Royal Caribbean Cruises (RCL) 10-K risk factor changes: FY2017 vs FY2016

Any significant deterioration of [removed: global,] [added: international,] national or local economic conditions could result in a prolonged period of booking slowdowns, depressed cruise prices and reduced onboard revenues.

Our operating costs, including fuel, food, payroll and benefits, airfare, taxes, insurance and security [removed: costs] [added: costs,] are all subject to increases due to market forces and economic or [removed: political] [added: geo-political] conditions or other factors beyond our control.

In addition, any significant increase in fuel prices could materially [added: and] adversely affect our business as fuel prices not only impact our fuel costs, but also some of our other expenses, such as crew travel, freight and commodity prices.

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

[removed: The proposed] [added: Since the initial referendum in June 2016, the expected] withdrawal has resulted in increased volatility in the global financial markets and, in particular, in global currency exchange rates.

The [removed: proposed] [added: expected] withdrawal could potentially adversely affect tax, legal and regulatory regimes to which our business in the region is subject.

The [added: expected] withdrawal could also, among other potential outcomes, disrupt the free movement of goods, services and people between the United Kingdom and the European Union.

Further, [added: as the expected withdrawal approaches, continued] uncertainty around these issues could lead to adverse effects on the economy of the United [removed: Kingdom] [added: Kingdom, including the value of the British Pound,] and the other economies in which we operate, making it more difficult to source passengers from these regions.

As a global operator, our business may be [added: also] impacted by changes in U.S. policy [added: or priorities] in areas such as trade, immigration and/or environmental or labor regulations, among others.

Depending on the nature and scope of [removed: these] [added: any such] changes, they could impact our domestic and international business operations.

[removed: While still unclear, these] [added: Any such] changes, and any international response to them, could potentially introduce new barriers to passenger [added: or crew] travel and/or cross border [removed: transactions.][added: transactions, impact our guest experience and/or increase our operating costs.]

The ownership and/or operation of cruise ships, [removed: airplanes,] private destinations, port facilities and shore excursions involves the risk of accidents, illnesses, mechanical failures, environmental incidents and other incidents which may bring into question safety, health, security and vacation satisfaction which could negatively impact our reputation.

Our cruise ships and port facilities may also be adversely impacted by [removed: unusual] weather [removed: patterns] or natural disasters or disruptions, such as hurricanes.

We are often forced to alter itineraries and occasionally [removed: to] cancel a cruise or a series of cruises [added: or to redeploy our ships] due to these [removed: or other factors,] [added: types of events,] which could have an adverse effect on our sales and [removed: profitability.][added: profitability in the current and future periods.]

[removed: A] [added: As of December 31, 2017, a] total of [removed: 60] [added: 75] new ships with approximately [removed: 173,000] [added: 184,000] berths are on order for delivery through [removed: 2021] [added: 2022] in the cruise industry.

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

We rely on [removed: shipyards and] [added: shipyards,] their subcontractors [added: and our suppliers] to effectively construct our new ships and to repair, maintain and upgrade our existing ships on a timely basis and in a cost effective manner.

[removed: Building, repairing, maintaining and/or upgrading a ship is sophisticated work that involves significant risks, and shipyards and/or] [added: Shipyards,] their subcontractors [added: and/or our suppliers] may encounter financial, technical or design problems when doing these jobs.

Our principal competitors within the cruise vacation industry include Carnival Corporation & plc, which owns, among others, Aida Cruises, Carnival Cruise Line, Costa Cruises, Cunard Line, Holland America Line, P&O [added: Cruises, Princess] Cruises and [removed: Princess Cruises;] [added: Seabourn;] Disney Cruise Line; MSC Cruises; and Norwegian Cruise Line Holdings [removed: Ltd] [added: Ltd,] which owns Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises.

See “-Adverse worldwide economic, geopolitical or other conditions…” and “-Incidents or adverse publicity concerning our ships and/or passengers or the cruise vacation [removed: industry …”] [added: industry…”] for more information.

[added: Our] ability to [added: access additional funding as and when needed, our ability to] timely refinance and/or replace our outstanding debt securities and credit facilities on acceptable terms and our cost of funding will depend upon numerous factors including, but not limited to, the vibrancy of the financial markets, our financial performance, the performance of our industry in general and the size, scope and timing of our financial needs.

Our liquidity could be adversely impacted if we are unable to satisfy the covenants required by our credit [removed: facilities or if we are required to post a significant amount of collateral under our interest rate hedging contracts.][added: facilities.]

More specifically, we may be required to prepay our [removed: ship] [added: bank] financing facilities if any person acquires ownership of more than 50% of our common stock or, subject to certain exceptions, during any 24-month period, a majority of the Board is no longer comprised of individuals who were members of the Board on the first day of such period.

Our business also requires us to make capital allocation decisions, such as ordering new ships and/or upgrading our [removed: ships,] [added: existing fleet,] based on expected market preferences and projected demand.

[added: Our reliance on third-party sellers is particularly pronounced in certain markets,] such as China, where we have a large number of travel agent charter and group sales and less retail agency and direct booking.

Disruptions in our shoreside [added: or shipboard] operations or our information systems may adversely affect our results of operations.

Our principal executive office and principal shoreside operations are located in [removed: Florida] [added: Florida,] and we have shoreside offices throughout the world.

We do not generally carry business interruption insurance for our shoreside [added: or shipboard] operations or our information systems.

Our success depends, in large part, on the skills and contributions of key executives and other employees, and on our ability to [removed: recruit] [added: recruit, develop] and retain high quality [removed: personnel in key markets.][added: personnel.]

[removed: We] [added: As demand for qualified personnel in the industry grows, we] must continue to [removed: sufficiently] [added: effectively] recruit, [removed: retain, train and] [added: train,] motivate [added: and retain] our [removed: employees] [added: employees, both shoreside and on our ships, in order] to [added: effectively compete in our industry,] maintain our current business and support our projected global [removed: growth both shoreside and on our ships.][added: growth.]

[removed: Furthermore, as] [added: As] of December 31, [removed: 2016,] [added: 2017,] 85% of our shipboard employees were covered by collective bargaining agreements.

Partnerships, joint [removed: ventures,] [added: ventures] and other business structures involving our co-investment with third [removed: parties,] [added: parties] generally include some form of shared control over the operations of the business and create additional risks, including the possibility that other investors in such ventures could become bankrupt or otherwise lack the financial resources to [removed: meet their obligations, or could have or develop business interests, policies or objectives that are inconsistent with ours.]

With the sale of 51% of our interest in Pullmantur [added: Holdings] in July 2016, we continue to expand the breadth of our co-investment activities, which also include TUI Cruises, SkySea Cruises, Grand Bahama Shipyard and minority ownership investments in various port development and other projects.

Events impacting our supply chain could be caused by factors beyond the control of our suppliers or us, including inclement weather, natural disasters, increased demand, problems in production or distribution and/or disruptions in [removed: third party] [added: third-party] logistics or transportation systems.

These technologies and systems [added: require significant investment and] must be [added: proven,] refined, updated, and/or replaced with more advanced systems in order to continue to meet our customers’ demands and expectations.

We may be exposed to [added: the threat of cyber attacks and/or data breaches, including the] risks and costs associated with [removed: cyber security, including] protecting [removed: the] [added: our key operating systems and maintaining] integrity and security of our [removed: guests’, employees’ and] business [removed: partners’] [added: information, as well as] personal [removed: information.][added: data of our guests, employees and business partners.]

In the course of doing business, we collect large volumes of [removed: internal and] [added: internal,] customer [added: and other third-party] data, including personally identifiable information [added: and individual credit data,] for various business purposes.

We are subject to federal, state and international laws [added: (including the European Union General Data Protection Regulation which will take effect in May 2018), as well as industry standards,] relating to the collection, use, retention, security and transfer of personally identifiable [removed: information.][added: information and individual credit data.]

Complying with emerging and changing international requirements [added: has caused, and] may cause us to incur substantial costs or require us to change our business practices.

[removed: In addition, even] [added: Even] if we are fully compliant with legal [added: and/or industry] standards and [added: any relevant] contractual requirements, we still may not be able to prevent security breaches involving sensitive [removed: data.][added: data and/or critical systems.]

These events could also result in additional security measures taken by local authorities which may potentially impact access to ports and/or destinations.

Operating internationally exposes us to a number of risks, including increased exposure to a wider range of regional and local economic conditions, volatile local political conditions, potential

In March 2017, China's National Tourism Administration issued a directive to travel agents to halt sales of holiday packages to South Korea.

This travel restriction has had a direct impact on our related itineraries impacting the overall performance of our China business.

It is uncertain what the ultimate scope and duration of this restriction will be, but to the extent that this or similar sanctions affecting regional travel and/or tourism continues or are put in place, it may impact local demand, available cruise itineraries and the overall financial performance of the China market.

In March 2017, the United Kingdom notified the European Council of its intent to withdraw from the European Union.

For example, the 2017 hurricane season was particularly impactful to our operations in the Caribbean.

This risk exists in emerging cruise markets, such as China, where capacity has grown rapidly over the past few years and in mature markets where excess capacity is typically redeployed.

Building, repairing, maintaining and/or upgrading a ship is sophisticated work that involves significant risks.

In addition, the prices of labor and/or various commodities that are used in the construction of ships can be subject to volatile price changes, including the impact of fluctuations in foreign exchange rates.

Investments in older tonnage, in particular, run the risk of not meeting expected returns and diluting related asset values.

meet their obligations, or could have or develop business interests, policies or objectives that are inconsistent with ours.

Cyber attacks can vary in scope and intent from economically driven attacks to malicious attacks targeting our key operating systems with the intent to disrupt, disable or otherwise cripple our maritime and /or shoreside operations.

This can include any combination of phishing attacks, malware and/or viruses targeted at our key systems.

The breadth and scope of this threat has grown over time, and the techniques and sophistication used to conduct cyber attacks, as well as the sources and targets of the attacks, change frequently.

While we invest time, effort and capital resources to secure our key systems and networks, our security measures cannot provide absolute assurance that we will be successful in preventing or responding to all such attacks.

A successful cyber attack may target us directly, or may be the result of a third party vendor's inadequate care.

In either scenario, the Company may suffer damage to its key systems and/or data that could interrupt our operations, adversely impact our reputation and brand and expose us to increased risks of governmental investigation, litigation

and other liability, any of which could adversely affect our business.

Furthermore, responding to such an attack and mitigating the risk of future attacks could result in additional operating and capital costs in systems technology, personnel, monitoring and other investments.

In addition to malicious cyber attacks, we are also subject to various risks associated with the collection, handling, storage and transmission of sensitive information.

We are members of three Protection and Indemnity ("P&I") clubs, which are part of a worldwide group of 13 P&I clubs, known as the International Group of P&I Clubs (the “IG”).

P&I coverage provided by the clubs is on a mutual basis and we are subject to additional premium calls in the event of a catastrophic loss incurred by any member of the 13 P&I clubs, whereby the reinsurance limits purchased by the IG are exhausted.

We are also subject to additional premium calls based on investment and underwriting shortfalls experienced by our own individual insurers.

For example, the series of terrorism incidents throughout Europe in early 2016 negatively impacted demand for European cruises in 2016, particularly as it relates to demand for these cruises from North American guests.

Also, while interest rates have been near historic lows for several years, prevailing rates started to increase at the end of 2015 and are expected to continue to rise in 2017, which, given our level of variable rate indebtedness, would adversely impact our operating results.

On June 23, 2016, voters in the United Kingdom approved an advisory referendum to withdraw from the European Union.

This risk may be amplified in emerging cruise markets, such as China, where we expect continuing increases in capacity over a relatively short time horizon.

Our ability to access additional funding as and when needed, our

In addition, our ability to make borrowings under our available credit facilities is subject to the absence of material adverse changes in our business.

Our reliance on third-party sellers is particularly pronounced in certain markets,

We are subject to various risks associated with the collection, handling, storage and transmission of sensitive information, including risks related to compliance with applicable laws and other contractual obligations, as well as the risk that our systems collecting such information could be compromised.

Additionally, the techniques and sophistication used to conduct cyber-attacks and breaches of information technology systems, as well as the sources and targets of these attacks, change frequently and are often not recognized until such attacks are launched or have been in place for a period of time.

Our security measures cannot provide assurance that we will be successful in preventing or identifying such breaches.

Our protection and indemnity (“P&I”) liability insurance is placed on a mutual basis and we are subject to additional premium calls in amounts based on claim records of all members of the P&I Club.

We are also subject to additional premium assessments including, but not limited to, investment or underwriting shortfalls experienced by the P&I Club.

All statements other than statements of historical fact, including statements regarding guidance (including our expectations for the first quarter and full year of [removed: 2017,] [added: 2018 and] our earnings and yield estimates for [removed: 2017] [added: 2018] set forth under the heading "Outlook" [removed: below and expectations regarding the timing and results of our Double-Double Program),] [added: below),] business and industry prospects or future results of operations or financial position, made in this Annual Report on Form 10-K are forward-looking.

| • | a discussion of our results of operations for the year ended December 31, [removed: 2016] [added: 2017] compared to the same period in [removed: 2015] [added: 2016] and the year ended December 31, [removed: 2015] [added: 2016] compared to the same period in [removed: 2014;] [added: 2015;] |

| • | a discussion of our business outlook, including our expectations for selected financial items for the first quarter and full year of [removed: 2017;] [added: 2018;] and |

If we had reduced our estimated average ship useful life by one year, depreciation expense for [removed: 2016] [added: 2017] would have increased by approximately [removed: $62.7] [added: $51.5] million.

If our ships were estimated to have no residual value, depreciation expense for [removed: 2016] [added: 2017] would have increased by approximately [removed: $221.9] [added: $215.5] million.

