MIAMI – November 7, 2017 – Royal Caribbean Cruises Ltd. (NYSE: RCL) today reported record third quarter results of $3.49 per share, which includes a $0.20 negative impact from the recent hurricanes; updated full year guidance to a range of $7.35 to $7.40, which includes a $0.26 negative impact from the recent hurricanes; and introduced its new three-year program designed to further drive performance: 20/20 Vision.

Third Quarter 2017 results:

>	US GAAP and Adjusted Net Income were $752.8 million or $3.49 per share.  Last year, US GAAP Net Income was $693.3 million, or $3.21 per share, and Adjusted Net Income was $690.9 million, or $3.20 per share.

>	Gross Yields were up 5.6% on a Constant-Currency basis (up 6.2% As-Reported).  Net Yields were up 5.3% on a Constant-Currency basis (up 5.9% As-Reported).

>	Gross Cruise Costs per APCDs increased 5.2% on a Constant-Currency basis (5.6% As-Reported).  Net Cruise Costs ("NCC") Excluding Fuel per APCDs were up 5.7% on a Constant-Currency basis (up 6.0% As-Reported).

Full Year 2017 Forecast:

>	Adjusted earnings per share are expected to be in the range of $7.35 to $7.40 per share.  This includes a $0.26 negative impact from the recent hurricanes.

>	Net Yields are expected to increase approximately 6.0% on a Constant-Currency and As-Reported basis.

>	NCC Excluding Fuel per APCDs are expected to be up approximately 2.0% on a Constant-Currency and As-Reported basis.

 

The unprecedented series of hurricanes this summer devastated many people and places in Texas, Florida and the Caribbean and our sympathies go out to all those who suffered and are suffering losses.   The repair and recovery efforts have been intense and most of the affected destinations served by our cruise ships have already been reopened or are about to be reopened.  Financially, the storms were unusually impactful because of when and where they hit and the net effect was a cost to the company in excess of $55 million or $0.26 per share.  Most of this impact was from lost revenue, but there were also direct costs associated with the storms and with the company's humanitarian efforts.  In addition, there were significant timing shifts across a wide range of activities as expenses were shifted between quarters to adjust to the storms.  Nevertheless, the company still expects to generate earnings for the year within the increased range of guidance provided prior to the storms.

"We are only weeks away from crossing the finish line of our Double-Double program and I want to thank all of our employees for their remarkable efforts," said Richard D. Fain, chairman and CEO.  "The recent storms presented extraordinary challenges and I am extremely proud of the generosity, strength of character and sense of social responsibility displayed by our employees and the industry as a whole."

20/20 Vision:

Our 20/20 Vision will continue to leverage the culture and discipline instilled by the Double-Double program.  As part of our 20/20 Vision, we look to improve our already excellent guest satisfaction and employee engagement, while delivering our environmental commitments.  These operational drivers are expected to further strengthen the foundation of the company and help deliver double-digit adjusted earnings per share by fiscal 2020, while further improving on our double-digit Return on Invested Capital.

"20/20 Vision will serve as a guiding light for the organization over the next three years.  The program builds on our proven formula for success: modest yield growth, strong cost

 

control and moderate capacity growth, while incorporating key operational drivers of our long-term progress," said Fain.

US GAAP and Adjusted Net Income for the third quarter were $752.8 million or $3.49 per share, better than previous guidance.  Last year, US GAAP Net Income was $693.3 million, or $3.21 per share, and Adjusted Net Income was $690.9 million, or $3.20 per share.

Gross Yields were up 5.6% on a Constant-Currency basis.  Net Yields were up 5.3% on a Constant-Currency basis.  This was better than previous guidance due to strong close in booking and pricing trends on China, Europe, and North American itineraries.  While the hurricanes had a negative impact on overall revenue, they were neutral to Net Yields in the third quarter.

Gross Cruise Costs per APCDs increased 5.2% on a Constant-Currency basis.  Net Cruise Costs ("NCC") Excluding Fuel per APCDs were up 5.7% on a Constant-Currency basis. The reduction in capacity due to the hurricanes mainly drove the increase in the cost metric relative to guidance. Absolute costs for the quarter were better than expected, mainly due to timing.

Favorable trends in fuel, in both price and consumption, also provided a benefit to the quarter. Bunker pricing net of hedging for the third quarter was $498.55 per metric ton and consumption was 322.4 metric tons.

