UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

FORM 10-Q 

(Mark One) 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to            

Commission File Number: 1-11884

ROYAL CARIBBEAN CRUISES LTD.

(Exact name of registrant as specified in its charter) 

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

1050 Caribbean Way, Miami, Florida 33132

(Address of principal executive offices) (zip code) 

(305) 539-6000

(Registrant’s telephone number, including area code) 

N/A

(Former name, former address and former fiscal year, if changed since last report) 

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	RCL	New York Stock Exchange

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒  No ☐ 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

Large accelerated filer ☒	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐
Emerging growth 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. ☐

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

There were 257,420,341 shares of common stock outstanding as of July 22, 2024.

ROYAL CARIBBEAN CRUISES LTD.

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3. Quantitative and Qualitative Disclosures About Market Risk	36
Item 4. Controls and Procedures	36
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	37
Item 1A. Risk Factors	37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 5. Other Information	38
Item 6. Exhibits	39
SIGNATURES	41

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited; in millions, except per share data)

	Quarter Ended June 30,
	2024		2023
Passenger ticket revenues	$	2,887	$	2,444
Onboard and other revenues	1,223		1,079
Total revenues	4,110		3,523
Cruise operating expenses:
Commissions, transportation and other	572		516
Onboard and other	244		220
Payroll and related	313		284
Food	225		203
Fuel	282		276
Other operating	516		456
Total cruise operating expenses	2,152		1,955
Marketing, selling and administrative expenses	466		435
Depreciation and amortization expenses	393		362
Operating Income	1,099		771
Other income (expense):
Interest income	4		10
Interest expense, net of interest capitalized	(298)		(355)
Equity investment income	56		42
Other expense	(3)		(5)
	(241)		(308)
Net Income	858		463
Less: Net Income attributable to noncontrolling interest	4		4
Net Income attributable to Royal Caribbean Cruises Ltd.	$	854	$	459
Earnings per Share:
Basic	$	3.32	$	1.79
Diluted	$	3.11	$	1.70
Weighted-Average Shares Outstanding:
Basic	257		256
Diluted	281		282
Comprehensive Income (Loss)
Net Income	$	858	$	463
Other comprehensive income (loss):
Foreign currency translation adjustments	6		(3)
Change in defined benefit plans	(12)		(3)
(Loss) gain on cash flow derivative hedges	(31)		5
Total other comprehensive loss	(37)		(1)
Comprehensive Income	821		462
Less: Comprehensive Income attributable to noncontrolling interest	4		4
Comprehensive Income attributable to Royal Caribbean Cruises Ltd.	$	817	$	458

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

1

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited; in millions, except per share data)

	Six Months Ended June 30,
	2024		2023
Passenger ticket revenues	$	5,429	$	4,340
Onboard and other revenues	2,409		2,068
Total revenues	7,838		6,408
Cruise operating expenses:
Commissions, transportation and other	1,070		919
Onboard and other	437		379
Payroll and related	631		594
Food	446		402
Fuel	586		577
Other operating	1,039		876
Total cruise operating expenses	4,209		3,747
Marketing, selling and administrative expenses	1,001		896
Depreciation and amortization expenses	780		721
Operating Income	1,848		1,044
Other income (expense):
Interest income	9		24
Interest expense, net of interest capitalized	(721)		(714)
Equity investment income	97		62
Other expense	(11)		(1)
	(626)		(629)
Net Income	1,222		415
Less: Net Income attributable to noncontrolling interest	8		4
Net Income attributable to Royal Caribbean Cruises Ltd.	$	1,214	$	411
Earnings per Share:
Basic	$	4.72	$	1.61
Diluted	$	4.46	$	1.60
Weighted-Average Shares Outstanding:
Basic	257		256
Diluted	281		259
Comprehensive Income (Loss)
Net Income	$	1,222	$	415
Other comprehensive income (loss):
Foreign currency translation adjustments	10		(10)
Change in defined benefit plans	(3)		—
Gain (loss) on cash flow derivative hedges	13		(27)
Total other comprehensive income (loss)	20		(37)
Comprehensive Income	1,242		378
Less: Comprehensive Income attributable to noncontrolling interest	8		4
Comprehensive Income attributable to Royal Caribbean Cruises Ltd.	$	1,234	$	374

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

2

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED BALANCE SHEETS

(in millions, except share data)

	As of
	June 30,		December 31,
	2024		2023
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	391	$	497
Trade and other receivables, net of allowances of $8 and $7 at June 30, 2024 and December 31, 2023, respectively	412		405
Inventories	242		248
Prepaid expenses and other assets	790		617
Derivative financial instruments	51		25
Total current assets	1,886		1,792
Property and equipment, net	31,759		30,114
Operating lease right-of-use assets	589		611
Goodwill	809		809
Other assets, net of allowances of $42 and $43 at June 30, 2024 and December 31, 2023, respectively	1,931		1,805
Total assets	$	36,974	$	35,131
Liabilities and Shareholders’ Equity
Current liabilities
Current portion of long-term debt	$	1,332	$	1,720
Current portion of operating lease liabilities	64		65
Accounts payable	821		792
Accrued expenses and other liabilities	1,410		1,478
Derivative financial instruments	22		35
Customer deposits	6,245		5,311
Total current liabilities	9,894		9,401
Long-term debt	19,785		19,732
Long-term operating lease liabilities	591		613
Other long-term liabilities	522		486
Total liabilities	30,792		30,232
Shareholders’ equity
Preferred stock ($0.01 par value; 20,000,000 shares authorized; none outstanding)	—		—
Common stock ($0.01 par value; 500,000,000 shares authorized; 285,863,919 and 284,672,386 shares issued, June 30, 2024 and December 31, 2023, respectively)	3		3
Paid-in capital	7,536		7,474
Retained earnings (accumulated deficit)	1,204		(10)
Accumulated other comprehensive loss	(654)		(674)
Treasury stock (28,468,430 and 28,248,125 common shares at cost, June 30, 2024 and December 31, 2023, respectively)	(2,081)		(2,069)
Total shareholders’ equity attributable to Royal Caribbean Cruises Ltd.	6,008		4,724
Noncontrolling Interests	174		175
Total shareholders’ equity	6,182		4,899
Total liabilities and shareholders’ equity	$	36,974	$	35,131

