacement rate.
Removed
Regardless, such replacement rate will give due consideration to any evolving or then-existing conventions for similar credit facilities, which may result in different than expected interest payments. 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
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
In addition, some countries have adopted restrictions against U.S. travelers, and we currently cannot predict when those restrictions will be eased. 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.
Removed
This, in turn, could decrease our revenue, increase our operating costs and otherwise impair our profitability. 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.
Removed
These regulatory efforts,both internationally and in the U.S., 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
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, the European Union has proposed 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 increase the use of low carbon fuel onboard our vessels as well as connectivity to shore power.
Removed
The proposed legislation also includes updates to the European Union Emission Trading System which would impose requirements to purchase carbon emission allowances beginning in 2024.
Removed
In addition, the U.S. and various state 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 incoming carbon intensity indicator regulation, 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.
Removed
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.
Removed
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.
Removed
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.
Removed
Labor, health and safety, financial responsibility and other maritime regulations and measures could affect operations and increase operating costs.
Removed
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, and financial responsibilities to our guests.
Removed
These issues are, and we believe will continue to be, an area of focus by the relevant authorities throughout the world. This could result in the enactment of more stringent regulation of cruise ships that could subject us to increasing compliance costs in the future and may increase our exposure, if any, to environmental-related litigation.
Removed
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.
Removed
In connection with the year end audit, each year, Faegre Drinker Biddle & Reath LLP, our U.S. tax counsel, delivers to us an opinion, based on certain representations and assumptions set forth in it, 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.
Removed
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.
Removed
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 or the Bahamas, such that they no longer qualify as equivalent exemption jurisdictions, that could affect our eligibility for the Section 883 exemption.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Information about our cruise ships, including their size, may be found within the Operating Strategies - Fleet upgrade and maintenance section and the Operations - Cruise Ships and Itineraries sections 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 - Ships and Itineraries section in Item 1 . Business .

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe complaint filed by Havana Docks Corporation ("Havana Docks Action") alleges it holds an interest in the Havana Cruise Port Terminal, and the complaint filed by Javier Garcia-Bengochea (the "Port of Santiago Action") alleges that he holds an interest in the Port of Santiago, Cuba, both of which were expropriated by the Cuban government.
Biggest changeThe complaint filed by Havana Docks Corporation ("Havana Docks Action") alleges it holds an interest in the Havana Cruise Port Terminal, which was expropriated by the Cuban government. The complaint further alleges that we trafficked in the terminal by embarking and disembarking passengers at these facilities.
During the fourth quarter of 2022, we recorded a charge of approximately $130.0 million to Other (expense) income within in our consolidated statements of comprehensive 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.
During 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.
Item 3. Legal Proceedings As previously reported, two lawsuits were filed against us in August 2019 in the U.S. District Court for the Southern District of Florida (the "Court") under Title III of the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act.
Item 3. Legal Proceedings As previously reported, a lawsuit was filed against us in August 2019 in the U.S. District Court for the Southern District of Florida (the "Court") under Title III of the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act.
We have appealed the judgment to the United States Court of Appeals for the 11th Circuit and the plaintiff has cross-appealed with regards to the interest calculation used for purposes of determining damages. We believe we have meritorious grounds for and intend to vigorously pursue our appeal.
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.
In the Havana Docks Action, the Court entered final judgment in December 2022 in favor of the plaintiff and awarded damages and attorneys' fees to the plaintiff in the aggregate amount of approximately $112 million.
The plaintiffs seek all available statutory remedies, including the value of the expropriated property, plus interest, treble damages, attorneys’ fees and costs. The Court entered final judgment in December 2022 in favor of the plaintiff and awarded damages and attorneys' fees to the plaintiff in the aggregate amount of approximately $112 million.
Removed
The complaints further allege that we trafficked in those properties by embarking and disembarking passengers at these facilities. The plaintiffs seek all available statutory remedies, including the value of the expropriated property, plus interest, treble damages, attorneys’ fees and costs.
Removed
The Court dismissed the Port of Santiago Action with prejudice on the basis that the plaintiff acquired his interest in the Port of Santiago after the enactment of the Helms-Burton Act. In November 2022, the United States Court of Appeals for the 11th Circuit affirmed the Court's dismissal of the lawsuit.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeIn the event we repurchase shares of our common stock, we will need to repay the amounts deferred under our export credit facilities as part of the principal amortization deferrals agreed with our lenders during 2020 and 2021. 24 Performance Graph The following graph compares the total return, assuming reinvestment of dividends, on an investment in the Company, based on performance of the Company's common stock, with the total return of the Standard & Poor's 500 Composite Stock Index ("S&P 500") and the Dow Jones United States Travel and Leisure Index for a five year period by measuring the changes in common stock prices from December 31, 2017 to December 31, 2022. 12/17 12/18 12/19 12/20 12/21 12/22 Royal Caribbean Cruises Ltd . 100.00 83.86 117.36 66.43 68.40 43.97 S&P 500 100.00 95.62 125.72 148.85 191.58 156.89 Dow Jones U.S.
Biggest changeIn the event we repurchase shares of our common stock, we will need to repay the amounts deferred under our export credit facilities as part of the principal amortization deferrals agreed with our lenders during 2020 and 2021. 24 Performance Graph The following graph compares the total return, assuming reinvestment of dividends, on an investment in the Company, based on performance of the Company's common stock, with the total return of the Standard & Poor's 500 Composite Stock Index ("S&P 500") and the Dow Jones United States Travel and Leisure Index for a five year period by measuring the changes in common stock prices from December 31, 2018 to December 31, 2023. 12/18 12/19 12/20 12/21 12/22 12/23 Royal Caribbean Cruises Ltd . 100.00 139.95 79.22 81.57 52.43 137.35 S&P 500 100.00 131.49 155.68 200.37 164.08 207.21 Dow Jones U.S.
