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

Cautionary Note Concerning Forward-Looking Statements

The discussion under this caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Quarterly Report on Form 10-Q includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding our expectations for future periods, business and industry prospects or future results of operations or financial position, made in this Quarterly Report on Form 10-Q are forward-looking. Words such as "anticipate," "believe," "considering," "could," "driving," "estimate," "expect," "goal," "intend," "may," "plan," "project," "seek," "should," "will," "would," and similar expressions are intended to further identify any of these forward-looking statements. Forward-looking statements reflect management's current expectations, but they are based on judgments and are inherently uncertain. Furthermore, they are subject to risks, uncertainties and other factors that could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements. Examples of these risks, uncertainties and other factors include, but are not limited to, those discussed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and, in particular, the risks discussed under the caption "Risk Factors" in Part I, Item 1A therein.

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

Overview

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

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

• a discussion of our results of operations for the quarter and six months ended June 30, 2024, compared to the same period in 2023; and

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

Critical Accounting Policies and Estimates

For a discussion of our critical accounting policies and estimates, refer to Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations within our Annual Report on Form 10-K for the year ended December 31, 2023.

Seasonality

Our revenues are seasonal based on demand for cruises. Demand has historically been strongest for cruises during the Northern Hemisphere’s summer months and holidays. In order to mitigate the impact of the winter weather in the Northern Hemisphere and to capitalize on the summer season in the Southern Hemisphere, our brands have historically focused on deployment to the Caribbean, Asia and Australia during that period.

Financial Presentation

Description of Certain Line Items

Revenues

Our revenues are comprised of the following:

• Passenger ticket revenues, which consist of revenue recognized from the sale of passenger tickets and the sale of air transportation to and from our ships; and

• Onboard and other revenues, which consist primarily of revenues from the sale of goods and/or services onboard our ships not included in passenger ticket prices, casino operations, cancellation fees, sales of vacation protection insurance, pre- and post-cruise tours and fees for operating certain port facilities. Onboard and other revenues also include revenues we receive from independent third-party concessionaires that pay us a percentage of their revenues in exchange for the right to provide selected goods and/or services onboard our ships, as well as revenues received for procurement and management related services we perform on behalf of our unconsolidated affiliates.

Cruise Operating Expenses

Our cruise operating expenses are comprised of the following:

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

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

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

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

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

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

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

Selected Operational and Financial Metrics

We utilize a variety of operational and financial metrics which are defined below to evaluate our performance and financial condition. As discussed in more detail herein, certain of these metrics are non-GAAP financial measures. These non-GAAP financial measures are provided along with the related GAAP financial measures as we believe they provide useful information to investors as a supplement to our consolidated financial statements, which are prepared and presented in accordance with GAAP. The presentation of non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

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

Adjusted Earnings per Share ("Adjusted EPS") is a non-GAAP measure that represents Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. (as defined below) divided by weighted average shares outstanding or by diluted weighted average shares outstanding, as applicable. We believe that this non-GAAP measure is meaningful when assessing our performance on a comparative basis.

Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. is a non-GAAP measure that represents Net Income attributable to Royal Caribbean Cruises Ltd. excluding certain items that we believe adjusting for is meaningful when assessing our performance on a comparative basis. For the periods presented, these items included (i) loss on extinguishment of debt; (ii) the amortization of the Silversea Cruises intangible assets resulting from the Silversea Cruises acquisition; (iii) gain on sale of controlling interest; (iv) tax on the sale of PortMiami noncontrolling interest; (v) Silver Whisper deferred tax liability release; (vi) restructuring charges and other initiative expenses; (vii) recovery of losses from one of our equity method investees; and (viii) impairment and credit losses (recoveries). A reconciliation of Net Income attributable to Royal Caribbean Cruises Ltd. to Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. is provided below under Results of Operations.

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

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

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

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

Gross Margin Yield represent Gross Margin per APCD.

Adjusted Gross Margin represent Gross Margin, adjusted for payroll and related, food, fuel, other operating expenses, and depreciation and amortization. Gross Margin is calculated pursuant to GAAP as total revenues less total cruise operating expenses, and depreciation and amortization.

Net Yields represent Adjusted Gross Margin per APCD. We utilize Adjusted Gross Margin and Net Yields to manage our business on a day-to-day basis as we believe that they are the most relevant measures of our pricing performance because they

reflect the cruise revenues earned by us net of our most significant variable costs, which are commissions, transportation and other expenses, and onboard and other expenses.

