SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



ý☒			QUARTERLY 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

For the transition period from to

ROYAL CARIBBEAN CRUISES LTD.

(Exact name of registrant as specified in its charter)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

RCL

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý☒ No o☐

Large accelerated filer x☒

Accelerated filer o☐

Non-accelerated filer o☐

Smaller reporting company o

☐

Emerging growth company o

☐

~~(Do not check if a smaller reporting company)~~

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o☐ No ý

There were ~~214,088,950~~255,736,665 shares of common stock outstanding as of ~~October 30, 2017.~~May 1, 2023.

~~Table of Contents~~

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ROYAL CARIBBEAN CRUISES LTD.

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

(unaudited; in thousands, except per share data)


	Quarter Ended March 31,
	2023		2022
Passenger ticket revenues	$	1,896,516	$	651,858
Onboard and other revenues	988,630		407,373
Total revenues	2,885,146		1,059,231
Cruise operating expenses:
Commissions, transportation and other	402,930		150,343
Onboard and other	158,635		74,439
Payroll and related	309,998		349,618
Food	199,391		100,184
Fuel	301,513		188,480
Other operating	420,438		321,878
Total cruise operating expenses	1,792,905		1,184,942
Marketing, selling and administrative expenses	460,855		394,030
Depreciation and amortization expenses	359,773		339,467
Operating Income (Loss)	271,613		(859,208)
Other (expense) income:
Interest income	14,808		3,322
Interest expense, net of interest capitalized	(359,387)		(277,659)
Equity investment income (loss)	20,471		(31,059)
Other income (expense)	4,585		(2,538)
	(319,523)		(307,934)
Net Loss	$	(47,910)	$	(1,167,142)
Loss per Share:
Basic	$	(0.19)	$	(4.58)
Diluted	$	(0.19)	$	(4.58)
Weighted-Average Shares Outstanding:
Basic	255,465		254,821
Diluted	255,465		254,821
Comprehensive Loss
Net Loss	$	(47,910)	$	(1,167,142)
Other comprehensive (loss) income:
Foreign currency translation adjustments	(6,546)		7,778
Change in defined benefit plans	3,513		12,597
(Loss) gain on cash flow derivative hedges	(31,697)		195,901
Total other comprehensive (loss) income	(34,730)		216,276
Comprehensive loss	$	(82,640)	$	(950,866)

Quarter Ended September 30,
2017 2016
Passenger ticket revenues $ 1,893,152
$ 1,899,956
Onboard and other revenues 676,392
663,785
Total revenues 2,569,544
2,563,741
Cruise operating expenses:

Commissions, transportation and other 409,597
400,933
Onboard and other 157,041
159,887
Payroll and related 210,764
214,081
Food 126,223
125,732
Fuel 160,752
178,772
Other operating 253,892
260,718
Total cruise operating expenses 1,318,269
1,340,123
Marketing, selling and administrative expenses 273,637
259,327
Depreciation and amortization expenses 240,150
229,328
Operating Income 737,488
734,963
Other income (expense):

Interest income 4,693
6,472
Interest expense, net of interest capitalized (73,233 ) (82,610 )
Equity investment income 85,120
46,539
Other expense (1,226 ) (12,107 )
15,354
(41,706 )
Net Income $ 752,842
$ 693,257
Earnings per Share:

Basic $ 3.51
$ 3.23
Diluted $ 3.49
$ 3.21
Weighted-Average Shares Outstanding:

Basic 214,694
214,819
Diluted 215,824
215,667
Comprehensive Income

Net Income $ 752,842
$ 693,257
Other comprehensive income (loss):

Foreign currency translation adjustments 5,889
4,043
Change in defined benefit plans (1,990 ) (5,051 )
Gain on cash flow derivative hedges 230,245
95,536
Total other comprehensive income 234,144
94,528
Comprehensive Income $ 986,986
$ 787,785

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

~~Table of Contents~~

ROYAL CARIBBEAN CRUISES LTD.

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

(~~unaudited;~~ in thousands, except ~~per~~ share data)


	As of
	March 31,		December 31,
	2023		2022
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	1,226,871	$	1,935,005
Trade and other receivables, net of allowances of $10,483 and $11,612 at March 31, 2023 and December 31, 2022, respectively	379,177		531,066
Inventories	221,299		224,016
Prepaid expenses and other assets	543,599		455,836
Derivative financial instruments	42,651		59,083
Total current assets	2,413,597		3,205,006
Property and equipment, net	27,466,333		27,546,445
Operating lease right-of-use assets	521,209		537,559
Goodwill	809,258		809,277
Other assets, net of allowances of $63,102 and $71,614 at March 31, 2023 and December 31, 2022, respectively	1,660,090		1,678,074
Total assets	$	32,870,487	$	33,776,361
Liabilities and Shareholders’ Equity
Current liabilities
Current portion of long-term debt	$	2,055,307	$	2,087,711
Current portion of operating lease liabilities	78,385		79,760
Accounts payable	714,837		646,727
Accrued expenses and other liabilities	1,200,590		1,459,957
Derivative financial instruments	121,836		131,312
Customer deposits	5,270,589		4,167,997
Total current liabilities	9,441,544		8,573,464
Long-term debt	19,404,804		21,303,480
Long-term operating lease liabilities	509,530		523,006
Other long-term liabilities	489,188		507,599
Total liabilities	29,845,066		30,907,549

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; 283,979,907 and 283,257,102 shares issued, March 31, 2023 and December 31, 2022, respectively)	2,840		2,832
Paid-in capital	7,351,493		7,284,852
Accumulated deficit	(1,755,339)		(1,707,429)
Accumulated other comprehensive loss	(677,944)		(643,214)
Treasury stock (28,248,125 and 28,018,385 common shares at cost, March 31, 2023 and December 31, 2022, respectively)	(2,069,432)		(2,068,229)
Total shareholders’ equity attributable to Royal Caribbean Cruises Ltd.	2,851,618		2,868,812
Noncontrolling Interests	173,803		—
Total shareholders’ equity	3,025,421		2,868,812
Total liabilities and shareholders’ equity	$	32,870,487	$	33,776,361

Nine Months Ended September 30,
2017 2016
Passenger ticket revenues $ 4,892,760
$ 4,794,653
Onboard and other revenues 1,880,618
1,792,145
Total revenues 6,773,378
6,586,798
Cruise operating expenses:

Commissions, transportation and other 1,060,176
1,060,391
Onboard and other 395,472
399,739
Payroll and related 636,861
671,955
Food 369,198
371,759
Fuel 508,914
531,283
Other operating 780,257
857,161
Total cruise operating expenses 3,750,878
3,892,288
Marketing, selling and administrative expenses 874,957
852,435
Depreciation and amortization expenses 710,836
661,712
Operating Income 1,436,707
1,180,363
Other income (expense):

Interest income 16,756
14,875
Interest expense, net of interest capitalized (230,182 ) (226,803 )
Equity investment income 120,359
94,832
Other expense (including a $21.7 million loss related to the first quarter 2016 elimination of the Pullmantur reporting lag) (6,546 ) (40,965 )
(99,613 ) (158,061 )
Net Income $ 1,337,094
$ 1,022,302
Earnings per Share:

Basic $ 6.22
$ 4.74
Diluted $ 6.19
$ 4.72
Weighted-Average Shares Outstanding:

Basic 214,882
215,663
Diluted 215,905
216,575
Comprehensive Income

Net Income $ 1,337,094
$ 1,022,302
Other comprehensive income (loss):

Foreign currency translation adjustments 14,210
8,423
Change in defined benefit plans (6,280 ) (12,148 )
Gain on cash flow derivative hedges 381,660
254,624
Total other comprehensive income 389,590
250,899
Comprehensive Income $ 1,726,684
$ 1,273,201

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

~~Table of Contents~~

~~ROYAL CARIBBEAN CRUISES LTD.~~

~~CONSOLIDATED BALANCE SHEETS~~

~~(in thousands, except share data)~~


ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
	Three Months Ended March 31,
	2023		2022
Operating Activities
Net Loss	$	(47,910)	$	(1,167,142)
Adjustments:
Depreciation and amortization	359,773		339,467
Net deferred income tax benefit	(11,366)		(3,067)
(Gain) loss on derivative instruments not designated as hedges	(3,397)		10,873
Share-based compensation expense	26,270		22,839
Equity investment (income) loss	(20,471)		31,059
Amortization of debt issuance costs, discounts and premiums	30,070		43,190

Loss on extinguishment of debt	13,289		—
Changes in operating assets and liabilities:
Decrease (increase) in trade and other receivables, net	122,940		(32,236)
Decrease (increase) in inventories	2,716		(29,242)
Increase in prepaid expenses and other assets	(78,489)		(124,394)
Increase in accounts payable trade	56,682		112,426
Decrease in accrued expenses and other liabilities	(258,713)		(119,068)
Increase in customer deposits	1,102,592		406,534
Other, net	15,932		(20,086)
Net cash provided by (used in) operating activities	1,309,918		(528,847)
Investing Activities
Purchases of property and equipment	(251,933)		(1,363,086)
Cash received on settlement of derivative financial instruments	5,405		5,650
Cash paid on settlement of derivative financial instruments	(5,658)		(77,853)

Cash received on loans to unconsolidated affiliates	5,392		4,444

Other, net	12,694		(12,296)
Net cash used in investing activities	(234,100)		(1,443,141)
Financing Activities
Debt proceeds	705,000		2,349,969
Debt issuance costs	(27,213)		(93,763)
Repayments of debt	(2,663,665)		(1,007,632)


Proceeds from sale of noncontrolling interest	209,320		—
Other, net	(7,617)		(10,843)
Net cash (used in) provided by financing activities	(1,784,175)		1,237,731
Effect of exchange rate changes on cash and cash equivalents	223		991
Net decrease in cash and cash equivalents	(708,134)		(733,266)
Cash and cash equivalents at beginning of period	1,935,005		2,701,770
Cash and cash equivalents at end of period	$	1,226,871	$	1,968,504
Supplemental Disclosure
Cash paid during the period for:
Interest, net of amount capitalized	$	389,294	$	225,771
Non-cash Investing Activities

Purchase of property and equipment included in accounts payable and accrued expenses and other liabilities	$	19,321	$	31,899

As of
September 30, December 31,
2017 2016
(unaudited)
Assets

Current assets

Cash and cash equivalents $ 139,950
$ 132,603
Trade and other receivables, net 285,332
291,899
Inventories 119,949
114,087
Prepaid expenses and other assets 200,125
209,716
Derivative financial instruments 52,796
—
Total current assets 798,152
748,305
Property and equipment, net 19,688,872
20,161,427
Goodwill 288,517
288,386
Other assets 1,323,773
1,112,206
$ 22,099,314
$ 22,310,324
Liabilities and Shareholders’ Equity

Current liabilities
Current portion of long-term debt $ 1,515,708
$ 1,285,735
Accounts payable 384,536
305,313
Accrued interest 92,914
46,166
Accrued expenses and other liabilities 748,442
692,322
Derivative financial instruments 89,333
146,592
Customer deposits 2,226,179
1,965,473
Total current liabilities 5,057,112
4,441,601
Long-term debt 6,076,499
8,101,701
Other long-term liabilities 530,215
645,610
Commitments and contingencies (Note 7)

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; 235,134,180 and 234,613,486 shares issued, September 30, 2017 and December 31, 2016, respectively) 2,351
2,346
Paid-in capital 3,375,969
3,328,517
Retained earnings 8,862,369
7,860,341
Accumulated other comprehensive loss (526,894 ) (916,484 )
Treasury stock (21,059,191 and 20,019,237 common shares at cost, September 30, 2017 and December 31, 2016, respectively) (1,278,307 ) (1,153,308 )
Total shareholders’ equity 10,435,488
9,121,412
$ 22,099,314
$ 22,310,324

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

~~Table of Contents~~

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~SHAREHOLDERS' EQUITY

(unaudited; in thousands)

Nine Months Ended September 30,
2017 2016
Operating Activities

Net income $ 1,337,094
$ 1,022,302
Adjustments:

Depreciation and amortization 710,836
661,712
Net deferred income tax expense 516
1,601
(Gain) loss on derivative instruments not designated as hedges (56,836 ) 6,353
Share-based compensation expense 52,469
22,041
Equity investment income (120,359 ) (94,832 )
Amortization of debt issuance costs 37,562
39,425
Gain on sale of property and equipment (30,902 ) —
Changes in operating assets and liabilities:

Decrease in trade and other receivables, net 16,245
9,823
Increase in inventories (6,131 ) (6,379 )
Decrease (increase) in prepaid expenses and other assets 10,211
(8,794 )
Increase (decrease) in accounts payable 77,436
(17,313 )
Increase in accrued interest 46,748
56,787
Increase in accrued expenses and other liabilities 12,870
17,929
Increase in customer deposits 256,855
197,277
Dividends received from unconsolidated affiliates 107,267
71,370
Other, net 2,720
21,650
Net cash provided by operating activities 2,454,601
2,000,952
Investing Activities

Purchases of property and equipment (387,335 ) (2,313,831 )
Cash received (paid) on settlement of derivative financial instruments 57,004
(172,878 )
Investments in and loans to unconsolidated affiliates —
(8,611 )
Cash received on loans to unconsolidated affiliates 31,633
22,470
Proceeds from the sale of property and equipment 230,000
—
Other, net ⁽¹⁾
(9,313 ) (44,709 )
Net cash used in investing activities (78,011 ) (2,517,559 )
Financing Activities

Debt proceeds 3,682,000
6,038,560
Debt issuance costs (25,987 ) (83,793 )
Repayments of debt (5,598,198 ) (4,818,262 )
Purchases of treasury stock (124,999 ) (299,959 )
Dividends paid (309,162 ) (243,557 )
Proceeds from exercise of common stock options 2,499
1,782
Other, net 4,137
2,179
Net cash (used in) provided by financing activities (2,369,710 ) 596,950
Effect of exchange rate changes on cash 467
(23,480 )
Net increase in cash and cash equivalents 7,347
56,863
Cash and cash equivalents at beginning of period 132,603
121,565
Cash and cash equivalents at end of period $ 139,950
$ 178,428
Supplemental Disclosure

Cash paid during the period for:

Interest, net of amount capitalized $ 147,789
$ 140,335
Non-cash Investing Activities

Notes receivable issued upon sale of property and equipment $ —
$ 213,042


	Common Stock		Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interest		Total Shareholders' Equity
Balance at January 1, 2023	$	2,832	$	7,284,852	$	(1,707,429)	$	(643,214)	$	(2,068,229)	$	—	$	2,868,812
Activity related to employee stock plans	8		21,343		—		—		—		—		21,351
Changes related to cash flow derivative hedges	—		—		—		(31,697)		—		—		(31,697)
Change in defined benefit plans	—		—		—		3,513		—		—		3,513
Foreign currency translation adjustments	—		—		—		(6,546)		—		—		(6,546)
Purchase of treasury stock	—		—		—		—		(1,203)		—		(1,203)
Noncontrolling Interest	—		45,298		—		—		—		173,803		219,101
Net Loss	—		—		(47,910)		—		—		—		(47,910)
Balance at March 31, 2023	$	2,840	$	7,351,493	$	(1,755,339)	$	(677,944)	$	(2,069,432)	$	173,803	$	3,025,421

⁽¹⁾ ~~Amount includes $26.0 million in 2016 related to cash included in the divestiture of our 51% interest in Pullmantur Holdings.~~


	Common Stock		Paid-in Capital		Retained Earnings (Accumulated Deficit)		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interest		Total Shareholders' Equity
Balance at January 1, 2022	$	2,827	$	7,557,297	$	302,276	$	(710,885)	$	(2,065,959)	$	—	$	5,085,556
Activity related to employee stock plans	3		17,888		37		—		—		—		17,928
Cumulative effect of adoption of Accounting Standards Update 2020-06	—		(307,640)		146,220		—		—		—		(161,420)
Changes related to cash flow derivative hedges	—		—		—		195,901		—		—		195,901
Change in defined benefit plans	—		—		—		12,597		—		—		12,597
Foreign currency translation adjustments	—		—		—		7,778		—		—		7,778
Purchase of treasury stock	—		—		—		—		(2,270)		—		(2,270)
Net Loss	—		—		(1,167,142)		—		—		—		(1,167,142)
Balance at March 31, 2022	$	2,830	$	7,267,545	$	(718,609)	$	(494,609)	$	(2,068,229)	$	—	$	3,988,928

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

~~Table of Contents~~4

ROYAL CARIBBEAN CRUISES LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

As used in this Quarterly Report on Form 10-Q,the terms “Royal Caribbean,” "Royal Caribbean Group," the “Company,” “we,” “our” and “us” refer to Royal Caribbean Cruises Ltd. and, depending on the context, Royal Caribbean Cruises Ltd.’s consolidated subsidiaries and/or affiliates. The terms “Royal Caribbean International,” “Celebrity ~~Cruises”~~Cruises,” and ~~“Azamara Club Cruises”~~"Silversea Cruises" refer to our ~~wholly-owned~~wholly owned global cruise brands. Throughout this Quarterly Report on Form 10-Q, we also refer to ~~regional~~our partner brands in which we hold an ownership interest, including “TUI ~~Cruises,” “Pullmantur”~~Cruises” and ~~“SkySea~~"Hapag-Lloyd Cruises.”" However, because these ~~regional~~partner brands are unconsolidated investments, our operating results and other disclosures herein do not include these brands unless otherwise specified. In accordance with cruise vacation industry practice, the term “berths” is determined based on double occupancy per cabin even though many cabins can accommodate three or more passengers. This Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, ~~2016, including the audited consolidated financial statements and related notes included therein.~~

2022.

This Quarterly Report on Form 10-Q also includes trademarks, trade names and service marks of other companies. Use or display by us of other parties’ trademarks, trade names or service marks is not intended to and does not imply a relationship with, or endorsement or sponsorship of us by, these other parties other than as described herein.

Note 1. General

~~Note 1. General~~

Description of Business

We are a global cruise company. ~~As of September 30, 2017, we~~We own and operate three global cruise brands: Royal Caribbean International, Celebrity Cruises and ~~Azamara Club~~Silversea Cruises (collectively, our "Global Brands"). We also own a 50% joint venture interest in TUI Cruises GmbH ("TUIC"), which operates the German ~~brand~~brands TUI Cruises ~~a 49% interest in the Spanish brand Pullmantur~~ and ~~have a minority interest in the Chinese brand SkySea~~Hapag-Lloyd Cruises (collectively, our "Partner Brands"). We account for our investments in our Partner Brands under the equity method of accounting. Together, our Global Brands and our Partner Brands have a combined fleet of 64 ships as of March 31, 2023. Our ships offer a selection of worldwide itineraries that call on more than 1,000 destinations in over 120 countries on all seven continents.

Liquidity

~~Prior to August 2016, Pullmantur Holdings S.L. ("Pullmantur Holdings"), the parent company~~As a result of the ~~Pullmantur brand (formerly known as Royal Caribbean Holdings de España S.L.), was wholly owned~~global pandemic impact of COVID-19, we paused our guest cruise operations in March 2020 and began resuming guest cruise operations in 2021, with our full fleet in service by ~~us. Effective July 31, 2016,~~June 2022. During this period of time, we ~~sold 51%~~have taken proactive measures to manage our liquidity, including issuing debt and shares of our ~~interest~~common stock, amending credit agreements to defer payments, obtaining relevant modification of covenant requirements and waivers, and reducing operating expenses and capital expenditures.

As of March 31, 2023, we had liquidity of $3.9 billion, including $2.6 billion of undrawn revolving credit facility capacity, and $1.2 billion in ~~Pullmantur Holdings.~~cash and cash equivalents. We ~~retain a 49% interest in Pullmantur Holdings as well as full ownership~~believe that we have sufficient liquidity to fund our obligations for at least the next twelve months from the issuance of these financial statements. Refer to Note 6. Debt for further information regarding refinancing transactions and the ~~four vessels currently operated by~~applicable financial covenants.

We will continue to pursue various opportunities to raise capital to fund obligations associated with future debt maturities and/or to extend the Pullmantur brand under bareboat charter arrangements. We account for the bareboat charters of the vessels to Pullmantur Holdings as operating leases. We also provide certain ship management services and other related services to Pullmantur Holdings.

maturity dates associated with our existing indebtedness or facilities.

Basis for Preparation of Consolidated Financial Statements

The unaudited consolidated financial statements are presented pursuant to the rules and regulations of the Securities and Exchange Commission. In our opinion, these statements include all adjustments necessary for a fair statement of the results of the interim periods reported herein. Adjustments consist only of normal recurring items, except for any items discussed in the notes below. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted as permitted by such Securities and Exchange Commission rules and regulations. Estimates are required for the preparation of financial statements in accordance with ~~GAAP and actual~~these principles. Actual results could differ from these estimates. Refer to Note 2. 2. Summary of Significant Accounting Policies in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2022 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 5. 5. Investments and Other Assets for further information regarding our variable interest entities. 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 Holding's financial position, results of operations and cash flows concurrently and consistently with the fiscal calendar of the Company (the "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

~~Table of Contents~~

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 Pullmantur 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 first quarter of 2016. Accordingly, the results of Pullmantur Holdings for November and December 2015 are included in our statement of comprehensive income (loss) for the nine months ended September 30, 2016. The effect of this change was 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 nine months ended September 30, 2016.~~

Note 2.2. Summary of Significant Accounting Policies

~~Recent~~Adoption of Accounting Pronouncements

~~Revenue from Contracts with Customers~~

In ~~May 2014, amended GAAP guidance was~~September 2022, the FASB issued ASU No. 2022-04, Liabilities-Supplier Finance Programs (Subtopic 405-50) - Disclosure of Supplier Finance Program Obligations. This ASU requires that a buyer in a supplier finance program disclose sufficient information about the program 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 addressed in the prior accounting guidance. This guidance must be applied using oneallow a user 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 made significant progress toward completing our evaluation of potential changes to our core revenues using the five-step model supported by the new revenue standard. Currently, we are in the process of finalizing our analysis and quantifying the effects of adoption, if any, on how we account for our customer loyalty programs and promotional offerings, as the new standard has changed the method of accounting for loyalty points from a cost-based model to a revenue deferral model using a relative stand-alone selling price method. We expect to complete this analysis and conclude our evaluation on the impact of adopting this new standard on our consolidated financial statements to understand the program’s nature, activity during the ~~fourth quarter of fiscal 2017. Based on our assessment~~period, changes from period to ~~date, we do not expect~~period, and potential magnitude. This ASU is expected to improve financial reporting by requiring new disclosures about the ~~adoption~~programs, thereby allowing financial statement users to better consider the effect of the new standard to materially change the timing of recognition of our core revenues, but we do anticipate enhancing our disclosures with respect to our revenue recognition policies in compliance with the new standard.

~~Upon adoption, we intend to elect the modified retrospective method.~~programs on an entity’s working capital, liquidity, and cash flows. This will involve applying the guidance retrospectively only to the most current period presented in the consolidated financial statements and recognizing the cumulative effect of initially applying the guidance as an adjustment to the January 1, 2018 opening balance of retained earnings.

~~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 the lease rights and obligations arising from the leasing arrangements, including operating leases, to be recognized as assets and liabilities on the balance sheet. The amendments also expand the required disclosures surrounding leasing arrangements. The guidance must be applied using a retrospective application method and will beASU is effective ~~for financial statements issued~~ for fiscal years beginning after December 15, ~~2018 and interim periods within those years. Early adoption~~2022, except for the amendment on roll forward information which is ~~permitted. We are currently evaluating the impact 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. 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~~fiscal years beginning after December 15, ~~2017 and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period.~~2023. We ~~intend to adopt the guidance on the date of initial application,~~adopted ASU No. 2022-04 effective January 1, ~~2018.~~2023. The adoption ~~of this newly issued guidance is~~did not ~~expected to~~ have a material impact to our consolidated financial ~~statements.~~statements and related disclosures.

Reclassifications

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

~~In October 2016, amended GAAP guidance was issued that requires~~For 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 guidance is effective for annual and interim reporting periods beginning after December 15, 2017. Early adoption is permitted as of the beginning of an annual period for which financial statements have not been issued. The guidance is required to be adopted retrospectively by recording a cumulative-effect adjustment to retained earnings as of the beginning of

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~~the adoption period. The adoption of this newly issued guidance is not expected to have a material impact to~~quarter ended March 31, 2023, we no longer separately present Accrued interest in our consolidated ~~financial statements.~~

~~Service Concession Arrangements~~

In May 2017, amended GAAP guidance was issued to clarify who should be viewed 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 multiple 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. We are currently evaluating the impact of the adoption of this newly issued guidance 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.balance sheets. 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~~amounts presented in prior periods ~~therein. Early adoption is permitted in any interim period after issuance of this guidance. All transition requirements~~were reclassified to Accrued expenses and elections should be applied to hedging relationships existing on the date of adoption. The effect of the adoption should be reflected as of the beginning of the fiscal year of adoption. We are currently evaluating the impact of the adoption of this newly issued guidance to our consolidated financial statements.

~~Other~~

~~Revenues and expenses include port costs that vary with guest head counts. The amounts of such port costs included in~~ ~~Passenger ticket revenues~~ on a gross basis were $135.9 million and $158.7 million for the third quarters of 2017 and 2016, respectively, and $413.7 million and $443.1 million for the nine months ended September 30, 2017 and 2016, respectively.

~~Reclassifications~~

~~For the third quarter and nine months ended September 30, 2016, restructuring charges of $1.9 million and $6.6 million, respectively, have been reclassified into~~ ~~Marketing, selling and administrative expenses~~ ~~in the consolidated statements of comprehensive income (loss) in order~~other liabilities to conform to the current year presentation.

For the ~~nine months~~quarter ended ~~September 30, 2016, share-based compensation expense of $22.0 million, equity investment income of $94.8 million~~March 31, 2023, we no longer separately present Impairments and ~~amortization of debt issuance costs of $22.9 million, have been reclassified~~Credit losses in ~~the~~our consolidated statements of ~~cash flows from~~ comprehensive loss. As a result, amounts presented in prior periods were reclassified to Other ~~net~~ to ~~Share-based compensation expense~~, ~~Equity investment income~~ ~~and~~ ~~Amortization of debt issuance costs, respectively, within~~ ~~Net cash provided by operating activities~~ ~~in order~~Operating to conform to the current year presentation.

~~Additionally, for~~For the ~~nine months~~quarter ended ~~September 30, 2016, amortization~~March 31, 2023, we no longer separately present Amortization of debt discounts and premiums;(Decrease) increase in accrued interest; and Impairments and Credit losses in our cash flows from Operating Activities within our consolidated statements of cash flows. As a result, amounts presented in prior periods were reclassified to Amortization of debt issuance costs, ~~of $11.3 million~~discounts and ~~$5.3 million, have been reclassified from~~ premiums;Decrease~~(increase) in prepaid expenses and other assets~~ ~~and from~~ ~~Increase~~ in accrued expenses and other ~~liabilities~~, liabilities; and Other, net, respectively, ~~in the consolidated statements of cash flows to~~ ~~Amortization of debt issuance costs~~, within ~~Net cash provided by operating activities~~ ~~in order~~ Operating Activities to conform to the current year presentation.Additionally, we no longer separately present Proceeds from the sale of property and equipment and other assets in our cash flows from Investing Activities within our consolidated statements of cash flows. As a result, amounts presented in prior periods were reclassified to Other, net within Investing Activities to conform to the current year presentation.

Note 3. Revenues

Revenue Recognition

Revenues are measured based on consideration specified in our contracts with customers and are recognized as the related performance obligations are satisfied.

The majority of our revenues are derived from passenger cruise contracts which are reported within Passenger ticket revenues in our consolidated statements of comprehensive 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 ranges from two to 23 nights.

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 cruise operating expenses. The amounts of port costs charged to our guests and included within Passenger ticket revenues on a gross basis were $203.4 million and $76.9 million for the quarters ended March 31, 2023 and 2022, respectively.

Our total revenues also include Onboard and other revenues, which consist primarily of 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 cruise passengers and recognize revenue 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.

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Disaggregated Revenues

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


	Quarter Ended March 31,
	2023		2022
Revenues by itinerary
North America (1)	$	2,193,008	$	889,087
Asia/Pacific	333,010		34,633
Europe	1,897		1,425
Other regions(2)	214,489		79,633
Total revenues by itinerary	2,742,404		1,004,778
Other revenues(3)	142,742		54,453
Total revenues	$	2,885,146	$	1,059,231

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

(2) Includes seasonality impacted itineraries primarily in South and Latin American countries.

