10-Q

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, 2019

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 209,561,071 shares of common stock outstanding as of July 18, 2019.

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	32
Item 3. Quantitative and Qualitative Disclosures About Market Risk	52
Item 4. Controls and Procedures	52
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	53
Item 1A. Risk Factors	53
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	62
Item 6. Exhibits	63
SIGNATURES	64

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(unaudited; in thousands, except per share data)

	Quarter Ended June 30,
	2019			2018
Passenger ticket revenues	$	2,017,836		$	1,672,570
Onboard and other revenues	788,795			665,035
Total revenues	2,806,631			2,337,605
Cruise operating expenses:
Commissions, transportation and other	426,934			358,305
Onboard and other	174,429			142,240
Payroll and related	265,569			226,315
Food	146,847			128,383
Fuel	181,924			172,309
Other operating	348,801			286,859
Total cruise operating expenses	1,544,504			1,314,411
Marketing, selling and administrative expenses	376,874			312,923
Depreciation and amortization expenses	311,600			253,376
Operating Income	573,653			456,895
Other income (expense):
Interest income	6,342			13,098
Interest expense, net of interest capitalized	(111,304		)	(81,864		)
Equity investment income	33,045			44,311
Other (expense) income	(21,781		)	33,855
	(93,698		)	9,400
Net Income	479,955			466,295
Less: Net Income attributable to noncontrolling interest	7,125			—
Net Income attributable to Royal Caribbean Cruises Ltd.	$	472,830		$	466,295
Earnings per Share:
Basic	$	2.26		$	2.20
Diluted	$	2.25		$	2.19
Weighted-Average Shares Outstanding:
Basic	209,531			211,673
Diluted	210,052			212,509
Comprehensive Income
Net Income	$	479,955		$	466,295
Other comprehensive income (loss):
Foreign currency translation adjustments	7,263			(11,521		)
Change in defined benefit plans	(9,722		)	(1,964		)
Loss on cash flow derivative hedges	(71,734		)	(68,900		)
Total other comprehensive loss	(74,193		)	(82,385		)
Comprehensive Income	405,762			383,910
Less: Comprehensive Income attributable to noncontrolling interest	7,125			—
Comprehensive Income attributable to Royal Caribbean Cruises Ltd.	$	398,637		$	383,910

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 thousands, except per share data)

	Six Months Ended June 30,
	2019			2018
Passenger ticket revenues	$	3,727,820		$	3,098,214
Onboard and other revenues	1,518,578			1,267,147
Total revenues	5,246,398			4,365,361
Cruise operating expenses:
Commissions, transportation and other	790,089			648,914
Onboard and other	309,599			241,777
Payroll and related	535,101			453,471
Food	286,381			248,025
Fuel	342,095			332,650
Other operating	694,943			565,593
Total cruise operating expenses	2,958,208			2,490,430
Marketing, selling and administrative expenses	791,821			650,284
Depreciation and amortization expenses	603,885			493,606
Operating Income	892,484			731,041
Other income (expense):
Interest income	16,126			20,831
Interest expense, net of interest capitalized	(211,719		)	(149,742		)
Equity investment income	66,739			73,063
Other (expense) income	(26,869		)	9,755
	(155,723		)	(46,093		)
Net Income	736,761			684,948
Less: Net Income attributable to noncontrolling interest	14,250			—
Net Income attributable to Royal Caribbean Cruises Ltd.	$	722,511		$	684,948
Earnings per Share:
Basic	$	3.45		$	3.23
Diluted	$	3.44		$	3.21
Weighted-Average Shares Outstanding:
Basic	209,427			212,139
Diluted	209,962			213,079
Comprehensive Income
Net Income	$	736,761		$	684,948
Other comprehensive income (loss):
Foreign currency translation adjustments	7,827			(10,361		)
Change in defined benefit plans	(10,375		)	5,796
(Loss) gain on cash flow derivative hedges	(22,891		)	73,630
Total other comprehensive (loss) income	(25,439		)	69,065
Comprehensive Income	711,322			754,013
Less: Comprehensive Income attributable to noncontrolling interest	14,250			—
Comprehensive Income attributable to Royal Caribbean Cruises Ltd.	$	697,072		$	754,013

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

2

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	As of
	June 30,			December 31,
	2019			2018
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	235,001		$	287,852
Trade and other receivables, net	340,921			324,507
Inventories	168,009			153,573
Prepaid expenses and other assets	500,477			456,547
Derivative financial instruments	38,559			19,565
Total current assets	1,282,967			1,242,044
Property and equipment, net	24,855,174			23,466,163
Operating lease right-of-use assets	720,854			—
Goodwill	1,373,124			1,378,353
Other assets	1,576,843			1,611,710
Total assets	$	29,808,962		$	27,698,270
Liabilities, Redeemable Noncontrolling Interest and Shareholders’ Equity
Current liabilities
Current portion of debt	$	946,227		$	1,646,841
Commercial paper	1,046,587			775,488
Current portion of operating lease liabilities	92,523			—
Accounts payable	531,788			488,212
Accrued interest	75,313			74,550
Accrued expenses and other liabilities	946,530			899,761
Derivative financial instruments	37,718			78,476
Customer deposits	3,909,454			3,148,837
Total current liabilities	7,586,140			7,112,165
Long-term debt	8,922,011			8,355,370
Long-term operating lease liabilities	644,088			—
Other long-term liabilities	561,550			583,254
Total liabilities	17,713,789			16,050,789
Commitments and contingencies (Note 11)
Redeemable noncontrolling interest	556,770			542,020
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; 236,405,705 and 235,847,683 shares issued, June 30, 2019 and December 31, 2018, respectively)	2,364			2,358
Paid-in capital	3,454,831			3,420,900
Retained earnings	10,692,890			10,263,282
Accumulated other comprehensive loss	(653,173		)	(627,734		)
Treasury stock (26,887,147 and 26,830,765 common shares at cost, at June 30, 2019 and December 31, 2018, respectively)	(1,958,509		)	(1,953,345		)
Total shareholders’ equity	11,538,403			11,105,461
Total liabilities, redeemable noncontrolling interest and shareholders’ equity	$	29,808,962		$	27,698,270

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

3

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited; in thousands)

	Six Months Ended June 30,
	2019			2018
Operating Activities
Net income	$	736,761		$	684,948
Adjustments:
Depreciation and amortization	603,885			493,606
Impairment losses	—			33,651
Net deferred income tax expense (benefit)	3,794			(893		)
(Gain) loss on derivative instruments not designated as hedges	(713		)	29,750
Share-based compensation expense	41,974			31,819
Equity investment income	(66,739		)	(73,063		)
Amortization of debt issuance costs	20,467			16,283
Loss on extinguishment of debt	6,326			—
Change in fair value of contingent consideration	10,700			—
Gain on sale of unconsolidated affiliate	—			(13,680		)
Recognition of deferred gain	—			(21,794		)
Changes in operating assets and liabilities:
(Increase) decrease in trade and other receivables, net	(14,262		)	16,162
Increase in inventories	(14,436		)	(10,485		)
Increase in prepaid expenses and other assets	(51,443		)	(152,626		)
Increase in accounts payable	43,594			58,842
Increase in accrued interest	763			13,706
Increase (decrease) in accrued expenses and other liabilities	34,056			(71,254		)
Increase in customer deposits	760,435			740,420
Dividends received from unconsolidated affiliates	80,572			158,942
Other, net	(207		)	(2,748		)
Net cash provided by operating activities	2,195,527			1,931,586
Investing Activities
Purchases of property and equipment	(1,866,141		)	(2,212,880		)
Cash received on settlement of derivative financial instruments	6,204			69,195
Cash paid on settlement of derivative financial instruments	(55,758		)	(34,898		)
Investments in and loans to unconsolidated affiliates	(3,046		)	—
Cash received on loans to unconsolidated affiliates	19,509			37,607
Proceeds from the sale of unconsolidated affiliate	—			13,215
Other, net	(173		)	(13,220		)
Net cash used in investing activities	(1,899,405		)	(2,140,981		)
Financing Activities
Debt proceeds	2,749,564			3,929,322
Debt issuance costs	(35,454		)	(48,535		)
Repayments of debt	(3,008,893		)	(3,029,944		)
Proceeds from issuance of commercial paper notes	13,335,536			—
Repayments of commercial paper notes	(13,080,788		)	—
Purchases of treasury stock	—			(369,476		)
Dividends paid	(293,197		)	(254,645		)
Proceeds from exercise of common stock options	265			4,062
Other, net	(15,930		)	(16,827		)
Net cash (used in) provided by financing activities	(348,897		)	213,957
Effect of exchange rate changes on cash	(76		)	(15,676		)
Net decrease in cash and cash equivalents	(52,851		)	(11,114		)
Cash and cash equivalents at beginning of period	287,852			120,112
Cash and cash equivalents at end of period	$	235,001		$	108,998
Supplemental Disclosure
Cash paid during the period for:
Interest, net of amount capitalized	$	141,961		$	114,061

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

4

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(unaudited; in thousands)

	Common Stock		Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total Shareholders' Equity
Balance at April 1, 2019	$	2,364	$	3,432,419	$	10,366,612		$	(578,980	)	$	(1,953,345	)	$	11,269,070
Activity related to employee stock plans	—		22,412		—			—			(5,164		)	17,248
Common stock dividends, $0.70 per share	—		—		(146,552		)	—			—			(146,552		)
Changes related to cash flow derivative hedges	—		—		—			(71,734		)	—			(71,734		)
Change in defined benefit plans	—		—		—			(9,722		)	—			(9,722		)
Foreign currency translation adjustments	—		—		—			7,263			—			7,263
Net Income attributable to Royal Caribbean Cruises Ltd.	—		—		472,830			—			—			472,830
Balance at June 30, 2019	$	2,364	$	3,454,831	$	10,692,890		$	(653,173	)	$	(1,958,509	)	$	11,538,403

	Common Stock		Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total Shareholders' Equity
Balance at January 1, 2019	$	2,358	$	3,420,900	$	10,263,282		$	(627,734	)	$	(1,953,345	)	$	11,105,461
Activity related to employee stock plans	6		33,931		—			—			(5,164		)	28,773
Common stock dividends, $1.40 per share	—		—		(292,903		)	—			—			(292,903		)
Changes related to cash flow derivative hedges	—		—		—			(22,891		)	—			(22,891		)
Change in defined benefit plans	—		—		—			(10,375		)	—			(10,375		)
Foreign currency translation adjustments	—		—		—			7,827			—			7,827
Net Income attributable to Royal Caribbean Cruises Ltd.	—		—		722,511			—			—			722,511
Balance at June 30, 2019	$	2,364	$	3,454,831	$	10,692,890		$	(653,173	)	$	(1,958,509	)	$	11,538,403

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

5

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY -Continued

(unaudited; in thousands)

	Common Stock		Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total Shareholders' Equity
Balance at April 1, 2018	$	2,357	$	3,390,055	$	9,090,544		$	(182,815	)	$	(1,653,345	)	$	10,646,796
Activity related to employee stock plans	1		7,506		—			—			—			7,507
Common stock dividends, $0.60 per share	—		—		(127,055		)	—			—			(127,055		)
Changes related to cash flow derivative hedges	—		—		—			(68,900		)	—			(68,900		)
Change in defined benefit plans	—		—		—			(1,964		)	—			(1,964		)
Foreign currency translation adjustments	—		—		—			(11,521		)	—			(11,521		)
Purchases of treasury stock	—		—		—			—			(137,460		)	(137,460		)
Net Income attributable to Royal Caribbean Cruises Ltd.	—		—		466,295			—			—			466,295
Balance at June 30, 2018	$	2,358	$	3,397,561	$	9,429,784		$	(265,200	)	$	(1,790,805	)	$	10,773,698

	Common Stock		Paid-in Capital		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Total Shareholders' Equity
Balance at January 1, 2018	$	2,352	$	3,390,117	$	9,022,405		$	(334,265	)	$	(1,378,306	)	$	10,702,303
Cumulative effect of accounting changes	—		—		(23,476		)	—			—			(23,476		)
Activity related to employee stock plans	6		7,444		—			—			—			7,450
Common stock dividends, $1.20 per share	—		—		(254,093		)	—			—			(254,093		)
Changes related to cash flow derivative hedges	—		—		—			73,630			—			73,630
Change in defined benefit plans	—		—		—			5,796			—			5,796
Foreign currency translation adjustments	—		—		—			(10,361		)	—			(10,361		)
Purchases of treasury stock	—		—		—			—			(412,499		)	(412,499		)
Net Income attributable to Royal Caribbean Cruises Ltd.	—		—		684,948			—			—			684,948
Balance at June 30, 2018	$	2,358	$	3,397,561	$	9,429,784		$	(265,200	)	$	(1,790,805	)	$	10,773,698

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

6

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,” 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,” “Azamara Club Cruises” and "Silversea Cruises" refer to our wholly- or majority-owned global cruise brands. Throughout this report, we also refer to regional brands in which we hold an ownership interest, including “TUI Cruises” and “Pullmantur.” However, because these regional 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 report should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2018, including the audited consolidated financial statements and related notes included therein.

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. As of June 30, 2019, we control and operate four global cruise brands: Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises and Silversea Cruises (collectively, our "Global Brands").

We also own a 50% joint venture interest in the German brand TUI Cruises and a 49% interest in the Spanish brand Pullmantur (collectively, our "Partner Brands"). We account for our investments in our Partner Brands under the equity method of accounting.

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 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, 2018 for a discussion of our significant accounting policies.

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 7. Other Assets for further information regarding our variable interest entities. We consolidate the operating results of Silversea Cruises on a three-month reporting lag to allow for more timely preparation of our consolidated financial statements. No material events or other transactions involving Silversea Cruises have occurred from March 31, 2019 through June 30, 2019 that would require further disclosure or adjustment to our consolidated financial statements as of and for the quarter ended June 30, 2019. 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

Adoption of Accounting Pronouncements

Leases

On January 1, 2019, we adopted the guidance codified in Accounting Standard Codification ("ASC") 842, Leases ("ASC 842") using the modified retrospective approach and elected the optional transition method, which allows entities to initially apply the standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Upon adoption, we applied the guidance to all existing leases.

7

For leases with a term greater than 12 months, the new guidance requires the lease rights and obligations arising from the leasing arrangements, including operating leases, to be recognized as assets and liabilities on the balance sheet. Upon adoption of the new guidance, the most significant impact was the recognition of right-of-use assets and lease liabilities relating to operating leases in the amounts of $801.8 million and $820.5 million, respectively, reported within Operating lease right-of-use assets and Long-term operating lease liabilities, respectively, with the current portion of the liability reported within Current portion of operating lease liabilities, in our consolidated balance sheet as of January 1, 2019. Accounting for finance leases remained substantially unchanged and continues to be reported within Property and equipment, net and Long-term debt, with the current portion of the debt reported within Current portion of debt, in our consolidated balance sheets. There was no cumulative effect of applying the new standard and accordingly there was no adjustment to our retained earnings upon adoption. The comparative information presented has not been restated and continues to be reported under the accounting standards in effect for those periods. For further information on leases, refer to Note 9. Leases.

This guidance did not have a material impact to our consolidated statements of comprehensive income (loss), consolidated statements of cash flows and our debt-covenants calculations under our current agreements.

Note 3. Business Combination

On July 31, 2018, we acquired a 66.7% equity stake in Silversea Cruise Holding Ltd. ("Silversea Cruises"), an ultra-luxury and expedition cruise line, from Heritage Cruise Holding Ltd. ("HCH"), previously known as Silversea Cruises Group Ltd. Silversea Cruises enhances our presence in the ultra-luxury and expedition markets and provides us with an opportunity to drive long-term capacity growth in these markets.

The purchase price consisted of $1.02 billion in cash, net of assumed liabilities, and contingent consideration that can range from zero up to a maximum of approximately 472,000 shares of our common stock, and is payable upon achievement of certain 2019-2020 performance metrics by Silversea Cruises. The fair value of the contingent consideration at the acquisition date was $44.0 million and is recorded within Other long-term liabilities in our consolidated balance sheets. Changes in the fair value of the contingent consideration are recorded in our results of operations, if any, in the period of the change. Refer to Note 14. Fair Value Measurements and Derivative Instruments for further information on the valuation of the contingent consideration.

To finance a portion of the purchase price, we drew in full on a $700 million unsecured credit agreement and the remainder of the transaction consideration was financed through the use of our revolving credit facilities.

We have accounted for this transaction under the provisions of ASC 805, Business Combinations. The purchase price for the Silversea Cruises acquisition was allocated based on estimates of the fair value of assets acquired and liabilities assumed at the acquisition date, with the excess allocated to goodwill. Goodwill is not deductible for tax purposes and consisted primarily of the opportunity to expand our cruise operations in strategic growth areas.

For reporting purposes, we include Silversea Cruises’ results of operations on a three-month reporting lag from January 1, 2019 through March 31, 2019 for the quarter ended June 30, 2019 and from October 1, 2018 through March 31, 2019 for the six months ended June 30, 2019. We have included Silversea Cruises' balance sheet as of March 31, 2019 in our consolidated balance sheet as of June 30, 2019. Refer to Note 1. General for further information on this three-month reporting lag.

Our purchase price allocation was final as of March 31, 2019. There were no material measurement period adjustments recorded during the six months ended June 30, 2019.

Pro-forma financial results relating to the Silversea Cruises acquisition are not presented, as this acquisition was not material to our consolidated results of operations.

8

Note 4. Intangible Assets

Intangible assets consist of finite and indefinite life assets and are reported within Other assets in our consolidated balance sheets.

The following is a summary of our intangible assets as of June 30, 2019 and December 31, 2018 (in thousands):

	June 30, 2019
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Finite-life intangible assets:
Customer relationships	$	97,400	$	4,329	$	93,071
Galapagos operating license	47,669		5,049		42,620
Other finite-life intangible assets	11,560		3,853		7,707
Total finite-life intangible assets	156,629		13,231		143,398
Indefinite-life intangible assets	351,725		—		351,725
Total intangible assets, net	$	508,354	$	13,231	$	495,123

	December 31, 2018
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Finite-life intangible assets:
Customer relationships	$	97,400	$	1,082	$	96,318
Galapagos operating license	47,669		4,206		43,463
Other finite-life intangible assets	11,560		963		10,597
Total finite-life intangible assets	156,629		6,251		150,378
Indefinite-life intangible assets	351,725		—		351,725
Total intangible assets, net	$	508,354	$	6,251	$	502,103

The estimated future amortization for finite-life intangible assets for each of the next five years is as follows (in thousands):

Year
Remainder of 2019	$	6,979
2020	$	12,995
2021	$	8,179
2022	$	8,179
2023	$	8,179
2024	$	8,179

Note 5. Revenues

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 satisfy this performance obligation and recognize revenue over the duration of each cruise, which generally range from two to 25 nights.

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Passenger ticket revenues include charges to our guests for port costs that vary with passenger head counts. These type of port costs, along with port costs that do not vary by passenger head counts, are included in our operating expenses. The amounts of port costs charged to our guests and included within Passenger ticket revenues on a gross basis were $173.6 million and $151.4 million for the quarters ended June 30, 2019 and 2018, respectively, and $325.6 million and $288.1 million for the six months ended June 30, 2019 and 2018, 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 passengers during a cruise and recognize revenue at the time of transfer over the duration of the related cruise.

Disaggregated Revenues

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

	Quarter Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenues by itinerary
North America(1)	$	1,571,769	$	1,264,167	$	3,252,827	$	2,611,427
Asia/Pacific(2)	327,777		283,198		817,852		816,177
Europe(3)	594,712		597,399		602,694		597,399
Other regions(4)	196,504		101,631		359,009		178,816
Total revenues by itinerary	2,690,762		2,246,395		5,032,382		4,203,819
Other revenues(5)	115,869		91,210		214,016		161,542
Total revenues	$	2,806,631	$	2,337,605	$	5,246,398	$	4,365,361

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

(2) Includes Southeast Asia (e.g., Singapore, Thailand and the Philippines), East Asia (e.g., China and Japan), South Asia (e.g., India and Pakistan) and Oceania (e.g., Australia and Fiji Islands) regions.

(3) Includes European countries (e.g., Nordics, Germany, France, Italy, Spain and the United Kingdom).

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

(5) Includes revenues primarily related to cancellation fees, vacation protection insurance, pre- and post-cruise tours and fees for operating certain port facilities. Amounts also include revenues related to our bareboat charter, procurement and management related services we perform on behalf of our unconsolidated affiliates. Refer to Note 7. Other Assets for more information on our unconsolidated affiliates.

Passenger ticket revenues are attributed to geographic areas based on where the reservation originates. For the quarters ended June 30, 2019 and 2018, our guests were sourced from the following areas:

	Quarter Ended June 30,
	2019		2018
Passenger ticket revenues:
United States	67	%	63	%
United Kingdom	9	%	10	%
All other countries (1)	24	%	27	%

For the six months ended June 30, 2019 and 2018, our guests were sourced from the following areas:

	Six Months Ended June 30,
	2019		2018
Passenger ticket revenues:
United States	66	%	60	%
All other countries (1)	34	%	40	%

(1) No other individual country's revenue exceeded 10% for the quarters and six months ended June 30, 2019 and 2018.

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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 during the duration of the cruise. ASC 606, Revenues from Contracts with Customers, defines a “contract liability” as an entity’s obligation to transfer goods or services to a customer for which the entity has received consideration from the customer. We do not consider customer deposits to be a contract liability until the customer no longer retains the unilateral right, resulting from the passage of time, to cancel such customer's reservation and receive a full refund. Customer deposits presented in our consolidated balance sheets include contract liabilities of $2.4 billion and $1.9 billion as of June 30, 2019 and December 31, 2018, respectively. Substantially all of our contract liabilities as of December 31, 2018 were recognized and reported within Total revenues in our consolidated statement of comprehensive income (loss) for the six months ended June 30, 2019.

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.

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, 2019 and December 31, 2018, our contract assets were $56.6 million and $57.8 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 agent commissions 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 agent commissions were $197.4 million and $153.5 million as of June 30, 2019 and December 31, 2018, respectively. Substantially all of our prepaid travel agent commissions at December 31, 2018 were expensed and reported within Commissions, transportation and other in our consolidated statements of comprehensive income (loss) for the six months ended June 30, 2019.

Note 6. Earnings Per Share

A reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share data):

	Quarter Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Net Income attributable to Royal Caribbean Cruises Ltd. for basic and diluted earnings per share	$	472,830	$	466,295	$	722,511	$	684,948
Weighted-average common shares outstanding	209,531		211,673		209,427		212,139
Dilutive effect of stock-based awards	521		836		535		940
Diluted weighted-average shares outstanding	210,052		212,509		209,962		213,079
Basic earnings per share	$	2.26	$	2.20	$	3.45	$	3.23
Diluted earnings per share	$	2.25	$	2.19	$	3.44	$	3.21

 

There were no antidilutive shares for the quarters and six months ended June 30, 2019 and 2018. 

Note 7. 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.

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We have determined that TUI Cruises GmbH, our 50%-owned joint venture, which operates the brand TUI Cruises, is a VIE. As of June 30, 2019, the net book value of our investment in TUI Cruises was $557.8 million, primarily consisting of $391.9 million in equity and a loan of €142.7 million, or approximately $162.5 million based on the exchange rate at June 30, 2019. As of December 31, 2018, the net book value of our investment in TUI Cruises was $578.1 million, primarily consisting of $403.0 million in equity and a loan of €150.6 million, or approximately $172.2 million based on the exchange rate at December 31, 2018. 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, our joint venture partner in TUI Cruises, and is secured by a first priority mortgage on the ship. The majority of these amounts were included within Other assets in our consolidated balance sheets.

In addition, we and TUI AG have each guaranteed the repayment by TUI Cruises of 50% of a bank loan. As of June 30, 2019, the outstanding principal amount of the loan was €31.7 million, or approximately $36.1 million based on the exchange rate at June 30, 2019. The loan amortizes quarterly and is currently secured by a first mortgage on Mein Schiff Herz. Based on current facts and circumstances, we do not believe potential obligations under our guarantee of this bank loan are probable. In addition to our guarantee of the bank loan, TUI Cruises 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 TUI Cruises below 37.55% through May 2031.

Our investment amount, outstanding term loan and the potential obligations under the bank loan guarantee are substantially our maximum exposure to loss in connection with our investment in TUI Cruises. We have determined that we are not the primary beneficiary of TUI Cruises. We believe that the power to direct the activities that most significantly impact TUI Cruises’ economic performance are shared between ourselves and TUI AG. All the significant operating and financial decisions of TUI Cruises require the consent of both parties, which we believe creates shared power over TUI Cruises. Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting.

In March 2009, we sold Celebrity Galaxy to TUI Cruises for €224.4 million, or $290.9 million, to serve as the original Mein Schiff 1. Due to the related party nature of this transaction, the gain on the sale of the ship of $35.9 million was deferred and being recognized over the remaining life of the ship, which was estimated to be 23 years. In April 2018, TUI Cruises sold the original Mein Schiff 1 and as a result we accelerated the recognition of the remaining balance of the deferred gain, which was $21.8 million. This amount is included within Other income (expense) in our consolidated statements of comprehensive income (loss) for the quarter and six months ended June 30, 2018.

We have determined that Pullmantur Holdings S.L. ("Pullmantur Holdings"), in which we have a 49% noncontrolling interest and Springwater Capital LLC has a 51% interest, is a VIE for which we are not the primary beneficiary, as we do not have the power to direct the activities that most significantly impact the entity's economic performance. Accordingly, we do not consolidate this entity and we account for this investment under the equity method of accounting. As of June 30, 2019 and December 31, 2018, our maximum exposure to loss in Pullmantur Holdings was $53.5 million and $58.5 million, respectively, consisting of loans and other receivables. These amounts were included within Trade and other receivables, net and Other assets in our consolidated balance sheets.

We have provided a non-revolving working capital facility to a Pullmantur Holdings subsidiary in the amount of up to €15.0 million or approximately $17.1 million based on the exchange rate at June 30, 2019. Proceeds of the facility, which were available to be drawn through December 2018, accrue interest at an interest rate of 6.5% per annum and are payable through 2022. An affiliate of Springwater Capital LLC has guaranteed repayment of 51% of the outstanding amounts under the facility. As of June 30, 2019, €12.0 million, or approximately $13.7 million, based on the exchange rate at June 30, 2019, was outstanding under this facility. As of December 31, 2018, €14.0 million, or approximately $16.0 million, based on the exchange rate at December 31, 2018, was outstanding under this facility.

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, ship upgrades and certain emergency repairs as may be required. During the quarter and six months ended June 30, 2019, we made payments of $4.8 million and $45.1 million, respectively, to Grand Bahama for ship repair and maintenance services. During the quarter and six months ended June 30, 2018, we made payments of $1.9 million and $24.3 million, respectively, to Grand Bahama for ship repair and maintenance services. 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 we account for this investment under the equity method of accounting. As of June 30, 2019, the net book value of our investment in Grand Bahama was $50.0 million, consisting of $36.7 million in equity and a loan of $13.3 million. As of December 31, 2018, the net book value of our investment in Grand Bahama was $56.1 million, consisting of $41.4 million in equity and a loan of $14.6 million. These amounts represent our maximum exposure to loss related to our investment in Grand Bahama. Our loan to Grand Bahama matures in March 2025 and bears interest at the lower of (i) LIBOR plus 3.50% and (ii) 5.50%. Interest payable on the

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loan is due on a semi-annual basis. During the quarter and six months ended June 30, 2019, we received principal and interest payments of $1.1 million and $7.6 million, respectively. During the quarter and six months ended June 30, 2018, we received principal and interest payments of approximately $11.2 million and $14.2 million, respectively. The loan balance is included within Other assets in our consolidated balance sheets. The loan is currently accruing interest under the effective yield method.

During the quarter ended June 30, 2019, Grand Bahama experienced an incident involving one of its drydocks where Oasis of the Seas was undergoing maintenance.  The damage from the incident resulted in a write-off of the related drydock by Grand Bahama.  Our equity investment income for the quarter and six months ended June 30, 2019 reflects our equity share of the write-off. Grand Bahama's management is working with its insurance underwriter to determine coverage under their existing policies.

We monitor credit risk associated with the loan through our participation on Grand Bahama’s board of directors along with our review of Grand Bahama’s financial statements and projected cash flows. Based on this review, we believe the risk of loss associated with the outstanding loan is not probable as of June 30, 2019.

In March 2018, we and Ctrip.com International Ltd. ("Ctrip") announced the decision to end the Skysea Holding International Ltd. ("Skysea Holding") venture in which we have a 36% ownership interest. As a result, we reviewed the recoverability of our investment in Skysea Holding and determined that our investment, debt facility and other receivables due from the brand were impaired and recognized an impairment charge of $23.3 million, which was included within Other expense in our consolidated statement of comprehensive income (loss) for the six months ended June 30, 2018. The charge reflected a full impairment of our investment in Skysea Holding and other receivables due to us and reduced the debt facility and the related accrued interest due to us from Skysea Holding to its net realizable value. In December 2018, the Golden Era, the ship operated by SkySea Cruises, and owned by a wholly-owned subsidiary of Skysea Holding, was sold to an affiliate of TUI AG. Proceeds from the sale were distributed to Ctrip and us, which eliminated our net receivable balance due from Skysea Holding, resulting in no further impairment charges. As of June 30, 2019 and December 31, 2018, we do not have any material exposures to loss related to our investment in Skysea Holding.

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

	Quarter Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Share of equity income from investments	$	33,045	$	44,311	$	66,739	$	73,063
Dividends received (1)	$	38,137	$	121,024	$	80,572	$	158,942

(1) For the quarter ended June 30, 2019, TUI Cruises paid us a dividend of €40.0 million, or approximately $45.6 million, based on the exchange rate at the time of the transaction. For the six months ended June 30, 2019, TUI Cruises paid us dividends totaling €90.0 million, or approximately $101.8 million, based on the exchange rates at the time of the transactions. The amounts included in the table above are net of tax withholdings.

	As of June 30, 2019		As of December 31, 2018
Total notes receivable due from equity investments	$	193,334	$	201,979
Less-current portion(1)	23,651		19,075
Long-term portion(2)	$	169,683	$	182,904

(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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We also provide ship management services to TUI Cruises GmbH, Pullmantur Holdings and Skysea Holding (which ceased cruising operations in September 2018). Additionally, we bareboat charter to Pullmantur Holdings the vessels currently operated by its brands, which were retained by us following the sale of our 51% interest in Pullmantur Holdings. We recorded the following as it relates to these services in our operating results within our consolidated statements of comprehensive income (loss) (in thousands):

	Quarter Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenues	$	11,975	$	14,157	$	23,857	$	28,230
Expenses	$	1,111	$	3,270	$	2,085	$	6,908

Note 8. Debt

In June 2018, we established a commercial paper program pursuant to which we may issue short-term unsecured notes from time to time in an aggregate amount of up to $1.2 billion. The interest rate for the commercial paper notes varies based on duration, market conditions and our credit ratings. The maturities of the commercial paper notes can vary, but cannot exceed 397 days from the date of issuance. We use the proceeds from our commercial paper notes for general corporate purposes. The commercial paper issued is backstopped by our revolving credit facilities. As of June 30, 2019, we had $1.0 billion of commercial paper notes outstanding with a weighted average interest rate of 2.93% and a weighted average maturity of approximately 40 days. As of December 31, 2018, we had $777.0 million of commercial paper notes outstanding with a weighted average interest rate of 3.19% and a weighted average maturity of approximately 23 days. In July 2019, our Board of Directors authorized an increase in the aggregate amount of commercial paper notes that we could issue under the program up to $2.9 billion.

In April 2019, we amended our $1.4 billion unsecured revolving credit facility due in 2020 to extend the termination date through April 2024, increase the facility size to $1.7 billion and reduce pricing. The interest rate and facility fee vary with our senior debt rating and are currently set at LIBOR plus 1.0% per annum and 0.125% per annum, respectively. These amendments did not result in the extinguishment of debt. In addition, in May 2019, we amended our $1.15 billion unsecured revolving credit facility due in 2022 to reduce pricing to match pricing on our $1.7 billion unsecured revolving credit facility due in 2024.

In April 2019, we entered into and drew in full on an unsecured three-year term loan agreement in the amount of $1.0 billion. The loan accrues interest at a floating rate of LIBOR plus an applicable margin, which varies with our senior debt rating, and is currently 1.075% per annum. Proceeds of this loan were used to repay the $700 million 364-day loan due July 2019 related to the acquisition of Silversea Cruises and the remaining balance of the unsecured term loan originally incurred in 2010 to purchase Allure of the Seas. The repayment of these loans resulted in a total loss on the extinguishment of debt of $6.3 million, which was recognized within Other (expense) income within our consolidated statements of comprehensive income (loss) for the quarter and six months ended June 30, 2019.

In April 2019, we took delivery of Spectrum of the Seas. To finance the purchase, we borrowed $908.0 million under a previously committed unsecured term loan which is 95% guaranteed by Euler Hermes Deutschland AG, the official export credit agency of Germany. The loan amortizes semi-annually over 12 years and bears interest at a fixed rate of 3.45% per annum.

In May 2019, we took delivery of Celebrity Flora. The purchase was financed through an unsecured term loan facility entered into in November 2017 in an amount up to €80.0 million, or approximately $91.1 million based on the exchange rate at June 30, 2019. As of June 30, 2019, we had fully drawn on this facility. The loan is due and payable at maturity in November 2024. Interest on the loan accrues at a floating rate based on EURIBOR plus the applicable margin. The applicable margin varies with our debt rating and was 1.195% as of June 30, 2019.

In June 2019, Silversea Cruises entered into a $300 million unsecured term loan facility for the financing of Silver Moon to pay a portion of the ship's contract price through a facility guaranteed by us. We expect to draw upon this loan when we take delivery of the ship, which we expect will occur in the third quarter of 2020. The loan will be due and payable at maturity in June 2028. Interest on the loan will accrue at LIBOR plus 1.50%.

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Note 9. Leases

Our operating leases primarily relate to preferred berthing arrangements, real estate and shipboard equipment and 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 sheet as of June 30, 2019. 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. Refer to Note 2. Summary of Significant Accounting Policies, for further information on the adoption of ASC 842.

Finance leases are included within Property and equipment, net and Long-term debt, with the current portion of the debt reported within Current portion of debt, in our consolidated balance sheets.

Our finance leases include two ships, Silver Whisper and Silver Explorer, operated by Silversea Cruises. The finance lease for Silver Whisper will expire in 2022, subject to an option to purchase the ship, and the finance lease for Silver Explorer will expire in 2021, subject to an option to extend the lease for up to an additional 6 years.

In June 2019, the Company entered into a new master lease agreement (“Master Lease”) with Miami-Dade County relating to the buildings and surrounding land located at its Miami headquarters, which are classified as finance leases in accordance with ASC 842 Leases. Prior to entering into the Master Lease, the buildings were classified as operating lease assets. The finance lease for the buildings and land will expire in 2072, which includes an initial 43 years lease term and two five-year options to extend the lease. We consider the possibility of exercising the two five-year options reasonably certain.

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 range from one to 10 years and the renewal periods for berthing agreements range from one year 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. Additionally, we do have a residual value guarantee associated with our lease of a terminal at PortMiami in Miami, Florida that approximates a percentage of cost of the asset as of the inception of the lease. We consider the possibility of incurring costs associated with the residual value guarantee to be remote.

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 LIBOR 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. We used the incremental borrowing rate as of the adoption date for operating leases that commenced prior to that date. 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.

Additionally, we bareboat charter to Pullmantur Holdings the vessels currently operated by its brands, which were retained by us following the sale of our 51% interest in Pullmantur Holdings in 2016. We account for the bareboat charters of these vessels as operating leases for which we are the lessor.  The remaining payments and term of these leases are immaterial to our consolidated financial statements.

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Supplemental balance sheet information for leases was as follows (in thousands):

	As of June 30, 2019
Lease assets:
Finance lease right-of-use assets, net:
Property and equipment, gross	$	373,867
Accumulated depreciation	(45,412		)
Property and equipment, net	328,455
Operating lease right-of-use assets	720,854
Total lease assets	$	1,049,309
Lease liabilities:
Finance lease liabilities:
Current portion of debt	$	24,573
Long-term debt	218,106
Total finance lease liabilities	242,679
Operating lease liabilities:
Current portion of operating lease liabilities	92,523
Long-term operating lease liabilities	644,088
Total operating lease liabilities	736,611
Total lease liabilities	$	979,290

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

	Consolidated Statement of Comprehensive Income (Loss) Classification	Quarter Ended June 30, 2019		Six Months Ended June 30, 2019
Lease costs:
Operating lease costs	Commission, transportation and other	$	19,057	$	38,113
Operating lease costs	Other operating expenses	6,930		13,861
Operating lease costs	Marketing, selling and administrative expenses	5,018		10,225
Finance lease costs:
Amortization of right-of-use-assets	Depreciation and amortization expenses	5,529		8,724
Interest on lease liabilities	Interest expense, net of interest capitalized	1,570		2,166
Total lease costs		$	38,104	$	73,089

In addition, certain of our berth agreements include variable lease costs based on the number of passengers berthed. During the quarter and six months ended June 30, 2019, we had $21.5 million and $55.8 million, respectively, of variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive income (loss).

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

	As of June 30, 2019
Weighted average of the remaining lease term
Operating leases	10.7 years
Finance leases	28.6 years
Weighted average discount rate
Operating leases	4.65	%
Finance leases	4.40	%

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

	Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	63,221
Operating cash flows from finance leases	$	2,166
Financing cash flows from finance leases	$	14,607
Supplemental noncash information:
Right-of-use assets obtained in exchange for lease obligations:
Finance leases	$	122,237

As of June 30, 2019, maturities related to lease liabilities were as follows (in thousands):

Year	Operating Leases			Finance Leases
Remainder of 2019	$	61,702		$	23,619
2020	122,781			43,411
2021	110,025			45,934
2022	103,561			22,832
2023	101,442			11,891
Thereafter	492,551			414,104
Total lease payments	992,062			561,791
Less: Interest	(255,451		)	(319,112		)
Present value of lease liabilities	$	736,611		$	242,679

Operating lease payments do not include any costs related to options to extend lease terms as none are reasonably certain of being exercised.

Under ASC 840, Leases, future minimum lease payments under noncancelable operating leases as of December 31, 2018 were as follows (in thousands):

Year
2019	$	67,682
2020	64,237
2021	56,142
2022	52,759
2023	52,522
Thereafter	383,974
	$	677,316

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Note 10. Redeemable Noncontrolling Interest

In connection with the acquisition of Silversea Cruises, we recorded a redeemable noncontrolling interest of $537.8 million due to the put options held by HCH. The put options may require us to purchase HCH's remaining interest, or 33.3% of Silversea Cruises, upon the occurrence or nonoccurrence of certain future events that are not solely within our control. HCH's interest is presented as Redeemable noncontrolling interest and is classified outside of shareholders' equity in our consolidated balance sheets. Additionally, the noncontrolling interest's share in the net earnings (loss) and contractual accretion requirements associated with the put options are included in Net Income attributable to noncontrolling interest in our consolidated statements of comprehensive income (loss).

The following table presents changes in the redeemable noncontrolling interest as of June 30, 2019 (in thousands):

Beginning balance January 1, 2019	$	542,020
Net income attributable to noncontrolling interest, including the contractual accretion of the put options	14,250
Other	500
Ending balance June 30, 2019	$	556,770

Note 11. Commitments and Contingencies

Ship Purchase Obligations

Our future capital commitments consist primarily of new ship orders. As of June 30, 2019, our Global Brands have the following ships on order:

Ship	Shipyard	Expected to Enter Service	Approximate Berths
Royal Caribbean International —
Oasis-class:
Unnamed	Chantiers de l’Atlantique	2nd Quarter 2021	5,700
Quantum-class:
Odyssey of the Seas	Meyer Werft GmbH	4th Quarter 2020	4,200
Icon-class:
Unnamed	Meyer Turku Oy	2nd Quarter 2022	5,600
Unnamed	Meyer Turku Oy	2nd Quarter 2024	5,600
Celebrity Cruises —
Edge-class:
Celebrity Apex	Chantiers de l’Atlantique	2nd Quarter 2020	2,900
Unnamed	Chantiers de l’Atlantique	4th Quarter 2021	3,250
Unnamed	Chantiers de l’Atlantique	4th Quarter 2022	3,250
Silversea Cruises —
Silver Origin	De Hoop	2nd Quarter 2020	100
Silver Moon	Fincantieri	3rd Quarter 2020	550
Silver Dawn	Fincantieri	3rd Quarter 2021	550
Total Berths			31,700

In addition, in April 2019, Silversea Cruises entered into an agreement with Meyer Werft to build two ships of a new generation, known as the Evolution-class. The ships are expected to have an aggregate capacity of approximately 1,200 berths and are expected to enter service in 2022 and 2023, respectively.

As of June 30, 2019, the aggregate cost of our ships on order presented in the table above, not including the two ships placed on order for Silversea Cruises during the reporting lag period, was $10.3 billion, of which we had deposited $614.0 million.

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Approximately 55.6% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at June 30, 2019. Refer to Note 14. Fair Value Measurements and Derivative Instruments for further information.

In addition, as of June 30, 2019, we have the following agreements in place for new ships on order for our Global Brands, which are contingent upon completion of conditions precedent and financing:

Ship	Shipyard	Expected to Enter Service	Approximate Berths
Royal Caribbean International —
Oasis-class:
Unnamed	Chantiers de l’Atlantique	4th Quarter 2023	5,700
Icon-class:
Unnamed	Meyer Turku Oy	2nd Quarter 2025	5,600
Celebrity Cruises —
Edge-class:
Unnamed	Chantiers de l’Atlantique	4th Quarter 2024	3,250

Litigation

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

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 12. Shareholders’ Equity

During both first and second quarter of 2019, we declared a cash dividend on our common stock of $0.70 per share, which was paid in April 2019 and July 2019, respectively. During the first quarter of 2019, we also paid a cash dividend on our common stock of $0.70 per share, which was declared during the fourth quarter of 2018.

During both first and second quarter of 2018, we declared a cash dividend on our common stock of $0.60 per share, which was paid in April 2018 and July 2018, respectively. During the first quarter of 2018, we also paid a cash dividend on our common stock of $0.60 per share, which was declared during the fourth quarter of 2017.

In May 2018, our board of directors authorized a 24-month common stock repurchase program for up to $1.0 billion. The timing and number of shares to be repurchased will depend on a variety of factors, including price and market conditions. Repurchases under the program may be made at management's discretion from time to time on the open market or through privately negotiated transactions. During the quarter and six months ended June 30, 2019, there were no common stock repurchases under this program. During the year ended December 31, 2018, we repurchased 2.8 million shares of our common stock under this program, for a total of approximately $300.0 million, in open market transactions. As of June 30, 2019, we have approximately $700.0 million that remains available for future stock repurchase transactions under our Board authorized program.