As of December 31, [removed: 2016,] [added: 2017,] the carrying amount of indefinite-life intangible assets was not material.

We review our [removed: ships, aircraft] [added: ships] and other long-lived assets for impairment whenever events or changes in circumstances indicate, based on estimated undiscounted future cash flows, that the carrying amount of these assets may not be fully recoverable.

The lowest level for which we maintain identifiable cash flows that are independent of the cash flows of other assets and liabilities is at the ship level for our ships [removed: and] [added: and, prior to the sale of the aircraft,] at the aggregated asset group level for our aircraft.

During the fourth quarter of [removed: 2016,] [added: 2017,] we performed a qualitative assessment of the Royal Caribbean International reporting unit.

No indicators of impairment exist primarily because the reporting unit's fair value has consistently exceeded its carrying value by a significant [removed: margin, its financial performance has been solid in the face of mixed economic environments] [added: margin] and forecasts of operating results generated by the reporting unit appear sufficient to support its carrying value.

As of December 31, [removed: 2016,] [added: 2017,] the carrying amount of goodwill attributable to our Royal Caribbean reporting unit was [removed: $286.8] [added: $286.9] million.

[removed: While it is typically very difficult] to determine [removed: the timing and ultimate outcome of such actions, we use our best judgment to determine] if it is probable that we will incur an expense related to the settlement or final adjudication of such matters and whether a reasonable estimation of such probable loss, if any, can be made.

| • | Onboard and other revenues, which consist primarily of revenues from the sale of goods and/or services onboard our ships not included in passenger ticket prices, cancellation fees, sales of vacation protection insurance and pre- and post-cruise tours. [removed: Additionally, revenue related to Pullmantur's travel agency network, land-based tours and air charter business to third parties are included in] Onboard and other revenues [removed: through March 31, 2014, the date of the sale of Pullmantur's non-core businesses. Onboard and other revenues] also includes revenues we receive from independent third-party concessionaires that pay us a percentage of their revenues in exchange for the right to provide selected goods and/or services onboard our ships, as well as revenues received for our bareboat [removed: charters to and] [added: charter,] procurement and management related services we perform on behalf of our unconsolidated affiliates. |

| • | Other operating expenses, which consist primarily of operating costs such as repairs and maintenance, port costs that do not vary with passenger head counts, vessel related insurance, entertainment and gains and/or losses related to the sale of our ships, if any. [removed: Additionally, costs associated with Pullmantur's travel agency network, land-based tours and air charter business to third parties are included in Other operating expenses through March 31, 2014, the date of the sale of Pullmantur's non-core businesses.] |

[removed: As discussed in more detail herein, certain of these metrics are] [added: These] non-GAAP financial [removed: measures, which] [added: measures are provided along with the related GAAP financial measures as] we believe [added: they] provide useful information to investors as a supplement to our consolidated financial statements, which are prepared and presented in accordance with GAAP.

For the periods presented, these items included the impairment of the Pullmantur related assets, the net loss related to the elimination of the Pullmantur reporting lag, the net gain related to the [added: 51%] sale of the Pullmantur and CDF [removed: brands and related costs,] [added: Croisières de France ("CDF") brands,] restructuring charges and other initiative costs related to our Pullmantur right-sizing strategy and other restructuring [removed: initiatives, the estimated impact of the divested Pullmantur non-core businesses for periods prior to the sales transaction, the loss recognized on the sale of Celebrity Century, the impact of the change in our voyage proration methodology and the reversal of a deferred tax asset valuation allowance due to Spanish tax reform.][added: initiatives.]

Available Passenger Cruise Days ("APCD") is our measurement of capacity and represents double occupancy per cabin multiplied by the number of cruise days for the [removed: period.][added: period, which excludes canceled cruise days and drydock days.]

Double-Double Program refers to the multi-year Adjusted EPS and Return on Invested Capital ("ROIC") goals we publicly announced in 2014 and [removed: are seeking] [added: sought] to achieve by the end of 2017.

Under the Double-Double Program, we [removed: are targeting] [added: targeted] Adjusted EPS of $6.78 by the end of 2017, which [removed: is] [added: was] double our 2014 Adjusted EPS of $3.39.

We [removed: are] also [removed: targeting] [added: targeted] ROIC of 10% by the end of 2017 as compared to ROIC of 5.9% in 2014.

[removed: Accordingly,] [added: Due to this uncertainty,] we do not believe that reconciling information for such projected figures would be meaningful.

[added: For the periods presented,] Net Cruise Costs [removed: also] excludes the net gain related to the [added: 51%] sale of the Pullmantur and CDF [removed: brands and related costs] [added: brands, restructuring charges] and [added: other] initiative costs related to our Pullmantur right-sizing strategy and other restructuring [removed: initiatives, as well as the loss recognized on the sale of Celebrity Century.][added: initiatives.]

We utilize Net Revenues and Net Yields to manage our business on a day-to-day basis as we believe that [removed: it is] [added: they are] the most relevant [removed: measure] [added: measures] of our pricing performance because [removed: it reflects] [added: they reflect] the cruise revenues earned by us net of our most significant variable costs, which are commissions, transportation and other expenses and onboard and other expenses.

[added: For the periods presented,] Net Yields [removed: also] excludes initiative costs related to the sale of the Pullmantur and CDF brands.

We believe these non-GAAP measures provide expanded insight to measure revenue and cost performance in addition to the [removed: standard United States] GAAP based financial measures.

[removed: As part] [added: The year 2017 marked the final year] of [removed: this effort, we set] [added: our Double-Double program ("Double-Double"), which was comprised of] two multi-year financial targets, including doubling our 2014 Adjusted [removed: Earnings Per Share (“Adjusted EPS”)] [added: EPS to $6.78] and achieving double-digit [removed: Return on Invested Capital (“ROIC”)] [added: ROIC] by the end of 2017.

Our long-term commitment to grow revenue yields, manage costs and maintain steady capacity growth [removed: continues to guide] [added: guided] us towards [added: the achievement of the] Double-Double.

[removed: While our Double-Double goals are demanding, they are consistent with and reflect the trajectory of our business over] [added: During] the [removed: last several years in which] [added: Double-Double period,] we have experienced annual Adjusted EPS growth of approximately [removed: 39%, 42% and] [added: 24%,] 26% and [added: 42% and] annual ROIC growth of approximately [removed: 16%, 29% and] [added: 18%,] 17% [added: and 29%,] in each of [removed: 2014, 2015] [added: 2017, 2016] and [removed: 2016,] [added: 2015,] respectively.

Our [removed: 2016] [added: 2017] net income was [removed: $1.3] [added: $1.6] billion, or [removed: $5.93] [added: $7.53] per diluted share, compared to [removed: $665.8 million,] [added: $1.3 billion,] or [removed: $3.02] [added: $5.93] per diluted share, in [removed: 2015.][added: 2016.]

Adjusted Net Income for [removed: 2016] [added: 2017] was [removed: $1.3] [added: $1.6] billion, or [removed: $6.08] [added: $7.53] per diluted share, compared to [removed: $1.1] [added: $1.3] billion, or [removed: $4.83] [added: $6.08] per diluted share, in [removed: 2015.][added: 2016.]

Adjusted EPS for [removed: 2016] [added: 2017] represents the [removed: third] [added: fourth] straight year we achieved a record amount, growing [removed: over 25% on 2015.][added: approximately 24% compared to 2016.]

Additionally, Net Yields on a Constant-Currency basis increased for the [removed: seventh] [added: eighth] consecutive year.

For the year ended December 31, [removed: 2016,] [added: 2017,] our Net Yields on a Constant-Currency basis increased by [removed: 3.9%,] [added: 6.4%,] primarily driven by increases in both ticket and onboard yields and by a benefit from the deconsolidation of the Pullmantur [removed: brand from the rest of the company in August.][added: brand.]

Growth came from a variety of areas, [removed: most notably from] [added: including] beverage package [removed: sales] [added: sales, specialty restaurants, shore excursions,] and our high speed onboard internet products.

In [removed: 2016,] [added: 2017,] our Net Cruise Costs [removed: excluding fuel] [added: Excluding Fuel] increased by [removed: 0.9%] [added: 2.0%] on a Constant Currency basis compared to [removed: 2015.][added: 2016.]

In [removed: 2016,] [added: 2017,] we bought back [removed: $300] [added: $225] million shares of common stock [removed: completing] [added: under] our $500 million share repurchase program that was announced in [removed: October 2015.][added: April 2017.]

In addition to investing in new [removed: hardware,] [added: hardware and our existing hardware through our fleet modernization programs, Royal Amplified and Celebrity Revolution,] we [added: continue to] opportunistically evaluate selling or transferring older ships to further optimize our fleet.

Since 2014, we have sold [removed: or are about to sell] four ships [removed: that are expected to improve our ROIC] - the sale of Celebrity Century to a subsidiary of Skysea Holdings, the sale of Ocean Dream to an unrelated [removed: third party,] [added: third-party,] the sale of Splendour of the Seas to TUI Cruises, and [removed: most recently, the pending] sale of Legend of the Seas to [removed: Thomson] [added: an affiliate of TUI AG, our joint venture partner in TUI] Cruises.

In addition to the items discussed above under "Executive Overview," significant items for [removed: 2016] [added: 2017] include:

| • | Both our net income and Adjusted Net Income for the year ended December 31, [removed: 2016] [added: 2017] was [removed: $1.3] [added: $1.6] billion, or [removed: $5.93 and $6.08] [added: $7.53] per share on a diluted basis, respectively, as compared to [added: both] net income and Adjusted Net Income of [removed: $665.8 million and $1.1] [added: $1.3] billion, or [removed: $3.02] [added: $5.93] and [removed: $4.83] [added: $6.08] per share on a diluted basis, respectively, for the year ended December 31, [removed: 2015.] [added: 2016.] |

In conjunction with performing the two-step goodwill impairment test for the Pullmantur reporting unit, we identified that the estimated fair value of certain long-lived assets, consisting of two ships and three aircraft, was less than their carrying values.

As a result of this determination, we evaluated these assets pursuant to our long-lived asset impairment test, resulting in an impairment charge of $113.2 million to write down these assets to their estimated fair values during the quarter ended September 30, 2015.

While it is typically very difficult to determine the timing and ultimate outcome of such actions, we use our best judgment

As discussed in more detail herein, certain of these metrics are non-GAAP financial measures.

We have not provided a quantitative reconciliation of (i) projected Total revenues to projected Net Revenues, (ii) projected Gross Yields to projected Net Yields, (iii) projected Gross Cruise Costs to projected Net Cruise Costs and projected Net Cruise Costs Excluding Fuel and (iv) projected Net Income and Earnings per Share to projected Adjusted Net Income and Adjusted Earnings per Share because preparation of meaningful GAAP projections of Total revenues, Gross Yields, Gross Cruise Costs, Net Income and Earnings per Share would require unreasonable effort.

Due to significant uncertainty, we are unable to predict, without unreasonable effort, the future movement of foreign exchange rates, fuel prices and interest rates inclusive of our related hedging programs.

In addition, we are unable to determine the future impact of restructuring expenses or other non-core business related gains and losses which may result from strategic initiatives.

These items are uncertain and could be material to our results of operations in accordance with GAAP.

The Double-Double program was successful in galvanizing our large workforce and drove a real step change in performance.

We finished 2017 with Adjusted EPS of $7.53 and ROIC in excess of 10%, exceeding our Double-Double targets.

Strong demand for Europe and North America products combined with strong onboard trends are responsible for the growth.

Partly offsetting these successes was the impact of the 2017 hurricane season and China's South Korea travel restrictions.

Net onboard revenue yield in 2017 grew by 6.8% year-over-year on a Constant Currency basis.

We also announced a 25% increase to our common stock dividend, our fifth consecutive year with a dividend increase.

In addition, during 2017, both Moody’s and S&P upgraded our senior unsecured debt rating to investment grade.

In 2018, all three of our Global Brands will each welcome a ship in the same year - a first in our history.

Royal Caribbean International will welcome newbuild Symphony of the Seas in April; Azamara Club Cruises will welcome Azamara Pursuit in August; and Celebrity Cruises will welcome its newbuild Celebrity Edge in November.

In 2018, we expect our capacity in the Caribbean will increase as Symphony of the Seas and Celebrity Edge join the Caribbean in the winter, Celebrity Infinity returns to the Caribbean and we upsize Jewel of the Seas to Freedom of the Seas and Enchantment of the Seas to Mariner of the Seas.

As a result of Mariner of the Seas repositioning from Asia/Pacific to North America to make way for Spectrum of the Seas’ arrival in early 2019, we expect our Asia/Pacific capacity will decrease year over year and will account for 17% of our total capacity in 2018.

We expect Europe will represent 17% of our capacity in 2018 with growth driven by the Symphony of the Seas' inaugural Western Mediterranean season replacing Freedom of the Seas and the addition of Azamara Pursuit.

In November 2017, we announced the order of Celebrity Flora, the brand’s first ship designed specifically for the Galapagos Islands, which we expect will sail beginning in 2019.

After announcing our achievement of Double-Double, we thanked employees for their contribution with individual salary bonuses of five percent.

Employees received equity-based awards equal to five percent of their 2017 salaries in an $80 million program called the "Thank You, Thank You Bonus." The awards, which vest over three years, went to all employees – shipboard and shoreside, full-time and part-time, domestic and overseas.

Corporate officers, however, were excluded.

