Table of Incorporation that prevent third parties, other than A. Wilhelmsen AS. and Cruise Associates, from acquiring beneficial ownership of more than 4.9% of our outstanding shares without the consent of our Board of Directors.Contents

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Information about our cruise ships, including their size, ~~and primary areas of operation,~~ may be found within the Operating Strategies - Fleet upgrade and maintenance ~~and expansion~~ section and the Operations - Cruise Ships and Itineraries sections inItem 1. Business. Information regarding our cruise ships under construction, estimated expenditures and financing may be found within the Future Capital Commitments and Funding Needs and Sources sections of Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Our principal executive office and principal shoreside operations are located in leased office buildings at the Port of Miami, Florida. We also lease a number of other offices in the USU.S. and throughout Europe, Asia, Mexico, South America and Australia to administer our brand operations globally.

We believe that our facilities are adequate for our current needs and that we are capable of obtaining additional facilities as necessary.

We also operate two private destinations which we utilize as ports-of-call on certain itineraries: (i) an island we own in the Bahamas which we call CocoCay; and (ii) Labadee, a secluded peninsula that we lease on the north coast of Haiti.

Item 3. Legal Proceedings

As previously reported, two lawsuits were filed against Royal Caribbean Cruises Ltd. in August 2019 in the U.S. District Court for the Southern District of Florida under Title III of the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act. The complaint filed by Havana Docks Corporation ("Havana Docks Action") alleges it holds an interest in the Havana Cruise Port Terminal 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. The complaints further allege that Royal Caribbean Cruises Ltd. 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. Royal Caribbean Cruises Ltd. filed its answer to each complaint in October 2019 and on October 15, 2020, and the Court dismissed the Port of Santiago Action with prejudice on the basis that the plaintiffs in that action lacked standing to bring the claim. This decision has been appealed by the plaintiffs. We believe we have meritorious defenses to the claims alleged in both the Havana Docks Action and the Port of Santiago Action, and we intend to vigorously defend ourselves against them. We believe that it is unlikely that the outcome of either action will have a material adverse impact to our financial condition, results of operations or cash flows. However, the outcome of litigation is inherently unpredictable and subject to significant uncertainties, and there can be no assurances that the final outcome of this case will not be material.

As previously reported, on October 7, 2020, a shareholder filed a putative class action complaint against us, and three officers, Richard Fain, Jason Liberty and Michael Bayley, in the United States District Court for the Southern District of Florida (the "Court"), alleging misrepresentations relating to COVID-19 in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, seeking unspecified damages on behalf of a purported class consisting of all persons and entities (subject to specified exceptions) that purchased or otherwise acquired our securities from February 4, 2020 through March 17, 2020. As previously disclosed, on October 27, 2020, a second complaint was filed by another shareholder against us and these same officers in the Court alleging the same misrepresentations relating to COVID-19. As is the case with the first action, the second action seeks unspecified damages on behalf of a purported class consisting of all persons and entities (subject to specified exceptions) that purchased or otherwise acquired our securities from February 4, 2020 through March 17, 2020. On December 23, 2020, these cases were consolidated with a new lead plaintiff, Indiana Public Retirement System. We cannot predict the duration or outcome of this lawsuit at this time, although management believes the claims are without merit. Depending on how this case progresses, it could be costly to defend and could divert the attention of management and other resources from operations. Accordingly, even if ultimately resolved in our favor, this action could have a material adverse effect on our business, financial condition, results of operations and liquidity. On February 25, 2021, the lead plaintiff filed with the Court a voluntary dismissal of the action without prejudice.

We are also routinely involved in other claims, regulatory investigations and inquiries, and consumer complaints, including those related to COVID-19, that are typical within the ~~cruise~~travel and tourism vacation industry. The majority of these claims are covered by insurance. We believe the outcome of such claims, net of expected insurance recoveries, will not have a material adverse impact on our financial condition or results of operations and cash flows.

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Item 4. Mine Safety Disclosures

None.

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PART II

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." ~~The table below sets forth the high and low sales prices of our common stock as reported by the NYSE for the two most recent years by quarter:~~

NYSE
Common Stock

High Low
2017
Fourth Quarter $133.75 $117.55
Third Quarter $125.00 $107.79
Second Quarter $115.63 $93.86
First Quarter $101.11 $82.72
2016
Fourth Quarter $86.84 $67.53
Third Quarter $75.72 $65.10
Second Quarter $84.56 $64.95
First Quarter $99.81 $64.21

Holders

As of February ~~12, 2018,~~22, 2021, there were ~~1,529~~1,296 record holders of our common stock. Since certain of our shares are held by brokers and other institutions on behalf of shareholders, the foregoing number is not representative of the number of beneficial owners.

Dividends

In 2016, we declared cash dividends on our common stock of $0.375 per share during the first and second quarters of 2016. We increased the dividend amount to $0.48 per share for the dividends declared in the third and fourth quarters of 2016 and the first and second quarters of 2017. The dividend amount was increased to $0.60 per share for the dividends declared in the third and fourth quarters of 2017.

Holders of our common stock have an equal right, pro rata based on number of shares held, to share in our profits in the form of dividends when and if declared by our ~~Board~~board of ~~Directors~~directors out of funds legally ~~available.~~available, subject to any rights of holders of preferred stock if any. Holders of our common stock have no rights to any sinking fund.

There are no exchange control restrictions on remittances of dividends on our common stock ~~since~~by reason of our incorporation in Liberia because (1) we are and intend to maintain our status as a nonresident Liberian entity under the Liberia Revenue Code of 2000 as ~~Amended~~amended and the regulations thereunder, and (2) our ship-owning subsidiaries are not now engaged, and are not in the future expected to engage, in any business in Liberia, including voyages exclusively within the territorial waters of the Republic of Liberia. Under current Liberian law, no Liberian taxes or withholding will be imposed on payments to holders of our securities other than to a holder that is a resident Liberian entity or a resident individual or an individual or entity subject to taxation in Liberia as a result of having a permanent establishment within the meaning of the Liberia Revenue Code of 2000 as ~~Amended~~amended in Liberia.

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

In connection with securing various financial covenant waivers, we agreed with certain of our lenders not to pay dividends until the end of the third quarter of 2022. In addition, in the event we thereafter declare a dividend, we will need to repay the amounts deferred under our export credit facilities as part of the principal amortization deferrals agreed with them during 2020 and 2021. Accordingly, we did not declare a dividend during the second, third and fourth quarters of 2020. Refer toNote 12. Shareholders' Equity to our consolidated financial statements under Item 8. Financial Statements and Supplemental Data for further information on dividends declared.

Share Repurchases

~~The following table presents the total number~~There were no repurchases of ~~shares of our~~ common stock ~~that we repurchased~~ during the quarter ended December 31, ~~2017:~~2020. As of December 31, 2020, the 24-month common stock repurchase program authorized by our board of directors on May 9, 2018 had expired.

In connection with our debt covenant waivers, we agreed with certain of our lenders not to engage in stock repurchases until the end of the third quarter of 2022. In addition, in the event we engage in share repurchases, we will need to repay the amounts deferred under our export credit facilities as part of the principal amortization deferrals agreed with them during 2020 and 2021.

Period Total number of shares purchased Average price paid per share
Total number of shares purchased as part of publicly announced plans or programs⁽¹⁾
Approximate dollar value of shares that may yet be purchased under the plans or programs
October 1, 2017 - October 31, 2017 — — — $375,000,000
November 1, 2017 - November 30, 2017 275,647 $124.05 275,647 $341,000,000
December 1, 2017 - December 31, 2017 526,470 $124.96 526,470 $275,000,000
Total 802,117 802,117

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~~(1)~~

On April 28, 2017, we announced that our board of directors authorized a 12-month common stock repurchase program for up to $500 million. The timing and number of shares to be repurchased will depend on a variety of factors including price and market conditions. During the fourth quarter of 2017, we repurchased 0.8 million shares of our common stock for a total of $100 million in open market transactions that were recorded within ~~Treasury stock~~ ~~in our consolidated balance sheet. Repurchases under the program may be made at management's discretion from time to time on the open market or through privately negotiated transactions.~~

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, ~~2012~~2015 to December 31, ~~2017.~~2020.


	12/12	12/13	12/14	12/15	12/16	12/17		12/15	12/16	12/17	12/18	12/19	12/20
Royal Caribbean Cruises Ltd.	100.00	142.11	251.44	313.65	260.04	385.47	Royal Caribbean Cruises Ltd.	100.00	82.91	122.90	103.06	144.23	81.65
S&P 500	100.00	132.39	150.51	152.59	170.84	208.14	S&P 500	100.00	111.96	136.40	130.42	171.49	203.04
Dow Jones US Travel & Leisure	100.00	145.48	169.28	179.27	192.85	238.77
Dow Jones U.S. Travel & Leisure							Dow Jones U.S. Travel & Leisure	100.00	107.57	133.19	125.74	155.84	158.56

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, ~~2012~~2015 and that all dividends were reinvested. Past performance is not necessarily an indicator of future results.

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Item 6. Selected Financial Data

The selected consolidated financial data presented below for the years ~~2013~~ended December 31, 2016 through ~~2017~~December 31, 2020 and as of the end of each such year, except for Adjusted Net (Loss) Income amounts, are derived from our audited consolidated financial statements and should be read in conjunction with those financial statements and the related notes as well as in conjunction with Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Year Ended December 31,
2017 2016 2015 2014 2013
(in thousands, except per share data)
Operating Data:
Total revenues $ 8,777,845
$ 8,496,401
$ 8,299,074
$ 8,073,855
$ 7,959,894
Operating income $ 1,744,056
$ 1,477,205
$ 874,902
$ 941,859
$ 798,148
Net income $ 1,625,133
$ 1,283,388
$ 665,783
$ 764,146
$ 473,692
Adjusted Net Income^{(1) (2) (3) (4)}
$ 1,625,133
$ 1,314,689
$ 1,065,066
$ 755,729
$ 539,224
Per Share Data—Basic:
Net income $ 7.57
$ 5.96
$ 3.03
$ 3.45
$ 2.16
Adjusted Net Income $ 7.57
$ 6.10
$ 4.85
$ 3.41
$ 2.46
Weighted-average shares 214,617
215,393
219,537
221,658
219,638
Per Share Data—Diluted:
Net income $ 7.53
$ 5.93
$ 3.02
$ 3.43
$ 2.14
Adjusted Net Income $ 7.53
$ 6.08
$ 4.83
$ 3.39
$ 2.44
Weighted-average shares and potentially dilutive shares 215,694
216,316
220,689
223,044
220,941
Dividends declared per common share $ 2.16
$ 1.71
$ 1.35
$ 1.10
$ 0.74
Balance Sheet Data:
Total assets $ 22,296,317
$ 22,310,324
$ 20,782,043
$ 20,524,060
$ 19,915,003
Total debt, including capital leases $ 7,539,451
$ 9,387,436
$ 8,527,243
$ 8,254,818
$ 7,916,860
Common stock $ 2,352
$ 2,346
$ 2,339
$ 2,331
$ 2,308
Total shareholders' equity $ 10,702,303
$ 9,121,412
$ 8,063,039
$ 8,284,359
$ 8,808,265


	Year Ended December 31,
	2020		2019		2018 (1)		2017		2016
	(in thousands, except per share data)
Operating Data: (2)
Total revenues	$	2,208,805	$	10,950,661	$	9,493,849	$	8,777,845	$	8,496,401
Operating (Loss) Income	$	(4,601,557)	$	2,082,701	$	1,894,801	$	1,744,056	$	1,477,205
Net (Loss) Income (3)	$	(5,775,130)	$	1,907,600	$	1,815,792	$	1,625,133	$	1,283,388
Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.	$	(5,797,462)	$	1,878,887	$	1,811,042	$	1,625,133	$	1,283,388
Adjusted Net (Loss) Income attributable to Royal Caribbean Ltd. (4)	$	(3,924,579)	$	2,002,847	$	1,873,363	$	1,625,133	$	1,314,689
Per Share Data—Basic: (2)
Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.	$	(27.05)	$	8.97	$	8.60	$	7.57	$	5.96
Adjusted Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.	$	(18.31)	$	9.56	$	8.90	$	7.57	$	6.10
Weighted-average shares	214,335		209,405		210,570		214,617		215,393
Per Share Data—Diluted: (2)
Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.	$	(27.05)	$	8.95	$	8.56	$	7.53	$	5.93
Adjusted Net (loss) Income attributable to Royal Caribbean Cruises Ltd.	$	(18.31)	$	9.54	$	8.86	$	7.53	$	6.08
Weighted-average shares and potentially dilutive shares	214,335		209,930		211,554		215,694		216,316
Dividends declared per common share	$	0.78	$	2.96	$	2.16	$	1.71	$	1.35
Balance Sheet Data:
Total assets (5) (6)	$	32,465,187	$	30,320,284	$	27,698,270	$	22,360,926	$	22,310,324
Total debt, including commercial paper and capital leases	$	19,329,043	$	11,034,876	$	10,777,699	$	7,539,451	$	9,387,436
Common stock	$	2,652	$	2,365	$	2,358	$	2,352	$	2,346
Total shareholders' equity	$	8,760,669	$	12,163,846	$	11,105,461	$	10,702,303	$	9,121,412

(1)On July 31, 2018, we acquired a 66.7% equity stake in Silversea Cruise Holding Ltd ("Silversea Cruises"). Refer to Note 1. General, Note 3. Business Combinations and Note 11. Redeemable Noncontrolling Interest to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for information on the Silversea Cruises acquisition.

~~(1)~~

~~For 2017, 2016 and 2015, refer to~~ ~~Financial Presentation~~ ~~and~~ ~~Results of Operations~~ ~~under Item 7.~~ ~~Management's Discussion and Analysis of Financial Condition and Results of Operations~~ ~~for definition of Adjusted Net Income and reconciliation of Adjusted Net Income to Net income.~~

(2)Operating Data and Per Share Data amounts in 2020 reflect the impact of our 2020 suspension of operations due to the COVID-19 pandemic, including impairment charges and credit losses of $1.6 billion incurred related to the impairment of goodwill and trademarks and trade names attributable to our Silversea Cruises reporting unit, and long-lived assets as well as credit losses mostly on receivables related to our sale of property and equipment.

(3)Amount for 2017 includes a gain of $30.9 million related to the sale of Legend of the Seas.

(4)For 2020, 2019 and 2018, refer to Financial Presentation and Results of Operations under Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations for the definition of Adjusted Net Income and a reconciliation of Adjusted Net Income to Net income.

(5)We reclassified prepaid commissions of $64.6 million from Customer deposits to Prepaid expenses and other assets in our consolidated balance sheet as of December 31, 2017 in order to conform to the current year presentation.

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(6)Upon adoption of the new Lease accounting guidance effective January 1, 2019, we recognized right-of-use assets relating to operating leases within Operating lease right-of-use assets in our consolidated balance sheet. As of December 31, 2019, we reported Operating lease right-of-use assets of $687.6 million in our consolidated balance sheet. The comparative information presented has not been recast and continues to be reported under the accounting standards in effect for those periods. For further information on leases, refer to Note 10. Leases, to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information.

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~~(2)~~	~~Amount for 2017 includes a gain of $30.9 million related to the sale of~~ ~~Legend of the Seas~~.

~~(3)~~

~~Amount for 2014 excludes restructuring and related impairment charges of $4.3 million~~, other initiative costs of $21.2 million, an $11.0 million loss related to the estimated impact of Pullmantur's non-core businesses that were sold in 2014 and a loss of $17.4 million recognized on the sale of ~~Celebrity Century~~. Additionally, the amount for 2014 excludes $28.9 million of net income resulting from the change in our voyage proration methodology and the reversal of a deferred tax asset valuation allowance of $33.5 million due to Spanish tax reform.


~~(4)~~	Amount for 2013 excludes restructuring and related impairment charges of $56.9 million and an $8.6 million loss related to the estimated impact of Pullmantur's non-core businesses that were sold in 2014.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Concerning Forward-Looking Statements

The discussion under this caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this document, ~~including, for example, under the "Risk Factors" and "Business" captions,~~ includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding ~~guidance (including~~ our expectations for the first quarter and full year of ~~2018 and our earnings and yield estimates for 2018 set forth under the heading "Outlook" below),~~2021, business and industry prospects or future results of operations or financial position, made in this Annual Report on Form 10-K are forward-looking. Words such as "anticipate," "believe," "could," "estimate," "expect," "goal," "intend," "may," "plan," "project," "seek," "should," "will," "driving" and similar expressions are intended to further identify any of these forward-looking statements. Forward-looking statements reflect management's current expectations but they are based on judgments and are inherently uncertain. Furthermore, they are subject to risks, uncertainties and other factors that could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements. Examples of these risks, uncertainties and other factors include, but are not limited to, those discussed in this Annual Report on Form 10-K and, in particular, the risks discussed under the caption "Risk Factors" in Part I, Item 1A ~~of this report.~~herein.

All forward-looking statements made in this Annual Report on Form 10-K speak only as of the date of this document. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

The discussion and analysis of our financial condition and results of operations ~~have been~~is organized to present the following:

•a review of our critical accounting policies 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, ~~2017~~2020 compared to the same period in ~~2016 and the year ended December 31, 2016 compared to the same period in 2015;~~2019;

•a discussion of our business outlook, ~~including our expectations for selected financial items for the first quarter~~ and ~~full year of 2018; and~~

•a discussion of our liquidity and capital resources, including our future capital and contractual commitments and potential funding sources.

A discussion of our results of operations for the year ended December 31, 2019 compared to the year ended December 31, 2018 is included in Part II. Item 7. 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, 2019, filed with the SEC on February 25, 2020, as updated by our Current Report on Form 8-K dated May 13, 2020, and is incorporated by reference into this Form 10-K.

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Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). (Refer to Note 1. 1. General and Note 2. 2. Summary of Significant Accounting Policies to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data). Certain of our accounting policies are deemed "critical," as they require management's highest degree of judgment, estimates and assumptions. We have discussed these accounting policies and estimates with the audit committee of our board of directors. We believe our most critical accounting policies are as follows:

Liquidity and COVID-19

The effects of COVID-19 have had and continue to have a material negative impact on our operations, financial results and liquidity. The full extent of the impact will be determined by the length of time COVID-19 influences our industry and our eventual gradual return to service. Given the ongoing effects of COVID-19 on our operations and global bookings, we have identified the estimation of our future liquidity requirements as a critical accounting policy.

The estimation of our future liquidity requirements includes numerous assumptions that are subject to various risks and uncertainties. The principal assumptions used to estimate our future liquidity requirements during our out-of-service period consist of:

•Expected date of return to operations;

•Expected gradual resumption of cruise operations;

•Expected lower than comparable historical occupancy levels during the resumption of cruise operations; and

•Expected incremental expenses for the resumption of cruise operations, for the maintenance of additional public health protocols and procedures for additional regulations.

The assumptions used to estimate our liquidity requirements are frequently and continuously evaluated because of the unprecedented non-operational environment we are experiencing due to COVID-19. In addition, the magnitude, duration and speed of the global pandemic continues to be uncertain. As a result, we have made reasonable estimates and judgments of the impact of COVID-19 on our liquidity within our financial statements and there may be changes to those estimates in future periods.

We have taken and will continue to take actions to improve our liquidity, including:

•Reduction of capital expenditures;

•Reduction of operating expenses (including furloughing staff and laying up vessels);

•Amending credit agreements to defer payments and covenant requirements, as well as extend maturity dates;

•Raising capital through debt and stock issuances; and

•Suspending dividend payments.

Ship Accounting

~~Our ships~~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 ~~15%~~10%-15% projected residual value, using the straight-line method over the estimated useful life of the asset, which is generally 3030-35 years. The ~~30-year~~30-35 year useful life ~~of our newly constructed ships~~ and ~~15% associated~~10%-15% residual value ~~are both based on~~is the weighted-average of all major components

of a ship. Our useful life and residual value estimates take into consideration the impact of anticipated technological changes, 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. We employ a cost allocation methodology at the component level, in order to support the estimated weighted-average useful lives and residual values, as well as to determine the net cost basis of assets being replaced. Given the very large and complex nature of our ships, our accounting estimates related to ships and determinations of ship improvement costs to be capitalized require considerable judgment and are inherently uncertain. We do not have cost segregation studies performed to specifically componentize our ship systems. ~~Therefore,~~However, we estimate the costs, useful lives and residual values of component systems based principally on general and technical information known about major ship component systems and their lives, ~~and~~as well as our knowledge of the cruise vacation industry. We do not identify and track depreciation by ship component systems, but instead utilize these estimates to determine the net cost basis of assets replaced or refurbished. Improvement costs that we believe add value to our ships are capitalized as additions to the ship and depreciated over the shorter of the improvements' estimated useful lives or that of the associated ship. The estimated cost and accumulated depreciation of replaced or refurbished ship components are written

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off and any resulting losses are recognized in within Cruise operating expensesin our Consolidated Statements of Comprehensive Income (Loss).

We use the deferral method to account for drydocking costs. Under the deferral method, drydocking costs incurred are deferred and charged to expense on a straight-line basis over the period to the next scheduled drydock, which we estimate to be a period of thirty to sixty months based on the vessel's age as required by Class. Deferred drydock costs consist of the costs to drydock the vessel and other costs incurred in connection with the drydock which are necessary to maintain the vessel's Class certification. Class certification is necessary in order for our cruise ships to be flagged in a specific country, obtain liability insurance and legally operate as passenger cruise ships. The activities associated with those drydocking costs cannot be performed while the vessel is in service and, as such, are done during a drydock as a planned major maintenance activity. 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. We perform a detailed analysis of the various activities performed for each drydock and only defer those costs that are directly related to planned major maintenance activities necessary to maintain Class. The costs deferred are related to activities not otherwise routinely periodically performed to maintain a vessel's designed and intended operating capability. Repairs and maintenance activities are charged to expense as incurred.

We use judgment when estimating the period between drydocks, which can result in adjustments to the estimated amortization of drydock costs. If the vessel is disposed of before the next drydock, the remaining balance in deferred drydock is written-off to the gain or loss upon disposal of vessel in the period in which the sale takes place. We also use judgment when identifying costs incurred during a drydock which are necessary to maintain the vessel's Class certification as compared to those costs attributable to repairs and maintenance which are expensed as incurred.

We believe we have made reasonable estimates for ship accounting purposes. However, should certain factors or circumstances cause us to revise our estimates of ship useful lives or projected residual values, depreciation expense could be materially higher or lower. 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 we had reduced our estimated average ship useful life by one year, depreciation expense for ~~2017~~2020 would have increased by approximately ~~$51.5~~$157.3 million. If our ships were estimated to have no residual value, depreciation expense for ~~2017~~2020 would have increased by approximately ~~$215.5~~$345.3 million. 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 based on our return to service expectations.

Business Combinations

On July 31, 2018, we acquired a 66.7% equity stake in Silversea Cruises for $1.02 billion in cash and contingent consideration. Refer to Note 3. Business Combination to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information on the acquisition.

On July 9, 2020, we acquired the remaining 33.3% interest in Silversea Cruises that we did not already own (the "noncontrolling interest") from Heritage. As a result of the acquisition of the noncontrolling interest, Silversea Cruises is now a wholly owned cruise brand. As consideration for the noncontrolling interest, we issued to Heritage 5.2 million shares of common stock, par value $0.01 per share, of Royal Caribbean Cruises Ltd. Pursuant to the agreement governing the acquisition, among other things, the parties terminated any existing obligation to issue Heritage any contingent consideration, at fair value, in connection with our acquisition of a 66.7% interest in Silversea Cruises on July 31, 2018. The share purchase did not result in a change of control. The purchase was accounted for as an equity transaction and no gain or loss was recognized in earnings. Refer to Note 11. Redeemable Noncontrolling Interest to our consolidated financial statements under Item 8. Financial

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Statements and Supplementary Data for further information regarding our acquisition of Silversea Cruises' noncontrolling interest.

We account for business combinations in accordance with ASC 805, Business Combinations, by applying the acquisition method of accounting. The acquisition method of accounting requires that we record the assets acquired and liabilities assumed, and the noncontrolling interest, if any, at their respective fair values at the acquisition date. Goodwill is recognized as the excess of the purchase price over the fair value of the net assets acquired. Significant estimates and assumptions are made by management to value such assets and liabilities based on third party valuations such as appraisals or internal valuations based on discounted cash flow analyses or other valuation techniques. Although we believe that those estimates and assumptions are reasonable and appropriate, they are inherently uncertain and subject to change. If during the measurement period (not to exceed one year), additional information is obtained about facts and circumstances that existed as of the acquisition date related to the fair value of the assets acquired and liabilities assumed, we may adjust our estimates to account for subsequent adjustments to the provisional amounts recognized at the acquisition date, resulting in an offsetting adjustment to the goodwill associated with the business acquired.

Uncertain tax positions and tax-related valuation allowances are initially established in connection with a business combination as of the acquisition date. Our purchase price measurement period for the Silversea Cruises 2018 acquisition was closed during 2019.

Any contingent consideration is estimated at fair value at the acquisition date. Liability-classified contingent consideration is remeasured each reporting period, with changes in fair value recognized in earnings until the contingent consideration is settled.

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. The impairment review for goodwill consists of a qualitative assessment of whether it is ~~more-likely-than-not~~more-likely than-not that a reporting unit's fair value is less than its carrying ~~amount,~~value, and if necessary, a ~~two-step~~ goodwill impairment test. Factors to consider when performing the qualitative assessment include general economic conditions, limitations on accessing capital, changes in forecasted operating results, changes in fuel prices and fluctuations in foreign exchange rates. ~~If the qualitative assessment demonstrates that it is more-likely-than-not that the estimated fair value of the reporting unit exceeds its carrying value, it is not necessary to perform the two-step~~

The goodwill impairment ~~test. We may elect to bypass the qualitative assessment and proceed directly to step~~

~~one, for any reporting unit, in any period. On~~analysis consists of a ~~periodic basis, we elect to bypass the qualitative assessment and proceed to step one to corroborate the results~~comparison of ~~recent years' qualitative assessments. We can resume the qualitative assessment for any reporting unit in any subsequent period.~~

~~When performing the two-step goodwill impairment test,~~ the fair value of the reporting unit ~~is determined and compared to the~~with its carrying ~~value of the net assets allocated to the reporting unit.~~value. We typically estimate the fair value of our reporting units using a probability-weighted discounted cash flow ~~model.~~model, which may also include a combination of a market-based valuation approach. 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 principal assumptions ~~we use~~used in the discounted cash flow model ~~are projected operating results, weighted-average~~for our 2020 impairment assessments were:

•The timing of our return to service, changes in market conditions and port or other restrictions;

•Forecasted net revenues, primarily the timing of returning to normalized operations, occupancy rates from existing and expected ship deliveries, including options, and terminal growth rate; and

•Weighted average cost of capital ~~and terminal value.~~ (i.e., discount rate).

The discounted cash flow model uses the most current projected operating results for the upcoming fiscal year as a base. To that base, we add future years' cash flows ~~assuming~~based on multiple revenue and expense scenarios ~~that reflect~~reflecting the impact of ~~different global economic environments~~various return to service management assumptions beyond the base year on the reporting unit. We discount the projected cash flows using rates specific to the reporting unit based on its weighted-average cost of capital.

If the fair value of the reporting unit exceeds its carrying value, no ~~further analysis or~~ write-down of goodwill is required. IfAs 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 ~~implied~~amount by which the carrying value of a reporting unit exceeds its fair value, not to exceed the total amount of ~~the reporting unit is~~goodwill allocated to all its underlying assets and liabilities, including both recognized and unrecognized tangible and intangible assets, based on their fair value. If necessary, goodwill is then written down to its implied fair value.such reporting unit.

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 ~~amount.~~value. We estimate the fair value of these assets using a discounted cash flow model and various valuation methods depending on the nature of the intangible asset, such as the relief-from-royalty method, for trademarks and ~~tradenames.~~ trade names. The principal assumptions used in the discounted cash flow model for our 2020 impairment assessments were:

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•Forecasted net revenues, primarily the timing of returning to normalized operations, occupancy rates from existing and expected ship deliveries, including options, and terminal growth rate;

•Royalty rate; and

•Weighted average cost of capital (i.e., discount rate).

If the carrying ~~amount~~value exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. If the fair value exceeds its carrying ~~amount,~~value, the indefinite-life intangible asset is not considered impaired. ~~As of December 31, 2017, the carrying amount of indefinite-life intangible assets was not material.~~ Other intangible assets assigned finite useful lives are amortized on a straight-line basis over their estimated useful lives. Refer to Note 6. Intangible Assets to our consolidated financial statements under Item 8. Financial Statements and Supplemental Data for further information on indefinite-life intangible assets.

We review our ships and other long-lived assets for impairment whenever events or changes in circumstances indicate, based on estimated undiscounted future cash flows, that the carrying ~~amount~~value of these assets may not be fully recoverable. We evaluate asset impairment at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The lowest level for which we maintain identifiable cash flows that are independent of the cash flows of other assets and liabilities is at the ship level for our ~~ships and, prior to the sale of the aircraft, at the aggregated asset group level for our aircraft.~~ships. If estimated future cash flows are less than the carrying value of an asset, an impairment charge is recognized to the extent its carrying value exceeds fair value. Refer to Note 7. Property and Equipment to our consolidated financial statements under Item 8. Financial Statements and Supplemental Data for further information on determination of fair value for long-lived assets.

We estimate fair value based on quoted market prices in active markets, if available. If active markets are not available, we base fair value on independent appraisals, sales price negotiations and projected future cash flows discounted at a rate estimated by management to be commensurate with the business risk. Quoted market prices are often not available for individual reporting units and for indefinite-life intangible assets. 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~~The outbreak of COVID-19 has resulted in an unprecedented global response to contain the spread and control the resurgence of the disease. These global efforts have resulted in travel restrictions and created significant uncertainty regarding worldwide port closures and availability of ports and destinations generally. As part of the global containment effort, the Company previously announced a voluntary suspension of its Global Brands' cruise operations through at least April 30, 2021, for most of our cruise operations.

~~During~~As a result of the ~~fourth quarter of 2017,~~developments in 2020, we performed ~~a qualitative assessment~~interim impairment evaluations, in addition to our annual impairment reviews, of certain of our goodwill, indefinite-lived intangible assets and long-lived assets in connection with the preparation of our 2020 quarterly and annual financial statements, as further discussed below.

Royal Caribbean International ~~reporting unit. Based~~Reporting Unit

We performed interim impairment evaluations of Royal Caribbean International’s goodwill in connection with the preparation of our quarterly financial statements for the periods ended March 31, 2020 and June 30, 2020 due to the significant impact that COVID-19 has had on our ~~qualitative assessment,~~projected cash flows and triggering events identified in those quarters. Our extended suspension of our operations and the possibility of further extensions created some uncertainty in forecasting the operating results and future cash flows used in our impairment analyses. As a result of the tests, we ~~concluded~~determined that ~~it was more-likely-than-not that~~ the ~~estimated~~ fair value of the Royal Caribbean International reporting unit exceeded its carrying value by approximately 30% and ~~thus, we~~8% as of March 31, 2020 and June 30, 2020, respectively, resulting in no impairment to the Royal Caribbean International goodwill in those periods. The fair value of the Royal Caribbean International reporting unit as of March 31, 2020 was determined using a discounted cash flow model and a probability-weighted discounted cash flow model in combination with a market based valuation approach for the June 30, 2020 and November 30, 2020 assessments. We did not ~~proceed~~perform interim impairment evaluation of Royal Caribbean International's goodwill during the quarter ended September 30, 2020 as no triggering events were identified.

During the fourth quarter of 2020, we performed our annual impairment review of goodwill for Royal Caribbean International's reporting unit. We did not perform a qualitative assessment but instead proceeded directly to the ~~two-step~~ goodwill impairment test. ~~No indicators~~As a result of ~~impairment exist primarily because~~ the ~~reporting unit's~~test, we determined the fair value ~~has consistently~~of the Royal Caribbean International reporting unit exceeded its carrying value by ~~a significant margin and forecasts of operating results generated by the reporting unit appear sufficient~~approximately 14% resulting in no impairment to ~~support its carrying value.~~Royal Caribbean International's goodwill. As of December 31, ~~2017,~~2020, the carrying ~~amount~~value of goodwill attributable to our Royal Caribbean reporting unit was ~~$286.9~~$296.6 million.

Silversea Cruises Reporting Unit

~~2015 Impairment of Pullmantur Related Assets~~

~~During the third quarter of 2015, we~~We performed an interim impairment ~~evaluation~~evaluations of ~~Pullmantur’s~~Silversea Cruises’ goodwill and ~~trademarks and~~ trade ~~names~~name in connection with the preparation of our financial ~~statements.~~statements for the quarter ended March 31, 2020. As a result of ~~this analysis,~~these analyses, we determined that the carrying value of the ~~Pullmantur~~Silversea Cruises reporting unit exceeded its fair value. Similarly, we determined that the carrying value of ~~Pullmantur’s trademarks and~~Silversea Cruises’ trade ~~names~~name exceeded ~~their~~its fair value. Accordingly, upon the completion of the ~~relevant~~ impairment ~~tests discussed above,~~test, we recognized impairment charges of ~~$123.8~~$576.2 million and ~~$174.3~~$30.8 million for goodwill and ~~trademark and~~the trade name, respectively, during the

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quarter ended March 31, 2020. We estimated the fair value of the Silversea Cruises reporting unit using a probability-weighted discounted cash flow model in combination with a market based valuation approach. We did not perform interim impairment evaluations of Silversea Cruises' reporting unit or trade names during the quarters ended June 30, 2020 and September 30, 2020 as no triggering events were identified.

During the fourth quarter of 2020, we performed our annual impairment review of Silversea Cruises' goodwill. We did not perform a qualitative assessment but instead proceeded directly to the goodwill impairment test. As a result of the test, we determined the fair value of the Silversea Cruises reporting unit exceeded its carrying value by approximately 12%, resulting in no impairment to Silversea Cruises' goodwill. As of December 31, 2020, the carrying value of goodwill attributable to our Silversea Cruises reporting unit was $508.6 million.

During the fourth quarter of 2020, we performed our annual impairment review of Silversea Cruises' trade name. As a result of the quantitative test, we determined that the fair value of the Silversea Cruises' trade name exceeded its carrying value by approximately 3%, resulting in no impairment to Silversea Cruises' trade name. We will continue to closely monitor the change in fair value of the Silversea Cruises' trade name. Any further adverse developments due to COVID-19 or other events affecting the projected cash flows for Silversea Cruises may lead to further impairment of the Silversea Cruises' trade name. As of December 31, 2020 and 2019, the carrying value of indefinite-life intangible assets was $321.5 million and $352.3 million, respectively, which primarily relates to the Silversea Cruises trade name.

Long-lived Assets

Events surrounding the COVID-19 pandemic negatively impacted the expected undiscounted cash flows of certain of our long-lived assets. We evaluated these assets during the year ended 2020 pursuant to our long-lived asset impairment test which resulted in an impairment charge of $464.2 million during the year ended December 31, 2020, to write down certain ships operated by our Global Brands to their estimated fair values. The amount also includes impairment charges for ships that our Global Brands disposed of during 2020 as well as the three Azamara ships.

We also recorded impairment charges of $171.3 million during the year ended December 31, 2020 for the three ships that we chartered to Pullmantur Holdings prior to the filing of the Pullmantur reorganization. During the quarter ended September 30, ~~2015. These charges reflected~~2020, we sold the ~~full~~ships to third parties for amounts approximating their carrying ~~amounts~~values and no further impairment was recorded.

During the year ended December 31, 2020, we also determined that certain construction in progress projects would be reduced in scope or would no longer be completed as a result of our capital cost containment measures in response to the ~~goodwill~~COVID-19 impact on our liquidity. This led to an impairment charge of $91.5 million of construction in progress assets reported in Property and ~~trademark and trade names leaving Pullmantur with no intangible assets on its books.~~equipment, net.

In ~~conjunction with performing~~addition, during the ~~two-step goodwill impairment test for the Pullmantur reporting unit,~~year ended December 31, 2020, we identified that the ~~estimated fair value of~~undiscounted cash flows for certain ~~long-lived~~right-of-use assets ~~consisting of two ships and three aircraft, was~~were less than their carrying ~~values. As a result~~values due to the negative impact of ~~this determination, we~~COVID-19. We evaluated these assets pursuant to our long-lived asset impairment test, resulting in an impairment charge of ~~$113.2~~$65.9 million to write down these assets to their estimated fair values during the ~~quarter~~year ended ~~September 30, 2015.~~December 31, 2020.

The combined impairment charge of $1.5 billion primarily related to our goodwill, trademarks and trade names, vessels, construction in progress, and right-of-use assets were recognized in earnings during the year ended December 31, 2020 and is reported within Impairment and credit losses within our consolidated statements of comprehensive income (loss). These impairment assessments and the resulting charges were determined based on management’s current estimates and projections using information through the time of the issuance of these financial statements. The adverse impact that COVID-19 will continue to have on our business, operating results, cash flows and overall financial condition is uncertain and may result in changes to the assumptions used in the impairment tests discussed above, which may result in additional impairments of our goodwill, indefinite-lived intangible assets and long-lived assets in the future. Refer to Risk Factors in Part 1, Item 1A. for further discussion on risks related to the COVID-19 pandemic.

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. We also use non-derivative financial instruments designated as hedges of our net investment in our foreign operations and investments. Although certain of our derivative financial instruments do not qualify or are not accounted for under hedge accounting, we do not hold or issue derivative financial instruments for trading or other speculative purposes. We account for derivative financial instruments in accordance with authoritative guidance. Refer to Note 2. 2. Summary of Significant Accounting Policies and Note ~~14.~~ ~~Fair Value Measurements~~19. Commitments and ~~Derivative Instruments~~Contingencies to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for more information on related authoritative guidance, the Company's hedging programs and derivative financial instruments.

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On a regular basis, we enter into foreign currency forward contracts, ~~and collars,~~ interest rate ~~cross-currency~~ and fuel swaps and options with third-party institutions in over-the-counter markets. We estimate the fair value of our foreign currency forward contracts and interest rate ~~and cross-currency~~ swaps using expected future cash flows based on the instruments' contract terms and published forward prices for foreign currency exchange and interest rates. We value floors which are embedded within our interest rate swaps using standard option pricing models with inputs based on the options’ contract terms, such as exercise price and maturity, and readily available market data, such as forward interest rates and interest rate volatility. We apply present value techniques and LIBOR or EURIBOR-based discount rates to convert the expected future cash flows to the current fair value of the instruments.

We estimate the fair value of our foreign currency collars using standard option pricing models with inputs based on the options' contract terms, such as exercise price and maturity, and readily available public market data, such as foreign exchange prices, foreign exchange volatility levels and discount rates.

~~We estimate the fair value of our~~ fuel swaps using expected future cash flows based on the swaps' contract terms and forward prices. We derive forward prices from published forward fuel curves which in turn are based on ~~pricing inputs provided by third-party institutions that transact in the fuel indices we hedge. We validate these pricing inputs against~~ actual market transactions and published price quotes for similar assets. We apply present value techniques and LIBOR-based discount rates to convert the expected future cash flows to the current fair value of the instruments. We also corroborate our fair value estimates using valuations provided by our counterparties.

We adjust the valuation of our derivative financial instruments to incorporate credit risk.

We believe it is unlikely that materially different estimates for the fair value of our foreign currency forward contracts and interest rate ~~cross-currency~~ and fuel swaps and options would be derived from other appropriate valuation models using similar assumptions, inputs or conditions suggested by actual historical experience.

The current suspension of our cruise operations due to the COVID-19 pandemic and our 2020 and expected 2021 ship disposals resulted in reductions to our forecasted fuel purchases. As of December 31, 2020, we discontinued cash flow hedge accounting on 0.6 million metric tons of our fuel swap agreements maturing in 2020 and 2021, which resulted in the reclassification of a net $104.4 million loss from Accumulated other comprehensive loss to Other expense during the year ended December 31, 2020. Changes in the fair value of fuel swaps for which cash flow hedge accounting was discontinued are currently recognized in Other expense each reporting period.

Future suspension of our operations or modifications to our itineraries may affect our expected forecasted fuel purchases which could result in further discontinuance of fuel swap cash flow hedge accounting and the reclassification of deferred gains or losses from Accumulated other comprehensive loss into earnings. Refer to Risk Factors in Part 1, Item 1A. for further discussion on risks related to the COVID-19 pandemic.

Contingencies—Litigation

to determine if it is probable that we will incur an expense related to the settlement or final adjudication of such matters and whether a reasonable estimation of such probable loss, if any, can be made. In assessing probable losses, we take into consideration estimates of the amount of insurance recoveries, if any, which are recorded as assets when recoverability is probable. We accrue a liability when we believe a loss is probable and the amount of loss can be reasonably estimated. 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. Demand is 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 to the Caribbean, Asia and Australia during that period.

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, ~~and~~ pre- and post-cruise ~~tours.~~ tours and fees for operating certain port facilities. Onboard and other revenues also ~~includes~~include revenues we receive from independent ~~third-party~~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 our

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bareboat charter, procurement and management related services we perform on behalf of our unconsolidated affiliates.

Cruise Operating Expenses

Our cruise operating expenses are comprised of the following:

•Commissions, transportation and other expenses, which consist of those costs directly associated with passenger ticket revenues, including travel agent commissions, air and other transportation expenses, port costs that vary with passenger head counts and related credit card fees;

•Onboard and other expenses, which consist of the direct costs associated with onboard and other revenues, including the costs of products sold onboard our ships, vacation protection insurance premiums, costs associated with pre- and post-cruise tours and related credit card fees as well as the minimal costs associated with concession revenues, as the costs are mostly incurred by third-party concessionaires and costs incurred for the procurement and management related services we perform on behalf of our unconsolidated affiliates;

•Payroll and related expenses, which consist of costs for shipboard personnel (costs associated with our shoreside personnel are included in Marketing, selling and administrative expenses);

•Food expenses, which include food costs for both guests and crew;

•Fuel expenses, which include fuel and related delivery, storage and emission consumable costs and the financial impact of fuel swap agreements; and

•Other operating expenses, which consist primarily of operating costs such as repairs and maintenance, port costs that do not vary with passenger head counts, vessel related insurance, entertainment and gains and/or losses related to the sale of our ships, if any.

We do not allocate payroll and related expenses, food expenses, fuel expenses or other operating expenses to the expense categories attributable to passenger ticket revenues or onboard and other revenues since they are incurred to provide the total cruise vacation experience.

Selected Operational and Financial Metrics

We utilize a variety of operational and financial metrics which are defined below to evaluate our performance and financial condition. As discussed in more detail herein, certain of these metrics are non-GAAP financial measures. 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. The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Adjusted (Loss) Earnings per Share ("Adjusted EPS")represents Adjusted Net (Loss) Income attributable to Royal Caribbean Cruises Ltd. 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.

Adjusted Net (Loss) Income represents net (loss) income less net income attributable to noncontrolling interest excluding certain items that we believe adjusting for is meaningful when assessing our performance on a comparative basis. For the periods presented, these items included (i) asset impairment and credit losses recorded in 2020 as a result of the impact of COVID-19; (ii) equity investment impairment charges recorded in the first quarter of 2020 as a result of the impact of COVID-19; (iii) currency translation losses recognized in connection with the ships that were previously chartered to Pullmantur; (iv) the estimated cash refund expected to be paid to Pullmantur guests and other expenses incurred as part of the Pullmantur S.A. reorganization; (v) restructuring charges incurred in relation to the reduction in our U.S. workforce and other initiatives expenses in 2020 and the reorganization of our international sales and marketing structure primarily in 2019; (vi) the amortization of non-cash debt discount on our convertible notes; (vii) loss on the extinguishment of debt; (viii) the amortization of the Silversea Cruises intangible assets resulting from the 2018 acquisition; (ix) the noncontrolling interest adjustment to exclude the impact of the contractual accretion requirements associated with the put option held by Heritage Cruise Holding Ltd. ("Heritage"), prior to the July 2020 noncontrolling interest purchase; (x) the change in fair value in the Silversea Cruises contingent consideration; (xi) net insurance recoveries or costs related ~~assets,~~to the ~~net~~collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas; (xii) transaction costs related to the 2018 Silversea Cruises acquisition; (xiii) the impairment loss and other costs related to the exit of our tour operations business; (xiv) the impairment loss related to Skysea Holding; and (xv) the ~~elimination~~impact of the ~~Pullmantur reporting lag, the net gain~~change in accounting principle related to the ~~51% sale~~recognition of stock-based compensation expense from the ~~Pullmantur and CDF Croisières de France ("CDF") brands, restructuring charges and other initiative costs related~~graded attribution method to ~~our Pullmantur right-sizing strategy and other restructuring initiatives.~~the straight-line attribution method for time-based stock awards.

Available Passenger Cruise Days ("~~APCD"~~APCD") is our measurement of capacity and represents double occupancy per cabin multiplied by the number of cruise days for the period, which excludes canceled cruise days and drydock days. We use this

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measure to perform capacity and rate analysis to identify our main non-capacity drivers that cause our cruise revenue and expenses to vary.

~~Double-DoubleProgram~~ refers to the multi-year Adjusted EPS and Return on Invested Capital ("ROIC") goals we publicly announced in 2014 and sought to achieve by the end of 2017. We designed this program to help us better execute and achieve our business goals by clearly articulating longer-term financial objectives. Under the Double-Double Program, we targeted Adjusted EPS of $6.78 by the end of 2017, which was double our 2014 Adjusted EPS of $3.39. We also targeted ROIC of 10% by the end of 2017 as compared to ROIC of 5.9% in 2014.

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

~~Gross Yields~~ ~~represent total revenues per APCD.~~

~~Net Cruise Costs~~ ~~and~~ ~~Net Cruise Costs Excluding Fuel~~ represent Gross Cruise Costs excluding commissions, transportation and other expenses and onboard and other expenses and, in the case of Net Cruise Costs Excluding Fuel, fuel expenses (each of which is described above under the ~~Description of Certain Line Items~~ heading). In measuring our ability to control costs in a manner that positively impacts net income, we believe changes in Net Cruise Costs and Net Cruise Costs Excluding Fuel to be the most relevant indicators of our performance. A reconciliation of historical Gross Cruise Costs to Net Cruise Costs and Net Cruise Costs Excluding Fuel is provided below under ~~Results of Operations~~. For the periods presented, Net Cruise Costs excludes the net gain related to the 51% sale of the Pullmantur and CDF brands, restructuring charges and other initiative costs related to our Pullmantur right-sizing strategy and other restructuring initiatives.

~~Net Revenues~~ ~~represent total revenues less commissions, transportation and other expenses and onboard and other expenses (each of which is described above under the~~ ~~Description of Certain Line Items~~ ~~heading).~~

~~Net Yields~~ represent Net Revenues per APCD. We utilize Net Revenues and Net Yields to manage our business on a day-to-day basis as we believe that they are the most relevant measures of our pricing performance because they reflect the cruise revenues earned by us net of our most significant variable costs, which are commissions, transportation and other expenses and onboard and other expenses. A reconciliation of historical Gross Yields to Net Yields is provided below under ~~Results of Operations. For the periods presented, Net Yields excludes initiative costs related to the sale of the Pullmantur and CDF brands.~~

Occupancy, in accordance with cruise vacation industry practice, is calculated by dividing Passenger Cruise Days 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.

~~We believe~~Although discussed in prior periods, we did not report nor reconcile our Gross Yields, Net Revenues, Net Yields, ~~Net~~Gross Cruise Costs, and Net Cruise Costs Excluding Fuel are our most relevant non-GAAP financial measures. However, a significant portion of our revenue and expenses are denominated in currencies other than the United States dollar. Because our reporting currency is the United States dollar, the value of these revenues and expenses can be affected by changes in currency exchange rates. Although such changes in local currency prices are just one of many elements impacting our revenues and expenses, they can be an important element. For this reason, we also monitor Net Yields, Net Cruise Costs and Net Cruise Costs Excluding Fuel, as ifdefined in our Annual Report on Form 10-K for twelve months ended December 31, 2019. Historically, we have utilized these financial metrics to measure relevant rate comparisons to other periods. However, our 2020 reduction in capacity and revenues and the ~~current periods' currency exchange rates had remained constant with~~shift in the ~~comparable prior periods' rates, or on~~nature of our running costs due to the suspension of our operations as a ~~"Constant Currency" basis.~~

It should be emphasized that Constant Currency is primarily used for comparing short-term changes and/or projections. Changes in guest sourcing and shifting the amount of purchases between currencies can change the impactresult of the ~~purely currency-based fluctuations.~~

The use of certain significant non-GAAP measures, such as Net Yields, Net Cruise Costs and Net Cruise Costs Excluding Fuel, allows us to perform capacity and rate analysis to separate the impact of known capacity changes from other less predictable changes which affect our business. We believe these non-GAAP measures provide expanded insight to measure revenue and cost performance in additionCOVID-19 pandemic ("COVID-19") do not allow for a meaningful comparison to the ~~GAAP based financial measures. There are no specific rules or regulations for determining non-GAAP and Constant Currency measures,~~prior period metrics and as such ~~there exists~~these metrics have been excluded from this report.

Recent Developments: COVID-19

The disruptions to our operations resulting from COVID-19 have had, and continue to have, a material negative impact on our financial condition and results of operations. The outbreak of COVID-19 has resulted in an unprecedented global response to contain the ~~possibility~~spread of the disease. These global efforts have resulted in travel restrictions and created significant uncertainty regarding worldwide port closures and availability of ports and destinations generally. As part of the global containment effort, we previously announced a voluntary suspension of our Global Brands’ cruise operations beginning March 13, 2020, which has been extended through at least April 30, 2021, for most of our cruise operations.

We continue to work with government and health authorities across the globe to address the unique public health challenges posed by COVID-19 and expect to re-start our global cruise operation in a phased manner. Notably, we resumed limited cruise operations outside of the U.S. in July and September with TUI Cruises and Hapag-Lloyd, respectively, for a limited period. Recently, we also received approval from the Singaporean Government to resume sailings out of Singapore. As a result, Quantum of the Seas, a ship from the Royal Caribbean International fleet, resumed cruising from Singapore in December 2020. These initial cruises are and will most likely continue to take place with reduced guest occupancy, modified itineraries and enhanced health protocols developed in collaboration with governments and health authorities.

CDC Framework for Conditional Sailing Order

On and effective as of October 30, 2020, the U.S. Centers for Disease Control and Prevention ("CDC") issued a Framework for Conditional Sailing Order (the “Conditional Order”) that ~~they~~will conditionally permit cruise ship passenger operations in U.S. waters under certain conditions and using a phased approach. The Conditional Order replaces the CDC’s No Sail Order that expired on October 31, 2020 and will remain in effect until the earlier of (1) the expiration of the Secretary of Health and Human Services’ declaration that COVID-19 constitutes a public health emergency, (2) the rescission or modification by the CDC Director of the Conditional Order based on specific public health or other considerations, or (3) November 1, 2021. See Part I. Item 1. Business - Regulation for further details on the Conditional Order.

We are working with both the CDC and the Healthy Sail Panel ("HSP"), formed in June 2020 by us and Norwegian Cruise Line Holdings Ltd. and composed of leading experts in relevant fields, including epidemiology, infectious diseases, public policy and regulation, engineering and general health safety, to prepare and develop our plan to meet the framework for the Conditional Order. While the Conditional Order represents an important step in our return to service, many uncertainties remain as to the specifics, timing and costs of administering and implementing the requirements of the Conditional Order, some of which may ~~not~~ be ~~comparable~~significant. Further, the Conditional Order contemplates that the CDC may issue additional requirements through technical instructions or orders as needed and that the phases described above will be further determined based on public health considerations, including the trajectory of the pandemic and the ability of cruise ship operators to successfully employ measures that mitigate the risk of COVID-19. Based on our assessment of these conditions or for other ~~companies~~reasons, we may determine it necessary to further extend our voluntary suspension of our Global Brands’ cruise sailings which currently extends through at least April 30, 2021, for most of our cruise operations.

