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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract] |
Commitments and Contingencies | Note 17. Commitments and Contingencies Ship Purchase Obligations Our future capital commitments consist primarily of new ship orders. As of December 31, 2022, we had one Oasis-class ship and three ships of a new generation, known as our Icon-class, on order for our Royal Caribbean International brand with an aggregate capacity of approximately 22,500 berths. As of December 31, 2022, we had one Edge-class ship on order for our Celebrity brand with an aggregate capacity of approximately 3,250 berths. Additionally as of December 31, 2022, we had two ships on order with an aggregate capacity of approximately 1,460 berths for our Silversea Cruises brand. The following provides further information on recent developments with respect to our ship orders. In September 2019, Silversea Cruises entered into two credit agreements, guaranteed by us, for the unsecured financing of the first and second Evolution-class ships for an amount of up to 80% of each ship's contract price through facilities to be guaranteed 95% by Euler Hermes, the official export credit agency of Germany. The maximum loan amount under each facility is not to exceed the United States dollar equivalent of €351.6 million in the case of the first Evolution-class ship and €359.0 million in the case of the second Evolution-class ship, or approximately $375.0 million and $382.9 million, respectively, based on the exchange rate at December 31, 2022. Each loan, once funded, will amortize semi-annually and will mature 12 years following the delivery of each ship. At our election, interest on each loan will accrue either (1) at a fixed rate of 4.14% and 4.18%, respectively (inclusive of the applicable margin) or (2) at a floating rate equal to LIBOR plus 0.79% and 0.83%, respectively. The first and second Evolution-class ships will each have a capacity of approximately 730 berths. In September 2021, we amended the credit agreements for the first and second Evolution-class ships to increase their maximum loan amounts by €175.6 million on an aggregate basis, or approximately $187.3 million based on the exchange rate at December 31, 2022. At our election, interest on incremental portion of each loan will accrue either (1) at a fixed rate of 4.34% and 4.38%, respectively (inclusive of the applicable margin) or (2) at a floating rate equal to LIBOR plus 0.99% and 1.03%, respectively. In December 2019, we entered into a credit agreement for the unsecured financing of the sixth Oasis-class ship for up to 80% of the ship’s contract price through a facility to be guaranteed 100% by BpiFrance Assurance Export, the official export credit agency of France. Under the financing arrangement, we have the right, but not the obligation, to satisfy the obligations to be incurred upon delivery and acceptance of the ship under the shipbuilding contract by assuming, at delivery and acceptance, the debt indirectly incurred by the shipbuilder during the construction of the ship. The maximum loan amount under the facility is not to exceed the United States dollar equivalent of €1.3 billion, or approximately $1.4 billion based on the exchange rate at December 31, 2022. The loan will amortize semi-annually and will mature 12 years following delivery of the ship. Interest on the loan will accrue at a fixed rate of 3.00% (inclusive of margin). The sixth Oasis-class ship will have a capacity of approximately 5,700 berths. In December 2019, we entered into a credit agreement for the unsecured financing of the third Icon-class ship for up to 80% of the ship’s contract price. Finnvera plc, the official export credit agency of Finland, has agreed to guarantee 95% of the substantial majority of the financing, with a smaller portion of the financing to be 95% guaranteed by Euler Hermes. The maximum loan amount under the facility is not to exceed the United States dollar equivalent of €1.4 billion, or approximately $1.5 billion based on the exchange rate at December 31, 2022. The loan, once funded, will amortize semi-annually and will mature 12 years following the delivery of the ship. Approximately 60% of the loan will accrue interest at a fixed rate of 3.29%. The balance of the loan will accrue interest at a floating rate of LIBOR plus 0.85%. The third Icon-class ship will have a capacity of approximately 5,600 berths During 2017, we entered into credit agreements for the unsecured financing of the first two Icon-class ships for up to 80% of each ship’s contract price. For each ship, Finnvera plc, has agreed to guarantee 100% of a substantial majority of the financing to the lenders, with a smaller portion of the financing to be 95% guaranteed by Euler Hermes. The maximum loan amount under each facility is not to exceed €1.4 billion, or approximately $1.5 billion, based on the exchange rate at December 31, 2022. Interest on approximately 75% of each loan will accrue at a fixed rate of 3.56% and 3.76% for the first and the second Icon-class ships, respectively, and the balance will accrue interest at a floating rate ranging from LIBOR plus 1.10% to 1.15% and LIBOR plus 1.15% to 1.20% for the first and the second Icon-class ships, respectively. Each loan will amortize semi-annually and will mature 12 years following delivery of each ship. The first and second Icon-class ships will each have a capacity of approximately 5,600 berths. During 2017, we entered into credit agreements for the unsecured financing of the fourth Edge-class ship for up to 80% of the ship’s contract price through facilities to be guaranteed 100% by Bpifrance Assurance Export. Under these financing arrangements, we have the right, but not the obligation, to satisfy the obligations to be incurred upon delivery and acceptance of the ship under the shipbuilding contract by assuming, at delivery and acceptance, the debt indirectly incurred by the shipbuilder during the construction of the ship. The maximum loan amount under the facility is not to exceed the United States dollar equivalent of €714.6 million or approximately $762.2 million based on the exchange rate at December 31, 2022. The loan will amortize semi-annually and will mature 12 years following delivery of the ship. Interest on the loan will accrue at a fixed rate of 3.18%. The fourth Edge-class ships will have a capacity of approximately 3,250 berths. Our future capital commitments consist primarily of new ship orders. As of December 31, 2022, the dates that ships on order by our Global and Partner Brands are expected to be delivered, subject to change in the event of construction delays, and their approximate berths are as follows:
