Royal Caribbean Cruises Ltd. today made a series of financial announcements, the most salient points of which are:

(1) Management identified an error in the previous accounting treatment of interest expense relating to its amortization of certain financing fees and has revised its past financial statements to reflect the correct accounting (the "Interest Expense Revision").

(2) Second quarter EPS was 47 cents before the Interest Expense Revision. After adjusting for the revision, the company reported earnings of 43 cents per share which is the midpoint of previous guidance range of 40 cents to 45 cents.

(3) Excluding the Interest Expense Revision, full year 2011 EPS guidance is now expected to be $3.05 to $3.15, reflecting a 10 cent reduction to prior guidance on continuing pricing softness for Eastern Mediterranean sailings, partially offset by strong cost savings. The Interest Expense Revision is forecasted to reduce 2011 EPS by 20 cents resulting in full year 2011 EPS guidance of $2.85 to $2.95.

(4) The Board of Directors reinstated the quarterly dividend at a rate of 10 cents per share.

Key Highlights

Interest Expense Accounting Revision: The financial statements included in this release have been revised (see attached table). This revision is not a restatement and prior period financial statements may still be relied upon. The company also noted that cash flows, operating income, Net Yields and Net Cruise Costs were not impacted by the revision.

Results For the Second Quarter 2011:

Net income was $93.5 million, or $0.43 per share, versus $53.7 million, or $0.25 per share, in 2010;

Net Yields increased 3.8% (0.8% on a Constant-Currency basis). Excluding Mediterranean sailings, Net Yields increased 9.8% (7.3% on a Constant-Currency basis);

Net Cruise Costs per APCD ("NCC") excluding fuel increased by 2.3% (decreased 0.1% on a Constant-Currency basis).

Full Year Guidance:

While most of the company's product groups are performing at or above prior expectations, ongoing pressures from events in the Eastern Mediterranean have reduced Constant-Currency Net Yield expectations for the year by 150 basis points since April;

Full year 2011 Net Yields are expected to increase approximately 5% (2% to 3% on a Constant-Currency basis). Excluding Mediterranean sailings, yields are expected to increase approximately 8% (approximately 6% on a Constant-Currency basis);

The company has been able to further reduce its cost outlook for the year and has reduced its Constant-Currency NCC excluding fuel by 100 basis points;

Full year 2011 EPS is expected to be within a range of $2.85 to $2.95. Excluding the Interest Expense Revision, EPS expectations would have been $3.05 to $3.15 per share.

Quarterly Dividend Reinstatement: The Company's Board of Directors declared a quarterly dividend of $0.10 per share payable on August 30, 2011 to shareholders of record at the close of business on August 12, 2011.

Financing: During July, the company amended and extended its primary Revolving Credit facility, which now has a capacity of $875 million and is due in 2016. Combined with its $525 million Revolver, the company now has $1.4 billion of Revolving Credit facilities. The company also drew a 12-year, $632 million unsecured financing for the delivery of the Celebrity Silhouette.

"Since our last guidance, the turmoil in the Eastern Mediterranean has caused pricing to deteriorate even further for this region. Fortunately, our other markets are performing exceptionally well and we have been able to take our cost reductions to the next level. As a result, profitability is still growing nicely year-over-year, but these disruptions have undermined our expectations for even better performance this year," said Richard D. Fain, chairman and chief executive officer. Fain continued, "Our long-term outlook remains highly positive and, with a strengthening balance sheet and solid liquidity, we are pleased to reinstate our dividend. It is our intention to continue paying quarterly dividends at this level or higher as our performance improves and we work toward our goal of returning to Investment Grade."

Second Quarter 2011 Results

Royal Caribbean Cruises Ltd. today announced net income of $93.5 million, or $0.43 per share, versus $53.7 million, or $0.25 per share, in 2010.

Revenues improved to $1.8 billion in the second quarter of 2011 compared to $1.6 billion in the second quarter of 2010 as a result of capacity increases and yield improvements. Net Yields for the second quarter of 2011 increased 3.8% (0.8% on a Constant-Currency basis). Excluding Mediterranean sailings, Net Yields in the second quarter improved 9.8% (7.3% on a Constant-Currency basis).