Update on Bookings

Booking activity for the second half of 2021 is aligned with our anticipated resumption of cruises. Pricing on these bookings is higher than 2019 both including and excluding the dilutive impact of future cruise credits (FCCs). While the brands are still in the process of opening for sale the remainder of their 2022/2023 seasons, first and second quarter 2022 sailings have been open for some time. Cumulative advance bookings for the first half of 2022 are within historical ranges and at higher prices. This was achieved with minimal sales and marketing spend, which we believe highlights a strong long-term demand for cruising.

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Since our last quarterly filing, approximately 75% of bookings made for 2021 are new and the ~~industry.~~ rest are due to the redemption of FCCs and our “Lift & Shift” program. We continue to provide guests who were booked on a suspended sailing with the option to request a refund, to receive an FCC, or to “lift and shift” their booking to the following year.

As of December 31, 2020, we had $1.8 billion in customer deposits of which approximately 50% are FCCs and the rest are related to new bookings. Approximately 53% of the guests booked on cancelled sailings since our suspension of operations have requested cash refunds.

Update on Recent Liquidity Actions and Ongoing Uses of Cash

As of December 31, 2020, we had liquidity of approximately $4.4 billion in the form of cash and cash equivalents of $3.7 billion and a $0.7 billion one-year commitment through August 12, 2021, for a 364-day term loan facility. As of December 31, 2020, our revolving credit facilities were fully utilized through a combination of amounts drawn and letters of credit issued under the facilities. Given the current environment, we continue to prioritize and bolster liquidity through significant cost and capital expenditure reductions, cash conservation and additional financing sources, as described below, to ensure that we are well positioned for recovery.

Reduced Operating Expenses

We have ~~not provided~~taken significant actions to reduce operating expenses during the suspension of our global cruise operations. In particular, we:

•significantly reduced ship operating expenses, including crew payroll, food, fuel, insurance and port charges;

•further reduced operating expenses as the Company’s ships transitioned during the year into various levels of layup;

•eliminated or significantly reduced marketing and selling expenses in 2020;

•reduced and furloughed our workforce, with approximately 23% of our US shoreside employee base being impacted; and

•suspended travel for shoreside employees and instituted a ~~quantitative reconciliation~~hiring freeze across the organization.•

We may seek to further reduce our average monthly expenses under a further prolonged non-revenue scenario and during the restart of ~~(i) projected Total revenues~~operations. This includes consideration of additional vessels heading to ~~projected Net Revenues, (ii) projected Gross Yields to projected Net Yields, (iii) projected Gross Cruise Costs to projected Net Cruise Costs~~cold layup as well as further assessment of our shoreside workforce, including those coming back from furlough.

Reduced Capital Expenditures

Since the start of February 2020, we have identified approximately $4.2 billion of total capital expenditure reductions or deferrals in 2020 and ~~projected Net Cruise Costs Excluding Fuel~~2021. The reductions or deferrals of capital expenditures are comprised of the following:

•$1.4 billion of non-newbuild, discretionary capital expenditures; and (iv) projected Net Income and Earnings per Share to projected Adjusted Net Income and Adjusted Earnings per Share because preparation of meaningful GAAP projections of Total revenues, Gross Yields, Gross Cruise Costs, Net Income and Earnings per Share would require unreasonable effort. Due to significant uncertainty,

•$2.8 billion in reduced spend or deferred installment payments for newbuild related payments which we are ~~unable~~currently finalizing.

COVID-19 has impacted shipyard operations which have and will continue to ~~predict, without unreasonable effort, the future movement of foreign exchange rates, fuel prices and interest rates inclusive~~result in delays of our ~~related hedging programs.~~previously contracted ship deliveries. During 2021, the Company expects the delivery of Odyssey of the Seas and Silver Dawn during the first and fourth quarters, respectively. As it relates to 2022, the Company has two ship deliveries scheduled: Wonder of the Seas and Celebrity Beyond. The exact durations of the ship delivery delays are currently under discussion with the impacted shipyards.

Debt Maturities, New Financings and Other Liquidity Actions

Since the start of February 2020, we have taken several additional actions to further improve our liquidity position and manage cash flow. In ~~addition, we~~particular, we:

• increased the capacity under our unsecured revolving credit facilities by $0.6 billion, and fully drew on both facilities;

• entered into a $2.35 billion 364-day senior secured loan agreement in March of 2020, which was repaid in May of 2020 with proceeds from the $3.32 billion senior secured notes ("Secured Notes") discussed below;

• issued $3.32 billion in Secured Notes, of which $1.0 billion is due in 2023 and $2.32 billion is due in 2025. The previously mentioned $2.35 billion, 364-day senior secured loan was repaid in its entirety with a portion of the proceeds of these notes. The Secured Notes are ~~unable to determine the future impact of restructuring expenses or other non-core business related gains~~unconditionally guaranteed by Celebrity Cruises Holdings Inc., Celebrity Cruises Inc. and losses which may result from strategic initiatives. These items are uncertain and could be material to our results of operations in accordance with GAAP. Due to this uncertainty, we do not believe that reconciling information for such projected figures would be meaningful.

~~Executive Overview~~

Our 2017 net income was $1.6 billion, or $7.53 per diluted share, compared to $1.3 billion, or $5.93 per diluted share, in 2016. Adjusted Net Income for 2017 was $1.6 billion, or $7.53 per diluted share, compared to $1.3 billion, or $6.08 per diluted share, in 2016. Adjusted EPS for 2017 represents the fourth straight year we achieved a record amount, growing approximately 24% compared to 2016.

~~The year 2017 marked the final year~~certain of our ~~Double-Double~~wholly-owned vessel-owning subsidiaries. $1.66 billion of the obligations under the Secured Notes and the related guarantees are secured by first priority security interests in collateral, which includes certain of our material intellectual property, a pledge of 100% of the equity interests of certain of our vessel-owning subsidiaries and mortgages on the 28 vessels owned by such subsidiaries;

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• secured deferrals of existing debt amortization under our export-credit backed debt facilities which increased the Company’s liquidity by an additional $1.5 billion;

•issued $1.0 billion senior guaranteed notes (“Unsecured Notes”) maturing 2023;

•issued $1.725 billion senior convertible notes maturing 2023;

•qualified for a government commercial paper program ~~("Double-Double"), which was comprised~~by the Bank of ~~two multi-year financial targets, including doubling~~England and issued £300.0 million, or approximately $409.9 million, of unsecured commercial paper thereunder;

•secured a commitment for a $700.0 million 364-day term loan facility available for draw any time prior to August 12, 2021;

•issued approximately 22.6 million shares of common stock for approximately $1.6 billion; and

• agreed with certain of our ~~2014 Adjusted EPS to $6.78 and achieving double-digit ROIC by~~lenders that we will not pay dividends or engage in stock repurchases until at least the end of ~~2017. The Double-Double program was successful~~the third quarter of 2022.

Expected debt maturities for 2021 are $0.4 billion, assuming completion of a remaining $0.4 billion in ~~galvanizing~~ship principal amortization deferrals. We estimate our ~~large workforce~~cash burn to be, on average, in the range of approximately $250 million to $290 million per month during a prolonged suspension of operations. This range includes all interest expenses, ongoing ship operating expenses, administrative expenses, hedging costs, expected necessary capital expenditures (net of committed financings in the case of newbuilds) and ~~drove a real step change~~excludes changes in ~~performance. Our long-term commitment~~customer deposits, commissions, principal repayments, and fees and collateral postings related to ~~grow revenue yields, manage~~financing and hedging activities.

As we return our fleet into service, we have incurred, as it relates to existing operations, and will incur incremental spend as we bring the ships out of their various levels of layup, return the crew to our vessels, take the necessary steps to ensure compliance with the recommended protocols and gear up our sales and marketing activities.

We continue to identify and evaluate further actions to enhance our liquidity and support our recovery. These include and are not limited to further reductions in capital expenditures, operating expenses and administrative costs and additional financings, and refinancings.

Both our non-export credit agency facilities and our export credit agency (“ECA”) facilities contain covenants that require us, among other things, to maintain ~~steady capacity growth guided us towards~~a fixed charge coverage ratio of at least 1.25x and limit our net debt-to-capital ratio to no more than 62.5%, and under certain facilities, to maintain minimum shareholders’ equity. During the ~~achievement~~course of 2020, we amended our export credit facilities, substantially all of our non-export credit facilities totaling an outstanding amount of $11.2 billion as of December 31, 2020, and our credit card processing agreements in order to waive the applicable financial covenants through and including the fourth quarter of 2021. The remainder of our credit facilities with financial covenants (totaling $130 million as of December 31, 2020) benefit from a financial covenant waiver through and including the first quarter of 2021. Certain of these amended agreements impose a monthly-tested liquidity covenant. As of December 31, 2020, the minimum liquidity requirement was $350.0 million. Pursuant to these amendments, we have also agreed that we will not pay cash dividends or effectuate share repurchases during the waiver period unless we are in compliance with the fixed charge coverage covenant as of the ~~Double-Double. We finished 2017 with Adjusted EPS~~end of ~~$7.53 and ROIC in excess~~the most recently completed quarter for the duration of ~~10%, exceeding our Double-Double targets.~~ the waiver period.

During the ~~Double-Double period,~~first quarter of 2021, we amended $4.9 billion of our non-export credit facilities and certain of our credit card processing agreements to extend the waiver of the financial covenants through and including the third quarter of 2022 or, if earlier, that date falling after January 1, 2022 on which we elect to comply with the modified covenants. In addition, pursuant to the amendments, we have ~~experienced annual Adjusted EPS growth~~modified the manner in which such covenants are calculated (temporarily in certain cases and permanently in others) as well as the levels at which our net debt to capitalization covenant will be tested during the period commencing immediately following the end of ~~approximately 24%, 26%~~the waiver period and ~~42% and annual ROIC growth~~continuing through the end of ~~approximately 18%, 17% and 29%, in each of 2017, 2016 and 2015, respectively.~~

~~Additionally, Net Yields on a Constant-Currency basis increased~~2023. The amendments also increase the monthly-tested minimum liquidity covenant to $500 million for the ~~eighth consecutive year. For~~duration of the waiver period (subject to reduction to $350 million, if we raise at least $500 million of additional capital). Pursuant to these amendments, the restrictions on paying cash dividends and effectuating share repurchases were extended through and including the third quarter of 2022.

As of December 31, 2020, we were in compliance with the applicable minimum liquidity covenant and we estimate that we will be in compliance for at least the next twelve months. Refer to Note 9. Debt for further information regarding our debt covenants.

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five-year period starting in April 2022. Pursuant to these amendments, we have agreed to implement the same liquidity covenant that applies in our non-export credit facilities. The amendments also provide for mandatory prepayment of the deferred amounts upon the taking of certain actions. Subject to a number of carve-outs, these include, but are not limited to, issuance of dividends, completion of share repurchases, issuances of debt other than for crisis and recovery purposes, the making of loans and the sale of assets other than at arm’s length.

In addition, in the fourth quarter of 2020 and the first quarter of 2021, we entered into amendments to our drawn and undrawn ECA facilities to provide for the issuance of guarantees in satisfaction of existing obligations under these facilities. Following issuance, which in the case of the undrawn facilities, will occur once the debt is drawn, the guarantees will be released under certain circumstances as other debt is repaid or refinanced on an unsecured and unguaranteed basis. In connection with and following the issuance of the guarantees, the guarantor subsidiaries are restricted from issuing additional guarantees in favor of lenders, other than those lenders who are party to the ECA facilities, and certain of the guarantor subsidiaries are restricted from incurring additional debt. In addition, the ECA facilities will benefit from guarantees to be issued by intermediary parent companies of subsidiaries that take delivery of any new vessels subject to export-credit backed financing.

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Executive Overview

During 2020, the world was heavily impacted by the COVID-19 pandemic. As part of the containment effort resulting from the global pandemic, we implemented a voluntary suspension of our cruise operation beginning March 13, 2020, which has been extended through at least April 30, 2021, for most of our cruise operations. As a result, we cancelled almost 2,000 sailings that were originally scheduled to sail in 2020.

Throughout the COVID-19 pandemic, our focus has been on the safety and well-being of our guests and crew, the care of our fleet, and the strength of our liquidity position. We repatriated 46,998 crew members, moved our whole fleet into various level of lay-up and formed an expert panel with Norwegian Cruise Line Holdings, called the Healthy Sail Panel ("HSP"), to develop a comprehensive set of enhanced health and safety protocols. Based on the detailed scientific recommendations of the HSP we were able to successfully resume operations in Singapore, with Quantum of the Seas, and in Europe with TUI Cruises and Hapag-Lloyd.

Since the suspension of our global cruise operation, we have taken aggressive actions to enhance our liquidity, preserve cash and obtain additional financing. During 2020, we raised approximately $9.3 billion of new capital through a combination of bond issuances, common stock public offerings and other loan facilities. We also reduced our steady-state monthly cruise operating expenses by approximately 80% and reduced the 2020 capital expenditures by $3.0 billion. In addition, in the second quarter of 2020 and the first quarter of 2021, we amended our export credit facilities to allow for the deferral of $1.5 billion of principal amortization through April 2022. We also amended over $11 billion of commercial bank and export credit facilities to provide covenant waivers through at least the third quarter of 2022. Given the current environment, we continue to prioritize and bolster our liquidity, working to ensure we are well positioned for recovery. Our average cash burn rate continues to be within the range of $250 million - $290 million per month during this prolonged suspension of operations, despite increased interest expenses from additional financing.

During the year ended December 31, ~~2017,~~2020, we executed several measures to structurally reduce our ~~Net Yields~~cost base, realign our capital allocation and improve our scale and margins. Besides working on ~~a Constant-Currency basis increased by 6.4%, primarily driven by increases in both ticket~~reducing our G&A expenses and onboard yields and by a benefit from the deconsolidation of the Pullmantur brand. Strong demand for Europe and North America products combined with strong onboard trends are responsible for the growth. Partly offsetting these successes was the impact of the 2017 hurricane season and China's South Korea travel restrictions.

Net onboard revenue yield in 2017 grew by 6.8% year-over-year on a Constant Currency basis. Growth came from a variety of areas, including beverage package sales, specialty restaurants, shore excursions, andstreamlining our ~~high speed onboard internet products.~~

We remain dedicated to finding efficiencies, identifying synergies and reducing costs, while at the same time, focusing on strategic investments in areas that will boost revenue. In 2017, our Net Cruise Costs Excluding Fuel increased by 2.0% on a Constant Currency basis compared to 2016.

~~The Company remains focused on improving returns for our shareholders. In 2017,~~procurement efforts, we bought back $225 million shares of common stock under our $500 million share repurchase program that was announced in April 2017. We also announced a 25% increase to our common stock dividend, our fifth consecutive year with a dividend increase. In addition, during 2017, both Moody’s and S&P upgraded our senior unsecured debt rating to investment grade.

~~In 2018, all~~successfully divested three of our ~~Global Brands will each welcome a ship~~oldest and less efficient ships, Empress of the Seas, Majesty of the Seas and Celebrity Xperience and are assisting in the ~~same year -~~reorganization in Spanish courts of Pullmantur Cruceros. We also acquired the remaining share of Silversea without impacting our liquidity and expanded our joint-venture with TUI Cruises to include Hapag-Lloyd Cruises. Despite disruptions in shipyard operations, we successfully took delivery of three new ships – Celebrity Apex, Silver Moon and Silver Origin. Moreover, in January 2021, we entered into a definitive agreement to sell our Azamara brand to Sycamore Partners in an all-cash transaction which is expected to close in the first quarter of 2021. The deal includes Azamara’s three-ship fleet and associated intellectual property. By reshaping our fleet’s efficiency and the corporations’ cost structure we are aligning our company to better support our operating leverage and earnings growth during our recovery.

As the pandemic persists, we will continue to search for further opportunities in our ~~history. Royal Caribbean International will welcome newbuild~~ ~~Symphony~~operations. As important, we are also focusing on our healthy return-to-service program, as well as returning to financial health.

We continue to work and collaborate with the HSP, epidemiological and policy experts, health authorities and various governments around the globe to ensure a healthy and safe return to cruising for guests, crew and the communities we visit. Regarding the resumption of operations out of the ~~Seas~~ ~~in April; Azamara Club Cruises will welcome~~ ~~Azamara Pursuit~~ ~~in August; and Celebrity Cruises will welcome its newbuild~~ ~~Celebrity Edge~~ ~~in November. In 2018, we expect our capacity in the Caribbean will increase as~~ ~~Symphony of the Seas~~ ~~and~~ ~~Celebrity Edge~~ ~~join the Caribbean in the winter,~~ ~~Celebrity Infinity~~ ~~returns to the Caribbean and we upsize~~ ~~Jewel of the Seas~~ to ~~Freedom of the Seas~~ ~~and~~ ~~Enchantment of the Seas~~ to ~~Mariner of the Seas. As a result of~~ ~~Mariner of the Seas~~ ~~repositioning from Asia/Pacific to North America to make way for~~ ~~Spectrum of the Seas’~~ arrival in early 2019, we expect our Asia/Pacific capacity will decrease year over year and will account for 17% of our total capacity in 2018. We expect Europe will represent 17% of our capacity in 2018 with growth driven by the ~~Symphony of the Seas'~~ ~~inaugural Western Mediterranean season replacing~~ ~~Freedom of the Seas~~ ~~and the addition of~~ ~~Azamara Pursuit.~~

~~In November 2017, we announced the order of~~ ~~Celebrity Flora~~, the brand’s first ship designed specifically for the Galapagos Islands, which we expect will sail beginning in 2019. In addition to investing in new hardware and our existing hardware through our fleet modernization programs, ~~Royal Amplified~~ ~~and~~ ~~Celebrity Revolution~~U.S., we continue to ~~opportunistically evaluate selling or transferring older ships~~prepare and develop our plan to ~~further optimize our fleet. Since 2014, we have sold four ships -~~meet the ~~sale of~~ ~~Celebrity Century~~ ~~to a subsidiary of Skysea Holdings,~~Framework for Conditional Sailing Order issued by the ~~sale of~~ ~~Ocean Dream~~ ~~to an unrelated third-party, the sale of~~ ~~Splendour of the Seas~~ ~~to TUI Cruises,~~U.S. Centers for Disease Control and ~~sale of~~ ~~Legend of the Seas~~ ~~to an affiliate of TUI AG, our joint venture partner in TUI Cruises.~~

After announcing our achievement of Double-Double, we thanked employees for their contribution with individual salary bonuses of five percent. Employees received equity-based awards equal to five percent of their 2017 salaries in an $80 million program called the "~~Thank You, Thank You Bonus~~Prevention (CDC).~~" The awards, which vest over three years, went to all employees – shipboard~~ Overall, and ~~shoreside, full-time and part-time, domestic and overseas. Corporate officers, however, were excluded. In addition~~due to the ~~five percent equity-based awards,~~challenges posed by the pandemic, we ~~will contribute~~expect to ~~the Crew Welfare Fund for upgrades to crew living~~re-start our global cruise operation in a phased manner with reduced guest occupancy, modified itineraries and ~~recreational areas.~~enhanced health and safety protocols.

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Results of Operations

In addition to the items discussed above under "Executive Overview," significant items for ~~2017~~2020 include:

~~Both our net income~~•Our Net (Loss) Income attributable to Royal Caribbean Cruises Ltd. and Adjusted Net (Loss) Income for the year ended December 31, ~~2017~~2020 was ~~$1.6~~$(5.8) billion and $(3.9) billion, or ~~$7.53~~$(27.05) and $(18.31) per share on a diluted basis, respectively, as compared to ~~both net income~~Net Income attributable to Royal Caribbean Cruises Ltd. and Adjusted Net Income of ~~$1.3~~$1.9 billion and $2.0 billion, or ~~$5.93~~$8.95 and ~~$6.08~~$9.54 per share on a diluted basis, respectively, for the year ended December 31, ~~2016.~~2019.

~~The estimated negative impact resulting from~~•Total revenues, excluding the ~~third quarter 2017 hurricane-related disruptions was approximately $0.26 per share on a diluted basis to our net income and Adjusted Net Income~~effect of changes in foreign currency rates, decreased by $8.7 billion for the year ended December 31, ~~2017.~~2020 compared to the same period in 2019 reflecting the volume impact of our cancelled sailings during 2020 as a result of the COVID-19 pandemic.

~~Total~~•The effect of changes in foreign currency exchange rates related to our passenger ticket and onboard and other revenue transactions, denominated in currencies other than the United States dollar, resulted in a decrease in total revenues ~~increased by $281.4~~of $22.0 million for the year ended December 31, ~~2017~~2020 compared to the same period in ~~2016 primarily~~2019.

•Total cruise operating expenses, excluding the effect of changes in foreign currency rate, decreased by $3.3 billion for the year ended December 31, 2020 compared to the same period in 2019 due to ~~an increase~~our cancelled sailings in ~~ticket prices and onboard spending on a per passenger basis, which are further discussed below.~~2020.

~~Total Cruise~~•The effect of changes in foreign currency exchange rates related to our cruise operating expenses, ~~decreased by $119.0~~denominated in currencies other than the United States dollar, resulted in a decrease in total operating expenses of $11.2 million for the year ended December 31, ~~2017~~2020 compared to the same period in ~~2016, primarily due to the decrease in capacity, which is further discussed below.~~2019.

~~Other items for 2017 include:~~

~~In May 2017, TUI Cruises, our 50% joint venture, took delivery of~~ ~~Mein Schiff 6~~.

•During the ~~second quarter~~year ended December 31, 2020, as a result of ~~2017,~~the current and expected ongoing impact of the COVID-19 pandemic on our operations and cash flows, we ~~entered into agreements with Meyer Turku~~recorded total impairment and credit losses of $1.6 billion. The impairment charges related to ~~build two Icon-class ships. In~~our goodwill, trademarks and trade names, long-lived assets, including right-of-use assets, and credit losses related to our notes receivable.

•Our consolidated results of operations include Silversea Cruises’ results of operations on a three-month reporting lag from October ~~2017, we entered into credit agreements~~1, 2019 through September 30, 2020 for the ~~unsecured financing~~twelve months ended December 31, 2020, from October 1, 2018 through September 30, 2019 in our consolidated results of ~~these ships~~operations for upthe year ended December 31, 2019 and from the date of acquisition of July 31, 2018 to ~~80%~~September 30, 2018 in our consolidated results of ~~each ship's contract price.~~operations for the year ended December 31, 2018. Refer to Note ~~15.~~ ~~Commitments and Contingencies~~1. General to our consolidated financial statements under Item 1. Financial Statementsfor further ~~information.~~

information on this three-month reporting lag.

•During the ~~third quarter of 2017,~~year ended December 31, 2020, we ~~entered into an agreement to purchase a ship for our Azamara Club Cruises brand. The sale is expected to be completed with the delivery of the ship scheduled for March 2018,~~executed and ~~the ship is expected to enter service during the third quarter of 2018.~~

~~During the fourth quarter of 2017, we entered into a credit agreement for the unsecured~~amended various financing ~~of a ship we have on order designed for the Galapagos Islands for our Celebrity Cruises brand.~~arrangements, as summarized below. Refer to Note 7. ~~Long-Term~~9. Debt and Note 12. Shareholders' Equity, to our consolidated financial statements under Item 8. Financial Statements and Supplemental Data for further ~~information.~~information on the following underlying financing transactions:

•a $0.6 billion increase in the capacity available under our revolving credit facilities;

•additional liquidity of $6.8 billion through the issuance of new debt, including convertible debt, net of repayments, and the securing of a one-year $700 million commitment for a 364-day term loan facility;

•£300.0 million, or $409.9 million, based on exchange rates as of December 31, 2020, of available and issued liquidity under an unsecured government commercial paper program with the Bank of England;

•the deferral of $0.9 million of existing debt amortization under our export-credit backed ship debt facilities through April 2021, which will be paid over a period of four years after the deferral period; and

•22.6 million shares of common stock for approximately $1.6 billion.

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We reported ~~net income,~~Net Income attributable to Royal Caribbean Cruises Ltd, Adjusted Net Income, earnings per share and Adjusted Earnings per Share as shown in the following table (in thousands, except per share data):


	Year Ended December 31,
	2020		2019		2018
Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.	$	(5,797,462)	$	1,878,887	$	1,811,042
Adjusted Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.	(3,924,579)		2,002,847		1,873,363
Net Adjustments to Net (Loss) Income attributable to Royal Caribbean Cruises Ltd. - Increase	$	1,872,883	$	123,960	$	62,321
Adjustments to Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.:
Impairment and credit losses (1)	$	1,566,380	$	—	$	—
Equity investment impairment (2)	39,735		—		—
Recognition of deferred currency translation adjustment loss on sale of assets (3)	69,044		—		—
Convertible debt amortization of debt discount (4)	46,546		—		—
Pullmantur reorganization settlement (5)	21,637		—		—
Oasis of the Seas incident, Grand Bahama's drydock write-off and other incidental expenses (6)	(1,938)		35,239		—
Loss on extinguishment of debt (7)	41,109		6,326		—
Change in the fair value of contingent consideration and amortization of Silversea Cruises intangible assets related to Silversea Cruises acquisition (8)	(33,814)		30,675		2,046
Restructuring charges and other initiatives expense (9)	51,853		13,707		—
Transaction and integration costs related to the Silversea Cruises acquisition (8)	—		2,048		31,759
Noncontrolling interest adjustment (10)	72,331		35,965		3,156
Impairment loss related to Skysea Holding (11)	—		—		23,343
Impairment and other costs related to exit of tour operations business (12)	—		—		11,255
Impact of change in accounting principle (13)	—		—		(9,238)
Net Adjustments to Net (Loss) Income attributable to Royal Caribbean Cruises Ltd. - Increase	$	1,872,883	$	123,960	$	62,321

Basic:
(Loss) Earnings per Share	$	(27.05)	$	8.97	$	8.60
Adjusted (Loss) Earnings per Share	$	(18.31)	$	9.56	$	8.90

Diluted:
(Loss) Earnings per Share	$	(27.05)	$	8.95	$	8.56
Adjusted (Loss) Earnings per Share	$	(18.31)	$	9.54	$	8.86

Weighted-Average Shares Outstanding:
Basic	214,335		209,405		210,570
Diluted	214,335		209,930		211,554

Year Ended December 31,
2017 2016 2015
Net income $ 1,625,133
$ 1,283,388
$ 665,783
Adjusted Net Income 1,625,133
1,314,689
1,065,066
Net Adjustments to Net Income - Increase $ —
$ 31,301
$ 399,283
Adjustments to Net Income:
Impairment of Pullmantur related assets⁽¹⁾
$ —
$ —
$ 399,283
Net loss related to the elimination of the Pullmantur reporting lag —
21,656
—
Net gain related to the sale of the Pullmantur and CDF Croisières de France brands —
(3,834 ) —
Restructuring charges —
8,452
—
Other initiative costs —
5,027
—
Net Adjustments to Net Income - Increase $ —
$ 31,301
$ 399,283

Basic:
   Earnings per Share $ 7.57
$ 5.96
$ 3.03
   Adjusted Earnings per Share $ 7.57
$ 6.10
$ 4.85

Diluted:
   Earnings per Share $ 7.53
$ 5.93
$ 3.02
   Adjusted Earnings per Share $ 7.53
$ 6.08
$ 4.83

Weighted-Average Shares Outstanding:
Basic 214,617
215,393
219,537
Diluted 215,694
216,316
220,689

(1) ~~Includes~~Represents asset impairment and credit losses recorded in 2020 as a result of the impact of COVID-19.

(2) Represents equity investment asset impairment, primarily for our investment in Grand Bahama Shipyard, recorded in the first quarter of 2020 as a result of the impact of COVID-19.

(3) Represents currency translation losses recognized in connection with the ships sold in 2020 that were previously chartered to Pullmantur. Refer to Note 8. Other Assets to our consolidated financial statements under Item 1. Financial Statements and Supplementary Data for further information.

(4) Represents the amortization of non-cash debt discount on our convertible notes.

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(5) Represents estimated cash refunds expected to be paid to Pullmantur guests and other expenses incurred as part of the Pullmantur S.A. reorganization.

(6) In 2020, amount includes net ~~deferred income tax benefit~~insurance recoveries related to the collapse of ~~$12.0~~the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas. In 2019,amount includes incidental costs, net of insurance recoveries, of $14.5 million related to the ~~Pullmantur impairment.~~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 Equity investment income within our consolidated statements of comprehensive income (loss) for the year ended December 31, 2019. Refer to Note 8. Other Assets to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for information.

(7) In 2020, represents the loss on the extinguishment of the $2.35 billion 364-day senior secured term loan. In 2019, represents the loss on the extinguishment of the $700 million 364-day loan related to the 2018 Silversea Cruises acquisition and the remaining balance of the unsecured term loan originally incurred in 2010 to purchase Allure of the Seas.

(8) Related to the 2018 Silversea Cruises acquisition. Refer to Note 1. General and Note 11. Redeemable Noncontrolling Interest to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for information on the Silversea Cruises acquisition.

(9) Represents restructuring charges incurred in relation to the reduction in our U.S. workforce and other initiatives expenses in 2020 and the reorganization of our international sales and marketing structure primarily in 2019. Refer to Note 20. Restructuring Charges to our consolidated financial statements under item 8. Financial Statements and Supplementary Data for further information on the restructuring activities.

(10) 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. Refer to Note 11. Redeemable Noncontrolling Interest to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information on noncontrolling interest.

(11) Represents an impairment loss related to Skysea Holding recorded in 2018.

(12) In 2014, we created a tour operations business that focused on developing, marketing and selling land based tours around the world through an e-commerce platform. During the second quarter of 2018, we decided to cease operations and exit this business. As a result, we incurred exit costs, primarily consisting of fixed asset impairment charges and severance expense.

(13) In January 2018, we elected to change our accounting policy from the graded attribution method to the straight-line attribution method for time-based stock awards. 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 our accounting policy.

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The following table presents operating results as a percentage of total revenues for the last three years:


	Year Ended December 31,							Year Ended December 31,
	2017		2016		2015			2020		2019		2018
Passenger ticket revenues	71.9	%	72.4	%	73.0	%	Passenger ticket revenues	68.1	%	71.7	%	71.5	%
Onboard and other revenues	28.1	%	27.6	%	27.0	%	Onboard and other revenues	31.9	%	28.3	%	28.5	%
Total revenues	100.0	%	100.0	%	100.0	%	Total revenues	100.0	%	100.0	%	100.0	%
Cruise operating expenses:							Cruise operating expenses:
Commissions, transportation and other	15.5	%	15.9	%	16.9	%	Commissions, transportation and other	15.6	%	15.1	%	15.1	%
Onboard and other	5.6	%	5.8	%	6.7	%	Onboard and other	7.1	%	5.8	%	5.7	%
Payroll and related	9.7	%	10.4	%	10.4	%	Payroll and related	35.7	%	9.9	%	9.7	%
Food	5.6	%	5.7	%	5.8	%	Food	7.3	%	5.3	%	5.5	%
Fuel	7.8	%	8.4	%	9.6	%	Fuel	16.8	%	6.4	%	7.5	%
Other operating	11.5	%	12.8	%	12.1	%	Other operating	42.7	%	12.8	%	12.0	%
Total cruise operating expenses	55.8	%	59.0	%	61.4	%	Total cruise operating expenses	125.2	%	55.4	%	55.4	%
Marketing, selling and administrative expenses	13.5	%	13.0	%	13.1	%	Marketing, selling and administrative expenses	54.3	%	14.2	%	13.7	%
Depreciation and amortization expenses	10.8	%	10.5	%	10.0	%	Depreciation and amortization expenses	57.9	%	11.4	%	10.9	%
Impairment of Pullmantur related assets	—	%	—	%	5.0	%
Operating income	19.9	%	17.4	%	10.5	%
Other expense	(1.4	)%	(2.3	)%	(2.5	)%
Net income	18.5	%	15.1	%	8.0	%
Impairment and credit losses							Impairment and credit losses	70.9	%	—	%	—	%

Operating (loss) income							Operating (loss) income	(208.3)	%	19.0	%	20.0	%
Other income (expense):							Other income (expense):
Interest income							Interest income	1.0	%	0.2	%	0.3	%
Interest expense, net of interest capitalized							Interest expense, net of interest capitalized	(38.2)	%	(3.7)	%	(3.5)	%
Equity investment (loss) income							Equity investment (loss) income	(9.7)	%	2.1	%	2.2	%

Other (expense) income							Other (expense) income	(6.2)	%	(0.2)	%	0.1	%
								(53.1)	%	(1.6)	%	(0.8)	%
Net (Loss) Income							Net (Loss) Income	(261.5)	%	17.4	%	19.1	%
Less: Net Income attributable to noncontrolling interest							Less: Net Income attributable to noncontrolling interest	1.0	%	0.3	%	0.1	%
Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.							Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.	(262.5)	%	17.2	%	19.1	%

Selected statistical information is shown in the following table:


	Year Ended December 31,							Year Ended December 31,
	2017		2016 ⁽¹⁾		2015			2020(1)		2019 (1)		2018 (1)
Passengers Carried	5,768,496		5,754,747		5,401,899		Passengers Carried	1,295,144		6,553,865		6,084,201
Passenger Cruise Days	40,033,527		40,250,557		38,523,060		Passenger Cruise Days	8,697,893		44,803,953		41,853,052
APCD	36,930,939		37,844,644		36,646,639		APCD	8,539,903		41,432,451		38,425,304
Occupancy	108.4	%	106.4	%	105.1	%	Occupancy	101.9	%	108.1	%	108.9	%

Year Ended December 31,
2017 2017
On a
Constant
Currency
basis 2016 2015
Passenger ticket revenues $ 6,313,170
$ 6,302,600
$ 6,149,323
$ 6,058,821
Onboard and other revenues 2,464,675
2,462,531
2,347,078
2,240,253
Total revenues 8,777,845
8,765,131
8,496,401
8,299,074
Less:
Commissions, transportation and other 1,363,170
1,361,001
1,349,677
1,400,778
Onboard and other 495,552
493,790
493,558
553,104
Net revenues including other initiative costs 6,919,123
6,910,340
6,653,166
6,345,192
Less:
Other initiative costs included within Net Revenues —
—
(2,230 ) —
Net Revenues $ 6,919,123
$ 6,910,340
$ 6,655,396
$ 6,345,192

APCD 36,930,939
36,930,939
37,844,644
36,646,639
Gross Yields $ 237.68
$ 237.34
$ 224.51
$ 226.46
Net Yields $ 187.35
$ 187.12
$ 175.86
$ 173.15

Table of Contents

~~Gross Cruise Costs, Net Cruise Costs and Net Cruise Costs Excluding Fuel were calculated as follows (in thousands, except APCD and costs per APCD):~~

Year Ended December 31,
2017 2017 On a
Constant
Currency
basis 2016 2015
Total cruise operating expenses $ 4,896,579
$ 4,891,324
$ 5,015,539
$ 5,099,393
Marketing, selling and administrative expenses ⁽¹⁾
1,186,016
1,189,694
1,100,290
1,086,504
Gross Cruise Costs 6,082,595
6,081,018
6,115,829
6,185,897
Less:
Commissions, transportation and other 1,363,170
1,361,001
1,349,677
1,400,778
Onboard and other 495,552
493,790
493,558
553,104
Net Cruise Costs including other initiative costs 4,223,873
4,226,227
4,272,594
4,232,015
Less:
Net gain related to the sale of Pullmantur and CDF Croisières de France brands included within other operating expenses —
—
(3,834 ) —
Other initiative costs included within cruise operating expenses and marketing, selling and administrative expenses —
—
2,433
—
Net Cruise Costs 4,223,873
4,226,227
4,273,995
4,232,015
Less:
Fuel ⁽²⁾
681,118
681,114
713,252
795,801
Net Cruise Costs Excluding Fuel $ 3,542,755
$ 3,545,113
$ 3,560,743
$ 3,436,214

APCD 36,930,939
36,930,939
37,844,644
36,646,639
Gross Cruise Costs per APCD $ 164.70
$ 164.66
$ 161.60
$ 168.80
Net Cruise Costs per APCD $ 114.37
$ 114.44
$ 112.94
$ 115.48
Net Cruise Cost Excluding Fuel per APCD $ 95.93
$ 95.99
$ 94.09
$ 93.77


~~(1)~~	~~For the year ended December 31, 2016, amount does not include restructuring charges of $8.5 million.~~


~~(2)~~	~~For the year ended December 31, 2016, amount does not include fuel expense of $0.4 million included within other initiative costs associated with the redeployment of Pullmantur’s~~ ~~Empress~~ ~~to the Royal Caribbean International brand.~~

Outlook

On March 10, 2020, we withdrew our full-year 2020 guidance due to the heightened impact and uncertainty of changes in the magnitude, duration and geographic reach of COVID-19. The ~~company does not make predictions about fuel pricing, interest rates~~magnitude, duration and speed of COVID-19 and related disruptions remain uncertain. As a consequence, the Company cannot reasonably estimate the impact of COVID-19 on its business, financial condition or ~~currency exchange rates but does provide guidance about its future business activities. On January 24, 2018, we announced~~near or longer-term financial or operational results. The adverse impact of the ~~following initial full year~~COVID-19 pandemic on our revenues, consolidated results of operations, cash flows and financial condition has been and will continue to be material in 2021. We expect to incur a net loss on both a US GAAP and adjusted basis for our first quarter ~~2018 guidance based~~of 2021, the extent of which will depend on many factors including the ~~then current fuel pricing, interest rates~~timing and ~~currency exchange rates:~~

~~Full Year 2018~~



	~~As Reported~~	~~Constant Currency~~
~~Net Yields~~	~~2.75% to 4.75%~~	~~1.5% to 3.5%~~
~~Net Cruise Costs per APCD~~	~~1.0% to 1.5%~~	~~0.5% to 1.0%~~
~~Net Cruise Costs per APCD, excluding Fuel~~	~~2.0% to 2.5%~~	~~1.5% to 2.0%~~
~~Capacity Increase~~	~~3.9%~~
~~Depreciation and Amortization~~	~~$1,053 to $1,063 million~~
~~Interest Expense, net~~	~~$280 to $290 million~~
~~Fuel Consumption (metric tons)~~	~~1,350,100~~
~~Fuel Expenses~~	~~$675 million~~
~~Percent Hedged (fwd consumption)~~	~~50%~~
~~Impact of 10% change in fuel prices~~	~~$38 million~~
~~1% Change in Currency~~	~~$18 million~~
~~1% Change in Net Yield~~	~~$75 million~~
~~1% Change in NCC x Fuel~~	~~$38 million~~
~~100 basis pt. Change in LIBOR~~	~~$30 million~~
~~Adjusted Earnings per Share — Diluted~~	~~$8.55 to $8.75~~

~~First Quarter 2018~~



	~~As Reported~~	~~Constant Currency~~
~~Net Yields~~	~~Approx. 5.5%~~	~~3.0% to 3.5%~~
~~Net Cruise Costs per APCD~~	~~Approx. 8.5%~~	~~Approx. 7.5%~~
~~Net Cruise Costs per APCD, excluding Fuel~~	~~Approx. 11.0%~~	~~Approx. 10.0%~~
~~Capacity Decrease~~	~~(3.9%)~~
~~Depreciation and Amortization~~	~~$245 to $250 million~~
~~Interest Expense, net~~	~~$59 to $63 million~~
~~Fuel Consumption (metric tons)~~	~~324,400~~
~~Fuel Expenses~~	~~$162 million~~
~~Percent Hedged (fwd consumption)~~	~~50%~~
~~Impact of 10% change in fuel prices~~	~~$9 million~~
~~1% Change in Currency~~	~~$4 million~~
~~1% Change in Net Yield~~	~~$16 million~~
~~1% Change in NCC x Fuel~~	~~$10 million~~
~~100 basis pt. Change in LIBOR~~	~~$5 million~~
~~Adjusted Earnings per Share — Diluted~~	~~Approx. $0.95~~

~~Since our earnings release on January 24, 2018, bookings have remained consistent with our previous expectations. Accordingly, our forecast has remained essentially unchanged.~~

~~Volatility in foreign currency exchange rates affects the United States dollar value~~extent of our ~~earnings. Based~~return to service. See Recent Developments: COVID-19 – Update on ~~our highest net exposure~~Bookings for ~~each quarter~~further indication of the booking environment for 2021 and the full year 2018, the top five foreign currencies are ranked below. For example, the Australian Dollar is the most impactful currency in the first and fourth quarters of 2018. Rankings are based on estimated net exposures.2022.



~~Ranking~~	Q1	Q2	Q3	Q4	~~FY 2018~~
1	~~AUD~~	~~GBP~~	~~GBP~~	~~AUD~~	~~GBP~~
2	~~CAD~~	~~AUD~~	~~CNH~~	~~GBP~~	~~AUD~~
3	~~GBP~~	~~CAD~~	~~EUR~~	~~CAD~~	~~CAD~~
4	~~EUR~~	~~CNH~~	~~CAD~~	~~EUR~~	~~EUR~~
5	~~CNH~~	~~EUR~~	~~AUD~~	~~CNH~~	~~CNH~~

~~The currency abbreviations above are defined as follows:~~



~~Currency Abbreviation~~		~~Currency~~
~~AUD~~		~~Australian Dollar~~
~~CAD~~		~~Canadian Dollar~~
~~CNH~~		~~Chinese Yuan~~
~~EUR~~		~~Euro~~
~~GBP~~		~~British Pound~~

Year Ended December 31, ~~2017~~2020 Compared to Year Ended December 31, ~~2016~~

2019

In this section, references to ~~2017~~2020 refer to the year ended December 31, ~~2017~~2020 and references to ~~2016~~2019 refer to the year ended December 31, ~~2016.~~

2019.

Revenues

Total revenues for ~~2017 increased $281.4 million,~~2020 decreased $8.7 billion, or ~~3.3%~~79.8%, to ~~$8.8~~$2.2 billion from ~~$8.5~~$11.0 billion in ~~2016.~~2019.

Passenger ticket revenues comprised ~~71.9%~~68.1% of our ~~2017~~2020 total revenues. Passenger ticket revenues ~~increased~~ decreasedby ~~$163.8 million,~~$6.4 billion, or ~~2.7%~~80.9% from ~~2016, despite the impact of canceled sailings resulting from hurricane-related disruptions during the third quarter of 2017. The increase was primarily due to:~~

~~an increase of $301.8 million in ticket prices primarily driven by the improvement in our ticket price on a per passenger basis due to the exit of the Pullmantur ships and the addition of~~ ~~Harmony of the Seas~~ ~~and~~ ~~Ovation of the Seas,~~ ~~as well as higher pricing on North America and Europe sailings. The increase in ticket prices on these itineraries was partially offset by lower pricing on Asia/Pacific sailings; and~~

~~the favorable effect of changes in foreign currency exchange rates related to our revenue transactions denominated in currencies other than the United States dollar of approximately $10.6 million.~~

~~The increase in passenger ticket revenues was partially offset by a 2.4% decrease in capacity, which decreased~~ ~~passenger ticket revenues~~ by~~$148.5 million primarily due to the sale of our majority interest in Pullmantur Holdings during the third quarter of 2016, the sale of~~ ~~Splendour of the Seas~~ ~~in the second quarter of 2016 and the sale of~~ ~~Legend of the Seas~~ ~~in first quarter of 2017, which was partially offset by an increase in capacity due to the addition of~~ ~~Ovation of the Seas~~ ~~and~~ ~~Harmony of the Seas~~ ~~into our fleet during the second quarter of 2016.~~

~~The remaining 28.1% of 2017 total revenues was comprised of~~ ~~Onboard and other revenues, which increased $117.6 million, or 5.0%. The increase in~~ ~~Onboard and other revenues~~ ~~was primarily due to:~~

a $125.3 million increase in onboard revenue attributable to higher spending on a per passenger basis primarily due to our revenue enhancing initiatives, including beverage package, shore excursion and specialty restaurant sales and promotions and increased revenue associated with internet and other telecommunication service.

~~a $45.7 million increase in other revenue primarily due to charter revenue and management fees earned from Pullmantur Holdings.~~

The increase was partially offset by a $55.6 million decrease attributable to the 2.4% decrease in capacity noted above, including the impact of canceled sailings resulting from hurricane-related disruptions during the third quarter of 2017.

~~Onboard and other revenues~~ ~~included concession revenues of $326.5 million in 2017 and $316.9 million in 2016.~~

~~Cruise Operating Expenses~~

~~Total cruise operating expenses for 2017 decreased $119.0 million, or 2.4%, to $4.9 billion in 2017 from $5.0 billion in 2016. The decrease was primarily due to:~~

~~a $120.5 million decrease attributable to the 2.4% decrease in capacity noted above;~~

~~a $30.9 million gain resulting from the sale of~~ ~~Legend of the Seas~~ ~~in 2017 compared to an immaterial gain from the sale of~~ ~~Splendour of the Seas~~ ~~in 2016;~~

~~a $17.2 million decrease in air expense due to itinerary changes and lower ticket costs;~~

~~a $16.8 million decrease in vessel maintenance primarily due to the timing of scheduled drydocks; and~~

a $15.5 million decrease in fuel expense, excluding the impact of the decrease in capacity. Our cost of fuel (net of the financial impact of fuel swap agreements) for 2017 decreased 4.6% per metric ton compared to 2016.

~~The decrease was partially offset by:~~

~~a $33.8 million increase in commissions expense mainly due to the increase in ticket prices discussed above and changes in commission incentives;~~

•~~a $19.3 million increase in head taxes primarily due to itinerary changes; and~~

~~an $18.9 million increase in food expenses mainly due to our new culinary initiatives.~~

~~Marketing, Selling and Administrative Expenses~~

~~Marketing, selling and administrative expenses~~ for 2017 increased $77.3 million, or 7.0%, to $1.2 billion from $1.1 billion in 2016. The increase was primarily due to an increase in payroll and benefits mostly driven by higher stock prices year over year related to our performance share awards, partially offset by a decrease in expenses due to the sale of our majority interest in Pullmantur Holdings.

~~Depreciation and Amortization Expenses~~

~~Depreciation and amortization expenses~~ ~~for 2017 increased $56.3 million, or 6.3%, to $951.2 million from $894.9 million in 2016.~~ T~~he increase was primarily due to the addition of~~ ~~Ovation of the Seas~~ ~~and~~ ~~Harmony of the Seas~~ in the second quarter of 2016, new shipboard additions associated with our ship upgrade projects and to a lesser extent, additions related to our shoreside projects. The increase was partially offset by the decrease in depreciation associated with the sale of ~~Legend of the Seas~~ ~~in the first quarter of 2017 and to a lesser extent, the sale of~~ ~~Splendour of the Seas~~ ~~in the second quarter of 2016.~~

~~Other Income (Expense)~~

~~Interest expense, net of interest capitalized~~, decreased $7.4 million, or 2.4%, to $300.0 million in 2017 from $307.4 million in 2016. The decrease was due to a lower average debt level in 2017 compared to 2016, partially offset by higher interest rates in 2017 compared to 2016.

~~Equity investment income~~ ~~increased $27.9 million, or 21.7%, to $156.2 million in 2017 from $128.4 million in 2016 primarily due to an increase in income from TUI Cruises, one of our equity method investments.~~

~~Other expense~~ ~~decreased $30.4 million, or 85.2%, to~~ ~~$5.3 million in 2017 from $35.7 million in 2016.~~2019. The decrease was primarily due to a ~~net loss of $21.7 million related to the elimination of the Pullmantur reporting lag in 2016 which did not recur in 2017.~~

~~Gross and Net Yields~~

~~Gross and Net Yields increased 5.9%~~ ~~and~~ ~~6.5% in 2017, respectively, compared to 2016 primarily due to the increase in passenger ticket and onboard and other revenues discussed above.~~

~~Gross and Net Cruise Costs~~

~~Gross Cruise Costs remained consistent in 2017 compared to 2016. Net Cruise Costs decreased 1.2% in 2017 compared to 2016 primarily due to the~~79.4% decrease in capacity ~~and cruise operating expenses discussed above. Gross Cruise Costs per APCD and Net Cruise Costs per APCD increased 1.9% and 1.3%~~driven by our cancelled sailings resulting from the suspension of our global fleet operations since mid-March 2020 in ~~2017, respectively, compared to 2016. The increase was mainly due~~response to the hurricane-related disruptions during the third quarter of 2017 which reduced our capacity; however, certain operating expenses were still incurred, negatively impacting our metrics per APCD. Net Cruise Costs Excluding Fuel per APCD increased 2.0% in 2017 compared to 2016.COVID-19 pandemic.

~~Other Comprehensive Income~~

~~Other comprehensive income~~ ~~in 2017 was $582.2 million compared to $411.9 million in 2016. The increase of $170.3 million or 41.3% was primarily due to the~~ ~~Gain on cash flow derivative hedges~~ in 2017 of $570.5 million compared to $411.2 million in 2016. The increase of $159.3 million in 2017 was primarily due to an increase in foreign currency forward contract values in 2017 compared to a decrease in 2016, which was partially offset by lower amounts of fuel swap losses reclasssified to income in 2017 and a smaller increase in fuel swap instrument values in 2017 compared to 2016.

~~Year Ended December 31, 2016 Compared to Year Ended December 31, 2015~~

~~In this section, references to 2016 refer to the year ended December 31, 2016 and references to 2015 refer to the year ended December 31, 2015.~~

~~Revenues~~

~~Total revenues for 2016 increased $197.3 million, or 2.4%, to $8.5 billion from $8.3 billion in 2015.~~

~~Passenger ticket revenues~~ ~~comprised 72.4% of our 2016 total revenues.~~ Passenger ticket revenues ~~increased~~also decreased by ~~$90.5~~$15.7 million ~~or 1.5%. The increase was primarily~~ due ~~to:~~

~~a 3.3% increase in capacity, which increased~~ ~~passenger ticket revenues by~~ ~~$198.1 million, net of the capacity decrease resulting from the sale of our majority interest in Pullmantur Holdings; and~~

~~an increase of $63.9 million in ticket prices primarily driven by our newest shipsas well as higher pricing on Alaska and Caribbean sailings. The increase in ticket prices was partially offset by lower pricing on Mediterranean and Asia sailings.~~

~~The increase in passenger ticket revenues was partially offset by~~to the unfavorable effect of changes in foreign currency exchange rates related to our ~~revenue transactions denominated~~revenues in currencies other than the United States ~~dollar of approximately $171.5 million.~~dollar.

The remaining ~~27.6%~~31.9% of ~~2016~~2020 total revenues was comprised of Onboard and other revenues, which ~~increased $106.8 million,~~decreased $2.4 billion, or ~~4.8%~~77.2%. The ~~increase~~decrease in Onboard and other revenues was primarily due ~~to:~~

~~a $70.5 million increase attributable~~ to the ~~3.3% increase~~79.4% decrease in capacity noted ~~above; and~~above.

~~an $89.9 million increase in onboard revenue attributable to higher spending on a per passenger basis primarily due to our ship upgrade programs~~Additionally, Onboard and other ~~revenue enhancing initiatives, including various beverage and gaming initiatives,~~revenues includes, to a much lesser extent, the promotion of specialty restaurants and the increased revenue associated with internet and other telecommunication services partially offset by a decrease in port activities revenue mainly due to itinerary changes.

~~The increase was partially offset by:~~

~~an approximate $16.4 million~~ unfavorable effect of changes in foreign currency exchange rates related to our onboard and other ~~revenue transactions~~revenues denominated in currencies other than the United States ~~dollar; and~~dollar of $6.4 million.

a $37.2 million decrease in other revenues primarily related to our travel agency business that was sold in 2015 partially offset by an increase in revenue received for our bareboat charter and ship management services associated with our unconsolidated affiliates. The decrease in revenues from our travel agency business sold is mostly offset by the related decrease in travel agency expenses discussed below.

Onboard and other revenues included concession revenues of ~~$316.9~~$76.0 million in ~~2016~~2020 and ~~$327.1~~$363.8 million in ~~2015.~~

2019.