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

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

The use of certain significant non-GAAP measures, such as Net Yields, Net Cruise Costs and Net Cruise Costs Excluding Fuel, allows us to perform capacity and rate analysis to separate the impact of known capacity changes from other less predictable changes which affect our business. We believe these non-GAAP measures provide expanded insight to measure revenue and cost performance in addition to the standard GAAP based financial measures. There are no specific rules or regulations for determining non-GAAP measures, and as such, they may not be comparable to other companies within the industry.

Results of Operations

Summary

Net Income attributable to Royal Caribbean Cruises Ltd. and Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. for the second quarter of 2024 was $854 million and $882 million, compared to Net Income and Adjusted Net Income of $459 million and $492 million, respectively, for the second quarter of 2023.

Net Income attributable to Royal Caribbean Cruises Ltd. and Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. for the six months ended June 30, 2024 was $1,214 million and $1,359 million, compared to Net Income and Adjusted Net Income of $411 million and $433 million, respectively, for the six months ended June 30, 2023

Significant items for the quarter and six months ended June 30, 2024 include:

• Total revenues, increased $587 million and $1,430 million for the quarter and six months ended June 30, 2024 as compared to the same period in 2023. The increase was primarily due to an increase in in ticket prices, capacity and onboard spending in 2024, compared to same periods in 2023.

• Total cruise operating expenses, increased $197 million and $462 million for the quarter and six months ended June 30, 2024 as compared to the same period in 2023. The increase was primarily due to an increase in capacity and occupancy, and additional drydock days in 2024 compared to the same period in 2023.

*•*In March 2024, we issued $1.25 billion aggregate principal amount of 6.25% senior notes. Upon closing, we redeemed all of the outstanding $1.25 billion aggregate principal amount of 11.625% Senior Notes Due 2027.

*•*During the quarter ended June 30, 2024, we repaid $839 million of outstanding deferred amounts under our export credit facilities,

• In May 2024, we took delivery of Silver Nova. Refer to Note 6*. Debt* to our consolidated financial statements for further information on the financing of the ship.

• In June 2024, we took delivery of Utopia of the Seas. Refer to Note 6*. Debt* to our consolidated financial statements for further information on the financing of the ship.

• In June 2024, TUI Cruises, our 50% joint venture, took delivery of Mein Schiff 7.

For further information regarding the debt transactions discussed above, refer to Note 6*. Debt* to our consolidated financial statements.

Operating results for the quarter ended June 30, 2024 compared to the same period in 2023 are shown in the following table (in millions, except per share data):

			Quarter Ended June 30,
			2024												2023
									% of Total Revenues												% of Total Revenues
Passenger ticket revenues			$	2,887					70.2		%				$	2,444					69.4		%
Onboard and other revenues			1,223						29.8		%				1,079						30.6		%
Total revenues			4,110						100.0		%				3,523						100.0		%
Cruise operating expenses:
Commissions, transportation and other			572						13.9		%				516						14.6		%
Onboard and other			244						5.9		%				220						6.2		%
Payroll and related			313						7.6		%				284						8.1		%
Food			225						5.5		%				203						5.8		%
Fuel			282						6.9		%				276						7.8		%
Other operating			516						12.6		%				456						12.9		%
Total cruise operating expenses			2,152						52.4		%				1,955						55.5		%
Marketing, selling and administrative expenses			466						11.3		%				435						12.3		%
Depreciation and amortization expenses			393						9.6		%				362						10.3		%
Operating Income			1,099						26.7		%				771						21.9		%
Other income (expense):
Interest income			4						0.1		%				10						0.3		%
Interest expense, net of interest capitalized			(298)						(7.3)		%				(355)						(10.1)		%
Equity investment income			56						1.4		%				42						1.2		%
Other expense			(3)						(0.1)		%				(5)						(0.1)		%
			(241)						(5.9)		%				(308)						(8.7)		%
Net Income			858						20.9		%				463						13.1		%
Less: Net Income attributable to noncontrolling interest			4						0.1		%				4						0.1		%
Net Income attributable to Royal Caribbean Cruises Ltd.			$	854					20.8		%				$	459					13.0		%
Diluted Earnings per Share			$	3.11											$	1.70