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Note 13. Changes in Accumulated Other Comprehensive Income (Loss) 

The following table presents the changes in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2019 and 2018 (in thousands):

	Accumulated Other Comprehensive Income (Loss) for the Six Months Ended June 30, 2019												Accumulated Other Comprehensive Income (Loss) for the Six Months Ended June 30, 2018
	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	$	(537,216	)	$	(26,023	)	$	(64,495	)	$	(627,734	)	$	(250,355	)	$	(33,666	)	$	(50,244	)	$	(334,265	)
Other comprehensive income (loss) before reclassifications	(3,249		)	(10,758		)	7,827			(6,180		)	69,932			5,082			(10,361		)	64,653
Amounts reclassified from accumulated other comprehensive loss	(19,642		)	383			—			(19,259		)	3,698			714			—			4,412
Net current-period other comprehensive income (loss)	(22,891		)	(10,375		)	7,827			(25,439		)	73,630			5,796			(10,361		)	69,065
Ending balance	$	(560,107	)	$	(36,398	)	$	(56,668	)	$	(653,173	)	$	(176,725	)	$	(27,870	)	$	(60,605	)	$	(265,200	)

The following table presents reclassifications out of accumulated other comprehensive income (loss) for the quarters and six months ended June 30, 2019 and 2018 (in thousands):

	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
Details About Accumulated Other Comprehensive Income (Loss) Components	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Six Months Ended June 30, 2018			Affected Line Item in Statements of Comprehensive Income (Loss)
Gain (loss) on cash flow derivative hedges:
Interest rate swaps	$	(409	)	$	(2,138	)	$	(800	)	$	(8,976	)	Interest expense, net of interest capitalized
Foreign currency forward contracts	(3,545		)	(3,156		)	(6,879		)	(6,468		)	Depreciation and amortization expenses
Foreign currency forward contracts	(1,300		)	14,601			(2,615		)	14,643			Other income (expense)
Fuel swaps	(1,188		)	(133		)	(1,444		)	192			Other income (expense)
Fuel swaps	13,362			2,043			31,380			(3,089		)	Fuel
	6,920			11,217			19,642			(3,698		)
Amortization of defined benefit plans:
Actuarial loss	(195		)	(372		)	(383		)	(714		)	Payroll and related
	(195		)	(372		)	(383		)	(714		)
Foreign cumulative translation	—			—			—			—			Other operating
Total reclassifications for the period	$	6,725		$	10,845		$	19,259		$	(4,412	)

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Note 14. 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 thousands): 

	Fair Value Measurements at June 30, 2019 Using										Fair Value Measurements at December 31, 2018 Using
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)	$	235,001	$	235,001	$	235,001	$	—	$	—	$	287,852	$	287,852	$	287,852	$	—	$	—
Total Assets	$	235,001	$	235,001	$	235,001	$	—	$	—	$	287,852	$	287,852	$	287,852	$	—	$	—
Liabilities:
Long-term debt (including current portion of debt)(5)	$	9,625,559	$	10,337,397	$	—	$	10,337,397	$	—	$	9,871,267	$	10,244,214	$	—	$	10,244,214	$	—
Total Liabilities	$	9,625,559	$	10,337,397	$	—	$	10,337,397	$	—	$	9,871,267	$	10,244,214	$	—	$	10,244,214	$	—

(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

(2) Inputs other than quoted prices included within Level 1 that are observable for the liability, either directly or indirectly. For unsecured revolving credit facilities and unsecured term loans, fair value is determined utilizing the income valuation approach. This valuation model takes into account the contract terms of our debt such as the debt maturity and the interest rate on the debt. The valuation model also takes into account the creditworthiness of the Company.

(3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of June 30, 2019 and December 31, 2018.

(4) Consists of cash and marketable securities with original maturities of less than 90 days.

(5) Consists of unsecured revolving credit facilities, senior notes, senior debentures and term loans. These amounts do not include our capital lease obligations or commercial paper.

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Other Financial Instruments 

The carrying amounts of accounts receivable, accounts payable, accrued interest, accrued expenses and commercial paper approximate fair value at June 30, 2019 and December 31, 2018.

Assets and liabilities that are recorded at fair value have been categorized based upon the fair value hierarchy. The following table presents information about the Company’s financial instruments recorded at fair value on a recurring basis (in thousands):

	Fair Value Measurements at June 30, 2019 Using								Fair Value Measurements at December 31, 2018 Using
Description	Total		Level 1(1)		Level 2(2)		Level 3(3)		Total		Level 1(1)		Level 2(2)		Level 3(3)
Assets:
Derivative financial instruments(4)	$	78,441	$	—	$	78,441	$	—	$	65,297	$	—	$	65,297	$	—
Total Assets	$	78,441	$	—	$	78,441	$	—	$	65,297	$	—	$	65,297	$	—
Liabilities:
Derivative financial instruments(5)	$	185,733	$	—	$	185,733	$	—	$	201,812	$	—	$	201,812	$	—
Contingent consideration (6)	54,700		—		—		54,700		44,000		—		—		44,000
Total Liabilities	$	240,433	$	—	$	185,733	$	54,700	$	245,812	$	—	$	201,812	$	44,000

(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

(2) Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate swaps and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity, as well as other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest rate yield curves. Derivative instrument fair values take into account the creditworthiness of the counterparty and the Company.

(3) Inputs that are unobservable. 

(4) Consists of foreign currency forward contracts, interest rate swaps and fuel swaps. Refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

(5) Consists of foreign currency forward contracts, interest rate swaps and fuel swaps. Refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

(6) The contingent consideration related to the Silversea Cruises acquisition is estimated by applying a Monte-Carlo simulation method using our closing stock price along with significant inputs not observable in the market, including the probability of achieving the milestones and estimated future operating results. The Monte-Carlo simulation is a generally accepted statistical technique used to generate a defined number of valuation paths in order to develop a reasonable estimate of fair value. Refer to Note 3. Business Combination for further information on the Silversea Cruises acquisition. For the quarter and six months ended June 30, 2019, we recorded a contingent consideration expense of $10.7 million recorded within Other (expense) income in our consolidated statements of comprehensive income (loss).

The reported fair values are based on a variety of factors and assumptions. Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of June 30, 2019 or December 31, 2018, or that will be realized in the future, and do not include expenses that could be incurred in an actual sale or settlement.

We have master International Swaps and Derivatives Association (“ISDA”) agreements in place with our derivative instrument counterparties. These ISDA agreements generally provide for final close out netting with our counterparties for all positions in the case of default or termination of the ISDA agreement. We have determined that our ISDA agreements provide us with rights of setoff on the fair value of derivative instruments in a gain position and those in a loss position with the same counterparty. We have elected not to offset such derivative instrument fair values in our consolidated balance sheets.

See Credit Related Contingent Features for further discussion on contingent collateral requirements for our derivative instruments.

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The following table presents information about the Company’s offsetting of financial assets under master netting agreements with derivative counterparties (in thousands):

	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	As of June 30, 2019									As of December 31, 2018
	Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet		Gross Amount of Eligible Offsetting Recognized Derivative Liabilities			Cash Collateral Received		Net Amount of Derivative Assets		Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet		Gross Amount of Eligible Offsetting Recognized Derivative Assets			Cash Collateral Received		Net Amount of Derivative Assets
Derivatives subject to master netting agreements	$	78,441	$	(76,389	)	$	—	$	2,052	$	65,297	$	(60,303	)	$	—	$	4,994
Total	$	78,441	$	(76,389	)	$	—	$	2,052	$	65,297	$	(60,303	)	$	—	$	4,994

The following table presents information about the Company’s offsetting of financial liabilities under master netting agreements with derivative counterparties (in thousands):

	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	As of June 30, 2019										As of December 31, 2018
	Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet			Gross Amount of Eligible Offsetting Recognized Derivative Assets		Cash Collateral Pledged		Net Amount of Derivative Liabilities			Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet			Gross Amount of Eligible Offsetting Recognized Derivative Liabilities		Cash Collateral Pledged		Net Amount of Derivative Liabilities
Derivatives subject to master netting agreements	$	(185,733	)	$	76,389	$	—	$	(109,344	)	$	(201,812	)	$	60,303	$	—	$	(141,509	)
Total	$	(185,733	)	$	76,389	$	—	$	(109,344	)	$	(201,812	)	$	60,303	$	—	$	(141,509	)

Concentrations of Credit Risk

We monitor our credit risk associated with financial and other institutions with which we conduct significant business and, to minimize these risks, we select counterparties with credit risks acceptable to us and we seek to limit our exposure to an individual counterparty. Credit risk, including but not limited to counterparty nonperformance under derivative instruments, our credit facilities and new ship progress payment guarantees, is not considered significant, as we primarily conduct business with large, well-established financial institutions, insurance companies and export credit agencies many of which we have long-term relationships with and which have credit risks acceptable to us or where the credit risk is spread out among a large number of counterparties. As of June 30, 2019 and December 31, 2018, we had counterparty credit risk exposure under our derivative instruments of $2.0 million and $5.6 million, respectively, which were limited to the cost of replacing the contracts in the event of non-performance by the counterparties to the contracts, the majority of which are currently our lending banks. We do not anticipate nonperformance by any of our significant counterparties. In addition, we have established guidelines we follow regarding credit ratings and instrument maturities to maintain safety and liquidity. We do not normally require collateral or other security to support credit relationships; however, in certain circumstances this option is available to us.

Derivative Instruments

We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates and fuel prices. We try to mitigate these risks through a combination of our normal operating and financing activities and through the use of derivative financial instruments pursuant to our hedging practices and policies. The financial impact of these hedging instruments is primarily offset by corresponding changes in the underlying exposures being hedged. We achieve this by closely matching the notional amount, term and conditions of the derivative instrument with the underlying risk being hedged. Although certain of our derivative financial instruments do not qualify or are not accounted for under hedge accounting, our objective is not to hold or issue derivative financial instruments for trading or other speculative purposes. 

We enter into various forward, swap and option contracts to manage our interest rate exposure and to limit our exposure to fluctuations in foreign currency exchange rates and fuel prices. These instruments are recorded on the balance sheet at their fair value and the vast majority are designated as hedges. We also use non-derivative financial instruments designated as hedges of our net investment in our foreign operations and investments.

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At inception of the hedge relationship, a derivative instrument that hedges the exposure to changes in the fair value of a firm commitment or a recognized asset or liability is designated as a fair value hedge. A derivative instrument that hedges a forecasted transaction or the variability of cash flows related to a recognized asset or liability is designated as a cash flow hedge.

Changes in the fair value of derivatives that are designated as fair value hedges are offset against changes in the fair value of the underlying hedged assets, liabilities or firm commitments. Gains and losses on derivatives that are designated as cash flow hedges are recorded as a component of Accumulated other comprehensive loss until the underlying hedged transactions are recognized in earnings. The foreign currency transaction gain or loss of our non-derivative financial instruments and the changes in the fair value of derivatives designated as hedges of our net investment in foreign operations and investments are recognized as a component of Accumulated other comprehensive loss along with the associated foreign currency translation adjustment of the foreign operation or investment, with the amortization of excluded components affecting earnings. 

On an ongoing basis, we assess whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the fair value or cash flow of hedged items. We use the long-haul method to assess hedge effectiveness using regression analysis for each hedge relationship under our interest rate, foreign currency and fuel hedging programs. We apply the same methodology on a consistent basis for assessing hedge effectiveness to all hedges within each hedging program (i.e., interest rate, foreign currency and fuel). We perform regression analyses over an observation period of up to three years, utilizing market data relevant to the hedge horizon of each hedge relationship. High effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the changes in the fair values of the derivative instrument and the hedged item. If it is determined that a derivative is not highly effective as a hedge or hedge accounting is discontinued, any change in fair value of the derivative since the last date at which it was determined to be effective is recognized in earnings.  

Cash flows from derivative instruments that are designated as fair value or cash flow hedges are classified in the same category as the cash flows from the underlying hedged items. In the event that hedge accounting is discontinued, cash flows subsequent to the date of discontinuance are classified within investing activities. Cash flows from derivative instruments not designated as hedging instruments are classified as investing activities. 

We consider the classification of the underlying hedged item’s cash flows in determining the classification for the designated derivative instrument’s cash flows. We classify derivative instrument cash flows from hedges of benchmark interest rate or hedges of fuel expense as operating activities due to the nature of the hedged item. Likewise, we classify derivative instrument cash flows from hedges of foreign currency risk on our newbuild ship payments as investing activities.

Interest Rate Risk

Our exposure to market risk for changes in interest rates primarily relates to our debt obligations including future interest payments. At June 30, 2019 and December 31, 2018, approximately 65.4% and 59.1%, respectively, of our debt was effectively fixed. We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense.

Market risk associated with our fixed rate debt is the potential increase in fair value resulting from a decrease in interest rates. We use interest rate swap agreements that effectively convert a portion of our fixed-rate debt to a floating-rate basis to manage this risk. At June 30, 2019 and December 31, 2018, we maintained interest rate swap agreements on the following fixed-rate debt instruments:

Debt Instrument	Swap Notional as of June 30, 2019 (In thousands)		Maturity	Debt Fixed Rate	Swap Floating Rate: LIBOR plus	All-in Swap Floating Rate as of June 30, 2019
Oasis of the Seas term loan	$	87,500	October 2021	5.41%	3.87%	6.49%
Unsecured senior notes	650,000		November 2022	5.25%	3.63%	6.15%
	$	737,500

These interest rate swap agreements are accounted for as fair value hedges.

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Market risk associated with our long-term floating rate debt is the potential increase in interest expense from an increase in interest rates. We use interest rate swap agreements that effectively convert a portion of our floating-rate debt to a fixed-rate basis to manage this risk. At June 30, 2019 and December 31, 2018, we maintained interest rate swap agreements on the following floating-rate debt instruments:

Debt Instrument	Swap Notional as of June 30, 2019 (In thousands)		Maturity	Debt Floating Rate		All-in Swap Fixed Rate
Celebrity Reflection term loan	$	299,979	October 2024	LIBOR plus	0.40%	2.85%
Quantum of the Seas term loan	459,375		October 2026	LIBOR plus	1.30%	3.74%
Anthem of the Seas term loan	483,333		April 2027	LIBOR plus	1.30%	3.86%
Ovation of the Seas term loan	622,500		April 2028	LIBOR plus	1.00%	3.16%
Harmony of the Seas term loan (1)	592,129		May 2028	EURIBOR plus	1.15%	2.26%
Odyssey of the Seas term loan (2)	460,000		October 2032	LIBOR plus	0.95%	3.20%
	$	2,917,316

(1) Interest rate swap agreements hedging the Euro-denominated term loan for Harmony of the Seas include EURIBOR zero-floor matching the hedged debt EURIBOR zero-floor. Amount presented is based on the exchange rate as of June 30, 2019.

(2) Interest rate swap agreements hedging the term loan for Odyssey of the Seas includes a LIBOR zero-floor matching the hedged debt zero-floor. The anticipated unsecured term loan for the financing of Odyssey of the Seas is expected to be drawn in October 2020.

These interest rate swap agreements are accounted for as cash flow hedges.

The notional amount of interest rate swap agreements related to outstanding debt and our current unfunded financing arrangements as of June 30, 2019 and December 31, 2018 was $3.7 billion and $3.4 billion, respectively.

Foreign Currency Exchange Rate Risk

Derivative Instruments

Our primary exposure to foreign currency exchange rate risk relates to our ship construction contracts denominated in Euros, our foreign currency denominated debt and our international business operations. We enter into foreign currency forward contracts to manage portions of the exposure to movements in foreign currency exchange rates. As of June 30, 2019, the aggregate cost of our ships on order was $10.3 billion, of which we had deposited $614.0 million as of such date. These amounts do not include any ships placed on order that are contingent upon completion of conditions precedent and/or financing, any ships on order by our Partner Brands and any ships on order placed by Silversea Cruises during the reporting lag period. Refer to Note 11. Commitments and Contingencies, for further information on our ships on order. At June 30, 2019 and December 31, 2018, approximately 55.6% and 53.5%, respectively, of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate. Our foreign currency forward contract agreements are accounted for as cash flow or net investment hedges depending on the designation of the related hedge.

On a regular basis, we enter into foreign currency forward contracts and, from time to time, we utilize cross-currency swap agreements and collar options to minimize the volatility resulting from the remeasurement of net monetary assets and liabilities denominated in a currency other than our functional currency or the functional currencies of our foreign subsidiaries. During the second quarter of 2019, we maintained an average of approximately $719.4 million of these foreign currency forward contracts. These instruments are not designated as hedging instruments. For the quarters ended June 30, 2019 and 2018, changes in the fair value of the foreign currency forward contracts resulted in a gain (loss) of $(4.2) million and $(36.9) million, respectively. For the six months ended June 30, 2019 and 2018, changes in the fair value of the foreign currency forward contracts resulted in a gain (loss) of $0.8 million and $(31.3) million, respectively. These amounts were recognized in earnings within Other (expense) income in our consolidated statements of comprehensive income (loss).

We consider our investments in our foreign operations to be denominated in relatively stable currencies and to be of a long-term nature. As of June 30, 2019, we maintained foreign currency forward contracts and designated them as hedges of a portion of our net investments primarily in TUI Cruises of €173.0 million, or approximately $197.0 million based on the exchange rate at June 30, 2019. These forward currency contracts mature in October 2021.

The notional amount of outstanding foreign exchange contracts, excluding the forward contracts entered into to minimize remeasurement volatility, as of June 30, 2019 and December 31, 2018 was $3.1 billion and $3.2 billion, respectively.

Non-Derivative Instruments

We also address the exposure of our investments in foreign operations by denominating a portion of our debt in our subsidiaries’ and investments’ functional currencies and designating it as a hedge of these subsidiaries and investments. We had designated debt as a hedge of our net investments

25

primarily in TUI Cruises of €197.5 million, or approximately $224.9 million, as of June 30, 2019. As of December 31, 2018, we had designated debt as a hedge of our net investments in TUI Cruises of €280.0 million, or approximately $320.2 million.

Fuel Price Risk

Our exposure to market risk for changes in fuel prices relates primarily to the consumption of fuel on our ships. We use fuel swap agreements to mitigate the financial impact of fluctuations in fuel prices.

Our fuel swap agreements are generally accounted for as cash flow hedges. At June 30, 2019, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2023. As of June 30, 2019 and December 31, 2018, we had the following outstanding fuel swap agreements as hedges of our fuel exposure:

	Fuel Swap Agreements
	As of June 30, 2019	As of December 31, 2018
	(metric tons)
2019	435,400	856,800
2020	830,500	830,500
2021	488,900	488,900
2022	322,900	322,900
2023	82,400	—

	Fuel Swap Agreements
	As of June 30, 2019		As of December 31, 2018
	(% hedged)
Projected fuel purchases:
2019	59	%	58	%
2020	55	%	54	%
2021	30	%	28	%
2022	19	%	19	%
2023	5	%	—	%

At June 30, 2019, $19.6 million of estimated unrealized net gain (loss) associated with our cash flow hedges pertaining to fuel swap agreements is expected to be reclassified to earnings from Accumulated other comprehensive loss within the next twelve months. Reclassification is expected to occur as the result of fuel consumption associated with our hedged forecasted fuel purchases.

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The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets were as follows (in thousands):

	Fair Value of Derivative Instruments
	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	As of June 30, 2019		As of December 31, 2018		Balance Sheet Location	As of June 30, 2019		As of December 31, 2018
		Fair Value		Fair Value			Fair Value		Fair Value
Derivatives designated as hedging instruments under ASC 815-20(1)
Interest rate swaps	Other assets	$	—	$	23,518	Other long-term liabilities	$	64,442	$	40,467
Foreign currency forward contracts	Derivative financial instruments	4,343		4,044		Derivative financial instruments	24,742		39,665
Foreign currency forward contracts	Other assets	9,514		10,844		Other long-term liabilities	54,632		16,854
Fuel swaps	Derivative financial instruments	32,520		10,966		Derivative financial instruments	12,956		37,627
Fuel swaps	Other assets	30,361		9,204		Other long-term liabilities	28,926		65,182
Total derivatives designated as hedging instruments under 815-20		76,738		58,576			185,698		199,795
Derivatives not designated as hedging instruments under ASC 815-20
Foreign currency forward contracts	Derivative financial instruments	$	—	$	1,751	Derivative financial instruments	$	—	$	808
Foreign currency forward contracts	Other assets	—		1,579		Other long-term liabilities	—		833
Fuel swaps	Derivative financial instruments	1,696		2,804		Derivative financial instruments	20		376
Fuel swaps	Other Assets	7		587		Other long-term liabilities	15		—
Total derivatives not designated as hedging instruments under 815-20		1,703		6,721			35		2,017
Total derivatives		$	78,441	$	65,297		$	185,733	$	201,812

(1) Accounting Standard Codification 815-20 “Derivatives and Hedging.”

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The location and amount of gain or (loss) recognized in income on fair value and cash flow hedging relationships were as follows (in thousands):

Quarter Ended June 30, 2019

Quarter Ended June 30, 2018

Fuel Expense

Depreciation and Amortization Expenses

Interest Income (Expense)

Other Income (Expense)

Fuel Expense

Depreciation and Amortization Expenses

Interest Income (Expense)

Other Income (Expense)

Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded

$181,924

$311,600

$(104,962)

$(21,781)

$172,309

$253,376

$(68,766)

$33,855

The effects of fair value and cash flow hedging:

Gain or (loss) on fair value hedging relationships in Subtopic 815-20

Interest contracts

Hedged items

n/a

n/a

$(13,287)

$—

n/a

n/a

$3,374

$—

Derivatives designated as hedging instruments

n/a

n/a

$10,944

$—

n/a

n/a

$(5,310)

$—

Gain or (loss) on cash flow hedging relationships in Subtopic 815-20

Interest contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income

n/a

n/a

$(409)

n/a

n/a

n/a

$(2,138)

n/a

Commodity contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income

$13,362

n/a

n/a

$(1,188)

$2,043

n/a

n/a

$(133)

Foreign exchange contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income

n/a

$(3,545)

n/a

$(1,300)

n/a

$(3,156)

n/a

$14,601

Six Months Ended June 30, 2019

Six Months Ended June 30, 2018

Fuel Expense

Depreciation and Amortization Expenses

Interest Income (Expense)

Other Income (Expense)

Fuel Expense

Depreciation and Amortization Expenses

Interest Income (Expense)

Other Income (Expense)

Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded

$342,095

$603,885

$(195,593)

$(26,869)

$332,650

$493,606

$(128,911)

$9,755

The effects of fair value and cash flow hedging:

Gain or (loss) on fair value hedging relationships in Subtopic 815-20

Interest contracts

Hedged items

n/a

n/a

$(21,746)

—

n/a

n/a

$16,556

—

Derivatives designated as hedging instruments

n/a

n/a

$16,779

—

n/a

n/a

$(17,880)

—

Gain or (loss) on cash flow hedging relationships in Subtopic 815-20

Interest contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive loss into income

n/a

n/a

$(800)

n/a

n/a

n/a

$(8,976)

n/a

Commodity contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive loss into income

$31,380

n/a

n/a

$(1,444)

$(3,089)

n/a

n/a

$192

Foreign exchange contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive loss into income

n/a

$(6,879)

n/a

$(2,615)

n/a

$(6,468)

n/a

$14,643

28

The carrying value and line item caption of non-derivative instruments designated as hedging instruments recorded within our consolidated balance sheets were as follows (in thousands):

		Carrying Value
Non-derivative instrument designated as hedging instrument under ASC 815-20	Balance Sheet Location	As of June 30, 2019			As of December 31, 2018
Foreign currency debt	Current portion of debt	$	(75,697	)	$	38,168
Foreign currency debt	Long-term debt	(149,177		)	281,984
		$	(224,874	)	$	320,152

The effect of derivative instruments qualifying and designated as hedging instruments and the related hedged items in fair value hedges on the consolidated statements of comprehensive income (loss) was as follows (in thousands):

Derivatives and Related Hedged Items under ASC 815-20 Fair Value Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivative and Hedged Item	Amount of Gain (Loss) Recognized in Income on Derivative										Amount of Gain (Loss) Recognized in Income on Hedged Item
		Quarter Ended June 30, 2019		Quarter Ended June 30, 2018			Six Months Ended June 30, 2019		Six Months Ended June 30, 2018			Quarter Ended June 30, 2019			Quarter Ended June 30, 2018		Six Months Ended June 30, 2019			Six Months Ended June 30, 2018
Interest rate swaps	Interest expense, net of interest capitalized	$	10,944	$	(5,310	)	$	16,779	$	(17,880	)	$	(13,287	)	$	3,374	$	(21,746	)	$	16,556
		$	10,944	$	(5,310	)	$	16,779	$	(17,880	)	$	(13,287	)	$	3,374	$	(21,746	)	$	16,556

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The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets for the cumulative basis adjustment for fair value hedges were as follows (in thousands):

Line Item in the Statement of Financial Position Where the Hedged Item is Included	Carrying Amount of the Hedged Liabilities				Cumulative amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liabilities
	As of June 30, 2019		As of December 31, 2018		As of June 30, 2019			As of December 31, 2018
Current portion of debt and Long-term debt	$	730,374	$	725,486	$	(3,019	)	$	(24,766	)
	$	730,374	$	725,486	$	(3,019	)	$	(24,766	)

The effect of derivative instruments qualifying and designated as cash flow hedging instruments on the consolidated financial statements was as follows (in thousands):

Derivatives under ASC 815-20  Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivative												Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Six Months Ended June 30, 2018				Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Six Months Ended June 30, 2018
Interest rate swaps	$	(40,132	)	$	8,867		$	(68,461	)	$	46,058		Interest expense, net of interest capitalized	$	(409	)	$	(2,138	)	$	(800	)	$	(8,976	)
Foreign currency forward contracts	19,394			(193,329		)	(70,750		)	(97,963		)	Depreciation and amortization expenses	(3,545		)	(3,156		)	(6,879		)	(6,468		)
Foreign currency forward contracts	—			—			—			—			Other income (expense)	(1,300		)	14,601			(2,615		)	14,643
Fuel swaps	—			—			—			—			Other income (expense)	(1,188		)	(133		)	(1,444		)	192
Fuel swaps	(44,076		)	126,778			135,962			121,837			Fuel	13,362			2,043			31,380			(3,089		)
	$	(64,814	)	$	(57,684	)	$	(3,249	)	$	69,932			$	6,920		$	11,217		$	19,642		$	(3,698	)

The table below represents amounts excluded from the assessment of effectiveness for our net investment hedging instruments for which the difference between changes in fair value and periodic amortization is recorded in accumulated other comprehensive income (loss) (in thousands):

Gain (Loss) Recognized in Income (Net Investment Excluded Components)	Six Months Ended June 30, 2019
Net inception fair value at January 1, 2019	$	(8,359	)
Amount of gain recognized in income on derivatives for the period ended June 30, 2019	1,556
Amount of loss remaining to be amortized in accumulated other comprehensive loss, as of June 30, 2019	(4,518		)
Fair value at June 30, 2019	$	(11,321	)

The effect of non-derivative instruments qualifying and designated as net investment hedging instruments on the consolidated financial statements was as follows (in thousands):

	Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss)
Non-derivative instruments under ASC 815-20  Net Investment Hedging Relationships	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018		Six Months Ended June 30, 2019		Six Months Ended June 30, 2018
Foreign Currency Debt	$	(2,994	)	$	15,853	$	2,708	$	7,609
	$	(2,994	)	$	15,853	$	2,708	$	7,609

There was no amount recognized in income (ineffective portion and amount excluded from effectiveness testing) for the quarters and six months ended June 30, 2019 and 2018.

30

The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as follows (in thousands):

		Amount of Gain (Loss) Recognized in Income on Derivatives
Derivatives Not Designated as Hedging Instruments under ASC 815-20	Location of Gain (Loss) Recognized in Income on Derivatives	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Six Months Ended June 30, 2018
Foreign currency forward contracts	Other income (expense)	$	(4,168	)	$	(36,894	)	$	846		$	(31,259	)
Fuel swaps	Fuel	122			(881		)	(14		)	1,326
Fuel swaps	Other income (expense)	(21		)	213			(119		)	183
		$	(4,067	)	$	(37,562	)	$	713		$	(29,750	)

 

Credit Related Contingent Features

Our current interest rate derivative instruments may require us to post collateral if our Standard & Poor’s and Moody’s credit ratings are below specified levels. Specifically, if on the fifth anniversary of executing a derivative instrument, or on any succeeding fifth-year anniversary, our credit ratings for our senior unsecured debt were to be rated below BBB- by Standard & Poor’s and Baa3 by Moody’s, then the counterparty may periodically demand that we post collateral in an amount equal to the difference between (i) the net market value of all derivative transactions with such counterparty that have reached their fifth year anniversary, to the extent negative, and (ii) the applicable minimum call amount.

The amount of collateral required to be posted following such event will change as, and to the extent, our net liability position increases or decreases by more than the applicable minimum call amount. If our credit rating for our senior unsecured debt is subsequently equal to or above BBB- by Standard & Poor’s or Baa3 by Moody’s, then any collateral posted at such time will be released to us and we will no longer be required to post collateral unless we meet the collateral trigger requirement at the next fifth-year anniversary. At June 30, 2019, five of our interest rate derivative instruments had reached their fifth anniversary; however, our senior unsecured debt credit rating was Baa2 by Moody’s and BBB- by Standard & Poor’s and, accordingly, we were not required to post any collateral as of such date.

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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 document 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 guidance (including our expectations for the third quarter and full year of 2019 and our earnings and yield estimates for 2019 set forth under the heading "Outlook" below), 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," "could," "estimate," "expect," "goal," "intend," "may," "plan," "project," "seek," "should," "will," "driving" 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 this Quarterly Report on Form 10-Q and, in particular, the risks discussed under the caption "Risk Factors" in Part II, Item 1A herein.

All forward-looking statements made in this Quarterly Report on Form 10-Q speak only as of the date of this document.  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, 2019 compared to the same periods in 2018;

• a discussion of our business outlook, including our expectations for selected financial items for the third quarter and full year of 2019; and

• a discussion of our liquidity and capital resources, including our future capital and contractual commitments and potential funding sources. 

32

Critical Accounting Policies

For a discussion of our critical accounting policies, 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, 2018.

Seasonality

Our revenues are seasonal based on demand for cruises. Demand is 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 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, 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 our bareboat charter, 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 agent 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

33

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

Adjusted Net Income attributable to Royal Caribbean Cruises Ltd. represents net income less net income attributable to noncontrolling interest 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) incidental costs related to the Grand Bahama drydock structure incident involving Oasis of the Seas and our share of the write-off of the related drydock by Grand Bahama, (ii) a loss on the early extinguishment of debt related to the repayment of certain loans, (iii) the change in fair value in the contingent consideration related to the Silversea Cruises acquisition, (iv) transaction costs related to the Silversea Cruises acquisition, (v) the amortization of the Silversea Cruises intangible assets resulting from the acquisition, (vi) the noncontrolling interest adjustment to exclude the impact of the contractual accretion requirements associated with the put option held by Heritage Cruise Holding Ltd.'s (previously known as Silversea Cruises Group Ltd.) noncontrolling interest, (vii) the impairment loss and other costs related to the exit of our tour operations business; (viii) the impairment loss related to Skysea Holding and (ix) the impact of the change in accounting principle related to the recognition of stock-based compensation expense from the graded attribution method to the straight-line attribution method for time-based stock awards.

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 drydock days. 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.

Gross Cruise Costs represent the sum of total cruise operating expenses plus marketing, selling and administrative expenses. For the periods presented, Gross Cruise Costs exclude (i) transaction costs related to the Silversea Cruises acquisition; (ii) the impairment loss and other costs related to the exit of our tour operations business; and (iii) the impact of the change in accounting principle related to the recognition of stock-based compensation expense from the graded attribution method to the straight-line attribution method for time-based stock awards, which were included within Marketing, selling and administrative expenses.

Gross Yields represent total revenues per APCD.

Net Cruise Costs and Net Cruise Costs Excluding Fuel represent Gross Cruise Costs excluding commissions, transportation and other expenses and onboard and other expenses and, in the case of Net Cruise Costs Excluding Fuel, fuel expenses (each of which is described above under the Description of Certain Line Items heading). In measuring our ability to control costs in a manner that positively impacts net income, we believe changes in Net Cruise Costs and Net Cruise Costs Excluding Fuel to be the most relevant indicators of our performance. A reconciliation of historical Gross Cruise Costs to Net Cruise Costs and Net Cruise Costs Excluding Fuel is provided below under Results of Operations. Net Cruise Costs and Net Cruise Costs Excluding Fuel exclude the incidental costs related to the Grand Bahama drydock structure incident involving Oasis of the Seas.

Net Revenues represent total revenues less commissions, transportation and other expenses and onboard and other expenses (each of which is described above under the Description of Certain Line Items heading).

Net Yields represent Net Revenues per APCD. We utilize Net Revenues 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. A reconciliation of historical Gross Yields to Net Yields is provided below under Results of Operations. 

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

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

We believe Net Yields, Net Cruise Costs and Net Cruise Costs Excluding Fuel are our most relevant non-GAAP financial measures. However, a significant portion of our revenue and expenses are denominated in currencies other than the United States dollar. Because our reporting currency is the United States dollar, the value of these revenues and expenses can 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, they can be an important element. For this reason, we also monitor Net Yields, Net Cruise Costs and Net

34

Cruise Costs Excluding Fuel as if the current period's currency exchange rates had remained constant with the comparable prior period's rates, or on a “Constant Currency” basis.

It should be emphasized that Constant Currency is primarily used for comparing short-term changes and/or projections. Changes in guest sourcing and shifting the amount of purchases between currencies can change the impact of the purely currency-based fluctuations.

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 and Constant Currency measures, and as such, they may not be comparable to other companies within the industry.

We have not provided a quantitative reconciliation of (i) projected Total revenues to projected Net Revenues, (ii) projected Gross Yields to projected Net Yields, (iii) projected Gross Cruise Costs to projected Net Cruise Costs and projected Net Cruise Costs Excluding Fuel and (iv) projected Net Income and Earnings per Share to projected Adjusted Net Income and Adjusted Earnings per Share because preparation of meaningful GAAP projections of Total revenues, Gross Yields, Gross Cruise Costs, Net Income and Earnings per Share would require unreasonable effort. Due to significant uncertainty, we are unable to predict, without unreasonable effort, the future movement of foreign exchange rates, fuel prices and interest rates inclusive of our related hedging programs. In addition, we are unable to determine the future impact of restructuring expenses or other non-core business related gains and losses which may result from strategic initiatives. These items are uncertain and could be material to our results of operations in accordance with GAAP. Due to this uncertainty, we do not believe that reconciling information for such projected figures would be meaningful.

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 2019 were $472.8 million and $532.7 million, or $2.25 and $2.54 per share on a diluted basis, respectively, compared to Net Income attributable to Royal Caribbean Cruises Ltd. and Adjusted Net Income attributable Royal Caribbean Cruises Ltd. of $466.3 million and $482.2 million, or $2.19 and $2.27 per share on a diluted basis, respectively, for the second quarter of 2018.

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, 2019 were $722.5 million and $808.6 million, or $3.44 and $3.85 per share on a diluted basis, respectively, compared to Net Income attributable to Royal Caribbean Cruises Ltd. and Adjusted Net Income attributable Royal Caribbean Cruises Ltd. of $684.9 million and $715.0 million, or $3.21 and $3.36 per share on a diluted basis, respectively, for the six months ended June 30, 2018.

For reporting purposes, we include Silversea Cruises’ results of operations on a three-month reporting lag from January 1, 2019 through March 31, 2019 for the quarter ended June 30, 2019 and from October 1, 2018 through March 31, 2019 for the six months ended June 30, 2019. Refer to Note 1. General to our consolidated financial statements for further information on this three-month reporting lag.

Significant items for the quarter and six months ended June 30, 2019 include:

• Total revenues, excluding the effect of changes in foreign currency exchange rates, increased $502.0 million and $959.0 million for the quarter and six months ended June 30, 2019 respectively, as compared to the same periods in 2018. The increase was primarily due to an increase in capacity and an increase in ticket prices and onboard spending on a per passenger basis, which are further discussed below.

• The effect of changes in foreign currency exchange rates related to our passenger ticket and onboard and other revenue transactions, denominated in currencies other than the United States dollar, resulted in a decrease in total revenues of $32.9 million and $77.9 million for the quarter and six months ended June 30, 2019 compared to the same periods in 2018.

• Total cruise operating expenses, excluding the effect of changes in foreign currency exchange rates, increased $239.8 million and $488.8 million for the quarter and six months ended June 30, 2019 as compared to the same periods in 2018. The increase was primarily due to an increase in capacity and the addition of Silversea Cruises, which are further discussed below.

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• The effect of changes in foreign currency exchange rates related to our cruise operating expenses, denominated in currencies other than the United States dollar, resulted in a decrease in total operating expenses of $9.7 million and $21.1 million for the quarter and six months ended June 30, 2019 compared to the same periods in 2018.

• The estimated negative impact resulting from the Grand Bahama drydock structure incident involving Oasis of the Seas and our share of the write-off of the related drydock by Grand Bahama is approximately $0.26 per share on a diluted basis to our Net Income attributable to Royal Caribbean Cruises Ltd. for the quarter and six months ended June 30, 2019.

• Effective June 5th, 2019, we stopped sailings to Cuba as the U.S government rescinded authorized travel to Cuba under the People-to-People program and prohibited travel to Cuba via cruise ships. The estimated negative impact resulting from this regulatory change is approximately $0.04 per share on a diluted basis to our Net Income attributable to Royal Caribbean Cruises Ltd. for the quarter and six months ended June 30, 2019.

• In April 2019, we entered into and drew in full on an unsecured three-year term loan agreement in the amount of $1.0 billion. Proceeds of this loan were used to repay the $700 million 364-day loan due July 2019 related to the acquisition of Silversea Cruises and the remaining balance of the unsecured term loan originally incurred in 2010 to purchase Allure of the Seas. The repayment of these loans resulted in a total loss on the extinguishment of debt of $6.3 million, which was recognized within Other (expense) income within our consolidated statements of comprehensive income (loss) for the quarter and six months ended June 30, 2019.

Other Items

• In February 2019, TUI Cruises, our 50% joint venture, took delivery of a new Mein Schiff 2 and the existing Mein Schiff 2 was renamed Mein Schiff Herz.

• During the second quarter of 2019, we took delivery of Spectrum of the Seas and Celebrity Flora. To finance the purchases, we borrowed $908.0 million and €80.0 million, or approximately $91.1 million based on the exchange rate at June 30, 2019, respectively, under previously committed unsecured term loans. Refer to Note 8. Debt to our consolidated financial statements for further information. Spectrum of the Seas and Celebrity Flora entered service in April 2019 and at the end of June 2019, respectively.

• In April 2019, we amended our $1.4 billion unsecured revolving credit facility due in 2020 to extend the termination date through April 2024, increase the facility size to $1.7 billion and reduce pricing. Refer to Note 8. Debt to our consolidated financial statements for further information.

• In May 2019, we amended our $1.15 billion unsecured revolving credit facility due in 2022 to reduce pricing to match pricing on our $1.7 billion unsecured revolving credit facility due in 2024.

• In April 2019, Silversea Cruises entered into an agreement with Meyer Werft to build two ships of a new generation, known as the Evolution-class. Refer to Note 11. Commitments and Contingencies to our consolidated financial statements for further information.

• In June 2019, we entered into a $300 million unsecured term loan facility for the financing of Silversea Cruises' Silver Moon. Refer to Note 8. Debt to our consolidated financial statements for further information.

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Operating results for the quarter and six months ended June 30, 2019 compared to the same periods in 2018 are shown in the following tables (in thousands, except per share data):

	Quarter Ended June 30,
	2019					2018
				% of Total Revenues					% of Total Revenues
Passenger ticket revenues	$	2,017,836		71.9	%	$	1,672,570		71.6	%
Onboard and other revenues	788,795			28.1	%	665,035			28.4	%
Total revenues	2,806,631			100.0	%	2,337,605			100.0	%
Cruise operating expenses:
Commissions, transportation and other	426,934			15.2	%	358,305			15.3	%
Onboard and other	174,429			6.2	%	142,240			6.1	%
Payroll and related	265,569			9.5	%	226,315			9.7	%
Food	146,847			5.2	%	128,383			5.5	%
Fuel	181,924			6.5	%	172,309			7.4	%
Other operating	348,801			12.4	%	286,859			12.3	%
Total cruise operating expenses	1,544,504			55.0	%	1,314,411			56.2	%
Marketing, selling and administrative expenses	376,874			13.4	%	312,923			13.4	%
Depreciation and amortization expenses	311,600			11.1	%	253,376			10.8	%
Operating Income	573,653			20.4	%	456,895			19.5	%
Other income (expense):
Interest income	6,342			0.2	%	13,098			0.6	%
Interest expense, net of interest capitalized	(111,304		)	(4.0	)%	(81,864		)	(3.5	)%
Equity investment income	33,045			1.2	%	44,311			1.9	%
Other (expense) income	(21,781		)	(0.8	)%	33,855			1.4	%
	(93,698		)	(3.3	)%	9,400			0.4	%
Net Income	479,955			17.1	%	466,295			19.9	%
Less: Net Income attributable to noncontrolling interest	7,125			0.3	%	—			—	%
Net Income attributable to Royal Caribbean Cruises Ltd.	$	472,830		16.8	%	$	466,295		19.9	%
Diluted Earnings per Share	$	2.25				$	2.19

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	Six months ended June 30,
	2019					2018
				% of Total Revenues					% of Total Revenues
Passenger ticket revenues	$	3,727,820		71.1	%	$	3,098,214		71.0	%
Onboard and other revenues	1,518,578			28.9	%	1,267,147			29.0	%
Total revenues	5,246,398			100.0	%	4,365,361			100.0	%
Cruise operating expenses:
Commissions, transportation and other	790,089			15.1	%	648,914			14.9	%
Onboard and other	309,599			5.9	%	241,777			5.5	%
Payroll and related	535,101			10.2	%	453,471			10.4	%
Food	286,381			5.5	%	248,025			5.7	%
Fuel	342,095			6.5	%	332,650			7.6	%
Other operating	694,943			13.2	%	565,593			13.0	%
Total cruise operating expenses	2,958,208			56.4	%	2,490,430			57.0	%
Marketing, selling and administrative expenses	791,821			15.1	%	650,284			14.9	%
Depreciation and amortization expenses	603,885			11.5	%	493,606			11.3	%
Operating Income	892,484			17.0	%	731,041			16.7	%
Other income (expense):
Interest income	16,126			0.3	%	20,831			0.5	%
Interest expense, net of interest capitalized	(211,719		)	(4.0	)%	(149,742		)	(3.4	)%
Equity investment income	66,739			1.3	%	73,063			1.7	%
Other (expense) income	(26,869		)	(0.5	)%	9,755			0.2	%
	(155,723		)	(3.0	)%	(46,093		)	(1.1	)%
Net Income	736,761			14.0	%	684,948			15.7	%
Less: Net Income attributable to noncontrolling interest	14,250			0.3	%	—			—	%
Net Income attributable to Royal Caribbean Cruises Ltd.	$	722,511		13.8	%	$	684,948		15.7	%
Diluted Earnings per Share	$	3.44				$	3.21

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

	Quarter Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Net Income attributable to Royal Caribbean Cruises Ltd.	$	472,830	$	466,295	$	722,511	$	684,948
Adjusted Net Income attributable to Royal Caribbean Cruises Ltd.	532,735		482,221		808,582		714,979
Net Adjustments to Net Income attributable to Royal Caribbean Cruises Ltd. - Increase	$	59,905	$	15,926	$	86,071	$	30,031
Adjustments to Net Income attributable to Royal Caribbean Cruises Ltd.:
Grand Bahama's drydock write-off(1)	$	15,121	$	—	$	15,121	$	—
Noncontrolling interest adjustment(2)	12,663		—		34,574		—
Oasis of the Seas incident(3)	12,026		—		12,026		—
Change in the fair value of contingent consideration related to Silversea Cruises acquisition(4)	10,700		—		10,700		—
Loss on extinguishment of debt	6,326		—		6,326		—
Amortization of Silversea Cruises intangible assets resulting from the acquisition(4)	3,069		—		6,138		—
Transaction costs related to Silversea Cruises acquisition(4)	—		4,671		1,186		4,671
Impairment and other costs related to exit of tour operations business(5)	—		11,255		—		11,255
Impairment loss related to Skysea Holding(6)	—		—		—		23,343
Impact of change in accounting principle(7)	—		—		—		(9,238		)
Net Adjustments to Net Income attributable to Royal Caribbean Cruises Ltd. - Increase	$	59,905	$	15,926	$	86,071	$	30,031
Basic:
Earnings per Share	$	2.26	$	2.20	$	3.45	$	3.23
Adjusted Earnings per Share	$	2.54	$	2.28	$	3.86	$	3.37
Diluted:
Earnings per Share	$	2.25	$	2.19	$	3.44	$	3.21
Adjusted Earnings per Share	$	2.54	$	2.27	$	3.85	$	3.36
Weighted-Average Shares Outstanding:
Basic	209,531		211,673		209,427		212,139
Diluted	210,052		212,509		209,962		213,079

(1) Refer to Note 7. Other Assets to our consolidated financial statements for information on the Grand Bahama's incident involving one of its drydocks.