Cruise Operating Expenses

Total cruise operating expenses for ~~2016~~2020 decreased ~~$83.9 million,~~$3.3 billion, or ~~1.6%~~54.4%, to ~~$5.0~~$2.8 billion in ~~2016~~2020 from ~~$5.1~~$6.1 billion in ~~2015.~~2019. The majority of the decrease was due to the 79.4% decrease in capacity noted above as a result of our cancelled sailings, including:

•a $1.3 billion decrease in Commissions, transportation and other primarily due ~~to:~~to lower commission and variable passenger tax expenses;

•a ~~$114.4~~$482.6 million decrease in ~~fuel expense, excluding the impact of the increase~~Onboard and other expenses mostly due to lower shore excursion costs and beverage costs;

•a $463.5 million decrease in ~~capacity. Our cost of fuel (net of the financial impact of fuel swap agreements) for 2016 decreased 10.3% per metric ton compared~~Other operating expenses mostly due to ~~2015;~~lower port fees and a decrease in ship maintenance and consumable costs;

•a $422.2 million decrease in Food expenses;

~~an approximate $40.9~~•a $326.9 million decrease in Fuel expenses;

•a $290.8 million decrease in Payroll and related expenses resulting from reduced onboard staffing levels; and

•the favorable effect of changes in foreign currency exchange rates related to our ~~cruise operating expenses~~expense transactions denominated in currencies other than the United States ~~dollar;~~

~~a $41.2 million decrease in other expenses primarily related to our travel agency business that was sold in 2015, which mostly offsets the related decrease in travel agency revenues discussed above;~~

~~a $25.0 million decrease in air expense primarily due to the decrease in air transportation sales and lower costs; and~~

~~a $20.2 million decrease in shore excursion expense attributable to lower contractual costs incurred and the decrease in port activities revenue discussed above.~~

~~The decrease was partially offset by a $164.7 million increase attributable to the 3.3% increase in capacity noted above.~~

dollar of $11.2 million.

Marketing, Selling and Administrative Expenses

Marketing, selling and administrative expenses for ~~2016 remained consistent compared~~2020 decreased $359.6 million, or 23.1% to ~~2015.~~$1.2 billion from $1.6 billion in 2019. The decrease was primarily due to the reduction and deferral of global sales and marketing activities due to the suspension of our operations.

Table of Contents

Depreciation and Amortization Expenses

Depreciation and amortization expenses for ~~2016~~2020 increased ~~$67.9~~$33.3 million, or ~~8.2%~~2.7%, to ~~$894.9 million from $827.0 million in 2015.~~$1.3 billion. The increase was primarily due to the ~~addition~~additions of~~Harmony~~ Celebrity Apex and Silver Origin in the first and second quarters of 2020, respectively, and a full year of depreciation in 2020 for Spectrum of the ~~Seas~~ ~~and~~ ~~Ovation of~~Seas. Additionally, the ~~Seas~~ ~~in the second quarter of 2016 into our fleet and the addition of~~ ~~Anthem of the Seas~~ ~~in the second quarter of 2015 and,~~increase is also attributable to ~~a lesser extent,~~ new shipboard additions in 2019 associated with our ship ~~upgrade~~modernization projects and additions related to our shoreside projects. ~~The increase~~

Impairment and Credit Losses

For the year ended December 31, 2020, as a result of the current and expected ongoing impact of the COVID-19 pandemic on our operations and cash flows, we recorded total impairment and credit losses of $1.6 billion, most of which was ~~partially offset by~~recorded during the three months ended March 31, 2020, related to the impairment of goodwill, intangibles, long-lived assets and credit losses related to the sale of ~~Splendour of the Seas~~ ~~in April 2016.~~

~~Impairment of Pullmantur Related Assets~~

~~During 2015, we recognized an impairment charge of $411.3 million to write down Pullmantur's goodwill to its implied fair value~~our property and to write down trademarks and trade names and certain long-lived assets, consisting of three aircraft that was then owned and operated by Pullmantur Air and two ships owned and operated by Pullmantur, to their fair value.

equipment.

Other Income (Expense)

Interest expense, net of interest capitalized, ~~decreased $29.6~~increased $435.7 million, or ~~10.7%~~106.7%, to ~~$307.4~~$844.2 million in ~~2016~~2020 from ~~$277.7~~$408.5 million in ~~2015.~~2019. The increase was primarily due to new debt issuances in 2020, a higher average ~~debt level attributable to the financing of~~ ~~Ovation~~balance on our revolver balances and a loss on extinguishment of the ~~Seas~~ ~~and~~ ~~Harmony~~$2.35 billion senior secured term loan of ~~the Seas, partially offset by lower pricing on debt refinanced in 2015.~~$41.1 million.

Equity investment (loss) income ~~increased $47.3~~ decreased $444.3 million, or ~~58.4%~~192.3%, to ~~$128.4~~a loss of $213.3 million in ~~2016~~2020 from ~~$81.0~~income of $231.0 million in ~~2015~~2019 mainly due to ~~the increase in income from TUI Cruises, one of~~losses reported by our equity ~~method investments.~~investments as a result of the adverse impact of COVID-19 on their operations and earnings and a $39.7 million impairment charge of equity investments, recorded during the three months ended March 31, 2020, primarily for our investment in Grand Bahama Shipyard.

Other expense was $137.1 million in ~~2016 was $35.7 million~~2020 compared to ~~$24.4~~$24.5 million in ~~2015.~~2019. The increase in expense of ~~$11.2~~$112.6 million includes recognition of a deferred currency translation adjustment loss of $69.0 million in the quarter ended June 30, 2020 related to the 2016 sale of our majority interest in the Pullmantur brand. We recognized the deferred currency translation loss in 2020 as we no longer have significant involvement in Pullmantur's operations. We also recognized $21.6 million of expense during the second quarter of 2020, approximating the estimated total cash refund expected to be paid to Pullmantur guests and other expenses incurred as part of a settlement agreement with our joint venture partner as part of the brand's reorganization Refer to Note 8. Other Assets to our consolidated financial statements under Item 8. Financial Statements and Supplemental Data for further information on our investment in Pullmantur. In addition, we recorded a net $92.0 million loss related to the change in fair value of mostly fuel swap derivative instruments with no hedge accounting. These expenses were partially offset by income of $45.1 million for the change in contingent consideration payable in 2020 to Heritage, the former minority shareholder of Silversea Cruises, and a decrease of $47.6 million in net tax expense mostly attributable to the suspension in our operations.

Other Comprehensive Income (Loss)

Other comprehensive income in 2020 was $58.4 million compared to Other comprehensive loss of $170.0 million in 2019. The change of $228.4 million in 2020 was primarily due to a net loss of $21.7 million related to the elimination of the Pullmantur reporting lag in 2016. The increase in other expense was partially offset by a decrease of $9.6 million in foreign exchange losses from the remeasurement of monetary assets and liabilities denominated in foreign currency.

~~Gross and Net Yields~~

Gross Yields remained consistent in 2016 compared to 2015. Net Yields increased 1.6% in 2016 compared to 2015 primarily due to the increase in passenger ticket and onboard and other revenues discussed above. Gross Yields and Net Yields increased 1.3% and 3.9%, respectively, in 2016 compared to 2015 on a Constant Currency basis.

~~Gross and Net Cruise Costs~~

Gross Cruise Costs decreased 1.1% in 2016 compared to 2015 primarily due to the decrease in fuel. Net Cruise Costs increased 1.0% in 2016 compared to 2015 primarily due to the increase in capacity, partially offset by the decrease in fuel, which are further discussed above. Gross Cruise Costs per APCD and Net Cruise Costs per APCD decreased 4.3% and 2.2%, respectively, in 2016 compared to 2015 primarily due to the decrease in fuel. Gross Cruise Costs per APCD on a Constant Currency basis decreased 3.4% in 2016 compared to 2015. Net Cruise Costs per APCD on a Constant Currency basis decreased 1.7% in 2016 compared to 2015. Net Cruise Costs Excluding Fuel per APCD remained consistent in 2016 compared to 2015 and increased 0.9% in 2016 compared to 2015 on a Constant Currency basis.

~~Other Comprehensive Income (Loss)~~

~~Other comprehensive income~~ ~~in 2016 was $411.9 millioncompared to a loss of$431.4 million in 2015. The change of $843.4 million was primarily due to the~~ Gain on cash flow derivative hedges in ~~2016~~2020 of ~~$411.2~~$38.0 million compared to ~~the~~ a Loss on cash flow derivative hedges of ~~$406.0~~$151.3 million in ~~2015.~~2019. The ~~gain in 2016 resulted mostly from the reclassification of losses~~decrease was primarily due to ~~earnings during 2016 from fuel cash flow hedges. In addition, there was~~ an increase in the fair value of our ~~fuel swaps~~foreign currency forward contracts in ~~2016 as~~2020 compared to a ~~result of higher forward fuel prices. The loss in 2015 was primarily due to the~~ decrease in ~~the~~ fair value of our ~~fuel swaps and~~foreign currency contracts in 2019.

Year Ended December 31, 2019 Compared to Year Ended December 31, 2018

A discussion of our ~~foreign currency forward contracts~~results of operations for the year ended December 31, 2019 compared to the year ended December 31, 2018 is included in Part II. Item 7 of our Annual Report on Form 10-K for the year ended Decem ber 3 1 , 2 01 9, filed with the SEC on February 25, 2020, as aupdated by our Current Report on Form 8-K dated May 13, 2020, and is incorporated by reference into this Form 10-K.

~~result~~

Table of ~~decreases in fuel prices and forward currency rates, somewhat offset by the reclassification of losses to earnings during 2015 from fuel cash flow hedges.~~Contents

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.

Liquidity and Capital Resources

Sources and Uses of Cash

~~Cash flow generated~~As a result of the COVID-19 impact on our business, including the suspension of global sailings, we have experienced a decrease in bookings and an increase in customer deposit refunds since the first quarter of 2020, which has significantly affected our liquidity and cash flow.

Net cash (used in) provided by operating activities decreased $7.4 billion to cash used of $(3.7) billion for the twelve months ended December 31, 2020, compared to cash provided of $3.7 billion in 2019. The current disruptions to our business led to a decrease in collections from ~~operations provides us with a significant source~~our guests as well as an increase of ~~liquidity.~~ refunds to guests for cancelled sailings during the twelve months ended December 31, 2020 compared to the same period in 2019.

Net cash provided by operating activities increased ~~$357.9~~$237.2 million to ~~$2.9~~$3.7 billion in ~~2017~~2019 compared to ~~$2.5~~$3.5 billion in ~~2016.~~2018. The increase in cash provided by operating activities was primarily attributable to an increase in proceeds from customer deposits, an increase in cash receipts from onboard spending and a decrease in fuel costs in ~~2017~~2019 compared to ~~2016.~~2018. Additionally, dividends received from unconsolidated affiliates ~~increased~~decreased by ~~$33.7~~$92.9 million.

~~Net cash provided by operating activities~~ increased $570.3 million to $2.5 billion in 2016 compared to $1.9 billion in 2015. The increase in cash provided by operating activities was primarily attributable to an increase in proceeds from customer deposits, an increase in cash receipts from onboard spending and a decrease in fuel costs in 2016 compared to 2015. Additionally, dividends received from unconsolidated affiliates increased by $42.6 million.

Net cash used in investing activities decreased ~~$2.5~~$0.9 billion to ~~$213.6 million~~$2.2 billion in ~~2017~~2020 compared to ~~$2.7~~$3.1 billion in ~~2016.~~2019. The decrease in investing activities was primarily attributable to a decrease in capital expenditures of ~~$1.9 billion due to ship deliveries in 2016,~~ ~~Ovation of the Seas~~ ~~and~~ ~~Harmony of the Seas~~, compared to no ship deliveries in 2017. In addition, we received $230.0 million of proceeds from the sale of property and equipment in 2017 which did not occur in 2016. Furthermore, during 2017, we received cash of $63.2 million on settlements on our foreign currency forward contracts compared to cash paid of $213.2 million during 2016.$1.1 billion.

Net cash used in investing activities ~~increased $981.9 million~~decreased $1.4 billion to ~~$2.7~~$3.1 billion in ~~2016~~2019 compared to ~~$1.7~~$4.5 billion in ~~2015.~~2018. The ~~increase~~decrease was primarily attributable to the $916.1 million of cash paid for the acquisition of Silversea Cruises, net of cash acquired, in 2018, which did not recur in 2019 and a decrease in capital expenditures of $635.4 million due mostly to the delivery of two more ships in 2018 compared to 2019, partially offset by higher fleet modernization costs in 2019 compared to 2018.

Net cash provided by financing activities was $9.3 billion in 2020 compared to Net cash used in financing activities of $0.7 billion in 2019. The change was primarily attributable to an increase in ~~capital expenditures~~debt proceeds of ~~$881.0 million~~$10.0 billion in ~~2016~~2020 compared to the same period in ~~2015 primarily due to the deliveries of~~ ~~Ovation of the Seas~~2019, and ~~Harmony of the Seas~~ ~~in 2016. Additionally, cash repayments received on loans to our unconsolidated affiliates decreased $86.0~~$1.4 million in ~~2016~~proceeds from common stock issuances on 2020. These proceeds were partially offset by net repayments of commercial paper of $1.1 billion during the twelve months ended December 31, 2020 compared to net borrowings of commercial paper of $0.6 billion during the same period in ~~2015 mainly due to TUI Cruises repaying in 2015 the outstanding balance of the debt facility we originally provided to them in 2011.~~2019.

Net cash used inby financing activities was ~~$2.7~~$0.7 billion in ~~2017~~2019 compared to Net cash provided in financing activities of$~~243.8 million~~1.2 billion in ~~2016.~~2018. The change was primarily attributable to a decrease in debt proceeds of ~~$1.5~~$5.1 billion ~~an increase~~ in ~~debt repayments of $1.5 billion and a higher amount of dividends paid during 2017~~2019 compared to ~~2016,~~2018 primarily due to a decrease in borrowings on our revolving credit facilities and less unsecured term loan borrowings resulting from less ship deliveries in 2019 and the financing of the acquisition of Silversea Cruises in 2018. This decrease in proceeds was partially offset by a decrease in repayments of debt of $2.9 billion and a decrease in stock repurchases of ~~$75.0~~$475.5 million ~~during 2017~~in 2019 compared to ~~2016. The decrease in debt proceeds was primarily due to the $841.8 million unsecured term loan borrowed in April 2016 to finance~~ ~~Ovation of the Seas and the €700.7 million and $226.1 million unsecured term loans borrowed in May 2016 to finance~~ ~~Harmony of the Seas~~ ~~that did not recur in 2017~~and lower drawings on our revolving credit facilities during 2017 compared to 2016, partially offset by $800 million in proceeds received from unsecured senior notes issued during 2017 which did not occur in 2016. The increase in repayment of debt was primarily due to higher payments on our revolving credit facilities.2018.

~~Net cash provided by financing activities~~ ~~was $243.8 million in 2016 compared to~~ ~~Net cash used in financing activities~~ of $253.5 million in 2015. The change was primarily attributable to an increase in debt proceeds of $2.9 billion during 2016 compared to 2015, partially offset by an increase in repayment of debt of $2.2 billion, an increase in ~~stock repurchases of~~ ~~$100.0 million~~and an increase in dividends paid of $66.3 million during 2016 compared to 2015. The increase in debt proceeds was primarily due to the $841.8 million unsecured term loan borrowed in April 2016 to finance ~~Ovation of the Seas, the €700.7 million and $226.1 million unsecured term loans borrowed in May~~

~~2016 to finance~~ ~~Harmony of the Seas~~, the $200.0 million unsecured term loan borrowed in April 2016 and higher drawings on our revolving credit facilities during 2016 compared to the $742.1 million unsecured term loan borrowed in April 2015 to finance ~~Anthem of the Seas.~~ ~~The increase in repayment of debt was primarily due to higher payments on our revolving credit facilities.~~

Future Capital Commitments

Capital Expenditures

Our future capital commitments consist primarily of new ship orders. As of December 31, ~~2017,~~2020, we have two ~~Quantum-class ships, two~~ Oasis-class ships, one Quantum-class ship, and ~~two~~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 ~~30,500~~32,400 berths. ~~Additionally,~~As of December 31, 2020, we have ~~four~~two Edge-class ships ~~of a new generation, known as our Edge-class, and a ship designed for the Galapagos Islands~~ on order for our Celebrity Cruises brand, with an aggregate capacity of approximately ~~11,700~~6,500 berths. ~~For each~~Additionally, as of ~~these orders,~~December 31, 2020, we have three ships on order for our Silversea Cruises brand with an aggregate capacity of approximately 1,750 berths. Refer to Item 1. Business-Operations for further information on our ships on order. For the 15 ships on order we have committed ~~unsecured~~ financing arrangements in place covering 80% of the cost of the ship, almost all of which include sovereign financing guarantees. ~~Furthermore, during 2017,~~Additionally, we ~~entered into~~have an agreement in place with Chantiers de l’Atlantique to ~~purchase a~~build an additional Edge-class ship for ~~our Azamara Club Cruises brand that~~delivery in 2025, which is ~~scheduled to be delivered in March 2018~~contingent upon completion of conditions precedent and ~~expected to enter service during the third quarter of 2018.~~financing.

As of December 31, ~~2017,~~2020, the aggregate cost of our ships on order, not including ~~the TUI Cruises'~~any ships on order by our Partner Brands and the Silversea Cruises ships that remain contingent upon final documentation and financing, was approximately ~~$13.3~~$14.2 billion, of which we had deposited ~~$465.7~~$684.8 million as of such date. Approximately ~~54.0%~~66.3% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at December 31, ~~2017. (Refer~~2020. Refer to Note ~~14.~~ 18. Fair Value Measurements and Derivative Instruments and Note ~~15.~~ 19. Commitments and Contingencies to our consolidated financial statements under Item 8. Financial Statements and Supplementary ~~Data)~~Data.

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Decreased demand for cruising as a result of concerns regarding the COVID-19 pandemic has had, and is expected to continue to have, a material impact on our cash flows, liquidity and financial position. In order to preserve liquidity throughout the COVID-19 pandemic, we deferred a significant portion of our planned 2020 and 2021 capital expenditures. As of December 31, ~~2017, anticipated~~2020, we anticipate overall full year capital expenditures, based on our existing ships on order, ~~are~~will be approximately ~~$3.4 billion for 2018,~~ $2.1 billion for ~~2019, $2.5 billion for 2020 and $2.5 billion for~~ 2021. These amounts do not include any ships on order by our Partner Brands.

Contractual Obligations

As of December 31, ~~2017,~~2020, our contractual obligations were as follows (in thousands):


	Payments due by period											Payments due by period
			Less than		1-3		3-5		More than					Less than		1-3		3-5		More than
	Total		1 year		years		years		5 years			Total		1 year		years		years		5 years
Operating Activities:											Operating Activities:
Operating lease obligations⁽¹⁾	$	241,468	$	29,420	$	44,191	$	22,644	$	145,213	Operating lease obligations(1)	$	873,415	$	124,108	$	226,823	$	153,818	$	368,666
Interest on long-term debt⁽²⁾	1,275,346		250,600		415,000		292,665		317,081		Interest on long-term debt(2)	3,690,617		908,230		1,521,157		746,103		515,127
Other⁽³⁾	879,206		214,444		282,570		150,003		232,189		Other(3)	567,193		202,618		327,671		14,185		22,719
Investing Activities:	0										Investing Activities:
Ship purchase obligations⁽⁴⁾	10,888,494		2,368,806		3,063,165		4,089,153		1,367,370		Ship purchase obligations(4)	11,602,504		1,321,218		5,585,545		3,384,256		1,311,485

Financing Activities:	0										Financing Activities:
Long-term debt obligations⁽⁵⁾	7,506,312		1,185,038		2,047,882		2,012,922		2,260,470
Capital lease obligations⁽⁶⁾	33,139		3,476		7,210		8,395		14,058
Other⁽⁷⁾	21,552		8,868		11,217		1,467		—
Commercial paper(5)											Commercial paper(5)	409,319		409,319		—		—		—
Debt obligations(6)											Debt obligations(6)	18,706,358		909,912		8,546,804		6,341,360		2,908,282
Capital lease obligations(7)											Capital lease obligations(7)	213,365		51,855		21,335		11,092		129,083
Other(8)											Other(8)	20,177		8,889		10,261		1,027		—
Total	$	20,845,517	$	4,060,652	$	5,871,235	$	6,577,249	$	4,336,381	Total	$	36,082,948	$	3,936,149	$	16,239,596	$	10,651,841	$	5,255,362

(1) We are obligated under noncancelable operating leases primarily for ~~offices, warehouses~~preferred berthing arrangements, real estate and ~~motor vehicles.~~shipboard equipment. Amounts represent contractual obligations with initial terms in excess of one year.

(2) ~~Long-term debt~~Debt obligations mature at various dates through fiscal year ~~2028~~2032 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, ~~2017.~~2020. Debt denominated in other currencies is calculated based on the applicable exchange rate at December 31, ~~2017.~~2020.

(3) Amounts primarily represent future commitments with remaining terms in excess of one year to pay for our usage of certain port facilities, marine consumables, services and maintenance contracts. ~~Amounts do not include~~Included in the ~~PortMiami lease~~1-3 year figure is estimated cash collateral of $181.1 million that we are required to deliver on or before July 18, 2021 in connection with our Port of Miami terminal operating lease. See Note 10. Leases to our consolidated financial statements under Item 1. Financial Statements for further ~~discussed below under~~ ~~Off-Balance Sheet Arrangements~~.information on the collateral requirement

(4) Amounts are based on contractual installment and delivery dates for our ships on order. Included in these figures are $9.4 billion in final contractual installments, which have committed financing. COVID-19 has impacted shipyard operations which have and will result in delays for our previously contracted ship deliveries. The exact duration of the ship delivery delays are currently under discussion with the impacted shipyards. Amounts do not include potential obligations which remain subject to cancellation at our sole ~~discretion.~~discretion or any agreements entered for ships on order that remain contingent upon completion of conditions precedent. Additionally, amounts do not include activity related to Silversea Cruises, including ships placed on order, if any, during the three-month reporting lag period.

(5) ~~Amounts represent debt obligations with initial terms~~In June 2020, RCL Cruises Ltd., we established a commercial paper facility under the Joint HM Treasury and Bank of England’s COVID Corporate Financing Facility commercial paper program in ~~excess of one year.~~an aggregate principal amount up to £300.0 million. Refer to Note 9. Debt to our consolidated financial statements under Item 8. Financial Statements and Supplemental Data to our consolidated financial statements for further information.

(6) Debt denominated in other currencies is calculated based on the applicable exchange rate at December 31, ~~2017.~~2020. In addition, debt obligations presented above are net of debt issuance costs of $314.8 million as of December 31, 2020.

~~(6)~~(7) Amounts represent capital lease obligations with initial terms in excess of one year.

~~(7)~~(8) Amounts represent fees payable to sovereign guarantors in connection with certain of our export credit debt facilities and facility fees on our revolving credit facilities.

Please refer to Funding Needs and Sources below for discussion on the planned funding of the above contractual obligations.

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As a normal part of our business, depending on market conditions, pricing and our overall growth strategy, we continuously consider opportunities to enter into contracts for the building of additional ships. We may also consider the sale of ships or the purchase of existing ships. We continuously consider potential acquisitions and strategic alliances. 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

We and TUI AG have each guaranteed repayment of 50% of a bank loan provided to TUI Cruises which is due 2022. Notwithstanding this, the lenders have agreed to release each shareholder’s guarantee if certain conditions are met by April 2018. As of December 31, 2017, €95.1 million, or approximately $114.2 million based on the exchange rate at December 31, 2017, remains outstanding. Based on current facts and circumstances, we do not believe potential obligations under this guarantee are probable.

TUI Cruises has entered into various ship construction and credit agreements that include certain restrictions on each of our and TUI AG's ability to reduce our current ownership interest in TUI Cruises below 37.55% through ~~2021.~~

In July 2016, we executed an agreement with Miami Dade County (“MDC”), which was simultaneously assigned to Sumitomo Banking Corporation (“SMBC”), to lease land from MDC and construct a new cruise terminal at PortMiami in Miami, Florida. The terminal is expected to be approximately 170,000 square feet and will serve as a homeport. During the construction period, SMBC will fund the costs of the terminal’s construction and land lease. Upon completion of the terminal's construction, we will operate and lease the terminal from SMBC for a five-year term. We determined that the lease arrangement between SMBC and us should be accounted for as an operating lease upon completion of the terminal.May 2033.

Some of the contracts that we enter into include indemnification provisions that obligate us to make payments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes, increased lender capital costs and other similar costs. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business. There are no stated or notional amounts included in the indemnification clauses and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses. We have not been required to make any payments under such indemnification clauses in the past and, under current circumstances, we do not believe an indemnification obligation is probable.

We have a residual value guarantee associated with our operating lease of a terminal at Port of Miami in Miami, Florida that approximates a percentage of cost of the asset as of the inception of the lease. We consider the possibility of incurring costs associated with the residual value guarantee to be remote. Also in connection with the Port of Miami terminal operating lease, we are required to deliver on or before July 18, 2021, cash collateral in an amount equal to the lesser of our residual value guarantee or the aggregate balance of the lessors' terminal construction debt, estimated at $181.1 million as of December 31, 2020. The collateral is to be issued to an escrow agent and pledged to the benefit of the terminal construction debt lenders until all amounts due by us under the lease have been paid in full.

Since the COVID-19 pandemic began, our senior unsecured ratings from Moody’s and S&P have been downgraded and are currently B2 and B, respectively. These downgrades reduce 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. Additionally, as a result of Moody’s downgrade of the Silversea Notes from Baa3 to Ba2 on August 31, 2020 and S&P’s downgrade of Silversea Cruises' Notes from BBB- to BB on August 31, 2020, certain covenants of the indenture governing the Silversea Notes have been reinstated. On February 25, 2021, S&P Global further downgraded the Silversea Cruises Notes from BB to BB-, which had no further impact with respect to the Silversea Cruises’ Notes.

The Company also has agreements with its credit card processors relating to customer deposits received by the Company for future voyages. These agreements allow the credit card processors to require, under certain circumstances, including breach

of the financial covenants, the existence of other material adverse changes, excessive chargebacks, and other triggering events, the Company to maintain a reserve that can be satisfied by posting collateral.

Executed amendments are in place for the majority of these providers, waiving reserve requirements tied to breach of our financial covenants through at least March 31, 2022 or September 30, 2022 depending on the agreement, and as such, we do not anticipate any incremental collateral requirements for the processors covered by these waivers in the next 12 months. We have a $75.0 million held in reserve with a processor where the agreement was amended in the first quarter of 2021, such that future proceeds will be withheld in reserve, of which the maximum projected exposure is approximately $200.0 million. The amount and timing are dependent on future factors that are uncertain, such as the date we return to operations, volume and value of future deposits and whether we transfer our business to other processors. If we require additional waivers on the credit card processing agreements and are not able to obtain them, this could lead to the termination of these agreements or the trigger of reserve requirements.

Certain of our surety agreements with third party providers for the benefit of certain agencies and associations that provide travel related bonds allow the surety to request collateral in the form of cash or letters of credit. As of December 31, ~~2017,~~2020, we have posted collateral in the amount of approximately $91 million.

As of December 31, 2020, other than the items described above, we are not party to any other off-balance sheet arrangements, including guarantee contracts, retained or contingent interest, certain derivative instruments and variable interest entities, that either have, or are reasonably likely to have, a current or future material effect on our financial position.

Funding Needs and Sources

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. The impact of COVID-19 resulted in our previously announced voluntary suspension

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of Global Brands' cruise operations from March 13, 2020, which has been extended through at least April 30, 2021, for most of our cruise operations. This suspension of operations has strained our sources of cash flow and liquidity, causing us to take actions resulting in reductions in our operating expenses, reductions in our capital expenses and new financings and other liquidity actions.

The Company continues to identify and evaluate further actions to improve its liquidity. These include, and are not limited to, further reductions in capital expenditures, operating expenses and administrative costs and additional financings. See further discussion on these liquidity actions at Recent Developments : COVID-19.

We have significant contractual obligations of which our debt service obligations and the capital expenditures associated with our ship purchases represent our largest funding needs. As of December 31, ~~2017,~~2020, we had ~~approximately $4.1~~$11.6 billion of committed financing for our ships on order.

As of December 31, 2020, we had $3.9 billion in contractual obligations due through December 31, ~~2018~~2021, of which approximately ~~$1.2~~$1.3 billion relates to debt maturities, ~~$0.3~~$0.9 billion relates to interest on ~~long-term~~ debt and ~~$2.4~~$1.3 billion relates to progress payments on our ship ~~purchase payments, including~~orders and the final installments payable due upon the ~~deliveries~~delivery of ~~Symphony~~Odyssey of the Seas ~~and~~ ~~Celebrity Edge~~ ~~in the~~.

first and fourth quarters of 2018, respectively. We have historically relied on a combination of cash flows provided by operations, drawdowns 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 these obligations.

~~We had a working capital deficit of $3.9 billion and $3.7 billion as~~As of December 31, ~~2017~~2020, we had liquidity of $4.4 billion, consisting of cash and ~~December 31, 2016, respectively. Included within our working capital deficit is $1.2~~cash equivalents of $3.7 billion and ~~$1.3~~a $0.7 billion ~~of current portion of debt, including capital leases, as~~one-year commitment for a 364-day term loan facility. As of December 31, 2017 and December 31, 2016, respectively. Similar to others in our industry, we operate with a substantial working capital deficit. This deficit is mainly attributable to the fact that, under our business model, a vast majority of our passenger ticket receipts are collected in advance of the applicable sailing date. These advance passenger receipts remain a current liability until the sailing date. The cash generated from these advance receipts is used interchangeably with cash on hand from other sources, such as2020, our revolving credit facilities were fully utilized through a combination of amounts drawn and ~~other cash from operations. The cash received as advanced receipts can be used to fund operating expenses for~~letters of credit issued under the ~~applicable future sailing or otherwise, pay down our revolving credit facilities, invest in long term investments or any other use of cash.~~facilities. In addition, we have a relatively low-level of accounts receivable and rapid turnover results in a limited investment in inventories. We generate substantial cash flows from operations and our business model, alongconnection with our ~~unsecured revolving credit facilities, has historically allowed us to maintain this working capital deficit and still meet our operating, investing and financing needs. We expect that~~debt covenant waiver extensions, we ~~will continue to have working capital deficits in the future.~~

As of December 31, 2017, we had liquidity of $2.2 billion, consisting of approximately $0.1 billion in cash and cash equivalents and $2.1 billion available under our unsecured revolving credit facilities. We anticipate that our cash flows from operations and our current financing arrangements, as described above, will be adequate to meet our capital expenditures and debt repayments over the next twelve-month period.

~~In April 2017, Moody's changed our senior unsecured debt credit rating to Baa3~~agreed with a stable outlook. Consistent with the provisions of our interest rate derivatives instruments, all collateral that was posted with our counterparties as of that date was returned in April 2017. In addition, the interest margins and guarantee premium payable under certain of our ~~credit agreements were automatically reduced~~lenders not to pay dividends or engage in ~~accordance with their terms.~~

~~On April 28, 2017, we announced that our Board of Directors authorized a twelve-month common~~ stock repurchase program for up to $500 million. As of December 31, 2017, we have $275.0 million that remains available for future common stock repurchase transactions under this Board approved program. Future repurchases may be made at management's discretion from time to time on the open market or through privately negotiated transactions. Repurchases under the program are expected to be funded from available cash or borrowings under our revolving credit facilities.repurchases. Refer to Note 8.12. Shareholders' Equity to our consolidated financial statements under Item 8. Financial Statementsfor further information.

Based on our assumptions and estimates and our financial condition, we believe that the liquidity resulting from the actions mentioned above will be sufficient to fund our liquidity requirements over at least the next twelve months from the issuance of these financial statements. However, there is no assurance that our assumptions and estimates are accurate due to possible unknown variables related to this unprecedented suspension of our operations and, as such, 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 1. Financial Statements for further information.

Under certain of our agreements, the contractual interest rate, facility fee and/or export credit agency fee vary with our debt rating. On August 24, 2020, Moody’s downgraded our senior unsecured rating from Ba2 to B2, and on August 31, 2020, S&P Global downgraded our senior unsecured rating from BB to B+, thereby increasing the contractual interest rate, facility fee and export credit agency fee across various facilities. On February 25, 2021, S&P Global further downgraded our senior unsecured rating from B+ to B, which had no further financial impact.

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 ~~the Board~~our board of directors is no longer comprised of individuals who were members of ~~the Board~~our board of directors on the first day of such period, we may be obligated to prepay indebtedness outstanding under our credit facilities, which we may be unable to replace on similar terms. Our public debt securities also contain change of control provisions that would be triggered by a third-party acquisition of greater than 50% of our common stock coupled with a ratings downgrade. If this were to occur, it would have an adverse impact on our liquidity and operations.

Debt Covenants

~~Certain of~~Both our ~~financing agreements~~export credit facilities and our non-export credit facilities contain covenants that require us, among other things, to maintain ~~minimum net worth of at least $8.0 billion,~~ a fixed charge coverage ratio of at least 1.25x and limit our net debt-to-capital ratio to no more than 62.5%., and under certain facilities, to maintain a minimum level of shareholders' equity. The fixed charge coverage ratio is calculated by dividing net cash from operations for the past four quarters by the sum of dividend payments plus scheduled principal debt payments in excess of any new financings for the past four quarters. Our minimum net worth and maximum net debt-to-capital calculations exclude the impact of Accumulated other comprehensive loss on Total ~~shareholders'~~shareholders’ equity. ~~We were well in excess of all debt covenant requirements as~~

As of December 31, ~~2017.~~ 2020, financial covenant testing on our export-credit and non-export credit facilities totaling $11.2 billion of, and our credit card processing agreements was waived through the fourth quarter of 2021 following amendments to the agreements during 2020.

In addition, pursuant to the amendments for the non-export credit facilities, we have modified the manner in which such covenants are calculated, temporarily in certain cases and permanently in others, as well as the levels at which our net debt to

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capitalization covenant will be tested during the period commencing immediately following the end of the waiver period and continuing through the end of 2023.

The ~~specific~~amendments impose a monthly-tested minimum liquidity covenant of $500.0 million for the duration of the waiver period, subject to reduction to $350.0 million if we raise at least $500.0 million of additional capital, which can be satisfied through previously undrawn facilities. In addition, the amendments to the non-export credit facilities place restrictions on paying cash dividends and effectuating share repurchases through the end of the third quarter of 2022, while the export credit facility amendments require us to prepay any deferred amounts if we elect to issue dividends or complete share repurchases. As of December 31, 2020, we were in compliance with the applicable minimum liquidity covenant and we estimate that we will be in compliance for at least the next twelve months.

In addition to the above, during 2020, we amended our Port of Miami Terminal "A" operating lease agreement to increase the lien basket in line with our debt facilities. In the first quarter of 2021, we also amended this lease to obtain a financial covenant waiver through the end of the third quarter of 2022, on the same terms as apply to the non-export credit facilities. As of December 31, 2020, we were in compliance with the amended covenants under the lease agreement.

Any further covenant waivers may lead to increased costs, increased interest rates, additional restrictive covenants and ~~related definitions~~other available lender protections as may be agreed with our lenders. There can be ~~found~~no assurance that we would be able to obtain additional waivers in a timely manner, or on acceptable terms. If we require additional waivers and are not able to obtain them or repay the ~~applicable~~ debt facilities, this would lead to an event of default and potential acceleration of amounts due under all of our outstanding debt and derivative contracts.

If we require additional waivers on the credit card processing agreements and are not able to obtain them, this could lead to the ~~majority~~termination of ~~which have been previously filed with~~these agreements or the ~~Securities and Exchange Commission.~~trigger of reserve requirements.

Dividends

~~In December 2017,~~During the first quarter of 2020 we declared a cash dividend on our common stock of $0.60 per share which was paid in the first quarter of 2018. We declared a cash dividend on our common stock of $0.60 per share during the third quarter of 2017 which was paid in the fourth quarter of 2017. During the first and second quarters of 2017, we declared a cash dividend on our common stock of $0.48$0.78 per share which was paid in the second ~~and third quarters~~quarter of ~~2017, respectively.~~ 2020.

During the second quarter of 2020, we agreed with certain of our lenders not to pay dividends or engage in common stock repurchases for so long as our debt covenant waivers are in effect. In addition, 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 as part of the principal amortization deferral provided in 2020 and the first quarter of ~~2017,~~2021. Accordingly, we ~~also paid a cash dividend on our common stock~~did not declare any additional dividends during 2020.

Table of ~~$0.48 per share which was declared during the fourth quarter of 2016.~~Contents

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Financial Instruments and Other

General

We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates and fuel prices. We try to mitigate these risks through a combination of our normal operating and financing activities and through the use of derivative financial instruments pursuant to our hedging practices and policies. The financial impact of these hedging instruments is primarily offset by corresponding changes in the underlying exposures being hedged. We achieve this by closely matching the amount, term and conditions of the derivative instrument with the underlying risk being hedged. Although certain of our derivative financial instruments do not qualify or are not accounted for under hedge accounting, our objective is not to hold or issue derivative financial instruments for trading or other speculative purposes. ~~(Refer~~Refer to Note ~~14.~~ 18. Fair Value Measurementsand Derivative Instruments to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data.)

Interest Rate Risk

Our exposure to market risk for changes in interest rates relates to our long-term debt obligations including future interest payments. At December 31, ~~2017,~~2020, approximately ~~57.4%~~64.5% of our long-term debt was effectively fixed as compared to ~~40.5%~~62.1% as of December 31, ~~2016.~~2019. We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense.

Market risk associated with our long-term 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. At December 31, ~~2017 and December 31, 2016,~~2020, we maintained interest rate swap agreements on the following fixed-rate debt instruments:


Debt Instrument	Swap Notional as of December 31, 2017 (In thousands)		Maturity	Debt Fixed Rate	Swap Floating Rate: LIBOR plus	All-in Swap Floating Rate as of December 31, 2017	Debt Instrument	Swap Notional as of December 31, 2020 (In thousands)		Maturity	Debt Fixed Rate	Swap Floating Rate: LIBOR plus	All-in Swap Floating Rate as of December 31, 2020
Oasis of the Seas term loan	$	140,000	October 2021	5.41%	3.87%	5.44%	Oasis of the Seas term loan	$	35,000	October 2021	5.41%	3.87%	4.12%
Unsecured senior notes	650,000		November 2022	5.25%	3.63%	5.05%	Unsecured senior notes	650,000		November 2022	5.25%	3.63%	3.85%
	$	790,000						$	685,000

These interest rate swap agreements are accounted for as fair value hedges.

The estimated fair value of our long-term fixed-rate debt at December 31, ~~2017~~2020 was ~~$2.4~~$12.9 billion, using quoted market prices, where available, or using the present value of expected future cash flows which incorporates risk profile. The fair value of our fixed to floating interest rate swap agreements was estimated to be ~~a liability~~an asset of ~~$19.8~~$18.8 million as of December 31, ~~2017,~~2020, based on the present value of expected future cash flows. A hypothetical one percentage point decrease in interest rates at December 31, ~~2017~~2020 would increase the fair value of our hedged and unhedged long-term fixed-rate debt by approximately ~~$127.4~~$67.2 million and would increase the fair value of our fixed to floating interest rate swap agreements by approximately ~~$31.8~~$11.8 million.

Market risk associated with our long-term floating-rate debt is the potential increase in interest expense from an increase in interest 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 ~~2018~~2021 interest expense by approximately ~~$30.1~~$59.4 million, assuming no change in foreign currency exchange rates.

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At December 31, ~~2017 and December 31, 2016,~~2020, we maintained interest rate swap agreements on the following floating-rate debt instruments:


Debt Instrument	Swap Notional as of December 31, 2017 (In thousands)		Maturity	Debt Floating Rate		All-in Swap Fixed Rate	Debt Instrument	Swap Notional as of December 31, 2020 (In thousands)		Maturity	Debt Floating Rate		All-in Swap Fixed Rate
Celebrity Reflection term loan	$	381,792	October 2024	LIBOR plus	0.40%	2.85%	Celebrity Reflection term loan	$	218,167	October 2024	LIBOR plus	0.40%	2.85%
Quantum of the Seas term loan	551,250		October 2026	LIBOR plus	1.30%	3.74%	Quantum of the Seas term loan	367,500		October 2026	LIBOR plus	1.30%	3.74%
Anthem of the Seas term loan	573,958		April 2027	LIBOR plus	1.30%	3.86%	Anthem of the Seas term loan	392,708		April 2027	LIBOR plus	1.30%	3.86%
Ovation of the Seas term loan	726,250		April 2028	LIBOR plus	1.00%	3.16%	Ovation of the Seas term loan	518,750		April 2028	LIBOR plus	1.00%	3.16%
Harmony of the Seas term loan ⁽¹⁾	728,373		May 2028	EURIBOR plus	1.15%	2.26%	Harmony of the Seas term loan (1)	530,191		May 2028	EURIBOR plus	1.15%	2.26%
Odyssey of the Seas term loan(2)							Odyssey of the Seas term loan(2)	460,000		October 2032	LIBOR plus	0.95%	3.20%
Odyssey of the Seas term loan (2)							Odyssey of the Seas term loan (2)	191,667		October 2032	LIBOR plus	0.95%	2.83%
	$	2,961,623						$	2,678,983

(1) Interest rate swap agreements hedging the Euro-denominated term loan for Harmony of the Seas include EURIBOR zero-floors matching the hedged debt EURIBOR zero-floor. Amount presented is based on the exchange rate as of December 31, 2020.


~~(1)~~	~~Interest rate swap agreements hedging the Euro-denominated term loan for~~ ~~Harmony of the Seas~~ ~~include EURIBOR zero-floors matching the hedged debt EURIBOR zero-floor. Amount presented is based on the exchange rate as of December 31, 2017.~~

(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 $460.0 million and $191.7 million interest rate swap agreements are October 2020 and October 2022, respectively. The anticipated unsecured term loan for the financing of Odyssey of the Seas was initially expected to be drawn in October 2020. However, due to the impact of COVID-19 to shipyard operations, there is a delay in the ship delivery.

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 a liability of ~~$24.5~~$154.5 million as of December 31, ~~2017~~2020 based on the present value of expected future cash flows. These interest rate swap agreements are accounted for as cash flow hedges.

Foreign Currency Exchange Rate Risk

Our primary exposure to foreign currency exchange rate risk relates to our ship construction contracts denominated in Euros, our foreign currency denominated debt and our international business operations. WeOn a regular basis, we enter into foreign currency forward contracts ~~collar options~~ and, from time to time, we utilize cross-currency swap agreements and collar options to manage portions of the exposure to movements in foreign currency exchange rates.

The estimated fair value, as of December 31, ~~2017,~~2020, of our Euro-denominated forward contracts associated with our ship construction contracts was ~~an asset~~a liability of ~~$235.9~~$70.9 million, based on the present value of expected future cash flows. As of December 31, ~~2017,~~2020, the aggregate cost of our ships on order, not including ~~the TUI Cruises'~~ ships on order by our Partner Brands and the Silversea Cruises ships that remain contingent upon final documentation and financing, was approximately ~~$13.3~~$14.2 billion, of which we had deposited ~~$465.7~~$684.8 million as of such date. Approximately ~~54.0%~~66.3% and ~~66.7%~~65.9% of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate at December 31, ~~2017~~2020 and ~~December 31, 2016,~~2019, respectively. A hypothetical 10% strengthening of the Euro as of December 31, ~~2017,~~2020, assuming no changes in comparative interest rates, would result in a ~~$716.0~~$941.2 million increase in the United States dollar cost of the foreign currency denominated ship construction contracts exposed to fluctuations in the Euro exchange rate. ~~The majority of our~~Our foreign currency forward ~~contracts, collar options and cross-currency swap~~contract agreements are accounted for as cash flow ~~fair value~~ or net investment hedges depending on the designation of the related hedge.

Our international business operations subject us to foreign currency exchange risk. We transact business in many different foreign currencies and maintain investments in foreign operations which may expose us to financial market risk resulting from fluctuations in foreign currency exchange rates. Movements in foreign currency exchange rates may affect the value of our earnings in foreign currencies and cash flows. We manage most of this exposure on a consolidated basis, which allows us to take advantage of any natural offsets. Therefore, weakness in one particular currency might be offset by strengths in other currencies over time. The extent to which one currency is effective as a natural offset of another currency fluctuates over time. In addition, some foreign currency exposures have little to no mitigating natural offsets available.

We consider our investments in our foreign operations to be denominated in relatively stable currencies and of a long-term nature. As of December 31, ~~2017,~~2020, we maintained foreign currency forward contracts and designated them as hedges of a portion of our net investment in TUI ~~cruises~~Cruises of ~~€101.0~~€245.0 million, or approximately ~~$121.3~~$299.7 million based on the exchange rate at December 31, ~~2017.~~2020. These forward currency contracts mature in October 2021.

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We also address the exposure of our investments in foreign operations by denominating a portion of our debt in our subsidiaries' and investments' functional currencies and designating it as a hedge of these subsidiaries and investments. We had designated debt as a hedge of our net investments primarily in TUI Cruises of approximately ~~€246.0~~€215.0 million, or approximately ~~$295.3~~$263.0 million, through December 31, ~~2017.~~2020. As of December 31, ~~2016,~~2019, we had designated debt as a hedge of our net investments primarily in TUI Cruises of approximately ~~€295.0~~€319.0 million, or approximately ~~$311.2~~$358.1 million.

We have included net gains of approximately ~~$68.5~~$22.1 million and ~~$114.0~~$96.8 million of foreign-currency transaction ~~losses~~remeasurement and of changes in the fair value of derivatives in the foreign currency translation adjustment component of Accumulated other comprehensive loss at December 31, ~~2017~~2020 and ~~December 31, 2016,~~2019, respectively.

~~Lastly, on~~On a regular basis, we enter into foreign currency forward contracts and, from time to time, we utilize cross-currency swap agreements and collar options to minimize the volatility resulting from the remeasurement of net monetary assets and liabilities denominated in a currency other than our functional currency or the functional currencies of our foreign subsidiaries. During ~~2017,~~2020, we maintained an average of approximately ~~$739.4~~$364.0 million of these foreign currency forward contracts. These instruments are not designated as hedging instruments. ~~In 2017, 2016~~For the years ended December 31, 2020, 2019 and ~~2015~~2018 changes in the fair value of the foreign currency forward contracts resulted in ~~a gain (loss)~~gains (losses) of approximately ~~$62.0~~$(19.0) million,, ~~$(51.1)~~ $1.4 million and ~~$(55.5)~~$(62.4) million, respectively, which offset gains (losses) ~~gains~~ arising from the remeasurement of monetary assets and liabilities denominated in foreign currencies in those same years of ~~$(75.6)~~$(1.5) million,, ~~$39.8~~ $0.4 million and ~~$34.6~~$57.6 million, respectively. These changes were recognized in earnings within Other ~~expense~~ income (expense) in our consolidated statements of comprehensive income (loss).

Fuel Price Risk

Our exposure to market risk for changes in fuel prices relates primarily to the consumption of fuel on our ships. Fuel cost, ~~(net~~net of the financial impact of fuel swap ~~agreements),~~agreements, as a percentage of our total revenues, was approximately ~~7.8%~~16.8% in ~~2017, 8.4%~~2020, 6.4% in ~~2016~~2019 and ~~9.6%~~7.5% in ~~2015.~~2018. We use fuel swap agreements to mitigate the financial impact of fluctuations in fuel prices.

As of December 31, ~~2017,~~2020, we had fuel swap agreements to pay fixed prices for fuel with an aggregate notional amount of approximately ~~$828.5~~$535.0 million, maturing through 2021. The fuel swap agreements represented 50% of our projected 2018 fuel requirements, 46% of our projected 2019 fuel requirements, 36% of our projected 2020 fuel requirements and 14% of our projected 2021 fuel requirements.2024. These fuel swap agreements are generally accounted for as cash flow hedges. The fuel swap agreements designated as hedges of projected fuel purchases represented 40% of our projected 2021 fuel requirements, 23% of our projected 2022 fuel requirements and 5% of our projected 2023 fuel requirements. The current suspension of the cruise operations due to the COVID-19 pandemic and our 2020 and expected 2021 ship disposals resulted in reductions to our forecasted fuel consumption. As of December 31, 2020, the Company had outstanding fuel swaps of 229,850 and 14,650 metric tons maturing in 2021 and 2022, respectively, that no longer hedge forecasted fuel consumption. The estimated fair value of ~~these contracts~~our fuel swap agreements at December 31, ~~2017~~2020 was estimated to be ~~an asset~~a liability of ~~$14.3~~$88.0 million. We estimate that a hypothetical 10% increase in our weighted-average fuel price from that experienced during the year ended December 31, ~~2017~~2020 would increase our forecasted ~~2018~~2021 fuel cost by approximately ~~$38.0~~$15.0 million, net of the impact of fuel swap agreements.

Item 8. Financial Statements and Supplementary Data

Our Consolidated Financial Statements and Quarterly Selected Financial Data are included beginning on page F-1 of this report.

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

None.

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Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chairman and Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined in Exchange Act Rule 13a-15(e), as of the end of the period covered by this report. Based upon such evaluation, our Chairman and Chief Executive Officer and Chief Financial Officer concluded that those controls and procedures are effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chairman and Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the ~~SEC’s~~Securities and Exchange Commission's (the "SEC") rules and forms.

Management's Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Our management, with the participation of our Chairman and Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based on the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, ~~2017.~~ 2020.

The effectiveness of our internal control over financial reporting as of December 31, ~~2017~~2020 has been audited by PricewaterhouseCoopers LLP, the independent registered ~~certified~~ public accounting firm that audited our consolidated financial statements included in this Annual Report on Form 10-K, as stated in its report, which is included herein on page F-2.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Exchange Act Rule 13a-15(d) during the quarter ended December 31, ~~2017~~2020 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there is only reasonable assurance that our controls will succeed in achieving their goals under all potential future conditions.

Item 9B. Other Information

None.

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PART III

Items 10, 11, 12, 13 and 14. Directors, Executive Officers and Corporate Governance; Executive Compensation; Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters; Certain Relationships and Related Transactions; and Director Independence and Principal Accountant Fees and Services.

Except for information concerning executive officers (called for by Item 401(b) of Regulation S-K), which is included in Part I of this Annual Report on Form 10-K, the information required by Items 10, 11, 12, 13 and 14 is incorporated herein by reference to certain sections of the Royal Caribbean Cruises Ltd. Definitive Proxy Statement relating to our ~~2018~~2021 Annual Meeting of Shareholders (the "Proxy Statement") to be filed with the Securities and Exchange Commission no later than 120 days after the close of the fiscal year. Please refer to the following sections in the Proxy Statement for more ~~information regarding our corporate governance:~~information: "Corporate Governance"; "Proposal 1—Election of Directors"; ~~and~~ "Certain Relationships and Related Person ~~Transactions.~~Transactions"; "Section 16(a) Beneficial Ownership Reporting Compliance"; "Executive Compensation"; "Security Ownership of Certain Beneficial Owners and Management"; and "Proposal 3—Ratification of Principal Independent Registered Public Accounting Firm." Copies of the Proxy Statement will become available when filed through our Investor Relations website at www.rclcorporate.com (please see "Financial Reports" under "Financial Information"); by contacting our Investor Relations department at 1050 Caribbean Way, Miami, Florida 33132—telephone (305) 982-2625; or by visiting the SEC's website at www.sec.gov.

We have adopted a Code of Business Conduct and Ethics that applies to all of our employees, including our executive officers, and our directors. A copy of the Code of Business Conduct and Ethics is posted in the corporate governance section of our website at www.rclcorporate.com and is available in print, without charge, to shareholders upon written request to our Corporate Secretary at Royal Caribbean Cruises, Ltd., 1050 Caribbean Way, Miami, Florida 33132. Any amendments to the code or any waivers from any provisions of the code granted to executive officers or directors will be promptly disclosed to investors by posting on our website at www.rclcorporate.com. None of the websites referenced in this Annual Report on Form 10-K or the information contained therein is incorporated herein by reference.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)(1) Financial Statements

Our Consolidated Financial Statements have been prepared in accordance with Item 8. Financial Statements and Supplementary Data and are included beginning on page F-1 of this report.


~~(2)~~	~~Financial Statement Schedules~~

(1)Financial Statement Schedules

None.