(3) Includes revenues primarily related to cancellation fees, vacation protection insurance, casino operations, pre- and post-cruise tours and fees for operating certain port facilities. Amounts also include revenues related to procurement and management related services we perform on behalf of our unconsolidated affiliates. Refer to Note ~~3. Earnings~~5. Investments and 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 quarters ended March 31, 2023 and 2022, our guests were sourced from the following areas:


	Quarter Ended March 31,
	2023		2022
Passenger ticket revenues:
United States	76	%	84	%
All other countries (1)	24	%	16	%

(1)No other individual country's revenue exceeded 10% for the quarters ended March 31, 2023 and 2022.

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 or onboard revenues during the duration of the cruise. 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. Customer deposits presented in our consolidated balance sheets include contract liabilities of $2.5 billion and $1.8 billion as of March 31, 2023 and December 31, 2022, respectively.

We have provided flexibility to guests with bookings on sailings cancelled due to COVID-19 by allowing guests to receive future cruise credits (“FCC”). As of March 31, 2023, our customer deposit balance includes approximately $0.5 billion of unredeemed FCCs. Given the lack of comparable historical experience of FCC redemptions, as of March 31, 2023 we are unable to estimate the number of FCCs that may not be used in future periods and get recognized as breakage. We will update our breakage analysis as future information is received.

Contract Receivables and Contract Assets

Although we generally require full payment from 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 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.

Our credit card processors agreements require us, under certain circumstances, to maintain a reserve that can be satisfied by posting collateral. One of our processors currently holds a portion of our customer deposits in reserve until the sailings take place or the funds are refunded to the customer. The cash reserve held by the processor was immaterial as of March 31, 2023.

We have contract assets that are conditional rights to consideration for satisfying the construction services performance obligations under a service concession arrangement. As of March 31, 2023 and December 31, 2022, our contract assets were $167.7 million and $167.9 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 advisor commissions and prepaid credit and debit card fees are an incremental cost of obtaining contracts with customers that we recognize as an asset and include within Prepaid expenses and other assets in our consolidated balance sheets. Prepaid travel advisor commissions and prepaid credit and debit card fees were $244.9 million as of March 31, 2023 and $177.5 million as of December 31, 2022. Our prepaid travel advisor commissions, and prepaid credit and debit card fees are recognized at the time of revenue recognition or at the time of voyage cancellation, and are reported primarily within Commissions, transportation and other in our consolidated statements of comprehensive loss.

Note 4. Loss Per Share

~~A reconciliation between basic~~Basic and diluted ~~earnings~~loss per share is as follows (in thousands, except per share data):


	Quarter Ended March 31,
	2023		2022
Net loss for basic and diluted loss per share	$	(47,910)	$	(1,167,142)
Weighted-average common shares outstanding	255,465		254,821
Diluted weighted-average shares outstanding	255,465		254,821
Basic loss per share	$	(0.19)	$	(4.58)
Diluted loss per share	$	(0.19)	$	(4.58)

Quarter Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Net income for basic and diluted earnings per share $ 752,842
$ 693,257
$ 1,337,094
$ 1,022,302
Weighted-average common shares outstanding 214,694
214,819
214,882
215,663
Dilutive effect of stock options, performance share awards and restricted stock awards 1,130
848
1,023
912
Diluted weighted-average shares outstanding 215,824
215,667
215,905
216,575
Basic earnings per share $ 3.51
$ 3.23
$ 6.22
$ 4.74
Diluted earnings per share $ 3.49
$ 3.21
$ 6.19
$ 4.72

~~There~~Basic loss per share is computed by dividing Net Loss by the weighted-average number of common stock outstanding during each period. Diluted loss per share incorporates the incremental shares issuable upon the assumed exercise of stock options and conversion of potentially dilutive securities. If we have a net loss for the period, all potential common shares will be considered antidilutive, resulting in the same basic and diluted net loss per share amounts for those periods. There were noapproximately 30,994,718 and 23,407,179 antidilutive shares for thequarters ended March 31, 2023 and ~~nine month periods ended September 30, 2017and September 30, 2016.~~

~~Note 4. Property and Equipment~~

In March ~~2017,~~31, 2022, respectively. As we ~~sold~~ ~~Legend of the Seas~~ ~~to an affiliate of TUI AG, our joint venture partner in TUI Cruises. The sale resulted in a gain of $30.9 million and is reported within~~ ~~Other operating~~ ~~within~~ ~~Cruise operating expenses~~ ~~in our consolidated statements of comprehensive income (loss)~~had net loss for the ~~nine months~~quarters ended ~~September 30, 2017.~~

~~In April 2016, we sold~~ ~~Splendour of the Seas~~March 31, 2023 and March 31, 2022, all potential common shares were determined to ~~TUI Cruises. Concurrent with the acquisition, TUI Cruises leased the ship to~~be antidilutive, resulting in the same ~~TUI AG affiliate mentioned above, which now operates the ship. The gain recognized did not have a material effect to our consolidated financial statements~~basic and ~~was also reported in~~ ~~Other operating~~ ~~within~~ ~~Cruise operating expenses~~ ~~in our consolidated statements of comprehensive income (loss)~~diluted net loss per share amounts for the ~~nine months ended September 30, 2016.~~period.

Note 5.5. Investments and 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 hold equity interests in ventures related to our cruise operations. We account for the majority of these investments as either an equity method investment or a controlled subsidiary.

Effective March 31, 2023, we closed on the previously announced partnership agreement with iCON Infrastructure Partners VI, L.P. ("iCON"). This partnership will own, develop, and manage cruise terminal facilities and infrastructure in key ports of call, initially including several development projects in Italy and Spain. As part of the transaction with iCON we also agreed to sell 80% of PortMiami. Refer below to equity method investments and controlled subsidiaries for further information on the transaction. In addition, the partnership will pursue additional port infrastructure developments, including future plans to own, develop, and manage an infrastructure project in the U.S. Virgin Islands.

Unconsolidated investments ("equity method investments")

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 is shared between ourselves and TUI AG, our joint venture partner. All the significant operating and financial decisions of TUIC require the 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.

As of ~~September 30, 2017,~~March 31, 2023, the net book value of our investment in ~~TUI Cruises~~TUIC was ~~approximately $582.5~~$483.9 million, primarily consisting of ~~$379.3~~$384.6 million in equity and a loan of ~~€170.4~~€83.2 million, or approximately ~~$201.5~~$90.4 million based on the exchange rate at ~~September 30, 2017.~~March 31, 2023. As of December 31, ~~2016,~~2022, the net book value of our investment in ~~TUI Cruises~~TUIC was ~~approximately $517.0~~$466.0 million, primarily consisting of ~~$323.5~~$361.5 million in equity and a loan of ~~€182.3~~€87.2 million, or approximately ~~$192.4~~$93.0 million based on the exchange rate at December 31, ~~2016.~~2022. 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 4.~~ ~~Property and Equipment~~ ~~for further information. The majority of these amounts were included within~~ ~~Other assets~~ ~~in our consolidated balance sheets.~~

In addition, we and TUI AG have each guaranteed the repayment by TUI Cruises of 50% of a bank loan. As of September 30, 2017, the outstanding principal amount of the loan was €100.4 million, or approximately $118.7 million based on the exchange rate at September 30, 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

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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 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 below 37.55% through ~~2021.~~

~~We have determined that Pullmantur Holdings, in which we have a 49% noncontrolling interest, is a VIE for which we~~ May 2033. Our investment amount and outstanding term loan 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 Pullmantur Holdings to Springwater Capital LLC ("Springwater"), we do not consolidate this entity and we account for this investment under the equity method of accounting. As of September 30, 2017,substantially our maximum exposure to loss in ~~Pullmantur Holdings was approximately $50.9 million consisting of loans and other receivables. As of December 31, 2016,~~connection with our ~~maximum exposure to loss~~investment in ~~Pullmantur Holdings was approximately $40.3 million consisting of loans and other receivables. These amounts were included within~~ ~~Trade and other receivables, net~~ ~~and~~ ~~Other assets~~ ~~in our consolidated balance sheets.~~TUIC.

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 $17.7 million based on the exchange rate at September 30, 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 September 30, 2017, no amounts had been drawn on this facility.

We have determined that Grand Bahama Shipyard Ltd. (“("Grand ~~Bahama”~~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 and certain emergency repairs as may be required. ~~During the quarter and nine months ended September 30, 2017, we made payments of $1.9 million and $7.5 million, respectively, to Grand Bahama for ship repair and maintenance services.~~ We have determined 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~~entity.

As part of the transaction with iCON, we sold our controlling interest in two Italian entities for an immaterial amount of net proceeds and we account for this investment under the equity method of accounting. As of September 30, 2017, the net book value of our investment in Grand Bahama was approximately $50.4 million, consisting of $30.8 million in equity and a loan of $19.6 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 to our investment in Grand Bahama. Our debt agreement with Grand Bahama was amended during the quarter ended March 31, 2016 to extend the maturity by 10 years and increase the applicable interest rate to the lower of (i) LIBOR plus 3.50% and (ii) 5.5%. Interest payablerecognized an immaterial gain on the ~~loan is due on a semi-annual basis. We continue to classify the loan, as modified, as non-accrual status. The loan balance is included within~~ ~~Other assets~~ in our consolidated balance sheets. We monitor credit risk associated with the loan through our participation on Grand Bahama’s board of directors along with our review of Grand Bahama’s financial statements and projected cash flows. Based on this review,sale. At closing, we ~~believe the risk of loss associated with the outstanding loan is not probable as of September 30, 2017.~~

We have determined that ~~Skysea Holding International Ltd. ("Skysea Holding"),~~the partnership and both Italian entities are VIE's. These entities in ~~which we have a 36% noncontrolling interest, is a VIE. During the second quarter~~Italy represent development projects to own, develop, and manage cruise terminal facilities in key ports 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.call. We have determined that we are not the primary beneficiary for either of ~~Skysea Holding~~these entities 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. Interest under these facilities, which mature in January 2030, currently accrues at a rate of 6.5% per annum. The facilities, which are pari passu to each other, are each 100% guaranteed by Skysea Holding and are secured by first priority mortgagesentities.

For further information on the ~~ship,~~ ~~Golden Era.~~ ~~As of September 30, 2017,~~measurements used to estimate the ~~net book~~fair value of our ~~investment in Skysea Holding~~equity method investments, refer to Note 11. Fair Value Measurements and its subsidiaries was approximately $97.3 million, consisting of $6.5 million in equity and loans and other receivables of $90.8 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.~~

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Derivative Instruments.

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


	Quarter Ended March 31,
	2023		2022
Share of equity income (loss) from investments	$	20,471	$	(31,059)
Dividends received (1)	$	802	$	423

(1) Represents dividends received from our investments accounted for under the equity method of accounting during the quarters ended March 31, 2023 and March 31, 2022. The amounts included in the table above are net of tax withholdings.


	As of March 31, 2023		As of December 31, 2022
Total notes receivable due from equity investments	$	99,746	$	101,392
Less-current portion (1)	18,094		18,406
Long-term portion (2)	$	81,652	$	82,986

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

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

Consolidated investments ("controlled subsidiaries")

As part of the transaction with iCON, we sold noncontrolling interest in two controlled subsidiaries, comprised of PortMiami and one entity in Spain. The majority of the proceeds comes from selling 80% of PortMiami for $208.9 million and

Quarter Ended September 30, 2017 Quarter Ended September 30, 2016 Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016
Share of equity income from investments $ 85,120
$ 46,539
$ 120,359
$ 94,832
Dividends received $ 49,865
$ 47,491
$ 107,267
$ 71,370
retained a 20% minority interest. We have determined PortMiami is a VIE, and we are the primary beneficiary as we have the power to direct the activities that most significantly impact the facility’s economic performance. Accordingly, we will continue to consolidate this entity. The cash consideration received, net of transaction costs, was allocated between paid in capital and noncontrolling interest using the net book value of PortMiami as of March 31, 2023, as presented in the statement of shareholders' equity.

Other Assets

Credit Losses

We ~~also provide ship~~reviewed our notes receivable for credit losses in connection with the preparation of our financial statements for the quarter ended March 31, 2023. In evaluating the allowance, management ~~services~~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 ~~TUI Cruises GmbH, Pullmantur Holdings~~repay, the estimated value of any underlying collateral, peer group information and ~~Skysea Holding. Additionally, we bareboat charter~~prevailing economic conditions. Our credit loss allowance beginning and ending balances as of March 31, 2023 and 2022 primarily relate to ~~Pullmantur Holdings~~credit losses recognized on notes receivable for the ~~vessels currently operated by its brands, which were retained by us following~~previous sale of certain property and equipment of $81.6 million. The notes receivable for the previous sale of our ~~51% interest~~property and equipment are related to loans that were originated in ~~Pullmantur Holdings. We recorded~~2015 and 2020.

The following table summarizes our credit loss allowance related to receivables (in thousands):


	Quarter Ended March 31,
	2023		2022
Balance, beginning of period	$	83,227	$	100,192
Credit loss (recovery), net	(7,287)		653
Write-offs	(2,355)		(8,152)
Balance, end of period	$	73,585	$	92,693

Note 6. Debt

Debt consists of the following (in thousands):


	Interest Rate (1)	Maturities Through	As of March 31, 2023		As of December 31, 2022
Fixed rate debt:
Unsecured senior notes	3.70% to 11.63%	2026 - 2030	$	7,898,504	$	7,199,331
Secured senior notes	8.25% to 11.50%	2025 - 2029	2,373,981		2,370,855
Unsecured term loans	1.28% to 5.89%	2027 - 2034	4,439,699		4,561,129
Convertible notes	2.88% to 6.00%	2023 - 2025	1,725,000		1,725,000
Total fixed rate debt			16,437,184		15,856,315
Variable rate debt:
Unsecured revolving credit facilities (2)	6.20% to 6.95%	2024 - 2025	371,971		2,744,105
USD unsecured term loan	5.71% to 9.69%	2023 - 2037	4,198,261		4,335,973
Euro unsecured term loan	6.46% to 7.09%	2023 - 2028	544,488		534,589
Total variable rate debt			5,114,720		7,614,667
Finance lease liabilities			336,892		351,332
Total debt (3)			21,888,796		23,822,314
Less: unamortized debt issuance costs			(428,685)		(431,123)
Total debt, net of unamortized debt issuance costs			21,460,111		23,391,191
Less—current portion			(2,055,307)		(2,087,711)
Long-term portion			$	19,404,804	$	21,303,480

(1) Interest rates based on outstanding loans as ~~it relates~~of March 31, 2023, and for variable rate debt include either LIBOR, EURIBOR or Term SOFR plus the applicable margin.

(2) Advances under our $1.9 billion facility accrue interest at Term SOFR plus an interest rate margin ranging from 1.40% to 2.15%. Advances under our $1.1 billion facility accrue interest at Term SOFR plus an interest rate margin ranging from 1.80% to 2.15%. Based on applicable Term SOFR rates, as of March 31, 2023, the interest rates under the $1.9 billion facility and the $1.1 billion facility were 6.20% and 6.95%, respectively. We also pay a facility fee for each facility ranging from 0.20% to 0.30% of the total commitments under such facility.

(3) At March 31, 2023 and December 31, 2022, the weighted average interest rate for total debt was 6.35% and 6.23%, respectively.

Unsecured revolving credit facilities

In January 2023, we amended and extended the majority of our two unsecured revolving credit facilities. The amendment extended the maturities of $2.3 billion of the $3.0 billion aggregate revolving credit capacity by one year to April 2025, with the remainder maturing in April 2024. Additionally, during the quarter ended March 31, 2023 we repaid $2.4 billion under our revolving credit facilities, resulting in an aggregate borrowing capacity of $2.6 billion under our unsecured revolving credit facilities as of March 31, 2023.

Our revolving credit facilities were partially utilized through a combination of amounts drawn and letters of credit issued under the facilities as of March 31, 2023.

Debt financing transactions

In February 2023, we issued $700 million aggregate principal amount of 7.25% senior guaranteed notes due January 2030 ("7.25% Priority Guaranteed Notes"). Upon closing, we terminated our commitment for the $700 million 364-day term loan facility. In addition, the remaining $350 million backstop committed financing was also terminated upon closing, which resulted in an immaterial loss on extinguishment of debt.

Export credit agency guarantees

Except for the term loans we incurred to acquire Celebrity Flora 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. For the majority of the loans as of March 31, 2023, we pay to the applicable export credit agency, depending on the financing agreement, an upfront fee of 2.35% to 5.48% of the maximum loan amount in consideration for these ~~services~~ guarantees. We amortize the fees that are paid upfront over the life of the loan. We classify these fees within Amortization of debt issuance costs, discounts and premiums in ~~our operating results within~~ our consolidated statements of ~~comprehensive income (loss)~~cash flows. Prior to the loan being drawn, we present these fees within 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 long-term debt or long-term debt.

Debt covenants

Our export credit facilities and our non-export credit facilities have an outstanding principal amount of approximately $9.4 billion as of March 31, 2023. These facilities, as well as certain of our credit card processing agreements, contain covenants that require us, among other things, to maintain a fixed charge coverage ratio, limit our net debt-to-capital ratio, maintain minimum liquidity, and under certain facilities, to maintain a minimum stockholders' equity. As of March 31, 2023, we were in compliance with our debt covenants and we estimate we will be in compliance for the next twelve months.

The following is a schedule of annual maturities on our total debt, including finance leases, as of March 31, 2023 for each of the next five years (in thousands):


Year	As of March 31, 2023 (1)
Remainder of 2023	$	1,806,425
2024	2,295,347
2025	3,671,929
2026	2,753,605
2027	3,494,845
Thereafter	7,866,645
	$	21,888,796

Quarter Ended September 30, 2017 Quarter Ended September 30, 2016 Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016
Revenues $ 14,054
$ 9,300
$ 39,987
$ 17,888
Expenses $ 3,770
$ 2,410
$ 11,503
$ 8,930

~~Note 6. Long-Term~~(1) Debt

~~In October 2017, we amended and restated our $1.2 billion unsecured revolving credit facility due August 2018. The amendment reduced~~ denominated in other currencies is calculated based on the applicable ~~margin~~exchange rate at March 31, 2023.

Note 7. Leases

Operating Leases

Our operating leases primarily relate to preferred berthing arrangements, real estate and ~~extended the termination date to October 2022. The applicable margin and facility fee vary with our debt rating~~shipboard equipment, and are ~~currently 1.175%~~included within Operating lease right-of-use assets, and ~~0.20%~~Long-term operating lease liabilities with the current portion of the liability included within Current portion of operating lease liabilities in our consolidated balance sheets as of March 31, 2023 and December 31, 2022. Leases with an initial term of 12 months or less are not recorded on our consolidated balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term. Our operating leases include SilverExplorer, ~~respectively. We~~operated by Silversea Cruises. The operating lease for Silver Explorer will expire in August 2023.

For some of our real estate leases and berthing agreements, we do have the ~~ability~~option to ~~increase~~extend our current lease term. For those lease agreements with renewal options, the ~~capacity~~renewal periods for real estate leases range from one to 10 years and the renewal periods for berthing agreements range from one 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.

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 Term SOFR 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.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.

Finance Leases

Our finance leases primarily relate to buildings and surrounding land located at our Miami headquarters and our lease for the Silver Dawn ship. Finance leases are included within Property and Equipment, net and Long-term debt with the current portion of the ~~amended facility by an additional $500 million, subject~~liability included within Current portion of long-term debt in our consolidated balance sheets as of March 31, 2023 and December 31, 2022. During the quarter ended March 31, 2023 we executed the bargain purchase option for the Silver Whisper.

The Company's master lease agreement (“Master Lease”) with Miami-Dade County related to the ~~receipt of additional or increased lender commitments,~~buildings and surrounding land located at our Miami headquarters is classified as a finance lease in accordance with ASC 842, Leases. The Master Lease includes two five-year options to extend the ~~termination date by up~~lease which we are reasonably certain to ~~two years,~~exercise. The total aggregate amount of the finance lease liabilities recorded for this Master Lease was $56.0 million and $55.5 million as of March 31, 2023 and December 31, 2022, respectively.

Silversea Cruises operates Silver Dawn under a sale-leaseback agreement with a bargain purchase option at the end of the 15-year lease term. Due to the bargain purchase option at the end of the lease term in 2036, whereby Silversea Cruises is reasonably certain of obtaining ownership of the ship, Silver Dawn is accounted for as a finance lease. The lease includes other purchase options beginning in year three, none of which are reasonably certain of being exercised at this time. The total aggregate amount of finance lease liabilities recorded for this ship was $260.1 million and $264.8 million as of March 31, 2023 and December 31, 2022, respectively. The lease payments on the Silver Dawn are subject to ~~lender consent. These amendments did not result~~adjustments based on the LIBOR rate.

The components of lease expense were as follows (in thousands):


	Consolidated Statement of Comprehensive Loss Classification	Quarter Ended March 31, 2023		Quarter Ended March 31, 2022
Lease costs:
Operating lease costs	Commission, transportation and other	$	55,101	$	22,729
Operating lease costs	Other operating expenses	5,545		5,471
Operating lease costs	Marketing, selling and administrative expenses	5,442		4,776
Financial lease costs:
Amortization of right-of-use-assets	Depreciation and amortization expenses	5,791		6,093
Interest on lease liabilities	Interest expense, net of interest capitalized	7,502		4,600
Total lease costs		$	79,381	$	43,669

In addition, certain of our berthing agreements include variable lease costs based on the number of passengers berthed. During the quarters ended March 31, 2023, and 2022 we had $37.7 million and $7.5 million of variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive loss, respectively.

The weighted average of the ~~extinguishment~~remaining lease terms and weighted average discount rates are as follows:


	As of March 31, 2023		As of December 31, 2022
Weighted average of the remaining lease term in years
Operating leases	17.81		17.69
Finance leases	19.68		19.26
Weighted average discount rate
Operating leases	7.24	%	6.92	%
Finance leases	6.44	%	6.43	%

Supplemental cash flow information related to leases is as follows (in thousands):


	Quarter Ended March 31, 2023		Quarter Ended March 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	36,421	$	28,193
Operating cash flows from finance leases	$	7,502	$	4,600
Financing cash flows from finance leases	$	13,988	$	17,034

As of ~~debt.~~March 31, 2023, maturities related to lease liabilities were as follows (in thousands):


Year	Operating Leases		Finance Leases
Remainder of 2023	$	89,291	$	33,923
2024	105,441		44,465
2025	99,815		43,974
2026	90,555		38,412
2027	71,207		37,358
Thereafter	789,278		706,482
Total lease payments	1,245,587		904,614
Less: Interest	(657,672)		(567,722)
Present value of lease liabilities	$	587,915	$	336,892

Note 7.8. Commitments and Contingencies

Ship Purchase Obligations

Our future capital commitments consist primarily of new ship orders. As of September 30, 2017, we had two Quantum-class ships, two Oasis-class ships and two ships of a new generation of ships, known as "Project Icon," on order for our Royal Caribbean International brand with an aggregate capacity of approximately 30,500 berths. Additionally, as of September 30, 2017, we have four Edge-classMarch 31, 2023, the dates that the ships on order ~~for~~by our ~~Celebrity Cruises brand with an aggregate capacity of approximately 11,600 berths. The following provides further information on recent developments with respect to our ship orders.~~

During the second quarter of 2017, we entered into agreements with Meyer Turku to build two "Project Icon" ships. Subsequently, in October 2017, we entered into credit agreements for the unsecured financing of these ships for up to 80% of each ship’s contract price. For each ship, the official Finnish export credit agency, Finnvera, plc, has agreed to guarantee to the lenders a substantial majority of the financing, with a smaller portion of the financing to be 95% guaranteed by Euler Hermes, the official German export credit agency. The maximum loan amount under each facility is not to exceed €1.4 billion, or approximately $1.7 billion, based on the exchange rate at September 30, 2017. Interest on approximately 75% of each loan will accrue at a fixed rate of 3.56%Global and 3.76% for the first and the second Icon-class ships, respectively, and the balance will accrue interest at a floating rate ranging from LIBOR plus 1.10% to 1.15% and LIBOR plus 1.15% to 1.20% for the first and the second Icon-class ships, respectively. Each loan will amortize semi-annually and will mature 12 years following delivery of each ship. The first and second Icon-class ships will each have a capacity of approximately 5,650 berths andPartner Brands are expected to ~~enter service~~be delivered, subject to change in the ~~second quarters~~event of ~~2022~~construction delays, and ~~2024, respectively.~~their approximate berths are as follows:

Ship

Shipyard

Expected delivery

Approximate
Berths

Royal Caribbean International —

Oasis-class:

Utopia of the Seas

Chantiers de l'Atlantique

2nd Quarter 2024

5,700

Icon-class:

Icon of the Seas

Meyer Turku Oy

4th Quarter 2023

5,600

Unnamed

Meyer Turku Oy

2nd Quarter 2025

5,600

Unnamed

Meyer Turku Oy

2nd Quarter 2026

5,600

Celebrity Cruises —

Edge-class:

Celebrity Ascent

Chantiers de l'Atlantique

4th Quarter 2023

3,250

Silversea Cruises —

Evolution Class:

Silver Nova

Meyer Werft

2nd Quarter 2023

730

Silver Ray

Meyer Werft

2nd Quarter 2024

730

TUI Cruises (50% joint venture) —

Mein Schiff 7

Meyer Turku Oy

2nd Quarter 2024

2,900

Unnamed

Fincantieri

4th Quarter 2024

4,100

Unnamed

Fincantieri

2nd Quarter 2026

4,100

Total Berths

38,310

In ~~July 2017, we entered into credit agreements for the unsecured financing~~addition, as of the third and fourth Edge-class ships and the fifth Oasis-class ship for up to 80% of each ship’s contract price through facilities to be guaranteed 100% by Bpifrance Assurance Export, the official export credit agency of France. Under these financing arrangements,March 31, 2023, we have ~~the right, but not the obligation,~~an agreement in place with Chantiers de l'Atlantique to satisfy the obligations to be incurred upon delivery and acceptance of each ship under the shipbuilding contract by assuming, at delivery and acceptance, the debt indirectly incurred by the shipbuilder during the construction of each ship. The maximum loan amount under each facility is not to exceed €684.2 million in the case of the thirdbuild an additional Edge-class ship, estimated for delivery in 2025, which is contingent upon completion of conditions precedent and the United States dollar equivalent of €714.6 million and €1.1 billion in the case of the fourth Edge-class ship and fifth Oasis-class ship, or approximately $844.7 million and $1.3 billion, respectively, based on the exchange rate at September 30, 2017. The loans will amortize semi-annually and will mature 12 years following delivery of each ship. Interest on the loans will accrue at a fixed rate of 1.28% for the third Edge-class ship and at a fixed rate of 3.18% for both, the fourth Edge-class ship and the fifth Oasis-class ship. The thirdfinancing.

~~Table of Contents~~

and fourth Edge-class ships, each of which will have a capacity of approximately 2,900 berths, are expected to enter service in the fourth quarters of 2021 and 2022, respectively. The fifth Oasis-class ship will have a capacity of approximately 5,450 berths and is expected to enter service in the second quarter of 2021.

~~In September 2017, 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.~~

As of ~~September 30, 2017,~~March 31, 2023, the aggregate cost of our ships on order presented in the table above, not including any ships on order by our Partner Brands, was approximately ~~$13.0~~$10.2 billion, of which we had deposited ~~$323.2 million~~$0.9 billion as of such date. Approximately ~~53.8%~~49.2% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at ~~September 30, 2017.~~March 31, 2023. Refer to Note ~~10.~~ 11. Fair Value Measurements and Derivative Instruments for further information.

Litigation

As previously reported, a lawsuit was filed against us in August 2019 in the U.S. District Court for the Southern District of Florida (the "Court") under Title III of the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act. The complaint filed by Havana Docks Corporation alleges it holds an interest in the Havana Cruise Port Terminal, which was expropriated by the Cuban government. The complaint further alleges that we trafficked in the terminal by embarking and disembarking passengers at these facilities. The plaintiff seeks all available statutory remedies, including the value of the expropriated property, plus interest, treble damages, attorneys’ fees and costs.

The Court entered final judgment in December 2022 in favor of the plaintiff and awarded damages and attorneys' fees to the plaintiff in the aggregate amount of approximately $112 million. We have appealed the judgment to the United States Court of Appeals for the 11th Circuit and the plaintiff has cross-appealed with regards to the interest calculation used for purposes of determining damages. We believe we have meritorious grounds for and intend to vigorously pursue our appeal. During the fourth quarter of 2022, we recorded a charge of approximately $130.0 million to Other income (expense) within our consolidated statements of comprehensive loss related to the Havana Docks Action, including post-judgment interest and related legal defense costs and bonding fees.