In addition to the five percent equity-based awards, we will contribute to the Crew Welfare Fund for upgrades to crew living and recreational areas.

| • | The estimated negative impact resulting from the third quarter 2017 hurricane-related disruptions was approximately $0.26 per share on a diluted basis to our net income and Adjusted Net Income for the year ended December 31, 2017. |

| • | During the second quarter of 2017, we entered into agreements with Meyer Turku to build two Icon-class ships. In October 2017, we entered into credit agreements for the unsecured financing of these ships for up to 80% of each ship's contract price. Refer to Note 15. Commitments and Contingencies to our consolidated financial statements for further information. |

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

| • | During the fourth quarter of 2017, we entered into a credit agreement for the unsecured financing of a ship we have on order designed for the Galapagos Islands for our Celebrity Cruises brand. Refer to Note 7. Long-Term Debt to our consolidated financial statements for further information. |

___________________________________________________________________

___________________________________________________________________

___________________________________________________________________

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

| Net Yields | 2.75% to 4.75% | | 1.5% to 3.5% |

| Net Yields | Approx. 5.5% | | 3.0% to 3.5% |

| Capacity Decrease | (3.9%) | | |

| Ranking | | Q1 | | Q2 | | Q3 | | Q4 | | FY 2018 |

| 5 | | CNH | | EUR | | AUD | | CNH | | CNH |

Total revenues for 2017 increased $281.4 million, or 3.3%, to $8.8 billion from $8.5 billion in 2016.

Passenger ticket revenues increased by $163.8 million, or 2.7% from 2016, despite the impact of canceled sailings resulting from hurricane-related disruptions during the third quarter of 2017.

| | |

| --- | --- |

The estimated impact of the divested Pullmantur non-core businesses was arrived at by adjusting the net income (loss) of these businesses for the ownership percentage we retained, as well as, for intercompany transactions that are no longer eliminated in our consolidated statements of comprehensive income (loss) subsequent to the sales transaction.

For the full year 2014, the impact of the voyage proration change represents net income that would have been recognized in 2013 had we recognized revenues and cruise operating expenses on a pro-rata basis for all voyages.

We have not provided a quantitative reconciliation of projected Gross Cruise Costs to projected Net Cruise Costs and projected Net Cruise Costs Excluding Fuel due to the significant uncertainty in projecting the costs deducted to arrive at these measures.

For the periods prior to the sale of the Pullmantur non-core businesses, Net Cruise Costs excludes the estimated impact of these divested businesses.

For the periods prior to the sale of the Pullmantur non-core businesses, we have presented Net Revenues excluding the estimated impact of these divested businesses in the financial tables under Results of Operations.

We have not provided a quantitative reconciliation of projected Gross Yields to projected Net Yields due to the significant uncertainty in projecting the costs deducted to arrive at this measure.

Accordingly, we do not believe that reconciling information for such projected figures would be meaningful.

For the periods prior to the sale of the Pullmantur non-core businesses, Net Yields excludes the estimated impact of these divested businesses.

The year 2016 marked the penultimate year of our Double-Double program ("Double-Double"), which we implemented in 2014 to challenge our employees towards a true step change in performance.

By communicating these goals to our employees, we have been able to better align and influence internal decision making and energize and focus our personnel towards reaching these targets.

The success of North American based sailings such as the Caribbean, Alaska, and Bermuda were largely responsible for our organic revenue growth.

Higher yields were also generated by the introductions of two new ships in 2016 - Ovation of the Seas in April and Harmony of the Seas in May.

Partly offsetting these successes was softer than anticipated demand from the China market and the continued geopolitical turmoil in Europe, resulting in a shift of sourcing from North American guests to European guests, particularly for Mediterranean sailings.

Net onboard revenue yield in 2016 grew by 7.8% year-over-year on a Constant Currency basis, despite the increasing value of the dollar relative to our basket of foreign currencies which created an unfavorable impact on our earnings and limited the spending power of our foreign guests.

We expect to continue this upward onboard yield growth trend in 2017 and expect them to grow by slightly more than the average net revenue yield growth for the year.

Going into 2017, we expect Net Cruise Costs excluding fuel on a Constant Currency basis to be flat as we remain intensely focused on cost controls, and further realize economies of scale.

Additionally, in September 2016, we announced a 28% increase to our common stock dividend.

For the year 2017, our capacity in the Caribbean will increase year-over-year as Harmony of the Seas and Celebrity Equinox will remain in the Caribbean year-round rather than spending the summer in Europe.

While Harmony of the Seas will be replaced by Freedom of the Seas in Europe, we will not be replacing Celebrity Equinox in the Eastern Mediterranean.

The combination of these deployment changes result in a reduction in capacity in Europe.

Our capacity in the Asia Pacific region is expected to grow 5% year-over-year primarily due to the first full year of deployment for Ovation of the Seas.

Industry-wide capacity in the region is expected to grow 17%, slowing from the 34% growth increase the region experienced in 2016.

In May 2016, we announced the order of our fifth Oasis-class ship for delivery in the spring of 2021, and two additional Edge-class ships scheduled for delivery in the fall of each of 2021 and 2022.

| • | The effect of changes in foreign currency exchange rates related to our passenger ticket and onboard and other revenue transactions and cruise operating expenses denominated in currencies other than the United States dollar resulted in a decrease to total revenues of $187.9 million for the year ended December 31, 2016 compared to the same period in 2015 and a decrease to cruise operating expenses of $40.9 million for the year ended December 31, 2016 compared to the same period in 2015. |

| • | Effective January 1, 2016, we eliminated Pullmantur Holdings', the parent company of the Pullmantur and CDF brands, two-month reporting lag to be consistent with the fiscal calendar of the Company. As a result of this change, the results of Pullmantur Holdings for November and December 2015 are included in our statement of comprehensive income (loss) for the year ended December 31, 2016. The effect of this change was a decrease to net income of $21.7 million and this amount is reported within Other income in our consolidated statements of comprehensive income (loss) for the year ended December 31, 2016. Refer to Note 1. General to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information on the elimination of the Pullmantur reporting lag. |

| • | In July 2016, we sold 51% of our interest in Pullmantur Holdings. We retain a 49% interest in Pullmantur Holdings as well as full ownership of the four vessels currently operated by the Pullmantur brand under bareboat charter arrangements. As a result of the sale of a majority interest in Pullmantur Holdings, we recognized an immaterial gain and no longer consolidate these businesses in our consolidated financial statements effective August 2016. Refer to Note 1. General to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information. |

| • | In April 2016, we took delivery of Ovation of the Seas. To finance the purchase, we borrowed $841.8 million under a previously committed 12-year unsecured term loan, which is 95% guaranteed by Hermes. Refer to Note 7. Long-Term Debt to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information. |

| • | In May 2016, we took delivery of Harmony of the Seas. To finance the purchase, we borrowed €700.7 million, or $739.2 million based on the exchange rate at December 31, 2016, and $226.1 million under previously committed unsecured term loans. Both of the facilities are 100% guaranteed by COFACE. Refer to Note 7. Long-Term Debt to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information. |

| • | In June 2016, we entered into an agreement to sell Legend of the Seas to Thomson Cruises. The sale is scheduled to be completed in March 2017 in order to retain the future revenues to be generated for sailings through that date. We expect to recognize a gain on the sale, which we do not expect will have a material effect to our annual consolidated financial statements. |

| • | During 2016, we entered into agreements with STX France to build a fifth Oasis-class ship for Royal Caribbean International and a third and fourth "Project Edge" ship for Celebrity Cruises. Additionally in 2016, we signed a memorandum of understanding with Meyer Turku to build two ships of a new generation of ships for Royal Caribbean International, known as "Project Icon." Refer to Note 15. Commitments and Contingencies to our consolidated financial statements under Item 8. Financial Statements and Supplementary Data for further information. |

| Estimated impact of divested businesses prior to sales transaction | — | | | | — | | | | 11,013 | | |

| Loss on sale of ship included within other operating expenses | — | | | | — | | | | 17,401 | | |

| Impact of voyage proration change (2) | — | | | | — | | | | (28,877 | | ) |

| Reversal of a deferred tax valuation allowance | — | | | | — | | | | (33,483 | | ) |

(2) Represents the net income amount that would have been recognized in 2013 had we recognized revenues and cruise operating expenses on a pro-rata basis for all voyages.

| Restructuring and related impairment charges | 0.1 | % | | — | % | | 0.1 | % |

Additionally, effective August 2016, we no longer include Pullmantur Holdings in these amounts.

| Net revenues related to divested businesses prior to sales transaction | — | | | | — | | | | | | | | 35,656 | | |

We [removed: manage] [added: 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.

Although certain of our derivative financial instruments do not qualify or are not accounted for under hedge accounting, [removed: we do] [added: our objective is] not [added: to] hold or issue derivative financial instruments for trading or other speculative purposes.

At December 31, [removed: 2016,] [added: 2017,] approximately [removed: 40.5%] [added: 57.4%] of our long-term debt was effectively fixed as compared to [removed: 31.2%] [added: 40.5%] as of December 31, [removed: 2015.][added: 2016.]

At December 31, [removed: 2016] [added: 2017] and December 31, [removed: 2015,] [added: 2016,] we maintained interest rate swap agreements on the following fixed-rate debt instruments:

| Debt Instrument | Swap Notional as of December 31, [removed: 2016] [added: 2017] (In thousands) | | | Maturity | Debt Fixed Rate | Swap Floating Rate: LIBOR plus | All-in Swap Floating Rate as of December 31, [removed: 2016] [added: 2017] |

| Oasis of the Seas term loan | $ | [removed: 175,000] [added: 140,000] | | October 2021 | 5.41% | 3.87% | [removed: 5.13%] [added: 5.44%] |

| Unsecured senior notes | 650,000 | | | November 2022 | 5.25% | 3.63% | [removed: 4.54%] [added: 5.05%] |

The estimated fair value of our long-term fixed-rate debt at December 31, [removed: 2016] [added: 2017] was [removed: $1.6] [added: $2.4] billion, using quoted market prices, where available, or using the present value of expected future cash flows which incorporates risk profile.

The fair value of our fixed to floating interest rate swap agreements was estimated to be a liability of [removed: $16.2] [added: $19.8] million as of December 31, [removed: 2016,] [added: 2017,] based on the present value of expected future cash flows.

A hypothetical one percentage point decrease in interest rates at December 31, [removed: 2016] [added: 2017] would increase the fair value of our hedged and unhedged long-term fixed-rate debt by approximately [removed: $83.4] [added: $127.4] million and would increase the fair value of our fixed to floating interest rate swap agreements by approximately [removed: $39.8] [added: $31.8] million.

A hypothetical one percentage point increase in interest rates would increase our forecasted [removed: 2017] [added: 2018] interest expense by approximately [removed: $42.7] [added: $30.1] million, assuming no change in foreign currency exchange rates.

At December 31, [removed: 2016] [added: 2017] and December 31, [removed: 2015,] [added: 2016,] we maintained interest rate swap agreements on the following floating-rate debt instruments:

| Debt Instrument | Swap Notional as of December 31, [removed: 2016] [added: 2017] (In thousands) | | [added: |] Maturity | Debt Floating Rate | | All-in Swap Fixed Rate |

| Celebrity Reflection term loan | [removed: 436,333] [added: $] | [added: 381,792] | [added: |] October 2024 | LIBOR plus | 0.40% | 2.85% |

| Quantum of the Seas term loan | [removed: 612,500] [added: 551,250] | | [added: |] October 2026 | LIBOR plus | 1.30% | 3.74% |

| Anthem of the Seas term loan | [removed: 634,375] [added: 573,958] | | [added: |] April 2027 | LIBOR plus | 1.30% | 3.86% |

| Ovation of the Seas term loan | [removed: 795,417] [added: 726,250] | | [added: |] April 2028 | LIBOR plus | 1.00% | 3.16% |

| Harmony of the Seas term loan (1) | [removed: 701,056] [added: 728,373] | | [added: |] May 2028 | EURIBOR plus | 1.15% | 2.26% |

[added: |] (1) [added: |] 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. [added: Amount presented is based on the exchange rate as of December 31, 2017. |]

The fair value of our floating to fixed interest rate swap agreements was estimated to be a liability of [removed: $42.8] [added: $24.5] million as of December 31, [removed: 2016] [added: 2017] based on the present value of expected future cash flows.

The estimated fair value, as of December 31, [removed: 2016,] [added: 2017,] of our Euro-denominated forward contracts associated with our ship construction contracts was [removed: a liability] [added: an asset] of [removed: $73.7] [added: $235.9] million, based on the present value of expected future cash flows.

As of December 31, [removed: 2016,] [added: 2017,] the aggregate cost of our ships on order, not including the TUI Cruises' ships on [removed: order and those subject to conditions to effectiveness,] [added: order,] was approximately [removed: $8.4] [added: $13.3] billion, of which we had deposited [removed: $316.1] [added: $465.7] million as of such date.

Approximately [removed: 66.7%] [added: 54.0%] and [removed: 58.2%] [added: 66.7%] of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate at December 31, [removed: 2016] [added: 2017] and December 31, [removed: 2015,] [added: 2016,] respectively.

A hypothetical 10% strengthening of the Euro as of December 31, [removed: 2016,] [added: 2017,] assuming no changes in comparative interest rates, would result in a [removed: $558.0] [added: $716.0] million increase in the United States dollar cost of the foreign currency denominated ship construction contracts exposed to fluctuations in the Euro exchange rate.

We [removed: partially mitigate] [added: also address] the exposure of our investments in foreign operations by denominating a portion of our debt in our [removed: subsidiaries’] [added: subsidiaries'] and [removed: investments’] [added: investments'] functional currencies and designating it as a hedge of these subsidiaries and investments.

[removed: We] [added: As of December 31, 2016, we] had designated debt as a hedge of our net investments in TUI Cruises of approximately €295.0 [added: million, or approximately $311.2 million.]

