Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2024 | Apr. 22, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Document Transition Report | false | |
Entity File Number | 1-11884 | |
Entity Registrant Name | ROYAL CARIBBEAN CRUISES LTD | |
Entity Incorporation, State or Country Code | N0 | |
Entity Tax Identification Number | 98-0081645 | |
Entity Address, Address Line One | 1050 Caribbean Way | |
Entity Address, City or Town | Miami | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33132 | |
City Area Code | 305 | |
Local Phone Number | 539-6000 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | RCL | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 257,349,196 | |
Entity Central Index Key | 0000884887 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Total revenues | $ 3,728 | $ 2,886 |
Cruise operating expenses: | ||
Total cruise operating expenses | 2,056 | 1,793 |
Marketing, selling and administrative expenses | 535 | 461 |
Depreciation and amortization expenses | 387 | 360 |
Operating Income | 750 | 272 |
Other income (expense): | ||
Interest income | 5 | 15 |
Interest expense, net of interest capitalized | (424) | (360) |
Equity investment income | 41 | 20 |
Other (expense) income | (8) | 5 |
Total other income (expense) | (386) | (320) |
Net Income (Loss) | 364 | (48) |
Less: Net Income attributable to noncontrolling interest | 4 | 0 |
Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. | $ 360 | $ (48) |
Earnings (Loss) per Share: | ||
Basic (in dollars per share) | $ 1.40 | $ (0.19) |
Diluted (in dollars per share) | $ 1.35 | $ (0.19) |
Weighted-Average Shares Outstanding: | ||
Basic (in shares) | 257 | 255 |
Diluted (in shares) | 281 | 255 |
Comprehensive Income (Loss) | ||
Net Income (Loss) | $ 364 | $ (48) |
Other comprehensive income (loss): | ||
Foreign currency translation adjustments | 4 | (7) |
Change in defined benefit plans | 9 | 4 |
Gain (loss) on cash flow derivative hedges | 44 | (32) |
Total other comprehensive income (loss) | 57 | (35) |
Comprehensive Income (Loss) | 421 | (83) |
Less: Comprehensive Income attributable to noncontrolling interest | 4 | 0 |
Comprehensive Income (Loss) attributable to Royal Caribbean Cruises Ltd. | 417 | (83) |
Passenger ticket revenues | ||
Total revenues | 2,542 | 1,897 |
Onboard and other revenues | ||
Total revenues | 1,186 | 989 |
Cruise operating expenses: | ||
Total cruise operating expenses | 193 | 159 |
Commissions, transportation and other | ||
Cruise operating expenses: | ||
Total cruise operating expenses | 498 | 403 |
Payroll and related | ||
Cruise operating expenses: | ||
Total cruise operating expenses | 318 | 310 |
Food | ||
Cruise operating expenses: | ||
Total cruise operating expenses | 221 | 199 |
Fuel | ||
Cruise operating expenses: | ||
Total cruise operating expenses | 304 | 302 |
Other operating | ||
Cruise operating expenses: | ||
Total cruise operating expenses | $ 522 | $ 420 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets | ||
Cash and cash equivalents | $ 437 | $ 497 |
Trade and other receivables, net of allowances of $9 and $7 at March 31, 2024 and December 31, 2023, respectively | 455 | 405 |
Inventories | 236 | 248 |
Prepaid expenses and other assets | 690 | 617 |
Derivative financial instruments | 52 | 25 |
Total current assets | 1,870 | 1,792 |
Property and equipment, net | 30,025 | 30,114 |
Operating lease right-of-use assets | 599 | 611 |
Goodwill | 809 | 809 |
Other assets, net of allowances of $43 at March 31, 2024 and December 31, 2023. | 1,887 | 1,805 |
Total assets | 35,190 | 35,131 |
Current liabilities | ||
Current portion of long-term debt | 1,643 | 1,720 |
Current portion of operating lease liabilities | 63 | 65 |
Accounts payable | 876 | 792 |
Accrued expenses and other liabilities | 1,236 | 1,478 |
Derivative financial instruments | 47 | 35 |
Customer deposits | 6,040 | 5,311 |
Total current liabilities | 9,905 | 9,401 |
Long-term debt | 18,876 | 19,732 |
Long-term operating lease liabilities | 603 | 613 |
Other long-term liabilities | 481 | 486 |
Total liabilities | 29,865 | 30,232 |
Shareholders’ equity | ||
Preferred stock ($0.01 par value; 20,000,000 shares authorized; none outstanding) | 0 | 0 |
Common stock ($0.01 par value; 500,000,000 shares authorized; 285,814,489 and 284,672,386 shares issued, March 31, 2024 and December 31, 2023, respectively) | 3 | 3 |
Paid-in capital | 7,496 | 7,474 |
Retained earnings (accumulated deficit) | 350 | (10) |
Accumulated other comprehensive loss | (617) | (674) |
Treasury stock (28,468,430 and 28,248,125 common shares at cost, March 31, 2024 and December 31, 2023, respectively) | (2,081) | (2,069) |
Total shareholders’ equity attributable to Royal Caribbean Cruises Ltd. | 5,151 | 4,724 |
Noncontrolling Interests | 174 | 175 |
Total shareholders’ equity | 5,325 | 4,899 |
Total liabilities and shareholders’ equity | $ 35,190 | $ 35,131 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Trade and other receivables, allowance for credit loss | $ 9 | $ 7 |
Other assets, allowance for credit loss | $ 43 | |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 285,814,489 | 284,672,386 |
Treasury stock, common shares (in shares) | 28,468,430 | 28,248,125 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Operating Activities | ||
Net Income (Loss) | $ 364 | $ (48) |
Adjustments: | ||
Depreciation and amortization | 387 | 360 |
Net deferred income tax benefit | 0 | (11) |
Gain (loss) on derivative instruments not designated as hedges | 35 | (3) |
Share-based compensation expense | 45 | 26 |
Equity investment income | (41) | (20) |
Amortization of debt issuance costs, discounts and premiums | 26 | 30 |
Loss on extinguishment of debt | 116 | 13 |
Changes in operating assets and liabilities: | ||
(Increase) decrease in trade and other receivables, net | (57) | 123 |
Decrease in inventories | 12 | 3 |
Increase in prepaid expenses and other assets | (80) | (78) |
Increase in accounts payable trade | 78 | 57 |
Decrease in accrued expenses and other liabilities | (238) | (261) |
Increase in customer deposits | 729 | 1,103 |
Other, net | (48) | 16 |
Net cash provided by operating activities | 1,328 | 1,310 |
Investing Activities | ||
Purchases of property and equipment | (242) | (252) |
Cash received on settlement of derivative financial instruments | 0 | 5 |
Cash paid on settlement of derivative financial instruments | (35) | (6) |
Investments in and loans to unconsolidated affiliates | (9) | 0 |
Cash received on loans from unconsolidated affiliates | 5 | 5 |
Other, net | (15) | 14 |
Net cash used in investing activities | (296) | (234) |
Financing Activities | ||
Debt proceeds | 2,179 | 705 |
Debt issuance costs | (19) | (27) |
Repayments of debt | (3,107) | (2,664) |
Premium on repayment of debt | (104) | 0 |
Proceeds from sale of noncontrolling interest | 0 | 209 |
Other, net | (40) | (7) |
Net cash used in financing activities | (1,091) | (1,784) |
Effect of exchange rate changes on cash and cash equivalents | (1) | 0 |
Net decrease in cash and cash equivalents | (60) | (708) |
Cash and cash equivalents at beginning of period | 497 | 1,935 |
Cash and cash equivalents at end of period | 437 | 1,227 |
Cash paid during the period for: | ||
Interest, net of amount capitalized | 411 | 389 |
Non-cash Investing Activities | ||
Purchase of property and equipment included in accounts payable and accrued expenses and other liabilities | $ 44 | $ 19 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Millions | Total | Common Stock | Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interest |
Beginning balance at Dec. 31, 2022 | $ 2,870 | $ 3 | $ 7,285 | $ (1,707) | $ (643) | $ (2,068) | |
Increase (Decrease) in Stockholders' Equity | |||||||
Activity related to employee stock plans | 21 | 21 | |||||
Changes related to cash flow derivative hedges | (32) | (32) | |||||
Change in defined benefit plans | 4 | 4 | |||||
Foreign currency translation adjustments | (7) | (7) | |||||
Purchase of treasury stock | (1) | (1) | |||||
Sale of noncontrolling interest | 219 | 45 | $ 174 | ||||
Net Income (Loss) | (48) | (48) | |||||
Ending balance at Mar. 31, 2023 | 3,026 | 3 | 7,351 | (1,755) | (678) | (2,069) | 174 |
Beginning balance at Dec. 31, 2023 | 4,899 | 3 | 7,474 | (10) | (674) | (2,069) | 175 |
Increase (Decrease) in Stockholders' Equity | |||||||
Activity related to employee stock plans | 22 | 22 | |||||
Changes related to cash flow derivative hedges | 44 | 44 | |||||
Change in defined benefit plans | 9 | 9 | |||||
Foreign currency translation adjustments | 4 | 4 | |||||
Purchase of treasury stock | (12) | (12) | |||||
Net Income attributable to noncontrolling interest | 4 | 4 | |||||
Dividends from noncontrolling interest | (5) | (5) | |||||
Net Income (Loss) | 360 | 360 | |||||
Ending balance at Mar. 31, 2024 | $ 5,325 | $ 3 | $ 7,496 | $ 350 | $ (617) | $ (2,081) | $ 174 |
General
General | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General | Note 1 . General Description of Business We are a global cruise company. We own and operate three global cruise brands: Royal Caribbean International, Celebrity Cruises and Silversea Cruises (collectively, our "Global Brands"). We also own a 50% joint venture interest in TUI Cruises GmbH ("TUIC"), which operates the German brands TUI Cruises and 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 65 ships as of March 31, 2024. Our ships offer a selection of worldwide itineraries that call on more than 1,000 destinations in over 120 countries on all seven continents. 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 these principles. Actual results could differ from these estimates. Refer to Note 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, 2023 for a discussion of our significant accounting policies. The Company has changed its presentation from thousands to millions and, as a result, any necessary rounding adjustments have been made to prior period disclosed amounts. 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 . Investments and Other Assets |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 . Summary of Significant Accounting Policies Recent Accounting Pronouncements In August 2023, the FASB issued ASU No. 2023-05, Business Combinations - Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. This ASU provides guidance requiring a joint venture to initially measure all contributions received upon its formation at fair value. The guidance is intended to provide users of joint venture financial statements with more decision-useful information. This ASU is effective for joint venture entities with a formation date on or after January 1, 2025 on a prospective basis. Early adoption is permitted, and joint ventures formed prior to the adoption date may elect to apply the new guidance retrospectively back to their original formation date. We are currently evaluating the impact of the new guidance on our consolidated financial statements. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU requires enhanced disclosures about significant segment expenses and other segment items and requires companies to disclose all annual disclosures about segments in interim periods. This ASU also requires public entities with a single reportable segment to provide all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 280. The amendments in this ASU are intended to improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments should be applied retrospectively to all periods presented. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The new guidance is intended to enhance the transparency and decision usefulness of income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption and retrospective application is permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Note 3 . Revenue 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 income (loss). Our performance obligation under these contracts is to provide a cruise vacation in exchange for the ticket price. We receive payment before we satisfy this performance obligation and recognize revenue over the duration of each cruise, which generally ranges from three Passenger ticket revenues include charges to our guests for port costs that vary with passenger head counts. These types 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 $242 million and $203 million for the quarters ended March 31, 2024 and 2023, 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. Disaggregated Revenues The following table disaggregates our total revenues by geographic regions where we provide cruise itineraries (in millions): Quarter Ended March 31, 2024 2023 Revenues by itinerary North America (1) $ 2,690 $ 2,193 Asia/Pacific 506 333 Europe 21 2 Other regions (2) 322 214 Total revenues by itinerary 3,539 2,742 Other revenues (3) 189 144 Total revenues $ 3,728 $ 2,886 (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 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, 2024 and 2023, our guests were sourced from the following areas: Quarter Ended March 31, 2024 2023 Passenger ticket revenues: United States 73 % 76 % All other countries (1) 27 % 24 % (1) No other individual country's revenue exceeded 10% for the quarters ended March 31, 2024 and 2023. 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 $2.9 billion and $2.6 billion as of March 31, 2024 and December 31, 2023, respectively. During the pandemic we provided flexibility to guests with bookings on sailings that were cancelled by allowing guests to receive future cruise credits (“FCCs”). As of March 31, 2024, our customer deposit balance includes approximately $317 million of unredeemed FCCs. Our FCCs are not refundable and do not have expiration dates. Based upon our analysis of historical redemption experience, we believe a portion of our FCCs are not probable of being used in future periods. Based on our current estimates, we recognized an immaterial amount of FCC breakage revenue during the quarter ended March 31, 2024. We will continue to monitor changes in redemption behavior and estimate and record revenue associated with breakage when the likelihood of the customer exercising their remaining rights becomes remote. 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. As of March 31, 2024, none of our credit card processors required us to maintain a reserve. 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, 2024 and December 31, 2023, our contract assets were $166 million and $167 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 $293 million as of March 31, 2024 and $257 million as of December 31, 2023. 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 income (loss). |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Note 4. Earnings (Loss) Per Share Basic and diluted earnings (loss) per share is as follows (in millions, except per share data): Quarter Ended March 31, 2024 2023 Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. for basic earnings (loss) per share $ 360 $ (48) Add convertible notes interest 19 — Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. for diluted earnings (loss) per share 379 (48) Weighted-average common shares outstanding 257 255 Dilutive effect of stock-based awards 1 — Dilutive effect of convertible notes 23 — Diluted weighted-average shares outstanding 281 255 Basic earnings (loss) per share $ 1.40 $ (0.19) Diluted earnings (loss) per share $ 1.35 $ (0.19) T |
