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, 2025 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, 2026, compared to the same period in 2025; 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, 2025.

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 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 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; (ii) restructuring charges and other initiative expenses; and (iii) equity investment impairment, (recovery) of losses and other. A reconciliation of Net Income attributable to Royal Caribbean Cruises Ltd. to Adjusted EBITDA is provided below under Results of Operations.

Adjusted EBITDA Margin is a non-GAAP measure that represents Adjusted EBITDA (as defined above) divided by total revenues.

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

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 and inducement expense; (ii) restructuring charges and other initiative expenses; (iii) the amortization of the Silversea intangible assets resulting from the Silversea acquisition; (iv) gain on sale of noncontrolling interest; and (v) equity investment impairment, recovery of losses, and other. 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.

Constant Currency is a significant measure for our revenues and expenses, which are denominated in currencies other than the U.S. Dollar. Because our reporting currency is the U.S. Dollar, the value of these revenues and expenses in U.S. Dollar will be affected by changes in currency exchange rates. Although such changes in local currency prices are just one of many elements impacting our revenues and expenses, it can be an important element. For this reason, we also monitor our revenues and expenses in "Constant Currency" - i.e., as if the current period's currency exchange rates had remained constant with the comparable prior period's rates. We calculate "Constant Currency" by applying the average of the prior period exchange rates for each of the corresponding months, so as to calculate what the results would have been had exchange rates been the same throughout both periods. We do not make predictions about future exchange rates and use current exchange rates for calculations of future periods. It should be emphasized that the use of Constant Currency is primarily used by us for comparing short-term changes and/or projections. Over the longer term, changes in guest sourcing and shifting the amount of purchases between currencies can significantly change the impact of the purely currency-based fluctuations.

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) provision for income taxes. 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.

Gross Margin Yield represent Gross Margin per APCD.

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 cost 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 restructuring charges and other initiative expenses.

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 ("PCD") 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 2026 was $1.1 billion, respectively, compared to Net Income attributable to Royal Caribbean Cruises Ltd. and Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. of $1.2 billion, respectively, for the second quarter of 2025.

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, 2026 was $2.1 billion, respectively, compared to Net Income attributable to Royal Caribbean Cruises Ltd. and Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. of $1.9 billion, respectively, for the six months ended June 30, 2025.

Significant items for the quarter and six months ended June 30, 2026 include:

• Total revenues increased $294 million and $747 million for the quarter and six months ended June 30, 2026 as compared to the same period in 2025. The increase was primarily due to an increase in capacity and higher pricing in 2026 compared to the same period in 2025.

• Total cruise operating expenses increased $264 million and $433 million for the quarter and six months ended June 30, 2026 as compared to the same period in 2025. The increase was primarily due to an increase in capacity in 2026 compared to the same period in 2025.

• In February 2026, we issued $1.25 billion of senior notes due in 2033 and $1.25 billion of senior notes due in 2038 for net proceeds of approximately $2.5 billion.

• In June 2026, we took delivery of Legend of the Seas.

• In June 2026, TUI Cruises, our 50% joint venture, took delivery of Mein Schiff Flow.

For further information regarding the debt transactions discussed above, refer to Note 6. Debt to our consolidated financial statements under Item 1. Financial Statements.

Operating results for the quarters and six months ended June 30, 2026 compared to the same period in 2025 are shown in the following tables (in millions, except per share data):