In addition, we are routinely involved in claims typical within the cruise vacation industry. 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.

Other

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 in any material amount is probable.

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.

Note ~~8. Shareholders’~~9. Shareholders' Equity

Dividends

~~In September 2017, we declared a cash dividend on our common stock of $0.60 per share which was paid in October 2017. During~~We did not declare any dividends during the ~~first~~quarters ended March 31, 2023 and ~~second quarters of 2017, we declared a cash dividend on our common stock of $0.48 per share which was paid in April 2017 and July 2017, respectively.~~March 31, 2022. During the first quarter of ~~2017,~~2022, we ~~also~~were restricted under certain of our credit facilities from paying dividends while waivers to the financial covenants within such facilities were in effect. While the waivers have now expired, in the event we declare a dividend, we will need to repay the principal amounts deferred under our export credit facilities.

Noncontrolling Interests

Effective March 31, 2023, we closed the previously announced partnership with iCON. We sold 80% of PortMiami for $208.9 million and retained a 20% minority interest. The cash consideration received, net of transaction costs, was allocated between paid ~~a cash dividend~~in capital and noncontrolling interest in the accompanying consolidated statement of shareholders' equity as of March 31, 2023. Refer toNote 5. Investments and Other Assets for further information on ~~our common stock of $0.48 per share which~~the transaction.

The Net Loss attributable to noncontrolling interest was ~~declared~~immaterial during the ~~fourth quarter of 2016.~~quarters ended March 31, 2023 and March 31, 2022.

During the third quarter of 2016, we declared a cash dividend on our common stock of $0.48 per share which was paid in October 2016. During the first and second quarters of 2016, we declared and paid a cash dividend on our common stock of $0.375 per share. During the first quarter of 2016, we also paid a cash dividend on our common stock of $0.375 per share which was declared during the fourth quarter of 2015.

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 third quarter of 2017, we repurchased 1.0 million shares of our common stock for a total of $125.0 million in open market transactions that were recorded within ~~Treasury stock~~ ~~in our consolidated balance sheets. With these repurchases, we have $375.0 million that remain available for future stock repurchase transactions under our Board approved program.~~

Note 9.10. Changes in Accumulated Other Comprehensive ~~Income (Loss)~~

Loss

The following table presents the changes in accumulated other comprehensive ~~income (loss)~~loss by component for the ~~nine months~~quarters ended ~~September 30, 2017~~March 31, 2023 and ~~2016~~2022 (in thousands):


	Accumulated Other Comprehensive Income (Loss) for the Nine Months Ended September 30, 2017												Accumulated Other Comprehensive Income (Loss) for the Nine Months Ended September 30, 2016													Accumulated Other Comprehensive Loss for the Quarter Ended March 31, 2023								Accumulated Other Comprehensive Loss for the Quarter Ended March 31, 2022
	Changes related to cash flow derivative hedges			Changes in defined benefit plans			Foreign currency translation adjustments			Accumulated other comprehensive loss			Changes related to cash flow derivative hedges			Changes in defined benefit plans			Foreign currency translation adjustments			Accumulated other comprehensive loss				Changes related to cash flow derivative hedges		Changes in defined benefit plans		Foreign currency translation adjustments		Accumulated other comprehensive loss		Changes related to cash flow derivative hedges		Changes in defined benefit plans		Foreign currency translation adjustments		Accumulated other comprehensive loss
Accumulated comprehensive loss at beginning of the year	$	(820,850	)	$	(28,083	)	$	(67,551	)	$	(916,484	)	$	(1,232,073	)	$	(26,447	)	$	(69,913	)	$	(1,328,433	)	Accumulated comprehensive loss at beginning of the year	$	(638,011)	$	(7,921)	$	2,718	$	(643,214)	$	(646,473)	$	(56,835)	$	(7,577)	$	(710,885)
Other comprehensive income (loss) before reclassifications	230,341			(7,130		)	14,210			237,421			(9,150		)	(13,521		)	8,423			(14,248		)	Other comprehensive income (loss) before reclassifications	(30,279)		3,168		(6,546)		(33,657)		224,619		11,869		7,778		244,266
Amounts reclassified from accumulated other comprehensive loss	151,319			850			—			152,169			263,774			1,373			—			265,147			Amounts reclassified from accumulated other comprehensive loss	(1,418)		345		—		(1,073)		(28,718)		728		—		(27,990)
Net current-period other comprehensive income (loss)	381,660			(6,280		)	14,210			389,590			254,624			(12,148		)	8,423			250,899			Net current-period other comprehensive income (loss)	(31,697)		3,513		(6,546)		(34,730)		195,901		12,597		7,778		216,276
Ending balance	$	(439,190	)	$	(34,363	)	$	(53,341	)	$	(526,894	)	$	(977,449	)	$	(38,595	)	$	(61,490	)	$	(1,077,534	)	Ending balance	$	(669,708)	$	(4,408)	$	(3,828)	$	(677,944)	$	(450,572)	$	(44,238)	$	201	$	(494,609)

The following table presents reclassifications out of accumulated other comprehensive ~~income (loss)~~loss for the quarters ended March 31, 2023 and ~~nine months ended September 30, 2017 and 2016~~2022 (in thousands):


	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income
Details About Accumulated Other Comprehensive Loss Components	Quarter Ended March 31, 2023		Quarter Ended March 31, 2022		Affected Line Item in Statements of Comprehensive Loss
Gain (loss) on cash flow derivative hedges:
Interest rate swaps	$	9,946	$	(10,434)	Interest expense, net of interest capitalized
Foreign currency forward contracts	(4,363)		(4,065)		Depreciation and amortization expenses
Foreign currency forward contracts	(501)		(1,218)		Other income (expense)
Fuel swaps	—		(369)		Other income (expense)
Fuel swaps	(3,664)		44,804		Fuel
	1,418		28,718
Amortization of defined benefit plans:
Actuarial loss	(345)		(728)		Payroll and related
	(345)		(728)
Total reclassifications for the period	$	1,073	$	27,990

Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
Details About Accumulated Other Comprehensive Income (Loss) Components Quarter Ended September 30, 2017 Quarter Ended September 30, 2016 Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016 Affected Line Item in Statements of
Comprehensive Income (Loss)
Loss on cash flow derivative hedges:

Interest rate swaps $ (7,860 ) $ (11,953 ) $ (24,580 ) $ (32,019 ) Interest expense, net of interest capitalized
Foreign currency forward contracts (2,710 ) (2,710 ) (8,130 ) (5,408 ) Depreciation and amortization expenses
Foreign currency forward contracts (1,512 ) (3,465 ) (9,187 ) (10,206 ) Other expense
Foreign currency forward contracts —
—
—
(207 ) Other operating
Foreign currency collar options (602 ) (601 ) (1,806 ) (1,806 ) Depreciation and amortization expenses
Fuel swaps 1,758
2,760
6,533
9,356
Other expense
Fuel swaps (32,386 ) (64,654 ) (114,149 ) (223,484 ) Fuel
(43,312 ) (80,623 ) (151,319 ) (263,774 )
Amortization of defined benefit plans:

Actuarial loss (293 ) (285 ) (850 ) (1,373 ) Payroll and related
(293 ) (285 ) (850 ) (1,373 )
Total reclassifications for the period $ (43,605 ) $ (80,908 ) $ (152,169 ) $ (265,147 )

~~Table of Contents~~

Note ~~10.~~11. 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 March 31, 2023										Fair Value Measurements at December 31, 2022
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:
Cash and cash equivalents(4)	$	1,226,871	$	1,226,871	$	1,226,871	$	—	$	—	$	1,935,005	$	1,935,005	$	1,935,005	$	—	$	—
Total Assets	$	1,226,871	$	1,226,871	$	1,226,871	$	—	$	—	$	1,935,005	$	1,935,005	$	1,935,005	$	—	$	—
Liabilities:
Long-term debt (including current portion of debt)(5)	$	21,123,218	$	21,909,938	$	—	$	21,909,938	$	—	$	23,039,859	$	22,856,306	$	—	$	22,856,306	$	—
Total Liabilities	$	21,123,218	$	21,909,938	$	—	$	21,909,938	$	—	$	23,039,859	$	22,856,306	$	—	$	22,856,306	$	—

Fair Value Measurements at September 30, 2017 Using Fair Value Measurements at December 31, 2016 Using
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:
Cash and cash equivalents⁽⁴⁾
$ 139,950
$ 139,950
$ 139,950
$ —
$ —
$ 132,603
$ 132,603
$ 132,603
$ —
$ —
Total Assets $ 139,950
$ 139,950
$ 139,950
$ —
$ —
$ 132,603
$ 132,603
$ 132,603
$ —
$ —
Liabilities:
Long-term debt (including current portion of long-term debt)⁽⁵⁾
$ 7,557,801
$ 8,111,168
$ —
$ 8,111,168
$ —
$ 9,347,051
$ 9,859,266
$ —
$ 9,859,266
$ —
Total Liabilities $ 7,557,801
$ 8,111,168
$ —
$ 8,111,168
$ —
$ 9,347,051
$ 9,859,266
$ —
$ 9,859,266
$ —
(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.


~~(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)~~

(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 the contract terms ~~of our debt such as the debt maturity and the interest rate on the debt. The valuation model also takes into account the creditworthiness of the Company.~~


~~(3)~~	~~Inputs that are unobservable. The Company did not use any Level 3 inputs as of September 30, 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.~~

~~Table~~ of ~~Contents~~

our debt such as the debt maturity and the interest rate on the debt. The valuation model also takes into account the creditworthiness of the Company.

(3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of March 31, 2023 and December 31, 2022.

(4) Consists of cash and marketable securities with original maturities of less than 90 days.

(5) Consists of unsecured revolving credit facilities, senior notes, term loans and convertible notes. These amounts do not include our finance lease obligations.

Other Financial Instruments

The carrying amounts of accounts receivable, accounts payable, accrued interest and accrued expenses approximate fair value at ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016.~~

2022.

Assets and liabilities that are recorded at fair value have been categorized based upon the fair value hierarchy. The following table presents information about the Company’s financial instruments recorded at fair value on a recurring basis (in thousands):


	Fair Value Measurements at March 31, 2023								Fair Value Measurements at December 31, 2022
Description	Total		Level 1(1)		Level 2(2)		Level 3(3)		Total		Level 1(1)		Level 2(2)		Level 3(3)
Assets:
Derivative financial instruments(4)	$	168,737	$	—	$	168,737	$	—	$	203,802	$	—	$	203,802	$	—
Total Assets	$	168,737	$	—	$	168,737	$	—	$	203,802	$	—	$	203,802	$	—
Liabilities:
Derivative financial instruments(5)	$	135,485	$	—	$	135,485	$	—	$	135,608	$	—	$	135,608	$	—
Total Liabilities	$	135,485	$	—	$	135,485	$	—	$	135,608	$	—	$	135,608	$	—

Fair Value Measurements at September 30, 2017 Using Fair Value Measurements at December 31, 2016 Using
Description Total
Level 1⁽¹⁾

Level 2⁽²⁾

Level 3⁽³⁾
Total
Level 1⁽¹⁾

Level 2⁽²⁾

Level 3⁽³⁾
Assets:

Derivative financial instruments⁽⁴⁾
$ 221,258
$ —
$ 221,258
$ —
$ 19,397
$ —
$ 19,397
$ —
Investments⁽⁵⁾
$ 3,237
3,237
—
—
$ 3,576
3,576
—
—
Total Assets $ 224,495
$ 3,237
$ 221,258
$ —
$ 22,973
$ 3,576
$ 19,397
$ —
Liabilities:

Derivative financial instruments⁽⁶⁾
$ 189,163
$ —
$ 189,163
$ —
$ 373,497
$ —
$ 373,497
$ —
Total Liabilities $ 189,163
$ —
$ 189,163
$ —
$ 373,497
$ —
$ 373,497
$ —
(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. No Level 1 inputs were used in fair value measurements of other financial instruments as of March 31, 2023 and December 31, 2022.

(2)Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate swaps and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity, as well as other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest rate yield curves. Derivative instrument fair values take into account the creditworthiness of the counterparty and the Company.


~~(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 asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate swaps, cross currency swaps and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity, as well as other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest rate yield curves. Fair value for foreign currency collar options is determined by 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 curves, foreign exchange volatility levels and discount rates. All derivative instrument fair values take into account the creditworthiness of the counterparty and the Company.


~~(3)~~	~~Inputs that are unobservable. The Company did not use any Level 3 inputs as of September 30, 2017 and December 31, 2016.~~

~~(4)~~

~~Consists of foreign currency forward contracts, interest rate swaps and fuel swaps. Please refer to the “Fair Value of Derivative Instruments”~~

(3)Inputs that are unobservable. No Level 3 inputs were used in fair value measurements of other financial instruments as of March 31, 2023 and December 31, 2022.

(4)Consists of foreign currency forward contracts, interest rate and fuel swaps. Refer to the "Fair Value of Derivative Instruments" table for breakdown by instrument type.

(5) Consists of foreign currency forward contracts, interest rate and fuel swaps. Refer to the "Fair Value of Derivative Instruments" table for breakdown by instrument type.


~~(5)~~	~~Consists of exchange-traded equity securities and mutual funds reported within~~ ~~Other assets~~ ~~in our consolidated balance sheets.~~


~~(6)~~	~~Consists of foreign currency forward contracts, interest rate swaps and fuel swaps. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.~~

The reported fair values are based on a variety of factors and assumptions. Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of ~~September 30, 2017~~March 31, 2023 or December 31, ~~2016,~~2022, or that will be realized in the future, and do not include expenses that could be incurred in an actual sale or settlement.

Nonfinancial Instruments Recorded at Fair Value on a Nonrecurring Basis

Nonfinancial instruments include items such as goodwill, indefinite-lived intangible assets, long-lived assets, right-of-use assets and equity method investments that are measured at fair value on a nonrecurring basis when events and circumstances indicate the carrying value is not recoverable. There were no nonfinancial instruments recorded at fair value as of March 31, 2023.

Master Netting Agreements

We have master International Swaps and Derivatives Association (“ISDA”) agreements in place with our derivative instrument counterparties. These ISDA agreements generally provide for final close out netting with our counterparties for all positions in the case of default or termination of the ISDA agreement. We have determined that our ISDA agreements provide us with rights of setoff on the fair value of derivative instruments in a gain position and those in a loss position with the same counterparty. We have elected not to offset such derivative instrument fair values in our consolidated balance sheets.

~~Table of Contents~~

See Credit Related Contingent Features for further discussion on contingent collateral requirements for our derivative instruments.

The following table presents information about the Company’s offsetting of financial assets under master netting agreements with derivative ~~counterparties:~~counterparties (in thousands):


	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	As of March 31, 2023								As of December 31, 2022
	Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet		Gross Amount of Eligible Offsetting Recognized Derivative Liabilities		Cash Collateral Received		Net Amount of Derivative Assets		Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet		Gross Amount of Eligible Offsetting Recognized Derivative Liabilities		Cash Collateral Received		Net Amount of Derivative Assets
Derivatives subject to master netting agreements	$	168,737	$	(96,057)	$	—	$	72,680	$	203,802	$	(105,228)	$	—	$	98,574
Total	$	168,737	$	(96,057)	$	—	$	72,680	$	203,802	$	(105,228)	$	—	$	98,574

Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
As of September 30, 2017 As of December 31, 2016
Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting
Recognized
Derivative Liabilities Cash Collateral
Received Net Amount of
Derivative Assets Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting
Recognized
Derivative Assets Cash Collateral
Received Net Amount of
Derivative Assets
(In thousands)
Derivatives subject to master netting agreements $ 221,258
$ (117,065 ) $ —
$ 104,193
$ 19,397
$ (19,397 ) $ —
$ —
Total $ 221,258
$ (117,065 ) $ —
$ 104,193
$ 19,397
$ (19,397 ) $ —
$ —

The following table presents information about the Company’s offsetting of financial liabilities under master netting agreements with derivative ~~counterparties:~~counterparties (in thousands):


																						Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements																					As of March 31, 2023								As of December 31, 2022
	As of September 30, 2017										As of December 31, 2016											Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet		Gross Amount of Eligible Offsetting Recognized Derivative Assets		Cash Collateral Pledged		Net Amount of Derivative Liabilities		Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet		Gross Amount of Eligible Offsetting Recognized Derivative Assets		Cash Collateral Pledged		Net Amount of Derivative Liabilities
	Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet			Gross Amount of Eligible Offsetting Recognized Derivative Assets		Cash Collateral Pledged		Net Amount of Derivative Liabilities			Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet			Gross Amount of Eligible Offsetting Recognized Derivative Liabilities		Cash Collateral Pledged		Net Amount of Derivative Liabilities
(In thousands)
Derivatives subject to master netting agreements	$	(189,163	)	$	117,065	$	—	$	(72,098	)	$	(373,497	)	$	19,397	$	7,213	$	(346,887	)	Derivatives subject to master netting agreements	$	(135,485)	$	96,057	$	—	$	(39,428)	$	(135,608)	$	105,228	$	—	$	(30,380)
Total	$	(189,163	)	$	117,065	$	—	$	(72,098	)	$	(373,497	)	$	19,397	$	7,213	$	(346,887	)	Total	$	(135,485)	$	96,057	$	—	$	(39,428)	$	(135,608)	$	105,228	$	—	$	(30,380)

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 ~~September 30, 2017,~~March 31, 2023, we had counterparty credit risk exposure under our derivative instruments of ~~approximately $101.6~~$88.5 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, we did not have any 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.

~~Table of Contents~~

Derivative Instruments

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 notional 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.

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.

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 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”~~"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 it was determined to be highly 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 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.

Interest Rate Risk

Our exposure to market risk for changes in interest rates primarily relates to our ~~long-term~~ debt obligations, including future interest payments. At ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, approximately ~~48.8%~~84% and ~~40.5%~~75%, respectively, of our ~~long-term~~ debt was effectively ~~fixed.~~fixed-rate debt, which is net of our interest rate swap agreements. We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense.

~~Table of Contents~~

Market risk associated with our ~~long-term fixed rate~~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 ~~September 30, 2017~~ March 31, 2023and December 31, ~~2016, we maintained~~2022, there were no interest rate swap agreements ~~on the following~~for fixed-rate debt ~~instruments:~~instruments.

Debt Instrument
Swap Notional as of September 30, 2017 (In thousands)
Maturity Debt Fixed Rate Swap Floating Rate: LIBOR plus All-in Swap Floating Rate as of September 30, 2017
Oasis of the Seas term loan
$ 157,500
October 2021 5.41% 3.87% 5.29%
Unsecured senior notes 650,000
November 2022 5.25% 3.63% 4.95%
$ 807,500

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

~~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.~~the market risk of increasing interest rates. At ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, we maintained interest rate swap agreements on the following floating-rate debt instruments:


Debt Instrument	Swap Notional as of March 31, 2023 (in thousands)		Maturity	Debt Floating Rate		All-in Swap Fixed Rate as of March 31, 2023
Celebrity Reflection term loan	$	109,083	October 2024	LIBOR plus	0.40%	2.85%
Quantum of the Seas term loan	245,000		October 2026	LIBOR plus	1.30%	3.74%
Anthem of the Seas term loan	271,875		April 2027	LIBOR plus	1.30%	3.86%
Ovation of the Seas term loan	380,417		April 2028	LIBOR plus	1.00%	3.16%
Harmony of the Seas term loan (1)	345,267		May 2028	EURIBOR plus	1.15%	2.26%
Odyssey of the Seas term loan (2)	383,333		October 2032	LIBOR plus	0.96%	3.21%
Odyssey of the Seas term loan (2)	191,667		October 2032	LIBOR plus	0.96%	2.84%
	$	1,926,642

Debt Instrument
Swap Notional as of September 30, 2017 (In thousands)
Maturity Debt Floating Rate All-in Swap Fixed Rate
Celebrity Reflection term loan
$ 409,063
October 2024 LIBOR plus 0.40% 2.85%
Quantum of the Seas term loan
581,875
October 2026 LIBOR plus 1.30% 3.74%
Anthem of the Seas term loan
604,167
April 2027 LIBOR plus 1.30% 3.86%
Ovation of the Seas term loan
760,833
April 2028 LIBOR plus 1.00% 3.16%
Harmony of the Seas term loan ⁽¹⁾
751,362
May 2028 EURIBOR plus 1.15% 2.26%
$ 3,107,300

(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 ~~September 30, 2017.~~March 31, 2023.

(2)Interest rate swap agreements hedging the term loan of Odyssey of the Seas include LIBOR zero-floors matching the debt LIBOR zero-floor. Amount presented is based on the exchange rate as of March 31, 2023.

These interest rate swap agreements are accounted for as cash flow hedges.

The notional amount of interest rate swap agreements related to outstanding debt as of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016~~2022 was ~~$3.9~~$1.9 billion, ~~and $4.0 billion,~~ respectively.

Foreign Currency Exchange Rate Risk

Derivative Instruments

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. We enter into foreign currency forward contracts ~~collar options and cross currency swap agreements~~ to manage portions of the exposure to movements in foreign currency exchange rates. As of ~~September 30, 2017,~~March 31, 2023, the aggregate cost of our ships on order ~~not including the TUI Cruises' ships on order and those subject to conditions to effectiveness,~~ was ~~approximately $13.0~~$10.2 billion, of which we had deposited ~~$323.2~~$922.5 million as of such date. These amounts do not include any ships placed on order that are contingent upon completion of conditions precedent and/or financing and any ships on order by our Partner Brands. Refer to Note 8.

Commitments and Contingencies, for further information on our ships on order. At ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, approximately ~~53.8%~~49.2% and ~~66.7%~~52.3%, respectively, of the aggregate cost of the ships under construction was 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.

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 the ~~third~~first quarter of ~~2017, we maintained an~~2023 and 2022 the average notional amount of ~~approximately $823.0 million of these~~ foreign currency forward ~~contracts.~~contracts was approximately $1.2 billion and $0.8 billion, respectively. These instruments are not designated as hedging instruments. ~~Changes~~For the quarters ended March 31, 2023 and 2022, changes in the fair value of the foreign currency forward contracts resulted in ~~a gain (loss),~~gains (losses) of ~~approximately $22.0~~$4.1 million and ~~$(2.5)~~$(7.0) million, ~~during~~respectively, which offset (losses) gains arising from the ~~quarters ended September 30, 2017~~remeasurement of monetary assets and ~~September 30, 2016, respectively, and approximately $57.1~~liabilities denominated in foreign currencies in those same periods of $(11.1) million and ~~$(11.8)~~$7.2 million, ~~during the nine months ended September 30, 2017 and September 30, 2016, respectively, that~~respectively. These amounts were recognized in earnings within Other ~~expense~~ income (expense) in our consolidated statements of comprehensive ~~income (loss).~~loss.

The notional amount of outstanding foreign exchange contracts, excluding the forward contracts entered into to minimize remeasurement volatility, as of March 31, 2023 and December 31, 2022 was $3.3 billion and $2.9 billion, respectively.

~~Table of Contents~~

Non-Derivative Instruments

We consider our ~~investments~~investment in our foreign operations to be denominated in relatively stable currencies and to be of a long-term nature. As of September 30, 2017, we maintained foreign currency forward contracts and designated them as hedges of a portion of our net investment in TUI cruises of €101.0 million, or approximately $119.4 million based on the exchange rate at September 30, 2017. These forward currency contracts mature in October 2021.

~~The notional amount of outstanding foreign exchange contracts including our forward contracts as of September 30, 2017 and December 31, 2016 was $4.1 billion and $1.3 billion, respectively.~~

~~Non-Derivative Instruments~~

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 €241.0~~€446.9 million, or approximately ~~$284.9~~$485.5 million, as of ~~September 30, 2017.~~March 31, 2023. As of December 31, 2022, we had designated debt as a hedge of our net investments primarily in TUI Cruises of €433.0 million, or approximately $461.9 million.

Fuel Price Risk

Our exposure to market risk for changes in fuel prices relates primarily to the consumption of fuel on our ships. We use fuel swap agreements to mitigate the financial impact of fluctuations in fuel prices.

Our fuel swap agreements are generally accounted for as cash flow hedges. In the case that our hedged forecasted fuel consumption is not probable of occurring, hedge accounting will be discontinued and the related accumulated other comprehensive gain or loss will be reclassified to Other income (expense) immediately. For hedged forecasted fuel consumption that remains possible of occurring, hedge accounting will be discontinued and the related accumulated other comprehensive gain or loss will remain in accumulated other comprehensive gain or loss until the underlying hedged transactions are recognized in earnings or the related hedged forecasted fuel consumption is deemed probable of not occurring.

Changes in the fair value of fuel swaps for which cash flow hedge accounting was discontinued are currently recognized in Other income (expense) foreach reporting period through the maturity dates of the fuel swaps. For the quarter ended March 31, 2023 and March 31, 2022, we did not discontinue cash flow hedge accounting on any of our fuel swap agreements.

At ~~September 30, 2017,~~March 31, 2023, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through ~~2021.~~2024. As of ~~September 30, 2017~~March 31, 2023 and December 31, ~~2016,~~2022, we had the following outstanding fuel swap agreements:


	Fuel Swap Agreements
	As of March 31, 2023	As of December 31, 2022
Designated as hedges:	(metric tons)
2023	673,551	825,651
2024	176,450	—

Fuel Swap Agreements
As of September 30, 2017 As of December 31, 2016
(metric tons)
2017 218,600
799,065
2018 756,700
616,300
2019 668,500
521,000
2020 531,200
306,500
2021 224,900
—


	Fuel Swap Agreements
	As of March 31, 2023		As of December 31, 2022
Designated hedges as a % of projected fuel purchases:	(% hedged)
2023	54	%	50	%
2024	10	%	—	%

Fuel Swap Agreements
As of September 30, 2017 As of December 31, 2016
(% hedged)
Projected fuel purchases:

2017 65 % 60 %
2018 56 % 44 %
2019 47 % 35 %
2020 36 % 20 %
2021 14 % —

~~Table~~As of ~~Contents~~

~~At September 30, 2017 and December~~March 31, ~~2016, $81.7~~2023, there was $34.1 million ~~and $138.5 million, respectively,~~ of estimated unrealized net loss associated with our cash flow hedges pertaining to fuel swap agreements ~~were~~that is expected to be reclassified to earnings from Accumulated other comprehensive loss within the next twelve ~~months.~~months when compared to $7.9 million of estimated unrealized net loss at December 31, 2022. Reclassification is expected to occur as the result of fuel consumption associated with our hedged forecasted fuel purchases.

The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets were as ~~follows:~~follows (in thousands):


	Fair Value of Derivative Instruments
	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	As of March 31, 2023		As of December 31, 2022		Balance Sheet Location	As of March 31, 2023		As of December 31, 2022
		Fair Value		Fair Value			Fair Value		Fair Value
Derivatives designated as hedging instruments under ASC 815-20(1)
Interest rate swaps	Other assets	$	94,170	$	115,049	Other long-term liabilities	$	—	$	—
Foreign currency forward contracts	Derivative financial instruments	23,602		18,892		Derivative financial instruments	69,290		84,953
Foreign currency forward contracts	Other assets	31,916		25,504		Other long-term liabilities	3,461		150
Fuel swaps	Derivative financial instruments	19,049		40,191		Derivative financial instruments	52,546		46,359
Fuel swaps	Other assets	—		4,166		Other long-term liabilities	10,188		4,147
Total derivatives designated as hedging instruments under 815-20		$	168,737	$	203,802		$	135,485	$	135,609

Fair Value of Derivative Instruments
Asset Derivatives Liability Derivatives
Balance Sheet Location As of September 30, 2017 As of December 31, 2016 Balance Sheet Location As of September 30, 2017 As of December 31, 2016
Fair Value Fair Value Fair Value Fair Value
(In thousands)
Derivatives designated as hedging instruments under ASC 815-20⁽¹⁾

Interest rate swaps Other assets $ 1,760
$ 5,246
Other long-term liabilities $ 52,611
$ 57,679
Foreign currency forward contracts Derivative financial instruments 45,583
—
Derivative financial instruments —
5,574
Foreign currency forward contracts Other assets 136,534
—
Other long-term liabilities 4,479
68,165
Fuel swaps Derivative financial instruments 7,213
—
Derivative financial instruments 81,981
129,486
Fuel swaps Other assets 29,721
13,608
Other long-term liabilities 40,517
95,125
Total derivatives designated as hedging instruments under 815-20 220,811
18,854
179,588
356,029
Derivatives not designated as hedging instruments under ASC 815-20
Fuel swaps Derivative financial instruments —
—
Derivative financial instruments 7,352
11,532
Fuel swaps Other Assets 447
543
Other long-term liabilities 2,223
5,936
Total derivatives not designated as hedging instruments under 815-20 447
543
9,575
17,468
Total derivatives $ 221,258
$ 19,397
$ 189,163
$ 373,497

(1)~~Accounting Standard Codification~~Subtopic 815-20 “~~Derivatives and Hedging.~~Hedging-General”

under ASC 815.