Investments and Other Assets
Investments and Other Assets | 3 Months Ended |
Mar. 31, 2024 | |
Other Assets [Abstract] | |
Investments and Other Assets | Note 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 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 sold 80% of the entity which owns our terminal at PortMiami. Refer below to equity method investments and controlled subsidiarie s 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 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 March 31, 2024, the net book value of our investment in TUIC was $678 million, primarily consisting of $594 million in equity and a loan of €67 million, or approximately $73 million based on the exchange rate at March 31, 2024. As of December 31, 2023, the net book value of our investment in TUIC was $657 million, primarily consisting of $566 million in equity and a loan of €71 million, or approximately $79 million based on the exchange rate at December 31, 2023. 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 and is secured by a first priority mortgage on the ship. TUIC has 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 TUIC below 37.55% through May 2033. Our investment amount and outstanding term loan are subs tantially our maximum exposure to loss in connection with our investment in TUIC. We have determined that Grand Bahama Shipyard Ltd. ("Grand Bahama"), a ship repair and maintenance facility in which we have a 40% noncontrolling interest, is a VIE. This facility serves cruise and cargo ships, oil and gas tankers and offshore units. We utilize this facility, among other ship repair facilities, for our regularly scheduled drydocks and certain emergency repairs as may be required. 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 and account for this investment under the equity method of accounting. During the second half of 2023, we formed a 50%-owned joint venture with the other 40% shareholder of Grand Bahama to operate Floating Docks S. DE RL. (“Floating Docks”). Floating Docks will construct two floating drydocks, with delivery dates expected in 2025 and 2026, that will be leased to Grand Bahama and allow it to service the entire range of cruise ships in operation and under construction, as well as much of the world’s commercial shipping fleet. We and our joint venture partner have each guaranteed 50% of certain installment payments payable by Floating Docks under the drydock and related construction contracts, which are contingent on the achievement of certain construction milestones, bringing our total payment guarantees to $59 million as of March 31, 2024. Our investment in Floating Docks, including loans, is immaterial to our consolidated financial statements as of March 31, 2024. We have determined that Floating Docks is a VIE. We have determined that we are not the primary beneficiary of Floating Docks since we believe that the power to direct the activities that most significantly impact Floating Docks' economic performance is shared between ourselves and our joint venture partner. All the significant operating and financial decisions of Floating Docks require the consent of both parties which we believe creates shared power over Floating Docks. Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting. As part of the transaction with iCON, we sold our controlling interest in two Italian entities for an immaterial amount of net proceeds and recognized an immaterial gain on the sale. At closing, we have determined that the partnership and both Italian entities are VIE's. These entities in Italy represent development projects to own, develop, and manage cruise terminal facilities in key ports of call. We have determined that we are not the primary beneficiary for either of these entities as we do not have the power to direct the activities that most significantly impact the economic performance. Accordingly, we do not consolidate these entities and account for these investments under the equity method of accounting. The following tables set forth information regarding our investments accounted for under the equity method of accounting, including the entities discussed above (in millions): Quarter Ended March 31, 2024 2023 Share of equity income from investments $ 41 $ 20 As of March 31, 2024 As of December 31, 2023 Total notes receivable due from equity investments $ 107 $ 105 Less-current portion (1) 18 19 Long-term portion (2) $ 89 $ 86 (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 an 80% interest in the entity which owns our terminal at PortMiami for $209 million and retained a 20% minority interest, effective March 31, 2023. We also sold a noncontrolling interest in another entity which is developing a port project in Spain for an immaterial amount. We have determined that both of these entities are VIEs, 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 continue to consolidate both entities. The cash consideration received for the sale of the PortMiami terminal company, net of transaction costs, was allocated between paid-in capital and noncontrolling interest using the net book value of our investment in the PortMiami terminal, as presented in the statement of shareholders' equity. Other Assets Credit Losses We reviewed our receivables for credit losses in connection with the preparation of our financial statements for the quarter ended March 31, 2024. In evaluating the allowance, management considered factors such as historical loss experience, the types of loans and the amount of loans in the loan portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, peer group information and prevailing economic conditions. Our credit loss allowance as of March 31, 2024 and 2023 primarily relates to credit losses recognized on notes receivable for the previous sale of certain property and equipment of $43 million and $63 million, respectively, which were originated in 2015 and 2020. The following table summarizes our credit loss allowance related to receivables (in millions): Three Months Ended March 31, 2024 2023 Balance, beginning of period $ 49 $ 83 Credit loss (recovery), net 2 (7) Write-offs — (2) Balance, end of period $ 51 $ 74 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt | Note 6 . Debt Debt consists of the following (in millions): Interest Rate (1) Maturities Through As of March 31, 2024 As of December 31, 2023 Fixed rate debt: Unsecured senior notes 3.70% to 9.25% 2026 - 2032 $ 7,898 $ 7,899 Secured senior notes 8.25% 2029 1,000 1,000 Unsecured term loans 1.28% to 5.89% 2027 - 2035 6,420 6,569 Convertible notes 6.00% 2025 1,150 1,150 Total fixed rate debt 16,468 16,618 Variable rate debt: Unsecured revolving credit facilities (2) 6.76% to 7.48% 2025 - 2028 304 899 USD unsecured term loan 6.05% to 9.95% 2024 - 2037 3,555 3,666 Euro unsecured term loan 5.00% to 6.14% 2024 - 2028 352 443 Total variable rate debt 4,211 5,008 Finance lease liabilities 363 369 Total debt (3) 21,042 21,995 Less: unamortized debt issuance costs (523) (543) Total debt, net of unamortized debt issuance costs 20,519 21,452 Less—current portion (1,643) (1,720) Long-term portion $ 18,876 $ 19,732 (1) Interest rates based on outstanding loan balance as of March 31, 2024, and for variable rate debt include either EURIBOR or Term SOFR plus the applicable margin. (2) Advances under our unsecured revolving credit facilities accrue interest at Term SOFR plus a 0.10% credit adjustment spread plus an interest rate margin primarily at 1.33%. Based on applicable Term SOFR rates, as of March 31, 2024, the maximum interest rate under the unsecured credit facilities was 6.76%. We also pay a facility fee primarily at 0.17% of the total commitments under such facility. (3) At March 31, 2024 and December 31, 2023, the weighted average interest rate for total debt was 5.75% and 6.06%, respectively. Unsecured revolving credit facilities As of March 31, 2024 our aggregate revolving credit capacity is $3.6 billion of which $1.8 billion of the commitments are scheduled to mature in October 2026, $1.8 billion of the commitments are scheduled to mature in October 2028, and the remaining $77 million of commitments are scheduled to mature in April 2025. As of March 31, 2024, we had undrawn capacity of $3.3 billion under our unsecured revolving credit facilities. In March 2024, we issued $1.25 billion of senior unsecured notes (the "notes") due in 2032 for net proceeds of approximately $1.24 billion. Interest accrues on the notes at a fixed rate of 6.25% per annum and is payable semi-annually in arrears. The proceeds from this notes issuance, together with cash on hand, were used to redeem all of the outstanding $1.25 billion aggregate principal amount of 11.625% Senior Notes due 2027. The repayment resulted in a loss on extinguishment of debt of $116 million that was recognized within Interest expense, net of interest capitalized within our consolidated statements of comprehensive income (loss) for the quarter ended March 31, 2024. 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, 2024, 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 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 consolidated statements of 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 revolving credit facilities, the majority of our term loans, and certain of our credit card processing agreements, contain covenants that require us, among other things, to maintain a fixed charge coverage ratio, limit our net debt-to-capital ratio, maintain minimum liquidity, and under certain facilities, to maintain a minimum stockholders' equity. As of March 31, 2024, our credit facility amendments require us to prepay outstanding deferred amounts of $839 million, if we elect to pay dividends or complete share repurchases. As of March 31, 2024, 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, 2024 for each of the next five years (in millions): Year As of March 31, 2024 (1) Remainder of 2024 $ 1,390 2025 2,628 2026 3,045 2027 2,509 2028 3,267 Thereafter 8,203 $ 21,042 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Leases | Note 7 . Leases Operating Leases Our operating leases primarily relate to preferred berthing arrangements, real estate, and shipboard equipment which are included within Operating lease right-of-use assets , and Long-term operating lease liabilities with the current portion of the liability included within Current portion of operating lease liabilities in our consolidated balance sheets as of March 31, 2024 and December 31, 2023. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term. The company's preferred berthing agreement with Miami-Dade County ("County") includes the development plans for the County to finance the construction of a new and improved cruise Terminal G at PortMiami. The aggregate amount of the operating lease liabilities recorded for this berthing agreement was $167 million as of March 31, 2024 and December 31, 2023. There will be future remeasurements as the County completes several construction milestones throughout the term of the extended lease. The most significant of which will be for Terminal G, which will include a remeasurement of the operating lease in 2027 or later, when the County satisfies substantial completion, as the minimum lease payments will increase to approximately $55 million per year, with expected 3% annual increases thereafter. For some of our real estate leases and berthing agreements, we do have the option to extend our current lease term. For those lease agreements with renewal options, the renewal periods for real estate leases primarily range from one one 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. I n 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 Silver Dawn . Finance leases are included within Property and Equipment , net and Long-term debt with the current portion of the liability included within Current portion of long-term debt in our consolidated balance sheets as of March 31, 2024 and December 31, 2023. The Company's master lease agreement (“Master Lease”) with Miami-Dade County related to the 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 lease, which we are reasonably certain to exercise. In November 2023, we executed a modification to the Master Lease agreement to extend its expiration from 2076 to 2077 after coming to an agreement with Miami-Dade County on the financing plans to finalize the development of the buildings and land. The modification of the Master Lease did not change the classification of the lease. The total aggregate amount of the finance lease liabilities recorded for this Master Lease was $105 million and $104 million as of March 31, 2024 and December 31, 2023, respectively. The development of the new campus buildings are expected to be completed in 2026, and the lease components will be recorded within our consolidated financial statements upon commencement. 