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

3

ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
	Six Months Ended June 30,
	2024		2023
Operating Activities
Net Income	$	1,222	$	415
Adjustments:
Depreciation and amortization	780		721
Net deferred income tax expense (benefit)	5		(6)
Loss (Gain) on derivative instruments not designated as hedges	40		(12)
Share-based compensation expense	83		66
Equity investment income	(97)		(62)
Amortization of debt issuance costs, discounts and premiums	51		58
Loss on extinguishment of debt	133		44
Changes in operating assets and liabilities:
(Increase) decrease in trade and other receivables, net	(16)		132
Decrease in inventories	6		8
Increase in prepaid expenses and other assets	(196)		(139)
Increase in accounts payable trade	18		30
Decrease in accrued expenses and other liabilities	(47)		(63)
Increase in customer deposits	934		1,508
Other, net	(15)		2
Net cash provided by operating activities	2,901		2,702
Investing Activities
Purchases of property and equipment	(2,382)		(1,048)
Cash received on settlement of derivative financial instruments	12		18
Cash paid on settlement of derivative financial instruments	(92)		(14)
Investments in and loans to unconsolidated affiliates	(20)		—
Cash received on loans from unconsolidated affiliates	9		11
Other, net	(21)		12
Net cash used in investing activities	(2,494)		(1,021)
Financing Activities
Debt proceeds	4,698		1,208
Debt issuance costs	(87)		(53)
Repayments of debt	(4,974)		(4,249)
Premium on repayment of debt	(104)		—
Proceeds from sale of noncontrolling interest	—		209
Other, net	(44)		(4)
Net cash used in financing activities	(511)		(2,889)
Effect of exchange rate changes on cash and cash equivalents	(2)		—
Net decrease in cash and cash equivalents	(106)		(1,209)
Cash and cash equivalents at beginning of period	497		1,935
Cash and cash equivalents at end of period	$	391	$	726

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

4

ROYAL CARIBBEAN CRUISES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in millions)
	Six Months Ended June 30,
	2024		2023
Supplemental Disclosure
Cash paid during the period for:
Interest, net of amount capitalized	$	621	$	560
Non-cash Investing Activities
Purchase of property and equipment included in accounts payable and accrued expenses and other liabilities	$	34	$	18

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

5

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(unaudited; in millions)

	Common Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interest		Total Shareholders' Equity
Balance at April 1, 2024	$	3	$	7,496	$	350	$	(617)	$	(2,081)	$	174	$	5,325
Activity related to employee stock plans	—		40		—		—		—		—		40
Changes related to cash flow derivative hedges	—		—		—		(31)		—		—		(31)
Change in defined benefit plans	—		—		—		(12)		—		—		(12)
Foreign currency translation adjustments	—		—		—		6		—		—		6
Net Income attributable to noncontrolling interest	—		—		—		—		—		4		4
Other activity attributable to noncontrolling interest	—		—		—		—		—		(4)		(4)
Net Income attributable to Royal Caribbean Cruises Ltd.	—		—		854		—		—		—		854
Balance at June 30, 2024	$	3	$	7,536	$	1,204	$	(654)	$	(2,081)	$	174	$	6,182

	Common Stock		Paid-in Capital		(Accumulated Deficit) Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interest		Total Shareholders' Equity
Balance at January 1, 2024	$	3	$	7,474	$	(10)	$	(674)	$	(2,069)	175		$	4,899
Activity related to employee stock plans	—		62		—		—		—		—		62
Changes related to cash flow derivative hedges	—		—		—		13		—		—		13
Change in defined benefit plans	—		—		—		(3)		—		—		(3)
Foreign currency translation adjustments	—		—		—		10		—		—		10
Purchase of treasury stock	—		—		—		—		(12)		—		(12)
Net Income attributable to noncontrolling interest	—		—		—		—		—		8		8
Other activity attributable to noncontrolling interest	—		—		—		—		—		(9)		(9)
Net Income attributable to Royal Caribbean Cruises Ltd.	—		—		1,214		—		—		—		1,214
Balance at June 30, 2024	$	3	$	7,536	$	1,204	$	(654)	$	(2,081)	$	174	$	6,182

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

6

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(unaudited; in millions)

	Common Stock		Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interest		Total Shareholders' Equity
Balance at April 1, 2023	$	3	$	7,351	$	(1,755)	$	(679)	$	(2,069)	$	174	$	3,025
Activity related to employee stock plans	—		43		—		—		—		—		43
Convertible notes settlement	—		12		—								12
Changes related to cash flow derivative hedges	—		—		—		5		—		—		5
Change in defined benefit plans	—		—		—		(3)		—		—		(3)
Foreign currency translation adjustments	—		—		—		(3)		—		—		(3)
Net Income attributable to noncontrolling interest	—		—		—		—		—		4		4
Net Income attributable to Royal Caribbean Cruises Ltd.	—		—		459		—		—		—		459
Balance at June 30, 2023	$	3	$	7,406	$	(1,296)	$	(680)	$	(2,069)	$	178	$	3,542