The carrying value and line item caption of non-derivative instruments designated as hedging instruments recorded within our consolidated

balance sheets were as ~~follows:~~follows (in thousands):

Carrying Value
Non-derivative instrument designated as
hedging instrument under ASC 815-20 Balance Sheet Location As of September 30, 2017 As of December 31, 2016
(In thousands)
Foreign currency debt Current portion of long-term debt $ 69,023
$ 61,601
Foreign currency debt Long-term debt 215,863
249,624
$ 284,886
$ 311,225

~~Table of Contents~~


		Carrying Value
Non-derivative instrument designated as hedging instrument under ASC 815-20	Balance Sheet Location	As of March 31, 2023		As of December 31, 2022
Foreign currency debt	Current portion of long-term debt	$	62,282	$	62,282
Foreign currency debt	Long-term debt	423,230		399,577
		$	485,512	$	461,859

The effect of derivative instruments qualifying and designated as hedging instruments and the related hedged items in fair value hedges on the consolidated statements of comprehensive ~~income (loss)~~loss was as ~~follows:~~follows (in thousands):


Derivatives and Related Hedged Items under ASC 815-20 Fair Value Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivative and Hedged Item	Amount of Gain (Loss) Recognized in Income on Derivative				Amount of Gain (Loss) Recognized in Income on Hedged Item
		Quarter Ended March 31, 2023		Quarter Ended March 31, 2022			Quarter Ended March 31, 2023		Quarter Ended March 31, 2022
Interest rate swaps	Interest expense, net of interest capitalized	$	—	$	(3,365)		$	—	$	6,024
		$	—	$	(3,365)		$	—	$	6,024

Derivatives and Related Hedged Items under ASC 815-20 Fair Value Hedging Relationships Location of Gain (Loss) Recognized in Income on Derivative and Hedged Item Amount of Gain (Loss)
Recognized in
Income on Derivative Amount of Gain (Loss)
Recognized in
Income on Hedged Item
Quarter Ended September 30, 2017 Quarter Ended September 30, 2016 Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016 Quarter Ended September 30, 2017 Quarter Ended September 30, 2016 Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016
(In thousands)
Interest rate swaps Interest expense, net of interest capitalized $ 600
$ 1,737
$ 2,642
$ 6,075
$ —
$ —
$ —
$ 7,203
Interest rate swaps Other expense (545 ) (7,662 ) 3,275
28,592
1,013
7,423
(841 ) (24,878 )
$ 55
$ (5,925 ) $ 5,917
$ 34,667
$ 1,013
$ 7,423
$ (841 ) $ (17,675 )

The effect of derivative instruments qualifying and designated as cash flow hedging instruments on the consolidated financial statements was as ~~follows:~~follows (in thousands):


Derivatives under ASC 815-20 Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Loss on Derivatives
	Quarter Ended March 31, 2023		Quarter Ended March 31, 2022
Interest rate swaps	$	(10,620)	$	74,865
Foreign currency forward contracts	21,420		(40,062)
Fuel swaps	(41,079)		189,816
	$	(30,279)	$	224,619

Derivatives
under ASC 815-20 Cash Flow Hedging Relationships
Amount of Gain (Loss) Recognized in
Accumulated Other
Comprehensive Income (Loss) on Derivative
(Effective Portion)
Location of
Gain (Loss)
Reclassified
from
Accumulated
Other Comprehensive
Loss into Income
(Effective
Portion) Amount of Gain (Loss) Reclassified from
Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion)
Quarter Ended September 30, 2017 Quarter Ended September 30, 2016 Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016 Quarter Ended September 30, 2017 Quarter Ended September 30, 2016 Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016
(In thousands)

Interest rate swaps $ (3,154 ) $ 6,598
$ (24,703 ) $ (126,505 ) Interest expense, net of interest capitalized $ (7,860 ) $ (11,953 ) $ (24,580 ) $ (32,019 )
Foreign currency forward contracts 122,211
11,405
221,861
22,715
Depreciation and amortization expenses (2,710 ) (2,710 ) (8,130 ) (5,408 )
Foreign currency forward contracts —
—
—
—
Other expense (1,512 ) (3,465 ) (9,187 ) (10,206 )
Foreign currency forward contracts —
—
—
—
Other operating —
—
—
(207 )
Foreign currency collar options —
—
—
—
Depreciation and amortization expenses (602 ) (601 ) (1,806 ) (1,806 )
Fuel swaps —
—
—
—
Other expense 1,758
2,760
6,533
9,356
Fuel swaps 67,878
(3,090 ) 33,183
94,640
Fuel (32,386 ) (64,654 ) (114,149 ) (223,484 )
$ 186,935
$ 14,913
$ 230,341
$ (9,150 ) $ (43,312 ) $ (80,623 ) $ (151,319 ) $ (263,774 )

~~Table of Contents~~

Derivatives under ASC 815-20
Cash Flow Hedging Relationships
Location of Gain (Loss)
Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Quarter Ended September 30, 2017 Quarter Ended September 30, 2016 Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016
(In thousands)

Interest rate swaps Other expense —
90
—
(1,152 )
Foreign currency forward contracts Other expense 75
—
100
(57 )
Fuel swaps Other expense 3,351
(8 ) 1,014
(3,949 )
$ 3,426
$ 82
$ 1,114
$ (5,158 )

The effect of non-derivative instruments qualifying and designated as net investment hedging instruments on the consolidated financial statements was as ~~follows:~~follows (in thousands):


	Amount of (Loss) Gain Recognized in Other Comprehensive Loss
Non-derivative instruments under ASC 815-20 Net Investment Hedging Relationships	Quarter Ended March 31, 2023		Quarter Ended March 31, 2022
Foreign Currency Debt	$	(8,980)	$	2,745
	$	(8,980)	$	2,745

Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) (Effective Portion)
Non-derivative instruments under ASC 815-20 Net
Investment Hedging Relationships Quarter Ended September 30, 2017 Quarter Ended September 30, 2016 Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016
(In thousands)

Foreign Currency Debt $ 7,949
$ (3,382 ) $ 34,206
$ 1,313
$ 7,949
$ (3,382 ) $ 34,206
$ 1,313

~~There was no amount recognized in income (ineffective portion and amount excluded from effectiveness testing) for thequarters and nine months ended September 30, 2017and September 30, 2016, respectively.~~

The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as ~~follows:~~follows (in thousands):


		Amount of Gain (Loss) Recognized in Income on Derivatives														Amount of Gain (Loss) Recognized in Income on Derivatives
Derivatives Not Designated as Hedging Instruments under ASC 815-20	Location of Gain (Loss) Recognized in Income on Derivatives	Quarter Ended September 30, 2017			Quarter Ended September 30, 2016			Nine Months Ended September 30, 2017			Nine Months Ended September 30, 2016			Derivatives Not Designated as Hedging Instruments under ASC 815-20	Location of Gain (Loss) Recognized in Income on Derivatives	Quarter Ended March 31, 2023		Quarter Ended March 31, 2022
(In thousands)
Foreign currency forward contracts	Other expense	$	21,951		$	(2,464	)	$	57,019		$	(11,712	)	Foreign currency forward contracts	Other income (expense)	$	4,118	$	(6,985)
Fuel swaps	Other expense	(175		)	(1,172		)	(255		)	(1,224		)	Fuel swaps	Other income (expense)	—		(7)
		$	21,776		$	(3,636	)	$	56,764		$	(12,936	)			$	4,118	$	(6,992)

Credit Related Contingent Features

Our current interest rate derivative instruments ~~may~~ require us to post collateral if our Standard & Poor’s and Moody’s credit ratings ~~are~~fall below specified levels. Specifically, under most of our agreements, if on the fifth anniversary of executing a derivative instrument, or on any succeeding fifth-year anniversary, our credit ratings for our senior unsecured debt ~~were to be~~is rated below BBB- by Standard & Poor’s and Baa3 by Moody’s, then the counterparty ~~may~~will periodically have the right to demand that we post collateral in an amount equal to the difference between (i) the net market value of all derivative transactions with such counterparty that have reached their fifth year anniversary, to the extent negative, and (ii) the applicable minimum call amount.

The amount of collateral required to be posted ~~following such event~~ will change as, and to the extent, our net liability position increases or decreases by more than the applicable minimum call amount. If our credit rating for our senior unsecured debt is subsequently equal to or above BBB- by Standard & Poor’s or Baa3 by Moody’s, then any collateral posted at such time will be released to us and we will no longer be required to post collateral unless we meet the collateral trigger requirement, generally, at the next fifth-year anniversary. ~~At September 30, 2017, four~~

As of ~~our interest rate derivative instruments had reached their fifth anniversary; however,~~March 31, 2023, our senior unsecured debt credit rating was ~~BBB-~~B by Standard & ~~Poor’s~~Poor's and ~~Baa3~~B3 by ~~Moody’s~~Moody's. As of March 31, 2023, five of our interest rate derivative hedges had reached their fifth-year anniversary; however, the net market value for these derivative hedges were in a net asset position, and accordingly, we were not required to post any collateral as of such date. As of December 31, 2016, two of our interest rate derivative instruments had reached their fifth anniversary. As our unsecured debt credit rating at December 31, 2016 was below BBB-/Baa3, we had posted $7.2 million in collateral as of such date. Consistent with the provisions of our interest rate derivatives instruments, all collateral that was posted with our counterparties was returned upon reaching investment grade.

~~Table of Contents~~

Item 2. 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~~Quarterly Report on Form 10-Q 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 fourth quarter and full year of 2017 and our earnings and yield estimates for 2017 set forth under the heading "Outlook" below),~~future periods, business and industry prospects or future results of operations or financial position, made in this Quarterly Report on Form 10-Q are forward-looking. Words such as "anticipate," "believe," "considering," "could," "driving," "estimate," "expect," "goal," "intend," "may," "plan," "project," "seek," "should," "will," ~~"driving"~~"would," 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 Quarterly Report on Form 10-Q and, in particular, the risks discussed under the caption "Risk Factors" in Part II, Item 1A herein.

All forward-looking statements made in this Quarterly Report on Form 10-Q speak only as of the date of this ~~document.~~filing. 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 ~~has been~~is organized to present the following:

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

•a discussion of our results of operations for the quarter ~~and nine months~~ ended ~~September 30, 2017~~March 31, 2023, compared to the same ~~periods~~period in ~~2016;~~2022; and

~~a discussion of our business outlook, including our expectations for selected financial items for the fourth quarter and full year of 2017; and~~

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

~~Table of Contents~~19

Critical Accounting Policies and Estimates

For a discussion of our critical accounting policies and estimates, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operationswithin our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2022.

Our revenues are seasonal based on demand for cruises. Demand ishas historically been 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 historically focused on deployment to the Caribbean, Asia and Australia during that period.

Financial Presentation

Description of Certain Line Items

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 airtransportation to and from our ships; and

•Onboard and other revenues, which consist primarily of revenues from the sale of goods and/or services onboard ourships not included in passenger ticket prices, casino operations, 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 apercentage 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 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 ticketrevenues, including travel ~~agent~~advisor 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, includingthe 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 swapagreements; 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.~~

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 EBITDA is a non-GAAP measure that represents EBITDA (as defined below) excluding certain items that we believe adjusting for is meaningful when assessing our profitability on a comparative basis. For the 2023 and 2022 periods, these items included (i) other income (expense); (ii) gain on sale of controlling interest; (iii) impairment and credit losses (recoveries); and (iv) restructuring charges and other initiative expenses. A reconciliation of Net Loss to Adjusted EBITDA is provided below under Results of Operations.

Adjusted ~~Earnings~~Loss per Share ("Adjusted EPS") is a non-GAAP measure thatrepresents Adjusted Net ~~Income~~Loss (as defined below) divided by weighted average shares outstanding or by diluted weighted average shares outstanding, as applicable. We believe that this non-GAAP measure is meaningful when assessing our performance on a comparative basis. A reconciliation of Loss per Share to Adjusted Loss per share is provided below under Results of Operations.

Adjusted Net ~~Income~~ Loss is a non-GAAP measure that represents ~~net income~~Net Loss excluding certain items that we believe adjusting for is meaningful when assessing our performance on a comparative basis. For the periods presented, these items included (i) loss on the ~~net loss related to~~extinguishment of debt; (ii) gain on sale of controlling interest; (iii) tax on the ~~elimination~~sale of PortMiami noncontrolling interest; (iv) Silver Whisper deferred tax liability release; (v) impairment and credit losses (recoveries); (vi) the amortization of the ~~Pullmantur reporting lag,~~Silversea Cruises intangible assets resulting from the ~~net gain related to the 51% sale of the Pullmantur~~Silversea Cruises acquisition in 2018; and ~~CDF Croisières de France~~ ("~~CDF") brands,~~(vii) restructuring charges and other initiative ~~costs related~~expenses. A reconciliation of Net Loss to ~~our Pullmantur right-sizing strategy and other restructuring initiatives.~~Adjusted Net Loss is provided below under Results of Operations.

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.~~cabins not available for sale. We use this measure to perform capacity and rate analysis to identify our main non-capacity drivers that cause our cruise revenue and expenses to vary.

EBITDA is a non-GAAP measure that represents Net Loss excluding (i) interest income; (ii) interest expense, net of interest capitalized; (iii) depreciation and amortization expenses; and (iv) income tax benefit or expense. We believe that this non-GAAP measure is meaningful when assessing our operating performance on a comparative basis. A reconciliation of Net Loss to EBITDA is provided below under Results of Operations.

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

Gross Margin Yield represent Gross Margin per APCD.

Adjusted Gross Margin represent Gross Margin, adjusted for payroll and related, fuel, food, other operating expenses, and depreciation and amortization. Gross Margin is calculated pursuant to ~~our Pullmantur right-sizing strategy and other restructuring initiatives.~~

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

Net Yields represent ~~Net Revenues~~Adjusted Gross Margin per APCD. We utilize ~~Net Revenues~~Adjusted Gross Margin 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. Net Yields excludes initiative costs related to the sale of the Pullmantur and CDF brands.~~

Occupancy ("Load Factor"), in accordance with cruise vacation industry practice, is calculated by dividing Passenger Cruise Days (as defined below) by APCD. A percentage in excess of 100% indicates that three or more passengers occupied some cabins.

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

~~We believe Net Yields, Net Cruise Costs and Net Cruise Costs Excluding Fuel are our most relevant non-GAAP financial measures. However, a~~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 isare just one of many elements impacting our revenues and expenses, itthey can be an important element. For this reason, we also monitor Net Yields, Net Cruise Costs and Net Cruise Costs Excluding Fuel as if the current ~~periods’~~period's currency exchange rates had remained constant with the comparable prior ~~periods’~~period's rates, or on a ~~“Constant Currency”~~"Constant Currency" basis.

~~Table of Contents~~

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 impact 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 addition to the standard GAAP based financial measures. There are no specific rules or regulations for determining non-GAAP and Constant Currency measures, and as such, ~~there exists the possibility that~~ they may not be comparable to other companies within the industry.

We ~~have~~have not provided a quantitative reconciliation of ~~(i)~~ projected ~~Total revenues~~non-GAAP financial measures to projected Net Revenues, (ii) projected Gross Yields to projected Net Yields, (iii) projected Gross Cruise Costs to projected Net Cruise Costs and projected Net Cruise Costs Excluding Fuel and (iv) projected Net Income and Earnings per Share to projected Adjusted Net Income and Adjusted Earnings per Sharethe most comparable GAAP financial measures because preparation of meaningful ~~GAAP~~U.S.GAAP projections of ~~Total revenues, Gross Yields, Gross Cruise Costs, Net Income and Earnings per Share~~ would require unreasonable effort. Due to significant uncertainty, we are unable to predict, without unreasonable effort, the future movement of foreign exchange rates, fuel prices and interest rates inclusive of our related hedging programs. In addition, we are unable to determine the future impact of ~~restructuring expenses or other~~ non-core business related gains and losses which may result from strategic initiatives. These items are uncertain and could be material to our results of operations in accordance with U.S GAAP. Due to this uncertainty, we do not believe that reconciling information for such projected figures would be meaningful.

Results of Operations

Summary

~~Both our net income~~ Net lossand Adjusted Net ~~Income~~loss for the ~~third~~first quarter of ~~2017 were $752.8~~2023 was $47.9 million and $58.9 million, or ~~$3.49~~$(0.19) and $(0.23) per share on a diluted basis, respectively, reflecting our return to full operations, compared to ~~net income~~Net Loss and Adjusted Net ~~Income~~Loss of ~~$693.3 million~~$(1.17) billion and ~~$690.9 million,~~$(1.16) billion, or ~~$3.21~~$(4.58) and ~~$3.20~~(4.57) per share on a diluted basis, respectively, for the ~~third~~first quarter of ~~2016.~~

Both our net income and Adjusted Net Income for the nine months ended September 30, 2017 were $1.3 billion, or $6.19 per share on a diluted basis as compared to net income and Adjusted Net Income of $1.0 billion and $1.1 billion, or $4.72 and $4.85, per share on a diluted basis, respectively, for the nine months ended September 30, 2016.

2022.

Significant items for the quarter ~~and nine months~~ ended ~~September 30, 2017~~March 31, 2023 include:

The estimated negative impact resulting from third quarter 2017 hurricane-related disruptions was approximately $0.20 per share on a diluted basis to our net income and Adjusted Net Income for the quarter and nine months ended September 30, 2017.

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 an increase in total revenues of $14.8 million for the quarter and a decrease of $16.6 million for the nine months ended September 30, 2017, respectively, as compared to the same periods in 2016.

•Total revenues, excluding the effect of changes in foreign currency exchange rates, ~~decreased $9.0 million and~~ increased ~~$203.2 million~~$1.9 billion, respectively, for the quarter ~~and nine months~~ ended ~~September 30, 2017, respectively,~~March 31, 2023 as compared to the same ~~periods~~period in ~~2016.~~2022. The ~~decrease~~increase reflects our return to full operations in 2023, compared to a partial return to operations during the same period in 2022. APCD for the first quarter ended March 31, 2023 was ~~due~~11,233,489, compared to 7,692,906 in the ~~decrease~~same period in capacity, including the hurricane-related disruptions during the third quarter of 2017, and the increase during the nine months was primarily due to an increase in ticket prices and onboard spending on a per passenger basis, which are further discussed below.2022.

•Total cruise operating expenses, ~~decreased $21.9 million and $141.4 million for~~excluding the quarter and nine months ended September 30, 2017, respectively, as compared to the same periods in 2016. The decreases were primarily due to the decrease in capacity, which is further discussed below. Additionally, we recognized a $30.9 million gain on the sale of ~~Legend of the Seas~~ ~~in March 2017.~~

~~The~~ effect of changes in foreign currency exchange rates, ~~related to our cruise operating expenses, denominated in currencies other than the United States dollar, was immaterial to our consolidated statements of comprehensive income (loss)~~increased $0.6 billion , for the quarter ended March 31, 2023 as compared to the same period in 2022. The increase reflects our return to full operations in 2023, compared to a partial return to operations during the same period in 2022.

•In January 2023, we amended and ~~nine months~~extended the majority of our two unsecured revolving credit facilities. The amendment has extended the maturities of $2.3 billion of the $3.0 billion aggregate revolving capacity by one year to April 2025, with the remainder maturing in April 2024. Additionally, during the quarter ended ~~September 30, 2017.~~March 31, 2023, we repaid $2.4 billion under our revolving credit facilities, resulting in an aggregate borrowing capacity of $2.6 billion under the facilities as of March 31, 2023.

~~Table~~•In February 2023, we issued $700 million aggregate principal amount of ~~Contents~~

~~Other Items~~

~~In May 2017, TUI Cruises,~~7.25% Priority Guaranteed Notes. Upon closing, we terminated our ~~50% joint venture, took delivery of~~ ~~Mein Schiff 6~~.

~~During the second quarter of 2017, we entered into agreements with Meyer Turku to build two "Project Icon" ships. In October 2017, we entered into credit agreements~~commitment for the ~~unsecured~~$700 million 364-day term loan facility. In addition, the remaining $350 million backstop committed financing was also terminated upon closing.

•Effective March 31, 2023, we closed on the previously announced partnership with iCON. As part of ~~these ships for up to~~the transaction, we sold 80% of ~~each ship's contract price.~~PortMiami for $208.9 million and retained a 20% minority interest. The partnership will own, develop,

and manage cruise terminal facilities and infrastructure in key ports of call, initially including several development projects in Italy, Spain, and the U.S. Virgin Islands. Refer to Note 7. ~~Commitments~~5. Investments and ~~Contingencies~~ toOther Assets in our consolidated financial statements for further ~~information.~~

information on the transaction.

~~During~~For further information regarding the ~~third quarter of 2017, we entered into an agreement~~debt transactions discussed above, refer to ~~purchase a ship for~~Note 6. Debt to our ~~Azamara Club Cruises brand. The sale is expected to be completed with the delivery of the ship scheduled for March 2018.~~

~~Table of Contents~~

consolidated financial statements.

Operating results for the quarter ~~and nine months~~ ended ~~September 30, 2017~~March 31, 2023 compared to the same period in ~~2016~~2022 are shown in the following table (in thousands, except per share data):


	Quarter Ended March 31,
	2023				2022
			% of Total Revenues				% of Total Revenues
Passenger ticket revenues	$	1,896,516	65.7	%	$	651,858	61.5	%
Onboard and other revenues	988,630		34.3	%	407,373		38.5	%
Total revenues	2,885,146		100.0	%	1,059,231		100.0	%
Cruise operating expenses:
Commissions, transportation and other	402,930		14.0	%	150,343		14.2	%
Onboard and other	158,635		5.5	%	74,439		7.0	%
Payroll and related	309,998		10.7	%	349,618		33.0	%
Food	199,391		6.9	%	100,184		9.5	%
Fuel	301,513		10.5	%	188,480		17.8	%
Other operating	420,438		14.6	%	321,878		30.4	%
Total cruise operating expenses	1,792,905		62.1	%	1,184,942		111.9	%
Marketing, selling and administrative expenses	460,855		16.0	%	394,030		37.2	%
Depreciation and amortization expenses	359,773		12.5	%	339,467		32.0	%
Operating Income (Loss)	271,613		9.4	%	(859,208)		(81.1)	%
Other (expense) income:
Interest income	14,808		0.5	%	3,322		0.3	%
Interest expense, net of interest capitalized	(359,387)		(12.5)	%	(277,659)		(26.2)	%
Equity investment income (loss)	20,471		0.7	%	(31,059)		(2.9)	%
Other income (expense)	4,585		0.2	%	(2,538)		(0.2)	%
	(319,523)		(11.1)	%	(307,934)		(29.1)	%
Net Loss	$	(47,910)	(1.7)	%	$	(1,167,142)	(110.2)	%
Diluted Loss per Share	$	(0.19)			$	(4.58)

Quarter Ended September 30, Nine months ended September 30,
2017 2016 2017 2016
% of Total
Revenues % of Total
Revenues % of Total
Revenues % of Total
Revenues
Passenger ticket revenues $ 1,893,152
73.7 % $ 1,899,956
74.1 % $ 4,892,760
72.2 % $ 4,794,653
72.8 %
Onboard and other revenues 676,392
26.3 % 663,785
25.9 % 1,880,618
27.8 % 1,792,145
27.2 %
Total revenues 2,569,544
100.0 % 2,563,741
100.0 % 6,773,378
100.0 % 6,586,798
100.0 %
Cruise operating expenses:

Commissions, transportation and other 409,597
15.9 % 400,933
15.6 % 1,060,176
15.7 % 1,060,391
16.1 %
Onboard and other 157,041
6.1 % 159,887
6.2 % 395,472
5.8 % 399,739
6.1 %
Payroll and related 210,764
8.2 % 214,081
8.4 % 636,861
9.4 % 671,955
10.2 %
Food 126,223
4.9 % 125,732
4.9 % 369,198
5.5 % 371,759
5.6 %
Fuel 160,752
6.3 % 178,772
7.0 % 508,914
7.5 % 531,283
8.1 %
Other operating 253,892
9.9 % 260,718
10.2 % 780,257
11.5 % 857,161
13.0 %
Total cruise operating expenses 1,318,269
51.3 % 1,340,123
52.3 % 3,750,878
55.4 % 3,892,288
59.1 %
Marketing, selling and administrative expenses 273,637
10.6 % 259,327
10.1 % 874,957
12.9 % 852,435
12.9 %
Depreciation and amortization expenses 240,150
9.3 % 229,328
8.9 % 710,836
10.5 % 661,712
10.0 %
Operating Income 737,488
28.7 % 734,963
28.7 % 1,436,707
21.2 % 1,180,363
17.9 %
Other income (expense):

Interest income 4,693
0.2 % 6,472
0.3 % 16,756
0.2 % 14,875
0.2 %
Interest expense, net of interest capitalized (73,233 ) (2.9 )% (82,610 ) (3.2 )% (230,182 ) (3.4 )% (226,803 ) (3.4 )%
Equity investment income 85,120
3.3 % 46,539
1.8 % 120,359
1.8
94,832
1.4 %
Other expense (1,226 ) — % (12,107 ) (0.5 )% (6,546 ) (0.1 )% (40,965 ) (0.6 )%
15,354
0.6 % (41,706 ) (1.6 )% (99,613 ) (1.5 )% (158,061 ) (2.4 )%
Net Income $ 752,842
29.3 % $ 693,257
27.0 % $ 1,337,094
19.7 % $ 1,022,302
15.5 %
Diluted Earnings per Share $ 3.49

$ 3.21

$ 6.19

$ 4.72

~~Table of Contents~~

Adjusted Net ~~Income~~Loss and Adjusted ~~Earnings~~Loss per Share were calculated as follows (in thousands, except per share data):


	Quarter Ended March 31,
	2023		2022
Net Loss	$	(47,910)	$	(1,167,142)
Loss on extinguishment of debt	13,289		—
Gain on sale of controlling interest (1)	(3,130)		—
PortMiami tax on sale of noncontrolling interest (2)	10,020		—
Silver Whisper deferred tax liability release (3)	(25,784)		—
Impairment and credit losses (recoveries) (4)	(6,990)		173
Amortization of Silversea Cruises intangible assets related to Silversea Cruises acquisition (5)	1,623		1,623
Restructuring charges and other initiative expenses	—		973
Adjusted Net Loss	$	(58,882)	$	(1,164,373)

Basic:
Loss per Share	$	(0.19)	$	(4.58)
Adjusted Loss per Share	$	(0.23)	$	(4.57)

Diluted:
Loss per Share	$	(0.19)	$	(4.58)
Adjusted Loss per Share	$	(0.23)	$	(4.57)

Weighted-Average Shares Outstanding:
Basic	255,465		254,821
Diluted	255,465		254,821

Quarter Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Net Income $ 752,842
$ 693,257
$ 1,337,094
$ 1,022,302
Adjusted Net income 752,842
690,911
1,337,094
1,050,031
Net Adjustments to Net Income- (Decrease) Increase $ —
$ (2,346 ) $ —
$ 27,729
Adjustments to Net Income:
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 ) —
(3,834 )
Restructuring charges —
1,897
—
6,627
Other initiative costs —
(409 ) —
3,280
Net Adjustments to Net Income- (Decrease) Increase $ —
$ (2,346 ) $ —
$ 27,729

Basic:

   Earnings per Share $ 3.51
$ 3.23
$ 6.22
$ 4.74
   Adjusted Earnings per Share $ 3.51
$ 3.22
$ 6.22
$ 4.87

Diluted:
   Earnings per Share $ 3.49
$ 3.21
$ 6.19
$ 4.72
   Adjusted Earnings per Share $ 3.49
$ 3.20
$ 6.19
$ 4.85

Weighted-Average Shares Outstanding:
Basic 214,694
214,819
214,882
215,663
Diluted 215,824
215,667
215,905
216,575
(1)Represents gain on sale of controlling interest in cruise terminal facilities in Italy. Included in Other operating within our consolidated statements of comprehensive loss.