(2) Adjustment made to exclude the impact of the contractual accretion requirements associated with the put option held by Heritage Cruise Holding Ltd.'s (previously known as Silversea Cruises Group Ltd.) noncontrolling interest. Refer to Note 10. Redeemable Noncontrolling Interest to our consolidated financial statements for further information on the noncontrolling interest.

(3) Represents incidental costs related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas, which were reported primarily within Other operating expenses in our consolidated statements of comprehensive income (loss) for the quarter and six months ended June 30, 2019.

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(4) Refer to Note 3. Business Combination to our consolidated financial statements for information on the Silversea Cruises acquisition.

(5) In 2014, we created a tour operations business that focused on developing, marketing and selling land based tours around the world through an e-commerce platform. During the second quarter of 2018, we decided to cease operations and exit this business. As a result, we incurred exit costs, primarily consisting of fixed asset impairment charges and severance expense.

(6) Refer to Note 7. Other Assets to our consolidated financial statements for information on the impairment loss related to Skysea Holding.

(7) In January 2018, we elected to change our accounting policy for recognizing stock-based compensation expense from the graded attribution method to the straight-line attribution method for time-based stock awards, resulting in an increase to Net Income attributable to Royal Caribbean Cruises Ltd. of $9.2 million, which is reported within Marketing, selling and administrative expenses in our consolidated statements of comprehensive income (loss) for the six months ended June 30, 2018.

Selected statistical information is shown in the following table:

	Quarter Ended June 30,				Six Months Ended June 30,
	2019(1)		2018		2019(1)		2018
Passengers Carried	1,663,900		1,461,055		3,197,126		2,866,006
Passenger Cruise Days	11,321,528		10,213,067		21,883,345		19,838,849
APCD	10,437,420		9,402,736		20,298,020		18,318,442
Occupancy	108.5	%	108.6	%	107.8	%	108.3	%

(1) Due to the three-month reporting lag, we include Silversea Cruises' result of operations from January 1, 2019 through March 31, 2019 for the quarter ended June 30, 2019 and from October 1, 2018 through March 31, 2019 for the six months ended June 30, 2019. Refer to Note 1. General and Note 3. Business Combination to our consolidated financial statements for more information on the three-month reporting lag and the Silversea Cruises acquisition.

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Gross Yields and Net Yields were calculated as follows (in thousands, except APCD and Yields):

	Quarter Ended June 30,						Six Months Ended June 30,
	2019		2019 On a Constant Currency Basis		2018		2019		2019 On a Constant Currency Basis		2018
Passenger ticket revenues	$	2,017,836	$	2,046,816	$	1,672,570	$	3,727,820	$	3,796,109	$	3,098,214
Onboard and other revenues	788,795		792,755		665,035		1,518,578		1,528,221		1,267,147
Total revenues	2,806,631		2,839,571		2,337,605		5,246,398		5,324,330		4,365,361
Less:
Commissions, transportation and other	426,934		431,763		358,305		790,089		800,874		648,914
Onboard and other	174,429		175,484		142,240		309,599		311,167		241,777
Net Revenues	$	2,205,268	$	2,232,324	$	1,837,060	$	4,146,710	$	4,212,289	$	3,474,670
APCD	10,437,420		10,437,420		9,402,736		20,298,020		20,298,020		18,318,442
Gross Yields	$	268.90	$	272.06	$	248.61	$	258.47	$	262.31	$	238.30
Net Yields	$	211.28	$	213.88	$	195.38	$	204.29	$	207.52	$	189.68

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

	Quarter Ended June 30,						Six Months Ended June 30,
	2019		2019 On a Constant Currency Basis		2018		2019		2019 On a Constant Currency Basis		2018
Total cruise operating expenses	$	1,544,504	$	1,554,172	$	1,314,411	$	2,958,208	$	2,979,273	$	2,490,430
Marketing, selling and administrative expenses (1) (2)	376,874		380,520		296,997		790,635		798,877		643,596
Gross Cruise Costs	1,921,378		1,934,692		1,611,408		3,748,843		3,778,150		3,134,026
Less:
Commissions, transportation and other	426,934		431,763		358,305		790,089		800,874		648,914
Onboard and other	174,429		175,484		142,240		309,599		311,167		241,777
Net Cruise Costs including other costs	1,320,015		1,327,445		1,110,863		2,649,155		2,666,109		2,243,335
Less:
Incidental costs related to the Oasis of the Seas incident included within cruise operating expenses	12,026		12,026		—		12,026		12,026		—
Net Cruise Costs	1,307,989		1,315,419		1,110,863		2,637,129		2,654,083		2,243,335
Less:
Fuel(3)	181,228		181,233		172,309		341,399		341,417		332,650
Net Cruise Costs Excluding Fuel	$	1,126,761	$	1,134,186	$	938,554	$	2,295,730	$	2,312,666	$	1,910,685
APCD	10,437,420		10,437,420		9,402,736		20,298,020		20,298,020		18,318,442
Gross Cruise Costs per APCD	$	184.09	$	185.36	$	171.38	$	184.69	$	186.13	$	171.09
Net Cruise Costs per APCD	$	125.32	$	126.03	$	118.14	$	129.92	$	130.76	$	122.46
Net Cruise Costs Excluding Fuel per APCD	$	107.95	$	108.67	$	99.82	$	113.10	$	113.94	$	104.30

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(1) For the six months ended June 30, 2019, the amount does not include the transaction costs related to the Silversea Cruises acquisition of $1.2 million. For the quarter and six months ended June 30, 2018, the amount does not include the impairment and other costs related to the exit of our tour operations business of $11.3 million and transaction costs related to the Silversea Cruises acquisition of $4.7 million.

(2) For the six months ended June 30, 2018, the amount does not include the impact of the change in accounting principle related to the recognition of stock-based compensation expense, which resulted in an increase to Net Income attributable to Royal Caribbean Cruises Ltd. of $9.2 million.

(3) For the quarter and six months ended June 30, 2019, the amount does not include incremental fuel expenses incurred of $0.7 million related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas.

2019 Outlook

The Company does not make predictions about fuel pricing, interest rates or currency exchange rates but does provide guidance about its future business activities. On July 25, 2019, we announce the following full year and third quarter 2019 guidance based on the then current fuel pricing, interest rates and currency exchange rates:

Full Year 2019

	As Reported	Constant Currency
Net Yields	6.5% to 7.0%	7.75% to 8.25%
Net Cruise Costs per APCD	Approx. 7.0%	Approx. 7.5%
Net Cruise Costs per APCD, Excluding Fuel	9.5% to 10.0%	10.0% to 10.5%
Capacity Change	8.1%
Depreciation and Amortization	$1,238 to $1,246 million
Interest Expense, net	$374 to $380 million
Fuel Consumption (metric tons)	1,476,300
Fuel Expenses	$703 million
Percent Hedged (fwd consumption)	59%
Adjusted Earnings per Share-Diluted	$9.55 to $9.65

Sensitivity

	Remaining Periods 2019
1% Change in Currency	$11 million
1% Change in Net Yields	$43 million
1% Change in NCC x Fuel	$20 million
100 basis pt. Change in LIBOR	$14 million
10% Change in Fuel Prices	$19 million

Third Quarter 2019

	As Reported	Constant Currency
Net Yields	5.5% to 6.0%	Approx. 6.5%
Net Cruise Costs per APCD	7.0% to 7.5%	Approx. 7.5%
Net Cruise Costs per APCD, Excluding Fuel	Approx. 10.5%	Approx. 11.0%
Capacity Change	9.1%
Depreciation and Amortization	$316 to $320 million
Interest Expense, net	$94 to $98 million
Fuel Consumption (metric tons)	372,000
Fuel Expenses	$179 million
Percent Hedged (fwd consumption)	58%
Adjusted Earnings per Share-Diluted	Approx. $4.35

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Sensitivity ⁽¹⁾ 

	Third Quarter 2019
1% Change in Currency	$7 million
1% Change in Net Yields	$24 million
1% Change in NCC x Fuel	$10 million
100 basis pt. Change in LIBOR	$5 million
10% Change in Fuel Prices	$9 million

(1) Due to the three-month reporting lag, Silversea Cruises does not impact the sensitivity analysis above for the third quarter 2019.

Volatility in foreign currency exchange rates affects the United States dollar value of our earnings. Based on our highest net exposure for each quarter and the full year 2019, the top five foreign currencies are ranked below. For example, the British Pound is expected to be the most impactful currency in the third quarter of 2019. The second quarter of 2019 rankings are based on actual results. Rankings for the remaining quarters and full year are based on estimated net exposures.

Ranking	Q1	Q2	Q3	Q4	FY 2019
1	AUD	GBP	GBP	AUD	GBP
2	CAD	CAD	CNH	GBP	AUD
3	GBP	AUD	EUR	CAD	CAD
4	CNH	CNH	CAD	EUR	CNH
5	EUR	MXN	AUD	CNH	EUR

The currency abbreviations above are defined as follows:

Currency Abbreviation	Currency
AUD	Australian Dollar
CAD	Canadian Dollar
CNH	Chinese Yuan
EUR	Euro
GBP	British Pound
MXN	Mexican Peso

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Quarter Ended June 30, 2019 Compared to Quarter Ended June 30, 2018

In this section, references to 2019 refer to the quarter ended June 30, 2019 and references to 2018 refer to the quarter ended June 30, 2018.

Revenues

Total revenues for 2019 increased $469.0 million, or 20.1%, to $2.8 billion from $2.3 billion in 2018.

Passenger ticket revenues comprised 71.9% of our 2019 total revenues. Passenger ticket revenues for 2019 increased by $345.3 million, or 20.6%, from 2018. The increase was primarily due to:

• an 11.0% increase in capacity, which increased Passenger ticket revenues by $184.1 million, primarily due to the additions of Spectrum of the Seas in the second quarter of 2019, Azamara Pursuit in the third quarter of 2018, Celebrity Edge in the fourth quarter of 2018 and the addition of Silversea Cruises to our fleet in the second half of 2018; and

• an increase of $190.0 million in ticket prices primarily driven by the improvement in our ticket price on a per passenger basis due to the addition of Silversea Cruises to our fleet in the second half of 2018, the additions of Spectrum of the Seas, Azamara Pursuit and Celebrity Edge, and higher pricing on our Caribbean and Asia/Pacific sailings.

The increase in Passenger ticket revenues was partially offset by an unfavorable effect of changes in foreign currency exchange rates related to our revenue transactions denominated in currencies other than the United States dollar of $29.0 million.

The remaining 28.1% of 2019 total revenues was comprised of Onboard and other revenues, which increased $123.8 million, or 18.6%, to $788.8 million in 2019 from $665.0 million in 2018. The increase in Onboard and other revenues was primarily due to:

• a $71.6 million increase attributable to the 11.0% increase in capacity noted above;

• a $38.4 million increase in onboard revenue attributable to higher spending on a per passenger basis primarily due to our revenue enhancing initiatives, including shore excursions, Perfect Day at CocoCay, specialty restaurants, internet services, beverage package sales and promotions, gaming initiatives and new programs and activities offered to our guests; and

• a $17.7 million increase in other revenue primarily due to revenue associated with our new cruise terminal at PortMiami and cancellation fees associated with non-refundable deposits and higher pricing.

The increase in Onboard and other revenues was partially offset by an unfavorable effect of changes in foreign currency exchange rates related to our revenue transactions denominated in currencies other than the United States dollar of $4.0 million.

Onboard and other revenues included concession revenues of $87.2 million in 2019 and $82.6 million in 2018.

Cruise Operating Expenses

Total Cruise operating expenses for 2019 increased $230.1 million, or 17.5%, to $1.5 billion from $1.3 billion in 2018. The increase was primarily due to:

• the 11.0% increase in capacity noted above, which increased cruise operating expenses by $143.2 million; and

• a $101.8 million increase in total cruise operating expenses, excluding the impact of the increase in capacity and the decrease in fuel expense, was primarily due to the addition of Silversea Cruises to our fleet in the second half of 2018 and incidental costs related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas.

The increase in Cruise operating expenses was partially offset by:

• a $9.2 million decrease in fuel expenses, excluding the impact of the increase in capacity. Our cost of fuel (net of the financial impact of fuel swap agreements) for 2019 decreased 5.0% per metric ton compared to 2018; and

• a favorable effect of changes in foreign currency exchange rates related to our cruise operating expenses denominated in currencies other than the United States dollar of $9.7 million.

Marketing, Selling and Administrative Expenses

Marketing, selling and administrative expenses for 2019 increased $64.0 million, or 20.4%, to $376.9 million from $312.9 million in 2018. The increase was primarily due to the addition of Silversea Cruises in the second half of 2018, higher spending

44

on advertisement and media promotions and an increase in payroll and benefits expense primarily driven by an increase in headcount and higher stock price year over year related to our performance share awards.

Depreciation and Amortization Expenses 

Depreciation and amortization expenses for 2019 increased $58.2 million, or 23.0%, to $311.6 million from $253.4 million in 2018. The increase was primarily due to the additions of Spectrum of the Seas in the second quarter of 2019, Azamara Pursuit in the third quarter of 2018 and Celebrity Edge in the fourth quarter of 2018 and the addition of Silversea Cruises to our fleet in the second half of 2018. Additionally, to a lesser extent, the increase is also attributable to new shipboard additions associated with our ship upgrade projects and additions related to our shoreside projects.

Other Income (Expense)

Interest expense, net of interest capitalized for 2019 increased $29.4 million, or 36.0%, to $111.3 million from $81.9 million in 2018. The increase was primarily due to a higher average debt level compared to 2018, mostly attributable to the financing of our newbuilds and our acquisition of Silversea Cruises in the second half of 2018 and to a lesser extent, higher interest rates in 2019 compared to 2018.

Equity investment income decreased $(11.3) million, or (25.4)%, to $33.0 million in 2019 from $44.3 million in 2018 mainly due to our share of the write-off of the related drydock by Grand Bahama related to the incident involving Oasis of the Seas.

Other expense was $21.8 million in 2019 compared to Other income of $33.9 million in 2018. Other expense in 2019 includes $6.3 million of debt extinguishment associated with the repayment of the $700 million loan associated with the Silversea Cruises acquisition and the remaining balance of the unsecured term loan related to purchase Allure of the Seas. Refer to Note 8. Debt to our consolidated financial statements for further information. In addition, Other income in 2018 included a gain of $13.7 million related to the sale of our remaining equity interest in a travel agency business, and a gain of $21.8 million related to the recognition of the remaining balance of a deferred gain from the sale of Celebrity Galaxy to TUI Cruises, neither of which recurred in 2019. Refer to Note 7. Other Assets to our consolidated financial statements for further information related to the deferred gain from the sale of Celebrity Galaxy.

Gross and Net Yields 

Gross and Net Yields increased 8.2% and 8.1%, respectively, in 2019 compared to 2018 primarily due to the increases in passenger ticket and onboard and other revenues discussed above. Gross and Net Yields on a Constant Currency basis increased 9.4% and 9.5%, respectively, in 2019 compared to 2018.  

Gross and Net Cruise Costs 

Gross and Net Cruise Costs increased 19.2% and 17.7%, respectively, in 2019 compared to 2018 primarily due to the increase in cruise operating expenses and capacity discussed above. Gross and Net Cruise Costs per APCD increased 7.4% and 6.1%, respectively, in 2019 compared to 2018 and Gross and Net Cruise Costs per APCD on a Constant Currency basis increased 8.2% and 6.7%, respectively, in 2019 compared to 2018.

Net Cruise Costs Excluding Fuel 

Net Cruise Costs Excluding Fuel per APCD increased 8.2% in 2019 compared to 2018 and on a Constant Currency basis increased 8.9% in 2019 compared to 2018.

Other Comprehensive Loss

Other comprehensive loss in 2019 was $74.2 million compared to $82.4 million in 2018. The decrease of $8.2 million, or 9.9%, was primarily due to foreign currency translations gains of $7.3 million in 2019, compared to foreign currency translations losses of $(11.5) million in 2018.

Six Months Ended June 30, 2019 Compared to Six Months Ended June 30, 2018

In this section, references to 2019 refer to the six months ended June 30, 2019 and references to 2018 refer to the six months ended June 30, 2018.

Revenues

Total revenues for 2019 increased $881.0 million, or 20.2%, to $5.2 billion from $4.4 billion in 2018. 

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Passenger ticket revenues comprised 71.1% of our 2019 total revenues. Passenger ticket revenues for 2019 increased by $629.6 million, or 20.3%, from 2018. The increase was primarily due to:

• a 10.8% increase in capacity, which increased passenger ticket revenues by $334.9 million, primarily due to the additions of Spectrum of the Seas in the second quarter of 2019, Symphony of the Seas in the second quarter of 2018, Azamara Pursuit in the third quarter of 2018 and Celebrity Edge in the fourth quarter of 2018 and the addition of Silversea Cruises to our fleet in the second half of 2018; and

• an increase of $363.0 million in ticket prices primarily driven by the improvement in our ticket price on a per passenger basis due to the addition of Silversea Cruises to our fleet in the second half of 2018, the additions of Spectrum of the Seas, Symphony of the Seas, Azamara Pursuit and Celebrity Edge, and higher pricing on our Caribbean and Asia/Pacific sailings.

The increase in Passenger ticket revenues was partially offset by an unfavorable effect of changes in foreign currency exchange rates related to our revenue transactions denominated in currencies other than the United States dollar of $68.3 million.

The remaining 28.9% of 2019 total revenues was comprised of Onboard and other revenues, which increased $251.4 million, or 19.8%, to $1.5 billion in 2019 from $1.3 billion in 2018. The increase in Onboard and other revenues was primarily due to:

• a $133.9 million increase attributable to the 10.8% increase in capacity noted above;

• an $85.7 million increase in onboard revenue attributable to higher spending on a per passenger basis primarily due to our revenue enhancing initiatives, including shore excursions, Perfect Day at CocoCay, specialty restaurants, internet services, beverage package sales and promotions, gaming initiatives and new programs and activities offered to our guests; and

• a $41.5 million increase in other revenues primarily due to revenue associated with our new cruise terminal at PortMiami and cancellation fees associated with non-refundable deposits and higher pricing.

The increase in Onboard and other revenues was partially offset by an unfavorable effect of changes in foreign currency exchange rates related to our revenue transactions denominated in currencies other than the United States dollar of $9.6 million.

Onboard and other revenues included concession revenue of $184.5 million in 2019 and $162.6 million in 2018.

Cruise Operating Expenses

Total cruise operating expenses for 2019 increased $467.8 million, or 18.8%, to $3.0 billion from $2.5 billion in 2018. The increase was primarily due to:

• the 10.8% increase in capacity noted above, which increased cruise operating expenses by $266.8 million; and

• a $248.3 million increase in total cruise operating expenses, excluding the impact of the increase in capacity and the decrease in fuel expense, was primarily due to the addition of Silversea Cruises to our fleet in the second half of 2018 as well as incidental costs related to the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas, expenses associated with our new cruise terminal at PortMiami and Perfect Day at CocoCay and an increase in commission expense primarily due to a decrease in direct sales.

The increase in Cruise operating expenses was partially offset by:

• a $26.2 million decrease in fuel expenses, excluding the impact of the increase in capacity. Our cost of fuel (net of the financial impact of fuel swap agreements) for 2019 decreased 7.1% per metric ton compared to 2018; and

• a favorable effect of changes in foreign currency exchange rates related to our expense transactions denominated in currencies other than the United States dollar of $21.1 million.

Marketing, Selling and Administrative Expenses

Marketing, selling and administrative expenses increased $141.5 million, or 21.8%, to $791.8 million from $650.3 million in 2018. The increase was primarily due to the addition of Silversea Cruises in the second half of 2018, higher spending on advertisement and media promotions and an increase in payroll and benefits expense primarily driven by an increase in headcount and higher stock price year over year related to our performance share awards. Marketing, selling and administrative expenses for 2018 include transaction costs incurred by us related to the Silversea Cruises acquisition and the impairment and other costs related to the exit of our tour operations business, neither of which recurred in 2019.

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Depreciation and Amortization Expenses 

Depreciation and amortization expenses for 2019 increased $110.3 million, or 22.3%, to $603.9 million from $493.6 million in 2018. The increase was primarily due to the additions of Spectrum of the Seas in the second quarter of 2019, Symphony of the Seas in the second quarter of 2018, Azamara Pursuit in the third quarter of 2018 and Celebrity Edge in the fourth quarter of 2018 and the addition of Silversea Cruises to our fleet in the second half of 2018. Additionally, to a lesser extent, the increase is also attributable to new shipboard additions associated with our ship upgrade projects and additions related to our shoreside projects.

Other Income (Expense)

Interest expense, net of interest capitalized, for 2019 increased $62.0 million, or 41.4%, to $211.7 million from $149.7 million in 2018. The increase was primarily due to a higher average debt level compared to 2018, mostly attributable to the financing of our newbuilds and our acquisition of Silversea Cruises in the second half of 2018, and to a lesser extent, higher interest rates in 2019 compared to 2018.

Equity investment income decreased $6.3 million, or 8.7%, to $66.7 million in 2019 from $73.1 million in 2018 mainly due to our share of the write-off of the drydock structure by Grand Bahama related to the incident involving Oasis of the Seas, partially offset by an increase in income from other investments.

Other expense was $26.9 million in 2019 compared to Other income of $9.8 million in 2018. Other expense in 2019 includes $6.3 million of debt extinguishment associated with the repayment of the $700 million loan associated with the Silversea Cruises acquisition and the remaining balance of the unsecured term loan related to purchase Allure of the Seas. Refer to Note 8. Debt to our consolidated financial statements for further information. Other income in 2018 included a gain of $21.8 million in 2018, related to the recognition of the remaining balance of a deferred gain from the sale of Celebrity Galaxy to TUI Cruises and a gain of $13.7 million related to the sale of our remaining equity interest in a travel agency business, neither of which recurred in 2019. These gains in Other income in 2018 were partially offset by an impairment charge of $23.3 million to write down our investment balance, debt facility and other receivables due from Skysea Holding to their net realizable value in 2018. For further information on the deferred gain recognized and impairment charge, refer to Note 7. Other Assets to our consolidated financial statements.

Gross and Net Yields

Gross and Net Yields increased 8.5% and 7.7%, respectively, in 2019 compared to 2018 primarily due to the increase in passenger ticket and onboard and other revenues, which are further discussed above. Gross and Net Yields on a Constant Currency basis increased 10.1% and 9.4%, respectively, in 2019 compared to 2018.

Gross and Net Cruise Costs 

Gross and Net Cruise Costs increased 19.6% and 17.6%, respectively, in 2019 compared to 2018 and Gross and Net Cruise Costs per APCD increased 7.9% and 6.1%, respectively, in 2019 compared to 2018, primarily due to the increase in cruise operating expenses discussed above. Gross and Net Cruise Costs per APCD on a Constant Currency basis increased 8.8% and 6.8%, respectively, in 2019 compared to 2018.  

Net Cruise Costs Excluding Fuel 

Net Cruise Costs Excluding Fuel per APCD increased 8.4% in 2019 compared to 2018 and on a Constant Currency basis increased 9.2% in 2019 compared to 2018.

Other Comprehensive (Loss) Income

Other comprehensive loss in 2019 was $25.4 million compared to other comprehensive income of $69.1 million in 2018. The change of $(94.5) million, or (136.8)%, was primarily due to a Loss on cash flow derivative hedges in 2019 of $(22.9) million, compared to a Gain on cash flow derivative hedges of $73.6 million in 2018. The change of $(96.5) million in 2019 was primarily due to a decrease in interest rate contract values in 2019 compared to an increase in 2018.

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Future Application of Accounting Standards

We have reviewed all recently issued, but not yet effective, accounting pronouncements and we do not expect the future adoption of any such pronouncements to have a material impact on our consolidated financial statements.

Liquidity and Capital Resources

Sources and Uses of Cash

Cash flow generated from operations provides us with a significant source of liquidity. Net cash provided by operating activities increased $263.9 million to $2.2 billion for the first six months in 2019 compared to $1.9 billion for the same period in 2018. The increase in cash provided by operating activities was primarily attributable to an increase in proceeds from customer deposits.

Net cash used in investing activities decreased $241.6 million to $1.9 billion for the first six months in 2019 compared to $2.1 billion for the same period in 2018. The decrease in investing activities was primarily attributable to a decrease in capital expenditures of $346.7 million.

Net cash used in financing activities was $348.9 million for the first six months in 2019 compared to Net cash provided by financing activities of $214.0 million for the same period in 2018. The change was primarily attributable to a decrease in debt proceeds of $1.2 billion for the first six months in 2019 compared to the same period in 2018 primarily due to a decrease in borrowings on our revolving credit facilities. This decrease was partially offset by net borrowings of commercial paper of $254.7 million during the first six months of 2019 compared to no borrowings of commercial paper during the same period in 2018 and no stock repurchases during the first six months of 2019 compared to $369.5 million of stock repurchases during the same period in 2018.

Future Capital Commitments

Capital Expenditures

As of June 30, 2019, our Global Brands and our Partner Brands have 13 ships on order. The expected dates that these ships will enter service and their approximate berths are as follows:

Ship	Shipyard	Expected to Enter Service	Approximate Berths
Royal Caribbean International —
Oasis-class:
Unnamed	Chantiers de l’Atlantique	2nd Quarter 2021	5,700
Quantum-class:
Odyssey of the Seas	Meyer Werft GmbH	4th Quarter 2020	4,200
Icon-class:
Unnamed	Meyer Turku Oy	2nd Quarter 2022	5,600
Unnamed	Meyer Turku Oy	2nd Quarter 2024	5,600
Celebrity Cruises —
Edge-class:
Celebrity Apex	Chantiers de l’Atlantique	2nd Quarter 2020	2,900
Unnamed	Chantiers de l’Atlantique	4th Quarter 2021	3,250
Unnamed	Chantiers de l’Atlantique	4th Quarter 2022	3,250
Silversea Cruises —
Silver Origin	De Hoop	2nd Quarter 2020	100
Silver Moon	Fincantieri	3rd Quarter 2020	550
Silver Dawn	Fincantieri	3rd Quarter 2021	550
TUI Cruises (50% joint venture) —
Mein Schiff 7	Meyer Turku Oy	2nd Quarter 2023	2,850
Unnamed	Fincantieri	3rd Quarter 2024	4,100
Unnamed	Fincantieri	1st Quarter 2026	4,100
Total Berths			42,750

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In April 2019, Silversea Cruises entered into agreements with Meyer Werft to build two ships of a new generation of ships, known as the Evolution-class. The ships are expected to have an aggregate capacity of approximately 1,200 berths and are expected to enter service in 2022 and 2023, respectively.

Our future capital commitments consist primarily of new ship orders. As of June 30, 2019, the aggregate cost of our ships on order presented in the table above, excluding any ships on order by our Partner Brands and the two ships placed on order in April 2019 for Silversea Cruises during the reporting lag period, was $10.3 billion, of which we had deposited $614.0 million. Approximately 55.6% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at June 30, 2019. Refer to Note 14. Fair Value Measurements and Derivative Instruments to our consolidated financial statements.

In addition, as of June 30, 2019, we have the following agreements in place for new ships on order, which are contingent upon completion of conditions precedent and financing:

Ship	Shipyard	Expected to Enter Service	Approximate Berths
Royal Caribbean International —
Oasis-class:
Unnamed	Chantiers de l’Atlantique	4th Quarter 2023	5,700
Icon-class:
Unnamed	Meyer Turku Oy	2nd Quarter 2025	5,600
Celebrity Cruises —
Edge-class:
Unnamed	Chantiers de l’Atlantique	4th Quarter 2024	3,250

As of June 30, 2019, we anticipate overall full year capital expenditures, based on our existing ships on order, will be approximately $3.0 billion for 2019, $4.0 billion for 2020, $3.2 billion for 2021, $3.6 billion for 2022 and $2.9 billion for 2023. These amounts do not include any ships on order by our Partner Brands.  

Contractual Obligations

As of June 30, 2019, our contractual obligations were as follows (in thousands):

	Payments due by period
			Less than		1-3		3-5		More than
	Total		1 year		years		years		5 years
Operating Activities:
Operating lease obligations(1)	$	992,062	$	123,565	$	222,886	$	194,204	$	451,407
Interest on debt(2)	2,088,454		369,588		637,367		417,716		663,783
Other(3)	491,609		188,731		231,712		35,808		35,358
Investing Activities:	0
Ship purchase obligations(4)	8,018,377		1,061,961		4,882,773		2,073,643		—
Financing Activities:	0
Commercial paper(5)	1,046,587		1,046,587		—		—		—
Debt obligations(6)	9,625,559		911,897		2,866,788		2,010,691		3,836,183
Finance lease obligations(7)	242,679		34,330		65,894		10,235		132,220
Other(8)	17,737		5,230		8,228		4,279		—
Total	$	22,523,064	$	3,741,889	$	8,915,648	$	4,746,576	$	5,118,951

(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 2036 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, 2019. Debt denominated in other currencies is calculated based on the

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applicable exchange rate at June 30, 2019. Amounts include imputed interest for our finance lease obligations, refer to Note 9, Leases, to our consolidated financial statements, for further information.

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

(4) 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. Additionally, amounts do not include activity related to Silversea Cruises, including ships placed on order, during the three-month reporting lag period. Refer to the Capital Expenditures section.

(5) Refer to Note 8. Debt to our consolidated financial statements for further information.

(6) Amounts represent debt obligations with initial terms in excess of one year. Debt denominated in other currencies is calculated based on the applicable exchange rate at June 30, 2019. In addition, debt obligations presented above are net of debt issuance costs of $182.9 million as of June 30, 2019.

(7) Amounts represent finance lease obligations with initial terms in excess of one year, net of imputed interest.

(8) Amounts represent fees payable to sovereign guarantors in connection with certain of our export credit debt facilities and facility fees on our revolving credit facilities.

In addition, we have leasehold improvement commitments under the lease of our corporate facilities of approximately $300 million to be incurred within the next three years. 

Please refer to Funding Needs and Sources for discussion on the planned funding of the above contractual obligations.

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

We and TUI AG have each guaranteed the repayment by TUI Cruises of 50% of a bank loan. As of June 30, 2019, the outstanding principal amount of the loan was €31.7 million, or approximately $36.1 million based on the exchange rate at June 30, 2019. The loan amortizes quarterly and is currently secured by a first mortgage on Mein Schiff Herz. Based on current facts and circumstances, we do not believe potential obligations under our guarantee of this bank loan are probable.

TUI Cruises has entered into various ship construction and credit agreements that include certain restrictions on each of our and TUI AG’s ability to reduce our current ownership interest in TUI Cruises below 37.55% through May 2031.

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 obligation is probable.

As of June 30, 2019, 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, 2019, we had $3.7 billion in contractual obligations due through June 30, 2020, of which approximately $2.0 billion relates to debt maturities including our commercial paper notes, $369.6 million relates to interest on debt and $1.1 billion relates to progress payments on our ship orders and the final installments payable due upon the deliveries of Celebrity Apex and Silver Origin, which are both scheduled for delivery in the first quarter of 2020. We have historically relied on a combination of cash flows provided by operations, drawdowns under our available credit facilities

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and our commercial paper program, the incurrence of additional debt and/or the refinancing of our existing debt and the issuance of additional shares of equity securities to fund these obligations.

As of June 30, 2019, we had a working capital deficit of $6.3 billion, which included $0.9 billion of current portion of debt, including finance leases, and $1.0 billion of commercial paper. As of December 31, 2018, we had a working capital deficit of $5.9 billion, which included $1.6 billion of current portion of debt, including finance leases and $775.5 million of commercial paper. Similar to others in our industry, we operate with a substantial working capital deficit. This deficit is mainly attributable to the fact that, under our business model, a vast majority of our passenger ticket receipts are collected in advance of the applicable sailing date. These advance passenger receipts remain a current liability until the sailing date. The cash generated from these advance receipts is used interchangeably with cash on hand from other sources, such as our revolving credit facilities, commercial paper and other cash from operations. The cash received as advanced receipts can be used to fund operating expenses for the applicable future sailing or otherwise, pay down our revolving credit facilities, commercial paper, invest in long term investments or any other use of cash. In addition, we have a relatively low-level of accounts receivable and rapid turnover results in a limited investment in inventories. We generate substantial cash flows from operations and our business model, along with our unsecured revolving credit facilities, has historically allowed us to maintain this working capital deficit and still meet our operating, investing and financing needs. We expect that we will continue to have working capital deficits in the future.

As of June 30, 2019, we had liquidity of $2.1 billion, consisting of $235.0 million in cash and cash equivalents and $1.8 billion available under our unsecured credit facilities, net of our outstanding commercial paper notes.

In April 2019, we entered into and drew in full on an unsecured three-year term loan agreement in the amount of $1.0 billion. The proceeds of this loan were used to repay the $700 million 364-day loan due July 2019 related to the acquisition of Silversea Cruises and the remaining balance of the unsecured term loan originally incurred in 2010 to purchase Allure of the Seas.

In July 2019, our Board of Directors authorized an increase in the aggregate amount of commercial paper notes that we could issue under the program from $1.2 billion to up to $2.9 billion.

We anticipate that our cash flows from operations and our current financing arrangements, as described above, will be adequate to meet our capital expenditures and debt repayments over the next twelve-month period.

As of June 30, 2019, we have approximately $700.0 million that remains available for future common stock repurchase transactions under a 24-month common stock repurchase program for up to $1.0 billion authorized by our board of directors in May 2018. Repurchases under the program may be made at management's discretion from time to time on the open market or through privately negotiated transactions and are expected to be funded from available cash or borrowings. Refer to Note 12. Shareholders' Equity to our consolidated financial statements for further information.

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.

Debt Covenants

Certain of our financing agreements contain covenants that require us, among other things, to maintain minimum net worth of at least $9.0 billion, a fixed charge coverage ratio of at least 1.25x and limit our net debt-to-capital ratio to no more than 62.5%.  The fixed charge coverage ratio is calculated by dividing net cash from operations for the past four quarters by the sum of dividend payments plus scheduled principal debt payments in excess of any new financings for the past four quarters. Our minimum net worth and maximum net debt-to-capital calculations exclude the impact of Accumulated other comprehensive loss on Total shareholders’ equity. We were well in excess of all debt covenant requirements as of June 30, 2019. The specific covenants and related definitions can be found in the applicable debt agreements, the majority of which have been previously filed with the Securities and Exchange Commission.

Dividends

During both the first and second quarter of 2019, we declared a cash dividend on our common stock of $0.70 per share, which was paid in April 2019 and July 2019, respectively. During the first quarter of 2019, we also paid a cash dividend on our common stock of $0.70 per share, which was declared during the fourth quarter of 2018.

During both the first and second quarter of 2018, we declared a cash dividend on our common stock of $0.60 per share, which was paid in April 2018 and July 2018, respectively. During the first quarter of 2018, we also paid a cash dividend on our common stock of $0.60 per share, which was declared during the fourth quarter of 2017.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

For a discussion of our market risks, refer to Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the year ended December 31, 2018. There have been no significant developments or material changes since the date of our Annual Report.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chairman and Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined in Exchange Act Rule 13a-15(e), as of the end of the period covered by this report. Based upon such evaluation, our Chairman and Chief Executive Officer and Chief Financial Officer concluded that those controls and procedures are effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chairman and Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and are effective to provide reasonable assurance that such information is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Exchange Act Rule 13a-15(d) during the quarter ended June 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. In July 2018, we acquired Silversea Cruise Holding Ltd. ("Silversea Cruises") and we are in the process of implementing the controls and procedures at Silversea Cruises and integrating the acquired business into our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Readers are cautioned that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there is only reasonable assurance that our controls will succeed in achieving their goals under all potential future conditions.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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.

Item 1A. Risk Factors

The risk factors set forth below and elsewhere in this Quarterly Report on Form 10-Q are important factors that could cause actual results to differ from expected or historical results. It is not possible to predict or identify all such risks. There may be additional risks that we consider not to be material, or which are not known, and any of these risks could have the effects set forth below. The ordering of the risk factors set forth below is not intended to reflect any Company indication of priority or likelihood. See Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations for a cautionary note regarding forward-looking statements.

Adverse worldwide economic or other conditions could reduce the demand for cruises and passenger spending, adversely impacting our operating results, cash flows and financial condition including potentially impairing the value of our ships and other assets.

The demand for cruises is affected by international, national and local economic conditions. Weak or uncertain economic conditions impact consumer confidence and pose a risk as vacationers may postpone or reduce discretionary spending. This, in turn, may result in cruise booking slowdowns, decreased cruise prices and lower onboard revenues. Given the global nature of our business, we are exposed to many different economies and our business could be hurt by challenging conditions in any of our markets. Any significant deterioration of international, national or local economic conditions could result in a prolonged period of booking slowdowns, depressed cruise prices and reduced onboard revenues.

Fears of terrorist attacks, war, and other hostilities could have a negative impact on our results of operations.

Events such as terrorist attacks, war (or war-like conditions), conflicts (domestic or cross-border), civil unrest and other hostilities, including an escalation in the frequency or severity of incidents, and the resulting political instability, travel restrictions and advisories, and concerns over safety and security aspects of traveling or the fear of any of the foregoing have had, and could have in the future, a significant adverse impact on demand and pricing in the travel and vacation industry. In view of our global operations, we are susceptible to a wide range of adverse events. These events could also result in additional security measures taken by local authorities which may potentially impact access to ports and/or destinations.

Our operating costs could increase due to market forces and economic or geo-political factors beyond our control.

Our operating costs, including fuel, food, payroll and benefits, airfare, taxes, insurance and security costs, are all subject to increases due to market forces and economic or geo-political conditions or other factors beyond our control. Increases in these operating costs could adversely affect our profitability.

Fluctuations in foreign currency exchange rates, fuel prices and interest rates could affect our financial results.

We are exposed to market risk attributable to changes in foreign currency exchange rates, fuel prices and interest rates. Significant changes in any of the foregoing could have a material impact on our financial results, net of the impact of our hedging activities and natural offsets. Our operating results have been and will continue to be impacted, often significantly, by changes in each of these factors. The value of our earnings in foreign currencies is adversely impacted by a strong United States dollar. In addition, any significant increase in fuel prices could materially and adversely affect our business as fuel prices not only impact our fuel costs, but also some of our other expenses, such as crew travel, freight and commodity prices. Also, a significant increase in interest rates could materially impact the cost of our floating rate debt. Furthermore, regulatory changes, such as the announcement of the United Kingdom’s Financial Conduct Authority to phase out LIBOR by the end of 2021, may adversely affect our portfolio of floating-rate debt and interest rate derivatives. If LIBOR ceases to exist, we may need to renegotiate any credit agreements or interest rate derivatives agreements extending beyond 2021 that utilize LIBOR as a factor in determining the interest rate or hedge rate, which could adversely impact our cost of debt.

See Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 3. Quantitative and Qualitative Disclosures About Market Risk for more information.

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Conducting business globally may result in increased costs and other risks.

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

Our future growth strategies increasingly depend on the growth and sustained profitability of certain international markets, such as China. Some factors that will be critical to our success in developing these markets may be different than those affecting our more-established North American and European markets. In the Chinese market, in particular, our future success depends on our ability to continue to raise awareness of our products, evolve the available distribution channels and adapt our offerings to best suit the Chinese consumer. China’s economy differs from the economies of other developed countries in many respects and, as the legal and regulatory system in China continues to evolve, there may be greater uncertainty as to the interpretation and enforcement of applicable laws and regulations.

Operating globally also exposes us to numerous and sometimes conflicting legal, regulatory and tax requirements. In many parts of the world, including countries in which we operate, practices in the local business communities might not conform to international business standards. We must adhere to policies designed to promote legal and regulatory compliance as well as applicable laws and regulations. However, we might not be successful in ensuring that our employees, agents, representatives and other third parties with whom we associate throughout the world properly adhere to them. Failure by us, our employees or any of these third parties to adhere to our policies or applicable laws or regulations could result in penalties, sanctions, damage to our reputation and related costs which in turn could negatively affect our results of operations and cash flows.

We have operations in and source passengers from the United Kingdom and other member countries of the European Union. In March 2017, the United Kingdom notified the European Council of its intent to withdraw from the European Union. Since the initial referendum in June 2016, the expected withdrawal has resulted in increased volatility in the global financial markets and, in particular, in global currency exchange rates. The expected withdrawal could potentially adversely affect tax, legal and regulatory regimes to which our business in the region is subject. The expected withdrawal could also, among other potential outcomes, disrupt the free movement of goods, services and people between the United Kingdom and the European Union. Further, as the expected withdrawal approaches, continued uncertainty around these issues could lead to adverse effects on the economy of the United Kingdom, including the value of the British Pound, and the other economies in which we operate, making it more difficult to source passengers from these regions. These risks may be exacerbated if a structured withdrawal agreement is not ratified before the extended October 31, 2019 deadline, and/or if voters of other countries within the European Union similarly elect to exit the European Union in future referendums.