~~(3)~~	~~Exhibits~~

~~INDEX TO EXHIBITS~~

(1)Exhibits

Exhibits ~~10.22~~10.90 through ~~10.50~~10.111 represent management compensatory plans or arrangements.

Incorporated By Reference

Exhibit Number

Exhibit Description

Form

Exhibit

Filing Date/ Period End Date

3.1

Restated Articles of Incorporation of the Company, as amended (composite)

S-3

3.1

3/23/2009

3.2

Amended and Restated By-Laws of the Company, as amended

8-K

3.1

12/6/2018

4.1

Indenture dated as of July 15, 1994, by and between the Company, as issuer, and The Bank of New York Trust Company, N.A., successor to NationsBank of Georgia, National Association, as Trustee

20-F

2.4

12/31/1994

4.2

Sixth Supplemental Indenture dated as of October 14, 1997, to the Indenture, dated as of July 15, 1994, by and between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee

20-F

2.11

12/31/1997

4.3

Eighth Supplemental Indenture dated as of March 16, 1998, to the Indenture, dated as of July 15, 1994, by and between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee

20-F

2.13

12/31/1997

4.4

Form of Indenture, dated as of July 31, 2006, by and between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee

S-3

4.1

7/31/2006

4.5

Second Supplemental Indenture dated as of November 7, 2012 between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee

8-K

4.1

11/7/2012

4.6

Third Supplemental Indenture, dated as of November 28, 2017 between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee

8-K

4.1

11/28/2017

4.7

Indenture dated as of January 30, 2017 among Silversea Cruise Finance Ltd., as issuer, Citibank, N.A., London Branch, as Trustee, as Principal Paying Agent and as Security Agent, and Citigroup Global Markets Deutschland AG, as Registrar

10-K

4.7

12/31/2018

4.8

Supplemental Indenture dated as of February 1, 2017 by and among Silversea Cruise Finance Ltd., as issuer, the other parties listed as New Guarantors, and Citibank, N.A., London Branch, as Trustee

10-K

4.8

12/31/2018

4.9

Second Supplemental Indenture dated as of February 1, 2019 by and between Silversea Cruise Finance Ltd., as issuer, and Citibank, N.A., London Branch, as Trustee

10-K

4.9

12/31/2018

4.10

Description of the Company's Securities*

4.11

Indenture, dated May 19, 2020, among the Company, the guarantors named therein, and The Bank of New York Mellon Trust Company, N.A., as trustee, principal paying agent , transfer agent, registrar and security agent.

8-K

4.1

5/19/2020

4.12

Indenture, dated June 9, 2020, among the Company, RCI Holdings LLC, a limited liability company formed and existing under the laws of Liberia and a direct wholly-owned subsidiary of the Company and The Bank of New York Mellon Trust Company, N.A., as trustee, principal paying agent, transfer agent, registrar and security agent.

8-K

4.1

6/9/2020

4.13

Indenture, dated June 9, 2020, among the Company, and The Bank of New York Mellon Trust Company, N.A., as trustee, paying agent, registrar, custodian and conversion agent.

8-K

4.2

6/9/2020

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Incorporated By Reference
Exhibit Number Exhibit Description Form Exhibit Filing Date/ Period End Date
3.1
Restated Articles of Incorporation of the Company, as amended (composite)
S-3 3.1 3/23/2009
3.2
Amended and Restated By-Laws of the Company
8-K 3.1 9/11/2013
4.1 Indenture dated as of July 15, 1994, by and between the Company, as issuer, and The Bank of New York Trust Company, N.A., successor to NationsBank of Georgia, National Association, as Trustee 20-F 2.4 12/31/1994
4.2 Sixth Supplemental Indenture dated as of October 14, 1997, to the Indenture, dated as of July 15, 1994, by and between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee 20-F 2.11 12/31/1997
4.3 Eighth Supplemental Indenture dated as of March 16, 1998, to the Indenture, dated as of July 15, 1994, by and between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee 20-F 2.13 12/31/1997
4.4
Form of Indenture, dated as of July 31, 2006, by and between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee
S-3 4.1 7/31/2006
4.5
Second Supplemental Indenture dated as of November 7, 2012 between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee
8-K 4.1 11/7/2012
4.6
Third Supplemental Indenture, dated as of November 28, 2017 between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee
8-K 4.1 11/28/2017
10.1 Amended and Restated Registration Rights Agreement dated as of July 30, 1997, by and among the Company, A. Wilhelmsen AS., Cruise Associates, Monument Capital Corporation, Archinav Holdings, Ltd. and Overseas Cruiseship, Inc. 20-F 2.20 12/31/1997
10.2
Amendment to the Amended and Restated Credit Agreement, dated as of June 15, 2015, by and among the Company, The Bank of Nova Scotia, as administrative agent for the lender parties and the lender parties
8-K 10.1 6/19/2015
10.3
Amendment to the Credit Agreement, dated as of December 4, 2017, by and among the Company, the various financial institutions as are or shall become parties thereto and The Bank of Nova Scotia, as administrative agent for the lender parties
8-K 10.1 12/7/2017
10.4
Assignment and Amendment to the Credit Agreement, dated as of August 23, 2013, by and among the Company, Nordea Bank Finland plc, New York Branch, as administrative agent for the lender parties and the lender parties
8-K 10.1 8/26/2013
10.5
Amendment No. 1 to the Amended and Restated Credit Agreement, dated as of July 10, 2015, by and among the Company Nordea Bank Finland Plc, New York Branch, as administrative agent for the lender parties and the lender parties
10-Q 10.2 6/30/2015
10.6
Amendment to the Credit Agreement, dated as of October 12, 2017, by and among the Company, the various financial institutions as are or shall become parties thereto and Nordea Bank AB (PUBL), New York branch, as administrative agent for the lender parties
8-K 10.3 10/17/2017
10.7
Amendment No. 4 to Hull No. S-697 Credit Agreement, dated as of February 2, 2016, by and between the Company, the Lenders from time to time party thereto, the Mandated Lead Arrangers and KfW-IPEX-Bank GmbH, as Hermes Agent and Facility Agent
10-K 10.7 12/31/2015
10.8
Amendment No. 4 to Hull No. S-698 Credit Agreement, dated as of February 3, 2016, by and between the Company, the Lenders from time to time party thereto, the Mandated Lead Arrangers and KfW-IPEX-Bank GmbH, as Hermes Agent and Facility Agent
10-K 10.8 12/31/2015

Incorporated By Reference

Exhibit Number

Exhibit Description

Form

Exhibit

Filing Date/ Period End Date

4.14

Indenture, dated October 16, 2020, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee, paying agent, registrar, custodian and conversion agent.

8-K

4.1

10/16/2020

10.1

Amended and Restated Registration Rights Agreement dated as of July 30, 1997, by and among the Company, A. Wilhelmsen AS., Cruise Associates, Monument Capital Corporation, Archinav Holdings, Ltd. and Overseas Cruiseship, Inc.

20-F

2.20

12/31/1997

10.2

Amendment to the Credit Agreement, dated as of December 4, 2017, by and among the Company, the various financial institutions as are or shall become parties thereto and The Bank of Nova Scotia, as administrative agent for the lender parties

8-K

10.1

12/7/2017

10.3

Amendment to the Credit Agreement, dated as of April 5, 2019, among Royal Caribbean Cruises Ltd., the various financial institutions as are or shall become parties thereto and The Bank of Nova Scotia, as administrative agent for the lender parties

8-K

10.1

4/10/2019

10.4

Amendment No. 1 to the Amended and Restated Credit Agreement, dated as of May 24, 2019, among the Company, the various financial institutions party thereto and Nordea Bank ABP, as administrative agent

10-Q

10.3

7/25/2019

10.5

Amendment to the Credit Agreement, dated as of October 12, 2017, by and among the Company, the various financial institutions as are or shall become parties thereto and Nordea Bank AB (PUBL), New York branch, as administrative agent for the lender parties

8-K

10.3

10/17/2017

10.6

Amendment No. 4 to Hull No. S-697 Credit Agreement, dated as of February 2, 2016, by and between the Company, the Lenders from time to time party thereto, the Mandated Lead Arrangers and KfW IPEX-Bank GmbH, as Hermes Agent and Facility Agent

10-K

10.7

12/31/2015

10.7

Amendment No. 5 to Hull No. S-697 Credit Agreement, dated as of July 3, 2018, by and between the Company, the Lenders from time to time party thereto, the Mandated Lead Arrangers and KfW IPEX-Bank GmbH, as Hermes Agent and Facility Agent

10-Q

10.4

6/30/2018

10.8

Amendment No. 4 to Hull No. S-698 Credit Agreement, dated as of February 3, 2016, by and between the Company, the Lenders from time to time party thereto, the Mandated Lead Arrangers and KfW IPEX-Bank GmbH, as Hermes Agent and Facility Agent

10-K

10.8

12/31/2015

10.9

Amendment No. 5 to Hull No. S-698 Credit Agreement, dated as of July 3, 2018, by and between the Company, the Lenders from time to time party thereto, the Mandated Lead Arrangers and KfW IPEX-Bank GmbH, as Hermes Agent and Facility Agent

10-Q

10.5

6/30/2018

10.10

Amendment No. 1 to Hull No. S-699 Credit Agreement, dated as of March 31, 2016, by and between the Company, the Lenders from time to time party thereto, the Mandated Lead Arrangers and KfW IPEX-Bank GmbH, as Hermes Agent and Facility Agent

10-Q

10.1

3/31/2016

10.11

Amendment No. 2 to Hull No. S-699 Credit Agreement, dated as of July 3, 2018, by and between the Company, the Lenders from time to time party thereto, the Mandated Lead Arrangers and KfW IPEX-Bank GmbH, as Hermes Agent and Facility Agent

10-Q

10.6

6/30/2018

10.12

Amendment and Restatement Agreement, dated as of January 15, 2016, in respect of a Facility Agreement dated, as of July 9, 2013, by and between the Company, the Lenders from time to time party thereto, Société Générale, as Facility Agent and Mandated Lead Arranger, BNP Paribas, as Documentation Bank and Mandated Lead Arranger, and HSBC France, as Mandated Lead Arranger

10-K

10.10

12/31/2015

Table of Contents

Incorporated By Reference
Exhibit Number Exhibit Description Form Exhibit Filing Date/ Period End Date
10.9
Amendment No. 1 to Hull No. S-699 Credit Agreement, dated as of March 31, 2016, by and between the Company, the Lenders from time to time party thereto, the Mandated Lead Arrangers and KfW-IPEX-Bank GmbH, as Hermes Agent and Facility Agent
10-Q 10.1 3/31/2016
10.10
Amendment and Restatement Agreement, dated as of January 15, 2016, in respect of a Facility Agreement dated, as of July 9, 2013, by and between the Company, the Lenders from time to time party thereto, Société Générale, as Facility Agent and Mandated Lead Arranger, BNP Paribas, as Documentation Bank and Mandated Lead Arranger, and HSBC France, as Mandated Lead Arranger
10-K 10.10 12/31/2015
10.11
Novation Agreement, dated as of January 30, 2015, by and between Frosaitomi Finance Ltd. the Company, Citibank International Limited, Citicorp Trustee Company Limited, Citibank N.A., London Branch and the banks and financial institutions as a lender parties thereto
8-K 10.1 2/5/2015
10.12
Form of Hull No. B34 Novated Credit Agreement (as amended and restated on February 8, 2017)
10-K 10.10 12/31/2016
10.13
Hull No. S-700 Credit Agreement, dated as of November 13, 2015, by and among the Company, the Lenders from time to time party thereto and KfW IPEX-Bank GmbH, as Hermes Agent, Facility Agent and Initial Mandated Lead Arranger.
8-K 10.1 11/19/2015
10.14
Hull No. S-713 Credit Agreement, dated as of November 13, 2015, by and among the Company, the Lenders from time to time party thereto and KfW IPEX-Bank GmbH, as Hermes Agent, Facility Agent and Initial Mandated Lead Arranger.
8-K 10.2 11/19/2015
10.15
Novation Agreement, dated as of June 22, 2016, by and between Saintiami Finance Ltd., Royal Caribbean Cruises Ltd., Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and the banks and financial institutions as lender parties thereto
8-K 10.1 6/28/2016
10.16
Novation Agreement, dated as of June 22, 2016, by and between Azairemia Finance Ltd., Royal Caribbean Cruises Ltd., Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and the banks and financial institutions as lender parties thereto
8-K 10.2 6/28/2016
10.17
Novation Agreement, dated as of July 24, 2017, between Hibisyeu Finance Ltd., Royal Caribbean Cruises Ltd., Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and the banks and financial institutions as lender parties thereto
8-K 10.1 7/28/2017
10.18
Novation Agreement, dated as of July 24, 2017, between Hoediscus Finance Ltd., Royal Caribbean Cruises Ltd., Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and the banks and financial institutions as lender parties thereto
8-K 10.2 7/28/2017
10.19
Novation Agreement, dated as of July 24, 2017, between Houatorris Finance Ltd., Royal Caribbean Cruises Ltd., Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and the banks and financial institutions as lender parties thereto
8-K 10.3 7/28/2017
10.20
Icon 1 Hull No. S-1400 Credit Agreement, dated as of October 11, 2017, between Royal Caribbean Cruises Ltd., as the Borrower, the Lenders from time to time party thereto, KfW IPEX-Bank GmbH, as Hermes Agent, Facility Agent, Documentation Agent and Initial Mandated Lead Arranger and BNP Paribas Fortis SA/NV as Finnvera Agent
8-K 10.1 10/17/2017

Incorporated By Reference

Exhibit Number

Exhibit Description

Form

Exhibit

Filing Date/ Period End Date

10.13

Amendment and Restatement Agreement, dated as of August 15, 2019, in respect of a Facility Agreement dated, as of July 9, 2013, by and between the Company, the Lenders from time to time party thereto, Société Générale, as Facility Agent and Mandated Lead Arranger, BNP Paribas, as Documentation Bank and Mandated Lead Arranger, and HSBC France, as Mandated Lead Arranger

10-Q

10.1

10/30/2019

10.14

Hull No. B34 Credit Agreement, dated as of January 30, 2015, as novated, amended and restated on the Actual Delivery Date pursuant to a novation agreement dated January 30, 2015 (as amended),between Royal Caribbean Cruises Ltd., Citibank N.A., London Branch, Citibank Europe plc, UK Branch, and the banks and financial institutions as lender parties thereto

10-Q

10.1

3/31/2018

10.15

Hull No. S-700 Credit Agreement, dated as of November 13, 2015, by and among the Company, the Lenders from time to time party thereto and KfW IPEX-Bank GmbH, as Hermes Agent, Facility Agent and Initial Mandated Lead Arranger

8-K

10.1

11/19/2015

10.16

Amendment No. 1 to Hull No. S-700 Credit Agreement, dated as of November 13, 2015, by and among the Company, the Lenders from time to time party thereto and KfW IPEX-Bank GmbH, as Hermes Agent, Facility Agent and Initial Mandated Lead Arranger

10-Q

10.7

6/30/2018

10.17

Amendment No. 2 to Hull No. S-700 Credit Agreement, dated as of July 3, 2018, by and among the Company, the Lenders from time to time party thereto and KfW IPEX-Bank GmbH, as Hermes Agent, Facility Agent and Initial Mandated Lead Arranger

10-Q

10.8

6/30/2018

10.18

Hull No. S-713 Credit Agreement, dated as of November 13, 2015, by and among the Company, the Lenders from time to time party thereto and KfW IPEX-Bank GmbH, as Hermes Agent, Facility Agent and Initial Mandated Lead Arranger

8-K

10.2

11/19/2015

10.19

Amendment No. 1 to Hull No. S-713 Credit Agreement, dated as of September 7, 2016, by and among the Company, the Lenders from time to time party thereto and KfW IPEX-Bank GmbH, as Hermes Agent, Facility Agent and Initial Mandated Lead Arranger

10-Q

10.9

6/30/2018

10.20

Amendment No. 2 to Hull No. S-713 Credit Agreement, dated as of July 3, 2018, by and among the Company, the Lenders from time to time party thereto and KfW IPEX-Bank GmbH, as Hermes Agent,Facility Agent and Initial Mandated Lead Arranger

10-Q

10.10

6/30/2018

10.21

Hull No. J34 Credit Agreement, dated as of June 22, 2016, as novated, amended and restated on the Actual Delivery Date pursuant to a novation agreement dated June 22, 2016 (as amended), between Royal Caribbean Cruises Ltd., Citibank N.A., London Branch, Citibank Europe plc, UK Branch, and the banks and financial institutions as lender parties thereto

10-K

10.18

12/31/2018

10.22

Novation Agreement, dated as of June 22, 2016, by and between Azairemia Finance Ltd., Royal Caribbean Cruises Ltd., Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and the banks and financial institutions as lender parties thereto

8-K

10.2

6/28/2016

10.23

First Supplemental Agreement, dated as of October 5, 2018, relating to Hull No. K34 and the Novation Agreement, dated as of June 22, 2016, by and between Azairemia Finance Ltd., Royal Caribbean Cruises Ltd., Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch, and the banks and financial institutions as lender parties thereto

10-K

10.20

12/31/2018

10.24

Novation Agreement, dated as of July 24, 2017, between Hibisyeu Finance Ltd., Royal Caribbean Cruises Ltd., Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and the banks and financial institutions as lender parties thereto

8-K

10.1

7/28/2017

Table of Contents

Incorporated By Reference
Exhibit Number Exhibit Description Form Exhibit Filing Date/ Period End Date
10.21
Icon 2 Hull No. S-1401 Credit Agreement, dated as of October 11, 2017, between Royal Caribbean Cruises Ltd., as the Borrower, the Lenders from time to time party thereto, KfW IPEX-Bank GmbH, as Hermes Agent, Facility Agent, Documentation Agent and Initial Mandated Lead Arranger and BNP Paribas Fortis SA/NV as Finnvera Agent
8-K 10.2 10/17/2017
10.22
Royal Caribbean Cruises Ltd. 2000 Stock Award Plan
8-K 10.1 12/8/2005
10.23
Amendment No. 1 to 2000 Stock Award Plan
8-K 10.1 9/22/2006
10.24
Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan (as amended)
10-K 10.17 12/31/2016
10.25
Form of 2008 Equity Incentive Plan Stock Option Award Agreement—Incentive Options
10-Q 10.3 9/30/2008
10.26
Form of 2008 Equity Incentive Plan Stock Option Award Agreement—Nonqualified Options
10-Q 10.4 9/30/2008
10.27
Form of 2008 Equity Incentive Plan Restricted Stock Unit Agreement— Executive Officer Grants
10-K 10.23 12/31/2013
10.28
Form of 2008 Equity Incentive Plan Restricted Stock Unit Agreement— Executive Officer Grants (Non-Vesting Into Retirement)
10-Q 10.7 9/30/2017
10.29
Form of 2008 Equity Incentive Plan Restricted Stock Unit Agreement—Director Grants
10-K 10.31 12/31/2010
10.30
Form of 2008 Equity Incentive Plan Performance Shares Agreement
10-K 10.27 12/31/2014
10.31
Form of 2008 Equity Incentive Plan Performance-Based Restricted Shares Agreement
10-K 10.26 12/31/2015
10.32
Employment Agreement, dated as of December 31, 2012, by and between the Company and Richard D. Fain
10-K 10.22 12/31/2012
10.33
Employment Agreement, dated as of December 31, 2012, by and between the Company and Adam M. Goldstein
10-K 10.23 12/31/2012
10.34
Employment Agreement, dated as of May 20, 2013, by and between the Company and Jason T. Liberty
10-Q 10.2 6/30/2013
10.35
Employment Agreement, dated as of July 16, 2015, by and between the Company and Michael W. Bayley
10-Q 10.3 6/30/2015
10.36
Form of First Amendment to Employment Agreement, dated as of February 6, 2015 (entered into between the Company and each of Messrs. Fain, Goldstein and Liberty)
10-K 10.33 12/31/2014
10.37
Employment Agreement dated as of August 3, 2015, by and between Celebrity Cruises Inc. and Lisa Lutoff-Perlo
10-K 10.31 12/31/2016
10.38
Royal Caribbean Cruises Ltd. Executive Short-Term Bonus Plan
10-Q 10.4 6/30/2015
10.39
Royal Caribbean Cruises Ltd. et. al. Non Qualified 401(k) Plan
8-K 10.2 12/8/2005
10.40
Amendment to Royal Caribbean Cruises Ltd. et. al. Non Qualified 401(k) Plan
10-K 10.29 12/31/2006
10.41
Amendment to Royal Caribbean Cruises Ltd. et. al. Non Qualified 401(k) Plan
10-K 10.28 12/31/2007
10.42
Amendment to Royal Caribbean Cruises Ltd. et. al. Non Qualified 401(k) Plan
10-K 10.36 12/31/2008
10.43
Royal Caribbean Cruises Ltd. Supplemental Executive Retirement Plan
8-K 10.3 12/8/2005
10.44
Amendment to Royal Caribbean Cruises Ltd. Supplemental Executive Retirement Plan
10-K 10.31 12/31/2006
10.45
Amendment to Royal Caribbean Cruises Ltd. Supplemental Executive Retirement Plan
10-K 10.31 12/31/2007
10.46
Amendment to Royal Caribbean Cruises Ltd. Supplemental Executive Retirement Plan
10-Q 10.1 9/30/2008
10.47
Amendment to Royal Caribbean Cruises Ltd. Supplemental Executive Retirement Plan
10-K 10.38 12/31/2008

Incorporated By Reference

Exhibit Number

Exhibit Description

Form

Exhibit

Filing Date/ Period End Date

10.25

Novation Agreement, dated as of July 24, 2017, between Hoediscus Finance Ltd., Royal Caribbean Cruises Ltd., Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and the banks and financial institutions as lender parties thereto

8-K

10.2

7/28/2017

10.26

Novation Agreement, dated as of July 24, 2017, between Houatorris Finance Ltd., Royal Caribbean Cruises Ltd., Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and the banks and financial institutions as lender parties thereto

8-K

10.3

7/28/2017

10.27

Novation Agreement, dated as of December 13, 2019, between Palmeraie Finance Limited, Royal Caribbean Cruises Ltd., Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch HSBC France, Banco Santander S.A., Banco Bilbao Vizcaya Argentaria S.A., Paris Branch, BNP Paribas SA, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch, Société Générale, Unicredit Bank AG and the banks and financial institutions as lender parties thereto

8-K

10.1

12/18/2019

10.28

Icon 1 Hull No. S-1400 Credit Agreement, dated as of October 11, 2017, between Royal Caribbean Cruises Ltd., as the Borrower, the Lenders from time to time party thereto, KfW IPEX-Bank GmbH, as Hermes Agent, Facility Agent, Documentation Agent and Initial Mandated Lead Arranger and BNP Paribas Fortis SA/NV as Finnvera Agent

8-K

10.1

10/17/2017

10.29

Amendment No. 1 to Icon 1 Hull No. S-1400 Credit Agreement, dated as of July 3, 2018, between Royal Caribbean Cruises Ltd., as the Borrower, the Lenders from time to time party thereto, KfW IPEX-Bank GmbH, as Hermes Agent, Facility Agent, Documentation Agent and Initial Mandated Lead Arranger and BNP Paribas Fortis SA/NV as Finnvera Agent

10-Q

10.11

6/30/2018

10.30

Icon 2 Hull No. S-1401 Credit Agreement, dated as of October 11, 2017, between Royal Caribbean Cruises Ltd., as the Borrower, the Lenders from time to time party thereto, KfW IPEX-Bank GmbH, as Hermes Agent, Facility Agent, Documentation Agent and Initial Mandated Lead Arranger and BNP Paribas Fortis SA/NV as Finnvera Agent

8-K

10.2

10/17/2017

10.31

Amendment No. 1 to Icon 2 Hull No. S-1401 Credit Agreement, dated as of July 3, 2018, between Royal Caribbean Cruises Ltd., as the Borrower, the Lenders from time to time party thereto, KfW IPEX-Bank GmbH, as Hermes Agent, Facility Agent, Documentation Agent and Initial Mandated Lead Arranger and BNP Paribas Fortis SA/NV as Finnvera Agent

10-Q

10.12

6/30/2018

10.32

Icon 3 Hull No. 1402 Credit Agreement, dated as of December 18, 2019, between Royal Caribbean Cruises Ltd., as the Borrower, KfW IPEX-Bank GmbH, as Facility Agent CIRR Agent, Documentation Agent, Hermes Agent, Initial Man dated Lead Arranger and Sole Bookrunner, and the Lenders and Residual Risk Guarantors from time to time party thereto

8-K

10.1

12/20/2019

10.33

Loan Agreement, dated as of June 29, 2018, among Royal Caribbean Cruises Ltd., as the Borrower, the Lenders from time to time party thereto, and JP Morgan Chase Bank, N.A. as Administrative Agent and Bank of America, N.A., Citigroup Global Markets Limited, Goldman Sachs Bank USA and Morgan Stanley Senior Funding,Inc. as Co-Syndication Agents

8-K

10.1

7/5/2018

10.34

Loan Agreement, dated as of April 5, 2019, among Royal Caribbean Cruises Ltd., as the Borrower, the Lenders from time to time party thereto, Bank of America, N.A. as Administrative Agent and Banco Bilbao Vizcaya Argentaria, S.A. New York Branch, Sumitomo Mitsui Banking Corporation, The Bank of Nova Scotia, Wells Fargo Bank, National Association and DNB Markets Inc. as Co-Syndication Agents

8-K

10.2

4/10/2019

10.35

Commercial Paper Dealer Agreement, dated June 14, 2018, between Royal Caribbean Cruises Ltd., as issuer, and the dealer party thereto

8-K

10.1

6/18/2018

Table of Contents

Incorporated By Reference
Exhibit Number Exhibit Description Form Exhibit Filing Date/ Period End Date
10.48
Cruise Policy for Members of the Board of Directors of the Company
10-K 10.35 12/31/2013
12.1
Statement regarding computation of fixed charge coverage ratio*

21.1
List of Subsidiaries*

23.1
Consent of PricewaterhouseCoopers LLP, an independent registered certified public accounting firm*

23.2
Consent of Drinker Biddle & Reath LLP*

24.1
Power of Attorney*

31.1
Certification of Richard D. Fain required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934*

31.2
Certification of Jason T. Liberty required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934*

32.1
Certification of Richard D. Fain and Jason T. Liberty pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code**

Incorporated By Reference

Exhibit Number

Exhibit Description

Form

Exhibit

Filing Date/ Period End Date

10.36

Term Loan Agreement, dated as of March 23, 2020, among Royal Caribbean Cruises Ltd., the various financial institutions as are or shall be party thereto and Morgan Stanley Senior Funding, Inc., as administrative agent for the lender parties and as collateral agent for the secured parties

8-K

10.1

3/23/2020

10.37

Sixth Amendment to a Credit Agreement, dated as of June 8, 2011 (as amended and restated from time to time) “Anthem of the Seas” – ex Hull No. S-698, dated April 8, 2020, between Royal Caribbean Cruises Ltd., the lenders party thereto, KfW IPEX-Bank GmbH, as Hermes agent, facility agent, initial mandated lead arrangers and the mandated lead arrangers

8-K

10.1

4/10/2020

10.38

Third Amendment Agreement to a Credit Agreement, dated as of 13 November 2015 (as amended and restated from time to time) “Spectrum of the Seas” – ex Hull No. S-700, dated April 8, 2020, between Royal Caribbean Cruises Ltd., the lenders party thereto, KfW IPEX-Bank GmbH, as Hermes agent, facility agent, initial mandated lead arrangers and the mandated lead arrangers

8-K

10.2

4/10/2020

10.39

Sixth Amendment Agreement to a Credit Agreement, dated as of June 8, 2011 (as amended from time to time) “Quantum of the Seas”—ex Hull No. S-697, dated April 21, 2020 between Royal Caribbean Cruises Ltd., the lenders party thereto, KfW IPEX-Bank GmbH, as Hermes agent, facility agent, initial mandated lead arrangers and the mandated lead arrangers

8-K

10.1

4/24/2020

10.40

Second Supplemental Agreement to a Credit Agreement in respect of the financing of acquisition of m.v. Celebrity Edge (ex hull no. J34), dated as of April 28, 2020, between Royal Caribbean Cruises Ltd., Citibank N.A., London Branch as global coordinator, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA agent, Citibank Europe PLC, UK branch as facility agent, the mandated lead arrangers and the other lenders party thereto

8-K

10.1

5/4/2020

10.41

Second Supplemental Agreement to a Credit Agreement in respect of the financing of acquisition of m.v. Celebrity Apex (ex hull no. K34), dated as of April 29, 2020, between Royal Caribbean Cruises Ltd., Citibank N.A., London Bank, as global coordinator, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA agent, Citibank Europe PLC, UK Branch as facility agent, the mandated lead arrangers and the other lenders party thereto

8-K

10.2

5/4/2020

10.42

Fourth Supplemental Agreement to a Credit Agreement in respect of the financing of acquisition of m.v. Symphony of the Seas (ex hull no. B34), dated as of April 29, 2020, between Royal Caribbean Cruises Ltd., Citibank N.A., London Branch as ECA agent, Citibank Europe PLC, UK Branch as facility agent, the mandated lead arrangers and the other lenders party thereto

8-K

10.3

5/4/2020

10.43

Amendment to the Amended and Restated Credit Agreement, dated as of May 7, 2020, among Royal Caribbean Cruises Ltd., the various financial institutions party thereto and Nordea Bank ABP, New York Branch as administrative agent

8-K

10.1

5/11/2020

10.44

Amendment to the Amended and Restated Credit Agreement, dated as of May 7, 2020, among Royal Caribbean Cruises Ltd., the various financial institutions party thereto and The Bank of Nova Scotia as administrative agent

8-K

10.2

5/11/2020

10.45

Amendment to the Term Loan Agreement, dated as of May 7, 2020, among Royal Caribbean Cruises Ltd., the various financial institutions party thereto and Bank of America, N.A. as administrative agent

8-K

10.3

5/11/2020

10.46

Third Amendment Agreement to a Credit Agreement dated as of 27 November 2013 (as amended and restated from time to time) “Ovation of the Seas” – ex hull no S-699, dated May 6, 2020, between Royal Caribbean Cruises Ltd., the lenders party thereto, KfW IPEX-Bank GmbH, as Hermes agent, facility agent, initial mandated lead arrangers and the mandated lead arrangers

8-K

10.4

5/11/2020

Table of Contents

Incorporated By Reference

Exhibit Number

Exhibit Description

Form

Exhibit

Filing Date/ Period End Date

10.47

Fourth Amendment and Restatement Agreement, relating to a credit agreement in respect of the financing of the acquisition of m.v. Harmony of the Seas (ex hull no. A34), dated May 6, 2020, between Royal Caribbean Cruises Ltd., Société Générale as facility agent, BNP Baribas, HSBC France and Société Générale as Mandated Lead Arrangers and the banks and financial institutions listed therein as lenders

8-K

10.5

5/11/2020

10.48

First Supplemental Agreement relating to Hull No. L34 at Chantiers de l’Atlantique (previously known as STX France S.A.), dated as of March 12, 2020, by and among Houatorris Finance Limited, Chantiers de L’Atlantique, the Company, Citibank Europe PLC, UK Branch as facility agent, Citicorp Trustee Company Limited as security trustee, Citibank N.A., London branch, HSBC France, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and the banks and financial institutions party thereto

10-Q

10.4

5/21/2020

10.49

First Supplemental Agreement relating to Hull No. M34 at Chantiers de l’Atlantique (previously known as STX France S.A.), dated as of March 12, 2020, by and among Hoediscus Finance Limited, Chantiers de L’Atlantique as seller, the Company as buyer, Citibank Europe PLC, UK Branch as facility agent, Citicorp Trustee Company Limited as security trustee, Citibank N.A., London branch as global coordinator, HSBC France as French coordinating bank, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA agent and the banks and financial institutions listed thereto

10-Q

10.5

5/21/2020

10.50

First Supplemental Agreement relating to Hull No. C34 at Chantiers de l’Atlantique (previously known as STX France S.A.), dated as of March 12, 2020, by and among Hibisyeu Finance Limited as borrower, Chantiers de L’Atlantique as seller, the Company as buyer, Citibank Europe PLC, UK Branch as facility agent, Citicorp Trustee Company Limited as security trustee, Citibank N.A., London branch as global coordinator, HSBC France as French coordinating bank, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch as ECA agent and the banks and financial institutions listed thereto

10-Q

10.6

5/21/2020

10.51

Amendment to the Amended and Restated Credit Agreement, dated as of July 28, 2020, among Royal Caribbean Cruises Ltd., the various financial institutions party thereto and Nordea Bank ABP, New York Branch as administrative agent

8-K

10.1

8/3/2020

10.52

Amendment to the Amended and Restated Credit Agreement, dated as of July 28, 2020, among Royal Caribbean Cruises Ltd., the various financial institutions party thereto and The Bank of Nova Scotia as administrative agent

8-K

10.2

8/3/2020

10.53

Amendment to Term Loan Agreement, dated as of July 28, 2020, among Royal Caribbean Cruises Ltd., the various financial institutions party thereto and Bank of America, N.A. as administrative agent

8-K

10.3

8/3/2020

10.54

Financial Covenant Waiver Extension Consent Letter relating to the Cruise Debt Holiday Principles, dated July 28, 2020, among Royal Caribbean Cruises Ltd., Silversea Cruise Holdings Ltd. and KfW IPEX-Bank GmbH

8-K

10.4

8/3/2020

10.55

Supplemental Agreement in relation to the extension of the waiver period for financial covenants in respect of the financing of the acquisition of Celebrity Edge (ex hull no. J34), dated July 28, 2020, among Royal Caribbean Cruises Ltd. and Citibank Europe plc, UK Branch

8-K

10.5

8/3/2020

10.56

Supplemental Agreement in relation to the extension of the waiver period for financial covenants in respect of the financing of the acquisition of Celebrity Apex (ex hull no. K34), dated July 28, 2020, among Royal Caribbean Cruises Ltd. and Citibank Europe plc, UK Branch

8-K

10.6

8/3/2020

10.57

Supplemental Agreement in relation to the extension of the waiver period for financial covenants in respect of the financing of the acquisition of Symphony of the Seas (ex hull no. B34), dated July 28, 2020, among Royal Caribbean Cruises Ltd. and Citibank Europe plc, UK Branch

8-K

10.7

8/3/2020

Table of Contents

Incorporated By Reference

Exhibit Number

Exhibit Description

Form

Exhibit

Filing Date/ Period End Date

10.58

Financial Covenant Waiver Extension Consent Letter relating to the Cruise Debt Holiday Principles, dated July 31, 2020, between Royal Caribbean Cruises Ltd. and KfW IPEX-Bank GmbH

8-K

10.8

8/3/2020

10.59

Third Amendment Agreement to a Credit Agreement dated as of 13 November 2015 (as amended and restated from time to time) in respect of “Odyssey of the Seas” – Hull S-713, dated 30 April 2020, between the Company, the lenders party thereto, KfW IPEX-Bank GmbH, as Hermes agent, facility agent, initial mandated lead arrangers and the mandated lead arrangers.

10.Q

10.15

8/10/2020

10.60

Amendment Letter, dated May 11, 2020 in respect of the Icon 3 Hull No. 1402 credit agreement, dated 18 December 2019 between the Company, the lenders and residual risk guarantors party thereto, and KfW IPEX-Bank GmbH as facility agent, CIRR agent, documentation agent, Hermes agent, initial mandated lead arranger and sole bookrunner.

10.Q

10.16

8/10/2020

10.61

Supplemental Agreement in relation to the extension of the waiver period for financial covenants in the EUR Facility Agreement in respect of m.v Harmony of the Seas, dated August 4, 2020, among the Company and Société Generale.

10.Q

10.17

8/10/2020

10.62

10.Q

10.9

11/4/2020

10.63

Supplemental Agreement in relation to certain amendments in connection with the Silversea negative covenants and the exercise of the Buyer's Stretch Option in respect of Edge 3 (ex. hull no. L34), dated August 29, 2020, among the Company, Hoediscus Finance Limited, Citibank Europe Plc, UK Branch, Citibank N.A., London Branch, Citicorp Trustee Company Limited, HSBC France and Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch

10.Q

10.10

11/4/2020

10.64

Supplemental Agreement in relation to certain amendments in connection with the Silversea negative covenants and the exercise of the Buyer's Stretch Option in respect of Edge 4 (ex. hull no. M34), dated August 29, 2020, by and among the Company, Hoediscus Finance Limited, Citibank Europe Plc, UK Branch, Citibank N.A., London Branch, Citicorp Trustee Company Limited, HSBC France and Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch

10.Q

10.11

11/4/2020

10.65

Supplemental Agreement in relation to certain amendments in connection with Silversea Cruise Holding Ltd. in respect of Oasis 5 (ex. hull no. C34), dated August 29, 2020, among the Company, Hibisyeu Finance Limited, Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch and HSBC France

10.Q

10.12

11/4/2020

10.66

Supplemental Agreement in relation to certain amendments in connection with Silversea Cruise Holding Ltd. in respect of Oasis 6 (ex. hull no. A35), dated August 29, 2020, among the Company, Palmeraie Finance Limited, Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch and HSBC France

10.Q

10.13

11/4/2020

10.67

Equity Distribution Agreement, dated as of December 3, 2020, among the Company and the financial institutions named therein.

8-K

1.1

12/4/2020

10.68

Fourth Supplemental Agreement relating to a credit agreement in respect of the financing of the acquisition of mv. Celebrity Edge (ex hull no. J34), dated as of October 30, 2020, between Royal Caribbean Cruises Limited, Citibank N.A., London Branch, SMBC Bank International PLC, Citibank Europe PLC, UK Branch, the mandated lead arrangers and the banks and financial institutions party thereto as lenders*

Table of Contents


*	~~Filed herewith~~


**	~~Furnished herewith~~

~~Interactive Data File~~


			Incorporated By Reference
~~101~~Exhibit Number	—	Exhibit Description	Form	Exhibit	Filing Date/ Period End Date
10.69		Fourth Supplemental Agreement relating to a credit agreement in respect of the financing of the acquisition of mv. Celebrity Apex (ex hull no. K34), dated as of October 30, 2020, between Royal Caribbean Cruises Limited, Citibank N.A., London Branch, SMBC Bank International PLC, Citibank Europe PLC, UK Branch, the mandated lead arrangers and the banks and financial institutions party thereto as lenders*
10.70		Fifth Amendment and Restatement Agreement relating to a credit agreement in respect of the financing of the acquisition of m.v. Harmony of the Seas (ex hull no. A34)(EUR Facility), dated October 30, 2020, between Royal Caribbean Cruises Ltd., Société Générale, the mandated lead arrangers and the banks and financial institutions party thereto*
10.71		Fourth Amendment and Restatement Agreement relating to a credit agreement in respect of the financing of m.v. Harmony of the Seas (ex hull no. A34)(USD Facility), dated October 30, 2020, between Royal Caribbean Cruises Ltd., Société General, the mandated lead arrangers and the banks and financial institutions party thereto*
10.72		Sixth Supplemental Agreement relating to a credit agreement in respect of the financing of the acquisition of m.v. Symphony of the Seas (ex hull no. B34), dated as of October 30, 2020, between Royal Caribbean Cruises Ltd., Citibank N.A., London Branch, Citibank Europe PLC, UK Branch, the mandated lead arrangers listed therein and the banks and financial institutions party thereto as lenders.*
10.73		Supplemental Agreement relating to a secured credit facility agreement for Hull No. L34 at Chantiers l’Atlantique S.A., dated November 13, 2020, between Hoediscus Finance Limited, Royal Caribbean Cruises Ltd., Citibank Europe PLC, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, SMBC Bank International PLC, the mandated lead arrangers and the banks and financial institutions party thereto*
10.74		Supplemental Agreement relating to a secured credit facility for hull no. M34, dated November 13, 2020, between Houatorris Finance Limited, Royal Caribbean Cruises Ltd., Citibank Europe PLC, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, SMBC Bank International PLC, the mandated lead arrangers and the banks and financial institutions party thereto*
10.75		Supplemental Agreement relating to Hull No. C34 at Chantiers de l’Atlantique, dated November 13, 2020, between Hibisyeu Finance Limited, Royal Caribbean Cruises Ltd., Citibank Europe PLC, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, SMBC Bank International PLC, the banks and financial institutions party thereto and the mandated lead arrangers*
10.76		Supplemental Agreement relating to Hull No. A35 at Chantiers de l’Atlantique, dated November 13, 2020, between Palmeraie Finance Limited, Royal Caribbean Cruises Ltd., Citibank Europe PLC, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, the mandated lead arrangers and the banks and financial institutions party thereo*
10.77		Amendment No. 4 in connection with the Credit Agreement in respect of “Celebrity Reflection” – Hull S-691, dated December 21, 2020, between Royal Caribbean Cruises Ltd., KfW IPEX-Bank GmbH and the banks and financial institutions party thereto*
10.78		Amendment No. 4 in connection with the Credit Agreement in respect of “Celebrity Silhouette” – Hull S-679, dated December 21, 2020, between Royal Caribbean Cruises Ltd., KfW IPEX-Bank GmbH and the banks and financial institutions party thereto*
10.79		Amendment No. 4 in connection with the Credit Agreement in respect of “Celebrity Solstice” – Hull S-675, dated December 21, 2020, between Royal Caribbean Cruises Ltd., KfW IPEX-Bank GmbH, the mandated co-lead arrangers and the banks and financial institutions party thereto*

Table of Contents

Incorporated By Reference

Exhibit Number

Exhibit Description

Form

Exhibit

Filing Date/ Period End Date

10.80

Amendment No. 4 in connection with the Credit Agreement in respect of “Odyssey of the Seas” – Hull S-713, dated December 21, 2020, between Royal Caribbean Cruises Ltd., KfW IPEX-Bank GmbH, the mandated lead arrangers and the banks and financial institutions party thereto*

10.81

Amendment No. 4 in connection with the Credit Agreement in respect of “Ovation of the Seas” – Hull S-699, dated December 21, 2020, between Royal Caribbean Cruises Ltd., KfW IPEX-Bank GmbH, the mandated lead arrangers and the banks and financial institutions party thereto*

10.82

Amendment No. 7 in connection with the Credit Agreement in respect of “Quantum of the Seas” – Hull S-697, dated December 21, 2020, between Royal Caribbean Cruises Ltd., KfW IPEX-Bank GmbH, the mandated lead arrangers and the banks and financial institutions party thereto*

10.83

Amendment No. 4 in connection with the Credit Agreement in respect of “Spectrum of the Seas” – Hull S-700, dated December 21, 2020, between Royal Caribbean Cruises Ltd., KfW IPEX-Bank GmbH, the mandated lead arrangers and the banks and financial institutions party thereto*

10.84

Amendment No. 7 in connection with the Credit Agreement in respect of “Anthem of the Seas” – Hull S-698, dated December 21, 2020, between Royal Caribbean Cruises Ltd., KfW IPEX-Bank GmbH, the mandated lead arrangers and the banks and financial institutions party thereto*

10.85

Amendment No. 4 in connection with the Credit Agreement in respect of “Celebrity Eclipse” – Hull S-677, dated December 21, 2020, between Royal Caribbean Cruises Ltd., KfW IPEX-Bank GmbH and the banks and financial institutions party thereto*

10.86

Amendment No. 4 in connection with the Credit Agreement in respect of “Celebrity Equinox” – Hull S-676, dated December 21, 2020, between Royal Caribbean Cruises Ltd., KfW IPEX-Bank GmbH and the banks and financial institutions party thereto*

10.87

Amendment No. 1 in connection with the Credit Agreement in respect of Hull S-719, dated as of December 21, 2020, between Silversea Cruise Holding Ltd., Royal Caribbean Cruises Ltd., KfW IPEX-Bank GmbH and the banks and financial institutions party thereto*

10.88

Amendment No. 1 in connection with the Credit Agreement in respect of Hull S-720, dated as of December 21, 2020, between Silversea Cruise Holding Ltd., Royal Caribbean Cruises Ltd., KfW IPEX-Bank GmbH and the banks and financial institutions party thereto*

10.89

Underwriting Agreement, dated October 13, 2020, among the Company and Morgan Stanley & Co. LLC and BofA Securities, Inc., as representatives of the several underwriters listed in Schedule 1 thereto.

8-K

1.1

10/15/2020

10.90

Royal Caribbean Cruises Ltd. 2008 Equity Incentive Plan (as amended)

10-K

10.17

12/31/2016

10.91

Form of 2008 Equity Incentive Plan Stock Option Award Agreement—Incentive Options

10-Q

10.3

9/30/2008

10.92

Form of 2008 Equity Incentive Plan Stock Option Award Agreement—Nonqualified Options

10-Q

10.4

9/30/2008

10.93

Form of 2008 Equity Incentive Plan Restricted Stock Unit Agreement— Executive Officer Grants

10-K

10.23

12/31/2013

10.94

Form of 2008 Equity Incentive Plan Restricted Stock Unit Agreement— Executive Officer Grants (Non-Vesting Into Retirement)

10-Q

10.7

9/30/2017

10.95

Form of 2008 Equity Incentive Plan Restricted Stock Unit Agreement—Director Grants

10-K

10.31

12/31/2010

10.96

Form of 2008 Equity Incentive Plan Performance Shares Agreement

10-K

10.27

12/31/2014

10.97

Form of 2008 Equity Incentive Plan Performance-Based Restricted Shares Agreement

10-K

10.26

12/31/2015

10.98

Employment Agreement, dated as of December 31, 2012, by and between the Company and Richard D. Fain

10-K

10.22

12/31/2012

Table of Contents

Incorporated By Reference

Exhibit Number

Exhibit Description

Form

Exhibit

Filing Date/ Period End Date

10.99

Employment Agreement, dated as of May 20, 2013, by and between the Company and Jason T. Liberty

10-Q

10.2

6/30/2013

10.100

Employment Agreement, dated as of July 16, 2015, by and between the Company and Michael W. Bayley

10-Q

10.3

6/30/2015

10.101

Form of First Amendment to Employment Agreement, dated as of February 6, 2015 (entered into between the Company and each of Messrs. Fain and Liberty)

10-K

10.33

12/31/2014

10.102

Employment Agreement dated as of August 3, 2015, by and between Celebrity Cruises Inc. and Lisa Lutoff-Perlo

10-K

10.31

12/31/2016

10.103

Employment Agreement, dated as of December 31, 2012, by and between the Company and Harri U. Kulovaara

10-K

10.26

2/25/2013

10.104

Form of First Amendment to Employment Agreement, dated as of February 6, 2015 (entered into between the Company and each of Messrs. Fain, Kulovaara and Liberty)

10-K

10.33

12/31/2014

10.105

Royal Caribbean Cruises Ltd. Executive Short-Term Bonus Plan

10-Q

10.4

6/30/2015

10.106

Royal Caribbean Cruises Ltd. Supplemental Executive Retirement Plan

8-K

10.3

12/8/2005

10.107

Amendment to Royal Caribbean Cruises Ltd. Supplemental Executive Retirement Plan

10-K

10.31

12/31/2006

10.108

Amendment to Royal Caribbean Cruises Ltd. Supplemental Executive Retirement Plan

10-K

10.31

12/31/2007

10.109

Amendment to Royal Caribbean Cruises Ltd. Supplemental Executive Retirement Plan

10-Q

10.1

9/30/2008

10.110

Amendment to Royal Caribbean Cruises Ltd. Supplemental Executive Retirement Plan

10-K

10.38

12/31/2008

10.111

Cruise Policy for Members of the Board of Directors of the Company

10-K

10.35

12/31/2013

21.1

List of Subsidiaries*

23.1

Consent of PricewaterhouseCoopers LLP, an independent registered public accounting firm*

23.2

Consent of Drinker Biddle & Reath LLP*

24.1

Power of Attorney*

31.1

Certification of Richard D. Fain required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934*

31.2

Certification of Jason T. Liberty required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934*

32.1

Certification of Richard D. Fain and Jason T. Liberty pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code**

* Filed herewith

** Furnished herewith

Interactive Data File

Table of Contents


101	The following financial statements from Royal Caribbean Cruises Ltd.'s Annual Report on Form 10-K for the year ended December 31, ~~2017, as filed with the SEC on February 20, 2018,~~2020 formatted in ~~XBRL,~~iXBRL (Inline eXtensible Business Reporting Language) are as follows:
	(i)	the Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015;~~2018;
	(ii)	the Consolidated Balance Sheets at December 31, ~~2017~~2020 and ~~2016;~~2019;
	(iii)	the Consolidated Statements of Cash Flows for the years ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015;~~2018;
	(iv)	the Consolidated Statements of Shareholders' Equity for the years ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015;~~2018; and
	(v)	the Notes to the Consolidated Financial Statements, tagged in summary and detail.
104		Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101

Item 16. Form 10-K Summary

None.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



ROYAL CARIBBEAN CRUISES LTD. (Registrant)
By:			/s/ JASON T. LIBERTY
			Jason T. Liberty Executive Vice President, Chief Financial Officer (Principal Financial Officer and duly authorized signatory)

February ~~20, 2018~~26, 2021

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on February ~~20, 2018.~~

26, 2021.



/s/ RICHARD D. FAIN
Richard D. Fain Director, Chairman and Chief Executive Officer (Principal Executive Officer)

/s/ JASON T. LIBERTY
Jason T. Liberty Executive Vice President, Chief Financial Officer (Principal Financial Officer)

/s/ HENRY L. PUJOL
Henry L. Pujol Senior Vice President, Chief Accounting Officer (Principal Accounting Officer)

*
John F. Brock Director

*
Stephen R. Howe Jr. Director

*
William L. Kimsey Director

*
Maritza G. Montiel Director

*
Ann S. Moore Director

*
Eyal M. Ofer Director

*
~~Thomas J. Pritzker~~ ~~Director~~

*
William K. Reilly Director

*
~~Bernt Reitan~~ ~~Director~~

*
Vagn O. Sørensen Director

*
Donald Thompson Director

*
Arne Alexander Wilhelmsen Director
*

Amy C. McPherson Director
*



*By:			/s/ JASON T. LIBERTY
			Jason T. Liberty, as Attorney-in-Fact

Table of Contents

ROYAL CARIBBEAN CRUISES LTD.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

F-1

Table of Contents

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders

of Royal Caribbean Cruises Ltd.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Royal Caribbean Cruises Ltd.and its subsidiaries (the “Company”) as of December 31, ~~2017~~2020 and ~~2016,~~2019, and the related consolidated statements of comprehensive (loss) income, ~~(loss),~~ shareholders’ equity, and cash flows for each of the three years in the period ended December 31, ~~2017,~~2020, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, ~~2017,~~2020, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, ~~2017~~2020 and ~~2016,~~ 2019,and the results of ~~their~~its operations and ~~their~~its cash flows for each of the three years in the period ended December 31, ~~2017~~ 2020in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, ~~2017,~~2020, based on criteria established in Internal Control - Integrated Framework(2013)issued by the COSO.

Change in Accounting Principle

As discussed in Note 2 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in ~~Management's~~Management’s Report on Internal Control ~~over~~Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ~~("PCAOB")~~(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Emphasis of Matter

As discussed in Note 1 to the consolidated financial statements, the impact to the Company’s global bookings resulting from the COVID-19 pandemic will continue to have a material negative impact on the Company’s results of operations and liquidity. Further, in April 2022, approximately $1.0 billion of long- term debt will need to be refinanced or extended should the commencement of operations be delayed beyond management’s current estimate. Management’s evaluation of the events and conditions and management’s plans to mitigate these matters are also described in Note 1.

F-2

Table of Contents

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Impairment Assessments – Royal Caribbean International & Silversea Cruises Reporting Units Goodwill and Silversea Cruises Indefinite-lived Intangible Asset Trade Name

As described in Notes 2, 5 and 6 to the consolidated financial statements, the Company’s consolidated goodwill balance was $809.5 million and the indefinite-lived intangible assets balance was $321.5 million as of December 31, 2020. The Royal Caribbean International reporting unit goodwill was $296.6 million, the Silversea Cruises reporting unit goodwill was $508.6 million and the Silversea Cruises’ indefinite-lived intangible asset trade name was $318.7 million, respectively, as of December 31, 2020. Management reviews goodwill and indefinite-lived intangible assets for impairment at the reporting unit level and asset level, respectively, annually or, when events or circumstances dictate, more frequently. The impairment analysis consists of a comparison of the fair value of the reporting unit or asset with its carrying value.