(2)Represents tax on the PortMiami sale of noncontrolling interest. These amounts are included in Other income (expense) in our consolidated statements of comprehensive loss. Refer to Note 5. Investments and Other Assets to our consolidated financial statements for further information on the transaction.

(3)Represents the release of the deferred tax liability subsequent to the execution of the bargain purchase option for the Silver Whisper. These amounts are included in Other income (expense) within our consolidated statements of comprehensive loss.

(4)Represents asset impairments and credit loss recoveries for notes receivables for which credit losses were previously recorded. These amounts are included in Other operating withinour consolidated statements of comprehensive loss.

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

Selected statistical information is shown in the following table:


	Quarter Ended March 31,
	2023		2022
Passengers Carried	1,806,270		734,809
Passenger Cruise Days	11,474,742		4,418,899
APCD	11,233,489		7,692,906
Occupancy	102.1	%	57.4	%

Quarter Ended September 30, Nine Months Ended September 30,
2017 2016 2017
2016⁽¹⁾
Passengers Carried 1,512,363
1,558,224
4,371,235
4,365,144
Passenger Cruise Days 10,189,900
10,727,918
30,100,035
30,367,048
APCD 9,214,470
9,766,482
27,646,779
28,503,681
Occupancy 110.6 % 109.8 % 108.9 % 106.5 %

⁽¹⁾ ~~Does not include November~~EBITDA and ~~December 2015 amounts for Pullmantur~~Adjusted EBITDA were calculated as ~~the net Pullmantur result for those months was included within~~ follows (in thousands):


	Quarter Ended March 31,
	2023		2022
Net Loss	$	(47,910)	$	(1,167,142)
Interest income	(14,808)		(3,322)
Interest expense, net of interest capitalized	359,387		277,659
Depreciation and amortization expenses	359,773		339,467
Income tax (benefit) expense (1)	(8,343)		6,578
EBITDA	648,099		(546,760)

Other expense (income) (2)	3,758		(4,040)
Gain on sale of controlling interest (3)	(3,130)		—
Impairment and credit losses (recoveries) (4)	(6,990)		173
Restructuring charges and other initiative expenses	—		973
Adjusted EBITDA	$	641,737	$	(549,654)

(1) Included in Other ~~expense~~ inincome (expense) within our consolidated statements of comprehensive loss.

(2) Represents net non-operating income ~~(loss)~~or expense. For the periods reported, primarily relates to gains or losses arising from the remeasurement of monetary assets and liabilities denominated in foreign currencies. The amount excludes income tax (benefit) expense, included in the EBITDA calculation above.

(3) Represents gain on sale of controlling interest in cruise terminal facilities in Italy. Included in Other operating within our consolidated statements of comprehensive loss.

(4) Represents asset impairments and credit loss recoveries for ~~the nine months ended September 30, 2016, as a result~~notes receivables for which credit losses were previously recorded. These amounts are included in Other operating withinour consolidated statements of ~~the elimination of the Pullmantur reporting lag, and did not affect Gross Yields, Net Yields, Gross Cruise Costs, Net Cruise Costs and Net Cruise Costs Excluding Fuel.~~comprehensive loss.

~~Table of Contents~~

Gross Margin Yields and Net Yields were calculated by dividing Gross Margin and Adjusted Gross Margin by APCD as follows (in thousands, except APCD and Yields):


	Quarter Ended March 31,
	2023		2022
Total revenue	$	2,885,146	$	1,059,231
Less:
Cruise operating expenses	1,792,905		1,184,942
Depreciation and amortization expenses	359,773		339,467

Gross Margin	732,468		(465,178)
Add:
Payroll and related	309,998		349,618
Food	199,391		100,184
Fuel	301,513		188,480
Other operating	420,438		321,878
Depreciation and amortization expenses	359,773		339,467
Adjusted Gross Margin	$	2,323,581	$	834,449

APCD	11,233,489		7,692,906
Gross Margin Yields	$	65.20	$	(60.47)
Net Yields	$	206.84	$	108.47

Quarter Ended September 30, Nine Months Ended September 30,
2017 2017 On a Constant Currency Basis 2016 2017 2017 On a Constant Currency Basis 2016
Passenger ticket revenues $ 1,893,152
$ 1,880,360
$ 1,899,956
$ 4,892,760
$ 4,907,927
$ 4,794,653
Onboard and other revenues 676,392
674,382
663,785
1,880,618
1,882,049
1,792,145
Total revenues 2,569,544
2,554,742
2,563,741
6,773,378
6,789,976
6,586,798
Less:

Commissions, transportation and other 409,597
406,500
400,933
1,060,176
1,062,632
1,060,391
Onboard and other 157,041
155,818
159,887
395,472
394,316
399,739
Net Revenues including other initiative costs 2,002,906
1,992,424
2,002,921
5,317,730
5,333,028
5,126,668
Less:
Other initiative costs included within Net Revenues —
—
(1,843 ) —
—
(1,843 )
Net Revenues $ 2,002,906
$ 1,992,424
$ 2,004,764
$ 5,317,730
$ 5,333,028
$ 5,128,511

APCD 9,214,470
9,214,470
9,766,482
27,646,779
27,646,779
28,503,681
Gross Yields $ 278.86
$ 277.25
$ 262.50
$ 245.00
$ 245.60
$ 231.09
Net Yields $ 217.37
$ 216.23
$ 205.27
$ 192.35
$ 192.90
$ 179.92

~~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):


	Quarter Ended March 31,
	2023		2022
Total cruise operating expenses	$	1,792,905	$	1,184,942
Marketing, selling and administrative expenses	460,855		394,030
Gross Cruise Costs	2,253,760		1,578,972
Less:
Commissions, transportation and other	402,930		150,343
Onboard and other	158,635		74,439
Net Cruise Costs Including Other Costs	1,692,195		1,354,190
Less:
Gain on sale of controlling interest (1)	(3,130)		—
Impairment and credit recoveries (2)	(6,990)		173
Restructuring charges and other initiative expenses (3)	—		973
Net Cruise Costs	1,702,315		1,353,044
Less:
Fuel	301,513		188,480
Net Cruise Costs Excluding Fuel	$	1,400,802	$	1,164,564

APCD	11,233,489		7,692,906
Gross Cruise Costs per APCD	$	200.63	$	205.25
Net Cruise Costs per APCD	$	151.54	$	175.88
Net Cruise Costs Excluding Fuel per APCD	$	124.70	$	151.38

(1) Represents gain on sale of controlling interest in cruise terminal facilities in Italy. Included in Other operating within our consolidated statements of comprehensive loss

(2) Represents asset impairments and credit losses recoveries for notes receivables for which credit losses were previously recorded. Included in Other operating within our consolidated statements of comprehensive loss.

(3) Included in Marketing, selling and administrative expenses within our consolidated statements of comprehensive loss.

Quarter Ended September 30, Nine Months Ended September 30,
2017 2017 On a Constant Currency Basis 2016 2017 2017 On a Constant Currency Basis 2016
Total cruise operating expenses $ 1,318,269
$ 1,311,964
$ 1,340,123
$ 3,750,878
$ 3,753,441
$ 3,892,288
Marketing, selling and administrative expenses⁽¹⁾
273,637
273,121
257,430
874,957
881,067
845,808
Gross Cruise Costs 1,591,906
1,585,085
1,597,553
4,625,835
4,634,508
4,738,096
Less:

Commissions, transportation and other 409,597
406,500
400,933
1,060,176
1,062,632
1,060,391
Onboard and other 157,041
155,818
159,887
395,472
394,316
399,739
Net Cruise Costs including other initiative costs 1,025,268
1,022,767
1,036,733
3,170,187
3,177,560
3,277,966
Less:

Net gain related to the sale of Pullmantur and CDF Croisières de France brands included within other operating expenses —
—
(3,834 ) —
—
(3,834 )
Other initiative costs included within cruise operating expenses and marketing, selling and administrative expenses —
—
(2,252 ) —
—
1,073
Net Cruise Costs 1,025,268
1,022,767
1,042,819
3,170,187
3,177,560
3,280,727
Less:
Fuel⁽²⁾
160,752
160,751
178,772
508,914
508,911
530,859
Net Cruise Costs Excluding Fuel $ 864,516
$ 862,016
$ 864,047
$ 2,661,273
$ 2,668,649
$ 2,749,868

APCD 9,214,470
9,214,470
9,766,482
27,646,779
27,646,779
28,503,681
Gross Cruise Costs per APCD $ 172.76
$ 172.02
$ 163.58
$ 167.32
$ 167.63
$ 166.23
Net Cruise Costs per APCD $ 111.27
$ 111.00
$ 106.78
$ 114.67
$ 114.93
$ 115.10
Net Cruise Costs Excluding Fuel per APCD $ 93.82
$ 93.55
$ 88.47
$ 96.26
$ 96.53
$ 96.47

⁽¹⁾ ~~For~~Quarter Ended March 31, 2023 Compared to Quarter Ended March 31, 2022

In this section, references to 2023 refer to the quarter ended March 31, 2023 and ~~nine~~references to 2022 refer to the quarter ended March 31, 2022.

Revenues

Total revenues for 2023 increased $1.8 billion to $2.9 billion from $1.1 billion in 2022.

Passenger ticket revenues comprised 65.7% of our 2023 total revenues. Passenger ticket revenues for 2023 increased by $1.2 billion, or 190.9% to $1.9 billion from $0.7 billion in 2022.

The remaining 34.3% of 2023 total revenues was comprised of Onboard and other revenues, which increased $0.6 billion, or 142.7% to $1.0 billion in 2023 from $407.4 million in 2022.

The increase in revenues reflects our return to full operations in 2023, compared to a partial return to operations during the same period in 2022. Occupancy in 2023 was 102.1% compared to 57.4% in 2022.

Onboard and other revenues included concession revenues of $104.0 million in 2023 and $48.4 million in 2022.

Cruise Operating Expenses

Total Cruise operating expenses for 2023 increased $0.6 billion to $1.8 billion from $1.2 billion in 2022. The increase was primarily due to:

•a $252.6 million increase in Commissions, transportation and other expenses;

•a $113.0 million increase in Fuel expense;

•a $99.2 million increase in Food expense;

•a $98.6 million increase in Other operating expenses; and

•a $84.2 million increase in Onboard and other expenses.

The increase in operating expenses noted above reflects our return to full operations in 2023, compared to a partial return to operations during the same period in 2022. Additionally, high inflation has impacted our operating costs, especially in fuel and food expense. Our cost of fuel (net of the financial impact of fuel swap agreements) for 2023 increased 25% per metric ton compared to 2022 mainly due to the increase in fuel price.

Marketing, Selling and Administrative Expenses

Marketing, selling and administrative expenses for 2023 increased $66.8 million, or 17.0%, to $460.9 million from $394.0 million in 2022. The increase reflects our return to full operations in 2023, compared to a partial return to operations during the same period in 2022. Additionally, the 2022 expenses reflect the ramp up of our global sales and marketing efforts to return to full operations in 2022.

Depreciation and Amortization Expenses

Depreciation and amortization expenses for 2023 increased $20.3 million, or 6.0%, to $359.8 million from $339.5 million in 2022. The increase was primarily due to depreciation expenses for Celebrity Beyond and Silver Endeavour ships, which were not part of our fleet during the same period in 2022.

Other (Expense) Income

Interest expense, net of interest capitalized for 2023increased $81.7 million, or 29.4%, to $359.4 million from $277.7 million in 2022. The increase was primarily due to refinancing transactions after the first quarter of 2022, as well as the impact of higher rates on floating-rate debt.

Equity investment income for 2023 was $20.5 million compared to Equity investment loss of$31.1 million in 2022. The increase in income was primarily due to income from TUI Cruises, one of our equity investments, in 2022 compared to losses in 2022.

Other Comprehensive (Loss) Income

Other comprehensive (loss) was $(34.7) millionin 2023 compared to Other comprehensive income of $216.3 million in 2022. The decrease of $251.0 million, or 116.1% was primarily due to Losses on cash flow derivative hedges in 2023 of $31.7 million compared to a Gain on cash flow derivative hedges in 2022 of $195.9 million, mostly as a result of a significant decrease in fair value of our fuel swaps in 2023 compared to 2022.

Future Application of Accounting Standards

Refer to Note 2. Summary of Significant Accounting Policies to our consolidated financial statements.

Liquidity and Capital Resources

Sources and Uses of Cash

Net cash provided by (used in) operating activities increased $1.8 billion to cash provided by of $1.3 billion for the three months ended ~~September 30, 2016, amounts do not include restructuring charges~~March 31, 2023 compared to cash used of ~~$1.9~~$0.5 billion for the same period in 2022. The increase was primarily attributable to our return to full operations in 2023, compared to a partial return to operations during the same period in 2022, and an increase in proceeds from customer deposits in 2023 compared to the same period in 2022.

Net cash used in investing activities decreased $1.2 billionto cash used of $234.1 million ~~and $6.6 million, respectively.~~

⁽²⁾ ~~For~~for the ~~nine~~three months ended ~~September 30, 2016, amount does not include fuel expense~~March 31, 2023, compared to cash used of ~~$0.4 million included within other initiative costs associated with~~$1.4 billion for the ~~redeployment~~same period in 2022. The decrease was primarily attributable to a decrease in capital expenditures of ~~Pullmantur’s~~ ~~Empress~~$1.1 billion during 2023, compared to the ~~Royal Caribbean International brand.~~same period in 2022, due to the delivery of Wonder of the Seas in 2022 compared to no ship deliveries during the same period in 2023.

Net cash used in financing activities was$1.8 billion for the three months ended March 31, 2023, compared to cash provided by financing activities of $1.2 billion for the same period in 2022. The change of $3.0 billion was primarily attributable to a decrease of $1.6 billion in debt proceeds in 2023 compared to the same period in 2022, and an increase in repayments of debt of $1.7 billion in 2023 compared to the same period in 2022. The change is partially offset by proceeds received of $209.3 million for the sale of noncontrolling interest of PortMiami during the quarter ended March 31, 2023.

~~Table~~

Future Capital Commitments

Capital Expenditures

Our future capital commitments consist primarily of ~~Contents~~

~~2017 Outlook~~

~~The Company does not make predictions about fuel pricing, interest rates or currency exchange rates but does provide guidance about its future business activities. On November 7, 2017, we announced~~new ship orders. As of March 31, 2023, the ~~following full year~~dates that the ships on order by our Global and ~~fourth quarter 2017 guidance based on~~Partner Brands are expected to be delivered, subject to change in the ~~then current fuel pricing, interest rates~~event of construction delays, and ~~currency exchange rates:~~

~~Full Year 2017~~

their approximate berths are as follows:



	~~As Reported~~	~~Constant Currency~~
~~Net Yields~~	~~Approx. 6.0%~~	~~Approx. 6.0%~~
~~Net Cruise Costs per APCD~~	~~1.0% to 1.5%~~	~~Approx. 1.5%~~
~~Net Cruise Costs per APCD, Excluding Fuel~~	~~Approx. 2.0%~~	~~Approx. 2.0%~~
~~Capacity Decrease~~	~~(2.4%)~~
~~Depreciation and Amortization~~	~~Approx. $950 million~~
~~Interest Expense, net~~	~~Approx. $280 million~~
~~Fuel Consumption (metric tons)~~	~~1,315,800~~
~~Fuel Expenses~~	~~$686 million~~
~~Percent Hedged (fwd consumption)~~	~~65%~~
~~Impact of 10% change in fuel prices~~	~~$7 million~~
~~1% Change in Currency~~	~~$4 million~~
~~1% Change in Net Yield~~	~~$16 million~~
~~1% Change in NCC ex Fuel~~	~~$9 million~~
~~1% Change in LIBOR~~	~~$6 million~~
~~Adjusted Earnings per Share-Diluted~~	~~$7.35 to $7.40~~

~~Fourth Quarter 2017~~



	~~As Reported~~	~~Constant Currency~~
~~Net Yields~~	~~Approx. 3.5%~~	~~2.0% to 2.5%~~
~~Net Cruise Costs per APCD~~	~~Approx. 7.0%~~	~~Approx. 6.5%~~
~~Net Cruise Costs per APCD, Excluding Fuel~~	~~Approx. 9.0%~~	~~Approx. 8.5%~~
~~Capacity Decrease~~	~~(0.6%)~~
~~Depreciation and Amortization~~	~~Approx. $240 million~~
~~Interest Expense, net~~	~~Approx. $65 million~~
~~Fuel Consumption (metric tons)~~	~~334,800~~
~~Fuel Expenses~~	~~$177 million~~
~~Percent Hedged (fwd consumption)~~	~~65%~~
~~Impact of 10% change in fuel prices~~	~~$7 million~~
~~1% Change in Currency~~	~~$4 million~~
~~1% Change in Net Yield~~	~~$16 million~~
~~1% Change in NCC ex Fuel~~	~~$9 million~~
~~1% Change in LIBOR~~	~~$6 million~~
~~Adjusted Earnings per Share-Diluted~~	~~$1.15 to $1.20~~

~~Table of Contents~~

Volatility in foreign currency exchange rates affects the US dollar value of our earnings. Based on our highest net exposure for each quarter and the full year 2017, 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 2017. The first, second and third quarters of 2017 rankings are based on actual results. Rankings for the fourth quarter and full year are based on estimated net exposures.

~~Ranking~~Ship

Shipyard

Q1Expected delivery

~~FY 2017~~Approximate
Berths

1Royal Caribbean International —

~~AUD~~

~~GBP~~

~~AUD~~

~~GBP~~

2Oasis-class:

~~CAD~~

~~CNH~~

~~GBP~~

~~AUD~~

3Utopia of the Seas

Chantiers de l'Atlantique

~~GBP~~2nd Quarter 2024

~~AUD~~

~~EUR~~

~~CAD~~

~~CAD~~5,700

~~CNH~~

~~CAD~~

~~EUR~~

~~CNH~~

~~BRL~~

~~MXN~~

~~CNH~~

~~EUR~~

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



~~Currency Abbreviation~~		~~Currency~~
~~AUD~~		~~Australian Dollar~~
~~BRL~~		~~Brazilian Real~~
~~CAD~~		~~Canadian Dollar~~
~~CNH~~		~~Chinese Yuan~~
~~EUR~~		~~Euro~~
~~GBP~~		~~British Pound~~
~~MXN~~		~~Mexican Peso~~

~~Quarter Ended September 30, 2017 Compared to Quarter Ended September 30, 2016~~

~~In this section, references to 2017 refer to the quarter ended September 30, 2017 and references to 2016 refer to the quarter ended September 30, 2016.~~

~~Revenues~~

~~Total revenues for 2017 increased $5.8 million, or 0.2%, from 2016.~~

~~Passenger ticket revenues~~ ~~comprised 73.7% of our 2017 total revenues and decreased by $6.8 million, or 0.4%, from 2016. The decrease was primarily driven by a 5.7% decrease in capacity, which decreased~~ ~~passenger ticket revenues~~ ~~by $107.4 million primarily due to the sale of our majority interest in Pullmantur Holdings during the third quarter of 2016, and to a lesser extent, the sale of~~ ~~Legend of the Seas~~ ~~in the first quarter of 2017, as well as the impact of canceled sailings resulting from hurricane-related disruptions during the third quarter of 2017.~~

~~The decrease was partially offset by:~~

~~an $88.0 million increase in ticket prices driven by the improvement in our ticket price on a per passenger basis due to the exit of the Pullmantur ships~~, ~~as well as higher pricing on North America and Europe sailings. The increase in ticket prices was partially offset by lower pricing on Asia/Pacific sailings; and~~

~~a 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 $12.8 million.~~

~~The remaining 26.3% of 2017 total revenues was comprised of~~ ~~onboard and other revenues, which increased $12.6 million, or 1.9%, to $676.4 million in 2017 from $663.8 million in 2016. The increase in~~ ~~onboard and other revenues~~ ~~was primarily due to:~~

a $30.7 million increase in onboard revenue attributable to higher spending on a per passenger basis due to our revenue enhancing initiatives, including beverage package sales and promotions, new strategies and promotion on specialty restaurants and the increased revenue associated with internet and other telecommunication services. The increase is also attributable to port activities mainly due to itinerary changes; and

~~Table of Contents~~

~~a $13.8 million increase in other revenue primarily due to charter revenue and management fees earned from Pullmantur Holdings.~~

The increase was partially offset by a $36.8 million decrease attributable to the 5.7% 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 $87.3 million in 2017 and $86.6 million in 2016.~~

~~Cruise Operating Expenses~~

Total cruise operating expenses for 2017 decreased $21.9 million, or 1.6%, from 2016. The decrease was primarily due to a $75.5 million decrease attributable to the 5.7% decrease in capacity noted above.

~~The decrease was partially offset by:~~

~~a $14.6 million increase in commissions expense mainly due to the increase in ticket prices discussed above and changes in commission incentives;~~

~~a $10.2 million increase in head taxes due to itinerary changes;~~

a ~~$9.6 million~~ ~~increase in other operating expenses primarily due to an immaterial gain recognized in 2016 as a result of the sale of our majority interest in Pullmantur Holdings; and~~

~~an $8.7 million increase in payroll and related expenses due to an increase in crew benefits.~~

~~Marketing, Selling and Administrative Expenses~~

~~Marketing, selling and administrative expenses~~ for 2017 increased $14.3 million, or 5.5%, to $273.6 million from $259.3 million in 2016. The increase was primarily due to an increase in payroll and benefits 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 $10.8 million, or 4.7%, to $240.2 million from $229.3 million in 2016. The increase was primarily due to new shipboard additions associated with our ship upgrade projects and to a lesser extent, additions related to shoreside projects, partially offset by the decrease in depreciation associated with the sale of ~~Legend of the Seas~~ ~~in the first quarter of 2017.~~

~~Other Income (Expense)~~

~~Interest expense, net of interest capitalized~~ ~~for 2017~~decreased $9.4 million, or 11.4%, to $73.2 million from $82.6 million in 2016. The decrease was primarily due to a lower average debt in 2017 compared to 2016, partially offset by higher interest rates in 2017 compared to 2016.

~~Equity investment income~~ ~~increased $38.6 million, or 82.9%, to $85.1 million in 2017 from $46.5 million in 2016 primarily due to an increase in income from TUI Cruises.~~

~~Other expense~~ decreased $10.9 million, or 89.9%, to $1.2 million in 2017 from $12.1 million in 2016 primarily due to fuel hedge ineffectiveness gains in 2017 compared to losses in 2016 and a decrease in foreign exchange losses in 2017, net of hedges.

~~Gross and Net Yields~~

Gross Yields and Net Yields increased 6.2% and 5.9% in 2017, respectively, compared to 2016 primarily due to the increase in passenger ticket and onboard and other revenues discussed above. Gross Yields and Net Yields, on a Constant Currency basis, increased 5.6% and 5.3% in 2017, respectively, compared to 2016.

~~Gross and Net Cruise Costs~~

~~Table of Contents~~

Gross Cruise Costs in 2017 was consistent with 2016 and Net Cruise Costs decreased 1.7% in 2017 compared to 2016 primarily due to the decrease in capacity discussed above. Gross Cruise Costs per APCD and Net Cruise Costs per APCD increased 5.6% and 4.2% in 2017, respectively, compared to 2016. Net Cruise Costs Excluding Fuel per APCD increased 6.0% in 2017 compared to 2016. The increases in 2017 were primarily due to the increase in cruise operating expenses discussed above. Additionally, the hurricane-related disruptions during the third quarter of 2017 reduced our capacity; however, certain operating expenses were still incurred, negatively impacting our metrics per APCD.

~~Other Comprehensive Income~~

~~Other comprehensive income~~ ~~in 2017 was $234.1 million compared to $94.5 million in 2016. The increase of $139.6 million, or 147.7%, was primarily due to the~~ ~~Gain on cash flow derivative hedges~~ in 2017 of $230.2 million compared to $95.5 million in 2016. The increase of $134.7 million in 2017 was primarily due to higher foreign currency forward contract and fuel swap instrument values in 2017 compared to 2016, partially offset by lower amounts of fuel swap losses reclassified to income in 2017 .

~~Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016~~

~~In this section, references to 2017 refer to the nine months ended September 30, 2017 and references to 2016 refer to the nine months ended September 30, 2016.~~

~~Revenues~~

~~Total revenues for 2017 increased $186.6 million, or 2.8%, from 2016.~~

~~Passenger ticket revenues~~ comprised 72.2% of our 2017 total revenues. Passenger ticket revenues for 2017 increased by $98.1 million, or 2.0%, 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 $258.1 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.~~

~~The increase was partially offset by:~~

~~a 3.0% decrease in capacity, which decreased~~ ~~passenger ticket revenues~~ by~~$144.2 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; and~~

an approximate $15.2 million unfavorable effect of changes in foreign currency exchange rates related to our passenger ticket revenue transactions denominated in currencies other than the United States dollar.

~~The remaining 27.8% of 2017 total revenues was comprised of~~ ~~onboard and other revenues, which increased $88.5 million, or 4.9%, in 2017 from 2016. The increase in~~ ~~onboard and other revenues~~ ~~was primarily due to:~~

a $99.8 million increase in onboard revenue attributable to higher spending on a per passenger basis primarily due to our revenue enhancing initiatives, including beverage package sales and promotions, gaming initiatives, new strategies and promotions on specialty restaurants and the increased revenue associated with internet and other telecommunication services. The increase is also attributable to port activities mainly due to itinerary changes; and

~~a $39.4 million increase in other revenue primarily due to charter revenue and management fees earned from Pullmantur Holdings.~~

The increase was partially offset by a $53.1 million decrease attributable to the 3.0% 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 $244.4 million in 2017 and $240.8 million in 2016.~~

~~Cruise Operating Expenses~~

~~Table of Contents~~

~~Total cruise operating expenses for 2017 decreased $141.4 million, or 3.6%, from 2016.~~

~~The decrease was primarily due to:~~

~~a $116.6 million decrease attributable to the 3.0% 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 $32.6 million decrease in air expense due to itinerary changes and lower ticket costs; and~~

~~a $23.9 million decrease in vessel maintenance primarily due to the timing of scheduled drydocks.~~

~~The net decrease was partially offset by an increase in commissions expense of $26.0 million mainly due to the increase in ticket prices discussed above.~~

~~Marketing, Selling and Administrative Expenses~~

~~Marketing, selling and administrative expenses~~ for 2017 increased $22.5 million, or 2.6%, to $875.0 million from $852.4 million in 2016. The increase was primarily due to an increase in payroll and benefits which was driven by an increase in our stock price 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 $49.1 million, or 7.4%, to $710.8 million from $661.7 million in 2016. The increase was primarily due to the addition of~~ ~~Ovation of the Seas~~ ~~and~~ ~~Harmony of the Seas~~ in the second quarter of 2016 into our fleet, and to a lesser extent, new shipboard additions associated with our ship upgrade projects. The increase was partially offset by the decrease in depreciation associated with 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.~~

~~Other Income (Expense)~~

~~Interest expense, net of interest capitalized,~~ ~~for 2017~~increased $3.4 million, or 1.5%, to $230.2 million from $226.8 million in 2016. The increase was primarily due to higher interest rates in 2017 compared to 2016, partially offset by lower average debt in 2017 compared to 2016.

~~Equity investment income~~ increased $25.5 million, or 26.9%, to $120.4 million in 2017 from $94.8 million in 2016 primarily due to an increase in income from TUI Cruises, partially offset by losses associated with Pullmantur Holdings in 2017. Effective July 31, 2016, as a result of the sale of 51% of our interest in Pullmantur Holdings, we account for our investment in Pullmantur Holdings under the equity method of accounting.

~~Other expense~~ decreased $34.4 million, or 84.0%, to $6.5 million in 2017 from $41.0 million in 2016 primarily due to the 2016 net loss of $21.7 million related to the elimination of the Pullmantur reporting lag that did not recur in 2017.

~~Gross and Net Yields~~

Gross Yields and Net Yields increased 6.0% and 6.9% in 2017, respectively, compared to 2016 primarily due to the increase in passenger ticket and onboard and other revenues discussed above. Gross Yields and Net Yields, on a Constant Currency basis, increased 6.3% and 7.2% in 2017, respectively, compared to 2016.

~~Gross and Net Cruise Costs~~

Gross Cruise Costs and Net Cruise Costs decreased 2.4% and 3.4% in 2017, respectively compared to 2016 primarily due to the decrease in capacity and cruise operating expenses discussed above. In 2017, Gross Cruise Costs per APCD, Net Cruise Costs per APCD and Net Cruise Costs Excluding Fuel were consistent with 2016, as reported and on a Constant Currency basis. The hurricane-related disruptions during the third quarter of 2017 reduced our capacity; however, certain operating expenses were still incurred, negatively impacting our metrics per APCD.