			Quarter Ended June 30,
			2026												2025
									% of Total Revenues												% of Total Revenues
Passenger ticket revenues			$	3,344					69.2		%				$	3,199					70.5		%
Onboard and other revenues			1,488						30.8		%				1,339						29.5		%
Total revenues			4,832						100.0		%				4,538						100.0		%
Cruise operating expenses:
Commissions, transportation and other			622						12.9		%				606						13.4		%
Onboard and other			288						6.0		%				262						5.8		%
Payroll and related			405						8.4		%				329						7.2		%
Food			262						5.4		%				246						5.4		%
Fuel			355						7.3		%				279						6.1		%
Other operating			615						12.7		%				561						12.4		%
Total cruise operating expenses			2,547						52.7		%				2,283						50.3		%
Marketing, selling and administrative expenses			513						10.6		%				508						11.2		%
Depreciation and amortization expenses			464						9.6		%				417						9.2		%
Operating Income			1,307						27.0		%				1,329						29.3		%
Other income (expense):
Interest income			5						0.1		%				12						0.3		%
Interest expense, net of interest capitalized			(236)						(4.9)		%				(228)						(5.0)		%
Equity investment income			67						1.4		%				107						2.4		%
Other income			7						0.1		%				11						0.2		%
Income before income taxes			1,150						23.8		%				1,232						27.1		%
Provision for income taxes			(14)						(0.3)		%				(17)						(0.4)		%
Net Income			1,136						23.5		%				1,214						26.8		%
Less: Net Income attributable to noncontrolling interest			8						0.2		%				5						0.1		%
Net Income attributable to Royal Caribbean Cruises Ltd.			$	1,128					23.3		%				$	1,210					26.7		%
Diluted Earnings per Share			4.20												4.41

			Six Months Ended June 30,
			2026												2025
									% of Total Revenues												% of Total Revenues
Passenger ticket revenues			$	6,365					68.6		%				$	5,942					69.6		%
Onboard and other revenues			2,919						31.4		%				2,595						30.4		%
Total revenues			9,284						100.0		%				8,537						100.0		%
Cruise operating expenses:
Commissions, transportation and other			1,186						12.8		%				1,128						13.2		%
Onboard and other			501						5.4		%				463						5.4		%
Payroll and related			806						8.7		%				669						7.8		%
Food			526						5.7		%				486						5.7		%
Fuel			619						6.7		%				557						6.5		%
Other operating			1,157						12.5		%				1,061						12.4		%
Total cruise operating expenses			4,795						51.6		%				4,362						51.1		%
Marketing, selling and administrative expenses			1,095						11.8		%				1,071						12.5		%
Depreciation and amortization expenses			925						10.0		%				829						9.7		%
Operating Income			2,469						26.6		%				2,275						26.6		%
Other income (expense):
Interest income			10						0.1		%				15						0.2		%
Interest expense, net of interest capitalized			(514)						(5.5)		%				(477)						(5.6)		%
Equity investment income			151						1.6		%				155						1.8		%
Other income			9						0.1		%				15						0.2		%
Income before income taxes			2,126						22.9		%				1,983						23.2		%
Provision for income taxes			(39)						(0.4)		%				(33)						(0.4)		%
Net Income			2,086						22.5		%				1,950						22.8		%
Less: Net Income attributable to noncontrolling interest			16						0.2		%				10						0.1		%
Net Income attributable to Royal Caribbean Cruises Ltd.			$	2,070					22.3		%				$	1,940					22.7		%
Diluted Earnings per Share			7.68												7.10

Adjusted Net Income attributable to Royal Caribbean Cruises Ltd., and Adjusted Earnings per Share are calculated as follows (in millions, except per share data. Certain amounts may not add or calculate due to the use of rounded numbers):

			Quarter Ended June 30,												Six Months Ended June 30,
			2026						2025						2026						2025
Net Income attributable to Royal Caribbean Cruises Ltd.			$	1,128					$	1,210					$	2,070					$	1,940
Loss on extinguishment of debt and inducement expense (1)			—						—						29						10
Restructuring charges and other initiative expenses (2)			—						3						3						6
Amortization of Silversea intangible assets resulting from the Silversea acquisition (3)			2						2						3						3
Gain on sale of noncontrolling interest (4)			—						(11)						—						(11)
Equity investment impairment, (recovery) of losses and other			—						(1)						—						(1)
Adjusted Net Income attributable to Royal Caribbean Cruises Ltd.			$	1,130					$	1,202					$	2,105					$	1,946
Basic
Earnings per Share			$	4.21					$	4.45					$	7.70					$	7.17
Adjusted Earnings per Share			$	4.22					$	4.43					$	7.83					$	7.20
Diluted:
Earnings per Share (5)			$	4.20					$	4.41					$	7.68					$	7.10
Adjusted Earnings per Share (6)			$	4.21					$	4.38					$	7.81					$	7.09
Weighted-Average Shares Outstanding:
Basic			268						272						269						270
Diluted			268						275						270						275

(1)For 2026, includes the loss on extinguishment of debt associated with redemptions of the senior notes maturing in 2026. For 2025, includes $10 million of inducement expense related to the settlements of the 2025 6.00% convertible notes. These amounts are included in Interest expense, net of interest capitalized within our consolidated statements of comprehensive income (loss).

