Port Security Conference

June 16, 2003

Royal Caribbean and Masa-Yards plan 3,600 passenger "Ultra Voyager"
The cruise ship newbuilding market could soon come back to life. Before year's end Royal Caribbean Cruises Ltd. and Kvaerner Masa-Yards hope to ink an agreement for up to two 3,600 passenger, 160,000 gt "Ultra Voyagers"

The two companies announced today that they had developed the design and had signed an agreement that could lead to a firm order. The agreement anticipates that the cruise line and the yard could enter into construction contracts for Ultra-Voyager, provided that certain conditions, such as the euro-dollar exchange rate, move to a more favorable position. Today's conditional agreement anticipates one newbuilding, deliverable in 2006, and one option, for delivery in 2007 or 2008.

The Ultra-Voyager would be a larger and more spacious version of Royal Caribbean's widely popular Voyager-class ships, currently the largest cruise ships in service in the world. The new Ultra-Voyager would be roughly 15 percent larger in space and in passenger capacity carrying 3,600 guests (double-occupancy), 500 more than its predecessors. At just under 160,000 gross registered tons, the Ultra-Voyager would provide even more room for passenger facilities and amenities and would provide even greater economies of scale than her predecessors.

A key factor affecting whether today's agreement leads to a firm contract is how much the current euro-dollar exchange rate improves. Royal Caribbean hopes that circumstances will allow it to finalize the order later this year and that these new berths will enjoy a lower capital and operating cost than earlier Voyager-class ships. The company may activate the agreement up to August 31, 2003, or under certain terms up to December 31, 2003.

"We are pleased that Royal Caribbean continues to place its faith in Kvaerner Masa-Yards and hope that conditions will allow us to proceed with our mutual plans," said Jorma Eloranta, president and chief executive officer of Kvaerner Masa-Yards Inc. "We will work hard to improve our cost efficiency even further, without compromising our high quality standards."

"We are nearing the completion of an aggressive shipbuilding program unprecedented in our history," said Richard D. Fain, chairman and CEO of Royal Caribbean. "That program has allowed us to develop some of the most innovative ships in the world and has greatly improved our economies of scale. We are operating in a different environment today, and we anticipate that the company's future fleet expansion will proceed at a more measured pace in terms of capacity, but not in terms of innovation."

Royal Caribbean has three ships under construction in Finland and in Germany. In addition, it has options for two Radiance-class ships in Germany. Fleet capacity has grown 77 percent in the last four years, the height of the company's growth spurt, or more than 15 percent annually. Adding an Ultra- Voyager in 2006 would increase capacity by 3.0 percent in 2006 and 2.9 percent in 2007. If the decision is made to build an Ultra-Voyager, there would be a two-year gap between the last of the current newbuildings and the first of the Ultra-Voyagers.

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