	Common Stock		Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Treasury Stock		Noncontrolling Interest		Total Shareholders' Equity
Balance at January 1, 2023	$	3	$	7,285	$	(1,707)	$	(643)	$	(2,068)	$	—	$	2,870
Activity related to employee stock plans	—		64		—		—		—		—		64
Convertible notes settlement	—		12		—		—		—		—		12
Changes related to cash flow derivative hedges	—		—		—		(27)		—		—		(27)
Change in defined benefit plans	—		—		—		—		—		—		—
Foreign currency translation adjustments	—		—		—		(10)		—		—		(10)
Purchase of treasury stock	—		—		—		—		(1)		—		(1)
Sale of noncontrolling interest	—		45		—		—		—		174		219
Net Income attributable to noncontrolling interest	—		—		—		—		—		4		4
Net Income attributable to Royal Caribbean Cruises Ltd.	—		—		411		—		—		—		411
Balance at June 30, 2023	$	3	$	7,406	$	(1,296)	$	(680)	$	(2,069)	$	178	$	3,542

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

7

ROYAL CARIBBEAN CRUISES LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

As used in this Quarterly Report on Form 10-Q, the terms “Royal Caribbean,” "Royal Caribbean Group," the “Company,” “we,” “our” and “us” refer to Royal Caribbean Cruises Ltd. and, depending on the context, Royal Caribbean Cruises Ltd.’s consolidated subsidiaries and/or affiliates. The terms “Royal Caribbean International,” “Celebrity Cruises,” and "Silversea Cruises" refer to our wholly owned global cruise brands. Throughout this Quarterly Report on Form 10-Q, we also refer to our partner brands in which we hold an ownership interest, including “TUI Cruises” and "Hapag-Lloyd Cruises." However, because these partner brands are unconsolidated investments, our operating results and other disclosures herein do not include these brands unless otherwise specified. In accordance with cruise vacation industry practice, the term “berths” is determined based on double occupancy per cabin even though many cabins can accommodate three or more passengers. This Quarterly Report on Form 10-Q should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2023.

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

Note 1. General

Description of Business 

We are a global cruise company. We own and operate three global cruise brands: Royal Caribbean International, Celebrity Cruises and Silversea Cruises (collectively, our "Global Brands"). We also own a 50% joint venture interest in TUI Cruises GmbH ("TUIC"), which operates the German brands TUI Cruises and Hapag-Lloyd Cruises (collectively, our "Partner Brands"). We account for our investments in our Partner Brands under the equity method of accounting. Together, our Global Brands and our Partner Brands have a combined fleet of 68 ships as of June 30, 2024. Our ships offer a selection of worldwide itineraries that call on more than 1,000 destinations in over 120 countries on all seven continents.

Basis for Preparation of Consolidated Financial Statements

The unaudited consolidated financial statements are presented pursuant to the rules and regulations of the Securities and Exchange Commission. In our opinion, these statements include all adjustments necessary for a fair statement of the results of the interim periods reported herein. Adjustments consist only of normal recurring items, except for any items discussed in the notes below. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted as permitted by such Securities and Exchange Commission rules and regulations. Estimates are required for the preparation of financial statements in accordance with these principles. Actual results could differ from these estimates. Refer to Note 2. Summary of Significant Accounting Policies in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2023 for a discussion of our significant accounting policies. The Company has changed its presentation from thousands to millions and, as a result, any necessary rounding adjustments have been made to prior period disclosed amounts.

All significant intercompany accounts and transactions are eliminated in consolidation. We consolidate entities over which we have control, usually evidenced by a direct ownership interest of greater than 50%, and variable interest entities where we are determined to be the primary beneficiary. Refer to Note 5. Investments and Other Assets for further information regarding our variable interest entities. For affiliates we do not control but over which we have significant influence on financial and operating policies, usually evidenced by a direct ownership interest from 20% to 50%, the investment is accounted for using the equity method.

Note 2. Summary of Significant Accounting Policies

Recent Accounting Pronouncements

In August 2023, the FASB issued ASU No. 2023-05, Business Combinations - Joint Venture Formations (Subtopic 805-60): Recognition and Initial Measurement. This ASU provides guidance requiring a joint venture to initially measure all contributions received upon its formation at fair value. The guidance is intended to provide users of joint venture financial statements with more decision-useful information. This ASU is effective for joint venture entities with a formation date on or after January 1, 2025 on a prospective basis. Early adoption is permitted, and joint ventures formed prior to the adoption date may elect to apply the new guidance retrospectively back to their original formation date. We are currently evaluating the impact of the new guidance on our consolidated financial statements.

8

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. This ASU requires enhanced disclosures about significant segment expenses and other segment items and requires companies to disclose all annual disclosures about segments in interim periods. This ASU also requires public entities with a single reportable segment to provide all the disclosures required by the amendments in this ASU and all existing segment disclosures in Topic 280. The amendments in this ASU are intended to improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted and the amendments should be applied retrospectively to all periods presented. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The new guidance is intended to enhance the transparency and decision usefulness of income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. This ASU is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption and retrospective application is permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements and related disclosures.

Note 3. Revenue

Revenue Recognition

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

The majority of our revenues are derived from passenger cruise contracts which are reported within Passenger ticket revenues in our consolidated statements of comprehensive income (loss). Our performance obligation under these contracts is to provide a cruise vacation in exchange for the ticket price. We receive payment before we satisfy this performance obligation and recognize revenue over the duration of each cruise, which generally ranges from three to 28 nights.