Shareholders' Equity to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information on dividends declared. Share Repurchases There were no repurchases of common stock during the year ended December 31, 2022.
Shareholders' Equity to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information on dividends declared. Share Repurchases There were no repurchases of common stock during the year ended December 31, 2023.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed on the New York Stock Exchange ("NYSE") under the symbol "RCL." Holders As of February 20, 2023, there were approximately 1,243 record holders of our common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed on the New York Stock Exchange ("NYSE") under the symbol "RCL." Holders As of February 16, 2024, there were approximately 1,186 record holders of our common stock.
Travel & Leisure 100.00 94.41 117.01 119.05 132.73 105.83 The stock performance graph assumes for comparison that the value of the Company's common stock and of each index was $100 on December 31, 2017 and that all dividends were reinvested. Past performance is not necessarily an indicator of future results. 25 Item 6. Reserved. Not applicable. 26
Travel & Leisure 100.00 123.94 126.10 140.59 112.10 152.56 The stock performance graph assumes for comparison that the value of the Company's common stock and of each index was $100 on December 31, 2018 and that all dividends were reinvested. Past performance is not necessarily an indicator of future results. 25 Item 6. Reserved Not applicable. 26

Item 7. Management's Discussion & Analysis

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

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Biggest change(13) Represents our loss contingency recorded in connection with the ongoing Havana Docks litigation inclusive of related legal fees and costs. 38 The following table presents operating results as a percentage of total revenues for the last three years: Year Ended December 31, 2022 2021 2020 Passenger ticket revenues 65.5 % 61.4 % 68.1 % Onboard and other revenues 34.5 % 38.6 % 31.9 % Total revenues 100.0 % 100.0 % 100.0 % Cruise operating expenses: Commissions, transportation and other 15.3 % 13.5 % 15.6 % Onboard and other 6.7 % 7.6 % 7.1 % Payroll and related 14.6 % 54.7 % 35.7 % Food 7.4 % 10.7 % 7.3 % Fuel 12.1 % 25.1 % 16.8 % Other operating 18.6 % 61.7 % 42.7 % Total cruise operating expenses 74.8 % 173.5 % 125.2 % Marketing, selling and administrative expenses 17.9 % 89.4 % 54.3 % Depreciation and amortization expenses 15.9 % 84.4 % 57.9 % Impairment and credit losses — % 5.4 % 70.9 % Operating Loss (8.6) % (252.6) % (208.3) % Other income (expense): Interest income 0.4 % 1.1 % 1.0 % Interest expense, net of interest capitalized (15.4) % (84.3) % (38.2) % Equity investment income (loss) 0.6 % (8.8) % (9.7) % Other (expense) income (1.4) % 1.3 % (6.2) % (15.7) % (90.7) % (53.1) % Net Loss (24.4) % (343.3) % (261.5) % Less: Net Income attributable to noncontrolling interest — % — % 1.0 % Net Loss attributable to Royal Caribbean Cruises Ltd.
Biggest changeThe 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.
Adjusted Net Loss attributable to Royal Caribbean Cruises Ltd. is a non-GAAP measure that represents net loss less net income attributable to noncontrolling interest, excluding certain items that we believe adjusting for is meaningful when assessing our performance on a comparative basis.
Adjusted Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. is a non-GAAP measure that represents net income (loss) less net income attributable to noncontrolling interest, excluding certain items that we believe adjusting for is meaningful when assessing our performance on a comparative basis.
Net Cruise Costs and Net C ruise Costs Excluding Fuel are non-GAAP measures that represent Gross Cruise Costs excluding commissions, transportation and other expenses and onboard and other expenses and, in the case of Net Cruise Costs Excluding Fuel, fuel expenses (each of which is described above under the Description of Certain Line Items heading).
Net Cruise Costs and Net C ruise Costs excluding Fuel are non-GAAP measures that represent Gross Cruise Costs excluding commissions, transportation and other expenses, onboard and other expenses and, in the case of Net Cruise Costs excluding Fuel, fuel expenses (each of which is described above under the Description of Certain Line Items heading).
The 28 significant deferred drydock costs consist of hauling and wharfage services provided by the drydock facility, hull inspection and related activities (e.g., scraping, pressure cleaning, bottom painting), maintenance to steering propulsion, thruster equipment and ballast tanks, port services such as tugs, pilotage and line handling, and freight associated with these items.
The significant deferred drydock costs consist of hauling and wharfage services provided by the drydock facility, hull inspection and related activities (e.g., scraping, pressure cleaning, bottom painting), maintenance to steering propulsion, thruster equipment and ballast tanks, port services such as tugs, pilotage and line handling, and freight associated with these items.
Due to the inherent uncertainties related to the eventual outcome of litigation and potential insurance recoveries, it is possible that certain matters may be resolved for amounts materially different from any provisions or disclosures that we have previously made. 31 Seasonality Our revenues are seasonal based on demand for cruises.
Due to the inherent uncertainties related to the eventual outcome of litigation and potential insurance recoveries, it is possible that certain matters may be resolved for amounts materially different from any provisions or disclosures that we have previously made. Seasonality Our revenues are seasonal based on demand for cruises.