The impact of COVID-19 on management’s operating plans and projected cash flows resulted in the completion of (i) an interim impairment assessment for the Royal Caribbean International reporting unit as of March 31, 2020 and June 30, 2020, and the Silversea Cruises reporting unit as of March 31, 2020; and (ii) an interim impairment assessment in respect to the Silversea Cruises trade name as of March 31, 2020. As a result of management’s interim impairment assessments, management recognized a goodwill impairment charge associated with the Silversea Cruises reporting unit of $576.2 million and an impairment charge of $30.8 million charge for the Silversea Cruises trade name for the quarter ended March 31, 2020. As of November 30, 2020, management performed the annual goodwill impairment reviews and determined no incremental impairment losses existed at the date of this annual assessment for the Royal Caribbean International reporting unit or the Silversea Cruises reporting unit and trade name. The fair value of the Silversea Cruises reporting unit was determined by management using a probability-weighted discounted cash flow model in combination with a market based valuation approach for all periods assessed. The fair value of the Royal Caribbean International reporting unit as of March 31, 2020 was determined using a discounted cash flow model and a probability-weighted discounted cash flow model in combination with a market based valuation approach for the June 30, 2020 and November 30, 2020 assessments. The principal assumptions used in the discounted cash flow analyses that support the Silversea Cruises and Royal Caribbean International reporting units’ impairment assessments consisted of the timing of management’s return to service; changes in market conditions; and port or other restrictions; forecasted net revenues, primarily the timing of returning to normalized operations, occupancy rates from existing and expected ship deliveries, including options, and terminal growth rate; and the weighted average cost of capital (i.e., discount rate). Management estimates the fair value of the intangible assets using a discounted cash flow model and various valuation methods depending on the nature of the intangible asset, such as the relief-from-royalty method for trade names. The principal assumptions used in the discounted cash flow analyses that support the Silversea Cruises trade name impairment

F-3

Table of Contents

assessments consisted of forecasted net revenues, primarily the timing of returning to normalized operations, occupancy rates from existing and expected ship deliveries, including options, and terminal growth rate; the royalty rate; and the weighted average cost of capital (i.e., discount rate).

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessments of the Royal Caribbean International and Silversea Cruises reporting units and the indefinite-lived intangible asset impairment assessments of the Silversea Cruises trade name is a critical audit matter are (i) the significant judgment by management when determining the fair value estimates; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to forecasted net revenues, primarily the timing of returning to normalized operations, occupancy rates from existing and expected ship deliveries, including options, and terminal growth rate, and the discount rate for the goodwill and trade name impairment assessments; and the royalty rate assumption for the trade name impairment assessments; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s goodwill and indefinite-lived intangible asset impairment assessments, including controls over the valuation of the Royal Caribbean International & Silversea Cruises reporting units and Silversea Cruises trade name. These procedures alsoincluded, among others, (i) testing management’s process for developing the fair value estimates; (ii) evaluating the appropriateness of the discounted future cash flow model, market based valuation approach and the relief-from-royalty model; (iii) testing the completeness and accuracy of underlying data used in the fair value estimates; and (iv) evaluating the reasonableness of the significant assumptions used by management related to forecasted net revenues, primarily the timing of returning to normalized operations, occupancy rates from existing and expected ship deliveries, including options, and terminal growth rate; and the discount rate for the goodwill and the trade name impairment assessments and the royalty rate assumption for the Silversea Cruises trade name impairment assessments. Evaluating management’s assumptions related to forecasted net revenues, primarily the timing of returning to normalized operations, occupancy rates from existing and expected ship deliveries, including options, and the terminal growth rate involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting unit and trade name; (ii) the consistency with external market and industry data; and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with specialized skill and knowledge were used to assist in the evaluation of discounted cash flow model, relief-from-royalty and market based valuation approach and the discount rates and royalty rate assumptions.

Certain Ship Impairment Assessments

As described in Notes 2 and 7 to the consolidated financial statements, the Company’s consolidated ships and ship improvements balance was $32.0 billion as of December 31, 2020. Management reviews long-lived assets for impairment whenever events or changes in circumstances indicate, based on estimated undiscounted future cash flows, that the carrying value of these assets may not be fully recoverable. The impact of COVID-19 on the Company’s expected future operating cash flows and management’s decision to dispose of certain vessels, resulted in management identifying impairment triggers for certain vessels. Management estimated the recoverability of certain vessels using undiscounted cash flow analyses at interim dates throughout 2020 and again at December 31, 2020. A number of vessels were found to have net carrying values in excess of their estimated undiscounted future cash flows, and as such, were subject to fair value assessments. Management determined fair value of the vessels based on intended use of the identified vessels, and as such, management used a combination of discounted cash flows, replacement cost, scrap and residual value techniques to estimate fair value. Consequently, management recognized $635.5 million of impairment losses during the year ended 2020. The suspension of operations and the possibility of further suspensions create uncertainty in forecasting undiscounted cash flows, which are used by management to determine if a vessel is at risk of impairment. Management’s principal assumptions used in the undiscounted cash flows consisted of the timing of management’s return to service; changes in market conditions; and port or other restrictions; forecasted net revenues, primarily the timing of returning to normalized operations, and occupancy rates; and management’s intended use of the vessel for its remaining useful life.

The principal considerations for our determination that performing procedures relating to certain ship impairment assessments is a critical audit matter are (i) the significant judgment by management in developing the undiscounted cash flow analyses for the ships with triggering events; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to forecasted net revenues, primarily the timing of returning to normalized operations, and occupancy rates and management’s intended use of the vessel for its remaining useful life.

F-4

Table of Contents

Liquidity - Impact of COVID-19

As described in Note 1 to the consolidated financial statements, the Company voluntarily suspended its global cruise operations effective March 13, 2020, and this suspension remains in effect through at least April 30, 2021 for most of its cruise operations. The suspension of operations and the impact to the Company’s global bookings resulting from the COVID-19 pandemic will continue to have a material negative impact on the Company’s results of operations and liquidity, which may be prolonged beyond containment of the disease. Management has and will continue undertaking several proactive measures to mitigate the financial and operational impacts of COVID-19, including reduction of capital expenditures and operating expenses (reduction and furloughing of workforce and laying up of vessels), issuing of debt and shares of our common stock, amending of credit agreements to defer payments and covenant requirements and suspending of dividend payments. As of December 31, 2020, the Company had liquidity of $4.4 billion, consisting of cash and cash equivalents of $3.7 billion and a $0.7 billion one-year commitment for a 364-day term loan facility. Based on management’s actions described above, and management’s assumptions regarding the impact of COVID-19 and the suspension of operations, as well as the Company’s present financial condition, management believes the available liquidity will be sufficient to fund the Company’s obligations for at least the next twelve months from the issuance of the consolidated financial statements. The principal assumptions used by management’s to estimate future liquidity requirements consist of (i) the expected date of return to operations; (ii) the expected resumption of operations; (iii) the expected occupancy levels; and (iv) the expected incremental expenses for the resumption of guest cruise operations for the maintenance of additional public health protocols and complying with additional regulations.

The principal considerations for our determination that performing procedures relating to the impact of COVID-19 on the Company’s liquidity is a critical audit matter are (i) the significant judgment by management when evaluating the uncertainty related to the effects of COVID-19 on the Company’s financial results and liquidity, which impacts the Company’s forecasted financial results and estimated liquidity requirements to satisfy its obligations; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s liquidity assessment to satisfy obligations for at least the next twelve months from the issuance of the consolidated financial statements.

/s/ PricewaterhouseCoopers LLP

~~Certified Public Accountants~~

Miami, Florida February 26, 2021

~~February 20, 2018~~

We have served as the Company’s auditor since at least 1989, which includes periods before the Company became subject to SEC reporting requirements. We have not ~~determined~~been able to determine the specific year we began serving as auditor of the Company.

F-5

Table of Contents

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME ~~(LOSS)~~

(in thousands, except per share data)


	Year Ended December 31,
	2020		2019		2018
Passenger ticket revenues	$	1,504,569	$	7,857,057	$	6,792,716
Onboard and other revenues	704,236		3,093,604		2,701,133
Total revenues	2,208,805		10,950,661		9,493,849
Cruise operating expenses:
Commissions, transportation and other	344,625		1,656,297		1,433,739
Onboard and other	157,213		639,782		537,355
Payroll and related	788,273		1,079,121		924,985
Food	161,750		583,905		520,909
Fuel	371,015		697,962		710,617
Other operating	942,232		1,405,698		1,134,602
Total cruise operating expenses	2,765,108		6,062,765		5,262,207
Marketing, selling and administrative expenses	1,199,620		1,559,253		1,303,144
Depreciation and amortization expenses	1,279,254		1,245,942		1,033,697
Impairment and credit losses	1,566,380		0		0



Operating (Loss) Income	(4,601,557)		2,082,701		1,894,801
Other income (expense):
Interest income	21,036		26,945		32,800
Interest expense, net of interest capitalized	(844,238)		(408,513)		(333,672)
Equity investment (loss) income	(213,286)		230,980		210,756

Other (expense) income	(137,085)		(24,513)		11,107
	(1,173,573)		(175,101)		(79,009)
Net (Loss) Income	(5,775,130)		1,907,600		1,815,792
Less: Net Income attributable to noncontrolling interest	22,332		28,713		4,750
Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.	$	(5,797,462)	$	1,878,887	$	1,811,042
(Loss) Earnings per Share:
Basic	$	(27.05)	$	8.97	$	8.60

Diluted	$	(27.05)	$	8.95	$	8.56
Comprehensive (Loss) Income
Net (Loss) Income	$	(5,775,130)	$	1,907,600	$	1,815,792
Other comprehensive (loss) income:
Foreign currency translation adjustments	40,346		869		(14,251)
Change in defined benefit plans	(19,984)		(19,535)		7,643
Gain (loss) on cash flow derivative hedges	38,010		(151,313)		(286,861)
Total other comprehensive income (loss)	58,372		(169,979)		(293,469)
Comprehensive (Loss) Income	$	(5,716,758)	$	1,737,621	$	1,522,323
Less: Comprehensive Income attributable to noncontrolling interest	22,332		28,713		4,750
Comprehensive (Loss) Income attributable to Royal Caribbean Cruises Ltd.	$	(5,739,090)	$	1,708,908	$	1,517,573

The accompanying notes are an integral part of these consolidated financial statements.

F-6

Year Ended December 31,
2017 2016 2015
(in thousands, except per share data)
Passenger ticket revenues $ 6,313,170
$ 6,149,323
$ 6,058,821
Onboard and other revenues 2,464,675
2,347,078
2,240,253
Total revenues 8,777,845
8,496,401
8,299,074
Cruise operating expenses:
Commissions, transportation and other 1,363,170
1,349,677
1,400,778
Onboard and other 495,552
493,558
553,104
Payroll and related 852,990
882,891
861,775
Food 492,857
485,673
480,009
Fuel 681,118
713,676
795,801
Other operating 1,010,892
1,090,064
1,007,926
Total cruise operating expenses 4,896,579
5,015,539
5,099,393
Marketing, selling and administrative expenses 1,186,016
1,108,742
1,086,504
Depreciation and amortization expenses 951,194
894,915
827,008
Impairment of Pullmantur related assets —
—
411,267
7,033,789
7,019,196
7,424,172
Operating Income 1,744,056
1,477,205
874,902
Other income (expense):
Interest income 30,101
20,856
12,025
Interest expense, net of interest capitalized (299,982 ) (307,370 ) (277,725 )
Equity investment income 156,247
128,350
81,026
Other expense⁽¹⁾
(5,289 ) (35,653 ) (24,445 )
(118,923 ) (193,817 ) (209,119 )
Net Income $ 1,625,133
$ 1,283,388
$ 665,783
Basic Earnings per Share:
Net income $ 7.57
$ 5.96
$ 3.03
Diluted Earnings per Share:
Net income $ 7.53
$ 5.93
$ 3.02
Comprehensive Income (Loss)
Net Income $ 1,625,133
$ 1,283,388
$ 665,783
Other comprehensive income (loss):
Foreign currency translation adjustments 17,307
2,362
(30,152 )
Change in defined benefit plans (5,583 ) (1,636 ) 4,760
Gain (loss) on cash flow derivative hedges 570,495
411,223
(406,047 )
Total other comprehensive income (loss) 582,219
411,949
(431,439 )
Comprehensive Income $ 2,207,352
$ 1,695,337
$ 234,344


~~(1)~~	~~Including a $21.7 million loss related to the 2016 elimination of the Pullmantur reporting lag and a net deferred tax benefit of $12.0 million related to the 2015 Pullmantur impairment.~~

Table of Contents

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED BALANCE SHEETS


	As of December 31,
	2020		2019
	(in thousands, except share data)
Assets
Current assets
Cash and cash equivalents	$	3,684,474	$	243,738
Trade and other receivables, net of allowances of $3,867 and $5,635 at December 31, 2020 and December 31, 2019, respectively	284,149		305,821
Inventories	118,703		162,107
Prepaid expenses and other assets	154,339		429,211
Derivative financial instruments	70,082		21,751
Total current assets	4,311,747		1,162,628
Property and equipment, net	25,246,595		25,466,808
Operating lease right-of-use assets	599,985		687,555
Goodwill	809,480		1,385,644
Other assets, net of allowances of $81,580 and $0 at December 31, 2020 and December 31, 2019, respectively	1,497,380		1,617,649
Total assets	$	32,465,187	$	30,320,284
Liabilities, redeemable noncontrolling interest and shareholders' equity
Current liabilities
Current portion of long-term debt	$	961,768	$	1,186,586
Commercial paper	409,319		1,434,180
Current portion of operating lease liabilities	102,677		96,976
Accounts payable	353,422		563,706
Accrued interest	252,668		70,090
Accrued expenses and other liabilities	615,750		1,078,345
Derivative financial instruments	56,685		94,875
Customer deposits	1,784,832		3,428,138
Total current liabilities	4,537,121		7,952,896
Long-term debt	17,957,956		8,414,110
Long-term operating lease liabilities	563,876		601,641
Other long-term liabilities	645,565		617,810
Total liabilities	23,704,518		17,586,457
Commitments and contingencies (Note 19)	0		0
Redeemable noncontrolling interest	0		569,981
Shareholders' equity
Preferred stock ($0.01 par value; 20,000,000 shares authorized; 0ne outstanding)	0		0
Common stock ($0.01 par value; 500,000,000 shares authorized; 265,198,371 and 236,547,842 shares issued, December 31, 2020 and December 31, 2019, respectively)	2,652		2,365
Paid-in capital	5,998,574		3,493,959
Retained earnings	5,562,775		11,523,326
Accumulated other comprehensive loss	(739,341)		(797,713)
Treasury stock (27,799,775 and 27,746,848 common shares at cost, December 31, 2020 and December 31, 2019, respectively)	(2,063,991)		(2,058,091)
Total shareholders' equity	8,760,669		12,163,846
Total liabilities, redeemable noncontrolling interest and shareholders’ equity	$	32,465,187	$	30,320,284

The accompanying notes are an integral part of these consolidated financial statements.

F-7

As of December 31,
2017 2016
(in thousands, except share data)
Assets
Current assets
Cash and cash equivalents $ 120,112
$ 132,603
Trade and other receivables, net 318,641
291,899
Inventories 111,393
114,087
Prepaid expenses and other assets 193,562
209,716
Derivative financial instruments 99,320
—
Total current assets 843,028
748,305
Property and equipment, net 19,735,180
20,161,427
Goodwill 288,512
288,386
Other assets 1,429,597
1,112,206
$ 22,296,317
$ 22,310,324
Liabilities and Shareholders' Equity
Current liabilities
Current portion of long-term debt $ 1,188,514
$ 1,285,735
Accounts payable 360,113
305,313
Accrued interest 47,469
46,166
Accrued expenses and other liabilities 903,022
692,322
Derivative financial instruments 47,464
146,592
Customer deposits 2,243,682
1,965,473
Total current liabilities 4,790,264
4,441,601
Long-term debt 6,350,937
8,101,701
Other long-term liabilities 452,813
645,610
Commitments and contingencies (Note 15)

Shareholders' equity
Preferred stock ($0.01 par value; 20,000,000 shares authorized; none outstanding) —
—
Common stock ($0.01 par value; 500,000,000 shares authorized; 235,198,901 and 234,613,486 shares issued, December 31, 2017 and December 31, 2016, respectively) 2,352
2,346
Paid-in capital 3,390,117
3,328,517
Retained earnings 9,022,405
7,860,341
Accumulated other comprehensive loss (334,265 ) (916,484 )
Treasury stock (21,861,308 and 20,019,237 common shares at cost, December 31, 2017 and December 31, 2016, respectively) (1,378,306 ) (1,153,308 )
Total shareholders' equity 10,702,303
9,121,412
$ 22,296,317
$ 22,310,324

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS


	Year Ended December 31,
	2020		2019		2018
	(in thousands)
Operating Activities
Net (Loss) Income	$	(5,775,130)	$	1,907,600	$	1,815,792
Adjustments:
Depreciation and amortization	1,279,254		1,245,942		1,033,697
Impairment and credit losses	1,566,380		0		33,651

Net deferred income tax (benefit) expense	(8,791)		7,745		(2,679)
Loss (gain) on derivative instruments not designated as hedges	49,316		(1,431)		61,148
Share-based compensation expense	39,779		75,930		46,061
Equity investment loss (income)	213,286		(230,980)		(210,756)
Amortization of debt issuance costs	89,442		31,991		41,978
Amortization of debt discounts and premiums	66,776		31,616		11,004
Loss on extinguishment of secured senior term loan	41,109		6,326		0
Change in fair value of contingent consideration	(45,126)		18,400		0
Recognition of deferred currency translation adjustment loss on sale of assets	69,044		0		0
Gain on sale of unconsolidated affiliate	0		0		(13,680)
Recognition of deferred gain	0		0		(21,794)
Changes in operating assets and liabilities:
Decrease (increase) in trade and other receivables, net	121,055		(9,898)		(9,573)
Decrease (increase) in inventories	27,077		(8,533)		(23,849)
Decrease (increase) in prepaid expenses and other assets	295,876		15,669		(71,770)

(Decrease) increase in accounts payable	(133,815)		75,281		91,737
Increase (decrease) in accrued interest	182,578		(4,460)		18,773
(Decrease) increase in accrued expenses and other liabilities	(180,479)		96,490		42,937
(Decrease) increase in customer deposits	(1,643,560)		280,139		385,990

Dividends received from unconsolidated affiliates	2,215		150,177		243,101
Other, net	12,061		28,362		7,371
Net cash (used in) provided by operating activities	(3,731,653)		3,716,366		3,479,139
Investing Activities
Purchases of property and equipment	(1,965,131)		(3,024,663)		(3,660,028)

Cash received on settlement of derivative financial instruments	15,874		7,621		76,529
Cash paid on settlement of derivative financial instruments	(161,335)		(68,836)		(98,074)
Investments in and loans to unconsolidated affiliates	(100,609)		(25,569)		(27,172)
Cash received on loans to unconsolidated affiliates	21,086		32,870		124,238
Proceeds from the sale of property and equipment	27,796		0		0
Proceeds from the sale of unconsolidated affiliate	0		0		13,215

Acquisition of Silversea Cruises, net of cash acquired	0		0		(916,135)
Other, net	(16,247)		(12,829)		(1,731)
Net cash used in investing activities	(2,178,566)		(3,091,406)		(4,489,158)

The accompanying notes are an integral part of these consolidated financial statements.

F-8

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

Year Ended December 31,
2017 2016 2015
(in thousands)
Operating Activities
Net income $ 1,625,133
$ 1,283,388
$ 665,783
Adjustments:
Depreciation and amortization 951,194
894,915
827,008
Impairment of Pullmantur related assets —
—
411,267
Net deferred income tax expense (benefit) 1,730
2,608
(10,001 )
Share-based compensation expense 69,459
32,659
36,073
Equity investment income (156,247 ) (128,350 ) (81,026 )
Amortization of debt issuance costs 45,943
52,795
52,153
Gain on sale of property and equipment (30,902 ) —
—
(Gain) loss on derivative instruments not designated as hedges (61,704 ) 45,670
59,162
Changes in operating assets and liabilities:
(Increase) decrease in trade and other receivables, net (32,043 ) 4,759
63,102
Decrease (increase) in inventories 2,424
(1,679 ) 1,197
Decrease (increase) in prepaid expenses and other assets 20,859
11,519
(2,262 )
Increase (decrease) in accounts payable 36,780
29,564
(25,278 )
Increase (decrease) in accrued interest 1,303
7,841
(10,749 )
Increase in accrued expenses and other liabilities 34,215
20,718
33,859
Increase (decrease) in customer deposits 274,705
188,632
(92,849 )
Dividends received from unconsolidated affiliates 109,677
75,942
33,338
Other, net (17,960 ) (4,291 ) (14,411 )
Net cash provided by operating activities 2,874,566
2,516,690
1,946,366
Investing Activities
Purchases of property and equipment (564,138 ) (2,494,363 ) (1,613,340 )
Cash received (paid) on settlement of derivative financial instruments 63,224
(213,202 ) (178,597 )
Investments in and loans to unconsolidated affiliates (10,396 ) (9,155 ) (56,163 )
Cash received on loans to unconsolidated affiliates 62,303
38,213
124,253
Proceeds from sale of property and equipment 230,000
—
—
Other, net ⁽¹⁾
5,415
(46,385 ) (19,128 )
Net cash used in investing activities (213,592 ) (2,724,892 ) (1,742,975 )
Financing Activities
Debt proceeds 5,866,966
7,338,560
4,399,501
Debt issuance costs (51,590 ) (88,241 ) (68,020 )
Repayments of debt (7,835,087 ) (6,365,570 ) (4,118,553 )
Purchase of treasury stock (224,998 ) (299,960 ) (200,000 )
Dividends paid (437,455 ) (346,487 ) (280,212 )
Proceeds from exercise of common stock options 2,525
2,258
11,252
Other, net 3,843
3,249
2,520
Net cash (used in) provided by financing activities (2,675,796 ) 243,809
(253,512 )
Effect of exchange rate changes on cash 2,331
(24,569 ) (17,555 )
Net (decrease) increase in cash and cash equivalents (12,491 ) 11,038
(67,676 )


								Year Ended December 31,
								2020		2019		2018

								(in thousands)
Financing Activities							Financing Activities
Debt proceeds							Debt proceeds	13,547,189		3,525,564		8,590,740
Debt issuance costs							Debt issuance costs	(374,715)		(50,348)		(81,959)
Repayments of debt							Repayments of debt	(3,845,133)		(4,060,244)		(6,963,511)
Proceeds from issuance of commercial paper notes							Proceeds from issuance of commercial paper notes	6,765,816		26,240,540		4,730,286
Repayments of commercial paper notes							Repayments of commercial paper notes	(7,837,635)		(25,613,111)		(3,965,450)
Purchase of treasury stock							Purchase of treasury stock	0		(99,582)		(575,039)
Dividends paid							Dividends paid	(326,421)		(602,674)		(527,494)
Proceeds from common stock issuances							Proceeds from common stock issuances	1,431,375		0		0

Other, net							Other, net	(10,688)		(10,516)		(9,500)
Net cash provided by (used in) financing activities							Net cash provided by (used in) financing activities	9,349,788		(670,371)		1,198,073
Effect of exchange rate changes on cash							Effect of exchange rate changes on cash	1,167		1,297		(20,314)
Net increase (decrease) in cash and cash equivalents							Net increase (decrease) in cash and cash equivalents	3,440,736		(44,114)		167,740
Cash and cash equivalents at beginning of year	132,603		121,565		189,241		Cash and cash equivalents at beginning of year	243,738		287,852		120,112
Cash and cash equivalents at end of year	$	120,112	$	132,603	$	121,565	Cash and cash equivalents at end of year	$	3,684,474	$	243,738	$	287,852
Supplemental Disclosures							Supplemental Disclosures
Cash paid during the year for:							Cash paid during the year for:
Interest, net of amount capitalized	$	249,615	$	256,775	$	248,611	Interest, net of amount capitalized	$	418,164	$	246,312	$	252,466

Non-Cash Investing Activities							Non-Cash Investing Activities
Contingent consideration for the acquisition of Silversea Cruises							Contingent consideration for the acquisition of Silversea Cruises	$	0	$	0	$	44,000
Purchases of property and equipment included in accounts payable and accrued expenses and other liabilities	$	139,644	$	—	$	—	Purchases of property and equipment included in accounts payable and accrued expenses and other liabilities	$	16,189	$	86,155	$	0
Notes receivable issued upon sale of property and equipment	$	20,409	$	213,042	$	—	Notes receivable issued upon sale of property and equipment	$	53,419	$	0	$	0
Non-Cash Financing Activities							Non-Cash Financing Activities
Acquisition of Silversea Cruises non-controlling interest							Acquisition of Silversea Cruises non-controlling interest	$	592,313	$	0	$	0
Termination of Silversea Cruises contingent consideration obligation							Termination of Silversea Cruises contingent consideration obligation	$	16,564	$	0	$	0
Common stock issuances pending cash settlement and included in trade receivables							Common stock issuances pending cash settlement and included in trade receivables	$	121,352	$	0	$	0

~~(1)Amount includes $26.0 million in 2016 related to cash included in the divestiture~~

The accompanying notes are an integral part of ~~Pullmantur Holdings.~~these consolidated financial statements.

F-9

Table of Contents

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


	Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Total Shareholders' Equity
	(in thousands, except per share data)
Balances at January 1, 2018	$	2,352	$	3,390,117	$	9,022,405	$	(334,265)	$	(1,378,306)	$	10,702,303
Cumulative effect of accounting changes	—		—		(23,476)		—		—		(23,476)
Activity related to employee stock plans	6		30,783		—		—		—		30,789
Common stock dividends, $2.60 per share	—		—		(546,689)		—		—		(546,689)

Changes related to cash flow derivative hedges	—		—		—		(286,861)		—		(286,861)
Change in defined benefit plans	—		—		—		7,643		—		7,643
Foreign currency translation adjustments	—		—		—		(14,251)		—		(14,251)
Purchases of treasury stock	—		—		—		—		(575,039)		(575,039)
Net Income attributable to Royal Caribbean Cruises Ltd.	—		—		1,811,042		—		—		1,811,042
Balances at December 31, 2018	2,358		3,420,900		10,263,282		(627,734)		(1,953,345)		11,105,461
Activity related to employee stock plans	7		73,059		—		—		(5,164)		67,902
Common stock dividends, $2.96 per share	—		—		(618,843)		—		—		(618,843)

Changes related to cash flow derivative hedges	—		—		—		(151,313)		—		(151,313)
Change in defined benefit plans	—		—		—		(19,535)		—		(19,535)
Foreign currency translation adjustments	—		—		—		869		—		869
Purchases of treasury stock	—		—		—		—		(99,582)		(99,582)


Net Income attributable to Royal Caribbean Cruises Ltd.	—		—		1,878,887		—		—		1,878,887
Balances at December 31, 2019	2,365		3,493,959		11,523,326		(797,713)		(2,058,091)		12,163,846
Activity related to employee stock plans	9		29,750		—		—		—		29,759
Common stock issuance	226		1,552,500		—		—		—		1,552,726
Equity component of convertible notes, net of issuance costs	—		307,640		—		—		—		307,640
Acquisition of Silversea non-controlling interest	52		608,825		—		—		—		608,877
Common stock dividends, $0.78 per share	—		—		(163,089)		—		—		(163,089)

Changes related to cash flow derivative hedges	—		—		—		38,010		—		38,010
Change in defined benefit plans	—		—		—		(19,984)		—		(19,984)
Foreign currency translation adjustments	—		—				40,346		—		40,346
Purchases of treasury stock	—		5,900		—		—		(5,900)		0


Net Loss attributable to Royal Caribbean Cruises Ltd.	—		—		(5,797,462)		—		—		(5,797,462)
Balances at December 31, 2020	$	2,652	$	5,998,574	$	5,562,775	$	(739,341)	$	(2,063,991)	$	8,760,669

The accompanying notes are an integral part of these consolidated financial statements.

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Common Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Treasury Stock Total Shareholders' Equity
(in thousands)
Balances at January 1, 2015 $ 2,331
$ 3,253,552
$ 6,575,248
$ (896,994 ) $ (649,778 ) $ 8,284,359
Issuance under employee related plans 8
40,497
—
—
—
40,505
Common Stock dividends —
—
(296,169 ) —
—
(296,169 )
Changes related to cash flow derivative hedges —
—
—
(406,047 ) —
(406,047 )
Change in defined benefit plans —
—
—
4,760
—
4,760
Foreign currency translation adjustments —
—
—
(30,152 ) —
(30,152 )
Purchase of Treasury Stock —
3,570
—
—
(203,570 ) (200,000 )
Net income —
—
665,783
—
—
665,783
Balances at December 31, 2015 2,339
3,297,619
6,944,862
(1,328,433 ) (853,348 ) 8,063,039
Issuance under employee related plans 7
30,898
—
—
—
30,905
Common Stock dividends —
—
(367,909 ) —
—
(367,909 )
Changes related to cash flow derivative hedges —
—
—
411,223
—
411,223
Change in defined benefit plans —
—
—
(1,636 ) —
(1,636 )
Foreign currency translation adjustments —
—
—
2,362
—
2,362
Purchases of Treasury Stock —
—
—
—
(299,960 ) (299,960 )
Net income —
—
1,283,388
—
—
1,283,388
Balances at December 31, 2016 2,346
3,328,517
7,860,341
(916,484 ) (1,153,308 ) 9,121,412
Issuance under employee related plans 6
61,600
—
—
—
61,606
Common Stock dividends —
—
(463,069 ) —
—
(463,069 )
Changes related to cash flow derivative hedges —
—
—
570,495
—
570,495
Change in defined benefit plans —
—
—
(5,583 ) —
(5,583 )
Foreign currency translation adjustments —
—
—
17,307
—
17,307
Purchases of Treasury Stock —
—
—
—
(224,998 ) (224,998 )
Net income —
—
1,625,133
—
—
1,625,133
Balances at December 31, 2017 $ 2,352
$ 3,390,117
$ 9,022,405
$ (334,265 ) $ (1,378,306 ) $ 10,702,303

ROYAL CARIBBEAN CRUISES LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Note 1.1. General

Description of Business

We are a global cruise company. We own and operate ~~three~~4 global cruise brands: Royal Caribbean International, Celebrity Cruises, Azamara and ~~Azamara Club Cruises.~~Silversea Cruises (collectively, our "Global Brands"). We also own a 50% joint venture interest in TUI Cruises GmbH ("TUIC"), that operates the German ~~brand~~brands TUI Cruises ~~a 49% interest in the Spanish brand Pullmantur~~ and ~~have a 36% interest in the Chinese brand SkySea~~Hapag-Lloyd Cruises (collectively, our "Partner Brands"). On June 30, 2020, TUIC acquired Hapag-Lloyd Cruises, a luxury and expedition brand for German-speaking guests, from TUI AG for approximately €1.2 billion, or $1.3 billion as of the purchase date. See Note 8. Other Assets for further information on the acquisition. We account for our investments in our Partner Brands under the equity method of accounting. Together, our Global Brands and our Partner Brands operate a combined 4961 ships as of December 31, ~~2017.~~2020. Our ships ~~operate on~~offer a selection of worldwide itineraries that call on ~~approximately 540~~more than 1,000 destinations on all ~~seven~~7 continents.

~~Effective~~In 2020, Pullmantur Holdings S.L. ("Pullmantur Holdings"), in which we own a 49% non-controlling interest, and certain of its other subsidiaries filed for reorganization in Spain under the terms of the Spanish insolvency laws (the "Pullmantur reorganization") due to the negative impact of the COVID-19 pandemic on the company. The Pullmantur brand has cancelled all of its scheduled ship operations. We suspended equity method accounting for Pullmantur Holdings during the second quarter of 2020. Refer to Note 8. Other Assets for further information regarding Pullmantur's reorganization filing and its impact to the Company.

On July 9, 2020, we acquired the remaining 33.3% interest in Silversea Cruises that we did not already own (the "noncontrolling interest") from Heritage Cruise Holding Ltd. ("Heritage"). As a result of the acquisition of the noncontrolling interest, Silversea Cruises is now a wholly owned cruise brand. As consideration for the noncontrolling interest, we issued to Heritage 5.2 million shares of common stock, par value $0.01 per share, of Royal Caribbean Cruises Ltd. Pursuant to the agreement governing the acquisition, among other things, the parties terminated any existing obligation to issue Heritage any contingent consideration, at fair value, in connection with our acquisition of a 66.7% interest in Silversea Cruises on July 31, ~~2016,~~2018. The share purchase did not result in a change of control. The purchase was accounted for as an equity transaction and no gain or loss was recognized in earnings. See Note 11. Redeemable Noncontrolling Interest for further information regarding our acquisition of the noncontrolling interest.

On January 19, 2021, we ~~sold 51%~~announced that we entered into a definitive agreement to sell the Azamara brand, including its 3-ship fleet and associated intellectual property to Sycamore Partners in an all-cash carve-out transaction for $201.0 million. The transaction is subject to customary conditions and is expected to close in the first quarter of 2021.

Management's Plan and Liquidity

As part of our ~~interest~~response to the COVID-19 pandemic, we voluntarily suspended our global cruise operations effective March 13, 2020 and this suspension remains in ~~Pullmantur~~effect through at least April 30, 2021, for most of our cruise operations.

We are working with both the U.S. Center for Disease Control and Prevention (“CDC”) and the Healthy Sail Panel (“HSP”), formed in June 2020 by us and Norwegian Cruise Line Holdings ~~(formerly known as Royal Caribbean Holdings de Españ~~Ltd. and composed of leading experts in relevant fields, including epidemiology, infectious diseases, public policy and regulation, engineering and general health safety, to prepare and develop a ~~S.L. or "RCHE"),~~plan to meet the ~~parent company~~requirements of the ~~Pullmantur brand. We retain~~CDC’s Framework for the Conditional Sailing Order (the “Conditional Order”). The Conditional Order permits cruise ship passenger operations in U.S. waters under certain conditions and following the establishment of certain protocols and procedures, with the order remaining in effect until the earlier of (1) the expiration of the Secretary of Health and Human Services’ declaration that COVID-19 constitutes a ~~49% interest in Pullmantur Holdings~~public health emergency; (2) the CDC Director rescinds or modifies the Conditional Order based on specific public health or other considerations, or (3) November 1, 2021.

Many uncertainties remain as to the specifics, timing and costs of administering and implementing the requirements of the Conditional Order, some of which may be significant, as well as ~~full ownership~~the extent of any additional requirements the CDC may issue as it provides further guidance on the requirements of the ~~four vessels~~Conditional Order. We expect to re-start our global cruise operations in a phased manner once we fulfill the requirements of the Conditional Order, with cruises having reduced guest occupancy, modified itineraries and enhanced health and safety protocols. Based on our assessment of these conditions or for other reasons, we may determine it necessary to further extend our voluntary suspension of our Global Brands’ cruise sailings which currently ~~operated by~~extends through at least April 30, 2021, for most of our cruise operations. As such, we believe the ~~Pullmantur brand~~suspension of our operations

The accompanying notes are an integral part of these consolidated financial statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

and the impact to our global bookings resulting from the COVID-19 pandemic will continue to have a material negative impact on our results of operations and liquidity, which may be prolonged beyond containment of the disease.

As of December 31, 2020, we had liquidity of $4.4 billion, consisting of cash and cash equivalents of $3.7 billion and a $0.7 billion one-year commitment for a 364-day term loan facility. As of December 31, 2020, our revolving credit facilities were fully utilized through a combination of amounts drawn and letters of credit issued under ~~bareboat charter arrangements. We account~~the facilities.

As of December 31, 2020, financial covenant testing on our amended export-credit and non-export credit facilities, totaling and outstanding principal amount of $11.2 billion, and on our credit card processing agreements, was waived through the fourth quarter of 2021 following amendments to the agreements during 2020.

During the first quarter of 2021, we further amended $4.9 billion of our non-export credit facilities and $6.2 billion of our export credit facilities, and certain credit card processing agreements to extend the waiver of our financial covenants through and including at least the third quarter of 2022. In addition, during the first quarter of 2021, we amended our export credit facilities to defer an additional $0.8 billion of principal payments due under these export facilities between April 2021 and March 2022. Pursuant to the covenant amendments for the ~~bareboat charters~~non-export facilities and certain of the ~~vessels~~credit card processingagreements, we have modified the manner in which such covenants are calculated, temporarily in certain cases and permanently in others, as well as the levels at which our net debt to ~~Pullmantur Holdings as operating leases. We also provide certain ship management services to Pullmantur Holdings. We recognized an immaterial gain on~~capitalization covenant will be tested during the ~~sale of our majority interest in Pullmantur Holdings. We had also retained full ownership~~period commencing immediately following the end of the ~~aircraft~~waiver period and continuing through the end of 2023. The amendments also impose a monthly-tested minimum liquidity covenant of $500.0 million for the duration of the waiver period subject to reduction to $350.0 million if we raise at least $500.0 million of additional capital, which can be satisfied through previously undrawn facilities. In addition, the amendments place restrictions on paying cash dividends and effectuating share repurchases through at least the end of the third quarter of 2022. As of December 31, 2020, we ~~subsequently sold during 2017. Effective August 2016,~~were in compliance with the applicable minimum liquidity covenant and we ~~no longer consolidate Pullmantur Holdings~~estimate that we will be in ~~our consolidated financial statements and our investment in~~compliance for at least the ~~company is accounted for under the equity method of accounting.~~next twelve months. Refer to Note 6. ~~Other Assets~~9. Debt for further information onregarding our ~~retained interest in Pullmantur Holdings~~debt covenants.

Significant events affecting travel, including COVID-19 and ~~Note 5.~~ ~~Property and Equipment~~ ~~for further information~~our suspension of operations, typically have an impact on the ~~sale~~booking pattern for cruise vacations, with the full extent of the ~~aircraft.~~impact generally determined by the length of time the event influences travel decisions. The ~~sale did~~estimation of our future liquidity requirements includes numerous assumptions that are subject to various risks and uncertainties. The principal assumptions used to estimate our future liquidity requirements consist of:

•Expected date of return to operations;

•Expected gradual resumption of cruise operations;

•Expected lower than comparable historical occupancy levels during the resumption of cruise operations; and

•Expected incremental expenses for the resumption of cruise operations, for the maintenance of additional public health protocols and procedures for additional regulations.

There can be no assurance that our assumptions and estimates are accurate due to possible variables, including, but not ~~represent a strategic shift~~limited to, the uncertainties associated with the CDC’s interpretation and application of the requirements in the Conditional Order and subsequent changes to those requirements, our ability to meet these requirements , some of which may be significant, and whether efforts by other countries to contain the disease will further restrict our ability to commence operations. We have and will continue undertaking several proactive measures to mitigate the financial and operational impacts of COVID-19, including reduction of capital expenditures and operating expenses (reduction and furloughing of workforce and laying up of vessels), issuing of debt and shares of our common stock, amending of credit agreements to defer payments and covenant requirements and suspending of dividend payments.

Based on these actions and our assumptions regarding the impact of COVID-19 and our suspension of operations, as well as our present financial condition, we believe that our available liquidity as described above will be sufficient to fund our obligations for at least the next twelve months from the issuance of these financial statements. Beyond the next 12 months, in April 2022, approximately $1.0 billion of long- term debt will need to be refinanced or extended should the commencement of operations be delayed beyond the summer of 2021, in order to maintain the Company's liquidity position. We are working on refinancing or negotiating extension of the obligation, which we expect to have completed in advance of the April 2022 due date. There can be no assurances that the Company will be successful in completing the refinancing or extension necessary to meet its obligations beyond twelve months from the issuance of these financial statements on terms acceptable to the Company. If the Company is unable to maintain the required minimum level of liquidity or negotiate its minimum liquidity requirements, it could have a ~~major~~significant adverse effect on the Company’s business, financial condition and operating results.

Any further covenant waivers may lead to increased costs, increased interest rates, additional restrictive covenants and other available lender protections as may be agreed with our ~~operations~~lenders. There can be no assurance that we would be able to obtain additional waivers in a timely manner, or on acceptable terms. If we require additional waivers and ~~financial results, as we continue~~are not able to ~~provide similar itineraries~~obtain them

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ROYAL CARIBBEAN CRUISES LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

or repay the debt facilities, this would lead to an event of default and ~~source passengers from the markets served~~potential acceleration of amounts due under all of our outstanding debt and derivative contracts.

The Company also has agreements with its credit card processors relating to customer deposits received by the ~~Pullmantur business. Therefore,~~Company for future voyages. These agreements allow the ~~sale~~credit card processors to require, under certain circumstances, including breach of ~~Pullmantur Holdings did~~the financial covenants, the existence of other material adverse changes, excessive chargebacks, and other triggering events, the Company to maintain a reserve that can be satisfied by posting collateral.

Executed amendments are in place for the majority of these providers, waiving collateral posting and reserve requirements tied to breach of our financial covenants through at least March 31, 2022 or September 30, 2022 depending on the agreement, and as such, we do not ~~meet~~anticipate any incremental collateral requirements for the ~~criteria for discontinued~~processors covered by these waivers in the next 12 months. We have approximately $75.0 million held in reserve with a processor where the agreement was amended in the first quarter of 2021, such that future proceeds will be withheld in reserve, of which the maximum exposure is approximately $200.0 million. The amount and timing are dependent on future factors that are uncertain, such as the date we return to operations, ~~reporting.~~volume and value of future deposits and whether we transfer our business to other processors. If we require additional waivers on the credit card processing agreements and are not able to obtain them, this could lead to the termination of these agreements or the trigger of reserve requirements.

Basis for Preparation of Consolidated Financial Statements

The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Estimates are required for the preparation of financial statements in accordance with these principles. Actual results could differ from these estimates. Refer to Note 2. 2. Summary of Significant Accounting Policies for a discussion of our significant accounting policies.

All significant intercompany accounts and transactions are eliminated in consolidation. We consolidate entities over which we have control, usually evidenced by a direct ownership interest of greater than 50%, and variable interest entities where we are determined to be the primary beneficiary. Refer to Note 6. 8. Other Assets for further information regarding our variable interest entities. We consolidate the operating results of Silversea Cruises on a three-month reporting lag to allow for more timely preparation of our consolidated financial statements. With the exception of the October 2020 delivery of the Silver Moon which is reported in our consolidated financial statements as of and for the year ended December 31, 2020, no material events or other transactions involving Silversea Cruises have occurred from September 30, 2020 through December 31, 2020. Refer to Note 7. Property and Equipment, and Note 9. Debt for further information on the delivery of Silver Moon.

For affiliates we do not control but over which we have significant influence on financial and operating policies, usually evidenced by a direct ownership interest from 20% to 50%, the investment is accounted for using the equity method.

~~Prior to January 1, 2016, we consolidated the operating results of Pullmantur Holdings on a~~ ~~two~~-month reporting lag to allow for more timely preparation of our consolidated financial statements. Effective January 1, 2016, we eliminated the two-month reporting lag to reflect Pullmantur Holdings' financial position, results of operations and cash flows concurrently and consistently with the fiscal calendar of the Company ("elimination of the Pullmantur reporting lag"). The elimination of the Pullmantur reporting lag represented a change in accounting principle which we believed to be preferable because it provided more current information to the users of our financial statements. A change in accounting principle requires retrospective application, if material. The impact of the elimination of the reporting lag was immaterial to prior periods and was immaterial for our fiscal year ended December 31, 2016. As a result, we have accounted for this change in accounting principle in our consolidated results for the year ended December 31, 2016. Accordingly, the results of Pullmantur Holdings for November and December 2015 were included in our statement of comprehensive income (loss) for the year ended December 31, 2016. The effect of this change was

~~F-9~~

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~~ROYAL CARIBBEAN CRUISES LTD.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~a decrease to net income of $21.7 million, which has been reported within~~ ~~Other expense~~ ~~in our consolidated statements of comprehensive income (loss) for the year ended December 31, 2016.~~

Note 2.2. Summary of Significant Accounting Policies

Revenues and Expenses

Deposits received on sales of passenger cruises are initially recorded as customer deposit liabilities on our balance sheet. Customer deposits are subsequently recognized as passenger ticket revenues, together with revenues from onboard and other goods and services and all associated cruise operating expenses of a voyage.

~~Revenues and expenses include port costs that vary with guest head counts. The amounts of such port costs charged~~ For further information on revenue recognition, refer to ~~our guests and included within~~ ~~Passenger ticket revenues~~ ~~on a gross basis were $569.5 million, $570.3 million and $561.1 million for the years 2017, 2016 and 2015, respectively.~~Note 4. Revenues.

Cash and Cash Equivalents

Cash and cash equivalents include cash and marketable securities with original maturities of less than 90 days.

Inventories

Inventories consist of provisions, supplies and fuel carried at the lower of cost (weighted-average) or net realizable value.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. We capitalize interest as part of the cost of acquiring certain assets. Improvement costs that we believe add value to our ships are capitalized as additions to the ship, the useful lives of the improvements are estimated and depreciated over the shorter of the improvements' estimated useful lives or that of the associated ~~ship.~~ship, and the replaced assets are disposed of on a net cost basis. The estimated cost and accumulated depreciation of replaced or refurbished ship components are written off and any resulting losses are recognized in

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ROYAL CARIBBEAN CRUISES LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Cruise operating expenses. Liquidated damages received from shipyards as a result of the late delivery of a new ship are recorded as reductions to the cost basis of the ship.

Depreciation of property and equipment is computed using the straight-line method over the estimated useful life of the asset. The useful lives of our ships are generally 3030-35 years, net of a ~~15%~~10%-15% projected residual value. The ~~30-year~~30-35-year useful life ~~of our newly constructed ships~~ and ~~15% associated~~10%-15% residual value are ~~both~~ based on the weighted-average of all major components of a ship. Our useful life and residual value estimates take into consideration the impact of anticipated technological changes, 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. We employ a cost allocation methodology at the component level, in order to support the estimated weighted-average useful lives and residual values, as well as to determine the net cost basis of assets being replaced. Given the very large and complex nature of our ships, our accounting estimates related to ships and determinations of ship improvement costs to be capitalized require considerable judgment and are inherently uncertain. Depreciation for assets under capital leases is computed using the shorter of the lease term or related asset life.

Depreciation of property and equipment is computed utilizing the following useful lives:


		Years
Ships		~~Years~~generally, 30-35
~~Ships~~Ship improvements		~~generally 30~~3-25
~~Ship improvements~~		~~3-20~~
Buildings and improvements	10-40
Computer hardware and software		3-10
Transportation equipment and other		3-30
Leasehold improvements		Shorter of remaining lease term or useful life 3-30

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. In the event a factor is identified that may trigger a change in the estimated useful lives and residual values of our ships, a review of the estimate is completed. In the fourth quarter of 2019, we completed a modernization of the Oasis of the Seas under our ship upgrade program. We spent $538.0 million under this ship upgrade program for the year ended December 31, 2019, with the Oasis of the Seas representing approximately $170.0 million. As a result of this capital investment and future planned investments in our Oasis-class ships, we performed a review of the estimated useful lives and residual values of Oasis-class ships, concluding in a change to the estimate. Effective fourth quarter of 2019, we revised the estimated useful lives of our Oasis-class ships from 30 years with a 15% residual value to 35 years with a 10% residual value. The change in the estimated useful lives and residual values was accounted for prospectively as a change in accounting estimate. The 35-year useful life with a 10% residual value is based on revised estimates of the weighted-average useful life of all major ship components for the Oasis-class ships. The change in estimate is consistent with our recent investments in and long term future plans to continue to invest in the upgrade of these ships, resulting in the use of certain ship components longer than originally estimated. In determining the change in estimated useful life and residual value, we utilized quantitative and qualitative analysis, including historical and projected usage patterns, industrybenchmarks, planned maintenance programs and projected operational and financial performance of the class. The change allows us to better match depreciation expense with the periods these assets are expected to be in use. For the year ended December 31, 2019, this change increased operating income and net income by approximately $4.6 million and increased earnings per share by $0.02 per share on a basic and diluted basis.

We review long-lived assets for impairment whenever events or changes in circumstances indicate, based on estimated undiscounted future cash flows, that the carrying ~~amount~~value of these assets may not be fully recoverable. For purposes of recognition and measurement of an impairment loss, long-lived assets are grouped with other assets and

~~F-10~~

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~~ROYAL CARIBBEAN CRUISES LTD.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. The lowest level for which we maintain identifiable cash flows that are independent of the cash flows of other assets and liabilities is at the ship level for our ~~ships and, prior to the sale of the aircraft, at the aggregated asset group level for our aircraft.~~ships. If estimated future cash flows are less than the carrying value of an asset, an impairment charge is recognized to the extent its carrying value exceeds fair value. Refer to Note 7. Property and Equipment for further information on determination of fair value for long-lived assets.

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ROYAL CARIBBEAN CRUISES LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

insurance and legally operate as passenger cruise ships. The activities associated with those drydocking costs cannot be performed while the vessel is in service and, as such, are done during a drydock as a planned major maintenance activity. 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. We perform a detailed analysis of the various activities performed for each drydock and only defer those costs that are directly related to planned major maintenance activities necessary to maintain Class. The costs deferred are related to activities not otherwise routinely periodically performed to maintain a vessel's designed and intended operating capability. Repairs and maintenance activities are charged to expense as incurred.

Goodwill

Goodwill represents the excess of cost over the fair value of net tangible and identifiable intangible assets acquired. We review goodwill for impairment at the reporting unit level annually or, when events or circumstances dictate, more frequently. The impairment review for goodwill consists of a qualitative assessment of whether it is more-likely-than-not that a reporting unit's fair value is less than its carrying ~~amount,~~value, and if necessary, a ~~two-step~~ goodwill impairment test. Factors to consider when performing the qualitative assessment include general economic conditions, limitations on accessing capital, changes in forecasted operating results, changes in fuel prices and fluctuations in foreign exchange rates. If the qualitative assessment demonstrates that it is more-likely-than-not that the estimated fair value of the reporting unit exceeds its carrying value, it is not necessary to perform the ~~two-step~~ goodwill impairment test. We may elect to bypass the qualitative assessment and proceed directly to step one, for any reporting unit, in any period. On a periodic basis, we elect to bypass the qualitative assessment and proceed to step one to corroborate the results of recent years' qualitative assessments. We can resume the qualitative assessment for any reporting unit in any subsequent period. ~~When performing the two-step~~

The goodwill impairment ~~test,~~analysis consists of a comparison of the fair value of the reporting unit ~~is determined and compared to~~with its carrying value. We typically estimate the ~~carrying~~fair value of our reporting units using a probability-weighted discounted cash flow model, which may also include a combination of a market-based valuation approach. 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 principal assumptions used in the discounted cash flow model for our 2020 impairment assessments were: (i) the timing of our return to service, changes in market conditions and port or other restrictions; (ii) forecasted net ~~assets allocated~~revenues, primarily the timing of returning to normalized operations, occupancy rates from existing and expected ship deliveries, including options, and terminal growth rate; and (iii) weighted average cost of capital (i.e., discount rate). The discounted cash flow model uses the most current projected operating results for the upcoming fiscal year as a base. To that base, we add future years' cash flows based on multiple revenue and expense scenarios reflecting the impact of various return to service management assumptions beyond the base year on the reporting unit. We discount the projected cash flows using rates specific to the reporting ~~unit.~~unit based on its weighted-average cost of capital. If the fair value of the reporting unit exceeds its carrying value, no ~~further analysis or~~ write-down of goodwill is required. IfAs 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 ~~implied~~amount by which the carrying value of a reporting unit exceeds its fair value, not to exceed the total amount of ~~the reporting unit is~~goodwill allocated to all its underlying assets and liabilities, including both recognized and unrecognized tangible and intangible assets, based on their fair value. If necessary, goodwill is then written down to its implied fair value.such reporting unit.

