Table	of	Contents

# UNITED	STATES

# SECURITIES	AND	EXCHANGE	COMMISSION

# (Mark	One)

# ANNUAL	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT	OF	1934

For	the	fiscal	year	ended	December	31,	2012

# o TRANSITION	REPORT	PURSUANT	TO	SECTION	13	OR	15(d)	OF	THE	SECURITIES	EXCHANGE	ACT OF	1934

# ROYAL	CARIBBEAN	CRUISES	LTD.

(Exact	name	of	registrant	as	specified	in	its	charter)

Republic	of	Liberia

(State	or	other	jurisdiction	of incorporation	or	organization)

(I.R.S.	Employer	Identification	No.)

(Address	of	principal	executive	offices)	(zip	code)

(Registrant's	telephone	number,	including	area	code)

										Securities	registered	pursuant	to	Section	12(b)	of	the	Act:

# Title	of	each	class

# Name	of	each	exchange	on	which	registered

Common	Stock,	par	value	$.01	per	share New	York	Stock	Exchange

										Securities	registered	pursuant	to	Section	12(g)	of	the	Act:	None

										Indicate	by	check	mark	if	the	registrant	is	a	well-known	seasoned	issuer,	as	defined	in	Rule	405	of	the	Securities	Act.	Yes ý				No	o

										Indicate	by	check	mark	if	the	registrant	is	not	required	to	file	reports	pursuant	to	Section	13	or	Section	15(d)	of	the	Act.	Yes o				No	ý

										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	ý				No	o

										Indicate	by	check	mark	whether	the	registrant	has	submitted	electronically	and	posted	on	its	corporate	Web	site,	if	any,	every	Interactive	Data	File	required	to	be	submitted	and	posted	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	and	post	such	files).	Yes	ý				No	o

										Indicate	by	check	mark	if	disclosure	of	delinquent	filers	pursuant	to	Item	405	of	Regulation	S-K	is	not	contained	herein,	and	will	not	be	contained,	to	the	best	of	registrant's	knowledge,	in	definitive	proxy	or information	statements	incorporated	by	reference	in	Part	III	of	this	Form	10-K	or	any	amendment	to	this	Form	10-K.	o

										Indicate	by	check	mark	whether	the	registrant	is	a	large	accelerated	filer,	an	accelerated	filer,	a	non-accelerated	filer,	or	a	smaller	reporting	company	(See	the	definitions	of	"large	accelerated	filer,"	"accelerated filer"	and	"smaller	reporting	company"	in	Rule	12b-2	of	the	Exchange	Act).

Large	accelerated	filer	ý Accelerated	filer	o

Non-accelerated	filer	o

Smaller	reporting	company	o

(Do	not	check	if	a smaller	reporting	company)

										Indicate	by	check	mark	whether	the	registrant	is	a	shell	company	(as	defined	in	Rule	12b-2	of	the	Act).	Yes

										The	aggregate	market	value	of	the	registrant's	common	stock	at	June	29,	2012	(based	upon	the	closing	sale	price	of	the	common	stock	on	the	New	York	Stock	Exchange	on	June	29,	2012)	held	by	those	persons deemed	by	the	registrant	to	be	non-affiliates	was	approximately	$4.5	billion.	Shares	of	the	registrant's	common	stock	held	by	each	executive	officer	and	director	and	by	each	entity	or	person	that,	to	the	registrant's knowledge,	owned	10%	or	more	of	the	registrant's	outstanding	common	stock	as	of	June	29,	2012	have	been	excluded	from	this	number	in	that	these	persons	may	be	deemed	affiliates	of	the	registrant.	This	determination of	possible	affiliate	status	is	not	necessarily	a	conclusive	determination	for	other	purposes.

# DOCUMENTS	INCORPORATED	BY	REFERENCE

										Portions	of	the	registrant's	Definitive	Proxy	Statement	relating	to	its	2013	Annual	Meeting	of	Shareholders	are	incorporated	by	reference	in	Part	III,	Items	10-14	of	this	Annual	Report	on	Form	10-K	as	indicated herein.

# PART	I

# PART	II

# PART	III

# PART	IV

								As	used	in	this	Annual	Report	on	Form	10-K,	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," "Pullmantur,"	"Azamara	Club	Cruises,"	"CDF	Croisières	de	France,"	and	"TUI	Cruises"	refer	to	our	cruise	brands.	However,	our	operating	results	and	other disclosures	herein	do	not	include	TUI	Cruises	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	Annual	Report	on	Form	10-K	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.

# General

								Royal	Caribbean	was	founded	in	1968	as	a	partnership.	Its	corporate	structure	evolved	over	the	years	and	the	current	parent	corporation,	Royal	Caribbean Cruises	Ltd.,	was	incorporated	on	July	23,	1985	in	the	Republic	of	Liberia	under	the	Business	Corporation	Act	of	Liberia.

								We	are	the	world's	second	largest	cruise	company.	We	own	Royal	Caribbean	International,	Celebrity	Cruises,	Pullmantur,	Azamara	Club	Cruises	and	CDF Croisières	de	France,	as	well	as	TUI	Cruises	through	a	50%	joint	venture.	Together,	these	six	brands	operate	a	combined	41	ships	in	the	cruise	vacation	industry	with	an aggregate	capacity	of	approximately	98,650	berths	as	of	December	31,	2012.

								Our	ships	operate	on	a	selection	of	worldwide	itineraries	that	call	on	approximately	455	destinations	on	all	seven	continents.	In	addition	to	our	headquarters	in Miami,	Florida,	we	have	offices	and	a	network	of	international	representatives	around	the	world	which	focus	on	our	global	guest	sourcing.

								We	compete	principally	on	the	basis	of	exceptional	service	provided	by	our	crew;	innovation	and	quality	of	ships;	variety	of	itineraries;	choice	of	destinations;	and price.	We	believe	that	our	commitment	to	build	state-of-the-art	ships	and	to	invest	in	the	maintenance	and	revitalization	of	our	fleet	to,	among	other	things,	incorporate our	latest	signature	innovations,	allows	us	to	continue	to	attract	new	and	loyal	repeat	guests.

								We	believe	cruising	continues	to	be	a	widely	accepted	vacation	choice	due	to	its	inherent	value,	extensive	itineraries	and	variety	of	shipboard	and	shoreside activities.	In	addition,	we	believe	that	our	products	appeal	to	a	large	consumer	base	and	are	not	dependent	on	a	single	market	or	demographic.

# Our	Brands

								Our	global	brands	include	Royal	Caribbean	International,	Celebrity	Cruises,	and	Azamara	Club	Cruises.	These	brands	are	complemented	by	our	Pullmantur	brand, which	has	been	tailored	to	serve	the	cruise	markets	in	Spain,	Portugal	and	Latin	America;	our	CDF	Croisières	de	France	brand,	which	provides	us	with	a	tailored product	targeted	at	the	French	market;	and	our	50%	joint	venture	TUI	Cruises	which	is	specifically	tailored	for	the	German	market.	The	operating	results	of	all	of	our brands	are	included	in	our	consolidated	results	of	operations,	except	for	TUI	Cruises,	which	is	accounted	for	under	the	equity	method	of	accounting.	See	Note	1.

General	and	Note	6.	Other	Assets	to

our	consolidated	financial	statements	under	Item	8.	Financial	Statements	and	Supplementary	Data	for	further	details.

								We	believe	our	global	brands	possess	the	versatility	to	enter	multiple	cruise	market	segments	within	the	cruise	vacation	industry.	Although	each	of	our	brands	has its	own	marketing	style	as	well	as	ships	and	crews	of	various	sizes,	the	nature	of	the	products	sold	and	services	delivered	by	our	brands	share	a	common	base	(i.e.	the sale	and	provision	of	cruise	vacations).	Our	brands	also	have	similar	itineraries	as	well	as	similar	cost	and	revenue	components.	In	addition,	our	brands	source	passengers from	similar	markets	around	the	world	and	operate	in	similar	economic	environments	with	a	significant	degree	of	commercial	overlap.	As	a	result,	we	strategically manage	our	brands	as	a	single	business	with	the	ultimate	objective	of	maximizing	long-term	shareholder	value.

# Royal	Caribbean	International

								We	currently	operate	22	ships	with	an	aggregate	capacity	of	approximately	62,000	berths	under	our	Royal	Caribbean	International	brand,	offering	cruise	itineraries that	range	from	two	to	18	nights.	As	previously	announced,	we	will	redeploy	Monarch	of	the	Seas	from	Royal	Caribbean	International	to	Pullmantur	in	April	2013.	In addition,	we	currently	have	three	ships	on	order	for	our	Royal	Caribbean	International	brand	with	an	aggregate	capacity	of	approximately	13,600	berths	which	are expected	to	enter	service	in	the	fourth	quarter	of	2014,	the	second	quarter	of	2015	and	the	second	quarter	of	2016,	respectively.	This	includes	our	recently	ordered	third Oasis-class	ship.	Royal	Caribbean	International	offers	a	variety	of	itineraries	to	destinations	worldwide,	including	Alaska,	Asia,	Australia,	Bahamas,	Bermuda,	Canada, the	Caribbean,	Europe,	the	Middle	East,	the	Panama	Canal,	South	America,	South	Pacific	and	New	Zealand.

								Royal	Caribbean	International	is	positioned	at	the	upper	end	of	the	contemporary	segment	of	the	cruise	vacation	industry,	generally	characterized	by	cruises	that	are seven	nights	or	shorter	and	feature	a	casual	ambiance	as	well	as	a	variety	of	activities	and	entertainment	venues.	We	believe	that	the	quality	of	the	Royal	Caribbean International	brand	also	enables	it	to	attract	guests	from	the	premium	segment,	which	is	generally	characterized	by	cruises	that	are	seven	to	14	nights	and	appeal	to	the more	experienced	guest	who	is	usually	more	affluent.	This	allows	Royal	Caribbean	International	to	achieve	market	coverage	that	is	among	the	broadest	of	any	of	the major	cruise	brands	in	the	cruise	vacation	industry.

								Royal	Caribbean	International's	strategy	is	to	attract	an	array	of	vacationing	guests	by	providing	a	wide	variety	of	itineraries	and	cruise	lengths	with	multiple innovative	options	for	onboard	dining,	entertainment	and	other	onboard	activities.	During	2011	Royal	Caribbean	International	initiated	a	vessel	revitalization	program	in order	to	incorporate	some	of	the	most	popular	features	of	our	newer	ships	across	the	fleet.	Nine	ships	were	revitalized	under	this	program	during	2011	and	2012	and	an additional	three	ships	are	scheduled	for	revitalization	during	2013.

								Royal	Caribbean	International	offers	a	variety	of	shore	excursions	at	each	port	of	call.	We	believe	that	the	variety	and	quality	of	Royal	Caribbean	International's product	offerings	represent	excellent	value	to	consumers,	especially	to	couples	and	families	traveling	with	children.	Because	of	the	brand's	extensive	and	innovative product	offerings,	we	believe	Royal	Caribbean	International	is	well	positioned	to	attract	new	consumers	to	the	cruise	vacation	industry	and	to	continue	to	bring	loyal repeat	guests	back	for	their	next	vacation.

# Celebrity	Cruises

								We	currently	operate	11	ships	with	an	aggregate	capacity	of	approximately	24,800	berths	under	our	Celebrity	Cruises	brand,	offering	cruise	itineraries	that	range from	two	to	18	nights.	Celebrity	Cruises	offers	a	global	cruise	experience	by	providing	a	variety	of	cruise	lengths	and	itineraries	to	marquee	destinations	throughout	the world,	including	Alaska,	Asia,	Australia,	Bermuda,	Canada,	the	Caribbean,

Europe,	Hawaii,	New	England,	New	Zealand,	the	Panama	Canal,	the	US	Pacific	Coast	and	South	America.	Celebrity	Cruises	was	the	first	major	cruise	line	to	operate	a ship	in	the	Galapagos	Islands,	Celebrity	Xpedition,	operating	in	this	location	since	2004.	Celebrity	Xpedition	has	96	berths	and	provides	this	unique	experience	on	seven day	cruises	that	include	pre-cruise	tours	in	Ecuador.

								Celebrity	Cruises	is	positioned	within	the	premium	segment	of	the	cruise	vacation	industry.	Celebrity	Cruises	delivers	a	modern	luxury	cruise	vacation	experience that	appeals	to	experienced	cruisers,	resulting	in	a	strong	base	of	loyal	repeat	guests.	The	brand	also	appeals	to	vacationers	who	have	not	yet	cruised	who	seek	to	explore destinations	throughout	the	world	and	would	enjoy	the	high	quality,	service-focused	and	modern	luxury	experience	the	brand	offers.

								Celebrity	Cruises'	strategy	is	to	deliver	an	intimate	experience	onboard	upscale	ships	that	offer	luxurious	accommodations,	a	high	staff-to-guest	ratio,	fine	dining, personalized	service,	extensive	spa	facilities,	and	unique	onboard	activities	and	entertainment.	The	brand	began	a	revitalization	program	for	all	four	Millennium-class ships	in	2010	in	order	to	incorporate	well	received	concepts	from	the	Solstice-class	ships.	The	revitalization	program	is	expected	to	be	completed	in	2013	when	Celebrity Constellation,	the	final	Millennium-class	vessel	to	be	revitalized,	will	undergo	a	second	revitalization	to	incorporate	additional	amenities	and	staterooms.

# Azamara	Club	Cruises

								We	currently	operate	two	ships	with	an	aggregate	capacity	of	approximately	1,400	berths	under	our	Azamara	Club	Cruises	brand,	offering	cruise	itineraries	that range	from	four	to	18	nights.	Azamara	Club	Cruises	is	designed	to	serve	the	up-market	segment	of	the	North	American,	United	Kingdom	and	Australian	markets.	The up-market	segment	incorporates	elements	of	the	premium	segment	and	the	luxury	segment	which	is	generally	characterized	by	smaller	ships,	high	standards	of accommodation	and	service,	higher	prices	and	exotic	itineraries	to	ports	which	are	inaccessible	to	larger	ships.

								Azamara	Club	Cruises'	strategy	is	to	deliver	distinctive	destination	experiences,	featuring	unique	itineraries	with	more	overnights	and	longer	stays	as	well	as thorough	tours	allowing	guests	to	truly	experience	the	destination.	Azamara	Club	Cruises'	focus	is	to	attract	experienced	travelers	who	are	looking	for	more	in-depth destination	experiences,	and	who	seek	a	more	intimate	onboard	experience	and	a	high	level	of	service.	Azamara	Club	Cruises	sails	in	Asia,	Northern	and	Western Europe,	the	Mediterranean,	South	and	Central	America,	the	less-traveled	islands	of	the	Caribbean	and	North	America.

								Azamara	Club	Cruises	offers	a	variety	of	onboard	services,	amenities	and	activities,	including	gaming	facilities,	fine	dining,	spa	and	wellness,	butler	service	for suites,	as	well	as	entertainment	venues.	Azamara	Club	Cruises	also	includes	as	part	of	the	base	price	of	the	cruise	certain	complimentary	onboard	services,	amenities	and activities	which	are	not	normally	included	in	the	base	price	of	other	cruise	lines.

# Pullmantur

								We	currently	operate	three	ships	with	an	aggregate	capacity	of	approximately	5,300	berths	under	our	Pullmantur	brand,	offering	cruise	itineraries	that	range	from four	to	12	nights.	As	previously	announced,	Monarch	of	the	Seas	will	be	redeployed	from	Royal	Caribbean	International	to	Pullmantur	in	April	2013.

								Pullmantur	serves	the	contemporary	segment	of	the	Spanish,	Portuguese	and	Latin	American	cruise	markets.	Pullmantur	also	has	land-based	tour	operations	and owns	a	49%	interest	in	an	air	business	that	operates	four	Boeing	747	aircraft	in	support	of	its	cruise	and	tour	operations.

								Pullmantur's	strategy	is	to	attract	cruise	guests	by	providing	a	variety	of	cruising	options	and	land-based	travel	packages.	Pullmantur	offers	a	range	of	cruise itineraries	to	Brazil,	the	Caribbean	and

Europe.	Pullmantur	offers	a	wide	array	of	onboard	activities	and	services	to	guests,	including	exercise	facilities,	swimming	pools,	beauty	salons,	gaming	facilities, shopping,	dining,	certain	complimentary	beverages,	and	entertainment	venues.	Pullmantur's	tour	operations	sell	land-based	travel	packages	primarily	to	Spanish	guests, including	hotels	and	flights	mainly	to	Caribbean	resorts,	and	land-based	tour	packages	to	Europe	primarily	aimed	at	Latin	American	guests.	In	addition,	Pullmantur owns	a	travel	agency	network	that	offers	a	wide	array	of	travel	related	products	to	guests	in	Spain.

# CDF	Croisières	de	France

								CDF	Croisières	de	France	currently	operates	the	1,350-berth	Horizon.	CDF	Croisières	de	France	is	designed	to	serve	the	contemporary	segment	of	the	French cruise	market	by	providing	a	brand	tailored	for	French	cruise	guests.	CDF	Croisières	de	France	offers	seasonal	itineraries	to	the	Mediterranean	and	a	variety	of	onboard services,	amenities	and	activities,	including	entertainment	venues,	exercise	and	spa	facilities,	fine	dining,	and	gaming	facilities.

# TUI	Cruises

								TUI	Cruises	is	designed	to	serve	the	contemporary	and	premium	segments	of	the	German	cruise	market	by	offering	tailored	product	for	German	guests.	All	onboard activities,	services,	shore	excursions	and	menu	offerings	are	designed	to	suit	the	preferences	of	this	target	market.	TUI	Cruises	operates	two	ships,	Mein	Schiff	I	and Mein	Schiff	II,	with	an	aggregate	capacity	of	approximately	3,800	berths.	In	addition,	TUI	Cruises	has	two	ships	on	order,	each	with	a	capacity	of	2,500	berths, scheduled	for	delivery	in	the	second	quarter	of	2014	and	second	quarter	of	2015,	respectively.	TUI	Cruises	is	a	joint	venture	owned	50%	by	us	and	50%	by	TUI	AG,	a German	tourism	and	shipping	company	that	also	owns	51%	of	TUI	Travel,	a	British	tourism	company.

# Industry

								Cruising	is	considered	a	well	established	vacation	sector	in	the	North	American	market,	a	growing	sector	over	the	long-term	in	the	European	market	and	a developing	but	promising	sector	in	several	other	emerging	markets.	Industry	data	indicates	that	a	significant	portion	of	cruise	guests	carried	are	first-time	cruisers.	We believe	this	presents	an	opportunity	for	long-term	growth	and	a	potential	for	increased	profitability.

								We	estimate	that	the	global	cruise	industry	carried	20.8	million	cruise	guests	in	2012	compared	to	20.2	million	cruise	guests	carried	in	2011	and	18.8	million	cruise guests	carried	in	2010.	We	estimate	that	the	global	cruise	fleet	was	served	by	approximately	432,000	berths	on	approximately	282	ships	at	the	end	of	2012.	There	are approximately	19	ships	with	an	estimated	65,000	berths	that	are	expected	to	be	placed	in	service	in	the	global	cruise	market	between	2013	and	2017,	although	it	is	also possible	that	ships	could	be	taken	out	of	service	during	these	periods.	The	majority	of	cruise	guests	have	historically	been	sourced	from	North	America	and	Europe.

# North	America

								The	North	American	cruise	market	has	historically	experienced	significant	growth.	The	compound	annual	growth	rate	in	cruise	guests	for	this	market	was approximately	4.5%	from	2008	to	2012.	We	estimate	that	North	America	was	served	by	144	ships	with	approximately	212,000	berths	at	the	beginning	of	2008	and	by 146	ships	with	approximately	258,000	berths	at	the	end	of	2012.	There	are	approximately	10	ships	with	an	estimated	40,000	berths	that	are	expected	to	be	placed	in service	in	the	North	American	cruise	market	between	2013	and	2017.

# Europe

								As	compared	to	North	America,	the	European	cruise	market	represents	a	smaller	but	even	faster	growing	sector	of	the	vacation	industry.	It	has	experienced	a compound	annual	growth	rate	in	cruise	guests	of	approximately	7.6%	from	2008	to	2012.	This	market	has	recently	experienced	a	number	of	challenges	as	a	result	of	the effects	of	the	Costa	Concordia	incident	and	the	continued	instability	in	the	European	economic	landscape.	However,	we	continue	to	believe	in	the	long	term	growth potential	of	this	market.	We	estimate	that	Europe	was	served	by	102	ships	with	approximately	108,000	berths	at	the	beginning	of	2008	and	by	117	ships	with approximately	156,000	berths	at	the	end	of	2012.	There	are	approximately	9	ships	with	an	estimated	25,000	berths	that	are	expected	to	be	placed	in	service	in	the European	cruise	market	between	2013	and	2017.

								The	following	table	details	the	growth	in	the	global,	North	American	and	European	cruise	markets	in	terms	of	cruise	guests	and	estimated	weighted-average	berths over	the	past	five	years:

|  |  | Weighted-Average |  | Weighted-Average |  | Weighted-Average |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Supply\tof |  | Supply\tof |  | Supply\tof |
|  | Global | Berths | North\tAmerican | Berths | European | Berths |
|  | Cruise | Marketed | Cruise | Marketed\tin | Cruise | Marketed\tin |
| Year | Guests^(1) | Globally^(1) | Guests^(2) | North\tAmerica^(1) | Guests | Europe^(1) |
| 2008 | 17,184,000 | 347,000 | 10,093,000 | 219,000 | 4,500,000 | 120,000 |
| 2009 | 17,340,000 | 363,000 | 10,198,000 | 222,000 | 5,000,000 | 131,000 |
| 2010 | 18,800,000 | 391,000 | 10,781,000 | 232,000 | 5,540,000 | 143,000 |
| 2011 | 20,227,000 | 412,000 | 11,625,000 | 245,000 | 5,894,000 | 149,000 |
| 2012 | 20,823,000 | 425,000 | 12,044,000 | 254,000 | 6,040,000 | 152,000 |

(1) Source:	Our	estimates	of	the	number	of	global	cruise	guests,	and	the	weighted-average	supply	of	berths	marketed	globally,	in	North	America	and	Europe	are based	on	a	combination	of	data	that	we	obtain	from	various	publicly	available	cruise	industry	trade	information	sources	including	Seatrade	Insider	and	Cruise Line	International	Association	("CLIA").	In	addition,	our	estimates	incorporate	our	own	statistical	analysis	utilizing	the	same	publicly	available	cruise	industry data	as	a	base.

(2) Source:	Cruise	Line	International	Association	based	on	cruise	guests	carried	for	at	least	two	consecutive	nights	for	years	2008	through	2011.	Year	2012	amounts represent	our	estimates	(see	number	(1)	above).

(3) Source:	CLIA	Europe,	formerly	European	Cruise	Council,	for	years	2008	through	2011.	Year	2012	amounts	represent	our	estimates	(see	number	(1)	above).

# Other	Markets

								In	addition	to	expected	industry	growth	in	North	America	and	Europe	as	discussed	above,	we	expect	the	Asia/Pacific	region	to	demonstrate	an	even	higher	growth rate	in	the	near	term,	although	it	will	continue	to	represent	a	relatively	small	sector	compared	to	North	America	and	Europe.

# Competition

								We	compete	with	a	number	of	cruise	lines.	Our	principal	competitors	are	Carnival	Corporation	&	plc,	which	owns,	among	others,	Aida	Cruises,	Carnival	Cruise Lines,	Costa	Cruises,	Cunard	Line,	Holland	America	Line,	Iberocruceros,	P&O	Cruises	and	Princess	Cruises;	Disney	Cruise	Line;	MSC	Cruises;	Norwegian	Cruise	Line and	Oceania	Cruises.	Cruise	lines	compete	with	other	vacation	alternatives	such	as	land-based	resort	hotels	and	sightseeing	destinations	for	consumers'	leisure	time. Demand	for	such	activities	is	influenced	by	political	and	general	economic	conditions.	Companies	within	the	vacation	market	are	dependent	on	consumer	discretionary spending.

# Operating	Strategies

# 								Our	principal	operating	strategies	are	to:

•protect	the	health,	safety	and	security	of	our	guests	and	employees	and	protect	the	environment	in	which	our	vessels	and	organization	operate,

•strengthen	and	support	our	human	capital	in	order	to	better	serve	our	global	guest	base	and	grow	our	business,

•further	strengthen	our	consumer	engagement	in	order	to	enhance	our	revenues,

•increase	the	awareness	and	market	penetration	of	our	brands	globally,

•focus	on	cost	efficiency,	manage	our	operating	expenditures	and	ensure	adequate	cash	and	liquidity,	with	the	overall	goal	of	maximizing	our	return	on invested	capital	and	long-term	shareholder	value,

•strategically	invest	in	our	fleet	through	the	revitalization	of	existing	ships	and	the	transfer	of	key	innovations	across	each	brand,	while	prudently expanding	our	fleet	with	the	new	state-of-the-art	cruise	ships	recently	delivered	and	on	order,

•capitalize	on	the	portability	and	flexibility	of	our	ships	by	deploying	them	into	those	markets	and	itineraries	that	provide	opportunities	to	optimize returns,	while	continuing	our	focus	on	existing	key	markets,

•further	enhance	our	technological	capabilities	to	service	customer	preferences	and	expectations	in	an	innovative	manner,	while	supporting	our	strategic focus	on	profitability,	and

•maintain	strong	relationships	with	travel	agencies,	which	continue	to	be	the	principal	industry	distribution	channel,	while	enhancing	our	consumer outreach	programs.

# Safety,	Environment	and	Health	policies

								We	are	committed	to	protecting	the	safety,	environment	and	health	of	our	guests,	employees	and	others	working	on	our	behalf.	We	are	also	committed	to	protecting the	marine	environment	in	which	our	ships	sail	and	the	communities	in	which	we	operate	by	reducing/mitigating	adverse	environmental	consequences	and	using resources	efficiently.	As	part	of	this	commitment,	we	have	established	a	Safety,	Environment	and	Health	Department	to	oversee	our	maritime	safety,	global	security, environmental	stewardship	and	medical/public	health	activities.	We	also	have	a	Maritime	Advisory	Board	of	experts	as	well	as	the	Safety,	Environment	and	Health (SEH)	Committee	of	our	Board	of	Directors	which	oversees	these	important	areas.	In	addition,	we	publish	an	annual	Stewardship	Report	on	our	performance	in	these important	areas,	which	can	be	accessed	on	our	brand	websites.

								Following	the	Costa	Concordia	incident	in	early	2012,	we	and	other	cruise	lines	performed	reviews	of	safety	and	emergency	response	procedures	to	identify	lessons learned	and	best	practices	to	further	protect	the	safety	of	our	guests	and	crew.	During	this	process,	we	held	regular	meetings	with	other	cruise	companies	to	propose	new industry-wide	policies	that	we	believe	will	further	drive	our	Company's	and	the	industry's	safety	performance.	A	number	of	these	policies	have	already	been implemented	and/or	publicly	announced	by	the	Cruise	Lines	International	Association	as	well	as	shared	with	international	regulators.

# Strengthen	and	support	our	human	capital

								We	believe	that	our	employees,	both	shipboard	and	shoreside,	are	a	critical	success	factor	for	our	business.	We	strive	to	identify,	hire,	develop,	motivate,	and	retain the	best	employees,	with	backgrounds

and	perspectives	as	diverse	as	our	guest	base.	Attracting,	engaging,	and	retaining	key	employees	has	been	and	will	remain	critical	to	our	success.

								We	continue	our	focus	on	providing	our	employees	with	a	competitive	compensation	structure,	development	and	other	personal	and	professional	growth opportunities	in	order	to	strengthen	and	support	our	human	capital.	We	also	seek	to	select,	develop	and	retain	leaders	to	advance	the	enterprise	now	and	in	the	future.	To that	end,	we	pay	special	attention	to	identifying	high	performing	potential	leaders	and	develop	deep	bench	strength	so	these	leaders	can	assume	leadership	roles throughout	the	organization.	We	strive	to	maintain	a	work	environment	that	reinforces	collaboration,	motivation	and	innovation,	and	believe	that	maintaining	our	vibrant and	distinctive	culture	is	critical	to	the	growth	of	our	business.

# Strengthen	our	consumer	engagement

								We	place	a	strong	focus	on	identifying	the	needs	of	our	guests	and	creating	product	features	that	our	customers	value.	We	are	focused	on	targeting	high	value guests	by	better	understanding	consumer	data	and	insights	and	creating	communication	strategies	that	best	resonate	with	our	target	audiences.

								We	interact	with	customers	across	all	touch	points	and	seek	to	identify	underlying	needs	for	which	guests	are	willing	to	pay	a	premium.	We	rely	on	various programs	prior	to,	during	and	after	a	cruise	vacation	aimed	at	increasing	our	ticket	prices,	onboard	revenues	and	occupancy.	In	2013,	we	will	continue	to	strategically invest	in	a	number	of	potential	revenue	enhancing	projects,	including	the	implementation	of	new	onboard	revenue	initiatives.	We	believe	these	initiatives	will	provide opportunities	for	increased	ticket	and	onboard	revenues.

# Global	awareness	and	market	penetration

								We	increase	brand	awareness	and	market	penetration	of	our	cruise	brands	in	various	ways,	including	by	using	communication	strategies	and	marketing	campaigns designed	to	emphasize	the	unique	qualities	of	each	brand	and	to	broaden	the	awareness	of	the	brand,	especially	among	the	brand	target	customer	groups.	Our	marketing strategies	include	the	use	of	traditional	media,	social	media,	brand	websites	and	travel	agencies.	Our	brands	engage	past	and	potential	guests	by	collaborating	with	travel partners	and	through	call	centers,	international	offices	and	international	representatives.	In	addition,	Royal	Caribbean	International,	Celebrity	Cruises	and	Azamara	Club Cruises	retain	repeat	guests	with	exclusive	benefits	offered	through	their	respective	loyalty	programs.

								We	also	increase	brand	awareness	across	all	of	our	brands	through	travel	agencies	who	generate	the	majority	of	our	bookings.	We	are	committed	to	further developing	and	strengthening	this	very	important	distribution	channel	by	continuing	to	focus	the	travel	agents	on	the	unique	qualities	of	each	of	our	brands.

								We	sell	and	market	our	global	brands,	Royal	Caribbean	International,	Celebrity	Cruises	and	Azamara	Club	Cruises,	to	guests	outside	of	North	America	through	our offices	in	the	United	Kingdom,	France,	Germany,	Norway,	Italy,	Spain,	Singapore,	China,	Brazil,	Australia	and	Mexico.	We	believe	that	having	a	local	presence	in these	markets	provides	us	with	the	ability	to	react	more	quickly	to	local	market	conditions	and	better	understand	our	consumer	base	in	each	market.	We	further	extend our	geographic	reach	with	a	network	of	36	independent	international	representatives	located	throughout	the	world	covering	111	countries.	Historically,	our	focus	has been	to	primarily	source	guests	for	our	global	brands	from	North	America.	Over	the	last	several	years,	we	have	continued	to	expand	our	focus	on	selling	and	marketing our	cruise	brands	to	guests	in	countries	outside	of	North	America	through	fleet	innovation	and	by	responding	to	the	itinerary	preferences	and	cultural	characteristics	of our	international	guests.	In	2013,	we	will	continue	to	focus	on	the	development	of	key	markets	in	Asia	and	we	will	focus	on	sourcing	guests	and	adding	capacity	to	the markets	where	we	expect	significant	growth	and	profitability,	such	as	China	and	Australia.

								We	are	also	focused	on	expanding	our	Pullmantur	brand	into	Latin	America,	with	particular	emphasis	in	Brazil.	We	also	look	for	opportunities	to	acquire	or	develop brands	tailored	to	specific	markets.	TUI	Cruises,	our	joint	venture	with	TUI	AG,	is	a	cruise	brand	targeted	at	the	cruise	market	in	Germany.	TUI	Cruises	complements our	other	tailored	brands	including	Pullmantur	and	CDF	Croisières	de	France.

								Passenger	ticket	revenues	generated	by	sales	originating	in	countries	outside	of	the	United	States	were	approximately	49%	of	total	passenger	ticket	revenues	in	2012 and	2011,	and	45%	in	2010.	International	guests	have	grown	from	approximately	1.3	million	in	2008	to	approximately	2.2	million	in	2012.

# Focus	on	cost	efficiency,	manage	our	operating	expenditures	and	ensure	adequate	cash	and	liquidity

								We	are	committed	to	our	efforts	to	identify	and	implement	cost	containment	initiatives,	including	a	number	of	initiatives	to	reduce	energy	consumption	and,	by extension,	fuel	costs.	These	include	the	design	of	more	fuel	efficient	ships	as	well	as	the	implementation	of	more	efficient	hardware,	including	propulsion	and	cooling systems	incorporating	energy	efficiencies.	In	addition,	we	are	focused	on	maintaining	a	strong	liquidity	position,	reducing	our	debt	and	improving	our	credit	metrics.	We are	also	continuing	to	pursue	our	long-term	objective	of	returning	our	credit	ratings	to	investment	grade.	We	believe	these	strategies	enhance	our	ability	to	achieve	our overall	goal	of	maximizing	our	return	on	invested	capital	and	long-term	shareholder	value.

# Fleet	revitalization,	maintenance	and	expansion

								We	place	a	strong	focus	on	product	innovation,	which	we	seek	to	achieve	by	introducing	new	concepts	on	our	new	ships	and	continuously	making	improvements	to our	fleet.	Several	of	these	innovations	have	become	signature	elements	of	our	brands,	such	as	the	"Royal	Promenade"	(a	boulevard	with	shopping,	dining	and entertainment	venues),	ice	skating	rinks,	rock	climbing	walls,	miniature	golf	and	full	court	basketball	for	the	Royal	Caribbean	International	brand,	and	the	design	of	the ships,	contemporary	quality	dining,	spacious	staterooms	and	suites	with	verandas,	spa	facilities	and	variety	of	bars	and	lounges	for	the	Celebrity	Cruises	brand.	In	2009 and	2010,	Royal	Caribbean	International	took	delivery	of	sister	ships,	Oasis	of	the	Seas	and	Allure	of	the	Seas,	which	are	the	largest	and	most	innovative	cruise	ships	in the	cruise	industry.	With	the	same	focus	on	product	innovation,	Celebrity	Cruises	ordered	a	total	of	five	Solstice-class	ships,	the	last	of	which,	Celebrity	Reflection,	was delivered	in	2012.	The	Solstice-class	ships	incorporate	many	new	and	improved	design	features.

								Our	revitalization	and	maintenance	programs	enable	us	to	incorporate	our	latest	signature	innovations	and	allow	us	to	benefit	from	economies	of	scale	by leveraging	our	suppliers.	Ensuring	consistency	across	our	fleet	provides	us	with	the	flexibility	to	redeploy	our	ships	among	our	brand	portfolio.	As	part	of	these	efforts:

•Royal	Caribbean	International	initiated	a	vessel	revitalization	program	in	2011	in	order	to	introduce	some	of	the	most	popular	features	of	the	Oasis-class ships	on	certain	Freedom-class,	Radiance-class	and	Vision-class	ships.	Liberty	of	the	Seas,	Freedom	of	the	Seas,	Radiance	of	the	Seas	and	Splendour	of the	Seas	were	revitalized	in	2011	and	Rhapsody	of	the	Seas,	Mariner	of	the	Seas,	Grandeur	of	the	Seas,	Serenade	of	the	Seas	and	Enchantment	of	the	Seas were	revitalized	in	2012	as	part	of	this	revitalization	program.	An	additional	three	ships	are	scheduled	for	revitalization	in	2013.

•Celebrity	Cruises	began	investing	in	the	revitalization	of	the	Millennium-class	ships	in	2010	as	Celebrity	Constellation	underwent	a	revitalization	of	its onboard	amenities	and	public	areas	to	incorporate	certain	Solstice-class	features.	In	2011	and	the	early	part	of	2012,	Celebrity	Infinity,	Celebrity	Summit and	Celebrity	Millennium	added	onboard	amenities,	public	areas	and	new	staterooms.	In	2013,	Celebrity	Constellation	will	undergo	a	second revitalization	to	incorporate	additional	amenities	and	staterooms.

								We	are	also	committed	to	building	state-of-the-art	ships,	and	currently	our	brands,	including	our	50%	joint	venture	TUI	Cruises,	have	signed	agreements	for	the construction	of	five	new	ships.	These	consist	of	our	recently	ordered	third	Oasis-class	ship	which	is	scheduled	to	enter	service	in	the	second	quarter	of	2016,	two	ships	of a	new	generation	of	Royal	Caribbean	International	cruise	ships	to	be	known	as	the	Quantum-class	which	are	scheduled	to	enter	service	in	the	fourth	quarter	of	2014	and second	quarter	of	2015,	respectively,	and	two	ships	of	a	new	generation	for	TUI	Cruises,	which	are	scheduled	to	enter	service	in	the	second	quarter	of	2014	and	second quarter	of	2015,	respectively.	These	additions	are	expected	to	increase	our	passenger	capacity	by	approximately	18,600	berths	by	December	31,	2016,	or	approximately 18.9%,	as	compared	to	our	capacity	as	of	December	31,	2012.	We	continuously	evaluate	opportunities	to	order	new	ships,	purchase	existing	ships	or	sell	ships	in	our current	fleet.

								In	support	of	our	maintenance	programs,	we	own	a	40%	interest	in	a	ship	repair	and	maintenance	facility,	Grand	Bahama	Shipyard	Ltd.,	which	is	the	largest	cruise ship	dry-dock	repair	facility	in	the	world	and	is	located	in	Freeport,	Grand	Bahama.	We	utilize	this	facility,	among	other	ship	repair	facilities,	for	our	regularly scheduled	drydocks	and	certain	emergency	repairs	as	may	be	required.	In	addition,	the	facility	serves	unaffiliated	cruise	and	cargo	ships,	oil	and	gas	tankers,	and offshore	units.

# Markets	and	itineraries

								In	an	effort	to	penetrate	untapped	markets,	diversify	our	consumer	base	and	respond	to	changing	economic	and	geopolitical	market	conditions,	we	continue	to	seek opportunities	to	optimally	deploy	ships	to	new	and	stronger	markets	and	itineraries	throughout	the	world.	The	portability	of	our	ships	and	our	investment	in infrastructure	allows	us	to	expand	into	new	markets	and	helps	us	reduce	our	dependency	on	any	one	market	by	allowing	us	to	create	"home	ports"	around	the	world.	In addition,	it	allows	us	to	readily	deploy	our	ships	to	meet	demand	within	our	existing	cruise	markets.

								Our	ships	offer	a	wide	selection	of	itineraries	that	call	on	approximately	455	ports	in	95	countries,	spanning	all	seven	continents.	We	are	focused	on	obtaining	the best	possible	long-term	shareholder	returns	by	operating	in	established	markets	while	growing	our	presence	in	developing	markets.	New	capacity	allows	us	to	expand into	new	markets	and	itineraries.	Our	brands	have	expanded	their	mix	of	itineraries	while	strengthening	our	ability	to	penetrate	the	Asian,	Caribbean,	European,	and Latin	American	markets	further.	In	addition,	in	order	to	capitalize	on	the	summer	season	in	the	Southern	Hemisphere	and	mitigate	the	impact	of	the	winter	weather	in	the Northern	Hemisphere,	our	brands	have	increased	deployment	to	Australia	and	Latin	America.

								We	continue	to	focus	on	the	acceleration	of	Royal	Caribbean	International's,	Celebrity	Cruises'	and	Azamara	Club	Cruises'	strategic	positioning	as	global	cruise brands.	In	2012,	Royal	Caribbean	International	continued	its	global	expansion	by	seasonally	adding	a	second	ship	in	Asia	and	a	third	ship	in	Australia,	adding	new departure	ports	in	Southern	Europe	in	order	to	target	guests	in	key	source	markets	in	the	region	and	increasing	capacity	in	Northern	Europe.	The	brand	also	modified certain	of	its	itineraries	for	2012	due	to	continuing	geopolitical	unrest	in	Northern	Africa	and	Greece.	In	2013,	Monarch	of	the	Seas	will	be	redeployed	to	the	Pullmantur fleet	and	Royal	Caribbean	International	will	decrease	its	European	capacity	by	approximately	23%	in	order	to	mitigate	its	exposure	to	the	uncertain	outlook	in	the European	market.	Royal	Caribbean	International	will	continue	to	offer	short	Bahamas

sailings,	return	to	year-round	southern	Caribbean	sailings	and	increase	capacity	in	Asia	and	China	with	the	repositioning	of	Mariner	of	the	Seas.

								In	October	2012,	Celebrity	Cruises	introduced	Celebrity	Reflection,	the	fifth	and	final	Solstice-class	ship,	which	offers	sailings	in	Europe	and	the	Caribbean.	The addition	of	Celebrity	Reflection	allows	Celebrity	Cruises	to	introduce	a	Solstice-class	ship	in	Alaska	and	Australia/New	Zealand,	offer	a	British	Isles/Northern	European program,	and	an	Asia	program	for	2013.	The	added	product	offerings	in	Europe	result	in	a	12%	capacity	increase	for	2013.	Celebrity	Cruises	is	expanding	its	focus	on destination	by	emphasizing	exotic	ports	and	calling	on	new	destinations	in	Australia	and	New	Zealand,	Hawaii,	the	Panama	Canal	and	Asia,	with	longer	cruises	in Southeast	Asia,	Indonesia,	China	and	Japan.

								In	2013,	Azamara	Club	Cruises'	voyages	will	be	sailing	to	184	ports	in	60	countries	around	the	globe	with	more	than	50%	of	its	ports-of-call	featuring	late	night stays	or	overnights,	allowing	guests	to	experience	the	destination	by	day	and	by	night.	The	Azamara	Club	Cruises	2013	deployment	features	South	America,	including Carnival	in	Rio	de	Janeiro,	Antarctica,	the	West	Indies,	British	Isles	and	Western	Europe,	Scandinavia	and	the	Baltics,	Eastern	&	Western	Mediterranean,	as	well	as	the Indian	Ocean	and	Asia.	Also,	Pullmantur	and	CDF	Croisières	de	France	will	continue	to	offer	itineraries	in	the	Caribbean,	Europe	and	South	America	with	particular emphasis	in	Brazil.

								In	an	effort	to	secure	desirable	berthing	facilities	for	our	ships,	and	to	provide	new	or	enhanced	cruise	destinations	for	our	guests,	we	actively	assist	or	invest	in	the development	or	enhancement	of	certain	port	facilities	and	infrastructure,	including	mixed-use	commercial	properties,	located	in	strategic	ports	of	call.	Generally,	we collaborate	with	local,	private	or	governmental	entities	by	providing	management	and/or	financial	assistance	and	often	enter	into	long-term	port	usage	arrangements.	Our participation	in	these	efforts	is	generally	accomplished	via	investments	with	the	relevant	government	authority	and/or	various	other	strategic	partners	established	to develop	and/or	operate	the	port	facilities,	by	providing	direct	development	and	management	expertise	or	in	certain	limited	circumstances,	by	providing	direct	or	indirect financial	support.	In	exchange	for	our	involvement,	we	generally	secure	preferential	berthing	rights	for	our	ships.

# Enhance	our	technological	capabilities

								The	need	to	develop	and	use	innovative	technology	is	increasingly	important.	To	this	end,	technology	is	a	pervasive	part	of	virtually	every	business	process	we	use in	order	to	support	our	strategic	focus	and	provide	a	quality	experience	to	our	customers	before,	during	and	after	their	cruise.	Moreover,	as	the	use	of	our	various websites	and	social	media	platforms	continue	to	increase	along	with	the	increasing	use	of	technology	onboard	our	ships	by	both	our	guests	and	crew,	we	continually need	to	upgrade	our	systems,	infrastructure	and	technologies	to	facilitate	this	growth.	To	further	our	customer-centricity,	during	2013,	we	intend	to	continue	to	improve our	customer	experiences	online	through	the	launch	of	a	new	digital	platform	which	will	include	among	other	improvements,	revamped	websites,	new	vacation packaging	capabilities,	support	of	mobile	applications	and	increased	bandwidth	onboard	our	ships	helping	our	guests	remain	well-connected	while	at	sea.	Active engagement	in	social	media	channels	is	also	an	integral	part	of	our	marketing	strategy	and	a	part	of	our	broader	consumer	engagement	strategy	and	relationship management	platform.

								To	support	our	strategic	focus	on	improving	revenue	yields,	during	2012,	we	began	to	implement	new	capabilities	to	improve	our	revenue	management	systems	and decision	support	processes	in	advance	of	our	WAVE	season	(traditionally	the	first	two	months	of	the	year	where	cruise	lines	experience	disproportionately	higher volume	cruise	sales).	In	2013,	we	will	continue	to	build	on	this	new	platform	and	introduce	new	price	optimization	tools	and	promotion	management	capabilities	in	our reservations	system.

								As	part	of	the	Royal	Caribbean	International	and	Celebrity	Cruises	revitalization	programs,	we	have	incorporated	many	of	the	technological	innovations	from	the Oasis-class	ships	and	Solstice-class	ships,	respectively,	across	our	fleet.	In	addition,	to	position	ourselves	for	the	future,	we	have	embarked	on	several	multi-year information	technology	strategic	initiatives	to	ensure	that	we	can	continue	to	innovate	and	respond	to	the	ever	increasing	expectations	of	our	guests	in	a	scalable	and	cost effective	manner.

# Travel	agency	support	and	direct	business

								Travel	agencies	continue	to	be	the	primary	source	of	ticket	sales	for	our	ships.	We	believe	in	the	value	of	this	distribution	channel	and	invest	heavily	in	maintaining strong	relationships	with	our	travel	partners.	To	accomplish	this	goal,	we	seek	to	ensure	that	our	commission	rates	and	incentive	structures	remain	competitive	with	the marketplace.	We	also	provide	brand	dedicated	sales	representatives	who	assist	our	travel	partners	through	a	number	of	platforms,	including	trained	customer	service representatives,	call	centers	and	online	training	tools.

								To	support	our	direct	sales	initiatives,	we	have	established	a	Consumer	Outreach	department	which	allows	consumers	24	hour	access	to	our	certified	vacation planners,	group	vacation	planners	and	customer	service	agents	in	our	call	centers	throughout	the	world.	In	addition,	we	maintain	and	invest	in	our	websites,	including mobile	applications	and	mobile	websites,	which	allow	guests	to	directly	plan,	book	and	customize	their	cruise,	as	well	as	encourage	guests	to	book	their	next	cruise vacations	onboard	our	ships.

# Guest	Services

								We	offer	to	handle	virtually	all	travel	aspects	related	to	guest	reservations	and	transportation,	including	arranging	guest	pre-	and	post-hotel	stay	arrangements	and air	transportation.