Costs in the second quarter of 2011 were virtually flat on a constant-currency basis and most expense categories performed better than expected. NCC excluding fuel increased 2.3% (decreased 0.1% on a Constant-Currency basis).

At-the-pump fuel pricing declines have lagged those of WTI during the quarter resulting in second quarter fuel pricing very similar to earlier calculations at $599 per metric ton. During the quarter and prior to the market declines in WTI pricing, the company monetized a portion of its WTI option portfolio thereby realizing a significant portion of the first quarter's marked-to-market gains. As a result of these actions, the net marked-to-market valuation of fuel options was immaterial in the second quarter.

2011 Outlook

The company provided the following updates to its forward guidance:

Revenue:

For the full year, the company expects Net Yields to improve approximately 5% on an as-reported basis and 2% to 3% on a Constant-Currency basis. For the third quarter, the company expects Net Yields to improve approximately 5% on an as-reported basis and 1% to 2% on a Constant-Currency basis. Excluding Mediterranean sailings, third quarter Net Yields are expected to increase approximately 11% (approximately 9% on a Constant-Currency basis).

Two factors that influenced the company's outlook in April are again affecting the outlook on yields, geopolitical events and fluctuations in the U.S. Dollar:

Geopolitical: The ongoing conflicts in the Eastern Mediterranean and its spillover effects continues to create hesitation around travel to the region. Some of this was already evident at the time of the company's last guidance. However, during the second quarter, the civil unrest in the Eastern Mediterranean expanded to other areas including Syria and Greece and the level of concern amongst travelers grew as tensions in the region dominated the headlines. This has resulted in a full year yield reduction of approximately 150 basis points versus April guidance. Net Yields for the Mediterranean are now expected to be down approximately 4% for the year, which is in stark contrast with the rest of the company's portfolio. The impact related to the events in Japan was reasonably clear by the time of the last guidance. The impact on bookings was immediate, but the situation has now stabilized. The guidance for 2011 has not changed materially from previous guidance and the outlook going forward is very positive.

Strengthening of the U.S. Dollar: In a reversal of the trends observed in April, the company's revenues have been negatively influenced by the strengthening of the U.S. Dollar relative to other currencies. Assuming current currency exchange rates, the company expects Net Yields for the full year on an as-reported basis to decline approximately 50 basis points from its previous guidance as a result of currency.

The company noted that with the exception of the Eastern Mediterranean, it continues to observe strong demand for its products, especially the Caribbean, Alaska and Northern Europe. The strength of this demand (both rate and volume) reinforces that Eastern Mediterranean pricing softness this summer appears to be geopolitically related and that the economic demand for its products is strong. Further supporting this premise, excluding the Mediterranean, Net Yields for the year are expected to be up approximately 8% (approximately 6% on a Constant-Currency basis).

Net Cruise Costs (Excluding Fuel):

For the full year, the company expects NCC excluding fuel to increase approximately 3% on an as-reported basis and 1% - 2% on a Constant-Currency basis. For the third quarter, the company expects NCC excluding fuel to increase 4% to 5% on an as-reported basis and approximately 2% on a Constant-Currency basis.

The company has remained focused on tight cost controls and has reduced operating costs 100 basis points more than expected through a number of initiatives. In addition the strengthening U.S. Dollar has improved NCC excluding fuel a further 50 basis points since April.

Fuel Expense

The company does not forecast fuel prices and its fuel cost calculations are based on current at-the-pump prices, net of hedging impacts. Based on today's fuel prices the company has included $202 million and $763 million of fuel expense in its third quarter 2011 and full year 2011 guidance, respectively. These figures also take account further energy savings initiatives which continue to reduce the company's already low level of energy consumption.

Forecasted consumption is now 55% hedged for the remainder of 2011 at a WTI barrel equivalent rate of approximately $67 bbl, 55% hedged in 2012 at an equivalent rate of $72 bbl, 47% hedged in 2013 at an equivalent rate of $78 bbl, 30% hedged in 2014 at an equivalent rate of $87 bbl and 20% hedged in 2015 at an equivalent rate of $88 bbl. Additionally, the company also utilizes fuel options to further protect against escalating fuel prices. WTI fuel options at strike prices ranging from $90 bbl to $100 bbl cover an additional 8% and 11% of estimated consumption in 2012 and 2013, respectively.