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 aggregate amount of finance lease liabilities recorded for this ship was $241 million and $246 million as of March 31, 2024 and December 31, 2023, respectively. The lease payments on the Silver Dawn are subject to adjustments based on the Term SOFR rate. The components of lease expense were as follows (in millions): Consolidated Statement of Comprehensive Income (Loss) Classification Quarter Ended March 31, 2024 Quarter Ended March 31, 2023 Lease costs: Operating lease costs Commission, transportation and other $ 71 $ 55 Operating lease costs Other operating expenses 4 6 Operating lease costs Marketing, selling and administrative expenses 4 5 Financial lease costs: Amortization of right-of-use-assets Depreciation and amortization expenses 3 6 Interest on lease liabilities Interest expense, net of interest capitalized 8 8 Total lease costs $ 90 $ 80 In addition, certain of our berthing agreements include variable lease costs based on the number of passengers berthed. During the quarters ended March 31, 2024, and 2023 we had $51 million and $38 million of variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive income (loss), respectively. These variable lease costs are included within the balances presented above. The weighted average of the remaining lease terms and weighted average discount rates are as follows: As of March 31, 2024 As of December 31, 2023 Weighted average of the remaining lease term in years Operating leases 20.02 19.43 Finance leases 24.06 23.92 Weighted average discount rate Operating leases 7.55 % 7.53 % Finance leases 5.84 % 5.83 % Supplemental cash flow information related to leases is as follows (in millions): Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 99 $ 36 Operating cash flows from finance leases 8 8 Financing cash flows from finance leases $ 6 $ 14 As of March 31, 2024, maturities related to lease liabilities were as follows (in millions): Year Operating Leases Finance Leases Remainder of 2024 $ 84 $ 35 2025 101 45 2026 91 39 2027 72 38 2028 72 37 Thereafter 1,062 684 Total lease payments 1,482 878 Less: Interest (816) (515) Present value of lease liabilities $ 666 $ 363 |
Leases | Note 7 . Leases Operating Leases Our operating leases primarily relate to preferred berthing arrangements, real estate, and shipboard equipment which are included within Operating lease right-of-use assets , and Long-term operating lease liabilities with the current portion of the liability included within Current portion of operating lease liabilities in our consolidated balance sheets as of March 31, 2024 and December 31, 2023. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term. The company's preferred berthing agreement with Miami-Dade County ("County") includes the development plans for the County to finance the construction of a new and improved cruise Terminal G at PortMiami. The aggregate amount of the operating lease liabilities recorded for this berthing agreement was $167 million as of March 31, 2024 and December 31, 2023. There will be future remeasurements as the County completes several construction milestones throughout the term of the extended lease. The most significant of which will be for Terminal G, which will include a remeasurement of the operating lease in 2027 or later, when the County satisfies substantial completion, as the minimum lease payments will increase to approximately $55 million per year, with expected 3% annual increases thereafter. For some of our real estate leases and berthing agreements, we do have the option to extend our current lease term. For those lease agreements with renewal options, the renewal periods for real estate leases primarily range from one one 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. I n 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 Silver Dawn . Finance leases are included within Property and Equipment , net and Long-term debt with the current portion of the liability included within Current portion of long-term debt in our consolidated balance sheets as of March 31, 2024 and December 31, 2023. The Company's master lease agreement (“Master Lease”) with Miami-Dade County related to the 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 lease, which we are reasonably certain to exercise. In November 2023, we executed a modification to the Master Lease agreement to extend its expiration from 2076 to 2077 after coming to an agreement with Miami-Dade County on the financing plans to finalize the development of the buildings and land. The modification of the Master Lease did not change the classification of the lease. The total aggregate amount of the finance lease liabilities recorded for this Master Lease was $105 million and $104 million as of March 31, 2024 and December 31, 2023, respectively. The development of the new campus buildings are expected to be completed in 2026, and the lease components will be recorded within our consolidated financial statements upon commencement. 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 aggregate amount of finance lease liabilities recorded for this ship was $241 million and $246 million as of March 31, 2024 and December 31, 2023, respectively. The lease payments on the Silver Dawn are subject to adjustments based on the Term SOFR rate. The components of lease expense were as follows (in millions): Consolidated Statement of Comprehensive Income (Loss) Classification Quarter Ended March 31, 2024 Quarter Ended March 31, 2023 Lease costs: Operating lease costs Commission, transportation and other $ 71 $ 55 Operating lease costs Other operating expenses 4 6 Operating lease costs Marketing, selling and administrative expenses 4 5 Financial lease costs: Amortization of right-of-use-assets Depreciation and amortization expenses 3 6 Interest on lease liabilities Interest expense, net of interest capitalized 8 8 Total lease costs $ 90 $ 80 In addition, certain of our berthing agreements include variable lease costs based on the number of passengers berthed. During the quarters ended March 31, 2024, and 2023 we had $51 million and $38 million of variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive income (loss), respectively. These variable lease costs are included within the balances presented above. The weighted average of the remaining lease terms and weighted average discount rates are as follows: As of March 31, 2024 As of December 31, 2023 Weighted average of the remaining lease term in years Operating leases 20.02 19.43 Finance leases 24.06 23.92 Weighted average discount rate Operating leases 7.55 % 7.53 % Finance leases 5.84 % 5.83 % Supplemental cash flow information related to leases is as follows (in millions): Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 99 $ 36 Operating cash flows from finance leases 8 8 Financing cash flows from finance leases $ 6 $ 14 As of March 31, 2024, maturities related to lease liabilities were as follows (in millions): Year Operating Leases Finance Leases Remainder of 2024 $ 84 $ 35 2025 101 45 2026 91 39 2027 72 38 2028 72 37 Thereafter 1,062 684 Total lease payments 1,482 878 Less: Interest (816) (515) Present value of lease liabilities $ 666 $ 363 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8 . Commitments and Contingencies Ship Purchase Obligations Our future capital commitments consist primarily of new ship orders. As of March 31, 2024, the dates that the ships on order by our Global and Partner Brands are expected to be delivered, subject to change in the event of construction delays, and their approximate berths are as follows: Ship Shipyard Expected delivery Approximate Royal Caribbean International — Oasis-class: Utopia of the Seas Chantiers de l'Atlantique 2nd Quarter 2024 5,700 Icon-class: Star of the Seas Meyer Turku Oy 3rd Quarter 2025 5,600 Unnamed Meyer Turku Oy 2nd Quarter 2026 5,600 Celebrity Cruises — Edge-class: Celebrity Xcel Chantiers de l'Atlantique 4th Quarter 2025 3,250 Silversea Cruises — Evolution-class: Silver Ray Meyer Werft 2nd Quarter 2024 730 TUI Cruises (50% joint venture) — Mein Schiff 7 Meyer Turku Oy 2nd Quarter 2024 2,900 Mein Schiff Relax Fincantieri 4th Quarter 2024 4,100 Unnamed Fincantieri 2nd Quarter 2026 4,100 Total Berths 31,980 In addition, in February 2024, we entered into an agreement with Chantiers de l’Atlantique to build an additional Oasis class ship for delivery in 2028, which is contingent upon completion of certain conditions precedent including financing. As of March 31, 2024, 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 $8.1 billion, of which we had deposited $748 million as of such date. Refer to Note 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 ("Havana Docks Action") alleges it holds an interest in the Havana Cruise Port Terminal, 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. 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 (expense) income within our consolidated statements of comprehensive income (loss) related to the Havana Docks Action, including post-judgment interest and related legal defense costs and bonding fees. In addition, we are routinely involved in claims typical within the cruise vacation industry. 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 our board of directors is no longer comprised of individuals who were members of our board of directors on the first day of such period, we may be obligated to prepay indebtedness outstanding under our credit facilities, which we may be unable to replace on similar terms. 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. |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
Shareholders' Equity | Note 9 . Shareholders' Equity Dividends We did not declare any dividends during the quarters ended March 31, 2024 and 2023. We were previously 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. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2024 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Changes in Accumulated Other Comprehensive Loss | Note 10 . Changes in Accumulated Other Comprehensive Loss The following table presents the changes in accumulated other comprehensive loss by component for the quarters ended March 31, 2024 and 2023 (in millions): Accumulated Other Comprehensive Loss for the Three Months Ended March 31, 2024 Accumulated Other Comprehensive Loss for the Three Months Ended March 31, 2023 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 $ (666) $ (2) $ (6) $ (674) $ (638) $ (8) $ 3 $ (643) Other comprehensive income (loss) before reclassifications 56 9 4 69 (30) 4 (7) (33) Amounts reclassified from accumulated other comprehensive loss (12) — — (12) (2) — — (2) Net current-period other comprehensive income (loss) 44 9 4 57 (32) 4 (7) (35) Ending balance $ (622) $ 7 $ (2) $ (617) $ (670) $ (4) $ (4) $ (678) The following table presents reclassifications out of accumulated other comprehensive loss for the quarters ended March 31, 2024 and 2023 (in millions): Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income Details About Accumulated Other Comprehensive Loss Components Quarter Ended March 31, 2024 Quarter Ended March 31, 2023 Affected Line Item in Statements of Gain (loss) on cash flow derivative hedges: Interest rate swaps $ 14 $ 10 Interest expense, net of interest capitalized Foreign currency forward contracts (6) (3) Depreciation and amortization expenses Foreign currency forward contracts — (1) Other (expense) income Fuel swaps — — Other (expense) income Fuel swaps 4 (4) Fuel $ 12 $ 2 |
Fair Value Measurements and Der