								Royal	Caribbean	International,	Celebrity	Cruises	and	Azamara	Club	Cruises	offer	rewards	to	their	guests	through	their	loyalty	programs,	Crown	&	Anchor	Society, Captain's	Club	and	Le	Club	Voyage,	respectively,	to	encourage	repeat	business.	Crown	&	Anchor	Society	has	over	7.2	million	members	worldwide.	Captain's	Club	and Le	Club	Voyage	have	2.0	million	members	combined	worldwide.	Members	are	typically	eligible	to	enroll	in	these	complimentary	programs	after	one	sailing	and	earn increasing	membership	status	by	accumulating	cruise	points	or	credits,	depending	on	the	brand,	which	may	be	redeemed	on	future	sailings.	Members	are	awarded	points or	credits	in	proportion	to	the	number	of	cruise	days	and	stateroom	category.	The	loyalty	programs	provide	certain	tiers	of	membership	benefits	which	can	be	redeemed by	guests	after	accumulating	the	number	of	cruise	points	or	credits	specified	for	each	tier.	In	addition,	upon	achieving	a	certain	level	of	cruise	points	or	credits,	members benefit	from	reciprocal	membership	benefits	across	all	of	our	loyalty	programs.	Examples	of	the	rewards	available	under	our	loyalty	programs	include,	but	are	not limited	to,	priority	ship	embarkation,	priority	waitlist	for	shore	excursions,	complimentary	laundry	service,	complimentary	internet,	booklets	with	onboard	discount offers,	upgraded	bathroom	amenities,	private	seating	on	the	pool	deck,	ship	tours	and,	in	the	case	of	our	most	loyal	guests	who	have	achieved	the	highest	levels	of	cruise points	or	credits,	complimentary	cruises.	We	regularly	work	to	enhance	each	of	our	loyalty	programs	by	adding	new	features	and	amenities	in	order	to	reward	our	repeat guests.

# Operations

# Cruise	Ships	and	Itineraries

								As	of	December	31,	2012,	our	brands,	including	our	50%	joint	venture	TUI	Cruises,	operate	41	ships	with	a	selection	of	worldwide	itineraries	ranging	from	two	to 18	nights	that	call	on	approximately	455	destinations.

								The	following	table	presents	summary	information	concerning	the	ships	we	will	operate	in	2013	under	our	six	cruise	brands,	including	our	50%	joint	venture	TUI Cruises,	and	their	geographic	areas	of	operation	based	on	2013	itineraries	(subject	to	change).

| Ship^(1) | Year	Ship<br>Entered	Service^(2) | Approximate<br>Berths |
| :--- | :--- | :--- |
| Azamara\tClub\tCruises |  |  |
| (4)\nAzamara\tJourney | 2004 | 700 |
| (5)\nAzamara\tQuest | 2006 | 700 |
| Pullmantur |  |  |
| Zenith | 1992 | 1,400 |
| Empress | 1990 | 1,600 |
| Sovereign | 1988 | 2,300 |
| (6)\nMonarch\tof\tthe\tSeas | 1991 | 2,350 |
| CDF\tCroisières\tde\tFrance |  |  |
| (7)\nHorizon | 1990 | 1,350 |
| (8) |  |  |
| TUI\tCruises |  |  |
| (9)\nMein\tSchiff\t1 | 2009 | 1,900 |
| (10)\nMein\tSchiff\t2 | 2011 | 1,900 |
| Total | Total | 98,646 |

(1) It	does	not	include	Pullmantur's	Atlantic	Star	which	has	been	out	of	operation	since	2009	and	will	be	transferred	to	an	affiliate	of	STX	France	as	part	of	the consideration	for	building	the	third	Oasis-class	ship	if	the	agreement	becomes	effective.	Additionally,	in	April	2012,	we	delivered	Ocean	Dream,	previously operated	by	Pullmantur,	to	an	unrelated	third	party	as	part	of	a	six	year	bareboat	charter	agreement.	The	charter	agreement	provides	a	renewal	option	exercisable by	the	unrelated	third	party	for	an	additional	four	years.

(2) The	year	a	ship	entered	service	refers	to	the	year	in	which	the	ship	commenced	cruise	revenue	operations	for	the	Company,	which	is	the	same	as	the	year	the	ship was	built,	unless	otherwise	noted.

# (3) Celebrity	Xpedition	was	built	in	2001.

# (4) Azamara	Journey	(formerly	Blue	Dream)	was	built	in	2000.

(5) Azamara	Quest	(formerly	Blue	Moon)	was	built	in	2000.

(6) Monarch	of	the	Seas	will	be	redeployed	from	Royal	Caribbean	International	to	Pullmantur	in	April	2013.

(8) TUI	Cruises	refers	to	our	50%	joint	venture.

								Our	brands,	including	our	50%	joint	venture	TUI	Cruises,	have	five	ships	on	order.	Two	ships	on	order	are	being	built	in	Germany	by	Meyer	Werft	GmbH,	two	are being	built	in	Finland	by	STX	Finland	and	one	will	be	built	in	France	by	STX	France.	The	expected	dates	that	our	ships	on	order	will	enter	service	and	their	approximate berths	are	as	follows:

| Ship | Expected	to<br>Enter	Service | Approximate<br>Berths |
| :--- | :--- | :--- |
| Royal\tCaribbean\tInternational— |  |  |
| Quantum-class: |  |  |
| Quantum\tof\tthe\tSeas | 4th\tQuarter\t2014 | 4,100 |
| Anthem\tof\tthe\tSeas | 2nd\tQuarter\t2015 | 4,100 |
| (1) |  |  |
| Oasis-class\n: |  |  |
| Unnamed | 2nd\tQuarter\t2016 | 5,400 |
| TUI\tCruises— |  |  |
| Mein\tSchiff\t3 | 2nd\tQuarter\t2014 | 2,500 |
| Mein\tSchiff\t4 | 2nd\tQuarter\t2015 | 2,500 |
| Total\tBerths | Total\tBerths | 18,600 |

(1) In	December	2012,	we	ordered	a	third	Oasis-class	ship	through	a	conditional	agreement.	The	agreement	is	subject	to	certain	closing	conditions and	is	expected	to	become	effective	in	the	first	quarter	of	2013.

# Seasonality

								Our	revenues	are	seasonal	based	on	the	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 increased	deployment	to	South	America	and	Australia	during	the	Northern	Hemisphere	winter	months.

# Passengers	and	Capacity

								Selected	statistical	information	is	shown	in	the	following	table	(see	Description	of	Certain	Line	Items	and	Selected	Operational	and	Financial	Metrics	under	Item	7. Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations,	for	definitions):

|  | 2012 | 2011 | 2010 | 2009 | 2008 |
| :--- | :--- | :--- | :--- | :--- | :--- |
| Passengers\tCarried | 4,852,079 | 4,850,010 | 4,585,920 | 3,970,278 | 4,017,554 |
| Passenger\tCruise\tDays | 35,197,783 | 34,818,335 | 32,251,217 | 28,503,046 | 27,657,578 |
| Available\tPassenger\tCruise\tDays\t(APCD) | 33,705,584 | 33,235,508 | 30,911,073 | 27,821,224 | 26,463,637 |
| Occupancy | 104.4% | 104.8% | 104.3% | 102.5% | 104.5% |

# Cruise	Pricing

								Our	cruise	ticket	prices	include	accommodations	and	a	wide	variety	of	activities	and	amenities,	including	meals	and	entertainment.	Prices	vary	depending	on	the destination,	cruise	length,	stateroom	category	selected	and	the	time	of	year	the	cruise	takes	place.	Although	we	grant	credit	terms	to	certain	travel	agencies	and	tour operators	in	select	markets	outside	of	the	United	States,	our	payment	terms	generally	require	an	upfront	deposit	to	confirm	a	reservation,	with	the	balance	due	prior	to the	sailing.	During	the	selling	period	of	a	cruise,	we	continually	monitor	and	adjust	our	cruise	ticket	prices	for	available	guest	staterooms	based	on	demand,	with	the objective	of	maximizing	net	yields.	In	2013,	we	plan	to	use	new	optimization	tools	to	set	pricing	and	leverage	enhancements	for	the	web	and	our	reservation	systems. Historically,	we	have	opened	cruises	for	sale	at	least	one	year	in	advance	and	often	as	much	as	two	years	in	advance.	Additionally,	we	offer	air	transportation	as	a service	for	guests	that	elect	to	utilize	our	transportation	program.	Our	air	transportation	program	is	available	in	major	cities	around	the	world	and	prices	vary	by	gateway and	destination.	Generally,	air	tickets	are	sold	to	guests	at	prices	close	to	cost.	Passenger	ticket	revenues	accounted	for	approximately	73%	of	total	revenues	in	2012, 2011	and	2010.

								From	time	to	time,	we	have	introduced	temporary	fuel	supplements	to	partially	offset	a	portion	of	fuel	costs,	which	result	in	an	additional	fee	being	charged	to	the guests.	While	none	of	our	brands	are	currently	charging	fuel	supplements,	we	reserve	the	right	to	reinstate	our	fuel	supplements	for	one	or	more	of	our	brands	and	will continue	to	monitor	our	markets	and	review	our	position	based	upon	the	appropriate	facts	and	circumstances.

# Onboard	Activities	and	Other	Revenues

								Our	cruise	brands	offer	modern	fleets	with	a	wide	array	of	onboard	services,	amenities	and	activities	which	vary	by	brand	and	ship.	While	many	onboard	activities are	included	in	the	base	price	of	a	cruise,	we	realize	additional	revenues	from,	among	other	things,	gaming,	the	sale	of	alcoholic	and	other	beverages,	gift	shop	items, shore	excursions,	photography,	spa/salon	and	fitness	services,	art	auctions,	catalogue	gifts	for	guests	and	a	wide	variety	of	specialty	restaurants	and	dining	options.	Royal Caribbean	International,	Celebrity	Cruises	and	Azamara	Club	Cruises	offer	functionality	on	their	respective	internet	sites	for	selecting	shore	excursions,	specialty	dining and	amenities	prior	to	embarkation.

								In	conjunction	with	our	cruise	vacations,	we	offer	pre-	and	post-cruise	hotel	packages	to	our	Royal	Caribbean	International,	Celebrity	Cruises	and	Azamara	Club Cruises	guests.	Pullmantur	offers	land-based	travel	packages	to	European	vacation	travelers	including	hotels	and	flights	to	Caribbean	resorts	and	sells	land	based	tour packages	to	Europe	aimed	at	Latin	American	guests.	Pullmantur	also	owns	a	49%	interest	in	an	air	business	that	operates	four	Boeing	747	aircraft	in	support	of	its	cruise and	tour	operations.	In	addition,	we	sell	cruise	vacation	protection	coverage,	which	provides	guests	with	coverage	for	trip	cancellation,	medical	protection	and	baggage protection.	We	expect	to	offer	these	programs	more	globally	in	2013.	Onboard	and	other	revenues	accounted	for	approximately	27%	of	total	revenues	in	2012,	2011	and 2010.

# Segment	Reporting

								We	operate	five	wholly-owned	cruise	brands,	Royal	Caribbean	International,	Celebrity	Cruises,	Azamara	Club	Cruises,	Pullmantur	and	CDF	Croisières	de	France. In	addition,	we	have	a	50%	investment	in	a	joint	venture	with	TUI	AG	which	operates	the	brand	TUI	Cruises.	We	believe	our	global	brands	possess	the	versatility	to enter	multiple	cruise	market	segments	within	the	cruise	vacation	industry.	Although	each	of	our	brands	has	its	own	marketing	style	as	well	as	ships	and	crews	of	various sizes,	the	nature	of	the	products	sold	and	services	delivered	by	our	brands	share	a	common	base	(i.e.	the	sale	and	provision	of	cruise	vacations).	Our	brands	also	have similar	itineraries	as	well	as

similar	cost	and	revenue	components.	In	addition,	our	brands	source	passengers	from	similar	markets	around	the	world	and	operate	in	similar	economic	environments with	a	significant	degree	of	commercial	overlap.	As	a	result,	our	brands	(including	TUI	Cruises)	have	been	aggregated	as	a	single	reportable	segment	based	on	the similarity	of	their	economic	characteristics,	types	of	consumers,	regulatory	environment,	maintenance	requirements,	supporting	systems	and	processes	as	well	as products	and	services	provided.	Our	Chairman	and	Chief	Executive	Officer	has	been	identified	as	the	chief	operating	decision-maker	and	all	significant	operating decisions	including	the	allocation	of	resources	are	based	upon	the	analyses	of	the	Company	as	one	segment.	(For	financial	information	see	Item	8.	Financial	Statements and	Supplementary	Data.)

# Employees

								As	of	December	31,	2012,	we	employed	approximately	62,000	employees,	including	55,000	shipboard	employees	as	well	as	6,200	full-time	and	750	part-time employees	in	our	shoreside	operations.	As	of	December	31,	2012,	approximately	80%	of	our	shipboard	employees	were	covered	by	collective	bargaining	agreements. Based	on	employee	survey	results,	we	believe	our	employees'	satisfaction	level	with	our	organization	is	strong.

# Insurance

								We	maintain	insurance	on	the	hull	and	machinery	of	our	ships,	which	includes	additional	coverage	for	disbursements,	earnings	and	increased	value,	which	are maintained	in	amounts	related	to	the	value	of	each	ship.	The	coverage	for	each	of	the	hull	policies	is	maintained	with	syndicates	of	insurance	underwriters	from	the British,	Scandinavian,	French,	United	States	and	other	international	insurance	markets.

								We	maintain	liability	protection	and	indemnity	insurance	for	each	of	our	ships	through	either	the	United	Kingdom	Mutual	Steam	Ship	Assurance	Association (Bermuda)	Limited,	the	Steamship	Mutual	Underwriting	Association	(Bermuda)	Limited	or	the	Assuranceforeningen	SKULD	(Gjensidig).	Our	protection	and	indemnity liability	insurance	is	done	on	a	mutual	basis	and	we	are	subject	to	additional	premium	calls	in	amounts	based	on	claim	records	of	all	members	of	the	mutual	protection and	indemnity	association.	We	are	also	subject	to	additional	premium	calls	based	on	investment	shortfalls	experienced	by	the	insurer.

								We	maintain	war	risk	insurance	which	covers	damage	due	to	acts	of	war,	including	invasion,	insurrection,	terrorism,	rebellion,	piracy	and	hijacking,	on	each	ship, through	a	Norwegian	war	risk	insurance	organization.	This	coverage	includes	coverage	for	physical	damage	to	the	ship	which	is	not	covered	under	the	hull	policies	as	a result	of	war	exclusion	clauses	in	such	hull	policies.	We	also	maintain	protection	and	indemnity	war	risk	coverage	for	risks	that	would	be	excluded	by	the	rules	of	the indemnity	insurance	organizations,	subject	to	certain	limitations.	Consistent	with	most	marine	war	risk	policies,	under	the	terms	of	our	war	risk	insurance	coverage, underwriters	can	give	seven	days	notice	to	us	that	the	policy	will	be	canceled	and	reinstated	at	higher	premium	rates.

								Insurance	coverage	for	shoreside	property,	shipboard	inventory,	and	general	liability	risks	are	maintained	with	insurance	underwriters	in	the	United	States	and	the United	Kingdom.

								We	do	not	carry	business	interruption	insurance	for	our	ships	based	on	our	evaluation	of	the	risks	involved	and	protective	measures	already	in	place,	as	compared	to the	cost	of	insurance.	We	carry	business	interruption	insurance	for	certain	of	our	shoreside	operations.

								All	insurance	coverage	is	subject	to	certain	limitations,	exclusions	and	deductible	levels.	In	addition,	in	certain	circumstances,	we	either	self-insure	or	co-insure	a portion	of	these	risks.	Premiums	charged	by	insurance	carriers,	including	carriers	in	the	maritime	insurance	industry,	increase	or	decrease	from	time	to	time	and	tend	to be	cyclical	in	nature.	These	cycles	are	impacted	both	by	our

own	loss	experience	and	by	losses	incurred	in	direct	and	reinsurance	markets.	We	historically	have	been	able	to	obtain	insurance	coverage	in	amounts	and	at	premiums we	have	deemed	to	be	commercially	acceptable.	No	assurance	can	be	given	that	affordable	and	secure	insurance	markets	will	be	available	to	us	in	the	future,	particularly for	war	risk	insurance.

								The	Athens	Convention	relating	to	the	Carriage	of	Passengers	and	their	Luggage	by	Sea	(1974)	and	the	1976	Protocol	to	the	Athens	Convention	are	generally applicable	to	passenger	ships.	The	United	States	has	not	ratified	the	Athens	Convention;	however,	with	limited	exceptions,	the	1976	Athens	Convention	Protocol	may	be contractually	enforced	with	respect	to	those	of	our	cruises	that	do	not	call	at	a	United	States	port.	The	International	Maritime	Organization	Diplomatic	Conference agreed	upon	a	new	Protocol	to	the	Athens	Convention	on	November	1,	2002.	The	2002	Protocol,	which	is	not	yet	in	force	pending	ratification	by	the	requisite	number	of countries,	substantially	increases	the	level	of	compulsory	insurance	which	must	be	maintained	by	passenger	ship	operators.	In	an	attempt	to	expedite	implementation, the	European	Union	adopted	the	European	Union	Regulation	392/2009	("EU	Passenger	Liability	Regulation")	on	the	liability	of	carriers	of	passengers	by	sea,	which became	effective	on	December	31,	2012.	This	regulation	incorporates	the	2002	Protocol	in	many	ways.	Compliance	with	the	EU	Passenger	Liability	Regulation	does	not have	a	material	impact	on	operating	costs.

# Trademarks

								We	own	a	number	of	registered	trademarks	related	to	the	Royal	Caribbean	International,	Celebrity	Cruises,	Azamara	Club	Cruises,	Pullmantur	and	CDF	Croisières de	France	cruise	brands.	The	registered	trademarks	include	the	name	"Royal	Caribbean	International"	and	its	crown	and	anchor	logo,	the	name	"Celebrity	Cruises"	and its	"X"	logo,	the	name	"Azamara	Club	Cruises"	and	its	logo,	the	names	"Pullmantur	Cruises"	and	"Pullmantur"	and	their	logos,	the	name	"CDF	Croisières	de	France" and	its	logo,	and	the	names	of	various	cruise	ships.	We	believe	our	trademarks	are	widely	recognized	throughout	the	world	and	have	considerable	value.

# Regulation

								Our	ships	are	regulated	by	various	international,	national,	state	and	local	laws,	regulations	and	treaties	in	force	in	the	jurisdictions	in	which	they	operate.	In addition,	our	ships	are	registered	in	the	Bahamas,	Malta	or	in	the	case	of	Celebrity	Xpedition,	Ecuador	(collectively,	the	"Flag	States").	Each	ship	is	subject	to	regulations issued	by	its	country	of	registry,	including	regulations	issued	pursuant	to	international	treaties	governing	the	safety	of	our	ships,	guests	and	crew	as	well	as environmental	protection.	Each	country	of	registry	conducts	periodic	inspections	to	verify	compliance	with	these	regulations	as	discussed	more	fully	below.	Ships operating	out	of	United	States	ports	are	subject	to	inspection	by	the	United	States	Coast	Guard	for	compliance	with	international	treaties	and	by	the	United	States	Public Health	Service	for	sanitary	and	health	conditions.	Our	ships	are	also	subject	to	similar	inspections	pursuant	to	the	laws	and	regulations	of	various	other	countries	our ships	visit.

								We	believe	that	we	are	in	material	compliance	with	all	the	regulations	applicable	to	our	ships	and	that	we	have	all	licenses	necessary	to	conduct	our	business. Health,	safety,	security,	environmental	and	financial	responsibility	issues	are,	and	we	believe	will	continue	to	be,	an	area	of	focus	by	the	relevant	government	authorities in	the	United	States	and	internationally.	From	time	to	time,	various	regulatory	and	legislative	changes	may	be	proposed	that	could	impact	our	operations	and	subject	us to	increasing	compliance	costs	in	the	future.

# Safety	and	Security	Regulations

								Our	ships	are	required	to	comply	with	international	safety	standards	defined	in	the	International	Convention	for	Safety	of	Life	at	Sea	("SOLAS"),	which	among other	things,	establishes	requirements

for	ship	design,	structural	features,	materials,	construction,	life	saving	equipment	and	safe	management	and	operation	of	ships	to	ensure	guest	and	crew	safety.	The SOLAS	standards	are	revised	from	time	to	time	and	the	most	recent	modifications	were	phased	in	through	2010.	Compliance	with	these	modified	standards	did	not	have a	material	effect	on	our	operating	costs.	SOLAS	incorporates	the	International	Safety	Management	Code	("ISM	Code"),	which	provides	an	international	standard	for	the safe	management	and	operation	of	ships	and	for	pollution	prevention.	The	ISM	Code	is	mandatory	for	all	vessels,	including	passenger	vessel	operators.	All	of	our operations	and	ships	are	regularly	audited	by	national	authorities	and	maintain	the	required	certificates	of	compliance	with	the	ISM	Code.	It	is	possible	that	the	Costa Concordia	incident	could	lead	to	new	safety	legislation	and/or	regulations.	Although	it	is	too	early	to	assess	the	impact	of	any	such	legislation	or	regulation,	we	already equal	or	exceed	most	of	the	new	safety	measures	under	discussion	and,	accordingly,	do	not	expect	that	we	would	be	required	to	incur	additional	material	compliance costs.

								Our	ships	are	subject	to	various	security	requirements,	including	the	International	Ship	and	Port	Facility	Security	Code	("ISPS	Code"),	which	is	part	of	SOLAS, and	the	U.S.	Maritime	Transportation	Security	Act	of	2002	("MTSA"),	which	applies	to	ships	that	operate	in	U.S.	ports.	In	order	to	satisfy	these	security	requirements, we	implement	security	measures,	conduct	vessel	security	assessments,	and	develop	security	plans.	The	security	plans	for	all	of	our	ships	have	been	submitted	to	and approved	by	the	respective	countries	of	registry	for	our	ships	in	compliance	with	the	ISPS	Code	and	the	MTSA.

								In	July	2010,	the	U.S.	adopted	the	Cruise	Vessel	Security	and	Safety	Act	of	2010,	which	applies	to	passenger	vessels	which	embark	or	include	port	stops	within	the United	States.	This	act	requires	the	implementation	of	certain	safety	design	features	as	well	the	establishment	of	practices	for	the	reporting	of	and	dealing	with allegations	of	crime.	In	2013,	the	U.S.	Coast	Guard	is	expected	to	issue	regulations	governing	implementation	of	certain	provisions	of	the	act.	We	already	exceed	most of	the	requirements	of	the	act	and	do	not	expect	any	costs	that	would	be	material	to	us	to	be	required	due	to	these	likely	regulations.

# Environmental	Regulations

								We	are	subject	to	various	United	States	and	international	laws	and	regulations	relating	to	environmental	protection.	Under	such	laws	and	regulations,	we	are prohibited	from,	among	other	things,	discharging	certain	materials,	such	as	petrochemicals	and	plastics,	into	the	waterways.	We	have	made,	and	will	continue	to	make, capital	and	other	expenditures	to	comply	with	environmental	laws	and	regulations.	From	time	to	time,	environmental	and	other	regulators	consider	more	stringent regulations,	which	may	affect	our	operations	and	increase	our	compliance	costs.	We	believe	that	the	impact	of	ships	on	the	global	environment	will	continue	to	be	an area	of	focus	by	the	relevant	authorities	throughout	the	world	and,	accordingly,	may	subject	us	to	increasing	compliance	costs	in	the	future,	including	the	items	described below.

								Our	ships	are	subject	to	the	International	Maritime	Organization's	("IMO")	regulations	under	the	International	Convention	for	the	Prevention	of	Pollution	from Ships	(the	"MARPOL	Regulations"),	which	includes	requirements	designed	to	prevent	and	minimize	pollution	by	oil,	sewage,	garbage	and	air	emissions.	We	have obtained	the	relevant	international	compliance	certificates	relating	to	oil,	sewage	and	air	pollution	prevention	for	all	of	our	ships.

								The	MARPOL	Regulations	impose	global	limitations	on	the	sulfur	content	of	fuel	used	by	ships	operating	worldwide.	Permitted	sulfur	content	was	reduced	from 4.5%	to	3.5%	on	January	1,	2012.	This	reduction	has	not	had	a	material	effect	on	our	fuel	and	operating	costs.	These	regulations	will	also	require	the	worldwide limitations	on	sulfur	content	of	fuel	to	be	reduced	to	0.5%	by	January	1,	2020,	subject	to	a	feasibility	review	to	be	completed	by	IMO	no	later	than	2018.	If	such	a reduced	limitation	is	implemented	worldwide	in	2020,	our	fuel	costs	could	increase	significantly.

								In	addition	to	the	global	limitations,	the	MARPOL	Regulations	establish	special	Emission	Control	Areas	("ECAs")	with	stringent	limitations	on	sulfur	and	nitrogen oxide	emissions	in	these	areas.	As	of	July	1,	2010,	ships	operating	in	designated	ECAs	are	required	to	operate	on	fuel	with	a	sulfur	content	of	1.0%.	Under	these regulations,	ships	operating	in	ECAs	will	be	required	to	further	reduce	their	fuel	sulfur	content	to	0.1%	beginning	on	January	1,	2015.

								As	of	February	2013,	there	are	three	established	ECAs:	the	Baltic	Sea,	the	North	Sea/English	Channel	and	certain	of	the	waters	surrounding	the	North	American coast.	In	addition,	in	July	2011,	the	IMO	accepted	and	adopted	the	application	by	the	United	States	to	designate	the	waters	surrounding	Puerto	Rico	and	the	US	Virgin Islands	as	an	ECA.	This	designation	will	be	effective	as	of	January	2014.

								As	of	the	date	hereof,	the	sulfur	content	reductions	in	the	existing	ECAs	has	not	had	a	material	impact	on	our	operations	and	we	do	not	expect	the	initial	sulfur content	reductions	in	the	Puerto	Rico/US	Virgin	Islands	ECA	will	have	a	material	effect	on	our	fuel	and	operating	costs.	However,	the	additional	reduction	to	0.1%	as	of January	1,	2015	will	increase	our	fuel	costs	after	this	date.	Based	on	2013	itineraries	and	projected	fuel	consumption	inside	these	ECAs,	as	well	as	current	fuel	prices	and technologies,	we	estimate	that	implementation	of	the	0.1%	low	sulfur	content	requirement	in	all	four	currently	designated	ECAs	would	increase	our	2013	fuel	costs	by approximately	$65.0	million	to	$70.0	million.	These	costs	may	be	reduced	by	possible	mitigating	factors,	such	as	decreases	in	fuel	prices,	changes	in	the	future	supply and	demand	for	fuel,	the	development	of	emissions	abatement	technologies,	including	new	engine	designs	or	exhaust	gas	treatment	systems,	the	acceptance	of	alternative compliance	methods,	the	cost	migration	effects	of	equivalent	compliance	initiatives	and	new	fuel	conservation	initiatives.

								In	July	2011,	new	MARPOL	Regulations	introduced	mandatory	measures	to	reduce	greenhouse	gas	emissions.	These	include	the	utilization	of	an	energy	efficiency design	index	(EEDI)	for	new	ships	as	well	as	the	establishment	of	an	energy	efficient	management	plan	for	all	ships.	The	EEDI	is	a	performance-based	mechanism	that requires	a	certain	minimum	energy	efficiency	in	new	ships.	These	regulations	became	effective	on	January	1,	2013.	We	do	not	anticipate	that	compliance	with	these regulations	will	have	a	material	effect	on	our	operating	costs.

								We	are	required	to	obtain	certificates	from	the	United	States	Coast	Guard	relating	to	our	ability	to	satisfy	liability	in	cases	of	water	pollution.	Pursuant	to	United States	Coast	Guard	regulations,	we	arrange	through	our	insurers	for	the	provision	of	guarantees	aggregating	$349.4	million	as	a	condition	to	obtaining	the	required certificates.	The	cost	of	obtaining	these	guarantees	does	not	have	a	material	effect	on	our	operating	costs.

# Labor	Regulations

								The	International	Labour	Organization,	an	agency	of	the	United	Nations	that	develops	worldwide	employment	standards,	has	adopted	a	new	Consolidated Maritime	Labour	Convention	(the	"Convention").	The	Convention,	which	will	be	effective	starting	in	August	2013,	reflects	a	broad	range	of	standards	and	conditions	to govern	all	aspects	of	crew	management	for	ships	in	international	commerce,	including	additional	requirements	not	previously	in	effect	relating	to	the	health,	safety, repatriation,	entitlements	and	status	of	crewmembers	and	crew	recruitment	practices.	Each	of	our	Flag	States	will	be	required	to	enact	legislation	prior	to	August	2013 that	includes	standards	at	least	as	stringent	as	those	set	forth	in	the	Convention.	As	of	the	date	of	this	report,	this	legislation	has	not	been	finalized.	Assuming	that	the Flag	States	do	not	impose	regulations	that	materially	differ	from	the	Convention	requirements,	we	do	no	anticipate	that	our	compliance	costs	will	be	material.	There	can be	no	assurances,	however,	that	the	Flag	States	will	not	seek	to	adopt	additional	requirements	that	could	require	us	to	incur	unanticipated	material	expenses.

# Consumer	Financial	Responsibility	Regulations

								We	are	required	to	obtain	certificates	from	the	United	States	Federal	Maritime	Commission	relating	to	our	ability	to	satisfy	liability	in	cases	of	non-performance	of obligations	to	guests,	as	well	as	casualty	and	personal	injury.	Pursuant	to	the	United	States	Federal	Maritime	Commission	regulations,	we	arrange	through	our	insurers for	the	provision	of	guarantees	in	the	amount	of	$15.0	million	for	each	of	our	two	U.S.	ship-operating	companies,	Royal	Caribbean	Cruises	Ltd.	and	Celebrity Cruises	Inc.	and	a	bond	in	the	amount	of	$15.0	million	for	one	of	our	U.K.	ship	operating	companies,	as	a	condition	to	obtaining	the	required	certificates.	In	February 2013,	the	United	States	Federal	Maritime	Commission	approved	amendments	to	the	performance	bond	requirements	that	will	increase	the	required	guarantees	to $30.0	million	per	operator	($90.0	million	in	the	aggregate)	over	a	two-year	phase-in	period.	Once	phased-in,	the	guarantee	requirements	will	be	subject	to	additional consumer	price	index	based	adjustments.	The	new	rules	will	become	effective	in	the	first	quarter	of	2014.	We	do	not	anticipate	that	compliance	with	the	new	rules	will have	a	material	effect	on	our	costs.

								We	are	also	required	by	the	United	Kingdom,	Norway,	Finland,	and	the	Baltics	to	establish	our	financial	responsibility	for	any	liability	resulting	from	the	non- performance	of	our	obligations	to	guests	from	these	jurisdictions.	In	the	United	Kingdom	we	are	currently	required	by	the	Association	of	British	Travel	Agents	to provide	performance	bonds	totaling	approximately	£32.1	million.	The	Norwegian	Travel	Guarantee	Fund	requires	us	to	maintain	performance	bonds	in	varying	amounts during	the	course	of	the	year	to	cover	our	financial	responsibility	in	Norway,	Finland	and	the	Baltics.	These	amounts	ranged	from	$4.9	million	to	$18.8	million	during 2012.	We	are	also	required	to	pay	to	the	United	Kingdom	Civil	Aviation	Authority	a	non-refundable	levy	of	£2.50	per	guest	where	we	arrange	a	flight	as	part	of	the cruise	vacation.

								Certain	other	jurisdictions	also	require	that	we	establish	financial	responsibility	to	our	guests	resulting	from	the	non-performance	of	our	obligations;	however,	the related	amounts	do	not	have	a	material	effect	on	our	costs.

# Regulations	Regarding	Protection	of	Disabled	Persons

								In	2010,	the	United	States	Department	of	Transportation	issued	regulations	(the	"New	ADA	Regulations")	addressing	various	issues	applicable	to	passenger	vessels under	the	American	with	Disabilities	Act	(the	"ADA").	Part	I	of	the	New	ADA	Regulations,	which	include	required	reservation	policies	for	disabled	guests	and requirements	for	aids	and	services	to	disabled	passengers,	became	effective	in	January	2011.	We	believe	we	are	in	compliance	with	Part	I	of	the	New	ADA	Regulations and	did	not	need	to	make	any	material	expenditures	to	comply.	Part	II,	when	issued,	is	expected	to	address	physical	accessibility	standards.	While	we	believe	our	vessels have	been	designed	and	outfitted	to	meet	the	needs	of	our	disabled	guests,	we	cannot	at	this	time	accurately	predict	whether	we	will	be	required	to	make	material modifications	or	incur	significant	additional	expenses	in	response	to	Part	II	of	the	New	ADA	Regulations.

# Taxation	of	the	Company

								The	following	is	a	summary	of	our	principal	taxes,	exemptions	and	special	regimes.	In	addition	to	or	instead	of	income	taxation,	virtually	all	jurisdictions	where	our ships	call	impose	some	tax	or	fee,	or	both,	based	on	guest	headcount,	tonnage	or	some	other	measure.

								We	are	primarily	foreign	corporations	engaged	in	the	owning	and	operating	of	passenger	cruise	ships	in	international	transportation.	During	2012,	we	also	operated other	businesses	primarily	consisting	of	the	land-tour	operation	in	Alaska	and	the	Pullmantur	land-tour	and	air	business.

# United	States	Income	Taxation

								The	following	is	a	discussion	of	the	application	of	the	United	States	federal	and	state	income	tax	laws	to	us	and	is	based	on	the	current	provisions	of	the	United States	Internal	Revenue	Code,	Treasury	Department	regulations,	administrative	rulings,	court	decisions	and	the	relevant	state	tax	laws,	regulations,	rulings	and	court decisions	of	the	states	where	we	have	business	operations.	All	of	the	foregoing	is	subject	to	change,	and	any	such	change	could	affect	the	accuracy	of	this	discussion.

# Application	of	Section	883	of	the	Internal	Revenue	Code

								We	and	Celebrity	Cruises,	Inc.	are	engaged	in	a	trade	or	business	in	the	United	States,	and	many	of	our	ship-owning	subsidiaries,	depending	upon	the	itineraries	of their	ships,	receive	income	from	sources	within	the	United	States.	Additionally,	our	United	Kingdom	tonnage	tax	company,	owned	by	us	and	Celebrity	Cruises,	Inc.,	is	a ship-operating	company	classified	as	a	partnership	for	United	States	federal	income	tax	purposes	that	may	earn	United	States	source	income.	Under	Section	883	of	the Internal	Revenue	Code,	certain	foreign	corporations	are	not	subject	to	United	States	federal	income	or	branch	profits	tax	on	United	States	source	income	derived	from	or incidental	to	the	international	operation	of	a	ship	or	ships,	including	income	from	the	leasing	of	such	ships.

								A	foreign	corporation	will	qualify	for	the	benefits	of	Section	883	if,	in	relevant	part:	(1)	the	foreign	country	in	which	the	foreign	corporation	is	organized	grants	an equivalent	exemption	to	corporations	organized	in	the	United	States;	and	(2)	the	stock	of	the	corporation	(or	the	direct	or	indirect	corporate	parent	thereof)	is	"primarily and	regularly	traded	on	an	established	securities	market"	in	the	United	States	or	another	qualifying	country	such	as	Norway.	In	the	opinion	of	our	United	States	tax counsel,	Drinker	Biddle	&	Reath	LLP,	based	on	the	representations	and	assumptions	set	forth	in	that	opinion,	we,	Celebrity	Cruises	Inc.	and	our	ship-owning subsidiaries	qualify	for	the	benefits	of	Section	883	because	we	and	each	of	those	subsidiaries	are	incorporated	in	Liberia	or	Malta,	which	are	qualifying	countries,	and our	common	stock	is	primarily	and	regularly	traded	on	an	established	securities	market	in	the	United	States	or	Norway.	If,	in	the	future,	(1)	Liberia	or	Malta	no	longer qualifies	as	an	equivalent	exemption	jurisdiction,	and	we	do	not	reincorporate	in	a	jurisdiction	that	does	qualify	for	the	exemption,	or	(2)	we	fail	to	qualify	as	a	publicly traded	corporation,	we	and	all	of	our	ship-owning	or	operating	subsidiaries	that	rely	on	Section	883	for	tax	exemption	on	qualifying	income	would	be	subject	to	United States	federal	income	tax	on	their	United	States	source	shipping	income	and	income	from	activities	incidental	thereto.

								We	believe	that	most	of	our	income	and	the	income	of	our	ship-owning	subsidiaries	is	derived	from	or	incidental	to	the	international	operation	of	a	ship	or	ships and,	therefore,	is	exempt	from	taxation	under	Section	883.	Additionally,	income	earned	through	a	partnership	will	qualify	as	income	derived	from	or	incidental	to	the international	operation	of	a	ship	or	ships	to	the	same	extent	as	the	income	would	so	qualify	if	earned	directly	by	the	partners.	Thus,	we	believe	that	United	States	source income	derived	from	or	incidental	to	the	international	operation	of	a	ship	or	ships	earned	by	the	United	Kingdom	tonnage	tax	company	will	qualify	for	exemption	under Section	883	to	the	same	extent	as	if	it	were	earned	directly	by	the	owners	of	the	United	Kingdom	tonnage	tax	company.

								Regulations	under	Section	883	list	activities	that	are	not	considered	by	the	Internal	Revenue	Service	to	be	incidental	to	the	international	operation	of	ships	including the	sale	of	air	and	land	transportation,	shore	excursions	and	pre-	and	post-cruise	tours.	Our	income	from	these	activities	that	is	earned	from	sources	within	the	United States	will	be	subject	to	United	States	taxation.

# Taxation	in	the	Absence	of	an	Exemption	under	Section	883

								If	we,	the	operator	of	our	vessels,	Celebrity	Cruises	Inc.,	or	our	ship-owning	subsidiaries	were	to	fail	to	meet	the	requirements	of	Section	883	of	the	Internal Revenue	Code,	or	if	the	provision	was

repealed,	then,	as	explained	below,	such	companies	would	be	subject	to	United	States	income	taxation	on	a	portion	of	their	income	derived	from	or	incidental	to	the international	operation	of	our	ships.

								Because	we	and	Celebrity	Cruises	Inc.	conduct	a	trade	or	business	in	the	United	States,	we	and	Celebrity	Cruises	Inc.	would	be	taxable	at	regular	corporate	rates	on our	separate	company	taxable	income	(i.e.,	without	regard	to	the	income	of	our	ship-owning	subsidiaries)	from	United	States	sources.	In	addition,	if	any	of	our	earnings and	profits	effectively	connected	with	our	United	States	trade	or	business	were	withdrawn,	or	were	deemed	to	have	been	withdrawn,	from	our	United	States	trade	or business,	those	withdrawn	amounts	would	be	subject	to	a	"branch	profits"	tax	at	the	rate	of	30%.	We	and	Celebrity	Cruises	Inc.	would	also	be	potentially	subject	to	tax on	portions	of	certain	interest	paid	by	us	at	rates	of	up	to	30%.

								If	Section	883	were	not	available	to	our	ship-owning	subsidiaries,	each	such	subsidiary	would	be	subject	to	a	special	4%	tax	on	its	United	States	source	gross transportation	income,	if	any,	each	year	because	it	does	not	have	a	fixed	place	of	business	in	the	United	States	and	its	income	is	derived	from	the	leasing	of	a	ship.

# Other	United	States	Taxation

								We	and	Celebrity	Cruises,	Inc.	earn	United	States	source	income	from	activities	not	considered	incidental	to	international	shipping.	The	tax	on	such	income	is	not material	to	our	results	of	operation	for	all	years	presented.

# State	Taxation

								We,	Celebrity	Cruises	Inc.	and	certain	of	our	subsidiaries	are	subject	to	various	United	States	state	income	taxes	which	are	generally	imposed	on	each	state's portion	of	the	United	States	source	income	subject	to	federal	income	taxes.	Additionally,	the	state	of	Alaska	subjects	an	allocated	portion	of	the	total	income	of companies	doing	business	in	Alaska	and	certain	other	affiliated	companies	to	Alaska	corporate	state	income	taxes	and	also	imposes	a	33%	tax	on	adjusted	gross	income from	onboard	gambling	activities	conducted	in	Alaska	waters.	This	did	not	have	a	material	impact	to	our	results	of	operations	for	all	years	presented.

# Maltese	and	Spanish	Income	Tax

								Our	Pullmantur	ship	owner-operator	subsidiaries,	which	include	the	owner-operator	of	CDF	Croisières	de	France's	ship,	qualify	as	licensed	shipping	organizations in	Malta.	No	Maltese	income	tax	is	charged	on	the	income	derived	from	shipping	activities	of	a	licensed	shipping	organization.	Instead,	a	licensed	shipping	organization is	liable	to	pay	a	tonnage	tax	based	on	the	net	tonnage	of	the	ship	or	ships	registered	under	the	relevant	provisions	of	the	Merchant	Shipping	Act.	A	company	qualifies	as a	shipping	organization	if	it	engages	in	qualifying	activities	and	it	obtains	a	license	from	the	Registrar-General	to	enable	it	to	carry	on	such	activities.	Qualifying activities	include,	but	are	not	limited	to,	the	ownership,	operation	(under	charter	or	otherwise),	administration	and	management	of	a	ship	or	ships	registered	as	a	Maltese ship	in	terms	of	the	Merchant	Shipping	Act	and	the	carrying	on	of	all	ancillary	financial,	security	and	commercial	activities	in	connection	therewith.

								Our	Maltese	operations	that	do	not	qualify	as	licensed	shipping	organizations,	which	are	not	considered	significant,	remain	subject	to	normal	Maltese	corporate income	tax.

								Pullmantur	has	sales	and	marketing	functions,	land-based	tour	operations	and	air	business	in	Spain.	These	activities	are	subject	to	Spanish	taxation.	The	tax	from these	operations	is	not	considered	significant	to	our	operations.

# United	Kingdom	Income	Tax

								We	operate	thirteen	ships	under	companies	which	have	elected	to	be	subject	to	the	United	Kingdom	tonnage	tax	regime	("U.K.	tonnage	tax").

								Companies	subject	to	U.K.	tonnage	tax	pay	a	corporate	tax	on	a	notional	profit	determined	with	reference	to	the	net	tonnage	of	qualifying	vessels.	Normal	United Kingdom	corporate	income	tax	is	not	chargeable	on	the	relevant	shipping	profits	of	a	qualifying	U.K.	tonnage	tax	company.	The	requirements	for	a	company	to	qualify for	the	U.K.	tonnage	tax	regime	include	being	subject	to	United	Kingdom	corporate	income	tax,	operating	qualifying	ships,	which	are	strategically	and	commercially managed	in	the	United	Kingdom,	and	fulfilling	a	seafarer	training	requirement.	Failure	to	meet	any	of	these	requirements	could	cause	us	to	lose	the	benefit	of	the tonnage	tax	regime	which	will	have	a	material	effect	on	our	results	of	operations.

								Relevant	shipping	profits	include	income	from	the	operation	of	qualifying	ships	and	from	shipping	related	activities.	Our	United	Kingdom	income	from	non- shipping	activities	which	do	not	qualify	under	the	U.K.	tonnage	tax	regime	and	which	are	not	considered	significant,	remain	subject	to	United	Kingdom	corporate income	tax.

# Brazilian	Income	Tax

								Pullmantur	and	our	U.K.	tonnage	tax	company	charters	certain	ships	to	Brazilian	companies	for	operations	in	Brazil	from	November	to	May.	Some	of	these	charters are	with	unrelated	third	parties	and	others	are	with	a	Brazilian	affiliate.	The	Brazilian	affiliate's	earnings	are	subject	to	Brazilian	taxation	which	is	not	considered significant.	The	charter	payments	made	to	the	U.K.	tonnage	tax	company	and	to	Pullmantur	are	exempt	from	Brazilian	income	tax	under	current	Brazilian	domestic	law.

# Other	Taxation

								We	and	certain	of	our	subsidiaries	are	subject	to	income	tax	in	other	jurisdictions	on	income	that	does	not	qualify	for	exemption	or	tonnage	tax	regimes.	The	tax	on such	income	was	not	material	to	our	results	of	operations	for	all	years	presented.	Our	U.K.	tonnage	tax	company	is	exempt	from	some	taxation	in	certain	jurisdictions where	those	companies	have	business	operations	under	relevant	United	Kingdom	tax	treaties.	CDF	Croisières	de	France's	operations	within	France	are	minimal	and therefore,	its	French	income	taxes	are	minimal.

# Website	Access	to	Reports

								We	make	available,	free	of	charge,	access	to	our	Annual	Reports,	all	quarterly	and	current	reports	and	all	amendments	to	those	reports,	as	soon	as	reasonably practicable	after	such	reports	are	electronically	filed	with	or	furnished	to	the	Securities	and	Exchange	Commission	through	our	website	at	www.rclinvestor.com.	The information	contained	on	our	website	is	not	a	part	of	any	of	these	reports	and	is	not	incorporated	by	reference	herein.

# Executive	Officers	of	the	Company

								Richard	D.	Fain	has	served	as	a	director	since	1979	and	as	our	Chairman	and	Chief	Executive	Officer	since	1988.	Mr.	Fain	has	been	involved	in	the	shipping industry	for	over	35	years.

								Adam	M.	Goldstein	has	served	as	President	of	Royal	Caribbean	International	since	February	2005	and	as	its	President	and	Chief	Executive	Officer	since September	2007.	Mr.	Goldstein	has	been	employed	with	Royal	Caribbean	since	1988	in	a	variety	of	positions,	including	Executive	Vice	President,	Brand	Operations	of Royal	Caribbean	International,	Senior	Vice	President,	Total	Guest	Satisfaction	and	Senior	Vice	President,	Marketing.	Mr.	Goldstein	served	as	National	Chair	of	the United	States	Travel	Association	(formerly,	Travel	Industry	Association	of	America)	in	2001.

								Michael	W.	Bayley	has	served	as	President	and	Chief	Executive	Officer	of	Celebrity	Cruises	since	August	2012.	Mr.	Bayley	has	been	employed	by	Royal Caribbean	for	over	30	years,	having	started	as	a	Purser	onboard	one	of	the	company's	ships.	He	has	served	in	a	number	of	roles	including,	most	recently,	as	Executive Vice	President,	Operations	from	February	2012	until	August	2012.	Other	positions	Mr.	Bayley	has	held	include	Executive	Vice	President,	International	from	May	2010 until	February	2012;	Senior	Vice	President,	International	from	December	2007	to	May	2010;	Senior	Vice	President,	Hotel	Operations	for	Royal	Caribbean	International; and	Chairman	and	Managing	Director	of	Island	Cruises.