			Six Months Ended June 30,
			2024												2023
									% of Total Revenues												% of Total Revenues
Passenger ticket revenues			$	5,429					69.3		%				$	4,340					67.7		%
Onboard and other revenues			2,409						30.7		%				2,068						32.3		%
Total revenues			7,838						100.0		%				6,408						100.0		%
Cruise operating expenses:
Commissions, transportation and other			1,070						13.7		%				919						14.3		%
Onboard and other			437						5.6		%				379						5.9		%
Payroll and related			631						8.1		%				594						9.3		%
Food			446						5.7		%				402						6.3		%
Fuel			586						7.5		%				577						9.0		%
Other operating			1,039						13.3		%				876						13.7		%
Total cruise operating expenses			4,209						53.7		%				3,747						58.5		%
Marketing, selling and administrative expenses			1,001						12.8		%				896						14.0		%
Depreciation and amortization expenses			780						10.0		%				721						11.3		%
Operating Income			1,848						23.6		%				1,044						16.3		%
Other income (expense):
Interest income			9						0.1		%				24						0.4		%
Interest expense, net of interest capitalized			(721)						(9.2)		%				(714)						(11.1)		%
Equity investment income			97						1.2		%				62						1.0		%
Other expense			(11)						(0.1)		%				(1)						—		%
			(626)						(8.0)		%				(629)						(9.8)		%
Net Income			1,222						15.6		%				415						6.5		%
Less: Net Income attributable to noncontrolling interest			8						0.1		%				4						0.1		%
Net Income attributable to Royal Caribbean Cruises Ltd.			$	1,214					15.5		%				$	411					6.4		%
Diluted Earnings per Share			$	4.46											$	1.60

Net Income attributable to Royal Caribbean Cruises Ltd. and Adjusted Net Income attributable to Royal Caribbean Cruises Ltd, were calculated as follows (in millions, except per share data):

			Quarter Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
Net Income attributable to Royal Caribbean Cruises Ltd.			$	854					$	459					$	1,214					$	411
Loss on extinguishment of debt			17						30						133						44
Amortization of Silversea Cruises intangible assets resulting from the Silversea Cruises acquisition (1)			2						2						3						3
Gain on sale of controlling interest (2)			—						—						—						(3)
PortMiami tax on sale of noncontrolling interest (3)			—						—						—						10
Silver Whisper deferred tax liability release (4)			—						—						—						(26)
Restructuring charges and other initiative expenses			3						5						3						5
Recovery of losses from one of our equity method investees			—						(4)						—						(4)
Impairment and credit losses (recoveries) (5)			6						—						6						(7)
Adjusted Net Income attributable to Royal Caribbean Cruises Ltd.			$	882					$	492					$	1,359					$	433
Basic:
Earnings per Share			$	3.32					$	1.79					$	4.72					$	1.61
Adjusted Earnings per Share			$	3.43					$	1.92					$	5.29					$	1.69
Diluted:
Earnings per Share (6)			$	3.11					$	1.70					$	4.46					$	1.60
Adjusted Earnings per Share (6)			$	3.21					$	1.82					$	4.97					$	1.69
Weighted-Average Shares Outstanding:
Basic			257						256						257						256
Diluted			281						282						281						259

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

(2)For 2023, represents gain on sale of controlling interest in cruise terminal facilities in Italy. These amounts are included in Other operating within our consolidated statements of comprehensive income (loss).

(3)For 2023, represents tax on the PortMiami sale of noncontrolling interest. These amounts are included in Other (expense) income in our consolidated statements of comprehensive income (loss).

(4)For 2023, represents the release of the deferred tax liability subsequent to the execution of the bargain purchase option for the Silver Whisper. These amounts are included in Other (expense) income within our consolidated statements of comprehensive income (loss).

(5)For 2024, represents property and equipment impairment charges related to certain construction in progress assets which we determined would no longer be completed. For 2023, represents asset impairments and credit losses recoveries for notes receivables for which credit losses were previously recorded. These amounts are included in Other operating within our consolidated statements of comprehensive income (loss).

(6)Diluted EPS and Adjusted Diluted EPS includes the add-back of dilutive interest expense related to our convertible notes of $19 million and $38 million for the quarter and six months ended June 30, 2024, respectively, and $21 million and $4 million for the quarter and six months ended June 30, 2023, respectively. Refer to Note 4*. Earnings Per Share* to our consolidated financial statements for further information.