~~Table of Contents~~

~~Other Comprehensive Income (Loss)~~

~~Other comprehensive income~~ ~~in 2017 was $389.6 million compared to $250.9 million in 2016. The increase of $138.7 million, or 55.3%, was primarily due to the~~ ~~Gain on cash flow derivative hedges~~ in 2017 of $381.7 million compared to $254.6 million in 2016. The increase of $127.1 million in 2017 was primarily due to higher foreign currency forward contract and interest rate swap instrument values in 2017 compared to 2016, partially offset by lower fuel swap instrument values and lower amounts of fuel swap losses reclassified to income in 2017.

~~Future Application of Accounting Standards~~

~~Refer to Note 2.~~ ~~Summary of Significant Accounting Policies~~ ~~to our consolidated financial statements for further information on~~ ~~Recent Accounting Pronouncements.~~

~~Liquidity and Capital Resources~~

~~Sources and Uses of Cash~~

~~Cash flow generated from operations provides us with a significant source of liquidity.~~ ~~Net cash provided by operating activities~~ increased $453.6 million to $2.5 billion for the first nine months in 2017 compared to $2.0 billion for the same period in 2016. The increase in cash provided by operating activities was primarily attributable to an increase in proceeds from customer deposits during the first nine months in 2017 compared to the same period in 2016. Additionally, dividends received from unconsolidated affiliates increased by $35.9 million.

~~Net cash used in investing activities~~ ~~decreased$2.4 billionto $78.0 million~~for the first nine months in 2017 compared to $2.5 billion for the same period in 2016. The decrease 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 $57.0 million on settlements on our foreign currency forward contracts compared to cash paid of $172.9 million during 2016.

~~Net cash used in financing activities~~ ~~was $2.4 billion for the first nine months in 2017 compared to~~ ~~Net cash provided in financing activities~~ of $0.6 billion for the same period in 2016. The change was primarily attributable to a decrease in debt proceeds of $2.4 billion, an increase in debt repayments of $0.8 billion and a higher amount of dividends paid during the first nine months of 2017 compared to the same period in 2016, partially offset by a decrease of stock repurchases of $175.0 million during the first nine months of 2017 compared to the same period in 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 2017and lower drawings on our revolving credit facilities during the first nine months of 2017 compared to the same period in 2016.~~

~~Table of Contents~~

~~Future Capital Commitments~~

~~Capital Expenditures~~

~~As of September 30, 2017, our Global Brands and our Partner Brands have 12 ships on order. The expected dates that these ships will enter service and their approximate berths are as follows:~~

Icon-class:

~~Ship~~

~~Expected to Enter~~

~~Service~~

~~Approximate~~

~~Berths~~

~~Royal Caribbean International —~~

~~Oasis-class:~~

~~Symphony~~Icon of the Seas

Meyer Turku Oy

~~1st~~4th Quarter ~~2018~~2023

~~5,450~~

5,600

Unnamed

Meyer Turku Oy

2nd Quarter ~~2021~~2025

~~5,450~~

5,600

~~Quantum-class:~~Unnamed

Meyer Turku Oy

2nd Quarter 2026

5,600

~~Spectrum of the Seas~~Celebrity Cruises —

Edge-class:

Celebrity Ascent

Chantiers de l'Atlantique

4th Quarter 2023

3,250

Silversea Cruises

Evolution Class:

Silver Nova

Meyer Werft

2nd Quarter ~~2019~~2023

~~4,150~~

730

~~Unnamed~~Silver Ray

Meyer Werft

~~4th Quarter 2020~~

~~4,150~~

~~Project Icon:~~

~~Unnamed~~

~~2nd Quarter 2022~~

~~5,650~~

~~Unnamed~~

2nd Quarter 2024

~~5,650~~

730

~~Celebrity Cruises — Edge-class:~~

~~Celebrity Edge~~

~~4th Quarter 2018~~

~~2,900~~

~~Celebrity Beyond~~

~~2nd Quarter 2020~~

~~2,900~~

~~Unnamed~~

~~4th Quarter 2021~~

~~2,900~~

~~Unnamed~~

~~4th Quarter 2022~~

~~2,900~~

TUI Cruises (50% joint venture) ⁽¹⁾—

~~Unnamed~~

~~2nd Quarter 2018~~

~~2,850~~

~~Unnamed~~

~~1st Quarter 2019~~

~~2,850~~

~~Total Berths~~

~~47,800~~

~~(1)~~

~~TUI Cruises plans to offset this additional capacity through the planned transfer of the their first two ships,~~ Mein Schiff 1 ~~and~~ ~~Mein Schiff 2, to an affiliate of TUI AG, our joint venture partner in TUI Cruises, in 2018 and 2019, respectively.~~

Meyer Turku Oy

2nd Quarter 2024

2,900

Unnamed

Fincantieri

4th Quarter 2024

4,100

Unnamed

Fincantieri

2nd Quarter 2026

4,100

Total Berths

38,310

~~During the second quarter~~

In addition, as of ~~2017,~~March 31, 2023, we ~~entered into agreements~~have an agreement in place with ~~Meyer Turku~~Chantiers de l’Atlantique to build ~~two ships~~an additional Edge-class ship with capacity of ~~a new generation~~approximately 3,250 berths, estimated for delivery in 2025, which is contingent upon completion of ships for Royal Caribbean International, known as “Project Icon.” Subsequently, in October 2017, we entered into credit agreements for the unsecured financing of these ships for up to 80% of each ship's contract price. Refer to Note 7. ~~Commitments~~conditions precedent and ~~Contingencies~~ ~~to our consolidated financial statements under Item 1.~~ ~~Financial Statements~~ ~~for further information.~~financing.

Our future capital commitments consist primarily of new ship orders. As of ~~September 30, 2017,~~March 31, 2023, the aggregate expected cost of our ships on order ~~not including~~presented in the ~~TUI Cruises'~~table above, excluding any ships on order by our Partner Brands, was ~~approximately $13.0~~$10.2 billion, of which we had deposited ~~$323.2 million as of such date.~~$0.9 billion. Approximately ~~53.8%~~49.2% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at ~~September 30, 2017.~~March 31, 2023. Refer to Note ~~10.~~ 8. Commitments and Contingencies and Note 11. Fair Value Measurements and Derivative Instrumentsto our consolidated financial ~~statements under Item 1.~~ ~~Financial Statements~~ ~~for further information.~~

~~In September 2017, 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.~~

statement.

As of ~~September 30, 2017,~~March 31, 2023, we anticipate overall full year capital expenditures, ~~not including the TUI Cruises'~~based on our existing ships on order, will be approximately ~~$0.6~~$4.2 billion for ~~2017, $3.2 billion for 2018, $2.1 billion for 2019, $2.5 billion for 2020 and $2.5 billion for 2021.~~2023. This amount does not include any ships on order by our Partner Brands.

~~Table of Contents~~

~~Contractual Obligations~~

Material Cash Requirements

As of ~~September 30, 2017,~~March 31, 2023, our ~~contractual obligations~~material cash requirements were as follows (in thousands):


	Remainder of
	2023		2024		2025		2026		2027		Thereafter		Total
Operating Activities:
Interest on debt(1)	$	849,009	$	1,202,768	$	1,089,901	$	833,427	$	700,903	$	1,237,058	$	5,913,066
Other(2)	121,999		129,961		123,002		121,241		118,424		859,471		1,474,098
Investing Activities:
Ship purchase obligations(3)	2,701,378		1,894,327		1,329,279		1,259,517		—		—		7,184,501
Total	$	3,672,386	$	3,227,056	$	2,542,182	$	2,214,185	$	819,327	$	2,096,529	$	14,571,665

Payments due by period
Less than 1-3 3-5 More than
Total 1 year years years 5 years
Operating Activities:

Operating lease obligations⁽¹⁾
$ 242,989
$ 28,742
$ 42,299
$ 24,910
$ 147,038
Interest on long-term debt⁽²⁾
1,073,803
233,134
352,304
246,912
241,453
Other⁽³⁾
850,768
170,063
297,523
165,395
217,787
Investing Activities: 0

Ship purchase obligations⁽⁴⁾
10,692,368
1,658,774
2,751,170
4,230,704
2,051,720
Financing Activities: 0

Long-term debt obligations⁽⁵⁾
7,557,801
1,511,773
1,991,501
1,209,893
2,844,634
Capital lease obligations⁽⁶⁾
34,406
3,935
7,051
8,272
15,148
Other⁽⁷⁾
33,684
8,525
20,012
5,147
—
Total $ 20,485,819
$ 3,614,946
$ 5,461,860
$ 5,891,233
$ 5,517,780
(1) Long-term debt obligations mature at various dates through fiscal year 2037 and bear interest at fixed and variable rates. Interest on variable-rate debt is calculated based on forecasted debt balances, including the impact of interest rate swap agreements, using the applicable rate at March 31, 2023. Debt denominated in other currencies is calculated based on the applicable exchange rate at March 31, 2023.


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

~~(2)~~

Long-term debt obligations mature at various dates through fiscal year 2028 and bear interest at fixed and variable rates. Interest on variable-rate debt is calculated based on forecasted debt balances, including the impact of interest rate swap agreements using the applicable rate at September 30, 2017. Debt denominated in other currencies is calculated based on the applicable exchange rate at September 30, 2017.


~~(3)~~	(2) Amounts primarily represent future commitments with remaining terms in excess of one year to pay for our usage of certain port facilities, marine consumables, services and maintenance contracts.


~~(4)~~	~~Amounts do not include potential obligations which remain subject to cancellation at our sole discretion.~~


~~(5)~~	~~Amounts represent debt obligations with initial terms in excess of one year.~~


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


~~(7)~~	~~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~~(3) Amounts are based on contractual installment and delivery dates for our ships on order. Included in these figures are $5.8 billion in final contractual installments, which have committed financing covering 80% of the cost of the ships on order for our Global Brands, almost all of which include sovereign financing guarantees. Amounts do not include potential obligations which remain subject to cancellation at our sole discretion or any agreements entered for ships on order that remain contingent upon completion of conditions precedent.

Refer to Note 6. Debt for maturities related to debt.

Refer to Note 7. Leases for maturities related to lease liabilities.

Refer to Funding Needs and Sources for discussion on the planned funding of the above ~~contractual obligations.~~

material cash requirements.

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

WeRefer to Note 5. Investments and ~~TUI AG have each guaranteed repayment of 50% of a bank loan provided~~Other Assets for ownership restrictions related to TUI ~~Cruises which is due 2022. Notwithstanding this, the lenders have agreed~~Cruises.

Refer to release each shareholder’s guarantee if certain conditions are met by April 2018. As of September 30, 2017, €100.4 million, or approximately $118.7 million based on the exchange rate at September 30, 2017, remains outstanding. Based on current factsNote 3. Revenues for credit card processor agreements for export credit agency guarantees.

Refer to Note 8. Commitments 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

~~Table of Contents~~

~~operate and lease the terminal from SMBC~~Contingencies 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.~~

agreements.

As of ~~September 30, 2017,~~March 31, 2023, other than the items ~~described~~referenced 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

WeHistorically, we have significant contractual obligations of which our debt service obligations and the capital expenditures associated with our ship purchases represent our largest funding needs. As of September 30, 2017, we had approximately $3.6 billion in contractual obligations due through September 30, 2018, of which approximately $1.5 billion relates to debt maturities, $233.1 million relates to interest on long-term debt and $1.7 billion relates to ship purchase payments, including the final installment payable due upon delivery of ~~Symphony of the Seas~~ ~~in the first quarter of 2018. We have historically~~ relied on a combination of cash flows provided by operations, ~~drawdowns~~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 ~~these~~our obligations.

~~We had~~ As a working capital deficit of $4.3 billion and $3.7 billion as of September 30, 2017 and December 31, 2016, respectively. Included within our working capital deficit is $1.5 billion and $1.3 billion of current portion of long-term debt, including capital leases, as of September 30, 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 advanceresult of the ~~applicable sailing date.~~global pandemic impact of COVID-19, we paused our guest cruise operations in March 2020 and began resuming guest cruise operations in 2021, with our full fleet in service by June 2022.

The Company continually identifies and evaluates actions to maintain adequate liquidity. 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 as our revolving credit facilitiesinclude, and ~~other cash from operations. The cash received as advanced receipts can be used to fund~~are not limited to: further reductions in capital expenditures, operating expenses for the applicable future sailing or otherwise, pay down our revolving credit facilities, invest in long term investments or any other use of cash. 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~~administrative costs and our business model, along 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 thatadditional financings. Additionally, we will continue to pursue various opportunities to raise capital to fund obligations associated with future debt maturities and/or to extend the maturity dates associated with our existing indebtedness or facilities. If needed, actions to raise capital may include issuances of debt, convertible debt or equity in private or public transactions or entering into new or extended credit facilities.

We have ~~working~~significant contractual obligations of which our debt service obligations and the capital ~~deficits in the future.~~

expenditures associated with our ship purchases represent our largest funding needs. As of ~~September 30, 2017,~~March 31, 2023, we had $7.8 billion of committed financing for our ships on order.

As of March 31, 2023, our obligations due through March 31, 2024 primarily consisted of $2.1 billion related to debt maturities, $1.3 billion related to interest on debt and $2.7 billion related to progress payments on our ship orders and, based on the expected delivery date, the final installment payable due upon the delivery of Silver Nova, Icon of the Seas, and Celebrity Ascent.

As of March 31, 2023, we had liquidity of ~~$1.9~~$3.9 billion, ~~consisting of approximately $140.0 million in~~including cash and cash equivalents of $1.2 billion, and ~~$1.8~~$2.6 billion ~~available~~of undrawn revolving credit facility capacity. Our revolving credit facilities were partially utilized through a combination of amounts drawn and letters of credit issued under the facilities as of March 31, 2023. We have agreed with certain of our lenders not to pay dividends or engage in stock repurchases unless we repay the remaining principal payments that were deferred under our ~~unsecured revolving~~export credit ~~facilities. We anticipate that our cash flows from operations~~facilities in 2020 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 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.

We have $375.0 million that remains available for future common stock repurchase transactions under our 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.2021. Refer to Note 8. 6. Debt and Note 9. Shareholders' Equity to our consolidated financial statements for further information.

~~Table~~Based on our assumptions and estimates and our financial condition, we believe that we have sufficient financial resources to fund our obligations for at least the next twelve months from the issuance of ~~Contents~~

these financial statements. However, there is no assurance that our assumptions and estimates are accurate as there is inherent uncertainty in our ability to predict future liquidity requirements. Refer to Note 1. General, to our consolidated financial statements under Part I. Item 1. Financial Statements for further information.

Debt Covenants

~~Certain~~Our export credit facilities and our non-export credit facilities, and certain of our ~~financing~~credit card processing agreements contain covenants that require us, among other things, to maintain ~~minimum net worth of at least $7.9 billion,~~ a fixed charge coverage ratio, ~~of at least 1.25x and~~ limit our net debt-to-capital ratio, and maintain a minimum liquidity, and under certain facilities, to ~~no more than 62.5%. The fixed charge coverage ratio is calculated by dividing net cash from operations for the past four quarters by the sum~~maintain a minimum level of ~~dividend payments plus scheduled principal debt payments in excess of any new financings for the past four quarters.~~shareholders' equity. Our minimum ~~net worth~~stockholders' equity and maximum net debt-to-capital calculations exclude the impact of Accumulated other comprehensive losson Total shareholders’ equity. WeIn 2021 and 2022, the financial covenant levels were ~~well~~modified for 2023 and 2024. As of March 31, 2023, we were in ~~excess of all debt covenant requirements as of September 30, 2017. The specific~~compliance with our financial covenants and ~~related definitions can~~we estimate that we will be ~~found~~ in compliance for at least the ~~applicable debt agreements, the majority of which have been previously filed with the Securities and Exchange Commission.~~

next twelve months.

Dividends

The declaration of dividends shall at all times be subject to the final determination of our board of directors that a dividend is prudent at that time in consideration of the needs of the business. In ~~September 2017,~~the event we declare a dividend or engage in share repurchases, we will need to repay the amounts deferred under our export credit facilities. Accordingly, we have not declared a ~~cash~~ dividend on our common stock of $0.60 per share which was paid in October of 2017. During the first and second quarters of 2017, we declared a cash dividend on our common stock of $0.48 per share which was paid in April 2017 and July 2017, respectively. Duringsince the first quarter of ~~2017, we also paid a cash dividend on our common stock of $0.48 per share which was declared during the fourth quarter of 2016.~~2020.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For a discussion of our market risks, refer to Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the year ended December 31, ~~2016. There~~2022. There have been no ~~significant developments or~~ material changes to our exposure to market risks since the date of our 2022 Annual Report.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our ~~Chairman~~President 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 Quarterly Report on Form 10-Q. Based upon such evaluation, our ~~Chairman~~President 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~~President 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~~ rules and ~~forms.~~

forms of the Securities and Exchange Commission (the "SEC").

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 ~~September 30, 2017~~March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

~~Readers are cautioned~~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.

~~Table of Contents~~33

Item 1. Legal Proceedings

Item 1A. Risk Factors

The risk factors set forth below and elsewhere in this Quarterly Report on Form 10-Q are important factors that could cause actual results to differ from expected or historical results. It is not possible to predict or identify all such risks. There may be additional risks that we consider not to be material, or which are not known, and any of these risks could ~~have the effects set forth below.~~affect our operations.The ordering of the risk factors set forth below is not intended to reflect ~~any Company indication of priority~~a risk's potential likelihood or ~~likelihood.~~magnitude. See Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for a cautionary note regarding forward-looking statements.

Macroeconomic, Business, Market and Operational Risks

Adverse ~~worldwide~~ economic or other conditions could reduce the demand for cruises and passenger spending, adversely impacting our operating results, cash flows and financial condition including ~~potentially~~ impairing the value of our goodwill, ships, trademarks and other ~~assets.~~assets and potentially affecting other critical accounting estimates where the impact may be material to our operating results.

~~The demand~~Demand for cruises is affected by international, national, and local economic conditions. Weak or uncertain economic conditions may impact consumer confidence and pose a risk as vacationers ~~may~~ postpone or reduce discretionary spending. This, in turn, may result in cruise booking slowdowns, decreased cruise prices and lower onboard revenues. Given the global nature of our business, we are exposed to many different economies, and our business could be ~~hurt~~negatively impacted by challenging conditions in any of ~~our markets. Any significant deterioration of global, national or local economic conditions could result~~the markets in ~~a prolonged period of booking slowdowns, depressed cruise prices and reduced onboard revenues.~~

~~Fears of terrorist attacks, war, and other hostilities could have a negative impact on our results of operations.~~

Events such as terrorist attacks, war (or war-like conditions), conflicts (domestic or cross-border), civil unrest and other hostilities, including an escalation in the frequency or severity of incidents, and the resulting political instability, travel restrictions and advisories, and concerns over safety and security aspects of traveling or the fear of any of the foregoing have had, and could have in the future, a significant adverse impact on demand and pricing in the travel and vacation industry. In view of our global operations,which we ~~are susceptible to a wide range of adverse events. These events could also result in additional security measures taken by local authorities which may potentially impact access to ports~~operate, and/or ~~destinations.~~

related reactions by our competitors in such markets.

Our operating costs could increase due to market forces and economic or ~~geo-political~~geopolitical factors beyond our control.

Our operating costs, including fuel, food, payroll and benefits, airfare, taxes, insurance, and security costs, ~~are all~~can be and have been subject to increases due to market forces and economic or ~~political~~geopolitical conditions or other factors beyond our ~~control.~~control, including global inflationary pressures, which have increased our operating costs. Increases in these operating costs ~~could~~have affected, and may continue to adversely affect, our future profitability.

~~Fluctuations in foreign currency exchange rates, fuel prices and interest rates could affect our financial results.~~

We are exposed to market risk attributable to changes in foreign currency exchange rates, fuel prices and interest rates. Significant changes in any of the foregoing could have a material impact on our financial results, net of the impact of our hedging activities and natural offsets. Our operating results have been and will continue to be impacted, often significantly, by changes in each of these factors. The value of our earnings in foreign currencies is adversely impacted by a strong United States dollar. In ~~addition, any significant increase~~particular, increases in fuel prices have and could continue to materially and adversely affect our business as fuel prices impact not only ~~impact~~ our fuel costs, but also some of our other expenses, such as crew travel, freight, and commodity prices. ~~See “Item 2.~~ ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Item 3.~~ ~~Quantitative and Qualitative Disclosures About Market Risk” for more information.~~

~~Conducting business globally~~Mandatory fuel restrictions may ~~result in increased costs and other risks.~~

~~We operate our business globally. Operating internationally exposes us~~also create uncertainty related to a number of risks, including increased exposure to a wider range of regional and local economic conditions, volatile local political conditions, potential changes in duties and taxes, including changing and/or uncertain interpretations of existing tax laws and regulations, required compliance with additional laws

~~and policies affecting cruising, vacation or maritime businesses or governing~~ the ~~operations of foreign-based companies, currency fluctuations, interest rate movements, difficulties in operating under local business environments, port quality~~price and availability ~~in certain regions, U.S. and global anti-bribery laws or regulations, imposition of trade barriers and restrictions on repatriation of earnings.~~

~~Our future growth strategies increasingly depend on the growth and sustained profitability~~ of certain international markets, such as China. Some factors that will be critical to our success in developing these markets may be different than those affecting our more-established North American and European markets. In the Chinese market, in particular, our future success depends on our ability to continue to raise awareness of our products, evolve the available distribution channels and adapt our offerings to best suit the Chinese consumer. China’s economy differs from the economies of other developed countries in many respects and, as the legal and regulatory system in China continues to evolve, there may be greater uncertainty as to the interpretation and enforcement of applicable laws and regulations. In March 2017, China's National Tourism Administration issued a directive to travel agents to halt sales of holiday packages to South Korea. This travel restriction has had a direct impact on our related itinerariesfuel types potentially impacting the overall performance of our China business. It is uncertain what the ultimate scope and duration of this restriction will be, but to the extent that this or similar sanctions affecting regional travel and/or tourism continues or are put in place, it may impact local demand, available cruise itineraries and the overall financial performance of the China market.

We have operations in and source passengers from the United Kingdom and other member countries of the European Union. In March 2017, the United Kingdom notified the European Council of its intent to withdraw from the European Union. Since the initial referendum in June 2016, the proposed withdrawal has resulted in increased volatility in the global financial markets and, in particular, in global currency exchange rates. The withdrawal could potentially adversely affect tax, legal and regulatory regimes to which our business in the region is subject. The withdrawal could also, among other potential outcomes, disrupt the free movement of goods, services and people between the United Kingdom and the European Union. Further, uncertainty around these issues could lead to adverse effects on the economy of the United Kingdom and the other economies in which we operate, making it more difficult to source passengers from these regions. These risks may be exacerbated if voters of other countries within the European Union similarly elect to exit the European Union in future referendums.

As a global operator, our business may be also impacted by changes in U.S. policy or priorities in areas such as trade, immigration and/or environmental or labor regulations, among others. Depending on the nature and scope of these changes, they could impact our domestic and international business operations. While still unclear, these changes, and any international response to them, could potentially introduce new barriers to passenger or crew travel and/or cross border transactions, impact our guest experience and/or increase our operating costs.

If we are unable to address these risks adequately, our financial position and results of operations could be adversely affected, including potentially impairing the value of our ships and other assets.

Price increases for commercial airline ~~service~~services for our guests or major changes or reduction in commercial airline ~~service~~services and/or availability could adversely impact the demand for cruises and undermine our ability to provide reasonably priced vacation packages to our guests.

Many of our guests depend on scheduled commercial airline services to transport them to or from the ports where our cruises embark or disembark. Increases in the price of airfare would increase the overall price of the cruise vacation to our guests, which may adversely impact demand for our cruises. In addition, changes in the availability ofand/or regulations governing commercial airline services could adversely affect our guests’ ability to obtain ~~airfare,~~air travel, as well as our ability to ~~fly~~transfer our guests to or from our cruise ships, which could adversely affect our results of operations.

Terrorist attacks, war, and other similar events could have a material adverse impact on our business and results of operations.

We are susceptible to a wide range of adverse events, including terrorist attacks, war, conflicts, civil unrest and other hostilities. The occurrence of these events or an escalation in the frequency or severity of them, and the resulting political instability, travel restrictions and advisories and concerns over safety and security aspects of traveling or the fear of any of the foregoing, have had, and could have in the future, a significant adverse impact on demand and pricing in the travel and vacation industry. These events could also result in additional security measures taken by local authorities which have, and may in the future, impact access to ports and/or destinations. In addition, such events have led, and could lead, to disruptions, instability and volatility in global markets, supply chains and industries, increased operating costs, such as fuel and food, and disruptions affecting our newbuild construction and fleet modernization efforts, any of which could materially and adversely impact our business and results of operations. Further, such events could have the effect of heightening the other risks we have described in this report, any of which also could materially and adversely affect our business and results of operations.

Disease outbreaks and an increase in concern about the risk of illness could adversely impact our business and results of operations, and may cause significant disruptions, create new risks, and exacerbate existing risks.

Disease outbreaks and increased concern related to illness when traveling to, from, and on our ships such as COVID-19 could cause a drop in demand for cruises, guest cancellations, travel restrictions, an unavailability of ports and/or destinations, cruise cancellations, ship redeployments and an inability to source our crew, provisions or supplies from certain places. In addition, we may be subject to increased concerns that cruises are more susceptible than other vacation alternatives to the spread of infectious diseases. For example, the unprecedented responses by governments and other authorities to control and contain the COVID-19 outbreak, including related variants, led to our voluntary suspension of our global cruise operations starting in March 2020. While we have resumed our global cruise operations, there is no assurance that our cruise operations will continue uninterrupted. In response to disease outbreaks, our industry, including our passengers and crew, may be subject to enhanced health and safety requirements in the future which may be costly and take a significant amount of time to implement across our fleet. For example, local governments may establish their own set of rules for self-quarantines and/or require proof of individuals' health status or vaccination prior to or upon visiting. Based on our assessment of these requirements and recommendations, or for other reasons, we may determine it necessary to cancel or modify certain of our Global Brands’ cruise sailings. The impact of any of these factors could have a material adverse effect on our business and results of operations. In addition, any operating or health protocols that we may develop or that may be required by law in the future in response to infectious diseases may be costly to develop and implement and may be less effective than we expected in reducing the risk of infection and spread of such disease on our cruise ships, all of which will negatively impact our operations and expose us to reputational and legal risks.

Incidents ~~or adverse publicity concerning our~~on ships, at port facilities, land destinations and/or ~~passengers or~~affecting the cruise vacation industry in general, ~~unusual weather conditions~~ and ~~other natural disasters or disruptions~~the associated negative media coverage and publicity, have affected and could continue to affect our reputation ~~as well as~~and impact our sales and results of operations.

~~The ownership and/or operation of cruise~~Cruise ships, ~~airplanes,~~ private destinations, port facilities and shore excursions ~~involves~~operated and/or offered by us and third parties may be susceptible to the risk of accidents, illnesses, mechanical failures, environmental incidents and other incidents which ~~may~~could bring into question safety, health, security and vacation satisfaction ~~which could~~and negatively impact our sales, operations and reputation. Incidents involving cruise ships, and, in particular the safety, health and security of guests and crew and the media coverage thereof, including those related to the COVID-19 pandemic, have impacted and could ~~in the future~~continue to impact demand for our cruises and pricing in the industry. In particular, we cannot predict the impact on our financial performance and the public’s concern regarding the health and safety of travel, especially by cruise ship, and related decreases in demand for travel and cruising. Moreover, our ability to attract and retain guests and crew depends, in part, upon the perception and reputation of our company and our brands and the public’s concerns regarding the health and safety of travel generally, as well as regarding the cruising industry and our ships specifically. Our reputation and our business could also be damaged by continued or additional negative publicity regarding the cruise industry in general, including publicity regarding the spread of contagious disease such as COVID-19, over-tourism in key ports and destinations and the potentially adverse environmental impacts of cruising. The

considerable expansion in the use of social ~~media~~ and digital ~~marketing over recent years~~media has compounded the potential scope and reach of any negative publicity. ~~If any such incident or news cycle occurs during a time of high seasonal demand, the effect could disproportionately impact our results of operations for the year.~~ In addition, incidents involving cruise ships may result in additional costs to our business, increasing government or other regulatory oversight and, in ~~the case of incidents involving our ships,~~certain cases, potential litigation.