								Gonzalo	Chico	Barbier	has	served	as	President	and	Chief	Executive	Officer	of	Pullmantur	since	June	2008.	From	1995	to	June	2008,	Mr.	Chico	served	as Executive	President	of	TNT	Spain,	a	division	of	TNT,	a	global	distribution,	logistics	and	international	mail	service	company.	From	1986	until	1995,	Mr.	Chico	was employed	in	a	variety	of	positions	with	Ford	Motor	Company	in	Spain	and	in	the	United	Kingdom,	including	Pan-European	Fleet	Business	Manager	of	Ford	of Europe,	Ltd.

								Lawrence	Pimentel	has	served	as	President	and	Chief	Executive	Officer	of	Azamara	Club	Cruises	since	July	2009.	From	2001	until	January	2009,	Mr.	Pimentel was	President,	Chief	Executive	Officer,	Director	and	co-owner	of	SeaDream	Yacht	Club,	a	privately	held	luxury	cruise	line	located	in	Miami,	Florida	with	two	yacht- style	ships	that	sailed	primarily	in	the	Caribbean	and	Mediterranean.	From	April	1991	to	February	2001,	Mr.	Pimentel	was	President	and	Chief	Executive	Officer	of Carnival	Corp.'s	Seabourn	Cruise	Line	and	from	May	1998	to	February	2001,	he	was	President	and	Chief	Executive	Officer	of	Carnival	Corp.'s	Cunard	Line.

								Brian	J.	Rice	has	served	as	Vice	Chairman	and	Chief	Financial	Officer	since	September	2012.	Mr.	Rice	previously	served	as	Executive	Vice	President	and	Chief Financial	Officer	from	November	2006	through	September	2012.	Mr.	Rice	has	been	employed	with	Royal	Caribbean	since	1989	in	a

variety	of	positions	including	Executive	Vice	President,	Revenue	Performance.	In	such	capacity,	Mr.	Rice	was	responsible	for	revenue	management,	air/sea,	groups, international	operations,	decision	support,	reservations	and	customer	service	for	both	Royal	Caribbean	International	and	Celebrity	Cruises.

								Harri	U.	Kulovaara	has	served	as	Executive	Vice	President,	Maritime	since	January	2005.	Mr.	Kulovaara	is	responsible	for	fleet	design	and	newbuild	operations. Mr.	Kulovaara	also	chairs	our	Maritime	Safety	Advisory	Board.	Mr.	Kulovaara	has	been	employed	with	Royal	Caribbean	since	1995	in	a	variety	of	positions,	including Senior	Vice	President,	Marine	Operations,	and	Senior	Vice	President,	Quality	Assurance.	Mr.	Kulovaara	is	a	naval	architect	and	engineer.

								Lisa	Bauer-Rudzki	has	served	as	Executive	Vice	President	of	Global	Sales	&	Marketing	for	Royal	Caribbean	International	since	September	2012.	Since	joining	the company	in	2002,	Mrs.	Bauer-Rudzki	has	held	various	key	roles	within	Royal	Caribbean	International,	including,	serving	as	Senior	Vice	President,	Global	Sales	& Marketing	from	February	2012	to	September	2012	and	serving	as	Senior	Vice	President,	Hotel	Operations	from	November	2007	to	February	2012.	As	Executive Vice	President	of	Global	Sales	&	Marketing,	Ms.	Bauer-Rudzki	is	responsible	for	Royal	Caribbean	International's	worldwide	marketing	and	revenue	management	as well	as	for	the	corporation's	international	sales	and	marketing	offices.

								Lisa	Lutoff-Perlo	has	served	as	Executive	Vice	President,	Operations	for	Royal	Caribbean	International	since	September	2012	after	serving	as	Senior	Vice President,	Operations	for	Royal	Caribbean	International	from	August	2012	to	September	2012.	Mrs.	Lutoff-Perlo	has	been	employed	with	the	Company	since	1985	in	a variety	of	positions	within	both	Celebrity	Cruises	and	Royal	Caribbean	International.	She	started	at	Royal	Caribbean	International	as	District	Sales	Manager	for	New England	and	more	recently,	from	August	2008	to	August	2012,	she	was	responsible	for	Celebrity	Cruises'	entire	hotel	operation.	In	her	role	as	Executive	Vice	President of	Operations,	Ms.	Lutoff-Perlo	is	responsible	for	all	of	Royal	Caribbean	International's	hotel,	marine	and	port	operations.

# Item	1A.				Risk	Factors

								The	risk	factors	set	forth	below	and	elsewhere	in	this	Annual	Report	on	Form	10-K	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.	The	risks	described	below	are	only	those	known	risks	relating	to	our	operations	and	financial condition	that	we	consider	material.	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.	See	Item	7.	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	for	a	cautionary	note	regarding	forward- looking	statements.

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

								The	demand	for	cruises	is	affected	by	international,	national	and	local	economic	and	geopolitical	conditions.	The	slow	pace	of	the	economic	recovery	coupled	with continued	instability	in	the	global	economic	landscape	has	had	and	continues	to	have	an	adverse	effect	on	vacationers'	discretionary	income	and	consumer	confidence. This,	in	turn,	has	resulted	in	cruise	booking	slowdowns,	decreased	cruise	prices	and	lower	onboard	revenues	for	us	and	for	others	in	the	cruise	industry	as	compared	to more	robust	economic	times.	Although	the	cruise	industry	continued	to	recover	in	2012,	recovery	has	been	slow	and	has	been	hindered	by	ongoing	economic	instability, including	the	continuing	European	sovereign	debt	crisis	and	financial	market	volatility.	In	addition,	certain	countries	have	been	more	severely	impacted	by	recent economic	conditions	than	other	economies	including,	for	example,	Spain	where	we	operate	our	Pullmantur	brand.	We	cannot	predict	with	any	certainty	whether	demand for	cruises	will	continue	to	improve	or	the	rate	of	such	improvement.	Stagnant	or	worsening	global	economic	conditions	could	result	in	a	prolonged	period	of	booking slowdowns,	depressed	cruise	prices	and	reduced	onboard	revenues.

								Demand	for	our	cruises	is	also	influenced	by	geopolitical	events.	Unfavorable	conditions,	such	as	cross-border	conflicts,	civil	unrest	and	governmental	changes, especially	in	regions	with	popular	ports	of	call,	can	undermine	consumer	demand	and/or	pricing	for	itineraries	featuring	these	ports.

								Continued	unrest	and	economic	instability	could	materially	adversely	impact	our	operating	results,	cash	flows	and	financial	condition	including	potentially impairing	the	value	of	our	ships,	goodwill	and	other	assets.	During	2012,	we	recognized	total	impairment	related	charges	of	$413.9	million	associated	with	our Pullmantur	brand.	See	"Item	7.	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations."	Despite	the	Pullmantur	related	impairment charges,	if	the	Spanish	economy	weakens	further	or	recovers	more	slowly	than	contemplated	or	if	the	economies	of	other	markets	(e.g.	France,	Brazil,	Latin	America) perform	worse	than	contemplated	in	our	discounted	cash	flow	model,	or	if	there	are	material	changes	to	the	projected	future	cash	flows	used	in	the	impairment	analyses, especially	in	Net	Yields,	an	additional	impairment	charge	of	the	Pullmantur	reporting	unit's	goodwill	and	trademarks	and	trade	names	may	be	required.

# 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	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.	The	decrease	in consumer	cruise	spending	as	a	result	of	the	Costa	Concordia	incident	and	the	economic	uncertainty	in	Europe	had	an	adverse	impact	on	our	cash	flows	from	operations in	2012.	See	"—Adverse	worldwide	economic,	geopolitical	or	other	conditions...."	and	"—Incidents	or	adverse	publicity	concerning	the	cruise	vacation	industry...."	for more	information.	If

worldwide	economic	conditions	worsen	or	there	is	another	significant	incident	impacting	the	cruise	industry,	our	operational	cash	flows	could	be	negatively	affected.

								Although	we	believe	we	can	access	sufficient	liquidity	to	fund	our	operations	and	obligations	as	expected,	there	can	be	no	assurances	to	that	effect.	During	2013,	we anticipate	raising	additional	funds	in	the	capital	or	credit	markets	as	part	of	our	refinancing	strategy	for	our	upcoming	2013	and	2014	maturities.	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	and	credit	ratings	and the	performance	of	our	industry	in	general.	See	"Item	7.	Management's	Discussion	&	Analysis	of	Financial	Condition	and	Results	of	Operations—Funding	Needs	and Sources"	for	more	information.

# Our	inability	to	satisfy	the	covenants	required	by	our	credit	facilities	could	adversely	impact	our	liquidity.

								Our	debt	agreements	contain	covenants,	including	covenants	restricting	our	ability	to	take	certain	actions	and	financial	covenants	that	require	us	to	maintain minimum	net	worth	and	fixed	charge	coverage	ratios	and	limit	our	net	debt-to-capital	ratio.	Our	ability	to	comply	with	the	terms	of	our	outstanding	facilities	may	be affected	by	general	economic	conditions,	industry	conditions	and	other	events,	some	of	which	may	be	beyond	our	control.	In	addition,	our	ability	to	make	borrowings under	our	available	credit	facilities	is	subject	to	the	absence	of	material	adverse	changes	in	our	business.	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	a	majority	of	our	debt	facilities	if	(i)	any	person	other	than	A.	Wilhelmsen AS.	and	Cruise	Associates	and	their	respective	affiliates	(the	"Applicable	Group")	acquires	ownership	of	more	than	33%	of	our	common	stock	and	the	Applicable	Group owns	less	of	our	common	stock	than	such	person	or	(ii)	subject	to	certain	exceptions,	during	any	24-month	period,	a	majority	of	the	Board	is	no	longer	comprised	of individuals	who	were	members	of	the	Board	on	the	first	day	of	such	period.	Certain	of	our	outstanding	debt	securities	also	contain	change	of	control	provisions	that would	be	triggered	by	the	acquisition	of	greater	than	50%	of	our	common	stock	by	a	person	other	than	a	member	of	the	Applicable	Group	coupled	with	a	ratings downgrade.

								Our	failure	to	comply	with	the	terms	of	our	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.	We	cannot	provide	assurances that	we	would	have	sufficient	liquidity	to	repay	or	refinance	the	borrowings	under	any	of	the	credit	facilities	or	settle	other	outstanding	contracts	if	such	amounts	were accelerated	upon	an	event	of	default.

								In	addition,	under	several	of	our	agreements	with	credit	card	processors	that	accept	credit	cards	for	the	sale	of	cruises	and	other	services,	the	credit	card	processor may	hold	back	a	reserve	from	our	credit	card	receivables	following	the	occurrence	of	certain	events,	including	a	default	under	our	major	credit	facilities.	As	of December	31,	2012,	we	were	not	required	to	maintain	any	reserve	under	such	agreements.

# Incidents	or	adverse	publicity	concerning	the	cruise	vacation	industry,	unusual	weather	conditions	and	other	natural	disasters	or	disruptions	could	affect	our reputation	as	well	as	impact	our	sales	and	results	of	operations.

								The	operation	of	cruise	ships,	airplanes,	land	tours,	port	facilities	and	shore	excursions	involves	the	risk	of	accidents,	illnesses,	environmental	incidents	and	other incidents	which	may	bring	into	question	guest	safety,	health,	security	and	vacation	satisfaction	which	could	negatively	impact	our	reputation.	Incidents	involving	cruise ships,	and,	in	particular	the	safety	and	security	of	guests	and	crew,	such	as	the	Costa	Concordia	incident,	media	coverage	thereof,	as	well	as	adverse	media	publicity concerning

the	cruise	vacation	industry	or	unusual	weather	patterns	or	natural	disasters	or	disruptions,	such	as	hurricanes	and	earthquakes,	and	the	collateral	impact	thereof	could impact	demand	for	our	cruises.	The	considerable	expansion	in	the	use	of	social	media	over	recent	years	has	compounded	the	potential	scope	of	the	negative	publicity that	could	be	generated	by	those	incidents.	If	any	such	incident	occurs	during	a	time	of	high	seasonal	demand,	the	effect	could	disproportionately	impact	our	results	of operations	for	the	year.	In	addition,	any	events	which	impact	the	travel	industry	more	generally	may	negatively	impact	our	ability	to	deliver	guests	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.

# The	impact	of	disruptions	in	the	global	financial	markets	may	affect	the	ability	of	our	counterparties	and	others	to	perform	their	obligations	to	us.

								The	financial	crisis	of	2008,	including	failures	of	financial	service	companies	and	the	related	liquidity	crisis,	disrupted	the	capital	and	credit	markets	and	additional economic	concerns	from	some	of	the	countries	in	the	European	Union	continue	to	strain	the	financial	markets	both	in	the	US	and	internationally.	A	recurrence	of	these disruptions	could	cause	our	counterparties	and	others	to	breach	their	obligations	to	us	under	our	contracts	with	them.	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	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.

# 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	both	by	the	introduction	of	new	ships	into	the	marketplace	and	by	deployment decisions	of	ourselves	and	our	competitors.	A	total	of	19	new	ships	with	approximately	65,000	berths	are	on	order	for	delivery	through	2017	in	the	cruise	industry.	The further	growth	in	capacity	from	these	new	ships	and	future	orders,	without	an	increase	in	the	cruise	industry's	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.	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,	goodwill	and	other	assets.

# If	we	are	unable	to	appropriately	balance	our	cost	management	strategy	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	assurances	that	we	can	successfully	balance	these	goals	with our	cost	containment	efforts.

# 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	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	Lines,	Costa	Cruises,	Cunard	Line,	Holland	America	Line,	Iberocruceros,	P&O	Cruises	and	Princess	Cruises;	Disney	Cruise	Line; MSC	Cruises;	Norwegian	Cruise	Line	and	Oceania	Cruises.

								In	the	event	that	we	do	not	compete	effectively	with	other	vacation	alternatives	and	cruise	companies,	our	results	of	operations	and	financial	position	could	be adversely	affected.

# Fears	of	terrorist	and	pirate	attacks,	war,	and	other	hostilities	and	the	spread	of	contagious	diseases	could	have	a	negative	impact	on	our	results	of	operations.

								Events	such	as	terrorist	and	pirate	attacks,	war,	and	other	hostilities	and	the	resulting	political	instability,	travel	restrictions,	the	spread	of	contagious	diseases	and concerns	over	safety,	health	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.	As	we	continue	to	globalize	our	operations,	we	become	susceptible	to	a	wider	range	of	adverse	events.

# Fluctuations	in	foreign	currency	exchange	rates	could	affect	our	financial	results.

								We	earn	revenues,	pay	expenses,	recognize	assets	and	incur	liabilities	in	currencies	other	than	the	U.S.	dollar,	including,	among	others,	the	British	pound	sterling, the	Canadian	dollar,	the	euro,	the	Australian	dollar	and	the	Brazilian	real.	In	2012,	we	derived	approximately	49%	of	revenues	from	operations	outside	the	United	States. Because	our	consolidated	financial	statements	are	presented	in	U.S.	dollars,	we	must	convert	revenues,	income	and	expenses,	as	well	as	assets	and	liabilities,	into U.S.	dollars	at	exchange	rates	in	effect	during	or	at	the	end	of	each	reporting	period.	Therefore,	absent	offsetting	changes	in	other	foreign	currencies,	increases	or decreases	in	the	value	of	the	U.S.	dollar	against	other	major	currencies	will	affect	our	revenues,	operating	income	and	the	value	of	balance	sheet	items	denominated	in foreign	currencies.	We	use	derivative	financial	instruments	to	mitigate	our	net	balance	sheet	exposure	to	currency	exchange	rate	fluctuations.	However,	there	can	be	no assurances	that	fluctuations	in	foreign	currency	exchange	rates,	particularly	the	strengthening	of	the	U.S.	dollar	against	major	currencies,	would	not	materially	affect	our financial	results.

								In	addition,	we	have	ship	construction	contracts	which	are	denominated	in	euros.	While	we	have	entered	into	euro-denominated	forward	contracts	and	collar	options to	manage	a	portion	of	the	currency	risk	associated	with	these	ship	construction	contracts,	we	are	exposed	to	fluctuations	in	the	euro	exchange	rate	for	the	portion	of	the ship	construction	contracts	that	has	not	been	hedged.	Additionally,	if	the	shipyard	is	unable	to	perform	under	the	related	ship	construction	contract,	any	foreign	currency hedges	that	were	entered	into	to	manage	the	currency	risk	would	need	to	be	terminated.	Termination	of	these	contracts	could	result	in	a	significant	loss.

# 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	are	considering	new	environmental	regulations	or	policies,	such as	requiring	the	use	of	low	sulfur	fuels,	increasing	fuel	efficiency	requirements,	further	restricting	emissions,	or	other	initiatives	to	limit	greenhouse	gas	emissions	that could	increase	our	cost	for	fuel,	cause	us	to	incur	significant	expenses	to	purchase	and/or	develop	new	equipment	and	adversely	impact	the	cruise	vacation	industry. 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	"Item	1.	Business—Regulation—Environmental	Regulations."	An	increase	in	fuel	prices	not	only	impacts	our	fuel	costs,	but	also	some	of our	other	expenses,	such	as	crew	travel,	freight	and	commodity	prices.

								In	addition,	we	are	subject	to	various	international,	national,	state	and	local	laws,	regulations	and	treaties	that	govern,	among	other	things,	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,	especially	in	light	of	the	Costa	Concordia	incident.	This	could	result	in	the	enactment	of	more	stringent	regulation	of	cruise	ships	that	could	subject	us	to increasing	compliance	costs	in	the	future.

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

								We	operate	our	business	globally	and	plan	to	continue	to	develop	our	international	presence.	Operating	internationally	exposes	us	to	a	number	of	risks,	including unstable	local	economic	conditions,	volatile	local	political	conditions,	potential	changes	in	duties	and	taxes,	including	changing	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,	U.S.	and	global	anti-bribery	laws	or	regulations, imposition	of	trade	barriers	and	restrictions	on	repatriation	of	earnings.	In	addition,	if	a	country	where	we	have	significant	operations	or	obligations	leaves	the	euro currency	system,	our	financial	condition	may	be	adversely	impacted.	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,	goodwill	and	other	assets.

								Operating	globally	also	exposes	us	to	numerous	and	sometimes	conflicting	legal	and	regulatory	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	which	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	flow.

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

								While	our	historical	focus	has	been	to	serve	the	North	American	cruise	market,	we	have	expanded	our	focus	to	increase	our	international	guest	sourcing,	including sourcing	from	the	Brazilian,	Asian	and	Australian	markets.	Expansion	into	new	markets	requires	significant	levels	of	investment.	There	can	be	no	assurance	that	these markets	will	develop	as	anticipated	or	that	we	will	have	success	in	these	markets,	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.

# Ship	construction,	repair	or	revitalization	delays	or	mechanical	faults	may	result	in	cancellation	of	cruises	or	unscheduled	drydocks	and	repairs	and	thus	adversely affect	our	results	of	operations.

								We	depend	on	shipyards	to	construct,	repair	and	revitalize	our	cruise	ships	on	a	timely	basis	and	in	good	working	order.	The	sophisticated	nature	of	building	a	ship involves	risks.	Delays	or	mechanical	faults	in	ship	construction	or	revitalization	have	in	the	past	and	may	in	the	future	result	in	delays	or	cancellation	of	cruises	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.

# Shipyards	and	their	subcontractors	may	experience	financial	difficulties	which	could	cause	or	result	in	delay,	ship	cancellations,	our	inability	to	procure	new capacity	in	a	timely	fashion	or	increases	in	shipbuilding	costs	that	could	adversely	affect	our	results	of	operations.

								We	rely	on	shipyards	to	construct,	repair	and	revitalize	our	vessels.	Financial	difficulties,	liquidations	or	closures	suffered	by	these	shipyards	and/or	their subcontractors	may	impact	the	timely	delivery	or	costs	of	new	ships	or	the	ability	of	shipyards	to	repair	and	revitalize	our	fleet	in	accordance	with	our	needs	or expectations.	The	shipyard	that	is	building	the	two	newbuilds	for	our	TUI	Cruises	joint	venture	is	currently	experiencing	financial	difficulties.	We	have	engaged	in discussions	with	the	shipyard	to	assess	the	impact	on	the	ships	they	are	building	for	TUI	Cruises.	This	situation	could	have	a	material	impact	on	the	ability	of	the shipyard	to	deliver	these	ships	in	accordance	with	the	terms	of	the	contract,	the	costs	borne	by	TUI	Cruises	associated	with	these	ships	and/or	the	financial	support	that we	may	need	to	provide	(e.g.	parent	guarantees,	additional	equity	contributions)	to	seek	to	ensure	timely	completion.

								In	addition,	there	are	a	limited	number	of	shipyards	with	the	capability	and	capacity	to	build	our	new	vessels	and,	accordingly,	closures	or	consolidation	in	the cruise	shipyard	industry	could	impact	our	ability	to	construct	new	vessels	when	and	as	planned	and/or	could	result	in	stronger	bargaining	power	on	the	part	of	the shipyards	and	thus	higher	prices	for	our	future	ship	orders.	Delivery	delays	and	cancelled	deliveries	can	adversely	affect	our	results	of	operations,	as	can	any	constraints on	our	ability	to	build,	repair	and	maintain	our	ships	on	a	timely	basis.

# Our	operating	costs,	especially	fuel	expenditures,	could	increase	due	to	market	forces	and	economic	or	geopolitical	factors	beyond	our	control.

								Expenditures	for	fuel	represent	a	significant	cost	of	operating	our	business.	If	fuel	prices	rise	significantly	in	a	short	period	of	time,	we	may	be	unable	to	increase fares	or	other	fees	sufficiently	to	offset	fully	our	increased	fuel	costs.	We	routinely	hedge	a	portion	of	our	future	fuel	requirements	to	protect	against	rising	fuel	costs. However,	there	can	be	no	assurance	that	our	hedge	contracts	will	provide	a	sufficient	level	of	protection	against	increased	fuel	costs	or	that	our	counterparties	will	be able	to	perform	under	our	hedge	contracts,	such	as	in	the	case	of	a	counterparty's	bankruptcy.	Further	volatility	in	fuel	prices	or	disruptions	in	fuel	supplies	could	have	a material	adverse	effect	on	our	results	of	operations,	financial	condition	and	liquidity.

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

# 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	is	affected	by	a number	of	factors,	including	existing	capacity	constraints,	constraints	related	to	the	size	of	certain	ships,	security	concerns,	adverse	weather	conditions	and	natural disasters,	financial	limitations	on	port	development,	exclusivity	arrangements	that	ports	may	have	with	our	competitors,	local	governmental	regulations	and	local community	concerns	about	port	development	and	other	adverse	impacts	on	their	communities	from	additional	tourists.	Any	limitations	on	the	availability	of	our	ports	of call	or	on	the	availability	of	shore	excursion	and	other	service	providers	at	such	ports	could	adversely	affect	our	results	of	operations.

# 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.

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

								Because	we	rely	on	travel	agencies	to	generate	the	majority	of	bookings	for	our	ships,	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.	In	addition,	the	travel	agent	industry	is	sensitive	to	economic	conditions	that	impact	discretionary	income.	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	operations	or	our	information	systems	may	adversely	affect	our	results	of	operations.

								Our	principal	executive	office	and	principal	shoreside	operations	are	located	at	the	Port	of	Miami,	Florida	and	we	have	call	centers	for	reservations	throughout	the world.	Although	we	have	developed	disaster	recovery	and	similar	contingency	plans,	actual	or	threatened	natural	disasters	(e.g.	hurricanes,	earthquakes,	tornados,	fires, 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	systems	failures,	computer	viruses,	cyber-attacks	impacting	our	shoreside	or	shipboard	operations	could	adversely	impact	our	business.	We	do	not carry	business	interruption	insurance	for	the	majority	of	our	shoreside	operations	or	our	information	systems.	As	such,	any	losses	or	damages	incurred	by	us	could	have an	adverse	impact	on	our	results	of	operations.

# Failure	to	develop	the	value	of	our	brands	and	differentiate	our	products	could	adversely	affect	our	results	of	operations.

								Our	success	depends	on	the	strength	and	continued	development	of	our	cruise	brands	and	on	the	effectiveness	of	our	brand	strategies.	Failure	to	protect	and differentiate	our	brands	from	competitors	throughout	the	vacation	market	could	adversely	affect	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	and	retain	high	quality employees.	We	must	continue	to	recruit,	retain	and	motivate	management	and	other	employees	sufficient	to	maintain	our	current	business	and	support	our	projected growth.	Furthermore,	as	of	December	31,	2012,	80%	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.	A	loss	of	key	employees	or	disruptions	among	our	personnel could	adversely	affect	our	results	of	operations.

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

								Partnerships,	joint	ventures,	and	other	business	structures	involving	our	co-investment	with	third	parties,	such	as	our	joint	venture	to	operate	TUI	Cruises,	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,	actions	by	another	investor	may	present	additional	risks	of	operational	difficulties	or	reputational	or	legal	concerns.

# A	failure	to	keep	pace	with	developments	in	technology	or	technological	obsolescence	could	impair	our	operations	or	competitive	position.

								Our	business	continues	to	demand	the	use	of	sophisticated	technology	and	systems.	These	technologies	and	systems	must	be	refined,	updated,	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,	and	a	failure	to	do	so	could	result	in	higher	than	anticipated	costs	or	could	impair	our	operating results.

# 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	United	States	trade	or	business	and/or	from	sources	within	the	United States.	Drinker	Biddle	&	Reath	LLP,	our	United	States	tax	counsel,	has	delivered	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	exempt	from	United	States	federal	income	tax	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	a	ship	or	ships.

								The	provisions	of	Section	883	are	subject	to	change	at	any	time	by	legislation.	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	or	Malta	such	that	they	no longer	qualify	as	equivalent	exemption	jurisdictions,	that	could	affect	our	eligibility	for	the	Section	883	exemption.	Accordingly,	there	can	be	no	assurance	that	we	will continue	to	be	exempt	from	United	States	income	tax	on	United	States	source	shipping	income	in	the	future.	If	we	were	not	entitled	to	the	benefit	of	Section	883,	we	and our	subsidiaries	would	be	subject	to	United	States	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	tonnage	tax	regimes	of	the	U.K.	and	Malta.	Further,	some	of	the	operations	of these	companies	are	conducted	in	jurisdictions	where	we	rely	on	tax	treaties	to	provide	exemption	from	taxation.	To	the	extent	the	tonnage	tax	laws	of	these	countries 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,	resulting	in	lower	net	income.

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

# 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	existence	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.

# 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.

# Provisions	of	our	Articles	of	Incorporation,	Bylaws	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	Bylaws	and	Liberian	law	may	inhibit	third	parties	from	effectuating	a	change	of	control	of	the	Company without	Board	approval	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.

# Item	1B.				Unresolved	Staff	Comments

# Item	2.				Properties

								Information	about	our	cruise	ships,	including	their	size	and	primary	areas	of	operation,	may	be	found	within	the	Operating	Strategies—Fleet	revitalization, maintenance	and	expansion	section	and	the	Operations—Cruise	Ships	and	Itineraries	section	in	Item	1.	Business.	Information	regarding	our	cruise	ships	under construction,	estimated	expenditures	and	financing	may	be	found	within	the	Future	Capital	Commitments	and	Funding	Needs	and	Sources	sections	of	Item	7.

Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations.

								Our	principal	executive	office	and	principal	shoreside	operations	are	located	at	the	Port	of	Miami,	Florida	where	we	lease	three	office	buildings	totaling approximately	361,800	square	feet	from	Miami-Dade	County,	Florida,	under	long-term	leases	with	current	terms	expiring	in	2021.	We	lease	two	office	buildings	in	the United	Kingdom	totaling	approximately	57,000	square	feet	used	to	conduct	our	operations	in	the	United	Kingdom.	We	also	lease	a	number	of	international	offices throughout	Europe,	Asia,	Mexico,	South	America	and	Australia	to	administer	our	brand	operations	globally.

								We	lease	an	office	building	in	Springfield,	Oregon	totaling	approximately	163,000	square	feet,	which	is	used	as	a	call	center	for	reservations.	In	addition,	we	own two	office	buildings	totaling	approximately	95,000	square	feet	in	Wichita,	Kansas,	which	are	used	as	call	centers	for	reservations	and	customer	service.	We	lease	two buildings	in	Miramar,	Florida	totaling	approximately	178,000	square	feet.	One	building	is	used	primarily	as	office	space	and	the	other	building	is	used	as	a	call	center for	reservations.	We	also	lease	our	logistics	center	in	Weston,	Florida	totaling	approximately	267,000	square	feet.

								We	believe	that	our	facilities	are	adequate	for	our	current	needs	and	that	we	are	capable	of	obtaining	additional	facilities	as	necessary.

								We	also	operate	two	private	destinations	which	we	utilize	as	a	port-of-call	on	certain	of	our	itineraries:	(i)	an	island	we	own	in	the	Bahamas	which	we	call CocoCay;	and	(ii)	Labadee,	a	secluded	peninsula	we	lease	on	the	north	coast	of	Haiti.

# Item	3.				Legal	Proceedings

								Between	August	1,	2011	and	September	8,	2011,	three	similar	purported	class	action	lawsuits	were	filed	against	us	and	certain	of	our	current	and	former	officers	in the	U.S.	District	Court	of	the	Southern	District	of	Florida.	The	cases	have	since	been	consolidated	and	a	consolidated	amended	complaint	was	filed	on	February	17, 2012.	The	consolidated	amended	complaint	was	filed	on	behalf	of	a	purported	class	of	purchasers	of	our	common	stock	during	the	period	from	October	26,	2010	through July	27,	2011	and	names	the	Company,	our	Chairman	and	CEO,	our	CFO,	the	President	and	CEO	of	our	Royal	Caribbean	International	brand	and	the	former	President and	CEO	of	our	Celebrity	Cruises	brand	as	defendants.	The	consolidated	amended	complaint	alleges	violations	of	Section	10(b)	of	the	Securities	Exchange	Act	of	1934 and	SEC	Rule	10b-5	as	well	as,	in	the	case	of	the	individual	defendants,	the	control	person	provisions	of	the	Securities	Exchange	Act.	The	complaint	principally	alleges that	the	defendants	knowingly	made	incorrect	statements	concerning	the	Company's	outlook	for	2011	by	not	taking	into	proper	account	lagging	European	and Mediterranean	bookings.	The	consolidated	amended	complaint	seeks	unspecified	damages,	interest,	and	attorneys'	fees.	We	filed	a	motion	to	dismiss	the	complaint	on April	9,	2012.	Briefing	on	that	motion	was	completed	on	August	2,	2012.	The	motion	is	currently	pending.	We	believe	the	claims	made	against	us	are	without	merit	and we	intend	to	vigorously	defend	ourselves	against	them.

								A	class	action	complaint	was	filed	in	June	2011	against	Royal	Caribbean	Cruises	Ltd.	in	the	United	States	District	Court	for	the	Southern	District	of	Florida	on behalf	of	a	purported	class	of	stateroom	attendants	employed	onboard	Royal	Caribbean	International	cruise	vessels	alleging	that	they	were	required	to	pay	other	crew members	to	help	with	their	duties	in	violation	of	the	U.S.	Seaman's	Wage	Act.	The	lawsuit	also	alleges	that	certain	stateroom	attendants	were	required	to	work	back	of house	assignments	without	the	ability	to	earn	gratuities	in	violation	of	the	U.S.	Seaman's	Wage	Act.	Plaintiffs	seek	judgment	for	damages,	wage	penalties	and	interest	in an	indeterminate	amount.	In	May	2012,	the	Court	granted	our	motion	to	dismiss	the	complaint	on	the	basis	that	the	applicable	collective	bargaining	agreement	requires any	such	claims	to	be	arbitrated.	Plaintiff's	appeal	of	this	decision	was	dismissed	for	lack	of	jurisdiction	by	the	United	States	Court	of	Appeals,	11th	Circuit.	Plaintiffs	are seeking	to	renew	their	appeal.	We	believe	the	appeal	is	without	merit	as	are	the	underlying	claims	made	against	us	and	we	intend	to	vigorously	defend	ourselves	against them.

								Because	of	the	inherent	uncertainty	as	to	the	outcome	of	the	proceedings	described	above,	we	are	unable	at	this	time	to	estimate	the	possible	impact	of	these	matters on	us.

								We	are	routinely	involved	in	other	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	4.				Mine	Safety	Disclosures

# Item	5.				Market	for	Registrant's	Common	Equity,	Related	Stockholder	Matters	and	Issuer	Purchases	of	Equity	Securities

# Market	Information

								Our	common	stock	is	listed	on	the	New	York	Stock	Exchange	("NYSE")	and	the	Oslo	Stock	Exchange	("OSE")	under	the	symbol	"RCL".	The	table	below	sets forth	the	high	and	low	sales	prices	of	our	common	stock	as	reported	by	the	NYSE	and	the	OSE	for	the	two	most	recent	years	by	quarter:

|  | NYSE |  | OSE |  |
| :--- | :--- | :--- | :--- | :--- |
|  | Common\tStock | Common\tStock | Common\tStock^(1) | Common\tStock^(1) |
|  | High | Low | High | Low |
| 2012 |  |  |  |  |
| Fourth\tQuarter | $36.18 | $30.26 | 202.50 | 169.70 |
| Third\tQuarter | 31.97 | 22.45 | 182.90 | 134.50 |
| Second\tQuarter | 29.45 | 22.12 | 167.60 | 134.60 |
| First\tQuarter | 31.96 | 25.40 | 183.70 | 149.30 |
| 2011 |  |  |  |  |
| Fourth\tQuarter | $30.99 | $18.70 | 168.00 | 111.60 |
| Third\tQuarter | 39.43 | 21.50 | 214.30 | 121.10 |
| Second\tQuarter | 42.30 | 32.68 | 232.60 | 180.00 |
| First\tQuarter | 49.99 | 40.26 | 293.10 | 226.30 |

(1) Denominated	in	Norwegian	kroner,	as	listed	in	the	price	history	database	available	at	www.oslobors.no.

# Holders

								As	of	February	13,	2013	there	were	1,128	record	holders	of	our	common	stock.	Since	certain	of	our	shares	are	held	by	brokers	and	other	institutions	on	behalf	of shareholders,	the	foregoing	number	is	not	representative	of	the	number	of	beneficial	owners.

# Dividends

								In	July	2011,	our	Board	of	Directors	reinstated	our	quarterly	dividend,	which	had	been	discontinued	in	the	fourth	quarter	of	2008.	We	subsequently	declared	cash dividends	on	our	common	stock	of	$0.10	per	share	during	the	third	and	fourth	quarters	of	2011	and	the	first	and	second	quarters	of	2012.	We	increased	the	dividend amount	to	$0.12	per	share	for	the	dividends	declared	in	the	third	and	fourth	quarters	of	2012.

								Holders	of	our	common	stock	have	an	equal	right	to	share	in	our	profits	in	the	form	of	dividends	when	and	if	declared	by	our	Board	of	Directors	out	of	funds legally	available.	Holders	of	our	common	stock	have	no	rights	to	any	sinking	fund.

								There	are	no	exchange	control	restrictions	on	remittances	of	dividends	on	our	common	stock	since	(1)	we	are	and	intend	to	maintain	our	status	as	a	nonresident Liberian	entity	under	the	Revenue	Code	of	Liberia	(2000)	and	the	regulations	thereunder,	and	(2)	our	ship-owning	subsidiaries	are	not	now	engaged,	and	are	not	in	the future	expected	to	engage,	in	any	business	in	Liberia,	including	voyages	exclusively	within	the	territorial	waters	of	the	Republic	of	Liberia.	Under	current	Liberian	law, no	Liberian	taxes	or	withholding	will	be	imposed	on	payments	to	holders	of	our	securities	other	than	to	a	holder	that	is	a	resident	Liberian	entity	or	a	resident	individual or	an	individual	or	entity	subject	to	taxation	in	Liberia	as	a	result	of	having	a	permanent	establishment	within	the	meaning	of	the	Revenue	Code	of	Liberia	(2000)	in Liberia.

								The	declaration	of	dividends	shall	at	all	times	be	subject	to	the	final	determination	of	our	Board	of	Directors	that	a	dividend	is	prudent	at	that	time	in	consideration of	the	needs	of	the	business.

# Performance	Graph

								The	following	graph	compares	the	total	return,	assuming	reinvestment	of	dividends,	on	an	investment	in	the	Company,	based	on	performance	of	the	Company's common	stock,	with	the	total	return	of	the	Standard	&	Poor's	500	Composite	Stock	Index	and	the	Dow	Jones	United	States	Travel	and	Leisure	Index	for	a	five	year period	by	measuring	the	changes	in	common	stock	prices	from	December	31,	2007	to	December	31,	2012.

# GRAPHIC

|  | 12/07 | 12/08 | 12/09 | 12/10 | 12/11 | 12/12 |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
| Royal\tCaribbean\tCruises\tLtd. | 100.00 | 32.89 | 60.47 | 112.43 | 59.75 | 83.26 |
| S&amp;P\t500 | 100.00 | 63.00 | 79.67 | 91.67 | 93.61 | 108.59 |
| Dow\tJones\tUS\tTravel\t&amp;\tLeisure | 100.00 | 64.87 | 84.97 | 120.13 | 128.17 | 145.26 |

								The	stock	performance	graph	assumes	for	comparison	that	the	value	of	the	Company's	common	stock	and	of	each	index	was	$100	on	December	31,	2007	and	that all	dividends	were	reinvested.	Past	performance	is	not	necessarily	an	indicator	of	future	results.

# Item	6.				Selected	Financial	Data

								The	selected	consolidated	financial	data	presented	below	for	the	years	2008	through	2012	and	as	of	the	end	of	each	such	year	are	derived	from	our	audited consolidated	financial	statements	and	should	be	read	in	conjunction	with	those	financial	statements	and	the	related	notes	as	well	as	in	conjunction	with	Item	7.

|  | 2012 | 2011 | 2010 | 2009 | 2008 |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | (in\tthousands,\texcept\tper\tshare\tdata) | (in\tthousands,\texcept\tper\tshare\tdata) | (in\tthousands,\texcept\tper\tshare\tdata) |  |
| Operating\tData: |  |  |  |  |  |
| Total\trevenues | $7,688,024 | $7,537,263 | $6,752,504 | $5,889,826 | $6,532,525 |
| (1) |  |  |  |  |  |
| Operating\tincome | 403,110 | 931,628 | 802,633 | 488,511 | 831,984 |
| (1)(2) |  |  |  |  |  |
| Net\tincome | 18,287 | 607,421 | 515,653 | 152,485 | 573,722 |
| Per\tShare\tData—Basic: |  |  |  |  |  |
| Net\tincome | $0.08 | $2.80 | $2.40 | $0.71 | $2.69 |
| Weighted-average\tshares | 217,930 | 216,983 | 215,026 | 213,809 | 213,477 |
| Per\tShare\tData—Diluted: |  |  |  |  |  |
| Net\tincome | $0.08 | $2.77 | $2.37 | $0.71 | $2.68 |
| Weighted-average\tshares\tand\tpotentially |  |  |  |  |  |
| dilutive\tshares | 219,457 | 219,229 | 217,711 | 215,295 | 214,195 |
| Dividends\tdeclared\tper\tcommon\tshare | $0.44 | $0.20 | $0.00 | $0.00 | $0.45 |
| Balance\tSheet\tData: |  |  |  |  |  |
| Total\tassets | $19,827,930 | $19,804,405 | $19,653,829 | $18,224,425 | $16,463,310 |
| Total\tdebt,\tincluding\tcapital\tleases | 8,489,947 | 8,495,853 | 9,150,116 | 8,419,770 | 7,011,403 |
| Common\tstock | 2,291 | 2,276 | 2,262 | 2,243 | 2,239 |
| Total\tshareholders'\tequity | 8,308,749 | 8,407,823 | 7,900,752 | 7,489,781 | 6,803,012 |

(1) Amounts	for	2012	include	an	impairment	charge	of	$385.4	million	to	write	down	Pullmantur's	goodwill	to	its	implied	fair	value	and	to	write down	trademarks	and	trade	names	and	certain	long-lived	assets,	consisting	of	three	aircraft	owned	and	operated	by	Pullmantur	Air,	to	their	fair value.	(See	Valuation	of	Goodwill,	Indefinite-Lived	Intangible	Assets	and	Long-Lived	Assets	under	Item	7.	Management's	Discussion	and Analysis	of	Financial	Condition	and	Results	of	Operations	for	more	information	regarding	the	impairment	of	these	assets).

(2) Amounts	for	2012	include	a	$33.7	million	charge	to	record	a	100%	valuation	allowance	related	to	our	deferred	tax	assets	for	Pullmantur.	In addition,	we	reduced	the	deferred	tax	liability	related	to	Pullmantur's	trademarks	and	trade	names	by	$5.2	million.	These	adjustments	resulted	in an	increase	of	$28.5	million	to	other	(expense)	income.	(See	Valuation	of	Goodwill,	Indefinite-Lived	Intangible	Assets	and	Long-Lived	Assets under	Item	7.	Management's	Discussion	and	Analysis	of	Financial	Condition	and	Results	of	Operations	for	more	information	regarding	these transactions).

# Item	7.				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, including,	for	example,	under	the	"Risk	Factors"	and	"Business"	captions,	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	first	quarter	and full	year	of	2013	set	forth	under	the	heading	"Outlook"	below),	business	and	industry	prospects	or	future	results	of	operations	or	financial	position,	made	in	this	Annual Report	on	Form	10-K	are	forward-looking.	Words	such	as	"anticipate,"	"believe,"	"could,"	"estimate,"	"expect,"	"goal,"	"intend,"	"may,"	"plan,"	"project,"	"seek," "should,"	"will,"	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,	the	following:

•the	impact	of	the	worldwide	economic	and	geopolitical	environment	or	other	conditions	on	the	demand	for	cruises;

•the	impact	of	the	worldwide	economic	environment	on	our	ability	to	generate	cash	flows	from	operations,	satisfy	the	financial	covenants	required	by	our credit	facilities,	or	obtain	new	borrowings	from	the	credit	or	capital	markets;

•the	impact	of	disruptions	in	the	global	financial	markets	on	the	ability	of	our	counterparties	and	others	to	perform	their	obligations	to	us	including	those associated	with	our	loan	agreements	and	derivative	contracts;

•negative	incidents	concerning	the	Company	and	the	cruise	vacation	industry,	or	adverse	publicity,	including	those	involving	the	health,	safety	and security	of	guests,	accidents,	unusual	weather	conditions	or	natural	disasters	or	disruptions;

•our	ability	to	appropriately	balance	our	cost	management	strategy	with	our	goal	of	satisfying	guest	expectations;

•failure	to	keep	pace	with	developments	in	technology	which	could	impair	our	operations	or	competitive	position;

•the	uncertainties	of	conducting	business	globally	and	our	ability	to	realize	the	intended	benefits	of	our	investments	in	new	markets;

•changes	in	operating	and	financing	costs,	including	changes	in	foreign	exchange	rates,	interest	rates,	fuel,	food,	payroll,	airfare,	insurance	and	security costs;

•vacation	industry	competition	and	industry	overcapacity	in	certain	markets;

•the	cost	of	or	changes	in	tax,	environmental,	labor,	health,	safety,	security	and	other	laws	and	regulations	affecting	our	business;

•pending	or	threatened	litigation,	enforcement	actions,	fines	or	penalties;

•emergency	ship	repairs,	including	the	related	lost	revenue;

•the	impact	of	ship	construction,	repair	or	refurbishment	delays,	ship	cancellations	or	ship	construction	price	increases	brought	about	by	construction faults,	mechanical	problems	or	financial	difficulties	encountered	by	shipyards	or	their	subcontractors;

•the	global	political	climate,	fears	of	terrorist	and	pirate	attacks,	armed	conflict,	the	unavailability	or	cost	of	air	service	and	the	resulting	concerns	over safety	and	security	aspects	of	traveling;

•the	spread	of	contagious	diseases;

•disruptions	to	our	shoreside	business	related	to	actual	or	threatened	natural	disasters,	information	systems	failure	or	similar	events;

•our	ability	to	differentiate	our	products;

•our	ability	to	manage	our	business	activities	that	involve	our	co-investment	with	third	parties;

•our	inability	to	adequately	incentivize	our	travel	agents	or	changes	and/or	disruptions	to	the	travel	agency	industry;

•the	loss	of	key	personnel,	strained	employee	relations	and/or	our	inability	to	retain	or	recruit	qualified	personnel;

•changes	in	our	principal	shareholders;

•uncertainties	of	a	foreign	legal	system	as	we	are	not	incorporated	in	the	United	States;

•the	unavailability	of	ports	of	call;	and

# •weather.

								The	above	examples	are	not	exhaustive	and,	in	addition,	new	risks	emerge	from	time	to	time.	All	forward-looking	statements	made	in	this	Annual	Report	on Form	10-K	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. You	should	consider	the	areas	of	risk	described	above,	as	well	as	those	set	forth	under	the	heading	"Risk	Factors"	in	Part	I,	Item	1A.	in	this	Annual	Report	on	Form	10- K,	when	considering	any	forward-looking	statements	that	may	be	made	by	us	and	our	business	generally.