Selected statistical information is shown in the following table:

			Quarter Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
Passengers Carried			2,040,242						1,900,810						4,094,624						3,707,079
Passenger Cruise Days			13,230,448						12,297,290						26,380,157						23,772,032
APCD			12,233,196						11,708,837						24,519,026						22,942,326
Occupancy			108.2		%				105.0		%				107.6		%				103.6		%

EBITDA and Adjusted EBITDA were calculated as follows (in millions):

						Quarter Ended June 30,												Six Months Ended June 30,
						2024						2023						2024						2023
Net Income attributable to Royal Caribbean Cruises Ltd.						$	854					$	459					$	1,214					$	411
Interest income						(4)						(10)						(9)						(24)
Interest expense, net of interest capitalized						298						355						721						714
Depreciation and amortization expenses						393						362						780						721
Income tax expense (benefit) (1)						17						8						23						(1)
EBITDA						1,558						1,174						2,729						1,821
Other (income) expense (2)						(14)						(3)						(12)						2
Gain on sale of controlling interest (3)						—						—						—						(3)
Recovery of losses from one of our equity method investees						—						(4)						—						(4)
Restructuring charges and other initiative expenses						3						5						3						5
Impairment and credit losses (recoveries) (4)						6						—						6						(7)
Adjusted EBITDA						$	1,553					$	1,172					$	2,726					$	1,814

(1) These amounts are included in Other (expense) income within our consolidated statements of comprehensive income (loss).

(2) Represents net non-operating expense. The amount excludes income tax expense (benefit), included in the EBITDA calculation above.

(3) For 2023, represents gain on sale of controlling interest in cruise terminal facilities in Italy. These amounts are included in Other operating within our consolidated statements of comprehensive income (loss).

(4) For 2024, represents property and equipment impairment charges related to certain construction in progress assets. For 2023, represents asset impairments and credit losses recoveries for notes receivables for which credit losses were previously recorded. These amounts are included in Other operating within our consolidated statements of comprehensive income (loss).

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

			Quarter Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
Total revenue			$	4,110					$	3,523					$	7,838					$	6,408
Less:
Cruise operating expenses			2,152						1,955						4,209						3,747
Depreciation and amortization expenses			393						362						780						721
Gross Margin			1,565						1,206						2,849						1,940
Add:
Payroll and related			313						284						631						594
Food			225						203						446						402
Fuel			282						276						586						577
Other operating			516						456						1,039						876
Depreciation and amortization expenses			393						362						780						721
Adjusted Gross Margin			$	3,294					$	2,787					$	6,331					$	5,110
APCD			12,233,196						11,708,837						24,519,026						22,942,326
Gross Margin Yields			$	127.94					$	103.04					$	116.21					$	84.51
Net Yields			$	269.38					$	238.00					$	258.23					$	222.74

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

			Quarter Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
Total cruise operating expenses			$	2,152					$	1,955					$	4,209					$	3,747
Marketing, selling and administrative expenses			466						435						1,001						896
Gross Cruise Costs			2,618						2,390						5,210						4,643
Less:
Commissions, transportation and other			572						516						1,070						919
Onboard and other			244						220						437						379
Net Cruise Costs Including Other Costs			1,802						1,654						3,703						3,345
Less:
Gain on sale of controlling interest (1)			—						—						—						(3)
Impairment and credit loss (recoveries) (2)			6						—						6						(7)
Restructuring charges and other initiative expenses (3)			3						5						3						5
Net Cruise Costs			1,793						1,649						3,694						3,350
Less:
Fuel			282						276						586						577
Net Cruise Costs Excluding Fuel			$	1,511					$	1,373					$	3,108					$	2,773
APCD			12,233,196						11,708,837						24,519,026						22,942,326
Gross Cruise Costs per APCD			$	214.06					$	204.10					$	212.50					$	202.40
Net Cruise Costs per APCD			$	146.70					$	140.76					$	150.69					$	146.04
Net Cruise Costs Excluding Fuel per APCD			$	123.65					$	117.19					$	126.78					$	120.87

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

(2) For 2024, represents property and equipment impairment charges related to certain construction in progress assets. For 2023, represents asset impairments and credit losses recoveries for notes receivables for which credit losses were previously recorded. These amounts are included in Other operating within our consolidated statements of comprehensive income (loss).

(3) These amounts are included in Marketing, selling and administrative expenses within our consolidated statements of comprehensive income (loss).

Quarter Ended June 30, 2024 Compared to Quarter Ended June 30, 2023

In this section, references to 2024 refer to the quarter ended June 30, 2024 and references to 2023 refer to the quarter ended June 30, 2023.