As a global operator, our business may be also impacted by changes in U.S. policy or priorities in areas such as trade, immigration and/or environmental or labor regulations, among others. Depending on the nature and scope of any such changes, they could impact our domestic and international business operations. Any such changes, and any international response to them, could potentially introduce new barriers to passenger or crew travel and/or cross border transactions, impact our guest experience and/or increase our operating costs.

If we are unable to address these risks adequately, our financial position and results of operations could be adversely affected, including potentially impairing the value of our ships and other assets.

Changes in U.S. foreign travel policy may affect our results of operations.

Changes in U.S. foreign policy could result in the imposition of travel restrictions or travel bans on U.S. persons to certain countries or result in the imposition of U.S. rules, regulations or legislation that could expose us to penalties or claims of monetary damages. The timing and scope of these changes are unpredictable, and they could cause us to cancel scheduled sailings, possibly on short notice, or could result in possible litigation against us. This, in turn, could decrease our revenue, increase our operating costs and otherwise impair our profitability. For instance, in June 2019, the U.S. government announced that cruise ships would no longer be allowed to travel between the U.S. and Cuba. This required us to change our high yielding Cuba sailings on short notice which impacted our earnings. Moreover, in May 2019, the U.S. government activated Title III of the Cuban Liberty and Solidarity (Libertad) Act of 1996, popularly known as the Helms-Burton Act. This allowed certain individuals whose property was confiscated by the Cuban government to sue in U.S. courts anyone who "traffics" in the property in question. The activation of Title III has resulted in litigation against one of our competitors and others in the tourism industry and could result in litigation against us.

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Price increases for commercial airline service for our guests or major changes or reduction in commercial airline service and/or availability could adversely impact the demand for cruises and undermine our ability to provide reasonably priced vacation packages to our guests.

Many of our guests depend on scheduled commercial airline services to transport them to or from the ports where our cruises embark or disembark. Increases in the price of airfare would increase the overall price of the cruise vacation to our guests, which may adversely impact demand for our cruises. In addition, changes in the availability of commercial airline services could adversely affect our guests’ ability to obtain airfare, as well as our ability to fly our guests to or from our cruise ships, which could adversely affect our results of operations.

Incidents or adverse publicity concerning our ships, port facilities, land destinations and/or passengers or the cruise vacation industry in general, unusual weather conditions and other natural disasters or disruptions could affect our reputation as well as impact our sales and results of operations.

The ownership and/or operation of cruise ships, private destinations, port facilities and shore excursions involves the risk of accidents, illnesses, mechanical failures, environmental incidents and other incidents which may bring into question safety, health, security and vacation satisfaction which could negatively impact our reputation. Incidents involving cruise ships, and, in particular the safety, health and security of guests and crew and media coverage thereof have impacted and could in the future impact demand for our cruises and pricing in the industry. Our reputation and our business could also be damaged by negative publicity regarding the cruise industry in general, including publicity regarding the spread of contagious disease and the potentially adverse environmental impacts of cruising. The considerable expansion in the use of social media and digital marketing over recent years has compounded the potential scope of any negative publicity. If any such incident or news cycle occurs during a time of high seasonal demand, the effect could disproportionately impact our results of operations for the year. In addition, incidents involving cruise ships may result in additional costs to our business, increasing government or other regulatory oversight and, in the case of incidents involving our ships, potential litigation.

Our cruise ships, port facilities and land destinations may also be adversely impacted by weather or natural disasters or disruptions, such as hurricanes. We are often forced to alter itineraries and occasionally cancel a cruise or a series of cruises or to redeploy our ships due to these types of events, which could have an adverse effect on our sales and profitability in the current and future periods. Increases in the frequency, severity or duration of severe weather events, including those related to climate change, could exacerbate their impact and cause further disruption to our operations or make certain destinations less desirable. In addition, these and any other events which impact the travel industry more generally may negatively impact our ability to deliver guests or crew to our cruises and/or interrupt our ability to obtain services and goods from key vendors in our supply chain. Any of the foregoing could have an adverse impact on our results of operations and on industry performance.

An increase in capacity worldwide or excess capacity in a particular market could adversely impact our cruise sales and/or pricing.

Although our ships can be redeployed, cruise sales and/or pricing may be impacted by the introduction of new ships into the marketplace, reductions in cruise capacity, overall market growth and deployment decisions of ourselves and our competitors. As of December 31, 2018, a total of 89 new ships with approximately 198,000 berths are on order for delivery through 2023 in the cruise industry. The further net growth in capacity from these new ships and future orders, without an increase in the cruise industry’s demand and/or share of the vacation market, could depress cruise prices and impede our ability to achieve yield improvement.

In addition, to the extent that we or our competitors deploy ships to a particular itinerary and the resulting capacity in that region exceeds the demand, we may lower pricing and profitability may be lower than anticipated. This risk exists in emerging cruise markets, where capacity has grown rapidly over the past few years and in mature markets where excess capacity is typically redeployed. Any of the foregoing could have an adverse impact on our results of operations, cash flows and financial condition, including potentially impairing the value of our ships and other assets.

Unavailability of ports of call may adversely affect our results of operations.

We believe that port destinations are a major reason why guests choose to go on a particular cruise or on a cruise vacation. The availability of ports and destinations is affected by a number of factors, including existing capacity constraints, constraints related to the size of certain ships, security, environmental and health concerns, adverse weather conditions and natural disasters, financial limitations on port development, exclusivity arrangements that ports may have with our competitors, geopolitical developments, local governmental regulations and local community concerns about port development and other adverse impacts on their communities from additional tourists and overcrowding. In addition, fuel costs may adversely impact the destinations on certain of our itineraries.

Today certain ports and destinations are facing a surge of both cruise and non-cruise tourism which, in certain cases, has fueled anti-tourism sentiments and related countermeasures to limit the volume of tourists allowed in these destinations. In certain

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destinations, countermeasures to limit the volume of tourists are being contemplated and/or put into effect, including proposed limits on cruise ships and cruise passengers and/or new environmental restrictions that limit our ability to call on specific ports/destinations. For example, effective 2020, the local government of Dubrovnik, Croatia will cap the number of cruise ships that can dock each day to two and the number of corresponding passengers. Similar existing and potential restrictions in ports and destinations such as Venice, Barcelona, Amsterdam, the Norwegian fjords, Zeebrugge and Bar Harbor could limit the itinerary and destination options we can offer our passengers going forward.

Any limitations on the availability or feasibility of our ports of call or on the availability of shore excursions and other service providers at such ports could adversely affect our results of operations.

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

We rely on shipyards, their subcontractors and our suppliers to effectively construct our new ships and to repair, maintain and upgrade our existing ships on a timely basis and in a cost-effective manner. There are a limited number of shipyards with the capability and capacity to build, repair, maintain and/or upgrade our ships.

Increased demand for available new construction slots and/or continued consolidation in the cruise shipyard industry could impact our ability to: (1) construct new ships, when and as planned, (2) cause us to continue to commit to new ship orders earlier than we have historically done so and/or (3) result in stronger bargaining power on the part of the shipyards and the export credit agencies providing financing for the project.  Our inability to timely and cost-effectively procure new capacity could have a significant negative impact on our future business plans and results of operations.

Building, repairing, maintaining and/or upgrading a ship is sophisticated work that involves significant risks. In addition, the prices of labor and/or various commodities that are used in the construction of ships can be subject to volatile price changes, including the impact of fluctuations in foreign exchange rates. Shipyards, their subcontractors and/or our suppliers may encounter financial, technical or design problems when doing these jobs.  If materialized, these problems could impact the timely delivery or costs of new ships or the ability of shipyards to repair and upgrade our fleet in accordance with our needs or expectations.  In addition, delays, mechanical faults and/or unforeseen incidents, such as the collapse of the drydock structure at the Grand Bahama Shipyard involving Oasis of the Seas, may result in cancellation of cruises or, in more severe situations, new ship orders, or necessitate unscheduled drydocks and repairs of ships. These events and any related adverse publicity could result in lost revenue, increased operating expenses, or both, and thus adversely affect our results of operations.

We may lose business to competitors throughout the vacation market.

We operate in the vacation market and cruising is one of many alternatives for people choosing a vacation. We therefore risk losing business not only to other cruise lines, but also to other vacation operators, which provide other leisure options, including hotels, resorts, internet-based alternative lodging sites and package holidays and tours.

We face significant competition from other cruise lines on the basis of cruise pricing, travel agent preference and also in terms of the nature of ships and services we offer to guests. Our principal competitors within the cruise vacation industry include Carnival Corporation & plc, which owns, among others, Aida Cruises, Carnival Cruise Line, Costa Cruises, Cunard Line, Holland America Line, P&O Cruises, Princess Cruises and Seabourn; Disney Cruise Line; MSC Cruises; and Norwegian Cruise Line Holdings Ltd, which owns Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises. Our revenues are sensitive to the actions of other cruise lines in many areas, including pricing, scheduling, capacity and promotions, which can have a substantial adverse impact not only on our revenues, but on overall industry revenues.

In the event that we do not effectively market or differentiate our cruise brands from our competitors or otherwise compete effectively with other vacation alternatives and new or existing cruise companies, our results of operations and financial position could be adversely affected.

We may not be able to obtain sufficient financing or capital for our needs or may not be able to do so on terms that are acceptable or consistent with our expectations.

To fund our capital expenditures (including new ship orders), operations and scheduled debt payments, we have historically relied on a combination of cash flows provided by operations, drawdowns under available credit facilities, the incurrence of additional indebtedness and the sale of equity or debt securities in private or public securities markets. Any circumstance or event which leads to a decrease in consumer cruise spending, such as worsening global economic conditions or significant incidents impacting the cruise industry, could negatively affect our operating cash flows. See “-Adverse worldwide economic or other conditions…” and “-Incidents or adverse publicity concerning our ships and/or passengers or the cruise vacation industry…” for more information.

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Although we believe we can access sufficient liquidity to fund our operations, investments and obligations as expected, there can be no assurances to that effect. Our ability to access additional funding as and when needed, our ability to timely refinance and/or replace our outstanding debt securities and credit facilities on acceptable terms and our cost of funding will depend upon numerous factors including, but not limited to, the vibrancy of the financial markets, our financial performance, the performance of our industry in general and the size, scope and timing of our financial needs. In addition, even where financing commitments have been secured, significant disruptions in the capital and credit markets could cause our banking and other counterparties to breach their contractual obligations to us. This could include failures of banks or other financial service companies to fund required borrowings under our loan agreements or to pay us amounts that may become due or return collateral that is refundable under our derivative contracts for hedging of fuel prices, interest rates and foreign currencies or other agreements. If any of the foregoing occurs it may have a negative impact on our cash flows, including our ability to meet our obligations, our results of operations and our financial condition.

Our liquidity could be adversely impacted if we are unable to satisfy the covenants required by our credit facilities.

Our debt agreements contain covenants, including covenants restricting our and their ability to take certain actions and financial covenants. Our ability to maintain our credit facilities may also be impacted by changes in our ownership base. More specifically, we may be required to prepay our bank financing facilities if any person acquires ownership of more than 50% of our common stock or, subject to certain exceptions, during any 24-month period, a majority of 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.  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.

Failure to comply with the terms of these debt facilities could result in an event of default. Generally, if an event of default under any debt agreement occurs, then pursuant to cross default acceleration clauses, our outstanding debt and derivative contract payables could become due and/or terminated. In addition, in such events, our credit card processors could hold back payments to create a reserve. We cannot provide assurances that we would have sufficient liquidity to repay, or the ability to refinance the debt if such amounts were accelerated upon an event of default.

If we are unable to appropriately balance our cost management and capital allocation strategies with our goal of satisfying guest expectations, it may adversely impact our business success.

Our goals call for us to provide high quality products and deliver high quality services. There can be no assurance that we can successfully balance these goals with our cost management and capital allocation strategies. Our business also requires us to make capital allocation decisions, such as ordering new ships, upgrading our existing fleet, enhancing our technology and data capabilities, and expanding our portfolio of land-based assets, based on expected market preferences, competition and projected demand. There can be no assurance that our strategies will be successful, which could adversely impact our business, financial condition and results of operations. Investments in older tonnage, in particular, run the risk of not meeting expected returns and diluting related asset values.

Our attempts to expand our business into new markets and new ventures may not be successful.

We opportunistically seek to grow our business through, among other things, expansion into new destination or source markets and establishment of new ventures complementary to our current offerings. These attempts to expand our business increase the complexity of our business, require significant levels of investment and can strain our management, personnel, operations and systems. There can be no assurance that these business expansion efforts will develop as anticipated or that we will succeed, and if we do not, we may be unable to recover our investment, which could adversely impact our business, financial condition and results of operations.

Our reliance on travel agencies to sell and market our cruises exposes us to certain risks which, if realized, could adversely impact our business.

We rely on travel agencies to generate the majority of bookings for our ships. Accordingly, we must ensure that our commission rates and incentive structures remain competitive. If we fail to offer competitive compensation packages, these agencies may be incentivized to sell cruises offered by our competitors to our detriment, which could adversely impact our operating results. Our reliance on third-party sellers is particularly pronounced in certain markets, such as China, where we have a large number of travel agent charter and group sales and less retail agency and direct bookings. In addition, the travel agent industry is sensitive to economic conditions that impact discretionary income of consumers. Significant disruptions, especially disruptions impacting those agencies that sell a high volume of our business, or contractions in the industry could reduce the number of travel agencies available for us to market and sell our cruises, which could have an adverse impact on our financial condition and results of operations.

Disruptions in our shoreside or shipboard operations or our information systems may adversely affect our results of operations.

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Our principal executive office and principal shoreside operations are located in Florida, and we have shoreside offices throughout the world. Actual or threatened natural disasters (e.g., hurricanes/typhoons, earthquakes, tornadoes, fires or floods) or similar events in these locations may have a material impact on our business continuity, reputation and results of operations. In addition, substantial or repeated information system failures, computer viruses or cyber-attacks impacting our shoreside or shipboard operations could adversely impact our business. We do not generally carry business interruption insurance for our shoreside or shipboard operations or our information systems. As such, any losses or damages incurred by us could have an adverse impact on our results of operations.

The loss of key personnel, our inability to recruit or retain qualified personnel, or disruptions among our shipboard personnel due to strained employee relations could adversely affect our results of operations.

Our success depends, in large part, on the skills and contributions of key executives and other employees, and on our ability to recruit, develop and retain high quality personnel and develop adequate succession plans. As demand for qualified personnel in the industry grows, we must continue to effectively recruit, train, motivate and retain our employees, both shoreside and on our ships, in order to effectively compete in our industry, maintain our current business and support our projected global growth.

As of December 31, 2018, 89% of our shipboard employees were covered by collective bargaining agreements. A dispute under our collective bargaining agreements could result in a work stoppage of those employees covered by the agreements. We may not be able to satisfactorily renegotiate these collective bargaining agreements when they expire. In addition, existing collective bargaining agreements may not prevent a strike or work stoppage on our ships. We may also be subject to or affected by work stoppages unrelated to our business or collective bargaining agreements. Any such work stoppages or potential work stoppages could have a material adverse effect on our financial results, as could a loss of key employees, our inability to recruit or retain qualified personnel or disruptions among our personnel.

Business activities that involve our co-investments with third parties may subject us to additional risks.

Partnerships, joint ventures and other business structures involving our co-investments with third parties generally include some form of shared control over the operations of the business and create additional risks, including the possibility that other investors in such ventures could become bankrupt or otherwise lack the financial resources to meet their obligations, or could have or develop business interests, policies or objectives that are inconsistent with ours. In addition to financial risks, our co-investment activities may also present managerial and operational risks and expose us to reputational or legal concerns. These or other issues related to our co-investments with third parties could adversely impact our operations.

Past or pending business acquisitions or potential acquisitions that we may decide to pursue in the future carry inherent risks which could adversely impact our financial performance and condition.

The Company, from time to time, has engaged in acquisitions (e.g., our Silversea Cruises acquisition) and may pursue acquisitions in the future, which are subject to, among other factors, the Company’s ability to identify attractive business opportunities and to negotiate favorable terms for such opportunities. Accordingly, the Company cannot make any assurances that potential acquisitions will be completed timely or at all, or that if completed, we would realize the anticipated benefits of such acquisition. Acquisitions also carry inherent risks such as, among others: (1) the potential delay or failure of our efforts to successfully integrate business processes and realizing expected synergies; (2) difficulty in aligning procedures, controls and/or policies; and (3) future unknown liabilities and costs that may be associated with an acquisition. In addition, acquisitions may also adversely impact our liquidity and/or debt levels, and the recognized value of goodwill and other intangible assets can be negatively affected by unforeseen events and/or circumstances, which may result in an impairment charge. Any of the foregoing events could adversely impact our financial condition and results of operations.

We rely on supply chain vendors and third-party service providers who are integral to the operations of our businesses. These vendors and service providers may be unable or unwilling to deliver on their commitments or may act in ways that could harm our business.

We rely on supply chain vendors to deliver key products to the operations of our businesses around the world. Any event impacting a vendor’s ability to deliver goods of the expected quality at the location and time needed could negatively impact our ability to deliver our cruise experience. Events impacting our supply chain could be caused by factors beyond the control of our suppliers or us, including inclement weather, natural disasters, increased demand, problems in production or distribution and/or disruptions in third-party logistics or transportation systems. Interruptions to our supply chain could increase costs and could limit the availability of products critical to our operations.

In order to achieve cost and operational efficiencies, we outsource to third-party vendors certain services that are integral to the operations of our global businesses, such as our onboard concessionaires, certain of our call center operations and operation of a large part of our information technology systems. We are subject to the risk that certain decisions are subject to the control of our third-party service providers and that these decisions may adversely affect our activities. A failure to adequately monitor a

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third-party service provider’s compliance with a service level agreement or regulatory or legal requirements could result in significant economic and reputational harm to us. There is also a risk the confidentiality, privacy and/or security of data held by third parties or communicated over third-party networks or platforms could become compromised.

If we are unable to keep pace with developments in technology or technological obsolescence, our operations or competitive position could become impaired.

Our business continues to demand the use of sophisticated technology and systems. These technologies and systems require significant investment and must be proven, refined, updated, upgraded and/or replaced with more advanced systems in order to continue to meet our customers’ demands and expectations. If we are unable to do so in a timely manner or within reasonable cost parameters or if we are unable to appropriately and timely train our employees to operate any of these new systems, our business could suffer. We also may not achieve the benefits that we anticipate from any new technology or system, which could result in higher than anticipated costs or impair our operating results.

We are exposed to cyber-attacks and data breaches, including the risks and costs associated with protecting our systems and maintaining integrity and security of our business information, as well as personal data of our guests, employees and business partners.

We are subject to cyber-attacks. These cyber-attacks can vary in scope and intent from attacks with the objective of compromising our systems, networks and communications for economic gain to attacks with the objective of disrupting, disabling or otherwise compromising our maritime and/or shoreside operations. The attacks can encompass a wide range of methods and intent, including phishing attacks, illegitimate requests for payment, theft of intellectual property, theft of confidential or non-public information, installation of malware, installation of ransomware and theft of personal or business information. The breadth and scope of these attacks, as well as the techniques and sophistication used to conduct these attacks, have grown over time.

A successful cyber-attack may target us directly, or it may be the result of a third party's inadequate care. In either scenario, the Company may suffer damage to its systems and data that could interrupt our operations, adversely impact our reputation and brand and expose us to increased risks of governmental investigation, litigation and other liability, any of which could adversely affect our business. Furthermore, responding to such an attack and mitigating the risk of future attacks could result in additional operating and capital costs in systems technology, personnel, monitoring and other investments.

In addition, we are also subject to various risks associated with the collection, handling, storage and transmission of sensitive information. In the course of doing business, we collect large volumes of employee, customer and other third-party data, including personally identifiable information and individual credit data, for various business purposes. We are subject to federal, state and international laws (including the European Union General Data Protection Regulation), as well as industry standards, relating to the collection, use, retention, security and transfer of personally identifiable information and individual credit data. In many cases, these laws apply not only to third-party transactions, but also to transfers of information between the Company and its subsidiaries, and among the Company, its subsidiaries and other parties with which the Company has commercial relations. Several jurisdictions have passed laws in this area, and other jurisdictions are considering imposing additional restrictions. These laws continue to develop and may be inconsistent from jurisdiction to jurisdiction. Complying with emerging and changing international requirements has caused, and may cause us to incur substantial costs or require us to change our business practices. If we fail to comply with the various applicable data collection and privacy laws, we could be exposed to fines, penalties, restrictions, litigation or other expenses, and our business could be adversely impacted.

While we continue to evolve our cyber-security practices in line with our business' reliance on technology and the changing external threat landscape, and we invest time, effort and financial resources to secure our systems, networks and communications, our security measures cannot provide absolute assurance that we will be successful in preventing or responding to all cyber-attacks. There can be no assurance that any breach or incident will not have a material impact on our operations and financial results.

Any breach, theft, loss, or fraudulent use of guest, employee, third-party or company data, could adversely impact our reputation and brand and our ability to retain or attract new customers, and expose us to risks of data loss, business disruption, governmental investigation, litigation and other liability, any of which could adversely affect our business. Significant capital investments and other expenditures could be required to remedy the problem and prevent future breaches, including costs associated with additional security technologies, personnel, experts and credit monitoring services for those whose data has been breached. Further, if we or our vendors experience significant data security breaches or fail to detect and appropriately respond to significant data security breaches, we could be exposed to government enforcement actions and private litigation.

The potential unavailability of insurance coverage, an inability to obtain insurance coverage at commercially reasonable rates or our failure to have coverage in sufficient amounts to cover our incurred losses may adversely affect our financial condition or results of operations.

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We seek to maintain appropriate insurance coverage at commercially reasonable rates. We normally insure based on the cost of an asset rather than replacement value and we also elect to self-insure, co-insure, or use deductibles in certain circumstances for certain risks such as loss of use of a ship or a cyber-security breach. The limits of insurance coverage we purchase are based on the availability of the coverage, evaluation of our risk profile and cost of coverage. Accordingly, we are not protected against all risks and we cannot be certain that our coverage will be adequate for liabilities actually incurred which could result in an unexpected decrease in our revenue and results of operations in the event of an incident.

We are members of four Protection and Indemnity ("P&I") clubs, which are part of a worldwide group of 13 P&I clubs, known as the International Group of P&I Clubs (the “IG”). P&I coverage provided by the clubs is on a mutual basis and we are subject to additional premium calls in the event of a catastrophic loss incurred by any member of the 13 P&I clubs, whereby the reinsurance limits purchased by the IG are exhausted. We are also subject to additional premium calls based on investment and underwriting shortfalls experienced by our own individual insurers.

We cannot be certain that insurance and reinsurance coverage will be available to us and at commercially reasonable rates in the future or at all or, if available, that it will be sufficient to cover potential claims. Additionally, if we or other insureds sustain significant losses, the result may be higher insurance premiums, cancellation of coverage, or the inability to obtain coverage. Such events could adversely affect our financial condition or results of operations.

Environmental, labor, health and safety, financial responsibility and other maritime regulations could affect operations and increase operating costs.

The United States and various state and foreign government or regulatory agencies have enacted or may enact environmental regulations or policies, such as requiring the use of low sulfur fuels, that could increase our direct cost to operate in certain markets, increase our cost for fuel, limit the supply of compliant fuel, cause us to incur significant expenses to purchase and/or develop new equipment and adversely impact the cruise vacation industry. While we have taken and expect to continue to take a number of actions to mitigate the potential impact of certain of these regulations, there can be no assurances that these efforts will be successful or completed on a timely basis.

There is increasing global regulatory focus on climate change, greenhouse gas (GHG) and other emissions. These regulatory efforts, both internationally and in the United States are still developing, and we cannot yet determine what the final regulatory programs or their impact will be in any jurisdiction where we do business. However, such climate change-related regulatory activity in the future may adversely affect our business and financial results by requiring us to reduce our emissions, purchase allowances or otherwise pay for our emissions. Such activity may also impact us by increasing our operating costs, including fuel costs.

Some environmental groups have also lobbied for more stringent regulation of cruise ships and have generated negative publicity about the cruise vacation industry and its environmental impact. See Part I, Item 1. Business-Regulation-Environmental Regulations in our Annual Report on Form 10-K for the year ended December 31, 2018.

In addition, we are subject to various international, national, state and local laws, regulations and treaties that govern, among other things, discharge from our ships, safety standards applicable to our ships, treatment of disabled persons, health and sanitary standards applicable to our guests, security standards on board our ships and at the ship/port interface areas, and financial responsibilities to our guests. These issues are, and we believe will continue to be, an area of focus by the relevant authorities throughout the world. This could result in the enactment of more stringent regulation of cruise ships that could subject us to increasing compliance costs in the future.

A change in our tax status under the United States Internal Revenue Code, or other jurisdictions, may have adverse effects on our income.

We and a number of our subsidiaries are foreign corporations that derive income from a U.S. trade or business and/or from sources within the United States. In connection with the year end audit, each year, Drinker Biddle & Reath LLP, our U.S. tax counsel, delivers to us an opinion, based on certain representations and assumptions set forth in it, to the effect that this income, to the extent derived from or incidental to the international operation of a ship or ships, is excluded from gross income for U.S. federal income tax purposes pursuant to Section 883 of the Internal Revenue Code. We believe that most of our income (including that of our subsidiaries) is derived from or incidental to the international operation of ships.

Our ability to rely on Section 883 could be challenged or could change in the future. Provisions of the Internal Revenue Code, including Section 883, are subject to legislative change at any time. Moreover, changes could occur in the future with respect to the identity, residence or holdings of our direct or indirect shareholders, trading volume or trading frequency of our shares, or relevant foreign tax laws of Liberia such that it no longer qualifies as an equivalent exemption jurisdiction, that could affect our eligibility for the Section 883 exemption. Accordingly, there can be no assurance that we will continue to be exempt from U.S. income tax on U.S. source shipping income in the future. If we were not entitled to the benefit of Section 883, we and our subsidiaries

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would be subject to U.S. taxation on a portion of the income derived from or incidental to the international operation of our ships, which would reduce our net income.

Additionally, portions of our business are operated by companies that are within the United Kingdom tonnage tax regime. Further, some of our operations are conducted in jurisdictions where we rely on tax treaties to provide exemption from taxation. To the extent the United Kingdom tonnage tax laws change or we do not continue to meet the applicable qualification requirements or if tax treaties are changed or revoked, we may be required to pay higher income tax in these jurisdictions, adversely impacting our results of operations.

As budgetary constraints continue to adversely impact the jurisdictions in which we operate, increases in income tax regulations, tax audits or tax reform affecting our operations may be imposed.

Litigation, enforcement actions, fines or penalties could adversely impact our financial condition or results of operations and/or damage our reputation.

Our business is subject to various United States and international laws and regulations that could lead to enforcement actions, fines, civil or criminal penalties or the assertion of litigation claims and damages. In addition, improper conduct by our employees, agents or joint venture partners could damage our reputation and/or lead to litigation or legal proceedings that could result in civil or criminal penalties, including substantial monetary fines. In certain circumstances it may not be economical to defend against such matters and/or a legal strategy may not ultimately result in us prevailing in a matter. Such events could lead to an adverse impact on our financial condition or results of operations.

We are not a United States corporation and our shareholders may be subject to the uncertainties of a foreign legal system in protecting their interests.

Our corporate affairs are governed by our Articles of Incorporation and By-Laws and by the Business Corporation Act of Liberia. The provisions of the Business Corporation Act of Liberia resemble provisions of the corporation laws of a number of states in the United States. However, while most states have a fairly well developed body of case law interpreting their respective corporate statutes, there are very few judicial cases in Liberia interpreting the Business Corporation Act of Liberia. As such, the rights and fiduciary responsibilities of directors under Liberian law are not as clearly established as the rights and fiduciary responsibilities of directors under statutes or judicial precedent in certain United States jurisdictions. For example, the right of shareholders to bring a derivative action in Liberian courts may be more limited than in United States jurisdictions. There may also be practical difficulties for shareholders attempting to bring suit in Liberia and Liberian courts may or may not recognize and enforce foreign judgments. Thus, our public shareholders may have more difficulty in protecting their interests with respect to actions by management, directors or controlling shareholders than would shareholders of a corporation incorporated in a United States jurisdiction.

Provisions of our Articles of Incorporation, By-Laws and Liberian law could inhibit others from acquiring us, prevent a change of control, and may prevent efforts by our shareholders to change our management.

Certain provisions of our Articles of Incorporation and By-Laws and Liberian law may inhibit third parties from effectuating a change of control of the Company without approval from our board of directors which could result in the entrenchment of current management. These include provisions in our Articles of Incorporation that prevent third parties, other than A. Wilhelmsen AS. and Cruise Associates, from acquiring beneficial ownership of more than 4.9% of our outstanding shares without the consent of our board of directors.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Share Repurchases

The following table provides information about our repurchase of common stock during the quarter ended June 30, 2019:

Period	Total number of shares purchased (1)	Average price paid per share	Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plans or programs
April 1, 2019 - April 30, 2019	56,382	$91.60	—	$700,000,000
May 1, 2019 - May 31, 2019	—	$—	—	$700,000,000
June 1, 2019 - June 30, 2019	—	$—	—	$700,000,000
Total	56,382		—

(1) Includes shares related to employee stock plans, primarily withheld by us to cover withholding taxes due at the election of certain holders.

As of June 30, 2019, we have approximately $700.0 million that remains available for future stock repurchase transactions under a 24-month common stock repurchase program for up to $1.0 billion authorized by our board of directors on May 9, 2018. Refer to Note 12. Shareholders' Equity to our consolidated financial statements under Item 1. Financial Statements for further information.

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Item 6. Exhibits

10.1	Amendment to the Credit Agreement, dated as of April 5, 2019, by and among the Company, the various financial institutions as are or shall become parties there to and The Bank of Nova Scotia, as administrative agent for the lender parties (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 10, 2019).
10.2	Loan Agreement, dated as of April 5, 2019, among Royal Caribbean Cruises Ltd., as the Borrower, the Lenders from time to time party thereto, Bank of America, N.A. as Administrative Agent and Banco Bilbao Vizcaya Argentaria, S.A. New York Branch, Sumitomo Mitsui Banking Corporation, The Bank of Nova Scotia, Wells Fargo Bank, National Association and DNB Markets Inc. as Co-Syndication Agents (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 10, 2019).
10.3	Amendment No. 1 to the Amended and Restated Credit Agreement, dated as of May 24, 2019, among the Company, the various financial institutions party thereto and Nordea Bank ABP, as administrative agent*
31.1	Certification of the Chairman and Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*
32.1	Certifications of the Chairman and Chief Executive Officer and the Chief Financial Officer pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code**

*	Filed herewith
**	Furnished herewith

Interactive Data File

101                         The following financial statements of Royal Caribbean Cruises Ltd. for the period ended June 30, 2019, formatted in iXBRL (Inline eXtensible Business Reporting Language) are filed herewith:

(i)   the Consolidated Statements of Comprehensive Income (Loss) (Unaudited) for the quarter and six months ended June 30, 2019 and 2018;

(ii) the Consolidated Balance Sheets at June 30, 2019 (Unaudited) and December 31, 2018;

(iii) the Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 2019 and 2018;

(iv)  the Consolidated Statements of Shareholders' Equity (Unaudited) for the the quarter and six months ended June 30, 2019 and 2018; and

(v)     the Notes to the Consolidated Financial Statements, tagged in summary and detail.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ROYAL CARIBBEAN CRUISES LTD.
	(Registrant)
	/s/ JASON T. LIBERTY
	Jason T. Liberty
	Executive Vice President, Chief Financial Officer
July 25, 2019	(Principal Financial Officer and duly authorized signatory)

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EX-10.3

EXHIBIT 10.3

EXECUTION COPY

AMENDMENT NO. 1 TO THE AMENDED AND RESTATED CREDIT AGREEMENT

This AMENDMENT NO. 1 TO THE CREDIT AGREEMENT (this “Amendment”), dated as of May 24, 2019, is among ROYAL CARIBBEAN CRUISES LTD., a Liberian corporation (the “Borrower”), the various financial institutions party hereto (collectively, the “Lender Parties”) and NORDEA BANK ABP, NEW YORK BRANCH (as successor to Nordea Bank AB (publ), New York Branch), as administrative agent (the “Administrative Agent”) for the Lender Parties.

PRELIMINARY STATEMENTS

(1)    The Borrower, the various financial institutions party thereto and the Administrative Agent are parties to a Credit Agreement, as amended and restated as of August 23, 2013, as further amended as of July 10, 2015 and as further amended and restated as of October 12, 2017 (such Credit Agreement as in effect immediately prior to giving effect to this Amendment, the “Credit Agreement”); and

(2)    The Borrower, the Lender Parties and the Administrative Agent have agreed to amend the Credit Agreement as hereinafter set forth herein.

NOW, THEREFORE, the parties hereto hereby agree as follows:

SECTION 1. Amendments to the Credit Agreement. The Borrower, the Administrative Agent and the Lender Parties agree that the Credit Agreement is, subject to the satisfaction of the conditions precedent set forth in Section 2, hereby amended as follows.

(a) The definitions of “Applicable Margin” and Applicable Percentage” in Section 1.1 are restated in full to read as follows:

“Applicable Margin” means as of any date, a percentage per annum determined by reference to the Senior Debt Rating in effect on such date as set forth below:

Senior Debt Rating S&P/Moody’s	Applicable Margin for Base Rate Advances	Applicable Margin for LIBO Rate Advances and Swing Line Advances
Level 1 A- or A3 (or higher)	0.000%	0.795%
Level 2 BBB+ or Baa1	0.000%	0.900%
Level 3 BBB or Baa2	0.000%	1.000%
Level 4 BBB- or Baa3	0.100%	1.100%
Level 5 BB+ or Ba1 (or lower)	0.300%	1.300%

“Applicable Percentage” means, as of any date a percentage per annum determined by reference to the Senior Debt Rating in effect on such date as set forth below:

NYDOCS02/1131965         Royal Caribbean – Enabling Amendment

Senior Debt Rating S&P/Moody’s	Applicable Percentage
Level 1 A- or A3 (or higher)	0.080%
Level 2 BBB+ or Baa1	0.100%
Level 3 BBB or Baa2	0.125%
Level 4 BBB- or Baa3	0.150%
Level 5 BB+ or Ba1 (or lower)	0.200%

(b) Clause (c)(i) of the definition of “Base Rate” in Section 1.1 is restated in full to read as follows:

(i) the rate per annum appearing on Reuters LIBOR01 Page (or any successor page) as the London interbank offered rate for deposits in Dollars (“LIBOR”), at approximately 11:00 A.M. (London time) on such date or

(c) Section 1.1 is amended by including the following terms in appropriate alphabetical order:

“LIBOR” has the meaning specified in the definition of Base Rate.

“LIBOR Screen Rate” means the LIBOR quote on the applicable screen page the Administrative Agent reasonably designates to determine LIBOR (or such other commercially available source providing such quotations as may be reasonably designated by the Administrative Agent from time to time).

“LIBOR Successor Rate” has the meaning specified in Section 2.8(c).

“LIBOR Successor Rate Conforming Changes” has the meaning specified in Section 2.8(c).

“Scheduled Unavailability Date” has the meaning specified in Section 2.8(c).

(d) Section 1.4 is amended by restating the last sentence thereof in full to read as follows:

Notwithstanding the foregoing, all obligations of any person that are or would be characterized as operating lease obligations in accordance with GAAP as in effect on December 31, 2018 (whether or not such operating lease obligations were in effect on such date) shall continue to be accounted for as operating lease obligations for purposes of this Agreement regardless of any change in GAAP following December 31, 2018 that would otherwise require such obligations to be recharacterized (on a prospective or retroactive basis or otherwise) as capitalized leases; provided that, for clarification purposes, operating leases recorded as liabilities on the balance sheet due to a change in accounting treatment, or otherwise, shall for all purposes not be treated as Indebtedness, Capital Lease Obligations or Capitalized Lease Liabilities.

NYDOCS02/1131965    Royal Caribbean – Enabling Amendment

(e) Section 2.8 is amended by including the following clause (c), which shall read as follows:

(c)    Notwithstanding anything to the contrary in this Agreement or any other Loan Documents, if the Administrative Agent determines (which determination shall be conclusive absent manifest error), or the Borrower or Required Lenders notify the Administrative Agent (with, in the case of the Required Lenders, a copy to Borrower) that the Borrower or Required Lenders (as applicable) have determined, that:

(i) adequate and reasonable means do not exist for ascertaining LIBOR for any requested Interest Period, including, without limitation, because the LIBOR Screen Rate is not available or published on a current basis and such circumstances are unlikely to be temporary; or

(ii) the administrator of the LIBOR Screen Rate or a governmental authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which LIBOR or the LIBOR Screen Rate shall no longer be made available, or used for determining the interest rate of loans (such specific date, the “Scheduled Unavailability Date”), or

(iii) syndicated loans currently being executed, or that include language similar to that contained in this Section 2.8(c), are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace LIBOR,

then, reasonably promptly after such determination by the Administrative Agent or receipt by the Administrative Agent of such notice, as applicable, the Administrative Agent and the Borrower may amend this Agreement to replace LIBOR with an alternate benchmark rate (including any mathematical or other adjustments to the benchmark (if any) incorporated therein), giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated syndicated credit facilities for such alternative benchmarks (any such proposed rate, a “LIBOR Successor Rate”), together with any proposed LIBOR Successor Rate Conforming Changes (as defined below) and any such amendment shall become effective at 5:00 P.M. (New York City time) on the fifth Business Day after the Administrative Agent shall have posted such proposed amendment to all Lenders and the Borrower unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Administrative Agent written notice that such Required Lenders do not accept such amendment. Such LIBOR Successor Rate shall be applied in a manner consistent with market practice; provided that to the extent such market practice is not administratively feasible for the Administrative Agent, such LIBOR Successor Rate shall be applied in a manner as otherwise reasonably determined by the Administrative Agent.

If no LIBOR Successor Rate has been determined and the circumstances under clause (i) above exist or the Scheduled Unavailability Date has occurred (as applicable), the Administrative Agent will promptly so notify the Borrower and each Lender.  Thereafter, (x) the obligation of the Lenders to make or maintain LIBO Rate Advances shall be suspended, (to the extent of the affected LIBO Rate Advances or Interest Periods), and (y) clause (c) of the definition of “Base Rate” in Section 1.1 shall no longer be utilized in determining the Base Rate.  Upon receipt of such notice,

NYDOCS02/1131965    Royal Caribbean – Enabling Amendment

the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of LIBO Rate Advances (to the extent of the affected LIBO Rate Advances or Interest Periods) or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Advances (subject to the foregoing clause (y)) in the amount specified therein.

Notwithstanding anything else herein, any definition of LIBOR Successor Rate shall provide that in no event shall such LIBOR Successor Rate be less than zero for purposes of this Agreement.

For purposes hereof, “LIBOR Successor Rate Conforming Changes” means, with respect to any proposed LIBOR Successor Rate, any conforming changes to the definition of Base Rate, Interest Period, timing and frequency of determining rates and making payments of interest and other administrative matters as may be appropriate, in the discretion of the Administrative Agent in consultation with the Borrower, to reflect the adoption of such LIBOR Successor Rate and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent determines that adoption of any portion of such market practice is not administratively feasible or that no market practice for the administration of such LIBOR Successor Rate exists, in such other manner of administration as the Administrative Agent determines is reasonably necessary in connection with the administration of this Agreement).

(f) Section 6.2.2 is amended by including the following clause (e), which shall read as follows:

(e)    Indebtedness of Silversea Cruise Holding Ltd. and its subsidiaries (“Silversea”) outstanding on May 24, 2019 and identified in Item 6.2.2 of the Disclosure Schedule.

(g) Section 6.2.3 is amended by including the following clause (t), which shall read as follows:

(t)    Liens on any property of Silversea in existence as of May 24, 2019 and identified in Item 6.2.3 of the Disclosure Schedule.

(h) The Disclosure Schedule is restated in full in the form attached to this Amendment as Exhibit A.

SECTION 2. Conditions of Amendment Effectiveness. This Amendment shall become effective as of the date first above written (the “Amendment Effective Date”) when, and only when, the Administrative Agent shall have received counterparts of this Amendment executed by the Borrower and all Lender Parties or, as to any of the Lender Parties, advice satisfactory to the Administrative Agent that such Lender Party has executed this Amendment. This Amendment is subject to the provisions of Section 11.1 of the Credit Agreement.

SECTION 3.  Representation and Warranty of the Borrower. To induce the Lender Parties to enter into this Amendment, the Borrower represents and warrants that, as of the Amendment Effective Date:

NYDOCS02/1131965    Royal Caribbean – Enabling Amendment

(a)    The representations and warranties contained in Article V of the Credit Agreement are true and correct in all material respects except for those representations and warranties that are qualified by materiality or Material Adverse Effect, which shall be true and correct, and

(b)    No Default and no Prepayment Event and no event which (with notice or lapse of time or both) would become a Prepayment Event has occurred and is continuing.

SECTION 4. Reference to and Effect on the Credit Agreement and the Notes. (a) On and after the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the Notes to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby.

(b)The Credit Agreement, as specifically amended by this Amendment, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed.

(c)The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender Party or the Administrative Agent under the Credit Agreement, nor constitute a waiver of any provision thereof.

SECTION 5. Costs and Expenses. The Borrower agrees to pay on demand all reasonable and documented out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation, execution, delivery and administration, modification and amendment of this Amendment and the other documents to be delivered hereunder (including the reasonable and documented fees and expenses of one counsel for the Administrative Agent and the Lender Parties with respect hereto and thereto; it being understood that the foregoing shall be limited to the reasonable and documented fees and expenses of Shearman & Sterling LLP) in accordance with the terms of Section 11.3 of the Credit Agreement.

SECTION 6. Execution in Counterparts. This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopier or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Amendment.

SECTION 7. Governing Law. This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.

SECTION 8. Defined Terms. Capitalized terms not otherwise defined in the Amendment shall have the same meanings as specified in the Credit Agreement.

[Remainder of page intentionally left blank.]

NYDOCS02/1131965    Royal Caribbean – Enabling Amendment

EXHIBIT 10.3

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

ROYAL CARIBBEAN CRUISES LTD.

By /s/ Antje M. Gibson
Name: Antje M. Gibson
Title: Vice President, Treasurer

Accepted and Agreed as of the date first above written:

NORDEA BANK ABP, NEW YORK BRANCH
as Administrative Agent and Lender

By /s/ Martin Lunder
Name: Martin Lunder
Title: Managing Director

By /s/ Lynn Sauro
Name: Lynn Sauro
Title: Director

CITIBANK, N.A.