Fair Value Measurements and Derivative Instruments | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements and Derivative Instruments | Note 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 millions): Fair Value Measurements at March 31, 2024 Fair Value Measurements at December 31, 2023 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) $ 437 $ 437 $ 437 $ — $ — $ 497 $ 497 $ 497 $ — $ — Total Assets $ 437 $ 437 $ 437 $ — $ — $ 497 $ 497 $ 497 $ — $ — Liabilities: Long-term debt (including current portion of debt) (5) $ 20,156 $ 22,768 $ — $ 22,768 $ — $ 21,083 $ 23,700 $ — $ 23,700 $ — Total Liabilities $ 20,156 $ 22,768 $ — $ 22,768 $ — $ 21,083 $ 23,700 $ — $ 23,700 $ — (1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment. (2) Inputs other than quoted prices included within Level 1 that are observable for the liability, either directly or indirectly. For unsecured revolving credit facilities and unsecured term loans, fair value is determined utilizing the income valuation approach. This valuation model takes into account 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. We valued our senior notes and convertible notes using a quoted market price, which is considered a Level 2 input as it is observable in the market; however, these instruments have a limited trading volume and as such this fair value estimate is not necessarily indicative of the value at which the instruments could be retired or transferred. (3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of March 31, 2024 and December 31, 2023. (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 as of March 31, 2024 and December 31, 2023. 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 millions): Fair Value Measurements at March 31, 2024 Fair Value Measurements at December 31, 2023 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) $ 173 $ — $ 173 $ — $ 144 $ — $ 144 $ — Total Assets $ 173 $ — $ 173 $ — $ 144 $ — $ 144 $ — Liabilities: Derivative financial instruments (4) $ 58 $ — $ 58 $ — $ 66 $ — $ 66 $ — Total Liabilities $ 58 $ — $ 58 $ — $ 66 $ — $ 66 $ — (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, 2024 and December 31, 2023. (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. (3) Inputs that are unobservable. No Level 3 inputs were used in fair value measurements of other financial instruments as of March 31, 2024 and December 31, 2023. (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. 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 March 31, 2024 or December 31, 2023, 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 material nonfinancial instruments recorded at fair value as of March 31, 2024. 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. 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 and liabilities under master netting agreements with derivative counterparties (in millions): Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements As of March 31, 2024 As of December 31, 2023 Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting Cash Collateral Net Amount of Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting Cash Collateral Net Amount of Derivatives subject to master netting agreements $ 173 $ (48) $ — $ 125 $ 144 $ (28) $ — $ 116 Total $ 173 $ (48) $ — $ 125 $ 144 $ (28) $ — $ 116 Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting Cash Collateral Net Amount of Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting Cash Collateral Net Amount of Derivatives subject to master netting agreements $ (58) $ 48 $ — $ (10) $ (66) $ 28 $ — $ (38) Total $ (58) $ 48 $ — $ (10) $ (66) $ 28 $ — $ (38) 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 March 31, 2024, we had counterparty credit risk exposure under our derivative instruments of $149 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. 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. 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" in offsetting changes in the fair value or cash flow of hedged items. For 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. The methodology for assessing hedge effectiveness is applied on a consistent basis for each one of our hedging programs (i.e., interest rate, foreign currency ship construction, foreign currency net investment and fuel). For our regression analyses, 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. 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. 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. Interest Rate Risk Our exposure to market risk for changes in interest rates primarily relates to our debt obligations, including future interest payments. At March 31, 2024 and December 31, 2023, approximately 86.3% and 83.2%, respectively, of our debt was effectively fixed-rate debt, which is net of our interest rate swap agreements. We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense. We use interest rate swap agreements that effectively convert a portion of our floating-rate debt to a fixed-rate basis to manage the market risk of increasing interest rates. At March 31, 2024 and December 31, 2023, we maintained interest rate swap agreements on the following floating-rate debt instruments: Debt Instrument Swap Notional as of March 31, 2024 (in millions) Maturity Debt Floating Rate All-in Fixed Rate as of March 31, 2024 Celebrity Reflection term loan $ 55 October 2024 Term SOFR plus 0.40% 2.88% Quantum of the Seas term loan 184 October 2026 Term SOFR plus 1.30% 3.78% Anthem of the Seas term loan 211 April 2027 Term SOFR plus 1.30% 3.90% Ovation of the Seas term loan 311 April 2028 Term SOFR plus 1.00% 3.20% Harmony of the Seas term loan (1) 281 May 2028 EURIBOR plus 1.15% 2.26% Odyssey of the Seas term loan (2) 345 October 2032 Term SOFR plus 0.96% 3.28% Odyssey of the Seas term loan (2) 173 October 2032 Term SOFR plus 0.96% 2.91% $ 1,560 (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 March 31, 2024. (2) Interest rate swap agreements hedging the term loan of Odyssey of the Seas include Term SOFR zero-floors, Term SOFR with no floors, and Overnight SOFR. These interest rate swap agreements are accounted for as cash flow hedges. The notional amount of interest rate swap agreements related to outstanding debt as of March 31, 2024 and December 31, 2023 was $1.6 billion. 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 to manage portions of the exposure to movements in foreign currency exchange rates. As of March 31, 2024, the aggregate cost of our ships on order was $8.1 billion, of which we had deposited $748 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 March 31, 2024 and December 31, 2023, approximately 44.1% and 43.5%, respectively, of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate. Our foreign currency forward contract agreements are accounted for as cash flow 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 first quarter of 2024 and 2023 the average notional amount of foreign currency forward contracts was approximately $1.1 billion and $1.2 billion, respectively. These instruments are not designated as hedging instruments. For the quarters ended March 31, 2024 and 2023, changes in the fair value of the foreign currency forward contracts resulted in (losses) gain of $(35) million and $4 million, respectively, which offset gains (losses) arising from the remeasurement of monetary assets and liabilities denominated in foreign currencies in those same periods of $30 million and $(11) million, respectively. These amounts were recognized in earnings within Other (expense) income in our consolidated statements of comprehensive income (loss). The notional amount of outstanding foreign exchange contracts, excluding the forward contracts entered into to minimize remeasurement volatility, as of March 31, 2024 and December 31, 2023 was $2.9 billion. Non-Derivative Instruments We consider our investments in our foreign operations to be denominated in relatively stable currencies and to be of a long-term nature. We 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 €659 million, or approximately $712 million, as of March 31, 2024. As of December 31, 2023, we had designated debt as a hedge of our net investments primarily in TUI Cruises of €648 million, or approximately $716 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 (expense) income 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 (expense) income for each reporting period through the maturity dates of the fuel swaps. For the quarters ended March 31, 2024 and March 31, 2023, we did not discontinue cash flow hedge accounting on any of our fuel swap agreements. At March 31, 2024, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2026. As of March 31, 2024 and December 31, 2023, we had the following outstanding fuel swap agreements: Fuel Swap Agreements As of March 31, 2024 As of December 31, 2023 Designated as hedges: (metric tons) 2024 789,801 1,054,501 2025 773,700 685,400 2026 252,700 44,200 Fuel Swap Agreements As of March 31, 2024 As of December 31, 2023 Designated hedges as a % of projected fuel purchases: (% hedged) 2024 62 % 61 % 2025 45 % 39 % 2026 15 % 3 % As of March 31, 2024, there was $39 million of estimated unrealized net gain associated with our cash flow hedges pertaining to fuel swap agreements that is expected to be reclassified to earnings from Accumulated other comprehensive loss within the next twelve months when compared to $21 million of estimated unrealized net loss at December 31, 2023. 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 (in millions): Fair Value of Derivative Instruments Asset Derivatives Liability Derivatives Balance Sheet Location As of March 31, 2024 As of December 31, 2023 Balance Sheet Location As of March 31, 2024 As of December 31, 2023 Fair Value Fair Value Fair Value Fair Value Derivatives designated as hedging instruments under ASC 815-20 (1) Interest rate-swaps Derivative financial instruments $ — 1 Derivative financial instruments $ — $ — Interest rate swaps Other assets 83 75 Other long-term liabilities — — Foreign currency forward contracts Derivative financial instruments 10 20 Derivative financial instruments 44 9 Foreign currency forward contracts Other assets 22 44 Other long-term liabilities 9 4 Fuel swaps Derivative financial instruments 42 4 Derivative financial instruments 3 26 Fuel swaps Other assets 16 — Other long-term liabilities 2 27 Total derivatives designated as hedging instruments under 815-20 $ 173 $ 144 $ 58 $ 66 (1) Subtopic 815-20 “ 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 (in millions): Carrying Value Non-derivative instrument designated as Balance Sheet Location As of March 31, 2024 As of December 31, 2023 Foreign currency debt Current portion of long-term debt $ 63 $ 65 Foreign currency debt Long-term debt 649 523 $ 712 $ 588 The effect of derivative instruments qualifying and designated as cash flow hedging instruments on the consolidated financial statements was as follows (in millions): Derivatives under ASC 815-20 Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in Quarter Ended March 31, 2024 Quarter Ended March 31, 2023 Interest rate swaps $ 21 $ (11) Foreign currency forward contracts (71) 21 Fuel swaps 106 (41) $ 56 $ (31) The effect of non-derivative instruments qualifying and designated as net investment hedging instruments on the consolidated financial statements was as follows (in millions): Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) Non-derivative instruments under ASC 815-20 Net Quarter Ended March 31, 2024 Quarter Ended March 31, 2023 Foreign Currency Debt $ 16 $ (9) $ 16 $ (9) The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as follows (in millions): Amount of (Loss) Gain Recognized in Income on Derivatives Derivatives Not Designated as Hedging Location of Quarter Ended March 31, 2024 Quarter Ended March 31, 2023 Foreign currency forward contracts Other (expense) income $ (35) $ 4 $ (35) $ 4 Credit Related Contingent Features Our current interest rate derivative instruments require us to post collateral if our Standard & Poor’s and Moody’s credit ratings 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 is rated below BBB- by Standard & Poor’s and Baa3 by Moody’s, then the counterparty 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 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. As of March 31, 2024, our senior unsecured debt credit rating was BB+ by Standard & Poor's and Ba2 by Moody's. As of March 31, 2024, five of our ship debt 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. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ 360 | $ (48) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 shares | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On February 14, 2024, Michael W. Bayley, the President and Chief Executive Officer of Royal Caribbean International, entered into a 10b5-1 trading arrangement that provides for the sale of up to 73,356 shares of the Company’s common stock, subject to certain conditions. This includes all common stock, net of shares withheld to cover tax withholding obligations, to be issued upon the anticipated vesting of 58,941 restricted stock units and 91,360 performance share awards. The arrangement's expiration date is August 30, 2024. On February 23, 2024, R. Alexander Lake, Chief Legal Officer and Secretary of the Company, entered into a 10b5-1 trading arrangement providing for the sale of up to 7,750 shares, subject to certain conditions. The arrangement's expiration date is February 21, 2025. |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Michael W. Bayley [Member] | |
Trading Arrangements, by Individual | |
Name | Michael W. Bayley |
Title | President and Chief Executive Officer |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | February 14, 2024 |
Arrangement Duration | 198 days |
Aggregate Available | 73,356 |
R. Alexander Lake [Member] | |
Trading Arrangements, by Individual | |
Name | R. Alexander Lake |
Title | Chief Legal Officer and Secretary of the Company |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | February 23, 2024 |
Arrangement Duration | 364 days |
Aggregate Available | 7,750 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Basis for Preparation of Consolidated Financial Statements | 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 these principles. Actual results could differ from these estimates. Refer to Note 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, 2023 for a discussion of our significant accounting policies. The Company has changed its presentation from thousands to millions and, as a result, any necessary rounding adjustments have been made to prior period disclosed amounts. |