Passenger ticket revenues include charges to our guests for port costs that vary with passenger head counts. These types of port costs, along with port costs that do not vary by passenger head counts, are included in our cruise operating expenses. The amounts of port costs charged to our guests and included within Passenger ticket revenues on a gross basis were $266 million and $226 million for the quarters ended June 30, 2024 and 2023, respectively, and $509 million and $430 million for the six months ended June 30, 2024 and 2023, respectively.

Our total revenues also include Onboard and other revenues, which consist primarily of revenues from the sale of goods and services onboard our ships that are not included in passenger ticket prices. We receive payment before or concurrently with the transfer of these goods and services to cruise passengers and recognize revenue over the duration of the related cruise.

As a practical expedient, we have omitted disclosures on our remaining performance obligations as the duration of our contracts with customers is less than a year.

Disaggregated Revenues

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

	Quarter Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenues by itinerary
North America (1)	$	2,575	$	2,137	$	5,265	$	4,330
Asia/Pacific	235		169		741		502
Europe	841		841		863		843
Other regions (2)	278		227		600		442
Total revenues by itinerary	3,929		3,374		7,469		6,117
Other revenues (3)	181		149		369		291
Total revenues	$	4,110	$	3,523	$	7,838	$	6,408

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

9

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

(3) Includes revenues primarily related to cancellation fees, vacation protection insurance, casino operations, pre- and post-cruise tours and fees for operating certain port facilities. Amounts also include revenues related to procurement and management related services we perform on behalf of our unconsolidated affiliates. Refer to Note 5. Investments and Other Assets for more information on our unconsolidated affiliates.

Passenger ticket revenues are attributed to geographic areas based on where the reservation originates. For the quarters and six months ended June 30, 2024 and 2023, our guests were sourced from the following areas:

	Quarter Ended June 30,
	2024		2023
Passenger ticket revenues:
United States	79	%	76	%
All other countries (1)	21	%	24	%

	Six Months Ended June 30,
	2024		2023
Passenger ticket revenues:
United States	76	%	76	%
All other countries (1)	24	%	24	%

(1)No other individual country's revenue exceeded 10% for the quarters and six months ended June 30, 2024 and 2023.

Customer Deposits and Contract Liabilities

Our payment terms generally require an upfront deposit to confirm a reservation, with the balance due prior to the cruise. Deposits received on sales of passenger cruises are initially recorded as Customer deposits in our consolidated balance sheets and subsequently recognized as passenger ticket revenues or onboard revenues during the duration of the cruise. ASC 606, Revenues from Contracts with Customers, defines a “contract liability” as an entity’s obligation to transfer goods or services to a customer for which the entity has received consideration from the customer. We do not consider customer deposits to be a contract liability until the customer no longer retains the unilateral right, resulting from the passage of time, to cancel such customer's reservation and receive a full refund. Customer deposits presented in our consolidated balance sheets include contract liabilities of $3.4 billion and $2.6 billion as of June 30, 2024 and December 31, 2023, respectively.

During the pandemic we provided flexibility to guests with bookings on sailings that were cancelled by allowing guests to receive future cruise credits (“FCCs”). As of June 30, 2024, our customer deposit balance includes approximately $298 million of unredeemed FCCs. Our FCCs are not refundable and do not have expiration dates. Based upon our analysis of historical redemption experience, we believe a portion of our FCCs are not probable of being used in future periods. Based on our current estimates, we recognized an immaterial amount of FCC breakage revenue during the quarter and six months ended June 30, 2024. We will continue to monitor changes in redemption behavior and estimate and record revenue associated with breakage when the likelihood of the customer exercising their remaining rights becomes remote.

Contract Receivables and Contract Assets

Although we generally require full payment from our customers prior to their cruise, we grant credit terms to a relatively small portion of our revenue sourced in select markets outside of the United States. As a result, we have outstanding receivables from passenger cruise contracts in those markets. We also have receivables from credit card merchants for cruise ticket purchases and goods and services sold to guests during cruises that are collected before, during or shortly after the cruise voyage. In addition, we have receivables due from concessionaires onboard our vessels. These receivables are included within Trade and other receivables, net in our consolidated balance sheets.

Our credit card processing agreements require us, under certain circumstances, to maintain a reserve that can be satisfied by posting collateral. As of June 30, 2024, none of our credit card processors required us to maintain a reserve.

We have contract assets that are conditional rights to consideration for satisfying the construction services performance obligations under a service concession arrangement. As of June 30, 2024 and December 31, 2023, our contract assets were $164

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million and $167 million, respectively, and were included within Other assets in our consolidated balance sheets. Given the short duration of our cruises and our collection terms, we do not have any other significant contract assets.

Assets Recognized from the Costs to Obtain a Contract with a Customer

Prepaid travel advisor commissions and prepaid credit and debit card fees are an incremental cost of obtaining contracts with customers that we recognize as an asset and include within Prepaid expenses and other assets in our consolidated balance sheets. Prepaid travel advisor commissions and prepaid credit and debit card fees were $321 million as of June 30, 2024 and $257 million as of December 31, 2023. Our prepaid travel advisor commissions and prepaid credit and debit card fees are recognized at the time of revenue recognition or at the time of voyage cancellation, and are reported primarily within Commissions, transportation and other in our consolidated statements of comprehensive income (loss).