By /s/ Alvaro De Velasco
Name: Alvaro De Velasco
Title: Vice President of Citibank, N.A.

BANCO BILBAO VIZCAYA ARGENTARIA, S.A. NEW YORK BRANCH

By /s/ Veronica Incera
Name: Veronica Incera
Title: Head of Global Client Coverage NY - CIB

By /s/ Miriam Trautmann
Name: Miriam Trautmann
Title: Senior Vice President

DNB CAPITAL LLC

By /s/ Sybille Andaur
Name: Sybille Andaur
Title: First Vice President

By /s/ Cathleen Buckley
Name: Cathleen Buckley
Title: Senior Vice President

FIFTH THIRD BANK

By /s/ Richard Arendale
Name: Richard Arendale
Title: Managing Director

HSBC BANK USA, NATIONAL ASSOCIATION

By /s/ Rafael De Paoli
Name: Rafael De Paoli
Title: Managing Director

BANK OF AMERICA, N.A.

By /s/ Brian D. Corum
Name: Brian D. Corum
Title: Managing Director

MIZUHO BANK, LTD.

By /s/ Tracy Rahn
Name: Tracy Rahn
Title: Authorized Signatory

SUNTRUST BANK

By /s/ Jonathan Hart
Name: Jonathan Hart
Title: Vice President

THE BANK OF NOVA SCOTIA

By /s/ Michelle C. Phillips
Name: Michelle C. Phillips
Title: Managing Director

BNP PARIBAS

By /s/ Richard Pace
Name: Richard Pace
Title: Managing Director

By /s/ Melissa Dyki
Name: Melissa Dyki
Title: Director

INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED NEW YORK BRANCH

By /s/ Kan Chen Name: Kan Chen Title: Director By /s/ Gang Duan Name: Gang Duan Title: Executive Director

JPMORGAN CHASE BANK, N.A.

By /s/ Nadeige Dang
Name: Nadeige Dang
Title: Executive Director

SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)

By /s/ Peder Garmefelt
Name: Peder Garmefelt
Title: Head of Shipping Finance, London

By /s/ Malcolm Stonehouse
Name: Malcolm Stonehouse
Title: Client Executive

SUMITOMO MITSUI BANKING CORPORATION

By /s/ Michael Maguire
Name: Michael Maguire
Title: Executive Director

MUFG BANK. LTD. (formerly known as The Bank Of Tokyo-Mitsubishi UFJ, Ltd.)

By /s/ Brett A. Parker
Name: Brett A. Parker
Title: Vice President

SOCIÉTÉ GÉNÉRALE

By /s/ Shelley Yu
Name: Shelley Yu
Title: Director

BANCO SANTANDER, S.A.

By /s/ Lucas Videla
Name: Lucas Videla
Title: Executive Director

By /s/ Pablo Tarrio
Name: Pablo Tarrio
Title: Attorney

U.S. BANK NATIONAL ASSOCIATION

By /s/ Rodney J. Winters
Name: Rodney J. Winters
Title: Vice President

WELLS FARGO BANK, NATIONAL ASSOCIATION

By /s/ Denis Waltrich
Name: Denis Waltrich
Title: Director

GOLDMAN SACHS BANK USA

By /s/ Jamie Minieri
Name: Jamie Minieri
Title: Authorized Signatory

LANDESBANK HESSEN-THÜRINGEN GIROZENTRALE, NEW YORK BRANCH

By /s/ Christian Jagenberg Name: Christian Jagenberg Title: Executive Vice President By /s/ Gerhard A. Winklmeier Name: Gerhard A. Winklmeier Title: Senior Vice President

MORGAN STANLEY BANK, N.A.

By /s/ Emanuel Ma
Name: Emanuel Ma
Title: Authorized Signatory

PNC BANK, NATIONAL ASSOCIATION

By /s/ Ryan Garr
Name: Ryan Garr
Title: Vice President

EXHIBIT 10.3

Exhibit A

Disclosure Schedule[see attached]

1187142.01B-NYCSR04A - MSW

DISCLOSURE SCHEDULE

Item 5.9 (b): Vessels

Vessel	Owner	Flag
Sovereign	RCL Sovereign LLC	Malta
Empress of the Seas	Nordic Empress Shipping Inc.	Bahamas
Monarch	RCL Monarch LLC	Malta
Majesty of the Seas	Majesty of the Seas Inc.	Bahamas
Grandeur of the Seas	Grandeur of the Seas Inc.	Bahamas
Rhapsody of the Seas	Rhapsody of the Seas Inc.	Bahamas
Enchantment of the Seas	Enchantment of the Seas Inc.	Bahamas
Vision of the Seas	Vision of the Seas Inc.	Bahamas
Voyager of the Seas	Voyager of the Seas Inc.	Bahamas
Horizon	RCL Horizon LLC	Malta
Zenith	RCL Zenith LLC	Malta
Mariner of the Seas	Mariner of the Seas Inc.	Bahamas
Celebrity Millennium	Millennium Inc.	Malta
Explorer of the Seas	Explorer of the Seas Inc.	Bahamas
Celebrity Infinity	Infinity Inc.	Malta
Radiance of the Seas	Radiance of the Seas Inc.	Bahamas
Celebrity Summit	Summit Inc.	Malta
Adventure of the Seas	Adventure of the Seas Inc.	Bahamas
Navigator of the Seas	Navigator of the Seas Inc.	Bahamas
Celebrity Constellation	Constellation Inc.	Malta
Serenade of the Seas	Serenade of the Seas Inc.	Bahamas
Jewel of the Seas	Jewel of the Seas Inc.	Bahamas
Celebrity Xpedition	Islas Galapagos Turismo y Vapores CA	Ecuador
Freedom of the Seas	Freedom of the Seas Inc.	Bahamas
Azamara Journey	Azamara Journey Inc.	Malta
Azamara Quest	Azamara Quest Inc.	Malta
Liberty of the Seas	Liberty of the Seas Inc.	Bahamas
Independence of the Seas	Independence of the Seas Inc.	Bahamas
Celebrity Solstice	Celebrity Solstice Inc.	Malta
Celebrity Equinox	Celebrity Equinox Inc.	Malta

1187142.01B-NYCSR04A - MSW

Vessel	Owner	Flag
Oasis of the Seas	Oasis of the Seas Inc.	Bahamas
Celebrity Eclipse	Celebrity Eclipse Inc.	Malta
Allure of the Seas	Allure of the Seas Inc.	Bahamas
Celebrity Silhouette	Celebrity Silhouette Inc.	Malta
Celebrity Reflection	Celebrity Reflection Inc.	Malta
Quantum of the Seas	Quantum of the Seas Inc.	Bahamas
Brilliance of the Seas	Brilliance of the Seas Shipping Inc.	Bahamas
Anthem of the Seas	Anthem of the Seas Inc.	Bahamas
Celebrity Xperience	Oceanadventures S.A.	Ecuador
Celebrity Xploration	Oceanadventures S.A.	Ecuador
Ovation of the Seas	Ovation of the Seas Inc.	Bahamas
Harmony of the Seas	Harmony of the Seas Inc.	Bahamas
Symphony of the Seas	Symphony of the Seas Inc.	Bahamas
Celebrity Edge	Celebrity Edge Inc.	Malta
Azamara Pursuit	Azamara Pursuit Inc.	Malta
Silver Cloud	Silver Cloud Shipping Co. Ltd.	Bahamas
Silver Wind	Silver Wind Shipping Ltd.	Bahamas
Silver Shadow	Silver Shadow Shipping Co. Ltd.	Bahamas
Silver Spirit	Silver Spirit Shipping Co. Ltd.	Bahamas
Silver Muse	Silver Muse Shipping Co. Ltd.	Bahamas
Silver Galapagos	Conodros CL	Ecuador

Item 5.10: Existing Principal Subsidiaries

Name of the Subsidiary	Jurisdiction of Organization
Jewel of the Seas Inc.	Liberia
Majesty of the Seas Inc.	Liberia
Grandeur of the Seas Inc.	Liberia
Enchantment of the Seas Inc.	Liberia
Rhapsody of the Seas Inc.	Liberia
Vision of the Seas Inc.	Liberia

1187142.01B-NYCSR04A - MSW

Name of the Subsidiary	Jurisdiction of Organization
Voyager of the Seas Inc.	Liberia
Explorer of the Seas Inc.	Liberia
Radiance of the Seas Inc.	Liberia
Adventure of the Seas Inc.	Liberia
Navigator of the Seas Inc.	Liberia
Serenade of the Seas Inc.	Liberia
Mariner of the Seas Inc.	Liberia
Millennium Inc.	Liberia
Infinity Inc.	Liberia
Summit Inc.	Liberia
Constellation Inc.	Liberia
Islas Galápagos Turismo y Vapores C.A.	Ecuador
Freedom of the Seas Inc.	Liberia
Azamara Journey Inc.	Liberia
Azamara Quest Inc.	Liberia
RCL Zenith LLC	Liberia
Nordic Empress Shipping Inc.	Liberia
Liberty of the Seas Inc.	Liberia
Independence of the Seas Inc.	Liberia
Celebrity Solstice Inc.	Liberia
Oasis of the Seas Inc.	Liberia
Celebrity Eclipse Inc.	Liberia
Celebrity Equinox Inc.	Liberia
RCL Horizon LLC	Liberia
RCL Sovereign LLC	Liberia
Allure of the Seas Inc.	Liberia
Celebrity Silhouette Inc.	Liberia
Celebrity Reflection Inc.	Liberia
RCL Monarch LLC	Liberia
Quantum of the Seas Inc.	Liberia
Brilliance of the Seas Shipping Inc.	Liberia
Anthem of the Seas Inc.	Liberia
Oceanadventures S.A.	Ecuador

1187142.01B-NYCSR04A - MSW

Name of the Subsidiary	Jurisdiction of Organization
Ovation of the Seas Inc.	Liberia
Harmony of the Seas Inc.	Liberia
Symphony of the Seas Inc.	Liberia
Celebrity Edge Inc.	Liberia
Azamara Pursuit Inc.	Liberia
Silver Cloud Shipping Co. Ltd.	Bahamas
Silver Wind Shipping Ltd.	Bahamas
Silver Shadow Shipping Co. Ltd.	Bahamas
Silver Spirit Shipping Co. Ltd.	Bahamas
Silver Muse Shipping Co. Ltd.	Bahamas
Conodros CL	Ecuador

Item 6.2.2: Existing Indebtedness of Silversea

(a)The obligations of the Borrower or its Subsidiaries in connection with those certain Bareboat Charterparties with respect to (i) the vessel SILVER EXPLORER dated July 22, 2011 between Silversea Cruises Ltd. and Hammonia Adventure and Cruise Shipping Company Ltd. and (ii) the vessel SILVER WHISPER dated March 15, 2012 between Whisper S.p.A. and various lessors, and the replacement, extension, renewal or amendment of each of the foregoing without increase in the amount or change in any direct or contingent obligor of such obligations, (the “Existing Silversea Leases”);

(b)Indebtedness arising pursuant to that certain Bareboat Charterparty dated May 17, 2018 by and between Hai Xing 1702 Limited and Silversea New Build Eight Ltd., as such agreement may be amended from time to time; and

(c)Indebtedness secured by Liens of the type described in Item 6.2.3 of the Disclosure Schedule.

Item 6.2.3: Existing Liens of Silversea

(a)Liens securing the $620 million in principal amount of 7.25% senior secured notes due 2025 issued by Silversea Cruise Finance Ltd. pursuant that that Indenture dated as of January 30, 2017;

(b)Liens on the vessels SILVER WHISPER and SILVER EXPLORER existing as of the Effective Date and securing the Existing Silversea Leases (and any Lien on such vessels securing any refinancing of the Existing Silversea Leases, so long as such Vessel was subject to a Lien securing the Indebtedness being refinanced immediately prior to such refinancing);

(c)Liens on the Vessel with Hull 6280 currently being built at Fincantieri S.p.A. and arising pursuant to that certain Bareboat Charterparty dated May 17, 2018 by and between Hai Xing 1702 Limited and Silversea New Build Eight Ltd., as such agreement may be amended from time to time (and any Lien on such vessel securing any refinancing of such bareboat charterparty); and

1187142.01B-NYCSR04A - MSW

(d)Liens securing Indebtedness of the type described in Item 6.2.2 of the Disclosure Schedule.

1187142.01B-NYCSR04A - MSW

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Richard D. Fain, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Royal Caribbean Cruises Ltd.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 25, 2019
	/s/	RICHARD D. FAIN
		Richard D. Fain
		Chairman and
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Jason T. Liberty, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Royal Caribbean Cruises Ltd.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 25, 2019
	/s/	JASON T. LIBERTY
		Jason T. Liberty
		Executive Vice President, Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

Exhibit 32.1

In connection with the quarterly report on Form 10-Q for the quarterly period ended June 30, 2019 as filed by Royal Caribbean Cruises Ltd. with the Securities and Exchange Commission on the date hereof (the “Report”), Richard D. Fain, Chairman and Chief Executive Officer, and Jason T. Liberty, Chief Financial Officer, each hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Royal Caribbean Cruises Ltd.

Date: July 25, 2019
	By:	/s/	RICHARD D. FAIN
			Richard D. Fain
			Chairman and
			Chief Executive Officer
			(Principal Executive Officer)
	By:	/s/	JASON T. LIBERTY
			Jason T. Liberty
			Executive Vice President, Chief Financial Officer
			(Principal Financial Officer)

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Jul. 18, 2019
Cover page.
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Central Index Key	0000884887
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2019
Entity File Number	1-11884
Entity Registrant Name	ROYAL CARIBBEAN CRUISES LTD
Entity Incorporation, State or Country Code	N0
Entity Tax Identification Number	98-0081645
Entity Address, Address Line One	1050 Caribbean Way
Entity Address, City or Town	Miami
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33132
City Area Code	305
Local Phone Number	539-6000
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	RCL
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		209,561,071

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Total revenues	$ 2,806,631	$ 2,337,605	$ 5,246,398	$ 4,365,361
Cruise operating expenses:
Total cruise operating expenses	1,544,504	1,314,411	2,958,208	2,490,430
Marketing, selling and administrative expenses	376,874	312,923	791,821	650,284
Depreciation and amortization expenses	311,600	253,376	603,885	493,606
Operating Income	573,653	456,895	892,484	731,041
Other income (expense):
Interest income	6,342	13,098	16,126	20,831
Interest expense, net of interest capitalized	(111,304)	(81,864)	(211,719)	(149,742)
Equity investment income	33,045	44,311	66,739	73,063
Other (expense) income	(21,781)	33,855	(26,869)	9,755
Total other income (expense)	(93,698)	9,400	(155,723)	(46,093)
Net Income	479,955	466,295	736,761	684,948
Less: Net Income attributable to noncontrolling interest	7,125	0	14,250	0
Net Income attributable to Royal Caribbean Cruises Ltd.	$ 472,830	$ 466,295	$ 722,511	$ 684,948
Earnings per Share:
Basic (in dollars per share)	$ 2.26	$ 2.20	$ 3.45	$ 3.23
Diluted (in dollars per share)	$ 2.25	$ 2.19	$ 3.44	$ 3.21
Weighted-Average Shares Outstanding:
Basic (in shares)	209,531	211,673	209,427	212,139
Diluted (in shares)	210,052	212,509	209,962	213,079
Other comprehensive income (loss):
Foreign currency translation adjustments	$ 7,263	$ (11,521)	$ 7,827	$ (10,361)
Change in defined benefit plans	(9,722)	(1,964)	(10,375)	5,796
Loss on cash flow derivative hedges	(71,734)	(68,900)	(22,891)	73,630
Total other comprehensive loss	(74,193)	(82,385)	(25,439)	69,065
Comprehensive Income	405,762	383,910	711,322	754,013
Less: Comprehensive Income attributable to noncontrolling interest	7,125	0	14,250	0
Comprehensive Income attributable to Royal Caribbean Cruises Ltd.	398,637	383,910	697,072	754,013
Passenger ticket revenues
Total revenues	2,017,836	1,672,570	3,727,820	3,098,214
Onboard and other revenues
Total revenues	788,795	665,035	1,518,578	1,267,147
Cruise operating expenses:
Total cruise operating expenses	174,429	142,240	309,599	241,777
Commissions, transportation and other
Cruise operating expenses:
Total cruise operating expenses	426,934	358,305	790,089	648,914
Payroll and related
Cruise operating expenses:
Total cruise operating expenses	265,569	226,315	535,101	453,471
Food
Cruise operating expenses:
Total cruise operating expenses	146,847	128,383	286,381	248,025
Fuel
Cruise operating expenses:
Total cruise operating expenses	181,924	172,309	342,095	332,650
Other operating
Cruise operating expenses:
Total cruise operating expenses	$ 348,801	$ 286,859	$ 694,943	$ 565,593

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CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 235,001	$ 287,852
Trade and other receivables, net	340,921	324,507
Inventories	168,009	153,573
Prepaid expenses and other assets	500,477	456,547
Derivative financial instruments	38,559	19,565
Total current assets	1,282,967	1,242,044
Property and equipment, net	24,855,174	23,466,163
Operating lease right-of-use assets	720,854
Goodwill	1,373,124	1,378,353
Other assets	1,576,843	1,611,710
Total assets	29,808,962	27,698,270
Current liabilities
Current portion of debt	946,227	1,646,841
Commercial paper	1,046,587	775,488
Current portion of operating lease liabilities	92,523
Accounts payable	531,788	488,212
Accrued interest	75,313	74,550
Accrued expenses and other liabilities	946,530	899,761
Derivative financial instruments	37,718	78,476
Customer deposits	3,909,454	3,148,837
Total current liabilities	7,586,140	7,112,165
Long-term debt	8,922,011	8,355,370
Long-term operating lease liabilities	644,088
Other long-term liabilities	561,550	583,254
Total liabilities	17,713,789	16,050,789
Commitments and contingencies (Note 11)
Redeemable noncontrolling interest	556,770	542,020
Shareholders’ equity
Preferred stock ($0.01 par value; 20,000,000 shares authorized; none outstanding)	0	0
Common stock ($0.01 par value; 500,000,000 shares authorized; 236,405,705 and 235,847,683 shares issued, June 30, 2019 and December 31, 2018, respectively)	2,364	2,358
Paid-in capital	3,454,831	3,420,900
Retained earnings	10,692,890	10,263,282
Accumulated other comprehensive loss	(653,173)	(627,734)
Treasury stock (26,887,147 and 26,830,765 common shares at cost, at June 30, 2019 and December 31, 2018, respectively)	(1,958,509)	(1,953,345)
Total shareholders’ equity	11,538,403	11,105,461
Total liabilities, redeemable noncontrolling interest and shareholders’ equity	$ 29,808,962	$ 27,698,270

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CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	20,000,000	20,000,000
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	236,405,705	235,847,683
Treasury stock, common shares (in shares)	26,887,147	26,830,765

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands		6 Months Ended
		Jun. 30, 2019	Jun. 30, 2018
Operating Activities
Net income		$ 736,761	$ 684,948
Adjustments:
Depreciation and amortization		603,885	493,606
Impairment losses		0	33,651
Net deferred income tax expense (benefit)		3,794	(893)
(Gain) loss on derivative instruments not designated as hedges		(713)	29,750
Share-based compensation expense		41,974	31,819
Equity investment income		(66,739)	(73,063)
Amortization of debt issuance costs		20,467	16,283
Loss on extinguishment of debt		6,326	0
Change in fair value of contingent consideration		10,700	0
Gain on sale of unconsolidated affiliate		0	(13,680)
Recognition of deferred gain		0	(21,794)
Changes in operating assets and liabilities:
(Increase) decrease in trade and other receivables, net		(14,262)	16,162
Increase in inventories		(14,436)	(10,485)
Increase in prepaid expenses and other assets		(51,443)	(152,626)
Increase in accounts payable		43,594	58,842
Increase in accrued interest		763	13,706
Increase (decrease) in accrued expenses and other liabilities		34,056	(71,254)
Increase in customer deposits		760,435	740,420
Dividends received from unconsolidated affiliates	[1]	80,572	158,942
Other, net		(207)	(2,748)
Net cash provided by operating activities		2,195,527	1,931,586
Investing Activities
Purchases of property and equipment		(1,866,141)	(2,212,880)
Cash received on settlement of derivative financial instruments		6,204	69,195
Cash paid on settlement of derivative financial instruments		(55,758)	(34,898)
Investments in and loans to unconsolidated affiliates		(3,046)	0
Cash received on loans to unconsolidated affiliates		19,509	37,607
Proceeds from the sale of unconsolidated affiliate		0	13,215
Other, net		(173)	(13,220)
Net cash used in investing activities		(1,899,405)	(2,140,981)
Financing Activities
Debt proceeds		2,749,564	3,929,322
Debt issuance costs		(35,454)	(48,535)
Repayments of debt		(3,008,893)	(3,029,944)
Proceeds from issuance of commercial paper notes		13,335,536	0
Repayments of commercial paper notes		(13,080,788)	0
Purchases of treasury stock		0	(369,476)
Dividends paid		(293,197)	(254,645)
Proceeds from exercise of common stock options		265	4,062
Other, net		(15,930)	(16,827)
Net cash (used in) provided by financing activities		(348,897)	213,957
Effect of exchange rate changes on cash		(76)	(15,676)
Net decrease in cash and cash equivalents		(52,851)	(11,114)
Cash and cash equivalents at beginning of period		287,852	120,112
Cash and cash equivalents at end of period		235,001	108,998
Cash paid during the period for:
Interest, net of amount capitalized		$ 141,961	$ 114,061

[1] For the quarter ended June 30, 2019, TUI Cruises paid us a dividend of €40.0 million, or approximately $45.6 million, based on the exchange rate at the time of the transaction. For the six months ended June 30, 2019, TUI Cruises paid us dividends totaling €90.0 million, or approximately $101.8 million, based on the exchange rates at the time of the transactions. The amounts included in the table above are net of tax withholdings.

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Treasury Stock
Beginning balance at Dec. 31, 2017	$ 10,702,303	$ 2,352	$ 3,390,117	$ 9,022,405	$ (334,265)	$ (1,378,306)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Activity related to employee stock plans	7,450	6	7,444
Common stock dividends	(254,093)			(254,093)
Changes related to cash flow derivative hedges	73,630				73,630
Change in defined benefit plans	5,796				5,796
Foreign currency translation adjustments	(10,361)				(10,361)
Net Income attributable to Royal Caribbean Cruises Ltd.	684,948			684,948
Purchases of treasury stock	(412,499)					(412,499)
Ending balance at Jun. 30, 2018	10,773,698	2,358	3,397,561	9,429,784	(265,200)	(1,790,805)
Beginning balance at Dec. 31, 2017	10,702,303	2,352	3,390,117	9,022,405	(334,265)	(1,378,306)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Purchases of treasury stock	(300,000)
Ending balance at Dec. 31, 2018	11,105,461	2,358	3,420,900	10,263,282	(627,734)	(1,953,345)
Beginning balance at Mar. 31, 2018	10,646,796	2,357	3,390,055	9,090,544	(182,815)	(1,653,345)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Activity related to employee stock plans	7,507	1	7,506
Common stock dividends	(127,055)			(127,055)
Changes related to cash flow derivative hedges	(68,900)				(68,900)
Change in defined benefit plans	(1,964)				(1,964)
Foreign currency translation adjustments	(11,521)				(11,521)
Net Income attributable to Royal Caribbean Cruises Ltd.	466,295			466,295
Purchases of treasury stock	(137,460)					(137,460)
Ending balance at Jun. 30, 2018	10,773,698	2,358	3,397,561	9,429,784	(265,200)	(1,790,805)
Beginning balance at Dec. 31, 2018	11,105,461	2,358	3,420,900	10,263,282	(627,734)	(1,953,345)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Activity related to employee stock plans	28,773	6	33,931			(5,164)
Common stock dividends	(292,903)			(292,903)
Changes related to cash flow derivative hedges	(22,891)				(22,891)
Change in defined benefit plans	(10,375)				(10,375)
Foreign currency translation adjustments	7,827				7,827
Net Income attributable to Royal Caribbean Cruises Ltd.	722,511			722,511
Ending balance at Jun. 30, 2019	11,538,403	2,364	3,454,831	10,692,890	(653,173)	(1,958,509)
Beginning balance at Mar. 31, 2019	11,269,070	2,364	3,432,419	10,366,612	(578,980)	(1,953,345)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Activity related to employee stock plans	17,248		22,412			(5,164)
Common stock dividends	(146,552)			(146,552)
Changes related to cash flow derivative hedges	(71,734)				(71,734)
Change in defined benefit plans	(9,722)				(9,722)
Foreign currency translation adjustments	7,263				7,263
Net Income attributable to Royal Caribbean Cruises Ltd.	472,830			472,830
Ending balance at Jun. 30, 2019	$ 11,538,403	$ 2,364	$ 3,454,831	$ 10,692,890	$ (653,173)	$ (1,958,509)

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended						6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Jun. 30, 2019	Jun. 30, 2018
Statement of Stockholders' Equity [Abstract]
Common stock dividends declared (in dollars per share)	$ 0.7	$ 0.70	$ 0.70	$ 0.6	$ 0.60	$ 0.60	$ 1.40	$ 1.20

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General

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

General

General

Description of Business 

We are a global cruise company. As of June 30, 2019, we control and operate four global cruise brands: Royal Caribbean International, Celebrity Cruises, Azamara Club Cruises and Silversea Cruises (collectively, our "Global Brands").

We also own a 50% joint venture interest in the German brand TUI Cruises and a 49% interest in the Spanish brand Pullmantur (collectively, our "Partner Brands"). We account for our investments in our Partner Brands under the equity method of accounting.

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 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, 2018 for a discussion of our significant accounting policies.

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 7. Other Assets for further information regarding our variable interest entities. We consolidate the operating results of Silversea Cruises on a three-month reporting lag to allow for more timely preparation of our consolidated financial statements. No material events or other transactions involving Silversea Cruises have occurred from March 31, 2019 through June 30, 2019 that would require further disclosure or adjustment to our consolidated financial statements as of and for the quarter ended June 30, 2019. 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.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Adoption of Accounting Pronouncements

Leases

On January 1, 2019, we adopted the guidance codified in Accounting Standard Codification ("ASC") 842, Leases ("ASC 842") using the modified retrospective approach and elected the optional transition method, which allows entities to initially apply the standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Upon adoption, we applied the guidance to all existing leases.

For leases with a term greater than 12 months, the new guidance requires the lease rights and obligations arising from the leasing arrangements, including operating leases, to be recognized as assets and liabilities on the balance sheet. Upon adoption of the new guidance, the most significant impact was the recognition of right-of-use assets and lease liabilities relating to operating leases in the amounts of $801.8 million and $820.5 million, respectively, reported within Operating lease right-of-use assets and Long-term operating lease liabilities, respectively, with the current portion of the liability reported within Current portion of operating lease liabilities, in our consolidated balance sheet as of January 1, 2019. Accounting for finance leases remained substantially unchanged and continues to be reported within Property and equipment, net and Long-term debt, with the current portion of the debt reported within Current portion of debt, in our consolidated balance sheets. There was no cumulative effect of applying the new standard and accordingly there was no adjustment to our retained earnings upon adoption. The comparative information presented has not been restated and continues to be reported under the accounting standards in effect for those periods. For further information on leases, refer to Note 9. Leases.

This guidance did not have a material impact to our consolidated statements of comprehensive income (loss), consolidated statements of cash flows and our debt-covenants calculations under our current agreements.

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Business Combination

6 Months Ended

Jun. 30, 2019

Business Combinations [Abstract]

Business Combination

Business Combination

On July 31, 2018, we acquired a 66.7% equity stake in Silversea Cruise Holding Ltd. ("Silversea Cruises"), an ultra-luxury and expedition cruise line, from Heritage Cruise Holding Ltd. ("HCH"), previously known as Silversea Cruises Group Ltd. Silversea Cruises enhances our presence in the ultra-luxury and expedition markets and provides us with an opportunity to drive long-term capacity growth in these markets.

The purchase price consisted of $1.02 billion in cash, net of assumed liabilities, and contingent consideration that can range from zero up to a maximum of approximately 472,000 shares of our common stock, and is payable upon achievement of certain 2019-2020 performance metrics by Silversea Cruises. The fair value of the contingent consideration at the acquisition date was $44.0 million and is recorded within Other long-term liabilities in our consolidated balance sheets. Changes in the fair value of the contingent consideration are recorded in our results of operations, if any, in the period of the change. Refer to Note 14. Fair Value Measurements and Derivative Instruments for further information on the valuation of the contingent consideration.

To finance a portion of the purchase price, we drew in full on a $700 million unsecured credit agreement and the remainder of the transaction consideration was financed through the use of our revolving credit facilities.

We have accounted for this transaction under the provisions of ASC 805, Business Combinations. The purchase price for the Silversea Cruises acquisition was allocated based on estimates of the fair value of assets acquired and liabilities assumed at the acquisition date, with the excess allocated to goodwill. Goodwill is not deductible for tax purposes and consisted primarily of the opportunity to expand our cruise operations in strategic growth areas.

For reporting purposes, we include Silversea Cruises’ results of operations on a three-month reporting lag from January 1, 2019 through March 31, 2019 for the quarter ended June 30, 2019 and from October 1, 2018 through March 31, 2019 for the six months ended June 30, 2019. We have included Silversea Cruises' balance sheet as of March 31, 2019 in our consolidated balance sheet as of June 30, 2019. Refer to Note 1. General for further information on this three-month reporting lag.

Our purchase price allocation was final as of March 31, 2019. There were no material measurement period adjustments recorded during the six months ended June 30, 2019.

Pro-forma financial results relating to the Silversea Cruises acquisition are not presented, as this acquisition was not material to our consolidated results of operations.

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Intangible Assets

6 Months Ended

Jun. 30, 2019

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Intangible Assets

Intangible Assets

Intangible assets consist of finite and indefinite life assets and are reported within Other assets in our consolidated balance sheets.

The following is a summary of our intangible assets as of June 30, 2019 and December 31, 2018 (in thousands):

	June 30, 2019
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Finite-life intangible assets:
Customer relationships	$	97,400	$	4,329	$	93,071
Galapagos operating license	47,669		5,049		42,620
Other finite-life intangible assets	11,560		3,853		7,707
Total finite-life intangible assets	156,629		13,231		143,398
Indefinite-life intangible assets	351,725		—		351,725
Total intangible assets, net	$	508,354	$	13,231	$	495,123

	December 31, 2018
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Finite-life intangible assets:
Customer relationships	$	97,400	$	1,082	$	96,318
Galapagos operating license	47,669		4,206		43,463
Other finite-life intangible assets	11,560		963		10,597
Total finite-life intangible assets	156,629		6,251		150,378
Indefinite-life intangible assets	351,725		—		351,725
Total intangible assets, net	$	508,354	$	6,251	$	502,103

The estimated future amortization for finite-life intangible assets for each of the next five years is as follows (in thousands):

Year
Remainder of 2019	$	6,979
2020	$	12,995
2021	$	8,179
2022	$	8,179
2023	$	8,179
2024	$	8,179

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Revenues

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

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 satisfy this performance obligation and recognize revenue over the duration of each cruise, which generally range from two to 25 nights.

Passenger ticket revenues include charges to our guests for port costs that vary with passenger head counts. These type of port costs, along with port costs that do not vary by passenger head counts, are included in our operating expenses. The amounts of port costs charged to our guests and included within Passenger ticket revenues on a gross basis were $173.6 million and $151.4 million for the quarters ended June 30, 2019 and 2018, respectively, and $325.6 million and $288.1 million for the six months ended June 30, 2019 and 2018, 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 passengers during a cruise and recognize revenue at the time of transfer over the duration of the related cruise.

Disaggregated Revenues

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

	Quarter Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenues by itinerary
North America(1)	$	1,571,769	$	1,264,167	$	3,252,827	$	2,611,427
Asia/Pacific(2)	327,777		283,198		817,852		816,177
Europe(3)	594,712		597,399		602,694		597,399
Other regions(4)	196,504		101,631		359,009		178,816
Total revenues by itinerary	2,690,762		2,246,395		5,032,382		4,203,819
Other revenues(5)	115,869		91,210		214,016		161,542
Total revenues	$	2,806,631	$	2,337,605	$	5,246,398	$	4,365,361

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

(2) Includes Southeast Asia (e.g., Singapore, Thailand and the Philippines), East Asia (e.g., China and Japan), South Asia (e.g., India and Pakistan) and Oceania (e.g., Australia and Fiji Islands) regions.

(3) Includes European countries (e.g., Nordics, Germany, France, Italy, Spain and the United Kingdom).

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

(5) Includes revenues primarily related to cancellation fees, vacation protection insurance, pre- and post-cruise tours and fees for operating certain port facilities. Amounts also include revenues related to our bareboat charter, procurement and management related services we perform on behalf of our unconsolidated affiliates. Refer to Note 7. Other Assets for more information on our unconsolidated affiliates.

Passenger ticket revenues are attributed to geographic areas based on where the reservation originates. For the quarters ended June 30, 2019 and 2018, our guests were sourced from the following areas:

	Quarter Ended June 30,
	2019		2018
Passenger ticket revenues:
United States	67	%	63	%
United Kingdom	9	%	10	%
All other countries (1)	24	%	27	%

For the six months ended June 30, 2019 and 2018, our guests were sourced from the following areas:

	Six Months Ended June 30,
	2019		2018
Passenger ticket revenues:
United States	66	%	60	%
All other countries (1)	34	%	40	%

(1) No other individual country's revenue exceeded 10% for the quarters and six months ended June 30, 2019 and 2018.

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 during the duration of the cruise. ASC 606, Revenues from Contracts with Customers, defines a “contract liability” as an entity’s obligation to transfer goods or services to a customer for which the entity has received consideration from the customer. We do not consider customer deposits to be a contract liability until the customer no longer retains the unilateral right, resulting from the passage of time, to cancel such customer's reservation and receive a full refund. Customer deposits presented in our consolidated balance sheets include contract liabilities of $2.4 billion and $1.9 billion as of June 30, 2019 and December 31, 2018, respectively. Substantially all of our contract liabilities as of December 31, 2018 were recognized and reported within Total revenues in our consolidated statement of comprehensive income (loss) for the six months ended June 30, 2019.

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.

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, 2019 and December 31, 2018, our contract assets were $56.6 million and $57.8 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 agent commissions 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 agent commissions were $197.4 million and $153.5 million as of June 30, 2019 and December 31, 2018, respectively. Substantially all of our prepaid travel agent commissions at December 31, 2018 were expensed and reported within Commissions, transportation and other in our consolidated statements of comprehensive income (loss) for the six months ended June 30, 2019.

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Earnings Per Share

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

A reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share data):

	Quarter Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Net Income attributable to Royal Caribbean Cruises Ltd. for basic and diluted earnings per share	$	472,830	$	466,295	$	722,511	$	684,948
Weighted-average common shares outstanding	209,531		211,673		209,427		212,139
Dilutive effect of stock-based awards	521		836		535		940
Diluted weighted-average shares outstanding	210,052		212,509		209,962		213,079
Basic earnings per share	$	2.26	$	2.20	$	3.45	$	3.23
Diluted earnings per share	$	2.25	$	2.19	$	3.44	$	3.21

 

There were no antidilutive shares for the quarters and six months ended June 30, 2019 and 2018.

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Other Assets

6 Months Ended

Jun. 30, 2019

Other Assets [Abstract]

Other Assets

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 have determined that TUI Cruises GmbH, our 50%-owned joint venture, which operates the brand TUI Cruises, is a VIE. As of June 30, 2019, the net book value of our investment in TUI Cruises was $557.8 million, primarily consisting of $391.9 million in equity and a loan of €142.7 million, or approximately $162.5 million based on the exchange rate at June 30, 2019. As of December 31, 2018, the net book value of our investment in TUI Cruises was $578.1 million, primarily consisting of $403.0 million in equity and a loan of €150.6 million, or approximately $172.2 million based on the exchange rate at December 31, 2018. 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, our joint venture partner in TUI Cruises, and is secured by a first priority mortgage on the ship. The majority of these amounts were included within Other assets in our consolidated balance sheets.

In addition, we and TUI AG have each guaranteed the repayment by TUI Cruises of 50% of a bank loan. As of June 30, 2019, the outstanding principal amount of the loan was €31.7 million, or approximately $36.1 million based on the exchange rate at June 30, 2019. The loan amortizes quarterly and is currently secured by a first mortgage on Mein Schiff Herz. Based on current facts and circumstances, we do not believe potential obligations under our guarantee of this bank loan are probable. In addition to our guarantee of the bank loan, TUI Cruises 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 TUI Cruises below 37.55% through May 2031.

Our investment amount, outstanding term loan and the potential obligations under the bank loan guarantee are substantially our maximum exposure to loss in connection with our investment in TUI Cruises. We have determined that we are not the primary beneficiary of TUI Cruises. We believe that the power to direct the activities that most significantly impact TUI Cruises’ economic performance are shared between ourselves and TUI AG. All the significant operating and financial decisions of TUI Cruises require the consent of both parties, which we believe creates shared power over TUI Cruises. Accordingly, we do not consolidate this entity and account for this investment under the equity method of accounting.

In March 2009, we sold Celebrity Galaxy to TUI Cruises for €224.4 million, or $290.9 million, to serve as the original Mein Schiff 1. Due to the related party nature of this transaction, the gain on the sale of the ship of $35.9 million was deferred and being recognized over the remaining life of the ship, which was estimated to be 23 years. In April 2018, TUI Cruises sold the original Mein Schiff 1 and as a result we accelerated the recognition of the remaining balance of the deferred gain, which was $21.8 million. This amount is included within Other income (expense) in our consolidated statements of comprehensive income (loss) for the quarter and six months ended June 30, 2018.

We have determined that Pullmantur Holdings S.L. ("Pullmantur Holdings"), in which we have a 49% noncontrolling interest and Springwater Capital LLC has a 51% interest, is a VIE for which we are not the primary beneficiary, as we do not have the power to direct the activities that most significantly impact the entity's economic performance. Accordingly, we do not consolidate this entity and we account for this investment under the equity method of accounting. As of June 30, 2019 and December 31, 2018, our maximum exposure to loss in Pullmantur Holdings was $53.5 million and $58.5 million, respectively, consisting of loans and other receivables. These amounts were included within Trade and other receivables, net and Other assets in our consolidated balance sheets.

We have provided a non-revolving working capital facility to a Pullmantur Holdings subsidiary in the amount of up to €15.0 million or approximately $17.1 million based on the exchange rate at June 30, 2019. Proceeds of the facility, which were available to be drawn through December 2018, accrue interest at an interest rate of 6.5% per annum and are payable through 2022. An affiliate of Springwater Capital LLC has guaranteed repayment of 51% of the outstanding amounts under the facility. As of June 30, 2019, €12.0 million, or approximately $13.7 million, based on the exchange rate at June 30, 2019, was outstanding under this facility. As of December 31, 2018, €14.0 million, or approximately $16.0 million, based on the exchange rate at December 31, 2018, was outstanding under this facility.

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, ship upgrades and certain emergency repairs as may be required. During the quarter and six months ended June 30, 2019, we made payments of $4.8 million and $45.1 million, respectively, to Grand Bahama for ship repair and maintenance services. During the quarter and six months ended June 30, 2018, we made payments of $1.9 million and $24.3 million, respectively, to Grand Bahama for ship repair and maintenance services. 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 we account for this investment under the equity method of accounting. As of June 30, 2019, the net book value of our investment in Grand Bahama was $50.0 million, consisting of $36.7 million in equity and a loan of $13.3 million. As of December 31, 2018, the net book value of our investment in Grand Bahama was $56.1 million, consisting of $41.4 million in equity and a loan of $14.6 million. These amounts represent our maximum exposure to loss related to our investment in Grand Bahama. Our loan to Grand Bahama matures in March 2025 and bears interest at the lower of (i) LIBOR plus 3.50% and (ii) 5.50%. Interest payable on the

loan is due on a semi-annual basis. During the quarter and six months ended June 30, 2019, we received principal and interest payments of $1.1 million and $7.6 million, respectively. During the quarter and six months ended June 30, 2018, we received principal and interest payments of approximately $11.2 million and $14.2 million, respectively. The loan balance is included within Other assets in our consolidated balance sheets. The loan is currently accruing interest under the effective yield method.

During the quarter ended June 30, 2019, Grand Bahama experienced an incident involving one of its drydocks where Oasis of the Seas was undergoing maintenance.  The damage from the incident resulted in a write-off of the related drydock by Grand Bahama.  Our equity investment income for the quarter and six months ended June 30, 2019 reflects our equity share of the write-off. Grand Bahama's management is working with its insurance underwriter to determine coverage under their existing policies.

We monitor credit risk associated with the loan through our participation on Grand Bahama’s board of directors along with our review of Grand Bahama’s financial statements and projected cash flows. Based on this review, we believe the risk of loss associated with the outstanding loan is not probable as of June 30, 2019.

In March 2018, we and Ctrip.com International Ltd. ("Ctrip") announced the decision to end the Skysea Holding International Ltd. ("Skysea Holding") venture in which we have a 36% ownership interest. As a result, we reviewed the recoverability of our investment in Skysea Holding and determined that our investment, debt facility and other receivables due from the brand were impaired and recognized an impairment charge of $23.3 million, which was included within Other expense in our consolidated statement of comprehensive income (loss) for the six months ended June 30, 2018. The charge reflected a full impairment of our investment in Skysea Holding and other receivables due to us and reduced the debt facility and the related accrued interest due to us from Skysea Holding to its net realizable value. In December 2018, the Golden Era, the ship operated by SkySea Cruises, and owned by a wholly-owned subsidiary of Skysea Holding, was sold to an affiliate of TUI AG. Proceeds from the sale were distributed to Ctrip and us, which eliminated our net receivable balance due from Skysea Holding, resulting in no further impairment charges. As of June 30, 2019 and December 31, 2018, we do not have any material exposures to loss related to our investment in Skysea Holding.

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

	Quarter Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Share of equity income from investments	$	33,045	$	44,311	$	66,739	$	73,063
Dividends received (1)	$	38,137	$	121,024	$	80,572	$	158,942

(1) For the quarter ended June 30, 2019, TUI Cruises paid us a dividend of €40.0 million, or approximately $45.6 million, based on the exchange rate at the time of the transaction. For the six months ended June 30, 2019, TUI Cruises paid us dividends totaling €90.0 million, or approximately $101.8 million, based on the exchange rates at the time of the transactions. The amounts included in the table above are net of tax withholdings.