~~Our cruise ships and port facilities may also be adversely impacted by unusual~~Significant weather, ~~patterns~~ climate events and/or natural disasters could adversely impact our business and results of operations.

Natural disasters (e.g., earthquakes, volcanos, wildfires), weather and/or ~~disruptions, such as hurricanes.~~climate events (including hurricanes and typhoons) could impact our source markets and operations resulting in travel restrictions, guest cancellations, an inability to source our crew or our provisions and supplies from certain places. We are often forced to alter itineraries and occasionally cancel a cruise or a series of cruises or to redeploy our ships due to these ~~or other factors,~~types of events, which could have an adverse effect on our sales, operating costs and ~~profitability. For example, the 2017 hurricane season was particularly impactful to our operations~~profitability in the ~~Caribbean.~~current and future periods. Increases in the frequency, severity or duration of ~~severe weather~~these types of events ~~including those related to climate change,~~ could exacerbate ~~the~~their impact and ~~cause further disruption to~~disrupt our ~~operations. In addition, these~~operations or make certain destinations less desirable or unavailable impacting our revenues and any other events which impact the travel industry more generally may negatively impact our ability to deliver guests or crew to our cruises and/or interrupt our ability to obtain services and goods from key vendors in our supply chain.profitability further. Any of the foregoing could have an adverse impact on our results of operations and on industry performance.

Our sustainability activities, including environmental, social and governance (ESG) matters, could result in reputational risks, increased costs and other risks.

Customers, investors, lenders, regulators and other industry stakeholders have placed increasing importance on corporate ESG practices and on the implications and social cost of their investments, which could cause us to incur additional costs and changes to our operations. If our ESG practices or disclosures do not meet stakeholders' evolving expectations and standards, our customer and employee retention, our access to certain types of capital, including export credit financing, and our brands and reputation may be negatively impacted, which could affect our business operations and financial condition. We could also incur additional costs and require additional resources to monitor, report and comply with various ESG practices, which could increase our operating costs and affect our results of operations and financial condition.

In addition, from time to time, we communicate certain initiatives regarding climate change and other ESG matters. We could fail or be perceived to fail to achieve such initiatives, which may negatively affect our reputation. The future adoption of new technology or processes to achieve the initiatives could also result in the impairment of existing assets.

Our reliance on shipyards, their subcontractors and our suppliers to implement our newbuild and ship upgrade programs and to repair and maintain our ships exposes us to risks which could adversely impact our business.

We rely on shipyards, their subcontractors and our suppliers to effectively construct our new ships and to repair, maintain, and upgrade our existing ships on a timely basis and in a cost effective manner. There are a limited number of shipyards with the capability and capacity to build, repair, maintain and/or upgrade our ships. As such, any disruptions affecting the newbuild or fleet modernization supply chain will adversely impact our business as there are limited substitutes.

Suspensions and/or slowdowns of work at shipyards, have impacted and could continue to impact our ability to construct new ships as planned, our ability to timely and cost-effectively procure new capacity, and our ability to execute scheduled drydocks and/or fleet modernizations. For instance, the effects of the COVID-19 pandemic on the shipyards, their subcontractors, and our suppliers have resulted in delays in our previously scheduled ship deliveries. Variations from our plan could have a significant negative impact on our business operations and financial condition.

Building, repairing, maintaining and/or upgrading a ship is sophisticated work that involves significant risks. Material increases in commodity and raw material prices, and other cost pressures impacting the construction of a new ship, such as the cost of labor and financing, could adversely impact the shipyard’s ability to build the ship on a cost-effective basis. We may be impacted if shipyards, their subcontractors, and/or our suppliers encounter financial difficulties, supply chain, technical or design problems when building or repairing a ship. These problems have impacted and may in the future impact the timely delivery or cost of new ships or the ability of shipyards to repair and upgrade our fleet in accordance with our needs or expectations. In addition, delays, mechanical faults and/or unforeseen incidents may result in cancellation of cruises or delays of new ship orders or necessitate unscheduled drydocks. Such events could result in lost revenue, increased operating expenses, or both, and thus adversely affect our results of operations.

An increase in capacity worldwide or excess capacity in a particular market could adversely impact our cruise sales and/or pricing.

Although our ships can be redeployed, cruise sales and/or pricing may be impacted by the introduction of new ships into the marketplace, reductions in cruise capacity, overall market growth and deployment decisions of ourselves and our competitors. As of ~~December~~March 31, ~~2016,~~2023, a total of 6246 new ships with approximately ~~173,000~~98,887 berths ~~are~~were on order for delivery through ~~2021~~2028 in the cruise ~~industry.~~ industry, including 10 ships currently scheduled to be delivered to our Global and Partner Brands.

The further net growth in capacity from these new ships and future orders, without an increase in the cruise industry’s demand and/or share of the vacation market, could depress cruise prices and impede our ability to achieve yield improvement.

In addition, to the extent that we or our competitors deploy ships to a particular ~~itinerary~~itinerary/region and the resulting capacity in that region exceeds the demand, weit may ~~lower~~negatively affect our pricing and profitability may be lower than anticipated. This risk exists in emerging cruise markets, such as China, where capacity has grown rapidly over the past few years and in mature markets where excess capacity is typically redeployed.profitability. Any of the foregoing could have an adverse impact on our results of operations, cash flows and financial condition, including potentially impairing the value of our ships and other assets.

Unavailability of ports of call may adversely affect our results of ~~operations~~.

We believe that port destinations are a major reason why guests choose to go on a particular cruise or on a cruise vacation. The availability of ports and destinations is affected by a number of factors, including industry demand and competition for key ports and destinations, existing capacity constraints, constraints related to the size of certain ships, security, ~~environmental and health concerns, adverse weather conditions and natural disasters,~~ financial limitations on port development, exclusivity arrangements that ports may have with our competitors, geopolitical developments, local governmental regulations, environmental regulations, and ~~local community concerns about port development and other adverse impacts on their communities from additional tourists. In addition,~~governmental response to disease outbreaks. Higher fuel costs also may adversely impact the destinations on certain of our ~~itineraries. Any~~itineraries as they become too costly to include.

In addition, certain ports and destinations have faced a surge of both cruise and non-cruise tourism which, in certain cases, has fueled anti-tourism sentiments and related countermeasures to limit the volume of tourists allowed in these destinations. In certain destinations, countermeasures to limit the volume of tourists have been contemplated and/or put into effect, including proposed limits on cruise ships and cruise passengers, which could limit the itinerary and destination options we can offer our passengers going forward.

Increased demand and competition for key ports of call or destinations, limitations on the availability or feasibility of ~~our~~use of specific ports of call and/or constraints on the availability of shore excursions and other service providers at such ports or destinations could adversely affect our ~~results of operations.~~operations and financial results.

Our reliance on shipyards and their subcontractors to implement our newbuild and ship upgrade programs and to repair and maintain our ships exposes us to risks which, if realized, could adversely impact our business.

~~We rely on shipyards and their subcontractors to effectively construct our new ships and to repair, maintain and upgrade our existing ships on a timely basis and in a cost effective manner.~~

There are a limited number of shipyards with the capability and capacity to build our new ships and, accordingly, increased demand for available new construction slots and/or continued consolidation in the cruise shipyard industry (including completion of Italian shipbuilder Fincantieri's bid for STX France) could impact our ability to construct new ships when and as planned, cause us to continue to commit to new ship orders earlier than we have historically done so and/or result in stronger bargaining power

on the part of the shipyards and the export credit agencies providing financing for the project. Our inability to timely and cost-effectively procure new capacity could have a significant negative impact on our future business plans and results of operations.

Building, repairing, maintaining and/or upgrading a ship is sophisticated work that involves significant risks, and shipyards and/or their subcontractors may encounter financial, technical or design problems when doing these jobs. If materialized, these problems could impact the timely delivery or costs of new ships or the ability of shipyards to repair and upgrade our fleet in accordance with our needs or expectations. In addition, delays or mechanical faults may result in cancellation of cruises or, in more severe situations, new ship orders, or necessitate unscheduled drydocks and repairs of ships. These events and any related adverse publicity could result in lost revenue, increased operating expenses, or both, and thus adversely affect our results of operations.

We may lose business to competitors throughout the vacation ~~market~~.

We operate in the vacation market and cruising is one of many alternatives for people choosing a vacation. We, therefore, risk losing business not only to other cruise lines, but also to other vacation operators, which provide other leisure options, including hotels, resorts, internet-based alternative lodging sites and package holidays and tours.

We face significant competition from other cruise lines on the basis of cruise pricing, travel ~~agent~~advisor preference and also in terms of the nature of ships, services and ~~services~~destinations that we offer to guests. Our principal competitors within the cruise vacation industry include Carnival Corporation & plc, which owns, among others, Aida Cruises, Carnival Cruise Line, Costa Cruises, Cunard Line, Holland America Line, P&O Cruises and Princess Cruises; Disney Cruise Line; MSC Cruises; and Norwegian Cruise Line Holdings Ltd, which owns Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises. Our revenues are sensitive to the actions of other cruise lines in many areas including pricing, scheduling, capacity and promotions, which can have a substantial adverse impact not only on our revenues, but also on overall industry revenues.

In the event that we do not effectively market or differentiate our cruise brands from our competitors or otherwise compete effectively with other vacation alternatives and new or existing cruise companies, our results of operations and financial position could be adversely affected.

If we are unable to appropriately manage our cost and capital allocation strategies with our goal of satisfying guest expectations, it may adversely impact our business success.

We strive to provide high quality products and deliver high quality services. There can be no assurance that we can successfully balance these goals with our cost management and capital allocation strategies. Our business also requires us to make capital allocation decisions across a broad scope of investment options with varying return profiles and time horizons for value realization. These include significant capital investment decisions such as ordering new ships, upgrading our existing fleet, enhancing our technology and/or data capabilities and expanding our portfolio of land-based assets, based on expected market preferences, competition and projected demand. There can be no assurance that our strategies will be successful, which could adversely impact our business, financial condition and results of operations. For example, our ownership and operation of older tonnage, in particular during the business disruption caused by COVID-19, has resulted in impaired asset values due to expected returns less than the carrying value of the assets.

Our attempts to expand our business into new markets and new ventures may not be successful.

We opportunistically seek to grow our business through, among other things, expansion into new destinations or source markets and establishment of new ventures complementary to our current offerings. These attempts to expand our business increase the complexity of our business, require significant levels of investment and can strain our management, personnel, operations and systems. In addition, we may be unable to execute our attempts to expand our business. There can be no assurance that these business expansion efforts will develop as anticipated or that we will succeed, and if we do not, we may be unable to recover our investment, which could adversely impact our business, financial condition and results of operations.

Risks associated with our development and operation of key land-based destination projects may adversely impact our business or results of operations.

We have invested, either directly or indirectly through joint ventures and partnerships, in a growing portfolio of key land-based projects including port and terminal facilities, private destinations and multi-brand destination projects. These investments can increase our exposure to certain key risks depending on the scope, location, and the ownership and management structure of these projects. These risks include susceptibility to weather events, exposure to local political/regulatory developments and policies, logistical challenges and human resource and labor risks and safety, environmental, and health risks, including challenges posed by the COVID-19 pandemic and its effects locally where we have these projects and relationships.

Our reliance on travel advisors to sell and market our cruises exposes us to certain risks which could adversely impact our business.

We rely on travel advisors to generate bookings for our ships. Accordingly, we must maintain competitive commission rates and incentive structures. If we fail to offer competitive compensation packages or fail to maintain our relationships, these agencies may be incentivized to sell cruises offered by our competitors, which could adversely impact our operating results. Our reliance on third-party sellers is particularly pronounced in certain markets. In addition, the travel advisor community is sensitive to economic conditions that impact discretionary income of consumers. Significant disruptions, such as those caused by the COVID-19 pandemic, or contractions in the industry could reduce the number of travel advisors available for us to market and sell our cruises, which could have an adverse impact on our financial condition and results of operations. Additionally, the strength of our recovery from suspended operations could be delayed if we are not aligned and partnered with key travel advisors.

Business activities that involve our co-investments with third parties may subject us to additional risks.

Partnerships, joint ventures and other business structures involving our co-investments with third parties generally include some form of shared control over the operations of the business and create additional risks, including the possibility that other investors in such ventures become bankrupt or otherwise lack the financial resources to meet their obligations or could have or develop business interests, policies or objectives that are inconsistent with ours. In addition to financial risks, our co-investment activities have also presented managerial and operational risks and expose us to reputational or legal concerns. These or other issues related to our co-investments with third parties could adversely impact our operations or liquidity. Further, due to the arrangements we have in place with our partners in these ventures, we are limited in our ability to control the strategy of these ventures, or their use of capital and other key factors to their results of operation, which could adversely affect our investments and impact our results of operations.

Past or pending business acquisitions or potential acquisitions that we may decide to pursue in the future carry inherent risks which could adversely impact our financial performance and condition.

The Company, from time to time, has engaged in acquisitions and may pursue acquisitions in the future, which are subject to, among other factors, the Company’s ability to identify attractive business opportunities and to negotiate favorable terms for such opportunities. Accordingly, the Company cannot make any assurances that potential acquisitions will be completed timely or at all, or that if completed, we would realize the anticipated benefits of such acquisitions. Acquisitions also carry inherent risks such as, among others: (i) the potential delay or failure of our efforts to successfully integrate business processes and realizing expected synergies; (ii) difficulty in aligning procedures, controls and/or policies; and (iii) future unknown liabilities and costs that may be associated with an acquisition. In addition, acquisitions may adversely impact our liquidity and/or debt levels, and the recognized value of goodwill and other intangible assets can be negatively affected by unforeseen events and/or circumstances, which may result in an impairment charge. Any of the foregoing events could adversely impact our financial condition and results of operations.

We rely on supply chain vendors and third-party service providers who are integral to the operations of our businesses. These vendors and service providers may be unable or unwilling to deliver on their commitments or may act in ways that could harm our business.

We rely on supply chain vendors to deliver key products to the operations of our businesses around the world. Any event impacting a vendor’s ability to deliver goods of the expected quality at the location and time needed could negatively impact our ability to deliver our cruise experience. Events impacting our supply chain could be caused by factors beyond the control of our suppliers or us, including inclement weather, natural disasters, new laws and regulations, labor actions, increased demand, problems in production or distribution, cybersecurity events, and/or disruptions in third-party logistics or transportation systems, including those caused by the COVID-19 pandemic. Any such interruptions to our supply chain could increase our costs and could limit the availability of products critical to our operations. In addition, increased regulation or stakeholder

expectations regarding sourcing practices, or supplier conduct that does not meet such standards, could cause our operating costs to increase or result in publicity that negatively affects our reputation.

In order to achieve cost and operational efficiencies, we outsource to third-party vendors certain services that are integral to the operations of our global businesses, such as our onboard concessionaires, certain of our call center operations, guest port services, logistics distribution and operation of a large part of our information technology systems. We are subject to the risk that certain decisions are subject to the control of our third-party service providers and that these decisions may adversely affect our activities. A failure to adequately monitor a third-party service provider’s compliance with a service level agreement or regulatory or legal requirements could result in significant economic and reputational harm to us. There is also a risk the confidentiality, privacy and/or security of data held by third parties or communicated over third-party networks or platforms could become compromised.

The potential unavailability of insurance coverage, an inability to obtain insurance coverage at commercially reasonable rates or our failure to have coverage in sufficient amounts to cover our incurred losses may adversely affect our financial condition or results of operations.

We seek to maintain appropriate insurance coverage at commercially reasonable rates. We normally obtain insurance based on the cost of an asset rather than replacement value, and we also elect to self-insure, co-insure, or use deductibles in certain circumstances for certain risks such as loss of use of a ship or other business interruption. The limits of insurance coverage we purchase are based on the availability of the coverage, evaluation of our risk profile and cost of coverage. We do not carry business interruption insurance and accordingly we have no insurance coverage for loss of revenues or earnings from our ships or other operations. Accordingly, we are not protected against all risks and cannot be certain that our coverage will be adequate for liabilities actually incurred which could result in an unexpected decrease in our revenue and results of operations in the event of an incident

We are members of four Protection and Indemnity (“P&I”) clubs, which are part of a worldwide group of 12 P&I clubs, known as the International Group of P&I Clubs (the “IG”). P&I coverage provided by the clubs is on a mutual basis, and we are subject to additional premium calls in the event of a catastrophic loss incurred by any member of the 12 P&I clubs, whereby the reinsurance limits purchased by the IG are exhausted. We are also subject to additional premium calls based on investment and underwriting shortfalls experienced by our own individual insurers.

We cannot be certain that insurance and reinsurance coverage will be available to us and at commercially reasonable rates in the future or at all or, if available, that it will be sufficient to cover potential claims. Additionally, if we or other insureds sustain significant losses, the result may be higher insurance premiums, cancellation of coverage, or the inability to obtain coverage. Such events could adversely affect our financial condition or results of operations.

Disruptions in our shoreside or shipboard operations or our information systems may adversely affect our results of operations.

Our principal executive office and principal shoreside operations are located in Florida, and we have shoreside offices throughout the world. Actual or threatened natural disasters (e.g., hurricanes/typhoons, earthquakes, tornadoes, fires or floods), municipal lockdowns, curfews, quarantines, or similar events in these locations may have a material impact on our business continuity, reputation and results of operations. In addition, substantial or repeated information system failures, computer viruses or cyber attacks impacting our shoreside or shipboard operations could adversely impact our business. We do not generally carry business interruption insurance for our shoreside or shipboard operations or our information systems. As such, any losses or damages incurred by us could have an adverse impact on our results of operations.

Provisions of our Articles of Incorporation, By-Laws and Liberian law could inhibit a change of control and may prevent efforts by our shareholders to change our management.

Certain provisions of our Articles of Incorporation and By-Laws and Liberian law may inhibit third parties from effectuating a change of control of the Company without approval from our board of directors which could result in the entrenchment of current management. These include provisions in our Articles of Incorporation that prevent third parties, other than A. Wilhelmsen AS and Cruise Associates and their permitted transferees, from acquiring beneficial ownership of more than 4.9% of our outstanding shares without the consent of our board of directors.

We may not be able to achieve our fiscal 2025 financial and climate-related performance goals.

In November 2022, we announced that we are targeting certain financial and climate-related performance goals for fiscal 2025. Our ability to achieve these goals is dependent on a number of factors, including the other risk factors described in this section. If we are not able to achieve these goals, the price of our common stock and reputation may be negatively affected.

We may not be able to obtain sufficient financing or capital for our needs or may not be able to do so on terms that are acceptable or consistent with our expectations.

To fund our capital expenditures (including new ship orders), operations and scheduled debt payments, we have historically relied on a combination of cash flows provided by operations, drawdowns under available credit facilities, the incurrence of additional indebtedness and the sale of equity or debt securities in private or public securities markets. Any circumstance or event which leads to a decrease in consumer cruise spending, such as worsening global economic conditions or significant incidents impacting the cruise industry, ~~could~~such as the COVID-19 pandemic, negatively ~~affect~~affects our operating cash flows. ~~See “-Adverse worldwide economic, geopolitical or other conditions…~~”As result of the COVID-19 pandemic and “-~~Incidents or adverse publicity concerning our ships and/or passengers or~~ the ~~cruise vacation industry…”~~ ~~for more information.~~

~~Although we believe we can access sufficient liquidity to fund~~resulting suspension of our operations, ~~investments~~we have experienced credit rating downgrades, which have reduced our ability to incur secured indebtedness by reducing the amount of indebtedness that we are permitted to secure, and ~~obligations as expected, there can~~may negatively impact our access to, and cost of, debt financing. Additionally, our ability to raise additional financing, whether or not secured, could be ~~no assurances~~limited if our credit rating is further downgraded, and/or if we fail to ~~that effect.~~ comply with applicable covenants governing our outstanding indebtedness, and/or if overall financial market conditions worsen.

Our ability to access additional funding as and when needed, our ability to timely refinance and/or replace our outstanding debt securities and credit facilities on acceptable terms and our cost of funding will depend upon numerous factors including, but not limited to, the ~~vibrancy~~strength of the financial markets, global market conditions, including inflationary pressures, interest rate fluctuations, our recovery and financial performance, the recovery and performance of our industry in general and the size, scope and timing of our financial needs. In addition, even where financing commitments have been secured, significant disruptions in the capital and credit markets could cause our banking and other counterparties to breach their contractual obligations to ~~us.~~us or could cause the conditions to the availability of such funding not to be satisfied. This could include failures of banks or other financial service companies to fund required borrowings under our loan agreements or to pay us amounts that may become due or return collateral that is refundable under our interest rate derivative ~~contracts for hedging of fuel prices, interest rates and foreign currencies~~instruments or other agreements. If any of the foregoing occurs for a prolonged period of time it ~~may~~will have a long-term negative impact on our cash flows ~~including~~and our ability to meet our ~~obligations, our results~~financial obligations.

Our substantial debt requires a significant amount of ~~operations~~cash to service and could adversely affect our financial condition.

We have a substantial amount of debt and significant debt service obligations. As of March 31, 2023, we had total debt of $21.5 billion. Our substantial debt has required us to dedicate a large portion of our cash flow from operations to service debt and fund repayments on our debt, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate expenses.

Our ~~liquidity could~~ability to make future scheduled payments on our debt service obligations or refinance our debt depends on our future operating and financial performance and ability to generate cash. This will be ~~adversely impacted if we are unable to satisfy the covenants required~~affected by ~~our credit facilities.~~

~~Our debt agreements contain covenants, including covenants restricting~~ our ability to ~~take~~successfully implement our business strategy, as well as general economic, financial, competitive, regulatory and other factors beyond our control, such as the disruption caused by the COVID-19 pandemic. If we cannot generate sufficient cash to meet our debt service obligations or fund our other business needs, we may, among other things, need to refinance all or a portion of our debt, obtain additional financing, delay planned capital expenditures or sell assets. We cannot assure that we will be able to generate sufficient cash through any of the foregoing. If we are not able to refinance any of our debt, obtain additional financing or sell assets on commercially reasonable terms or at all, we may not be able to satisfy our obligations with respect to our debt.

Our substantial debt could also result in other negative consequences for us. For example, it could increase our vulnerability to adverse general economic or industry conditions; limit our flexibility in planning for, or reacting to, changes in our business or the industry in which we operate; place us at a competitive disadvantage compared to our competitors that have less debt; make us more vulnerable to downturns in our business, the economy or the industry in which we operate; limit our ability to raise additional debt or equity capital in the future to satisfy our requirements relating to working capital, capital expenditures, development projects, strategic initiatives or other purposes; restrict us from making strategic acquisitions, introducing new technologies or exploiting business opportunities; limit or restrict our ability to obtain and maintain performance bonds to cover our financial responsibility requirements in various jurisdictions for non-performance of guest travel, casualty and personal injury; make it difficult for us to satisfy our obligations with respect to our debt; and increase our exposure to the risk of increased interest rates as certain ~~actions~~of our borrowings are (and may in the future be) at a variable rate of interest.

Despite our leverage, we may incur more debt, which could adversely affect our business.

We may incur substantial additional debt in the future. Except for the restrictions under the indentures governing our Secured Notes, our Priority Guaranteed Notes, and certain of our other debt instruments, including our unsecured bank and export credit facilities, we are not restricted under the terms of our debt instruments from incurring additional debt. Although the indentures governing the Secured Notes, the Priority Guaranteed Notes, and certain of our other debt instruments, including our unsecured bank and export credit facilities, contain restrictions on the incurrence of additional debt, these restrictions are subject to a number of significant qualifications and exceptions, and under certain circumstances the amount of debt that could be incurred in compliance with these restrictions could be substantial. If new debt is added to our existing debt levels, the related risks that we now face would increase. Additionally, there is no guarantee that financing will be available in the future or that such financing will be available with similar terms or terms that are commercially acceptable to us. As of March 31, 2023, we have commitments for approximately $7.2 billion of debt to finance the purchase of 7 ships on order by our Royal Caribbean International, Celebrity Cruises and Silversea Cruises brands, all of which are guaranteed by the export credit agencies in the countries in which the ships are being built. The ultimate size of each facility will depend on the final contract price (including change orders and owner’s supply) as well as fluctuations in the EUR/USD exchange rate. Refer to Note 6. Debt to our consolidated financial statements under Item 1. Financial Statements for further information regarding our "Secured Notes" and "Priority Guaranteed Notes".

We are subject to restrictive debt covenants that may limit our ability to finance our future operations and capital needs and to pursue business opportunities and activities. In addition, if we fail to comply with any of these restrictions, it could have a material adverse effect on us.

Certain of our debt instruments, including our indentures and our unsecured bank and export credit facilities, limit our flexibility in operating our business. For example, certain of our loan agreements and indentures restrict or limit our and our subsidiaries’ ability to, among other things, incur or guarantee additional indebtedness; pay dividends or distributions on, or redeem or repurchase capital stock and make other restricted payments; make investments; consummate certain asset sales; engage in certain transactions with affiliates; grant or assume certain liens; and consolidate, merge or transfer all or substantially all of our assets. In addition, both our export credit facilities and our non-export credit facilities contain covenants that require us, among other things, to maintain a minimum liquidity, a specified minimum fixed charge coverage ratio, and limit our net debt-to-capital ratio. In addition, our ECA facilities also require us to maintain a minimum stockholders' equity. Refer to Note 6. Debt to our consolidated financial statements under Item 1. Financial Statements for further discussion on our covenants and existing waivers.

All of these limitations are subject to significant exceptions and qualifications. Despite these exceptions and qualifications, we cannot assure you that the operating and financial ~~covenants.~~restrictions and covenants in certain of our debt instruments will not adversely affect our ability to finance our future operations or capital needs or engage in other business activities that may be in our interest. Any future indebtedness may include similar or other restrictive terms and we may be required to further encumber our assets. In addition, our ability to ~~make borrowings~~comply with these covenants and restrictions may be affected by events beyond our control. These include prevailing economic, financial and industry conditions. If we breach any of these covenants or restrictions, we could be in default under such indebtedness and certain of our ~~available credit facilities is subject~~other debt instruments, and the relevant debt holders or lenders could elect to declare the ~~absence~~debt, together with accrued and unpaid interest and other fees, if any, immediately due and payable and proceed against any collateral securing that debt. If the debt under certain of ~~material adverse changes~~our debt instruments that we enter into were to be accelerated, our liquid assets may be insufficient to repay in full such indebtedness. Borrowings under other debt instruments that contain cross-default provisions also may be accelerated or become payable on demand. In these circumstances, our ~~business. Our~~assets may not be sufficient to repay in full that indebtedness and our other indebtedness then outstanding.

In addition, our ability to maintain our credit facilities may also be impacted by changes in our ownership base. More specifically, we may be required to prepay our ~~bank financing~~non-ECA and ECA facilities if any person acquires ownership of more than 50% of our common stock or, subject to certain exceptions, during any 24-month period, a majority of ~~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. 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.~~downgrade, which would require us to offer to repurchase our debt securities in the event of such change of control.

If we elect to settle conversions of our convertible notes in shares of our common stock or a combination of cash and shares of our common stock, conversions of our convertible notes will result in dilution for our existing shareholders. Furthermore, new equity or convertible debt issuances will also result in dilution for our existing shareholders.

We have an aggregate principal amount of $1.7 billion in convertible notes outstanding. If note holders elect to convert, the notes will be converted into our shares of common stock, cash, or a combination of common stock and cash, at our

discretion. Prior to March 15, 2023, August 15, 2023, and May 15, 2025, our convertible notes issued in June 2020, October 2020, and August 2022, respectively, will be convertible at the option of holders during certain periods only upon satisfaction of certain conditions. Beyond those dates, the convertible notes will be convertible at any time until the close of business on the second scheduled trading day immediately preceding their maturity date. Conversions of our convertible notes into shares of our common stock or a combination of common stock and cash, will result in dilution to our shareholders. Additionally, if we raise additional funds through equity or convertible debt issuances, our shareholders could experience dilution of their ownership interest, and these equity or convertible debt securities could have rights, preferences, and privileges that are superior to that of holders of our common stock.

We did not declare quarterly dividends on our common stock in the quarter ended March 31, 2023 and do not expect to pay dividends on our common stock for the foreseeable future.

We have not declared a dividend since the first quarter of 2020. We expect that any income received from operations will be devoted to our future operations and recovery. We do not expect to pay cash dividends on our common stock for the foreseeable future.In addition, in the event we thereafter declare a dividend, we will need to repay our amounts deferred under the export credit facilities. Payment of dividends would, in any case, depend upon our profitability at the time, cash available for those dividends, and other factors as our board of directors may consider relevant.