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.
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.
Derivative Instruments We enter into various forward, swap and option contracts to manage our interest rate exposure and to limit our exposure to fluctuations in foreign currency exchange rates and fuel prices. These instruments are recorded on the balance sheet at their fair value and the vast majority are designated as hedges.
Derivative Instruments We enter into various forward, swap and option contracts to manage our interest rate exposure and to limit our exposure to fluctuations in foreign currency exchange rates and fuel prices. These instruments are recorded on the balance sheet at their fair 30 value and the vast majority are designated as hedges.
If circumstances cause us to change our assumptions in making determinations as to whether ship 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 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.
These non-GAAP financial measures are provided along with the related GAAP financial measures as we believe they provide useful information to investors as a supplement to our consolidated financial statements, which are prepared and presented in 32 accordance with GAAP.
These non-GAAP financial measures are provided along with the related GAAP financial measures as we believe they provide useful information to investors as a supplement to our consolidated financial statements, which are prepared and presented in accordance with GAAP.
In measuring our ability to control costs in a manner that positively impacts net income, we believe changes in Net Cruise Costs and Net Cruise Costs Excluding Fuel to be the most relevant indicators of our performance.
In measuring our ability to control costs in a manner that positively impacts net income, we believe changes in Net Cruise Costs and Net Cruise Costs Excluding Fuel to be the most relevant indicators of our cost performance.
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, 2022 compared to the same period in 2021; 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, 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.
A reconciliation of Net Loss attributable to Royal Caribbean Cruises Ltd. to Adjusted Net Loss attributable to Royal Caribbean Cruises Ltd. is provided below under Results of Operations.
A reconciliation of Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. to Adjusted Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. is provided below under Results of Operations.
Debt Covenants Our export credit facilities, 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 minimum liquidity, and under certain facilities, to maintain a minimum level of stockholders' 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 maintain a minimum liquidity, and under certain facilities, to maintain a minimum level of shareholders' equity.
In the event we declare a dividend or engage in share repurchases, we will need to repay the amounts deferred under our export credit facilities. Accordingly, we have not declared a dividend since the first quarter of 2020. 49
In the event we declare a dividend or engage in share repurchases, we will need to repay the amounts deferred under our export credit facilities. Accordingly, we have not declared a dividend since the first quarter of 2020. 48
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 seven 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.
A discussion of our results of operations, and sources and uses of cash for the year ended December 31, 2021 compared to the year ended December 31, 2020 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, 2022 compared to the year ended December 31, 2021 is included in Part II. Item 7.
Refer to Note 4 . Goodwill to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information on goodwill. 29 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-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.
Included in these figures are $5.7 billion in final contractual installments, which have committed financing covering 80% of the cost of the ships on order for our Global Brands, almost all of which include sovereign financing guarantees.
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.
Intangible Assets to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information on indefinite-life intangible assets.
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.
The estimation of fair value utilizing discounted expected future cash flows includes numerous uncertainties which require our significant judgment when making assumptions of expected revenues, operating costs, marketing, selling and administrative expenses, interest rates, ship additions and retirements as well as assumptions regarding the cruise vacation industry's competitive environment and general economic and business conditions, among other factors.
The estimation of fair value utilizing discounted expected future cash flows includes numerous uncertainties which require our significant judgment when making assumptions of expected revenues, operating costs, marketing, selling and administrative expenses, interest rates, and assumptions regarding the cruise vacation industry's competitive environment and general economic and business conditions, among other factors.
We periodically review estimated useful lives and residual values for ongoing reasonableness, considering long term views on our intended use of each class of ships and the planned level of improvements to maintain and enhance vessels within those classes.
We periodically review estimated useful lives and residual values for ongoing reasonableness, considering long term views on our intended use of each class of ships the planned level of improvements to maintain, enhance, and to comply with environmental regulations for vessels within those classes.
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 25% and 19%, as of November 30, 2022 and November 30, 2021, 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 62% and 25%, as of November 30, 2023 and November 30, 2022, respectively, resulting in no impairment to Silversea Cruises' tr ade name.
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, 2021 , filed with the SEC on March 1, 2022 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, 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").
As a result of the tests, we determined the fair value of the Silversea Cruises reporting unit exceeded its carrying value by approximately 26% and 35% as of November 30, 2022 and 2021, 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% and 26% as of November 30, 2023 and 2022, respectively, resulting in no impairment to Silversea Cruises' goodwill.
As of December 31, 2022 and 2021, the carrying value of indefinite-life intangible assets was $321.5 million, which primarily relates to the Silversea Cruises trade name. We did not perform interim impairment evaluations of Silversea Cruises's goodwill or trade names during 2022 and 2021, as no triggering events were identified.
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.
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 7 . Other Assets 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 3 . Revenue to our consolidated financial statements under Item 8.
We have agreed with certain of our lenders not to pay dividends or engage in stock repurchases unless we repay the remaining principal payments that were deferred under our export credit facilities in 2020 and 2021. Refer to Note 10 . Shareholders' Equity to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information.
We have agreed with certain of our lenders not to pay dividends or engage in stock repurchases unless we repay the remaining principal payments that were deferred under our export credit facilities in 2020 and 2021. Refer to Note 8 . Debt and Note 10 . Shareholders' Equity to our consolidated financial statements under Item 8.
As of November 30, 2022, and November 30, 2021, the fair value of the Silversea Cruises reporting unit was determined using a discounted cash flow model in combination with a market-based valuation approach.
