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Marine Log

August 31, 2006

Royal Caribbean buys Pullmantur

Royal Caribbean Cruises Ltd. (NYSE, OSE: RCL) is to purchase Spanish cruise and tour operator Pullmantur SA.

Pullmantur, formed in 1971, is the largest cruise operator in Spain.

Its cruise division consists of five ships operating in Europe and Latin America. Its tour operations sells travel packages to Spanish guests--including hotel and flights-- primarily to Caribbean resorts, and sells travel packages to Europe aimed at Latin American customers. A small air business that operates three aircraft in support of its cruise and tour.

Pullmantur has offices in Spain and Portugal, with approximately 2,600 employees, and will be Royal Caribbean's first wholly-owned European brand.

Royal Caribbean expects the acquisition to be completed by the fourth quarter of 2006, subject to regulatory approvals.

Royal Caribbean has signed an agreement with the shareholders of Pullmantur to buy all of the capital stock of the company for Euros 430 million ($552 million), plus Pullmantur's net debt of approximately Euros 270 million ($346 million). Royal Caribbean has obtained a committed bridge facility to support the purchase.

As part of the transaction, Pullmantur will withdraw from all Cuba-related activities prior to closing.

"Pullmantur offers a terrific strategic opportunity for Royal Caribbean to further grow our presence in the European and Latin American markets in a major and tangible way," said Richard D. Fain, chairman and chief executive officer of Royal Caribbean Cruises Ltd. "We have made significant inroads into these regions through our Royal Caribbean International and Celebrity Cruises brands, and this combination will allow us to accelerate our growth in these markets. Pullmantur will remain an independent brand under the Royal Caribbean umbrella, keeping its distinctive and successful customer experience."

"Our partnership with Royal Caribbean is a bold strategic move that will enable us to further grow our highly successful brand," said Alfonso Lopez Perez, general manager of Pullmantur. "This is an excellent opportunity to align ourselves with one of the world's largest and most successful companies in the travel industry. We are very familiar with Royal Caribbean, and I know our two organizations will both benefit from the combination."

Royal Caribbean expects this acquisition to be neutral to marginally accretive to 2007 earnings per share and accretive thereafter.

Regarding 2006 earnings, the company continues to expect full year Net Yields to increase in the range of 3% to 4% as compared to 2005, and earnings to be in the range of $2.90 to $3.00 per share, excluding any impact from Pullmantur. Additionally, the company now expects earnings for the third quarter of 2006 to be in the range of $1.55 to $1.60 per share, based on slightly stronger yield expectations of an increase of approximately 3% over the third quarter of 2005. The exact impact of Pullmantur on the company's fourth quarter earnings depends on the timing of the closing and finalization of acquisition adjustments. Since the fourth quarter is traditionally Pullmantur's weakest quarter, any impact is likely to be negative.

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