Revenues

Total revenues for 2024 increased $587 million to $4.1 billion from $3.5 billion in 2023.

Passenger ticket revenues comprised 70.2% of our 2024 total revenues. Passenger ticket revenues for 2024 increased by $443 million, or 18.1% to $2.9 billion from $2.4 billion in 2023. The increase was primarily due to:

• a $334 million increase driven by increases in our occupancy of 3.2% and ticket prices on a per passenger basis on existing hardware as well as the benefit of new hardware, compared to the same period in 2023; and

• a 4.5% increase in capacity which increased Passenger ticket revenues by $109 million, due to the additions of Icon of the Seas, Celebrity Ascent, and Silver Nova compared to the same period in 2023.

The remaining 30% of 2024 total revenues was comprised of Onboard and other revenues, which increased $144 million, or 13.3% to $1.2 billion in 2024 from $1.1 billion in 2023. The increase was primarily due to:

• $84 million driven by improved pricing and an increase in load factors of 3.2% in 2024 compared to the same period in 2023; and

• $48 million driven by increase capacity noted above due to the addition of new hardware.

Cruise Operating Expenses

Total Cruise operating expenses for 2024 increased $197 million to $2.2 billion from $2.0 billion in 2023. The increase was primarily due to:

• the 4.5% increase in capacity noted above increased cruise operating expenses by $88 million; and

•$97 million of the increase is driven by various factors including higher drydock and maintenance related expenses; an increase in Commissions, transportation and other expenses due to the increase in load factors of 3.2% in 2024 compared to the same period in 2023.

Other Income (Expense)

Interest expense, net of interest capitalized for 2024 decreased $57 million, or (16.1)%, to $298 million from $355 million in 2023. The decrease was primarily due to lower interest expense of $88 million in 2024 resulting from the redemption of our 11.50% Secured Notes during 2023 and the redemption of our 11.625% Senior Notes in March 2024. The decrease was partially offset by an increase of $43 million primarily related to the debt of our new ship deliveries between June and December 2023, as well as deliveries through June 2024.

Other Comprehensive Income (Loss)

Other comprehensive loss was $(37) million in 2024 compared to Other comprehensive loss of $(1) million for the same period in 2023. The increase of $(36) million was primarily due to a Loss on cash flow derivative hedges in 2024 of $31 million compared to a Gain on cash flow derivative hedges in 2023 of $5 million, mostly as a result of an increase in fair value of our foreign currency forwards in 2024 compared to 2023.

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

In this section, references to 2024 refer to the six months ended June 30, 2024 and references to 2023 refer to the six months ended June 30, 2023.

Revenues

Total revenues for 2024 increased $1.4 billion to $7.8 billion from $6.4 billion in 2023.

Passenger ticket revenues comprised 69% of our 2024 total revenues. Passenger ticket revenues for 2024 increased by $1.1 billion, or 25% to $5.4 billion from $4.3 billion in 2023. The increase was primarily due to:

• a $790 million increase driven by increases in our occupancy of 4.0% and ticket prices on a per passenger basis on existing hardware as well as the benefit of new hardware, compared to the same period in 2023; and

• a 6.9% increase in capacity which increased Passenger ticket revenues by $298 million, primarily due to the additions of Icon of the Seas, Celebrity Ascent, and Silver Nova compared to the same period in 2023.

The remaining 31% of 2024 total revenues was comprised of Onboard and other revenues, which increased $341 million, or 16.5% to $2.4 billion in 2024 from $2.1 billion in 2023. The increase was primarily due to:

• a $142 million increase driven by a 6.9% increase in capacity due to the additions of new hardware noted above in 2024 compared to the same period in 2023; and

• $141 million increase driven by improved pricing and an increase in load factors of 4.0% in 2024 compared to the same period in 2023.

Cruise Operating Expenses

Total Cruise operating expenses for 2024 increased $0.5 billion to $4.2 billion from $3.7 billion in 2023. The increase was primarily due to:

*•*the 6.9% increase in capacity noted above increased cruise operating expenses by $258 million; and

•$213 million of the increase is driven by various factors including an increase ticket prices noted above; higher drydock and maintenance related expenses; and an increase in Commissions, and head taxes expenses due to the increase in load factors of 4.0% in 2024 compared to the same period in 2023.