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.
The principal assumptions used in the discounted cash flow model for our 2022 impairment assessment consisted of: • Forecasted revenues per available passenger cruise day; • Occupancy rates from existing and expected ship deliveries; • 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 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 2022 impairment assessment consisted of: • Forecasted revenues per available passenger cruise day; • Occupancy rates from existing and expected ship deliveries; • 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 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 carrying value of goodwill attributable to our Silversea Cruises reporting unit was $508.6 million as of December 31, 2022 and 2021. 30 During the fourth quarters of 2022 and 2021, 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, 2023 and 2022. During the fourth quarters of 2023 and 2022, we performed our annual impairment reviews of the Silversea Cruises trade name.
(3) For the year ended December, 31, 2021, we include Azamara Cruises' metrics through March 19, 2021, the effective sale date of the brand. Refer to Note 1. General to our consolidated financial statements under Item 8. Financial Statements and Supplementary 39 Data for more information on the sale of the Azamara Cruises brand.
Financial Statements and Supplementary Data for more information on the three-month reporting lag. (2) For the year ended December, 31, 2021, we include Azamara Cruises' metrics through March 19, 2021, the effective sale date of the brand. Refer to Note 1. General to our consolidated financial statements under Item 8 .
Financial Statements and Supplementary Data for ownership restrictions related to TUI Cruises. Refer to Note 8 . Debt to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for export credit agency guarantees. Refer to Note 17. Commitments and Contingencies to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for other agreements.
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.
(3) Represents equity investment asset impairment, primarily for our investments in TUI Cruises GmbH in 2021 and Grand Bahama Shipyard in 2020, as a result of the impact of COVID-19. These amounts are included in Equity investment income (loss) within our consolidated statements of comprehensive income (loss).
For 2021, amount represents equity investment asset impairment, primarily for our investments in TUI Cruises GmbH, as a result of the impact of COVID-19. These amounts are included in Equity investment income (loss) within our consolidated statements of comprehensive income (loss).
As of December 31, 2022, we have one Edge-class ship on order for our Celebrity Cruises brand, with a capacity of approximately 3,250 berths. Additionally, as of December 31, 2022, we have two ships on order for our Silversea Cruises brand with an aggregate capacity of approximately 1,460 berths. Refer to Item 1.
As of December 31, 2023, we have one Edge-class ship on order for our Celebrity Cruises brand, with a capacity of approximately 3,250 berths. Additionally, as of December 31, 2023, we have one Evolution-class ship on order for our Silversea Cruises brand with an aggregate capacity of approximately 730 berths. Refer to Item 1.
Since our full fleet is in service, we expect to return to seasonal trends 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, 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 • 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.
As of December 31, 2022, we had approximately $7.6 billion of committed financing for our ships on order.
As of December 31, 2023, we had approximately $6.0 billion of committed financing for our ships on order.
(2) Represents net non-operating income or expense. For 2022, primarily relates to our loss contingency recorded of approximately $130 million in connection with the ongoing Havana Docks litigation inclusive of related legal fees and costs, as well as amounts related to changes in fair value of fuel swaps for which cash flow hedge accounting was discounted.
(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.
As of December 31, 2022, our obligations due through December 31, 2023 primarily consisted of $2.1 billion related to debt maturities, $1.3 billion related to interest on debt and $2.7 billion related to progress payments on our ship orders and, based on expected delivery date, the final installments payable due upon the delivery of Silver Nova, Icon of the Seas, and Celebrity Ascent .
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 .
Our 2022 Net Loss was $(2.2) billion, or $(8.45) 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 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.
If we had reduced our estimated average ship useful life by one year, depreciation expense for 2022 would have increased by approximately $85.0 million. If our ships were estimated to have no residual value, depreciation expense for 2022 would have increased by approximately $307.6 million.
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.
Based on our qualitative assessment, we concluded that it was more-likely-than-not that the estimated fair value of the Royal Caribbean International reporting unit exceeded its carrying value and thus, we did not proceed to the two-step goodwill impairment test.
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.
Adjusted Net Loss for 2022 was $(1.9) billion, or $(7.50) 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. 2022 adjusted EBITDA was $711.6 million, compared to adjusted EBITDA of $3.6 billion in 2019.
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.
(4) Represents net insurance recoveries related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas. (5) Represents expenses other than estimated cash refunds incurred as part of the Pullmantur S.A. reorganization.
(9) Represents estimated cash refunds expected to be paid to Pullmantur guests and other expenses incurred as part of the Pullmantur S.A. reorganization. (10) Amounts include net insurance recoveries related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas.
Financial Statements and Supplementary Data for further information regarding debt covenants. Dividends The declaration of dividends shall at all times be subject to the final determination of our board of directors that a dividend is prudent at that time in consideration of the needs of the business.
Dividends The declaration of dividends shall at all times be subject to the final determination of our board of directors that a dividend is prudent at that time in consideration of the needs of the business.
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 2022, we performed a qualitative assessment 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 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.
(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. A reconciliation of Loss per Share to Adjusted Loss per share is provided below under Results of Operations.
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.
Future Capital Commitments Capital Expenditures Our future capital commitments consist primarily of new ship orders. As of December 31, 2022, we have one Oasis-class ship, and three ships of a new generation, known as our Icon-class, on order for our Royal Caribbean International brand with an aggregate capacity of approximately 22,500 berths.
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.