# Overview

								The	discussion	and	analysis	of	our	financial	condition	and	results	of	operations	has	been	organized	to	present	the	following:

•a	review	of	our	critical	accounting	policies	and	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	year	ended	December	31,	2012	compared	to	the	same	period	in	2011	and	the	year	ended	December	31, 2011	compared	to	the	same	period	in	2010;

•a	discussion	of	our	business	outlook,	including	our	expectations	for	selected	financial	items	for	the	first	quarter	and	full	year	of	2013;	and

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

# Critical	Accounting	Policies

								Our	consolidated	financial	statements	are	prepared	in	accordance	with	accounting	principles	generally	accepted	in	the	United	States	of	America	("GAAP").	(See Note	1.	General	and	Note	2.	Summary	of	Significant	Accounting	Policies	to	our	consolidated	financial	statements	under	Item	8.	Financial	Statements	and Supplementary	Data.)	Certain	of	our	accounting	policies	are	deemed	"critical,"	as	they	require	management's	highest	degree	of	judgment,	estimates	and	assumptions. We	have	discussed	these	accounting	policies	and	estimates	with	the	audit	committee	of	our	board	of	directors.	We	believe	our	most	critical	accounting	policies	are	as follows:

# Ship	Accounting

								Our	ships	represent	our	most	significant	assets	and	are	stated	at	cost	less	accumulated	depreciation	and	amortization.	Depreciation	of	ships	is	generally	computed net	of	a	15%	projected	residual	value	using	the	straight-line	method	over	the	estimated	useful	life	of	the	asset,	which	is	generally	30	years.	The	30	year	useful	life	of	our newly	constructed	ships	and	15%	associated	residual	value	are	both	based	on	the	weighted-average	of	all	major	components	of	a	ship.	Our	useful	life	and	residual	value estimates	take	into	consideration	the	impact	of	anticipated	technological	changes,	long-term	cruise	and	vacation	market	conditions	and	historical	useful	lives	of similarly-built	ships.	In	addition,	we	take	into	consideration	our	estimates	of	the	weighted-average	useful	lives	of	the	ships'	major	component	systems,	such	as	hull, superstructure,	main	electric,	engines	and	cabins.	Given	the	very	large	and	complex	nature	of	our	ships,	our	accounting	estimates	related	to	ships	and	determinations	of ship	improvement	costs	to	be	capitalized	require	considerable	judgment	and	are	inherently	uncertain.	We	do	not	have	cost	segregation	studies	performed	to	specifically componentize	our	ship	systems.	Therefore,	we	estimate	the	costs	of	component	systems	based	principally	on	general	and	technical	information	known	about	major	ship component	systems	and	their	lives	and	our	knowledge	of	the	cruise	vacation	industry.	We	do	not	identify	and	track	depreciation	by	ship	component	systems,	but	instead utilize	these	estimates	to	determine	the	net	cost	basis	of	assets	replaced	or	refurbished.	Improvement	costs	that	we	believe	add	value	to	our	ships	are	capitalized	as additions	to	the	ship	and	depreciated	over	the	shorter	of	the	improvements'	estimated	useful	lives	or	that	of	the	associated	ship.	The	estimated	cost	and	accumulated depreciation	of	replaced	or	refurbished	ship	components	are	written	off	and	any	resulting	losses	are	recognized	in	cruise	operating	expenses.

								We	use	the	deferral	method	to	account	for	drydocking	costs.	Under	the	deferral	method,	drydocking	costs	incurred	are	deferred	and	charged	to	expense	on	a straight-line	basis	over	the	period	to	the	next	scheduled	drydock,	which	we	estimate	to	be	a	period	of	thirty	to	sixty	months	based	on	the	vessel's	age	as	required	by	Class. Deferred	drydock	costs	consist	of	the	costs	to	drydock	the	vessel	and	other	costs	incurred	in	connection	with	the	drydock	which	are	necessary	to	maintain	the	vessel's Class	certification.	Class	certification	is	necessary	in	order	for	our	cruise	ships	to	be	flagged	in	a	specific	country,	obtain	liability	insurance	and	legally	operate	as passenger	cruise	ships.	The	activities	associated	with	those	drydocking	costs	cannot	be	performed	while	the	vessel	is	in	service	and,	as	such,	are	done	during	a	drydock as	a	planned	major	maintenance	activity.	The	significant	deferred	drydock	costs	consist	of	hauling	and	wharfage	services	provided	by	the	drydock	facility,	hull inspection	and	related	activities	(e.g.	scraping,	pressure	cleaning,	bottom	painting),	maintenance	to	steering	propulsion,	stabilizers,	thruster	equipment	and	ballast	tanks, port	services	such	as	tugs,	pilotage	and	line	handling,	and	freight	associated	with	these	items.	We	perform	a	detailed	analysis	of	the	various	activities	performed	for	each drydock	and	only	defer	those	costs	that	are	directly	related	to	planned	major	maintenance	activities	necessary	to	maintain	Class.	The	costs	deferred	are	not	otherwise routinely	periodically	performed	to	maintain	a	vessel's	designed	and	intended	operating	capability.	Repairs	and	maintenance	activities	are	charged	to	expense	as	incurred.

								We	use	judgment	when	estimating	the	period	between	drydocks,	which	can	result	in	adjustments	to	the	estimated	amortization	of	drydock	costs.	If	the	vessel	is disposed	of	before	the	next	drydock,	the	remaining	balance	in	deferred	drydock	is	written-off	to	the	gain	or	loss	upon	disposal	of	vessel	in	the	period	in	which	the	sale takes	place.	We	also	use	judgment	when	identifying	costs	incurred	during	a	drydock	which	are	necessary	to	maintain	the	vessel's	Class	certification	as	compared	to	those costs	attributable	to	repairs	and	maintenance	which	are	expensed	as	incurred.	(See	Note	2.	Summary	of	Significant	Accounting	Policies	to	our	consolidated	financial statements	under	Item	8.	Financial	Statements	and	Supplementary	Data).

								We	believe	we	have	made	reasonable	estimates	for	ship	accounting	purposes.	However,	should	certain	factors	or	circumstances	cause	us	to	revise	our	estimates	of ship	useful	lives	or	projected	residual	values,	depreciation	expense	could	be	materially	higher	or	lower.	If	circumstances	cause	us	to	change	our	assumptions	in	making determinations	as	to	whether	ship	improvements	should	be	capitalized,	the	amounts	we	expense	each	year	as	repairs	and	maintenance	costs	could	increase,	partially offset	by	a	decrease	in	depreciation	expense.	If	we	had	reduced	our	estimated	average	30-year	ship	useful	life	by	one	year,	depreciation	expense	for	2012	would	have increased	by	approximately	$40.4	million.	If	our	ships	were	estimated	to	have	no	residual	value,	depreciation	expense	for	2012	would	have	increased	by	approximately $166.7	million.

# Valuation	of	Goodwill,	Indefinite-Lived	Intangible	Assets	and	Long-Lived	Assets

								We	review	goodwill,	trademarks	and	trade	names,	which	are	our	most	significant	indefinite-lived	intangible	assets,	for	impairment	at	the	reporting	unit	level annually	or,	when	events	or	circumstances	dictate,	more	frequently.	The	impairment	review	for	goodwill	consists	of	a	qualitative	assessment	of	whether	it	is	more-likely- than-not	that	a	reporting	unit's	fair	value	is	less	than	its	carrying	amount,	and	if	necessary,	a	two-step	goodwill	impairment	test.	Factors	to	consider	when	performing	the qualitative	assessment	include	general	economic	conditions,	limitations	on	accessing	capital,	changes	in	forecasted	operating	results,	changes	in	fuel	prices	and fluctuations	in	foreign	exchange	rates.	If	the	qualitative	assessment	demonstrates	that	it	is	more-likely-than-not	that	the	estimated	fair	value	of	the	reporting	unit	exceeds its	carrying	value,	it	is	not	necessary	to	perform	the	two-step	goodwill	impairment	test.	We	may	elect	to	bypass	the	qualitative	assessment	and	proceed	directly	to	step one,	for	any	reporting	unit,	in	any	period.	We	can	resume	the	qualitative	assessment	for	any	reporting	unit	in	any	subsequent	period.

								When	performing	the	two-step	goodwill	impairment	test,	the	fair	value	of	the	reporting	unit	is	determined	and	compared	to	the	carrying	value	of	the	net	assets allocated	to	the	reporting	unit.	We	estimate	the	fair	value	of	our	reporting	units	using	a	probability-weighted	discounted	cash	flow	model.	The	estimation	of	fair	value utilizing	discounted	expected	future	cash	flows	includes	numerous	uncertainties	which	require	our	significant	judgment	when	making	assumptions	of	expected	revenues, operating	costs,	marketing,	selling	and	administrative	expenses,	interest	rates,	ship	additions	and	retirements	as	well	as	assumptions	regarding	the	cruise	vacation industry's	competitive	environment	and	general	economic	and	business	conditions,	among	other	factors.	The	principal	assumptions	used	in	the	discounted	cash	flow model	are	projected	operating	results,	weighted-average	cost	of	capital,	and	terminal	value.	The	discounted	cash	flow	model	uses	our	2013	projected	operating	results	as a	base.	To	that	base	we	add	future	years'	cash	flows	assuming	multiple	revenue	and	expense	scenarios	that	reflect	the	impact	of	different	global	economic	environments beyond	2013	on	the	reporting	unit.	We	discount	the	projected	cash	flows	using	rates	specific	to	the	reporting	unit	based	on	its	weighted-average	cost	of	capital.	If	the	fair value	of	the	reporting	unit	exceeds	its	carrying	value,	no	further	analysis	or	write-down	of	goodwill	is	required.	If	the	fair	value	of	the	reporting	unit	is	less	than	the carrying	value	of	its	net	assets,	the	implied	fair	value	of	the	reporting	unit	is	allocated	to	all	its	underlying	assets	and	liabilities,	including	both	recognized	and unrecognized	tangible	and	intangible	assets,	based	on	their	fair	value.	If	necessary,	goodwill	is	then	written	down	to	its	implied	fair	value.

								The	impairment	review	for	indefinite-life	intangible	assets	consists	of	a	comparison	of	the	fair	value	of	the	asset	with	its	carrying	amount.	We	estimate	the	fair	value of	our	indefinite-life	intangible	assets,	which	consist	of	trademarks	and	trade	names	related	to	Pullmantur,	using	a	discounted	cash	flow	model	and	the	relief-from- royalty	method.	The	royalty	rate	used	is	based	on	comparable	royalty	agreements	in	the	tourism	and	hospitality	industry.	The	discount	rate	used	is	comparable	to	the	rate used	in	valuing	the	Pullmantur	reporting	unit	in	our	goodwill	impairment	test.	If	the	carrying	amount	exceeds	its	fair	value,	an	impairment	loss	is	recognized	in	an amount	equal	to	that	excess.	If	the	fair	value	exceeds	its	carrying	amount,	the	indefinite-life	intangible	asset	is	not	considered	impaired.	Other	intangible	assets	assigned finite	useful	lives	are	amortized	on	a	straight-line	basis	over	their	estimated	useful	lives.

								The	factors	influencing	expected	future	cash	flows	for	purposes	of	goodwill	impairment	testing	discussed	above	also	affect	the	assessment	of	recoverability	of Pullmantur's	deferred	tax	assets.	Pullmantur's	deferred	tax	assets	principally	result	from	net	operating	loss	carryforwards.	We	regularly	review	deferred	tax	assets	for recoverability	based	on	our	history	of	earnings,	expectations	of	future	earnings,	and	tax	planning	strategies.	Realization	of	deferred	tax	assets	ultimately	depends	on	the existence	of	sufficient	taxable	income	to	support	the	amount	of	deferred	tax	assets.	A	valuation	allowance	is	recorded	in	those	circumstances	in	which	we	conclude	it	is not	more-likely-than-not	we	will	recover	the	deferred	tax	assets	prior	to	their	expiration.

								We	review	our	ships,	aircraft	and	other	long-lived	assets	for	impairment	whenever	events	or	changes	in	circumstances	indicate,	based	on	estimated	undiscounted future	cash	flows,	that	the	carrying	amount	of	these	assets	may	not	be	fully	recoverable.	We	evaluate	asset	impairment	at	the	lowest	level	for	which	identifiable	cash flows	are	largely	independent	of	the	cash	flows	of	other	assets	and	liabilities.	The	lowest	level	for	which	we	maintain	identifiable	cash	flows	that	are	independent	of	the cash	flows	of	other	assets	and	liabilities	is	at	the	ship	level	for	our	ships	and	at	the	aggregated	asset	group	level	for	our	aircraft.	(See	Note	2.	Summary	of	Significant Accounting	Policies	to	our	consolidated	financial	statements	under	Item	8.	Financial	Statements	and	Supplementary	Data).	If	estimated	future	cash	flows	are	less	than the	carrying	value	of	an	asset,	an	impairment	charge	is	recognized	for	the	difference	between	the	asset's	estimated	fair	value	and	its	carrying	value.

								We	estimate	fair	value	based	on	quoted	market	prices	in	active	markets,	if	available.	If	active	markets	are	not	available	we	base	fair	value	on	independent	appraisals, sales	price	negotiations	and	projected	future	cash	flows	discounted	at	a	rate	estimated	by	management	to	be	commensurate	with	the	business	risk.	Quoted	market	prices are	often	not	available	for	individual	reporting	units	and	for	indefinite-life	intangible	assets.	Accordingly,	we	estimate	the	fair	value	of	a	reporting	unit	and	an	indefinite- life	intangible	asset	using	an	expected	present	value	technique.

# Impairment	of	Pullmantur	related	assets

								During	the	fourth	quarter	of	2012,	we	performed	our	annual	impairment	review	of	goodwill	for	Pullmantur's	reporting	unit.	We	did	not	perform	a	qualitative assessment	but	instead	proceeded	directly	to	the	two-step	goodwill	impairment	test.	Pullmantur	is	a	brand	targeted	primarily	at	the	Spanish,	Portuguese	and	Latin American	markets	and	although	Pullmantur	has	diversified	its	passenger	sourcing	over	the	past	few	years,	Spain	still	represents	Pullmantur's	largest	market.	As previously	disclosed,	European	economies	continued	to	demonstrate	instability	in	light	of	heightened	concerns	over	sovereign	debt	issues	as	well	as	the	impact	of proposed	austerity	measures	on	certain	markets.	The	Spanish	economy	was	more	severely	impacted	than	many	other	economies	and	there	is	significant	uncertainty	as	to when	it	will	recover.	In	addition,	the	impact	of	the	Costa	Concordia	incident	has	had	a	more	lingering	effect	than	expected	and	the	impact	in	future	years	is	uncertain. These	factors	were	identified	in	the	past	as	significant	risks	which	could	lead	to	the	impairment	of	Pullmantur's	goodwill.

								The	Spanish	economy	has	progressively	worsened	and	forecasts	suggest	the	challenging	operating	environment	will	continue	for	an	extended	period	of	time.	The unemployment	rate	in	Spain	reached

26%	during	the	fourth	quarter	of	2012	and	is	expected	to	rise	further	in	2013.	The	International	Monetary	Fund,	which	had	projected	GDP	growth	of	1.8%	a	year	ago, revised	its	2013	GDP	projections	downward	for	Spain	to	a	contraction	of	1.3%	during	the	fourth	quarter	of	2012	and	further	reduced	it	to	a	contraction	of	1.5%	in January	of	2013.	During	the	latter	half	of	2012	new	austerity	measures,	such	as	increases	to	the	Value	Added	Tax,	cuts	to	benefits,	the	phasing	out	of	exemptions	and	the suspension	of	government	bonuses,	were	implemented	by	the	Spanish	government.	We	believe	these	austerity	measures	are	having	a	larger	impact	on	consumer confidence	and	discretionary	spending	than	previously	anticipated.	As	a	result,	there	has	been	a	significant	deterioration	in	bookings	from	guests	sourced	from	Spain during	the	2013	WAVE	season.	The	combination	of	all	of	these	factors	has	caused	us	to	negatively	adjust	our	cash	flow	projections,	especially	our	closer-in	Net	Yield assumptions	and	the	expectations	regarding	future	capacity	growth	for	the	brand.

								Based	on	our	updated	cash	flow	projections,	we	determined	the	implied	fair	value	of	goodwill	was	$145.5	million	and	recognized	an	impairment	charge	of $319.2	million.	Similarly,	we	determined	that	the	fair	value	of	Pullmantur's	trademarks	and	trade	names	no	longer	exceeded	their	carrying	value.	Accordingly,	we recognized	an	impairment	charge	of	approximately	$17.4	million	to	write	down	trademarks	and	trade	names	to	their	fair	value	of	$204.9	million.

								As	part	of	step	two	of	our	goodwill	impairment	analysis,	we	identified	that	the	estimated	fair	values	of	certain	long-lived	assets,	consisting	of	three	aircraft	owned and	operated	by	Pullmantur	Air,	were	less	than	their	carrying	values.	As	a	result,	we	proceeded	to	our	long-lived	asset	impairment	test.	Pullmantur's	strategy	to	further diversify	its	passenger	sourcing	and	reduce	its	reliance	on	the	Spanish	market	has	led	us	to	reduce	the	expected	years	in	which	we	will	use	these	aircraft	when performing	the	undiscounted	cash	flow	test.	The	undiscounted	cash	flows	for	Pullmantur's	aircraft	were	determined	to	be	less	than	their	carrying	value	and	an impairment	charge	of	$48.9	million	was	required.

								The	combined	impairment	charge	of	$385.4	million	related	to	Pullmantur's	goodwill,	trademarks	and	trade	names	and	aircraft	was	recognized	in	earnings	during	the quarter	ended	December	31,	2012	and	is	reported	within	Impairment	of	Pullmantur	related	assets	within	our	consolidated	statements	of	comprehensive	income	(loss).

								The	factors	influencing	the	Spanish	economy	and	Pullmantur's	operating	cash	flows	discussed	above	also	affect	the	recoverability	of	Pullmantur's	deferred	tax assets.	During	the	fourth	quarter	of	2012,	we	updated	our	deferred	tax	asset	recoverability	analysis	for	projections	included	within	the	goodwill	valuation	model discussed	above.	These	projections,	including	the	impact	of	recently	enacted	laws	regarding	net	operating	loss	utilization,	and	the	review	of	our	tax	planning	strategies show	that	it	is	no	longer	more-likely-than-not	that	we	will	recover	the	deferred	tax	assets	prior	to	their	expiration.	As	such,	we	have	determined	that	a	100%	valuation allowance	of	our	deferred	tax	assets	was	required	resulting	in	a	deferred	income	tax	expense	of	$33.7	million.	In	addition,	Pullmantur	has	a	deferred	tax	liability	that was	recorded	at	the	time	of	acquisition.	This	liability	represents	the	tax	effect	of	the	basis	difference	between	the	tax	and	book	values	of	the	trademarks	and	trade	names that	were	acquired	at	the	time	of	the	acquisition.	Due	to	the	impairment	charge	related	to	these	intangible	assets,	we	reduced	the	deferred	tax	liability	by	$5.2	million. The	net	$28.5	million	impact	of	these	adjustments	was	recognized	in	earnings	during	the	fourth	quarter	of	2012	and	is	reported	within	Other	(expense)	income	in	our statements	of	comprehensive	income	(loss).

								If	the	Spanish	economy	weakens	further	or	recovers	more	slowly	than	contemplated	or	if	the	economies	of	other	markets	(e.g.	France,	Brazil,	Latin	America) perform	worse	than	contemplated	in	our	discounted	cash	flow	model,	or	if	there	are	material	changes	to	our	projected	future	cash	flows	used	in	the	impairment	analyses, especially	in	Net	Yields,	an	additional	impairment	charge	of	the	Pullmantur	reporting	unit's	goodwill,	trademarks,	trade	names	and	long-lived	assets	may	be	required.

								During	the	fourth	quarter	of	2012,	we	performed	a	qualitative	assessment	of	the	Royal	Caribbean	International	reporting	unit.	Based	on	our	qualitative	assessment, we	concluded	that	it	was	more-likely-than-not	that	the	estimated	fair	value	of	the	Royal	Caribbean	International	reporting	unit	exceeded	its	carrying	value	as	of December	31,	2012	and	thus,	did	not	proceed	to	the	two-step	goodwill	impairment	test.	No	indicators	of	impairment	exist	primarily	because	the	reporting	unit's	fair	value has	consistently	exceeded	its	carrying	value	by	a	significant	margin,	its	financial	performance	has	been	solid	in	the	face	of	mixed	economic	environments	and	forecasts of	operating	results	generated	by	the	reporting	unit	appear	sufficient	to	support	its	carrying	value.

# Derivative	Instruments

								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	have	non- derivative	financial	instruments	designated	as	hedges	of	our	net	investment	in	our	foreign	operations	and	investments.	The	fuel	options	we	have	entered	into	represent economic	hedges	which	are	not	designated	as	hedging	instruments	for	accounting	purposes	and	thus,	changes	in	their	fair	value	are	immediately	recognized	in	earnings. Although	certain	of	our	derivative	financial	instruments	do	not	qualify	or	are	not	accounted	for	under	hedge	accounting,	our	derivative	instruments	are	not	held	for trading	or	speculative	purposes.	We	account	for	derivative	financial	instruments	in	accordance	with	authoritative	guidance.	Refer	to	Note	2.	Summary	of	Significant Accounting	Policies	and	Note	13.	Fair	Value	Measurements	and	Derivative	Instruments	to	our	consolidated	financial	statements	for	more	information	on	related authoritative	guidance,	the	Company's	hedging	programs	and	derivative	financial	instruments.

								We	enter	into	foreign	currency	forward	contracts	and	collars,	interest	rate,	cross-currency	and	fuel	swaps	and	options	with	third	party	institutions	in	over-the- counter	markets.	We	estimate	the	fair	value	of	our	foreign	currency	forward	contracts	and	interest	rate	and	cross-currency	swaps	using	expected	future	cash	flows	based on	the	instruments'	contract	terms	and	published	forward	curves	for	foreign	currency	exchange	and	interest	rates.	We	apply	present	value	techniques	and	LIBOR-based discount	rates	to	convert	the	expected	future	cash	flows	to	the	current	fair	value	of	the	instruments.

								We	estimate	the	fair	value	of	our	foreign	currency	collars	using	standard	option	pricing	models	with	inputs	based	on	the	options'	contract	terms,	such	as	exercise price	and	maturity,	and	readily	available	public	market	data,	such	as	foreign	exchange	curves,	foreign	exchange	volatility	levels	and	discount	rates.

								We	estimate	the	fair	value	of	our	fuel	swaps	using	expected	future	cash	flows	based	on	the	swaps'	contract	terms	and	forward	prices.	We	derive	forward	prices	from forward	fuel	curves	based	on	pricing	inputs	provided	by	third-party	institutions	that	transact	in	the	fuel	indices	we	hedge.	We	validate	these	pricing	inputs	against	actual market	transactions	and	published	price	quotes	for	similar	assets.	We	apply	present	value	techniques	and	LIBOR-based	discount	rates	to	convert	the	expected	future	cash flows	to	the	current	fair	value	of	the	instruments.	We	also	corroborate	our	fair	value	estimates	using	valuations	provided	by	our	counterparties.

								We	estimate	the	fair	value	for	our	fuel	call	options	based	on	the	prevailing	market	price	for	the	instruments	consisting	of	published	price	quotes	for	similar	assets based	on	recent	transactions	in	an	active	market.

								We	adjust	the	valuation	of	our	derivative	financial	instruments	to	incorporate	credit	risk,	when	applicable.

								We	believe	it	is	unlikely	that	materially	different	estimates	for	the	fair	value	of	our	foreign	currency	forward	contracts	and	interest	rate,	cross-currency	and	fuel swaps	and	options	would	be

derived	from	other	appropriate	valuation	models	using	similar	assumptions,	inputs	or	conditions	suggested	by	actual	historical	experience.

# Contingencies—Litigation

								On	an	ongoing	basis,	we	assess	the	potential	liabilities	related	to	any	lawsuits	or	claims	brought	against	us.	While	it	is	typically	very	difficult	to	determine	the timing	and	ultimate	outcome	of	such	actions,	we	use	our	best	judgment	to	determine	if	it	is	probable	that	we	will	incur	an	expense	related	to	the	settlement	or	final adjudication	of	such	matters	and	whether	a	reasonable	estimation	of	such	probable	loss,	if	any,	can	be	made.	In	assessing	probable	losses,	we	take	into	consideration estimates	of	the	amount	of	insurance	recoveries,	if	any.	We	accrue	a	liability	when	we	believe	a	loss	is	probable	and	the	amount	of	loss	can	be	reasonably	estimated.	Due to	the	inherent	uncertainties	related	to	the	eventual	outcome	of	litigation	and	potential	insurance	recoveries,	it	is	possible	that	certain	matters	may	be	resolved	for amounts	materially	different	from	any	provisions	or	disclosures	that	we	have	previously	made.

								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	increased deployment	to	South	America	and	Australia	during	the	Northern	Hemisphere	winter	months.

# 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,	Pullmantur's	land-based	tours	and	hotel	and	air	packages including	Pullmantur	Air's	charter	business	to	third	parties.

								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.

# 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;

•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	and	storage	costs,	including	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	operating	lease	costs,	costs	associated	with	Pullmantur's	land-based	tours	and	Pullmantur	Air's	charter	business	to	third	parties,	vessel related	insurance	and	entertainment.

								We	do	not	allocate	payroll	and	related	costs,	food	costs,	fuel	costs	or	other	operating	costs	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	which	we	believe	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.

								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.	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.

# 								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.	We	have	not	provided	a	quantitative	reconciliation	of	projected	Gross	Cruise	Costs	to	projected	Net Cruise	Costs	and	projected	Net	Cruise	Costs	Excluding	Fuel	due	to	the	significant	uncertainty	in	projecting	the	costs	deducted	to	arrive	at	these	measures.	Accordingly, we	do	not	believe	that	reconciling	information	for	such	projected	figures	would	be	meaningful.

								Net	Debt-to-Capital	is	a	ratio	which	represents	total	long-term	debt,	including	current	portion	of	long-term	debt,	less	cash	and	cash	equivalents	("Net	Debt") divided	by	the	sum	of	Net	Debt	and	total	shareholders'	equity.	We	believe	Net	Debt	and	Net	Debt-to-Capital,	along	with	total	long-term	debt	and	shareholders'	equity	are useful	measures	of	our	capital	structure.	A	reconciliation	of	historical	Debt-to-Capital	to	Net	Debt-to-Capital	is	provided	below	under	Results	of	Operations.

								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	it	is	the most	relevant	measure	of	our	pricing	performance	because	it	reflects	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.	We	have	not	provided	a	quantitative	reconciliation	of	projected	Gross	Yields	to	projected	Net	Yields	due	to	the	significant	uncertainty	in	projecting	the	costs deducted	to	arrive	at	this	measure.	Accordingly,	we	do	not	believe	that	reconciling	information	for	such	projected	figures	would	be	meaningful.

								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	that	the	impairment	charges	recognized	in	2012	related	to	Pullmantur's	goodwill,	trademarks,	trade	names	and	long-lived	assets	and	the	charges	related to	the	adjustments	to	Pullmantur's	deferred	tax	assets	and	deferred	tax	liability	("the	impairment	related	charges")	are	not	an	indication	of	our	future	earnings performance.	As	such,	we	believe	it	is	more	meaningful	for	the	impairment	related	charges	to	be	excluded	from	our	net	income	and	earnings	per	share,	and	accordingly, we	have	elected	to	also	present	non-GAAP	net	income	and	non-GAAP	EPS	excluding	these	impairment	related	charges	for	the	year	ended	December	31,	2012.

								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	is	just	one	of	many	elements impacting	our	revenues	and	expenses,	it	can	be	an	important	element.	For	this	reason,	we	also	monitor	Net	Yields,	Net	Cruise	Costs	and	Net	Cruise	Costs	Excluding	Fuel as	if	the	current	periods'	currency	exchange	rates	had	remained	constant	with	the	comparable	prior	periods'	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.	Over	the	longer	term,	changes	in	guest sourcing	and	shifting	the	amount	of	purchases	between	currencies	can	significantly	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,	allow	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	United	States	GAAP	based	financial	measures.	There	are	no	specific	rules or	regulations	for	determining	non-GAAP	and	Constant	Currency	measures,	and	as	such,	there	exists	the	possibility	that	they	may	not	be	comparable	to	other	companies within	the	industry.

# Executive	Overview

								We	believe	our	results	of	operations	for	2012	demonstrate	the	strength	and	resiliency	of	our	brands	and	the	value	proposition	of	a	cruise	vacation.	Despite	the	slow pace	of	the	economic	recovery	and	the	continued	instability	in	the	global	economic	landscape,	especially	in	Europe,	our	net	income	for	2012,	before	the	impairment related	charges,	was	$432.2	million	and	our	Net	Yields	increased	1.5%.	During	the	fourth	quarter	of	2012,	we	recognized	an	impairment	charge	of	$385.4	million	to write	down	Pullmantur's	goodwill	to	its	implied	fair	value	and	to	write	down	trademarks	and	trade	names	and	certain	long-lived	assets,	consisting	of	three	aircraft	owned and	operated	by	Pullmantur	Air,	to	their	fair	value.	In	addition,	we	recognized	a	$33.7	million	charge	to	record	a	100%	valuation	allowance	related	to	our	deferred	tax assets	for	Pullmantur	and	we	reduced	the	deferred	tax	liability	related	to	Pullmantur's	trademarks	and	trade	names	by	$5.2	million.	As	a	result,	our	net	income	for	2012 was	$18.3	million	as	compared	to	$607.4	million	for	2011,	which	was	not	impacted	by	the	impairment	related	charges.

								Our	results	of	operations	for	the	year	ended	December	31,	2012	were	also	negatively	impacted	by	the	effect	of	the	Costa	Concordia	incident	on	booking	patterns throughout	the	industry.	These	effects	were	magnified	by	the	timing	of	the	incident,	which	occurred	in	early	2012	during	WAVE	season	(traditionally	the	first	two months	of	the	year	where	cruise	lines	experience	disproportionately	higher	volume	cruise	sales).	We	continue	to	believe	the	impact	of	the	Costa	Concordia	incident	will not	have	a	significant	long	term	impact	on	our	business.

								Our	results	of	operations	were	also	influenced	by	changes	to	our	international	distribution	system	mainly	in	Brazil	implemented	in	late	2011	pursuant	to	which	we began	directly	distributing	certain	of	our	cruises	rather	than	indirectly	distributing	them	through	charter	arrangements.	In	addition,	our	results	were	impacted	by	certain deployment	initiatives	including,	but	not	limited	to,	increased	deployment	in	Australia	and	China.

								Our	continued	focus	on	cost	control	has	helped	us	to	maintain	our	profitability	despite	a	tough	operating	environment	with	upward	pressure	on	costs.	We	intend	to continue	these	efforts	during	2013.	In	addition,	during	2013	we	will	continue	to	strengthen	our	revenue	enhancement	opportunities	by	strategically	investing	in	a	number of	projects,	including	the	introduction	of	beverage	packages	fleet	wide,	retail	and	casino	enhancements,	the	continuation	of	our	vessel	revitalization	program,	the introduction	of	new	onboard	revenue	initiatives	and	various	information	technology	infrastructure	investments.	We	also	intend	to	enhance	our	focus	on	identifying	the needs	of	our	guests	and	creating	product	features	that	our	customers	value.	We	are	focused	on	targeting	high-value	guests	by	better	understanding	consumer	data	and insights	and	creating	communication	strategies	that	best	resonate	with	our	target	audiences.	In	2013,	we	will	continue	to	focus	on	the	development	of	key	markets	in	Asia and	we	will	focus	on	sourcing	guests	and	adding	capacity	to	other	markets	where	we	expect	significant	growth	and	profitability,	such	as	Australia.	We	believe	these initiatives	will	provide	opportunities	for	increased	ticket	and	onboard	revenues	with	the	ultimate	goal	of	maximizing	our	long-term	return	on	invested	capital	and shareholder	value.

								During	2012,	we	took	delivery	of	Celebrity	Reflection,	the	fifth	and	final	Solstice-class	ship,	and	ordered	a	third	Oasis-class	ship	through	a	conditional	agreement. The	agreement	is	subject	to	certain	closing	conditions	and	is	expected	to	become	effective	in	the	first	quarter	of	2013.	The	ship	is	scheduled	for	delivery	in	the	second quarter	of	2016.	We	also	have	two	Quantum-class	ships	on	order	for	Royal	Caribbean	International	which	are	expected	to	enter	service	in	the	third	quarter	of	2014	and	in the	second	quarter	of	2015,	respectively,	and	two	ships	on	order	for	our	joint	venture	TUI	Cruises	which	are	scheduled	for	delivery	in	the	second	quarter	of	2014	and second	quarter	of	2015,	respectively.	As	part	of	our	vessel	revitalization	program,	five	ships	were	revitalized	for	the	Royal	Caribbean	International	brand	during	2012. By	the	end	of	2013,	we	expect	that	all	of	the	Vision-class	and	Freedom-class	ships	and	all	but	one	of	the	Radiance-class	ships	will	have	been	revitalized.	For	the

Celebrity	Cruises	brand,	two	ships	underwent	revitalization	during	2012	to	incorporate	certain	Solstice-class	features.	By	the	end	of	2013,	the	Millennium-class revitalization	program	will	be	complete	as	the	final	ship	is	scheduled	to	be	revitalized	during	the	course	of	2013.

								As	of	December	31,	2012,	our	liquidity	position	remained	strong	at	$2.2	billion,	consisting	of	approximately	$194.9	million	in	cash	and	cash	equivalents	and $2.0	billion	available	under	our	unsecured	credit	facilities.	In	addition,	we	continue	to	be	focused	on	our	goal	of	returning	to	an	investment	grade	credit	rating.	We	have already	made	strides	in	this	direction	and	further	improvements	are	anticipated	through	increasing	operating	cash	flow,	a	moderate	capital	expenditure	program,	retiring of	debt	and	favorable	financing	programs.

								In	2012,	we	implemented	a	number	of	actions	in	furtherance	of	our	refinancing	strategy	for	our	maturities	in	2013	and	2014.	These	actions,	which	enabled	us	to refinance	a	portion	of	our	outstanding	indebtedness	with	later	maturity	debt	without	increasing	our	total	level	of	indebtedness	included:

•obtaining	funds	through	the	incurrence	of	$940.0	million	of	new	debt	obligations,	including	$650.0	million	of	5.25%	unsecured	senior	notes	due November	2022	and	a	$290.0	million	unsecured	term	loan	due	February	2016.	With	these	funds	we	were	able	to	repay	amounts	outstanding	under	our revolving	credit	facilities	and	repurchase	€255.0	million,	or	approximately	$328.0	million,	in	aggregate	principal	amount	of	our	€1.0	billion	5.625% unsecured	senior	notes	due	2014,	and

•our	establishment	of	new	borrowing	capacity,	including	€365.0	million	in	available	capacity	under	a	Euro-denominated	unsecured	term	loan	due	July 2017	to	be	drawn	at	any	time	on	or	prior	to	June	30,	2013	and	$233.0	million	of	additional	revolving	credit	capacity	utilizing	the	accordion	feature	on	our revolving	facility	due	July	2016.

								During	2013,	it	is	likely	we	will	secure	additional	liquidity	in	the	capital	and/or	credit	markets	as	part	of	our	refinancing	strategy	for	our	upcoming	2013	and	2014 maturities.	We	anticipate	funding	these	maturities	and	other	obligations	in	2013	through	a	combination	of	currently	available	and	anticipated	new	credit	facilities	and other	financing	arrangements	and	operating	cash	flows.

# Results	of	Operations

								In	addition	to	the	items	discussed	above	under	"Executive	Overview",	significant	items	for	2012	include:

•Total	revenues	increased	2.0%	to	$7.7	billion	from	$7.5	billion	in	2011	partially	due	to	a	1.5%	increase	in	Net	Yields	and	a	1.4%	increase	in	capacity (measured	by	APCD	for	such	period).

•Cruise	operating	expenses	increased	4.3%	to	$5.2	billion	from	$4.9	billion	in	2011	partially	due	to	an	increase	in	fuel	expenses	and	the	1.4%	increase	in capacity	noted	above.

•We	recognized	an	impairment	charge	of	$385.4	million	to	write	down	Pullmantur's	goodwill	to	its	implied	fair	value	and	to	write	down	trademarks	and trade	names	and	certain	long-lived	assets,	consisting	of	three	aircraft	owned	and	operated	by	Pullmantur	Air,	to	their	fair	value.	In	addition,	we recognized	a	$33.7	million	charge	to	record	a	100%	valuation	allowance	related	to	our	deferred	tax	assets	for	Pullmantur	and	we	reduced	the	deferred	tax liability	related	to	Pullmantur's	trademarks	and	trade	names	by	$5.2	million.	As	a	result,	our	net	income	for	2012	was	$18.3	million	as	compared	to $607.4	million	for	2011.

•We	took	delivery	of	Celebrity	Reflection.	To	finance	the	purchase	we	borrowed	$673.5	million	under	our	previously	committed	12-year	unsecured	term loan	which	is	95%	guaranteed	by	Hermes.	See	Note	7.	Long-Term	Debt	to	our	consolidated	financial	statements	under	Item	8.	Financial	Statements	and Supplementary	Data	for	further	information.

•We	exercised	our	option	under	our	agreement	with	Meyer	Werft	to	construct	Anthem	of	the	Seas,	the	second	Quantum-class	ship	for	Royal	Caribbean International	with	approximately	4,100	berths	which	is	expected	to	enter	service	in	the	second	quarter	of	2015.	We	have	a	committed	bank	financing agreement	to	finance	the	purchase	of	the	ship	which	includes	a	sovereign	financing	guarantee.	See	Note	14.	Commitments	and	Contingencies	to	our consolidated	financial	statements	under	Item	8.	Financial	Statements	and	Supplementary	Data	for	further	information.

•We	reached	a	conditional	agreement	with	STX	France	to	build	the	third	Oasis-class	ship	for	Royal	Caribbean	International.	The	agreement	is	subject	to certain	closing	conditions	and	is	expected	to	become	effective	in	the	first	quarter	of	2013.	The	ship	will	have	a	capacity	of	approximately	5,400	berths and	is	expected	to	enter	service	in	the	second	quarter	of	2016.	If	the	agreement	becomes	effective,	Pullmantur's	Atlantic	Star,	which	has	been	out	of operation	since	2009,	will	be	transferred	to	an	affiliate	of	STX	France	as	part	of	the	consideration.	The	transfer	is	not	expected	to	result	in	a	gain	or	a loss.	See	Note	5.	Property	and	Equipment	to	our	consolidated	financial	statements	under	Item	8.	Financial	Statements	and	Supplementary	Data	for further	information.

# Other	Items:

•TUI	Cruises,	our	50%	joint	venture,	entered	into	an	agreement	with	STX	Finland	to	build	its	second	newbuild	ship,	scheduled	for	delivery	in	the	second quarter	of	2015.	TUI	Cruises	has	entered	into	a	credit	agreement	providing	financing	for	up	to	80%	of	the	contract	price	of	the	ship.

								We	reported	historical	total	revenues,	operating	income,	net	income,	non-GAAP	net	income	(excluding	the	impairment	related	charges),	earnings	per	share	and non-GAAP	earnings	per	share	(excluding	the	impairment	related	charges)	as	shown	in	the	following	table	(in	thousands,	except	per	share	data):

|  | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Total\trevenues | $7,688,024 | $7,537,263 | $6,752,504 |
| Operating\tincome | $403,110 | $931,628 | $802,633 |
| Net\tincome | $18,287 | $607,421 | $515,653 |
| Pullmantur\timpairment\trelated\tcharges | 413,932 | — | — |
| Non-GAAP\tNet\tincome | $432,219 | $607,421 | $515,653 |
| Basic\tearnings\tper\tshare: |  |  |  |
| Net\tincome | $0.08 | $2.80 | $2.40 |
| Non-GAAP\tNet\tincome | $1.98 | $2.80 | $2.40 |
| Diluted\tearnings\tper\tshare: |  |  |  |
| Net\tincome | $0.08 | $2.77 | $2.37 |
| Non-GAAP\tNet\tincome | $1.97 | $2.77 | $2.37 |

								The	following	table	presents	historical	operating	data	as	a	percentage	of	total	revenues	for	the	last	three	years:

|  | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Passenger\tticket\trevenues | 72.8% | 73.3% | 72.7% |
| Onboard\tand\tother\trevenues | 27.2 | 26.7 | 27.3 |
| Total\trevenues | 100.0% | 100.0% | 100.0% |
| Cruise\toperating\texpenses: |  |  |  |
| Commissions,\ttransportation\tand\tother | 16.8% | 17.2% | 17.4% |
| Onboard\tand\tother | 6.9 | 7.1 | 7.1 |
| Payroll\tand\trelated | 10.8 | 11.0 | 11.4 |
| Food | 5.8 | 5.6 | 5.7 |
| Fuel | 11.8 | 10.1 | 9.6 |
| Other\toperating | 15.0 | 14.5 | 14.8 |
| Total\tcruise\toperating\texpenses | 67.1 | 65.6 | 66.0 |
| Marketing,\tselling\tand\tadministrative\texpenses | 13.2 | 12.7 | 12.6 |
| Depreciation\tand\tamortization\texpenses | 9.5 | 9.3 | 9.5 |
| Impairment\tof\tPullmantur\trelated\tassets | 5.0 | — | — |
| Operating\tincome | 5.2 | 12.4 | 11.9 |
| Other\texpense | (5.0) | (4.3) | (4.2) |
| Net\tincome | 0.2% | 8.1% | 7.6% |

								Selected	historical	statistical	information	is	shown	in	the	following	table:

|  | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Passengers\tCarried | 4,852,079 | 4,850,010 | 4,585,920 |
| Passenger\tCruise\tDays | 35,197,783 | 34,818,335 | 32,251,217 |
| APCD | 33,705,584 | 33,235,508 | 30,911,073 |
| Occupancy | 104.4% | 104.8% | 104.3% |

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

|  | 2012 | 2012<br>On	a<br>Constant<br>Currency<br>basis | 2011 | 2010 |
| :--- | :--- | :--- | :--- | :--- |
| Passenger\tticket\trevenues | $5,594,595 | $5,698,635 | $5,525,904 | $4,908,644 |
| Onboard\tand\tother\trevenues | 2,093,429 | 2,116,296 | 2,011,359 | 1,843,860 |
| Total\trevenues | 7,688,024 | 7,814,931 | 7,537,263 | 6,752,504 |
| Less: |  |  |  |  |
| Commissions,\ttransportation\tand\tother | 1,289,255 | 1,317,028 | 1,299,713 | 1,175,522 |
| Onboard\tand\tother | 529,453 | 540,011 | 535,501 | 480,564 |
| Net\trevenues | $5,869,316 | $5,957,892 | $5,702,049 | $5,096,418 |
| APCD | 33,705,584 | 33,705,584 | 33,235,508 | 30,911,073 |
| Gross\tYields | $228.09 | $231.86 | $226.78 | $218.45 |
| Net\tYields | $174.13 | $176.76 | $171.56 | $164.87 |

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

|  |  | Year	Ended	December	31, | Year	Ended	December	31, |  |
| :--- | :--- | :--- | :--- | :--- |
|  | 2012 | 2012\tOn\ta\nConstant\nCurrency\nbasis | 2011 | 2010 |
| Total\tcruise\toperating\texpenses | $5,157,434 | $5,231,963 | $4,942,607 | $4,458,076 |
| Marketing,\tselling\tand\tadministrative\texpenses | 1,011,543 | 1,029,564 | 960,602 | 848,079 |
| Gross\tCruise\tCosts | 6,168,977 | 6,261,527 | 5,903,209 | 5,306,155 |
| Less: |  |  |  |  |
| Commissions,\ttransportation\tand\tother | 1,289,255 | 1,317,028 | 1,299,713 | 1,175,522 |
| Onboard\tand\tother | 529,453 | 540,011 | 535,501 | 480,564 |
| Net\tCruise\tCosts | $4,350,269 | $4,404,488 | $4,067,995 | $3,650,069 |
| Less:\nFuel | 909,691 | 914,444 | 764,758 | 646,998 |
| Net\tCruise\tCosts\tExcluding\tFuel | $3,440,578 | $3,490,044 | $3,303,237 | $3,003,071 |
| APCD | 33,705,584 | 33,705,584 | 33,235,508 | 30,911,073 |
| Gross\tCruise\tCosts\tper\tAPCD | $183.03 | $185.77 | $177.62 | $171.66 |
| Net\tCruise\tCosts\tper\tAPCD | $129.07 | $130.68 | $122.40 | $118.08 |
| Net\tCruise\tCost\tExcluding\tFuel\tper\tAPCD | $102.08 | $103.54 | $99.39 | $97.15 |

# 								Net	Debt-to-Capital	was	calculated	as	follows	(in	thousands):

|  | 2012 | 2011 |
| :--- | :--- | :--- |
| Long-term\tdebt,\tnet\tof\tcurrent\tportion | $6,970,464 | $7,856,962 |
| Current\tportion\tof\tlong-term\tdebt | 1,519,483 | 638,891 |
| Total\tdebt | 8,489,947 | 8,495,853 |
| Less:\tCash\tand\tcash\tequivalents | 194,855 | 262,186 |
| Net\tDebt | $8,295,092 | $8,233,667 |
| Total\tshareholders'\tequity | $8,308,749 | $8,407,823 |
| Total\tdebt | 8,489,947 | 8,495,853 |
| Total\tdebt\tand\tshareholders'\tequity | 16,798,696 | 16,903,676 |
| Debt-to-Capital | 50.5% | 50.3% |
| Net\tDebt | 8,295,092 | 8,233,667 |
| Net\tDebt\tand\tshareholders'\tequity | $16,603,841 | $16,641,490 |
| Net\tDebt-to-Capital | 50.0% | 49.5% |

# Outlook

								On	February	4,	2013,	we	announced	the	following	initial	first	quarter	and	full	year	2013	guidance:

|  | As	Reported | Constant	Currency |
| :--- | :--- | :--- |
| Net\tYields | 3%\tto\t5% | 2%\tto\t4% |
| Net\tCruise\tCosts\tper\tAPCD | 3%\tto\t4% | Approx.\t3% |
| Net\tCruise\tCosts\tper\tAPCD,\texcluding\tFuel | Approx.\t3% | 2%\tto\t3% |
| Capacity\tIncrease | 1.4% |  |
| Depreciation\tand\tAmortization | $750\tto\t$770\tmillion |  |
| Interest\tExpense,\tnet | $335\tto\t$355\tmillion |  |
| Fuel\tConsumption\t(metric\ttons) | 1,377,500 |  |
| Fuel\tExpenses | $960\tmillion |  |
| Percent\tHedged\t(fwd\tconsumption) | 55% |  |
| Impact\tof\t10%\tchange\tin\tfuel\tprices | $43\tmillion |  |
| EPS | $2.30\tto\t$2.50 |  |

# First	Quarter	2013

|  | As	Reported | Constant	Currency |
| :--- | :--- | :--- |
| Net\tYields | Approx.\t2% | 2%\tto\t3% |
| Net\tCruise\tCosts\tper\tAPCD | 2%\tto\t3% | 2%\tto\t3% |
| Net\tCruise\tCosts\tper\tAPCD,\texcluding\tFuel | Approx.\t2% | Approx.\t2% |
| Capacity\tIncrease | 1.5% |  |
| Depreciation\tand\tAmortization | $183\tto\t$193\tmillion |  |
| Interest\tExpense,\tnet | $82\tto\t$92\tmillion |  |
| Fuel\tConsumption\t(metric\ttons) | 350,600 |  |
| Fuel\tExpenses | $245\tmillion |  |
| Percent\tHedged\t(fwd\tconsumption) | 53% |  |
| Impact\tof\t10%\tchange\tin\tfuel\tprices | $12\tmillion |  |
| EPS | $0.10\tto\t$0.20 |  |

								Since	our	earnings	release	on	February	4,	2013,	bookings	have	remained	encouraging	and	consistent	with	our	previous	expectations.	Accordingly,	our	outlook	has remained	essentially	unchanged.