Note 4. Earnings Per Share

Basic and diluted earnings per share is 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. for basic earnings per share	$	854	$	459	$	1,214	$	411
Add convertible notes interest	19		21		38		4
Net Income attributable to Royal Caribbean Cruises Ltd. for diluted earnings per share	873		480		1,252		415
Weighted-average common shares outstanding	257		256		257		256
Dilutive effect of stock-based awards	1		—		1		—
Dilutive effect of convertible notes	23		26		23		3
Diluted weighted-average shares outstanding	281		282		281		259
Basic earnings per share	$	3.32	$	1.79	$	4.72	$	1.61
Diluted earnings per share	$	3.11	$	1.70	$	4.46	$	1.60

There were no antidilutive shares from our stock-based awards and convertible notes for the quarters ended June 30, 2024 and 2023. In addition, there were no antidilutive shares for the six months ended June 30, 2024, and approximately 25,459,641 antidilutive shares for the six months ended June 30, 2023.

Note 5. Investments and Other Assets

A Variable Interest Entity (“VIE”) is an entity in which the equity investors have not provided enough equity to finance the entity’s activities or the equity investors: (1) cannot directly or indirectly make decisions about the entity’s activities through their voting rights or similar rights; (2) do not have the obligation to absorb the expected losses of the entity; (3) do not have the right to receive the expected residual returns of the entity; or (4) have voting rights that are not proportionate to their economic interests and the entity’s activities involve or are conducted on behalf of an investor with a disproportionately small voting interest. We hold equity interests in ventures related to our cruise operations. We account for the majority of these investments as either an equity method investment or a controlled subsidiary.

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

Unconsolidated investments ("equity method investments")

We have determined that TUI Cruises GmbH ("TUIC"), our 50%-owned joint venture, which operates the brands TUI Cruises and Hapag-Lloyd Cruises, is a VIE. We have determined that we are not the primary beneficiary of TUIC. We believe that the power to direct the activities that most significantly impact TUIC’s economic performance is shared between ourselves and TUI AG, our joint venture partner. All the significant operating and financial decisions of TUIC require the consent of both

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parties, which we believe creates shared power over TUIC. Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting.

As of June 30, 2024, the net book value of our investment in TUIC was $716 million, primarily consisting of $642 million in equity and a loan of €63 million, or approximately $68 million based on the exchange rate at June 30, 2024. As of December 31, 2023, the net book value of our investment in TUIC was $657 million, primarily consisting of $566 million in equity and a loan of €71 million, or approximately $79 million based on the exchange rate at December 31, 2023. The loan, which was made in connection with the sale of Splendour of the Seas in April 2016, accrues interest at a rate of 6.25% per annum and is payable over 10 years. This loan is 50% guaranteed by TUI AG and is secured by a first priority mortgage on the ship.

TUIC has various ship construction and financing agreements which include certain restrictions on each of our and TUI AG’s ability to reduce our current ownership interest in TUIC below 37.55% through May 2033. Our investment amount and outstanding term loan are substantially our maximum exposure to loss in connection with our investment in TUIC.

We have determined that Grand Bahama Shipyard Ltd. ("Grand Bahama"), a ship repair and maintenance facility in which we have a 40% noncontrolling interest, is a VIE. This facility serves cruise and cargo ships, oil and gas tankers and offshore units. We utilize this facility, among other ship repair facilities, for our regularly scheduled drydocks and certain emergency repairs as may be required. We have determined that we are not the primary beneficiary of this facility as we do not have the power to direct the activities that most significantly impact the facility’s economic performance. Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting.

In 2023, we formed a 50%-owned joint venture with the other 40% shareholder of Grand Bahama to operate Floating Docks S. DE RL. (“Floating Docks”). Floating Docks will construct two floating drydocks, with delivery dates expected in 2025 and 2026, that will be leased to Grand Bahama and allow it to service the entire range of cruise ships in operation and under construction, as well as much of the world’s commercial shipping fleet. We and our joint venture partner have each guaranteed 50% of certain installment payments payable by Floating Docks under the drydock and related construction contracts, which are contingent on the achievement of certain construction milestones, bringing our total payment guarantees to $48 million as of June 30, 2024. Our investment in Floating Docks, including loans, is immaterial to our consolidated financial statements as of June 30, 2024.

We have determined that Floating Docks is a VIE. We have determined that we are not the primary beneficiary of Floating Docks since we believe that the power to direct the activities that most significantly impact Floating Docks' economic performance is shared between ourselves and our joint venture partner. All the significant operating and financial decisions of Floating Docks require the consent of both parties which we believe creates shared power over Floating Docks. Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting.

In 2023, as part of the transaction with iCON, we sold our controlling interest in two Italian entities for an immaterial amount of net proceeds and recognized an immaterial gain on the sale. We have determined that the partnership and both Italian entities are VIE's. These entities in Italy represent development projects to own, develop, and manage cruise terminal facilities in key ports of call. We have determined that we are not the primary beneficiary for either of these entities as we do not have the power to direct the activities that most significantly impact the economic performance. Accordingly, we do not consolidate these entities and account for these investments under the equity method of accounting.

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

	Quarter Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Share of equity income from investments	$	56	$	42	$	97	$	62

	As of June 30, 2024		As of December 31, 2023
Total notes receivable due from equity investments	$	110	$	105
Less-current portion (1)	17		19
Long-term portion (2)	$	93	$	86

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

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

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Consolidated investments ("controlled subsidiaries")

As part of the transaction with iCON, we sold an 80% interest in the entity which owns our terminal at PortMiami for $209 million and retained a 20% minority interest, effective March 31, 2023. We also sold a noncontrolling interest in another entity which is developing a port project in Spain for an immaterial amount. We have determined that both of these entities are VIEs, and we are the primary beneficiary as we have the power to direct the activities that most significantly impact the facility’s economic performance. Accordingly, we continue to consolidate both entities. The cash consideration received for the sale of the PortMiami terminal company, net of transaction costs, was allocated between paid-in capital and noncontrolling interest using the net book value of our investment in the PortMiami terminal, as presented in the statement of shareholders' equity.