Liquidity and Capital Resources Sources and Uses of Cash Net cash provided by (used in) operating activities increased by $2.4 billion to cash provided of $0.5 billion for the year ended December 31, 2022, compared to cash used of $1.9 billion for the same period in 2021.
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.
A reconciliation of Gross Cruise 33 Costs to Net Cruise Costs and Net Cruise Costs Excluding Fuel is provided below under Results of Operations. For the 2022 period presented, Net Cruise Costs and Net Cruise Costs Excluding Fuel excludes restructuring and other initiative expenses.
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.
As amended by ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment , if the fair value of the reporting unit is less than the carrying value of its net assets, an impairment is recognized based on the amount by which the carrying value of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to such reporting unit.
If the fair value of the reporting unit is less than the carrying value of its net assets, an impairment is recognized based on the amount by which the carrying value of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to such reporting unit. Refer to Note 4 .
For the p eriods presented, these items included (i) other expenses, which includes our loss contingency in connection with the ongoing Havana Docks litigation recorded in 2022; (ii) impa irment and credit losses; (iii) restru cturing charges and other initiative expenses; (iv) equity investment asset impairments; (v) net insurance recoveries or costs related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas ; (vi) Pullmantur reorganization settlement; (vii) the net gain recognized in 2021 in relation to the sale of the Azamara brand; (viii) the noncontrolling interest adjustment to exclude the impact of the contractual accretion requirements associated with the put option held by Heritage Cruise Holding Ltd. and (ix) transaction costs related to the 2018 Silversea Cruises acquisition.
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.
(9) Adjustment made to exclude the impact of the contractual accretion requirements associated with the put option held by Heritage Cruise Holding Ltd.'s (previously known as Silversea Cruises Group Ltd.) noncontrolling interest, which noncontrolling interest we acquired on July 9, 2020.
(4) Adjustment made to exclude the impact of the contractual accretion requirements associated with the put option held by Silversea Cruises Group Ltd.'s noncontrolling interest.
Revenues Total revenues increased $7.3 billion, or 477.0%, to $8.8 billion in 2022 from $1.5 billion in 2021. Passenger ticket revenues comprised 65.5% of our 2022 total revenues.
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.
Net cash used in investing activities increased by $843.0 million to cash used of $3.0 billion for the year ended December 31, 2022, compared to cash used of $2.1 billion for the same period in 2021.
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.
Ship Accounting Ships represent our most significant assets and are stated at cost less accumulated depreciation and amortization. Depreciation of ships is generally computed net of a 10%-15% projected residual value, using the straight-line method over the estimated useful life of the asset, which is generally 30-35 years.
Depreciation of ships is generally computed net of a 10%-15% projected residual value, using the straight-line method over the estimated useful life of the asset, which is generally 30-35 years. The 30-35 year useful life and 10%-15% residual value is the weighted-average of all major components of a ship.
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. Passenger Cruise Days represent the number of passengers carried for the period multiplied by the number of days of their respective cruises.
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.
(2) Included within Total cruise operating expenses in our consolidated statements of comprehensive loss. 43 Year Ended December 31, 2022 Compared to Year Ended December 31, 2021 In this section, references to 2022 refer to the year ended December 31, 2022 and references to 2021 refer to the year ended December 31, 2021.
(3) These amounts are included in Marketing, selling and administrative expenses within our consolidated statements of comprehensive income (loss). 44 Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 In this section, references to 2023 refer to the year ended December 31, 2023 and references to 2022 refer to the year ended December 31, 2022.
As of December 31, 2022, 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 Historically, we relied on a combination of cash flows provided by operations, draw-downs under our available credit facilities, the incurrence of additional debt and/or the refinancing of our existing debt and the issuance of additional shares of equity securities to fund our obligations.
As of 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.
In addition, we take into consideration our estimates of the weighted-average useful lives of the ships' major component systems, such as hull, superstructure, main electric, engines and cabins.
Our useful life and residual value estimates take into consideration the impact of anticipated technological changes, environmental regulations, long-term cruise and vacation market conditions and historical useful lives of similarly-built ships. In addition, we take into consideration our estimates of the weighted-average useful lives of the ships' major component systems, such as hull, superstructure, main electric, engines and cabins.
(5) Represents equity investment asset impairment, primarily for our investments in TUI Cruises GmbH in 2021 and Grand Bahama Shipyard in 2020, as a result of the impact of COVID-19.
For 2021, amount represents equity investment asset impairment, primarily for our investments in TUI Cruises GmbH as a result of the impact of COVID-19. These amount is included in Equity investment income (loss) within our consolidated statements of comprehensive income (loss).
In order to preserve liquidity, we deferred a significant portion of our planned 2020, 2021 and 2022 capital expenditures. As of December 31, 2022, we anticipate overall full year capital expenditures, based on our existing ships on order, will be approximately $4.1 billion for 2023.
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.
However, there is no assurance that our assumptions and estimates are accurate as there is inherent uncertainty in our ability to predict future liquidity requirements. Refer to Note 1 . General, Management’s Plan and Liquidity, to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information.
However, there is no assurance that our assumptions and estimates are accurate as there is inherent uncertainty in our ability to predict future liquidity requirements.
Gross Cruise Costs per APCD increased 8.2% as-reported and 8.8% in Constant Currency, compared to 2019. Net Cruise Costs, excluding Fuel, per APCD increased 12.9% as-reported and 13.5% in Constant Currency, compared to 2019. Our cost-conscious mindset has helped to mitigate the effects of inflation, and we benefited from reduced costs related to health protocols as the year went on.
