July 28, 2003

RCL reports second quarter results
Royal Caribbean Cruises Ltd. today announced that net income for the second quarter of 2003 was $55.7 million ($0.28 per share), compared to $66.7 million ($0.34) for second quarter 2002. Revenues for the second quarter of 2003 were $905.8 million, up 10.2% from $821.8 million in 2002. The increase in revenues was primarily due to a 15.5% increase in capacity, partially offset by a 4.6% decline in gross yields. The decrease in gross yields was primarily associated with lower cruise ticket prices and occupancy levels, partially offset by an increase in shipboard revenues. Net yields for the second quarter of 2003 decreased 4.8% from the second quarter of 2002, which was significantly better than the company's previous guidance of a decline of 6% to 9%.

Since the company's last update, bookings and pricing levels have continued to strengthen. Bookings continue to come closer to the sailing date and visibility remains limited making forecasting net yield performance more difficult than in prior years. Royal Caribbean currently forecasts that net yields for the full year will be down approximately 1% to 2% from the prior year. Net yields in the third quarter of 2003 are expected to be down 2% to 4% and net yields for the fourth quarter 2003 are expected to be roughly flat to slightly down.

"We are pleased that the post war recovery is turning out to be better than we originally anticipated," said chairman and CEO Richard D. Fain. "While we will continue to feel the effects for the rest of this year, we remain focused on building our brands and look forward to recovering net yields lost from the unfortunate events of the past two years."

Operating and SG&A expenses, on a per available passenger cruise day basis, were flat on a quarter over quarter basis. Higher fuel costs and the Brilliance of the Seas lease payments were offset by lower commission costs associated with lower ticket prices and other economies of scale. For the quarter, running and SG&A expenses were up 1.7%, on a per available passenger cruise day basis. This increase is primarily attributable to the increase in fuel costs and the Brilliance of the Seas lease payments. The company estimates running and SG&A expenses, on a per available passenger cruise day basis, for the second half of the year to be flat to slightly up. For the full year 2003, running and SG&A expenses, on a per available passenger cruise day basis, are estimated to increase 2% to 3% from the prior year.

During July, the company received $50 million in additional commitments under the terms of its unsecured revolving credit facility. The additional commitments have increased the availability under the facility to $550 million and will not alter any of the facility's existing terms. Assuming interest rates remain at their historically low levels for the remainder of the year, the company now estimates that interest expense for 2003 will be in the range of $265 million to $275 million.

This month the company will add Serenade of the Seas to its fleet, which is the third in the 2,100-passenger Radiance-class series for Royal Caribbean International. The Serenade of the Seas and her sister ships, Radiance of the Seas and Brilliance of the Seas, have nearly three acres of exterior glass with panoramic elevators facing the sea and almost 600 balcony staterooms. In addition to Royal Caribbean International's signature rock-climbing wall, the ship offers recreational activities such as a jogging track, a basketball and volleyball court, a pair of self-leveling pool tables and a fully equipped gym with panoramic views of the sea. These recreational activities are complimented by specialty restaurants such as Chops Grill steakhouse and Portofino Italian restaurant.

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