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

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

(4)For 2025, represents gain on sale of noncontrolling interest of Floating Docks and Grand Bahama Shipyard. These amounts are included in Other income within our consolidated statements of comprehensive income (loss).

(5)For 2025, diluted EPS includes the add-back of dilutive inducement and interest expense related to our convertible notes of $1 million and $16 million for the quarter and for the six months ended June 30, 2025, respectively. Refer to Note 4*. Earnings Per Share* to our consolidated financial statements under Item 1. Financial Statements for further information.

(6)For 2025, Adjusted Diluted EPS includes the add-back of dilutive interest expense related to our convertible notes of $1 million and $6 million for the quarter and six months ended June 30, 2025, respectively.

Selected statistical information is shown in the following table:

			Quarter Ended June 30,												Six Months Ended June 30,
			2026						2025						2026						2025
Passengers Carried			2,399,066						2,254,057						4,908,738						4,495,730
Passenger Cruise Days			14,962,211						14,277,894						29,835,410						28,046,226
APCD			13,572,396						12,942,385						27,275,099						25,600,377
Occupancy			110.2		%				110.3		%				109.4		%				109.6		%

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are calculated as follows (in millions, except APCD and per APCD data. Certain amounts may not add or calculate due to the use of rounded numbers):

			Quarter Ended June 30,												Six Months Ended June 30,
			2026						2025						2026						2025
Net Income attributable to Royal Caribbean Cruises Ltd.			$	1,128					$	1,210					$	2,070					$	1,940
Interest income			(5)						(12)						(10)						(15)
Interest expense, net of interest capitalized			236						228						514						477
Depreciation and amortization expenses			464						417						925						829
Provision for income taxes			14						17						39						33
EBITDA			1,837						1,860						3,538						3,264
Other income			(7)						(11)						(9)						(15)
Restructuring charges and other initiative expenses (1)			—						3						3						6
Equity investment impairment, (recovery) of losses and other			—						(1)						—						(1)
Adjusted EBITDA			$	1,830					$	1,851					$	3,532					$	3,252
Total revenues			$	4,832					$	4,538					$	9,284					$	8,537
APCD			13,572,396						12,942,385						27,275,099						25,600,377
Net Income attributable to Royal Caribbean Cruises Ltd. per APCD			$	83.13					$	93.47					$	75.89					$	75.76
Adjusted EBITDA per APCD			$	134.84					$	143.00					$	129.50					$	127.04
Adjusted EBITDA Margin			37.9		%				40.8		%				38.0		%				38.1		%

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

Gross Margin Yields and Net Yields are calculated as follows (in millions, except APCD and Yields. Certain amounts may not add or calculate due to the use of rounded numbers):

			Quarter Ended June 30,												Six Months Ended June 30,
			2026						2025						2026						2025
Total revenues			$	4,832					$	4,538					$	9,284					$	8,537
Less:
Cruise operating expenses			2,547						2,283						4,795						4,362
Depreciation and amortization expenses			464						417						925						829
Gross Margin			1,820						1,838						3,564						3,345
Add:
Payroll and related			405						329						806						669
Food			262						246						526						486
Fuel			355						279						619						557
Other operating			615						561						1,157						1,061
Depreciation and amortization expenses			464						417						925						829
Adjusted Gross Margin			$	3,922					$	3,670					$	7,597					$	6,946
APCD			13,572,396						12,942,385						27,275,099						25,600,377
Gross Margin Yields			$	134.11					$	142.00					$	130.69					$	130.67
Net Yields			$	288.95					$	283.56					$	278.54					$	271.33