Net Cruise Costs, excluding Fuel, per APCD increased 7.5% as-reported and 7.9% in Constant Currency, compared to 2019. Our disciplined cost control helped mitigate the effects of inflation.
The change was primarily due to Changes in defined benefits plan in 2022 of $48.9 million compared to $8.7 million in 2021. 45 Future Application of Accounting Standards Refer to Note. 2 Summary of Significant Accounting Policies to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information on Recent Accounting Pronouncements .
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.
We have evaluated our estimated ship useful lives and projected residual values in light of our current environment and determined that there are no changes to these estimates. Valuation of Goodwill, Indefinite-Lived Intangible Assets and Long-Lived Assets We review goodwill and indefinite-lived intangible assets for impairment at the reporting unit level annually or, when events or circumstances dictate, more frequently.
Valuation of Goodwill, Indefinite-Lived Intangible Assets and Long-Lived Assets We review goodwill and indefinite-lived intangible assets for impairment at the reporting unit level annually or, when events or circumstances dictate, more frequently.
Our minimum stockholders' equity and maximum net debt-to-capital calculations exclude the impact of Accumulated other comprehensive loss on Total stockholders' equity . In 2021 and 2022, the financial covenant levels were modified for 2023 and 2024.
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.
(3) Represents estimated cash refunds expected to be paid to Pullmantur guests and other expenses incurred as part of the Pullmantur S.A. reorganization. (4) Represents asset impairment and credit losses as a result of the impact of COVID-19, with 2022 and 2021 amounts net of the recovery of credit losses previously recognized.
For 2022 and 2021, amounts represents asset impairment and credit losses as a result of the impact of COVID-19, net of the recovery of credit losses previously recognized.
(7) Represents primarily restructuring charges incurred in relation to the reduction in our U.S. workforce and other initiatives expenses. (8) In 2022 and 2021, represents the amortization of the Silversea Cruises intangible assets resulting from the 2018 Silversea Cruises acquisition.
(2) Represents the change in the fair value of the contingent consideration and the amortization of the Silversea Cruises intangible assets resulting from the 2018 Silversea Cruises acquisition. (3) Represents restructuring charges incurred in relation to the reorganization of our international sales and marketing structure and other initiatives expenses.
For further information regarding the repayment transactions, refer to Note 8 . Debt to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data . (2) Represents the amortization of non-cash debt discount on our convertible notes.
For further information regarding the debt transactions discussed above, refer to Note 8 . Debt to our consolidated financial statements under Item 8.
Lastly, we anticipate taking delivery of Icon of the Seas by the end of the year, to begin operating revenue sailings in 2024. 35 Results of Operations In addition to the items discussed above under "Executive Overview," significant items for 2022 include: • Our Net Loss attributable to Royal Caribbean Cruises Ltd. and Adjusted Net Loss attributable to Royal Caribbean Cruises Ltd. for the year ended December 31, 2022 was $(2.2) billion and $(1.9) billion, or $(8.45) and $(7.50) per share on a diluted basis, respectively, reflecting our return to full operations, compared to Net Loss attributable to Royal Caribbean Cruises Ltd. and Adjusted Net Loss attributable to Royal Caribbean Cruises Ltd. of $(5.3) billion and $(4.8) billion, or $(20.89) and $(19.19) per share on a diluted basis, respectively, for the year ended December 31, 2021. • Total revenues, excluding the effect of changes in foreign currency rates, increased by $7.5 billion for the year ended December 31, 2022 as compared to the same period in 2021.
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.
As of December 31, 2022, the carrying amount of goodwill attributable to our Royal Caribbean reporting unit was $296.4 million. We did not perform interim impairment evaluations of Royal Caribbean International's goodwill during 2022 as no triggering events were identified.
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.
Financial Statements and Supplementary Data for further information. 36 We reported Net Loss attributable to Royal Caribbean Cruises Ltd., Adjusted Net Loss attributable to Royal Caribbean Cruises Ltd., Loss per Share and Adjusted Loss per Share as shown in the following table (in thousands, except per share data): Year Ended December 31, 2022 2021 2020 Net Loss attributable to Royal Caribbean Cruises Ltd. $ (2,155,962) $ (5,260,499) $ (5,797,462) Loss on extinguishment of debt (1) $ 93,810 $ 138,759 $ 41,109 Convertible debt amortization of debt discount (2) — 104,291 46,546 Pullmantur reorganization settlement (3) — 10,242 21,637 Impairment and credit losses (4) 562 82,001 1,566,380 Equity investment impairment (5) — 31,344 39,735 Oasis of the Seas incident (6) — (6,584) (1,938) Restructuring charges and other initiatives expense (7) 11,625 1,831 51,853 Amortization of Silversea Cruises intangible assets and change in the fair value of contingent consideration related to Silversea Cruises acquisition (8) 6,493 6,493 (33,814) Noncontrolling interest adjustment (9) — — 72,331 Net gain related to the sale of Azamara brand (10) — (3,371) — Currency translation adjustment losses (11) — — 69,044 Net loss related to the elimination of the Silversea Cruises reporting lag (12) — 62,604 — Litigation loss contingency (13) 130,033 — — Adjusted Net Loss attributable to Royal Caribbean Cruises Ltd. $ (1,913,439) $ (4,832,889) $ (3,924,579) Basic: Loss per Share $ (8.45) $ (20.89) $ (27.05) Adjusted Loss per Share $ (7.50) $ (19.19) $ (18.31) Diluted: Loss per Share $ (8.45) $ (20.89) $ (27.05) Adjusted Loss per Share $ (7.50) $ (19.19) $ (18.31) Weighted-Average Shares Outstanding: Basic 255,011 251,812 214,335 Diluted 255,011 251,812 214,335 (1) Represents net losses related to the early repayment of debt.