								Total	revenues	for	2012	increased	$150.8	million	or	2.0%	to	$7.7	billion	from	$7.5	billion	in	2011.	Despite	the	impact	of	the	Costa	Concordia	incident	and	the continued	instability	in	the	global	economic	landscape,	especially	in	Europe,	our	passenger	ticket	revenues	increased	$68.7	million	or	1.2%	to	$5.6	billion	from $5.5	billion	in	2011	and	our	onboard	and	other	revenues	increased	$82.1	million	or	4.1%	to	$2.1	billion	from	$2.0	billion	in	2011.

								Approximately	$171.1	million	of	the	increase	in	total	revenues	was	driven	by	an	increase	in	Pullmantur's	land-based	tours,	hotel	and	air	packages,	an	increase	in onboard	spending	on	a	per	passenger	basis,	and	an	increase	in	concession	revenues.	The	increase	in	Pullmantur's	land-based	tours,	hotel	and	air	packages	was	attributable to	an	increase	in	guests	and	the	addition	of	new	itineraries.	The	increase	in	onboard	spending	was	primarily	due	to	the	addition	of	specialty	restaurants	and	other	onboard activities	as	a	result	of	our	ship	revitalization	projects	and	other	revenue	enhancing	initiatives.	The	increase	in	concession	revenues	was	due	to	an	increase	in	spending	on a	per	passenger	basis.	In	addition,	the	increase	in	total	revenues	was	partially	attributable	to	changes	to	our	international	distribution	system	mainly	in	Brazil	and	certain deployment	initiatives	including,	but	not	limited	to	increased	deployment	in	Australia	and	China	as	described	above.	These	increases	were	partially	offset	by	the unfavorable	effect	of	changes	in	foreign	currency	exchange	rates	related	to	our	revenue	transactions	denominated	in	currencies	other	than	the	United	States	dollar	of approximately	$126.9	million.

								Approximately	$106.6	million	of	the	increase	in	total	revenues	was	attributable	to	a	1.4%	increase	in	capacity.	The	increase	in	capacity	was	primarily	due	to	the addition	of	Celebrity	Silhouette	which	entered	service	in	July	2011	and	the	addition	of	Celebrity	Reflection	which	entered	service	in	October	2012.	This	increase	in capacity	was	partially	offset	by	the	sale	of	Celebrity	Mercury	to	TUI	Cruises	in	February	2011	and	the	completion	of	our	one-year	charter	of	the	Bleu	de	France	in November	2011	following	its	sale	to	a	third	party	in	November	2010.	We	consolidate	the	operating	results	of	Pullmantur	and	its	wholly-owned	subsidiary,	CDF Croisières	de	France,	on	a	two-month	lag	to	allow	for	more	timely	preparation	of	our	consolidated	financial	statements.	(See	Note	1.	General	to	our	consolidated

financial	statements	under	Item	8.	Financial	Statements	and	Supplementary	Data).	The	increase	in	capacity	was	also	partially	offset	by	the	delivery	of	Ocean	Dream	to an	unrelated	third	party	in	April	2012	as	part	of	a	six	year	bareboat	charter	agreement.

								Total	cruise	operating	expenses	for	2012	increased	$214.8	million	or	4.3%	to	$5.2	billion	from	$4.9	billion	for	2011.	Approximately	$219.4	million	of	this	increase was	attributable	to	increases	in	fuel	expenses,	and	expenses	related	to	Pullmantur's	land-based	tours,	hotel	and	air	packages.	Fuel	expenses,	which	are	net	of	the	financial impact	of	fuel	swap	agreements	accounted	for	as	hedges,	increased	15.2%	per	metric	ton	in	2012	as	compared	to	2011	primarily	as	a	result	of	increasing	fuel	prices.	The increase	in	Pullmantur's	land-based	tours,	hotel	and	air	packages	expenses	was	primarily	attributable	to	an	increase	in	guests	and	the	addition	of	new	itineraries.	These increases	were	partially	offset	by	a	decrease	in	commissions	expenses	attributable	to	increased	charter	business	and	changes	in	our	distribution	channels.	In	addition, $69.9	million	of	the	increase	in	cruise	operating	expenses	was	attributable	to	the	1.4%	increase	in	capacity	mentioned	above.	These	increases	in	cruise	operating expenses	were	partially	offset	by	the	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	approximately	$74.5	million.

# Marketing,	Selling	and	Administrative	Expenses

								Marketing,	selling	and	administrative	expenses	for	2012	increased	$50.9	million	or	5.3%	to	$1.0	billion	from	$960.6	million	for	2011.	The	increase	was	due	to	an increase	in	costs	associated	with	investments	in	technology	and	to	an	increase	in	advertising	expenses	related	to	our	global	expansion.	These	increases	were	partially offset	by	the	favorable	effect	of	changes	in	foreign	currency	exchange	rates	related	to	our	marketing,	selling	and	administrative	expenses	denominated	in	currencies other	than	the	United	States	dollar.

# Depreciation	and	Amortization	Expenses

								Depreciation	and	amortization	expenses	for	2012	increased	$28.1	million	or	4.0%	to	$730.5	million	from	$702.4	million	for	2011.	The	increase	was	primarily	due to	the	addition	of	Celebrity	Silhouette	which	entered	service	in	July	2011,	the	addition	of	Celebrity	Reflection	which	entered	service	in	October	2012	and	to	new shipboard	additions	associated	with	our	ship	revitalization	projects.	This	increase	was	partially	offset	by	the	sale	of	Celebrity	Mercury	to	TUI	Cruises	in	February	2011.

								During	2012,	we	recognized	an	impairment	charge	of	$385.4	million	to	write	down	Pullmantur's	goodwill	to	its	implied	fair	value	and	to	write	down	trademarks and	trade	names	and	certain	long-lived	assets,	consisting	of	three	aircraft	owned	and	operated	by	Pullmantur	Air,	to	their	fair	value.	(See	Valuation	of	Goodwill, Indefinite-Lived	Intangible	Assets	and	Long-Lived	Assets	above	for	more	information	regarding	the	impairment	of	these	assets).

# Other	Income	(Expense)

								Interest	expense,	net	of	interest	capitalized,	decreased	to	$355.8	million	in	2012	from	$382.4	million	in	2011.	The	decrease	was	due	to	lower	interest	rates	and	a lower	average	debt	level.

								Other	expense	was	$50.4	million	in	2012	compared	to	other	income	of	$32.9	million	in	2011	for	a	net	change	of	$83.3	million	when	comparing	these	periods.	The change	in	other	expense	was	primarily	due	to	the	following:

•Deferred	income	tax	expense	of	$33.7	million	as	a	result	of	a	100%	valuation	allowance	recorded	in	connection	with	Pullmantur's	deferred	tax	assets	that are	no	longer	expected	to	be	recovered	prior	to	their	expiration;

•A	reduction	in	deferred	income	tax	expense	of	$5.2	million	due	to	a	reduction	in	Pullmantur's	deferred	tax	liability	related	to	the	impairment	charge	of Pullmantur's	trademarks	and	trade	names;

•A	loss	of	$5.7	million	associated	with	changes	in	the	fair	value	of	our	fuel	call	options	in	2012	as	compared	to	a	gain	of	$18.9	million	in	2011,	for	a	net change	of	$24.6	million;

•A	loss	of	$2.7	million	due	to	ineffectiveness	on	our	fuel	swaps	in	2012	as	compared	to	a	gain	of	$7.1	million	in	2011,	for	a	net	change	of	$9.8	million;

•A	loss	of	$7.5	million	on	the	early	extinguishment	of	€255.0	million,	or	approximately	$328.0	million	in	aggregate	principal	amount	of	our	outstanding €1.0	billion	unsecured	senior	notes	due	2014	in	September	2012.

# Net	Yields

								Net	Yields	increased	1.5%	in	2012	compared	to	2011	primarily	due	an	increase	in	Pullmantur's	land	based	tours,	hotel	and	air	packages	revenue	and	an	increase	in onboard	spending.	In	addition,	the	increase	was	due	to	the	changes	in	our	international	distribution	system	mainly	in	Brazil	and	certain	deployment	initiatives.	Net Yields	increased	3.0%	in	2012	compared	to	2011	on	a	Constant	Currency	basis.

# Net	Cruise	Costs

								Net	Cruise	Costs	increased	6.9%	in	2012	compared	to	2011	due	to	the	1.4%	increase	in	capacity	and	a	5.4%	increase	in	Net	Cruise	Cost	per	APCD.	The	increase	in Net	Cruise	Costs	per	APCD	was	primarily	due	to	an	increase	in	fuel	and	Pullmantur's	land-based	tours,	hotel	and	air	packages	expenses	as	discussed	above.	In	addition, the	increase	in	Net	Cruise	Cost	per	APCD	was	due	to	the	changes	in	our	international	distribution	system	mainly	in	Brazil	and	certain	deployment	initiatives.	Net	Cruise Costs	per	APCD	increased	6.8%	in	2012	compared	to	2011	on	a	Constant	Currency	basis.	Net	Cruise	Costs	Excluding	Fuel	per	APCD	increased	2.7%	in	2012	compared to	2011.	Net	Cruise	Costs	Excluding	Fuel	per	APCD	increased	4.2%	in	2012	compared	to	2011	on	a	Constant	Currency	basis.

								Total	revenues	for	2011	increased	$784.8	million	or	11.6%	to	$7.5	billion	from	$6.8	billion	in	2010.	Approximately	$507.8	million	of	this	increase	was	attributable to	a	7.5%	increase	in	capacity.	The	increase	in	capacity	was	primarily	due	to	a	full	year	of	revenue	generated	by	Allure	of	the	Seas	which	entered	service	in	December 2010,	the	addition	of	Celebrity	Silhouette	which	entered	service	in	July	2011,	and	a	full	year	of	Celebrity	Eclipse	which	entered	service	in	April	2010.	This	increase	in capacity	was	partially	offset	by	the	sale	of	Celebrity	Mercury	to	TUI	Cruises	in	February	2011.	In	addition,	approximately	$277.0	million	of	the	increase	in	revenue	was driven	by	an	increase	in	ticket	prices	and

the	favorable	effect	of	changes	in	foreign	currency	exchange	rates	related	to	our	revenue	transactions	denominated	in	currencies	other	than	the	United	States	dollar. These	increases	were	partially	mitigated	by	the	impact	of	geopolitical	events	including	the	political	unrest	in	the	Eastern	Mediterranean	and	Northern	Africa	and	the earthquake	and	related	events	in	Japan	which	offset	pricing	improvements	in	other	regions.	These	events	resulted	in	deployment	changes	to	avoid	calling	on	ports	in those	areas	and	pricing	reductions	to	stimulate	demand	in	other	areas.

								Onboard	and	other	revenues	included	concession	revenues	of	$273.4	million	in	2011	compared	to	$237.0	million	for	the	same	period	in	2010.	The	increase	in concession	revenues	was	due	to	an	increase	in	spending	on	a	per	passenger	basis	and	the	increase	in	capacity	mentioned	above.

								Total	cruise	operating	expenses	for	2011	increased	$484.5	million	or	10.9%	to	$4.9	billion	from	$4.5	billion	for	2010.	Approximately	$335.2	million	of	the	increase was	attributable	to	the	7.5%	increase	in	capacity	mentioned	above.	Other	significant	drivers	of	the	increase	include	an	increase	in	fuel,	air	and	other	hotel	and	vessel expenses	and	head	taxes,	as	well	as	the	unfavorable	effect	of	changes	in	foreign	currency	exchange	rates	related	to	our	cruise	operating	expenses	denominated	in currencies	other	than	the	United	States	dollar.	Fuel	expenses,	which	are	net	of	the	financial	impact	of	fuel	swap	agreements,	increased	18.4%	per	metric	ton	in	2011	as compared	to	2010	primarily	as	a	result	of	increasing	fuel	prices.	The	increase	in	air	and	other	hotel	and	vessel	expenses	and	head	taxes	were	primarily	due	to	deployment changes.

								Marketing,	selling	and	administrative	expenses	for	2011	increased	$112.5	million	or	13.3%	to	$960.6	million	from	$848.1	million	for	2010.	The	increase	was	due to	an	increase	in	marketing,	selling	and	payroll	expenses	primarily	associated	with	our	international	expansion	and,	to	a	much	lesser	extent,	an	increase	in	expenses associated	with	technological	innovations.

								Depreciation	and	amortization	expenses	for	2011	increased	$58.7	million	or	9.1%	to	$702.4	million	from	$643.7	million	for	2010.	The	increase	is	primarily	due	to a	full	year	of	Allure	of	the	Seas	which	entered	service	in	December	2010,	the	addition	of	Celebrity	Silhouette	which	entered	service	in	July	2011,	and	a	full	year	of Celebrity	Eclipse	which	entered	service	in	April	2010.	These	increases	were	partially	offset	by	the	sale	of	Celebrity	Mercury	to	TUI	Cruises	and	the	sale	of	Bleu	de France.

								Interest	expense,	net	of	interest	capitalized,	increased	to	$382.4	million	in	2011	from	$371.2	million	in	2010.	The	increase	was	due	to	a	reduction	in	interest capitalized	for	ships	under	construction.	Interest	capitalized	decreased	to	$14.0	million	in	2011	from	$28.1	million	in	2010	primarily	due	to	a	lower	average	level	of investment	in	ships	under	construction.	Gross	interest	expense	decreased	to	$396.4	million	from	$399.3	million	in	2010.	The	decrease	was	primarily	due	to	lower interest	rates	partially	offset	by	a	higher	average	debt	level.

								Other	income	decreased	to	$32.9	million	in	2011	from	$75.0	million	in	2010.	The	$42.1	million	decrease	in	other	income	was	due	primarily	to	an	$89.0	million	gain recorded	from	a	litigation	settlement	during	2010	that	did	not	recur	in	2011,	which	was	partially	offset	by:

•Income	on	our	investments	in	unconsolidated	subsidiaries	of	$22.2	million	in	2011	as	compared	to	income	of	$0.2	million	in	2010,	for	a	net	increase	of $22.0	million	when	comparing	these	periods;

								Net	Yields	increased	4.1%	in	2011	compared	to	2010	primarily	due	to	an	increase	in	ticket	prices	and	the	favorable	impact	of	changes	in	exchange	rates,	as discussed	above.	Net	Yields	per	APCD	increased	2.4%	in	2011	compared	to	2010	on	a	Constant	Currency	basis.

								Net	Cruise	Costs	increased	11.4%	in	2011	compared	to	2010	due	to	the	7.5%	increase	in	capacity	and	a	3.7%	increase	in	Net	Cruise	Cost	per	APCD.	The	increase	in Net	Cruise	Costs	per	APCD	was	primarily	driven	by	an	increase	in	fuel	and	other	hotel	and	vessel	expenses,	and	to	a	lesser	extent,	the	unfavorable	impact	of	changes	in exchange	rates,	as	discussed	above.	Net	Cruise	Costs	per	APCD	increased	2.7%	in	2011	compared	to	2010	on	a	Constant	Currency	basis.	Net	Cruise	Costs	Excluding Fuel	per	APCD	increased	2.3%	in	2011	compared	to	2010.	Net	Cruise	Costs	Excluding	Fuel	per	APCD	increased	1.3%	in	2011	compared	to	2010	on	a	Constant Currency	basis.

# Recently	Adopted,	and	Future	Application	of,	Accounting	Standards

								Refer	to	Note	2.	Summary	of	Significant	Accounting	Policies	to	our	consolidated	financial	statements	under	Item	8.	Financial	Statements	and	Supplementary	Data for	further	information	on	Recently	Adopted	Accounting	Standards	and	Recent	Accounting	Pronouncements.

# 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	decreased	$74.0	million	to $1.4	billion	for	2012	compared	to	$1.5	billion	for	2011.	This	decrease	was	primarily	a	result	of	a	decrease	in	net	income	after	adjusting	for	non-cash	items	and	to	the timing	of	collections	on	our	trade	accounts	receivable	partially	offset	by	a	higher	rate	of	increase	in	customer	deposits	and	an	increase	in	cash	received	on	the	settlement of	derivative	financial	instruments.

								Net	cash	used	in	investing	activities	was	$1.3	billion	for	2012	compared	to	$924.6	million	for	2011.	The	change	was	primarily	due	to	$290.0	million	of	proceeds received	from	the	sale	of	Celebrity	Mercury	and	$55.0	million	of	proceeds	received	from	the	sale	of	Bleu	de	France	during	2011	which	did	not	recur	in	2012.	During 2012,	our	use	of	cash	was	primarily	related	to	capital	expenditures	of	$1.3	billion,	up	from	$1.2	billion	for	2011.	The	increase	in	capital	expenditures	was	primarily attributable	to	an	increase	in	payments	related	to	our	ship	revitalization	projects	in	2012.	We	also	provided	$110.7	million	under	a	debt	facility	to	one	of	our unconsolidated	affiliates	during	2011	which	did	not	recur	in	2012.

								Net	cash	used	in	financing	activities	was	$179.6	million	for	2012	compared	to	$676.5	million	for	2011,	primarily	as	a	result	of	our	refinancing	strategy	for	our upcoming	2013	and	2014	maturities.	The	change	was	due	to	a	net	increase	in	debt	facility	drawings	of	$980.1	million	during	2012	as	compared	to	2011.	The	net	increase in	debt	facility	drawings	was	primarily	due	to	proceeds	received	from	the	issuance	of	$650.0	million	unsecured	senior	notes	and	amounts	borrowed	under	an	unsecured term	loan	of	$290.0	million	during	2012	which	did	not	occur	in	2011.	The	change	in	net	cash	used	in	financing	activities	was	also	due	to	an	increase	in	repayments	of debt	of	approximately	$382.2	million.	The	increase	in	repayments	of	debt	was	primarily	due	to	an	increase	of	$590.0	million	in	repayments	on	our	unsecured	revolving credit	facilities	from	$885.0	million	during	2011	to	$1.5	billion	during	2012.	The	increase	in	repayments	of	debt	was	also	due	$344.6	million	paid	in	conjunction	with the	repurchase	of	€255.0	million

or	approximately	$328.0	million	in	aggregate	principal	amount	of	our	€1.0	billion	5.625%	unsecured	senior	notes	and	the	prepayment	of	a	$100.0	million	unsecured term	loan	during	2012	as	compared	to	the	repayment	of	a	$500.0	million	unsecured	senior	note	and	a	prepayment	of	$200.0	million	on	our	Allure	of	the	Seas	unsecured term	loan	during	2011.	The	change	was	also	due	to	cash	dividends	paid	on	our	common	stock	of	$117.7	million	for	2012	as	compared	to	$21.7	million	for	2011.

# Future	Capital	Commitments

								Our	future	capital	commitments	consist	primarily	of	new	ship	orders.	As	of	December	31,	2012,	we	had	two	Quantum-class	ships	and	one	Oasis-class	ship	on	order for	our	Royal	Caribbean	International	brand	with	an	aggregate	capacity	of	approximately	13,600	berths.	The	agreement	for	our	Oasis-class	ship	is	subject	to	certain closing	conditions	and	is	expected	to	become	effective	in	the	first	quarter	of	2013.	We	also	have	an	option	to	construct	a	fourth	Oasis-class	ship	which	will	expire	five days	prior	to	the	first	anniversary	of	the	effective	date	of	the	contract.

								As	of	December	31,	2012,	the	aggregate	cost	of	our	ships	on	order	was	approximately	$3.6	billion,	of	which	we	had	deposited	$131.0	million	as	of	such	date. Approximately	49.7%	of	the	aggregate	cost	was	exposed	to	fluctuations	in	the	euro	exchange	rate	at	December	31,	2012.	(See	Note	13.	Fair	Value	Measurements	and Derivative	Instruments	and	Note	14.	Commitments	and	Contingencies	to	our	consolidated	financial	statements	under	Item	8.	Financial	Statements	and	Supplementary Data).

# Contractual	Obligations

								As	of	December	31,	2012,	our	contractual	obligations	were	as	follows	(in	thousands):

|  |  |  | Payments	due	by	period |  |  |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  |  | Less\tthan | 1-3 | 3-5 | More\tthan |
|  | Total | 1\tyear | years | years | 5\tyears |
| Operating\tActivities: |  |  |  |  |  |
| (1)(2) |  |  |  |  |  |
| Operating\tlease\tobligations | $630,948 | $65,929 | $118,563 | $108,343 | $338,113 |
| (3) |  |  |  |  |  |
| Interest\ton\tlong-term\tdebt | 1,404,380 | 314,315 | 396,439 | 232,940 | 460,686 |
| (4) |  |  |  |  |  |
| Other\nInvesting\tActivities: | 779,112 | 231,137 | 273,093 | 178,234 | 96,648 |
| (5) |  |  |  |  |  |
| Ship\tpurchase\tobligations\nFinancing\tActivities: | 2,896,826 | 242,391 | 1,609,550 | 1,044,885 | — |
| (6) |  |  |  |  |  |
| Long-term\tdebt\tobligations | 8,437,016 | 1,509,945 | 2,604,499 | 1,841,418 | 2,481,154 |
| (7) |  |  |  |  |  |
| Capital\tlease\tobligations | 52,931 | 9,538 | 8,097 | 4,875 | 30,421 |
| (8) |  |  |  |  |  |
| Other | 98,665 | 30,740 | 46,580 | 17,664 | 3,681 |
| Total | $14,299,878 | $2,403,995 | $5,056,821 | $3,428,359 | $3,410,703 |

(1) We	are	obligated	under	noncancelable	operating	leases	primarily	for	a	ship,	offices,	warehouses	and	motor	vehicles.

(2) Under	the	Brilliance	of	the	Seas	lease	agreement,	we	may	be	required	to	make	a	termination	payment	of	approximately	£65.4	million,	or approximately	$106.3	million	based	on	the	exchange	rate	at	December	31,	2012,	if	the	lease	is	canceled	in	2020.	This	amount	is	included	in	the more	than	5	years	column.

(3) Long-term	debt	obligations	mature	at	various	dates	through	fiscal	year	2027	and	bear	interest	at	fixed	and	variable	rates.	Interest	on	variable- rate	debt	is	calculated	based	on	forecasted	debt

balances,	including	interest	swapped	using	the	applicable	rate	at	December	31,	2012.	Debt	denominated	in	other	currencies	is	calculated	based on	the	applicable	exchange	rate	at	December	31,	2012.

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

(5) Amounts	represent	contractual	obligations	with	initial	terms	in	excess	of	one	year.	Amounts	include	our	third	Oasis-class	ship	which	was ordered	under	a	conditional	agreement	in	December	2012	and	is	expected	to	become	effective	in	the	first	quarter	of	2013.

(6) Amounts	represent	debt	obligations	with	initial	terms	in	excess	of	one	year.

(7) Amounts	represent	capital	lease	obligations	with	initial	terms	in	excess	of	one	year.

(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.

								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

								In	July	2002,	we	entered	into	an	operating	lease	denominated	in	British	pound	sterling	for	the	Brilliance	of	the	Seas.	The	lease	payments	vary	based	on	sterling LIBOR.	The	lease	has	a	contractual	life	of	25	years;	however,	both	the	lessor	and	we	have	certain	rights	to	cancel	the	lease	at	year	18	(i.e.	2020)	upon	advance	notice given	approximately	one	year	prior	to	cancellation.	In	the	event	of	early	termination	at	year	18,	we	have	the	option	to	cause	the	sale	of	the	vessel	at	its	fair	value	and	to use	the	proceeds	towards	the	applicable	termination	payment.	Alternatively,	we	could	opt	at	such	time	to	make	a	termination	payment	of	approximately	£65.4	million,	or approximately	$106.3	million	based	on	the	exchange	rate	at	December	31,	2012	and	relinquish	our	right	to	cause	the	sale	of	the	vessel.	Under	current	circumstances	we do	not	believe	early	termination	of	this	lease	is	probable.

								Under	the	Brilliance	of	the	Seas	operating	lease,	we	have	agreed	to	indemnify	the	lessor	to	the	extent	its	after-tax	return	is	negatively	impacted	by	unfavorable changes	in	corporate	tax	rates,	capital	allowance	deductions	and	certain	unfavorable	determinations	which	may	be	made	by	United	Kingdom	tax	authorities.	These indemnifications	could	result	in	an	increase	in	our	lease	payments.	We	are	unable	to	estimate	the	maximum	potential	increase	in	our	lease	payments	due	to	the	various circumstances,	timing	or	a	combination	of	events	that	could	trigger	such	indemnifications.	The	United	Kingdom	tax	authorities	are	disputing	the	lessor's	accounting treatment	of	the	lease	and	the	lessor	and	tax	authorities	are	in	discussions	on	the	matter.	If	the	characterization	of	the	lease	is	ultimately	determined	to	be	incorrect,	we could	be	required	to	indemnify	the	lessor	under	certain	circumstances.	The	lessor	has	advised	us	that	they	believe	their	characterization	of	the	lease	is	correct.	Based	on the	foregoing	and	our	review	of	available	information,	we	do	not	believe	an	indemnification	payment	is	probable.	However,	if	the	lessor	loses	its	dispute	and	we	are required	to	indemnify	the	lessor,	we	cannot	at	this	time	predict	the	impact	that	such	an	occurrence	would	have	on	our	financial	condition	and	results	of	operations.

								In	connection	with	the	sale	of	Celebrity	Mercury	in	February	2011,	we	and	TUI	AG	each	guaranteed	repayment	of	50%	of	an	€180.0	million	5-year	amortizing bank	loan	provided	to	TUI	Cruises.	As	of	December	31,	2012,	€153.0	million,	or	approximately	$201.7	million	based	on	the	exchange	rate	at	December	31,	2012, remains	outstanding.	Based	on	current	facts	and	circumstances,	we	do	not	believe	potential	obligations	under	this	guarantee	are	probable.

								TUI	Cruises	entered	into	construction	agreements	with	STX	Finland	that	includes	certain	restrictions	on	each	of	our	and	TUI	AG's	ability	to	reduce	our	current ownership	interest	in	TUI	Cruises	below	37.5%	through	the	construction	period	for	the	first	TUI	newbuild	vessel.	In	addition,	the	bank	credit	facility	agreement	for	the financing	of	the	ship	extends	this	restriction	through	2019.

								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.

								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	the	capital	expenditures	associated	with	our	ship	purchases	and	our	debt	service	obligations	represent	our largest	funding	needs.	We	have	historically	relied	on	a	combination	of	cash	flows	provided	by	operations,	drawdowns	under	our	available	credit	facilities,	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.

								We	had	a	working	capital	deficit	of	$3.2	billion	as	of	December	31,	2012	as	compared	to	a	working	capital	deficit	of	$2.1	billion	as	of	December	31,	2011.	Included within	our	working	capital	deficit	is	$1.5	billion	and	$0.6	billion	of	current	portion	of	long-term	debt	as	of	December	31,	2012	and	2011,	respectively.	The	increase	is due	to	the	increase	in	current	maturities	of	long-term	debt.	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	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,	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	December	31,	2012,	we	have	approximately	$8.5	billion	in	long-term	debt	obligations,	of	which	approximately	$2.5	billion	is	due	through	January	2014. Also,	we	have	approximately	$894.0	million	in	contractual	obligations,	other	than	long-term	debt,	due	through	December	31,	2013.	We	expect	to	fund	these	obligations through	our	existing	liquidity,	future	financing	arrangements	and

cash	flows	from	operations.	As	of	December	31,	2012,	our	liquidity	was	$2.2	billion,	consisting	of	approximately	$194.9	million	in	cash	and	cash	equivalents	and $2.0	billion	available	under	our	unsecured	credit	facilities.	Of	the	$2.0	billion	available	under	our	unsecured	credit	facilities,	$1.5	billion	is	from	revolving	credit facilities	and	€365.0	million	(or	$0.5	billion	based	on	the	exchange	rate	at	December	31,	2012)	is	from	an	unsecured	Euro-denominated	term	loan	facility.	We	have	the ability	to	draw	on	the	€365.0	million	facility	at	any	time	on	or	prior	to	June	30,	2013.	During	2013,	it	is	likely	we	will	secure	additional	liquidity	in	the	capital	and/or credit	markets	as	part	of	our	refinancing	strategy	for	our	upcoming	2013	and	2014	maturities.	In	addition,	we	may	elect	to	fund	our	contractual	obligations	through	other means	if	opportunities	arise.

								As	of	December	31,	2012,	we	have	on	order	two	Quantum-class	ships	and	one	Oasis-class	ship.	Each	of	the	Quantum-class	ships	have	committed	unsecured	bank financing	arrangements	which	include	sovereign	financing	guarantees.	The	agreement	for	our	Oasis-class	ship	is	subject	to	certain	closing	conditions	and	is	expected	to become	effective	in	the	first	quarter	of	2013.

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

								We	continue	our	focus	on	ensuring	adequate	cash	and	liquidity.	We	are	focused	on	cost	efficiency	and	continue	to	implement	cost	containment	initiatives	including a	number	of	initiatives	to	reduce	energy	consumption	and,	by	extension,	fuel	costs.	These	include	the	design	of	more	fuel	efficient	ships	and	the	implementation	of	other hardware	and	energy	efficiencies.

								If	(i)	any	person	other	than	A.	Wilhelmsen	AS.	and	Cruise	Associates	and	their	respective	affiliates	(the	"Applicable	Group")	acquires	ownership	of	more	than	33% of	our	common	stock	and	the	Applicable	Group	owns	less	of	our	common	stock	than	such	person,	or	(ii)	subject	to	certain	exceptions,	during	any	24-month	period,	a majority	of	the	Board	is	no	longer	comprised	of	individuals	who	were	members	of	the	Board	on	the	first	day	of	such	period,	we	may	be	obligated	to	prepay	indebtedness outstanding	under	the	majority	of	our	credit	facilities,	which	we	may	be	unable	to	replace	on	similar	terms.	Certain	of	our	outstanding	debt	securities	also	contain	change of	control	provisions	that	would	be	triggered	by	the	acquisition	of	greater	than	50%	of	our	common	stock	by	a	person	other	than	a	member	of	the	Applicable	Group 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	$5.6	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)	income	on	total	shareholders' equity.	We	are	well	in	excess	of	all	debt	covenant	requirements	as	of	December	31,	2012.	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.

								We	declared	and	paid	cash	dividends	on	our	common	stock	of	$0.10	per	share	during	each	of	the	first	and	second	quarters	of	2012	and	$0.12	per	share	during	each of	the	third	and	fourth	quarters	of	2012.

# Item	7A.				Quantitative	and	Qualitative	Disclosures	About	Market	Risk

# Financial	Instruments	and	Other

								We	are	exposed	to	market	risk	attributable	to	changes	in	interest	rates,	foreign	currency	exchange	rates	and	fuel	prices.	We	manage	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	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,	we	do	not	hold	or	issue	derivative	financial	instruments	for	trading	or	other	speculative	purposes.	We monitor	our	derivative	positions	using	techniques	including	market	valuations	and	sensitivity	analyses.	(See	Note	13.	Fair	Value	Measurements	and	Derivative Instruments	to	our	consolidated	financial	statements	under	Item	8.	Financial	Statements	and	Supplementary	Data.)

# Interest	Rate	Risk

								Our	exposure	to	market	risk	for	changes	in	interest	rates	relates	to	our	long-term	debt	obligations,	including	future	interest	payments,	and	our	operating	lease	for Brilliance	of	the	Seas.	At	December	31,	2012,	approximately	45.8%	of	our	long-term	debt	was	effectively	fixed	as	compared	to	40%	as	of	December	31,	2011.	We	use interest	rate	swap	agreements	to	modify	our	exposure	to	interest	rate	movements	and	to	manage	our	interest	expense	and	rent	expense.

								Market	risk	associated	with	our	long-term	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	December	31,	2012	and	December	31,	2011,	we maintained	interest	rate	swap	agreements	on	the	$420.0	million	fixed	rate	portion	of	our	Oasis	of	the	Seas	unsecured	amortizing	term	loan.	The	interest	rate	swap agreements	effectively	changed	the	interest	rate	on	the	balance	of	the	unsecured	term	loan,	which	was	$315.0	million	as	of	December	31,	2012,	from	a	fixed	rate	of 5.41%	to	a	LIBOR-based	floating	rate	equal	to	LIBOR	plus	3.87%,	currently	approximately	4.42%.	These	interest	rate	swap	agreements	are	accounted	for	as	fair	value hedges.	In	addition,	during	2012,	we	terminated	our	interest	rate	swap	agreements	that	effectively	changed	$350.0	million	of	debt	with	a	fixed	rate	of	7.25%	to	LIBOR- based	floating	rate	debt	in	order	to	manage	our	percentage	of	fixed	rate	debt.	Terminating	the	swaps	did	not	result	in	a	gain	or	loss.	Upon	termination	of	these	swaps,	we received	net	cash	proceeds	of	approximately	$60.6	million.	A	$60.1	million	increase	to	the	carrying	value	of	the	debt	is	being	amortized	to	reduce	interest	expense	over the	remaining	life	of	the	debt.

								The	estimated	fair	value	of	our	long-term	fixed	rate	debt	at	December	31,	2012	was	$4.5	billion,	using	quoted	market	prices,	where	available,	or	using	the	present value	of	expected	future	cash	flows	which	incorporates	risk	profile.	The	fair	value	of	our	fixed	to	floating	interest	rate	swap	agreements	was	estimated	to	be	an	asset	of $5.7	million	as	of	December	31,	2012,	based	on	the	present	value	of	expected	future	cash	flows.	A	hypothetical	one	percentage	point	decrease	in	interest	rates	at December	31,	2012	would	increase	the	fair	value	of	our	long-term	fixed	rate	debt	by	approximately	$51.5	million,	net	of	an	increase	in	the	fair	value	of	the	associated fixed	to	floating	interest	rate	swap	agreements.

								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.	A	hypothetical	one	percentage	point	increase	in	interest rates	would	increase	our	forecasted	2013	interest	expense	by

approximately	$31.6	million,	assuming	no	change	in	foreign	currency	exchange	rates.	At	December	31,	2012	and	December	31,	2011,	we	maintained	forward-starting interest	rate	swap	agreements	that	beginning	April	2013	effectively	convert	the	interest	rate	on	approximately	$627.2	million	of	the	Celebrity	Reflection	unsecured amortizing	term	loan	balance	from	LIBOR	plus	0.40%	to	a	fixed-rate	(including	applicable	margin)	of	2.85%	through	the	term	of	the	loan.	These	interest	rate	swap agreements	are	accounted	for	as	cash	flow	hedges.	In	addition,	during	2012,	we	entered	into	forward-starting	interest	rate	swap	agreements	that	hedge	the	anticipated unsecured	amortizing	term	loans	that	will	finance	our	purchase	of	Quantum	of	the	Seas	and	Anthem	of	the	Seas.	Forward-starting	interest	rate	swaps	hedging	the Quantum	of	the	Seas	loan	will	effectively	convert	the	interest	rate	for	$735.0	million	of	the	anticipated	loan	balance	from	LIBOR	plus	1.30%	to	a	fixed	rate	of	3.74% (inclusive	of	margin)	beginning	in	October	2014.	Forward-starting	interest	rate	swaps	hedging	the	Anthem	of	the	Seas	loan	will	effectively	convert	the	interest	rate	for $725.0	million	of	the	anticipated	loan	balance	from	LIBOR	plus	1.30%	to	a	fixed	rate	of	3.86%	(inclusive	of	margin)	beginning	in	April	2015.	The	fair	value	of	our floating	to	fixed	interest	rate	swap	agreements	was	estimated	to	be	a	liability	of	$55.5	million	as	of	December	31,	2012	based	on	the	present	value	of	expected	future	cash flows.

								Market	risk	associated	with	our	operating	lease	for	Brilliance	of	the	Seas	is	the	potential	increase	in	rent	expense	from	an	increase	in	sterling	LIBOR	rates.	A hypothetical	one	percentage	point	increase	in	sterling	LIBOR	rates	would	increase	our	forecasted	2013	rent	expense	by	approximately	$2.7	million,	based	on	the exchange	rate	at	December	31,	2012.

# Foreign	Currency	Exchange	Rate	Risk

								Our	primary	exposure	to	foreign	currency	exchange	rate	risk	relates	to	our	ship	construction	contracts	denominated	in	euro	and	our	growing	international	business operations.	We	enter	into	foreign	currency	forward	contracts,	collar	options	and	cross	currency	swap	agreements	to	manage	portions	of	the	exposure	to	movements	in foreign	currency	exchange	rates.

								The	estimated	fair	value	as	of	December	31,	2012	of	our	euro-denominated	forward	contracts	associated	with	our	ship	construction	contracts	was	an	asset	of $4.1	million,	based	on	the	present	value	of	expected	future	cash	flows.	As	of	December	31,	2012,	the	aggregate	cost	of	our	ships	on	order	was	approximately $3.6	billion,	of	which	we	had	deposited	$131.0	million	as	of	such	date.	Approximately	49.7%	and	43.3%	of	the	aggregate	cost	of	the	ships	under	construction	was exposed	to	fluctuations	in	the	euro	exchange	rate	at	December	31,	2012	and	December	31,	2011,	respectively.	A	hypothetical	10%	strengthening	of	the	euro	as	of December	31,	2012,	assuming	no	changes	in	comparative	interest	rates,	would	result	in	a	$205.3	million	increase	in	the	United	States	dollar	cost	of	the	foreign	currency denominated	ship	construction	contracts	exposed	to	fluctuations	in	the	euro	exchange	rate.

								Our	growing	international	business	operations	subject	us	to	an	increasing	level	of	foreign	currency	exchange	risk.	We	transact	business	in	many	different	foreign currencies	and	maintain	investments	in	foreign	operations	which	may	expose	us	to	financial	market	risk	resulting	from	fluctuations	in	foreign	currency	exchange	rates. Movements	in	foreign	currency	exchange	rates	may	affect	the	translated	value	of	our	earnings	and	cash	flows.	We	manage	most	of	this	exposure	on	a	consolidated	basis, which	allows	us	to	take	advantage	of	any	natural	offsets.	Therefore,	weakness	in	one	particular	currency	might	be	offset	by	strengths	in	other	currencies	over	time.	Our earnings	are	also	subject	to	volatility	resulting	from	the	remeasurement	of	net	monetary	assets	and	liabilities	denominated	in	a	currency	other	than	the	United	States dollar.	To	mitigate	our	foreign	currency	exchange	rate	exposure	resulting	from	our	net	foreign	currency	denominated	monetary	assets	and	liabilities,	we	denominate	a portion	of	our	debt	in	our	subsidiaries'	and	investments'	functional	currencies,	enter	into	foreign	currency	forward	contracts	and	we	have	historically	utilized	cross currency	swap	agreements.

								During	2012,	we	terminated	a	portion	of	our	foreign	currency	forward	contracts	for	Celebrity	Reflection	because	their	maturity	dates	were	not	aligned	with	the ship's	delivery	date.	The	terminated

contracts	were	designated	as	cash	flow	hedges.	Simultaneously,	we	entered	into	new	foreign	currency	forward	contracts	that	were	aligned	with	the	ship's	delivery	date and	designated	the	contracts	as	cash	flow	hedges.	We	effected	the	termination	of	the	contracts	by	entering	into	offsetting	foreign	currency	forward	contracts.	Neither	the original	nor	the	offsetting	foreign	currency	forward	contracts	were	designated	as	hedging	instruments.	As	a	result,	subsequent	changes	in	the	fair	value	of	the	original and	offsetting	foreign	currency	forward	contracts	were	recognized	in	earnings	immediately	and	were	reported	within	other	income	(expense)	in	our	consolidated statements	of	comprehensive	income	(loss).	We	deferred	a	loss	of	$10.8	million	within	accumulated	other	comprehensive	income	(loss)	and	a	gain	of	$1.7	million	within property	and	equipment,	net	for	the	terminated	contracts.	During	the	fourth	quarter	of	2012,	we	began	recognition	of	the	net	deferred	loss	of	$9.1	million	as	an	increase to	depreciation	expense	over	the	estimated	useful	life	of	the	vessel.

								During	2012,	we	entered	into	foreign	currency	collar	options	to	hedge	a	portion	of	our	foreign	currency	exposure	on	the	construction	contract	price	for	Anthem	of the	Seas.	These	options	mature	in	April	2015	and	have	an	estimated	fair	value	of	$9.0	million	at	December	31,	2012.	In	addition,	to	further	increase	the	portion	of	our €1.0	billion	debt	that	we	utilize	as	a	net	investment	hedge	of	our	euro	denominated	investments	in	foreign	operations,	we	terminated	our	cross	currency	swap	agreements that	effectively	changed	€150.0	million	of	our	€1.0	billion	unsecured	senior	notes	which	bear	interest	at	a	fixed	rate	of	5.625%,	to	$190.9	million	with	a	fixed	rate	of 6.68%.	Upon	termination	of	these	swaps,	we	received	net	cash	proceeds	of	approximately	$9.1	million	and	deferred	a	loss	of	$2.6	million	within	accumulated	other comprehensive	income	(loss)	which	we	will	recognize	within	interest	expense,	net	of	capitalized	interest	over	the	remaining	life	of	the	debt.

								We	consider	our	investments	in	our	foreign	operations	to	be	denominated	in	relatively	stable	currencies	and	of	a	long-term	nature.	We	partially	mitigate	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	assigned	debt	as	a	hedge	of	our	net	investments	in	Pullmantur	and	TUI	Cruises	of	approximately	€481.7	million and	€665.0	million,	or	approximately	$635.1	million	and	$863.2	million,	through	December	31,	2012	and	2011,	respectively.	Accordingly,	we	have	included approximately	$10.1	million	of	foreign-currency	transaction	losses	in	the	foreign	currency	translation	adjustment	component	of	accumulated	other	comprehensive income	(loss)	at	December	31,	2012.	A	hypothetical	10%	increase	or	decrease	in	the	December	31,	2012	euro	exchange	rate	would	increase	or	decrease	the	fair	value	of our	assigned	debt	by	$68.0	million,	which	would	be	offset	by	a	corresponding	decrease	or	increase	in	the	United	States	dollar	value	of	our	net	investment.

								Lastly,	on	a	regular	basis,	we	enter	into	foreign	currency	forward	contracts	to	minimize	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	2012,	we	maintained	an	average of	approximately	$334.7	million	of	these	foreign	currency	forward	contracts.	These	instruments	are	not	designated	as	hedging	instruments.	Foreign	currency	forward contract	gains	of	approximately	$7.7	million	are	recognized	in	earnings	within	other	income	(expense)	in	our	consolidated	statements	of	comprehensive	income	(loss). This	gain	offset	exchange	losses	arising	from	the	remeasurement	of	monetary	assets	and	liabilities	denominated	in	foreign	currencies	of	$11.8	million	in	2012.

# Fuel	Price	Risk

								Our	exposure	to	market	risk	for	changes	in	fuel	prices	relates	primarily	to	the	consumption	of	fuel	on	our	ships.	Fuel	cost	(net	of	the	financial	impact	of	fuel	swap agreements),	as	a	percentage	of	our	total	revenues,	was	approximately	11.8%	in	2012,	10.1%	in	2011	and	9.6%	in	2010.	We	use	a	range	of	instruments	including	fuel swap	agreements	and	fuel	call	options	to	mitigate	the	financial	impact	of	fluctuations	in	fuel	prices.	During	2012,	we	terminated	our	remaining	fuel	call	options	by selling

offsetting	fuel	call	options	in	order	to	adjust	the	hedged	percentage	of	our	projected	fuel	requirements.	Upon	termination,	we	received	net	cash	proceeds	of approximately	$10.7	million.	Subsequent	to	the	termination,	neither	the	original	nor	the	offsetting	fuel	call	options	were	designated	as	hedging	instruments	and	changes in	their	fair	value	were	recognized	in	earnings	immediately	and	were	reported	in	other	income	(expense)	in	our	consolidated	statements	of	comprehensive	income	(loss).

								As	of	December	31,	2012,	we	had	fuel	swap	agreements	to	pay	fixed	prices	for	fuel	with	an	aggregate	notional	amount	of	approximately	$1.1	billion,	maturing through	2016.	The	fuel	swap	agreements	represent	55%	of	our	projected	2013	fuel	requirements,	45%	of	our	projected	2014	fuel	requirements,	25%	of	our	projected 2015	fuel	requirements	and	7%	of	our	projected	2016	fuel	requirements.	The	estimated	fair	value	of	these	contracts	at	December	31,	2012	was	estimated	to	be	an	asset	of $48.6	million.	We	estimate	that	a	hypothetical	10%	increase	in	our	weighted-average	fuel	price	from	that	experienced	during	the	year	ended	December	31,	2012	would increase	our	forecasted	2013	fuel	cost	by	approximately	$35.8	million,	net	of	the	impact	of	fuel	swap	agreements.

# Item	8.				Financial	Statements	and	Supplementary	Data

								Our	Consolidated	Financial	Statements	and	Quarterly	Selected	Financial	Data	are	included	beginning	on	page	F-1	of	this	report.

# Item	9.				Changes	In	and	Disagreements	With	Accountants	on	Accounting	and	Financial	Disclosure

# Item	9A.				Controls	and	Procedures

# Evaluation	of	Disclosure	Controls	and	Procedures

								Our	management,	with	the	participation	of	our	Chairman	and	Chief	Executive	Officer	and	Vice	Chairman	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	Vice	Chairman	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	Vice	Chairman	and	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.

# Management's	Report	on	Internal	Control	Over	Financial	Reporting

								Our	management	is	responsible	for	establishing	and	maintaining	adequate	internal	control	over	financial	reporting,	as	such	term	is	defined	in	Exchange	Act Rule	13a-15(f).	Our	management,	with	the	participation	of	our	Chairman	and	Chief	Executive	Officer	and	our	Vice	Chairman	and	Chief	Financial	Officer,	conducted	an evaluation	of	the	effectiveness	of	our	internal	control	over	financial	reporting	based	on	the	framework	in	Internal	Control-Integrated	Framework	issued	by	the Committee	of	Sponsoring	Organizations	of	the	Treadway	Commission.	Based	on	this	evaluation,	management	concluded	that	our	internal	control	over	financial reporting	was	effective	as	of	December	31,	2012.	The	effectiveness	of	our	internal	control	over	financial	reporting	as	of	December	31,	2012	has	been	audited	by PricewaterhouseCoopers	LLP,	the	independent	registered	certified	public	accounting	firm	that	audited	our	consolidated	financial	statements	included	in	this	Annual Report	on	Form	10-K,	as	stated	in	its	report,	which	is	included	herein	on	page	F-2.