Intangible Assets

In connection with our acquisitions, we have acquired certain intangible assets to which value has been assigned based on our estimates. Intangible assets that are deemed to have an indefinite life are not amortized, but are subject to an annual impairment test, or when events or circumstances dictate, more frequently. The impairment review for indefinite-life intangible ~~asset~~assets can be performed using a qualitative or quantitative impairment ~~test~~assessment. The quantitative assessment consists of a comparison of the fair value of the ~~indefinite-life intangible~~ asset with its carrying ~~amount.~~value. We estimate the fair value of these assets using a discounted cash flow model and various valuation methods depending on the nature of the intangible asset, such as the relief-from-royalty method for trademarks and trade names. The principal assumptions used in the discounted cash flows model for our 2020 impairment assessments were: (i) forecasted net revenues, primarily the timing of returning to normalized operations, occupancy rates from existing and expected ship deliveries, including options, and terminal growth rate; (ii) royalty rate; and (iii) weighted average cost of capital (i.e., discount rate). If the carrying ~~amount~~value exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. If the fair value exceeds its carrying ~~amount,~~value, the indefinite-life intangible asset is not considered impaired.

Other intangible assets assigned finite useful lives are amortized on a straight-line basis over their estimated useful lives.

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ROYAL CARIBBEAN CRUISES LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Contingencies — Litigation

On an ongoing basis, we assess the potential liabilities related to any lawsuits or claims brought against us. While it is typically very difficult to determine the timing and ultimate outcome of such actions, we use our best judgment to determine if it is probable that we will incur an expense related to the settlement or final adjudication of such matters and whether a reasonable estimation of such probable loss, if any, can be made. In assessing probable losses, we take into consideration estimates of the amount of insurance recoveries, if any, which are recorded as assets when recoverability is probable. We accrue a liability when we believe a loss is probable and the amount of loss can be reasonably estimated. 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.

Advertising Costs

Advertising costs are expensed as incurred except those costs which result in tangible assets, such as brochures, which are treated as prepaid expenses and charged to expense as consumed. Advertising costs consist of media advertising as well as brochure, production and direct mail costs.

Media advertising was ~~$233.5~~$138.1 million, ~~$240.3~~$309.4 million and ~~$242.8~~$255.7 million, and brochure, production and direct mail costs were ~~$126.7~~$69.1 million, ~~$120.8~~$156.0 million and ~~$127.1~~$133.4 million for the years ~~2017, 2016~~ended December 31, 2020, 2019 and ~~2015,~~2018, respectively.

Derivative Instruments

At inception of the hedge relationship, a derivative instrument that hedges the exposure to changes in the fair value of a firm commitment or a recognized asset or liability is designated as a fair value hedge. A derivative instrument that hedges a forecasted transaction or the variability of cash flows related to a recognized asset or liability is designated as a cash flow hedge.

Changes in the fair value of derivatives that are designated as fair value hedges are offset against changes in the fair value of the underlying hedged assets, liabilities or firm commitments. Gains and losses on derivatives that are designated as cash flow hedges are recorded as a component of Accumulated other comprehensive loss until the underlying hedged transactions are recognized in earnings. The foreign currency transaction gain or loss of our non-derivative financial instruments and the changes in the fair value of derivatives designated as hedges of our net investment in foreign operations and investments are recognized as a component of Accumulated other comprehensive loss along with the associated foreign currency translation adjustment of the foreign ~~operation.~~operation or investment. In certain hedges of our net investment in foreign operations and investments, we exclude forward points from the assessment of hedge effectiveness and we amortize the related amounts directly into earnings.

On an ongoing basis, we assess whether derivatives used in hedging transactions are "highly effective" in offsetting changes in the fair value or cash flow of hedged items. WeFor our net investment hedges, we use the dollar offset method to measure effectiveness. For all other hedging programs, we use the long-haul method to assess hedge effectiveness using regression analysis for each hedge ~~relationship under our interest rate, foreign currency and fuel hedging programs. We apply the same~~relationship. The methodology for assessing hedge effectiveness is applied on a consistent basis for ~~assessing hedge effectiveness to all hedges within~~ each one of our hedging ~~program~~programs (i.e., interest rate, foreign currency ship construction, foreign currency net investment and fuel). ~~We perform~~For our regression analyses, ~~over~~we use an observation period of up to three years, utilizing market data relevant to the hedge horizon of each hedge relationship. High effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the changes in the fair values of the derivative instrument and the hedged item. The determination of ineffectiveness is based on the amount of dollar offset between the change in fair value of the derivative instrument and the change in fair value of the hedged item at the end of the reporting period. If it is determined that a derivative is not highly effective as a hedge or hedge accounting is discontinued, any change in fair value of the derivative since the last date at which

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it was determined to be effective is recognized in earnings. ~~In addition, the ineffective portion of our highly effective hedges is immediately recognized in earnings and reported in~~ ~~Other expense~~ ~~in our consolidated statements of comprehensive income (loss).~~

Cash flows from derivative instruments that are designated as fair value or cash flow hedges are classified in the same category as the cash flows from the underlying hedged items. In the event that hedge accounting is discontinued, cash flows

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subsequent to the date of discontinuance are classified within investing activities. Cash flows from derivative instruments not designated as hedging instruments are classified as investing activities.

We consider the classification of the underlying hedged item’s cash flows in determining the classification for the designated derivative instrument’s cash flows. We classify derivative instrument cash flows from hedges of benchmark interest rate or hedges of fuel expense as operating activities due to the nature of the hedged item. Likewise, we classify derivative instrument cash flows from hedges of foreign currency risk on our newbuild ship payments as investing ~~activities and derivative instrument cash flows from hedges of foreign currency risk on debt payments as financing~~ activities.

Foreign Currency Translations and Transactions

We translate assets and liabilities of our foreign subsidiaries whose functional currency is the local currency, at exchange rates in effect at the balance sheet date. We translate revenues and expenses at weighted-average exchange rates for the period. Equity is translated at historical rates and the resulting foreign currency translation adjustments are included as a component of Accumulated other comprehensive loss, which is reflected as a separate component of Shareholders' equity. Exchange gains or losses arising from the remeasurement of monetary assets and liabilities denominated in a currency other than the functional currency of the entity involved are immediately included in our earnings, except for certain liabilities that have been designated to act as a hedge of a net investment in a foreign operation or investment. Exchange gains (losses) ~~gains~~ were ~~$(75.6)~~$(1.5) million, ~~$39.8~~$0.4 million and ~~$34.6~~$57.6 million for the years ~~2017, 2016~~ended December 31, 2020, 2019 and ~~2015,~~2018, respectively, and were recorded within Other ~~expense~~income (expense). The majority of our transactions are settled in United States dollars. Gains or losses resulting from transactions denominated in other currencies are recognized in income at each balance sheet date.

Concentrations of Credit Risk

We monitor our credit risk associated with financial and other institutions with which we conduct significant business and, to minimize these risks, we select counterparties with credit risks acceptable to us and we seek to limit our exposure to an individual counterparty. Credit risk, including but not limited to counterparty nonperformance under derivative instruments, our credit facilities and new ship progress payment guarantees, is not considered significant, as we primarily conduct business with large, well-established financial institutions, insurance companies and export credit agencies many of which we have long-term relationships with and which have credit risks acceptable to us or where the credit risk is spread out among a large number of counterparties. As of December 31, ~~2017,~~2020, we had $26.9 million counterparty credit risk exposure under our derivative instruments ~~of approximately $212.8 million,~~ which was limited to the cost of replacing the contracts in the event of non-performance by the counterparties to the contracts, the majority of which are currently our lending banks. As of December 31, ~~2016,~~2019, we ~~did not have any~~had 0 counterparty credit risk exposure under our derivative instruments. We do not anticipate nonperformance by any of our significant counterparties. In addition, we have established guidelines we follow regarding credit ratings and instrument maturities to maintain safety and liquidity. We do not normally require collateral or other security to support credit relationships; however, in certain circumstances this option is available to us.

(Loss) Earnings Per Share

Basic (loss) earnings per share is computed by dividing ~~net income~~ Net (Loss) Income attributable to Royal Caribbean Cruises Ltd.by the weighted-average number of shares of common stock outstanding during each period. Diluted (loss) earnings per share incorporates the incremental shares issuable upon the assumed exercise of stock options and conversion of potentially dilutive securities.

Stock-Based Employee Compensation

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We measure and recognize compensation expense at the estimated fair value of employee stock awards. Compensation expense for awards and the related tax effects are recognized as they vest. We use the estimated amount of expected forfeitures to calculate compensation costs for all outstanding awards.

Segment Reporting

~~We own~~As of December 31, 2020, we controlled and ~~operate three~~operated 4 global cruise ~~brands,~~brands: Royal Caribbean International, Celebrity Cruises, Azamara and ~~Azamara Club~~Silversea Cruises. We also own a 50% joint venture interest ~~with TUI AG which~~in TUIC, that operates the ~~brand~~German brands TUI Cruises ~~a 49% interest in the Spanish brand Pullmantur~~ and ~~have a 36% interest in the Chinese brand SkySea~~Hapag-Lloyd Cruises. We believe our brands possess the versatility to enter multiple cruise market segments within the cruise vacation industry. Although each of these brands ~~have~~has its own marketing style as well as ships and crews of various sizes, the nature of the products sold and services delivered by these brands share a common base (i.e., the sale and provision of cruise vacations). Our brands also have similar itineraries as well as similar cost and revenue components. In addition, our brands source passengers from similar markets around the world and operate in similar economic environments with a significant degree of commercial overlap. As a result, our brands have been aggregated as a single reportable segment based on the similarity of their economic characteristics, types of consumers, regulatory environment, maintenance requirements, supporting systems and processes as well as products and services provided. Our Chairman and Chief Executive

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Officer has been identified as the chief operating decision-maker and all significant operating decisions including the allocation of resources are based upon the analyses of the Company as ~~one~~1 segment.

~~Information~~ Refer to Note 4. Revenues for passenger ticket revenue information by geographic ~~area is shown in the table below. Passenger ticket revenues are attributed to geographic areas based on where the reservation originates.~~area.

2017
2016
2015
Passenger ticket revenues:

United States 59%
55% 55%
All other countries 41%
45% 45%

~~Recent~~Adoption of Accounting Pronouncements

~~Revenue from Contracts with Customers~~

~~In May 2014, amended GAAP~~On January 1, 2019, we adopted the guidance was issued to clarify the principles used to recognize revenue for all entities. The guidance also requires more detailed disclosures and provides additional guidance for transactions that were not comprehensively addressedcodified in ~~the prior accounting guidance. This guidance must be applied~~Accounting Standard Codification ("ASC") 842, Leases ("ASC 842") using ~~one of two retrospective application methods and will be effective for our annual reporting period beginning after December 15, 2017, including interim periods therein.~~

~~We have elected~~ the modified retrospective approach and elected the optional transition method, which ~~will involve applying~~allows entities to initially apply the ~~guidance retrospectively only to~~standard at the ~~most current period presented in the consolidated financial statements~~adoption date and ~~recognizing the cumulative effect of initially applying the guidance as an~~recognize a cumulative-effect adjustment to the ~~January 1, 2018~~ opening balance of retained earnings ~~if any. We have completed our evaluation~~in the period of ~~potential changes~~adoption. Upon adoption, we applied the guidance to our core revenues using the five-step model supported by the new revenue standard, including our accounting for customer loyalty programs and promotional offerings. Based on our assessment, the adoption of this newly issued guidance is not expected to have a material impact to the timing of recognition of our core revenues, but will require us to enhance our disclosures with respect to our revenue recognition policies.all existing leases.

~~Leases~~

~~In February 2016, amended GAAP guidance was issued to increase the transparency and comparability of lease accounting among organizations.~~ For leases with a term greater than 12 months, the ~~amendments require~~new guidance requires the lease rights and obligations arising from the leasing arrangements, including operating leases, to be recognized as assets and liabilities on the balance sheet. Upon adoption of the new guidance, the most significant impact was the recognition of right-of-use assets and lease liabilities relating to operating leases in the amounts of $801.8 million and $820.5 million, respectively, reported within Operating lease right-of-use assets and Long-term operating lease liabilities, respectively, with the current portion of the liability reported within Current portion of operating lease liabilities, in our consolidated balance sheet as of January 1, 2019. Accounting for finance leases remained substantially unchanged and continues to be reported within Property and equipment, net and Long-term debt, with the current portion of the debt reported within Current portion of debt, in our consolidated balance sheets. There was no cumulative effect of applying the new standard and accordingly there was no adjustment to our retained earnings upon adoption. The comparative information presented has not been recast and continues to be reported under the accounting standards in effect for those periods. For further information on leases, refer to Note 10. Leases.

This guidance did not have a material impact to our consolidated statements of comprehensive income (loss), consolidated statements of cash flows and our debt-covenants calculations under our current agreements.

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") 2016-13, Financial Instruments - Credit Losses (Topic 326); Measurement of Credit Losses on Financial Instruments. This ASU, along with subsequent ASUs issued to clarify certain of its provisions, introduces new guidance which makes substantive changes to the accounting model for financial assets subject to credit losses that are measured at amortized cost, as well as certain off-balance sheet credit exposures. The updates include the introduction of a new current expected credit loss (“CECL”) model that is based on expected rather than incurred losses. On January 1, 2020, we adopted these updates using the modified retrospective approach. The adoption did not have a material impact to our consolidated financial statements.

In January 2020, the FASB issued ASU No. 2020-01, Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivative and Hedging (Topic 815), which clarifies the interaction of rules for equity securities, the equity method of accounting, and forward contracts and purchase options on certain types of securities. The guidance clarifies how to account for the transition into and out of the equity method of accounting when considering observable transactions under the measurement alternative. The ASU is effective for annual reporting periods beginning after December 15, 2020, including interim reporting periods within those annual periods, with early adoption permitted. We adopted the guidance during the quarter ended December 31, 2020. The adoption did not have a material impact to our consolidated financial statements.

Recent Accounting Pronouncements

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848), which provides optional expedients and exceptions to the current guidance on contract modifications and hedging relationships to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. Subsequently, in January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848), which presents amendments ~~also expand~~to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. The guidance in both ASUs was effective upon issuance and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. We are currently evaluating the impact of the new guidance on our consolidated financial statements.

In August 2020, the FASB issued ASU No. 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40), which simplifies the accounting for convertible instruments. The guidance removes certain accounting models which separate the embedded conversion features from the host contract for convertible instruments, requiring bifurcation only if the convertible debt feature qualifies as a derivative under ASC 815 or for convertible debt issued at a substantial premium. The ASU removes certain settlement conditions required ~~disclosures surrounding leasing arrangements.~~

for equity contracts to qualify for the derivative scope exception, permitting more contracts to qualify for it.

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~~The~~In addition, the guidance ~~must be applied using a retrospective application~~eliminates the treasury stock method to calculate diluted earnings per share for convertible instruments and ~~will be effective for financial statements issued for fiscal years beginning after December 15, 2018 and interim periods within those years. Early adoption is permitted. We are currently evaluating~~requires the ~~impact~~use of the ~~adoption of this newly issued guidance to our consolidated financial statements.~~

~~Classification of Certain Cash Receipts and Cash Payments~~

~~In August 2016, amended GAAP guidance was issued to clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows.~~if-converted method. The amendments are aimed at reducing the existing diversity in practice. The guidance should be applied using a retrospective transition method to each period presented and will be effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. We intend to adopt the guidance on the date of initial application, January 1, 2018. The adoption of this newly issued guidance is not expected to have a material impact to our consolidated financial statements.

~~Intra-Entity Transfers of Assets Other Than Inventory~~

In October 2016, amended GAAP guidance was issued that requires the income tax consequences of an intra-entity transfer of an asset, other than inventory, to be recognized at the time that the transfer occurs, rather than when the asset is sold to an outside party. The new guidanceASU is effective for annual ~~and interim~~ reporting periods beginning after December 15, ~~2017. Early~~2021, including interim reporting periods within those annual periods, with early adoption is permitted ~~as of~~no earlier than the fiscal year beginning ~~of an annual period for which financial statements have not been issued.~~after December 15, 2020. The guidance is ~~required to be adopted retrospectively by recording a cumulative-effect adjustment to retained earnings as of the beginning of the adoption period. The adoption of this newly issued guidance is not~~ expected to have an impact on our consolidated financial statements given the recent issuance of convertible notes, however, we are still evaluating the extent of the impact of the new guidance on our consolidated financial statements.

Reclassifications

For the year ended December 31, 2020, we separately presented Amortization of debt discounts and premiums, which includes amortization of commercial paper notes discount, in our consolidated statements of cash flows. As a result, the prior year amortization amounts were reclassified from Other, net within Operating Activities to conform to the current year presentation. Also for the year ended December 31, 2020, we no longer separately presented Proceeds from exercise of common stock options in our consolidated statements of cash flows. As a result, the prior year amounts were reclassified to Other, net within Financing Activities to conform to the current year presentation.

Note 3. Business Combination

On July 31, 2018, we acquired a 66.7% equity stake ("the 2018 acquisition") in Silversea Cruise Holding Ltd. ("Silversea Cruises"), an ultra-luxury and expedition cruise line, from Heritage Cruise Holding Ltd. ("Heritage"), previously known as Silversea Cruises Group Ltd.

The purchase price for the 2018 acquisition consisted of $1.02 billion in cash, net of assumed liabilities, and contingent consideration due to Heritage for which any obligation was terminated upon our acquisition of the noncontrolling interest in 2020. The fair value of the contingent consideration at the time of the 2018 acquisition was $44.0 million. Changes to the fair value of the contingent consideration were recorded in our results of operations, if any, in the period of the change prior to its termination. Refer to Note 18. Fair Value Measurements and Derivative Instruments for further information on the valuation of the contingent consideration.

To finance a portion of the 2018 acquisition purchase price, we drew in full on a $700 million unsecured credit agreement and the remainder of the transaction consideration was financed through the use of our revolving credit facilities.

We have accounted for the Silversea Cruises acquisition under the provisions of ASC 805, Business Combinations. The purchase price for the 2018 acquisition was allocated based on estimates of the fair value of assets acquired and liabilities assumed at the acquisition date, with the excess allocated to goodwill. Goodwill is not deductible for tax purposes and consisted primarily of the opportunity to expand our cruise operations in strategic growth areas. Our purchase price allocation was final during 2019. There were no material ~~impact~~measurement period adjustments recorded for the year ended December 31, 2019.

On July 9, 2020, we acquired the remaining 33.3% interest in Silversea Cruises that we did not already own (the "noncontrolling interest") from Heritage. As a result of the acquisition of the noncontrolling interest, Silversea Cruises is now a wholly owned cruise brand. As consideration for our acquisition of the noncontrolling interest, we issued to Heritage 5.2 million shares of common stock, par value $0.01 per share, of Royal Caribbean Cruises Ltd. Pursuant to the agreement governing the acquisition of the noncontrolling interest, among other things, the parties terminated any existing obligation to issue Heritage any contingent consideration, at fair value, in connection with the 2018 acquisition. The share purchase did not result in a change of control. The purchase was accounted for as an equity transaction and no gain or loss was recognized in earnings. Refer to Note 11. Redeemable Noncontrolling Interest to our consolidated financial ~~statements.~~statements under Item 8. Financial Statements and Supplementary Data for further information regarding our acquisition of the noncontrolling interest.

For reporting purposes, we included Silversea Cruises’ results of operations on a three-month reporting lag from October 1, 2019 through September 30, 2020 in our consolidated results of operations for the year ended December 31, 2020; from October 1, 2018 through September 30, 2019 in our consolidated results of operations for the year ended December 31, 2019 and from the July 31, 2018 date of acquisition through September 30, 2018 in our consolidated results of operations for the year ended December 31, 2018. We have included Silversea Cruises' balance sheets as of September 30, 2020 and 2019 in our consolidated balance sheets as of December 31, 2020 and 2019, respectively. Refer to Note 1. General for further information on this three-month reporting lag.

~~Service Concession Arrangements~~

Note 4. Revenues

~~In May 2017, amended GAAP guidance was issued to clarify who should be viewed~~Revenue Recognition

Revenues are measured based on consideration specified in our contracts with customers and are recognized as the customer under service concession arrangements. A service concession arrangement is an arrangement under which a public sector entity (“grantor”), such as a Port Authority, grants a private entity (“operator”), such as the Company, the right to operate the grantor's infrastructure for a specified period of time. The amended guidance will require the Company to evaluate the relationship with the grantor and identify the multiplerelated performance obligations that may exist under these concession arrangements, including consideration of construction services that may be performed, operational services, and any other maintenance or ancillary services performed under the service concession. In addition, the amended guidance will require that all revenue streams identified under such arrangements be evaluated with the grantor as the customer, irrespective of whether some of the revenues are paid by third-party users of the infrastructure under concession. The clarification will enable a more consistent application of the new Revenue from Contracts with Customers guidance, which along with this clarification guidance, will be effective for our annual reporting period beginning after December 15, 2017, including interim periods therein. This guidance must be applied using one of two retrospective application methods. The adoption of this newly issued guidance is not expected to have a material impact to our consolidated financial statements.

~~Derivatives and Hedging~~

In August 2017, amended GAAP guidance was issued to simplify and improve the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements. In addition to changes in designation and measurement for qualifying hedge relationships, the guidance requires an entity to report the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported. As a result, hedge ineffectiveness will no longer be separately measured or reported. This guidance will be effective for our annual reporting period beginning after December 15, 2018, including interim periods therein. Early adoption is permitted in any interim period after issuance of this guidance. All transition

satisfied.

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~~requirements and elections should be applied to hedging relationships existing on the date~~The majority of ~~adoption. The effect of the adoption should be reflected as of the beginning of the fiscal year of adoption. We plan to early adopt this guidance~~our revenues are derived from passenger cruise contracts which are reported within Passenger ticket revenues in ~~the first quarter of 2018. The adoption for this newly issued guidance is not expected to have a material impact on~~ our consolidated ~~financial statements.~~statements of comprehensive income (loss). Our performance obligation under these contracts is to provide a cruise vacation in exchange for the ticket price. We satisfy this performance obligation and recognize revenue over the duration of each cruise, which generally range from two to 24 nights.

~~Reclassifications~~

~~For~~Passenger ticket revenues include charges to our guests for port costs that vary with passenger head counts. These type of port costs, along with port costs that do not vary by passenger head counts, are included in our operating expenses. The amounts of port costs charged to our guests and included within Passenger ticket revenues on a gross basis were $125.0 million,$666.8 million and $611.4 million for the ~~year~~years ended December 31, ~~2016, restructuring charges~~2020, 2019 and 2018, respectively.

Our total revenues also include Onboard and other revenues, which consist primarily of ~~$8.5 million~~revenues from the sale of goods and services onboard our ships that are not included in passenger ticket prices. We receive payment before or concurrently with the transfer of these goods and services to passengers during a cruise and recognize revenue at the time of transfer over the duration of the related cruise.

As a practical expedient, we have omitted disclosures on our remaining performance obligations as the duration of our contracts with customers is less than a year.

Disaggregated Revenues

The following table disaggregates our total revenues by geographic regions where we provide cruise itineraries (in thousands):


	Year Ended December 31,
	2020		2019		2018
Revenues by itinerary
North America(1)	$	1,342,429	$	6,392,354	$	5,399,951
Asia/Pacific(2)	411,865		1,529,898		1,463,083
Europe(3)	18,604		1,942,057		1,914,549
Other regions	241,590		567,904		348,145
Total revenues by itinerary	2,014,488		10,432,213		9,125,728
Other revenues(4)	194,317		518,448		368,121
Total revenues	$	2,208,805	$	10,950,661	$	9,493,849

(1)Includes the United States, Canada, Mexico and the Caribbean.

(2)Includes Southeast Asia (e.g., Singapore, Thailand and the Philippines), East Asia (e.g., China and Japan), South Asia (e.g., India and Pakistan) and Oceania (e.g., Australia and Fiji Islands) regions.

(3)Includes European countries (e.g., the Nordics, Germany, France, Italy, Spain and the United Kingdom).

(4)Includes revenues primarily related to cancellation fees, vacation protection insurance and pre- and post-cruise tours and fees for operating certain port facilities. Amounts also include revenues related to our bareboat charter, procurement and management related services we perform on behalf of our unconsolidated affiliates. Refer to Note 8. Other Assets for more information on our unconsolidated affiliates.

Passenger ticket revenues are attributed to geographic areas based on where the reservation originates. For the years ended December 31, 2020, 2019 and 2018, our guests were sourced from the following areas:


	Year Ended December 31,
	2020		2019		2018
Passenger ticket revenues:
United States	67	%	65	%	61	%
United Kingdom	7	%	9	%	10	%

All other countries (1)	26	%	26	%	29	%

(1)No other individual country's revenue exceeded 10% for the years ended December 31, 2020, 2019 and 2018.

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Customer Deposits and Contract Liabilities

Our payment terms generally require an upfront deposit to confirm a reservation, with the balance due prior to the cruise. Deposits received on sales of passenger cruises are initially recorded as Customer deposits in our consolidated balance sheets and subsequently recognized as passenger ticket revenues during the duration of the cruise. Additionally, refunds payable to guests who have elected cash refunds for cancelled sailings are recorded in Accounts Payable. ASC 606, Revenues from Contracts with Customers, defines a “contract liability” as an entity’s obligation to transfer goods or services to a customer for which the entity has received consideration from the customer. We do not consider customer deposits to be a contract liability until the customer no longer retains the unilateral right, resulting from the passage of time, to cancel such customer's reservation and receive a full refund.

The current reduction in demand for cruising due to the COVID-19 pandemic has resulted in an unprecedented low level of advance bookings and the associated customer deposits received. At the same time, we experienced significant cancellations beginning in the second half of March 2020, which has led to issuance of refunds to customers, while other customers have been ~~reclassified~~rebooked on future cruises or received credits in lieu of cash refunds.

As of December 31, 2020, refunds due to customers mostly as a result of booking cancellations were $95.8 million compared to $9.8 million as of December 31, 2019 and are included within Accounts payable in our consolidated balance sheets. Customer deposits also include deposits related to cancelled cruises prior to the election of a cash refund by guests. Due to the uncertainty around our return to sailing and the future demand for cruising, we are unable to estimate the amount of the December 31, 2020 customer deposits that will be recognized in earnings compared to amounts that will be refunded to customers or issued as a credit for future travel through the end of 2021. Customer deposits presented in our consolidated balance sheets include contract liabilities of $124.8 million and $1.7 billion as of December 31, 2020 and December 31, 2019, respectively.

Contract Receivables and Contract Assets

Although we generally require full payment from ~~Restructuring charges~~ ~~into~~ ~~Marketing, selling~~our customers prior to their cruise, we grant credit terms to a relatively small portion of our revenue sourced in select markets outside of the United States. As a result, we have outstanding receivables from passenger cruise contracts in those markets. We also have receivables from credit card merchants for cruise ticket purchases and ~~administrative~~goods and services sold to guests during cruises that are collected before, during or shortly after the cruise voyage. In addition, we have receivables due from concessionaires onboard our vessels. These receivables are included within Trade and other receivables, net in our consolidated balance sheets.

We have contract assets that are conditional rights to consideration for satisfying the construction services performance obligations under a service concession arrangement. As of December 31, 2020 and 2019, our contract assets were $53.7 million and $55.5 million, respectively, and were included within Other assets in our consolidated balance sheets. Given the short duration of our cruises and our collection terms, we do not have any other significant contract assets.

Assets Recognized from the Costs to Obtain a Contract with a Customer

Prepaid travel agent commissions are an incremental cost of obtaining contracts with customers that we recognize as an asset and include within Prepaid expenses and other assets in ~~the~~our consolidated balance sheets. Prepaid travel agent commissions were $1.1 million and $163.2 million as of December 31, 2020 and 2019, respectively. Our prepaid travel agent commissions at December 31, 2019 were expensed and reported primarily within Other operating in our consolidated statements of comprehensive income (loss) during the year ended December 31, 2020.

Note 5. Goodwill

The impact of COVID-19 on our operating plans and projected cash flows resulted in ~~order~~the completion of interim impairment assessments in respect of certain reporting units as of March 31, 2020 and June 30, 2020, in addition to ~~conform~~our annual goodwill impairment assessment performed as of November 30, 2020. Refer to Note 1. General for further information regarding COVID-19 and its impact to the ~~current year presentation.~~Company.

As a result of our evaluations, we determined that the fair value of the Royal Caribbean International reporting unit exceeded its carrying value as of March 31, 2020 and June 30, 2020 by approximately 30% and 8%, respectively, resulting in no impairment to the Royal Caribbean International goodwill in those periods. We did not perform an interim impairment evaluation of Royal Caribbean International's goodwill during the quarter ended September 30, 2020 as no triggering events were identified. In respect to the Silversea Cruises reporting unit, we determined the carrying value of the reporting unit

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exceeded its fair value as of March 31, 2020. Accordingly, we recognized a goodwill impairment charge of $576.2 million for the quarter ended March 31, 2020. We did not perform interim impairment evaluations of Silversea Cruises' reporting unit during the quarters ended June 30, 2020 and September 30, 2020 as no triggering events were identified.

As of November 30, 2020, we performed our annual goodwill impairment reviews and determined no incremental impairment losses existed at the date of this annual assessment. We determined the fair value of the Royal Caribbean International and Silversea Cruises reporting units exceeded their carrying values by approximately 14% and 12% respectively at the date of this annual assessment.

The suspension of operations, as further discussed in Note 3.~~Goodwill~~1. General, and possibility of further suspensions create uncertainty in forecasting operating cash flows. The fair value of the Royal Caribbean International reporting unit as of March 31, 2020 was determined using a discounted cash flow model and a probability-weighted discounted cash flow model in combination with a market based valuation approach for the June 30, 2020 and November 30, 2020 assessments. For the Silversea reporting unit a probability-weighted discounted cash flow model in combination with a market based valuation approach was used for all periods assessed. This requires the use of assumptions that are subject to risk and uncertainties. The principal assumptions used in the discounted cash flow analyses that support our Royal Caribbean International and Silversea Cruises reporting unit impairment assessments consisted of:

•The timing of our return to service, changes in market conditions and port or other restrictions;

•Forecasted net revenues, primarily the timing of returning to normalized operations, occupancy rates from existing and expected ship deliveries, including options, and terminal growth rate; and

•Weighted average cost of capital (i.e., discount rate).

The adverse impact COVID-19 will continue to have on our business, operating results, cash flows and overall financial condition is uncertain and may result in changes to the assumptions used in the impairment tests discussed above, which may result in impairments to these assets in the future.

The carrying ~~amount~~value of goodwill attributable to our Royal Caribbean International, Celebrity Cruises and ~~Celebrity~~Silversea Cruises reporting units and the changes in such balances during the years ended December 31, ~~2017~~2020 and ~~December 31, 2016~~2019 were as follows (in thousands):

Royal
Caribbean
International Celebrity Cruises Total
Balance at December 31, 2015 $ 286,764
$ —
$ 286,764
Goodwill attributable to purchase of Ocean Adventures⁽¹⁾
—
1,600
1,600
Foreign currency translation adjustment (10 ) 32
22
Balance at December 31, 2016 286,754
1,632
288,386
Foreign currency translation adjustment 126
—
126
Balance at December 31, 2017 $ 286,880
$ 1,632
$ 288,512


	Royal Caribbean International		Celebrity Cruises		Silversea Cruises		Total
Balance at December 31, 2018	$	286,711	$	1,632	$	1,090,010	$	1,378,353

Silversea Goodwill adjustment (1)	0		0		(5,224)		(5,224)
Goodwill attributable to the purchase of photo operation onboard our ships (2)	12,518		0		0		12,518
Foreign currency translation adjustment	(3)		0		0		(3)
Balance at December 31, 2019	299,226		1,632		1,084,786		1,385,644
Impairment charge	0		0		(576,208)		(576,208)
Transfer of goodwill attributable to the 2019 purchase of photo operations onboard our ships	(2,694)		2,694		0		0
Foreign currency translation adjustment	44		0		0		44
Balance at December 31, 2020	$	296,576	$	4,326	$	508,578	$	809,480

~~(1)~~

~~In 2016, we purchased Ocean Adventures.~~

(1)In 2018, we acquired a 66.7% equity stake in Silversea Cruises. Our controlling interest purchase price allocation was final during 2019. In 2020, we acquired the remaining 33.3% minority interest, making Silversea Cruises a wholly owned brand. Refer to Note 1. General, Note 3. Business Combination, and Note 11. Redeemable Noncontrolling Interest for further information.

(2)In 2019, we purchased the photo operations onboard our ships from our former concessionaire. The acquisition was accounted for as a business purchase combination using the purchase method of accounting which requires the use of ~~fair value measurements. The business combination, including purchase transaction and assets acquired, was immaterial to our consolidated financial statements.~~

~~During the fourth quarter of 2017, we performed a qualitative assessment of whether it was more-likely-than-not that our Royal Caribbean International reporting unit's~~ fair value measurements. The business combination, including purchase transaction and assets acquired, was less than its carrying amount before applying the two-step goodwill impairment test. The qualitative analysis included assessing the impact of certain factors such as general economic conditions, limitations on accessing capital, changes in forecasted operating results, changes in fuel prices and fluctuations in foreign exchange rates. Based onimmaterial to 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. No indicators of impairment exist primarily because the reporting unit's fair value has consistently exceeded its carrying value by a significant margin and forecasts of operating results generated by the reporting unit appear sufficient to support its carrying value. As a result of our assessment, we did not record an impairment of goodwill for the year ended December 31, 2017.consolidated financial statements.

~~For the year ended December 31, 2016, we did not record an impairment of goodwill for our reporting units.~~

During the fourth quarter of 2015, we performed our annual impairment review of goodwill for the Royal Caribbean International reporting unit. We elected to bypass the qualitative assessment and proceeded directly to step one of the two-step goodwill impairment test to corroborate the results of prior years' qualitative assessments. As a result of the test, we determined the fair value of the Royal Caribbean International reporting unit exceeded its carrying value by approximately 90% resulting in no impairment to the Royal Caribbean International goodwill for the year ended December 31, 2015.

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In 2015, for our Pullmantur reporting unit, we reviewed the two-step goodwill impairment test based on our cash flow projections. As a result of this analysis, we determined that the carrying value of the Pullmantur reporting unit exceeded its fair value. Accordingly, upon the completion of the two-step impairment test, we recognized a goodwill impairment charge of $123.8 million. The charge reflected the full carrying amount of the goodwill leaving Pullmantur with no goodwill on its books. This impairment charge was recognized in earnings during the third quarter of 2015 and is reported within ~~Impairment of Pullmantur related assets~~ ~~within our consolidated statements of comprehensive income (loss).~~

Note 4.6.Intangible Assets

Intangible assets consist of finite and indefinite life assets and are reported in within Other assets in our consolidated balance sheets.

The ~~carrying amount~~impact of ~~indefinite-life intangible assets was not material for~~COVID-19 on our operating plans and projected cash flows resulted in the ~~years ended December 31, 2017 and December 31, 2016.~~

~~During the third quarter~~completion of ~~2015, we performed~~ an interim impairment assessment for the Silversea Cruises trade name as of March 31, 2020, in addition to our annual indefinite-lived intangible asset impairment assessment performed as of November 30, 2020. Refer to Note 1. General for further information regarding COVID-19 and its impact to the Company.

As a result of our evaluation, we determined the carrying value of ~~Pullmantur's trademarks~~the Silversea Cruises trade name exceeded its fair value as of March 31, 2020. Accordingly, we recognized an impairment charge of $30.8 million for the quarter ended March 31, 2020. We did not perform interim impairment evaluations of Silversea Cruises' trade name during the quarters ended June 30, 2020 and September 30, 2020 as no triggering events were identified.

As of November 30, 2020, we performed our annual trade ~~names~~name impairment review and determined no incremental impairment losses existed at the date of this annual assessment. We determined the fair value of the Silversea Cruises trade name exceeded its carrying value by approximately 3% at the date of this annual assessment. The adverse impact COVID-19 will continue to have on our business, operating results, cash flows and overall financial condition is uncertain and may result in changes to the assumptions used in the impairment tests discussed above. In addition, further suspension beyond 2021 or changes to our planned ship deliveries could adversely impact our expected occupancy rates and may result in additional impairment charges of the Silversea Cruises trade name in the future.

The suspension of operations, as further discussed in Note 1. General, and possibility of further suspensions create uncertainty in forecasting operating cash flows. The determination of our trade name fair values using a discounted cash flow model and various valuation methods depending on the nature of the intangible asset, such as the relief-from-royalty method, require the use of assumptions that are subject to ~~compare~~risk and uncertainties. The principal assumptions used in the ~~fair value~~discounted cash flow analyses that support the Silversea Cruises trade name impairment assessments consisted of:

•Forecasted net revenues, primarily the timing of ~~these indefinite-lived~~returning to normalized operations, occupancy rates from existing and expected ship deliveries, including options, and terminal growth rate;

•Royalty rate; and

•Weighted average cost of capital (i.e., discount rate).

The following is a summary of our intangible assets to its carrying value. We used a discount rate comparable to the rate used in valuing the Pullmantur reporting unit in our goodwill impairment test. Based on our cash flow projections, we determined that the fair value of Pullmantur’s trademarks and trade names no longer exceeded their carrying value. Accordingly, we recognized an impairment charge of approximately $174.3 million to write down trademarks and trade names to their fair value. The charge reflected the full carrying amount of the trademark and trade names leaving Pullmantur with no intangible assets on its books. This impairment charge was recognized in earnings during the third quarter of 2015 and is reported within ~~Impairment of Pullmantur related assets~~ ~~within our consolidated statements of comprehensive income (loss).~~

~~Finite-life intangible assets had a gross carrying amount and accumulated amortization amount of $11.6 million and $3.7 million, respectively,~~ as of December 31, ~~2017, consisting~~2020 (in thousands, except weighted average amortization period), with Silversea Cruises' trade name representing approximately $318.7 million of ~~operating licenses~~the indefinite-lived intangible asset balance:


	As of December 31, 2020
	Remaining Weighted Average Amortization Period (Years)	Gross Carrying Value		Accumulated Amortization		Accumulated Impairment Losses		Net Carrying Value
Finite-life intangible assets:
Customer relationships	12.8	$	97,400	$	14,069	$	0	$	83,331
Galapagos operating license	23.8	47,669		7,621		0		40,048
Other finite-life intangible assets	0	11,560		11,560		0		0
Total finite-life intangible assets		156,629		33,250		0		123,379
Indefinite-life intangible assets (1)		352,275		—		30,800		321,475
Total intangible assets, net		$	508,904	$	33,250	$	30,800	$	444,854

(1) Primarily relates to ~~operate in~~ the ~~Galapagos Islands. As~~Silversea Cruises trade name.

The following is a summary of our intangible assets as of December 31, ~~2017, the remaining~~2019 (in thousands, except weighted average ~~remaining life~~amortization period):

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)


	As of December 31, 2019
	Remaining Weighted Average Amortization Period (Years)	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Finite-life intangible assets:
Customer relationships	13.8	$	97,400	$	7,576	$	89,824
Galapagos operating license	24.7	47,669		6,010		41,659
Other finite-life intangible assets	0.8	11,560		6,743		4,817
Total finite-life intangible assets		156,629		20,329		136,300
Indefinite-life intangible assets (1)		352,275		—		352,275
Total intangible assets, net		$	508,904	$	20,329	$	488,575

(1) Primarily relates to the Silversea Cruises trade name.

The estimated future amortization for finite-life intangible assets ~~was immaterial to our consolidated financial statements.~~for each of the next five years is as follows (in thousands):


Year

2021	$	8,179
2022	$	8,179
2023	$	8,179
2024	$	8,179
2025	$	8,179

Note 5.7. Property and Equipment

Property and equipment consists of the following (in thousands):


	As of December 31,
	2020		2019
Ships	$	29,872,655	$	28,348,088
Ship improvements	2,108,922		3,920,800
Ships under construction	1,078,243		1,110,962
Land, buildings and improvements, including leasehold improvements and port facilities	524,849		472,067
Computer hardware and software, transportation equipment and other	1,678,903		1,698,007
Total property and equipment	35,263,572		35,549,924
Less—accumulated depreciation and amortization(1)	(10,016,977)		(10,083,116)
	$	25,246,595	$	25,466,808

2017 2016
Ships $ 23,714,745
$ 23,978,822
Ship improvements 2,410,525
2,359,639
Ships under construction 642,235
354,425
Land, buildings and improvements, including leasehold improvements and port facilities 250,079
341,605
Computer hardware and software, transportation equipment and other 762,512
1,108,301
Total property and equipment 27,780,096
28,142,792
Less—accumulated depreciation and amortization (8,044,916 ) (7,981,365 )
$ 19,735,180
$ 20,161,427
(1)Amount includes accumulated depreciation and amortization for assets in service.

Ships under construction include progress payments for the construction of new ships as well as planning, design, capitalized interest and other associated costs. We capitalized interest costs of ~~$24.2~~$59.1 million, ~~$25.3~~$56.5 million and ~~$26.5~~$49.6 million for the years ~~2017, 2016~~ended December 31, 2020, 2019 and ~~2015,~~2018, respectively.

During ~~2017,~~2020, we ~~sold our three aircraft and 6%~~took delivery of ~~our ownership stake in Wamos Air, S.A. (formerly known as Pullmantur Air, S.A.)~~Celebrity Apex, Silver Origin and Silver Moon. Refer to ~~Wamos Air, S.A. In connection with the sale transaction, we extended two loans to Wamos Air, S.A. totaling €17.3 million, or approximately $20.8 million based~~Note 9. Debt for further information on the ~~exchange rate at~~financings for Celebrity Apex and Silver Moon. The October 2020 Silversea Cruises delivery and related financing for the Silver Moon was reported in our consolidated financial statements as of and for the year ended December 31, ~~2017. The loans accrue interest at rates ranging from 4.78%~~2020, regardless of the three month reporting lag for Silversea Cruises, due to ~~5.35% per annum, amortize through maturity~~the materiality of ~~October 2019 and July 2021, respectively, and are secured by first priority security interests over~~ the ~~aircraft engines and shares sold~~

transaction.

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During the first quarter 2020, we determined that the lease for Silver Explorer, operated by Silversea Cruises and previously classified as a finance lease, was an operating lease based on modification of the terms of the lease. Accordingly, Silver Explorer is included within Operating lease right-of use assets, Current portion of operating lease liabilities, and Long term lease liabilitiesin ~~connection with the transaction. The sale resulted in an immaterial gain that was recognized in earnings during the fourth quarter of 2017. Post-sale, we retain a 13% interest in Wamos Air, S.A.~~

~~During 2017, we entered into agreements with Meyer Turku to build two Icon-class ships for~~ our ~~Royal Caribbean International brand and we entered into an agreement to purchase a ship for our Azamara Club Cruises brand.~~consolidated balance sheets. Refer to Note ~~15.~~ ~~Commitments and Contingencies~~10. Leases for further information.

During 2019, we took delivery of Spectrum of the Seas and Celebrity Flora. Refer to Note 9. Debt for further information. During 2019 Silversea Cruises terminated the operating lease for Silver Discover.

~~In March 2017,~~Long-lived Assets impairments

We review our long-lived assets for impairment whenever events or circumstances indicate potential impairment losses exist. The impact of COVID-19 on our expected future operating cash flows, as well as decisions to dispose of certain vessels, resulted in the identification of impairment triggers for certain vessels. Refer to Note 1. General for further information regarding COVID-19 and its impact to the Company.

We estimated the recoverability of certain vessels using undiscounted cash flow analyses at interim dates throughout 2020 and again at December 31,2020. A number of vessels were found to have net carrying values in excess of their estimated undiscounted future cash flows and, as such, were subject to fair value assessments. Fair value was determined based on our intended use of the identified vessels and, as such, we used a combination of discounted cash flows, replacement cost, scrap and residual value techniques to estimate fair value. Differences between the estimated fair values and the net carrying values were recorded as an impairment charge within the period the loss was identified. Consequently, we recorded $635.5 million of impairment losses during the year ended 2020. Included in this amount are $171.3 million impairment losses recorded for the 3 ships that we chartered to Pullmantur Holdings, prior to its filing for reorganization. Refer to Note 8. Other Assets for further information regarding Pullmantur's reorganization. During the quarter ended September 30, 2020, we sold ~~Legend~~the ships previously chartered to Pullmantur Holdings to third parties for amounts approximating their carrying values and no further impairment was recorded. Also included in the $635.5 million impairment loss for the year ended December 31, 2020, is a $166.8 million impairment charge for the 3 Azamara ships to be included in the sale of the ~~Seas~~Azamara brand that is expected to close in the first quarter of 2021.

The suspension of operations, as discussed in Note 1. General, and the possibility of further suspensions create uncertainty in forecasting undiscounted cash flows, which are used to determine if a vessel is at risk of impairment and in estimating the fair value of our ships. Our principal assumptions used in our undiscounted cash flows consisted of:

•The timing of our return to service, changes in market conditions and port or other restrictions;

•Forecasted net revenues, primarily the timing of returning to normalized operations, and occupancy rates; and

•Intended use of the vessel for the remaining useful life.

During the year ended December 31, 2020, we also determined that certain construction in progress projects would be reduced in scope or would no longer be completed as a result of our capital cost containment measures in response to the COVID-19 impact on our liquidity. This led to an ~~affiliate~~impairment charge of ~~TUI AG, our joint venture partner~~$91.5 million of construction in ~~TUI Cruises. The sale resulted in a gain of $30.9 million and is~~progress assets.

These impairment charges were reported within ~~Other operating~~ ~~within~~ ~~Cruise operating expenses~~Impairment and Credit Losses in our consolidated statements of comprehensive ~~income~~ (loss) ~~for the year ended December 31, 2017.~~income.

~~During 2016, we sold our 51% interest in Pullmantur Holdings. For further information on the sale transaction, refer to~~ Note 1. ~~General~~8. Due to this sale and the resulting change in the nature of the cash flows generated by the vessels that are owned by us and operated by Pullmantur Holdings, we reviewed these vessels for impairment and determined that the undiscounted future cash flows of the vessels exceeded their carrying value; therefore, no impairment was required at the time of the sale.

~~In April 2016, we sold~~ ~~Splendour of the Seas~~ to TUI Cruises. Concurrent with the acquisition, TUI Cruises leased the ship to an affiliate of TUI AG, our joint venture partner in TUI Cruises, which now operates the ship. The gain recognized did not have a material effect to our consolidated financial statements.

During 2015, in conjunction with performing the two-step goodwill impairment test for the Pullmantur reporting unit, we identified that the estimated fair value of certain long-lived assets, consisting of two ships and three aircraft were less than their carrying values. As a result of this determination, we evaluated these assets pursuant to our long-lived asset impairment test, resulting in an impairment charge of $113.2 million to write down these assets to their estimated fair values. This impairment charge was recognized in earnings during the third quarter of 2015 and is reported within ~~Impairment of Pullmantur related assets~~ ~~within our consolidated statements of comprehensive income (loss).~~

~~During 2015, Pullmantur sold~~ ~~Ocean Dream~~ to an unrelated third-party for $34.6 million. The purchase price was paid via a secured promissory note, payable over a nine-year period. The buyer's obligations under this loan accrue interest at the rate of 6.0% per annum and are secured by a first priority mortgage on the ship. The sale resulted in an immaterial gain that was deferred and is expected to be recognized at the end of the nine-year term.

~~Note 6.~~Other Assets

A Variable Interest Entity ("VIE") is an entity in which the equity investors have not provided enough equity to finance the entity's activities or the equity investors (1) cannot directly or indirectly make decisions about the entity's activities through their voting rights or similar rights; (2) do not have the obligation to absorb the expected losses of the entity; (3) do not have the right to receive the expected residual returns of the entity; or (4) have voting rights that are not proportionate to their economic interests and the entity's activities involve or are conducted on behalf of an investor with a disproportionately small voting interest.

We have determined that TUI Cruises GmbH ("TUIC"), our 50%-owned joint venture, which operates the ~~brand~~brands TUI Cruises and Hapag-Lloyd Cruises, is a VIE. We have determined that we are not the primary beneficiary of TUIC. We believe that the power to direct the activities that most significantly impact TUIC’s economic performance are shared between ourselves and TUI AG, our joint venture partner. All the significant operating and financial decisions of TUIC require the

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ROYAL CARIBBEAN CRUISES LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

consent of both parties, which we believe creates shared power over TUIC. Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting.

On June 30, 2020, TUIC acquired Hapag-Lloyd Cruises, a luxury and expedition brand for German-speaking guests, from TUI AG for approximately €1.2 billion, or approximately $1.3 billion as of the purchase date. Hapag-Lloyd Cruises operates 2 luxury liners and 2 smaller expedition ships. We and TUI AG each made an equity contribution of €75.0 million, or approximately $84.2 million to TUIC to fund a portion of the purchase price, the remainder of which was financed by third-party financing.

As of December 31, ~~2017,~~2020, the net book value of our investment in ~~TUI Cruises~~TUIC was ~~approximately $624.5~~$538.4 million, primarily consisting of ~~$422.8~~$387.5 million in equity and a loan of ~~€166.5~~€118.9 million, or approximately ~~$199.8~~$145.5 million, based on the exchange rate at December 31, ~~2017.~~2020. As of December 31, ~~2016,~~2019, the net book value of our investment in ~~TUI Cruises~~TUIC was ~~approximately $517.0~~$598.1 million, primarily consisting of ~~$323.5~~$443.1 million in equity and a loan of ~~€182.3~~€133.2 million, or approximately ~~$192.4~~$149.5 million, based on the exchange rate at December 31, ~~2016.~~2019. The loan, which was made in connection with the sale of Splendour of the Seas in April 2016, accrues interest at a rate of 6.25% per annum and is payable over 10 years. This loan is 50% guaranteed by TUI AG ~~our joint venture partner in TUI Cruises,~~ and is secured by a first priority mortgage on the ship. ~~Refer to Note 5.~~ ~~Property and Equipment~~ ~~for further information.~~ The majority of these amounts were included within Other assets in our consolidated balance sheets.

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~~ROYAL CARIBBEAN CRUISES LTD.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

In addition, we and TUI AG have each guaranteed the repayment by TUI Cruises of 50% of a bank loan. As of December 31, 2017, the outstanding principal amount of the loan was €95.1 million, or approximately $114.2 million based on the exchange rate at December 31, 2017. While this loan matures in May 2022, the lenders have agreed to release each shareholder's guarantee if certain conditions are met by April 2018. The loan amortizes quarterly and is secured by first mortgages on the ~~Mein Schiff 1~~ ~~and Mein Schiff 2~~ ~~vessels. Based on current facts and circumstances, we do not believe potential obligations under our guarantee of this bank loan are probable.~~

Our investment amount, outstanding term loan and the potential obligations under the bank loan guarantee are substantially our maximum exposure to loss in connection with our investment in TUI Cruises. We have determined that we are not the primary beneficiary of TUI Cruises. We believe that the power to direct the activities that most significantly impact TUI Cruises’ economic performance are shared between ourselves and TUI AG. All the significant operating and financial decisions of TUI Cruises require the consent of both parties, which we believe creates shared power over TUI Cruises. Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting.

~~TUI Cruises~~ TUIC has two newbuild ships on order scheduled to be delivered in each of 2018 and 2019. TUI Cruises has in place agreements for the secured financing of each of the ships on order for up to 80% of the contract price. The remaining portion of the contract price of the ships is expected to be funded through an existing €150.0 million, or approximately $180.1 million based on the exchange rate at December 31, 2017, bank facility and TUI Cruises’ cash flows from operations. The various ship construction and financing agreements which include certain restrictions on each of our and TUI AG’s ability to reduce our current ownership interest in ~~TUI Cruises~~TUIC below 37.55% through ~~2021.~~May 2033. Our investment amount and outstanding term loan are substantially our maximum exposure to loss in connection with our investment in TUIC.