Other Assets

Credit Losses

We reviewed our receivables for credit losses in connection with the preparation of our financial statements for the quarter ended June 30, 2024. In evaluating our credit loss allowance, management considered factors such as historical loss experience, the types of loans and the amount of loans in the loan portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, peer group information and prevailing economic conditions. Our credit loss allowance as of June 30, 2024 and 2023 primarily relates to credit losses recognized on notes receivable for the previous sale of certain property and equipment of $42 million and $63 million, respectively, which were originated in 2015 and 2020.

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

	Six Months Ended June 30,
	2024		2023
Balance, beginning of period	$	49	$	83
Credit loss (recovery), net	2		(8)
Write-offs	—		(2)
Balance, end of period	$	51	$	73

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Note 6. Debt

Debt consists of the following (in millions):

	Weighted Average Rate (1)	Maturities Through	As of June 30, 2024		As of December 31, 2023
Fixed rate debt:
Unsecured senior notes	6.09%	2026 - 2032	$	7,899	$	7,899
Secured senior notes	8.25%	2029	1,000		1,000
Unsecured term loans	3.26%	2027 - 2036	8,133		6,569
Convertible notes	6.00%	2025	1,150		1,150
Total fixed rate debt			18,182		16,618
Variable rate debt:
Unsecured revolving credit facilities (2)	6.76%	2028	325		899
USD unsecured term loan	6.81%	2024 - 2037	2,574		3,666
Euro unsecured term loan	4.95%	2028	250		443
Total variable rate debt			3,149		5,008
Finance lease liabilities			357		369
Total debt (3)			21,688		21,995
Less: unamortized debt issuance costs			(571)		(543)
Total debt, net of unamortized debt issuance costs			21,117		21,452
Less—current portion			(1,332)		(1,720)
Long-term portion			$	19,785	$	19,732

(1) Weighted average interest rates are based on outstanding loan balance as of June 30, 2024, and for variable rate debt include either EURIBOR or Term SOFR plus the applicable margin.

(2) Advances under our unsecured revolving credit facilities accrue interest at Term SOFR plus a 0.10% credit adjustment spread plus an interest rate margin of 1.33%. Based on applicable Term SOFR rates, as of June 30, 2024, the maximum interest rate under the unsecured credit facilities was 6.77%. We also pay a facility fee of 0.17% of the total commitments under such facility.

(3) At June 30, 2024 and December 31, 2023, the weighted average interest rate for total debt was 5.64% and 6.06%, respectively.

Unsecured revolving credit facilities

As of June 30, 2024 our aggregate revolving credit capacity is $3.7 billion of which $1.86 billion of the commitments are scheduled to mature in October 2026 and $1.86 billion of the commitments are scheduled to mature in October 2028. As of June 30, 2024, we had undrawn capacity of $3.4 billion under our unsecured revolving credit facilities.

Debt financing transactions

In March 2024, we issued $1.25 billion of senior unsecured notes (the "notes") due in 2032 for net proceeds of approximately $1.24 billion. Interest accrues on the notes at a fixed rate of 6.25% per annum and is payable semi-annually in arrears. The proceeds from this notes issuance, together with cash on hand, were used to redeem all of the outstanding $1.25 billion aggregate principal amount of 11.625% Senior Notes due 2027. The repayment resulted in a loss on extinguishment of debt of $116 million that was recognized within Interest expense, net of interest capitalized within our consolidated statements of comprehensive income (loss) for the six months ended June 30, 2024.

Export credit facilities and agency guarantees

In May 2024, we took delivery of Silver Ray. To finance the delivery, we borrowed a total of $507 million under the committed financing agreement, resulting in an unsecured term loan which is 95% guaranteed by Euler Hermes. The unsecured loan amortizes semi-annually over 12 years and bears interest at a fixed rate of 4.33% per annum.

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In June 2024, we took delivery of Utopia of the Seas. To finance the delivery, we borrowed a total of $1.5 billion under the committed financing agreement, resulting in an unsecured term loan which is 100% guaranteed by BpiFrance Assurance Export. The unsecured term loan amortizes semi-annually over 12 years and bears interest primarily at a fixed rate of 3.00% per annum.

During the quarter ended June 30, 2024, we repaid $839 million of outstanding deferred amounts under our export credit facilities. These repayments included both scheduled payments and an early repayment of the amortization deferral obtained on our export credit facilities in 2020 and 2021, which resulted in an immaterial loss on extinguishment of debt that was recognized within Interest expense, net of interest capitalized within our consolidated statements of comprehensive income (loss) for the quarter and six months ended June 30, 2024.

Except for the term loan we incurred to acquire Silver Moon, all of our unsecured ship financing term loans are guaranteed by the export credit agency in the respective country in which the ship is constructed. For the majority of the loans as of June 30, 2024, we pay to the applicable export credit agency, depending on the financing agreement, an upfront fee of 2.35% to 5.48% of the maximum loan amount in consideration for these guarantees. We amortize the fees that are paid upfront over the life of the loan. We classify these fees within Amortization of debt issuance costs, discounts and premiums in our consolidated statements of cash flows. Prior to the loan being drawn, we present these fees within Other assets in our consolidated balance sheets. Once the loan is drawn, such fees are classified as a discount to the related loan, or contra-liability account, within Current portion of long-term debt or long-term debt.