# Changes	in	Internal	Controls	Over	Financial	Reporting

								There	were	no	changes	in	our	internal	control	over	financial	reporting	identified	in	connection	with	the	evaluation	required	by	paragraph	(d)	of	Exchange	Act Rules	13a-15	during	the	quarter	ended	December	31,	2012	that	have	materially	affected,	or	are	reasonably	likely	to	materially	affect,	our	internal	control	over	financial reporting.

# Inherent	Limitations	on	Effectiveness	of	Controls

								It	should	be	noted	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	the	reasonable	assurance	that	our	controls	will	succeed	in	achieving	their	goals	under	all	potential	future conditions.

# Item	9B.				Other	Information

# 								Items	10,	11,	12,	13	and	14.	Directors,	Executive	Officers	and	Corporate	Governance,	Executive	Compensation,	Security	Ownership	of	Certain	Beneficial

# Owners	and	Management	and	Related	Stockholder	Matters,	Certain	Relationships	and	Related	Transactions,	and	Director	Independence	and	Principal

# Accountant	Fees	and	Services.

								Except	for	information	concerning	executive	officers	(called	for	by	Item	401(b)	of	Regulation	S-K),	which	is	included	in	Part	I	of	this	Annual	Report	on	Form	10- K,	the	information	required	by	Items	10,	11,	12,	13	and	14	is	incorporated	herein	by	reference	to	the	Royal	Caribbean	Cruises	Ltd.	definitive	proxy	statement	(the "Proxy	Statement")	to	be	filed	with	the	Securities	and	Exchange	Commission	no	later	than	120	days	after	the	close	of	the	fiscal	year.	Please	refer	to	the	following sections	in	the	Proxy	Statement	for	more	information	regarding	our	corporate	governance:	"Corporate	Governance";	"Proposal	1—Election	of	Directors";	and	"Certain Relationships	and	Related	Party	Transactions".	Copies	of	the	Proxy	Statement	will	become	available	when	filed	through	our	Investor	Relations	website	at www.rclinvestor.com	(please	see	"Financial	Reports"	under	"Financial	Information");	by	contacting	our	Investor	Relations	department	at	1050	Caribbean	Way,	Miami, Florida	33132—telephone	(305)	982-2625;	or	by	visiting	the	SEC's	website	at	www.sec.gov.

								We	have	adopted	a	Code	of	Business	Conduct	and	Ethics	that	applies	to	all	of	our	employees,	including	our	executive	officers,	and	our	directors.	This	document	is posted	on	our	website	at	www.rclinvestor.com.	None	of	the	websites	referenced	in	this	Annual	Report	on	Form	10-K	or	the	information	contained	therein	is incorporated	herein	by	reference.

# Item	15.				Exhibits	and	Financial	Statement	Schedules

# (a)(1)		Financial	Statements

					Our	Consolidated	Financial	Statements	have	been	prepared	in	accordance	with	Item	8.	Financial	Statements	and	Supplementary	Data	and	are	included	beginning	on page	F-1	of	this	report.

(2) Financial	Statement	Schedules

(3) Exhibits

					The	exhibits	listed	on	the	accompanying	Index	to	Exhibits	are	filed	or	incorporated	by	reference	as	part	of	this	Annual	Report	on	Form	10-K	and	such	Index	to Exhibits	is	hereby	incorporated	herein	by	reference.

# 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.

(Registrant)

Brian	J.	Rice

Vice	Chairman	and	Chief	Financial	Officer

(Principal	Financial	Officer	and	duly	authorized	signatory)

								Pursuant	to	the	requirements	of	the	Securities	Exchange	Act	of	1934,	this	report	has	been	signed	below	by	the	following	persons	on	behalf	of	the	registrant	and	in the	capacities	indicated	on	February	25,	2013.

	/s/	RICHARD	D.	FAIN

Richard	D.	Fain

Director,	Chairman	and	Chief	Executive	Officer (Principal	Executive	Officer)

Brian	J.	Rice Vice	Chairman	and	Chief	Financial	Officer (Principal	Financial	Officer)

/s/	HENRY	L.	PUJOL

Henry	L.	Pujol

Vice	President	and	Corporate	Controller (Principal	Accounting	Officer)

Gert	W.	Munthe Director

Brian	J.	Rice,	as	Attorney-in-Fact

# INDEX	TO	EXHIBITS

								Exhibits	10.15	through	10.32	represent	management	compensatory	plans	or	arrangements.

4.2 —Sixth	Supplemental	Indenture	dated	as	of	October	14,	1997	to	Indenture	dated	as	of	July	15,	1994	between	the	Company, as	issuer,	and	The	Bank	of	New	York	Trust	Company,	N.A.,	as	Trustee	(incorporated	by	reference	to	Exhibit	2.11	to	the Company's	1997	Annual	Report	on	Form	20-F,	File	No.	1-11884).

4.3 —Eighth	Supplemental	Indenture	dated	as	of	March	16,	1998	to	Indenture	dated	as	of	July	15,	1994	between	the	Company, as	issuer,	and	The	Bank	of	New	York	Trust	Company,	N.A.,	as	Trustee	(incorporated	by	reference	to	Exhibit	2.13	to	the Company's	1997	Annual	Report	on	Form	20-F,	File	No.	1-11884).

4.4 —Thirteenth	Supplemental	Indenture	dated	as	of	November	21,	2003	to	Indenture	dated	as	of	July	15,	1994	between	the Company,	as	issuer,	and	The	Bank	of	New	York	Trust	Company,	N.A.,	as	Trustee	(incorporated	by	reference	to Exhibit	2.14	to	the	Company's	2003	Annual	Report	on	Form	20-F,	File	No.	1-11884.)

4.5 —Fourteenth	Supplemental	Indenture	dated	as	of	June	12,	2006	to	Indenture	dated	as	of	July	15,	1994	between	the Company,	as	issuer,	and	The	Bank	of	New	York	Trust	Company,	N.A.,	as	Trustee	(incorporated	by	reference	to Exhibit	4.13	to	the	Company's	2006	Annual	Report	on	Form	10-K).

4.6 —Fifteenth	Supplemental	Indenture	dated	as	of	June	12,	2006	to	Indenture	dated	as	of	July	15,	1994	between	the	Company, as	issuer,	and	The	Bank	of	New	York	Trust	Company,	N.A.,	as	Trustee	(incorporated	by	reference	to	Exhibit	4.14	to	the Company's	2006	Annual	Report	on	Form	10-K).

4.7 —Form	of	Indenture	dated	as	of	July	31,	2006	between	the	Company,	as	issuer,	and	The	Bank	of	New	York	Trust Company,	N.A.,	as	Trustee	(incorporated	by	reference	to	Exhibit	4.1	to	the	Company's	Registration	Statement	on	Form	S-3 (No.	333-136186)	filed	with	the	Commission	on	July	31,	2006).

4.8 —Indenture	dated	as	of	January	25,	2007	among	the	Company,	as	issuer,	The	Bank	of	New	York,	as	trustee,	transfer	agent, principal	paying	agent	and	security	registrar,	and	AIB/BNY	Fund	Management	(Ireland)	Limited,	as	Irish	paying	agent (incorporated	by	reference	to	Exhibit	10.1	to	the	Company's	Current	Report	on	Form	8-K	filed	with	the	Commission	on January	26,	2007).

10.1 —Amended	and	Restated	Registration	Rights	Agreement	dated	as	of	July	30,	1997	among	the	Company,	A.	Wilhelmsen AS.,	Cruise	Associates,	Monument	Capital	Corporation,	Archinav	Holdings,	Ltd.	and	Overseas	Cruiseship,	Inc. (incorporated	by	reference	to	Exhibit	2.20	to	the	Company's	1997	Annual	Report	on	Form	20-F,	File	No.	1-11884).

10.2 —Assignment	and	Amendment	to	the	US$875,000,000	Amended	and	Restated	Credit	Agreement	dated	as	of	July	15,	2011 among	the	Company,	the	various	financial	institutions	party	thereto	and	Citibank,	N.A.,	as	administrative	agent (incorporated	by	reference	to	Exhibit	10.1	to	the	Company's	Current	Report	on	Form	8-K	filed	on	July	19,	2011).

10.3 —US$525,000,000	Credit	Agreement,	dated	as	of	November	19,	2010,	as	amended,	among	the	Company,	the	various financial	institutions	as	are	or	shall	become	parties	thereto	and	Nordea	Bank	Finland	plc,	New	York	Branch,	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	with	the	Commission	on	November	19,	2010	and	Exhibit	10.9	to	the	Company's	2010	Annual	Report	on Form	10-K).

10.4 —Assignment	and	Amendment	Deed	to	Hull	No.	679	Credit	Agreement,	dated	as	of	February	17,	2012,	among	Celebrity Silhouette	Inc.,	the	Company	and	KfW	IPEX-BANK	GMBH,	in	its	capacity	as	agent	for	Hermes,	administrative	agent	and lender	(incorporated	by	reference	to	Exhibit	10.5	to	the	Company's	2011	Annual	Report	on	Form	10-K).

10.5 —Assignment	and	Amendment	Deed	to	Hull	No.	691	Credit	Agreement,	dated	as	of	February	17,	2012,	among	Celebrity Solstice	V	Inc.,	the	Company	and	KfW	IPEX-BANK	GMBH,	in	its	capacity	as	agent	for	Hermes,	administrative	agent	and lender	(incorporated	by	reference	to	Exhibit	10.6	to	the	Company's	2011	Annual	Report	on	Form	10-K).

10.6 —Assignment	and	Amendment	No.	4	to	Credit	Agreement,	dated	as	of	March	26,	2012,	among	Oasis	of	the	Seas	Inc.,	Royal Caribbean	Cruises	Ltd.,	the	various	financial	institutions	as	are	parties	to	the	Credit	Agreement	and	BNP	Paribas,	as administrative	agent	(incorporated	by	reference	to	Exhibit	10.1	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the quarterly	period	ended	March	31,	2012).

10.7 —Assignment	and	Amendment	No.	4	to	Credit	Agreement,	dated	as	of	March	26,	2012,	among	Allure	of	the	Seas	Inc., Royal	Caribbean	Cruises	Ltd.,	the	various	financial	institutions	as	are	parties	to	the	Credit	Agreement	and	Skandinaviska Enskilda	Banken	AB,	as	administrative	agent	(incorporated	by	reference	to	Exhibit	10.1	to	the	Company's	Quarterly	Report on	Form	10-Q	for	the	quarterly	period	ended	March	31,	2012).

10.8 —Hull	No.	S-697	Credit	Agreement,	dated	as	of	June	8,	2011,	between	Company,	the	Lenders	from	time	to	time	party thereto	and	KfW-IPEX-Bank	GmbH,	as	Hermes	Agent,	Facility	Agent	and	Initial	Mandated	Lead	Arranger,	as	amended	on February	17,	2012	and	May	10,	2012	(incorporated	by	reference	to	Exhibit	10.1	to	the	Company's	Quarterly	Report	on Form	10-Q	for	the	Quarterly	Period	ended	June	30,	2012).

10.10 —Office	Building	Lease	Agreement	dated	July	25,	1989	between	Miami-Dade	County	and	the	Company,	as	amended (incorporated	by	reference	to	Exhibits	10.116	and	10.117	to	the	Company's	Registration	Statement	on	Form	F-1,	File No.	33-46157,	filed	with	the	Commission	and	Exhibit	10.1	to	the	Company's	Current	Report	on	Form	8-K	filed	on	August	5, 2011).

10.11 —Office	Building	Lease	Agreement	dated	January	18,	1994	between	Miami-Dade	County	and	the	Company	(incorporated by	reference	to	Exhibit	2.13	to	the	Company's	1993	Annual	Report	on	Form	20-F,	File	No.	1-11884	and	Exhibit	10.2	to	the Company's	Current	Report	on	Form	8-K	filed	on	August	5,	2011).

10.12 —Multi-Tenant	Office	Lease	Agreement	dated	May	3,	2000,	as	amended	through	January	26,	2010,	between	the	Company and	RT	Miramar	II,	LLC	(incorporated	by	reference	to	Exhibit	4.6	to	the	Company's	2003	Annual	Report	on	Form	20-F	and Exhibit	10.17	to	the	Company's	2009	Annual	Report	on	Form	10-K).

10.13 —Lease	Agreement	dated	January	24,	2005,	as	amended	through	March	20,	2006,	between	the	Company	and	RC Springfield	2007,	LLC	(formerly	Workstage-Oregon,	LLC)	(incorporated	by	reference	to	Exhibit	10.7	to	the	Company's 2004	Annual	Report	on	Form	10-K,	Exhibit	10.2	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	quarterly	period ended	June	30,	2005	and	Exhibit	10.12	to	the	Company's	2007	Annual	Report	on	Form	10-K).

10.14 —Lease	dated	August	30,	2006	between	DV3	Addlestone	Limited,	RCL	Investments	Ltd.	(formerly	Harmony	Investments (Global)	Limited)	and	the	Company	(incorporated	by	reference	to	Exhibit	10.12	to	the	Company's	2006	Annual	Report	on Form	10-K).

10.15 —Royal	Caribbean	Cruises	Ltd.	2000	Stock	Award	Plan,	as	amended	and	restated	through	September	18,	2006 (incorporated	by	reference	to	Exhibit	10.1	to	the	Company's	Current	Report	on	Form	8-K	filed	with	the	Commission	on December	8,	2005	and	Exhibit	10.1	to	the	Company's	Current	Report	on	Form	8-K	filed	with	the	Commission	on September	22,	2006).

10.16 —Royal	Caribbean	Cruises	Ltd.	2008	Equity	Incentive	Plan,	as	amended	by	Amendment	No.	1	dated	as	of	May	20,	2010 (incorporated	by	reference	to	Exhibit	10.1	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	quarterly	period	ended June	30,	2008	and	Exhibit	10.3	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	quarterly	period	ended	June	30, 2010).

10.17 —Form	of	Royal	Caribbean	Cruises	Ltd.	2008	Equity	Incentive	Plan	Stock	Option	Award	Agreement—Incentive	Options (incorporated	by	reference	to	Exhibit	10.3	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	quarterly	period	ended September	30,	2008).

10.18 —Form	of	Royal	Caribbean	Cruises	Ltd.	2008	Equity	Incentive	Plan	Stock	Option	Award	Agreement—Nonqualified	shares (incorporated	by	reference	to	Exhibit	10.4	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	quarterly	period	ended September	30,	2008).

10.19 —Form	of	Royal	Caribbean	Cruises	Ltd.	2008	Equity	Incentive	Plan	Restricted	Stock	Unit	Agreement	(incorporated	by reference	to	Exhibit	10.5	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	quarterly	period	ended	September	30, 2008).

10.22 —Employment	Agreement	dated	December	31,	2012	between	the	Company	and	Richard	D.	Fain*

10.23 —Employment	Agreement	dated	December	31,	2012	between	the	Company	and	Adam	M.	Goldstein*

10.24 —Employment	Agreement	dated	December	31,	2012	between	Celebrity	Cruises	Inc.	and	Michael	W.	Bayley*

10.25 —Employment	Agreement	dated	December	31,	2012	between	the	Company	and	Brian	J.	Rice*

10.26 —Employment	Agreement	dated	December	31,	2012	between	the	Company	and	Harri	U.	Kulovaara*

10.27 —Description	of	consulting	arrangement	between	the	Company	and	William	K.	Reilly	(incorporated	by	reference	to Exhibit	10.16	to	the	Company's	2004	Annual	Report	on	Form	10-K).

10.28 —Royal	Caribbean	Cruises	Ltd.	Executive	Short-Term	Bonus	Plan	dated	as	of	September	12,	2008,	as	amended (incorporated	by	reference	to	Exhibit	10.5	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	quarterly	period	ended September	30,	2011).

10.29 —Royal	Caribbean	Cruises	Ltd.	et.	al.	Non	Qualified	Deferred	Compensation	Plan,	formerly	Royal	Caribbean	Cruises	Ltd. et.	al.	Non	Qualified	401(k)	Plan,	as	amended	through	November	11,	2008	(incorporated	by	reference	to	Exhibit	10.2	to	the Company's	Current	Report	on	Form	8-K	filed	with	the	Commission	on	December	8,	2005,	Exhibit	10.29	to	the	Company's 2006	Annual	Report	on	Form	10-K,	Exhibit	10.28	to	the	Company's	2007	Annual	Report	on	Form	10-K,	Exhibit	10.29	to the	Company's	2007	Annual	Report	on	Form	10-K	and	Exhibit	10.36	to	the	Company's	2008	Annual	Report	on	Form	10-K).

10.30 —Royal	Caribbean	Cruises	Ltd.	Supplemental	Executive	Retirement	Plan	as	amended	through	November	11,	2008 (incorporated	by	reference	to	Exhibit	10.3	to	the	Company's	Current	Report	on	Form	8-K	filed	with	the	Commission	on December	8,	2005,	Exhibit	10.31	to	the	Company's	2006	Annual	Report	on	Form	10-K,	Exhibit	10.31	to	the	Company's 2007	Annual	Report	on	Form	10-K,	Exhibit	10.1	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	quarterly	period ended	September	30,	2008	and	Exhibit	10.38	to	the	Company's	Annual	Report	on	Form	10-K).

10.31 —Summary	of	Royal	Caribbean	Cruises	Ltd.	Board	of	Directors	Compensation	(incorporated	by	reference	to	Exhibit	10.29 to	the	Company's	2010	Annual	Report	on	Form	10-K).

10.32 —Cruise	Policy	effective	as	of	October	3,	2007	for	Members	of	the	Board	of	Directors	of	the	Company	(incorporated	by reference	to	Exhibit	10.2	to	the	Company's	Quarterly	Report	on	Form	10-Q	for	the	quarterly	period	ended	September	30, 2007).

12.1 —Statement	regarding	computation	of	fixed	charge	coverage	ratio*

21.1 —List	of	Subsidiaries*

32.1 —Certification	of	Richard	D.	Fain	and	Brian	J.	Rice	pursuant	to	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	from	Royal	Caribbean	Cruises	Ltd.'s	Annual	Report	on	Form	10-K	for	the	year	ended December	31,	2012,	as	filed	with	the	SEC	on	February	25,	2013,	formatted	in	XBRL,	as	follows:

(i) the	Consolidated	Statements	of	Comprehensive	Income	(Loss)	for	the	years	ended	December	31,	2012,	2011	and	2010; (ii)	 the	Consolidated	Balance	Sheets	at	December	31,	2012	and	2011;

(iv)	 the	Consolidated	Statements	of	Shareholders'	Equity	for	the	years	ended	December	31,	2012,	2011	and	2010;	and (v)	 the	Notes	to	the	Consolidated	Financial	Statements,	tagged	in	summary	and	detail.

# INDEX	TO	CONSOLIDATED	FINANCIAL	STATEMENTS

# Report	of	Independent	Registered	Certified	Public	Accounting	Firm

# To	the	Board	of	Directors	and	Shareholders

of	Royal	Caribbean	Cruises,	Ltd.

								In	our	opinion,	the	accompanying	consolidated	balance	sheets	and	the	related	consolidated	statements	of	comprehensive	income	(loss),	shareholders'	equity	and cash	flows	present	fairly,	in	all	material	respects,	the	financial	position	of	Royal	Caribbean	Cruises,	Ltd.	and	its	subsidiaries	at	December	31,	2012	and	2011,	and	the results	of	their	operations	and	their	cash	flows	for	each	of	the	three	years	in	the	period	ended	December	31,	2012	in	conformity	with	accounting	principles	generally accepted	in	the	United	States	of	America.	Also	in	our	opinion,	the	Company	maintained,	in	all	material	respects,	effective	internal	control	over	financial	reporting	as	of December	31,	2012,	based	on	criteria	established	in	Internal	Control—Integrated	Framework	issued	by	the	Committee	of	Sponsoring	Organizations	of	the	Treadway Commission	(COSO).	The	Company's	management	is	responsible	for	these	financial	statements,	for	maintaining	effective	internal	control	over	financial	reporting	and for	its	assessment	of	the	effectiveness	of	internal	control	over	financial	reporting,	included	in	Management's	Report	on	Internal	Control	Over	Financial	Reporting appearing	under	Item	9A.	Our	responsibility	is	to	express	opinions	on	these	financial	statements	and	on	the	Company's	internal	control	over	financial	reporting	based	on our	integrated	audits.	We	conducted	our	audits	in	accordance	with	the	standards	of	the	Public	Company	Accounting	Oversight	Board	(United	States).	Those	standards require	that	we	plan	and	perform	the	audits	to	obtain	reasonable	assurance	about	whether	the	financial	statements	are	free	of	material	misstatement	and	whether	effective internal	control	over	financial	reporting	was	maintained	in	all	material	respects.	Our	audits	of	the	financial	statements	included	examining,	on	a	test	basis,	evidence supporting	the	amounts	and	disclosures	in	the	financial	statements,	assessing	the	accounting	principles	used	and	significant	estimates	made	by	management,	and evaluating	the	overall	financial	statement	presentation.	Our	audit	of	internal	control	over	financial	reporting	included	obtaining	an	understanding	of	internal	control	over financial	reporting,	assessing	the	risk	that	a	material	weakness	exists,	and	testing	and	evaluating	the	design	and	operating	effectiveness	of	internal	control	based	on	the assessed	risk.	Our	audits	also	included	performing	such	other	procedures	as	we	considered	necessary	in	the	circumstances.	We	believe	that	our	audits	provide	a reasonable	basis	for	our	opinions.

								A	company's	internal	control	over	financial	reporting	is	a	process	designed	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.	A	company's	internal	control	over	financial reporting	includes	those	policies	and	procedures	that	(i)	pertain	to	the	maintenance	of	records	that,	in	reasonable	detail,	accurately	and	fairly	reflect	the	transactions	and dispositions	of	the	assets	of	the	company;	(ii)	provide	reasonable	assurance	that	transactions	are	recorded	as	necessary	to	permit	preparation	of	financial	statements	in accordance	with	generally	accepted	accounting	principles,	and	that	receipts	and	expenditures	of	the	company	are	being	made	only	in	accordance	with	authorizations	of management	and	directors	of	the	company;	and	(iii)	provide	reasonable	assurance	regarding	prevention	or	timely	detection	of	unauthorized	acquisition,	use,	or disposition	of	the	company's	assets	that	could	have	a	material	effect	on	the	financial	statements.

								Because	of	its	inherent	limitations,	internal	control	over	financial	reporting	may	not	prevent	or	detect	misstatements.	Also,	projections	of	any	evaluation	of effectiveness	to	future	periods	are	subject	to	the	risk	that	controls	may	become	inadequate	because	of	changes	in	conditions,	or	that	the	degree	of	compliance	with	the policies	or	procedures	may	deteriorate.

/s/	PricewaterhouseCoopers	LLP PricewaterhouseCoopers	LLP Miami,	Florida February	25,	2013

# CONSOLIDATED	STATEMENTS	OF	COMPREHENSIVE	INCOME	(LOSS)

| Passenger	ticket	revenues | $ 5,594,595 | $ 5,525,904 | $ 4,908,644 |
| :--- | :--- | :--- | :--- |
| Onboard\tand\tother\trevenues | 2,093,429 | 2,011,359 | 1,843,860 |
| Total\trevenues | 7,688,024 | 7,537,263 | 6,752,504 |
| Cruise\toperating\texpenses: |  |  |  |
| Commissions,\ttransportation\tand\tother | 1,289,255 | 1,299,713 | 1,175,522 |
| Onboard\tand\tother | 529,453 | 535,501 | 480,564 |
| Payroll\tand\trelated | 828,198 | 825,676 | 767,586 |
| Food | 449,649 | 424,308 | 388,205 |
| Fuel | 909,691 | 764,758 | 646,998 |
| Other\toperating | 1,151,188 | 1,092,651 | 999,201 |
| Total\tcruise\toperating\texpenses | 5,157,434 | 4,942,607 | 4,458,076 |
| Marketing,\tselling\tand\tadministrative\texpenses | 1,011,543 | 960,602 | 848,079 |
| Depreciation\tand\tamortization\texpenses | 730,493 | 702,426 | 643,716 |
| Impairment\tof\tPullmantur\trelated\tassets | 385,444 | — | — |
|  | 7,284,914 | 6,605,635 | 5,949,871 |
| Operating\tIncome | 403,110 | 931,628 | 802,633 |
| Other\tincome\t(expense): |  |  |  |
| Interest\tincome | 21,331 | 25,318 | 9,243 |
| Interest\texpense,\tnet\tof\tinterest\tcapitalized | (355,785) | (382,416) | (371,207) |
| Extinguishment\tof\tunsecured\tsenior\tnotes | (7,501) | — | — |
| related\tto\tthe\tPullmantur\timpairment) | (42,868) | 32,891 | 74,984 |
|  | (384,823) | (324,207) | (286,980) |
| Net\tIncome | $18,287 | $607,421 | $515,653 |
| Basic\tEarnings\tper\tShare: |  |  |  |
| Net\tincome | $0.08 | $2.80 | $2.40 |
| Diluted\tEarnings\tper\tShare: |  |  |  |
| Net\tincome | $0.08 | $2.77 | $2.37 |
| Comprehensive\tIncome\t(Loss) |  |  |  |
| Net\tIncome | $18,287 | $607,421 | $515,653 |
| Other\tcomprehensive\tincome\t(loss): |  |  |  |
| Foreign\tcurrency\ttranslation\tadjustments | (2,764) | (18,200) | (29,065) |
| Change\tin\tdefined\tbenefit\tplans | (4,567) | (6,698) | (5,422) |
| Loss\ton\tcash\tflow\tderivative\thedges | (51,247) | (76,106) | (123,180) |
| Total\tother\tcomprehensive\tloss | (58,578) | (101,004) | (157,667) |
| Comprehensive\t(Loss)\tIncome | $(40,291) | $506,417 | $357,986 |

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

# CONSOLIDATED	BALANCE	SHEETS

| Cash	and	cash	equivalents | $194,855 | $262,186 |
| :--- | :--- | :--- |
| Trade\tand\tother\treceivables,\tnet | 281,421 | 292,447 |
| Inventories | 146,295 | 144,553 |
| Prepaid\texpenses\tand\tother\tassets | 207,662 | 185,460 |
| Derivative\tfinancial\tinstruments | 57,827 | 84,642 |
| Total\tcurrent\tassets | 888,060 | 969,288 |
| Property\tand\tequipment,\tnet | 17,451,034 | 16,934,817 |
| Goodwill | 432,975 | 746,537 |
| Other\tassets | 1,055,861 | 1,153,763 |
|  | $19,827,930 | $19,804,405 |
| Liabilities\tand\tShareholders'\tEquity |  |  |
| Current\tliabilities |  |  |
| Current\tportion\tof\tlong-term\tdebt | $1,519,483 | $638,891 |
| Accounts\tpayable | 351,587 | 304,623 |
| Accrued\tinterest | 106,366 | 123,853 |
| Accrued\texpenses\tand\tother\tliabilities | 541,722 | 564,272 |
| Customer\tdeposits | 1,546,993 | 1,436,003 |
| Total\tcurrent\tliabilities | 4,066,151 | 3,067,642 |
| Long-term\tdebt | 6,970,464 | 7,856,962 |
| Other\tlong-term\tliabilities | 482,566 | 471,978 |
| Commitments\tand\tcontingencies\t(Note\t14) |  |  |
| Shareholders'\tequity |  |  |
| Preferred\tstock\t($0.01\tpar\tvalue;\t20,000,000\tshares\tauthorized;\tnone\toutstanding) | — | — |
| shares\tissued,\tDecember\t31,\t2012\tand\tDecember\t31,\t2011,\trespectively) | 2,291 | 2,276 |
| Paid-in\tcapital | 3,109,887 | 3,071,759 |
| Retained\tearnings | 5,744,791 | 5,823,430 |
| Accumulated\tother\tcomprehensive\tloss | (134,516) | (75,938) |
| Treasury\tstock\t(10,308,683\tcommon\tshares\tat\tcost,\tDecember\t31,\t2012\tand\tDecember\t31,\t2011) | (413,704) | (413,704) |
| Total\tshareholders'\tequity | 8,308,749 | 8,407,823 |
|  | $19,827,930 | $19,804,405 |

# CONSOLIDATED	STATEMENTS	OF	CASH	FLOWS

|  | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
|  |  | (in\tthousands) |  |
| Operating\tActivities |  |  |  |
| Net\tincome | $18,287 | $607,421 | $515,653 |
| Adjustments: |  |  |  |
| Depreciation\tand\tamortization | 730,493 | 702,426 | 643,716 |
| Impairment\tof\tPullmantur\trelated\tassets | 385,444 | — | — |
| Net\tdeferred\ttax\texpense\trelated\tto\tPullmantur\timpairment | 28,488 | — | — |
| Loss\t(gain)\ton\tfuel\tcall\toptions | 5,651 | (18,920) | 2,826 |
| Loss\ton\textinguishment\tof\tunsecured\tsenior\tnotes | 7,501 | — | — |
| Changes\tin\toperating\tassets\tand\tliabilities: |  |  |  |
| Decrease\tin\ttrade\tand\tother\treceivables,\tnet | 8,026 | 87,872 | 146,498 |
| Increase\tin\tinventories | (1,645) | (18,423) | (20,274) |
| Increase\tin\tprepaid\texpenses\tand\tother\tassets | (1,614) | (17,052) | (10,954) |
| Increase\t(decrease)\tin\taccounts\tpayable | 36,602 | 56,755 | (15,507) |
| (Decrease)\tincrease\tin\taccrued\tinterest | (15,786) | (28,553) | 13,359 |
| Increase\tin\taccrued\texpenses\tand\tother\tliabilities | 33,060 | 25,318 | 71,969 |
| Increase\tin\tcustomer\tdeposits | 103,733 | 19,482 | 135,975 |
| Cash\treceived\ton\tsettlement\tof\tderivative\tfinancial\tinstruments | 69,684 | 12,200 | 172,993 |
| Dividends\treceived\tfrom\tunconsolidated\taffiliate | — | 21,147 | — |
| Other,\tnet | (26,190) | 6,066 | 6,765 |
| Net\tcash\tprovided\tby\toperating\tactivities | 1,381,734 | 1,455,739 | 1,663,019 |
| Investing\tActivities |  |  |  |
| Purchases\tof\tproperty\tand\tequipment | (1,291,499) | (1,173,626) | (2,187,189) |
| Cash\t(paid)\treceived\ton\tsettlement\tof\tderivative\tfinancial\tinstruments | (10,886) | 16,307 | (91,325) |
| Loan\tto\tunconsolidated\taffiliate | — | (110,660) | — |
| Cash\tpayments\treceived\ton\tloan\tto\tunconsolidated\taffiliate | 23,512 | — | — |
| Proceeds\tfrom\tsale\tof\tships | 9,811 | 345,000 | — |
| Other,\tnet | 5,739 | (1,586) | (9,404) |
| Net\tcash\t(used\tin)\tinvesting\tactivities | (1,263,323) | (924,565) | (2,287,918) |
| Financing\tActivities |  |  |  |
| Debt\tproceeds | 2,558,474 | 1,578,368 | 2,420,262 |
| Debt\tissuance\tcosts | (75,839) | (84,381) | (90,782) |
| Repayments\tof\tdebt | (2,216,701) | (2,179,046) | (1,600,265) |
| Extinguishment\tof\tunsecured\tsenior\tnotes | (344,589) | — | — |
| Dividends\tpaid | (117,707) | (21,707) | — |
| Proceeds\tfrom\texercise\tof\tcommon\tstock\toptions | 15,146 | 19,463 | 26,158 |
| Other,\tnet | 1,599 | 10,788 | 1,587 |
| Net\tcash\t(used\tin)\tprovided\tby\tfinancing\tactivities | (179,617) | (676,515) | 756,960 |
| Effect\tof\texchange\trate\tchanges\ton\tcash | (6,125) | (12,402) | 3,249 |
| Net\t(decrease)\tincrease\tin\tcash\tand\tcash\tequivalents | (67,331) | (157,743) | 135,310 |
| Cash\tand\tcash\tequivalents\tat\tbeginning\tof\tyear | 262,186 | 419,929 | 284,619 |
| Cash\tand\tcash\tequivalents\tat\tend\tof\tyear | $194,855 | $262,186 | $419,929 |
| Supplemental\tDisclosures |  |  |  |
| Cash\tpaid\tduring\tthe\tyear\tfor: |  |  |  |
| Interest,\tnet\tof\tamount\tcapitalized | $341,047 | $360,892 | $297,477 |

# CONSOLIDATED	STATEMENTS	OF	SHAREHOLDERS'	EQUITY

|  |  |  | Other | Other |  | Total |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Common\nStock | Paid-in\nCapital | Retained\nEarnings | Comprehensive\nIncome\t(Loss) | Treasury\nStock | Shareholders'\nEquity |
|  |  |  | (in\tthousands) | (in\tthousands) |  |  |
| Balances\tat\tJanuary\t1,\t2010 | $2,243 | $2,973,495 | $4,745,014 | $182,733 | $(413,704) | $7,489,781 |
| Issuance\tunder\temployee\trelated\tplans | 19 | 53,635 | — | — | — | 53,654 |
| Dividends\tdeclared\tby\tPullmantur\tAir,\tS.A.^(1) | — | — | (669) | — | — | (669) |
| Changes\trelated\tto\tcash\tflow\tderivative\thedges | — | — | — | (123,180) | — | (123,180) |
| Change\tin\tdefined\tbenefit\tplans | — | — | — | (5,422) | — | (5,422) |
| Foreign\tcurrency\ttranslation\tadjustments | — | — | — | (29,065) | — | (29,065) |
| Net\tincome | — | — | 515,653 | — | — | 515,653 |
| Balances\tat\tDecember\t31,\t2010 | $2,262 | $3,027,130 | $5,259,998 | $25,066 | $(413,704) | $7,900,752 |
| Issuance\tunder\temployee\trelated\tplans | 14 | 44,629 | — | — | — | 44,643 |
| Common\tStock\tdividends | — | — | (43,435) | — | — | (43,435) |
| Dividends\tdeclared\tby\tPullmantur\tAir,\tS.A.^(1) | — | — | (554) | — | — | (554) |
| Changes\trelated\tto\tcash\tflow\tderivative\thedges | — | — | — | (76,106) | — | (76,106) |
| Change\tin\tdefined\tbenefit\tplans | — | — | — | (6,698) | — | (6,698) |
| Foreign\tcurrency\ttranslation\tadjustments | — | — | — | (18,200) | — | (18,200) |
| Net\tincome | — | — | 607,421 | — | — | 607,421 |
| Balances\tat\tDecember\t31,\t2011 | $2,276 | $3,071,759 | $5,823,430 | $(75,938) | $(413,704) | $8,407,823 |
| Issuance\tunder\temployee\trelated\tplans | 15 | 38,128 | — | — | — | 38,143 |
| Common\tStock\tdividends | — | — | (95,979) | — | — | (95,979) |
| Dividends\tdeclared\tby\tPullmantur\tAir,\tS.A.^(1) | — | — | (947) | — | — | (947) |
| Changes\trelated\tto\tcash\tflow\tderivative\thedges | — | — | — | (51,247) | — | (51,247) |
| Change\tin\tdefined\tbenefit\tplans | — | — | — | (4,567) | — | (4,567) |
| Foreign\tcurrency\ttranslation\tadjustments | — | — | — | (2,764) | — | (2,764) |
| Net\tincome | — | — | 18,287 | — | — | 18,287 |
| Balances\tat\tDecember\t31,\t2012 | $2,291 | $3,109,887 | $5,744,791 | $(134,516) | $(413,704) | $8,308,749 |

(1) Dividends	declared	by	Pullmantur	Air,	S.A.	to	its	non-controlling	shareholder.	See	Note	6.	 Other	Assets	for	further	information	regarding	Pullmantur	Air,	S.A.'s	ownership	structure.

								The	following	tables	summarize	activity	in	accumulated	other	comprehensive	income	(loss)	related	to	derivatives	designated	as	cash	flow	hedges,	change	in	defined benefit	plans	and	the	foreign	currency	translation	adjustments	(in	thousands):

|  | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Accumulated\tnet\tgain\t(loss)\ton\tcash\tflow\tderivative\thedges\tat\tbeginning\tof\tyear | $(33,258) | $42,848 | $166,028 |
| Net\t(loss)\tgain\ton\tcash\tflow\tderivative\thedges | 58,138 | 70,480 | (54,877) |
| Net\t(gain)\tloss\treclassified\tinto\tearnings | (109,385) | (146,586) | (68,303) |
| Accumulated\tnet\tgain\t(loss)\ton\tcash\tflow\tderivative\thedges\tat\tend\tof\tyear | $(84,505) | $(33,258) | $42,848 |

|  | Changes<br>related	to	cash<br>flow	derivative<br>hedges | Change	in<br>defined<br>benefit	plans | Foreign<br>currency<br>translation<br>adjustments | Accumulated<br>other<br>comprehensive<br>income	(loss) |
| :--- | :--- | :--- | :--- | :--- |
| Accumulated\tother\tcomprehensive\tgain\tat\tbeginning\tof\tthe\tyear | $(33,258) | $(30,256) | $(12,424) | $(75,938) |
| Current-period\tchange | (51,247) | (4,567) | (2,764) | (58,578) |
| Accumulated\tother\tcomprehensive\tgain\tat\tend\tof\tyear | $(84,505) | $(34,823) | $(15,188) | $(134,516) |

# NOTES	TO	THE	CONSOLIDATED	FINANCIAL	STATEMENTS

# Note	1.	General

# Description	of	Business

								We	are	a	global	cruise	company.	We	own	Royal	Caribbean	International,	Celebrity	Cruises,	Pullmantur,	Azamara	Club	Cruises,	CDF	Croisières	de	France	and	a 50%	joint	venture	interest	in	TUI	Cruises.	Together,	these	six	brands	operate	a	combined	41	ships	as	of	December	31,	2012.	Our	ships	operate	on	a	selection	of worldwide	itineraries	that	call	on	approximately	455	destinations	on	all	seven	continents.

# Basis	for	Preparation	of	Consolidated	Financial	Statements

								The	consolidated	financial	statements	are	prepared	in	accordance	with	accounting	principles	generally	accepted	in	the	United	States	of	America	("GAAP"). Estimates	are	required	for	the	preparation	of	financial	statements	in	accordance	with	these	principles.	Actual	results	could	differ	from	these	estimates.

								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.	See	Note	6.	Other	Assets	for	further information	regarding	our	variable	interest	entities.	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.	We	consolidate	the	operating	results	of Pullmantur	and	its	wholly-owned	subsidiary,	CDF	Croisières	de	France,	on	a	two-month	lag	to	allow	for	more	timely	preparation	of	our	consolidated	financial statements.	No	material	events	or	transactions	affecting	Pullmantur	or	CDF	Croisières	de	France	have	occurred	during	the	two-month	lag	period	of	November	2012	and December	2012	that	would	require	disclosure	or	adjustment	to	our	consolidated	financial	statements	as	of	December	31,	2012,	except	for	the	impairment	of	Pullmantur related	assets,	as	described	in	Note	3.	Goodwill,	Note	4.	Intangible	Assets,	Note	5.	Property	and	Equipment	and	Note	12.	Income	Taxes.

# Note	2.	Summary	of	Significant	Accounting	Policies

# Revenues	and	Expenses

								Deposits	received	on	sales	of	passenger	cruises	are	initially	recorded	as	customer	deposit	liabilities	on	our	balance	sheet.	Customer	deposits	are	subsequently recognized	as	passenger	ticket	revenues,	together	with	revenues	from	onboard	and	other	goods	and	services	and	all	associated	direct	costs	of	a	voyage,	upon	completion of	voyages	with	durations	of	ten	days	or	less,	and	on	a	pro-rata	basis	for	voyages	in	excess	of	ten	days.	Revenues	and	expenses	include	port	costs	that	vary	with	guest head	counts.	The	amounts	of	such	port	costs	included	in	passenger	ticket	revenues	on	a	gross	basis	were	$459.8	million,	$442.9	million	and	$398.0	million	for	the	years 2012,	2011	and	2010,	respectively.

# Cash	and	Cash	Equivalents

								Cash	and	cash	equivalents	include	cash	and	marketable	securities	with	original	maturities	of	less	than	90	days.

# NOTES	TO	THE	CONSOLIDATED	FINANCIAL	STATEMENTS	(Continued)

# Note	2.	Summary	of	Significant	Accounting	Policies	(Continued)

# Inventories

								Inventories	consist	of	provisions,	supplies	and	fuel	carried	at	the	lower	of	cost	(weighted-average)	or	market.

# Property	and	Equipment

								Property	and	equipment	are	stated	at	cost	less	accumulated	depreciation	and	amortization.	We	capitalize	interest	as	part	of	the	cost	of	acquiring	certain	assets. Improvement	costs	that	we	believe	add	value	to	our	ships	are	capitalized	as	additions	to	the	ship	and	depreciated	over	the	shorter	of	the	improvements'	estimated	useful lives	or	that	of	the	associated	ship.	The	estimated	cost	and	accumulated	depreciation	of	replaced	or	refurbished	ship	components	are	written	off	and	any	resulting	losses are	recognized	in	cruise	operating	expenses.	Liquidated	damages	received	from	shipyards	as	a	result	of	the	late	delivery	of	a	new	ship	are	recorded	as	reductions	to	the cost	basis	of	the	ship.

								Depreciation	of	property	and	equipment	is	computed	using	the	straight-line	method	over	the	estimated	useful	life	of	the	asset.	The	useful	lives	of	our	ships	are generally	30	years,	net	of	a	15%	projected	residual	value.	The	30	year	useful	life	of	our	newly	constructed	ships	and	15%	associated	residual	value	are	both	based	on	the weighted-average	of	all	major	components	of	a	ship.	Depreciation	for	assets	under	capital	leases	is	computed	using	the	shorter	of	the	lease	term	or	related	asset	life.	(See Note	5.	Property	and	Equipment.)

								Depreciation	of	property	and	equipment	is	computed	utilizing	the	following	useful	lives:

|  | Years |
| :--- | :--- |
| Ships | 30 |
| Ship\timprovements | 3-20 |
| Buildings\tand\timprovements | 10-40 |
| Computer\thardware\tand\tsoftware | 3-5 |
| Transportation\tequipment\tand\tother | 3-30 |
| Leasehold\timprovements | Shorter\tof\tremaining\tlease\tterm\tor\tuseful\tlife\t3-30 |

								We	review	long-lived	assets	for	impairment	whenever	events	or	changes	in	circumstances	indicate,	based	on	estimated	undiscounted	future	cash	flows,	that	the carrying	amount	of	these	assets	may	not	be	fully	recoverable.	We	evaluate	asset	impairment	in	accordance	with	ASC	360-10-35-23	(Property,	Plant	and	Equipment), which	requires	that,	for	purposes	of	recognition	and	measurement	of	an	impairment	loss,	long-lived	assets	be	grouped	with	other	assets	and	liabilities	at	the	lowest	level for	which	identifiable	cash	flows	are	largely	independent	of	the	cash	flows	of	other	assets	and	liabilities.	The	lowest	level	for	which	we	maintain	identifiable	cash	flows that	are	independent	of	the	cash	flows	of	other	assets	and	liabilities	is	at	the	ship	level	for	our	ships	and	at	the	aggregated	asset	group	level	for	our	aircraft.

								We	use	the	deferral	method	to	account	for	drydocking	costs.	Under	the	deferral	method,	drydocking	costs	incurred	are	deferred	and	charged	to	expense	on	a straight-line	basis	over	the	period	to	the	next	scheduled	drydock,	which	we	estimate	to	be	a	period	of	thirty	to	sixty	months	based	on	the	vessel's	age	as	required	by	Class. Deferred	drydock	costs	consist	of	the	costs	to	drydock	the	vessel	and	other	costs	incurred	in	connection	with	the	drydock	which	are	necessary	to	maintain	the	vessel's Class

certification.	Class	certification	is	necessary	in	order	for	our	cruise	ships	to	be	flagged	in	a	specific	country,	obtain	liability	insurance	and	legally	operate	as	passenger cruise	ships.	The	activities	associated	with	those	drydocking	costs	cannot	be	performed	while	the	vessel	is	in	service	and,	as	such,	are	done	during	a	drydock	as	a	planned major	maintenance	activity.	The	significant	deferred	drydock	costs	consist	of	hauling	and	wharfage	services	provided	by	the	drydock	facility,	hull	inspection	and	related activities	(e.g.	scraping,	pressure	cleaning,	bottom	painting),	maintenance	to	steering	propulsion,	stabilizers,	thruster	equipment	and	ballast	tanks,	port	services	such	as tugs,	pilotage	and	line	handling,	and	freight	associated	with	these	items.	We	perform	a	detailed	analysis	of	the	various	activities	performed	for	each	drydock	and	only defer	those	costs	that	are	directly	related	to	planned	major	maintenance	activities	necessary	to	maintain	Class.	The	costs	deferred	are	not	otherwise	routinely	periodically performed	to	maintain	a	vessel's	designed	and	intended	operating	capability.	Repairs	and	maintenance	activities	are	charged	to	expense	as	incurred.

# Goodwill

								Goodwill	represents	the	excess	of	cost	over	the	fair	value	of	net	tangible	and	identifiable	intangible	assets	acquired.	We	review	goodwill	for	impairment	at	the reporting	unit	level	annually	or,	when	events	or	circumstances	dictate,	more	frequently.	The	impairment	review	for	goodwill	consists	of	a	qualitative	assessment	of whether	it	is	more-likely-than-not	that	a	reporting	unit's	fair	value	is	less	than	its	carrying	amount,	and	if	necessary,	a	two-step	goodwill	impairment	test.	Factors	to consider	when	performing	the	qualitative	assessment	include	general	economic	conditions,	limitations	on	accessing	capital,	changes	in	forecasted	operating	results, changes	in	fuel	prices	and	fluctuations	in	foreign	exchange	rates.	If	the	qualitative	assessment	demonstrates	that	it	is	more-likely-than-not	that	the	estimated	fair	value	of the	reporting	unit	exceeds	its	carrying	value,	it	is	not	necessary	to	perform	the	two-step	goodwill	impairment	test.	We	may	elect	to	bypass	the	qualitative	assessment	and proceed	directly	to	step	one,	for	any	reporting	unit,	in	any	period.	We	can	resume	the	qualitative	assessment	for	any	reporting	unit	in	any	subsequent	period.	When performing	the	two-step	goodwill	impairment	test,	the	fair	value	of	the	reporting	unit	is	determined	and	compared	to	the	carrying	value	of	the	net	assets	allocated	to	the reporting	unit.	If	the	fair	value	of	the	reporting	unit	exceeds	its	carrying	value,	no	further	analysis	or	write-down	of	goodwill	is	required.	If	the	fair	value	of	the	reporting unit	is	less	than	the	carrying	value	of	its	net	assets,	the	implied	fair	value	of	the	reporting	unit	is	allocated	to	all	its	underlying	assets	and	liabilities,	including	both recognized	and	unrecognized	tangible	and	intangible	assets,	based	on	their	fair	value.	If	necessary,	goodwill	is	then	written	down	to	its	implied	fair	value.