In March 2009, we sold Celebrity Galaxy to TUI Cruises for €224.4 million, or $290.9 million as of the sale date, to serve as the original Mein Schiff 1. Due to the related party nature of this transaction, the gain on the sale of the ship of $35.9 million was deferred and was being recognized over the remaining life of the ship which was estimated to be 23 years. In April 2018, TUI Cruises sold the original Mein Schiff 1 and as a result we accelerated the recognition of the remaining balance of the deferred gain, which was $21.8 million. This amount is included within Other income (expense) in our consolidated statements of comprehensive income (loss) for the year ended December 31, 2018.

We ~~have~~ determined that Pullmantur Holdings, in which we have a 49% noncontrolling interest and Springwater Capital LLC has a 51% interest, is a VIE for which we are not the primary beneficiary as we do not have the power to direct the activities that most significantly impact the entity's economic performance. ~~Accordingly, following the sale of our 51% interest in~~In 2020, Pullmantur Holdings and certain of its subsidiaries filed for reorganization under the terms of the Spanish insolvency laws due to ~~Springwater Capital LLC ("Springwater") in 2016, we do not consolidate this entity and we account for this investment under~~the negative impact of the COVID-19 pandemic on the companies. We suspended the equity method of ~~accounting.~~ accounting for Pullmantur Holdings during the second quarter of 2020 as we do not intend to fund the entity's future losses and lost our ability to exert significant influence over the entity's activities as a result of the reorganization process.

In connection with the reorganization, we terminated the agreements chartering 3 of our ships to Pullmantur Holdings and sold the ships to third parties during the quarter ended September 30, 2020 for amounts approximating their carrying values. Refer to Note 7. Property and Equipment for further discussion on the impact of the ships' sale on our consolidated financial statements. In addition, we recognized a loss of $69.0 million within Other expense in our consolidated statements of comprehensive (loss) income, during the quarter ended June 30, 2020 representing deferred currency translation adjustment losses, net of hedging, as we no longer had significant involvement in the Pullmantur operation.

During the quarter ended June 30, 2020, we entered into an agreement with Springwater Capital LLC to settle the guarantees previously issued by them and for costs that we incurred as a result of Pullmantur S.A.'s reorganization. As part of this settlement, we agreed to provide Pullmantur guests the option to apply their paid deposits toward a Royal Caribbean International or Celebrity Cruises sailing, or request a cash refund. An amount of $21.6 million, approximating the estimated total cash refund expected to be paid to Pullmantur guests and other expenses incurred as part of the reorganization, was recorded in Other expense in our consolidated statements of comprehensive (loss) income for the quarter ended June 30, 2020.

As of December 31, ~~2017,~~2020, we did not have any exposure to credit loss in Pullmantur Holdings. As of December 31, 2019, our maximum exposure to loss in Pullmantur Holdings was ~~approximately $53.7 million consisting of loans and other receivables. As of December 31, 2016, our maximum exposure to loss in Pullmantur Holdings was approximately $43.7~~$49.7 million, consisting of loans and other receivables. These amounts were included within Trade and other ~~receivables,~~ receivables, net and Other assets in our consolidated balance sheets.

In conjunction with the sale of our 51% interest in Pullmantur Holdings, we agreed to provide a non-revolving working capital facility to a Pullmantur Holdings subsidiary in the amount of up to €15.0 million or approximately $18.0 million based on the exchange rate at December 31, 2017. Proceeds of the facility, which may be drawn through July 2018, will bear interest at the rate of 6.5% per annum and are payable through 2022. Springwater has guaranteed repayment of 51% of the outstanding amounts under the facility. As of December 31, 2017, no amounts had been drawn on this facility. See Note 1. ~~General~~ ~~for further discussion on the sales transaction.~~

We have determined that Grand Bahama Shipyard Ltd. ("Grand Bahama"), a ship repair and maintenance facility in which we have a 40% noncontrolling interest, is a VIE. This facility serves cruise and cargo ships, oil and gas tankers and offshore units. We utilize this facility, among other ship repair facilities, for our regularly scheduled drydocks, ship upgrades and certain emergency repairs as may be required. During the ~~year~~years ended December 31, ~~2017~~2020 and ~~2016,~~2019, we made payments of ~~$16.0 million~~$0.2 million. and ~~$39.8~~$45.7 million, respectively, to Grand Bahama for ship repair and maintenance services. We have determined

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ROYAL CARIBBEAN CRUISES LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

that we are not the primary beneficiary of this facility, as we do not have the power to direct the activities that most significantly impact the facility's economic performance. Accordingly, we do not consolidate this ~~entity and~~entity.

Given the impact of the COVID-19 pandemic to our business, we ~~account for this investment under the~~evaluated whether our equity method ~~of accounting. As of~~ ~~December~~investments were other than temporarily impaired. During the quarter ended March 31, ~~2017, the net book value of our investment in Grand Bahama was approximately $49.4 million, consisting of $32.4 million in equity and a loan of $17.0 million. As of~~ ~~December 31, 2016~~, the net book value of our investment in Grand Bahama was approximately $47.0 million, consisting of $23.2 million in equity and a loan of $23.8 million. These amounts represent our maximum exposure to loss related to2020, we performed an impairment evaluation on our investment in Grand Bahama. ~~During~~As a result of the ~~first quarter~~evaluation, we did not deem our investment balance to be recoverable and recorded an impairment charge of ~~2016,~~$30.1 million bringing our ~~debt agreement with~~investment balance to 0. The impairment assessment and the resulting charge on our equity method investment in Grand Bahama ~~was amended~~were determined based on management’s estimates and projections. We are currently recognizing our share of equity method losses against the carrying value of our loans receivable from Grand Bahama.

For further information on the measurements used to ~~extend~~estimate the ~~maturity by 10 years~~fair value of our equity investments, refer to Note 18. Fair Value Measurements and ~~increase the applicable~~Derivative Instruments.

As of December 31, 2020, we had exposure to credit loss in Grand Bahama consisting of $19.1 million in loans. Our loans to Grand Bahama mature between December 2020 and March 2026 and bear interest ~~rate to the lower~~

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~~ROYAL CARIBBEAN CRUISES LTD.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~of (i)~~at LIBOR plus ~~3.50% and (ii) 5.50%.~~2.0% to 3.75%, capped at 5.75% for the majority of the outstanding loan balance. Interest payable on the ~~loan~~loans is due on a semi-annual basis. We ~~have experienced strong payment performance on~~did not receive principal and interest payments during the ~~loan since its amendment, and as a result completed an evaluation and review of the loan resulting in a reclassification of the loan to accrual status as of October 2017.~~year ended December 31, 2020. During the year ended December 31, ~~2017,~~2019, we received principal and interest payments of ~~approximately $15.7 million. During the year ended December 31, 2016, we received payments of approximately $14.8~~$8.6 million. The loan ~~balance is~~balances are included within Trade and other receivables, net and Other assets in our consolidated balance sheets. ~~The loan is currently accruing interest under the effective yield method, which includes the recognition of previously unrecognized interest that accumulated while the loan was in non-accrual status.~~

We monitor credit risk associated with the ~~loan~~loans through our participation on Grand ~~Bahama's~~Bahama’s board of directors along with our review of Grand ~~Bahama's~~Bahama’s financial statements and projected cash flows. ~~Based on this review,~~Effective April 1, 2020, we~~believe the risk of loss associated with the outstanding loan is not probable as of December 31, 2017.~~

We have determined that Skysea Holding International Ltd. ("Skysea Holding"), in which we have a 36% noncontrolling interest, is a VIE. During the second quarter of 2017, we made an equity contribution of $7.1 million which increased our equity interest from 35% to 36%. The contribution was made pursuant to a funding arrangement in which the entity's three largest investors agreed to contribute a total of $30.0 million in proportion to their equity interest in a series of installments. We have determined that we are not the primary beneficiary of Skysea Holding as we do not have the power to direct the activities that most significantly impact the entity's economic performance. Accordingly, we do not consolidate this entity and we account for this investment under the equity method of accounting. In December 2014, we and Ctrip.com International Ltd, which also owns 36% of Skysea Holding, each provided a debt facility to a wholly owned subsidiary of Skysea Holding in the amount of $80.0 million, with an applicable interest rate of 6.5% per annum, which mature in January 2030. Due to recent payment performance, placed the loans ~~were classified to~~in non-accrual status ~~in 2017. The facilities, which are pari passu to each other, are each 100% guaranteed by Skysea Holding and are secured by first priority mortgages~~based on ~~the ship~~ ~~Golden Era.~~ As of December 31, 2017, the net book value of our investment in Skysea Holding and its subsidiaries was approximately $96.0 million, consisting of $4.4 million in equity and loans and other receivables of $91.6 million. As of December 31, 2016, the net book value of our investment in Skysea Holding and its subsidiaries was approximately $98.0 million, consisting of $9.2 million in equity and loans and other receivables of $88.8 million. The majority of these amounts were included within ~~Other assets~~ ~~in our consolidated balance sheets and represent our maximum exposure to loss related to our investment in Skysea Holding.~~

~~We monitor credit risk associated with the loan through our participation on Skysea Holding's board of directors along with~~ our review of ~~Skysea Holding's financial statements and~~Grand Bahama's projected cash ~~flows. Based on this review, webelieve~~flows which have been adversely affected by impacts to their operations caused by the ~~risk~~2019 crane accident related to Oasis of ~~loss associated with~~ the ~~outstanding loan is not probable as of~~Seas, Hurricane Dorian and most recently, COVID-19. During the year ended December 31, ~~2017.~~2020, no credit losses were recorded related to these loans.

In April 2019, Grand Bahama experienced an incident involving one of its drydocks where Oasis of the Seas was undergoing maintenance. The damage from the incident resulted in a write-off of the related drydock by Grand Bahama. Our equity investment income for the year ended December 31, 2019 reflects our equity share of the write-off and other incidental expenses. Grand Bahama's management is working with its insurance underwriter to determine coverage under their existing policies.

The following tables set forth information regarding our investments accounted for under the equity method of accounting, including the entities discussed above, (in thousands):


	Year ended December 31,
	2020		2019		2018
Share of equity (loss) income from investments	$	(213,286)	$	230,980	$	210,756
Dividends received (1)	$	2,215	$	150,177	$	243,101

For the period ended December 31,
2017 2016 2015
Share of equity income from investments $ 156,247
$ 128,350
$ 81,026
Dividends received $ 109,677
$ 75,942
$ 33,338

(1) For the year ended December 31, 2019, TUI Cruises paid us dividends totaling €170.0 million, or approximately $190.3 million, based on the exchange rates at the time of the transactions. The amounts included in the table above are net of tax withholdings.

As of December 31,
2017 2016
Total notes receivable due from equity investments $ 314,323
$ 323,636
Less-current portion⁽¹⁾
38,658
40,742
Long-term portion⁽²⁾
$ 275,665
$ 282,894


	As of December 31,
	2020		2019
Total notes receivable due from equity investments	$	164,596	$	184,558
Less-current portion (1)	29,501		25,933
Long-term portion (2)	$	135,095	$	158,625

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~~ROYAL CARIBBEAN CRUISES LTD.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

(1) Included within Trade and other receivables, net in our consolidated balance sheets.

(2)Included within Other assets in our consolidated balance sheets.

We also provide ship management services to TUI Cruises GmbH and provided management services to Pullmantur Holdings (which filed for reorganization in Spain in June 2020) and Skysea ~~Holding.~~Holding (which ceased cruising operations in September 2018). Additionally, we bareboat ~~charter~~chartered to Pullmantur Holdings the vessels ~~currently~~previously operated by its brands, which were retained by us following the sale of our 51% interest in Pullmantur Holdings. These bareboat charters were

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ROYAL CARIBBEAN CRUISES LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

terminated when Pullmantur Holdings filed for reorganization in Spain. We recorded the following as it relates to these services in our operating results within our consolidated statements of comprehensive income (loss) (in thousands):


								Year ended December 31,
								2020		2019		2018

	For the period ended December 31,
	2017		2016		2015
Revenues	$	53,532	$	30,517	$	20,217	Revenues	$	21,372	$	47,242	$	54,705
Expenses	$	15,176	$	12,795	$	15,669	Expenses	$	4,986	$	4,304	$	11,531

Summarized financial information for our affiliates accounted for under the equity method of accounting was as follows (in thousands):


	As of December 31,
	2020		2019
Current assets	$	488,329	$	435,152
Non-current assets	5,456,061		4,019,394
Total assets	$	5,944,390	$	4,454,546

Current liabilities	$	1,106,700	$	1,094,552
Non- current liabilities	3,771,992		2,267,936
Total liabilities	$	4,878,692	$	3,362,488

Equity attributable to:
Noncontrolling interest	$	0	$	1,784

As of December 31,
2017 2016
Current assets $ 532,330
$ 492,707
Non-current assets 3,673,613
2,942,580
Total assets $ 4,205,943
$ 3,435,287

Current liabilities $ 1,152,193
$ 887,175
Non- current liabilities 1,974,166
1,704,495
Total liabilities $ 3,126,359
$ 2,591,670

Equity attributable to:
Noncontrolling interest $ 1,753
$ 1,544


	Year ended December 31,
	2020		2019		2018
Total revenues	$	619,795	$	2,354,744	$	2,255,352
Total expenses	(939,481)		(1,875,952)		(1,779,160)
Net income	$	(319,686)	$	478,792	$	476,192

Credit Losses

We reviewed our notes receivable for credit losses in connection with the preparation of our financial statements. In evaluating the credit loss allowance, management considered factors such as historical loss experience, the types of loans and the amount of loans in the loan portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, peer group information and prevailing economic conditions. Based on these credit loss estimation factors, during the year ended December 31, 2020, we recorded a loss provision of $187.1 million primarily on notes receivable of approximately $81.6 million related to our previous sales of property and equipment to third parties and on receivables of approximately $103.5 million mostly related to loans and other receivables due from Pullmantur Holdings. We also wrote-off a credit loss allowance amount of $107.3 million during 2020, primarily due to loans and other receivables related to Pullmantur Holdings.

F-28

For the period ended December 31,
2017 2016 2015
Total revenues $ 1,994,014
$ 1,340,662
$ 990,172
Total expenses (1,684,276 ) (1,078,470 ) (830,898 )
Net income $ 309,738
$ 262,192
$ 159,274

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ROYAL CARIBBEAN CRUISES LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

~~Note 7.Long-Term Debt~~

~~Long-term debt consists of~~The following table summarizes our credit loss allowance related to receivables for the ~~following~~year ended December 31, 2020 (in thousands):


	Credit Loss Allowance
Balance at January 1, 2020	$	5,635
Loss provision for receivables	187,128
Write-offs	(107,316)
Balance at December 31, 2020	$	85,447

Our credit loss allowance balance for the year ended December 31, 2020 primarily related to a $81.6 million loss provision recognized during 2020 on notes receivable related to our previous sale of property and equipment mostly to third parties.

F-29

2017 2016
$1.4 billion unsecured revolving credit facility, LIBOR plus 1.175%, currently 2.64% and a facility fee of 0.20%, due 2020 $ 300,000
$ 925,000
$1.2 billion unsecured revolving credit facility, LIBOR plus 1.175%, currently 2.58% and a facility fee of 0.20%, due 2022 280,000
805,000
Unsecured senior notes and senior debentures, 2.65% to 7.50%, due 2018, 2020, 2022, 2027 and 2028 1,866,359
1,073,261
$200 million unsecured term loan, LIBOR plus 1.30% —
200,000
$841.8 million unsecured term loan, LIBOR plus 1.00%, currently 2.52% due through 2028 736,604
806,756
$226.1 million unsecured term loan, 2.53%, due through 2028 197,837
216,677
€700.7 million unsecured term loan, EURIBOR plus 1.15% currently 1.15%, due through 2028 736,020
708,417
$742.1 million unsecured term loan, LIBOR plus 1.30%, currently 2.81%, due through 2027 587,497
649,338
$273.2 million unsecured term loan, LIBOR plus 1.75% —
273,166
$519 million unsecured term loan, LIBOR plus 0.45%, currently 2.00%, due through 2020 129,786
173,049
$420 million unsecured term loan, 5.41%, due through 2021 135,514
171,444
$420 million unsecured term loan, LIBOR plus 1.65%, currently 3.21%, due through 2021 140,000
175,000
€159.4 million unsecured term loan, EURIBOR plus 1.58%, currently 1.58%, due through 2021 63,798
70,082
$524.5 million unsecured term loan, LIBOR plus 0.50%, currently 1.96%, due through 2021 174,833
218,542
$566.1 million unsecured term loan, LIBOR plus 0.37%, currently 1.90%, due through 2022 212,276
259,448
$1.1 billion unsecured term loan, LIBOR plus 1.65%, currently 3.21%, due through 2022 345,877
460,652
$632.0 million unsecured term loan, LIBOR plus 0.40%, currently 1.86%, due through 2023 315,979
368,643
$673.5 million unsecured term loan, LIBOR plus 0.40%, currently 1.92%, due through 2024 392,860
448,983
$65.0 million unsecured term loan, LIBOR plus 1.45%, currently 3.02%, due through 2019 65,227
67,027
$380.0 million unsecured term loan, LIBOR plus 1.45%, currently 3.02%, due 2018 380,000
380,000
$791.1 million unsecured term loan, LIBOR plus 1.30%, currently 2.85%, due through 2026 593,331
659,256
$290.0 million unsecured term loan, LIBOR plus 1.75% —
290,000
€365 million unsecured term loan, EURIBOR plus 1.75% —
123,963
$7.3 million unsecured term loan, LIBOR plus 2.5% —
3,964
$30.3 million unsecured term loan, LIBOR plus 3.75%, currently 5.29%, due through 2021 5,400
6,597
€80.0 million unsecured term loan, EURIBOR plus 1.32% currently 1.32%, due through 2024 14,267
—
Capital lease obligations 33,139
40,385
Total debt 7,706,604
9,574,650
Less: unamortized debt issuance costs (167,153 ) (187,214 )
Total debt, net of unamortized debt issuance costs 7,539,451
9,387,436
Less: current portion (1,188,514 ) (1,285,735 )
Long-term portion $ 6,350,937
$ 8,101,701

In October 2017, we amended and restated our $1.2 billion unsecured revolving credit facility due August 2018. The amendment reduced the applicable margin and extended the termination date to October 2022. The applicable margin and facility fee vary with our debt rating and are currently 1.175% and 0.20%, respectively. In December 2017, we also amended and restated our $1.4 billion unsecured revolving credit facility due June 2020 to reduce pricing in line with the amended pricing of the $1.2 billion unsecured revolving credit facility. These amendments did not result

~~F-22~~

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ROYAL CARIBBEAN CRUISES LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 9. Debt

inDebt consists of the ~~extinguishment of debt. Accordingly,~~following (in thousands):


			As of December 31,
	Interest Rate(1)	Maturities Through	2020		2019
Fixed rate debt:
Unsecured senior notes	2.65% - 9.13%	2020 - 2028	$	2,464,994	$	1,746,280
Secured senior notes	7.25% - 11.50%	2023 - 2025	3,895,166		662,398
Unsecured term loans	2.53% - 5.41%	2021 - 2032	3,210,161		2,806,774
Convertible notes	2.88% - 4.25%	2023	1,454,488		0
Total fixed rate debt			11,024,809		5,215,452
Variable rate debt:
Unsecured revolving credit facilities(2)	1.45%	2022 - 2024	3,289,000		165,000
Unsecured UK Commercial paper		2021	409,319		0
USD Commercial paper	0%	—	0		1,434,180
USD unsecured term loan	0.74% - 4.05%	2020- 2028	4,002,249		3,519,853
Euro unsecured term loan	1.15% -1.58%	2021 - 2028	705,064		676,740
Total variable rate debt			8,405,632		5,795,773
Finance lease liabilities			213,365		230,258
Total debt (3)			19,643,806		11,241,483
Less: unamortized debt issuance costs			(314,763)		(206,607)
Total debt, net of unamortized debt issuance costs			19,329,043		11,034,876
Less—current portion including commercial paper			(1,371,087)		(2,620,766)
Long-term portion			$	17,957,956	$	8,414,110

(1)Interest rates based on outstanding loan balance as of December 31, ~~2017,~~2020 and, for variable rate debt, include either LIBOR or EURIBOR plus the applicable margin.

(2)Includes $1.9 billion facility due in 2024 and $1.6 billion facility due in 2022, each of which accrue interest at LIBOR plus 1.30%, which interest rate was 1.54%, as of December 31, 2020 and each is subject to a facility fee of 0.20%.

(3)At December 31, 2020 and 2019, the weighted average interest rate for total debt was 6.02% and 3.99%, respectively.

In March 2020, we ~~have an~~increased the capacity of our $1.7 billion and $1.2 billion unsecured revolving credit facilities due in 2024 and 2022, by $200 million and $400 million, respectively, utilizing their respective accordion features. As of December 31, 2020, our aggregate revolving borrowing capacity was $3.5 billion and was fully utilized through a combination of ~~$2.6 billion.~~amounts drawn and letters of credit issued under the facilities. Certain of our surety agreements with third party providers for the benefit of certain agencies and associations that provide travel related bonds allow the surety to request collateral in the form of cash or letters of credit. As of December 31, 2020, we have posted collateral in the amount of approximately $91 million.

In March 2020, we took delivery of Celebrity Apex. To finance the purchase, we borrowed $722.2 million under a previously committed unsecured term loan which is 100% guaranteed by BpiFrance Assurance Export, the official export credit agency of France. The loan amortizes semi-annually over 12 years and bears interest at a fixed rate of 3.23% per annum. In the second quarter of 2020 and the first quarter of 2021, we amended the agreement to defer the payment of all principal payments due between April 2020 and March 2022.The deferred amounts will be repayable starting in 2022 over a five year period.

In ~~November 2017,~~March 2020, we borrowed $2.2 billion pursuant to a 364-day senior secured term loan agreement. In May 2020, this secured term loan was increased by an additional $150 million through the exercise of the accordion feature. The increased secured term loan balance was repaid with proceeds from the $3.32 billion Secured Notes (as described below) issued in May 2020. This secured term loan would have matured 364 days after funding and could have been extended at our option for an additional 364 days subject to customary conditions, including the payment of a 1.00% extension fee. Interest accrued at

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

LIBOR plus a margin of 2.25% which would have increased to 2.50% and 2.75% at 180 days and 365 days, respectively, after funding. We would have also been required to pay a duration fee in an amount equal to 0.25% of the aggregate loan principal amount every 60 days. Additionally, 2 of our board members each purchased a participation interest equal to $100 million. The repayment of this secured term loan in May 2020 resulted in a total loss on the extinguishment of debt of $41.1 million, which was recognized within Interest expense, net of interest capitalized within our consolidated statements of comprehensive income (loss).

In May 2020, we issued ~~$300~~$3.32 billion of senior secured notes (the "Secured Notes") for net proceeds of approximately $3.2 billion. We repaid the $2.35 billion, 364-day senior secured term loan in its entirety with a portion of the proceeds of the Secured Notes. $1.0 billion of the notes accrue interest at 10.875% and mature in 2023 (the "2023 Secured Notes"). The remaining $2.32 billion of the Secured Notes accrue interest at 11.5% and mature in 2025 (the "2025 Secured Notes"). The Secured Notes are fully and unconditionally guaranteed by Celebrity Cruises Holdings Inc., Celebrity Cruises Inc., and certain of our wholly-owned vessel-owning subsidiaries. $1.66 billion of the obligations under the Secured Notes and the related guarantees are secured by first priority security interests in the collateral (which generally includes certain of our material intellectual property, a pledge of 100% of the equity interests of certain of our vessel-owning subsidiaries, the collateral account established pursuant to the indenture governing the Secured Notes (the "Secured Notes Indenture"), mortgages on the 28 vessels owned by such subsidiaries, and an assignment of insurance and earnings in respect of such vessels, subject to permitted liens and certain exclusions and release provisions), subject to certain adjustments after the date of issuance based on our debt rating as of the date of issuance and our lien basket amount in certain of our credit facilities. Prior to March 1, 2023, we may, at our option, redeem some or all of the 2023 Secured Notes at 100% of the principal amount thereof plus accrued and unpaid interest plus the applicable “make-whole premium” described in the Secured Notes Indenture. On or after March 1, 2023, we may, at our option, redeem some or all of the 2023 Secured Notes at a redemption price equal to 100% of the principal amount of the 2023 Secured Notes to be redeemed plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Prior to June 1, 2022, we may, at our option, redeem some or all of the 2025 Secured Notes at 100% of the principal amount plus accrued and unpaid interest plus the applicable “make-whole premium” described in the Secured Notes Indenture. On or after June 1, 2022, we may, at our option, redeem some or all of the 2025 Secured Notes at the applicable redemption prices set forth in the Secured Notes Indenture. In addition, on or prior to June 1, 2022, we may, at our option, redeem up to 40% of the 2025 Secured Notes with the proceeds from certain equity offerings at the redemption price listed in the Secured Notes Indenture.In addition, we may redeem all, but not part, of the Secured Notes upon the occurrence of specified tax events set forth in the Secured Notes Indenture.

In June 2020, we issued $1.0 billion of senior unsecured notes which accrue interest at 9.125% and mature in 2023. The notes are fully and unconditionally guaranteed by RCI Holdings LLC, which owns 100% of the equity interests in certain of our wholly-owned vessel-owning subsidiaries.

In June 2020, we issued $1.15 billion of convertible notes which accrue interest at 4.25% and mature in 2023. The notes are convertible into our shares of common stock, cash, or a combination of common stock and cash, at our election. The initial conversion rate per $1,000 principal amount of the convertible notes is 13.8672 shares of our common stock, which is equivalent to an initial conversion price of approximately $72.11 per share, subject to adjustment in certain circumstances. Prior to March 15, 2023, the convertible notes will be convertible at the option of holders during certain periods, and only under the following conditions:

•during any calendar quarter after September 30, 2020, if the last reported sale price per share of our common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

•the trading price per $1,000 principal amount of notes is less than 98% of the product of the last reported sale price per share of our common stock and the conversation rate for 10 consecutive trading days (in which case the notes are convertible at any time during the 5 business day period following the 10 consecutive trading day period);

•if we call the notes for a tax redemption; or

•upon the occurrence of specified corporate events.

On or after March 15, 2023, 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.

Holders of the convertible notes may require us, upon the occurrence of certain events that constitute a fundamental change under the indenture, to offer to repurchase the convertible notes at a repurchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

We allocated $907.9 million of ~~2.65%~~the convertible notes' proceeds, net of debt issue costs, to Long-term debt and ~~$500~~$209.0 million to Paid-in-capital on our Consolidated Balance Sheet. We recognized the equity component by ascribing the difference between the proceeds and the fair value of ~~3.70% unsecured senior~~the convertible notes' debt component to Paid-in-capital and the corresponding debt discount will be amortized to interest expense over the term of the convertible notes ~~due 2020~~using the straight-line method, which approximates the effective interest method. The fair value of the convertible notes' debt component was determined utilizing a present value calculation. Debt issuance costs on the convertible notes were allocated to the debt and ~~2028, respectively, at 99.977% and 99.623%~~equity components in proportion to the allocation of ~~par, respectively. Amounts from~~proceeds to those components. We incurred total debt issue costs of $33.1 million on the issuance of ~~these~~the debt and allocated $6.2 million to Paid-in-capital. Debt issuance costs attributable to debt will be amortized to interest expense over the term of the convertible notes.

In October 2020, we issued $575 million of senior convertible notes which accrue interest at 2.875% and mature in 2023. The notes are convertible into shares of our common stock, cash, or a combination of common stock and cash, at our election. The initial conversion rate per $1,000 principal amount of the convertible notes is 12.1212 shares of our common stock, which is equivalent to an initial conversion price of approximately $82.50 per share, subject to adjustment in certain circumstances. Prior to August 15, 2023, the convertible notes will be convertible at the option of holders during certain periods, and only under the following conditions:

•during any calendar quarter after December 31, 2020, if the last reported sale price per share of our common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day;

•if we call the notes for a tax redemption; or

•upon the occurrence of specified corporate events.

On or after August 15, 2023, 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.

We allocated $463.0 million of the convertible notes' proceeds, net of debt issue costs, to Long-term debt and $101.9 million to Paid-in-capital on our Consolidated Balance Sheet. We recognized the equity component by ascribing the difference between the proceeds and the fair value of the convertible notes' debt component to Paid-in-capital and the corresponding debt discount will be amortized to interest expense over the term of the convertible notes using the straight-line method, which approximates the effective interest method. The fair value of the convertible notes' debt component was determined utilizing a present value calculation. Debt issuance costs on the convertible notes were ~~used for general corporate purposes, such~~allocated to the debt and equity components in proportion to the allocation of proceeds to those components. We incurred total debt issue costs of $10.1 million on the issuance of the debt and allocated $1.8 million to Paid-in-capital. Debt issuance costs attributable to debt will be amortized to interest expense over the term of the convertible notes.

The net carrying value of the liability component of the convertible notes was as ~~repayment and refinancing~~follows:


(in thousands)	As of December 31, 2020
Principal	$	1,725,000
Less: Unamortized debt discount and transaction costs	312,117
	$	1,412,883

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Table of ~~debt.~~Contents

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The interest expense recognized related to the convertible notes was as follows:


(in thousands)	As of December 31, 2020
Contractual interest expense	$	30,832
Amortization of debt discount and transaction costs	52,518
	$	83,350

In ~~November 2017, we entered into~~June 2020, RCL Cruises Ltd., our subsidiary that operates and manages our business in the United Kingdom, established a ~~credit agreement which provides~~commercial paper facility for the purpose of issuing short-term, unsecured Sterling-denominated notes that are eligible for purchase under the Joint HM Treasury and Bank of England’s COVID Corporate Financing Facility commercial paper program in an ~~unsecured term loan facility in an~~aggregate principal amount up to ~~€80.0~~£300.0 million. The maturities of the commercial paper notes can vary by note, but cannot exceed 364 days from the date of issuance. As of December 31, 2020, we had £300.0 million, or approximately ~~$96.0~~$409.9 million, based on the exchange rate at December 31, ~~2017,~~2020, of commercial paper notes outstanding under this program.

In August 2020, we secured a binding commitment from Morgan Stanley Senior Funding Inc. for ~~the purchase of~~ a ~~ship we have on order designed for the Galapagos Islands.~~$700 million term loan facility. We may draw ~~up to five times under~~on the facility ~~through~~at any time prior to August 12, 2021. Once drawn, the ~~earlier~~loan will bear interest at LIBOR + 3.75% and will mature 364 days from funding. The facility will be guaranteed by RCI Holdings, LLC, our wholly owned subsidiary that owns the equity interests in subsidiaries that own seven of our vessels. We have the ability to increase the capacity of the facility by an additional $300 million from time to time subject to the receipt of additional or increased commitments and the issuance of guarantees from additional subsidiaries.

In October 2020, we took delivery of Silver Moon. To finance the ~~ship and June 30, 2019. As~~purchase, Silversea Cruise Holding Ltd., our wholly owned subsidiary, borrowed $300 million under a previously committed unsecured term loan facility, guaranteed by us, to pay a portion of ~~December 31, 2017, we have drawn €11.9 million, or approximately $14.3 million based on~~ the ~~exchange rate at December 31, 2017, on this facility.~~ship's contract price. The loan is due and payable at maturity in ~~November 2024.~~June 2028, provided however, that each lender may elect to cause us to repay the outstanding amount of any advances held by such lender on June 2026 upon 90 days advance notice. The loan amortizes semi-annually starting six months after funding, with 1/24th of the outstanding principal payable every six months and the balance payable upon maturity. Interest on the loan currently accrues at ~~a floating rate based on EURIBOR~~LIBOR plus 2.00%. The financing to purchase Silver Moon is reflected in our Consolidated Balance Sheet for the ~~applicable margin. The applicable margin varies with our debt rating and was 1.32% as of~~year ended December 31, ~~2017. In addition,~~2020.

During 2020, we amended certain export-credit backed ship debt facilities to benefit from a 12-month debt amortization deferral (the "Debt Deferral"). Under the Debt Deferral, deferred debt amortization of approximately $0.9 billion will be paid over a period of 4 years after the 12-month deferral period. The Debt Deferral was offered by certain export credit agencies as a result of the current impact to cruise-line borrowers as a result of COVID-19. During the first quarter of 2021, we further amended our export-credit backed ship debt facilities and deferred an additional $0.8 billion of principal payments due under these export facilities between April 2021 and March 2022. The new amounts being deferred are ~~subject~~scheduled to be repaid over a ~~commitment fee of 0.20% per annum on~~five year period starting in April 2022.

Except for the ~~undrawn amount.~~

~~Except as described above,~~financings incurred to acquire Celebrity Flora,Azamara Pursuit and Silver Moon, all of our unsecured ship financing term loans are guaranteed by the export credit agency in the respective country in which the ship is constructed. InAs of December 31, 2020, in consideration for these guarantees, depending on the financing arrangement, we pay to the applicable export credit agency (1) a fee of ~~1.01%~~2.97% per annum based on the outstanding loan balance semi-annually over the term of the loan (subject to ~~adjustment~~adjustments based upon our credit ratings) or (2) an upfront fee of 2.35% to 2.37% of the maximum loan amount. We amortize the fees that are paid upfront over the life of the loan and those that are paid semi-annually over each respective payment period. ~~We classify~~Prior to the loan being drawn, we present these fees within ~~Amortization~~Other assets in our consolidated balance sheets. Once the loan is drawn, such fees are classified as a discount to the related loan, or contra-liability account, within Current portion of debt ~~issuance costs~~ inor long-term debt. In our consolidated statements of cash flows, we classify these fees within Amortization of debt issuance costs.

Both our export credit facilities and ~~within~~ ~~Other assets~~our non-export credit facilities totaling an outstanding principal amount of approximately $11.2 billion as of December 31, 2020 contain covenants that, among other things, require us to maintain financial ratios, including in certain cases, a fixed charge coverage ratio of at least 1.25x and/or minimum shareholders' equity and limit our net debt-to-capital ratio.

During 2020, we amended all of our export credit facilities, all of our non-export credit facilities and certain of our credit card processing agreements which contain financial covenants, with the exception of a $130.0 million term loan due 2023, to

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

extend the financial covenant waiver through and including the fourth quarter of 2021. The $130.0 million term loan, which remains subject to a covenant waiver through the end of the first quarter of 2021, is prepayable at any time without penalty.

During the first quarter of 2021, we amended $4.9 billion of our non-export credit facilities and certain of our credit card processing agreements to extend the waiver of the financial covenants through and including the third quarter of 2022 or, if earlier, that date falling after January 1, 2022 on which we elect to comply with the modified covenants. In addition, pursuant to the amendments, we have modified the manner in which such covenants are calculated (temporarily in certain cases and permanently in others) as well as the levels at which our net debt to capitalization covenant will be tested during the period commencing immediately following the end of the waiver period and continuing through the end of 2023. The amendments also increase the monthly-tested minimum liquidity covenant to $500 million for the duration of the waiver period (subject to reduction to $350 million if we raise at least $500 million of additional capital). As of the date of these financial statements, we were in compliance with the applicable minimum liquidity covenant. Pursuant to these amendments, the restrictions on paying cash dividends and effectuating share repurchases were extended through and including the third quarter of 2022.

During the first quarter of 2021, we also amended $6.2 billion of our export credit facilities to extend the waiver of the financial covenants through and including at least the end of the third quarter of 2022. These amendments also allow for the deferral of up to $1.1 billion of principal payments due between April 2021 and April 2022 subject to the satisfaction of various conditions precedent. As of February 19, 2021, the conditions precedent have been satisfied for 13 of the 15 amended facilities, which will allow us to defer $0.8 billion of amortization payments due during this period. There can be no assurances that the conditions precedent will be met for the remaining two facilities. The deferred amounts will be repayable semi-annually over a five-year period starting in April 2022. Pursuant to these amendments, we have agreed to implement the same liquidity covenant that applies in our ~~consolidated balance sheets.~~non-export credit facilities. The amendments also provide for mandatory prepayment of the deferred amounts upon the taking of certain actions. Subject to a number of carveouts, these include, but are not limited to, issuance of dividends, completion of share repurchases, issuances of debt other than for crisis and recovery purposes, the making of loans and the sale of assets other than at arm’s length

In the fourth quarter of 2020 and the first quarter of 2021, we entered into amendments to our drawn and undrawn ECA facilities to provide for the issuance of guarantees in satisfaction of existing obligations under these facilities. Following issuance (which, in the case of the undrawn facilities, will occur once the debt is drawn), the guarantees will be released under certain circumstances as other debt is repaid or refinanced on an unsecured and unguaranteed basis. In connection with and following the issuance of the guarantees, the guarantor subsidiaries are restricted from issuing additional guarantees in favor of lenders (other than those lenders who are party to the ECA facilities), and certain of the guarantor subsidiaries are restricted from incurring additional debt. In addition, the ECA facilities will benefit from guarantees to be issued by intermediary parent companies of subsidiaries that take delivery of any new vessels subject to export-credit backed financing.

For information related to the covenants in our Port of Miami Terminal "A" operating lease agreement, refer to Note 10. Leases.

Under certain of our agreements, the contractual interest rate, facility fee and/or export credit agency fee vary with our debt rating. On August 24, 2020, Moody’s downgraded our senior unsecured rating from Ba2 to B2, and on August 31, 2020, S&P Global downgraded our senior unsecured rating from BB to B+. On February 25, 2021, S&P Global further downgraded our senior unsecured rating from B+ to B.

In April 2019, we amended our $1.4 billion unsecured revolving credit facility due in 2020 to extend the termination date through April 2024, increase the facility size to $1.7 billion and reduce pricing. The interest rate and facility fee vary with our senior debt rating set at LIBOR plus 1.0% per annum and 0.125% per annum, respectively. These amendments did not result in the extinguishment of debt. In addition, in May 2019, we amended our $1.15 billion unsecured revolving credit facility due in 2022 to reduce pricing to match pricing on our $1.7 billion unsecured revolving credit facility due in 2024.

In April 2019, we entered into and drew in full on an unsecured three-year term loan agreement in the amount of $1.0 billion. The loan accrues interest at a floating rate of LIBOR plus an applicable margin, which varies with our senior ~~notes~~debt rating set at 1.075% per annum. Proceeds of this loan were used to repay the $700 million 364-day loan due July 2019 related to the acquisition of Silversea Cruises and ~~senior debentures are not redeemable prior~~the remaining balance of the unsecured term loan originally incurred in 2010 to ~~maturity, except that certain series may be redeemed upon~~purchase Allure of the Seas. The repayment of these loans resulted in a total loss on the extinguishment of debt of $6.3 million, which was recognized within Other (expense) income within our consolidated statements of comprehensive income (loss) for the twelve months ended December 31, 2019.

In April 2019, we took delivery of Spectrum of the Seas. To finance the purchase, we borrowed $908.0 million under a previously committed unsecured term loan which is 95% guaranteed by Euler Hermes Aktiengesellschaft, the official export credit agency of Germany. The loan amortizes semi-annually over 12 years and bears interest at a fixed rate of 3.45% per

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

annum.In the second quarter of 2020 and the first quarter of 2021, we amended the agreement to defer the payment of all principal payments due between April 2020 and March 2022.The deferred amounts will be repayable starting in 2022 over a ~~make-whole premium.~~five year period.

In May 2019, we took delivery of Celebrity Flora. The purchase was financed through an unsecured term loan facility entered into in November 2017 in an amount up to €80.0 million, or approximately $97.9 million based on the exchange rate at December 31, 2020. As of December 31, 2020, we had fully drawn on this facility. The loan is due and payable at maturity in November 2024. Interest on the loan accrues at a floating rate based on EURIBOR plus the applicable margin. The applicable margin varies with our debt rating and was 1.195% as of December 31, 2019.

In June 2018, we established a commercial paper program pursuant to which we may issue short-term unsecured notes from time to time in an aggregate amount of up to $1.2 billion, which was increased to $2.9 billion in August 2019. The commercial paper issued is backstopped by our revolving credit facilities. As of December 31, 2019 we had $1.4 billion of commercial paper notes outstanding with a weighted average interest rate of 2.19% and a weighted average maturity of approximately 21 days. We terminated this commercial paper program as of August 5, 2020.

Following is a schedule of annual maturities on ~~long-term~~our total debt net of debt issuance costs, and including ~~capital~~finance leases and commercial paper, as of December 31, ~~2017~~2020 for each of the next five years (in thousands):


Year
2021	$	1,371,087
2022	4,143,884
2023	4,433,261
2024	2,862,486
2025	3,480,961
Thereafter	3,037,364
	$	19,329,043

Note 10. Leases

Operating leases

Our operating leases primarily relate to preferred berthing arrangements, real estate and shipboard equipment and are included within Operating lease right-of-use assets, and Long-term operating lease liabilities with the current portion of the liability included within Current portion of operating lease liabilities in our consolidated balance sheet as of December 31, 2020. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term. During the first quarter of 2020, we determined that the lease for Silver Explorer, operated by Silversea Cruises and previously classified as a finance lease, was an operating lease based on modification of the terms of the lease. The operating lease for Silver Explorer will expire in 2023.

In June 2019, the Company entered into a new master lease agreement (“Master Lease”) with Miami-Dade County relating to the buildings and surrounding land located at its Miami headquarters, which are classified as finance leases in accordance with ASC 842. Prior to entering into the Master Lease, the buildings were classified as operating lease assets. The finance lease for the buildings and land will expire in 2072, which includes an initial 43 years lease term and 2 five-year options to extend the lease. We consider the possibility of exercising the 2 five-year options reasonably certain.

For some of our real estate leases and berthing agreements, we do have the option to extend our current lease term. For those lease agreements with renewal options, the renewal periods for real estate leases range from one to 10 years and the renewal periods for berthing agreements range from one year to 20 years. Generally, we do not include renewal options as a component of our present value calculation for berthing agreements. However, for certain real estate leases, we include them.

We have a residual value guarantee associated with our Port of Miami Terminal "A" operating lease agreement ("Port of Miami terminal lease") that approximates a percentage of the cost of the asset as of the inception of the lease. We consider the possibility of incurring costs associated with the residual value guarantee to be remote.

Also in connection with the Port of Miami terminal lease, we are required to deliver on or before July 18, 2021, cash collateral in an amount equal to the lesser of our residual value guarantee or the aggregate balance of the lenders' terminal

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Year
2018 $ 1,188,514
2019 762,614
2020 1,292,478
2021 640,734
2022 1,380,583
Thereafter 2,274,528
$ 7,539,451
construction debt, estimated at $181.1 million as of December 31, 2020. The collateral is to be returned when all amounts due by us under the lease have been paid in full.

During the second quarter of 2020, we amended our Port of Miami terminal lease to increase the lien basket in line with our debt facilities. We further amended this lease in the first quarter of 2021 to and obtain a financial covenant waiver through the third quarter of 2022. This obligation is prepayable at any time without penalty. As of December 31, 2020, we were in compliance with the amended covenants under the lease agreement.

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate in determining the present value of lease payments. We estimate our incremental borrowing rates based on LIBOR and U.S. Treasury note rates corresponding to lease terms increased by the Company’s credit risk spread and reduced by the estimated impact of collateral. We used the incremental borrowing rate as of the adoption date for operating leases that commenced prior to that date. In addition, we have lease agreements with lease and non-lease components, which are generally accounted for separately. However, for berthing agreements, we account for the lease and non-lease components as a single lease component.

Commencing in 2016 when we sold our 51% interest in the Pullmantur brand to Pullmantur Holdings, and continuing through the quarter ended June 30, 2020, we bareboat chartered to Pullmantur Holdings the vessels operated by the Pullmantur brand. On June 22, 2020, Pullmantur S.A., a subsidiary of Pullmantur Holdings, filed for reorganization in Spain, at which time we terminated these bareboat charters. See Note 8. Other Assets for further discussion of Pullmantur Holdings. We accounted for the bareboat charters of these vessels as operating leases for which we were the lessor.

Finance Leases

Silversea Cruises operates the Silver Whisper, under a finance lease. The finance lease for the Silver Whisper will expire in 2022, subject to an option to purchase the ship. The total aggregate amount of the finance lease liabilities recorded for this ship was $31.5 million and $55.6 million at December 31, 2020 and December 31, 2019, respectively. The lease payments on the Silver Whisper are subject to adjustments based on the LIBOR rate.

Supplemental balance sheet information for leases was as follows (in thousands):


	As of December 31, 2020		As of December 31, 2019
Lease assets:
Finance lease right-of-use assets, net:
Property and equipment, gross	$	364,910	$	376,159
Accumulated depreciation	(71,288)		(57,955)
Property and equipment, net	293,622		318,204
Operating lease right-of-use assets	599,985		687,555
Total lease assets	$	893,607	$	1,005,759
Lease liabilities:
Finance lease liabilities:
Current portion of debt	51,856		33,561
Long-term debt	161,509		196,697
Total finance lease liabilities	213,365		230,258
Operating lease liabilities:
Current portion of operating lease liabilities	102,677		96,976
Long-term operating lease liabilities	563,876		601,641
Total operating lease liabilities	666,553		698,617
Total lease liabilities	$	879,918	$	928,875

0The components of lease expense were as follows (in thousands):

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	Consolidated Statement of Comprehensive Income (Loss) Classification	Year ended December 31, 2020		Year ended December 31, 2019
Lease costs:
Operating lease costs	Commission, transportation and other	$	38,349	$	76,226
Operating lease costs	Other operating expenses	30,955		27,868
Operating lease costs	Marketing, selling and administrative expenses	21,971		18,837
Finance lease costs:
Amortization of right-of-use-assets	Depreciation and amortization expenses	6,901		22,044
Interest on lease liabilities	Interest expense, net of interest capitalized	4,429		8,355
Total lease costs		$	102,605	$	153,330

In addition, certain of our berth agreements include variable lease costs based on the number of passengers berthed. During the twelve months ended December 31, 2020, we had $24.3 million of variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive income (loss).

Weighted average of the remaining lease terms and weighted average discount rates are as follows:


	As of December 31, 2020		As of December 31, 2019
Weighted average of the remaining lease term
Operating leases	7.8		10.3
Finance leases	41.2		30.22
Weighted average discount rate
Operating leases	4.59	%	4.65	%
Finance leases	6.89	%	4.47	%

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


	Year ended December 31, 2020		Year ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	89,179	$	125,307
Operating cash flows from finance leases	$	4,429	$	8,355
Financing cash flows from finance leases	$	19,778	$	32,090

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As of December 31, 2020, maturities related to lease liabilities were as follows (in thousands):


Years	Operating Leases		Finance Leases

2021	$	124,108	$	62,501
2022	117,698		23,822
2023	109,125		12,789
2024	81,696		12,529
2025	72,123		12,566
Thereafter	368,666		395,007
Total lease payments	873,416		519,214
Less: Interest	(206,863)		(305,849)
Present value of lease liabilities	$	666,553	$	213,365

Operating lease payments do not include any costs related to options to extend lease terms as none are reasonably certain of being exercised.

Under ASC 840, Leases, future minimum lease payments under noncancelable operating leases, primarily for offices, warehouses and motor vehicles, as of December 31, 2018 were as follows (in thousands):


Year
2019	$	67,682
2020	64,237
2021	56,142
2022	52,759
2023	52,522
Thereafter	383,974
	$	677,316

Total expense for operating leases, primarily for offices, warehouses and motor vehicles amounted to $32.2 million for the year ended December 31, 2018.

In July 2016, we executed an agreement with Miami Dade County (“MDC”), which was simultaneously assigned to Sumitomo Banking Corporation (“SMBC”), to lease land from MDC and construct a new cruise terminal of approximately 170,000 square feet at PortMiami in Miami, Florida, which was completed during the fourth quarter of 2018 and serves as a homeport. During the construction period, SMBC funded the costs of the terminal’s construction and land lease. Once the terminal was substantially completed, we commenced operating and leasing the terminal from SMBC for a five-year term. We determined that the lease arrangement between SMBC and us should be accounted for as an operating lease.

Right-of-use assets impairments

During the year ended December 31, 2020, we identified that the undiscounted cash flows for certain right-of-use assets were less than their carrying values due to the negative impact of COVID-19. We evaluated these assets pursuant to our long-lived asset impairment test, resulting in an impairment charge of $65.9 million to write down these assets to their estimated fair values during the year ended December 31, 2020.

Note 11. Redeemable Noncontrolling Interest

In connection with the 2018 Silversea Cruises acquisition, we recorded redeemable noncontrolling interest due to the put options held by the noncontrolling interest shareholder. At the date of the 2018 acquisition, the estimated fair value of the noncontrolling interest was based on 33.3% of Silversea Cruises' equity value, which was determined based on the transaction price paid for 66.7% of Silversea Cruises in the 2018 acquisition.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

On July 9, 2020, we acquired the remaining 33.3% noncontrolling interest in Silversea Cruises from Heritage in exchange for 5.2 million shares of common stock, par value $0.01 per share, of Royal Caribbean Cruises Ltd. Pursuant to the agreement governing the acquisition of the noncontrolling interest, among other things, the parties terminated any existing obligation to issue Heritage any contingent consideration, at fair value, in connection with our acquisition of a 66.7% interest in Silversea Cruises in 2018. The purchase of the noncontrolling interest was accounted for as an equity transaction during the quarter ended September 30, 2020 and no gain or loss was recognized in earnings. The carrying amount of the noncontrolling interest was adjusted to 0 and the difference between the carrying amount of the noncontrolling interest and the fair value of the consideration paid was recognized as additional paid in capital.

The noncontrolling interest's share in the net earnings (loss) and contractual accretion requirements associated with the put options, for periods prior to our acquisition of the noncontrolling interest, are included in Net income attributable to noncontrolling interest in our consolidated statements of comprehensive income (loss). As of December 31, 2019, the noncontrolling interest shareholder's interest is presented as Redeemable noncontrolling interest and is classified outside of shareholders' equity in our consolidated balance sheets.

The following table presents changes in the redeemable noncontrolling interest as of December 31, 2020 (in thousands):


Balance as of January 1, 2019	$	542,020
Net income attributable to noncontrolling interest, including the contractual accretion of the put options	28,713
Distribution to noncontrolling interest	(752)
Balance at December 31, 2019	$	569,981
Net income attributable to noncontrolling interest, including the contractual accretion of the put options	22,332
Acquisition of noncontrolling interest	(592,313)

Balance at December 31, 2020	$	0

Note 8.12.Shareholders' Equity

Common Stock Issued

During October 2020, we issued 9.6 million shares of common stock, par value $0.01 per share, at a price of $60.00 per share. We received net proceeds of $557.4 million from the sale of our common stock, after deducting the underwriters’ discount and the estimated offering expenses payable by us.

During December 2020, we issued 13.0 million shares of common stock, par value $0.01 per share, at an average price of $76.65 per share. We received net proceeds of $994.6 million after deducting the underwriters’ discount and the estimated offering expenses payable by us. Of the total proceeds, $868.6 million was received as of December 31, 2020 and the remainder was received in January of 2021.

Dividends Declared

During the ~~fourth and third quarters~~first quarter of ~~2017,~~2020 we declared a cash dividend on our common stock of ~~$0.60~~$0.78 per share which was paid in the second quarter of 2020.

During the second quarter of 2020, we agreed with certain of our lenders not to pay dividends or engage in common stock repurchases for so long as our debt covenant waivers are in effect. In addition, 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 as part of the Debt Deferral. Accordingly, we did not declare a dividend during the second, third, and fourth quarters of 2020. Pursuant to amendments made to these agreements during the first quarter of 2021, the restrictions on paying cash dividends and effectuating share repurchases were extended through and including the third quarter of 2022.

During the fourth and third quarters of 2019, we declared a cash dividend on our common stock of $0.78 per share which was paid in the first quarter of ~~2018~~2020 and fourth quarter of ~~2017,~~2019, respectively. During the first and second quarters of ~~2017,~~2019, we declared a cash dividend on our common stock of ~~$0.48~~$0.70 per share which was paid in the second and third quarters of ~~2017,~~2019, respectively.