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.
The increase in income was primarily due to income from TUI Cruises, one of our equity investments, in 2022 compared to losses in 2021. 44 Other (expense) income decreased $140.7 million, or 693.5%, to other expense of $120.4 million in 2022 from other income of $20.3 million in 2021.
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.
(1) Long-term debt obligations mature at various dates through fiscal year 2037 and bear interest at fixed and variable rates. Interest on variable-rate debt is calculated based on forecasted debt balances, including the impact of interest rate swap agreements, using the applicable rate at December 31, 2022.
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.
Cruise Operating Expenses Total C r uise operating expenses increased by $4.0 billion, or 148.9%, to $6.6 billion in 2022 from $2.7 billion in 2021.
Onboard and other revenues included concession revenues of $472 million in 2023 and $332 million in 2022. Cruise Operating Expenses Total C r uise operating expenses increased by $1.2 billion, or 17.5%, to $7.8 billion in 2023 from $6.6 billion in 2022.
We have discussed these accounting policies and estimates with the audit committee of our board of directors.
We have discussed these accounting policies and estimates with the audit committee of our board of directors. We believe our critical accounting policies and estimates are as follows: Ship Accounting Ships represent our most significant assets and are stated at cost less accumulated depreciation and amortization.
(3) Amount includes incidental costs, net of insurance recoveries of $14.5 million related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas , which were reported primarily within Other operating expenses in our consolidated statements of comprehensive income (loss) for the year ended December 31, 2019; and $20.7 million regarding the Grand Bahama incident involving one of its drydocks, included in our equity investment income within our consolidated statements of comprehensive income (loss) for the year ended December 31, 2019.
Year Ended December 31, 2019 Net Income attributable to Royal Caribbean Cruises Ltd. $ 1,879 Oasis of the Seas incident, Grand Bahama's drydock write-off and other incidental expenses (1) 35 Loss on extinguishment of debt 6 Change in the fair value of contingent consideration and amortization of Silversea Cruises intangible assets related to Silversea Cruises acquisition (2) 31 Restructuring charges and other initiatives expense (3) 14 Transaction and integration costs related to the Silversea Cruises acquisition (2) 2 Noncontrolling interest adjustment (4) 36 Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. $ 2,003 Basic: Earnings per Share $ 8.97 Adjusted Earnings per Share $ 9.56 Diluted: Earnings per Share $ 8.95 Adjusted Earnings per Share $ 9.54 Weighted-Average Shares Outstanding: Basic 209 Diluted 210 38 (1) Amount includes incidental costs, net of insurance recoveries of $14 million related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas , which were reported primarily within Other operating expenses in our consolidated statements of comprehensive income (loss) for the year ended December 31, 2019; and $21 million regarding the Grand Bahama incident involving one of its drydocks, included in our equity investment income within our consolidated statements of comprehensive income (loss) for the year ended December 31, 2019.
EBITDA and Adjusted EBITDA were calculated as follows (in thousands): Year Ended December 31, 2022 2021 2020 Net Loss attributable to Royal Caribbean Cruises Ltd. $ (2,155,962) $ (5,260,499) $ (5,797,462) Interest income (35,857) (16,773) (21,036) Interest expense, net of interest capitalized 1,364,162 1,291,753 844,238 Depreciation and amortization expenses 1,406,689 1,292,878 1,279,254 Income tax (benefit) expense (1) 4,153 (47,167) (14,990) EBITDA 583,185 (2,739,808) (3,709,996) Other expense (2) 116,223 26,883 152,075 Impairment and credit losses 562 82,001 1,566,380 Restructuring charges and other initiatives expense 11,625 1,831 51,853 Equity investment impairment (3) — 31,344 39,735 Oasis of the Seas incident (4) — (6,584) (1,938) Pullmantur reorganization settlement (5) — 5,242 1,637 Net gain related to the sale of the Azamara brand — (3,371) — Noncontrolling interest adjustment (6) — — 72,331 Adjusted EBITDA $ 711,595 $ (2,602,462) $ (1,827,923) (1) Included within Other (expense) income in our consolidated statements of comprehensive loss.
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).
The increase in cash used in investing activities was primarily attributable to an increase in capital expenditures of $480.4 million due to the increased cost associated with taking delivery of Wonder of the Seas and Celebrity Beyond in 2022 compared to taking delivery of Odyssey of the Seas and Silver Dawn in 2021, and an increase in cash paid on settlement of derivative financial instruments of $281.7 million in 2022 compared to 2021.
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

21 edited+1 added−4 removed12 unchanged
Biggest changeAt December 31, 2022, we maintained interest rate swap agreements on the following floating-rate debt instruments: Debt Instrument Swap Notional as of December 31, 2022 (In thousands) Maturity Debt Floating Rate All-in Swap Fixed Rate Celebrity Reflection term loan $ 109,083 October 2024 LIBOR plus 0.40% 2.85% Quantum of the Seas term loan 245,000 October 2026 LIBOR plus 1.30% 3.74% Anthem of the Seas term loan 271,875 April 2027 LIBOR plus 1.30% 3.86% Ovation of the Seas term loan 380,417 April 2028 LIBOR plus 1.00% 3.16% Harmony of the Seas term loan (1) 338,990 May 2028 EURIBOR plus 1.15% 2.26% Odyssey of the Seas term loan (2) 383,333 October 2032 LIBOR plus 0.96% 3.21% Odyssey of the Seas term loan (2) 191,667 October 2032 LIBOR plus 0.96% 2.84% $ 1,920,365 ___________________________________________________________________ 50 (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, 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.