# Intangible	Assets

								In	connection	with	our	acquisitions,	we	have	acquired	certain	intangible	assets	of	which	value	has	been	assigned	to	them	based	on	our	estimates.	Intangible	assets that	are	deemed	to	have	an	indefinite	life	are	not	amortized,	but	are	subject	to	an	annual	impairment	test,	or	when	events	or	circumstances	dictate,	more	frequently.	The indefinite-life	intangible	asset	impairment	test	consists	of	a	comparison	of	the	fair	value	of	the	indefinite-life	intangible	asset	with	its	carrying	amount.	If	the	carrying amount	exceeds	its	fair	value,	an	impairment	loss	is	recognized	in	an	amount	equal	to	that	excess.	If	the	fair	value	exceeds	its	carrying	amount,	the	indefinite-life intangible	asset	is	not	considered	impaired.

								Other	intangible	assets	assigned	finite	useful	lives	are	amortized	on	a	straight-line	basis	over	their	estimated	useful	lives.

# Advertising	Costs

								Advertising	costs	are	expensed	as	incurred	except	those	costs	which	result	in	tangible	assets,	such	as	brochures,	which	are	treated	as	prepaid	expenses	and	charged to	expense	as	consumed.	Advertising	costs	consist	of	media	advertising	as	well	as	brochure,	production	and	direct	mail	costs.	Media	advertising	was	$200.9	million, $193.7	million	and	$166.0	million,	and	brochure,	production	and	direct	mail	costs	were	$130.4	million,	$124.3	million	and	$104.1	million	for	the	years	2012,	2011	and 2010,	respectively.

								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	have	non- derivative	financial	instruments	designated	as	hedges	of	our	net	investment	in	our	foreign	operations	and	investments.	Although	certain	of	our	derivative	financial instruments	do	not	qualify	or	are	not	accounted	for	under	hedge	accounting,	we	do	not	hold	or	issue	derivative	financial	instruments	for	trading	or	speculative	purposes.

								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) income	until	the	underlying	hedged	transactions	are	recognized	in	earnings.

								The	foreign-currency	transaction	gain	or	loss	of	our	non-derivative	financial	instruments	designated	as	hedges	of	our	net	investment	in	foreign	operations	and investments	are	recognized	as	a	component	of	accumulated	other	comprehensive	(loss)	income	along	with	the	associated	foreign	currency	translation	adjustment	of	the foreign	operation.

								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.	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.	In	addition,	the	ineffective	portion	of	our	highly	effective	hedges	is	recognized	in	earnings immediately	and	reported	in	other	income	(expense)	in	our	consolidated	statements	of	comprehensive	income	(loss).

								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.

# Foreign	Currency	Translations	and	Transactions

								We	translate	assets	and	liabilities	of	our	foreign	subsidiaries	whose	functional	currency	is	the	local	currency,	at	exchange	rates	in	effect	at	the	balance	sheet	date. We	translate	revenues	and	expenses	at	weighted-average	exchange	rates	for	the	period.	Equity	is	translated	at	historical	rates	and	the	resulting	foreign	currency translation	adjustments	are	included	as	a	component	of	accumulated	other	comprehensive	(loss)	income,	which	is	reflected	as	a	separate	component	of	shareholders' equity.	Exchange	gains	or	losses	arising	from	the	remeasurement	of	monetary	assets	and	liabilities	denominated	in	a	currency	other	than	the	functional	currency	of	the entity	involved	are	immediately	included	in	our	earnings,	except	for	certain	liabilities	that	have	been	designated	to	act	as	a	hedge	of	a	net	investment	in	a	foreign operation	or	investment.	Exchange	losses	were	$11.8	million,	$1.6	million	and	$9.5	million	for	the	years	2012,	2011	and	2010,	respectively,	and	were	recorded	within other	income	(expense).	The	majority	of	our	transactions	are	settled	in	United	States	dollars.	Gains	or	losses	resulting	from	transactions	denominated	in	other	currencies are	recognized	in	income	at	each	balance	sheet	date.

# 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	with	which	we	have	long-term	relationships	and	which	have credit	risks	acceptable	to	us	or	where	the	credit	risk	is	spread	out	among	a	large	number	of	counterparties.	In	addition,	our	exposure	under	foreign	currency	forward contracts,	foreign	currency	collar	options,	fuel	call	options,	interest	rate	and	fuel	swap	agreements	was	approximately	$60.8	million	and	$135.5	million	as	of December	31,	2012	and	December	31,	2011,	respectively,	and	was	limited	to	the	cost	of	replacing	the	contracts	in	the	event	of	non-performance	by	the	counterparties	to the	contracts,	all	of	which	are	currently	our	lending	banks.	We	do	not	anticipate	nonperformance	by	any	of	our	significant	counterparties.	In	addition,	we	have established	guidelines	regarding	credit	ratings	and	instrument	maturities	that	we	follow	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.

# Earnings	Per	Share

								Basic	earnings	per	share	is	computed	by	dividing	net	income	by	the	weighted-average	number	of	shares	of	common	stock	outstanding	during	each	period.	Diluted earnings	per	share	incorporates	the	incremental	shares	issuable	upon	the	assumed	exercise	of	stock	options	and	conversion	of	potentially	dilutive	securities.	(See Note	10.	Earnings	Per	Share.)

# Stock-Based	Employee	Compensation

								We	measure	and	recognize	compensation	expense	at	the	fair	value	of	employee	stock	awards.	Compensation	expense	for	awards	and	the	related	tax	effects	are recognized	as	they	vest.	We	use	the	estimated	amount	of	expected	forfeitures	to	calculate	compensation	costs	for	all	outstanding	awards.

								We	operate	five	wholly-owned	cruise	brands,	Royal	Caribbean	International,	Celebrity	Cruises,	Azamara	Club	Cruises,	Pullmantur	and	CDF	Croisières	de	France. In	addition,	we	have	a	50%	investment	in	a	joint	venture	with	TUI	AG	which	operates	the	brand	TUI	Cruises.	We	believe	our	global	brands	possess	the	versatility	to enter	multiple	cruise	market	segments	within	the	cruise	vacation	industry.	Although	each	of	our	brands	has	its	own	marketing	style	as	well	as	ships	and	crews	of	various sizes,	the	nature	of	the	products	sold	and	services	delivered	by	our	brands	share	a	common	base	(i.e.	the	sale	and	provision	of	cruise	vacations).	Our	brands	also	have similar	itineraries	as	well	as	similar	cost	and	revenue	components.	In	addition,	our	brands	source	passengers	from	similar	markets	around	the	world	and	operate	in similar	economic	environments	with	a	significant	degree	of	commercial	overlap.	As	a	result,	our	brands	(including	TUI	Cruises)	have	been	aggregated	as	a	single reportable	segment	based	on	the	similarity	of	their	economic	characteristics,	types	of	consumers,	regulatory	environment,	maintenance	requirements,	supporting	systems and	processes	as	well	as	products	and	services	provided.	Our	Chairman	and	Chief	Executive	Officer	has	been	identified	as	the	chief	operating	decision-maker	and	all significant	operating	decisions	including	the	allocation	of	resources	are	based	upon	the	analyses	of	the	Company	as	one	segment.

								Information	by	geographic	area	is	shown	in	the	table	below.	Passenger	ticket	revenues	are	attributed	to	geographic	areas	based	on	where	the	reservation	originates.

|  | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Passenger\tticket\trevenues: |  |  |  |
| United\tStates | 51% | 51% | 55% |
| All\tother\tcountries | 49% | 49% | 45% |

# Recently	Adopted	Accounting	Standards

								In	January	2012,	we	adopted	authoritative	guidance	issued	in	2011,	the	purpose	of	which	was	to	achieve	consistent	fair	value	measurements	and	to	clarify	certain disclosure	requirements	for	fair	value	measurements.	The	guidance	includes	clarification	about	when	the	concept	of	highest	and	best	use	is

applicable	to	fair	value	measurements,	requires	quantitative	disclosures	about	inputs	used	and	qualitative	disclosures	about	the	sensitivity	of	recurring	Level	3 measurements,	and	requires	the	classification	of	all	assets	and	liabilities	measured	at	fair	value	in	the	fair	value	hierarchy,	including	those	assets	and	liabilities	which	are not	recorded	at	fair	value	but	for	which	fair	value	is	disclosed.	The	adoption	of	this	guidance	did	not	have	a	material	impact	on	our	consolidated	financial	statements. See	Note	13.	Fair	Value	Measurements	and	Derivative	Instruments	for	our	disclosures	required	under	this	guidance.

								In	January	2012,	we	adopted	authoritative	guidance	issued	in	2011	on	the	presentation	of	comprehensive	income	which	requires	an	entity	to	present	components	of net	income	and	other	comprehensive	income	in	one	continuous	statement,	referred	to	as	the	statement	of	comprehensive	income,	or	in	two	separate	but	consecutive statements.	The	new	guidance	eliminates	the	option	to	report	other	comprehensive	income	and	its	components	in	the	statement	of	changes	in	equity.	We	elected	to present	this	information	using	one	continuous	statement.	See	our	consolidated	statements	of	comprehensive	income	(loss).

# Recent	Accounting	Pronouncements

								In	July	2012,	amended	guidance	was	issued	regarding	the	periodic	impairment	testing	of	indefinite-lived	intangible	assets.	The	new	guidance	allows	an	entity	to assess	qualitative	factors	to	determine	if	it	is	more-likely-than-not	that	indefinite-lived	intangible	assets	might	be	impaired	and,	based	on	this	assessment,	whether	it	is necessary	to	perform	the	quantitative	impairment	tests.	This	guidance	will	be	effective	for	our	annual	and	interim	impairment	tests	for	fiscal	years	beginning	after September	15,	2012.	The	adoption	of	this	newly	issued	guidance	will	not	have	an	impact	on	our	consolidated	financial	statements.

								In	February	2013,	amended	guidance	was	issued	over	the	presentation	of	amounts	reclassified	from	accumulated	other	comprehensive	income	to	net	income.	The new	guidance	requires	an	entity	to	present,	either	in	a	single	note	or	parenthetically	on	the	face	of	the	financial	statements,	the	effect	of	significant	amounts	reclassified from	each	component	of	accumulated	other	comprehensive	income	based	on	its	source	(e.g.,	the	release	due	to	cash	flow	hedges	from	interest	rate	contracts)	and	the income	statement	line	items	affected	by	the	reclassification	(e.g.,	interest	income	or	interest	expense).	This	guidance	must	be	applied	prospectively	and	will	be	effective for	our	interim	and	annual	reporting	periods	beginning	after	December	15,	2012.	The	disclosures	will	be	added	to	our	future	filings	when	applicable.

# Note	3.	Goodwill

								The	carrying	amount	of	goodwill	attributable	to	our	Royal	Caribbean	International	and	the	Pullmantur	reporting	units	was	as	follows	(in	thousands):

|  | International | Pullmantur | Other | Total |
| :--- | :--- | :--- | :--- | :--- |
| Balance\tat\tDecember\t31,\t2010 | $283,723 | $473,383 | $2,222 | $759,328 |
| Foreign\tcurrency\ttranslation\tadjustment | — | (14,254) | 1,463 | (12,791) |
| Balance\tat\tDecember\t31,\t2011 | $283,723 | $459,129 | $3,685 | $746,537 |
| Impairment\tcharge | — | (319,214) | — | (319,214) |
| Foreign\tcurrency\ttranslation\tadjustment | — | 5,624 | 28 | 5,652 |
| Balance\tat\tDecember\t31,\t2012 | $283,723 | $145,539 | $3,713 | $432,975 |

								During	the	fourth	quarter	of	2012,	we	performed	a	qualitative	assessment	of	whether	it	was	more-likely-than-not	that	our	Royal	Caribbean	International	reporting unit's	fair	value	was	less	than	its	carrying	amount	before	applying	the	two-step	goodwill	impairment	test.	The	qualitative	analysis	included	assessing	the	impact	of certain	factors	such	as	general	economic	conditions,	limitations	on	accessing	capital,	changes	in	forecasted	operating	results,	changes	in	fuel	prices	and	fluctuations	in foreign	exchange	rates.	Based	on	our	qualitative	assessment,	we	concluded	that	it	was	more-likely-than-not	that	the	estimated	fair	value	of	the	Royal	Caribbean International	reporting	unit	exceeded	its	carrying	value	as	of	December	31,	2012	and	thus,	did	not	proceed	to	the	two-step	goodwill	impairment	test.	No	indicators	of impairment	exist	primarily	because	the	reporting	unit's	fair	value	has	consistently	exceeded	its	carrying	value	by	a	significant	margin,	its	financial	performance	has	been solid	in	the	face	of	mixed	economic	environments	and	forecasts	of	operating	results	generated	by	the	reporting	unit	appear	sufficient	to	support	its	carrying	value.

								In	addition,	during	the	fourth	quarter	of	2012,	we	performed	our	annual	impairment	review	of	goodwill	for	Pullmantur's	reporting	unit.	We	did	not	perform	a qualitative	assessment	but	instead	proceeded	directly	to	the	two-step	goodwill	impairment	test.	We	estimated	the	fair	value	of	the	Pullmantur	reporting	unit	using	a probability-weighted	discounted	cash	flow	model.	The	principal	assumptions	used	in	the	discounted	cash	flow	model	are	projected	operating	results,	weighted-average cost	of	capital,	and	terminal	value.	The	discounted	cash	flow	model	used	our	2013	projected	operating	results	as	a	base.	To	that	base	we	added	future	years'	cash	flows assuming	multiple	revenue	and	expense	scenarios	that	reflect	the	impact	on	Pullmantur's	reporting	unit	of	different	global	economic	environments	beyond	2013.	We assigned	a	probability	to	each	revenue	and	expense	scenario.	We	discounted	the	projected	cash	flows	using	rates	specific	to	Pullmantur's	reporting	unit	based	on	its weighted-average	cost	of	capital.

								The	estimation	of	fair	value	utilizing	discounted	expected	future	cash	flows	includes	numerous	uncertainties	which	require	our	significant	judgment	when	making assumptions	of	expected	revenues,	operating	costs,	marketing,	selling	and	administrative	expenses,	interest	rates,	ship	additions	and	retirements	as	well	as	assumptions regarding	the	cruise	vacation	industry's	competitive	environment	and	general	economic	and	business	conditions,	among	other	factors.	Pullmantur	is	a	brand	targeted primarily	at	the	Spanish,	Portuguese	and	Latin	American	markets	and	although	Pullmantur	has	diversified	its	passenger	sourcing	over	the	past	few	years,	Spain	still represents	Pullmantur's	largest	market.	As	previously	disclosed,	during	2012	European	economies	continued	to	demonstrate	instability

# Note	3.	Goodwill	(Continued)

in	light	of	heightened	concerns	over	sovereign	debt	issues	as	well	as	the	impact	of	proposed	austerity	measures	on	certain	markets.	The	Spanish	economy	was	more severely	impacted	than	many	other	economies	and	there	is	significant	uncertainty	as	to	when	it	will	recover.	In	addition,	the	impact	of	the	Costa	Concordia	incident	has had	a	more	lingering	effect	than	expected	and	the	impact	in	future	years	is	uncertain.	These	factors	were	identified	in	the	past	as	significant	risks	which	could	lead	to	the impairment	of	Pullmantur's	goodwill.

								More	recently,	the	Spanish	economy	has	progressively	worsened	and	forecasts	suggest	the	challenging	operating	environment	will	continue	for	an	extended	period of	time.	The	unemployment	rate	in	Spain	reached	26%	during	the	fourth	quarter	of	2012	and	is	expected	to	rise	further	in	2013.	The	International	Monetary	Fund,	which had	projected	GDP	growth	of	1.8%	a	year	ago,	revised	its	2013	GDP	projections	downward	for	Spain	to	a	contraction	of	1.3%	during	the	fourth	quarter	of	2012	and further	reduced	it	to	a	contraction	of	1.5%	in	January	of	2013.	During	the	latter	half	of	2012	new	austerity	measures,	such	as	increases	to	the	Value	Added	Tax,	cuts	to benefits,	the	phasing	out	of	exemptions	and	the	suspension	of	government	bonuses,	were	implemented	by	the	Spanish	government.	We	believe	these	austerity	measures are	having	a	larger	impact	on	consumer	confidence	and	discretionary	spending	than	previously	anticipated.	As	a	result,	there	has	been	a	significant	deterioration	in bookings	from	guests	sourced	from	Spain	during	the	2013	WAVE	season.	The	combination	of	all	of	these	factors	has	caused	us	to	negatively	adjust	our	cash	flow projections,	especially	our	closer-in	Net	Yield	assumptions	and	the	expectations	regarding	future	capacity	growth	for	the	brand.

								Based	on	our	updated	cash	flow	projections,	we	determined	the	implied	fair	value	of	goodwill	for	the	Pullmantur	reporting	unit	was	$145.5	million	and	recognized an	impairment	charge	of	$319.2	million.	This	impairment	charge	was	recognized	in	earnings	during	the	fourth	quarter	of	2012	and	is	reported	within	Impairment	of Pullmantur	related	assets	within	our	consolidated	statements	of	comprehensive	income	(loss).	There	have	been	no	goodwill	impairment	charges	related	to	the Pullmantur	reporting	unit	in	prior	periods.	See	Note	13.	Fair	Value	Measurements	and	Derivative	Instruments	for	further	discussion.

								If	the	Spanish	economy	weakens	further	or	recovers	more	slowly	than	contemplated	or	if	the	economies	of	other	markets	(e.g.	France,	Brazil,	Latin	America) perform	worse	than	contemplated	in	our	discounted	cash	flow	model,	or	if	there	are	material	changes	to	the	projected	future	cash	flows	used	in	the	impairment	analyses, especially	in	Net	Yields,	an	additional	impairment	charge	of	the	Pullmantur	reporting	unit's	goodwill	may	be	required.

# Note	4.	Intangible	Assets

								Intangible	assets	are	reported	in	other	assets	in	our	consolidated	balance	sheets	and	consist	of	the	following	(in	thousands):

|  | 2012 | 2011 |
| :--- | :--- | :--- |
| Indefinite-life\tintangible\tasset—Pullmantur\ttrademarks\tand\ttrade\tnames | $218,883 | $225,679 |
| Impairment\tcharge | (17,356) | — |
| Foreign\tcurrency\ttranslation\tadjustment | 3,339 | (6,796) |
| Total | $204,866 | $218,883 |

# Note	4.	Intangible	Assets	(Continued)

								During	the	fourth	quarter	of	2012,	we	performed	the	annual	impairment	review	of	our	trademarks	and	trade	names	using	a	discounted	cash	flow	model	and	the relief-from-royalty	method.	The	royalty	rate	used	is	based	on	comparable	royalty	agreements	in	the	tourism	and	hospitality	industry.	These	trademarks	and	trade	names relate	to	Pullmantur	and	we	have	used	a	discount	rate	comparable	to	the	rate	used	in	valuing	the	Pullmantur	reporting	unit	in	our	goodwill	impairment	test.

								As	described	in	Note	3.	Goodwill,	the	continued	deterioration	of	the	Spanish	economy	caused	us	to	negatively	adjust	our	cash	flow	projections	for	the	Pullmantur reporting	unit,	especially	our	closer-in	Net	Yield	assumptions	and	the	timing	of	future	capacity	growth	for	the	brand.	Based	on	our	updated	cash	flow	projections,	we determined	that	the	fair	value	of	Pullmantur's	trademarks	and	trade	names	no	longer	exceeded	their	carrying	value.	Accordingly,	we	recognized	an	impairment	charge	of approximately	$17.4	million	to	write	down	trademarks	and	trade	names	to	their	fair	value	of	$204.9	million.	This	impairment	charge	was	recognized	in	earnings	during the	fourth	quarter	of	2012	and	is	reported	within	Impairment	of	Pullmantur	related	assets	within	our	consolidated	statements	of	comprehensive	income	(loss).	See Note	13.	Fair	Value	Measurements	and	Derivative	Instruments	for	further	discussion.

								If	the	Spanish	economy	weakens	further	or	recovers	more	slowly	than	contemplated	or	if	the	economies	of	other	markets	(e.g.	France,	Brazil,	Latin	America) perform	worse	than	contemplated	in	our	discounted	cash	flow	model,	or	if	there	are	material	changes	to	the	projected	future	cash	flows	used	in	the	impairment	analyses, especially	in	Net	Yields,	an	additional	impairment	charge	of	Pullmantur's	trademarks	and	trade	names	may	be	required.

								Finite-life	intangible	assets	and	related	accumulated	amortization	are	immaterial	to	our	2012,	2011,	and	2010	consolidated	financial	statements.

# Note	5.	Property	and	Equipment

								Property	and	equipment	consists	of	the	following	(in	thousands):

|  | 2012 | 2011 |
| :--- | :--- | :--- |
| Ships | $20,855,606 | $19,958,127 |
| Ship\timprovements | 1,341,137 | 976,363 |
| Ships\tunder\tconstruction | 169,274 | 227,123 |
| Land,\tbuildings\tand\timprovements,\tincluding\tleasehold\timprovements\tand\tport\tfacilities | 377,821 | 360,399 |
| Computer\thardware\tand\tsoftware,\ttransportation\tequipment\tand\tother | 698,865 | 748,102 |
| Total\tproperty\tand\tequipment | 23,442,703 | 22,270,114 |
| Less—accumulated\tdepreciation\tand\tamortization | (5,991,669) | (5,335,297) |
|  | $17,451,034 | $16,934,817 |

								Ships	under	construction	include	progress	payments	for	the	construction	of	new	ships	as	well	as	planning,	design,	interest,	commitment	fees	and	other	associated costs.	We	capitalized	interest	costs	of	$13.3	million,	$14.0	million	and	$28.1	million	for	the	years	2012,	2011	and	2010,	respectively.

								During	2012,	Pullmantur	delivered	Ocean	Dream	to	an	unrelated	third	party	as	part	of	a	six	year	bareboat	charter	agreement.	The	charter	agreement	provides	a renewal	option	exercisable	by	the

# Note	5.	Property	and	Equipment	(Continued)

unrelated	third	party	for	an	additional	four	years.	The	charter	agreement	constitutes	an	operating	lease	and	charter	revenue	is	being	recognized	on	a	straight-line	basis over	the	six	year	charter	term.	The	charter	revenue	recognized	during	2012	was	not	material	to	our	results	of	operations.

								We	review	our	long-lived	assets	for	impairment	whenever	events	or	changes	in	circumstances	indicate,	based	on	estimated	undiscounted	future	cash	flows.	As	part of	step	two	of	our	goodwill	impairment	analysis,	(see	Note	3.	Goodwill	for	further	information),	we	identified	that	the	estimated	fair	values	of	certain	long-lived	assets, consisting	of	three	aircraft	owned	and	operated	by	Pullmantur	Air,	were	less	than	their	carrying	values.	As	a	result,	we	proceeded	to	our	long-lived	asset	impairment test.	Pullmantur's	strategy	to	further	diversify	its	passenger	sourcing	and	reduce	its	reliance	on	the	Spanish	market	has	led	us	to	reduce	the	number	of	years	during	which we	expect	to	use	these	aircraft	when	performing	the	undiscounted	cash	flow	test.	The	undiscounted	cash	flows	for	Pullmantur's	aircraft	were	determined	to	be	less	than their	carrying	value	and	an	impairment	charge	of	$48.9	million	was	required.	This	impairment	charge	was	recognized	in	earnings	during	the	fourth	quarter	of	2012	and	is reported	within	Impairment	of	Pullmantur	related	assets	within	our	consolidated	statements	of	comprehensive	income	(loss).	See	Note	13.	Fair	Value	Measurements and	Derivative	Instruments	for	further	discussion.

								In	December	2012,	we	reached	a	conditional	agreement	with	STX	France	to	build	the	third	Oasis-class	ship	for	Royal	Caribbean	International.	The	agreement	is subject	to	certain	closing	conditions	and	is	expected	to	become	effective	in	the	first	quarter	of	2013.	The	ship	will	have	a	capacity	of	approximately	5,400	berths	and	is expected	to	enter	service	in	the	second	quarter	of	2016.	If	the	agreement	becomes	effective,	Pullmantur's	Atlantic	Star,	which	has	been	out	of	operation	since	2009,	will be	transferred	to	an	affiliate	of	STX	France	as	part	of	the	consideration.	The	transfer	is	not	expected	to	result	in	a	gain	or	a	loss.	In	addition,	we	have	an	option	to construct	a	fourth	Oasis-class	ship	which	will	expire	five	days	prior	to	the	first	anniversary	of	the	effective	date	of	the	contract.

# Note	6.	Other	Assets

# Variable	Interest	Entities

								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	Grand	Bahama	Shipyard	Ltd.	("Grand	Bahama"),	a	ship	repair	and	maintenance	facility	in	which	we	have	a	40%	noncontrolling	interest, is	a	VIE.	The	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	and	certain	emergency	repairs	as	may	be	required.	We	have	determined	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	December	31,	2012	and	December	31,	2011,	the	net	book	value	of	our	investment	in	Grand	Bahama,	including equity	and	loans,	was	approximately	$59.3	million	and	$61.4	million,

# Note	6.	Other	Assets	(Continued)

respectively,	which	is	also	our	maximum	exposure	to	loss	as	we	are	not	contractually	required	to	provide	any	financial	or	other	support	to	the	facility.	The	majority	of our	loans	to	Grand	Bahama	are	in	non-accrual	status	and	the	majority	of	this	amount	was	included	within	other	assets	in	our	consolidated	balance	sheets.	We	received approximately	$5.5	million	and	$10.8	million	in	principal	and	interest	payments	related	to	loans	that	are	in	accrual	status	from	Grand	Bahama	in	2012	and	2011, respectively,	and	recorded	income	associated	with	our	investment	in	Grand	Bahama.	We	monitor	credit	risk	associated	with	these	loans	through	our	participation	on	the Grand	Bahama's	board	of	directors	along	with	our	review	of	the	Grand	Bahama's	financial	statements	and	projected	cash	flows.	Based	on	this	review,	we	believe	the	risk of	loss	associated	with	these	loans	was	not	probable	as	of	December	31,	2012.

								In	conjunction	with	our	acquisition	of	Pullmantur	in	2006,	we	obtained	a	49%	noncontrolling	interest	in	Pullmantur	Air,	S.A.	("Pullmantur	Air"),	a	small	air business	that	operates	four	aircraft	in	support	of	Pullmantur's	operations.	We	have	determined	Pullmantur	Air	is	a	VIE	for	which	we	are	the	primary	beneficiary	as	we have	the	power	to	direct	the	activities	that	most	significantly	impact	its	economic	performance	and	we	are	obligated	to	absorb	its	losses.	In	accordance	with	authoritative guidance,	we	have	consolidated	the	assets	and	liabilities	of	Pullmantur	Air.	We	do	not	separately	disclose	the	assets	and	liabilities	of	Pullmantur	Air	as	they	are immaterial	to	our	December	31,	2012	and	December	31,	2011	consolidated	financial	statements.

								We	have	determined	that	TUI	Cruises	GmbH,	our	50%-owned	joint	venture	which	operates	the	brand	TUI	Cruises,	is	a	VIE.	As	of	December	31,	2012	and December	31,	2011,	our	investment	in	TUI	Cruises,	including	equity	and	loans,	was	approximately	$287.0	million	and	$282.0	million,	respectively,	and	the	majority	of this	amount	was	included	within	other	assets	in	our	consolidated	balance	sheets.	In	addition,	in	conjunction	with	our	sale	of	Celebrity	Mercury	to	TUI	Cruises	in	2011, we	and	TUI	AG	each	guaranteed	the	repayment	of	50%	of	an	€180.0	million	5-year	bank	loan	provided	to	TUI	Cruises	(refer	to	further	details	below).	This	investment amount	and	the	potential	obligations	under	this	guarantee	are	substantially	our	maximum	exposure	to	loss.	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 our	joint	venture	partner,	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	connection	with	our	sale	of	Celebrity	Mercury	to	TUI	Cruises	in	2011,	we	provided	a	debt	facility	to	TUI	Cruises	in	the	amount	of	up	to	€90.0	million.	The outstanding	principal	amount	of	the	facility	as	of	December	31,	2012	was	€68.6	million,	or	approximately	$90.4	million	based	on	the	exchange	rate	at	December	31, 2012.	The	loan	bears	interest	at	the	rate	of	9.54%	per	annum,	is	payable	over	seven	years,	is	50%	guaranteed	by	TUI	AG	(our	joint	venture	partner)	and	is	secured	by second	mortgages	on	both	of	TUI	Cruises'	ships,	Mein	Schiff	1	and	Mein	Schiff	2.	In	addition,	we	and	TUI	AG	each	guaranteed	the	repayment	of	50%	of	an €180.0	million	5-year	bank	loan	provided	to	TUI	Cruises,	of	which	€153.0	million,	or	approximately	$201.7	million	based	on	the	exchange	rate	at	December	31,	2012, remains	outstanding	as	of	December	31,	2012,	in	connection	with	the	sale	of	the	ship.	The	bank	loan	amortizes	quarterly	and	is	secured	by	first	mortgages	on	both	Mein Schiff	1	and	Mein	Schiff	2.	Based	on	current	facts	and	circumstances,	we	do	not	believe	potential	obligations	under	this	guarantee	are	probable.

								During	2011,	TUI	Cruises	entered	into	a	construction	agreement	with	STX	Finland	to	build	its	first	newbuild	ship,	scheduled	for	delivery	in	the	second	quarter	of 2014.	TUI	Cruises	has	entered	into	a	credit	agreement	for	financing	of	up	to	80%	of	the	contract	price	of	the	ship.	The	remaining	portion	of	the	contract	price	of	the	ship will	be	funded	through	either	TUI	Cruises'	cash	flows	from	operations	or	loans	and/or	equity	contributions	from	us	and	TUI	AG.	The	construction	agreement	includes certain	restrictions	on	each	of	our	and	TUI	AG's	ability	to	reduce	our	current	ownership	interest	in	TUI	Cruises	below	37.5%	through	the	construction	period.	In addition,	the	credit	agreement	extends	this	restriction	through	2019.	In	2012,	TUI	Cruises	exercised	their	option	under	the	agreement	with	STX	Finland	to	construct	their second	newbuild	ship,	scheduled	for	delivery	in	the	second	quarter	of	2015.	TUI	Cruises	has	secured	a	bank	financing	commitment	for	80%	of	the	contract	price	of	the second	ship	as	well	as	a	conditional	guarantee	commitment	from	Finnvera,	the	official	export	agency	of	Finland,	for	95%	of	the	bank	loan	facility.	The	remaining portion	of	the	contract	price	of	the	ship	will	be	funded	through	either	TUI	Cruises'	cash	flows	from	operations	or	loans	and/or	equity	contributions	from	us	and	TUI	AG.

# Note	7.	Long-Term	Debt

								Long-term	debt	consists	of	the	following	(in	thousands):

(1) Corresponds	to	Oasis	of	the	Seas	unsecured	term	loan.	With	respect	to	60%	of	the	financing,	the	lenders	have	the	ability	to	exit	the	facility	in October	2015.

(2) Corresponds	to	Allure	of	the	Seas	unsecured	term	loan.	With	respect	to	100%	of	the	financing,	the	lenders	have	the	ability	to	exit	the	facility	in October	2017.

# Note	7.	Long-Term	Debt	(Continued)

								During	2012,	the	credit	facility	we	obtained	in	connection	with	our	purchase	of	Celebrity	Solstice	was	assigned	from	Celebrity	Solstice	Inc.,	our	subsidiary	which owns	the	ship,	to	Royal	Caribbean	Cruises	Ltd.	Similar	assignments	were	simultaneously	made	from	the	ship-owning	subsidiary	level	to	Royal	Caribbean	Cruises	Ltd. for	the	facilities	relating	to	Celebrity	Equinox,	Celebrity	Eclipse,	Celebrity	Silhouette,	Celebrity	Reflection,	Oasis	of	the	Seas	and	Allure	of	the	Seas.	Other	than	the change	in	borrower,	the	economic	terms	of	these	facilities	remain	unchanged.	These	amended	facilities	each	contain	covenants	substantially	similar	to	the	covenants	in our	other	parent-level	ship	financing	agreements	and	our	revolving	credit	facilities.

								During	2012,	we	entered	into	a	credit	agreement	which	provides	an	unsecured	Euro-denominated	term	loan	facility	in	an	amount	up	to	€365.0	million,	or approximately	$481.2	million	based	on	the	exchange	rate	at	December	31,	2012.	We	have	the	ability	to	draw	on	this	facility	at	anytime	on	or	prior	to	June	30,	2013.	As of	February	25,	2013,	we	have	not	drawn	on	this	facility.	All	amounts	borrowed	under	the	facility	will	be	due	and	payable	at	maturity	in	July	2017.	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	would	have	been	3.0%	as	of December	31,	2012.	In	addition,	we	are	subject	to	a	commitment	fee	of	1.05%	per	annum	of	the	undrawn	amount.	We	anticipate	the	proceeds	from	this	loan	facility	will be	used	primarily	as	part	of	our	refinancing	strategy	for	our	maturities	in	2013	and	2014.	In	connection	with	entering	into	this	facility,	we	prepaid	our	$100.0	million unsecured	floating	rate	term	loan	due	September	2013.

								During	2012,	we	borrowed	$290.0	million	under	an	unsecured	term	loan.	All	amounts	borrowed	under	the	facility	will	be	due	and	payable	at	maturity	in	February 2016.	Interest	on	the	loan	accrues	at	a	floating	rate	based	on	LIBOR	plus	the	applicable	margin.	The	applicable	margin	varies	with	our	debt	rating	and	was	2.5%	as	of December	31,	2012.	The	proceeds	of	this	loan	were	used	to	reduce	outstanding	balances	on	our	revolving	credit	facilities.

								During	2012,	we	repurchased	€255.0	million	or	approximately	$328.0	million	in	aggregate	principal	amount	of	our	€1.0	billion	5.625%	unsecured	senior	notes	due 2014	through	a	debt	tender	offer	conducted	outside	of	the	United	States.	Total	consideration	paid	in	connection	with	the	tender	offer,	including	premium	and	related fees	and	expenses	was	$344.6	million.	The	repurchase	of	the	unsecured	senior	notes	resulted	in	a	loss	on	the	early	extinguishment	of	debt	of	approximately	$7.5	million which	was	recognized	in	earnings	immediately	and	is	reported	within	extinguishment	of	unsecured	senior	notes	in	our	consolidated	statements	of	comprehensive	income (loss).

								During	2012,	we	took	delivery	of	Celebrity	Reflection.	To	finance	the	purchase,	we	borrowed	$673.5	million	under	our	previously	committed	unsecured	term	loan which	is	95%	guaranteed	by	Hermes.	The	loan	amortizes	semi-annually	over	12	years	and	bears	interest	at	LIBOR	plus	a	margin	of	0.40%,	currently	approximately 1.03%.	In	addition	during	2011,	we	entered	into	forward-starting	interest	rate	swap	agreements	which	effectively	convert	the	floating	rate	available	to	us	per	the	credit agreement	to	a	fixed	rate	(including	applicable	margin)	of	2.85%	effective	April	2013	through	the	remaining	term	of	the	loan.	See	Note	13.	Fair	Value	Measurements and	Derivative	Instruments	for	further	information	regarding	these	agreements.

								In	November	2012,	we	issued	$650.0	million	of	5.25%	unsecured	senior	notes	due	2022	at	par.	The	net	proceeds	from	the	offering	were	used	to	repay	amounts outstanding	under	our	unsecured	revolving	credit	facilities.	The	issuance	of	these	notes	was	part	of	our	refinancing	strategy	for	our	maturities	in	2013	and	2014.

								During	2012,	we	increased	the	capacity	of	our	revolving	credit	facility	due	July	2016	by	$233.0	million,	bringing	our	total	capacity	under	this	facility	to	$1.1	billion as	of	December	31,	2012.	We	have	the	ability	to	increase	the	capacity	of	this	facility	by	an	additional	$67.0	million	subject	to	the	receipt	of	additional	or	increased lender	commitments.	We	also	have	a	revolving	credit	facility	due	November	2014	with	capacity	of	$525.0	million	as	of	December	31,	2012,	giving	us	aggregate revolving	borrowing	capacity	of	$1.6	billion.

								Certain	of	our	unsecured	ship	financing	term	loans	are	guaranteed	by	the	export	credit	agency	in	the	respective	country	in	which	the	ship	is	constructed.	In consideration	for	these	guarantees,	depending	on	the	financing	arrangement,	we	pay	to	the	applicable	export	credit	agency	fees	that	range	from	either	(1)	0.88%	to	1.48% per	annum	based	on	the	outstanding	loan	balance	semi-annually	over	the	term	of	the	loan	(subject	to	adjustment	in	certain	of	our	facilities	based	upon	our	credit	ratings) or	(2)	an	upfront	fee	of	approximately	2.3%	to	2.37%	of	the	maximum	loan	amount.	We	amortize	the	fees	that	are	paid	upfront	over	the	life	of	the	loan	and	those	that are	paid	semi-annually	over	each	respective	payment	period.	We	classify	these	fees	within	Debt	issuance	costs	in	our	consolidated	statements	of	cash	flows	and	within Other	Assets	in	our	consolidated	balance	sheets.

								Under	certain	of	our	agreements,	the	contractual	interest	rate,	facility	fee	and/or	export	credit	agency	fee	vary	with	our	debt	rating.

								The	unsecured	senior	notes	and	senior	debentures	are	not	redeemable	prior	to	maturity,	except	that	certain	series	may	be	redeemed	upon	the	payment	of	a	make- whole	premium.

								Following	is	a	schedule	of	annual	maturities	on	long-term	debt	including	capital	leases	as	of	December	31,	2012	for	each	of	the	next	five	years	(in	thousands):

| Year |  |
| :--- | :--- |
| 2013 | $1,519,483 |
| 2014 | 1,549,057 |
| 2015 | 1,063,539 |
| 2016 | 1,102,119 |
| 2017 | 744,174 |
| Thereafter | 2,511,575 |

# Note	8.	Shareholders'	Equity

								In	December	2012,	we	declared	and	paid	a	cash	dividend	on	our	common	stock	of	$0.12	per	share.	During	the	fourth	quarter	of	2012,	we	also	paid	a	cash	dividend on	our	common	stock	of	$0.12	per	share	which	was	declared	during	the	third	quarter	of	2012.	We	declared	and	paid	cash	dividends	on	our	common	stock	of	$0.10	per share	during	the	first	and	second	quarters	of	2012.	During	the	first	quarter	of	2012,	we	also	paid	a	cash	dividend	on	our	common	stock	of	$0.10	per	share	which	was declared	during	the	fourth	quarter	of	2011.

# Note	9.	Stock-Based	Employee	Compensation

								We	currently	have	awards	outstanding	under	three	stock-based	compensation	plans,	which	provide	for	awards	to	our	officers,	directors	and	key	employees.	The plans	consist	of	a	1995	Incentive	Stock	Option	Plan,	a	2000	Stock	Award	Plan,	and	a	2008	Equity	Plan.	Our	ability	to	issue	new	awards	under	the	1995	Incentive	Stock Option	Plan	and	the	2000	Stock	Award	Plan	terminated	in	accordance	with	the	terms	of	the	plans	in	February	2005	and	September	2009,	respectively.	The	2008	Equity Plan,	as	amended,	provides	for	the	issuance	of	up	to	11,000,000	shares	of	our	common	stock	pursuant	to	grants	of	(i)	incentive	and	non-qualified	stock	options,	(ii)	stock appreciation	rights,	(iii)	restricted	stock,	(iv)	restricted	stock	units	and	(v)	performance	shares.	During	any	calendar	year,	no	one	individual	shall	be	granted	awards	of more	than	500,000	shares.	With	limited	exceptions,	options	and	restricted	stock	units	outstanding	as	of	December	31,	2012	vest	in	equal	installments	over	four	to	five years	from	the	date	of	grant.	With	certain	limited	exceptions,	options	and	restricted	stock	units	are	forfeited	if	the	recipient	ceases	to	be	a	director	or	employee	before	the shares	vest.	Options	are	granted	at	a	price	not	less	than	the	fair	value	of	the	shares	on	the	date	of	grant	and	expire	not	later	than	ten	years	after	the	date	of	grant.

								In	2012,	we	redesigned	our	long-term	incentive	award	program	and	began	to	grant	performance	shares	to	our	officers	in	lieu	of	stock	options.	Under	our	prior program,	our	officers	received	a	combination	of	stock	options	and	restricted	stock	units.	Beginning	in	2012,	our	officers	instead	receive	their	long-term	incentive	awards through	a	combination	of	performance	shares	and	restricted	stock	units.	Each	performance	share	award	is	expressed	as	a	target	number	of	performance	shares	based upon	the	fair	market	value	of	our	common	stock	on	the	date	the	award	is	issued.	The	actual	number	of	shares	underlying	each	award	(not	to	exceed	200%	of	the	target number	of	performance	shares)	will	be	determined	based	upon	the	Company's	achievement	of	a	specified	performance	target	range.	For	the	grants	awarded	in	2012,	the performance	target	is	diluted	earnings	per	share	("EPS")	for	the	year	ended	December	31,	2012,	as	adjusted	by	the	Compensation	Committee	of	our	Board	of	Directors for	events	that	are	outside	of	management's	control.	In	2012,	we	issued	a	target	number	of	329,088	performance	shares	which	will	vest	on	the	third	anniversary	of	the award	issue	date.	In	February	2013,	the	Compensation	Committee	of	our	Board	of	Directors	set	the	actual	payout	level	at	94%	of	target	for	the	performance	shares issued	in	2012.

								We	also	provide	an	Employee	Stock	Purchase	Plan	("ESPP")	to	facilitate	the	purchase	by	employees	of	up	to	800,000	shares	of	common	stock	in	the	aggregate. Offerings	to	employees	are	made	on	a	quarterly	basis.	Subject	to	certain	limitations,	the	purchase	price	for	each	share	of	common	stock	is	equal	to	90%	of	the	average	of the	market	prices	of	the	common	stock	as	reported	on	the	New	York	Stock	Exchange	on	the	first	business	day	of	the	purchase	period	and	the	last	business	day	of	each month	of	the	purchase	period.	35,927,	28,802,	and	30,054	shares	of	our	common	stock	were	issued	under	the	ESPP	at	a	weighted-average	price	of	$25.58,	$29.46	and $27.87	during	2012,	2011	and	2010,	respectively.

								Under	the	chief	executive	officer's	employment	agreement,	we	issued	10,086	shares	of	our	common	stock	per	quarter	during	2012,	2011	and	2010	to	the	chief executive	officer.

# Note	9.	Stock-Based	Employee	Compensation	(Continued)

								Total	compensation	expense	recognized	for	employee	stock-based	compensation	for	the	years	ended	December	31,	2012,	2011	and	2010	were	as	follows:

| Classification	of	expense | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| In\tthousands |  |  |  |
| Marketing,\tselling\tand\tadministrative\texpenses | $24,153 | $23,803 | $27,598 |
| Payroll\tand\trelated\texpenses | — | — | 475 |
| Total\tCompensation\tExpense | $24,153 | $23,803 | $28,073 |

								The	fair	value	of	each	stock	option	grant	is	estimated	on	the	date	of	grant	using	the	Black-Scholes	option	pricing	model.	The	estimated	fair	value	of	stock	options, less	estimated	forfeitures,	is	amortized	over	the	vesting	period	using	the	graded-vesting	method.	The	majority	of	our	stock	option	grants	occur	early	in	our	fiscal	year. The	assumptions	used	in	the	Black-Scholes	option-pricing	model	are	as	follows:

|  | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Dividend\tyield | 1.5% | 0.0% | 0.0% |
| Expected\tstock\tprice\tvolatility | 46.0% | 46.0% | 45.0% |
| Risk-free\tinterest\trate | 1.1% | 2.6% | 2.6% |
| Expected\toption\tlife | 6\tyears | 6\tyears | 6\tyears |

								Expected	volatility	was	based	on	a	combination	of	historical	and	implied	volatilities.	The	risk-free	interest	rate	was	based	on	United	States	Treasury	zero	coupon issues	with	a	remaining	term	equal	to	the	expected	option	life	assumed	at	the	date	of	grant.	The	expected	term	was	calculated	based	on	historical	experience	and represents	the	time	period	options	actually	remain	outstanding.	We	estimate	forfeitures	based	on	historical	pre-vesting	forfeiture	rates	and	revise	those	estimates	as appropriate	to	reflect	actual	experience.

								Stock	options	activity	and	information	about	stock	options	outstanding	are	summarized	in	the	following	tables:

|  |  |  | Weighted- |  |
| :--- | :--- | :--- | :--- | :--- |
|  |  | Weighted- | Average |  |
|  |  | Average | Remaining | Aggregate |
|  | Number\tof | Exercise | Contractual | Intrinsic |
|  |  |  |  | (1) |
| Stock\tOptions\tActivity | Options | Price | Term | Value |
|  |  |  | (years) | (in\tthousands) |
| Outstanding\tat\tJanuary\t1,\t2012 | 5,671,658 | $30.62 | 6.15 | $21,887 |
| Granted | 7,576 | $26.06 |  |  |
| Exercised | (906,011) | $16.24 |  |  |
| Canceled | (324,450) | $30.40 |  |  |
| Outstanding\tat\tDecember\t31,\t2012 | 4,448,773 | $33.56 | 4.55 | $25,522 |
| Vested\tand\texpected\tto\tvest\tat\tDecember\t31,\t2012 | 4,367,468 | $33.54 | 4.50 | $25,113 |
| Options\tExercisable\tat\tDecember\t31,\t2012 | 3,329,335 | $36.24 | 3.83 | $12,565 |

(1) The	intrinsic	value	represents	the	amount	by	which	the	fair	value	of	stock	exceeds	the	option	exercise	price	as	of	December	31,	2012.