Gross Cruise Costs, Net Cruise Costs and Net Cruise Costs excluding Fuel are calculated as follows (in millions, except APCD and costs per APCD. Certain amounts may not add or calculate due to the use of rounded numbers):

			Quarter Ended June 30,												Six Months Ended June 30,
			2026						2025						2026						2025
Total cruise operating expenses			$	2,547					$	2,283					$	4,795					$	4,362
Marketing, selling and administrative expenses			513						508						1,095						1,071
Gross Cruise Costs			3,060						2,791						5,890						5,433
Less:
Commissions, transportation and other			622						606						1,186						1,128
Onboard and other			288						262						501						463
Net Cruise Costs including other costs			2,150						1,923						4,203						3,842
Less:
Restructuring charges and other initiatives expenses (1)			—						3						3						6
Net Cruise Costs			2,150						1,920						4,200						3,837
Less:
Fuel			355						279						619						557
Net Cruise Costs excluding Fuel			$	1,796					$	1,641					$	3,581					$	3,280
APCD			13,572,396						12,942,385						27,275,099						25,600,377
Gross Cruise Costs per APCD			$	225.48					$	215.68					$	215.95					$	212.22
Net Cruise Costs per APCD			$	158.42					$	148.34					$	154.00					$	149.88
Net Cruise Costs excluding Fuel per APCD			$	132.30					$	126.76					$	131.30					$	128.14

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

Quarter Ended June 30, 2026 Compared to Quarter Ended June 30, 2025

In this section, references to 2026 refer to the quarter ended June 30, 2026 and references to 2025 refer to the quarter ended June 30, 2025.

Revenues

Total revenues increased $294 million, or 6.5%, to $4.8 billion in 2026 from $4.5 billion in 2025.

Passenger ticket revenues comprised 69% of our 2026 total revenues. Passenger ticket revenues increased by $145 million, or 4.5% to $3.3 billion in 2026 from $3.2 billion in 2025. The increase was primarily driven by a 4.9% capacity growth as a result of the addition of Star of the Seas and Celebrity Xcel compared to the same period in 2025.

The remaining 31% of 2026 total revenues was comprised of Onboard and other revenues, which increased $149 million, or 11% to $1.5 billion in 2026 from $1.3 billion in 2025. The increase was primarily due to:

• $65 million driven by 4.9% capacity growth as a result of the addition of Star of the Seas and Celebrity Xcel compared to the same period in 2025; and

• $83 million driven by higher onboard spending on a per passenger basis in 2026 compared to the same period in 2025.

Cruise Operating Expenses

Total Cruise operating expenses increased by $264 million, or 11.6%, to $2.5 billion in 2026 from $2.3 billion in 2025. The increase was primarily due to:

• a $111 million increase due to the 4.9% increase in capacity compared to the same period in 2025;

• a $76 million increase in crew payroll and related expenses primarily driven by addition of new ships compared to the same period in 2025; and

• a $76 million increase in fuel expenses related to higher rates per metric ton compared to the same period in 2025.

Other comprehensive income

Other comprehensive (loss) income for 2026 decreased by $307 million, or 174.4%, to a loss of $(131) million in 2026 from a gain of $176 million in 2025. The decrease was primarily due to a (loss) on cash flow derivative hedges of $(137) million in 2026 compared to a gain of $181 million in 2025, mostly as a result of a significant decrease in the fair value of our FX forward swaps and fuel swaps in 2026 compared to 2025.

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025

In this section, references to 2026 refer to the six months ended June 30, 2026 and references to 2025 refer to the six months ended June 30, 2025.

Revenues

Total revenues for 2026 increased $0.7 billion to $9.3 billion from $8.5 billion in 2025.

Passenger ticket revenues comprised 69% of our 2026 total revenues. Passenger ticket revenues for 2026 increased by $423 million, or 7.1% to $6.4 billion from $5.9 billion in 2025. The increase was primarily due to a 6.5% capacity growth as a result of the addition of Star of the Seas and Celebrity Xcel, compared to the same period in 2025.