These changes were recognized in earnings within Other income (expense) in our consolidated statements of comprehensive income (loss). 51 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 (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.
Financial Statements and Supplementary Data Our Consolidated Financial Statements are included beginning on page F-1 of this report. Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure None. 52
Financial Statements and Supplementary Data Our Consolidated Financial Statements are included beginning on page F-1 of this report. Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure None. 51
Fuel cost, net of the financial impact of fuel swap agreements, as a percentage of our total revenues, was approximately 12.1% in 2022, 25.1% in 2021 and 16.8% in 2020. 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 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.
A hypothetical 10% strengthening of the Euro as of December 31, 2022, assuming no changes in comparative interest rates, would result in a $511.7 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, 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.
We estimate that a hypothetical 10% increase in our weighted-average fuel price from that experienced during the year ended December 31, 2022 would increase our forecasted 2023 fuel cost by approximately $61.0 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, 2023 would increase our forecasted 2024 fuel cost by approximately $58 million, net of the impact of fuel swap agreements. Item 8.
The fair value of our floating to fixed interest rate swap agreements was estimated to be an asset of $123.3 million as of December 31, 2022 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 $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.
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 2023 interest expense by approximately $34.8 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 2024 interest expense by approximately $25.5 million, assuming no change in foreign currency exchange rates.
During 2022, we maintained an average of approximately $1.1 billion of these foreign currency forward contracts. These instruments are not designated as hedging instruments.
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.
At December 31, 2022, approximately 75.0% of our long-term debt was effectively fixed as compared to 65.7% as of December 31, 2021. We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense.
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.
Approximately 52.3% of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate at December 31, 2022 and 2021, respectively.
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.
As of December 31, 2022, we had fuel swap agreements to pay fixed prices for fuel with an aggregate notional amount of approximately $498.1 million, maturing through 2023. These fuel swap agreements are generally accounted for as cash flow hedges. The fuel swap agreements designated as hedges of projected fuel purchases represented 50% of our projected 2023 fuel requirements.
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.
A hypothetical one percentage point decrease in interest rates at December 31, 2022 would decrease the fair value of our hedged and unhedged long-term fixed-rate debt by approximately $369.4 million. 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, 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.
We have included net gains of approximately $63.5 million and $47.7 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, 2022 and 2021, 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.
As of December 31, 2022, the aggregate cost of our ships on order, not including ships on order by our Partner Brands, was approximately $9.8 billion, of which we had deposited $0.8 billion as of such date.
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.
The estimated fair value of our fuel swap agreements at December 31, 2022 was estimated to be a liability of $6.1 million.
The estimated fair value of our fuel swap agreements at December 31, 2023 was estimated to be a liability of $48 million.
For the years ended December 31, 2022, 2021 and 2020 changes in the fair value of the foreign currency forward contracts resulted in losses of approximately $(101.8) million, $(30.9) million and $(19.0) million, respectively, which offset gains (losses) arising from the remeasurement of monetary assets and liabilities denominated in foreign currencies in those same years of $93.0 million, $24.3 million and $(1.5) million, respectively.
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.
The estimated fair value, as of December 31, 2022, of our Euro-denominated forward contracts associated with our ship construction contracts was a liability of $40.7 million, based on the present value of expected future cash flows.
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.
We had designated debt as a hedge of our net investments primarily in TUI Cruises of approximately €433.0 million, or approximately $461.9 million, through December 31, 2022. As of December 31, 2021, we had designated debt as a hedge of our net investments primarily in TUI Cruises of approximately €97.0 million, or approximately $110.3 million.
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.
At December 31, 2022, there were no interest rate swap agreements for fixed-rate debt instruments. The estimated fair value of our long-term fixed-rate debt at December 31, 2022 was $14.8 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 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.
Amount presented is based on the exchange rate as of December 31, 2022. (2) Interest rate swap agreements hedging the term loan of Odyssey of the Seas include LIBOR zero-floors matching the debt LIBOR zero-floor. The effective dates of the $383.3 million and $191.7 million interest rate swap agreements are October 2020 and October 2022, respectively.
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.
Removed
Market risk associated with our fixed-rate debt is the potential increase in fair value resulting from a decrease in interest rates. We use interest rate swap agreements that effectively convert a portion of our fixed-rate debt to a floating-rate basis to manage this risk.
Added
(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.
Removed
During the quarter ended September 30, 2022, we redeemed our 5.25% senior unsecured notes due 2022 in full and terminated the related interest rate swap agreements, which resulted in the dedesignation of the fair value hedges and recognition of an immaterial loss representing the fair value hedge carrying amount adjustment on these notes.
Removed
The fair value of our fixed to floating interest rate swap agreements was estimated to be an asset of $7.7 million as of December 31, 2021, based on the present value of expected future cash flows.
Removed
The unsecured term loan for the financing of Odyssey of the Seas was drawn on March 2021. These interest rate swap agreements are accounted for as cash flow hedges.

Other RCL 10-K year-over-year comparisons