Basis of Consolidation | 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 . Investments and Other Assets |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2023, the FASB issued ASU No. 2023-05, Business Combinations - Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. This ASU provides guidance requiring a joint venture to initially measure all contributions received upon its formation at fair value. The guidance is intended to provide users of joint venture financial statements with more decision-useful information. This ASU is effective for joint venture entities with a formation date on or after January 1, 2025 on a prospective basis. Early adoption is permitted, and joint ventures formed prior to the adoption date may elect to apply the new guidance retrospectively back to their original formation date. We are currently evaluating the impact of the new guidance on our consolidated financial statements. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU requires enhanced disclosures about significant segment expenses and other segment items and requires companies to disclose all annual disclosures about segments in interim periods. This ASU also requires public entities with a single reportable segment to provide all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 280. The amendments in this ASU are intended to improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments should be applied retrospectively to all periods presented. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The new guidance is intended to enhance the transparency and decision usefulness of income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption and retrospective application is permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table disaggregates our total revenues by geographic regions where we provide cruise itineraries (in millions): Quarter Ended March 31, 2024 2023 Revenues by itinerary North America (1) $ 2,690 $ 2,193 Asia/Pacific 506 333 Europe 21 2 Other regions (2) 322 214 Total revenues by itinerary 3,539 2,742 Other revenues (3) 189 144 Total revenues $ 3,728 $ 2,886 (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 5 . Investments and Other Assets for more information on our unconsolidated affiliates. Quarter Ended March 31, 2024 2023 Passenger ticket revenues: United States 73 % 76 % All other countries (1) 27 % 24 % (1) No other individual country's revenue exceeded 10% for the quarters ended March 31, 2024 and 2023. |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation Between Basic and Diluted Earnings (Loss) Per Share | Basic and diluted earnings (loss) per share is as follows (in millions, except per share data): Quarter Ended March 31, 2024 2023 Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. for basic earnings (loss) per share $ 360 $ (48) Add convertible notes interest 19 — Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. for diluted earnings (loss) per share 379 (48) Weighted-average common shares outstanding 257 255 Dilutive effect of stock-based awards 1 — Dilutive effect of convertible notes 23 — Diluted weighted-average shares outstanding 281 255 Basic earnings (loss) per share $ 1.40 $ (0.19) Diluted earnings (loss) per share $ 1.35 $ (0.19) |
Investments and Other Assets (T
Investments and Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Other Assets [Abstract] | |
Schedule of Other Nonoperating Income | The following tables set forth information regarding our investments accounted for under the equity method of accounting, including the entities discussed above (in millions): Quarter Ended March 31, 2024 2023 Share of equity income from investments $ 41 $ 20 |
Schedule of Related Party Transactions | As of March 31, 2024 As of December 31, 2023 Total notes receivable due from equity investments $ 107 $ 105 Less-current portion (1) 18 19 Long-term portion (2) $ 89 $ 86 (1) Included within Trade and other receivables, net in our consolidated balance sheets. (2) Included within Other assets in our consolidated balance sheets. |
Schedule of Credit Loss Allowance | The following table summarizes our credit loss allowance related to receivables (in millions): Three Months Ended March 31, 2024 2023 Balance, beginning of period $ 49 $ 83 Credit loss (recovery), net 2 (7) Write-offs — (2) Balance, end of period $ 51 $ 74 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | Debt consists of the following (in millions): Interest Rate (1) Maturities Through As of March 31, 2024 As of December 31, 2023 Fixed rate debt: Unsecured senior notes 3.70% to 9.25% 2026 - 2032 $ 7,898 $ 7,899 Secured senior notes 8.25% 2029 1,000 1,000 Unsecured term loans 1.28% to 5.89% 2027 - 2035 6,420 6,569 Convertible notes 6.00% 2025 1,150 1,150 Total fixed rate debt 16,468 16,618 Variable rate debt: Unsecured revolving credit facilities (2) 6.76% to 7.48% 2025 - 2028 304 899 USD unsecured term loan 6.05% to 9.95% 2024 - 2037 3,555 3,666 Euro unsecured term loan 5.00% to 6.14% 2024 - 2028 352 443 Total variable rate debt 4,211 5,008 Finance lease liabilities 363 369 Total debt (3) 21,042 21,995 Less: unamortized debt issuance costs (523) (543) Total debt, net of unamortized debt issuance costs 20,519 21,452 Less—current portion (1,643) (1,720) Long-term portion $ 18,876 $ 19,732 (1) Interest rates based on outstanding loan balance as of March 31, 2024, and for variable rate debt include either EURIBOR or Term SOFR plus the applicable margin. (2) Advances under our unsecured revolving credit facilities accrue interest at Term SOFR plus a 0.10% credit adjustment spread plus an interest rate margin primarily at 1.33%. Based on applicable Term SOFR rates, as of March 31, 2024, the maximum interest rate under the unsecured credit facilities was 6.76%. We also pay a facility fee primarily at 0.17% of the total commitments under such facility. (3) At March 31, 2024 and December 31, 2023, the weighted average interest rate for total debt was 5.75% and 6.06%, respectively. |
Schedule of Maturities of Long-term Debt | The following is a schedule of annual maturities on our total debt, including finance leases, as of March 31, 2024 for each of the next five years (in millions): Year As of March 31, 2024 (1) Remainder of 2024 $ 1,390 2025 2,628 2026 3,045 2027 2,509 2028 3,267 Thereafter 8,203 $ 21,042 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Leases [Abstract] | |
Schedule of Lease Expense and Cash Flow Information | The components of lease expense were as follows (in millions): Consolidated Statement of Comprehensive Income (Loss) Classification Quarter Ended March 31, 2024 Quarter Ended March 31, 2023 Lease costs: Operating lease costs Commission, transportation and other $ 71 $ 55 Operating lease costs Other operating expenses 4 6 Operating lease costs Marketing, selling and administrative expenses 4 5 Financial lease costs: Amortization of right-of-use-assets Depreciation and amortization expenses 3 6 Interest on lease liabilities Interest expense, net of interest capitalized 8 8 Total lease costs $ 90 $ 80 The weighted average of the remaining lease terms and weighted average discount rates are as follows: As of March 31, 2024 As of December 31, 2023 Weighted average of the remaining lease term in years Operating leases 20.02 19.43 Finance leases 24.06 23.92 Weighted average discount rate Operating leases 7.55 % 7.53 % Finance leases 5.84 % 5.83 % Supplemental cash flow information related to leases is as follows (in millions): Three Months Ended March 31, 2024 Three Months Ended March 31, 2023 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 99 $ 36 Operating cash flows from finance leases 8 8 Financing cash flows from finance leases $ 6 $ 14 |
Schedule of Maturities, Operating Leases | As of March 31, 2024, maturities related to lease liabilities were as follows (in millions): Year Operating Leases Finance Leases Remainder of 2024 $ 84 $ 35 2025 101 45 2026 91 39 2027 72 38 2028 72 37 Thereafter 1,062 684 Total lease payments 1,482 878 Less: Interest (816) (515) Present value of lease liabilities $ 666 $ 363 |
Schedule of Maturities, Finance Leases | As of March 31, 2024, maturities related to lease liabilities were as follows (in millions): Year Operating Leases Finance Leases Remainder of 2024 $ 84 $ 35 2025 101 45 2026 91 39 2027 72 38 2028 72 37 Thereafter 1,062 684 Total lease payments 1,482 878 Less: Interest (816) (515) Present value of lease liabilities $ 666 $ 363 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Capital Commitments | As of March 31, 2024, the dates that the ships on order by our Global and Partner Brands are expected to be delivered, subject to change in the event of construction delays, and their approximate berths are as follows: Ship Shipyard Expected delivery Approximate Royal Caribbean International — Oasis-class: Utopia of the Seas Chantiers de l'Atlantique 2nd Quarter 2024 5,700 Icon-class: Star of the Seas Meyer Turku Oy 3rd Quarter 2025 5,600 Unnamed Meyer Turku Oy 2nd Quarter 2026 5,600 Celebrity Cruises — Edge-class: Celebrity Xcel Chantiers de l'Atlantique 4th Quarter 2025 3,250 Silversea Cruises — Evolution-class: Silver Ray Meyer Werft 2nd Quarter 2024 730 TUI Cruises (50% joint venture) — Mein Schiff 7 Meyer Turku Oy 2nd Quarter 2024 2,900 Mein Schiff Relax Fincantieri 4th Quarter 2024 4,100 Unnamed Fincantieri 2nd Quarter 2026 4,100 Total Berths 31,980 |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Changes In Accumulated Other Comprehensive Income (Loss) by Component | The following table presents the changes in accumulated other comprehensive loss by component for the quarters ended March 31, 2024 and 2023 (in millions): Accumulated Other Comprehensive Loss for the Three Months Ended March 31, 2024 Accumulated Other Comprehensive Loss for the Three Months Ended March 31, 2023 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 $ (666) $ (2) $ (6) $ (674) $ (638) $ (8) $ 3 $ (643) Other comprehensive income (loss) before reclassifications 56 9 4 69 (30) 4 (7) (33) Amounts reclassified from accumulated other comprehensive loss (12) — — (12) (2) — — (2) Net current-period other comprehensive income (loss) 44 9 4 57 (32) 4 (7) (35) Ending balance $ (622) $ 7 $ (2) $ (617) $ (670) $ (4) $ (4) $ (678) |
Schedule of Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | The following table presents reclassifications out of accumulated other comprehensive loss for the quarters ended March 31, 2024 and 2023 (in millions): Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income Details About Accumulated Other Comprehensive Loss Components Quarter Ended March 31, 2024 Quarter Ended March 31, 2023 Affected Line Item in Statements of Gain (loss) on cash flow derivative hedges: Interest rate swaps $ 14 $ 10 Interest expense, net of interest capitalized Foreign currency forward contracts (6) (3) Depreciation and amortization expenses Foreign currency forward contracts — (1) Other (expense) income Fuel swaps — — Other (expense) income Fuel swaps 4 (4) Fuel $ 12 $ 2 |
Fair Value Measurements and D_2
Fair Value Measurements and Derivative Instruments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Derivative Instruments | |
Schedule of Estimated Fair Value of Financial Instruments that are not Measured at Fair Value on Recurring Basis | 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 millions): Fair Value Measurements at March 31, 2024 Fair Value Measurements at December 31, 2023 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) $ 437 $ 437 $ 437 $ — $ — $ 497 $ 497 $ 497 $ — $ — Total Assets $ 437 $ 437 $ 437 $ — $ — $ 497 $ 497 $ 497 $ — $ — Liabilities: Long-term debt (including current portion of debt) (5) $ 20,156 $ 22,768 $ — $ 22,768 $ — $ 21,083 $ 23,700 $ — $ 23,700 $ — Total Liabilities $ 20,156 $ 22,768 $ — $ 22,768 $ — $ 21,083 $ 23,700 $ — $ 23,700 $ — (1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment. (2) Inputs other than quoted prices included within Level 1 that are observable for the liability, either directly or indirectly. For unsecured revolving credit facilities and unsecured term loans, fair value is determined utilizing the income valuation approach. This valuation model takes into account 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. We valued our senior notes and convertible notes using a quoted market price, which is considered a Level 2 input as it is observable in the market; however, these instruments have a limited trading volume and as such this fair value estimate is not necessarily indicative of the value at which the instruments could be retired or transferred. (3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of March 31, 2024 and December 31, 2023. (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. |
Schedule of Company's Financial Instruments Recorded at Fair Value on Recurring Basis | 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 millions): Fair Value Measurements at March 31, 2024 Fair Value Measurements at December 31, 2023 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) $ 173 $ — $ 173 $ — $ 144 $ — $ 144 $ — Total Assets $ 173 $ — $ 173 $ — $ 144 $ — $ 144 $ — Liabilities: Derivative financial instruments (4) $ 58 $ — $ 58 $ — $ 66 $ — $ 66 $ — Total Liabilities $ 58 $ — $ 58 $ — $ 66 $ — $ 66 $ — (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, 2024 and December 31, 2023. (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. (3) Inputs that are unobservable. No Level 3 inputs were used in fair value measurements of other financial instruments as of March 31, 2024 and December 31, 2023. (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. |
Schedule of Offsetting Assets | The following table presents information about the Company’s offsetting of financial assets and liabilities under master netting agreements with derivative counterparties (in millions): Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements As of March 31, 2024 As of December 31, 2023 Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting Cash Collateral Net Amount of Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting Cash Collateral Net Amount of Derivatives subject to master netting agreements $ 173 $ (48) $ — $ 125 $ 144 $ (28) $ — $ 116 Total $ 173 $ (48) $ — $ 125 $ 144 $ (28) $ — $ 116 Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting Cash Collateral Net Amount of Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting Cash Collateral Net Amount of Derivatives subject to master netting agreements $ (58) $ 48 $ — $ (10) $ (66) $ 28 $ — $ (38) Total $ (58) $ 48 $ — $ (10) $ (66) $ 28 $ — $ (38) |
Schedule of Offsetting Liabilities | The following table presents information about the Company’s offsetting of financial assets and liabilities under master netting agreements with derivative counterparties (in millions): Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements As of March 31, 2024 As of December 31, 2023 Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting Cash Collateral Net Amount of Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting Cash Collateral Net Amount of Derivatives subject to master netting agreements $ 173 $ (48) $ — $ 125 $ 144 $ (28) $ — $ 116 Total $ 173 $ (48) $ — $ 125 $ 144 $ (28) $ — $ 116 Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting Cash Collateral Net Amount of Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting Cash Collateral Net Amount of Derivatives subject to master netting agreements $ (58) $ 48 $ — $ (10) $ (66) $ 28 $ — $ (38) Total $ (58) $ 48 $ — $ (10) $ (66) $ 28 $ — $ (38) |
