Royal Caribbean Cruises .(RCL) - 2025 Q4 - Annual Report

Passenger Growth and Performance - Passengers carried increased to 9,446,010 in 2025, up from 8,564,272 in 2024, reflecting a growth of approximately 10.3% year-over-year[86] - Passenger cruise days reached 58,518,751 in 2025, compared to 54,844,780 in 2024, indicating a growth of about 4.8%[86] - Occupancy rate improved to 109.7% in 2025, up from 108.5% in 2024, demonstrating a continued recovery in demand[86] Revenue Composition - Passenger ticket revenues accounted for approximately 70% of total revenues in 2025, 2024, and 2023[91] - Onboard and other revenues constituted around 30% of total revenues in 2025, 2024, and 2023, highlighting the importance of ancillary services[93] Workforce and Employee Engagement - The company employed approximately 108,000 employees as of December 31, 2025, with 87% of shipboard employees covered by collective bargaining agreements[98] - The workforce invested approximately 1.8 million hours in learning programs in 2025, completing around 2.8 million courses[103] - The shoreside employee engagement scores remained high in 2025, exceeding most global industry benchmarks[104] Compliance and Environmental Regulations - The company operates under various international regulations, ensuring compliance with safety and environmental standards[112] - The company is required to comply with the Standards of Training, Certification, and Watchkeeping for Seafarers (STCW), ensuring crew training and competency are up-to-date[115] - Compliance with the MARPOL Regulations has been achieved through equipping over 70% of the fleet with Advanced Emissions Purification (AEP) systems, mitigating potential operational impacts[121] - The company has implemented measures to comply with the EU Emission Trading System (ETS), which will require purchasing carbon emission allowances for 40% of emissions in Europe starting in 2024, increasing to 100% by 2026[129] - The FuelEU Maritime regulation mandates a 2% reduction in GHG intensity by 2025, escalating to 80% by 2050, with no material impact expected on operations for 2025 and 2026[130] - The company is subject to various international and national environmental regulations, which may increase compliance costs in the future due to potential stricter regulations[118] - The company is required to comply with the Clean Water Act and the Vessel General Permit, which regulate incidental discharges from commercial vessels, with potential impacts on environmental operations[132] - The company has obtained compliance certificates for oil, sewage, air pollution prevention, and ballast water management for all ships, ensuring adherence to international regulations[119] Financial Obligations and Taxation - The company maintains surety bonds for non-performance obligations to guests, currently set at $32 million per operator, subject to adjustments based on the consumer price index[135] - The company has established financial responsibility for liabilities resulting from non-performance obligations in multiple jurisdictions, including the UK, where performance bonds can reach up to £179 million during peak seasons[136] - Royal Caribbean Cruises Ltd. and its subsidiaries would be subject to U.S. income taxation on a portion of their income if they fail to meet the requirements of Section 883 of the Internal Revenue Code[146] - A special 4% tax on U.S. source gross transportation income would apply to ship-owning subsidiaries if Section 883 is not available[148] - The company operated 16 ships under the U.K. tonnage tax regime during the year ended December 31, 2025, with most ships transitioning to this regime in 2026[151] - The OECD's Global Minimum Tax introduces a new global minimum tax of 15%, with certain aspects effective from January 1, 2024, and the majority of earnings affected starting in 2026[154][155] - The company does not expect the Global Minimum Tax rules to have a material impact on its results of operations for the years 2024 and 2025[155] - Royal Caribbean Cruises Ltd. is subject to various U.S. state income taxes, including a 33% tax on adjusted gross income from onboard gambling activities conducted in Alaska waters[150] - The tax on U.S. source income from activities not considered incidental to international shipping is not material to the company's results of operations[149] - The company’s parent corporation is incorporated in Liberia, which has not announced plans to revise its local corporate income tax laws as part of the Pillar Two proposal[156] Leadership and Management - The executive team includes Jason T. Liberty as Chairman and CEO, Naftali Holtz as CFO, and Michael W. Bayley as President and CEO of Royal Caribbean[157][158][160] - Laura Hodges Bethge became President of Celebrity Cruises in May 2023, having held various leadership roles since joining the company in 2000[161]