Ship |  | Shipyard |  | Expected to be delivered |  | Approximate Berths
Royal Caribbean International — |  |  |  |  |  |
Oasis-class: |  |  |  |  |  |
Utopia of the Seas |  | Chantiers de l’Atlantique |  | 2nd Quarter 2024 |  | 5,700
Icon-class: |  |  |  |  |  |
Icon of the Seas |  | Meyer Turku Oy |  | 4th Quarter 2023 |  | 5,600
Unnamed |  | Meyer Turku Oy |  | 2nd Quarter 2025 |  | 5,600
Unnamed |  | Meyer Turku Oy |  | 2nd Quarter 2026 |  | 5,600
Celebrity Cruises — |  |  |  |  |  |
Edge-class: |  |  |  |  |  |
Celebrity Ascent |  | Chantiers de l’Atlantique |  | 4th Quarter 2023 |  | 3,250
Silversea Cruises — |  |  |  |  |  |
Evolution-class: |  |  |  |  |  |
Silver Nova |  | Meyer Werft |  | 2nd Quarter 2023 |  | 730
Silver Ray |  | Meyer Werft |  | 2nd Quarter 2024 |  | 730
TUI Cruises (50% joint venture) — |  |  |  |  |  |
Mein Schiff 7 |  | Meyer Turku Oy |  | 2nd Quarter 2024 |  | 2,900
Unnamed |  | Fincantieri |  | 4th Quarter 2024 |  | 4,100
Unnamed |  | Fincantieri |  | 2nd Quarter 2026 |  | 4,100
Total Berths |  |  |  |  |  | 38,310
In addition, as of December 31, 2022, we have an agreement in place with Chantiers de l’Atlantique to build an additional Edge-class ship for delivery in 2025, which is contingent upon completion of conditions precedent and financing. As of December 31, 2022, the aggregate cost of our ships on order, presented in the above table, not including any ships on order by our Partner Brands, was approximately $9.8 billion, of which we had deposited $831.6 million. Approximately 52.3% of the aggregate cost was exposed to fluctuations in the Euro exchange rate at December 31, 2022. Refer to Note 16. Fair Value Measurements and Derivative Instruments for further information. Litigation As previously reported, two lawsuits were filed against us in August 2019 in the U.S. District Court for the Southern District of Florida (the "Court") under Title III of the Cuban Liberty and Democratic Solidarity Act, also known as the Helms-Burton Act. The complaint filed by Havana Docks Corporation ("Havana Docks Action") alleges it holds an interest in the Havana Cruise Port Terminal, and the complaint filed by Javier Garcia-Bengochea (the "Port of Santiago Action") alleges that he holds an interest in the Port of Santiago, Cuba, both of which were expropriated by the Cuban government. The complaints further allege that we trafficked in those properties by embarking and disembarking passengers at these facilities. The plaintiffs seek all available statutory remedies, including the value of the expropriated property, plus interest, treble damages, attorneys’ fees and costs. The Court dismissed the Port of Santiago Action with prejudice on the basis that the plaintiff acquired his interest in the Port of Santiago after the enactment of the Helms-Burton Act. In November 2022, the United States Court of Appeals for the 11th Circuit affirmed the Court's dismissal of the lawsuit. In the Havana Docks Action, the Court entered final judgment in December 2022 in favor of the plaintiff and awarded damages and attorneys' fees to the plaintiff in the aggregate amount of approximately $112 million. We have appealed the judgment to the United States Court of Appeals for the 11th Circuit and the plaintiff has cross-appealed with regards to the interest calculation used for purposes of determining damages. We believe we have meritorious grounds for and intend to vigorously pursue our appeal. During the fourth quarter of 2022, we recorded a charge of approximately $130.0 million to Other (expense) income within our consolidated statements of comprehensive loss related to the Havana Docks Action, including post-judgment interest and related legal defense costs and bonding fees. In addition, we are routinely involved in claims typical within the cruise vacation industry. The majority of these claims are covered by insurance. We believe the outcome of such claims, net of expected insurance recoveries, will not have a material adverse impact on our financial condition or results of operations and cash flows. Other Some of the contracts that we enter into include indemnification provisions that obligate us to make payments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes, increased lender capital costs and other similar costs. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business. There are no stated or notional amounts included in the indemnification clauses and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses. We have not been required to make any payments under such indemnification clauses in the past and, under current circumstances, we do not believe an indemnification in any material amount is probable. 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. At December 31, 2022, we have future commitments to pay for our usage of certain port facilities, marine consumables, services and maintenance contracts as follows (in thousands):
Year |
2023 | $ | 187,855 |
2024 | 101,324 |
2025 | 96,798 |
2026 | 55,872 |
2027 | 52,883 |
Thereafter | 455,858 |
| $ | 950,590 |

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