Debt covenants

Our revolving credit facilities, the majority of our term loans, and certain of our credit card processing agreements, contain covenants that require us, among other things, to maintain a fixed charge coverage ratio, limit our net debt-to-capital ratio, maintain minimum liquidity, and under certain facilities, to maintain a minimum level of stockholders' equity. As of June 30, 2024, we were in compliance with our debt covenants and we estimate we will be in compliance for 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.

The following is a schedule of annual maturities on our total debt, including finance leases, as of June 30, 2024 for each of the next five years (in millions):

Year	As of June 30, 2024 (1)
Remainder of 2024	$	694
2025	2,453
2026	2,949
2027	2,622
2028	3,545
Thereafter	9,425
	$	21,688

(1)    Debt denominated in other currencies is calculated based on the applicable exchange rate at June 30, 2024.

Note 7. Leases

Operating Leases

Our operating leases primarily relate to preferred berthing arrangements, real estate, and shipboard equipment which are included within Operating lease right-of-use assets, and Long-term operating lease liabilities with the current portion of the liability included within Current portion of operating lease liabilities in our consolidated balance sheets as of June 30, 2024 and December 31, 2023. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. We recognize lease expense for these leases on a straight-line basis over the lease term.

The company's preferred berthing agreement with Miami-Dade County ("County") includes the development plans for the County to finance the construction of a new and improved cruise Terminal G at PortMiami. The aggregate amount of the operating lease liabilities recorded for this berthing agreement was $167 million as of June 30, 2024 and December 31, 2023. There will be future remeasurements of the operating lease as the County completes several construction milestones throughout the term of the extended lease, including an expected remeasurement in 2027 or later, when the County satisfies substantial

15

completion of Terminal G, as the minimum lease payments will increase at such time to approximately $55 million per year, with expected 3% annual increases thereafter.

For some of our real estate leases and berthing agreements, we do have the option to extend our current lease term. For those lease agreements with renewal options, the renewal periods for real estate leases primarily range from one to 10 years and the renewal periods for berthing agreements primarily range from one to 20 years. Generally, we do not include renewal options as a component of our present value calculation for berthing agreements. However, for certain real estate leases, we include them.

As most of our leases do not provide an implicit rate, we use our incremental borrowing rate in determining the present value of lease payments. We estimate our incremental borrowing rates based on Term SOFR and U.S. Treasury note rates corresponding to lease terms increased by the Company’s credit risk spread and reduced by the estimated impact of collateral. In addition, we have lease agreements with lease and non-lease components, which are generally accounted for separately. However, for berthing agreements, we account for the lease and non-lease components as a single lease component.

Finance Leases

Our finance leases primarily relate to buildings and surrounding land located at our Miami headquarters and our lease for Silver Dawn. Finance leases are included within Property and Equipment, net and Long-term debt with the current portion of the liability included within Current portion of long-term debt in our consolidated balance sheets as of June 30, 2024 and December 31, 2023.

The Company's master lease agreement (“Master Lease”) with Miami-Dade County related to the buildings and surrounding land located at our Miami headquarters is classified as a finance lease in accordance with ASC 842, Leases. The Master Lease includes two five-year options to extend the lease, which we are reasonably certain to exercise. In November 2023, we executed a modification to the Master Lease agreement to extend its expiration from 2076 to 2077 after coming to an agreement with Miami-Dade County on the financing plans to finalize the development of the buildings and land. The modification of the Master Lease did not change the classification of the lease. The total aggregate amount of the finance lease liabilities recorded for this Master Lease was $105 million and $104 million as of June 30, 2024 and December 31, 2023, respectively. The development of the new campus buildings are expected to be completed in 2026, and the lease components will be recorded within our consolidated financial statements upon commencement.

Silversea Cruises operates Silver Dawn under a sale-leaseback agreement with a bargain purchase option at the end of the 15-year lease term. Due to the bargain purchase option at the end of the lease term in 2036, whereby Silversea Cruises is reasonably certain of obtaining ownership of the ship, Silver Dawn is accounted for as a finance lease. The lease includes other purchase options beginning in year three, none of which are reasonably certain of being exercised at this time. The aggregate amount of finance lease liabilities recorded for this ship was $236 million and $246 million as of June 30, 2024 and December 31, 2023, respectively. The lease payments on the Silver Dawn are subject to adjustments based on the Term SOFR rate.

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

	Consolidated Statement of Comprehensive Income (Loss) Classification	Quarter Ended June 30, 2024		Six Months Ended June 30, 2024
Lease costs:
Operating lease costs	Commission, transportation and other	$	42	$	113
Operating lease costs	Other operating expenses	4		7
Operating lease costs	Marketing, selling and administrative expenses	5		9
Financial lease costs:
Amortization of right-of-use-assets	Depreciation and amortization expenses	3		7
Interest on lease liabilities	Interest expense, net of interest capitalized	7		14
Total lease costs		$	61	$	150

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	Consolidated Statement of Comprehensive Income (Loss) Classification	Quarter Ended June 30, 2023		Six Months Ended June 30, 2023
Lease costs:
Operating lease costs	Commission, transportation and other	$	40	$	95
Operating lease costs	Other operating expenses	6		11
Operating lease costs	Marketing, selling and administrative expenses	6		11
Financial lease costs:
Amortization of right-of-use-assets	Depreciation and amortization expenses	6		12
Interest on lease liabilities	Interest expense, net of interest capitalized	7		15
Total lease costs		$	65	$	144

In addition, certain of our berthing agreements include variable lease costs based on the number of passengers berthed. During the quarter and six months ended June 30, 2024, we had $28 million and $79 million of variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive income (loss), respectively, compared to $21 million and $59 million of variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive income (loss) during the quarter and six months ended June 30, 2023, respectively. These variable lease costs are included within the balances presented above.