The remaining 31% of 2026 total revenues was comprised of Onboard and other revenues, which increased $324 million, or 12.5% to $2.9 billion in 2026 from $2.6 billion in 2025. The increase was primarily due to:

• a $170 million increase driven by a 6.5% capacity growth as a result of the additions of new ships noted above compared to the same period in 2025; and

• a $155 million increase driven by higher pricing on both existing ships and new ships in 2026 compared to the same period in 2025.

Cruise Operating Expenses

Total Cruise operating expenses for 2026 increased $433 million to $4.8 billion from $4.4 billion in 2025. The increase was primarily due to:

• a $285 million increase due to the 6.5% increase in capacity noted above; and

• a $137 million increase in crew payroll and related expenses primarily driven by addition of new ships compared to the same period in 2025.

Depreciation and Amortization Expenses

Depreciation and amortization expenses for 2026 increased $96 million, or 11.6%, to $925 million from $829 million in 2025. The increase was primarily due to the addition of new ships noted above compared to the same period in 2025.

Other comprehensive income (loss)

Other comprehensive income was $88 million in 2026 compared to $283 million for the same period in 2025. The decrease of $195 million in income was primarily due to a gain on cash flow derivative hedges of $84 million in 2026 compared to a gain of $309 million in 2025, mostly as a result of a significant decrease in the fair value of our FX forward swaps in 2026 compared to 2025, partially offset by a significant increase in the fair value of our fuel swaps in 2026 compared to 2025.

Future Application of Accounting Standards

Refer to Note 2*. Summary of Significant Accounting Policies* to our consolidated financial statements under Item 1. 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 $3.7 billion for the six months ended June 30, 2026, compared to $3.4 billion in 2025.

Net cash used in investing activities increased by $2.1 billion to $3.2 billion for the six months ended June 30, 2026, compared to $1.1 billion in 2025. The change of $2.1 billion was primarily attributable to increased capital expenditures in 2026 compared to 2025.

Net cash used in financing activities decreased by $1.4 billion to $0.4 billion for the six months ended June 30, 2026, compared to $1.9 billion in 2025. The change of $1.4 billion was primarily attributable to an increase in debt proceeds of $5 billion related to the issuance of senior notes and the loan to finance Legend of the Seas, offset by repayment of debt of $2.2 billion in 2026 compared to the same period in 2025. Additionally, an increase of $0.8 billion in repurchases of common stock in 2026 part of the previously authorized share repurchase program compared to the same period in 2025, an increase of $326 million on dividend payments, and an increase of $129 million related to payments of withholding tax on stock awards in 2026 compared to the same period in 2025.

Future Capital Commitments

Capital Expenditures

Our future capital commitments consist primarily of new ship orders. As of June 30, 2026, the dates that the ships on order by our Global and Partner Brands are expected to be delivered, and their approximate berths are as follows:

Ship						Shipyard						Expected Delivery Dates						Approximate Berths
Royal Caribbean
Oasis-class:
Unnamed						Chantiers de l'Atlantique						2nd Quarter 2028						5,700
Icon-class:
Hero of the Seas						Meyer Turku Oy						3rd Quarter 2027						5,600
Unnamed						Meyer Turku Oy						2nd Quarter 2028						5,600
Unnamed						Meyer Turku Oy						2nd Quarter 2029						5,600
Discovery-class:
Unnamed						Chantiers de l'Atlantique						4th Quarter 2029						4,300
Unnamed						Chantiers de l'Atlantique						2nd Quarter 2032						4,300
Celebrity Cruises
Edge-Class:
Celebrity Xcite						Chantiers de l'Atlantique						4th Quarter 2028						3,250
Celebrity River Cruises:
Celebrity Compass						TeamCo Shipyard						2nd Quarter 2027						170
Celebrity Seeker						TeamCo Shipyard						3rd Quarter 2027						170
Unnamed						TeamCo Shipyard						1st Quarter 2028						170
Unnamed						TeamCo Shipyard						2nd Quarter 2028						170
Mein Schiff
Unnamed						Fincantieri						1st Quarter 2031						4,100
Unnamed						Fincantieri						4th Quarter 2032						4,100
Total Berths																		43,230