We have included approximately [removed: $114.0] [added: $68.5] million and [removed: $104.5] [added: $114.0] million of foreign-currency transaction losses and of changes in the fair value of derivatives in the foreign currency translation adjustment component of Accumulated other comprehensive loss at December 31, [removed: 2016] [added: 2017] and December 31, [removed: 2015,] [added: 2016,] respectively.

During [removed: 2016,] [added: 2017,] we maintained an average of approximately [removed: $642.4] [added: $739.4] million of these foreign currency forward contracts.

In [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014] [added: 2015] changes in the fair value of the foreign currency forward contracts [removed: were losses] [added: resulted in a gain (loss)] of approximately [removed: $51.1] [added: $62.0] million, [removed: $55.5] [added: $(51.1)] million and [removed: $48.6] [added: $(55.5)] million, respectively, which offset [added: (losses)] gains arising from the remeasurement of monetary assets and liabilities denominated in foreign currencies in those same years of [removed: $39.8] [added: $(75.6)] million, [removed: $34.6] [added: $39.8] million and [removed: $49.5] [added: $34.6] million, respectively.

These changes were recognized in earnings within Other [removed: income (expense)] [added: expense] in our consolidated statements of comprehensive income (loss).

Fuel cost (net of the financial impact of fuel swap agreements), as a percentage of our total revenues, was approximately [removed: 8.4%] [added: 7.8%] in [removed: 2016, 9.6%] [added: 2017, 8.4%] in [removed: 2015] [added: 2016] and [removed: 11.7%] [added: 9.6%] in [removed: 2014.][added: 2015.]

As of December 31, [removed: 2016,] [added: 2017,] we had fuel swap agreements to pay fixed prices for fuel with an aggregate notional amount of approximately [removed: $1.0 billion,] [added: $828.5 million,] maturing through [removed: 2020.][added: 2021.]

The fuel swap agreements represented [removed: 60%] [added: 50%] of our projected [removed: 2017] [added: 2018] fuel requirements, [removed: 44%] [added: 46%] of our projected [removed: 2018] [added: 2019] fuel requirements, [removed: 35%] [added: 36%] of our projected [removed: 2019] [added: 2020] fuel requirements and [removed: 20%] [added: 14%] of our projected [removed: 2020] [added: 2021] fuel requirements.

The estimated fair value of these contracts at December 31, [removed: 2016] [added: 2017] was estimated to be [removed: a liability] [added: an asset] of [removed: $227.9] [added: $14.3] million.

We estimate that a hypothetical 10% increase in our weighted-average fuel price from that experienced during the year ended December 31, [removed: 2016] [added: 2017] would increase our forecasted [removed: 2017] [added: 2018] fuel cost by approximately [removed: $30.0] [added: $38.0] million, net of the impact of fuel swap agreements.

| | $ | 790,000 | | | | | |

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | |

| | $ | 2,961,623 | | | | | |

___________________________________________________________________

| | |

| --- | --- |

As of December 31, 2017, we maintained foreign currency forward contracts and designated them as hedges of a portion of our net investment in TUI cruises of €101.0 million, or approximately $121.3 million based on the exchange rate at December 31, 2017.

These forward currency contracts mature in October 2021.

We had designated debt as a hedge of our net investments in TUI Cruises of approximately €246.0 million, or approximately $295.3 million, through December 31, 2017.

We monitor our derivative positions using techniques including market valuations and sensitivity analyses.

| | $ | 825,000 | | | | | |

| | | | | | | |

| --- | --- | --- | --- | --- | --- | --- |

| | | | | | | |

| | 3,179,681 | | | | | |

Amount presented is based on the exchange rate as of December 31, 2016.

million, or approximately $311.2 million, through December 31, 2016.

As of December 31, 2015, no debt was designated as a hedge of our net investments in Pullmantur and TUI Cruises.

We also own a 50% joint venture interest in the German brand TUI Cruises, a 49% interest in the Spanish brand Pullmantur and a [removed: minority] [added: 36%] interest in the Chinese brand SkySea Cruises (collectively, our "Partner Brands").

Together, our Global Brands and our Partner Brands operate a combined total of 49 ships in the cruise vacation industry with an aggregate capacity of approximately [removed: 123,270] [added: 124,070] berths as of December 31, [removed: 2016.][added: 2017.]

Our ships operate on a selection of worldwide itineraries that call on approximately [removed: 535] [added: 540] destinations on all seven continents.

In addition, [added: we believe] our brands are well-positioned globally and possess the ability to attract a wide range of guests by appealing to multiple customer bases allowing our global sourcing to be well diversified.

In addition, our [removed: brands] [added: Global Brands] source passengers from similar markets around the world and operate [added: in]

[removed: in] similar economic environments with a significant degree of commercial overlap.

As a result, we strategically manage our [removed: brands] [added: Global Brands] as a single business with the ultimate objective of maximizing long-term shareholder value.

The brand appeals to families with children of all ages, as well as both older and younger [removed: couples.][added: couples, providing cruises that generally feature a casual ambiance as well as a variety of activities and entertainment venues.]

We believe that the quality of the Royal Caribbean International brand [removed: also enables] [added: allows] it to [removed: attract guests from the premium segment allowing Royal Caribbean International to] achieve market coverage that is among the broadest of any of the major cruise brands in the cruise vacation industry.

Royal Caribbean International’s strategy is to attract an array of vacationing guests by providing a wide variety of itineraries to destinations worldwide including Alaska, Asia, Australia, Bahamas, Bermuda, Canada, the Caribbean, Europe, the Panama Canal and New Zealand with cruise lengths that range from two to [removed: 24] [added: 23] nights.

[removed: We currently] [added: Under our Royal Caribbean International brand, we] operate [removed: 25] [added: 24] ships with an aggregate capacity of approximately [removed: 78,150 berths under our Royal Caribbean International brand.][added: 76,450 berths.]

[removed: We] [added: Additionally, we] have [removed: four] [added: six] ships on order with an aggregate capacity of approximately [removed: 19,200] [added: 30,500] berths.

These ships include our fourth and fifth Quantum-class ships, which are scheduled to enter service in the second quarter of 2019 and fourth quarter of 2020, respectively, [removed: and] the fourth and fifth Oasis-class ships, which are scheduled to enter service in the first quarter of 2018 and second quarter of 2021, [added: respectively, and the first and second ships of a new generation, known as our Icon-class, which are expected to enter service in the second quarters of 2022 and 2024,] respectively.

Celebrity Cruises’ strategy is to target affluent consumers by delivering a [removed: "Modern Luxury"] [added: destination-rich, modern luxury] experience [removed: that includes a destination-rich experience,] [added: on] upscale ships that offer, among other things, luxurious accommodations, [removed: a high staff-to-guest ratio, fine dining, personalized] [added: high-end design spaces, high-standard] service and [removed: extensive spa facilities.][added: fine dining.]

Celebrity Cruises offers a [removed: variety] [added: range] of itineraries to [removed: popular] destinations, including Alaska, Asia, Australia, Bermuda, Canada, the Caribbean, Europe, the [removed: Galapagos,] [added: Galapagos Islands,] Hawaii, [added: India,] New Zealand, the Panama Canal and South America with cruise lengths [removed: that range] [added: ranging] from two to [removed: 18] [added: 19] nights.

[removed: We currently] [added: Under our Celebrity Cruises brand, we] operate 12 ships with an aggregate capacity of approximately 23,170 [removed: berths under our Celebrity Cruises brand.][added: berths.]

[removed: Additionally, we have] [added: These ships include] four ships of a new generation, known as [removed: "Project Edge," on order with an aggregate capacity of approximately 11,600 berths] [added: our Edge-class,] which are expected to enter service in the fourth quarter of 2018, the first quarter of 2020 and the fourth quarters of 2021 and 2022, [removed: respectively.][added: respectively, and a ship designed for the Galapagos Islands, which is expected to enter service in the second quarter of 2019.]

The up-market segment incorporates elements of the premium segment and the luxury segment which is generally characterized by smaller ships, high standards of accommodation and [removed: service, higher prices] [added: service] and exotic itineraries.

Azamara Club Cruises offers a variety of itineraries to popular destinations, including Asia, Australia/New Zealand, Northern and Western Europe, the Mediterranean, Central and North America and the [removed: less-][added: less-traveled islands of the Caribbean.]

[removed: We currently] [added: Under our Azamara Club Cruises brand, we] operate two ships with an aggregate capacity of approximately 1,400 [removed: berths under our Azamara Club Cruises brand, offering cruise itineraries that range from three to 21 nights.]

Our Global Brands are complemented by our 50% joint venture interest in TUI Cruises, which is specifically tailored for the German market, our 49% interest in the Spanish brand Pullmantur, which is primarily focused on the cruise market in [removed: Spain] [added: Spain,] and [removed: a minority] [added: our 36%] interest in SkySea [removed: Cruises] [added: Cruises, which is] specifically tailored for the Chinese market.

TUI Cruises operates [removed: five] [added: six] ships, with an aggregate capacity of approximately [removed: 11,300] [added: 13,800] berths.

[removed: In addition,] [added: Additionally,] TUI Cruises [removed: currently] has [removed: three newbuild] [added: two] ships on order which are scheduled for delivery in the second [removed: quarters] [added: quarter] of [removed: 2017 and] 2018 and the first quarter of 2019, respectively.

[added: | (1) |] TUI Cruises plans to offset this additional capacity through the planned transfer of [removed: the] their [removed: first two] [added: existing, oldest] ships, Mein Schiff 1 and Mein Schiff 2, [added: in 2018 and 2019, respectively,] to [removed: Thomson Cruises,] an affiliate of TUI AG, [added: our joint venture partner] in [removed: 2018 and 2019, respectively.][added: TUI Cruises. |]

Pullmantur operates in the contemporary segment of the Spanish [added: and Latin American] cruise [removed: market] [added: markets] and is designed to attract Spanish-speaking families and couples and includes a Spanish-speaking crew as well as tailored food and entertainment options.

[removed: Pullmantur currently operates] [added: The] four ships [removed: with] [added: operated by Pullmantur have] an aggregate capacity of approximately 7,450 berths.

We and Ctrip each own [removed: 35%] [added: 36%] of the venture, with the remaining equity held by the venture's management and a private equity fund.

SkySea Cruises commenced operations during the second quarter of 2015 and operates one ship, SkySea Golden Era, which [removed: it purchased from us in 2014.][added: has a capacity of approximately 1,800 berths.]

Cruising is considered a well-established vacation sector in the North American and European markets and a developing [removed: but promising] sector in several other emerging markets.

[added: Industry data indicates that market penetration] rates are still low and that a significant portion of cruise guests carried are first-time cruisers.

| (1) | Source: Our estimates are based on a combination of data obtained from publicly available sources including the International Monetary Fund, United Nations, Department of Economic and Social Affairs, Cruise Lines International Association ("CLIA") and G.P. Wild. [added: In addition, our estimates incorporate our own analysis utilizing the same publicly available cruise industry data as a base.] |

| (4) | Our estimates include the Southeast Asia (e.g., Singapore, Thailand and the Philippines), East Asia (e.g., China and Japan), South Asia [removed: (e.g.] [added: (e.g.,] India and Pakistan) and [removed: Oceanian] [added: Oceania] (e.g., Australia and Fiji Islands) regions. |

We estimate that the global cruise fleet was served by [added: a weighted average of] approximately [removed: 503,000] [added: 517,000] berths [removed: on] [added: during 2017 with] approximately [removed: 298] [added: 311] ships at the end of [removed: 2016.][added: 2017.]

[removed: There are] [added: As of December 31, 2017, there were] approximately [removed: 60] [added: 75] ships with an estimated [removed: 173,000] [added: 184,000] berths that are expected to be placed in service in the global cruise market between [removed: 2017] [added: 2018] and [removed: 2021,] [added: 2022,] although it is also possible that [removed: additional] ships could be ordered or taken out of service during these periods.

We estimate that the global cruise industry carried [removed: 24.0] [added: approximately 25.8] million cruise guests in [removed: 2016] [added: 2017] compared to [removed: 23.0] [added: approximately 24.0] million cruise guests carried in [removed: 2015] [added: 2016] and [removed: 22.0] [added: approximately 23.0] million cruise guests carried in [removed: 2014.][added: 2015.]

| 2016 | | 493,000 | | 123,270 | | 24,000 | | [removed: 12,581] [added: 12,274] | | [removed: 6,542] [added: 6,512] | | [removed: 3,636] [added: 4,466] |

| (1) | Source: Our estimates of the number of global cruise guests and the weighted-average supply of berths marketed globally are based on a combination of data that we obtain from various publicly available cruise industry trade information sources. We use data obtained from Seatrade Insider, Cruise Industry News and company press releases to estimate weighted-average supply of berths and CLIA and G.P. Wild to estimate cruise guest information. In addition, our estimates incorporate our own [removed: statistical] analysis utilizing the same publicly available cruise industry data as a base. |

| (5) | Our estimates include the Southeast Asia (e.g., Singapore, Thailand and the Philippines), East Asia (e.g., China and Japan), South Asia (e.g., India and Pakistan) and [removed: Oceanian] [added: Oceania] (e.g., Australia and Fiji Islands) regions. |

[removed: The majority of industry] [added: Industry] cruise guests are [added: primarily] sourced from North America, which represented approximately [removed: 52%] [added: 50%] of global cruise guests in [removed: 2016.][added: 2017.]

The compound annual growth rate in cruise guests sourced from this market was approximately 2% from [removed: 2012] [added: 2013] to [removed: 2016.][added: 2017.]

Royal Caribbean International is positioned to compete in both the contemporary and premium segments of the cruise vacation industry.

Additionally, we have five ships on order with an aggregate capacity of approximately 11,700 berths.

berths offering cruise itineraries ranging from four to 21 nights.