Schedule of Fuel Swap Agreements | As of March 31, 2024 and December 31, 2023, we had the following outstanding fuel swap agreements: Fuel Swap Agreements As of March 31, 2024 As of December 31, 2023 Designated as hedges: (metric tons) 2024 789,801 1,054,501 2025 773,700 685,400 2026 252,700 44,200 Fuel Swap Agreements As of March 31, 2024 As of December 31, 2023 Designated hedges as a % of projected fuel purchases: (% hedged) 2024 62 % 61 % 2025 45 % 39 % 2026 15 % 3 % |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets were as follows (in millions): Fair Value of Derivative Instruments Asset Derivatives Liability Derivatives Balance Sheet Location As of March 31, 2024 As of December 31, 2023 Balance Sheet Location As of March 31, 2024 As of December 31, 2023 Fair Value Fair Value Fair Value Fair Value Derivatives designated as hedging instruments under ASC 815-20 (1) Interest rate-swaps Derivative financial instruments $ — 1 Derivative financial instruments $ — $ — Interest rate swaps Other assets 83 75 Other long-term liabilities — — Foreign currency forward contracts Derivative financial instruments 10 20 Derivative financial instruments 44 9 Foreign currency forward contracts Other assets 22 44 Other long-term liabilities 9 4 Fuel swaps Derivative financial instruments 42 4 Derivative financial instruments 3 26 Fuel swaps Other assets 16 — Other long-term liabilities 2 27 Total derivatives designated as hedging instruments under 815-20 $ 173 $ 144 $ 58 $ 66 (1) Subtopic 815-20 “ Hedging-General ” under ASC 815. |
Schedule of Fair Value and Line Item Caption of Non-derivative Instruments | The carrying value and line item caption of non-derivative instruments designated as hedging instruments recorded within our consolidated balance sheets were as follows (in millions): Carrying Value Non-derivative instrument designated as Balance Sheet Location As of March 31, 2024 As of December 31, 2023 Foreign currency debt Current portion of long-term debt $ 63 $ 65 Foreign currency debt Long-term debt 649 523 $ 712 $ 588 |
Schedule of Non Derivative Instruments Qualifying and Designated as Hedging Instruments in Net Investment Hedges | The effect of non-derivative instruments qualifying and designated as net investment hedging instruments on the consolidated financial statements was as follows (in millions): Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) Non-derivative instruments under ASC 815-20 Net Quarter Ended March 31, 2024 Quarter Ended March 31, 2023 Foreign Currency Debt $ 16 $ (9) $ 16 $ (9) |
Not Designated as Hedging Instrument | |
Derivative Instruments | |
Schedule of Derivative Instruments, Gain (Loss) | The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as follows (in millions): Amount of (Loss) Gain Recognized in Income on Derivatives Derivatives Not Designated as Hedging Location of Quarter Ended March 31, 2024 Quarter Ended March 31, 2023 Foreign currency forward contracts Other (expense) income $ (35) $ 4 $ (35) $ 4 |
Cash flow hedge | |
Derivative Instruments | |
Schedule of Interest Rate Derivatives | At March 31, 2024 and December 31, 2023, we maintained interest rate swap agreements on the following floating-rate debt instruments: Debt Instrument Swap Notional as of March 31, 2024 (in millions) Maturity Debt Floating Rate All-in Fixed Rate as of March 31, 2024 Celebrity Reflection term loan $ 55 October 2024 Term SOFR plus 0.40% 2.88% Quantum of the Seas term loan 184 October 2026 Term SOFR plus 1.30% 3.78% Anthem of the Seas term loan 211 April 2027 Term SOFR plus 1.30% 3.90% Ovation of the Seas term loan 311 April 2028 Term SOFR plus 1.00% 3.20% Harmony of the Seas term loan (1) 281 May 2028 EURIBOR plus 1.15% 2.26% Odyssey of the Seas term loan (2) 345 October 2032 Term SOFR plus 0.96% 3.28% Odyssey of the Seas term loan (2) 173 October 2032 Term SOFR plus 0.96% 2.91% $ 1,560 (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 March 31, 2024. (2) Interest rate swap agreements hedging the term loan of Odyssey of the Seas |
Schedule of Derivative Instruments, Gain (Loss) | The effect of derivative instruments qualifying and designated as cash flow hedging instruments on the consolidated financial statements was as follows (in millions): Derivatives under ASC 815-20 Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in Quarter Ended March 31, 2024 Quarter Ended March 31, 2023 Interest rate swaps $ 21 $ (11) Foreign currency forward contracts (71) 21 Fuel swaps 106 (41) $ 56 $ (31) |
General (Details)
General (Details) destination in Thousands | Mar. 31, 2024 ship destination brand country continent |
Schedule of Equity Method Investments [Line Items] | |
Number of cruise brands | brand | 3 |
Number of cruise ships | ship | 65 |
Number of destinations (more than) | destination | 1 |
Number of countries (over) | country | 120 |
Number of continents | continent | 7 |
TUI Cruises | |
Schedule of Equity Method Investments [Line Items] | |
Investment in a joint venture, percentage of interest | 50% |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Capitalized Contract Cost [Line Items] | |||
Passenger ticket revenues | $ 3,728 | $ 2,886 | |
Contract liability | 2,900 | $ 2,600 | |
Customer deposit | 317 | ||
Contract asset | 166 | 167 | |
Commission, transportation and other | |||
Capitalized Contract Cost [Line Items] | |||
Capitalized contract costs | 293 | $ 257 | |
Port Costs | |||
Capitalized Contract Cost [Line Items] | |||
Passenger ticket revenues | $ 242 | $ 203 | |
Minimum | |||
Capitalized Contract Cost [Line Items] | |||
Duration of cruises | 3 days | ||
Maximum | |||
Capitalized Contract Cost [Line Items] | |||
Duration of cruises | 28 days |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 3,728 | $ 2,886 | |
Cruise Itinerary | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 3,539 | 2,742 | |
Cruise Itinerary | North America | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | [1] | 2,690 | 2,193 |
Cruise Itinerary | Asia/Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 506 | 333 | |
Cruise Itinerary | Europe | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 21 | 2 | |
Cruise Itinerary | Other regions | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | [2] | 322 | 214 |
Other Revenues | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | [3] | $ 189 | $ 144 |
Passenger Ticket | Other regions | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of revenues by country | [4] | 27% | 24% |
Passenger Ticket | United States | |||
Disaggregation of Revenue [Line Items] | |||
Percentage of revenues by country | 73% | 76% | |
[1] Includes the United States, Canada, Mexico and the Caribbean. . Investments and Other Assets No other individual country's revenue exceeded 10% for the quarters ended March 31, 2024 and 2023. |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Earnings Per Share [Abstract] | ||
Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. for basic earnings (loss) per share | $ 360 | $ (48) |
Add convertible notes interest | 19 | 0 |
Net Income (Loss) attributable to Royal Caribbean Cruises Ltd. for diluted earnings (loss) per share | $ 379 | $ (48) |
Weighted-average common shares outstanding (in shares) | 257,000,000 | 255,000,000 |
Dilutive effect of stock-based awards (in shares) | 1,000,000 | 0 |
Dilutive effect of convertible notes (in shares) | 23,000,000 | 0 |
Diluted weighted-average shares outstanding (in shares) | 281,000,000 | 255,000,000 |
Basic earnings (loss) per share (in dollars per share) | $ 1.40 | $ (0.19) |
Diluted earnings (loss) per share (in dollars per share) | $ 1.35 | $ (0.19) |
Antidilutive securities (in shares) | 0 | 30,994,718 |
Investments and Other Assets -
Investments and Other Assets - Narrative (Details) € in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2016 | Mar. 31, 2024 USD ($) entity | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) floating_drydock | Mar. 31, 2024 EUR (€) entity | Dec. 31, 2023 EUR (€) | |
Investments in and Advances to Affiliates [Line Items] | ||||||
Proceeds from sale of noncontrolling interest | $ 0 | $ 209 | ||||
Credit loss | 2 | (7) | ||||
Property, Plant and Equipment | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Credit loss | $ 43 | $ 63 | ||||
Port Of Miami | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Percentage of investment sold | 80% | |||||
Proceeds from sale of noncontrolling interest | $ 209 | |||||
Port Of Miami | Variable Interest Entity, Primary Beneficiary | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Percentage of ownership interest | 20% | |||||
TUI Cruises GmbH joint venture | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Percentage of ownership interest | 50% | 50% | ||||
Investments in entity | $ 678 | $ 657 | ||||
Underlying equity in net assets | 594 | 566 | ||||
Advances to affiliate | $ 73 | $ 79 | € 67 | € 71 | ||
TUI Cruises GmbH joint venture | TUI cruise ships | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Restriction on reduction of current ownership interest (as a percent) | 37.55% | 37.55% | ||||
TUI Cruises GmbH joint venture | Splendour of the Seas | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Interest rate on loan provided to related party (as a percent) | 6.25% | |||||
Debt instrument, term | 10 years | |||||
Debt, guaranteed percentage | 50% | |||||
TUI Cruises GmbH joint venture | Not Primary Beneficiary | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Percentage of ownership interest | 50% | 50% | ||||
Grand Bahama | Not Primary Beneficiary | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Percentage of ownership interest | 40% | 40% | ||||
Floating Docks S. DE RL | Not Primary Beneficiary | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Percentage of ownership interest | 50% | 50% | ||||
Number of floating drydocks | floating_drydock | 2 | |||||
Percentage of certain installment payments payable | 50% | 50% | ||||
Investment total guaranteed | $ 59 | |||||
Italian Entities | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Number of entities | entity | 2 | 2 | ||||
Other Shareholder | Grand Bahama | Not Primary Beneficiary | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Percentage of ownership interest | 40% | 40% |
Investments and Other Assets _2
Investments and Other Assets - Schedule of Other Nonoperating Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Other Assets [Abstract] | ||
Share of equity income from investments | $ 41 | $ 20 |
Investments and Other Assets _3
Investments and Other Assets - Schedule of Related Party Transactions (Details) - Equity Investment - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Total notes receivable due from equity investments | $ 107 | $ 105 | |
Less-current portion | [1] | 18 | 19 |
Long-term portion | [2] | $ 89 | $ 86 |
[1] Included within Trade and other receivables, net in our consolidated balance sheets. Included within Other assets in our consolidated balance sheets. |
Investments and Other Assets _4
Investments and Other Assets - Schedule of Credit Loss Allowance (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance, beginning of period | $ 49 | $ 83 |
Credit loss (recovery), net | 2 | (7) |
Write-offs | 0 | (2) |
Balance, end of period | $ 51 | $ 74 |
Debt - Schedule of Long-term De
Debt - Schedule of Long-term Debt (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2024 | Dec. 31, 2023 | ||
Debt Instrument [Line Items] | |||
Total debt | [1] | $ 21,042 | $ 21,995 |
Less: unamortized debt issuance costs | (523) | (543) | |
Total debt, net of unamortized debt issuance costs | 20,519 | 21,452 | |
Less—current portion | (1,643) | (1,720) | |
Long-term portion | $ 18,876 | $ 19,732 | |
Weighted average interest rate | 5.75% | 6.06% | |
Total fixed rate debt | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 16,468 | $ 16,618 | |
Unsecured senior notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | 7,898 | 7,899 | |
Secured senior notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | 1,000 | 1,000 | |
Unsecured term loans | |||
Debt Instrument [Line Items] | |||
Long-term debt | 6,420 | 6,569 | |
Convertible notes | |||
Debt Instrument [Line Items] | |||
Long-term debt | 1,150 | 1,150 | |
Total variable rate debt | |||
Debt Instrument [Line Items] | |||
Long-term debt | 4,211 | 5,008 | |
Unsecured revolving credit facilities | |||
Debt Instrument [Line Items] | |||
Long-term debt | [2] | $ 304 | 899 |
Unsecured revolving credit facilities | Unsecured Revolving Credit Facility Due 2024 | |||
Debt Instrument [Line Items] | |||
Facility fee | 0.17% | ||
USD unsecured term loan | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 3,555 | 3,666 | |
Euro unsecured term loan | |||
Debt Instrument [Line Items] | |||
Long-term debt | 352 | 443 | |
Finance lease liabilities | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 363 | $ 369 | |
Term SOFR plus | Unsecured revolving credit facilities | Unsecured Revolving Credit Facility Due 2024 | |||
Debt Instrument [Line Items] | |||
Credit adjustment spread | 0.10% | ||
Margin on floating rate base (as a percent) | 1.33% | ||
Minimum | Unsecured senior notes | |||
Debt Instrument [Line Items] | |||
Long term debt, stated interest rate (as a percent) | [3] | 3.70% | |
Minimum | Secured senior notes | |||
Debt Instrument [Line Items] | |||
Long term debt, stated interest rate (as a percent) | [3] | 8.25% | |
Minimum | Unsecured term loans | |||
Debt Instrument [Line Items] | |||
Long term debt, stated interest rate (as a percent) | [3] | 1.28% | |
Minimum | Convertible notes | |||