Increased regulatory oversight, and the phasing out of LIBOR may adversely affect the value of a portion of our indebtedness.

The publication of certain LIBOR settings ceased after December 31, 2021, and uncertainty regarding alternative reference rates remains as many market participants await a wider adoption of replacement products prior to the cessation of the remaining USD LIBOR tenors (currently scheduled for June 30, 2023). When LIBOR ceases to exist, the level of interest payments on the portion of our indebtedness that bears interest at variable rates might be affected if we, the agent, and/or the lenders holding a majority of the outstanding loans or commitments under such indebtedness fail to amend such indebtedness to implement a replacement rate. Regardless, such replacement rate will give due consideration to any evolving or then-existing conventions for similar credit facilities, which may result in different than expected interest payments.

Compliance and Regulatory Risks

Changes in U.S. or other countries’ foreign travel policy have affected, and may continue to affect our results of operations.

Changes in U.S. and other countries' foreign policy have in the past and could in the future result in the imposition of travel restrictions or travel bans on persons to certain countries or result in the imposition of travel advisories, warnings, rules, regulations or legislation exposing us to penalties or claims of monetary damages. In addition, some countries have adopted restrictions against U.S. travelers, and we currently cannot predict when those restrictions will be eased. The timing and scope of these changes and regulations can be unpredictable, and they could cause us to cancel scheduled sailings, possibly on short notice, or could result in litigation against us. This, in turn, could decrease our revenue, increase our operating costs and otherwise impair our profitability.

Factors associated with climate change, including an increasing global regulatory focus, could adversely affect our business.

There is increasing global regulatory focus on climate change, greenhouse gas and other emissions. These regulatory efforts,both internationally and in the U.S., are still developing, including the international alignment of such efforts, and we cannot yet determine what the final regulatory programs or their impact will be on our business. However, such climate change-related regulatory activity in the future may adversely affect our business and financial results by requiring us to reduce our emissions, pay for our emissions, modify our itineraries and may increase our exposure, if any, to climate change-related litigation. Such activity may also impact us by increasing our operating costs, including fuel costs. For example, the European Union has proposed a series of significant carbon reforms under its Fit for 55 package designed to meet its 2030 emission goals, which would require us, among other things, to increase the use of low carbon fuel onboard our vessels as well as connectivity to shore power. The proposed legislation also includes updates to the European Union Emission Trading System which would impose requirements to purchase carbon emission allowances beginning in 2024. In addition, the U.S. and various state and foreign government or regulatory agencies have enacted, or may enact, environmental regulations or policies, such as requiring the use of low sulfur fuels (e.g., IMO Sulfur Limit) or the incoming carbon intensity indicator regulation, that have or could increase our direct cost to operate in certain markets, increase our cost of fuel, limit the supply of compliant fuel, cause us to incur significant expenses to purchase and/or develop new equipment and adversely impact the cruise vacation industry. If enacted, these regulations may individually or collectively have a material adverse effect on our business and results of operations due to increased costs associated with compliance and modified itineraries in the affected regions.

There has also been growing environmental scrutiny of the environmental impact of the cruise vacation industry, and some environmental groups are advocating for more stringent regulation of ship emissions at berth and at sea. This negative publicity of the cruise industry and any related measures may lead to changes in consumer preferences, such as methods or frequency of travel, which could adversely impact our operations and financial results and subject us to reputational impacts and costs.

Labor, health and safety, financial responsibility and other maritime regulations and measures could affect operations and increase operating costs.

We are subject to various international, national, state and local laws, regulations and treaties that govern, among other things, discharge from our ships, safety standards applicable to our ships, treatment of disabled persons, health and sanitary standards applicable to our guests, security standards on board our ships and at the ship/port interface areas, and financial responsibilities to our guests. These issues are, and we believe will continue to be, an area of focus by the relevant authorities throughout the world. This could result in the enactment of more stringent regulation of cruise ships that could subject us to increasing compliance costs in the future and may increase our exposure, if any, to environmental-related litigation.

A change in our tax status under the U.S. Internal Revenue Code, or other jurisdictions, may have adverse effects on our results of operations.

Royal Caribbean Cruises Ltd. and a number of our subsidiaries are foreign corporations that derive income from a U.S. trade or business and/or from sources within the U.S. In connection with the year end audit, each year, Faegre Drinker Biddle & Reath LLP, our U.S. tax counsel, delivers to us an opinion, based on certain representations and assumptions set forth in it, to the effect that this income, to the extent derived from or incidental to the international operation of a ship or ships, is excluded from gross income for U.S. federal income tax purposes pursuant to Section 883 of the Internal Revenue Code. We believe that most of our income (including that of our subsidiaries) is derived from or incidental to the international operation of ships.

Our ~~failure~~ability to rely on Section 883 could be challenged or could change in the future. Provisions of the Internal Revenue Code, including Section 883, are subject to legislative change at any time. Moreover, changes could occur in the future with respect to the identity, residence or holdings of our direct or indirect shareholders, trading volume or trading frequency of our shares, or relevant foreign tax laws of Liberia or the Bahamas, such that they no longer qualify as equivalent exemption jurisdictions, that could affect our eligibility for the Section 883 exemption. Accordingly, there can be no assurance that we will continue to be exempt from U.S. income tax on U.S. source shipping income in the future. If we were not entitled to the benefit of Section 883, we and our subsidiaries would be subject to U.S. taxation on a portion of the income derived from or incidental to the international operation of our ships, which would reduce our net income.

Additionally, portions of our business are operated by companies that are within the United Kingdom tonnage tax regime. Further, some of our operations are conducted in jurisdictions where we rely on tax treaties to provide exemption from taxation. To the extent the United Kingdom tonnage tax laws change or we do not continue to meet the applicable qualification requirements or if tax treaties are changed or revoked, we may be required to pay higher income tax in these jurisdictions, adversely impacting our results of operations.

Numerous countries are considering implementation of the OECD’s 15% global minimum tax, which may materially impact us. In addition, as budgetary constraints may adversely impact fiscal policy in the jurisdictions in which we operate, we may be subject to changes in our existing tax treatment or other tax reform, as well as increased tax audits.

We are not a U.S. corporation and, as a result, our shareholders may be subject to the uncertainties of a foreign legal system in protecting their interests.

Our corporate affairs are governed by our Articles of Incorporation and By-Laws and by the Business Corporation Act of Liberia. The provisions of the Business Corporation Act of Liberia resemble provisions of the corporation laws of a number of states in the U.S. However, there are very few judicial cases in Liberia interpreting the Business Corporation Act of Liberia. While the Business Corporation Act of Liberia provides that it is to be applied and construed to make the laws of Liberia, with respect of the subject matter of the Business Corporation Act of Liberia, uniform with the laws of the State of Delaware and other states with substantially similar legislative provisions (and adopts their case law to the extent it is non-conflicting), there have been few Liberian court cases interpreting the Business Corporation Act of Liberia, and we cannot predict whether Liberian courts would reach the same conclusions as United States courts. We understand that legislation has been proposed but not yet adopted by the Liberian legislature which amends the provisions regarding the adoption of non-Liberian law to, among other things, provide for the adoption of the statutory and case law of Delaware and not also states with substantially similar legislative provisions, and potentially provide the courts of Liberia discretion in application of non-statutory corporation law of Delaware in cases when the laws of Liberia are silent. The right of shareholders to bring a derivative action in Liberian courts may be more limited than in U.S. jurisdictions. There may also be practical difficulties for shareholders attempting to bring suit in Liberia, and Liberian courts may or may not recognize and enforce foreign judgments. Thus, our shareholders may have

more difficulty challenging actions taken by management, directors or controlling shareholders than would shareholders of a corporation incorporated in a U.S. jurisdiction.

General Risk Factors

Conducting business globally results in increased costs and other risks.

We operate our business globally, which exposes us to a number of risks, including increased exposure to a wider range of regional and local economic conditions, volatile local political conditions, potential changes in duties and taxes, including changing and/or uncertain interpretations of existing tax laws and regulations, required compliance with additional laws and policies affecting cruising, vacation or maritime businesses or governing the operations of foreign-based companies, currency fluctuations, interest rate movements, difficulties in operating under local business environments, port quality and availability in certain regions, U.S. and global anti-bribery laws and regulations, imposition of trade barriers and restrictions on repatriation of earnings.

Our future growth strategies increasingly depend on the growth and sustained profitability of international markets. Factors that will be critical to our success in these markets include our ability to continue to raise awareness of our products and our ability to adapt our offerings to best suit rapidly evolving consumer demands. The execution of our planned growth strategies is dependent on meeting the governmental and regulatory measures and policies in each of these markets. Our ability to realize our future growth strategy is highly dependent on our ability to satisfy country-specific policies and requirements in order to return to service, as well as meet the needs of region-specific consumer preferences as services come back online. These factors may cause us to reevaluate some of our international business strategies.

Operating globally also exposes us to numerous and sometimes conflicting legal, regulatory and tax requirements. In many parts of the world, including countries in which we operate, practices in the local business communities might not conform to international business standards. We cannot guarantee consistent interpretation, application, and enforcement of newly issued rules and regulations, which could place limits on our operations or increase our costs, as well as negatively impact our future growth strategies in our key growth markets. We must adhere to policies designed to promote legal and regulatory compliance as well as applicable laws and regulations. However, we might not be successful in ensuring that our employees, agents, representatives and other third parties with whom we associate properly adhere to applicable laws and regulations. In addition, we may be exposed to the risk of penalties and other liabilities if we fail to comply with ~~the terms~~all applicable legal and regulatory requirements. Failure by us, our employees or any of these third parties to adhere to our ~~debt facilities~~policies or applicable laws or regulations could result in ~~an event~~penalties, sanctions, damage to our reputation and related costs, which in turn could negatively affect our results of ~~default. Generally, if an event~~operations and cash flows.

As a global operator, our business also may be impacted by changes in U.S. policy or priorities in areas such as trade, immigration and/or environmental or labor regulations, among others. Depending on the nature and scope of ~~default under~~ any ~~debt agreement occurs, then pursuant~~such changes, they could impact our domestic and international business operations. Any such changes, and any international response to ~~cross default acceleration clauses, our outstanding debt and derivative contract payables~~them, could ~~become due~~potentially introduce new barriers to passenger or crew travel and/or ~~terminated. In addition, in such events,~~cross border transactions, impact our ~~credit card processors could hold back payments to create a reserve. We cannot provide assurances that we would have sufficient liquidity to repay,~~ guest experience and/or ~~the ability to refinance the debt if such amounts were accelerated upon an event of default.~~

increase our operating costs.

If we are unable to ~~appropriately balance~~address these risks adequately, our ~~cost management and capital allocation strategies with our goal of satisfying guest expectations, it may adversely impact our business success.~~

Our goals call for us to provide high quality products and deliver high quality services. There can be no assurance that we can successfully balance these goals with our cost management and capital allocation strategies. Our business also requires us to make capital allocation decisions, such as ordering new ships and/or upgrading our existing fleet, based on expected market preferences and projected demand. There can be no assurance that our strategies will be successful, which could adversely impact our business, financial ~~condition~~position and results of ~~operations. Investments~~operations could be adversely affected, including impairing the value of our ships and other assets.

The terms of our existing debt financing gives, and any future preferred equity or debt financing may give, holders of any preferred securities or debt securities rights that are senior to rights of our common shareholders.

The holders of our existing debt have rights, preferences and privileges senior to those of holders of our common stock in ~~older tonnage,~~the event of liquidation. If we incur additional debt or raise equity through the issuance of preferred stock or convertible securities, the terms of the debt or the preferred stock issued may give the holders rights, preferences and privileges senior to those of holders of our common stock, particularly in ~~particular, run~~ the ~~risk~~event of ~~not meeting expected returns~~liquidation. If we raise funds through the issuance of additional equity, the ownership percentage of our existing shareholders would be diluted.

Fluctuations in foreign currency exchange rates, fuel prices and ~~diluting related asset values.~~

~~Our attempts to expand~~interest rates could affect our ~~business into new markets and new ventures may not be successful.~~

We opportunistically seek to grow our business through, among other things, expansion into new destination or source markets and establishment of new ventures complementary to our current offerings. These attempts to expand our business increase the complexity of our business, require significant levels of investment and can strain our management, personnel, operations and systems. There can be no assurance that these business expansion efforts will develop as anticipated or that we will succeed, and if we do not, we may be unable to recover our investment, which could adversely impact our business, financial condition and results of operations.

~~Our reliance on travel agencies to sell and market our cruises exposes us to certain risks which, if realized, could adversely impact our business.~~

We rely on travel agencies to generate the majority of bookings for our ships. Accordingly, we must ensure that our commission rates and incentive structures remain competitive. If we fail to offer competitive compensation packages, these agencies may be incentivized to sell cruises offered by our competitors to our detriment, which could adversely impact our operating results. Our reliance on third-party sellers is particularly pronounced in certain markets, such as China, where we have a large number of travel agent charter and group sales and less retail agency and direct booking. In addition, the travel agent industry is sensitive to economic conditions that impact discretionary income. Significant disruptions, especially disruptions impacting those agencies that sell a high volume of our business, or contractions in the industry could reduce the number of travel agencies available for usare exposed to market risk attributable to changes in foreign currency exchange rates, fuel prices and ~~sell our cruises, which~~interest rates. Significant changes in any of the foregoing could ~~have an adverse impact on our financial condition and results of operations.~~

~~Disruptions in our shoreside operations or our information systems may adversely affect our results of operations.~~

Our principal executive office and principal shoreside operations are located in Florida, and we have shoreside offices throughout the world. Actual or threatened natural disasters (e.g., hurricanes/typhoons, earthquakes, tornadoes, fires or floods) or similar events in these locations may have a material impact on our ~~business continuity, reputation~~financial results, net of the impact of our hedging activities and natural offsets. Our operating results have been and will continue to be impacted, often significantly, by changes in each of ~~operations. In addition, substantial or repeated information systems failures, computer viruses or cyber-attacks impacting~~these factors

A portion of our ~~shoreside or shipboard operations~~indebtedness bears interest at variable rates that are linked to changing market interest rates. As a result, an increase in market interest rates would increase our interest expense and our debt service obligations. As of March 31, 2023, we had approximately $3.4 billion of indebtedness that bears interest at variable rates, which is net of our interest rate swap

agreements. This amount represented approximately 15.7% of our total indebtedness. As of March 31, 2023, a hypothetical 1% increase in prevailing interest rates would increase our forecasted 2023 interest expense by approximately $11.1 million. Additionally, the value of our earnings in foreign currencies is adversely impacted by a strong U.S. dollar.

Any further impairment of our goodwill, long-lived assets, equity investments and notes receivable could adversely ~~impact~~affect our ~~business.~~ financial condition and operating results.

We doevaluate goodwill for impairment on an annual basis, or more frequently when circumstances indicate that the carrying value of a reporting unit may not ~~generally carry business interruption insurance for~~be recoverable. A challenging operating environment, conditions affecting consumer demand or spending, the deterioration of general macroeconomic conditions, expected ship deliveries, or other factors could result in a change to the future cash flows we expect to derive from our ~~shoreside operations or~~operations. Reductions of cash flows used in the valuation analyses may result in the recording of impairments, which could adversely affect our ~~information systems. As such, any losses or damages incurred by us could have an adverse impact on our results of operations.~~

financial condition and operating results.

The loss of key personnel, our inability to recruit or retain qualified personnel, or disruptions among our shipboard personnel ~~due to strained employee relations~~ could adversely affect our results of operations.

Our success depends, in large part, on the skills and contributions of key executives and other employees and on our ability to recruit, develop and retain high quality ~~personnel.~~personnel as well as having adequate succession plans and back-up operating plans for when critical executives are unable to serve. As demand for qualified personnel in the industry grows, we must continue to effectively recruit, train, motivate and retain our employees, both shoreside and on our ships, in order to effectively compete in our industry, maintain our current business and support our projected global growth.

qualified personnel and/or increased turnover may inhibit our ability to operate our business in an optimal manner, and may result in increased costs if we need to hire temporary personnel, and/or increased wages and/or benefits in order to attract and retain employees, all of which may negatively impact our results of operations.

As of ~~December~~March 31, ~~2016, 85%~~2023, approximately 89% of our shipboard employees were covered by collective bargaining agreements. A dispute under our collective bargaining agreements could result in a work stoppage of those employees covered by the agreements. We may not be able to satisfactorily renegotiate these collective bargaining agreements when they expire. In addition, existing collective bargaining agreements may not prevent a strike or work stoppage on our ships. We may also be subject to or affected by work stoppages unrelated to our business or collective bargaining agreements. Any such work stoppages or potential work stoppages could have a material adverse effect on our financial results, as could a loss of key employees, our inability to recruit or retain qualified personnel or disruptions among our personnel.

~~Business activities that involve our co-investment with third parties may subject us to additional risks.~~

Partnerships, joint ventures, and other business structures involving our co-investment with third parties, generally include some form of shared control over the operations of the business and create additional risks, including the possibility that other investors in such ventures could become bankrupt or otherwise lack the financial resources to meet their obligations, or could have or develop business interests, policies or objectives thatIf we are inconsistent with ours. With the sale of 51% of our interest in Pullmantur Holdings in July 2016, we continue to expand the breadth of our co-investment activities, which also include TUI Cruises, SkySea Cruises, Grand Bahama Shipyard and minority ownership investments in various port development and other projects. In addition to financial risks, our co-investment activities may also present managerial and operational risks and expose us to reputational or legal concerns. These or other issues related to our co-investment with third parties could adversely impact our operations.



Republic of Liberia						98-0081645
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)



			Page

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements			1

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2119

Item 3. Quantitative and Qualitative Disclosures About Market Risk			3933

Item 4. Controls and Procedures			3933

PART II. OTHER INFORMATION

Item 1. Legal Proceedings			4034

Item 1A. Risk Factors			4034

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			4847

Item 6. Exhibits			4948

SIGNATURES			5049



	Quarter Ended September 30,
	2017			2016
Passenger ticket revenues	$	1,893,152		$	1,899,956
Onboard and other revenues	676,392			663,785
Total revenues	2,569,544			2,563,741
Cruise operating expenses:
Commissions, transportation and other	409,597			400,933
Onboard and other	157,041			159,887
Payroll and related	210,764			214,081
Food	126,223			125,732
Fuel	160,752			178,772
Other operating	253,892			260,718
Total cruise operating expenses	1,318,269			1,340,123
Marketing, selling and administrative expenses	273,637			259,327
Depreciation and amortization expenses	240,150			229,328
Operating Income	737,488			734,963
Other income (expense):
Interest income	4,693			6,472
Interest expense, net of interest capitalized	(73,233		)	(82,610		)
Equity investment income	85,120			46,539
Other expense	(1,226		)	(12,107		)
	15,354			(41,706		)
Net Income	$	752,842		$	693,257
Earnings per Share:
Basic	$	3.51		$	3.23
Diluted	$	3.49		$	3.21
Weighted-Average Shares Outstanding:
Basic	214,694			214,819
Diluted	215,824			215,667
Comprehensive Income
Net Income	$	752,842		$	693,257
Other comprehensive income (loss):
Foreign currency translation adjustments	5,889			4,043
Change in defined benefit plans	(1,990		)	(5,051		)
Gain on cash flow derivative hedges	230,245			95,536
Total other comprehensive income	234,144			94,528
Comprehensive Income	$	986,986		$	787,785



	Nine Months Ended September 30,
	2017			2016
Passenger ticket revenues	$	4,892,760		$	4,794,653
Onboard and other revenues	1,880,618			1,792,145
Total revenues	6,773,378			6,586,798
Cruise operating expenses:
Commissions, transportation and other	1,060,176			1,060,391
Onboard and other	395,472			399,739
Payroll and related	636,861			671,955
Food	369,198			371,759
Fuel	508,914			531,283
Other operating	780,257			857,161
Total cruise operating expenses	3,750,878			3,892,288
Marketing, selling and administrative expenses	874,957			852,435
Depreciation and amortization expenses	710,836			661,712
Operating Income	1,436,707			1,180,363
Other income (expense):
Interest income	16,756			14,875
Interest expense, net of interest capitalized	(230,182		)	(226,803		)
Equity investment income	120,359			94,832
Other expense (including a $21.7 million loss related to the first quarter 2016 elimination of the Pullmantur reporting lag)	(6,546		)	(40,965		)
	(99,613		)	(158,061		)
Net Income	$	1,337,094		$	1,022,302
Earnings per Share:
Basic	$	6.22		$	4.74
Diluted	$	6.19		$	4.72
Weighted-Average Shares Outstanding:
Basic	214,882			215,663
Diluted	215,905			216,575
Comprehensive Income
Net Income	$	1,337,094		$	1,022,302
Other comprehensive income (loss):
Foreign currency translation adjustments	14,210			8,423
Change in defined benefit plans	(6,280		)	(12,148		)
Gain on cash flow derivative hedges	381,660			254,624
Total other comprehensive income	389,590			250,899
Comprehensive Income	$	1,726,684		$	1,273,201



	As of
	September 30,			December 31,
	2017			2016
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	139,950		$	132,603
Trade and other receivables, net	285,332			291,899
Inventories	119,949			114,087
Prepaid expenses and other assets	200,125			209,716
Derivative financial instruments	52,796			—
Total current assets	798,152			748,305
Property and equipment, net	19,688,872			20,161,427
Goodwill	288,517			288,386
Other assets	1,323,773			1,112,206
	$	22,099,314		$	22,310,324
Liabilities and Shareholders’ Equity
Current liabilities
Current portion of long-term debt	$	1,515,708		$	1,285,735
Accounts payable	384,536			305,313
Accrued interest	92,914			46,166
Accrued expenses and other liabilities	748,442			692,322
Derivative financial instruments	89,333			146,592
Customer deposits	2,226,179			1,965,473
Total current liabilities	5,057,112			4,441,601
Long-term debt	6,076,499			8,101,701
Other long-term liabilities	530,215			645,610
Commitments and contingencies (Note 7)
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; 235,134,180 and 234,613,486 shares issued, September 30, 2017 and December 31, 2016, respectively)	2,351			2,346
Paid-in capital	3,375,969			3,328,517
Retained earnings	8,862,369			7,860,341
Accumulated other comprehensive loss	(526,894		)	(916,484		)
Treasury stock (21,059,191 and 20,019,237 common shares at cost, September 30, 2017 and December 31, 2016, respectively)	(1,278,307		)	(1,153,308		)
Total shareholders’ equity	10,435,488			9,121,412
	$	22,099,314		$	22,310,324



Debt Instrument	Swap Notional as of September 30, 2017 (In thousands)		Maturity	Debt Fixed Rate	Swap Floating Rate: LIBOR plus	All-in Swap Floating Rate as of September 30, 2017
Oasis of the Seas term loan	$	157,500	October 2021	5.41%	3.87%	5.29%
Unsecured senior notes	650,000		November 2022	5.25%	3.63%	4.95%
	$	807,500



Derivatives under ASC 815-20 Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivative (Effective Portion)												Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion)
	Quarter Ended September 30, 2017			Quarter Ended September 30, 2016			Nine Months Ended September 30, 2017			Nine Months Ended September 30, 2016				Quarter Ended September 30, 2017			Quarter Ended September 30, 2016			Nine Months Ended September 30, 2017			Nine Months Ended September 30, 2016
(In thousands)
Interest rate swaps	$	(3,154	)	$	6,598		$	(24,703	)	$	(126,505	)	Interest expense, net of interest capitalized	$	(7,860	)	$	(11,953	)	$	(24,580	)	$	(32,019	)
Foreign currency forward contracts	122,211			11,405			221,861			22,715			Depreciation and amortization expenses	(2,710		)	(2,710		)	(8,130		)	(5,408		)
Foreign currency forward contracts	—			—			—			—			Other expense	(1,512		)	(3,465		)	(9,187		)	(10,206		)
Foreign currency forward contracts	—			—			—			—			Other operating	—			—			—			(207		)
Foreign currency collar options	—			—			—			—			Depreciation and amortization expenses	(602		)	(601		)	(1,806		)	(1,806		)
Fuel swaps	—			—			—			—			Other expense	1,758			2,760			6,533			9,356
Fuel swaps	67,878			(3,090		)	33,183			94,640			Fuel	(32,386		)	(64,654		)	(114,149		)	(223,484		)
	$	186,935		$	14,913		$	230,341		$	(9,150	)		$	(43,312	)	$	(80,623	)	$	(151,319	)	$	(263,774	)



Derivatives under ASC 815-20 Cash Flow Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
		Quarter Ended September 30, 2017		Quarter Ended September 30, 2016			Nine Months Ended September 30, 2017		Nine Months Ended September 30, 2016
(In thousands)
Interest rate swaps	Other expense	—		90			—		(1,152		)
Foreign currency forward contracts	Other expense	75		—			100		(57		)
Fuel swaps	Other expense	3,351		(8		)	1,014		(3,949		)
		$	3,426	$	82		$	1,114	$	(5,158	)



	Payments due by period
			Less than		1-3		3-5		More than
	Total		1 year		years		years		5 years
Operating Activities:
Operating lease obligations⁽¹⁾	$	242,989	$	28,742	$	42,299	$	24,910	$	147,038
Interest on long-term debt⁽²⁾	1,073,803		233,134		352,304		246,912		241,453
Other⁽³⁾	850,768		170,063		297,523		165,395		217,787
Investing Activities:	0
Ship purchase obligations⁽⁴⁾	10,692,368		1,658,774		2,751,170		4,230,704		2,051,720
Financing Activities:	0
Long-term debt obligations⁽⁵⁾	7,557,801		1,511,773		1,991,501		1,209,893		2,844,634
Capital lease obligations⁽⁶⁾	34,406		3,935		7,051		8,272		15,148
Other⁽⁷⁾	33,684		8,525		20,012		5,147		—
Total	$	20,485,819	$	3,614,946	$	5,461,860	$	5,891,233	$	5,517,780


Period	Total number of shares purchased (1)	Average price paid per share	Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plans or programs
January 1, 2023 - January 31,2023	—	—	—	—
February 1, 2023 - February 28, 2023	229,740	5.24	—	—
March 1, 2023 - March 31, 2023	—	—	—	—
Total	229,740	5.24	—	—



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
July 1, 2017 - July 31, 2017	—	—	—	$500,000,000
August 1, 2017 - August 31, 2017	827,826	$120.78	827,826	$400,000,000
September 1, 2017 - September 30, 2017	212,128	$117.83	212,128	$375,000,000
Total	1,039,954		1,039,954



10.1		~~Novation~~Transition and Separation Agreement, dated as of ~~July 24, 2017,~~March 31, 2023, by and between ~~Hibisyeu Finance Ltd., Royal Caribbean~~Lisa Lutoff-Perlo and Celebrity 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 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 28, 2017).Inc.
10.2
~~10.2~~	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 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on July 28, 2017).

~~10.3~~	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 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on July 28, 2017).

~~10.4~~	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 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on October 17, 2017).
	��
~~10.5~~	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 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on October 17, 2017).

~~10.6~~	Amendment to the Credit Agreement, dated as of October 12, 2017, among Royal Caribbean Cruises Ltd., 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 (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on October 17, 2017).

~~10.7~~	Form of Performance Shares Agreement pursuant to the 2008 Equity Incentive Plan, as amended and restated
10.3	Form of Performance Shares Agreement (Vesting into Retirement) pursuant to the 2008 Equity Incentive Plan, as amended and restated
10.4	Form of Restricted Stock Unit Agreement - Executive Officer Grants (Non-Vesting Into Retirement)*for Non-Employee Directors pursuant to the 2008 Equity Incentive Plan, as amended and restated
10.5	Form of Restricted Stock Unit Agreement pursuant to the 2008 Equity Incentive Plan, as amended and restated
~~31.1~~10.6		Form of Restricted Stock Unit Agreement (Vesting into Retirement) pursuant to the 2008 Equity Incentive Plan, as amended and restated
31.1	Certification of the ~~Chairman and~~ Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*1934
31.2
~~31.2~~	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*1934
32.1
~~32.1~~	Certifications of the ~~Chairman and~~ Chief Executive Officer and the Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code**


~~(ii)~~	~~the Consolidated Balance Sheets at September 30, 2017 and December 31, 2016;~~



						ROYAL CARIBBEAN CRUISES LTD.
						(Registrant)


						/s/ ~~JASON T. LIBERTY~~NAFTALI HOLTZ
						~~Jason T. Liberty~~Naftali Holtz
						~~Executive Vice President,~~ Chief Financial Officer
~~November 7, 2017~~May 4, 2023						(Principal Financial Officer and duly authorized signatory)