Additionally, during 2017, we entered into an agreement to purchase a 700 berth ship that is scheduled to be delivered in March 2018 and expected to enter service during the third quarter of 2018.

Included in this count is Mein Schiff 6, which entered the fleet in May 2017.

Pullmantur Holdings S.L. ("Pullmantur Holdings"), the parent company of the Pullmantur brand, is a joint venture owned 49% by us and 51% by Springwater Capital LLC ("Springwater").

| 2016 | | 3.43% | | 1.23% | | 0.11% |

| 2017 | | 3.56% | | 1.21% | | 0.12% |

___________________________________________________________________

| 2017 | | 517,000 | | 124,070 | | 25,800 | | 12,854 | | 6,435 | | 5,068 |

___________________________________________________________________

Cruise guests sourced from this market remained consistent compared to 2013.

| • | capitalize on the portability and flexibility of our ships by deploying them into those markets and |

In 2017, we continued our commitment to control our operating costs and will continue to do so in 2018.

In order to sustain our competitive advantage, we will continue to seek innovative technologies.

Additionally, we entered into an agreement to purchase a ship for Azamara Club Cruises that is scheduled to enter service in the third quarter of 2018.

The addition of these ships is expected to increase passenger capacity of our Global Brands by approximately 42,900 berths by the end of 2024.

We also have a robust Onboard Cruise Sales department to help guests to book their next cruise vacations while onboard our ships.

We regularly work to enhance each of our loyalty programs by adding

| Symphony of the Seas | | 2018 | | 2018 | | 5,450 | | Mediterranean, Eastern/Western Caribbean |

| Celebrity Edge | | 2018 | | 2018 | | 2,900 | | Eastern/Western Caribbean |

| Azamara Pursuit | | 2001 | | 2018 | | 700 | | Mediterranean, Northern Europe, South America |

| Mein Schiff 1 (2) | | 2018 | | 2018 | | 2,850 | | Southeastern Asia, Middle East, Mediterranean |

| Total | | | | | | 134,070 | | |

__________________________________________________________________

| (2) | TUI Cruises' newbuild scheduled for delivery in 2018 will enter service as Mein Schiff 1 and the existing Mein Schiff 1, not included above, is planned for transfer to an affiliate of TUI AG, our joint venture partner in TUI Cruises. |

| Icon-class: | | | | |

| Unnamed | | 2nd Quarter 2024 | | 5,650 |

| Edge-class: | | | | |

| Celebrity Flora | | 2nd Quarter 2019 | | 100 |

___________________________________________________________________

In September 2017, we entered into an agreement to purchase a 700 berth ship for our Azamara Club Cruises brand that is scheduled to be delivered in March 2018 and expected to enter service during the third quarter of 2018.

| | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | |

| Occupancy | 108.4% | | 106.4% | | 105.1% | | 105.6% | | 104.7% |

___________________________________________________________________

| | |

| --- | --- |

retail shops and a wide variety of specialty restaurants and dining options.

Royal Caribbean International is positioned at the upper end of the contemporary segment of the cruise vacation industry, generally characterized by cruises that are seven nights or shorter and feature a casual ambiance as well as a variety of activities and entertainment venues.

This count includes our two newest ships, the 5,450 berth Harmony of the Seas and the 4,100 berth Ovation of the Seas, which entered our fleet in May and April of 2016, respectively.

Additionally, we signed a memorandum of understanding to build two new ships of a new generation of ships, known as "Project Icon," which are expected to enter service in the second quarters of 2022 and 2024, respectively.

traveled islands of the Caribbean.

Refer to Note 1.

Prior to August 2016, Pullmantur Holdings S.L. ("Pullmantur Holdings"), the parent company of the Pullmantur brand (formerly known as Royal Caribbean Holdings de España S.L. or "RCHE"), was wholly owned by us.

Effective July 31, 2016, we sold 51% of our interest in Pullmantur Holdings.

We retain a 49% interest in Pullmantur Holdings as well as full ownership of the four vessels currently operated by the Pullmantur brand under bareboat charter arrangements.

General to our consolidated financial statements under Item 8.

Financial Statements and Supplementary Data for further information on the sale transaction.

Pullmantur Holdings also previously operated the small French regional brand CDF Croisières de France.

Industry data indicates that market penetration

| 2012 | | 3.33% | | 1.21% | | 0.04% |

| 2016 | | 3.49% | | 1.24% | | 0.09% |

| 2012 | | 425,000 | | 98,650 | | 20,813 | | 11,641 | | 6,225 | | 1,474 |

_______________________________________________________________________________

The compound annual growth rate in cruise guests sourced from this market was approximately 25% from 2012 to 2016.

Cruise lines compete with

We continue our commitment to identify and implement cost containment initiatives.

In 2016, we implemented initiatives, such as the closing of one of our international offices and personnel reorganization in our corporate offices, aimed at improving operating efficiencies and economies of scale.

We will continue to focus on and evaluate cost containment initiatives in 2017.

In addition, we continue to pursue our objective of returning our credit ratings to investment grade.

The addition of these ships, net of Legend of the Seas departing the fleet in 2017, is expected to increase passenger capacity of our Global Brands by approximately 34,000 berths by the end of 2022, which represents an estimated compound annual growth rate of 4.4% from 2016 to December 31, 2022.

Additionally, TUI Cruises, our 50% joint venture, currently has agreements for the construction of three new ships.

| Legend of the Seas(2) | | 1995 | | 1995 | | 1,800 | | Australia/New Zealand |

| Mein Schiff 1 | | 1996 | | 2009 | | 1,900 | | Southeastern Asia, Northern Europe, Mediterranean |

| Total | | | | | | 125,770 | | |

_______________________________________________________________________________

| (2) | In June 2016, we entered into an agreement to sell Legend of the Seas to Thomson Cruises, an affiliate of TUI AG, our joint venture partner, which is scheduled to be completed in March 2017. |

_______________________________________________________________________________

| (1) | TUI Cruises plans to offset this additional capacity through the planned transfer of the their first two ships, Mein Schiff 1 and Mein Schiff 2, to Thomson Cruises in 2018 and 2019, respectively. |

In October 2016, we signed a memorandum of understanding with Meyer Turku to build two ships of a new generation of ships for Royal Caribbean International, known as "Project Icon," which are expected to enter service in the second quarters of 2022 and 2024, respectively.

While the design is still being finalized, each ship will likely accommodate approximately 5,000 guests.

These orders are contingent upon completion of conditions precedent, including documentation and financing.

| | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | |

| Occupancy | 106.4 | % | | 105.1 | % | | 105.6 | % | | 104.7 | % | | 104.4 | % |

_______________________________________________________________________________

Additionally, effective August 2016, we no longer include Pullmantur Holdings in these amounts.

We are routinely involved in [removed: other] claims typical within the cruise vacation industry.

In April 2015, the Alaska Department of Environmental Conservation issued Notices of Violation to Royal Caribbean International and Celebrity Cruises seeking monetary penalties for alleged violations of the Alaska Marine Visible Emission Standards that occurred over the previous five years on certain of our vessels.

In February 2017, we settled all claims pursuant to a Compliance Order by Consent in which we agreed to pay an amount and perform certain remedial actions which, individually and in the aggregate, are immaterial to our financial condition or results of operations and cash flows.

For the fiscal year ended December 31, [removed: 2016][added: 2017]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K [added: (§229.405 of this chapter)] is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [added: o]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, [removed: or] a smaller reporting [removed: company (See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act).][added: company, or an emerging growth company.]

| Large accelerated filer x | | Accelerated filer o | | Non-accelerated filer o [removed: (Do not check if a smaller reporting company)] | | Smaller reporting company o |

The aggregate market value of the registrant's common stock at June 30, [removed: 2016] [added: 2017] (based upon the closing sale price of the common stock on the New York Stock Exchange on June 30, [removed: 2016)] [added: 2017)] held by those persons deemed by the registrant to be non-affiliates was approximately [removed: $12.1] [added: $19.9] billion.

Shares of the registrant's common stock held by each executive officer and director and by each entity or person that, to the registrant's knowledge, owned 10% or more of the registrant's outstanding common stock as of June 30, [removed: 2016] [added: 2017] have been excluded from this number in that these persons may be deemed affiliates of the registrant.

There were [removed: 214,803,837] [added: 213,749,009] shares of common stock outstanding as of February [removed: 9, 2017.][added: 12, 2018.]

Portions of the registrant's Definitive Proxy Statement relating to its [removed: 2017] [added: 2018] Annual Meeting of Shareholders are incorporated by reference in Part III, Items 10-14 of this Annual Report on Form 10-K as indicated herein.

| [Item [removed: 1.](#s0947028B58F25C408AAF3061C037AC5B)] [added: 1.](#s949C90E3972E5177AD82E03A6B3A9EF3)] | | [removed: [Business](#s0947028B58F25C408AAF3061C037AC5B)] [added: [Business](#s949C90E3972E5177AD82E03A6B3A9EF3)] | | [removed: [1](#s0947028B58F25C408AAF3061C037AC5B)] [added: [1](#s949C90E3972E5177AD82E03A6B3A9EF3)] |

| [Item [removed: 1A.](#sF6C3A35545D85244BC791ACFA5FE1CD4)] [added: 1A.](#s47BB490DEE535703B795191C6ABAD178)] | | [Risk [removed: Factors](#sF6C3A35545D85244BC791ACFA5FE1CD4)] [added: Factors](#s47BB490DEE535703B795191C6ABAD178)] | | [removed: [24](#sF6C3A35545D85244BC791ACFA5FE1CD4)] [added: [23](#s47BB490DEE535703B795191C6ABAD178)] |

| [Item [removed: 1B.](#s145D2F2F34D9543E9C8758A9C3C5A9C9)] [added: 1B.](#s65B5984D30895E829E7425F10EFE35B9)] | | [Unresolved Staff [removed: Comments](#s145D2F2F34D9543E9C8758A9C3C5A9C9)] [added: Comments](#s65B5984D30895E829E7425F10EFE35B9)] | | [removed: [33](#s145D2F2F34D9543E9C8758A9C3C5A9C9)] [added: [33](#s65B5984D30895E829E7425F10EFE35B9)] |

| [Item [removed: 2.](#s7E57B719578052B4864CA872C938DA91)] [added: 2.](#sBE7A4B3871CA52EDBF074274A7D45A4C)] | | [removed: [Properties](#s7E57B719578052B4864CA872C938DA91)] [added: [Properties](#sBE7A4B3871CA52EDBF074274A7D45A4C)] | | [removed: [33](#s7E57B719578052B4864CA872C938DA91)] [added: [33](#sBE7A4B3871CA52EDBF074274A7D45A4C)] |

| [Item [removed: 3.](#s816669C2137A516799B5983DB8C452EB)] [added: 3.](#sC1B1FDD27B105C0996F3ED3931BC51D3)] | | [Legal [removed: Proceedings](#s816669C2137A516799B5983DB8C452EB)] [added: Proceedings](#sC1B1FDD27B105C0996F3ED3931BC51D3)] | | [removed: [33](#s816669C2137A516799B5983DB8C452EB)] [added: [33](#sC1B1FDD27B105C0996F3ED3931BC51D3)] |

| [Item [removed: 4.](#sC38FEA4BD61B5418AACE16A1059F502E)] [added: 4.](#s17C1FC7DE4175CBE97CF129F1FB51021)] | | [Mine Safety [removed: Disclosures](#sC38FEA4BD61B5418AACE16A1059F502E)] [added: Disclosures](#s17C1FC7DE4175CBE97CF129F1FB51021)] | | [removed: [33](#sC38FEA4BD61B5418AACE16A1059F502E)] [added: [33](#s17C1FC7DE4175CBE97CF129F1FB51021)] |

| [Item [removed: 5.](#s0ADA4729682754888D20D94E3D73129A)] [added: 5.](#s16440EEEAA78583C9C7D884F76625642)] | | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s0ADA4729682754888D20D94E3D73129A)] [added: Securities](#s16440EEEAA78583C9C7D884F76625642)] | | [removed: [34](#s0ADA4729682754888D20D94E3D73129A)] [added: [34](#s16440EEEAA78583C9C7D884F76625642)] |

| [Item [removed: 6.](#sFD94F5BE47C05A04B0C692E11D2FFB12)] [added: 6.](#s244449DBFCCD5577AC3C036490383543)] | | [Selected Financial [removed: Data](#sFD94F5BE47C05A04B0C692E11D2FFB12)] [added: Data](#s244449DBFCCD5577AC3C036490383543)] | | [removed: [36](#sFD94F5BE47C05A04B0C692E11D2FFB12)] [added: [37](#s244449DBFCCD5577AC3C036490383543)] |

| [Item [removed: 7.](#s23F16566024B56BFA539144FA0C72AFE)] [added: 7.](#s03D92C2B15A35AD4B69F9A14E0C05A48)] | | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s23F16566024B56BFA539144FA0C72AFE)] [added: Operations](#s03D92C2B15A35AD4B69F9A14E0C05A48)] | | [removed: [37](#s23F16566024B56BFA539144FA0C72AFE)] [added: [38](#s03D92C2B15A35AD4B69F9A14E0C05A48)] |

| [Item [removed: 7A.](#s79F6DA844A1C5B649BC98B4A716A5DC6)] [added: 7A.](#s5135B177FBBB5CC1AD459FBA08879F73)] | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#s79F6DA844A1C5B649BC98B4A716A5DC6)] [added: Risk](#s5135B177FBBB5CC1AD459FBA08879F73)] | | [removed: [62](#s79F6DA844A1C5B649BC98B4A716A5DC6)] [added: [62](#s5135B177FBBB5CC1AD459FBA08879F73)] |