								The	weighted-average	estimated	fair	value	of	stock	options	granted	was	$9.90,	$21.39	and	$11.69	during	the	years	ended	December	31,	2012,	2011	and	2010, respectively.	The	total	intrinsic	value	of	stock	options	exercised	during	the	years	ended	December	31,	2012,	2011	and	2010	was	$15.3	million,	$17.3	million	and $26.9	million,	respectively.	As	of	December	31,	2012,	there	was	approximately	$2.6	million	of	total	unrecognized	compensation	cost,	net	of	estimated	forfeitures, related	to	stock	options	granted	under	our	stock	incentive	plans	which	is	expected	to	be	recognized	over	a	weighted-average	period	of	0.6	years.

								Restricted	stock	units	are	converted	into	shares	of	common	stock	upon	vesting	or,	if	applicable,	settle	on	a	one-for-one	basis.	The	cost	of	these	awards	is	determined using	the	fair	value	of	our	common	stock	on	the	date	of	the	grant,	and	compensation	expense	is	recognized	over	the	vesting	period.	Restricted	stock	activity	is summarized	in	the	following	table:

| Restricted	Stock	Activity | Number	of<br>Awards | Average<br>Grant	Date<br>Fair	Value |
| :--- | :--- | :--- |
| Non-vested\tshare\tunits\tat\tJanuary\t1,\t2012 | 1,372,225 | $15.67 |
| Granted | 599,163 | $30.03 |
| Vested | (613,650) | $30.19 |
| Canceled | (161,298) | $26.00 |
| Non-vested\tshare\tunits\texpected\tto\tvest\tas\tof\tDecember\t31,\t2012 | 1,196,440 | $14.02 |

								The	weighted-average	estimated	fair	value	of	restricted	stock	units	granted	during	the	year	ended	December	31,	2011,	and	2010	were	$45.67	and	$25.32, respectively.	The	total	fair	value	of	shares	released	on	the	vesting	of	restricted	stock	units	during	the	years	ended	December	31,	2012,	2011	and	2010	was	$18.8	million, $25.1	million	and	$12.0	million,	respectively.	As	of	December	31,	2012,	we	had	$9.3	million	of	total	unrecognized	compensation	expense,	net	of	estimated	forfeitures, related	to	restricted	stock	unit	grants,	which	will	be	recognized	over	the	weighted-average	period	of	1.1	years.

								Performance	stock	awards	are	converted	into	shares	of	common	stock	upon	vesting	on	a	one-for-one	basis.	We	estimate	the	fair	value	of	each	performance	share when	the	grant	is	authorized	and	the	related	service	period	has	commenced.	We	remeasure	the	fair	value	of	our	performance	shares	in	each	subsequent	reporting	period until	the	grant	date	has	occurred,	which	is	the	date	when	the	performance	conditions	are	satisfied.	We	recognize	compensation	cost	over	the	vesting	period	based	on	the probability	of	the	service	and	performance	conditions	being	achieved	adjusted	for	each	subsequent	fair	value	measurement	until	the	grant	date.	If	the	specified	service and	performance	conditions	are	not

met,	compensation	expense	will	not	be	recognized	and	any	previously	recognized	compensation	expense	will	be	reversed.	Performance	stock	activity	is	summarized	in the	following	table:

								As	of	December	31,	2012,	we	had	$6.2	million	of	total	unrecognized	compensation	expense,	net	of	estimated	forfeitures,	related	to	performance	share	unit	grants, which	will	be	recognized	over	the	weighted-average	period	of	2	years.

# Note	10.	Earnings	Per	Share

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

|  | 2012 | 2011 | 2010 |
| :--- | :--- | :--- | :--- |
| Net\tincome\tfor\tbasic\tand\tdiluted\tearnings\tper\tshare | $18,287 | $607,421 | $515,653 |
| Weighted-average\tcommon\tshares\toutstanding | 217,930 | 216,983 | 215,026 |
| Dilutive\teffect\tof\tstock\toptions,\tperformance\tstock\tawards\tand\trestricted\tstock\tawards | 1,527 | 2,246 | 2,685 |
| Diluted\tweighted-average\tshares\toutstanding | 219,457 | 219,229 | 217,711 |
| Basic\tearnings\tper\tshare:\nNet\tincome | $0.08 | $2.80 | $2.40 |
| Diluted\tearnings\tper\tshare:\nNet\tincome | $0.08 | $2.77 | $2.37 |

								Diluted	earnings	per	share	did	not	reflect	options	to	purchase	an	aggregate	of	3.1	million,	2.8	million	and	2.6	million	shares	for	each	of	the	years	ended December	31,	2012,	2011	and	2010,	respectively,	because	the	effect	of	including	them	would	have	been	antidilutive.

# Note	11.	Retirement	Plan

								We	maintain	a	defined	contribution	pension	plan	covering	full-time	shoreside	employees	who	have	completed	the	minimum	period	of	continuous	service.	Annual contributions	to	the	plan	are	discretionary	and	are	based	on	fixed	percentages	of	participants'	salaries	and	years	of	service,	not	to	exceed	certain	maximums.	Pension expenses	were	$15.2	million,	$15.3	million	and	$13.3	million	for	the	years	ended	December	31,	2012,	2011	and	2010,	respectively.

# Note	12.	Income	Taxes

								We	and	the	majority	of	our	subsidiaries	are	currently	exempt	from	United	States	corporate	tax	on	United	States	source	income	from	the	international	operation	of ships	pursuant	to	Section	883	of	the	Internal	Revenue	Code.	Regulations	under	Section	883	have	limited	the	activities	that	are	considered	the	international	operation	of	a ship	or	incidental	thereto.	Accordingly,	our	provision	for	United	States	federal	and	state	income	taxes	includes	taxes	on	certain	activities	not	considered	incidental	to	the international	operation	of	our	ships.

								Additionally,	some	of	our	ship-operating	subsidiaries	are	subject	to	income	tax	under	the	tonnage	tax	regimes	of	Malta	or	the	United	Kingdom.	Under	these regimes,	income	from	qualifying	activities	is	not	subject	to	corporate	income	tax.	Instead,	these	subsidiaries	are	subject	to	a	tonnage	tax	computed	by	reference	to	the tonnage	of	the	ship	or	ships	registered	under	the	relevant	provisions	of	the	tax	regimes.	Income	from	activities	not	considered	qualifying	activities,	which	we	do	not consider	significant,	remains	subject	to	Maltese	or	United	Kingdom	corporate	income	tax.

								Income	tax	(expense)	for	items	not	qualifying	under	Section	883,	tonnage	taxes	and	income	taxes	for	the	remainder	of	our	subsidiaries	was	approximately	$(55.5) million,	$(20.7)	million	and	$(20.3)	million	and	was	recorded	within	other	income	(expense)	for	the	years	ended	December	31,	2012,	2011	and	2010,	respectively.	In addition,	all	interest	expense	and	penalties	related	to	income	tax	liabilities	are	classified	as	income	tax	expense	within	other	income	(expense).

								We	do	not	expect	to	incur	income	taxes	on	future	distributions	of	undistributed	earnings	of	foreign	subsidiaries.	Consequently,	no	deferred	income	taxes	have	been provided	for	the	distribution	of	these	earnings.

								We	regularly	review	deferred	tax	assets	for	recoverability	based	on	our	history	of	earnings,	expectations	of	future	earnings,	and	tax	planning	strategies.	Realization of	deferred	tax	assets	ultimately	depends	on	the	existence	of	sufficient	taxable	income	to	support	the	amount	of	deferred	taxes.	A	valuation	allowance	is	recorded	in those	circumstances	in	which	we	conclude	it	is	not	more-likely-than-not	we	will	recover	the	deferred	tax	assets	prior	to	their	expiration.	As	previously	disclosed,	during 2012	European	economies	continued	to	demonstrate	instability	in	light	of	heightened	concerns	over	sovereign	debt	issues	as	well	as	the	impact	of	proposed	austerity measures	on	certain	markets.	The	Spanish	economy	was	more	severely	impacted	than	many	other	economies	around	the	world	where	we	operate	and	there	is	significant uncertainty	as	to	when	it	will	recover.	In	addition,	the	impact	of	the	Costa	Concordia	incident	has	had	a	more	lingering	effect	than	expected	and	the	impact	in	future years	is	uncertain.	Please	refer	to	Note	3.	Goodwill	for	further	information.

								During	the	fourth	quarter	of	2012,	we	updated	our	deferred	tax	asset	recoverability	analysis	for	projections	included	within	the	goodwill	valuation	model.	These projections,	including	the	impact	of	recently	enacted	laws	regarding	net	operating	loss	utilization,	and	the	review	of	our	tax	planning	strategies	show	that	it	is	no	longer more-likely-than-not	that	we	will	recover	the	deferred	tax	assets	prior	to	their	expiration.	As	such,	we	have	determined	that	a	100%	valuation	allowance	of	our	deferred tax	assets	was	required	resulting	in	a	deferred	income	tax	expense	of	$33.7	million.	In	addition,	Pullmantur	has	a	deferred	tax	liability	that	was	recorded	at	the	time	of acquisition.	This	liability	represents	the	tax	effect	of	the	basis	difference	between	the	tax	and	book	values	of	the	trademarks	and	trade	names	that	were	acquired	at	the time	of	the	acquisition.	Due	to	the	impairment	charge	related	to	these	intangible	assets,	we	reduced	the	deferred	tax	liability	by	$5.2	million	to	$61.5	million.	The	net $28.5	million	impact	of	these	adjustments	was	recognized	in	earnings	during	the	fourth	quarter	of	2012	and	is	reported	within	Other	(expense)	income	in	our	statements of	comprehensive	income	(loss).

# Note	12.	Income	Taxes	(Continued)

								Deferred	tax	assets,	related	valuation	allowances	and	deferred	tax	liabilities	related	to	our	operations	are	not	material	as	of	December	31,	2012	and	2011.

# Note	13.	Fair	Value	Measurements	and	Derivative	Instruments

# Fair	Value	Measurements

								The	estimated	fair	value	of	our	financial	instruments	that	are	not	measured	at	fair	value	on	a	recurring	basis,	categorized	based	upon	the	fair	value	hierarchy,	are	as follows	(in	thousands):

(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	our	creditworthiness	based	on	publicly	available	credit	default	swap	rates.

(3) Inputs	that	are	unobservable.	The	Company	did	not	use	any	Level	3	inputs	as	of	December	31,	2012	and	December	31,	2011.

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

(5) Consists	of	unsecured	revolving	credit	facilities,	unsecured	senior	notes,	senior	debentures	and	unsecured	term	loans.	Does	not	include	our	capital	lease	obligations.

# Note	13.	Fair	Value	Measurements	and	Derivative	Instruments	(Continued)

# Other	Financial	Instruments

								The	carrying	amounts	of	accounts	receivable,	accounts	payable,	accrued	interest	and	accrued	expenses	approximate	fair	value	at	December	31,	2012	and December	31,	2011.

								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 | Fair	Value	Measurements |  |  | Fair	Value	Measurements | Fair	Value	Measurements |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | at\tDecember\t31,\t2012\tUsing | at\tDecember\t31,\t2012\tUsing | at\tDecember\t31,\t2012\tUsing | at\tDecember\t31,\t2012\tUsing | at\tDecember\t31,\t2011\tUsing | at\tDecember\t31,\t2011\tUsing | at\tDecember\t31,\t2011\tUsing | at\tDecember\t31,\t2011\tUsing |
| Description | Total | Level\t1^(1) | Level\t2^(2) | Level\t3^(3) | Total | Level\t1^(1) | Level\t2^(2) | Level\t3^(3) |
| Assets: |  |  |  |  |  |  |  |  |
| Derivative\tfinancial |  |  |  |  |  |  |  |  |
| (4) |  |  |  |  |  |  |  |  |
| instruments | $96,489 | — | 96,489 | — | $201,130 | — | 201,130 | — |
| (5) |  |  |  |  |  |  |  |  |
| Investments | $6,231 | 6,231 | — | — | $6,941 | 6,941 | — | — |
| Total\tAssets | $102,720 | $6,231 | $96,489 | $— | $208,071 | $6,941 | $201,130 | $— |
| Liabilities: |  |  |  |  |  |  |  |  |
| Derivative\tfinancial |  |  |  |  |  |  |  |  |
| (6) |  |  |  |  |  |  |  |  |
| instruments | $85,119 | — | 85,119 | — | $84,344 | — | 84,344 | — |
| Total\tLiabilities | $85,119 | $— | $85,119 | $— | $84,344 | $— | $84,344 | $— |

(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,	cross	currency	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.	For	fuel	call	options,	fair	value	is	determined	by	using the	prevailing	market	price	for	the	instruments	consisting	of	published	price	quotes	for	similar	assets	based	on	recent	transactions	in	an	active market.	Fair	value	for	foreign	currency	collar	options	is	determined	by	using	standard	option	pricing	models	with	inputs	based	on	the	options' contract	terms,	such	as	exercise	price	and	maturity,	and	readily	available	public	market	data,	such	as	foreign	exchange	curves,	foreign	exchange volatility	levels	and	discount	rates.	All	derivative	instrument	fair	values	take	into	account	the	creditworthiness	of	the	counterparty	and	the Company.

(4) Consists	of	foreign	currency	forward	contracts	and	collar	options,	interest	rate	swaps,	cross	currency	swaps,	fuel	swaps	and	purchased	fuel	call options.	Please	refer	to	the	"Fair	Value	of	Derivative	Instruments"	table	for	breakdown	by	instrument	type.

(5) Consists	of	exchange-traded	equity	securities	and	mutual	funds.

(6) Consists	of	interest	rate	swaps,	fuel	swaps,	foreign	currency	forward	contracts	and	sold	fuel	call	options.	Please	refer	to	the	"Fair	Value	of Derivative	Instruments"	table	for	breakdown	by	instrument	type.

								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

December	31,	2012	or	December	31,	2011,	or	that	will	be	realized	in	the	future,	and	do	not	include	expenses	that	could	be	incurred	in	an	actual	sale	or	settlement.

								The	following	table	presents	information	about	the	Company's	goodwill,	indefinite-life	intangible	assets	and	long-lived	assets	for	our	Pullmantur	reporting	unit recorded	at	fair	value	on	a	nonrecurring	basis	(in	thousands):

| Description | Total | Level	1 | Level	2 | Level	3 | Total	Impairment |
| :--- | :--- | :--- | :--- | :--- | :--- |
| (1) |  |  |  |  |  |
| Pullmantur\tGoodwill | $145,539 | — | — | 145,539 | $319,214 |
| Indefinite-life\tintangible\tasset—Pullmantur\ttrademarks\tand\ttrade |  |  |  |  |  |
| (2) |  |  |  |  |  |
| names | $204,866 | — | — | 204,866 | $17,356 |
| (3) |  |  |  |  |  |
| Long-lived\tassets—Pullmantur\taircraft | $62,288 | — | — | 62,288 | $48,874 |

(1) We	estimated	the	fair	value	of	the	Pullmantur	reporting	unit	using	a	probability-weighted	discounted	cash	flow	model.	The	principal assumptions	used	in	the	discounted	cash	flow	model	are	projected	operating	results,	weighted-average	cost	of	capital,	and	terminal	value. Significantly	impacting	these	assumptions	were	the	anticipated	future	transfer	of	vessels	from	our	other	cruise	brands	to	Pullmantur.	The discounted	cash	flow	model	used	our	2013	projected	operating	results	as	a	base.	To	that	base	we	added	future	years'	cash	flows	through	2017 assuming	multiple	revenue	and	expense	scenarios	that	reflect	the	impact	of	different	global	economic	environments	for	this	period	on Pullmantur's	reporting	unit.	We	assigned	a	probability	to	each	revenue	and	expense	scenario.	We	discounted	the	projected	cash	flows	using	rates specific	to	Pullmantur's	reporting	unit	based	on	its	weighted-average	cost	of	capital,	which	was	determined	to	be	10%.

(2) We	estimated	the	fair	value	of	our	indefinite-life	intangible	asset	using	a	discounted	cash	flow	model	and	the	relief-from-royalty	method.	We used	a	royalty	rate	of	3%	based	on	comparable	royalty	agreements	in	the	tourism	and	hospitality	industry.	These	trademarks	and	trade	names relate	to	Pullmantur	and	we	have	used	a	discount	rate	of	11%,	comparable	to	the	rate	used	in	valuing	the	Pullmantur	reporting	unit.

(3) We	estimated	the	fair	value	of	our	long-lived	assets	using	an	undiscounted	cash	flow	model.	A	significant	assumption	in	performing	the undiscounted	cash	flow	test	was	the	number	of	years	during	which	we	expect	to	use	these	aircraft.

								Goodwill	and	indefinite-life	intangible	assets	related	to	Pullmantur	with	a	carrying	amount	of	$459.1	million	and	$218.9	million,	respectively,	were	written	down	to its	implied	fair	value	of	$145.5	million	and	its	fair	value	of	$204.9	million,	respectively.	The	impairment	charges,	totaling	approximately	$336.6	million,	were recognized	during	the	fourth	quarter	of	2012	and	are	reported	within	Impairment	of	Pullmantur	related	assets	in	our	consolidated	statements	of	comprehensive	income (loss).	Pullmantur's	goodwill	and	indefinite-life	intangible	assets	are	reported	within	goodwill	and	other	assets,	respectively,	in	our	consolidated	balance	sheets.

								Long-lived	assets	with	a	carrying	amount	of	$116.3	million,	were	written	down	to	their	fair	value	of	$62.3	million,	resulting	in	a	loss	of	$48.9	million	which	was recognized	during	the	fourth	quarter	of	2012	and	is	reported	within	Impairment	of	Pullmantur	related	assets	in	our	consolidated	statements	of

comprehensive	income	(loss).	Long-lived	assets	are	reported	within	property	and	equipment,	net	in	our	consolidated	balance	sheets.

								We	are	exposed	to	market	risk	attributable	to	changes	in	interest	rates,	foreign	currency	exchange	rates	and	fuel	prices.	We	manage	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	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,	we	do	not	hold	or	issue	derivative	financial	instruments	for	trading	or	other	speculative	purposes.	We monitor	our	derivative	positions	using	techniques	including	market	valuations	and	sensitivity	analyses.

								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	have	non- derivative	financial	instruments	designated	as	hedges	of	our	net	investment	in	our	foreign	operations	and	investments.

								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) income	until	the	underlying	hedged	transactions	are	recognized	in	earnings.	The	foreign	currency	transaction	gain	or	loss	of	our	non-derivative	financial	instruments designated	as	hedges	of	our	net	investment	in	foreign	operations	and	investments	are	recognized	as	a	component	of	accumulated	other	comprehensive	(loss)	income along	with	the	associated	foreign	currency	translation	adjustment	of	the	foreign	operation.

								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	commensurate	with	the	contractual	life	of	the	derivative	instrument,	up	to	three years	for	interest	rate	and	foreign	currency	relationships	and	four	years	for	fuel	relationships.	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.	The	determination	of ineffectiveness	is	based	on	the	amount	of	dollar	offset	between	the	change	in	fair	value	of	the	derivative	instrument	and	the	change	in	fair	value	of	the	hedged	item	at	the end	of	the

reporting	period.	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.	In	addition,	the	ineffective	portion	of	our	highly	effective	hedges	is	recognized	in earnings	immediately	and	reported	in	other	income	(expense)	in	our	consolidated	statements	of	comprehensive	income	(loss).

								Our	exposure	to	market	risk	for	changes	in	interest	rates	relates	to	our	long-term	debt	obligations	including	future	interest	payments.	At	December	31,	2012, approximately	45.8%	of	our	long-term	debt	was	effectively	fixed	as	compared	to	40%	as	of	December	31,	2011.	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	long-term	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	December	31,	2012	and	2011,	we	maintained	interest rate	swap	agreements	on	the	$420.0	million	fixed	rate	portion	of	our	Oasis	of	the	Seas	unsecured	amortizing	term	loan.	The	interest	rate	swap	agreements	effectively changed	the	interest	rate	on	the	balance	of	the	unsecured	term	loan,	which	was	$315.0	million	as	of	December	31,	2012,	from	a	fixed	rate	of	5.41%	to	a	LIBOR-based floating	rate	equal	to	LIBOR	plus	3.87%,	currently	approximately	4.42%.	These	interest	rate	swap	agreements	are	accounted	for	as	fair	value	hedges.

								During	2012,	we	terminated	our	interest	rate	swap	agreements	that	effectively	changed	$350.0	million	of	debt	with	a	fixed	rate	of	7.25%	to	LIBOR-based	floating rate	debt.	The	swaps	were	designated	as	fair	value	hedges	and	terminating	the	swaps	did	not	result	in	a	gain	or	loss.	We	received	net	cash	proceeds	of	approximately $60.6	million	upon	termination.	A	$60.1	million	increase	to	the	carrying	value	of	the	debt	is	being	amortized	to	reduce	interest	expense	over	the	remaining	life	of the	debt.

								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.	During	2012,	we	entered	into	forward-starting	interest	rate swap	agreements	that	hedge	the	anticipated	unsecured	amortizing	term	loans	that	will	finance	our	purchase	of	Quantum	of	the	Seas	and	Anthem	of	the	Seas.	Forward- starting	interest	rate	swaps	hedging	the	Quantum	of	the	Seas	loan	will	effectively	convert	the	interest	rate	for	$735.0	million	of	the	anticipated	loan	balance	from	LIBOR plus	1.30%	to	a	fixed	rate	of	3.74%	(inclusive	of	margin)	beginning	in	October	2014.	Forward-starting	interest	rate	swaps	hedging	the	Anthem	of	the	Seas	loan	will effectively	convert	the	interest	rate	for	$725.0	million	of	the	anticipated	loan	balance	from	LIBOR	plus	1.30%	to	a	fixed	rate	of	3.86%	(inclusive	of	margin)	beginning	in April	2015.	These	interest	rate	swap	agreements	are	accounted	for	as	cash	flow	hedges.

								In	addition,	at	December	31,	2012	and	2011,	we	maintained	forward-starting	interest	rate	swap	agreements	that	beginning	April	2013	effectively	convert	the interest	rate	on	a	portion	of	the	Celebrity	Reflection	unsecured	amortizing	term	loan	balance	for	approximately	$627.2	million	from	LIBOR	plus	0.40%	to	a	fixed-rate (including	applicable	margin)	of	2.85%	through	the	term	of	the	loan.	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	on	our	current	unfunded	financing	arrangements	as	of	December	31,	2012	and 2011	was	$2.4	billion	and	$1.3	billion,	respectively.

								Our	primary	exposure	to	foreign	currency	exchange	rate	risk	relates	to	our	ship	construction	contracts	denominated	in	euros	and	our	growing	international	business operations.	We	enter	into	foreign	currency	forward	contracts,	collar	options	and	cross	currency	swap	agreements	to	manage	portions	of	the	exposure	to	movements	in foreign	currency	exchange	rates.	As	of	December	31,	2012,	the	aggregate	cost	of	our	ships	on	order	was	approximately	$3.6	billion,	of	which	we	had	deposited $131.0	million	as	of	such	date.	Approximately	49.7%	and	43.3%	of	the	aggregate	cost	of	the	ships	under	construction	was	exposed	to	fluctuations	in	the	euro	exchange rate	at	December	31,	2012	and	December	31,	2011,	respectively.	The	majority	of	our	foreign	currency	forward	contracts,	collar	options	and	cross	currency	swap agreements	are	accounted	for	as	cash	flow	or	fair	value	hedges	depending	on	the	designation	of	the	related	hedge.

								We	terminated	a	portion	of	our	foreign	currency	forward	contracts	for	Celebrity	Reflection	prior	to	the	ship's	delivery	in	2012	because	the	forward	contract	maturity dates	were	not	aligned	with	the	ship's	delivery	date.	The	terminated	contracts	were	designated	as	cash	flow	hedges.	Simultaneously,	we	entered	into	new	foreign currency	forward	contracts	that	were	aligned	with	the	ship's	delivery	date	and	designated	the	contracts	as	cash	flow	hedges.	We	effected	the	termination	of	the	contracts by	entering	into	offsetting	foreign	currency	forward	contracts.	Neither	the	original	nor	the	offsetting	foreign	currency	forward	contracts	were	designated	as	hedging instruments.	As	a	result,	subsequent	changes	in	the	fair	value	of	the	original	and	offsetting	foreign	currency	forward	contracts	were	recognized	in	earnings	immediately and	were	reported	within	other	income	(expense)	in	our	consolidated	statements	of	comprehensive	income	(loss).	We	deferred	a	loss	of	$10.8	million	within	accumulated other	comprehensive	income	(loss)	and	a	gain	of	$1.7	million	within	property	and	equipment,	net	for	the	terminated	contracts.	During	the	fourth	quarter	of	2012,	we began	recognition	of	the	net	deferred	loss	of	$9.1	million	to	depreciation	expense	over	the	estimated	useful	life	of	the	vessel.

								During	2012,	we	entered	into	foreign	currency	collar	options	to	hedge	a	portion	of	our	foreign	currency	exposure	on	the	construction	contract	price	of	Anthem	of	the Seas.	These	foreign	currency	collar	options	are	accounted	for	as	cash	flow	hedges	and	mature	in	April	2015.

								During	2012,	we	terminated	our	cross	currency	swap	agreements	that	effectively	changed	€150.0	million	of	our	€1.0	billion	unsecured	senior	notes	which	bear interest	at	a	fixed	rate	of	5.625%,	to	$190.9	million	with	a	fixed	rate	of	6.68%.	We	received	net	cash	proceeds	of	approximately	$9.1	million	and	deferred	a	loss	of $2.6	million	within	accumulated	other	comprehensive	income	(loss)

which	we	will	recognize	within	interest	expense,	net	of	capitalized	interest	over	the	remaining	life	of	the	debt.

								On	a	regular	basis,	we	enter	into	foreign	currency	forward	contracts	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	2012,	we	maintained	an	average of	approximately	$334.7	million	of	these	foreign	currency	forward	contracts.	These	instruments	are	not	designated	as	hedging	instruments.	Changes	in	the	fair	value	of the	foreign	currency	forward	contracts,	of	approximately	$7.7	million,	are	recognized	in	earnings	within	other	income	(expense)	in	our	consolidated	statements	of comprehensive	income	(loss).

								The	notional	amount	of	outstanding	foreign	exchange	contracts	including	our	forward	contracts,	cross	currency	swap	agreements	and	collar	options	as	of December	31,	2012	and	December	31,	2011	was	$1.2	billion	and	$0.9	billion,	respectively.

# Non-Derivative	Instruments

								We	consider	our	investments	in	our	foreign	operations	to	be	denominated	in	relatively	stable	currencies	and	of	a	long-term	nature.	We	partially	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	assigned	debt	as	a	hedge	of	our	net	investments	in	Pullmantur	and	TUI	Cruises	of	approximately	€481.7	million and	€665.0	million,	or	approximately	$635.1	million	and	$863.2	million,	through	December	31,	2012	and	2011,	respectively.

								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	and	fuel	call	options to	mitigate	the	financial	impact	of	fluctuations	in	fuel	prices.

								Our	fuel	swap	agreements	are	accounted	for	as	cash	flow	hedges.	At	December	31,	2012,	we	have	hedged	the	variability	in	future	cash	flows	for	certain	forecasted fuel	transactions	occurring	through	2016.	As	of	December	31,	2012	and	2011,	we	had	entered	into	the	following	fuel	swap	agreements:

| 2012 | — | 738,000 |
| :--- | :--- | :--- |
| 2013 | 755,000 | 644,000 |
| 2014 | 635,000 | 418,000 |
| 2015 | 363,000 | 284,000 |
| 2016 | 104,000 | — |

| 2012 | 0% | 55% |
| :--- | :--- | :--- |
| 2013 | 55% | 47% |
| 2014 | 45% | 30% |
| 2015 | 25% | 20% |
| 2016 | 7% | — |

								At	December	31,	2012	and	2011,	$47.2	million	and	$78.5	million,	respectively,	of	estimated	unrealized	net	gains	associated	with	our	cash	flow	hedges	pertaining	to fuel	swap	agreements	were	expected	to	be	reclassified	to	earnings	from	other	accumulated	comprehensive	(loss)	income	within	the	next	twelve	months.	Reclassification is	expected	to	occur	as	the	result	of	fuel	consumption	associated	with	our	hedged	forecasted	fuel	purchases.

								During	2012,	we	terminated	our	remaining	fuel	call	options	by	selling	offsetting	fuel	call	options.	We	received	net	cash	proceeds	of	approximately	$10.7	million upon	termination.	Subsequent	to	the	termination,	neither	the	original	nor	the	offsetting	fuel	call	options	are	designated	as	hedging	instruments	and	changes	in	their	fair value	are	recognized	in	earnings	immediately	and	are	reported	in	other	income	(expense)	in	our	consolidated	statements	of	comprehensive	income	(loss).

								The	fair	value	and	line	item	caption	of	derivative	instruments	recorded	were	as	follows:

|  | Asset	Derivatives | Asset	Derivatives | Asset	Derivatives | Liability	Derivatives | Liability	Derivatives | Liability	Derivatives |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Balance\tSheet\nLocation | As\tof\nDecember\t31,\n2012\nFair\tValue | As\tof\nDecember\t31,\n2011\nFair\tValue | Balance\tSheet\nLocation | As\tof\nDecember\t31,\n2012\nFair\tValue | As\tof\nDecember\t31,\n2011\nFair\tValue |
| In\tthousands |  |  |  |  |  |  |
| Derivatives\tdesignated\tas\thedging |  |  |  |  |  |  |
| instruments\tunder\tASC\t815-20^(1) |  |  |  |  |  |  |
|  |  |  |  | Other\tlong-term |  |  |
| Interest\trate\tswaps | Other\tAssets | $5,099 | $65,531 | liabilities | $55,471 | $11,369 |
|  |  |  |  | Other\tlong-term |  |  |
| Cross\tcurrency\tswaps | Other\tAssets | — | 2,914 | liabilities | — | — |
|  | Derivative |  |  |  |  |  |
|  | Financial |  |  | Accrued\texpenses\tand |  |  |
| Foreign\tcurrency\tforward\tcontracts | Instruments | 951 | 1,895 | other\tliabilities | 338 | 31,775 |
|  |  |  |  | Other\tlong-term |  |  |
| Foreign\tcurrency\tforward\tcontracts | Other\tAssets | 11,564 | — | liabilities | 1,000 | — |
|  |  |  |  | Other\tlong-term |  |  |
| Foreign\tcurrency\tcollar\toptions | Other\tAssets | 8,974 | — | liabilities | — | — |
|  | Derivative |  |  |  |  |  |
|  | Financial |  |  | Accrued\texpenses\tand |  |  |
| Fuel\tswaps | Instruments | 48,624 | 82,747 | other\tliabilities | 1,761 | — |
|  |  |  |  | Other\tlong-term |  |  |
| Fuel\tswaps | Other\tAssets | 8,585 | 26,258 | liabilities | 6,369 | 29,213 |
| Total\tderivatives\tdesignated\tas\thedging\ninstruments\tunder\t815-20 |  | 83,797 | 179,345 |  | 64,939 | 72,357 |
| Derivatives\tnot\tdesignated\tas\thedging\ninstruments\tunder\tASC\t815-20 |  |  |  |  |  |  |
|  |  |  |  | Other\tlong-term |  |  |
| Foreign\tcurrency\tforward\tcontracts | Other\tAssets | $4,440 | $5,414 | liabilities | $11,475 | $11,987 |
|  | Derivative |  |  |  |  |  |
|  | Financial |  |  | Accrued\texpenses\tand |  |  |
| Fuel\tswaps | Instruments | — | — | other\tliabilities | 475 | — |
|  | Derivative |  |  |  |  |  |
|  | Financial |  |  | Accrued\texpenses\tand |  |  |
| Fuel\tcall\toptions | Instruments | 8,252 | — | other\tliabilities | 8,230 | — |
|  |  |  |  | Other\tlong-term |  |  |
| Fuel\tcall\toptions | Other\tAssets | — | 16,371 | liabilities | — | — |
| Total\tderivatives\tnot\tdesignated\tas\thedging\ninstruments\tunder\t815-20 |  | 12,692 | 21,785 |  | 20,180 | 11,987 |
| Total\tderivatives |  | $96,489 | $201,130 |  | $85,119 | $84,344 |

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

								The	fair	value	and	line	item	caption	of	non-derivative	instruments	recorded	was	as	follows:

| Non-derivative	instrument	designated	as<br>hedging	instrument	under	ASC	815-20 | Balance	Sheet	Location | As	of	December	31,<br>2012 | As	of	December	31,<br>2011 |
| :--- | :--- | :--- | :--- |
| In\tthousands |  |  |  |
| Foreign\tcurrency\tdebt | Current\tportion\tof\tlong-term\tdebt | $17,516 | $17,246 |
| Foreign\tcurrency\tdebt | Long-term\tdebt | 617,593 | 845,971 |
|  |  | $635,109 | $863,217 |

								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:

|  | Location	of	Gain | Amount	of	Gain	(Loss) | Amount	of	Gain	(Loss) | Amount	of	Gain	(Loss) | Amount	of	Gain	(Loss) |
| :--- | :--- | :--- | :--- | :--- | :--- |
|  | (Loss) | Recognized\tin |  | Recognized\tin |  |
|  | Recognized\tin | Income\ton\tDerivative | Income\ton\tDerivative | Income\ton\tHedged\tItem | Income\ton\tHedged\tItem |
| Derivatives\tand\trelated\tHedged\tItems\nunder\tASC\t815-20\tFair\tValue\tHedging\nRelationships | Income\ton\nDerivative\tand\nHedged\tItem | Year\tEnded\nDecember\t31,\n2012 | Year\tEnded\nDecember\t31,\n2011 | Year\tEnded\nDecember\t31,\n2012 | Year\tEnded\nDecember\t31,\n2011 |
| In\tthousands |  |  |  |  |  |
|  | Interest\texpense,\tnet\tof |  |  |  |  |
| Interest\trate\tswaps | interest\tcapitalized | $13,682 | $18,278 | $32,389 | $31,045 |
| Interest\trate\tswaps | Other\tincome\t(expense) | (1,763) | 7,817 | 2,070 | (7,223) |
|  | Extinguishment\tof |  |  |  |  |
| Interest\trate\tswaps | unsecured\tsenior\tnotes | — | — | 9,698 | — |
| Foreign\tcurrency\tforward\tcontracts | Other\tincome\t(expense) | — | 22,901 | — | (23,720) |
|  |  | $11,919 | $48,996 | $44,157 | $102 |

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

|  | Amount	of	Gain	(Loss) | Amount	of	Gain	(Loss) |  | Reclassified	from | Reclassified	from | (Loss) | Portion	and |  |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | Recognized\tin\tOCI | Recognized\tin\tOCI | Location\tof | Accumulated | Accumulated | Recognized | Amount |  |
|  | on\tDerivative | on\tDerivative | Gain | OCI\tinto\tIncome | OCI\tinto\tIncome | in\tIncome\ton | Excluded\tfrom |  |
|  | (Effective\tPortion) | (Effective\tPortion) | (Loss) | (Effective\tPortion) | (Effective\tPortion) | Derivative | Effectiveness\ttesting) | Effectiveness\ttesting) |
|  |  |  | Reclassified |  |  | (Ineffective |  |  |
|  |  |  | from |  |  | Portion\tand |  |  |
|  |  |  | Accumulated |  |  | Amount |  |  |
|  |  |  | OCI\tinto |  |  | Excluded |  |  |
| Derivatives\tunder\nASC\t815-20\tCash\tFlow\nHedging\tRelationships | Year\tEnded\nDecember\t31,\n2012 | Year\tEnded\nDecember\t31,\n2011 | Income\n(Effective\nPortion) | Year\tEnded\nDecember\t31,\n2012 | Year\tEnded\nDecember\t31,\n2011 | from\nEffectiveness\nTesting) | Year\tEnded\nDecember\t31,\n2012 | Year\tEnded\nDecember\t31,\n2011 |
| In\tthousands |  |  |  |  |  |  |  |  |
|  |  |  | Other\tincome |  |  | Other\tincome |  |  |
| Cross\tcurrency\tswaps | $851 | $(6,013) | (expense) | $2,505 | $(15,011) | (expense) | $— | $— |
|  |  |  | Interest |  |  | Other\tincome |  |  |
| Cross\tcurrency\tswaps | — | — | Expense | (2,209) | — | (expense) | — | — |
|  |  |  | Other\tincome |  |  | Other\tincome |  |  |
| Interest\trate\tswaps | (44,971) | (10,131) | (expense) | — | — | (expense) | (348) | (21) |
| Foreign\tcurrency\tforward\tcontracts | 11,928 | (22,263) | Depreciation\nand\namortization\nexpenses |  |  | Other\tincome |  |  |
|  |  |  |  | (953) | (734) | (expense) | — | (1,015) |
| Foreign\tcurrency\tforward\tcontracts | — | (12,375) | Other\tincome\n(expense) |  |  | Other\tincome |  |  |
|  |  |  |  | (953) | (285) | (expense) | — | — |
|  |  |  | Depreciation |  |  |  |  |  |
|  |  |  | and |  |  |  |  |  |
|  |  |  | amortization |  |  | Other\tincome |  |  |
| Foreign\tcurrency\tcollar\toptions | 3,316 | — | expenses | — | — | (expense) | — | — |
|  |  |  |  |  |  | Other\tincome |  |  |
| Fuel\tswaps | 87,014 | 121,262 | Fuel | 110,995 | 162,616 | (expense) | (1,041) | 7,086 |
|  | $58,138 | $70,480 |  | $109,385 | $146,586 |  | $(1,389) | $6,050 |

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

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

| Derivatives	Not	Designated	as	Hedging<br>Instruments	under	ASC	815-20 | Recognized	in	Income<br>on	Derivative | Year	Ended<br>December	31,	2012 | Year	Ended<br>December	31,	2011 |
| :--- | :--- | :--- | :--- |
| In\tthousands |  |  |  |
| Foreign\tcurrency\tforward\tcontracts | Other\tincome\t(expense) | $7,152 | $4,633 |
| Fuel\tswaps | Other\tincome\t(expense) | (3,058) | — |
| Fuel\tcall\toptions | Other\tincome\t(expense) | (5,613) | 18,915 |
|  |  | $(1,519) | $23,548 |

# 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	remain	below	specified	levels. Specifically,	if	on	the	fifth	anniversary	of	entering	into	a	derivative	transaction	and	on	all	succeeding	fifth-year	anniversaries	our	credit	ratings	for	our	senior	unsecured debt	were	to	be	below	BBB-	by	Standard	&	Poor's	and	Baa3	by	Moody's,	then	each	counterparty	to	such	derivative	transaction	with	whom	we	are	in	a	net	liability position	that	exceeds	the	applicable	minimum	call	amount	may	demand	that	we	post	collateral	in	an	amount	equal	to	the	net	liability	position.	The	amount	of	collateral required	to	be	posted	following	such	event	will	change	each	time	our	net	liability	position	increases	or	decreases	by	more	than	the	applicable	minimum	call	amount.	If our	credit	rating	for	our	senior	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.	Currently,	our senior	unsecured	debt	credit	rating	is	BB	with	a	stable	outlook	by	Standard	&	Poor's	and	Ba1	with	a	stable	outlook	by	Moody's.	We	currently	have	four	interest	rate derivative	hedges	that	have	a	term	of	at	least	five	years.	The	aggregate	fair	values	of	all	derivative	instruments	with	such	credit-related	contingent	features	in	net	liability positions	as	of	December	31,	2012	and	December	31,	2011	were	$55.5	million	and	$11.4	million,	respectively,	which	do	not	include	the	impact	of	any	such	derivatives in	net	asset	positions.	The	earliest	that	any	of	the	four	interest	rate	derivative	hedges	will	reach	their	fifth	anniversary	is	November	2016.	Therefore,	as	of	December	31, 2012,	we	were	not	required	to	post	collateral	for	any	of	our	derivative	transactions.

# Note	14.	Commitments	and	Contingencies

# Capital	Expenditures

								During	2012,	we	exercised	our	option	under	the	agreement	with	Meyer	Werft	to	construct	Anthem	of	the	Seas,	the	second	Quantum-class	ship,	with	approximately 4,100	berths	which	is	expected	to	enter

# Note	14.	Commitments	and	Contingencies	(Continued)

service	in	the	second	quarter	of	2015.	During	2011,	we	entered	into	credit	agreements	to	finance	the	construction	of	Quantum	of	the	Seas	and	Anthem	of	the	Seas.	Each facility	makes	available	to	us	unsecured	term	loans	in	an	amount	up	to	the	United	States	dollar	equivalent	corresponding	to	approximately	€595.0	million.	Hermes	has agreed	to	guarantee	to	the	lenders	payment	of	95%	of	the	financing.	The	loans	will	amortize	semi-annually	and	will	mature	12	years	following	delivery	of	the	applicable ship.	Pursuant	to	the	credit	agreements,	interest	on	the	loans	will	accrue	at	our	election	(to	be	made	prior	to	funding)	at	either	a	fixed	rate	of	4.76%	or	a	floating	rate	of LIBOR	plus	a	margin	of	1.30%.	Separately,	we	have	entered	into	forward-starting	interest	rate	swap	agreements	which	effectively	convert	the	floating	rates	available	to us	per	the	credit	agreements	to	fixed	rates	(including	applicable	margin)	of	3.74%	and	3.86%	for	Quantum	of	the	Seas	and	Anthem	of	the	Seas,	respectively.	See	Note	13. Fair	Value	Measurements	and	Derivative	Instruments	for	further	information	regarding	these	swap	agreements.

								As	of	December	31,	2012,	the	aggregate	cost	of	our	ships	on	order	was	approximately	$3.6	billion,	of	which	we	had	deposited	$131.0	million	as	of	such	date. Approximately	49.7%	of	the	aggregate	cost	was	exposed	to	fluctuations	in	the	euro	exchange	rate	at	December	31,	2012.	(See	Note	13.	Fair	Value	Measurements	and Derivative	Instruments).

# Litigation

								A	class	action	complaint	was	filed	in	June	2011	against	Royal	Caribbean	Cruises	Ltd.	in	the	United	States	District	Court	for	the	Southern	District	of	Florida	on behalf	of	a	purported	class	of	stateroom	attendants	employed	onboard	Royal	Caribbean	International	cruise	vessels	alleging	that	they	were	required	to	pay	other	crew members	to	help	with	their	duties	in	violation	of	the	U.S.	Seaman's	Wage	Act.	The	lawsuit	also	alleges	that	certain	stateroom	attendants	were	required	to	work	back	of house	assignments	without	the	ability	to	earn	gratuities	in	violation	of	the	U.S.	Seaman's	Wage	Act.	Plaintiffs	seek	judgment	for	damages,	wage	penalties	and	interest	in an	indeterminate	amount.	In	May	2012,	the	Court	granted	our	motion	to	dismiss	the	complaint	on	the	basis	that	the	applicable	collective	bargaining	agreement	requires any	such	claims	to	be	arbitrated.	Plaintiff's	appeal	of	this	decision	was	dismissed	for	lack	of	jurisdiction	by	the	United	States	Court	of	Appeals,	11 th 	Circuit.	Plaintiffs	are

seeking	to	renew	their	appeal.	We	believe	the	appeal	is	without	merit	as	are	the	underlying	claims	made	against	us	and	we	intend	to	vigorously	defend	ourselves	against them.

# Operating	Leases

								In	addition,	we	are	obligated	under	other	noncancelable	operating	leases	primarily	for	offices,	warehouses	and	motor	vehicles.	As	of	December	31,	2012,	future minimum	lease	payments	under	noncancelable	operating	leases	were	as	follows	(in	thousands):

| Year |  |
| :--- | :--- |
| 2013 | $65,929 |
| 2014 | 60,357 |
| 2015 | 58,206 |
| 2016 | 55,547 |
| 2017 | 52,796 |
| Thereafter | 338,113 |

# 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.

								At	December	31,	2012,	we	have	future	commitments	to	pay	for	our	usage	of	certain	port	facilities,	marine	consumables,	services	and	maintenance	contracts	as follows	(in	thousands):

| Year |  |
| :--- | :--- |
| 2013 | $231,137 |
| 2014 | 144,288 |
| 2015 | 128,805 |
| 2016 | 83,603 |
| 2017 | 94,631 |
| Thereafter | 96,648 |

# Note	15.	Quarterly	Selected	Financial	Data	(Unaudited)

|  | First	Quarter | First	Quarter | Second	Quarter | Second	Quarter | Third	Quarter | Third	Quarter | Fourth	Quarter | Fourth	Quarter |
| :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- |
|  | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 | 2012 | 2011 |
| Total\trevenues^(1) | $1,834,480 | $1,671,995 | $1,821,004 | $1,767,873 | $2,226,390 | $2,321,994 | $1,806,150 | $1,775,401 |
| Operating\tincome^(2) | $135,375 | $149,534 | $96,905 | $168,190 | $452,137 | $507,742 | $(281,307) | $106,162 |
| Net\tincome\t(loss)^(2),(3) | $46,964 | $78,410 | $(3,653) | $93,491 | $367,779 | $398,958 | $(392,803) | $36,562 |
| Earnings\tper\tshare: |  |  |  |  |  |  |  |  |
| Basic | $0.22 | $0.36 | $(0.02) | $0.43 | $1.69 | $1.84 | $(1.80) | $0.17 |
| Diluted | $0.21 | $0.36 | $(0.02) | $0.43 | $1.68 | $1.82 | $(1.80) | $0.17 |
| Dividends\tdeclared\tper\tshare | $0.10 | $— | $0.10 | $— | $0.12 | $0.10 | $0.12 | $0.10 |

(1) Our	revenues	are	seasonal	based	on	the	demand	for	cruises.	Demand	is	strongest	for	cruises	during	the	Northern	Hemisphere's	summer	months	and	holidays.

(2) Amounts	for	the	fourth	quarter	of	2012,	include	an	impairment	charge	of	$385.4	million	to	write	down	Pullmantur's	goodwill	to	its	implied	fair	value	and	to	write	down	trademarks	and trade	names	and	certain	long-lived	assets,	consisting	of	three	aircraft	owned	and	operated	by	Pullmantur	Air,	to	their	fair	value.

(3) Amounts	for	the	fourth	quarter	of	2012,	include	a	$33.7	million	charge	to	record	a	100%	valuation	allowance	related	to	our	deferred	tax	assets	for	Pullmantur.	In	addition,	we	reduced	the deferred	tax	liability	related	to	Pullmantur's	trademarks	and	trade	names	by	$5.2	million.	These	adjustments	resulted	in	an	increase	of	$28.5	million	to	other	(expense)	income.



Question: what was the percentage increase in port costs from 2010 to 2012
Calculation:     port_cost_change = 459.8 - 398.0
 port_cost_percent_change = port_cost_change / 398.0
 answer = port_cost_percent_change * 100
Answer: 15.53%