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

	As of June 30, 2024		As of December 31, 2023
Weighted average of the remaining lease term in years
Operating leases	20.06		19.43
Finance leases	23.99		23.92
Weighted average discount rate
Operating leases	7.53	%	7.53	%
Finance leases	5.85	%	5.83	%

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

	Six Months Ended June 30, 2024		Six Months Ended June 30, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	138	$	91
Operating cash flows from finance leases	14		15
Financing cash flows from finance leases	$	13	$	19

As of June 30, 2024, maturities related to lease liabilities were as follows (in millions):

Year	Operating Leases		Finance Leases
Remainder of 2024	$	58	$	23
2025	102		45
2026	92		39
2027	73		38
2028	73		37
Thereafter	1,061		685
Total lease payments	1,459		867
Less: Interest	(804)		(510)
Present value of lease liabilities	$	655	$	357

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Note 8. Commitments and Contingencies

Ship Purchase Obligations

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.

As of June 30, 2024, the aggregate cost of our ships on order presented in the table above, not including any ships on order by our Partner Brands, was approximately $5.7 billion, of which we had deposited $543 million as of such date. Refer to Note 11. Fair Value Measurements and Derivative Instruments for further information.

Litigation

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

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

In addition, we are routinely involved in claims typical within the cruise vacation industry. The majority of these claims are covered by insurance. We believe the outcome of such claims, net of expected insurance recoveries, will not have a material adverse impact on our financial condition or results of operations and cash flows.

Other

Some of the contracts that we enter into include indemnification provisions that obligate us to make payments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes, increased lender capital costs and other similar costs. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business. There are no stated or notional amounts included in the indemnification clauses and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses. We have not been required to make any payments under such indemnification clauses in the past and, under current circumstances, we do not believe an indemnification in any material amount is probable.

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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.

Note 9. Shareholders' Equity

Dividends

We did not declare any dividends during the six months ended June 30, 2024 and 2023. We were previously restricted under our export credit facilities from paying dividends. During the quarter ended June 30, 2024, we repaid the principal amounts deferred under our export credit facilities, which eliminated the restriction on dividends and share repurchases. Refer to Note 6. Debt for further information on the transaction.

In July 2024, our Board of Directors declared a dividend of $0.40 per share, payable in October 2024.

Note 10. Changes in Accumulated Other Comprehensive Loss

The following table presents the changes in accumulated other comprehensive loss by component for the six months ended June 30, 2024 and 2023 (in millions):

	Accumulated Other Comprehensive Loss for the Six Months Ended June 30, 2024								Accumulated Other Comprehensive Loss for the Six Months Ended June 30, 2023
	Changes related to cash flow derivative hedges		Changes in defined benefit plans		Foreign currency translation adjustments		Accumulated other comprehensive loss		Changes related to cash flow derivative hedges		Changes in defined benefit plans		Foreign currency translation adjustments		Accumulated other comprehensive loss
Accumulated comprehensive loss at beginning of the year	$	(666)	$	(2)	$	(6)	$	(674)	$	(638)	$	(8)	$	3	$	(643)
Other comprehensive income (loss) before reclassifications	42		(3)		10		49		(42)		—		(10)		(52)
Amounts reclassified from accumulated other comprehensive loss	(29)		—		—		(29)		15		—		—		15
Net current-period other comprehensive income (loss)	13		(3)		10		20		(27)		—		(10)		(37)
Ending balance	$	(653)	$	(5)	$	4	$	(654)	$	(665)	$	(8)	$	(7)	$	(680)

The following table presents reclassifications out of accumulated other comprehensive loss for the quarters and six months ended June 30, 2024 and 2023 (in millions):

	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income
Details About Accumulated Other Comprehensive Loss Components	Quarter Ended June 30, 2024		Quarter Ended June 30, 2023		Six Months Ended June 30, 2024		Six Months Ended June 30, 2023		Affected Line Item in Statements of Comprehensive Income (Loss)
Gain (loss) on cash flow derivative hedges:
Interest rate swaps	$	12	$	10	$	25	$	20	Interest expense, net of interest capitalized
Foreign currency forward contracts	(6)		(4)		(11)		(9)		Depreciation and amortization expenses
Foreign currency forward contracts	—		(10)		—		(10)		Other (expense) income
Fuel swaps	—		—		—		—		Other (expense) income
Fuel swaps	11		(12)		15		(16)		Fuel
	$	17	$	(16)	$	29	$	(15)

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Note 11. Fair Value Measurements and Derivative Instruments 

Fair Value Measurements

The estimated fair value of our financial instruments that are not measured at fair value, categorized based upon the fair value hierarchy, are as follows (in millions): 

	Fair Value Measurements at June 30, 2024										Fair Value Measurements at December 31, 2023
Description	Total Carrying Amount		Total Fair Value		Level 1(1)		Level 2(2)		Level 3(3)		Total Carrying Amount		Total Fair Value		Level 1(1)		Level 2(2)		Level 3(3)
Assets:
Cash and cash equivalents(4)	$	391	$	391	$	391	$	—	$	—	$	497	$	497	$	497	$	—	$	—
Total Assets	$	391	$	391	$	391	$	—	$	—	$	497	$	497	$	497	$	—	$	—
Liabilities:
Long-term debt (including current portion of debt)(5)	$	20,760	$	23,647	$	—	$	23,647	$	—	$	21,083	$	23,700	$	—	$	23,700	$	—
Total Liabilities	$	20,760