| [Item [removed: 8.](#sF120DFAE13335CC6976A4158DAE1A589)] [added: 8.](#s6D49F5832C5F593D8299E7DF9833806F)] | | [Financial Statements and Supplementary [removed: Data](#sF120DFAE13335CC6976A4158DAE1A589)] [added: Data](#s6D49F5832C5F593D8299E7DF9833806F)] | | [removed: [64](#sF120DFAE13335CC6976A4158DAE1A589)] [added: [64](#s6D49F5832C5F593D8299E7DF9833806F)] |

| [Item [removed: 9.](#sD7DE8C525B47582FBEE6F1E0C8EA286D)] [added: 9.](#s38A9B567F60A5C44B16C5550EFE800EE)] | | [Changes In and Disagreements With Accountants on Accounting and Financial [removed: Disclosure](#sD7DE8C525B47582FBEE6F1E0C8EA286D)] [added: Disclosure](#s38A9B567F60A5C44B16C5550EFE800EE)] | | [removed: [65](#sD7DE8C525B47582FBEE6F1E0C8EA286D)] [added: [64](#s38A9B567F60A5C44B16C5550EFE800EE)] |

| [Item [removed: 9A.](#s19729651BE6B5B6984D3C256CE263DA2)] [added: 9A.](#s65222074BA885BCF968FA89383CCA57E)] | | [Controls and [removed: Procedures](#s19729651BE6B5B6984D3C256CE263DA2)] [added: Procedures](#s65222074BA885BCF968FA89383CCA57E)] | | [removed: [66](#s19729651BE6B5B6984D3C256CE263DA2)] [added: [65](#s65222074BA885BCF968FA89383CCA57E)] |

| [Item [removed: 9B.](#s49BB375A7D985A5290F66736B570C8CE)] [added: 9B.](#sF527A8AFDEC35EFFB602D11FCA4ADC36)] | | [Other [removed: Information](#s49BB375A7D985A5290F66736B570C8CE)] [added: Information](#sF527A8AFDEC35EFFB602D11FCA4ADC36)] | | [removed: [66](#s49BB375A7D985A5290F66736B570C8CE)] [added: [65](#sF527A8AFDEC35EFFB602D11FCA4ADC36)] |

| [PART [removed: III](#s64C86BE5B27D53AB8EAA6811C06D3C3B)] [added: III](#sAF2306D00C045390978E30B30F5EF1CD)] | | | | |

| [Item [removed: 10.](#s1AB06283D0925D9DBE66769E58C3B737)] [added: 10.](#s3EBFCCF35BB253738E11D3B19B812715)] | | [Directors, Executive Officers and Corporate [removed: Governance](#s1AB06283D0925D9DBE66769E58C3B737)] [added: Governance](#s3EBFCCF35BB253738E11D3B19B812715)] | | [removed: [67](#s1AB06283D0925D9DBE66769E58C3B737)] [added: [66](#s3EBFCCF35BB253738E11D3B19B812715)] |

| [Item [removed: 11.](#s1AB06283D0925D9DBE66769E58C3B737)] [added: 11.](#s3EBFCCF35BB253738E11D3B19B812715)] | | [Executive [removed: Compensation](#s1AB06283D0925D9DBE66769E58C3B737)] [added: Compensation](#s3EBFCCF35BB253738E11D3B19B812715)] | | [removed: [67](#s1AB06283D0925D9DBE66769E58C3B737)] [added: [66](#s3EBFCCF35BB253738E11D3B19B812715)] |

| [Item [removed: 12.](#s1AB06283D0925D9DBE66769E58C3B737)] [added: 12.](#s3EBFCCF35BB253738E11D3B19B812715)] | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s1AB06283D0925D9DBE66769E58C3B737)] [added: Matters](#s3EBFCCF35BB253738E11D3B19B812715)] | | [removed: [67](#s1AB06283D0925D9DBE66769E58C3B737)] [added: [66](#s3EBFCCF35BB253738E11D3B19B812715)] |

| [Item [removed: 13.](#s1AB06283D0925D9DBE66769E58C3B737)] [added: 13.](#s3EBFCCF35BB253738E11D3B19B812715)] | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#s1AB06283D0925D9DBE66769E58C3B737)] [added: Independence](#s3EBFCCF35BB253738E11D3B19B812715)] | | [removed: [67](#s1AB06283D0925D9DBE66769E58C3B737)] [added: [66](#s3EBFCCF35BB253738E11D3B19B812715)] |

| [Item [removed: 14.](#s1AB06283D0925D9DBE66769E58C3B737)] [added: 14.](#s3EBFCCF35BB253738E11D3B19B812715)] | | [Principal Accounting Fees and [removed: Services](#s1AB06283D0925D9DBE66769E58C3B737)] [added: Services](#s3EBFCCF35BB253738E11D3B19B812715)] | | [removed: [67](#s1AB06283D0925D9DBE66769E58C3B737)] [added: [66](#s3EBFCCF35BB253738E11D3B19B812715)] |

| [Item [removed: 15.](#s2144D35753455269A3FBDF99B8C629D7)] [added: 15.](#sA83C732B41BA5A52A68243ED1FCBB5BC)] | | [Exhibits, Financial Statement [removed: Schedules](#s2144D35753455269A3FBDF99B8C629D7)] [added: Schedules](#sA83C732B41BA5A52A68243ED1FCBB5BC)] | | [removed: [68](#s2144D35753455269A3FBDF99B8C629D7)] [added: [67](#sA83C732B41BA5A52A68243ED1FCBB5BC)] |

| [Item [removed: 16.](#s52f097db20c0460d9ddec9624d53436d)] [added: 16.](#sE71E6759D50451FC86E412A2F44BB732)] | | [Form 10-K [removed: Summary](#s52f097db20c0460d9ddec9624d53436d)] [added: Summary](#sE71E6759D50451FC86E412A2F44BB732)] | | [removed: [68](#s2144D35753455269A3FBDF99B8C629D7)] [added: [67](#sA83C732B41BA5A52A68243ED1FCBB5BC)] |

Throughout this [removed: report,] [added: Annual Report on Form 10-K,] we also refer to regional brands in which we hold an ownership interest, including “TUI Cruises,” “Pullmantur” and “SkySea [removed: Cruises”.][added: Cruises."However, because these regional brands are unconsolidated investments, our operating results and other disclosures herein do not include these brands unless otherwise specified.]

10-K 1 rcl-20171231x10k.htm 10-K

See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

| Emerging growth company o | | (Do not check if a smaller reporting company) | | | | |

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

| [PART I](#sB7BFA754CA705230894A7F955CFBBD7F) | | | | |

| [PART II](#sD4EAC571AE8E55E2946A9C46D5F94C64) | | | | |

| [PART IV](#sC0FA2043D83F50D09ABAE77D4CCD59CE) | | | | |

| [Signatures](#s2B8D1622A70F5984AE1FC24F6B7A1207) | | | | [71](#s2B8D1622A70F5984AE1FC24F6B7A1207) |

10-K 1 rcl-20161231x10k.htm 10-K

Yes x No o

| [PART I](#s5C0854BC7078527FAF4C59ACB6BF335F) | | | | |

| [PART II](#sB9486319F48455D39D3F936A62252379) | | | | |

| [PART IV](#sEF5CB655DE495AC699ED716BBD8BAEAE) | | | | |

| [Signatures](#s61F9A85CB51B50B4952E4EA682E02C9C) | | | | [68](#s61F9A85CB51B50B4952E4EA682E02C9C) |

However, because these regional brands are unconsolidated investments, our operating results and other disclosures herein do not include these brands unless otherwise specified.

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

As of February [removed: 9, 2017] [added: 12, 2018,] there were [removed: 1,874] [added: 1,529] record holders of our common stock.

In [removed: 2015,] [added: 2016,] we declared cash dividends on our common stock of [removed: $0.30] [added: $0.375] per share during the first and second quarters of [removed: 2015.][added: 2016.]

We increased the dividend amount to [removed: $0.375] [added: $0.48] per share for the dividends declared in the third and fourth quarters of [removed: 2015] [added: 2016] and the first and second quarters of [removed: 2016.][added: 2017.]

The dividend amount was increased to [removed: $0.48] [added: $0.60] per share for the dividends declared in the third and fourth quarters of [removed: 2016.][added: 2017.]

The following graph compares the total return, assuming reinvestment of dividends, on an investment in the Company, based on performance of the Company's common stock, with the total return of the Standard & Poor's 500 Composite Stock Index and the Dow Jones United States Travel and Leisure Index for a five year period by measuring the changes in common stock prices from December 31, [removed: 2011] [added: 2012] to December 31, [removed: 2016.][added: 2017.]

[removed: ][added: ]

The stock performance graph assumes for comparison that the value of the Company's common stock and of each index was $100 on December 31, [removed: 2011] [added: 2012] and that all dividends were reinvested.

| 2017 | | | |

| Fourth Quarter | $133.75 | | $117.55 |

| Third Quarter | $125.00 | | $107.79 |

| Second Quarter | $115.63 | | $93.86 |

| First Quarter | $101.11 | | $82.72 |

Share Repurchases

The following table presents the total number of shares of our common stock that we repurchased during the quarter ended December 31, 2017:

| | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | |

| Period | Total number of shares purchased | | Average price paid per share | | Total number of shares purchased as part of publicly announced plans or programs(1) | | Approximate dollar value of shares that may yet be purchased under the plans or programs |

| October 1, 2017 - October 31, 2017 | — | | — | | — | | $375,000,000 |

| November 1, 2017 - November 30, 2017 | 275,647 | | $124.05 | | 275,647 | | $341,000,000 |

| December 1, 2017 - December 31, 2017 | 526,470 | | $124.96 | | 526,470 | | $275,000,000 |

| Total | 802,117 | | | | 802,117 | | |

___________________________________________________________________

| | |

| --- | --- |

| (1) | On April 28, 2017, we announced that our board of directors authorized a 12-month common stock repurchase program for up to $500 million. The timing and number of shares to be repurchased will depend on a variety of factors including price and market conditions. During the fourth quarter of 2017, we repurchased 0.8 million shares of our common stock for a total of $100 million in open market transactions that were recorded within Treasury stock in our consolidated balance sheet. Repurchases under the program may be made at management's discretion from time to time on the open market or through privately negotiated transactions. |

| | 12/12 | | 12/13 | | 12/14 | | 12/15 | | 12/16 | | 12/17 |

| Royal Caribbean Cruises Ltd. | 100.00 | | 142.11 | | 251.44 | | 313.65 | | 260.04 | | 385.47 |

| S&P 500 | 100.00 | | 132.39 | | 150.51 | | 152.59 | | 170.84 | | 208.14 |

| Dow Jones US Travel & Leisure | 100.00 | | 145.48 | | 169.28 | | 179.27 | | 192.85 | | 238.77 |

| 2015 | | | |

| Fourth Quarter | $103.40 | | $87.08 |

| Third Quarter | $97.60 | | $77.74 |

| Second Quarter | $83.32 | | $65.91 |

| First Quarter | $85.56 | | $72.79 |

In 2015, we applied for and received approval to delist from the Oslo Stock Exchange ("OSE").

Our last day of trading on the OSE was March 8, 2016.

| | 12/11 | | 12/12 | | 12/13 | | 12/14 | | 12/15 | | 12/16 |

| Royal Caribbean Cruises Ltd. | 100.00 | | 139.36 | | 198.03 | | 350.40 | | 437.09 | | 362.38 |

| S&P 500 | 100.00 | | 116.00 | | 153.58 | | 174.60 | | 177.01 | | 198.18 |

| Dow Jones US Travel & Leisure | 100.00 | | 113.33 | | 164.87 | | 191.85 | | 203.17 | | 218.56 |

The selected consolidated financial data presented below for the years [removed: 2012] [added: 2013] through [removed: 2016] [added: 2017] and as of the end of each such year, except for Adjusted Net Income amounts, are derived from our audited consolidated financial statements and should be read in conjunction with those financial statements and the related notes as well as in conjunction with Item 7.

| | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | |

| Total revenues | $ | [removed: 8,496,401] [added: 8,777,845] | | | $ | [removed: 8,299,074] [added: 8,496,401] | | | $ | [removed: 8,073,855] [added: 8,299,074] | | | $ | [removed: 7,959,894] [added: 8,073,855] | | | $ | [removed: 7,688,024] [added: 7,959,894] | |

| Operating income | $ | [removed: 1,477,205] [added: 1,744,056] | | | $ | [removed: 874,902] [added: 1,477,205] | | | $ | [removed: 941,859] [added: 874,902] | | | $ | [removed: 798,148] [added: 941,859] | | | $ | [removed: 403,110] [added: 798,148] | |

| Net income | $ | [removed: 1,283,388] [added: 1,625,133] | | | $ | [removed: 665,783] [added: 1,283,388] | | | $ | [removed: 764,146] [added: 665,783] | | | $ | [removed: 473,692] [added: 764,146] | | | $ | [removed: 18,287] [added: 473,692] | |

| Adjusted Net Income(1) (2) (3) [added: (4)] | $ | [removed: 1,314,689] [added: 1,625,133] | | | $ | [removed: 1,065,066] [added: 1,314,689] | | | $ | [removed: 755,729] [added: 1,065,066] | | | $ | [removed: 539,224] [added: 755,729] | | | $ | [removed: 442,873] [added: 539,224] | |

| Net income | $ | [removed: 5.96] [added: 7.57] | | | $ | [removed: 3.03] [added: 5.96] | | | $ | [removed: 3.45] [added: 3.03] | | | $ | [removed: 2.16] [added: 3.45] | | | $ | [removed: 0.08] [added: 2.16] | |

| Adjusted Net Income | $ | [removed: 6.10] [added: 7.57] | | | $ | [removed: 4.85] [added: 6.10] | | | $ | [removed: 3.41] [added: 4.85] | | | $ | [removed: 2.46] [added: 3.41] | | | $ | [removed: 2.03] [added: 2.46] | |

| Weighted-average shares | [removed: 215,393] [added: 214,617] | | | | [removed: 219,537] [added: 215,393] | | | | [removed: 221,658] [added: 219,537] | | | | [removed: 219,638] [added: 221,658] | | | | [removed: 217,930] [added: 219,638] | | |

| Net income | $ | [removed: 5.93] [added: 7.53] | | | $ | [removed: 3.02] [added: 5.93] | | | $ | [removed: 3.43] [added: 3.02] | | | $ | [removed: 2.14] [added: 3.43] | | | $ | [removed: 0.08] [added: 2.14] | |

| Adjusted Net Income | $ | [removed: 6.08] [added: 7.53] | | | $ | [removed: 4.83] [added: 6.08] | | | $ | [removed: 3.39] [added: 4.83] | | | $ | [removed: 2.44] [added: 3.39] | | | $ | [removed: 2.02] [added: 2.44] | |

| Weighted-average shares and potentially dilutive shares | [removed: 216,316] [added: 215,694] | | | | [removed: 220,689] [added: 216,316] | | | | [removed: 223,044] [added: 220,689] | | | | [removed: 220,941] [added: 223,044] | | | | [removed: 219,457] [added: 220,941] | | |

| Dividends declared per common share | $ | [removed: 1.71] [added: 2.16] | | | $ | [removed: 1.35] [added: 1.71] | | | $ | [removed: 1.10] [added: 1.35] | | | $ | [removed: 0.74] [added: 1.10] | | | $ | [removed: 0.44] [added: 0.74] | |

| Total assets | $ | [removed: 22,310,324] [added: 22,296,317] | | | $ | [removed: 20,782,043] [added: 22,310,324] | | | $ | [removed: 20,524,060] [added: 20,782,043] | | | $ | [removed: 19,915,003] [added: 20,524,060] | | | $ | [removed: 19,670,401] [added: 19,915,003] | |

| Total debt, including capital leases | $ | [removed: 9,387,436] [added: 7,539,451] | | | $ | [removed: 8,527,243] [added: 9,387,436] | | | $ | [removed: 8,254,818] [added: 8,527,243] | | | $ | [removed: 7,916,860] [added: 8,254,818] | | | $ | [removed: 8,332,418] [added: 7,916,860] | |

| Common stock | $ | [removed: 2,346] [added: 2,352] | | | $ | [removed: 2,339] [added: 2,346] | | | $ | [removed: 2,331] [added: 2,339] | | | $ | [removed: 2,308] [added: 2,331] | | | $ | [removed: 2,291] [added: 2,308] | |

| Total shareholders' equity | $ | [removed: 9,121,412] [added: 10,702,303] | | | $ | [removed: 8,063,039] [added: 9,121,412] | | | $ | [removed: 8,284,359] [added: 8,063,039] | | | $ | [removed: 8,808,265] [added: 8,284,359] | | | $ | [removed: 8,308,749] [added: 8,808,265] | |

| (1) | For [removed: 2016, 2015] [added: 2017, 2016] and [removed: 2014,] [added: 2015,] refer to Financial Presentation and Results of Operations under Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations for definition of Adjusted Net Income and reconciliation of Adjusted Net Income to Net income. |

| [removed: (2)] [added: (4)] | Amount for 2013 excludes restructuring and related impairment charges of $56.9 million and an $8.6 million loss related to the estimated impact of Pullmantur's non-core businesses that were sold in 2014. |

___________________________________________________________________

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

| (3) | Amount for 2014 excludes restructuring and related impairment charges of $4.3 million, other initiative costs of $21.2 million, an $11.0 million loss related to the estimated impact of Pullmantur's non-core businesses that were sold in 2014 and a loss of $17.4 million recognized on the sale of Celebrity Century. Additionally, the amount for 2014 excludes $28.9 million of net income resulting from the change in our voyage proration methodology and the reversal of a deferred tax asset valuation allowance of $33.5 million due to Spanish tax reform. |

| | |

| --- | --- |

_______________________________________________________________________________

| (3) | Amount for 2012 excludes an impairment charge of $385.4 million, to write down Pullmantur's goodwill to its implied fair value and to write down trademarks and trade names and certain long-lived assets, consisting of aircraft that was then owned and operated by Pullmantur Air, to their fair value, and a net deferred tax charge of $28.5 million. The net deferred tax charge includes a $33.7 million charge to record a 100% valuation allowance related to our deferred tax assets for Pullmantur and a $5.2 million tax benefit to reduce the deferred tax liability related to Pullmantur's trademarks and trade names. Additionally, the amount for 2012 excludes a $10.7 million loss related to the estimated impact of Pullmantur's non-core businesses that were sold in 2014. |

Our management, with the participation of our Chairman and Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of the effectiveness of our internal control over financial reporting based on the Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations [removed: ("COSO")] of the Treadway Commission.

Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, [removed: 2016.][added: 2017.]

The effectiveness of our internal control over financial reporting as of December 31, [removed: 2016] [added: 2017] has been audited by PricewaterhouseCoopers LLP, the independent registered certified public accounting firm that audited our consolidated financial statements included in this Annual Report on Form 10-K, as stated in its report, which is included herein on page F-2.

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Exchange Act Rule 13a-15(d) during the quarter ended December 31, [removed: 2016] [added: 2017] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Except for information concerning executive officers (called for by Item 401(b) of Regulation S-K), which is included in Part I of this Annual Report on Form 10-K, the information required by Items 10, 11, 12, 13 and 14 is incorporated herein by reference to the Royal Caribbean Cruises Ltd. Definitive Proxy Statement relating to our [removed: 2017] [added: 2018] Annual Meeting of Shareholders (the "Proxy Statement") to be filed with the Securities and Exchange Commission no later than 120 days after the close of the fiscal year.

Please refer to the following sections in the Proxy Statement for more information regarding our corporate governance: "Corporate Governance"; "Proposal 1—Election of Directors"; and "Certain Relationships and Related Person Transactions." Copies of the Proxy Statement will become available when filed through our Investor Relations website at [removed: www.rclinvestor.com] [added: www.rclcorporate.com] (please see "Financial Reports" under "Financial Information"); by contacting our Investor Relations department at 1050 Caribbean Way, Miami, Florida 33132—telephone (305) 982-2625; or by visiting the SEC's website at www.sec.gov.

A copy of the Code of Business Conduct and Ethics is posted in the corporate governance section of our website at [removed: www.rclinvestor.com] [added: www.rclcorporate.com] and is available in print, without charge, to shareholders upon written request to our Corporate Secretary at Royal Caribbean Cruises, Ltd., 1050 Caribbean Way, Miami, Florida 33132.

Any amendments to the code or any waivers from any provisions of the code granted to executive officers or directors will be promptly disclosed to investors by posting on our website at [removed: www.rclinvestor.com.][added: www.rclcorporate.com.]

INDEX TO EXHIBITS

Exhibits 10.22 through 10.50 represent management compensatory plans or arrangements.

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| | | | | Incorporated By Reference | | | | |

| Exhibit Number | | Exhibit Description | | Form | | Exhibit | | Filing Date/ Period End Date |

| 3.1 | | [Restated Articles of Incorporation of the Company, as amended (composite)](http://www.sec.gov/Archives/edgar/data/884887/000095014409002488/g18145exv3w1.htm) | | S-3 | | 3.1 | | 3/23/2009 |

| 3.2 | | [Amended and Restated By-Laws of the Company](http://www.sec.gov/Archives/edgar/data/884887/000088488713000061/exh31form8k20130911.htm) | | 8-K | | 3.1 | | 9/11/2013 |

| 4.1 | | Indenture dated as of July 15, 1994, by and between the Company, as issuer, and The Bank of New York Trust Company, N.A., successor to NationsBank of Georgia, National Association, as Trustee | | 20-F | | 2.4 | | 12/31/1994 |

| 4.2 | | Sixth Supplemental Indenture dated as of October 14, 1997, to the Indenture, dated as of July 15, 1994, by and between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee | | 20-F | | 2.11 | | 12/31/1997 |

| 4.3 | | Eighth Supplemental Indenture dated as of March 16, 1998, to the Indenture, dated as of July 15, 1994, by and between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee | | 20-F | | 2.13 | | 12/31/1997 |

| 4.4 | | [Form of Indenture, dated as of July 31, 2006, by and between the Company, as issuer, and The Bank of New York Trust Company, N.A., as Trustee](http://www.sec.gov/Archives/edgar/data/884887/000095010306001865/dp03192_ex0401.htm) | | S-3 | | 4.1 | | 7/31/2006 |

| 4.5 | | [Second Supplemental Indenture dated as of November 7, 2012 between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee](http://www.sec.gov/Archives/edgar/data/884887/000088488712000067/exh4120121102.htm) | | 8-K | | 4.1 | | 11/7/2012 |

| 4.6 | | [Third Supplemental Indenture, dated as of November 28, 2017 between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A., as Trustee](http://www.sec.gov/Archives/edgar/data/884887/000110465917070725/a17-25229_5ex4d1.htm) | | 8-K | | 4.1 | | 11/28/2017 |

| 10.1 | | Amended and Restated Registration Rights Agreement dated as of July 30, 1997, by and among the Company, A. Wilhelmsen AS., Cruise Associates, Monument Capital Corporation, Archinav Holdings, Ltd. and Overseas Cruiseship, Inc. | | 20-F | | 2.20 | | 12/31/1997 |

| 10.2 | | [Amendment to the Amended and Restated Credit Agreement, dated as of June 15, 2015, by and among the Company, The Bank of Nova Scotia, as administrative agent for the lender parties and the lender parties](http://www.sec.gov/Archives/edgar/data/884887/000088488715000058/exh101form8k20150615.htm) | | 8-K | | 10.1 | | 6/19/2015 |

| 10.3 | | [Amendment to the Credit Agreement, dated as of December 4, 2017, by and among the Company, the various financial institutions as are or shall become parties thereto and The Bank of Nova Scotia, as administrative agent for the lender parties](http://www.sec.gov/Archives/edgar/data/884887/000110465917072317/a17-28076_1ex10d1.htm) | | 8-K | | 10.1 | | 12/7/2017 |

| 10.4 | | [Assignment and Amendment to the Credit Agreement, dated as of August 23, 2013, by and among the Company, Nordea Bank Finland plc, New York Branch, as administrative agent for the lender parties and the lender parties](http://www.sec.gov/Archives/edgar/data/884887/000088488713000059/exh101total.htm) | | 8-K | | 10.1 | | 8/26/2013 |

| 10.5 | | [Amendment No. 1 to the Amended and Restated Credit Agreement, dated as of July 10, 2015, by and among the Company Nordea Bank Finland Plc, New York Branch, as administrative agent for the lender parties and the lender parties](http://www.sec.gov/Archives/edgar/data/884887/000088488715000073/rcl-6302015x102.htm) | | 10-Q | | 10.2 | | 6/30/2015 |

| 10.6 | | [Amendment to the Credit Agreement, dated as of October 12, 2017, by and among the Company, the various financial institutions as are or shall become parties thereto and Nordea Bank AB (PUBL), New York branch, as administrative agent for the lender parties](http://www.sec.gov/Archives/edgar/data/884887/000110465917062535/a17-24009_1ex10d3.htm) | | 8-K | | 10.3 | | 10/17/2017 |

| 10.7 | | [Amendment No. 4 to Hull No. S-697 Credit Agreement, dated as of February 2, 2016, by and between the Company, the Lenders from time to time party thereto, the Mandated Lead Arrangers and KfW-IPEX-Bank GmbH, as Hermes Agent and Facility Agent](http://www.sec.gov/Archives/edgar/data/884887/000088488716000126/rcl-20151231xex107.htm) | | 10-K | | 10.7 | | 12/31/2015 |

| 10.8 | | [Amendment No. 4 to Hull No. S-698 Credit Agreement, dated as of February 3, 2016, by and between the Company, the Lenders from time to time party thereto, the Mandated Lead Arrangers and KfW-IPEX-Bank GmbH, as Hermes Agent and Facility Agent](http://www.sec.gov/Archives/edgar/data/884887/000088488716000126/rcl-20151231xex108.htm) | | 10-K | | 10.8 | | 12/31/2015 |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| | | | | Incorporated By Reference | | | | |

| Exhibit Number | | Exhibit Description | | Form | | Exhibit | | Filing Date/ Period End Date |

| 10.9 | | [Amendment No. 1 to Hull No. S-699 Credit Agreement, dated as of March 31, 2016, by and between the Company, the Lenders from time to time party thereto, the Mandated Lead Arrangers and KfW-IPEX-Bank GmbH, as Hermes Agent and Facility Agent](http://www.sec.gov/Archives/edgar/data/884887/000088488716000143/rcl-3312016xexhibit101.htm) | | 10-Q | | 10.1 | | 3/31/2016 |

| 10.10 | | [Amendment and Restatement Agreement, dated as of January 15, 2016, in respect of a Facility Agreement dated, as of July 9, 2013, by and between the Company, the Lenders from time to time party thereto, Société Générale, as Facility Agent and Mandated Lead Arranger, BNP Paribas, as Documentation Bank and Mandated Lead Arranger, and HSBC France, as Mandated Lead Arranger](http://www.sec.gov/Archives/edgar/data/884887/000088488716000126/rcl-20151231xex1010.htm) | | 10-K | | 10.10 | | 12/31/2015 |

