RCLRoyal Caribbean Group

In November 2024, September 2025, the FASB issued ASU No. 2024-04, Debt 2025-06, Intangibles - Debt with Conversion Goodwill and Other Options - Internal - Use Software (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. 350-40): Targeted Improvements to the Accounting for Internal - Use Software. This ASU new guidance is intended to improve eliminate the relevance use of project stages and consistency in application of the induced conversion guidance by clarifying the requirements introduces a principles-based framework for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion rather than a debt extinguishment. recognizing and capitalizing internal-use software costs. The amendments in this ASU are is effective for annual reporting periods beginning after December 15, 2025, and 2027, including interim reporting periods within those annual reporting periods. Early adoption is permitted for entities that have adopted permitted. We are evaluating the amendments in Update 2020-06 and the amendments can be applied on either a prospective or a retrospective basis. We early adopted impact of the new guidance effective October 1, 2024 on a retrospective basis. The adoption of this guidance did not have a material impact to our consolidated financial statements or and related disclosures.

In 2025, 2026, we expect our capacity to increase by 5.4% 6.7% compared to 2024, 2025, with the addition a full year of Star of the Seas in late summer and Celebrity Xcel in late 2025, Xcel, and a full year delivery of operations for Utopia Legend of the Seas and Silver Ray. in the summer. In addition, the first Royal Beach Club, our portfolio of exclusive land-based destinations is expected to reach 8 by 2028, with additions of Silversea’s Cormorant at Paradise Island in the Bahamas, is set to open towards the end of the year, and Wonder of the Seas will join Utopia of the Seas focused on short Caribbean itineraries. We also expect to advance development of the 55 South, Royal Beach Club Cozumel, Santorini, and Royal Beach Club Cozumel on the horizon. In addition, we will continue development of Perfect Day Mexico, Mexico and Silversea’s new hotel in Puerto Williams, Chile that will provide a further-elevated and seamless guest experience for its Antarctica expeditions. Royal Beach Club Lelepa. Our new ships, optimized deployment, continued load factor growth and enhanced onboard product offerings are expected to drive growth in Net Yields Yields, total revenues, and Total Revenues. earnings.

Our business continues to demand the use of sophisticated The Company depends on technology and systems. automated systems, including emerging technologies, such as artificial intelligence (“AI”), to operate its business, including but not limited to, computerized reservation systems, ship operations and crew scheduling systems, shipboard internet services, cloud-based technologies, technical and business operations systems and commercial websites and applications, including our mobile app. These technologies and systems require significant investment and must be refined, updated, upgraded and/or replaced with more advanced systems capabilities in order to continue to meet our customers’ demands and expectations, to operate in an interconnected business world, as well as to conduct our business operations effectively. If we are unable to do so in a timely manner or within reasonable cost parameters, if there are any disruptions, delays or deficiencies in design or if we are unable to appropriately and timely train our employees to operate any effectively availing ourselves 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 impair our operating results. technological advances.

The Court entered final judgment in December 2022 in favor of the plaintiff and awarded damages and attorneys' fees to the plaintiff in the aggregate amount of approximately $112 million. We then appealed the judgment to the United States Court of Appeals for the 11th Circuit. On October 22, 2024, the 11th Circuit issued an opinion reversing the lower court’s judgment. The plaintiff's petition for a rehearing by the full 11th Circuit was subsequently denied. The plaintiff has the right to petition petitioned the United States Supreme Court for a writ of certiorari. During the fourth quarter of 2022, we recorded a charge of approximately $130 million to Other income (expense) within our consolidated statements of comprehensive income (loss) related to the Havana Docks Action, including post-judgment interest and related legal defense costs and bonding fees. Following the 11th Circuit's denial of the rehearing petition, we released approximately $124 million of the previously recorded loss contingency for the year ended December 31, 2024, recognized within Other income (expense) within our consolidated statements of comprehensive income (loss). certiorari, which was granted on October 3, 2025.