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General | 3 Months Ended
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Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
General | Note 1. General Description of Business We are a global cruise company. We own and operate three global cruise brands: Royal Caribbean International, Celebrity Cruises and Silversea Cruises (collectively, our "Global Brands"). We also own 50% of TUI Cruises GmbH ("TUIC"), which operates the German brands TUI Cruises and Hapag-Lloyd Cruises (collectively, our "Partner Brands"). We account for our investment in TUIC under the equity method of accounting. Together, our Global Brands and our Partner Brands operate a combined 59 ships as of March 31, 2021. Our ships offer a selection of worldwide itineraries that call on more than 1,000 destinations on all seven continents. Effective March 19, 2021, we sold our wholly-owned brand, Azamara Cruises ("Azamara"), including its three-ship fleet and associated intellectual property, to Sycamore Partners for $201 million, subject to closing adjustments. Management's Plan and Liquidity In response to the COVID-19 pandemic, we voluntarily suspended our global cruise operations effective March 13, 2020 and this suspension remains in effect through at least June 30, 2021, for most of our cruise operations. We continue to work with the U.S. Centers for Disease Control and Prevention (“CDC”), other U.S. and non-U.S. regulatory agencies and a panel composed of leading experts in relevant fields, including epidemiology, infectious diseases, public policy and applicable regulations, engineering and general health safety (the "Healthy Sail Panel" or “HSP”) to develop a plan to return to service in consideration of global vaccination efforts. For cruise ship operations in U.S. waters, our return to service plan also considers the requirements of the CDC’s Framework for the Conditional Sailing Order (the “Conditional Order”), including recently issued technical instructions under the Conditional Order. The Conditional Order permits cruise ship passenger operations in U.S. waters under certain conditions and following the establishment of certain protocols and procedures, with the Conditional Order remaining in effect until the earlier of (1) the expiration of the Secretary of Health and Human Services’ declaration that COVID-19 constitutes a public health emergency, (2) the date the CDC Director rescinds or modifies the Conditional Order based on specific public health or other considerations, or (3) November 1, 2021. On April 28, 2021, the CDC issued a letter to members of the cruising industry communicating that it remains committed to the resumption of cruise ship passenger operations in the U.S. following the requirements of the Conditional Order by mid-summer 2021. In the communication, the CDC provided clarifications to its previously issued technical instructions regarding several matters including port operations and COVID-19 testing and vaccination protocols. We are currently evaluating the impact of these clarifications on the technical instructions. We expect to re-start the rest of our global cruise operations in a phased manner once we fulfill the requirements of the CDC and other U.S. and non-U.S. regulatory agencies, also with reduced guest occupancy, modified itineraries and enhanced health, safety and vaccination protocols. Based on our assessment of these requirements, the status of COVID-19 infection and/or vaccination rates in the U.S. or globally or for other reasons, we may determine it necessary to further extend our voluntary suspension of our Global Brands’ cruise sailings which currently extends through at least June 30, 2021, for most of our cruise operations. As such, we believe the suspension of our operations and the impact to our global bookings resulting from COVID-19 will continue to have a material negative impact on our results of operations and liquidity, which may be prolonged beyond containment of the disease and its variants. Significant events affecting travel, including COVID-19 and our suspension of operations, typically have an impact on the booking pattern for cruise vacations, with the full extent of the impact generally determined by the length of time the event influences travel decisions. The estimation of our future liquidity requirements include numerous assumptions that are subject to various risks and uncertainties. The principal assumptions used to estimate our future liquidity requirements consist of: •Expected date of return to operations; •Expected gradual resumption of cruise operations; •Expected lower than comparable historical occupancy levels during the resumption of cruise operations; and •Expected incremental expenses for the resumption of cruise operations, for the maintenance of additional public health protocols and procedures for additional regulations. There can be no assurance that our assumptions and estimates are accurate due to possible variables, including, but not limited to, the uncertainties associated with the CDC’s interpretation and application of the requirements in the Conditional Order and subsequent changes to those requirements, our ability to meet these requirements, some of which may be significant, and whether efforts by other countries to contain the disease and its variants will further restrict our ability to commence operations. We have implemented and may continue to pursue a number of proactive measures to mitigate the financial and operational impacts of COVID-19, including reduction of capital expenditures and operating expenses (such as reduction and furloughing of workforce and laying up of vessels), the issuance of debt and shares of our common stock, the amendment of credit agreements to defer payments and the waiver and/or modification of covenant requirements and the suspension of dividend payments. As of March 31, 2021, we had liquidity of $5.8 billion, consisting of cash and cash equivalents of $5.1 billion and a $0.7 billion 364-day term loan facility commitment available to draw through August 12, 2022. Our revolving credit facilities were fully utilized through a combination of amounts drawn and letters of credit issued under the facilities as of March 31, 2021. We have extended our $1.0 billion unsecured loan due April 2022 and our $1.6 billion unsecured revolving credit facility due October 2022 to October 2023 and April 2024, respectively. As of March 31, 2021, we were in compliance with our financial covenants. Refer to Note 7. Debt for further information regarding the amendments made to our debt facilities and credit card processing agreements, including related covenants, during the quarter ended March 31, 2021. Based on our assumptions regarding the impact of COVID-19 and our suspension of operations, as well as our present financial condition, we believe that we have sufficient financial resources to fund our obligations for at least the next twelve months from the issuance of these financial statements. 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, 2020 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 6. 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 December 31, 2020 through March 31, 2021. 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. The March 2021 sale of Azamara does not represent a strategic shift that will have a major effect on our operations and financial results, as we continue to provide similar itineraries to and source passengers from the markets served by the Azamara business. Therefore, the sale of Azamara did not meet the criteria for discontinued operations reporting. Effective March 19, 2021, we no longer consolidate Azamara's balance sheet nor recognize its results of operations in our consolidated financial statements. We recognized an immaterial gain on the sale during the quarter ended March 31, 2021 and have agreed to provide certain transition services to Azamara for a period of time for a fee.

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