Marketing, Selling and Administrative Expenses

Marketing, selling and administrative expenses for 2024 increased $105 million, or 11.7%, to $1 billion from $896 million in 2023. The increase was primarily due to an increase in payroll and benefits expense driven by an increase in headcount and higher stock price related to our performance share awards in 2024 compared to the same period in 2023, and higher spending on advertisement and media promotions.

Other Comprehensive Income (Loss)

Other comprehensive income was $20 million in 2024 compared to Other comprehensive loss of $(37) million for the same period in 2023. The increase of $57 million, or 154.1% was primarily due to a Gain on cash flow derivative hedges in 2024 of $13 million compared to a Loss on cash flow derivative hedges in 2023 of $(27) million, mostly as a result of a significant increase in fair value of our fuel swaps in 2024 compared to 2023.

Future Application of Accounting Standards

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

Liquidity and Capital Resources

Sources and Uses of Cash

Cash flow generated from operations provides us with a significant source of liquidity. Net cash provided by operating activities was $2.9 billion and $2.7 billion for the six months ended June 30, 2024, and 2023, respectively. Cash flows from operating activities increased $0.2 billion primarily driven by an increase in operating income of $0.8 billion during 2024, offset by a decrease in the change in customer deposits of $(0.6) billion in 2024 compared to the same period in 2023.

Net cash used in investing activities was $2.5 billion for the six months ended June 30, 2024, compared to $1.0 billion for the same period in 2023. Cash flows used in investing activities were primarily attributable by an increase in capital expenditures of $1.3 billion during 2024, compared to the same period in 2023 due to the delivery of Utopia of the Seas and Silver Ray in 2024, compared to the delivery of Silver Nova during the same period in 2023.

Net cash used in financing activities was $0.5 billion for the six months ended June 30, 2024, compared to $2.9 billion for the same period in 2023. The change of $2.4 billion was primarily attributable to repayments of debt of $5.0 billion, offset by debt proceeds of $4.7 billion in 2024 compared to repayments of debt of $4.2 billion, offset by debt proceeds of $1.2 billion in 2023. Additionally, during 2023, we received proceeds of $209 million for the sale of noncontrolling interest of PortMiami, which did not recur in 2024.

Future Capital Commitments

Capital Expenditures

Our future capital commitments consist primarily of new ship orders. As of June 30, 2024, the dates that the ships on order by our Global and Partner Brands are expected to be delivered, subject to change in the event of construction delays, and their approximate berths are as follows:

Ship						Shipyard						Expected delivery						Approximate Berths
Royal Caribbean International —
Icon-class:
Star of the Seas						Meyer Turku Oy						3rd Quarter 2025						5,600
Unnamed						Meyer Turku Oy						2nd Quarter 2026						5,600
Celebrity Cruises —
Edge-class:
Celebrity Xcel						Chantiers de l'Atlantique						4th Quarter 2025						3,250
TUI Cruises (50% joint venture) —
Mein Schiff Relax						Fincantieri						1st Quarter 2025						4,100
Unnamed						Fincantieri						2nd Quarter 2026						4,100
Total Berths																		22,650

In addition, in February 2024, we entered into an agreement with Chantiers de l’Atlantique to build an additional Oasis class ship, for delivery in 2028, which is contingent upon completion of certain conditions precedent including financing.

Our future capital commitments consist primarily of new ship orders. As of June 30, 2024, the aggregate expected cost of our ships on order presented in the table above, excluding any ships on order by our Partner Brands, was $5.7 billion, of which we had deposited $543 million. Approximately 44.4% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at June 30, 2024. Refer to Note 8. Commitments and Contingencies and Note 11*. Fair Value Measurements and Derivative Instruments* to our consolidated financial statement*.*

As of June 30, 2024, we anticipate overall full year capital expenditures, based on our existing ships on order, will be approximately $3.5 billion for 2024. This amount does not include any ships on order by our Partner Brands.

Material Cash Requirements

As of June 30, 2024, our material cash requirements were as follows (in millions):

			Remainder of
			2024						2025						2026						2027						2028						Thereafter						Total
Operating Activities:
Interest on debt(1)			$	557					$	1,070					$	952					$	811					$	629					$	1,549					$	5,568
Other(2)			63						132						148						153						139						1,013						1,648
Investing Activities:
Ship purchase obligations(3)			144						2,145						1,264						—						—						—						3,553
Total			$	764					$	3,347					$	2,364					$	964					$	768					$	2,562					$	10,769

(1) Long-term debt obligations mature at various dates through fiscal year 2037 and bear interest at fixed and variable rates. Interest on variable-rate debt is calculated based on forecasted debt balances, including the impact of interest rate swap agreements, using the applicable rate at June 30, 2024. Debt denominated in other currencies is calculated based on the applicable exchange rate at June 30, 2024.