	As of June 30, 2019		As of December 31, 2018
Total notes receivable due from equity investments	$	193,334	$	201,979
Less-current portion(1)	23,651		19,075
Long-term portion(2)	$	169,683	$	182,904

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

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

We also provide ship management services to TUI Cruises GmbH, Pullmantur Holdings and Skysea Holding (which ceased cruising operations in September 2018). Additionally, we bareboat charter to Pullmantur Holdings the vessels currently operated by its brands, which were retained by us following the sale of our 51% interest in Pullmantur Holdings. We recorded the following as it relates to these services in our operating results within our consolidated statements of comprehensive income (loss) (in thousands):

	Quarter Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenues	$	11,975	$	14,157	$	23,857	$	28,230
Expenses	$	1,111	$	3,270	$	2,085	$	6,908

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Debt

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

Debt

Debt

In June 2018, we established a commercial paper program pursuant to which we may issue short-term unsecured notes from time to time in an aggregate amount of up to $1.2 billion. The interest rate for the commercial paper notes varies based on duration, market conditions and our credit ratings. The maturities of the commercial paper notes can vary, but cannot exceed 397 days from the date of issuance. We use the proceeds from our commercial paper notes for general corporate purposes. The commercial paper issued is backstopped by our revolving credit facilities. As of June 30, 2019, we had $1.0 billion of commercial paper notes outstanding with a weighted average interest rate of 2.93% and a weighted average maturity of approximately 40 days. As of December 31, 2018, we had $777.0 million of commercial paper notes outstanding with a weighted average interest rate of 3.19% and a weighted average maturity of approximately 23 days. In July 2019, our Board of Directors authorized an increase in the aggregate amount of commercial paper notes that we could issue under the program up to $2.9 billion.

In April 2019, we amended our $1.4 billion unsecured revolving credit facility due in 2020 to extend the termination date through April 2024, increase the facility size to $1.7 billion and reduce pricing. The interest rate and facility fee vary with our senior debt rating and are currently set at LIBOR plus 1.0% per annum and 0.125% per annum, respectively. These amendments did not result in the extinguishment of debt. In addition, in May 2019, we amended our $1.15 billion unsecured revolving credit facility due in 2022 to reduce pricing to match pricing on our $1.7 billion unsecured revolving credit facility due in 2024.

In April 2019, we entered into and drew in full on an unsecured three-year term loan agreement in the amount of $1.0 billion. The loan accrues interest at a floating rate of LIBOR plus an applicable margin, which varies with our senior debt rating, and is currently 1.075% per annum. Proceeds of this loan were used to repay the $700 million 364-day loan due July 2019 related to the acquisition of Silversea Cruises and the remaining balance of the unsecured term loan originally incurred in 2010 to purchase Allure of the Seas. The repayment of these loans resulted in a total loss on the extinguishment of debt of $6.3 million, which was recognized within Other (expense) income within our consolidated statements of comprehensive income (loss) for the quarter and six months ended June 30, 2019.

In April 2019, we took delivery of Spectrum of the Seas. To finance the purchase, we borrowed $908.0 million under a previously committed unsecured term loan which is 95% guaranteed by Euler Hermes Deutschland AG, the official export credit agency of Germany. The loan amortizes semi-annually over 12 years and bears interest at a fixed rate of 3.45% per annum.

In May 2019, we took delivery of Celebrity Flora. The purchase was financed through an unsecured term loan facility entered into in November 2017 in an amount up to €80.0 million, or approximately $91.1 million based on the exchange rate at June 30, 2019. As of June 30, 2019, we had fully drawn on this facility. The loan is due and payable at maturity in November 2024. Interest on the loan accrues at a floating rate based on EURIBOR plus the applicable margin. The applicable margin varies with our debt rating and was 1.195% as of June 30, 2019.

In June 2019, Silversea Cruises entered into a $300 million unsecured term loan facility for the financing of Silver Moon to pay a portion of the ship's contract price through a facility guaranteed by us. We expect to draw upon this loan when we take delivery of the ship, which we expect will occur in the third quarter of 2020. The loan will be due and payable at maturity in June 2028. Interest on the loan will accrue at LIBOR plus 1.50%.

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Leases

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Leases

Leases

Our operating leases primarily relate to preferred berthing arrangements, real estate and shipboard equipment and 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 sheet as of June 30, 2019. 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. Refer to Note 2. Summary of Significant Accounting Policies, for further information on the adoption of ASC 842.

Finance leases are included within Property and equipment, net and Long-term debt, with the current portion of the debt reported within Current portion of debt, in our consolidated balance sheets.

Our finance leases include two ships, Silver Whisper and Silver Explorer, operated by Silversea Cruises. The finance lease for Silver Whisper will expire in 2022, subject to an option to purchase the ship, and the finance lease for Silver Explorer will expire in 2021, subject to an option to extend the lease for up to an additional 6 years.

In June 2019, the Company entered into a new master lease agreement (“Master Lease”) with Miami-Dade County relating to the buildings and surrounding land located at its Miami headquarters, which are classified as finance leases in accordance with ASC 842 Leases. Prior to entering into the Master Lease, the buildings were classified as operating lease assets. The finance lease for the buildings and land will expire in 2072, which includes an initial 43 years lease term and two five-year options to extend the lease. We consider the possibility of exercising the two five-year options reasonably certain.

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 range from one to 10 years and the renewal periods for berthing agreements range from one year 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. Additionally, we do have a residual value guarantee associated with our lease of a terminal at PortMiami in Miami, Florida that approximates a percentage of cost of the asset as of the inception of the lease. We consider the possibility of incurring costs associated with the residual value guarantee to be remote.

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 LIBOR 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. We used the incremental borrowing rate as of the adoption date for operating leases that commenced prior to that date. 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.

Additionally, we bareboat charter to Pullmantur Holdings the vessels currently operated by its brands, which were retained by us following the sale of our 51% interest in Pullmantur Holdings in 2016. We account for the bareboat charters of these vessels as operating leases for which we are the lessor.  The remaining payments and term of these leases are immaterial to our consolidated financial statements.

Supplemental balance sheet information for leases was as follows (in thousands):

	As of June 30, 2019
Lease assets:
Finance lease right-of-use assets, net:
Property and equipment, gross	$	373,867
Accumulated depreciation	(45,412		)
Property and equipment, net	328,455
Operating lease right-of-use assets	720,854
Total lease assets	$	1,049,309
Lease liabilities:
Finance lease liabilities:
Current portion of debt	$	24,573
Long-term debt	218,106
Total finance lease liabilities	242,679
Operating lease liabilities:
Current portion of operating lease liabilities	92,523
Long-term operating lease liabilities	644,088
Total operating lease liabilities	736,611
Total lease liabilities	$	979,290

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

	Consolidated Statement of Comprehensive Income (Loss) Classification	Quarter Ended June 30, 2019		Six Months Ended June 30, 2019
Lease costs:
Operating lease costs	Commission, transportation and other	$	19,057	$	38,113
Operating lease costs	Other operating expenses	6,930		13,861
Operating lease costs	Marketing, selling and administrative expenses	5,018		10,225
Finance lease costs:
Amortization of right-of-use-assets	Depreciation and amortization expenses	5,529		8,724
Interest on lease liabilities	Interest expense, net of interest capitalized	1,570		2,166
Total lease costs		$	38,104	$	73,089

In addition, certain of our berth agreements include variable lease costs based on the number of passengers berthed. During the quarter and six months ended June 30, 2019, we had $21.5 million and $55.8 million, respectively, of variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive income (loss).

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

	As of June 30, 2019
Weighted average of the remaining lease term
Operating leases	10.7 years
Finance leases	28.6 years
Weighted average discount rate
Operating leases	4.65	%
Finance leases	4.40	%

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

	Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	63,221
Operating cash flows from finance leases	$	2,166
Financing cash flows from finance leases	$	14,607
Supplemental noncash information:
Right-of-use assets obtained in exchange for lease obligations:
Finance leases	$	122,237

As of June 30, 2019, maturities related to lease liabilities were as follows (in thousands):

Year	Operating Leases			Finance Leases
Remainder of 2019	$	61,702		$	23,619
2020	122,781			43,411
2021	110,025			45,934
2022	103,561			22,832
2023	101,442			11,891
Thereafter	492,551			414,104
Total lease payments	992,062			561,791
Less: Interest	(255,451		)	(319,112		)
Present value of lease liabilities	$	736,611		$	242,679

Operating lease payments do not include any costs related to options to extend lease terms as none are reasonably certain of being exercised.

Under ASC 840, Leases, future minimum lease payments under noncancelable operating leases as of December 31, 2018 were as follows (in thousands):

Year
2019	$	67,682
2020	64,237
2021	56,142
2022	52,759
2023	52,522
Thereafter	383,974
	$	677,316

Leases

Leases

Our operating leases primarily relate to preferred berthing arrangements, real estate and shipboard equipment and 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 sheet as of June 30, 2019. 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. Refer to Note 2. Summary of Significant Accounting Policies, for further information on the adoption of ASC 842.

Finance leases are included within Property and equipment, net and Long-term debt, with the current portion of the debt reported within Current portion of debt, in our consolidated balance sheets.

Our finance leases include two ships, Silver Whisper and Silver Explorer, operated by Silversea Cruises. The finance lease for Silver Whisper will expire in 2022, subject to an option to purchase the ship, and the finance lease for Silver Explorer will expire in 2021, subject to an option to extend the lease for up to an additional 6 years.

In June 2019, the Company entered into a new master lease agreement (“Master Lease”) with Miami-Dade County relating to the buildings and surrounding land located at its Miami headquarters, which are classified as finance leases in accordance with ASC 842 Leases. Prior to entering into the Master Lease, the buildings were classified as operating lease assets. The finance lease for the buildings and land will expire in 2072, which includes an initial 43 years lease term and two five-year options to extend the lease. We consider the possibility of exercising the two five-year options reasonably certain.

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 range from one to 10 years and the renewal periods for berthing agreements range from one year 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. Additionally, we do have a residual value guarantee associated with our lease of a terminal at PortMiami in Miami, Florida that approximates a percentage of cost of the asset as of the inception of the lease. We consider the possibility of incurring costs associated with the residual value guarantee to be remote.

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 LIBOR 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. We used the incremental borrowing rate as of the adoption date for operating leases that commenced prior to that date. 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.

Additionally, we bareboat charter to Pullmantur Holdings the vessels currently operated by its brands, which were retained by us following the sale of our 51% interest in Pullmantur Holdings in 2016. We account for the bareboat charters of these vessels as operating leases for which we are the lessor.  The remaining payments and term of these leases are immaterial to our consolidated financial statements.

Supplemental balance sheet information for leases was as follows (in thousands):

	As of June 30, 2019
Lease assets:
Finance lease right-of-use assets, net:
Property and equipment, gross	$	373,867
Accumulated depreciation	(45,412		)
Property and equipment, net	328,455
Operating lease right-of-use assets	720,854
Total lease assets	$	1,049,309
Lease liabilities:
Finance lease liabilities:
Current portion of debt	$	24,573
Long-term debt	218,106
Total finance lease liabilities	242,679
Operating lease liabilities:
Current portion of operating lease liabilities	92,523
Long-term operating lease liabilities	644,088
Total operating lease liabilities	736,611
Total lease liabilities	$	979,290

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

	Consolidated Statement of Comprehensive Income (Loss) Classification	Quarter Ended June 30, 2019		Six Months Ended June 30, 2019
Lease costs:
Operating lease costs	Commission, transportation and other	$	19,057	$	38,113
Operating lease costs	Other operating expenses	6,930		13,861
Operating lease costs	Marketing, selling and administrative expenses	5,018		10,225
Finance lease costs:
Amortization of right-of-use-assets	Depreciation and amortization expenses	5,529		8,724
Interest on lease liabilities	Interest expense, net of interest capitalized	1,570		2,166
Total lease costs		$	38,104	$	73,089

In addition, certain of our berth agreements include variable lease costs based on the number of passengers berthed. During the quarter and six months ended June 30, 2019, we had $21.5 million and $55.8 million, respectively, of variable lease costs recorded within Commission, transportation and other in our consolidated statement of comprehensive income (loss).

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

	As of June 30, 2019
Weighted average of the remaining lease term
Operating leases	10.7 years
Finance leases	28.6 years
Weighted average discount rate
Operating leases	4.65	%
Finance leases	4.40	%

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

	Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	63,221
Operating cash flows from finance leases	$	2,166
Financing cash flows from finance leases	$	14,607
Supplemental noncash information:
Right-of-use assets obtained in exchange for lease obligations:
Finance leases	$	122,237

As of June 30, 2019, maturities related to lease liabilities were as follows (in thousands):

Year	Operating Leases			Finance Leases
Remainder of 2019	$	61,702		$	23,619
2020	122,781			43,411
2021	110,025			45,934
2022	103,561			22,832
2023	101,442			11,891
Thereafter	492,551			414,104
Total lease payments	992,062			561,791
Less: Interest	(255,451		)	(319,112		)
Present value of lease liabilities	$	736,611		$	242,679

Operating lease payments do not include any costs related to options to extend lease terms as none are reasonably certain of being exercised.

Under ASC 840, Leases, future minimum lease payments under noncancelable operating leases as of December 31, 2018 were as follows (in thousands):

Year
2019	$	67,682
2020	64,237
2021	56,142
2022	52,759
2023	52,522
Thereafter	383,974
	$	677,316

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Redeemable Noncontrolling Interest

6 Months Ended

Jun. 30, 2019

Noncontrolling Interest [Abstract]

Redeemable Noncontrolling Interest

Redeemable Noncontrolling Interest

In connection with the acquisition of Silversea Cruises, we recorded a redeemable noncontrolling interest of $537.8 million due to the put options held by HCH. The put options may require us to purchase HCH's remaining interest, or 33.3% of Silversea Cruises, upon the occurrence or nonoccurrence of certain future events that are not solely within our control. HCH's interest is presented as Redeemable noncontrolling interest and is classified outside of shareholders' equity in our consolidated balance sheets. Additionally, the noncontrolling interest's share in the net earnings (loss) and contractual accretion requirements associated with the put options are included in Net Income attributable to noncontrolling interest in our consolidated statements of comprehensive income (loss).

The following table presents changes in the redeemable noncontrolling interest as of June 30, 2019 (in thousands):

Beginning balance January 1, 2019	$	542,020
Net income attributable to noncontrolling interest, including the contractual accretion of the put options	14,250
Other	500
Ending balance June 30, 2019	$	556,770

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Ship Purchase Obligations

Our future capital commitments consist primarily of new ship orders. As of June 30, 2019, our Global Brands have the following ships on order:

Ship	Shipyard	Expected to Enter Service	Approximate Berths
Royal Caribbean International —
Oasis-class:
Unnamed	Chantiers de l’Atlantique	2nd Quarter 2021	5,700
Quantum-class:
Odyssey of the Seas	Meyer Werft GmbH	4th Quarter 2020	4,200
Icon-class:
Unnamed	Meyer Turku Oy	2nd Quarter 2022	5,600
Unnamed	Meyer Turku Oy	2nd Quarter 2024	5,600
Celebrity Cruises —
Edge-class:
Celebrity Apex	Chantiers de l’Atlantique	2nd Quarter 2020	2,900
Unnamed	Chantiers de l’Atlantique	4th Quarter 2021	3,250
Unnamed	Chantiers de l’Atlantique	4th Quarter 2022	3,250
Silversea Cruises —
Silver Origin	De Hoop	2nd Quarter 2020	100
Silver Moon	Fincantieri	3rd Quarter 2020	550
Silver Dawn	Fincantieri	3rd Quarter 2021	550
Total Berths			31,700

In addition, in April 2019, Silversea Cruises entered into an agreement with Meyer Werft to build two ships of a new generation, known as the Evolution-class. The ships are expected to have an aggregate capacity of approximately 1,200 berths and are expected to enter service in 2022 and 2023, respectively.

As of June 30, 2019, the aggregate cost of our ships on order presented in the table above, not including the two ships placed on order for Silversea Cruises during the reporting lag period, was $10.3 billion, of which we had deposited $614.0 million.

Approximately 55.6% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at June 30, 2019. Refer to Note 14. Fair Value Measurements and Derivative Instruments for further information.

In addition, as of June 30, 2019, we have the following agreements in place for new ships on order for our Global Brands, which are contingent upon completion of conditions precedent and financing:

Ship	Shipyard	Expected to Enter Service	Approximate Berths
Royal Caribbean International —
Oasis-class:
Unnamed	Chantiers de l’Atlantique	4th Quarter 2023	5,700
Icon-class:
Unnamed	Meyer Turku Oy	2nd Quarter 2025	5,600
Celebrity Cruises —
Edge-class:
Unnamed	Chantiers de l’Atlantique	4th Quarter 2024	3,250

Litigation

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

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.

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Shareholders' Equity

6 Months Ended

Jun. 30, 2019

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

During both first and second quarter of 2019, we declared a cash dividend on our common stock of $0.70 per share, which was paid in April 2019 and July 2019, respectively. During the first quarter of 2019, we also paid a cash dividend on our common stock of $0.70 per share, which was declared during the fourth quarter of 2018.

During both first and second quarter of 2018, we declared a cash dividend on our common stock of $0.60 per share, which was paid in April 2018 and July 2018, respectively. During the first quarter of 2018, we also paid a cash dividend on our common stock of $0.60 per share, which was declared during the fourth quarter of 2017.

In May 2018, our board of directors authorized a 24-month common stock repurchase program for up to $1.0 billion. The timing and number of shares to be repurchased will depend on a variety of factors, including price and market conditions. Repurchases under the program may be made at management's discretion from time to time on the open market or through privately negotiated transactions. During the quarter and six months ended June 30, 2019, there were no common stock repurchases under this program. During the year ended December 31, 2018, we repurchased 2.8 million shares of our common stock under this program, for a total of approximately $300.0 million, in open market transactions. As of June 30, 2019, we have approximately $700.0 million that remains available for future stock repurchase transactions under our Board authorized program.

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Changes in Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2019

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Changes in Accumulated Other Comprehensive Income (Loss)

Changes in Accumulated Other Comprehensive Income (Loss) 

The following table presents the changes in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2019 and 2018 (in thousands):

	Accumulated Other Comprehensive Income (Loss) for the Six Months Ended June 30, 2019												Accumulated Other Comprehensive Income (Loss) for the Six Months Ended June 30, 2018
	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	$	(537,216	)	$	(26,023	)	$	(64,495	)	$	(627,734	)	$	(250,355	)	$	(33,666	)	$	(50,244	)	$	(334,265	)
Other comprehensive income (loss) before reclassifications	(3,249		)	(10,758		)	7,827			(6,180		)	69,932			5,082			(10,361		)	64,653
Amounts reclassified from accumulated other comprehensive loss	(19,642		)	383			—			(19,259		)	3,698			714			—			4,412
Net current-period other comprehensive income (loss)	(22,891		)	(10,375		)	7,827			(25,439		)	73,630			5,796			(10,361		)	69,065
Ending balance	$	(560,107	)	$	(36,398	)	$	(56,668	)	$	(653,173	)	$	(176,725	)	$	(27,870	)	$	(60,605	)	$	(265,200	)

The following table presents reclassifications out of accumulated other comprehensive income (loss) for the quarters and six months ended June 30, 2019 and 2018 (in thousands):

	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
Details About Accumulated Other Comprehensive Income (Loss) Components	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Six Months Ended June 30, 2018			Affected Line Item in Statements of Comprehensive Income (Loss)
Gain (loss) on cash flow derivative hedges:
Interest rate swaps	$	(409	)	$	(2,138	)	$	(800	)	$	(8,976	)	Interest expense, net of interest capitalized
Foreign currency forward contracts	(3,545		)	(3,156		)	(6,879		)	(6,468		)	Depreciation and amortization expenses
Foreign currency forward contracts	(1,300		)	14,601			(2,615		)	14,643			Other income (expense)
Fuel swaps	(1,188		)	(133		)	(1,444		)	192			Other income (expense)
Fuel swaps	13,362			2,043			31,380			(3,089		)	Fuel
	6,920			11,217			19,642			(3,698		)
Amortization of defined benefit plans:
Actuarial loss	(195		)	(372		)	(383		)	(714		)	Payroll and related
	(195		)	(372		)	(383		)	(714		)
Foreign cumulative translation	—			—			—			—			Other operating
Total reclassifications for the period	$	6,725		$	10,845		$	19,259		$	(4,412	)

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Fair Value Measurements and Derivative Instruments

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements and Derivative Instruments

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 thousands): 

	Fair Value Measurements at June 30, 2019 Using										Fair Value Measurements at December 31, 2018 Using
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)	$	235,001	$	235,001	$	235,001	$	—	$	—	$	287,852	$	287,852	$	287,852	$	—	$	—
Total Assets	$	235,001	$	235,001	$	235,001	$	—	$	—	$	287,852	$	287,852	$	287,852	$	—	$	—
Liabilities:
Long-term debt (including current portion of debt)(5)	$	9,625,559	$	10,337,397	$	—	$	10,337,397	$	—	$	9,871,267	$	10,244,214	$	—	$	10,244,214	$	—
Total Liabilities	$	9,625,559	$	10,337,397	$	—	$	10,337,397	$	—	$	9,871,267	$	10,244,214	$	—	$	10,244,214	$	—

(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

(2) Inputs other than quoted prices included within Level 1 that are observable for the liability, either directly or indirectly. For unsecured revolving credit facilities and unsecured term loans, fair value is determined utilizing the income valuation approach. This valuation model takes into account the contract terms of our debt such as the debt maturity and the interest rate on the debt. The valuation model also takes into account the creditworthiness of the Company.

(3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of June 30, 2019 and December 31, 2018.

(4) Consists of cash and marketable securities with original maturities of less than 90 days.

(5) Consists of unsecured revolving credit facilities, senior notes, senior debentures and term loans. These amounts do not include our capital lease obligations or commercial paper.

Other Financial Instruments 

The carrying amounts of accounts receivable, accounts payable, accrued interest, accrued expenses and commercial paper approximate fair value at June 30, 2019 and December 31, 2018.

Assets and liabilities that are recorded at fair value have been categorized based upon the fair value hierarchy. The following table presents information about the Company’s financial instruments recorded at fair value on a recurring basis (in thousands):

	Fair Value Measurements at June 30, 2019 Using								Fair Value Measurements at December 31, 2018 Using
Description	Total		Level 1(1)		Level 2(2)		Level 3(3)		Total		Level 1(1)		Level 2(2)		Level 3(3)
Assets:
Derivative financial instruments(4)	$	78,441	$	—	$	78,441	$	—	$	65,297	$	—	$	65,297	$	—
Total Assets	$	78,441	$	—	$	78,441	$	—	$	65,297	$	—	$	65,297	$	—
Liabilities:
Derivative financial instruments(5)	$	185,733	$	—	$	185,733	$	—	$	201,812	$	—	$	201,812	$	—
Contingent consideration (6)	54,700		—		—		54,700		44,000		—		—		44,000
Total Liabilities	$	240,433	$	—	$	185,733	$	54,700	$	245,812	$	—	$	201,812	$	44,000

(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

(2) Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate swaps and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity, as well as other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest rate yield curves. Derivative instrument fair values take into account the creditworthiness of the counterparty and the Company.

(3) Inputs that are unobservable. 

(4) Consists of foreign currency forward contracts, interest rate swaps and fuel swaps. Refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

(5) Consists of foreign currency forward contracts, interest rate swaps and fuel swaps. Refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

(6) The contingent consideration related to the Silversea Cruises acquisition is estimated by applying a Monte-Carlo simulation method using our closing stock price along with significant inputs not observable in the market, including the probability of achieving the milestones and estimated future operating results. The Monte-Carlo simulation is a generally accepted statistical technique used to generate a defined number of valuation paths in order to develop a reasonable estimate of fair value. Refer to Note 3. Business Combination for further information on the Silversea Cruises acquisition. For the quarter and six months ended June 30, 2019, we recorded a contingent consideration expense of $10.7 million recorded within Other (expense) income in our consolidated statements of comprehensive income (loss).

The reported fair values are based on a variety of factors and assumptions. Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of June 30, 2019 or December 31, 2018, or that will be realized in the future, and do not include expenses that could be incurred in an actual sale or settlement.

We have master International Swaps and Derivatives Association (“ISDA”) agreements in place with our derivative instrument counterparties. These ISDA agreements generally provide for final close out netting with our counterparties for all positions in the case of default or termination of the ISDA agreement. We have determined that our ISDA agreements provide us with rights of setoff on the fair value of derivative instruments in a gain position and those in a loss position with the same counterparty. We have elected not to offset such derivative instrument fair values in our consolidated balance sheets.

See Credit Related Contingent Features for further discussion on contingent collateral requirements for our derivative instruments.

The following table presents information about the Company’s offsetting of financial assets under master netting agreements with derivative counterparties (in thousands):

	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	As of June 30, 2019									As of December 31, 2018
	Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet		Gross Amount of Eligible Offsetting Recognized Derivative Liabilities			Cash Collateral Received		Net Amount of Derivative Assets		Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet		Gross Amount of Eligible Offsetting Recognized Derivative Assets			Cash Collateral Received		Net Amount of Derivative Assets
Derivatives subject to master netting agreements	$	78,441	$	(76,389	)	$	—	$	2,052	$	65,297	$	(60,303	)	$	—	$	4,994
Total	$	78,441	$	(76,389	)	$	—	$	2,052	$	65,297	$	(60,303	)	$	—	$	4,994

The following table presents information about the Company’s offsetting of financial liabilities under master netting agreements with derivative counterparties (in thousands):

	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	As of June 30, 2019										As of December 31, 2018
	Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet			Gross Amount of Eligible Offsetting Recognized Derivative Assets		Cash Collateral Pledged		Net Amount of Derivative Liabilities			Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet			Gross Amount of Eligible Offsetting Recognized Derivative Liabilities		Cash Collateral Pledged		Net Amount of Derivative Liabilities
Derivatives subject to master netting agreements	$	(185,733	)	$	76,389	$	—	$	(109,344	)	$	(201,812	)	$	60,303	$	—	$	(141,509	)
Total	$	(185,733	)	$	76,389	$	—	$	(109,344	)	$	(201,812	)	$	60,303	$	—	$	(141,509	)

Concentrations of Credit Risk

We monitor our credit risk associated with financial and other institutions with which we conduct significant business and, to minimize these risks, we select counterparties with credit risks acceptable to us and we seek to limit our exposure to an individual counterparty. Credit risk, including but not limited to counterparty nonperformance under derivative instruments, our credit facilities and new ship progress payment guarantees, is not considered significant, as we primarily conduct business with large, well-established financial institutions, insurance companies and export credit agencies many of which we have long-term relationships with and which have credit risks acceptable to us or where the credit risk is spread out among a large number of counterparties. As of June 30, 2019 and December 31, 2018, we had counterparty credit risk exposure under our derivative instruments of $2.0 million and $5.6 million, respectively, which were limited to the cost of replacing the contracts in the event of non-performance by the counterparties to the contracts, the majority of which are currently our lending banks. We do not anticipate nonperformance by any of our significant counterparties. In addition, we have established guidelines we follow regarding credit ratings and instrument maturities to maintain safety and liquidity. We do not normally require collateral or other security to support credit relationships; however, in certain circumstances this option is available to us.

Derivative Instruments

We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates and fuel prices. We try to mitigate these risks through a combination of our normal operating and financing activities and through the use of derivative financial instruments pursuant to our hedging practices and policies. The financial impact of these hedging instruments is primarily offset by corresponding changes in the underlying exposures being hedged. We achieve this by closely matching the notional amount, term and conditions of the derivative instrument with the underlying risk being hedged. Although certain of our derivative financial instruments do not qualify or are not accounted for under hedge accounting, our objective is not to hold or issue derivative financial instruments for trading or other speculative purposes. 

We enter into various forward, swap and option contracts to manage our interest rate exposure and to limit our exposure to fluctuations in foreign currency exchange rates and fuel prices. These instruments are recorded on the balance sheet at their fair value and the vast majority are designated as hedges. We also use non-derivative financial instruments designated as hedges of our net investment in our foreign operations and investments.

At inception of the hedge relationship, a derivative instrument that hedges the exposure to changes in the fair value of a firm commitment or a recognized asset or liability is designated as a fair value hedge. A derivative instrument that hedges a forecasted transaction or the variability of cash flows related to a recognized asset or liability is designated as a cash flow hedge.

Changes in the fair value of derivatives that are designated as fair value hedges are offset against changes in the fair value of the underlying hedged assets, liabilities or firm commitments. Gains and losses on derivatives that are designated as cash flow hedges are recorded as a component of Accumulated other comprehensive loss until the underlying hedged transactions are recognized in earnings. The foreign currency transaction gain or loss of our non-derivative financial instruments and the changes in the fair value of derivatives designated as hedges of our net investment in foreign operations and investments are recognized as a component of Accumulated other comprehensive loss along with the associated foreign currency translation adjustment of the foreign operation or investment, with the amortization of excluded components affecting earnings. 

On an ongoing basis, we assess whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the fair value or cash flow of hedged items. We use the long-haul method to assess hedge effectiveness using regression analysis for each hedge relationship under our interest rate, foreign currency and fuel hedging programs. We apply the same methodology on a consistent basis for assessing hedge effectiveness to all hedges within each hedging program (i.e., interest rate, foreign currency and fuel). We perform regression analyses over an observation period of up to three years, utilizing market data relevant to the hedge horizon of each hedge relationship. High effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the changes in the fair values of the derivative instrument and the hedged item. If it is determined that a derivative is not highly effective as a hedge or hedge accounting is discontinued, any change in fair value of the derivative since the last date at which it was determined to be effective is recognized in earnings.  

Cash flows from derivative instruments that are designated as fair value or cash flow hedges are classified in the same category as the cash flows from the underlying hedged items. In the event that hedge accounting is discontinued, cash flows subsequent to the date of discontinuance are classified within investing activities. Cash flows from derivative instruments not designated as hedging instruments are classified as investing activities. 

We consider the classification of the underlying hedged item’s cash flows in determining the classification for the designated derivative instrument’s cash flows. We classify derivative instrument cash flows from hedges of benchmark interest rate or hedges of fuel expense as operating activities due to the nature of the hedged item. Likewise, we classify derivative instrument cash flows from hedges of foreign currency risk on our newbuild ship payments as investing activities.

Interest Rate Risk

Our exposure to market risk for changes in interest rates primarily relates to our debt obligations including future interest payments. At June 30, 2019 and December 31, 2018, approximately 65.4% and 59.1%, respectively, of our debt was effectively fixed. We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense.

Market risk associated with our fixed rate debt is the potential increase in fair value resulting from a decrease in interest rates. We use interest rate swap agreements that effectively convert a portion of our fixed-rate debt to a floating-rate basis to manage this risk. At June 30, 2019 and December 31, 2018, we maintained interest rate swap agreements on the following fixed-rate debt instruments:

Debt Instrument	Swap Notional as of June 30, 2019 (In thousands)		Maturity	Debt Fixed Rate	Swap Floating Rate: LIBOR plus	All-in Swap Floating Rate as of June 30, 2019
Oasis of the Seas term loan	$	87,500	October 2021	5.41%	3.87%	6.49%
Unsecured senior notes	650,000		November 2022	5.25%	3.63%	6.15%
	$	737,500

These interest rate swap agreements are accounted for as fair value hedges.

Market risk associated with our long-term floating rate debt is the potential increase in interest expense from an increase in interest rates. We use interest rate swap agreements that effectively convert a portion of our floating-rate debt to a fixed-rate basis to manage this risk. At June 30, 2019 and December 31, 2018, we maintained interest rate swap agreements on the following floating-rate debt instruments:

Debt Instrument	Swap Notional as of June 30, 2019 (In thousands)		Maturity	Debt Floating Rate		All-in Swap Fixed Rate
Celebrity Reflection term loan	$	299,979	October 2024	LIBOR plus	0.40%	2.85%
Quantum of the Seas term loan	459,375		October 2026	LIBOR plus	1.30%	3.74%
Anthem of the Seas term loan	483,333		April 2027	LIBOR plus	1.30%	3.86%
Ovation of the Seas term loan	622,500		April 2028	LIBOR plus	1.00%	3.16%
Harmony of the Seas term loan (1)	592,129		May 2028	EURIBOR plus	1.15%	2.26%
Odyssey of the Seas term loan (2)	460,000		October 2032	LIBOR plus	0.95%	3.20%
	$	2,917,316

(1) Interest rate swap agreements hedging the Euro-denominated term loan for Harmony of the Seas include EURIBOR zero-floor matching the hedged debt EURIBOR zero-floor. Amount presented is based on the exchange rate as of June 30, 2019.

(2) Interest rate swap agreements hedging the term loan for Odyssey of the Seas includes a LIBOR zero-floor matching the hedged debt zero-floor. The anticipated unsecured term loan for the financing of Odyssey of the Seas is expected to be drawn in October 2020.

These interest rate swap agreements are accounted for as cash flow hedges.

The notional amount of interest rate swap agreements related to outstanding debt and our current unfunded financing arrangements as of June 30, 2019 and December 31, 2018 was $3.7 billion and $3.4 billion, respectively.

Foreign Currency Exchange Rate Risk

Derivative Instruments

Our primary exposure to foreign currency exchange rate risk relates to our ship construction contracts denominated in Euros, our foreign currency denominated debt and our international business operations. We enter into foreign currency forward contracts to manage portions of the exposure to movements in foreign currency exchange rates. As of June 30, 2019, the aggregate cost of our ships on order was $10.3 billion, of which we had deposited $614.0 million as of such date. These amounts do not include any ships placed on order that are contingent upon completion of conditions precedent and/or financing, any ships on order by our Partner Brands and any ships on order placed by Silversea Cruises during the reporting lag period. Refer to Note 11. Commitments and Contingencies, for further information on our ships on order. At June 30, 2019 and December 31, 2018, approximately 55.6% and 53.5%, respectively, of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate. Our foreign currency forward contract agreements are accounted for as cash flow or net investment hedges depending on the designation of the related hedge.

On a regular basis, we enter into foreign currency forward contracts and, from time to time, we utilize cross-currency swap agreements and collar options to minimize the volatility resulting from the remeasurement of net monetary assets and liabilities denominated in a currency other than our functional currency or the functional currencies of our foreign subsidiaries. During the second quarter of 2019, we maintained an average of approximately $719.4 million of these foreign currency forward contracts. These instruments are not designated as hedging instruments. For the quarters ended June 30, 2019 and 2018, changes in the fair value of the foreign currency forward contracts resulted in a gain (loss) of $(4.2) million and $(36.9) million, respectively. For the six months ended June 30, 2019 and 2018, changes in the fair value of the foreign currency forward contracts resulted in a gain (loss) of $0.8 million and $(31.3) million, respectively. These amounts were recognized in earnings within Other (expense) income in our consolidated statements of comprehensive income (loss).

We consider our investments in our foreign operations to be denominated in relatively stable currencies and to be of a long-term nature. As of June 30, 2019, we maintained foreign currency forward contracts and designated them as hedges of a portion of our net investments primarily in TUI Cruises of €173.0 million, or approximately $197.0 million based on the exchange rate at June 30, 2019. These forward currency contracts mature in October 2021.

The notional amount of outstanding foreign exchange contracts, excluding the forward contracts entered into to minimize remeasurement volatility, as of June 30, 2019 and December 31, 2018 was $3.1 billion and $3.2 billion, respectively.

Non-Derivative Instruments

We also address the exposure of our investments in foreign operations by denominating a portion of our debt in our subsidiaries’ and investments’ functional currencies and designating it as a hedge of these subsidiaries and investments. We had designated debt as a hedge of our net investments

primarily in TUI Cruises of €197.5 million, or approximately $224.9 million, as of June 30, 2019. As of December 31, 2018, we had designated debt as a hedge of our net investments in TUI Cruises of €280.0 million, or approximately $320.2 million.

Fuel Price Risk

Our exposure to market risk for changes in fuel prices relates primarily to the consumption of fuel on our ships. We use fuel swap agreements to mitigate the financial impact of fluctuations in fuel prices.

Our fuel swap agreements are generally accounted for as cash flow hedges. At June 30, 2019, we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2023. As of June 30, 2019 and December 31, 2018, we had the following outstanding fuel swap agreements as hedges of our fuel exposure:

	Fuel Swap Agreements
	As of June 30, 2019	As of December 31, 2018
	(metric tons)
2019	435,400	856,800
2020	830,500	830,500
2021	488,900	488,900
2022	322,900	322,900
2023	82,400	—

	Fuel Swap Agreements
	As of June 30, 2019		As of December 31, 2018
	(% hedged)
Projected fuel purchases:
2019	59	%	58	%
2020	55	%	54	%
2021	30	%	28	%
2022	19	%	19	%
2023	5	%	—	%

At June 30, 2019, $19.6 million of estimated unrealized net gain (loss) associated with our cash flow hedges pertaining to fuel swap agreements is expected to be reclassified to earnings from Accumulated other comprehensive loss within the next twelve months. Reclassification is expected to occur as the result of fuel consumption associated with our hedged forecasted fuel purchases.

The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets were as follows (in thousands):

	Fair Value of Derivative Instruments
	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	As of June 30, 2019		As of December 31, 2018		Balance Sheet Location	As of June 30, 2019		As of December 31, 2018
		Fair Value		Fair Value			Fair Value		Fair Value
Derivatives designated as hedging instruments under ASC 815-20(1)
Interest rate swaps	Other assets	$	—	$	23,518	Other long-term liabilities	$	64,442	$	40,467
Foreign currency forward contracts	Derivative financial instruments	4,343		4,044		Derivative financial instruments	24,742		39,665
Foreign currency forward contracts	Other assets	9,514		10,844		Other long-term liabilities	54,632		16,854
Fuel swaps	Derivative financial instruments	32,520		10,966		Derivative financial instruments	12,956		37,627
Fuel swaps	Other assets	30,361		9,204		Other long-term liabilities	28,926		65,182
Total derivatives designated as hedging instruments under 815-20		76,738		58,576			185,698		199,795
Derivatives not designated as hedging instruments under ASC 815-20
Foreign currency forward contracts	Derivative financial instruments	$	—	$	1,751	Derivative financial instruments	$	—	$	808
Foreign currency forward contracts	Other assets	—		1,579		Other long-term liabilities	—		833
Fuel swaps	Derivative financial instruments	1,696		2,804		Derivative financial instruments	20		376
Fuel swaps	Other Assets	7		587		Other long-term liabilities	15		—
Total derivatives not designated as hedging instruments under 815-20		1,703		6,721			35		2,017
Total derivatives		$	78,441	$	65,297		$	185,733	$	201,812

(1) Accounting Standard Codification 815-20 “Derivatives and Hedging.”

The location and amount of gain or (loss) recognized in income on fair value and cash flow hedging relationships were as follows (in thousands):

Quarter Ended June 30, 2019

Quarter Ended June 30, 2018

Fuel Expense

Depreciation and Amortization Expenses

Interest Income (Expense)

Other Income (Expense)

Fuel Expense

Depreciation and Amortization Expenses

Interest Income (Expense)

Other Income (Expense)

Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded

$181,924

$311,600

$(104,962)

$(21,781)

$172,309

$253,376

$(68,766)

$33,855

The effects of fair value and cash flow hedging:

Gain or (loss) on fair value hedging relationships in Subtopic 815-20

Interest contracts

Hedged items

n/a

n/a

$(13,287)

$—

n/a

n/a

$3,374

$—

Derivatives designated as hedging instruments

n/a

n/a

$10,944

$—

n/a

n/a

$(5,310)

$—

Gain or (loss) on cash flow hedging relationships in Subtopic 815-20

Interest contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income

n/a

n/a

$(409)

n/a

n/a

n/a

$(2,138)

n/a

Commodity contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income

$13,362

n/a

n/a

$(1,188)

$2,043

n/a

n/a

$(133)

Foreign exchange contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income

n/a

$(3,545)

n/a

$(1,300)

n/a

$(3,156)

n/a

$14,601

Six Months Ended June 30, 2019

Six Months Ended June 30, 2018

Fuel Expense

Depreciation and Amortization Expenses

Interest Income (Expense)

Other Income (Expense)

Fuel Expense

Depreciation and Amortization Expenses

Interest Income (Expense)

Other Income (Expense)

Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded

$342,095

$603,885

$(195,593)

$(26,869)

$332,650

$493,606

$(128,911)

$9,755

The effects of fair value and cash flow hedging:

Gain or (loss) on fair value hedging relationships in Subtopic 815-20

Interest contracts

Hedged items

n/a

n/a

$(21,746)

—

n/a

n/a

$16,556

—

Derivatives designated as hedging instruments

n/a

n/a

$16,779

—

n/a

n/a

$(17,880)

—

Gain or (loss) on cash flow hedging relationships in Subtopic 815-20

Interest contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive loss into income

n/a

n/a

$(800)

n/a

n/a

n/a

$(8,976)

n/a

Commodity contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive loss into income

$31,380

n/a

n/a

$(1,444)

$(3,089)

n/a

n/a

$192

Foreign exchange contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive loss into income

n/a

$(6,879)

n/a

$(2,615)

n/a

$(6,468)

n/a

$14,643

The carrying value and line item caption of non-derivative instruments designated as hedging instruments recorded within our consolidated balance sheets were as follows (in thousands):

		Carrying Value
Non-derivative instrument designated as hedging instrument under ASC 815-20	Balance Sheet Location	As of June 30, 2019			As of December 31, 2018
Foreign currency debt	Current portion of debt	$	(75,697	)	$	38,168
Foreign currency debt	Long-term debt	(149,177		)	281,984
		$	(224,874	)	$	320,152

The effect of derivative instruments qualifying and designated as hedging instruments and the related hedged items in fair value hedges on the consolidated statements of comprehensive income (loss) was as follows (in thousands):

Derivatives and Related Hedged Items under ASC 815-20 Fair Value Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivative and Hedged Item	Amount of Gain (Loss) Recognized in Income on Derivative										Amount of Gain (Loss) Recognized in Income on Hedged Item
		Quarter Ended June 30, 2019		Quarter Ended June 30, 2018			Six Months Ended June 30, 2019		Six Months Ended June 30, 2018			Quarter Ended June 30, 2019			Quarter Ended June 30, 2018		Six Months Ended June 30, 2019			Six Months Ended June 30, 2018
Interest rate swaps	Interest expense, net of interest capitalized	$	10,944	$	(5,310	)	$	16,779	$	(17,880	)	$	(13,287	)	$	3,374	$	(21,746	)	$	16,556
		$	10,944	$	(5,310	)	$	16,779	$	(17,880	)	$	(13,287	)	$	3,374	$	(21,746	)	$	16,556

The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets for the cumulative basis adjustment for fair value hedges were as follows (in thousands):

Line Item in the Statement of Financial Position Where the Hedged Item is Included	Carrying Amount of the Hedged Liabilities				Cumulative amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liabilities
	As of June 30, 2019		As of December 31, 2018		As of June 30, 2019			As of December 31, 2018
Current portion of debt and Long-term debt	$	730,374	$	725,486	$	(3,019	)	$	(24,766	)
	$	730,374	$	725,486	$	(3,019	)	$	(24,766	)

The effect of derivative instruments qualifying and designated as cash flow hedging instruments on the consolidated financial statements was as follows (in thousands):

Derivatives under ASC 815-20  Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivative												Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Six Months Ended June 30, 2018				Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Six Months Ended June 30, 2018
Interest rate swaps	$	(40,132	)	$	8,867		$	(68,461	)	$	46,058		Interest expense, net of interest capitalized	$	(409	)	$	(2,138	)	$	(800	)	$	(8,976	)
Foreign currency forward contracts	19,394			(193,329		)	(70,750		)	(97,963		)	Depreciation and amortization expenses	(3,545		)	(3,156		)	(6,879		)	(6,468		)
Foreign currency forward contracts	—			—			—			—			Other income (expense)	(1,300		)	14,601			(2,615		)	14,643
Fuel swaps	—			—			—			—			Other income (expense)	(1,188		)	(133		)	(1,444		)	192
Fuel swaps	(44,076		)	126,778			135,962			121,837			Fuel	13,362			2,043			31,380			(3,089		)
	$	(64,814	)	$	(57,684	)	$	(3,249	)	$	69,932			$	6,920		$	11,217		$	19,642		$	(3,698	)

The table below represents amounts excluded from the assessment of effectiveness for our net investment hedging instruments for which the difference between changes in fair value and periodic amortization is recorded in accumulated other comprehensive income (loss) (in thousands):

Gain (Loss) Recognized in Income (Net Investment Excluded Components)	Six Months Ended June 30, 2019
Net inception fair value at January 1, 2019	$	(8,359	)
Amount of gain recognized in income on derivatives for the period ended June 30, 2019	1,556
Amount of loss remaining to be amortized in accumulated other comprehensive loss, as of June 30, 2019	(4,518		)
Fair value at June 30, 2019	$	(11,321	)

The effect of non-derivative instruments qualifying and designated as net investment hedging instruments on the consolidated financial statements was as follows (in thousands):

	Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss)
Non-derivative instruments under ASC 815-20  Net Investment Hedging Relationships	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018		Six Months Ended June 30, 2019		Six Months Ended June 30, 2018
Foreign Currency Debt	$	(2,994	)	$	15,853	$	2,708	$	7,609
	$	(2,994	)	$	15,853	$	2,708	$	7,609

There was no amount recognized in income (ineffective portion and amount excluded from effectiveness testing) for the quarters and six months ended June 30, 2019 and 2018.