Our future capital commitments consist primarily of new ship orders. As of June 30, 2026, the aggregate expected cost of our ships on order presented in the table above, excluding any ships on order by our Partner Brands, was approximately $16.5 billion, of which we had deposited $1.3 billion. Approximately 52.6% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at June 30, 2026. Refer to Note 8*. Commitments and Contingencies* and Note 11. Fair Value Measurements and Derivative Instruments to our consolidated financial statements under Item 1. Financial Statements for further information.

As of June 30, 2026, we anticipate overall full year capital expenditures, based on our existing ships on order, will be approximately $4.7 billion for 2026 . This amount does not include any ships on order by our Partner Brands.

Material Cash Requirements

As of June 30, 2026, our material cash requirements were as follows (in millions):

			Remainder of
			2026						2027						2028						2029						2030						Thereafter						Total
Operating Activities:
Operating lease obligations(1)			$	70					$	124					$	113					$	61					$	51					$	995					$	1,414
Interest on debt(2)			564						1,049						872						769						723						2,606						6,583
Other(3)			206						277						137						128						111						894						1,753
Investing Activities:
Ship purchase obligations(4)			328						2,456						4,587						3,625						157						1,669						12,822
Total			$	1,168					$	3,906					$	5,709					$	4,583					$	1,042					$	6,164					$	22,572

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

(2)Long-term debt obligations mature at various dates through fiscal year 2042 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, 2026. Debt denominated in other currencies is calculated based on the applicable exchange rate at June 30, 2026.

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

(4)Amounts are based on contractual installment and delivery dates for our ships on order. Included in these figures are $11.1 billion in final contractual installments, which have committed financing covering approximately 80% of the cost of the ships on order for our Global Brands, all of which include sovereign financing guarantees, excluding ships on order for Celebrity River Cruises. 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 to our consolidated financial statements under Item 1. Financial Statements for maturities related to debt.

Refer to Funding Needs and Sources below 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 to our consolidated financial statements under Item 1. Financial Statements for ownership restrictions related to TUI Cruises.

Refer to Note 6. Debt to our consolidated financial statements under Item 1. Financial Statements for export credit agency guarantees.

Refer to Note 8*. Commitments and Contingencies* to our consolidated financial statements under Item 1. Financial Statements for other agreements.

As of June 30, 2026, other than the items described above, we are not party to any other off-balance sheet arrangements, including guarantee contracts, retained or contingent interest, certain derivative instruments and variable interest entities, that either have, or are reasonably likely to have, a current or future material effect on our financial position.

Funding Needs and Sources

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, 2026, we had approximately $14.3 billion of committed financing for our ships on order, which excludes ships on order for Celebrity River Cruises. As of June 30, 2026, our obligations due through June 30, 2027 primarily consisted of $1.6 billion related to debt maturities, $1.1 billion related to interest on debt and $0.8 billion related to progress payments on our ship orders. 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, 2026, we had liquidity of $6.9 billion, including cash and cash equivalents of $0.9 billion, and $6 billion of undrawn revolving credit facility capacity.

We may be obligated to prepay indebtedness outstanding under our credit 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 our Board is made up of persons who were not (i) members of the Board on the first day of such period, (ii) nominated by persons who were members of the Board on the first day of such period, or (iii) nominated by directors who themselves were nominated under clauses (i) or (ii) above. If prepayment is triggered, we may be unable to replace our credit facilities 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, and limit our net debt-to-capital ratio. As of June 30, 2026, we were in compliance with our financial covenants and we estimate that we will be in compliance for at least the next twelve months.

Dividends

The declaration of dividends shall at all times be subject to the final determination of our Board that a dividend is prudent at that time in consideration of the needs of the business. During the quarter ended June 30, 2026, our Board declared a dividend of $1.50 per share, which was paid in July 2026.