| 10.11 | | [Novation Agreement, dated as of January 30, 2015, by and between Frosaitomi Finance Ltd. the Company, Citibank International Limited, Citicorp Trustee Company Limited, Citibank N.A., London Branch and the banks and financial institutions as a lender parties thereto](http://www.sec.gov/Archives/edgar/data/884887/000088488715000015/exh101form8k20150130.htm) | | 8-K | | 10.1 | | 2/5/2015 |

| 10.12 | | [Form of Hull No. B34 Novated Credit Agreement (as amended and restated on February 8, 2017)](http://www.sec.gov/Archives/edgar/data/884887/000088488717000020/rcl-20161231xex1010.htm) | | 10-K | | 10.10 | | 12/31/2016 |

| 10.13 | | [Hull No. S-700 Credit Agreement, dated as of November 13, 2015, by and among the Company, the Lenders from time to time party thereto and KfW IPEX-Bank GmbH, as Hermes Agent, Facility Agent and Initial Mandated Lead Arranger.](http://www.sec.gov/Archives/edgar/data/884887/000088488715000109/exh101form8k20151113.htm) | | 8-K | | 10.1 | | 11/19/2015 |

| 10.14 | | [Hull No. S-713 Credit Agreement, dated as of November 13, 2015, by and among the Company, the Lenders from time to time party thereto and KfW IPEX-Bank GmbH, as Hermes Agent, Facility Agent and Initial Mandated Lead Arranger.](http://www.sec.gov/Archives/edgar/data/884887/000088488715000109/exh102form8k20151113.htm) | | 8-K | | 10.2 | | 11/19/2015 |

| 10.15 | | [Novation Agreement, dated as of June 22, 2016, by and between Saintiami Finance Ltd., Royal Caribbean Cruises Ltd., Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and the banks and financial institutions as lender parties thereto](http://www.sec.gov/Archives/edgar/data/884887/000088488716000171/exh101form8k20160622.htm) | | 8-K | | 10.1 | | 6/28/2016 |

| 10.16 | | [Novation Agreement, dated as of June 22, 2016, by and between Azairemia Finance Ltd., Royal Caribbean Cruises Ltd., Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and the banks and financial institutions as lender parties thereto](http://www.sec.gov/Archives/edgar/data/884887/000088488716000171/exh102form8k20160622.htm) | | 8-K | | 10.2 | | 6/28/2016 |

| 10.17 | | [Novation Agreement, dated as of July 24, 2017, between Hibisyeu Finance Ltd., Royal Caribbean Cruises Ltd., Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and the banks and financial institutions as lender parties thereto](http://www.sec.gov/Archives/edgar/data/884887/000114036117029156/ex10_1.htm) | | 8-K | | 10.1 | | 7/28/2017 |

| 10.18 | | [Novation Agreement, dated as of July 24, 2017, between Hoediscus Finance Ltd., Royal Caribbean Cruises Ltd., Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and the banks and financial institutions as lender parties thereto](http://www.sec.gov/Archives/edgar/data/884887/000114036117029156/ex10_2.htm) | | 8-K | | 10.2 | | 7/28/2017 |

| 10.19 | | [Novation Agreement, dated as of July 24, 2017, between Houatorris Finance Ltd., Royal Caribbean Cruises Ltd., Citibank Europe Plc, UK Branch, Citicorp Trustee Company Limited, Citibank N.A., London Branch, HSBC France, Sumitomo Mitsui Banking Corporation Europe Limited, Paris Branch and the banks and financial institutions as lender parties thereto](http://www.sec.gov/Archives/edgar/data/884887/000114036117029156/ex10_3.htm) | | 8-K | | 10.3 | | 7/28/2017 |

| 10.20 | | [Icon 1 Hull No. S-1400 Credit Agreement, dated as of October 11, 2017, between Royal Caribbean Cruises Ltd., as the Borrower, the Lenders from time to time party thereto, KfW IPEX-Bank GmbH, as Hermes Agent, Facility Agent, Documentation Agent and Initial Mandated Lead Arranger and BNP Paribas Fortis SA/NV as Finnvera Agent](http://www.sec.gov/Archives/edgar/data/884887/000110465917062535/a17-24009_1ex10d1.htm) | | 8-K | | 10.1 | | 10/17/2017 |

The exhibits listed on the accompanying Index to Exhibits are filed or incorporated by reference as part of this Annual Report on Form 10-K and such Index to Exhibits is hereby incorporated herein by reference.

| | Jason T. Liberty [added: Executive Vice President,] Chief Financial Officer (Principal Financial Officer and duly authorized signatory) |

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on February [removed: 23, 2017.][added: 20, 2018.]

| Jason T. Liberty [added: Executive Vice President,] Chief Financial Officer (Principal Financial Officer) |

| [removed: 23.1 | | Consent] [added: [Report] of [removed: PricewaterhouseCoopers LLP, an independent registered certified public accounting firm* | | | | |] [added: Independent Registered Certified Public Accounting Firm](#s08ACBC2E40E75DC997D96FE40BCD38D6)] | [added: [F-2](#s08ACBC2E40E75DC997D96FE40BCD38D6)] |

| [removed: | (v) | the Notes] [added: [Notes] to the Consolidated Financial [removed: Statements, tagged in summary and detail.] [added: Statements](#s25B3C5628D2C53AEA87C81607423F748)] | [added: [F-9](#s25B3C5628D2C53AEA87C81607423F748) |]

[removed: | [Report] [added: Report] of Independent Registered [removed: Certified] Public Accounting [removed: Firm](#sAD61C1AA5B9A577DAD8975631FA7D262) | [F-2](#sAD61C1AA5B9A577DAD8975631FA7D262) |][added: Firm]

| [Consolidated Statements of Comprehensive Income [removed: (Loss)](#sAAC87D29921A5F9CA7526DDFDB1B36FC)] [added: (Loss)](#s1F9B427E259D5F73A924CB6A4F9ADD40)] | [removed: [F-3](#sAAC87D29921A5F9CA7526DDFDB1B36FC)] [added: [F-4](#s1F9B427E259D5F73A924CB6A4F9ADD40)] |

| [Consolidated Balance [removed: Sheets](#s0591205DEF7C5D369B351CFB133CD52A)] [added: Sheets](#s40666B1322495DE3A893AABAFCAEF466)] | [removed: [F-4](#s0591205DEF7C5D369B351CFB133CD52A)] [added: [F-5](#s40666B1322495DE3A893AABAFCAEF466)] |

| [Consolidated Statements of Cash [removed: Flows](#s2B01A9E0A2E15A3DBDCE3B53B8C3E774)] [added: Flows](#s512E47055EDE5C0BA4403933A09E1954)] | [removed: [F-5](#s2B01A9E0A2E15A3DBDCE3B53B8C3E774)] [added: [F-6](#s512E47055EDE5C0BA4403933A09E1954)] |

| [Consolidated Statements of Shareholders' [removed: Equity](#s0807F9170F29524082843AB064786A5D)] [added: Equity](#sF77D93CF5D9C5256847540DF39614838)] | [removed: [F-7](#s0807F9170F29524082843AB064786A5D)] [added: [F-8](#sF77D93CF5D9C5256847540DF39614838)] |

In our opinion, the [removed: accompanying] consolidated [removed: balance sheets and the related consolidated] [added: financial] statements [removed: of comprehensive income (loss), of shareholders’ equity and of cash flows] [added: referred to above] present fairly, in all material respects, the financial position of [removed: Royal Caribbean Cruises Ltd. and its subsidiaries at] [added: the Company as of] December 31, [removed: 2016] [added: 2017] and [removed: 2015,] [added: 2016,] and the results of their operations and their cash flows for each of the three years in the period ended December 31, [removed: 2016] [added: 2017] in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2016,] [added: 2017,] based on criteria established in Internal Control - Integrated Framework (2013) issued by the [removed: Committee of Sponsoring Organizations of the Treadway Commission (COSO).][added: COSO.]

The Company's management is responsible for these [added: consolidated] financial statements, for maintaining effective internal control over financial [removed: reporting] [added: reporting,] and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A.

Our responsibility is to express opinions on [removed: these] [added: the Company’s consolidated] financial statements and on the Company's internal control over financial reporting based on our [removed: integrated] audits.

We conducted our audits in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the [added: consolidated] financial statements are free of material [removed: misstatement] [added: misstatement, whether due to error or fraud,] and whether effective internal control over financial reporting was maintained in all material respects.

Our audits [removed: of the financial statements] [added: also] included [removed: examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing] [added: evaluating] the accounting principles used and significant estimates made by management, [removed: and] [added: as well as] evaluating the overall [added: presentation of the consolidated] financial [removed: statement presentation.][added: statements.]

| | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Passenger ticket revenues | $ | [removed: 6,149,323] [added: 6,313,170] | | | $ | [removed: 6,058,821] [added: 6,149,323] | | | $ | [removed: 5,893,847] [added: 6,058,821] | |

| Onboard and other revenues | [removed: 2,347,078] [added: 2,464,675] | | | | [removed: 2,240,253] [added: 2,347,078] | | | | [removed: 2,180,008] [added: 2,240,253] | | |

| Total revenues | [removed: 8,496,401] [added: 8,777,845] | | | | [removed: 8,299,074] [added: 8,496,401] | | | | [removed: 8,073,855] [added: 8,299,074] | | |

| Commissions, transportation and other | [removed: 1,349,677] [added: 1,363,170] | | | | [removed: 1,400,778] [added: 1,349,677] | | | | [removed: 1,372,785] [added: 1,400,778] | | |

| Onboard and other | [removed: 493,558] [added: 495,552] | | | | [removed: 553,104] [added: 493,558] | | | | [removed: 582,750] [added: 553,104] | | |

| Payroll and related | [removed: 882,891] [added: 852,990] | | | | [removed: 861,775] [added: 882,891] | | | | [removed: 847,641] [added: 861,775] | | |

| Food | [removed: 485,673] [added: 492,857] | | | | [removed: 480,009] [added: 485,673] | | | | [removed: 478,130] [added: 480,009] | | |

| Fuel | [removed: 713,676] [added: 681,118] | | | | [removed: 795,801] [added: 713,676] | | | | [removed: 947,391] [added: 795,801] | | |

| Other operating | [removed: 1,090,064] [added: 1,010,892] | | | | [removed: 1,007,926] [added: 1,090,064] | | | | [removed: 1,077,584] [added: 1,007,926] | | |

| Total cruise operating expenses | [removed: 5,015,539] [added: 4,896,579] | | | | [removed: 5,099,393] [added: 5,015,539] | | | | [removed: 5,306,281] [added: 5,099,393] | | |

| Marketing, selling and administrative expenses | [removed: 1,100,290] [added: 1,186,016] | | | | [removed: 1,086,504] [added: 1,108,742] | | | | [removed: 1,048,952] [added: 1,086,504] | | |

| Depreciation and amortization expenses | [removed: 894,915] [added: 951,194] | | | | [removed: 827,008] [added: 894,915] | | | | [removed: 772,445] [added: 827,008] | | |

| Impairment of Pullmantur related assets | — | | | | [removed: 411,267] [added: —] | | | | [removed: —] [added: 411,267] | | |

| | [removed: 7,019,196] [added: 7,033,789] | | | | [removed: 7,424,172] [added: 7,019,196] | | | | [removed: 7,131,996] [added: 7,424,172] | | |

| Operating Income | [removed: 1,477,205] [added: 1,744,056] | | | | [removed: 874,902] [added: 1,477,205] | | | | [removed: 941,859] [added: 874,902] | | |

| Interest income | [removed: 20,856] [added: 30,101] | | | | [removed: 12,025] [added: 20,856] | | | | [removed: 10,344] [added: 12,025] | | |

| Interest expense, net of interest capitalized | [removed: (307,370] [added: (299,982] | | ) | | [removed: (277,725] [added: (307,370] | | ) | | [removed: (258,299] [added: (277,725] | | ) |

| Equity investment income | [removed: 128,350] [added: 156,247] | | | | [removed: 81,026] [added: 128,350] | | | | [removed: 51,640] [added: 81,026] | | |

| Other [removed: (expense) income(1)] [added: expense(1)] | [removed: (35,653] [added: (5,289] | | ) | | [removed: (24,445] [added: (35,653] | | ) | | [removed: 18,602] [added: (24,445] | | [added: )] |

| | [removed: (193,817] [added: (118,923] | | ) | | [removed: (209,119] [added: (193,817] | | ) | | [removed: (177,713] [added: (209,119] | | ) |

| Net Income | $ | [removed: 1,283,388] [added: 1,625,133] | | | $ | [removed: 665,783] [added: 1,283,388] | | | $ | [removed: 764,146] [added: 665,783] | |

| Net income | $ | [removed: 5.96] [added: 7.57] | | | $ | [removed: 3.03] [added: 5.96] | | | $ | [removed: 3.45] [added: 3.03] | |

February 20, 2018

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Royal Caribbean Cruises Ltd. and its subsidiaries as of December 31, 2017 and 2016, and the related consolidated statements of comprehensive income (loss), shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2017, including the related notes (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Basis for Opinions

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Definition and Limitations of Internal Control over Financial Reporting

Certified Public Accountants

February 20, 2018

We have served as the Company’s auditor since at least 1989, which includes periods before the Company became subject to SEC reporting requirements.

We have not determined the specific year we began serving as auditor of the Company.

___________________________________________________________________

| | $ | 22,296,317 | | | $ | 22,310,324 | |

| | $ | 22,296,317 | | | $ | 22,310,324 | |

| Purchases of property and equipment included in accounts payable and accrued expenses and other liabilities | $ | 139,644 | | | $ | — | | | $ | — | |

___________________________________________________________________

| Purchases of Treasury Stock | — | | | | — | | | | — | | | | — | | | | (224,998 | | ) | | (224,998 | | ) |