Debt Instrument [Line Items] | |||
Long term debt, stated interest rate (as a percent) | [3] | 6% | |
Minimum | Unsecured revolving credit facilities | |||
Debt Instrument [Line Items] | |||
Long term debt, current interest rate (as a percent) | [2],[3] | 6.76% | |
Minimum | USD unsecured term loan | |||
Debt Instrument [Line Items] | |||
Long term debt, current interest rate (as a percent) | [3] | 6.05% | |
Minimum | Euro unsecured term loan | |||
Debt Instrument [Line Items] | |||
Long term debt, current interest rate (as a percent) | [3] | 5% | |
Maximum | Unsecured senior notes | |||
Debt Instrument [Line Items] | |||
Long term debt, stated interest rate (as a percent) | [3] | 9.25% | |
Maximum | Unsecured term loans | |||
Debt Instrument [Line Items] | |||
Long term debt, stated interest rate (as a percent) | [3] | 5.89% | |
Maximum | Unsecured revolving credit facilities | |||
Debt Instrument [Line Items] | |||
Long term debt, current interest rate (as a percent) | [2],[3] | 7.48% | |
Maximum | Unsecured revolving credit facilities | Unsecured Revolving Credit Facility Due 2024 | |||
Debt Instrument [Line Items] | |||
Long term debt, current interest rate (as a percent) | 6.76% | ||
Maximum | USD unsecured term loan | |||
Debt Instrument [Line Items] | |||
Long term debt, current interest rate (as a percent) | [3] | 9.95% | |
Maximum | Euro unsecured term loan | |||
Debt Instrument [Line Items] | |||
Long term debt, current interest rate (as a percent) | [3] | 6.14% | |
[1]At March 31, 2024 and December 31, 2023, the weighted average interest rate for total debt was 5.75% and 6.06%, respectively[2]Advances under our unsecured revolving credit facilities accrue interest at Term SOFR plus a 0.10% credit adjustment spread plus an interest rate margin primarily at 1.33%. Based on applicable Term SOFR rates, as of March 31, 2024, the maximum interest rate under the unsecured credit facilities was 6.76%. We also pay a facility fee primarily at 0.17% of the total commitments under such facility.[3]Interest rates based on outstanding loan balance as of March 31, 2024, and for variable rate debt include either EURIBOR or Term SOFR plus the applicable margin. |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2024 | Mar. 31, 2024 | Mar. 31, 2023 | Oct. 31, 2023 | ||
Long-Term Debt | |||||
Loss on extinguishment of debt | $ 116,000,000 | $ 13,000,000 | |||
Outstanding deferred amount | $ 839,000,000 | $ 839,000,000 | |||
Minimum | Contract With Customer, Liability, Up-Front Payment Arrangement | |||||
Long-Term Debt | |||||
Credit agency fees, percentage of loan amount payable | 2.35% | ||||
Maximum | Contract With Customer, Liability, Up-Front Payment Arrangement | |||||
Long-Term Debt | |||||
Credit agency fees, percentage of loan amount payable | 5.48% | ||||
Unsecured senior notes | Minimum | |||||
Long-Term Debt | |||||
Fixed interest rate | [1] | 3.70% | 3.70% | ||
Unsecured senior notes | Maximum | |||||
Long-Term Debt | |||||
Fixed interest rate | [1] | 9.25% | 9.25% | ||
Unsecured senior notes | Senior Notes Due 2032 | |||||
Long-Term Debt | |||||
Face amount | $ 1,250,000,000 | $ 1,250,000,000 | |||
Proceeds from senior notes | $ 1,240,000,000 | ||||
Fixed interest rate | 6.25% | 6.25% | |||
Unsecured senior notes | Senior Notes Due 2027 | |||||
Long-Term Debt | |||||
Fixed interest rate | 11.625% | 11.625% | |||
Repayment of debt | $ 1,250,000,000 | ||||
Loss on extinguishment of debt | 116,000,000 | ||||
Revolving Credit Facility | Line of Credit | |||||
Long-Term Debt | |||||
Remaining borrowing capacity | 3,300,000,000 | $ 3,300,000,000 | |||
Revolving Credit Facility | Line of Credit | Aggregate Revolving Capacity, October 2024 | |||||
Long-Term Debt | |||||
Maximum borrowing capacity | $ 3,600,000,000 | ||||
Revolving Credit Facility | Line of Credit | Aggregate Revolving Capacity, October 2026 | |||||
Long-Term Debt | |||||
Maximum borrowing capacity | 1,800,000,000 | 1,800,000,000 | |||
Revolving Credit Facility | Line of Credit | Aggregate Revolving Capacity, October 2028 | |||||
Long-Term Debt | |||||
Maximum borrowing capacity | 1,800,000,000 | 1,800,000,000 | |||
Revolving Credit Facility | Line of Credit | Aggregate Revolving Capacity, April 2025 | |||||
Long-Term Debt | |||||
Maximum borrowing capacity | $ 77,000,000 | $ 77,000,000 | |||
[1]Interest rates based on outstanding loan balance as of March 31, 2024, and for variable rate debt include either EURIBOR or Term SOFR plus the applicable margin. |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Long-term Debt (Details) $ in Millions | Mar. 31, 2024 USD ($) | [1] |
Debt Disclosure [Abstract] | ||
Remainder of 2024 | $ 1,390 | |
2025 | 2,628 | |
2026 | 3,045 | |
2027 | 2,509 | |
2028 | 3,267 | |
Thereafter | 8,203 | |
Total | $ 21,042 | |
[1]Debt denominated in other currencies is calculated based on the applicable exchange rate at March 31, 2024. |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 3 Months Ended | |||
Mar. 31, 2024 USD ($) extension_option | Mar. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Nov. 30, 2023 USD ($) | |
Lessee, Lease, Description [Line Items] | ||||
Present value of lease liabilities | $ 666 | |||
Increase percentage of annual lease payment | 3% | |||
Present value of lease liabilities | 363 | |||
Variable lease cost | 51 | $ 38 | ||
Berthing Agreement | ||||
Lessee, Lease, Description [Line Items] | ||||
Present value of lease liabilities | $ 167 | $ 167 | ||
Lease payments to be paid when certain conditions are met | $ 55 | |||
Berthing Agreement | Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Renewal term | 1 year | |||
Berthing Agreement | Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Renewal term | 20 years | |||
Building | Minimum | ||||
Lessee, Lease, Description [Line Items] | ||||
Renewal term | 1 year | |||
Building | Maximum | ||||
Lessee, Lease, Description [Line Items] | ||||
Renewal term | 10 years | |||
Land and Building | ||||
Lessee, Lease, Description [Line Items] | ||||
Number of extension options | extension_option | 2 | |||
Additional lease term | 5 years | |||
Present value of lease liabilities | $ 105 | 104 | ||
Ships | Silver Dawn | ||||
Lessee, Lease, Description [Line Items] | ||||
Present value of lease liabilities | $ 241 | $ 246 | ||
Finance lease term | 15 years |
Leases - Schedule of Lease Expe
Leases - Schedule of Lease Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Lessee, Lease, Description [Line Items] | ||
Amortization of right-of-use-assets | $ 3 | $ 6 |
Interest on lease liabilities | 8 | 8 |
Total lease costs | 90 | 80 |
Commission, transportation and other | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease costs | 71 | 55 |
Other operating expenses | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease costs | 4 | 6 |
Marketing, selling and administrative expenses | ||
Lessee, Lease, Description [Line Items] | ||
Operating lease costs | $ 4 | $ 5 |
Leases - Schedule of Lease Term
Leases - Schedule of Lease Terms and Discount Rates (Details) | Mar. 31, 2024 | Dec. 31, 2023 |
Weighted average of the remaining lease term in years | ||
Operating leases | 20 years 7 days | 19 years 5 months 4 days |
Finance leases | 24 years 21 days | 23 years 11 months 1 day |
Weighted average discount rate | ||
Operating leases | 7.55% | 7.53% |
Finance leases | 5.84% | 5.83% |
Leases - Supplemental Noncash I
Leases - Supplemental Noncash Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 99 | $ 36 |
Operating cash flows from finance leases | 8 | 8 |
Financing cash flows from finance leases | $ 6 | $ 14 |
Leases - Schedule of Lease Matu
Leases - Schedule of Lease Maturities (Details) $ in Millions | Mar. 31, 2024 USD ($) |
Operating Leases | |
Remainder of 2024 | $ 84 |
2025 | 101 |
2026 | 91 |
2027 | 72 |
2028 | 72 |
Thereafter | 1,062 |
Total lease payments | 1,482 |
Less: Interest | (816) |
Present value of lease liabilities | 666 |
Finance Leases | |
Remainder of 2024 | 35 |
2025 | 45 |
2026 | 39 |
2027 | 38 |
2028 | 37 |
Thereafter | 684 |
Total lease payments | 878 |
Less: Interest | (515) |
Present value of lease liabilities | $ 363 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Capital Commitments (Details) | Mar. 31, 2024 berth |
Long-term Purchase Commitment [Line Items] | |
Ship passenger capacity berths | 31,980 |
Royal Caribbean International | Utopia of the Seas | |
Long-term Purchase Commitment [Line Items] | |
Ship passenger capacity berths | 5,700 |
Royal Caribbean International | Star of the Seas | |
Long-term Purchase Commitment [Line Items] | |
Ship passenger capacity berths | 5,600 |
Royal Caribbean International | Unnamed | |
Long-term Purchase Commitment [Line Items] | |
Ship passenger capacity berths | 5,600 |
Celebrity Cruises | Celebrity Xcel | |
Long-term Purchase Commitment [Line Items] | |
Ship passenger capacity berths | 3,250 |
Silversea Cruises | Silver Ray | |
Long-term Purchase Commitment [Line Items] | |
Ship passenger capacity berths | 730 |
TUI Cruises | Mein Schiff 7 | |
Long-term Purchase Commitment [Line Items] | |
Ship passenger capacity berths | 2,900 |
TUI Cruises | Mein Schiff Relax | |
Long-term Purchase Commitment [Line Items] | |
Ship passenger capacity berths | 4,100 |
TUI Cruises | Unnamed | |
Long-term Purchase Commitment [Line Items] | |
Ship passenger capacity berths | 4,100 |
Commitments and Contingencies_2
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Dec. 31, 2022 | Mar. 31, 2024 | Dec. 31, 2022 | |
Commitments and Contingencies | |||
Aggregate cost of ships on order, not including TUI cruises on order | $ 8,100 | ||
Deposit for the purchase of ships expected to enter service | $ 748 | ||
Plaintiff amount | $ 112 | ||
Loss in period | $ 130 | ||
Number of months considered to determine requirement of prepayment of debts | 24 months | ||
Line of Credit | Minimum | |||
Commitments and Contingencies | |||
Debt instrument covenant, minimum percentage of ownership by a person | 50% | ||
Debt Securities | Minimum | |||
Commitments and Contingencies | |||
Debt instrument covenant, minimum percentage of ownership by a person | 50% |
Changes in Accumulated Other _3
Changes in Accumulated Other Comprehensive Loss - Schedule of Changes In Accumulated Other Comprehensive Income (Loss) by Component (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | $ 4,724 | |
Other comprehensive income (loss) before reclassifications | 69 | $ (33) |
Amounts reclassified from accumulated other comprehensive loss | (12) | (2) |
Net current-period other comprehensive income (loss) | 57 | (35) |
Ending balance | 5,151 | |
Changes related to cash flow derivative hedges | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (666) | (638) |
Other comprehensive income (loss) before reclassifications | 56 | (30) |
Amounts reclassified from accumulated other comprehensive loss | (12) | (2) |
Net current-period other comprehensive income (loss) | 44 | (32) |
Ending balance | (622) | (670) |
Changes in defined benefit plans | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (2) | (8) |
Other comprehensive income (loss) before reclassifications | 9 | 4 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Net current-period other comprehensive income (loss) | 9 | 4 |
Ending balance | 7 | (4) |
Foreign currency translation adjustments | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (6) | 3 |
Other comprehensive income (loss) before reclassifications | 4 | (7) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 |
Net current-period other comprehensive income (loss) | 4 | (7) |
Ending balance | (2) | (4) |
Accumulated other comprehensive loss | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Beginning balance | (674) | (643) |
Ending balance | $ (617) | $ (678) |
Changes in Accumulated Other _4
Changes in Accumulated Other Comprehensive Loss - Schedule of Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Interest expense, net of interest capitalized | $ (424) | $ (360) |
Depreciation and amortization expenses | (387) | (360) |
Other (expense) income | (8) | 5 |
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | Gain (loss) on cash flow derivative hedges: | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Total reclassifications for the period | 12 | 2 |
Interest rate swaps | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | Gain (loss) on cash flow derivative hedges: | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Interest expense, net of interest capitalized | 14 | 10 |
Foreign currency forward contracts | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | Gain (loss) on cash flow derivative hedges: | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Depreciation and amortization expenses | (6) | (3) |
Other (expense) income | 0 | (1) |
Fuel swaps | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | Gain (loss) on cash flow derivative hedges: | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Other (expense) income | 0 | 0 |
Fuel | $ 4 | $ (4) |
Fair Value Measurements and D_3
Fair Value Measurements and Derivative Instruments - Schedule of Estimated Fair Value (Details) - Nonrecurring - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | |
Level 1 | |||
Assets: | |||
Cash and cash equivalents | [1],[2] | $ 437 | $ 497 |
Total Assets | [2] | 437 | 497 |
Liabilities: | |||
Long-term debt (including current portion of debt) | [2],[3] | 0 | 0 |
Total Liabilities | [2] | 0 | 0 |
Level 2 | |||
Assets: | |||
Cash and cash equivalents | [1],[4] | 0 | 0 |
Total Assets | [4] | 0 | 0 |
Liabilities: | |||
Long-term debt (including current portion of debt) | [3],[4] | 22,768 | 23,700 |
Total Liabilities | [4] | 22,768 | 23,700 |
Level 3 | |||
Assets: | |||
Cash and cash equivalents | [1],[5] | 0 | 0 |
Total Assets | [5] | 0 | 0 |
Liabilities: | |||
Long-term debt (including current portion of debt) | [3],[5] | 0 | 0 |
Total Liabilities | [5] | 0 | 0 |
Total Carrying Amount | |||
Assets: | |||