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

(3) Amounts are based on contractual installment and delivery dates for our ships on order. Included in these figures are $3.0 billion in final contractual installments, which have committed financing with sovereign guarantees covering approximately 80% of the cost of the ships on order for our Global Brands. Amounts do not include potential obligations which remain subject to cancellation at our sole discretion or any agreements entered for ships on order that remain contingent upon completion of conditions precedent.

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

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

Refer to Funding Needs and Sources for discussion on the planned funding of the above material cash requirements.

As a normal part of our business, depending on market conditions, pricing and our overall growth strategy, we continuously consider opportunities to enter into contracts for the building of additional ships. We may also consider the sale of ships or the purchase of existing ships. We continuously consider potential acquisitions and strategic alliances. If any of these were to occur, they would be financed through the incurrence of additional indebtedness, the issuance of additional shares of equity securities or through cash flows from operations.

Off-Balance Sheet Arrangements

Refer to Note 5*. Investments and Other Assets* for ownership restrictions related to TUI Cruises.

Refer to Note 3*. Revenue* for credit card processor agreements for export credit agency guarantees.

Refer to Note 8*. Commitments and Contingencies* for other agreements.

As of June 30, 2024, other than the items referenced above, we are not party to any other off-balance sheet arrangements, including guarantee contracts, retained or contingent interest, certain derivative instruments and variable interest entities, that either have, or are reasonably likely to have, a current or future material effect on our financial position.

Funding Needs and Sources

We have significant contractual obligations of which our debt service obligations and the capital expenditures associated with our ship purchases represent our largest funding needs. As of June 30, 2024, we had $3.9 billion of committed financing for our ships on order. As of June 30, 2024, our obligations due through June 30, 2025 primarily consisted of $1.3 billion related to debt maturities, $1.1 billion related to interest on debt and $0.2 billion related to progress payments on our ship orders and, based on the expected delivery date, the final installment payable due upon the delivery. We have historically relied on a

combination of cash flows provided by operations, draw-downs under our available credit facilities, the incurrence of additional debt and/or the refinancing of our existing debt and the issuance of additional shares of equity securities to fund our obligations.

As of June 30, 2024, we had liquidity of $3.8 billion, including cash and cash equivalents of $0.4 billion, and $3.4 billion of undrawn revolving credit facility capacity.

If any person acquires ownership of more than 50% of our common stock or, subject to certain exceptions, during any 24-month period, a majority of our board of directors is no longer comprised of individuals who were members of our board of directors on the first day of such period, we may be obligated to prepay indebtedness outstanding under our credit facilities, which we may be unable to replace on similar terms. Our public debt securities also contain change of control provisions that would be triggered by a third-party acquisition of greater than 50% of our common stock coupled with a ratings downgrade. If this were to occur, it would have an adverse impact on our liquidity and operations.

Based on our assumptions and estimates and our financial condition, we believe that we have sufficient financial resources to fund our obligations for at least the next twelve months from the issuance of these financial statements. However, there is no assurance that our assumptions and estimates are accurate as there is inherent uncertainty in our ability to predict future liquidity requirements.

Debt Covenants

Our export credit facilities and our non-export credit facilities, and certain of our credit card processing agreements contain covenants that require us, among other things, to maintain a fixed charge coverage ratio, limit our net debt-to-capital ratio, and maintain a minimum liquidity, and under certain facilities, to maintain a minimum level of stockholders' equity. Our minimum stockholders' equity and maximum net debt-to-capital calculations exclude the impact of Accumulated other comprehensive loss on Total shareholders’ equity. As of June 30, 2024, we were in compliance with our financial covenants and we estimate that we will be in compliance for at least the next twelve months. In July 2024, we amended all of our export credit facilities to remove the stockholders' equity covenant, which has eliminated the contractual requirement for us to maintain a minimum level of stockholders' equity.

Dividends

The declaration of dividends shall at all times be subject to the final determination of our board of directors that a dividend is prudent at that time in consideration of the needs of the business. In July 2024, our Board of Directors declared a dividend of $0.40 per share, payable in October 2024.