The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as follows (in thousands):

		Amount of Gain (Loss) Recognized in Income on Derivatives
Derivatives Not Designated as Hedging Instruments under ASC 815-20	Location of Gain (Loss) Recognized in Income on Derivatives	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Six Months Ended June 30, 2018
Foreign currency forward contracts	Other income (expense)	$	(4,168	)	$	(36,894	)	$	846		$	(31,259	)
Fuel swaps	Fuel	122			(881		)	(14		)	1,326
Fuel swaps	Other income (expense)	(21		)	213			(119		)	183
		$	(4,067	)	$	(37,562	)	$	713		$	(29,750	)

 

Credit Related Contingent Features

Our current interest rate derivative instruments may require us to post collateral if our Standard & Poor’s and Moody’s credit ratings are below specified levels. Specifically, if on the fifth anniversary of executing a derivative instrument, or on any succeeding fifth-year anniversary, our credit ratings for our senior unsecured debt were to be rated below BBB- by Standard & Poor’s and Baa3 by Moody’s, then the counterparty may periodically demand that we post collateral in an amount equal to the difference between (i) the net market value of all derivative transactions with such counterparty that have reached their fifth year anniversary, to the extent negative, and (ii) the applicable minimum call amount.

The amount of collateral required to be posted following such event will change as, and to the extent, our net liability position increases or decreases by more than the applicable minimum call amount. If our credit rating for our senior unsecured debt is subsequently equal to or above BBB- by Standard & Poor’s or Baa3 by Moody’s, then any collateral posted at such time will be released to us and we will no longer be required to post collateral unless we meet the collateral trigger requirement at the next fifth-year anniversary. At June 30, 2019, five of our interest rate derivative instruments had reached their fifth anniversary; however, our senior unsecured debt credit rating was Baa2 by Moody’s and BBB- by Standard & Poor’s and, accordingly, we were not required to post any collateral as of such date.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

Basis for Preparation of Consolidated Financial Statements

Basis for Preparation of Consolidated Financial Statements

The unaudited consolidated financial statements are presented pursuant to the rules and regulations of the Securities and Exchange Commission. In our opinion, these statements include all adjustments necessary for a fair statement of the results of the interim periods reported herein. Adjustments consist only of normal recurring items, except for any items discussed in the notes below. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted as permitted by such 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, 2018 for a discussion of our significant accounting policies.

Basis of Consolidation

All significant intercompany accounts and transactions are eliminated in consolidation. We consolidate entities over which we have control, usually evidenced by a direct ownership interest of greater than 50%, and variable interest entities where we are determined to be the primary beneficiary. Refer to Note 7. Other Assets for further information regarding our variable interest entities. We consolidate the operating results of Silversea Cruises on a three-month reporting lag to allow for more timely preparation of our consolidated financial statements. No material events or other transactions involving Silversea Cruises have occurred from March 31, 2019 through June 30, 2019 that would require further disclosure or adjustment to our consolidated financial statements as of and for the quarter ended June 30, 2019. 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.

Adoption of Accounting Pronouncements

Adoption of Accounting Pronouncements

Leases

On January 1, 2019, we adopted the guidance codified in Accounting Standard Codification ("ASC") 842, Leases ("ASC 842") using the modified retrospective approach and elected the optional transition method, which allows entities to initially apply the standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Upon adoption, we applied the guidance to all existing leases.

For leases with a term greater than 12 months, the new guidance requires the lease rights and obligations arising from the leasing arrangements, including operating leases, to be recognized as assets and liabilities on the balance sheet. Upon adoption of the new guidance, the most significant impact was the recognition of right-of-use assets and lease liabilities relating to operating leases in the amounts of $801.8 million and $820.5 million, respectively, reported within Operating lease right-of-use assets and Long-term operating lease liabilities, respectively, with the current portion of the liability reported within Current portion of operating lease liabilities, in our consolidated balance sheet as of January 1, 2019. Accounting for finance leases remained substantially unchanged and continues to be reported within Property and equipment, net and Long-term debt, with the current portion of the debt reported within Current portion of debt, in our consolidated balance sheets. There was no cumulative effect of applying the new standard and accordingly there was no adjustment to our retained earnings upon adoption. The comparative information presented has not been restated and continues to be reported under the accounting standards in effect for those periods. For further information on leases, refer to Note 9. Leases.

This guidance did not have a material impact to our consolidated statements of comprehensive income (loss), consolidated statements of cash flows and our debt-covenants calculations under our current agreements.

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Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2019

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Schedule of Intangible Assets

The following is a summary of our intangible assets as of June 30, 2019 and December 31, 2018 (in thousands):

	June 30, 2019
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Finite-life intangible assets:
Customer relationships	$	97,400	$	4,329	$	93,071
Galapagos operating license	47,669		5,049		42,620
Other finite-life intangible assets	11,560		3,853		7,707
Total finite-life intangible assets	156,629		13,231		143,398
Indefinite-life intangible assets	351,725		—		351,725
Total intangible assets, net	$	508,354	$	13,231	$	495,123

	December 31, 2018
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Finite-life intangible assets:
Customer relationships	$	97,400	$	1,082	$	96,318
Galapagos operating license	47,669		4,206		43,463
Other finite-life intangible assets	11,560		963		10,597
Total finite-life intangible assets	156,629		6,251		150,378
Indefinite-life intangible assets	351,725		—		351,725
Total intangible assets, net	$	508,354	$	6,251	$	502,103

Finite-lived Intangible Asset Amortization Expense

The estimated future amortization for finite-life intangible assets for each of the next five years is as follows (in thousands):

Year
Remainder of 2019	$	6,979
2020	$	12,995
2021	$	8,179
2022	$	8,179
2023	$	8,179
2024	$	8,179

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Revenues (Tables)

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

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

	Quarter Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenues by itinerary
North America(1)	$	1,571,769	$	1,264,167	$	3,252,827	$	2,611,427
Asia/Pacific(2)	327,777		283,198		817,852		816,177
Europe(3)	594,712		597,399		602,694		597,399
Other regions(4)	196,504		101,631		359,009		178,816
Total revenues by itinerary	2,690,762		2,246,395		5,032,382		4,203,819
Other revenues(5)	115,869		91,210		214,016		161,542
Total revenues	$	2,806,631	$	2,337,605	$	5,246,398	$	4,365,361

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

(2) Includes Southeast Asia (e.g., Singapore, Thailand and the Philippines), East Asia (e.g., China and Japan), South Asia (e.g., India and Pakistan) and Oceania (e.g., Australia and Fiji Islands) regions.

(3) Includes European countries (e.g., Nordics, Germany, France, Italy, Spain and the United Kingdom).

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

(5) Includes revenues primarily related to cancellation fees, vacation protection insurance, pre- and post-cruise tours and fees for operating certain port facilities. Amounts also include revenues related to our bareboat charter, procurement and management related services we perform on behalf of our unconsolidated affiliates. Refer to Note 7. Other Assets for more information on our unconsolidated affiliates.

Passenger ticket revenues are attributed to geographic areas based on where the reservation originates. For the quarters ended June 30, 2019 and 2018, our guests were sourced from the following areas:

	Quarter Ended June 30,
	2019		2018
Passenger ticket revenues:
United States	67	%	63	%
United Kingdom	9	%	10	%
All other countries (1)	24	%	27	%

For the six months ended June 30, 2019 and 2018, our guests were sourced from the following areas:

	Six Months Ended June 30,
	2019		2018
Passenger ticket revenues:
United States	66	%	60	%
All other countries (1)	34	%	40	%

(1)

No other individual country's revenue exceeded 10% for the quarters and six months ended June 30, 2019 and 2018.

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2019

Earnings Per Share [Abstract]

Reconciliation Between Basic and Diluted Earnings Per Share

A reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share data):

	Quarter Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Net Income attributable to Royal Caribbean Cruises Ltd. for basic and diluted earnings per share	$	472,830	$	466,295	$	722,511	$	684,948
Weighted-average common shares outstanding	209,531		211,673		209,427		212,139
Dilutive effect of stock-based awards	521		836		535		940
Diluted weighted-average shares outstanding	210,052		212,509		209,962		213,079
Basic earnings per share	$	2.26	$	2.20	$	3.45	$	3.23
Diluted earnings per share	$	2.25	$	2.19	$	3.44	$	3.21

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Other Assets (Tables)

6 Months Ended

Jun. 30, 2019

Other Assets [Abstract]

Schedule of Other Nonoperating Income (Expense)

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

	Quarter Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Share of equity income from investments	$	33,045	$	44,311	$	66,739	$	73,063
Dividends received (1)	$	38,137	$	121,024	$	80,572	$	158,942

(1)

For the quarter ended June 30, 2019, TUI Cruises paid us a dividend of €40.0 million, or approximately $45.6 million, based on the exchange rate at the time of the transaction. For the six months ended June 30, 2019, TUI Cruises paid us dividends totaling €90.0 million, or approximately $101.8 million, based on the exchange rates at the time of the transactions. The amounts included in the table above are net of tax withholdings.

Schedule of Related Party Transactions

We recorded the following as it relates to these services in our operating results within our consolidated statements of comprehensive income (loss) (in thousands):

	Quarter Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Revenues	$	11,975	$	14,157	$	23,857	$	28,230
Expenses	$	1,111	$	3,270	$	2,085	$	6,908

	As of June 30, 2019		As of December 31, 2018
Total notes receivable due from equity investments	$	193,334	$	201,979
Less-current portion(1)	23,651		19,075
Long-term portion(2)	$	169,683	$	182,904

(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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Leases (Tables)

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

Schedule of Supplemental Balance Sheet Information

Supplemental balance sheet information for leases was as follows (in thousands):

	As of June 30, 2019
Lease assets:
Finance lease right-of-use assets, net:
Property and equipment, gross	$	373,867
Accumulated depreciation	(45,412		)
Property and equipment, net	328,455
Operating lease right-of-use assets	720,854
Total lease assets	$	1,049,309
Lease liabilities:
Finance lease liabilities:
Current portion of debt	$	24,573
Long-term debt	218,106
Total finance lease liabilities	242,679
Operating lease liabilities:
Current portion of operating lease liabilities	92,523
Long-term operating lease liabilities	644,088
Total operating lease liabilities	736,611
Total lease liabilities	$	979,290

Schedule of Lease Expense and Cash Flow Information

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

	Consolidated Statement of Comprehensive Income (Loss) Classification	Quarter Ended June 30, 2019		Six Months Ended June 30, 2019
Lease costs:
Operating lease costs	Commission, transportation and other	$	19,057	$	38,113
Operating lease costs	Other operating expenses	6,930		13,861
Operating lease costs	Marketing, selling and administrative expenses	5,018		10,225
Finance lease costs:
Amortization of right-of-use-assets	Depreciation and amortization expenses	5,529		8,724
Interest on lease liabilities	Interest expense, net of interest capitalized	1,570		2,166
Total lease costs		$	38,104	$	73,089

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

	Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	63,221
Operating cash flows from finance leases	$	2,166
Financing cash flows from finance leases	$	14,607
Supplemental noncash information:
Right-of-use assets obtained in exchange for lease obligations:
Finance leases	$	122,237

Schedule of Lease Terms and Discount Rates

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

	As of June 30, 2019
Weighted average of the remaining lease term
Operating leases	10.7 years
Finance leases	28.6 years
Weighted average discount rate
Operating leases	4.65	%
Finance leases	4.40	%

Schedule of Maturities, Operating Leases

As of June 30, 2019, maturities related to lease liabilities were as follows (in thousands):

Year	Operating Leases			Finance Leases
Remainder of 2019	$	61,702		$	23,619
2020	122,781			43,411
2021	110,025			45,934
2022	103,561			22,832
2023	101,442			11,891
Thereafter	492,551			414,104
Total lease payments	992,062			561,791
Less: Interest	(255,451		)	(319,112		)
Present value of lease liabilities	$	736,611		$	242,679

Under ASC 840, Leases, future minimum lease payments under noncancelable operating leases as of December 31, 2018 were as follows (in thousands):

Year
2019	$	67,682
2020	64,237
2021	56,142
2022	52,759
2023	52,522
Thereafter	383,974
	$	677,316

Schedule of Maturities, Financial Leases

As of June 30, 2019, maturities related to lease liabilities were as follows (in thousands):

Year	Operating Leases			Finance Leases
Remainder of 2019	$	61,702		$	23,619
2020	122,781			43,411
2021	110,025			45,934
2022	103,561			22,832
2023	101,442			11,891
Thereafter	492,551			414,104
Total lease payments	992,062			561,791
Less: Interest	(255,451		)	(319,112		)
Present value of lease liabilities	$	736,611		$	242,679

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Redeemable Noncontrolling Interest (Tables)

6 Months Ended

Jun. 30, 2019

Noncontrolling Interest [Abstract]

Schedule of Redeemable Noncontrolling Interest

The following table presents changes in the redeemable noncontrolling interest as of June 30, 2019 (in thousands):

Beginning balance January 1, 2019	$	542,020
Net income attributable to noncontrolling interest, including the contractual accretion of the put options	14,250
Other	500
Ending balance June 30, 2019	$	556,770

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2019

Commitments and Contingencies Disclosure [Abstract]

Schedule of Capital Commitments

Our future capital commitments consist primarily of new ship orders. As of June 30, 2019, our Global Brands have the following ships on order:

Ship	Shipyard	Expected to Enter Service	Approximate Berths
Royal Caribbean International —
Oasis-class:
Unnamed	Chantiers de l’Atlantique	2nd Quarter 2021	5,700
Quantum-class:
Odyssey of the Seas	Meyer Werft GmbH	4th Quarter 2020	4,200
Icon-class:
Unnamed	Meyer Turku Oy	2nd Quarter 2022	5,600
Unnamed	Meyer Turku Oy	2nd Quarter 2024	5,600
Celebrity Cruises —
Edge-class:
Celebrity Apex	Chantiers de l’Atlantique	2nd Quarter 2020	2,900
Unnamed	Chantiers de l’Atlantique	4th Quarter 2021	3,250
Unnamed	Chantiers de l’Atlantique	4th Quarter 2022	3,250
Silversea Cruises —
Silver Origin	De Hoop	2nd Quarter 2020	100
Silver Moon	Fincantieri	3rd Quarter 2020	550
Silver Dawn	Fincantieri	3rd Quarter 2021	550
Total Berths			31,700

Schedule of Contingent Capital Commitments

In addition, as of June 30, 2019, we have the following agreements in place for new ships on order for our Global Brands, which are contingent upon completion of conditions precedent and financing:

Ship	Shipyard	Expected to Enter Service	Approximate Berths
Royal Caribbean International —
Oasis-class:
Unnamed	Chantiers de l’Atlantique	4th Quarter 2023	5,700
Icon-class:
Unnamed	Meyer Turku Oy	2nd Quarter 2025	5,600
Celebrity Cruises —
Edge-class:
Unnamed	Chantiers de l’Atlantique	4th Quarter 2024	3,250

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Changes in Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2019

Comprehensive Income (Loss), Net of Tax, Attributable to Parent [Abstract]

Schedule of Changes In Accumulated Other Comprehensive Income (Loss) by Component

The following table presents the changes in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2019 and 2018 (in thousands):

	Accumulated Other Comprehensive Income (Loss) for the Six Months Ended June 30, 2019												Accumulated Other Comprehensive Income (Loss) for the Six Months Ended June 30, 2018
	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	$	(537,216	)	$	(26,023	)	$	(64,495	)	$	(627,734	)	$	(250,355	)	$	(33,666	)	$	(50,244	)	$	(334,265	)
Other comprehensive income (loss) before reclassifications	(3,249		)	(10,758		)	7,827			(6,180		)	69,932			5,082			(10,361		)	64,653
Amounts reclassified from accumulated other comprehensive loss	(19,642		)	383			—			(19,259		)	3,698			714			—			4,412
Net current-period other comprehensive income (loss)	(22,891		)	(10,375		)	7,827			(25,439		)	73,630			5,796			(10,361		)	69,065
Ending balance	$	(560,107	)	$	(36,398	)	$	(56,668	)	$	(653,173	)	$	(176,725	)	$	(27,870	)	$	(60,605	)	$	(265,200	)

Schedule of Reclassifications Out of Accumulated Other Comprehensive Income (Loss)

The following table presents reclassifications out of accumulated other comprehensive income (loss) for the quarters and six months ended June 30, 2019 and 2018 (in thousands):

	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
Details About Accumulated Other Comprehensive Income (Loss) Components	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Six Months Ended June 30, 2018			Affected Line Item in Statements of Comprehensive Income (Loss)
Gain (loss) on cash flow derivative hedges:
Interest rate swaps	$	(409	)	$	(2,138	)	$	(800	)	$	(8,976	)	Interest expense, net of interest capitalized
Foreign currency forward contracts	(3,545		)	(3,156		)	(6,879		)	(6,468		)	Depreciation and amortization expenses
Foreign currency forward contracts	(1,300		)	14,601			(2,615		)	14,643			Other income (expense)
Fuel swaps	(1,188		)	(133		)	(1,444		)	192			Other income (expense)
Fuel swaps	13,362			2,043			31,380			(3,089		)	Fuel
	6,920			11,217			19,642			(3,698		)
Amortization of defined benefit plans:
Actuarial loss	(195		)	(372		)	(383		)	(714		)	Payroll and related
	(195		)	(372		)	(383		)	(714		)
Foreign cumulative translation	—			—			—			—			Other operating
Total reclassifications for the period	$	6,725		$	10,845		$	19,259		$	(4,412	)

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Fair Value Measurements and Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2019

Derivative Instruments

Fair Value Measurements, Nonrecurring

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 thousands): 

	Fair Value Measurements at June 30, 2019 Using										Fair Value Measurements at December 31, 2018 Using
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)	$	235,001	$	235,001	$	235,001	$	—	$	—	$	287,852	$	287,852	$	287,852	$	—	$	—
Total Assets	$	235,001	$	235,001	$	235,001	$	—	$	—	$	287,852	$	287,852	$	287,852	$	—	$	—
Liabilities:
Long-term debt (including current portion of debt)(5)	$	9,625,559	$	10,337,397	$	—	$	10,337,397	$	—	$	9,871,267	$	10,244,214	$	—	$	10,244,214	$	—
Total Liabilities	$	9,625,559	$	10,337,397	$	—	$	10,337,397	$	—	$	9,871,267	$	10,244,214	$	—	$	10,244,214	$	—

(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

(2) Inputs other than quoted prices included within Level 1 that are observable for the liability, either directly or indirectly. For unsecured revolving credit facilities and unsecured term loans, fair value is determined utilizing the income valuation approach. This valuation model takes into account the contract terms of our debt such as the debt maturity and the interest rate on the debt. The valuation model also takes into account the creditworthiness of the Company.

(3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of June 30, 2019 and December 31, 2018.

(4) Consists of cash and marketable securities with original maturities of less than 90 days.

(5) Consists of unsecured revolving credit facilities, senior notes, senior debentures and term loans. These amounts do not include our capital lease obligations or commercial paper.

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Assets and liabilities that are recorded at fair value have been categorized based upon the fair value hierarchy. The following table presents information about the Company’s financial instruments recorded at fair value on a recurring basis (in thousands):

	Fair Value Measurements at June 30, 2019 Using								Fair Value Measurements at December 31, 2018 Using
Description	Total		Level 1(1)		Level 2(2)		Level 3(3)		Total		Level 1(1)		Level 2(2)		Level 3(3)
Assets:
Derivative financial instruments(4)	$	78,441	$	—	$	78,441	$	—	$	65,297	$	—	$	65,297	$	—
Total Assets	$	78,441	$	—	$	78,441	$	—	$	65,297	$	—	$	65,297	$	—
Liabilities:
Derivative financial instruments(5)	$	185,733	$	—	$	185,733	$	—	$	201,812	$	—	$	201,812	$	—
Contingent consideration (6)	54,700		—		—		54,700		44,000		—		—		44,000
Total Liabilities	$	240,433	$	—	$	185,733	$	54,700	$	245,812	$	—	$	201,812	$	44,000

(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

(2) Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate swaps and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity, as well as other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest rate yield curves. Derivative instrument fair values take into account the creditworthiness of the counterparty and the Company.

(3) Inputs that are unobservable. 

(4) Consists of foreign currency forward contracts, interest rate swaps and fuel swaps. Refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

(5) Consists of foreign currency forward contracts, interest rate swaps and fuel swaps. Refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

(6)

The contingent consideration related to the Silversea Cruises acquisition is estimated by applying a Monte-Carlo simulation method using our closing stock price along with significant inputs not observable in the market, including the probability of achieving the milestones and estimated future operating results. The Monte-Carlo simulation is a generally accepted statistical technique used to generate a defined number of valuation paths in order to develop a reasonable estimate of fair value. Refer to Note 3. Business Combination for further information on the Silversea Cruises acquisition. For the quarter and six months ended June 30, 2019, we recorded a contingent consideration expense of $10.7 million recorded within Other (expense) income in our consolidated statements of comprehensive income (loss).

Offsetting Assets

The following table presents information about the Company’s offsetting of financial assets under master netting agreements with derivative counterparties (in thousands):

	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	As of June 30, 2019									As of December 31, 2018
	Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet		Gross Amount of Eligible Offsetting Recognized Derivative Liabilities			Cash Collateral Received		Net Amount of Derivative Assets		Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet		Gross Amount of Eligible Offsetting Recognized Derivative Assets			Cash Collateral Received		Net Amount of Derivative Assets
Derivatives subject to master netting agreements	$	78,441	$	(76,389	)	$	—	$	2,052	$	65,297	$	(60,303	)	$	—	$	4,994
Total	$	78,441	$	(76,389	)	$	—	$	2,052	$	65,297	$	(60,303	)	$	—	$	4,994

Offsetting Liabilities

The following table presents information about the Company’s offsetting of financial liabilities under master netting agreements with derivative counterparties (in thousands):

	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	As of June 30, 2019										As of December 31, 2018
	Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet			Gross Amount of Eligible Offsetting Recognized Derivative Assets		Cash Collateral Pledged		Net Amount of Derivative Liabilities			Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet			Gross Amount of Eligible Offsetting Recognized Derivative Liabilities		Cash Collateral Pledged		Net Amount of Derivative Liabilities
Derivatives subject to master netting agreements	$	(185,733	)	$	76,389	$	—	$	(109,344	)	$	(201,812	)	$	60,303	$	—	$	(141,509	)
Total	$	(185,733	)	$	76,389	$	—	$	(109,344	)	$	(201,812	)	$	60,303	$	—	$	(141,509	)

Schedule of Price Risk Derivatives

As of June 30, 2019 and December 31, 2018, we had the following outstanding fuel swap agreements as hedges of our fuel exposure:

	Fuel Swap Agreements
	As of June 30, 2019	As of December 31, 2018
	(metric tons)
2019	435,400	856,800
2020	830,500	830,500
2021	488,900	488,900
2022	322,900	322,900
2023	82,400	—

	Fuel Swap Agreements
	As of June 30, 2019		As of December 31, 2018
	(% hedged)
Projected fuel purchases:
2019	59	%	58	%
2020	55	%	54	%
2021	30	%	28	%
2022	19	%	19	%
2023	5	%	—	%

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets were as follows (in thousands):

	Fair Value of Derivative Instruments
	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	As of June 30, 2019		As of December 31, 2018		Balance Sheet Location	As of June 30, 2019		As of December 31, 2018
		Fair Value		Fair Value			Fair Value		Fair Value
Derivatives designated as hedging instruments under ASC 815-20(1)
Interest rate swaps	Other assets	$	—	$	23,518	Other long-term liabilities	$	64,442	$	40,467
Foreign currency forward contracts	Derivative financial instruments	4,343		4,044		Derivative financial instruments	24,742		39,665
Foreign currency forward contracts	Other assets	9,514		10,844		Other long-term liabilities	54,632		16,854
Fuel swaps	Derivative financial instruments	32,520		10,966		Derivative financial instruments	12,956		37,627
Fuel swaps	Other assets	30,361		9,204		Other long-term liabilities	28,926		65,182
Total derivatives designated as hedging instruments under 815-20		76,738		58,576			185,698		199,795
Derivatives not designated as hedging instruments under ASC 815-20
Foreign currency forward contracts	Derivative financial instruments	$	—	$	1,751	Derivative financial instruments	$	—	$	808
Foreign currency forward contracts	Other assets	—		1,579		Other long-term liabilities	—		833
Fuel swaps	Derivative financial instruments	1,696		2,804		Derivative financial instruments	20		376
Fuel swaps	Other Assets	7		587		Other long-term liabilities	15		—
Total derivatives not designated as hedging instruments under 815-20		1,703		6,721			35		2,017
Total derivatives		$	78,441	$	65,297		$	185,733	$	201,812

(1)

Accounting Standard Codification 815-20 “Derivatives and Hedging.”

The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets for the cumulative basis adjustment for fair value hedges were as follows (in thousands):

Line Item in the Statement of Financial Position Where the Hedged Item is Included	Carrying Amount of the Hedged Liabilities				Cumulative amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liabilities
	As of June 30, 2019		As of December 31, 2018		As of June 30, 2019			As of December 31, 2018
Current portion of debt and Long-term debt	$	730,374	$	725,486	$	(3,019	)	$	(24,766	)
	$	730,374	$	725,486	$	(3,019	)	$	(24,766	)

Derivative Instruments, Gain (Loss)

The location and amount of gain or (loss) recognized in income on fair value and cash flow hedging relationships were as follows (in thousands):

Quarter Ended June 30, 2019

Quarter Ended June 30, 2018

Fuel Expense

Depreciation and Amortization Expenses

Interest Income (Expense)

Other Income (Expense)

Fuel Expense

Depreciation and Amortization Expenses

Interest Income (Expense)

Other Income (Expense)

Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded

$181,924

$311,600

$(104,962)

$(21,781)

$172,309

$253,376

$(68,766)

$33,855

The effects of fair value and cash flow hedging:

Gain or (loss) on fair value hedging relationships in Subtopic 815-20

Interest contracts

Hedged items

n/a

n/a

$(13,287)

$—

n/a

n/a

$3,374

$—

Derivatives designated as hedging instruments

n/a

n/a

$10,944

$—

n/a

n/a

$(5,310)

$—

Gain or (loss) on cash flow hedging relationships in Subtopic 815-20

Interest contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income

n/a

n/a

$(409)

n/a

n/a

n/a

$(2,138)

n/a

Commodity contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income

$13,362

n/a

n/a

$(1,188)

$2,043

n/a

n/a

$(133)

Foreign exchange contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive income (loss) into income

n/a

$(3,545)

n/a

$(1,300)

n/a

$(3,156)

n/a

$14,601

Six Months Ended June 30, 2019

Six Months Ended June 30, 2018

Fuel Expense

Depreciation and Amortization Expenses

Interest Income (Expense)

Other Income (Expense)

Fuel Expense

Depreciation and Amortization Expenses

Interest Income (Expense)

Other Income (Expense)

Total amounts of income and expense line items presented in the statement of financial performance in which the effects of fair value or cash flow hedges are recorded

$342,095

$603,885

$(195,593)

$(26,869)

$332,650

$493,606

$(128,911)

$9,755

The effects of fair value and cash flow hedging:

Gain or (loss) on fair value hedging relationships in Subtopic 815-20

Interest contracts

Hedged items

n/a

n/a

$(21,746)

—

n/a

n/a

$16,556

—

Derivatives designated as hedging instruments

n/a

n/a

$16,779

—

n/a

n/a

$(17,880)

—

Gain or (loss) on cash flow hedging relationships in Subtopic 815-20

Interest contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive loss into income

n/a

n/a

$(800)

n/a

n/a

n/a

$(8,976)

n/a

Commodity contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive loss into income

$31,380

n/a

n/a

$(1,444)

$(3,089)

n/a

n/a

$192

Foreign exchange contracts

Amount of gain or (loss) reclassified from accumulated other comprehensive loss into income

n/a

$(6,879)

n/a

$(2,615)

n/a

$(6,468)

n/a

$14,643

Fair Value and Line Item Caption of Non-derivative Instruments

The carrying value and line item caption of non-derivative instruments designated as hedging instruments recorded within our consolidated balance sheets were as follows (in thousands):

		Carrying Value
Non-derivative instrument designated as hedging instrument under ASC 815-20	Balance Sheet Location	As of June 30, 2019			As of December 31, 2018
Foreign currency debt	Current portion of debt	$	(75,697	)	$	38,168
Foreign currency debt	Long-term debt	(149,177		)	281,984
		$	(224,874	)	$	320,152

Non Derivative Instruments Qualifying and Designated as Hedging Instruments in Net Investment Hedges

The effect of non-derivative instruments qualifying and designated as net investment hedging instruments on the consolidated financial statements was as follows (in thousands):

	Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss)
Non-derivative instruments under ASC 815-20  Net Investment Hedging Relationships	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018		Six Months Ended June 30, 2019		Six Months Ended June 30, 2018
Foreign Currency Debt	$	(2,994	)	$	15,853	$	2,708	$	7,609
	$	(2,994	)	$	15,853	$	2,708	$	7,609

Not Designated as Hedging Instrument

Derivative Instruments

Derivative Instruments, Gain (Loss)

The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as follows (in thousands):

		Amount of Gain (Loss) Recognized in Income on Derivatives
Derivatives Not Designated as Hedging Instruments under ASC 815-20	Location of Gain (Loss) Recognized in Income on Derivatives	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Six Months Ended June 30, 2018
Foreign currency forward contracts	Other income (expense)	$	(4,168	)	$	(36,894	)	$	846		$	(31,259	)
Fuel swaps	Fuel	122			(881		)	(14		)	1,326
Fuel swaps	Other income (expense)	(21		)	213			(119		)	183
		$	(4,067	)	$	(37,562	)	$	713		$	(29,750	)

Fair Value Hedging

Derivative Instruments

Schedule of Interest Rate Derivatives

At June 30, 2019 and December 31, 2018, we maintained interest rate swap agreements on the following fixed-rate debt instruments:

Debt Instrument	Swap Notional as of June 30, 2019 (In thousands)		Maturity	Debt Fixed Rate	Swap Floating Rate: LIBOR plus	All-in Swap Floating Rate as of June 30, 2019
Oasis of the Seas term loan	$	87,500	October 2021	5.41%	3.87%	6.49%
Unsecured senior notes	650,000		November 2022	5.25%	3.63%	6.15%
	$	737,500

Derivative Instruments, Gain (Loss)

The effect of derivative instruments qualifying and designated as hedging instruments and the related hedged items in fair value hedges on the consolidated statements of comprehensive income (loss) was as follows (in thousands):

Derivatives and Related Hedged Items under ASC 815-20 Fair Value Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivative and Hedged Item	Amount of Gain (Loss) Recognized in Income on Derivative										Amount of Gain (Loss) Recognized in Income on Hedged Item
		Quarter Ended June 30, 2019		Quarter Ended June 30, 2018			Six Months Ended June 30, 2019		Six Months Ended June 30, 2018			Quarter Ended June 30, 2019			Quarter Ended June 30, 2018		Six Months Ended June 30, 2019			Six Months Ended June 30, 2018
Interest rate swaps	Interest expense, net of interest capitalized	$	10,944	$	(5,310	)	$	16,779	$	(17,880	)	$	(13,287	)	$	3,374	$	(21,746	)	$	16,556
		$	10,944	$	(5,310	)	$	16,779	$	(17,880	)	$	(13,287	)	$	3,374	$	(21,746	)	$	16,556

Cash flow hedge

Derivative Instruments

Schedule of Interest Rate Derivatives

At June 30, 2019 and December 31, 2018, we maintained interest rate swap agreements on the following floating-rate debt instruments:

Debt Instrument	Swap Notional as of June 30, 2019 (In thousands)		Maturity	Debt Floating Rate		All-in Swap Fixed Rate
Celebrity Reflection term loan	$	299,979	October 2024	LIBOR plus	0.40%	2.85%
Quantum of the Seas term loan	459,375		October 2026	LIBOR plus	1.30%	3.74%
Anthem of the Seas term loan	483,333		April 2027	LIBOR plus	1.30%	3.86%
Ovation of the Seas term loan	622,500		April 2028	LIBOR plus	1.00%	3.16%
Harmony of the Seas term loan (1)	592,129		May 2028	EURIBOR plus	1.15%	2.26%
Odyssey of the Seas term loan (2)	460,000		October 2032	LIBOR plus	0.95%	3.20%
	$	2,917,316

(1) Interest rate swap agreements hedging the Euro-denominated term loan for Harmony of the Seas include EURIBOR zero-floor matching the hedged debt EURIBOR zero-floor. Amount presented is based on the exchange rate as of June 30, 2019.

(2)

Interest rate swap agreements hedging the term loan for Odyssey of the Seas includes a LIBOR zero-floor matching the hedged debt zero-floor. The anticipated unsecured term loan for the financing of Odyssey of the Seas is expected to be drawn in October 2020.

Derivative Instruments, Gain (Loss)

The table below represents amounts excluded from the assessment of effectiveness for our net investment hedging instruments for which the difference between changes in fair value and periodic amortization is recorded in accumulated other comprehensive income (loss) (in thousands):

Gain (Loss) Recognized in Income (Net Investment Excluded Components)	Six Months Ended June 30, 2019
Net inception fair value at January 1, 2019	$	(8,359	)
Amount of gain recognized in income on derivatives for the period ended June 30, 2019	1,556
Amount of loss remaining to be amortized in accumulated other comprehensive loss, as of June 30, 2019	(4,518		)
Fair value at June 30, 2019	$	(11,321	)

The effect of derivative instruments qualifying and designated as cash flow hedging instruments on the consolidated financial statements was as follows (in thousands):

Derivatives under ASC 815-20  Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivative												Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
	Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Six Months Ended June 30, 2018				Quarter Ended June 30, 2019			Quarter Ended June 30, 2018			Six Months Ended June 30, 2019			Six Months Ended June 30, 2018
Interest rate swaps	$	(40,132	)	$	8,867		$	(68,461	)	$	46,058		Interest expense, net of interest capitalized	$	(409	)	$	(2,138	)	$	(800	)	$	(8,976	)
Foreign currency forward contracts	19,394			(193,329		)	(70,750		)	(97,963		)	Depreciation and amortization expenses	(3,545		)	(3,156		)	(6,879		)	(6,468		)
Foreign currency forward contracts	—			—			—			—			Other income (expense)	(1,300		)	14,601			(2,615		)	14,643
Fuel swaps	—			—			—			—			Other income (expense)	(1,188		)	(133		)	(1,444		)	192
Fuel swaps	(44,076		)	126,778			135,962			121,837			Fuel	13,362			2,043			31,380			(3,089		)
	$	(64,814	)	$	(57,684	)	$	(3,249	)	$	69,932			$	6,920		$	11,217		$	19,642		$	(3,698	)

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General (Details)	Jun. 30, 2019 brand
Schedule of Equity Method Investments [Line Items]
Number of cruise brands	4
Maximum
Schedule of Equity Method Investments [Line Items]
Investment in a joint venture, percentage of interest	50.00%
Minimum
Schedule of Equity Method Investments [Line Items]
Investment in a joint venture, percentage of interest	20.00%
TUI Cruises
Schedule of Equity Method Investments [Line Items]
Investment in a joint venture, percentage of interest	50.00%
Pullmantur and CDF Croisieres de France
Schedule of Equity Method Investments [Line Items]
Investment in a joint venture, percentage of interest	49.00%

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Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Jan. 01, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets	$ 720,854
Lease liabilities	$ 736,611
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets		$ 801,800
Lease liabilities		$ 820,500

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Business Combination (Details) - USD ($)	Jul. 31, 2018	Apr. 30, 2019
Silversea Cruises
Business Acquisition [Line Items]
Percentage of interests acquired	66.70%
Payments to acquire business	$ 1,020,000,000.00
Contingent consideration	44,000,000.0
Silversea Cruises
Business Acquisition [Line Items]
Long-term debt		$ 700,000,000
Silversea Cruises | Silversea Cruises
Business Acquisition [Line Items]
Long-term debt	$ 700,000,000
Minimum | Silversea Cruises
Business Acquisition [Line Items]
Contingent consideration, shares (in shares)	0
Maximum | Silversea Cruises
Business Acquisition [Line Items]
Contingent consideration, shares (in shares)	472,000

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Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Finite-life intangible assets, gross carrying value	$ 156,629	$ 156,629
Accumulated Amortization	13,231	6,251
Finite-life intangible assets, net carrying value	143,398	150,378
Indefinite-life intangible assets	351,725	351,725
Gross Carrying Value	508,354	508,354
Net Carrying Value	495,123	502,103
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Finite-life intangible assets, gross carrying value	97,400	97,400
Accumulated Amortization	4,329	1,082
Finite-life intangible assets, net carrying value	93,071	96,318
Galapagos operating license
Finite-Lived Intangible Assets [Line Items]
Finite-life intangible assets, gross carrying value	47,669	47,669
Accumulated Amortization	5,049	4,206
Finite-life intangible assets, net carrying value	42,620	43,463
Other finite-life intangible assets
Finite-Lived Intangible Assets [Line Items]
Finite-life intangible assets, gross carrying value	11,560	11,560
Accumulated Amortization	3,853	963
Finite-life intangible assets, net carrying value	$ 7,707	$ 10,597

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Intangible Assets - Finite-lived Intangible Assets Amortization Expense (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Remainder of 2019	$ 6,979
2020	12,995
2021	8,179
2022	8,179
2023	8,179
2024	$ 8,179

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Revenues - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Capitalized Contract Cost [Line Items]
Passenger ticket revenues	$ 2,806,631	$ 2,337,605	$ 5,246,398	$ 4,365,361
Contract liability	2,400,000		2,400,000		$ 1,900,000
Contract asset	56,600		56,600		57,800
Commission, transportation and other
Capitalized Contract Cost [Line Items]
Prepaid travel agent commissions	197,400		$ 197,400		$ 153,500
Minimum
Capitalized Contract Cost [Line Items]
Length of cruise			2 days
Maximum
Capitalized Contract Cost [Line Items]
Length of cruise			25 days
Port Costs
Capitalized Contract Cost [Line Items]
Passenger ticket revenues	$ 173,600	$ 151,400	$ 325,600	$ 288,100

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Revenues - Disaggregation of Revenue (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation of Revenue [Line Items]
Total revenues		$ 2,806,631	$ 2,337,605	$ 5,246,398	$ 4,365,361
Cruise Itinerary
Disaggregation of Revenue [Line Items]
Total revenues		2,690,762	2,246,395	5,032,382	4,203,819
Cruise Itinerary | North America
Disaggregation of Revenue [Line Items]
Total revenues	[1]	1,571,769	1,264,167	3,252,827	2,611,427
Cruise Itinerary | Asia Pacific
Disaggregation of Revenue [Line Items]
Total revenues	[2]	327,777	283,198	817,852	816,177
Cruise Itinerary | Europe
Disaggregation of Revenue [Line Items]
Total revenues	[3]	594,712	597,399	602,694	597,399
Cruise Itinerary | Other regions
Disaggregation of Revenue [Line Items]
Total revenues	[4]	196,504	101,631	359,009	178,816
Other Revenues
Disaggregation of Revenue [Line Items]
Total revenues	[5]	$ 115,869	$ 91,210	$ 214,016	$ 161,542
Passenger Ticket | Other regions
Disaggregation of Revenue [Line Items]
Percentage of revenues by country	[6]	24.00%	27.00%	34.00%	40.00%
Passenger Ticket | United States
Disaggregation of Revenue [Line Items]
Percentage of revenues by country		67.00%	63.00%	66.00%	60.00%
Passenger Ticket | United Kingdom
Disaggregation of Revenue [Line Items]
Percentage of revenues by country		9.00%	10.00%

[1] Includes the United States, Canada, Mexico and the Caribbean.

[2] Includes Southeast Asia (e.g., Singapore, Thailand and the Philippines), East Asia (e.g., China and Japan), South Asia (e.g., India and Pakistan) and Oceania (e.g., Australia and Fiji Islands) regions.

[3] Includes European countries (e.g., Nordics, Germany, France, Italy, Spain and the United Kingdom).

[4] Includes seasonality impacted itineraries primarily in South and Latin American countries.

[5] Includes revenues primarily related to cancellation fees, vacation protection insurance, pre- and post-cruise tours and fees for operating certain port facilities. Amounts also include revenues related to our bareboat charter, procurement and management related services we perform on behalf of our unconsolidated affiliates. Refer to Note 7. Other Assets for more information on our unconsolidated affiliates.

[6] No other individual country's revenue exceeded 10% for the quarters and six months ended June 30, 2019 and 2018.