Cash and cash equivalents | [1] | 437 | 497 |
Total Assets | 437 | 497 | |
Liabilities: | |||
Long-term debt (including current portion of debt) | [3] | 20,156 | 21,083 |
Total Liabilities | 20,156 | 21,083 | |
Total Fair Value | |||
Assets: | |||
Cash and cash equivalents | [1] | 437 | 497 |
Total Assets | 437 | 497 | |
Liabilities: | |||
Long-term debt (including current portion of debt) | [3] | 22,768 | 23,700 |
Total Liabilities | $ 22,768 | $ 23,700 | |
[1]Consists of cash and marketable securities with original maturities of less than 90 days.[2]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.[3]Consists of unsecured revolving credit facilities, senior notes, term loans and convertible notes. These amounts do not include our finance lease obligations.[4]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. We valued our senior notes and convertible notes using a quoted market price, which is considered a Level 2 input as it is observable in the market; however, these instruments have a limited trading volume and as such this fair value estimate is not necessarily indicative of the value at which the instruments could be retired or transferred. |
Fair Value Measurements and D_4
Fair Value Measurements and Derivative Instruments - Schedule of Company's Financial Instruments Recorded at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | |
Level 1 | |||
Assets: | |||
Asset Derivatives | [1],[2] | $ 0 | $ 0 |
Total Assets | [2] | 0 | 0 |
Liabilities: | |||
Liability Derivatives | [1],[2] | 0 | 0 |
Total Liabilities | [2] | 0 | 0 |
Level 2 | |||
Assets: | |||
Asset Derivatives | [1],[3] | 173 | 144 |
Total Assets | [3] | 173 | 144 |
Liabilities: | |||
Liability Derivatives | [1],[3] | 58 | 66 |
Total Liabilities | [3] | 58 | 66 |
Level 3 | |||
Assets: | |||
Asset Derivatives | [1],[4] | 0 | 0 |
Total Assets | [4] | 0 | 0 |
Liabilities: | |||
Liability Derivatives | [1],[4] | 0 | 0 |
Total Liabilities | [4] | 0 | 0 |
Total | |||
Assets: | |||
Asset Derivatives | [1] | 173 | 144 |
Total Assets | 173 | 144 | |
Liabilities: | |||
Liability Derivatives | [1] | 58 | 66 |
Total Liabilities | $ 58 | $ 66 | |
[1] 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. 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, 2024 and December 31, 2023. 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. Inputs that are unobservable. No Level 3 inputs were used in fair value measurements of other financial instruments as of March 31, 2024 and December 31, 2023. |
Fair Value Measurements and D_5
Fair Value Measurements and Derivative Instruments - Schedule of Offsetting of Derivative Instruments (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Offsetting of Financial Assets under Master Netting Agreements [Abstract] | ||
Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet | $ 173 | $ 144 |
Gross Amount of Eligible Offsetting Recognized Derivative Liabilities | (48) | (28) |
Cash Collateral Received | 0 | 0 |
Net Amount of Derivative Assets | 125 | 116 |
Offsetting of Financial Liabilities under Master Netting Agreements [Abstract] | ||
Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet | (58) | (66) |
Gross Amount of Eligible Offsetting Recognized Derivative Assets | 48 | 28 |
Cash Collateral Pledged | 0 | 0 |
Net Amount of Derivative Liabilities | $ (10) | $ (38) |
Fair Value Measurements and D_6
Fair Value Measurements and Derivative Instruments - Derivative Instruments, Interest Rate Risk, Foreign Currency Exchange Rate Risk (Narrative) (Details) € in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2024 USD ($) | Mar. 31, 2024 EUR (€) | Mar. 31, 2023 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2023 EUR (€) | Dec. 31, 2023 USD ($) | |
Gains and losses from derivatives involved in hedging relationships | ||||||
Derivative instrument, credit risk exposure | $ 149 | |||||
Maximum length of time hedged in derivative contract | 3 years | 3 years | ||||
Percentage of debt bearing fixed interest | 86.30% | 83.20% | ||||
Aggregate cost of ships on order, not including partner brands on order | $ 8,100 | |||||
Amount deposited for cost of ships on order | $ 748 | |||||
Percentage of aggregate cost exposed to fluctuations in the euro exchange rate | 44.10% | 43.50% | ||||
Foreign currency gain (loss) | $ 30 | $ (11) | ||||
Foreign currency debt | ||||||
Gains and losses from derivatives involved in hedging relationships | ||||||
Carrying Value | 712 | $ 588 | ||||
TUI Cruises | Foreign currency debt | ||||||
Gains and losses from derivatives involved in hedging relationships | ||||||
Carrying Value | 712 | € 659 | $ 716 | € 648 | ||
Interest rate swaps | ||||||
Gains and losses from derivatives involved in hedging relationships | ||||||
Notional amount | 1,600 | 1,600 | ||||
Foreign currency forward contracts | Not Designated | ||||||
Gains and losses from derivatives involved in hedging relationships | ||||||
Notional amount | 1,100 | 1,200 | ||||
Gain (loss) fair value of foreign currency forward contracts recognized in earnings | (35) | $ 4 | ||||
Foreign exchange contracts | ||||||
Gains and losses from derivatives involved in hedging relationships | ||||||
Notional amount | $ 2,900 | $ 2,900 |
Fair Value Measurements and D_7
Fair Value Measurements and Derivative Instruments - Schedule of Interest Rate Derivatives (Details) - Interest rate swaps - Cash flow hedge $ in Millions | 3 Months Ended | |
Mar. 31, 2024 USD ($) | ||
Interest Rate Cash Flow Hedges [Abstract] | ||
Notional Amount | $ 1,560 | |
Celebrity Reflection term loan | ||
Interest Rate Cash Flow Hedges [Abstract] | ||
Notional Amount | $ 55 | |
All-in Fixed Rate as of March 31, 2024 | 2.88% | |
Celebrity Reflection term loan | Term SOFR plus | ||
Interest Rate Cash Flow Hedges [Abstract] | ||
Debt Floating Rate | 0.40% | |
Quantum of the Seas term loan | ||
Interest Rate Cash Flow Hedges [Abstract] | ||
Notional Amount | $ 184 | |
All-in Fixed Rate as of March 31, 2024 | 3.78% | |
Quantum of the Seas term loan | Term SOFR plus | ||
Interest Rate Cash Flow Hedges [Abstract] | ||
Debt Floating Rate | 1.30% | |
Anthem of the Seas term loan | ||
Interest Rate Cash Flow Hedges [Abstract] | ||
Notional Amount | $ 211 | |
All-in Fixed Rate as of March 31, 2024 | 3.90% | |
Anthem of the Seas term loan | Term SOFR plus | ||
Interest Rate Cash Flow Hedges [Abstract] | ||
Debt Floating Rate | 1.30% | |
Ovation of the Seas term loan | ||
Interest Rate Cash Flow Hedges [Abstract] | ||
Notional Amount | $ 311 | |
All-in Fixed Rate as of March 31, 2024 | 3.20% | |
Ovation of the Seas term loan | Term SOFR plus | ||
Interest Rate Cash Flow Hedges [Abstract] | ||
Debt Floating Rate | 1% | |
Harmony of the Seas term loan | ||
Interest Rate Cash Flow Hedges [Abstract] | ||
Notional Amount | $ 281 | [1] |
All-in Fixed Rate as of March 31, 2024 | 2.26% | [1] |
Harmony of the Seas term loan | EURIBOR plus | ||
Interest Rate Cash Flow Hedges [Abstract] | ||
Debt Floating Rate | 1.15% | [1] |
Odyssey of the Seas term loan | ||
Interest Rate Cash Flow Hedges [Abstract] | ||
Notional Amount | $ 345 | [2] |
All-in Fixed Rate as of March 31, 2024 | 3.28% | [2] |
Odyssey of the Seas term loan | Term SOFR plus | ||
Interest Rate Cash Flow Hedges [Abstract] | ||
Debt Floating Rate | 0.96% | [2] |
Odyssey of the Seas term loan | ||
Interest Rate Cash Flow Hedges [Abstract] | ||
Notional Amount | $ 173 | [2] |
All-in Fixed Rate as of March 31, 2024 | 2.91% | [2] |
Odyssey of the Seas term loan | Term SOFR plus | ||
Interest Rate Cash Flow Hedges [Abstract] | ||
Debt Floating Rate | 0.96% | [2] |
[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 March 31, 2024. Interest rate swap agreements hedging the term loan of Odyssey of the Seas include Term SOFR zero-floors, Term SOFR with no floors, and Overnight SOFR. |
Fair Value Measurements and D_8
Fair Value Measurements and Derivative Instruments - Schedule of Fuel Price Risk (Details) - Fuel Swap Agreements $ in Millions | Mar. 31, 2024 USD ($) T | Dec. 31, 2023 USD ($) T |
Derivative Instruments | ||
Estimated unrealized net gain (loss) associated with cash flow hedges pertaining to fuel swap agreements expected to be reclassified to earnings from accumulated other comprehensive income loss | $ | $ 39 | $ (21) |
2024 | ||
Derivative Instruments | ||
Fuel Swap Agreements (metric tons) | 789,801 | 1,054,501 |
Percentage of projected requirements | 62% | 61% |
2025 | ||
Derivative Instruments | ||
Fuel Swap Agreements (metric tons) | 773,700 | 685,400 |
Percentage of projected requirements | 45% | 39% |
2026 | ||
Derivative Instruments | ||
Fuel Swap Agreements (metric tons) | 252,700 | 44,200 |
Percentage of projected requirements | 15% | 3% |
Fair Value Measurements and D_9
Fair Value Measurements and Derivative Instruments - Schedule of Derivative Instruments in Statement of Financial Position, Fair Value (Details) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 | |
Derivative financial instruments | |||
Asset Derivatives | |||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Derivative financial instruments | Derivative financial instruments | |
Liability Derivatives | |||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Derivative financial instruments | Derivative financial instruments | |
Other assets | |||
Asset Derivatives | |||
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other assets, net of allowances of $43 at March 31, 2024 and December 31, 2023. | Other assets, net of allowances of $43 at March 31, 2024 and December 31, 2023. | |
Other long-term liabilities | |||
Liability Derivatives | |||
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Other long-term liabilities | Other long-term liabilities | |
Designated as Hedging Instrument | |||
Asset Derivatives | |||
Asset Derivatives | [1] | $ 173 | $ 144 |
Liability Derivatives | |||
Liability Derivatives | [1] | 58 | 66 |
Interest rate swaps | Designated as Hedging Instrument | Derivative financial instruments | |||
Asset Derivatives | |||
Asset Derivatives | 0 | 1 | |
Liability Derivatives | |||
Liability Derivatives | 0 | 0 | |
Interest rate swaps | Designated as Hedging Instrument | Other assets | |||
Asset Derivatives | |||
Asset Derivatives | [1] | 83 | 75 |
Interest rate swaps | Designated as Hedging Instrument | Other long-term liabilities | |||
Liability Derivatives | |||
Liability Derivatives | [1] | 0 | 0 |
Foreign currency forward contracts | Designated as Hedging Instrument | Derivative financial instruments | |||
Asset Derivatives | |||
Asset Derivatives | [1] | 10 | 20 |
Liability Derivatives | |||
Liability Derivatives | [1] | 44 | 9 |
Foreign currency forward contracts | Designated as Hedging Instrument | Other assets | |||
Asset Derivatives | |||
Asset Derivatives | [1] | 22 | 44 |
Foreign currency forward contracts | Designated as Hedging Instrument | Other long-term liabilities | |||
Liability Derivatives | |||
Liability Derivatives | [1] | 9 | 4 |
Fuel swaps | Designated as Hedging Instrument | Derivative financial instruments | |||
Asset Derivatives | |||
Asset Derivatives | [1] | 42 | 4 |
Liability Derivatives | |||
Liability Derivatives | [1] | 3 | 26 |
Fuel swaps | Designated as Hedging Instrument | Other assets | |||
Asset Derivatives | |||
Asset Derivatives | [1] | 16 | 0 |
Fuel swaps | Designated as Hedging Instrument | Other long-term liabilities | |||
Liability Derivatives | |||
Liability Derivatives | [1] | $ 2 | $ 27 |
[1] Subtopic 815-20 “ Hedging-General ” under ASC 815. |
Fair Value Measurements and _10
Fair Value Measurements and Derivative Instruments - Schedule of Balance Sheet Hedging Instruments (Details) - Foreign currency debt - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Derivative Instruments | ||
Carrying Value | $ 712 | $ 588 |
Current portion of long-term debt | ||
Derivative Instruments | ||
Carrying Value | 63 | 65 |
Long-term debt | ||
Derivative Instruments | ||
Carrying Value | $ 649 | $ 523 |
Fair Value Measurements and _11
Fair Value Measurements and Derivative Instruments - Schedule of Designated Cash Flow Hedges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Effect of derivative instruments involved in hedging on the consolidated financial statements | ||
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Loss on Derivatives | $ 56 | $ (31) |
Interest rate swaps | ||
Effect of derivative instruments involved in hedging on the consolidated financial statements | ||
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Loss on Derivatives | 21 | (11) |
Foreign currency forward contracts | ||
Effect of derivative instruments involved in hedging on the consolidated financial statements | ||
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Loss on Derivatives | (71) | 21 |
Fuel swaps | ||
Effect of derivative instruments involved in hedging on the consolidated financial statements | ||
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Loss on Derivatives | $ 106 | $ (41) |
Fair Value Measurements and _12
Fair Value Measurements and Derivative Instruments - Non-Derivative Net Investment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Foreign currency debt | ||
Net investment hedge | ||
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) | $ 16 | $ (9) |
Fair Value Measurements and _13
Fair Value Measurements and Derivative Instruments - Derivatives Not Designated as Hedging Instruments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Derivative Instruments | ||
Amount of (Loss) Gain Recognized in Income on Derivatives | $ (35) | $ 4 |
Foreign currency forward contracts | Other income (expense) | ||
Derivative Instruments | ||
Amount of (Loss) Gain Recognized in Income on Derivatives | $ (35) | $ 4 |
Fair Value Measurements and _14
Fair Value Measurements and Derivative Instruments - Credit Features (Details) | Mar. 31, 2024 derivative |
Fair Value Disclosures [Abstract] | |
Number of interest rate derivative hedges requiring collateral to be posted | 5 |