Common Stock Repurchase Program

During the ~~fourth and third quarters of 2016, we declared a cash dividend~~quarter ended on ~~our~~June 30, 2020, the 24-month common stock repurchase program authorized by our board of ~~$0.48 per share which was paid in the first quarter of 2017 and fourth quarter of 2016, respectively. We also declared and paid a cash dividend~~directors on May 9, 2018 had expired. In connection with our ~~common stock of $0.375 per share during each of the first and second quarters of 2016. During~~

debt covenant waivers, we agreed with our lenders not to engage

~~F-23~~

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

in stock repurchases for so long as our debt covenant waivers are in effect. Effective in the first quarter of ~~2016, we also paid a cash dividend on~~2021, the agreement with our ~~common~~lenders to suspend stock ~~of $0.375 per share which was declared during~~repurchases is extended through the ~~fourth~~third quarter of ~~2015.~~2022.

In April 2017, our board of directors authorized a 12-month common stock repurchase program for up to $500 million. The timing and number of shares to be repurchased will depend on a variety of factors including price and market conditions. Repurchases under the program may be made at management's discretion from time to time on the open market or through privately negotiated transactions. During the year ended December 31, ~~2017,~~2019, we repurchased ~~1.8~~0.9 million shares of our common stock under this program, for a total of ~~$225.0~~$99.6 million, in open market transactions that were recorded within Treasury stockin our consolidated balance sheets. ~~As of December 31, 2017, we have $275.0 million that remain available for future stock repurchase transactions under our Board approved program.~~

~~During February 2018, we repurchased an additional 1.5 million shares for a total of $186.4 million in open market transactions.~~

During the fourth quarter of 2015, our board of directors authorized a common stock repurchase program for up to $500 million that was completed in August 2016. During 2016, we purchased 4.1 million shares for a total of $300.0 million in open market transactions. These transactions were recorded within ~~Treasury stock~~ ~~in our consolidated balance sheet. Our repurchases under this program, including the 2.1 million shares repurchased for $200.0 million during the fourth quarter of 2015, totaled $500.0 million.~~

Note 9.13.Stock-Based Employee Compensation

We currently have awards outstanding under ~~two~~1 stock-based compensation ~~plans,~~plan, our 2008 Equity Plan, which ~~provide~~provides for awards to our officers, directors and key employees. The ~~plans consist~~plan consists of a ~~2000 Stock Award Plan and a 2008 Equity Plan. Our ability to issue new awards under the 2000 Stock Award Plan terminated in accordance with the terms of the plan in September 2009. The~~ 2008 Equity Plan, as amended, provides for the issuance of up to 14,000,000 shares of our common stock pursuant to grants of (i) incentive and non-qualified stock options, (ii) stock appreciation rights, (iii) stock awards (including time-based and/or performance-based stock awards) and (iv) restricted stock units (including time-based and performance-based restricted stock units). During any calendar year, no one individual (other than non-employee members of our ~~Board~~board of ~~Directors)~~directors) may be granted awards of more than 500,000 shares and no non-employee member of our ~~Board~~board of ~~Directors~~directors may be granted awards with a value in excess of $500,000 at the grant date. Options and restricted stock units outstanding as of December 31, ~~2017~~2020 generally vest in equal installments over four years from the date of grant. In addition, performance shares and performance share units generally vest in three years. With certain limited exceptions, awards are forfeited if the recipient ceases to be an employee before the shares vest. ~~Options are granted at a price not less than the fair value of the shares on the date of grant and expire not later than ten years after the date of grant.~~

Prior to 2012, our officers received a combination of stock options and restricted stock units. Beginning in 2012, our officers instead receive their long-term incentive awards through a combination of performance share units and restricted stock units. Each performance share unit award is expressed as a target number of performance share units based upon the fair market value of our common stock on the date the award is issued. The actual number of shares underlying each award (not to exceed 200% of the target number of performance share units) will be determined based upon the Company's achievement of a specified performance target range. In ~~2017,~~2020, we issued a target number of ~~140,542~~245,417 performance share units, which will vest approximately three years following the award issue date. The performance payout of these grants will be based on return on our invested capital ("ROIC") and earnings per share ~~(“EPS”~~("EPS") for the year ended December 31, ~~2019,~~2022, as may be adjusted by the Talent and Compensation Committee of our ~~Board~~board of ~~Directors~~directors in early ~~2020~~2023 for events that are outside of management's control. In 2014, we also issued a one-time performance-based equity award to our Chairman & Chief Executive Officer in a target amount of 63,771 performance share units. In February 2016, the Compensation Committee set the payout level for this grant at 165% of target based on our 2015 ROIC performance. As of December 2017, the award is no longer subject to restrictions on transfer.

Beginning in 2016, our senior officers meeting certain minimum age and service criteria receive their long-term incentive awards through a combination of restricted stock awards and restricted stock units. The restricted stock awards are subject to both performance and time-based vesting criteria while the restricted stock units are subject only to ~~time-~~

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~~ROYAL CARIBBEAN CRUISES LTD.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~based~~time-based vesting criteria. Each restricted stock award is issued in an amount equal to 200% of the target number of shares underlying the award based upon the fair market value of our common stock on the date the award is issued. ~~Dividends~~Declared dividends accrue (but do not get paid) on the restricted stock awards during the vesting period, with the accrued amounts to be paid out following vesting only on the number of shares underlying the award which actually vest based on satisfaction of the performance criteria. The actual number of shares that vest (not to exceed 200% of the shares) will be determined based upon the Company's achievement of a specified performance target range. In ~~2017,~~2020, we issued ~~137,948~~260,924 restricted stock awards, representing 200% of the target number of shares underlying the award, all of which are considered issued and outstanding from the date of issuance, however; grantees will only retain those shares earned as the result of the Company achieving the performance goals during the measurement period. The performance payout of the ~~2017~~2020 awards will be based on ROIC and EPS for the year ended December 31, ~~2019,~~2022, as may be adjusted by the Talent and Compensation Committee of our ~~Board~~board of ~~Directors~~directors in early ~~2020~~2023 for events that are outside of management's control.

On January 24, 2018, the Company issued a one-time bonus award for all non-officer employees. These awards vest, in equal installments, over the 3 years following the award issue date. For shoreside eligible employees, awards were issued as equity-settled restricted stock units. As of December 31, 2020, these awards have fully vested.

We also provide an Employee Stock Purchase Plan ("ESPP") to facilitate the purchase by employees of up to 1,300,000 shares of common stock in the aggregate. Offerings to employees are made on a quarterly basis. Subject to certain limitations, the purchase price for each share of common stock is equal to 85% of the average of the market prices of the common stock as reported on the New York Stock Exchange on the first business day of the purchase period and the last business day of each month of the purchase period. During ~~2017, 2016~~the years ended December 31, 2020, 2019 and ~~2015, 51,989, 42,347~~2018, 184,936, 91,586 and ~~28,724~~74,100 shares of our common stock were purchased under the ESPP at a weighted-average price of ~~$93.15, $65.48~~$48.08, $98.20 and ~~$72.52,~~$97.50, respectively.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Total compensation expense recognized for employee stock-based compensation for the years ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015~~2018 was as ~~follows:~~follows (in thousands):


	Employee Stock-Based Compensation							Employee Stock-Based Compensation
Classification of expense	2017		2016		2015		Classification of expense	2020		2019		2018
(In thousands)
Marketing, selling and administrative expenses	$	69,459	$	32,659	$	36,073	Marketing, selling and administrative expenses	$	39,780	$	75,930	$	46,061

Total compensation expense	$	69,459	$	32,659	$	36,073	Total compensation expense	$	39,780	$	75,930	$	46,061

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The estimated fair value of stock options, less estimated forfeitures, is amortized over the vesting period using the graded-vesting method. We did not issue any stock options during the years ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015.~~2018.

Stock option activity and information about stock options outstanding are summarized in the following table:


Stock Option Activity	Number of Options		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value⁽¹⁾		Stock Option Activity	Number of Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term	Aggregate Intrinsic Value(1)
					(years)	(in thousands)						(years)	(in thousands)
Outstanding at January 1, 2017	346,310		$	32.82	2.39	$	17,221
Outstanding at January 1, 2020								Outstanding at January 1, 2020	64,987	$	41.22	0.87	$	5,990
Granted	—		—		—	—		Granted	0	0		—	—
Exercised	(72,000	)	$	35.07	—	—		Exercised	(15,340)	$	25.18	—	—
Canceled	(1,586	)	$	46.18	—	—		Canceled	0	$	0	—	—
Outstanding at December 31, 2017	272,724		$	32.15	1.41	$	24,053
Vested at December 31, 2017	272,724		$	32.15	1.41	$	24,053
Options Exercisable at December 31, 2017	272,724		$	32.15	1.41	$	24,053
Outstanding at December 31, 2020								Outstanding at December 31, 2020	49,647	$	46.18	0.11	$	1,355
Vested at December 31, 2020								Vested at December 31, 2020	49,647	$	46.18	0.11	$	1,355
Options Exercisable at December 31, 2020								Options Exercisable at December 31, 2020	49,647	$	46.18	0.11	$	1,355


~~(1)~~	(1)The intrinsic value represents the amount by which the fair value ~~of stock exceeds the option exercise price.~~

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~~ROYAL CARIBBEAN CRUISES LTD.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

stock exceeds the option exercise price.

The total intrinsic value of stock options exercised during the years ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015~~2018 was ~~$4.5~~$1.5 million, ~~$2.3~~$8.1 million and ~~$13.8~~$11.1 million, respectively. As of December 31, ~~2017,~~2020, there was no0 unrecognized compensation cost, net of estimated forfeitures, related to stock options granted under our stock incentive plan.

Restricted stock units are converted into shares of common stock upon vesting or, if applicable, are settled on a ~~one-for-one~~1-for-one basis. The cost of these awards is determined using the fair value of our common stock on the date of the grant, and compensation expense is recognized over the vesting period. Restricted stock activity is summarized in the following table:


Restricted Stock Units Activity	Number of Awards	Weighted- Average Grant Date Fair Value
Non-vested share units as of January 1, 2020	801,835	108.48
Granted	598,433	78.51
Vested	(315,541)	104.38
Canceled	(112,135)	109.43
Non-vested share units as of December 31, 2020	972,592	91.26

Restricted Stock Units Activity Number of
Awards Weighted-
Average
Grant Date
Fair Value
Non-vested share units at January 1, 2017 748,516
$ 61.95
Granted 425,170
$ 99.03
Vested (376,992 ) $ 59.62
Canceled (58,795 ) $ 71.47
Non-vested share units expected to vest as of December 31, 2017 737,899
$ 83.78

The weighted-average estimated fair value of restricted stock units granted during the ~~year~~years ended ~~2016~~December 31, 2019 and ~~2015~~2018 was ~~$64.51~~$112.13 and ~~$73.98,~~$122.12, respectively. The total fair value of shares released on the vesting of restricted stock units during the years ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015~~2018 was ~~$38.7~~$31.2 million, ~~$23.2~~$30.8 million, and ~~$27.6~~$33.9 million, respectively. As of December 31, ~~2017,~~2020, we had ~~$24.2~~$42.3 million of total unrecognized compensation expense, net of estimated forfeitures, related to restricted stock unit grants, which will be recognized over the weighted-average period of ~~1.73~~1.15 years.

Performance share units are converted into shares of common stock upon vesting on a ~~one-for-one~~1-for-one basis. We estimate the fair value of each performance share when the grant is authorized and the related service period has commenced. We remeasure

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

the fair value of our performance shares in each subsequent reporting period until the grant date has occurred, which is the date when the performance conditions are satisfied. We recognize compensation cost over the vesting period based on the probability of the service and performance conditions being achieved adjusted for each subsequent fair value measurement until the grant date. If the specified service and performance conditions are not met, compensation expense will not be recognized and any previously recognized compensation expense will be reversed. Performance share units activity is summarized in the following table:


Performance Share Units Activity	Number of Awards	Weighted- Average Grant Date Fair Value
Non-vested share units as of January 1, 2020	286,017	105.76
Granted	245,417	95.81
Vested	(221,016)	89.41
Canceled	(42,696)	110.72
Non-vested share units as of December 31, 2020	267,722	109.34

Performance Share Units Activity Number of
Awards Weighted-
Average
Grant Date
Fair Value
Non-vested share units at January 1, 2017 342,152
$ 61.78
Granted 140,542
$ 84.16
Vested (105,615 ) $ 45.62
Canceled (23,929 ) $ 71.37
Non-vested share units expected to vest as of December 31, 2017 353,150
$ 74.87

The weighted-average estimated fair value of performance share units granted during the ~~year~~years ended ~~2016~~December 31, 2019 and ~~2015~~2018 was ~~$65.83~~$87.39 and ~~$71.36,~~$97.98, respectively. The total fair value of shares released on the vesting of performance share units during the years ended December 31, ~~2017~~, ~~2016~~2020, 2019 and ~~2015~~2018 was ~~$10.0~~$24.6 million,, ~~$16.9~~ $23.0 million and ~~$18.3~~$27.3 million, respectively. As of December 31, ~~2017,~~2020, we had ~~$11.9~~$7.0 million of total unrecognized compensation expense, net of estimated forfeitures, related to performance share unit grants, which will be recognized over the weighted-average period of ~~1.08 years.~~

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~~ROYAL CARIBBEAN CRUISES LTD.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

1.32 year.

The shares underlying our restricted stock awards to age and service eligible senior officers are issued as of the grant date in an amount equal to 200% of the target number of shares. Following the vesting date, the restrictions will lift with respect to the number of shares for which the performance criteria was met and any excess shares will be canceled. Dividends will accrue on the issued restricted shares during the vesting period, but will not be paid to the recipient until the awards vest and the final number of shares underlying the award is determined, at which point, the dividends will be paid in cash only on the earned shares. We estimate the fair value of each restricted stock award when the grant is authorized and the related service period has commenced. We remeasure the fair value of these restricted stock awards in each subsequent reporting period until the grant date has occurred, which is the date when the performance conditions are satisfied. We recognize compensation cost over the vesting period based on the probability of the service and performance conditions being achieved adjusted for each subsequent fair value measurement until the grant date. If the specified service and performance conditions are not met, compensation expense will not be recognized, any previously recognized compensation expense will be reversed, and any unearned shares will be returned to the Company. Restricted stock awards activity is summarized in the following table:


Restricted Stock Awards Activity	Number of Awards	Weighted- Average Grant Date Fair Value
Non-vested share units as of January 1, 2020	452,456	114.01
Granted	260,924	110.21
Vested	(137,948)	95.04
Canceled	0	0
Non-vested share units as of December 31, 2020	575,432	116.83

Restricted Stock Awards Activity Number of
Awards Weighted-
Average
Grant Date
Fair Value
Non-vested share units at January 1, 2017 132,228
$ 66.93
Granted 137,948
$ 95.04
Vested —
$ —
Canceled —
$ —
Non-vested share units expected to vest as of December 31, 2017 270,176
$ 81.28

The weighted-average estimated fair value of restricted stock awards granted during the ~~year~~years ended ~~2016~~December 31, 2019 and 2018 was ~~$66.93.~~$118.08 and $129.23, respectively. As of December 31, ~~2017,~~2020, we had ~~$2.0~~$2.2 million of total unrecognized compensation expense, net of estimated forfeitures, related to restricted stock award grants, which will be recognized over the weighted-average period of ~~1.62~~1.37 years.

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ROYAL CARIBBEAN CRUISES LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note ~~10.~~14. (Loss) Earnings Per Share

A reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share data):


	Year Ended December 31,
	2020		2019		2018
Net (Loss) Income attributable to Royal Caribbean Cruises Ltd. for basic and diluted (loss) earnings per share	$	(5,797,462)	$	1,878,887	$	1,811,042
Weighted-average common shares outstanding	214,335		209,405		210,570
Dilutive effect of stock-based awards	0		525		984
Diluted weighted-average shares outstanding	214,335		209,930		211,554
Basic (loss) earnings per share	$	(27.05)	$	8.97	$	8.60
Diluted (loss) earnings per share	$	(27.05)	$	8.95	$	8.56

Year Ended December 31,
2017 2016 2015
Net income for basic and diluted earnings per share $ 1,625,133
$ 1,283,388
$ 665,783
Weighted-average common shares outstanding 214,617
215,393
219,537
Dilutive effect of stock-based awards 1,077
923
1,152
Diluted weighted-average shares outstanding 215,694
216,316
220,689
Basic earnings per share:
Net income $ 7.57
$ 5.96
$ 3.03
Diluted earnings per share:
Net income $ 7.53
$ 5.93
$ 3.02

There were noapproximately 282,118 antidilutive shares for the year ended December 31, ~~2017~~, ~~2016~~2020, compared to 0 antidilutive shares for the years ended December 31, 2019 and ~~2015.~~2018.

Since the Company expects to settle in cash the principal outstanding under our convertible notes that mature in 2023, we currently use the treasury stock method when calculating their potential dilutive effect, if any. While no shares of the convertible notes are currently convertible, they would be anti-dilutive for the year ended December 31, 2020.

Note ~~11.~~15. Retirement Plan

We maintain a defined contribution plan covering shoreside employees. Effective January 1, 2016, we commenced annual, non-elective contributions to the plan on behalf of all eligible participants equal to 3% of participants' eligible

~~F-27~~

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~~ROYAL CARIBBEAN CRUISES LTD.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

earnings. Remaining annual contributions to the plan are discretionary and are based on fixed percentages of participants' salaries and years of service, not to exceed certain maximums. Contribution expenses were ~~$17.4~~$18.4 million, ~~$16.7~~$21.2 million and ~~$16.8~~$18.9 million for the years ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015,~~2018, respectively.

Note ~~12.~~16. Income Taxes

We are subject to corporate income taxes in countries where we have operations or subsidiaries. We and the majority of our ship-operating and vessel-owning subsidiaries are currently exempt from U.S. corporate income tax on U.S. source income from the international operation of ships pursuant to Section 883 of the Internal Revenue Code. Regulations under Section 883 have limited the activities that are considered the international operation of a ship or incidental thereto. Accordingly, our provision for U.S. federal and state income taxes includes taxes on certain activities not considered incidental to the international operation of our ships.

Additionally, ~~some~~one of our ship-operating subsidiaries ~~are~~is subject to ~~income~~ tax under the tonnage tax ~~regimes~~regime of ~~Malta or~~ the United Kingdom. Under ~~these regimes,~~this regime, income from qualifying activities is subject to corporate income tax, but the tax is computed by reference to the tonnage of the ship or ships registered under the relevant provisions of the tax regimes (the "relevant shipping profits"), which replaces the regular taxable income base. Income from activities not considered qualifying activities, which we do not consider significant, remains subject to ~~Maltese or U.K.~~United-Kingdom corporate income tax.

~~Income~~For the year ended December 31, 2020, we had an income tax benefit of approximately $15 million primarily driven by items not qualifying under Section 883. For the years ended December 31, 2019 and 2018, income tax expense was $32.6 million and $20.9 million, respectively, for items not qualifying under Section 883, tonnage ~~taxes~~tax and income taxes for the remainder of our ~~subsidiaries was approximately $18.3 million, $20.1 million and $11.1 million and was~~subsidiaries. Income taxes are recorded within Other ~~expense~~ ~~for the years ended December 31, 2017, 2016 and 2015, respectively.~~income (expense). In addition, all interest expense and penalties related to income tax liabilities are classified as income tax expense within Other ~~expense~~income (expense).

For a majority of our subsidiaries, we do not expect to incur income taxes on future distributions of undistributed ~~earnings of foreign subsidiaries.~~earnings. Accordingly, no deferred income taxes have been provided for the distribution of these earnings. Where we do expect to incur income taxes on future distributions of undistributed earnings, we have provided for deferred taxes, which we do not consider significant to our operations.

As of December 31, ~~2017,~~2020, the Company had ~~Net Operating Losses~~deferred tax assets for U.S. and foreign net operating losses (“NOLs”) ~~in foreign jurisdictions~~ of ~~$7.5~~approximately $41.2 million. ~~If not utilized, $5.0~~We have provided a valuation allowance for approximately $28.6 million of these NOLs. $18.3 million of the NOLs are subject to ~~expiration~~expire between ~~2018~~2021 and ~~2024. The Company has not recognized any benefits related to these NOLs, as all NOLs have full valuation allowances.~~2030.

~~Net~~

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Our deferred tax assets and deferred tax liabilities and corresponding valuation allowances related to our operations were not material as of December 31, ~~2017~~2020 and ~~2016.~~2019.

We regularly review deferred tax assets for recoverability based on our history of earnings, expectations of future earnings, and tax planning strategies. Realization of deferred tax assets ultimately depends on the existence of sufficient taxable income to support the amount of deferred taxes. A valuation allowance is recorded in those circumstances in which we conclude it is not more-likely-than-not we will recover the deferred tax assets prior to their expiration.

During the third quarter of 2015, the Pullmantur trademark and trade names were impaired. As a result of the impairment, there was no longer a difference between the book and tax basis of the trademark and trade names. During the third quarter of 2015, we reversed the deferred tax liability of $43.4 million and increased the deferred tax asset valuation allowance by $31.4 million, or to 100% of the deferred tax asset balance. The resulting net $12.0 million deferred tax benefit was recorded as part of our income tax provision and was reported within ~~Other expense~~ in our consolidated statements of comprehensive income (loss) for the year ended December 31, 2015. Effective July 31, 2016, we sold 51% of our interest in Pullmantur Holdings. For further information on the sale transaction, refer to

Note 1. ~~General~~17.

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~~ROYAL CARIBBEAN CRUISES LTD.~~

~~NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~Note 13.~~ Changes in Accumulated Other Comprehensive Income (Loss)

The following table presents the changes in accumulated other comprehensive loss by component for the years ended December 31, ~~2017~~2020, 2019 and ~~2016~~2018 (in thousands):


	Changes related to cash flow derivative hedges		Changes in defined benefit plans		Foreign currency translation adjustments		Accumulated other comprehensive (loss) income

Accumulated comprehensive loss at January 1, 2018	$	(250,355)	$	(33,666)	$	(50,244)	$	(334,265)
Other comprehensive income (loss) before reclassifications	(297,994)		6,156		(14,251)		(306,089)
Amounts reclassified from accumulated other comprehensive loss	11,133		1,487		0		12,620
Net current-period other comprehensive income (loss)	(286,861)		7,643		(14,251)		(293,469)

Accumulated comprehensive loss at January 1, 2019	(537,216)		(26,023)		(64,495)		(627,734)
Other comprehensive income (loss) before reclassifications	(146,108)		(20,314)		869		(165,553)
Amounts reclassified from accumulated other comprehensive loss	(5,205)		779		0		(4,426)
Net current-period other comprehensive (loss) income	(151,313)		(19,535)		869		(169,979)

Accumulated comprehensive loss at January 1, 2020	(688,529)		(45,558)		(63,626)		(797,713)
Other comprehensive (loss) income before reclassifications	(41,109)		(22,051)		(28,698)		(91,858)
Amounts reclassified from accumulated other comprehensive loss	79,119		2,067		69,044		150,230
Net current-period other comprehensive (loss) income	38,010		(19,984)		40,346		58,372

Accumulated comprehensive loss at December 31, 2020	$	(650,519)	$	(65,542)	$	(23,280)	$	(739,341)

F-44

Changes related to cash flow derivative hedges Changes in defined
benefit plans Foreign currency translation adjustments Accumulated other comprehensive income (loss)

Accumulated comprehensive loss at January 1, 2015 $ (826,026 ) $ (31,207 ) $ (39,761 ) $ (896,994 )
Other comprehensive (loss) income before reclassifications (697,671 ) 3,053
(25,952 ) (720,570 )
Amounts reclassified from accumulated other comprehensive loss 291,624
1,707
(4,200 ) 289,131
Net current-period other comprehensive (loss) income (406,047 ) 4,760
(30,152 ) (431,439 )

Accumulated comprehensive loss at January 1, 2016 (1,232,073 ) (26,447 ) (69,913 ) (1,328,433 )
Other comprehensive income (loss) before reclassifications 73,973
(2,777 ) 2,362
73,558
Amounts reclassified from accumulated other comprehensive loss 337,250
1,141
—
338,391
Net current-period other comprehensive income (loss) 411,223
(1,636 ) 2,362
411,949

Accumulated comprehensive loss at January 1, 2017 (820,850 ) (28,083 ) (67,551 ) (916,484 )
Other comprehensive income (loss) before reclassifications 381,865
(6,755 ) 17,307
392,417
Amounts reclassified from accumulated other comprehensive loss 188,630
1,172
—
189,802
Net current-period other comprehensive income (loss) 570,495
(5,583 ) 17,307
582,219

Accumulated comprehensive loss at December 31, 2017 $ (250,355 ) $ (33,666 ) $ (50,244 ) $ (334,265 )

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ROYAL CARIBBEAN CRUISES LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table presents reclassifications out of accumulated other comprehensive loss for the years ended December 31, ~~2017~~2020, 2019 and ~~2016~~2018 (in thousands):


	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into (Loss) Income
Details about Accumulated Other Comprehensive Loss Components	Year Ended December 31, 2020		Year Ended December 31, 2019		Year Ended December 31, 2018		Affected Line Item in Statements of Comprehensive Income (Loss)
Gain (loss) on cash flow derivative hedges:


Interest rate swaps	(25,267)		(4,289)		(10,931)		Interest expense, net of interest capitalized
Foreign currency forward contracts	(14,679)		(14,063)		(12,843)		Depreciation and amortization expenses
Foreign currency forward contracts	(7,315)		(5,080)		12,855		Other income (expense)



Fuel swaps	3,549		(1,292)		(1,580)		Other income (expense)
Fuel swaps	(35,407)		29,929		1,366		Fuel
	(79,119)		5,205		(11,133)
Amortization of defined benefit plans:
Actuarial loss	(2,067)		(779)		(1,487)		Payroll and related
Prior service costs	0		0		0		Payroll and related
	(2,067)		(779)		(1,487)
Release of foreign cumulative translation due to sale or liquidation of businesses:
Foreign cumulative translation	(69,044)		0		0		Other operating
Total reclassifications for the period	$	(150,230)	$	4,426	$	(12,620)

During the year ended December 31, 2020, a $69.0 million net loss was recorded within Other expense in our consolidated statements of comprehensive (loss) income. The amount was recognized in earnings in connection with the Pullmantur reorganization, as we no longer have significant involvement in the Pullmantur operations and these amounts were previously deferred in Accumulated other comprehensive loss. The net loss consisted of a $92.6 million loss resulting from the recognition of a currency translation adjustment, partially offset by the recognition of a deferred $23.6 million foreign exchange gain related to the Pullmantur net investment hedge. Of the $69.0 million loss, $34.3 million and $34.7 million was released from Accumulated other comprehensive loss during the quarters ended June 30, 2020 and September 30, 2020, respectively.

~~F-29~~

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Amount of Loss Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
Details about Accumulated Other Comprehensive Income (Loss) Components Year Ended December 31, 2017 Year Ended December 31, 2016 Year Ended December 31, 2015 Affected Line Item in Statements of Comprehensive Income (Loss)
Loss on cash flow derivative hedges:
     Interest rate swaps (31,603 ) (41,480 ) (36,401 ) Interest expense, net of interest capitalized
     Foreign currency forward contracts (10,840 ) (8,114 ) (2,871 ) Depreciation and amortization expenses
     Foreign currency forward contracts (9,472 ) (14,342 ) 7,580
Other expense
     Foreign currency forward contracts —
(207 ) —
Other indirect operating expenses
     Foreign currency collar options (2,408 ) (2,408 ) (1,605 ) Depreciation and amortization expenses
     Fuel swaps 7,382
13,685
(9,583 ) Other expense
     Fuel swaps (141,689 ) (284,384 ) (248,744 ) Fuel
(188,630 ) (337,250 ) (291,624 )
Amortization of defined benefit plans:
    Actuarial loss (1,172 ) (1,141 ) (1,414 ) Payroll and related
          Prior service costs —
—
(293 )

Payroll and related
(1,172 ) (1,141 ) (1,707 )
Release of foreign cumulative translation due to sale or liquidation of businesses:
Foreign cumulative translation —
—
4,200
Other operating
Total reclassifications for the period $ (189,802 ) $ (338,391 ) $ (289,131 )

Note ~~14.~~ 18. Fair Value Measurements and Derivative Instruments

Fair Value Measurements

The estimated fair value of our financial instruments that are not measured at fair value, categorized based upon the fair value hierarchy, are as follows (in thousands):


	Fair Value Measurements at December 31, 2017 Using										Fair Value Measurements at December 31, 2016 Using											Fair Value Measurements at December 31, 2020										Fair Value Measurements at December 31, 2019
Description	Total Carrying Amount		Total Fair Value		Level 1⁽¹⁾		Level 2⁽²⁾		Level 3⁽³⁾		Total Carrying Amount		Total Fair Value		Level 1⁽¹⁾		Level 2⁽²⁾		Level 3⁽³⁾		Description	Total Carrying Amount		Total Fair Value		Level 1(1)		Level 2(2)		Level 3(3)		Total Carrying Amount		Total Fair Value		Level 1(1)		Level 2(2)		Level 3(3)
Assets:																					Assets:
Cash and cash equivalents⁽⁴⁾	$	120,112	$	120,112	$	120,112	$	—	$	—	$	132,603	$	132,603	$	132,603	$	—	$	—
Cash and cash equivalents(4)																					Cash and cash equivalents(4)	$	3,684,474	$	3,684,474	$	3,684,474	0		0		$	243,738	$	243,738	$	243,738	0		0
Total Assets	$	120,112	$	120,112	$	120,112	$	—	$	—	$	132,603	$	132,603	$	132,603	$	—	$	—	Total Assets	$	3,684,474	$	3,684,474	$	3,684,474	$	0	$	0	$	243,738	$	243,738	$	243,738	$	0	$	0
Liabilities:																					Liabilities:
Long-term debt (including current portion of long-term debt)⁽⁵⁾	$	7,506,312	$	8,038,092	$	—	$	8,038,092	$	—	$	9,347,051	$	9,859,266	$	—	$	9,859,266	$	—
Long-term debt (including current portion of long-term debt)(5)																					Long-term debt (including current portion of long-term debt)(5)	$	18,706,359	$	20,981,040	0		$	20,981,040	0		$	9,370,438	$	10,059,055	0		$	10,059,055	0
Total Liabilities	$	7,506,312	$	8,038,092	$	—	$	8,038,092	$	—	$	9,347,051	$	9,859,266	$	—	$	9,859,266	$	—	Total Liabilities	$	18,706,359	$	20,981,040	$	0	$	20,981,040	$	0	$	9,370,438	$	10,059,055	$	0	$	10,059,055	$	0


Year	North America⁽¹⁾⁽²⁾	Europe⁽¹⁾⁽³⁾	Asia/Pacific⁽¹⁾⁽⁴⁾
2013	3.32%	1.24%	0.05%
2014	3.46%	1.23%	0.06%
Year (1)				Year (1)	North America(2)(3)	Europe(2)(4)	Asia/Pacific(2)(5)
2015	3.36%	1.25%	0.08%	2015	3.36%	1.25%	0.08%
2016	3.43%	1.23%	0.11%	2016	3.43%	1.23%	0.11%
2017	3.56%	1.21%	0.12%	2017	3.56%	1.28%	0.15%
2018				2018	3.87%	1.38%	0.16%
2019				2019	3.89%	1.41%	0.20%


Year (1)	Weighted-Average Supply of Berths Marketed Globally(2)	Royal Caribbean Group Total Berths(3)	Global Cruise Guests(2)	North American Cruise Guests(2)(4)	European Cruise Guests(2)(5)	Asia/Pacific Cruise Guests(2)(6)
2015	469,000	112,700	23,000	12,004	6,587	3,129
2016	493,000	123,270	24,000	12,274	6,512	4,466
2017	515,000	124,070	26,700	12,865	6,779	5,415
2018	546,000	135,520	28,500	14,062	7,343	5,685
2019	579,000	141,570	30,000	14,246	7,554	7,317



Year	Weighted-Average Supply of Berths Marketed Globally⁽¹⁾	Royal Caribbean Cruises Ltd. Total Berths⁽²⁾	Global Cruise Guests⁽¹⁾	North American Cruise Guests⁽¹⁾⁽³⁾	European Cruise Guests⁽¹⁾⁽⁴⁾	Asia/Pacific Cruise Guests⁽¹⁾⁽⁵⁾
2013	432,000	98,750	21,343	11,710	6,430	2,045
2014	448,000	105,750	22,039	12,269	6,387	2,382
2015	469,000	112,700	23,000	12,004	6,587	3,129
2016	493,000	123,270	24,000	12,274	6,512	4,466
2017	517,000	124,070	25,800	12,854	6,435	5,068



Ship	Year Ship Built	Year Ship Entered/Will Enter Service⁽¹⁾	Approximate Berths	Primary Areas of Operation
Royal Caribbean International
Symphony of the Seas	2018	2018	5,450	Mediterranean, Eastern/Western Caribbean
Harmony of the Seas	2016	2016	5,450	Eastern/Western Caribbean
Ovation of the Seas	2016	2016	4,100	Eastern Asia, Australia/New Zealand
Anthem of the Seas	2015	2015	4,150	Bermuda, Canada, Eastern/Southern Caribbean
Quantum of the Seas	2014	2014	4,150	Eastern Asia
Allure of the Seas	2010	2010	5,450	Eastern/Western Caribbean
Oasis of the Seas	2009	2009	5,450	Eastern/Western Caribbean
Independence of the Seas	2008	2008	3,600	Northern Europe, Mediterranean, Western Caribbean
Liberty of the Seas	2007	2007	3,750	Western Caribbean
Freedom of the Seas	2006	2006	3,750	Eastern/Western Caribbean, Mediterranean
Jewel of the Seas	2004	2004	2,150	Mediterranean, Southern Caribbean
Mariner of the Seas	2003	2003	3,100	Eastern Asia, Bahamas
Serenade of the Seas	2003	2003	2,100	Eastern/Southern Caribbean, Northern Europe, Canada, Bermuda
Navigator of the Seas	2002	2002	3,250	Northern Europe, Southern/Western Caribbean, Mediterranean
Brilliance of the Seas	2002	2002	2,100	Northern Europe, Western Caribbean
Adventure of the Seas	2001	2001	3,200	Eastern/Western/Southern Caribbean, Canada
Radiance of the Seas	2001	2001	2,100	Alaska, Australia/New Zealand
Explorer of the Seas	2000	2000	3,250	Alaska, Australia/New Zealand
Voyager of the Seas	1999	1999	3,250	Eastern Asia, Australia/New Zealand
Vision of the Seas	1998	1998	2,000	Mediterranean, Western Caribbean
Enchantment of the Seas	1997	1997	2,250	Bahamas
Rhapsody of the Seas	1997	1997	2,000	Mediterranean, Western Caribbean
Grandeur of the Seas	1996	1996	1,950	Southern Caribbean, Bermuda, Canada, Bahamas
Majesty of the Seas	1992	1992	2,350	Bahamas, Cuba, Western Caribbean
Empress of the Seas	1990	2016	1,550	Bahamas, Cuba, Western Caribbean



Ship	Year Ship Built	Year Ship Entered/Will Enter Service⁽¹⁾	Approximate Berths	Primary Areas of Operation
Celebrity Cruises
Celebrity Edge	2018	2018	2,900	Eastern/Western Caribbean
Celebrity Reflection	2012	2012	3,000	Mediterranean, Eastern/Western/Southern Caribbean
Celebrity Silhouette	2011	2011	2,850	Northern Europe, Mediterranean, Eastern/Western/Southern Caribbean
Celebrity Eclipse	2010	2010	2,850	Northern Europe, Mediterranean, Southern Caribbean, South America
Celebrity Equinox	2009	2009	2,850	Eastern/Western/Southern Caribbean
Celebrity Solstice	2008	2008	2,850	Alaska, Australia/New Zealand
Celebrity Xploration	2007	2016	20	Galapagos Islands
Celebrity Constellation	2002	2002	2,150	Mediterranean, Middle East, Southeast Asia
Celebrity Summit	2001	2001	2,150	Southern Caribbean, Bermuda, Canada
Celebrity Infinity	2001	2001	2,150	South America, Alaska, Western Caribbean, Bahamas
Celebrity Xpedition	2001	2004	100	Galapagos Islands
Celebrity Millennium	2000	2000	2,150	Alaska, Southeastern/Eastern Asia
Celebrity Xperience	1982	2016	50	Galapagos Islands
Azamara Club Cruises
Azamara Quest	2000	2007	700	Mediterranean, Eastern/Western/Southern Caribbean, Latin America, Middle East, Australia, Asia
Azamara Journey	2000	2007	700	Southeastern Asia, Eastern Asia, Australia/New Zealand, Mediterranean, Northern Europe, Cuba
Azamara Pursuit	2001	2018	700	Mediterranean, Northern Europe, South America
Pullmantur
Zenith	1992	2014	1,400	Mediterranean, Northern Europe, Eastern Caribbean
Monarch	1991	2013	2,350	Eastern/Southern Caribbean
Horizon	1990	2010	1,400	Mediterranean, Middle East
Sovereign	1988	2008	2,300	Mediterranean, Brazil
TUI Cruises
Mein Schiff 1 ⁽²⁾	2018	2018	2,850	Southeastern Asia, Middle East, Mediterranean
Mein Schiff 6	2017	2017	2,500	North/South/Central America, Mediterranean
Mein Schiff 5	2016	2016	2,500	Southern Caribbean, Mediterranean, Dubai, Northern Europe
Mein Schiff 4	2015	2015	2,500	Northern Europe, Mediterranean, Dubai
Mein Schiff 3	2014	2014	2,500	Northern Europe, Eastern/Southern Caribbean, Mediterranean, Southeast Asia
Mein Schiff 2	1997	2011	1,900	Mediterranean
SkySea Cruises
SkySea Golden Era	1995	2015	1,800	Eastern Asia
Total			134,070



(Mark One)
x☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



o☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



Republic of Liberia (State or other jurisdiction of incorporation or organization)			98-0081645 (I.R.S. Employer Identification No.)


~~(1)~~	Source: Our estimates are based on a combination of data obtained from publicly available sources including the International Monetary Fund, United Nations, Department of Economic and Social Affairs, Cruise Lines International Association ("CLIA") and G.P. Wild. In addition, our estimates incorporate our own analysis utilizing the same publicly available cruise industry data as a base.


~~(2)~~	~~Our estimates include the United States and Canada.~~


~~(3)~~	~~Our estimates include European countries relevant to the industry (e.g., Nordics, Germany, France, Italy, Spain and the United Kingdom).~~


~~(4)~~	Our estimates include the Southeast Asia (e.g., Singapore, Thailand and the Philippines), East Asia (e.g., China and Japan), South Asia (e.g., India and Pakistan) and Oceania (e.g., Australia and Fiji Islands) regions.


~~(2)~~	~~Total berths include our berths related to our Global Brands and Partner Brands.~~


~~(5)~~	Our estimates include the Southeast Asia (e.g., Singapore, Thailand and the Philippines), East Asia (e.g., China and Japan), South Asia (e.g., India and Pakistan) and Oceania (e.g., Australia and Fiji Islands) regions.


Ship	Year Ship Built	Year Ship In Service or Delivered, if after 2020(1)	Approximate Berths
Royal Caribbean International
Odyssey of the Seas	2021	2021	4,200
Spectrum of the Seas	2019	2019	4,150
Symphony of the Seas	2018	2018	5,500
Harmony of the Seas	2016	2016	5,500
Ovation of the Seas	2016	2016	4,150
Anthem of the Seas	2015	2015	4,150
Quantum of the Seas	2014	2014	4,150
Allure of the Seas	2010	2010	5,500
Oasis of the Seas	2009	2009	5,600
Independence of the Seas	2008	2008	3,850
Liberty of the Seas	2007	2007	3,800
Freedom of the Seas	2006	2006	3,950
Jewel of the Seas	2004	2004	2,200
Mariner of the Seas	2003	2003	3,350
Serenade of the Seas	2003	2003	2,150
Navigator of the Seas	2002	2002	3,400
Brilliance of the Seas	2002	2002	2,150
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 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


Employee Location	Male	Female	Unidentified
Shoreside - U.S.	43%	57%
Shoreside - International	47%	52%	1%
Shipboard	79%	21%


U.S. Shoreside Representation by Ethnicity			% of Total U.S. Shoreside Population
White			46%
Hispanic			37%
African American			11%
Asian			5%
Others(1)			1%


~~(1)~~	~~The year a ship entered service refers to the year in which the ship commenced or is expected to commence cruise revenue operations for the brand.~~


~~(2)~~	~~TUI Cruises' newbuild scheduled for delivery in 2018 will enter service as~~ ~~Mein Schiff 1~~ ~~and the existing~~ ~~Mein Schiff 1, not included above, is planned for transfer to an affiliate of TUI AG,~~As of December 31, 2020, our ~~joint venture partner in TUI Cruises.~~


~~(1)~~	~~TUI Cruises plans to offset this additional capacity through the planned transfer of their existing, oldest ships,~~ ~~Mein Schiff 1~~ ~~and~~ ~~Mein Schiff 2,~~ ~~in 2018 and 2019, respectively, to an affiliate of TUI AG, our joint venture partner in TUI Cruises.~~



	Year Ended December 31,
	2017	2016⁽¹⁾	2015	2014	2013
Passengers Carried	5,768,496	5,754,747	5,401,899	5,149,952	4,884,763
Passenger Cruise Days	40,033,527	40,250,557	38,523,060	36,710,966	35,561,772
Available Passenger Cruise Days (APCD)	36,930,939	37,844,644	36,646,639	34,773,915	33,974,852
Occupancy	108.4%	106.4%	105.1%	105.6%	104.7%


Employee Type(1)	U.S. Based Employees	International Employees
Shoreside Operations	4,000	2,000
Shipboard Employees		78,000
Private Destinations(2)		1,000



Name		Age			Position
Richard D. Fain		7073			Chairman, Chief Executive Officer and Director
Jason T. Liberty		4245			Executive Vice President, Chief Financial Officer
~~Adam M. Goldstein~~		58	~~President and Chief Operating Officer~~
Michael W. Bayley	5962			President and Chief Executive Officer, Royal Caribbean International
Lisa Lutoff-Perlo		6063			President and Chief Executive Officer, Celebrity Cruises
~~Lawrence Pimentel~~Roberto Martinoli		6668			President and Chief Executive Officer, ~~Azamara Club~~Silversea Cruises
Harri U. Kulovaara		6568			Executive Vice President, Maritime
Bradley H. Stein		6265			Senior Vice President, General Counsel, Chief Compliance Officer
Henry L. Pujol		5053			Senior Vice President, Chief Accounting Officer
Naftali Holtz		43			Senior Vice President, Finance



	NYSE Common Stock
	High	Low
2017
Fourth Quarter	$133.75	$117.55
Third Quarter	$125.00	$107.79
Second Quarter	$115.63	$93.86
First Quarter	$101.11	$82.72
2016
Fourth Quarter	$86.84	$67.53
Third Quarter	$75.72	$65.10
Second Quarter	$84.56	$64.95
First Quarter	$99.81	$64.21



Period	Total number of shares purchased	Average price paid per share	Total number of shares purchased as part of publicly announced plans or programs⁽¹⁾	Approximate dollar value of shares that may yet be purchased under the plans or programs
October 1, 2017 - October 31, 2017	—	—	—	$375,000,000
November 1, 2017 - November 30, 2017	275,647	$124.05	275,647	$341,000,000
December 1, 2017 - December 31, 2017	526,470	$124.96	526,470	$275,000,000
Total	802,117		802,117



	Year Ended December 31,
	2017		2017 On a Constant Currency basis		2016			2015
Passenger ticket revenues	$	6,313,170	$	6,302,600	$	6,149,323		$	6,058,821
Onboard and other revenues	2,464,675		2,462,531		2,347,078			2,240,253
Total revenues	8,777,845		8,765,131		8,496,401			8,299,074
Less:
Commissions, transportation and other	1,363,170		1,361,001		1,349,677			1,400,778
Onboard and other	495,552		493,790		493,558			553,104
Net revenues including other initiative costs	6,919,123		6,910,340		6,653,166			6,345,192
Less:
Other initiative costs included within Net Revenues	—		—		(2,230		)	—
Net Revenues	$	6,919,123	$	6,910,340	$	6,655,396		$	6,345,192

APCD	36,930,939		36,930,939		37,844,644			36,646,639
Gross Yields	$	237.68	$	237.34	$	224.51		$	226.46
Net Yields	$	187.35	$	187.12	$	175.86		$	173.15



	Year Ended December 31,
	2017		2017 On a Constant Currency basis		2016			2015
Total cruise operating expenses	$	4,896,579	$	4,891,324	$	5,015,539		$	5,099,393
Marketing, selling and administrative expenses ⁽¹⁾	1,186,016		1,189,694		1,100,290			1,086,504
Gross Cruise Costs	6,082,595		6,081,018		6,115,829			6,185,897
Less:
Commissions, transportation and other	1,363,170		1,361,001		1,349,677			1,400,778
Onboard and other	495,552		493,790		493,558			553,104
Net Cruise Costs including other initiative costs	4,223,873		4,226,227		4,272,594			4,232,015
Less:
Net gain related to the sale of Pullmantur and CDF Croisières de France brands included within other operating expenses	—		—		(3,834		)	—
Other initiative costs included within cruise operating expenses and marketing, selling and administrative expenses	—		—		2,433			—
Net Cruise Costs	4,223,873		4,226,227		4,273,995			4,232,015
Less:
Fuel ⁽²⁾	681,118		681,114		713,252			795,801
Net Cruise Costs Excluding Fuel	$	3,542,755	$	3,545,113	$	3,560,743		$	3,436,214

APCD	36,930,939		36,930,939		37,844,644			36,646,639
Gross Cruise Costs per APCD	$	164.70	$	164.66	$	161.60		$	168.80
Net Cruise Costs per APCD	$	114.37	$	114.44	$	112.94		$	115.48
Net Cruise Cost Excluding Fuel per APCD	$	95.93	$	95.99	$	94.09		$	93.77



	Page
Report of Independent Registered ~~Certified~~ Public Accounting Firm		~~F-2~~F-2
Consolidated Statements of Comprehensive (Loss) Income ~~(Loss)~~		~~F-4~~F-6
Consolidated Balance Sheets		~~F-5~~F-7
Consolidated Statements of Cash Flows		~~F-6~~F-8
Consolidated Statements of Shareholders' Equity		~~F-8~~F-10
Notes to the Consolidated Financial Statements		~~F-9~~F-11



	Royal Caribbean International			Celebrity Cruises		Total
Balance at December 31, 2015	$	286,764		$	—	$	286,764
Goodwill attributable to purchase of Ocean Adventures⁽¹⁾	—			1,600		1,600
Foreign currency translation adjustment	(10		)	32		22
Balance at December 31, 2016	286,754			1,632		288,386
Foreign currency translation adjustment	126			—		126
Balance at December 31, 2017	$	286,880		$	1,632	$	288,512



	2017			2016
$1.4 billion unsecured revolving credit facility, LIBOR plus 1.175%, currently 2.64% and a facility fee of 0.20%, due 2020	$	300,000		$	925,000
$1.2 billion unsecured revolving credit facility, LIBOR plus 1.175%, currently 2.58% and a facility fee of 0.20%, due 2022	280,000			805,000
Unsecured senior notes and senior debentures, 2.65% to 7.50%, due 2018, 2020, 2022, 2027 and 2028	1,866,359			1,073,261
$200 million unsecured term loan, LIBOR plus 1.30%	—			200,000
$841.8 million unsecured term loan, LIBOR plus 1.00%, currently 2.52% due through 2028	736,604			806,756
$226.1 million unsecured term loan, 2.53%, due through 2028	197,837			216,677
€700.7 million unsecured term loan, EURIBOR plus 1.15% currently 1.15%, due through 2028	736,020			708,417
$742.1 million unsecured term loan, LIBOR plus 1.30%, currently 2.81%, due through 2027	587,497			649,338
$273.2 million unsecured term loan, LIBOR plus 1.75%	—			273,166
$519 million unsecured term loan, LIBOR plus 0.45%, currently 2.00%, due through 2020	129,786			173,049
$420 million unsecured term loan, 5.41%, due through 2021	135,514			171,444
$420 million unsecured term loan, LIBOR plus 1.65%, currently 3.21%, due through 2021	140,000			175,000
€159.4 million unsecured term loan, EURIBOR plus 1.58%, currently 1.58%, due through 2021	63,798			70,082
$524.5 million unsecured term loan, LIBOR plus 0.50%, currently 1.96%, due through 2021	174,833			218,542
$566.1 million unsecured term loan, LIBOR plus 0.37%, currently 1.90%, due through 2022	212,276			259,448
$1.1 billion unsecured term loan, LIBOR plus 1.65%, currently 3.21%, due through 2022	345,877			460,652
$632.0 million unsecured term loan, LIBOR plus 0.40%, currently 1.86%, due through 2023	315,979			368,643
$673.5 million unsecured term loan, LIBOR plus 0.40%, currently 1.92%, due through 2024	392,860			448,983
$65.0 million unsecured term loan, LIBOR plus 1.45%, currently 3.02%, due through 2019	65,227			67,027
$380.0 million unsecured term loan, LIBOR plus 1.45%, currently 3.02%, due 2018	380,000			380,000
$791.1 million unsecured term loan, LIBOR plus 1.30%, currently 2.85%, due through 2026	593,331			659,256
$290.0 million unsecured term loan, LIBOR plus 1.75%	—			290,000
€365 million unsecured term loan, EURIBOR plus 1.75%	—			123,963
$7.3 million unsecured term loan, LIBOR plus 2.5%	—			3,964
$30.3 million unsecured term loan, LIBOR plus 3.75%, currently 5.29%, due through 2021	5,400			6,597
€80.0 million unsecured term loan, EURIBOR plus 1.32% currently 1.32%, due through 2024	14,267			—
Capital lease obligations	33,139			40,385
Total debt	7,706,604			9,574,650
Less: unamortized debt issuance costs	(167,153		)	(187,214		)
Total debt, net of unamortized debt issuance costs	7,539,451			9,387,436
Less: current portion	(1,188,514		)	(1,285,735		)
Long-term portion	$	6,350,937		$	8,101,701



Year
2018	$	1,188,514
2019	762,614
2020	1,292,478
2021	640,734
2022	1,380,583
Thereafter	2,274,528
	$	7,539,451



	Amount of Loss Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
Details about Accumulated Other Comprehensive Income (Loss) Components	Year Ended December 31, 2017			Year Ended December 31, 2016			Year Ended December 31, 2015			Affected Line Item in Statements of Comprehensive Income (Loss)
Loss on cash flow derivative hedges:
Interest rate swaps	(31,603		)	(41,480		)	(36,401		)	Interest expense, net of interest capitalized
Foreign currency forward contracts	(10,840		)	(8,114		)	(2,871		)	Depreciation and amortization expenses
Foreign currency forward contracts	(9,472		)	(14,342		)	7,580			Other expense
Foreign currency forward contracts	—			(207		)	—			Other indirect operating expenses
Foreign currency collar options	(2,408		)	(2,408		)	(1,605		)	Depreciation and amortization expenses
Fuel swaps	7,382			13,685			(9,583		)	Other expense
Fuel swaps	(141,689		)	(284,384		)	(248,744		)	Fuel
	(188,630		)	(337,250		)	(291,624		)
Amortization of defined benefit plans:
Actuarial loss	(1,172		)	(1,141		)	(1,414		)	Payroll and related
Prior service costs	—			—			(293		)	Payroll and related
	(1,172		)	(1,141		)	(1,707		)
Release of foreign cumulative translation due to sale or liquidation of businesses:
Foreign cumulative translation	—			—			4,200			Other operating
Total reclassifications for the period	$	(189,802	)	$	(338,391	)	$	(289,131	)


~~(1)~~	Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.


~~(2)~~	Inputs other than quoted prices included within Level 1 that are observable for the liability, either directly or indirectly. For unsecured revolving credit facilities and unsecured term loans, fair value is determined utilizing the income valuation approach. This valuation model takes into account


~~(3)~~	~~Inputs that are unobservable. The Company did not use any Level 3 inputs as of December 31, 2017 and December 31, 2016.~~


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


~~(5)~~	~~Consists of unsecured revolving credit facilities, senior notes, senior debentures and term loans. This does not include our capital lease obligations.~~