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Earnings Per Share [Abstract]
Net Income attributable to Royal Caribbean Cruises Ltd. for basic and diluted earnings per share	$ 472,830	$ 466,295	$ 722,511	$ 684,948
Weighted-average common shares outstanding (in shares)	209,531,000	211,673,000	209,427,000	212,139,000
Dilutive effect of stock-based awards and stock options (in shares)	521,000	836,000	535,000	940,000
Diluted weighted-average shares outstanding (in shares)	210,052,000	212,509,000	209,962,000	213,079,000
Basic earnings per share (in dollars per share)	$ 2.26	$ 2.20	$ 3.45	$ 3.23
Diluted earnings per share (in dollars per share)	$ 2.25	$ 2.19	$ 3.44	$ 3.21
Antidilutive securities (in shares)	0	0	0	0

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Other Assets - Narrative (Details) $ in Thousands, € in Millions	1 Months Ended			3 Months Ended		6 Months Ended
	Apr. 30, 2016	Mar. 31, 2009 USD ($)	Mar. 31, 2009 EUR (€)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 EUR (€)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 EUR (€)	Mar. 31, 2018
Other Assets
Gain on sale of equipment						$ 0	$ 21,794
Proceeds from collection of advance to affiliate						19,509	37,607
Loss from equity investment				$ (33,045)	$ (44,311)	$ (66,739)	(73,063)
Mein Schiff 1
Other Assets
Useful life		23 years	23 years
TUI Cruises GmbH joint venture
Other Assets
Percentage of ownership interest				50.00%		50.00%		50.00%
Investments in entity				$ 557,800		$ 557,800			$ 578,100
Underlying equity in net assets				391,900		391,900			403,000
Advances to affiliate				162,500		$ 162,500		€ 142.7	172,200	€ 150.6
Debt, guaranteed percentage						50.00%
Additional amount outstanding on line of credit provided to TUI Cruises				$ 36,100		$ 36,100		€ 31.7
Proceeds from sale of equipment		$ 290,900	€ 224.4
Deferred gain on sale		$ 35,900
Gain on sale of equipment					21,800		21,800
TUI Cruises GmbH joint venture | TUI cruise ships
Other Assets
Restriction on reduction of current ownership interest (as a percent)				37.55%		37.55%		37.55%
TUI Cruises GmbH joint venture | Splendour of the Seas
Other Assets
Long term debt, term	10 years
Pullmantur and CDF Croisieres de France
Other Assets
Percentage of ownership interest				49.00%		49.00%		49.00%
Advances to affiliate				$ 17,100		$ 17,100		€ 15.0
Interest rate on loan provided to related party (as a percent)				6.50%		6.50%		6.50%
Debt, guaranteed percentage						51.00%
Retained ownership percentage of subsidiary after sale						49.00%
Maximum loss exposure				$ 53,500		$ 53,500			58,500
Proceeds from credit facility				$ 13,700		$ 13,700		€ 12.0	16,000	€ 14.0
Percentage of subsidiary which has been sold				51.00%		51.00%		51.00%
Grand Bahamas Shipyard Ltd.
Other Assets
Proceeds from collection of advance to affiliate				$ 1,100	11,200	$ 7,600	14,200
Grand Bahamas Shipyard Ltd. | Not Primary Beneficiary
Other Assets
Percentage of ownership interest				40.00%		40.00%		40.00%
Investments in entity				$ 50,000		$ 50,000			56,100
Underlying equity in net assets				36,700		36,700			41,400
Related party transaction, payment amount for ship repair and maintenance				4,800	$ 1,900	45,100	24,300
Grand Bahamas Shipyard Ltd. | Not Primary Beneficiary | Non-accrual status of advances to affiliates
Other Assets
Advances to affiliate				$ 13,300		$ 13,300			$ 14,600
Interest rate on loan provided to related party (as a percent)				5.50%		5.50%		5.50%
Grand Bahamas Shipyard Ltd. | Not Primary Beneficiary | Non-accrual status of advances to affiliates | LIBOR
Other Assets
Debt instrument, basis spread on variable rate						3.50%
Skysea Holding
Other Assets
Impairment charge							$ 23,300
Skysea Holding | Not Primary Beneficiary
Other Assets
Percentage of ownership interest											36.00%
Splendour of the Seas | TUI Cruises GmbH joint venture
Other Assets
Interest rate on loan provided to related party (as a percent)	6.25%
Debt, guaranteed percentage	50.00%
Springwater Capital LLC | Pullmantur and CDF Croisieres de France
Other Assets
Percentage of ownership interest				51.00%		51.00%		51.00%

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Other Assets - Share of Equity Income From Investments (Details) $ in Thousands, € in Millions		3 Months Ended			6 Months Ended
		Jun. 30, 2019 USD ($)	Jun. 30, 2019 EUR (€)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2019 EUR (€)	Jun. 30, 2018 USD ($)
Schedule of Investments [Line Items]
Share of equity income from investments		$ 33,045		$ 44,311	$ 66,739		$ 73,063
Dividends received	[1]	38,137		$ 121,024	80,572		$ 158,942
TUI Cruises
Schedule of Investments [Line Items]
Dividends received	[1]	$ 45,600	€ 40.0		$ 101,800	€ 90.0

[1] For the quarter ended June 30, 2019, TUI Cruises paid us a dividend of €40.0 million, or approximately $45.6 million, based on the exchange rate at the time of the transaction. For the six months ended June 30, 2019, TUI Cruises paid us dividends totaling €90.0 million, or approximately $101.8 million, based on the exchange rates at the time of the transactions. The amounts included in the table above are net of tax withholdings.

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Other Assets - Notes Receivable Due From Equity Instruments (Details) - USD ($) $ in Thousands		Jun. 30, 2019	Dec. 31, 2018
Other Assets [Abstract]
Total notes receivable due from equity investments		$ 193,334	$ 201,979
Less-current portion	[1]	23,651	19,075
Long-term portion	[2]	$ 169,683	$ 182,904

[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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Other Assets - Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Other Assets [Abstract]
Revenues	$ 11,975	$ 14,157	$ 23,857	$ 28,230
Expenses	$ 1,111	$ 3,270	$ 2,085	$ 6,908

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Debt (Details)	1 Months Ended				3 Months Ended	6 Months Ended		12 Months Ended
	Jul. 31, 2019 USD ($)	Jun. 30, 2019 USD ($)	Apr. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)	May 31, 2019 USD ($)	Mar. 31, 2019 USD ($)	Nov. 30, 2017 EUR (€)
Long-Term Debt
Short-term debt amount outstanding				$ 1,200,000,000
Loss on extinguishment of debt						$ 6,326,000	$ 0
Commercial Paper
Long-Term Debt
Borrowings outstanding		$ 1,000,000,000.0			$ 1,000,000,000.0	$ 1,000,000,000.0		$ 777,000,000.0
Weighted average interest rate		2.93%			2.93%	2.93%		3.19%
Long term debt, term						40 days		23 days
Loans Payable
Long-Term Debt
Loss on extinguishment of debt					$ 6,300,000	$ 6,300,000
$1.4 billion Unsecured Revolving Credit Facility | Revolving Credit Facility
Long-Term Debt
Long-term debt			$ 1,700,000,000							$ 1,400,000,000
Facility fee						0.125%
Unsecured Revolving Credit Facility Due 2022 | Revolving Credit Facility
Long-Term Debt
Long-term debt									$ 1,150,000,000
Term Loan | Loans Payable
Long-Term Debt
Long term debt, term			3 years
Long-term debt			$ 1,000,000,000.0
Silversea Cruises
Long-Term Debt
Long-term debt			$ 700,000,000
Novation Agreement | Unsecured Debt
Long-Term Debt
Long term debt, term			12 years
Unsecured debt			$ 908,000,000.0
Interest rate			3.45%
Unsecured Term Loan Facility | Unsecured Debt
Long-Term Debt
Long-term debt		$ 91,100,000			91,100,000	$ 91,100,000					€ 80,000,000.0
Silver Moon Credit Agreement | Unsecured Debt
Long-Term Debt
Long-term debt		$ 300,000,000			$ 300,000,000	$ 300,000,000
LIBOR | $1.4 billion Unsecured Revolving Credit Facility | Revolving Credit Facility
Long-Term Debt
Debt instrument, basis spread on variable rate						1.00%
LIBOR | Term Loan | Loans Payable
Long-Term Debt
Debt instrument, basis spread on variable rate			1.075%
LIBOR | Silver Moon Credit Agreement | Unsecured Debt
Long-Term Debt
Debt instrument, basis spread on variable rate		1.50%
EURIBOR | Unsecured Term Loan Facility | Unsecured Debt
Long-Term Debt
Debt instrument, basis spread on variable rate						1.195%
Euler Hermes | Novation Agreement | Unsecured Debt
Long-Term Debt
Percentage guaranteed by export credit agency			95.00%
Subsequent Event | Forecast
Long-Term Debt
Short-term debt amount outstanding	$ 2,900,000,000

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Leases - Narrative (Details) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2019 USD ($) ship	Jun. 30, 2019 USD ($) ship extension_option
Lessee, Lease, Description [Line Items]
Variable lease cost | $	$ 21.5	$ 55.8
Pullmantur and CDF Croisieres de France
Lessee, Lease, Description [Line Items]
Percentage of subsidiary which has been sold	51.00%	51.00%
Cruise ships
Lessee, Lease, Description [Line Items]
Number of ships under finance leases | ship	2	2
Additional lease term	6 years	6 years
Real Estate
Lessee, Lease, Description [Line Items]
Additional lease term	5 years	5 years
Finance lease term	43 years	43 years
Number of extension options | extension_option		2
Minimum | Real Estate
Lessee, Lease, Description [Line Items]
Renewal term	1 year	1 year
Minimum | Berthing Agreement
Lessee, Lease, Description [Line Items]
Renewal term	1 year	1 year
Maximum | Real Estate
Lessee, Lease, Description [Line Items]
Renewal term	10 years	10 years
Maximum | Berthing Agreement
Lessee, Lease, Description [Line Items]
Renewal term	20 years	20 years

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Leases - Supplemental Balance Sheet Information (Details) $ in Thousands	Jun. 30, 2019 USD ($)
Finance lease right-of-use assets, net:
Property and equipment, gross	$ 373,867
Accumulated depreciation	(45,412)
Property and equipment, net	328,455
Operating lease right-of-use assets	720,854
Total lease assets	1,049,309
Finance lease liabilities:
Current portion of debt	24,573
Long-term debt	218,106
Total finance lease liabilities	242,679
Operating lease liabilities:
Current portion of operating lease liabilities	92,523
Long-term operating lease liabilities	644,088
Total operating lease liabilities	736,611
Total lease liabilities	$ 979,290

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Leases - Schedule of Lease Expense (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Financial lease costs
Amortization of right-of-use-assets	$ 5,529	$ 8,724
Interest on lease liabilities	1,570	2,166
Total lease costs	38,104	73,089
Commission, transportation and other
Lessee, Lease, Description [Line Items]
Operating lease costs	19,057	38,113
Other operating expenses
Lessee, Lease, Description [Line Items]
Operating lease costs	6,930	13,861
Marketing, selling and administrative expenses
Lessee, Lease, Description [Line Items]
Operating lease costs	$ 5,018	$ 10,225

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Leases - Schedule of Lease Terms and Discount Rates (Details)	Jun. 30, 2019
Weighted average of the remaining lease term
Operating leases	10 years 8 months 12 days
Finance leases	28 years 7 months 6 days
Weighted average discount rate
Operating leases	4.65%
Finance leases	4.40%

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Leases - Supplemental Noncash Information (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2019 USD ($)
Leases [Abstract]
Operating cash flows from operating leases	$ 63,221
Operating cash flows from finance leases	2,166
Financing cash flows from finance leases	14,607
Right-of-use assets obtained in exchange for lease obligations:
Finance leases	$ 122,237

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Leases - Schedule of Lease Maturities (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Operating Leases
Remainder of 2019	$ 61,702
2020	122,781
2021	110,025
2022	103,561
2023	101,442
Thereafter	492,551
Total lease payments	992,062
Less: Interest	(255,451)
Present value of lease liabilities	736,611
Finance Leases
Remainder of 2019	23,619
2020	43,411
2021	45,934
2022	22,832
2023	11,891
Thereafter	414,104
Total lease payments	561,791
Less: Interest	(319,112)
Present value of lease liabilities	$ 242,679
Operating Leases
2019		$ 67,682
2020		64,237
2021		56,142
2022		52,759
2023		52,522
Thereafter		383,974
Total		$ 677,316

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Redeemable Noncontrolling Interest - Narrative (Details) - USD ($) $ in Millions	Jun. 30, 2019	Jul. 31, 2018
Royal Caribbean International | Silversea Cruises Group
Redeemable Noncontrolling Interest [Line Items]
Ownership percentage by noncontrolling owners	33.30%
Silversea Cruises
Redeemable Noncontrolling Interest [Line Items]
Redeemable noncontrolling interest		$ 537.8

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Redeemable Noncontrolling Interest - Schedule of Redeemable Noncontrolling Interest (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Beginning balance January 1, 2019			$ 542,020
Net income attributable to noncontrolling interest, including the contractual accretion of the put options	$ 7,125	$ 0	14,250	$ 0
Other			500
Ending balance June 30, 2019	$ 556,770		$ 556,770

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Commitments and Contingencies - Future Commitments (Details)	Jun. 30, 2019 berth
Long-term Purchase Commitment [Line Items]
Ship passenger capacity berths	31,700
Royal Caribbean International | Oasis-class
Long-term Purchase Commitment [Line Items]
Ship passenger capacity berths	5,700
Royal Caribbean International | Odyssey of the Seas
Long-term Purchase Commitment [Line Items]
Ship passenger capacity berths	4,200
Royal Caribbean International | Icon Class Ship One
Long-term Purchase Commitment [Line Items]
Ship passenger capacity berths	5,600
Royal Caribbean International | Icon Class Ship Two
Long-term Purchase Commitment [Line Items]
Ship passenger capacity berths	5,600
Celebrity Cruises | Celebrity Apex
Long-term Purchase Commitment [Line Items]
Ship passenger capacity berths	2,900
Celebrity Cruises | Edge Class Ship One
Long-term Purchase Commitment [Line Items]
Ship passenger capacity berths	3,250
Celebrity Cruises | Edge Class Ship Two
Long-term Purchase Commitment [Line Items]
Ship passenger capacity berths	3,250
Silversea Cruises | Silver Origin
Long-term Purchase Commitment [Line Items]
Ship passenger capacity berths	100
Silversea Cruises | Silver Moon
Long-term Purchase Commitment [Line Items]
Ship passenger capacity berths	550
Silversea Cruises | Silver Dawn
Long-term Purchase Commitment [Line Items]
Ship passenger capacity berths	550

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Commitments and Contingencies - Narrative (Details) $ in Millions	6 Months Ended
	Jun. 30, 2019 USD ($) ship berth	Apr. 30, 2019 ship berth	Dec. 31, 2018
Unrecorded Unconditional Purchase Obligation [Line Items]
Ship passenger capacity berths | berth	31,700
Number of months considered to determine requirement of prepayment of debts	24 months
Cruise ships on order
Unrecorded Unconditional Purchase Obligation [Line Items]
Aggregate cost of ships on order, not including TUI cruises on order | $	$ 10,300.0
Deposit for the purchase of ships expected to enter service | $	$ 614.0
Percentage of aggregate cost exposed to fluctuations in the euro exchange rate	55.60%		53.50%
Line of Credit | Minimum
Unrecorded Unconditional Purchase Obligation [Line Items]
Debt instrument covenant, minimum percentage of ownership by a person	50.00%
Debt Securities | Minimum
Unrecorded Unconditional Purchase Obligation [Line Items]
Debt instrument covenant, minimum percentage of ownership by a person	50.00%
Royal Caribbean International Cruise Ships | Silversea Cruises | Cruise ships on order
Unrecorded Unconditional Purchase Obligation [Line Items]
Number of ships under construction | ship	2	2
Ship passenger capacity berths | berth		1,200

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Commitments and Contingencies - Contingent Capital Commitments (Details)	Jun. 30, 2019 berth
Unrecorded Unconditional Purchase Obligation [Line Items]
Ship passenger capacity berths	31,700
Cruise ships on order | Royal Caribbean International Cruise Ships | Oasis-class
Unrecorded Unconditional Purchase Obligation [Line Items]
Ship passenger capacity berths	5,700
Cruise ships on order | Royal Caribbean International Cruise Ships | Icon-class
Unrecorded Unconditional Purchase Obligation [Line Items]
Ship passenger capacity berths	5,600
Cruise ships on order | Royal Caribbean International Cruise Ships | Edge-class
Unrecorded Unconditional Purchase Obligation [Line Items]
Ship passenger capacity berths	3,250

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Shareholders' Equity (Details) - USD ($)	1 Months Ended					3 Months Ended						6 Months Ended		12 Months Ended
	Jul. 31, 2019	Apr. 30, 2019	Jul. 31, 2018	May 31, 2018	Apr. 30, 2018	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Subsequent Event [Line Items]
Dividend declared (in dollars per share)						$ 0.7	$ 0.70	$ 0.70	$ 0.6	$ 0.60	$ 0.60	$ 1.40	$ 1.20
Common stock, dividends, per share, cash paid (in dollars per share)		$ 0.70	$ 0.60		$ 0.60		$ 0.70			$ 0.60
Length of repurchase program				24 months
Common stock repurchase program, authorized amount				$ 1,000,000,000.0
Treasury stock, shares, acquired (in shares)						0						0		2,800,000
Treasury stock, value, acquired, cost method									$ 137,460,000				$ 412,499,000	$ 300,000,000.0
Remaining authorized repurchase amount						$ 700,000,000.0						$ 700,000,000.0
Forecast | Subsequent Event
Subsequent Event [Line Items]
Common stock, dividends, per share, cash paid (in dollars per share)	$ 0.70

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Changes in Accumulated Other Comprehensive Income (Loss) - Changes in AOCI by Component (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Changes in accumulated other comprehensive loss by component
Total other comprehensive loss	$ (74,193)	$ (82,385)	$ (25,439)	$ 69,065
Changes related to cash flow derivative hedges
Changes in accumulated other comprehensive loss by component
Accumulated comprehensive loss at beginning of the year			(537,216)	(250,355)
Other comprehensive income (loss) before reclassifications			(3,249)	69,932
Amounts reclassified from accumulated other comprehensive loss			(19,642)	3,698
Total other comprehensive loss			(22,891)	73,630
Ending balance	(560,107)	(176,725)	(560,107)	(176,725)
Changes in defined benefit plans
Changes in accumulated other comprehensive loss by component
Accumulated comprehensive loss at beginning of the year			(26,023)	(33,666)
Other comprehensive income (loss) before reclassifications			(10,758)	5,082
Amounts reclassified from accumulated other comprehensive loss			383	714
Total other comprehensive loss			(10,375)	5,796
Ending balance	(36,398)	(27,870)	(36,398)	(27,870)
Foreign currency translation adjustments
Changes in accumulated other comprehensive loss by component
Accumulated comprehensive loss at beginning of the year			(64,495)	(50,244)
Other comprehensive income (loss) before reclassifications			7,827	(10,361)
Amounts reclassified from accumulated other comprehensive loss			0	0
Total other comprehensive loss			7,827	(10,361)
Ending balance	(56,668)	(60,605)	(56,668)	(60,605)
Accumulated other comprehensive loss
Changes in accumulated other comprehensive loss by component
Accumulated comprehensive loss at beginning of the year			(627,734)	(334,265)
Other comprehensive income (loss) before reclassifications			(6,180)	64,653
Amounts reclassified from accumulated other comprehensive loss			(19,259)	4,412
Total other comprehensive loss			(25,439)	69,065
Ending balance	$ (653,173)	$ (265,200)	$ (653,173)	$ (265,200)

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Changes in Accumulated Other Comprehensive Income (Loss) - Reclassifications (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Reclassifications out of accumulated other comprehensive loss
Interest expense, net of interest capitalized	$ 111,304	$ 81,864	$ 211,719	$ 149,742
Depreciation and amortization	311,600	253,376	603,885	493,606
Other income (expense)	(21,781)	33,855	(26,869)	9,755
Fuel	181,924	172,309	342,095	332,650
Other operating	(93,698)	9,400	(155,723)	(46,093)
Net income	472,830	466,295	722,511	684,948
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
Reclassifications out of accumulated other comprehensive loss
Net income	6,725	10,845	19,259	(4,412)
Gain (loss) on cash flow derivative hedges | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
Reclassifications out of accumulated other comprehensive loss
Net income	6,920	11,217	19,642	(3,698)
Gain (loss) on cash flow derivative hedges | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | Interest rate swaps
Reclassifications out of accumulated other comprehensive loss
Interest expense, net of interest capitalized	(409)	(2,138)	(800)	(8,976)
Gain (loss) on cash flow derivative hedges | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | Foreign currency forward contracts
Reclassifications out of accumulated other comprehensive loss
Depreciation and amortization	(3,545)	(3,156)	(6,879)	(6,468)
Other income (expense)	(1,300)	14,601	(2,615)	14,643
Gain (loss) on cash flow derivative hedges | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income | Fuel swaps
Reclassifications out of accumulated other comprehensive loss
Other income (expense)	(1,188)	(133)	(1,444)	192
Fuel	13,362	2,043	31,380	(3,089)
Actuarial loss | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
Reclassifications out of accumulated other comprehensive loss
Payroll and related	(195)	(372)	(383)	(714)
Changes in defined benefit plans | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
Reclassifications out of accumulated other comprehensive loss
Net income	(195)	(372)	(383)	(714)
Foreign cumulative translation | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
Reclassifications out of accumulated other comprehensive loss
Other operating	$ 0	$ 0	$ 0	$ 0

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Fair Value Measurements and Derivative Instruments - Estimated Fair Value (Details) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Thousands		Jun. 30, 2019	Dec. 31, 2018
Level 1
Assets:
Cash and cash equivalents	[1],[2]	$ 235,001	$ 287,852
Total Assets	[2]	235,001	287,852
Liabilities:
Long-term debt (including current portion of long-term debt)	[2],[3]	0	0
Total Liabilities	[2]	0	0
Level 2
Assets:
Cash and cash equivalents	[1],[4]	0	0
Total Assets	[4]	0	0
Liabilities:
Long-term debt (including current portion of long-term debt)	[3],[4]	10,337,397	10,244,214
Total Liabilities	[4]	10,337,397	10,244,214
Level 3
Assets:
Cash and cash equivalents	[1],[5]	0	0
Total Assets	[5]	0	0
Liabilities:
Long-term debt (including current portion of long-term debt)	[3],[5]	0	0
Total Liabilities	[5]	0	0
Total Carrying Amount
Assets:
Cash and cash equivalents	[1]	235,001	287,852
Total Assets		235,001	287,852
Liabilities:
Long-term debt (including current portion of long-term debt)	[3]	9,625,559	9,871,267
Total Liabilities		9,625,559	9,871,267
Total Fair Value
Assets:
Cash and cash equivalents	[1]	235,001	287,852
Total Assets		235,001	287,852
Liabilities:
Long-term debt (including current portion of long-term debt)	[3]	10,337,397	10,244,214
Total Liabilities		$ 10,337,397	$ 10,244,214

[1] Consists of cash and marketable securities with original maturities of less than 90 days.

[2] Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

[3] Consists of unsecured revolving credit facilities, senior notes, senior debentures and term loans. These amounts do not include our capital lease obligations or commercial paper.

[4] Inputs other than quoted prices included within Level 1 that are observable for the liability, either directly or indirectly. For unsecured revolving credit facilities and unsecured term loans, fair value is determined utilizing the income valuation approach. This valuation model takes into account the contract terms of our debt such as the debt maturity and the interest rate on the debt. The valuation model also takes into account the creditworthiness of the Company.

[5] Inputs that are unobservable. The Company did not use any Level 3 inputs as of June 30, 2019 and December 31, 2018.

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Fair Value Measurements and Derivative Instruments - Recurring (Details) - USD ($) $ in Thousands		3 Months Ended	6 Months Ended
		Jun. 30, 2019	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Assets:
Derivative financial instruments		$ 2,052	$ 2,052		$ 4,994
Liabilities:
Derivative financial instruments		109,344	109,344		141,509
Contingent consideration expense		10,700	10,700	$ 0
Fair Value, Measurements, Recurring | Level 1
Assets:
Derivative financial instruments	[1],[2]	0	0		0
Total Assets	[2]	0	0		0
Liabilities:
Derivative financial instruments	[2],[3]	0	0		0
Contingent consideration	[2],[4]	0	0		0
Total Liabilities	[2]	0	0		0
Fair Value, Measurements, Recurring | Level 2
Assets:
Derivative financial instruments	[1],[5]	78,441	78,441		65,297
Total Assets	[5]	78,441	78,441		65,297
Liabilities:
Derivative financial instruments	[3],[5]	185,733	185,733		201,812
Contingent consideration	[4],[5]	0	0		0
Total Liabilities	[5]	185,733	185,733		201,812
Fair Value, Measurements, Recurring | Level 3
Assets:
Derivative financial instruments	[1],[6]	0	0		0
Total Assets	[6]	0	0		0
Liabilities:
Derivative financial instruments	[3],[6]	0	0		0
Contingent consideration	[4],[6]	54,700	54,700		44,000
Total Liabilities	[6]	54,700	54,700		44,000
Total | Fair Value, Measurements, Recurring
Assets:
Derivative financial instruments	[1]	78,441	78,441		65,297
Total Assets		78,441	78,441		65,297
Liabilities:
Derivative financial instruments	[3]	185,733	185,733		201,812
Contingent consideration	[4]	54,700	54,700		44,000
Total Liabilities		$ 240,433	$ 240,433		$ 245,812

[1] Consists of foreign currency forward contracts, interest rate swaps and fuel swaps. Refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

[2] Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

[3] Consists of foreign currency forward contracts, interest rate swaps and fuel swaps. Refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

[4] The contingent consideration related to the Silversea Cruises acquisition is estimated by applying a Monte-Carlo simulation method using our closing stock price along with significant inputs not observable in the market, including the probability of achieving the milestones and estimated future operating results. The Monte-Carlo simulation is a generally accepted statistical technique used to generate a defined number of valuation paths in order to develop a reasonable estimate of fair value. Refer to Note 3. Business Combination for further information on the Silversea Cruises acquisition. For the quarter and six months ended June 30, 2019, we recorded a contingent consideration expense of $10.7 million recorded within Other (expense) income in our consolidated statements of comprehensive income (loss).

[5] Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate swaps and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity, as well as other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest rate yield curves. Derivative instrument fair values take into account the creditworthiness of the counterparty and the Company.

[6] Inputs that are unobservable. 

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Fair Value Measurements and Derivative Instruments - Offsetting of Derivative Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Offsetting of Financial Assets under Master Netting Agreements [Abstract]
Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet	$ 78,441	$ 65,297
Gross Amount of Eligible Offsetting Recognized Derivative Liabilities	(76,389)	(60,303)
Cash Collateral Received	0	0
Net Amount of Derivative Assets	2,052	4,994
Offsetting of Financial Liabilities under Master Netting Agreements [Abstract]
Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet	(185,733)	(201,812)
Gross Amount of Eligible Offsetting Recognized Derivative Assets	76,389	60,303
Cash Collateral Pledged	0	0
Net Amount of Derivative Liabilities	$ (109,344)	$ (141,509)

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Fair Value Measurements and Derivative Instruments - Derivative Instruments, Interest Rate Risk, Foreign Currency Exchange Rate Risk (Narrative) (Details) $ in Thousands, € in Millions	3 Months Ended		6 Months Ended			12 Months Ended
	Jun. 30, 2019 USD ($) ship	Jun. 30, 2018 USD ($)	Jun. 30, 2019 USD ($) ship	Jun. 30, 2019 EUR (€)	Jun. 30, 2018 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2018 EUR (€)	Jun. 30, 2019 EUR (€) ship	Apr. 30, 2019 ship
Gains and losses from derivatives involved in hedging relationships
Derivative instrument, credit risk exposure			$ 2,000			$ 5,600
Maximum length of time hedged in derivative contract			3 years	3 years
Percentage of debt bearing fixed interest	65.40%		65.40%			59.10%		65.40%
Change in fair value of contingent consideration	$ 10,700		$ 10,700		$ 0
Interest rate swaps
Gains and losses from derivatives involved in hedging relationships
Derivative, notional amount	3,700,000		3,700,000			$ 3,400,000
Forward Contracts
Gains and losses from derivatives involved in hedging relationships
Change in fair value of foreign currency forward contracts recognized in earnings	(4,200)	$ (36,900)	800		$ (31,300)
Forward Contracts | Not Designated
Gains and losses from derivatives involved in hedging relationships
Derivative, notional amount	719,400		719,400
Foreign exchange contracts
Gains and losses from derivatives involved in hedging relationships
Derivative, notional amount	3,100,000		3,100,000			$ 3,200,000
Cruise ships on order
Gains and losses from derivatives involved in hedging relationships
Aggregate cost of ships on order, not including partner brands on order			10,300,000
Amount deposited for cost of ships on order	$ 614,000		$ 614,000
Percentage of aggregate cost exposed to fluctuations in the euro exchange rate	55.60%		55.60%			53.50%		55.60%
TUI Cruises | Forward Contracts | Designated as Hedging Instrument
Gains and losses from derivatives involved in hedging relationships
Derivative, notional amount	$ 197,000		$ 197,000					€ 173.0
Foreign currency debt
Gains and losses from derivatives involved in hedging relationships
Carrying value of non-derivative instrument designated as hedging instrument			(224,874)			$ 320,152
Foreign currency debt | TUI Cruises
Gains and losses from derivatives involved in hedging relationships
Carrying value of non-derivative instrument designated as hedging instrument			$ 224,900	€ 197.5		$ 320,200	€ 280.0
Royal Caribbean International Cruise Ships | Silversea Cruises | Cruise ships on order
Gains and losses from derivatives involved in hedging relationships
Number of ships under construction | ship	2		2					2	2

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Fair Value Measurements and Derivative Instruments - Interest Rate Risk (Details) - Interest rate swaps	6 Months Ended
	Jun. 30, 2019 USD ($)
Fair Value Hedging
Interest Rate Fair Value Hedges [Abstract]
Long-term debt	$ 737,500,000
Fair Value Hedging | Oasis of the Seas term loan
Interest Rate Fair Value Hedges [Abstract]
Long-term debt	$ 87,500,000
Debt Fixed Rate	5.41%
Fair Value Hedging | Unsecured senior notes
Interest Rate Fair Value Hedges [Abstract]
Long-term debt	$ 650,000,000
Debt Fixed Rate	5.25%
Cash flow hedge
Interest Rate Cash Flow Hedges [Abstract]
Swap notional amount	$ 2,917,316,000
Cash flow hedge | Celebrity Reflection term loan
Interest Rate Cash Flow Hedges [Abstract]
Swap notional amount	$ 299,979,000
All-in Swap Fixed Rate	2.85%
Cash flow hedge | Quantum of the Seas term loan
Interest Rate Cash Flow Hedges [Abstract]
Swap notional amount	$ 459,375,000
All-in Swap Fixed Rate	3.74%
Cash flow hedge | Anthem of the Seas term loan
Interest Rate Cash Flow Hedges [Abstract]
Swap notional amount	$ 483,333,000
All-in Swap Fixed Rate	3.86%
Cash flow hedge | Ovation of the Seas term loan
Interest Rate Cash Flow Hedges [Abstract]
Swap notional amount	$ 622,500,000
All-in Swap Fixed Rate	3.16%
Cash flow hedge | Harmony of the Seas term loan
Interest Rate Cash Flow Hedges [Abstract]
Swap notional amount	$ 592,129,000	[1]
All-in Swap Fixed Rate	2.26%	[1]
Cash flow hedge | Odyssey of the Seas
Interest Rate Cash Flow Hedges [Abstract]
Swap notional amount	$ 460,000,000	[2]
All-in Swap Fixed Rate	3.20%	[2]
LIBOR | Fair Value Hedging | Oasis of the Seas term loan
Interest Rate Fair Value Hedges [Abstract]
Swap Floating Rate: LIBOR plus	3.87%
All-in swap floating rate	6.49%
LIBOR | Fair Value Hedging | Unsecured senior notes
Interest Rate Fair Value Hedges [Abstract]
Swap Floating Rate: LIBOR plus	3.63%
All-in swap floating rate	6.15%
LIBOR | Cash flow hedge | Celebrity Reflection term loan
Interest Rate Cash Flow Hedges [Abstract]
Debt Floating Rate	0.40%
LIBOR | Cash flow hedge | Quantum of the Seas term loan
Interest Rate Cash Flow Hedges [Abstract]
Debt Floating Rate	1.30%
LIBOR | Cash flow hedge | Anthem of the Seas term loan
Interest Rate Cash Flow Hedges [Abstract]
Debt Floating Rate	1.30%
LIBOR | Cash flow hedge | Ovation of the Seas term loan
Interest Rate Cash Flow Hedges [Abstract]
Debt Floating Rate	1.00%
EURIBOR | Cash flow hedge | Harmony of the Seas term loan
Interest Rate Cash Flow Hedges [Abstract]
Debt Floating Rate	1.15%	[1]
EURIBOR | Cash flow hedge | Odyssey of the Seas
Interest Rate Cash Flow Hedges [Abstract]
Debt Floating Rate	0.95%	[2]

[1] Interest rate swap agreements hedging the Euro-denominated term loan for Harmony of the Seas include EURIBOR zero-floor matching the hedged debt EURIBOR zero-floor. Amount presented is based on the exchange rate as of June 30, 2019.

[2] Interest rate swap agreements hedging the term loan for Odyssey of the Seas includes a LIBOR zero-floor matching the hedged debt zero-floor. The anticipated unsecured term loan for the financing of Odyssey of the Seas is expected to be drawn in October 2020.

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Fair Value Measurements and Derivative Instruments - Fuel Price Risk (Details) - Fuel Swap Agreements $ in Millions	Jun. 30, 2019 USD ($) T	Dec. 31, 2018 T
Derivative Instruments
Estimated unrealized net loss associated with cash flow hedges pertaining to fuel swap agreements expected to be reclassified to earnings from accumulated other comprehensive income loss | $	$ 19.6
2019
Derivative Instruments
Fuel swap agreements (metric tons)	435,400	856,800
Percentage of projected requirements	59.00%	58.00%
2020
Derivative Instruments
Fuel swap agreements (metric tons)	830,500	830,500
Percentage of projected requirements	55.00%	54.00%
2021
Derivative Instruments
Fuel swap agreements (metric tons)	488,900	488,900
Percentage of projected requirements	30.00%	28.00%
2022
Derivative Instruments
Fuel swap agreements (metric tons)	322,900	322,900
Percentage of projected requirements	19.00%	19.00%
2023
Derivative Instruments
Fuel swap agreements (metric tons)	82,400	0
Percentage of projected requirements	5.00%	0.00%

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Fair Value Measurements and Derivative Instruments - Balance Sheet (Details) - USD ($) $ in Thousands		Jun. 30, 2019	Dec. 31, 2018
Asset Derivatives
Asset Derivatives		$ 78,441	$ 65,297
Liability Derivatives
Liability Derivatives		185,733	201,812
Designated as Hedging Instrument
Asset Derivatives
Asset Derivatives	[1]	76,738	58,576
Liability Derivatives
Liability Derivatives	[1]	185,698	199,795
Notional Disclosures
Carrying Amount of the Hedged Liabilities		730,374	725,486
Cumulative amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liabilities		(3,019)	(24,766)
Not Designated as Hedging Instrument
Asset Derivatives
Asset Derivatives		1,703	6,721
Liability Derivatives
Liability Derivatives		35	2,017
Interest rate swaps | Designated as Hedging Instrument | Other assets
Asset Derivatives
Asset Derivatives	[1]	0	23,518
Interest rate swaps | Designated as Hedging Instrument | Other long-term liabilities
Liability Derivatives
Liability Derivatives	[1]	64,442	40,467
Foreign currency forward contracts | Designated as Hedging Instrument | Other assets
Asset Derivatives
Asset Derivatives	[1]	9,514	10,844
Foreign currency forward contracts | Designated as Hedging Instrument | Derivative financial instruments
Asset Derivatives
Asset Derivatives	[1]	4,343	4,044
Liability Derivatives
Liability Derivatives	[1]	24,742	39,665
Foreign currency forward contracts | Designated as Hedging Instrument | Other long-term liabilities
Liability Derivatives
Liability Derivatives	[1]	54,632	16,854
Foreign currency forward contracts | Not Designated as Hedging Instrument | Other assets
Asset Derivatives
Asset Derivatives		0	1,579
Foreign currency forward contracts | Not Designated as Hedging Instrument | Derivative financial instruments
Asset Derivatives
Asset Derivatives		0	1,751
Liability Derivatives
Liability Derivatives		0	808
Foreign currency forward contracts | Not Designated as Hedging Instrument | Other long-term liabilities
Liability Derivatives
Liability Derivatives		0	833
Fuel swaps | Designated as Hedging Instrument | Other assets
Asset Derivatives
Asset Derivatives	[1]	30,361	9,204
Fuel swaps | Designated as Hedging Instrument | Derivative financial instruments
Asset Derivatives
Asset Derivatives	[1]	32,520	10,966
Liability Derivatives
Liability Derivatives	[1]	12,956	37,627
Fuel swaps | Designated as Hedging Instrument | Other long-term liabilities
Liability Derivatives
Liability Derivatives	[1]	28,926	65,182
Fuel swaps | Not Designated as Hedging Instrument | Other assets
Asset Derivatives
Asset Derivatives		7	587
Fuel swaps | Not Designated as Hedging Instrument | Derivative financial instruments
Asset Derivatives
Asset Derivatives		1,696	2,804
Liability Derivatives
Liability Derivatives		20	376
Fuel swaps | Not Designated as Hedging Instrument | Other long-term liabilities
Liability Derivatives
Liability Derivatives		$ 15	$ 0

[1] Accounting Standard Codification 815-20 “Derivatives and Hedging.”

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Fair Value Measurements and Derivative Instruments - Income Statement Hedging Instruments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Effect of derivative instruments involved in hedging on the consolidated financial statements
Fuel	$ 181,924	$ 172,309	$ 342,095	$ 332,650
Depreciation and amortization	311,600	253,376	603,885	493,606
Interest Income (Expense)	(104,962)	(68,766)	(195,593)	(128,911)
Other income (expense)	(21,781)	33,855	(26,869)	9,755
Fair Value Hedging
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Income on Hedged Item	(13,287)	3,374	(21,746)	16,556
Amount of Gain (Loss) Recognized in Income on Derivative	10,944	(5,310)	16,779	(17,880)
Fair Value Hedging | Interest Contracts | Interest expense, net of interest capitalized
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Income on Hedged Item	(13,287)	3,374	(21,746)	16,556
Amount of Gain (Loss) Recognized in Income on Derivative	10,944	(5,310)	16,779	(17,880)
Fair Value Hedging | Interest Contracts | Other income (expense)
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Income on Hedged Item	0	0	0	0
Amount of Gain (Loss) Recognized in Income on Derivative	0	0	0	0
Fair Value Hedging | Interest rate swaps | Interest expense, net of interest capitalized
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Income on Hedged Item	(13,287)	3,374	(21,746)	16,556
Amount of Gain (Loss) Recognized in Income on Derivative	10,944	(5,310)	16,779	(17,880)
Cash flow hedge | Interest Contracts | Interest expense, net of interest capitalized
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion)	(409)	(2,138)	(800)	(8,976)
Cash flow hedge | Fuel swaps | Fuel cost
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion)	13,362	2,043	31,380	(3,089)
Cash flow hedge | Fuel swaps | Other income (expense)
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion)	(1,188)	(133)	(1,444)	192
Cash flow hedge | Foreign exchange contracts | Depreciation and amortization expenses
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion)	(3,545)	(3,156)	(6,879)	(6,468)
Cash flow hedge | Foreign exchange contracts | Other income (expense)
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion)	$ (1,300)	$ 14,601	$ (2,615)	$ 14,643

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Fair Value Measurements and Derivative Instruments - Balance Sheet Hedging Instruments (Details) - Foreign currency debt - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Derivative Instruments
Carrying value of non-derivative instrument designated as hedging instrument	$ (224,874)	$ 320,152
Current portion of debt
Derivative Instruments
Carrying value of non-derivative instrument designated as hedging instrument	(75,697)	38,168
Long-term debt
Derivative Instruments
Carrying value of non-derivative instrument designated as hedging instrument	$ (149,177)	$ 281,984

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Fair Value Measurements and Derivative Instruments - Designated Cash Flow Hedges (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivative	$ (64,814)	$ (57,684)	$ (3,249)	$ 69,932
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income	6,920	11,217	19,642	(3,698)
Derivative Instruments, Gain (Loss) Recognized in Income, Ineffective Portion and Amount Excluded from Effectiveness Testing, Net [Abstract]
Net inception fair value at January 1, 2019					$ (8,359)
Amount of gain recognized in income on derivatives for the period ended June 30, 2019			1,556
Amount of loss remaining to be amortized in accumulated other comprehensive loss, as of June 30, 2019			(4,518)
Fair value at June 30, 2019	(11,321)		(11,321)
Interest rate swaps
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivative	(40,132)	8,867	(68,461)	46,058
Foreign currency forward contracts
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivative	19,394	(193,329)	(70,750)	(97,963)
Foreign currency forward contracts
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivative	0	0	0	0
Fuel swaps
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivative	0	0	0	0
Fuel Swap
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivative	(44,076)	126,778	135,962	121,837
Interest expense, net of interest capitalized | Interest rate swaps
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income	(409)	(2,138)	(800)	(8,976)
Depreciation and amortization expenses | Foreign currency forward contracts
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income	(3,545)	(3,156)	(6,879)	(6,468)
Other income (expense) | Foreign currency forward contracts
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income	(1,300)	14,601	(2,615)	14,643
Other income (expense) | Fuel swaps
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income	(1,188)	(133)	(1,444)	192
Fuel | Fuel Swap
Effect of derivative instruments involved in hedging on the consolidated financial statements
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income	$ 13,362	$ 2,043	$ 31,380	$ (3,089)

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Fair Value Measurements and Derivative Instruments - Non-Derivative Net Investment (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Foreign Currency Debt
Net investment hedge
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss)	$ (2,994)	$ 15,853	$ 2,708	$ 7,609

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Fair Value Measurements and Derivative Instruments - Derivatives Not Designated as Hedging Instruments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Derivative Instruments
Amount of gain (loss) recognized in income on derivatives	$ (4,067)	$ (37,562)	$ 713	$ (29,750)
Foreign currency forward contracts | Other income (expense)
Derivative Instruments
Amount of gain (loss) recognized in income on derivatives	(4,168)	(36,894)	846	(31,259)
Fuel swaps | Other income (expense)
Derivative Instruments
Amount of gain (loss) recognized in income on derivatives	(21)	213	(119)	183
Fuel swaps | Fuel cost
Derivative Instruments
Amount of gain (loss) recognized in income on derivatives	$ 122	$ (881)	$ (14)	$ 1,326

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Fair Value Measurements and Derivative Instruments - Credit Features (Details)	Jun. 30, 2019 derivative
Fair Value Disclosures [Abstract]
Number of derivatives matured	5

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Label	Element	Value
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (23,476,000)
Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (23,476,000)