"Delivering record earnings during a period of such unprecedented disruption is a testament to the strength in demand for cruising and for our brands," said Jason T. Liberty, executive vice president and CFO.  "Strong demand trends coupled with our continued cost discipline have put us in a strong position to successfully complete our Double-Double program.  As a matter of fact, I am pleased to report that we have already achieved our Double-Double targets on a trailing twelve month basis through September 2017."

The company expects full year Adjusted EPS guidance to be in the range of $7.35 to $7.40 per share.  Excluding the cost of the hurricanes, Adjusted EPS would have been in the range of $7.60 to $7.65 per share.

Constant-Currency and As-Reported Net Yields are expected to increase approximately 6.0% for the full year and NCC ex. Fuel per APCDs are expected to be up approximately 2.0% on a Constant-Currency and As-Reported basis.

Taking into account current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company expects 2017 Adjusted EPS to be in the range of $7.35 to $7.40 per share.

Constant-Currency Net Yields are expected to be up 2.0% to 2.5% in the fourth quarter of 2017.   NCC ex. Fuel are expected to be up approximately 8.5% on a Constant-Currency basis. The year-over-year increase is driven by planned sales and marketing investments, timing of third quarter costs and lower than expected APCDs due to the hurricanes.

Based on current fuel pricing, interest rates, currency exchange rates and the factors detailed above, the company expects fourth quarter Adjusted EPS to be in the range of $1.15 to $1.20 per share.

The company is experiencing strong early booking trends for 2018.  Booked load factors and APDs are higher than same time last year while the booking window has continued to extend.  Management is excited by the 2018 introduction of Symphony of the Seas in Europe next spring and Celebrity Edge in Fort Lauderdale in December of 2018.  While

still early in the booking cycle, the view for 2018 is encouraging and the company expects another year of solid yield and earnings growth.

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 $177 million and $686 million of fuel expense in its fourth quarter and full year 2017 guidance, respectively.

Forecasted consumption is 65% hedged via swaps for 2017 and 56%, 47%, 36% and 14% hedged for 2018, 2019, 2020 and 2021, respectively. For the same five-year period, the average cost per metric ton of the hedge portfolio is approximately $498, $421, $331, $340 and $351, respectively. 

The company provided the following fuel statistics for the fourth quarter and full year 2017.

 

In summary, the company provided the following guidance for the fourth quarter and full year 2017:

Based upon current ship orders, projected capital expenditures for full year 2017, 2018, 2019, 2020 and 2021 are $0.6 billion, $3.2 billion, $2.1 billion, $2.5 billion and $2.5 billion, respectively.  The increase in the future capital expenditures relates to the ship modernization programs for Royal Caribbean International and Celebrity Cruises, called Royal Amplified and the Celebrity Revolution, respectively.  In addition, the future capital expenditures include the acquisition of the Azamara Pursuit.  Capacity changes for 2017, 2018, 2019, 2020 and 2021 are expected to be -2.4%, 3.8%, 6.6%, 4.2% and 8.0%, respectively.  These figures do not include potential ship sales or additions that we may elect to make in the future.

The company has scheduled a conference call at 10 a.m. Eastern Standard Time today to discuss its earnings.  This call can be heard, either live or on a delayed basis, on the company's investor relations website at www.rclinvestor.com.

Adjusted Net Income represents net income excluding certain items that we believe adjusting for is meaningful when assessing our performance on a comparative basis. For the periods presented, these items included the net loss related to the elimination of the Pullmantur reporting lag, the net gain related to the 51% sale of the Pullmantur and CDF Croisières de France ("CDF") brands, restructuring charges and other initiative costs related to our Pullmantur right-sizing strategy and other restructuring initiatives.

Represents Adjusted Net Income divided by the diluted shares outstanding at the end of the reporting period. We believe this measure is meaningful when assessing our performance on a comparative basis. 

APCD is our measurement of capacity and represents double occupancy per cabin multiplied by the number of cruise days for the period which excludes canceled cruise days and drydock days. 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.  For the nine months ended September 30, 2016, APCDs reported do not include the November and December 2015 APCD amounts related to the elimination of the Pullmantur reporting lag.

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 US Dollar.  Because our reporting currency is the US Dollar, the value of these revenues and expenses in US Dollars will be affected by changes in currency exchange rates.  Although such changes

in local currency prices are 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 on a "Constant-Currency" basis – i.e., as if the current period's currency exchange rates had remained constant with the comparable prior period's rates.  We calculate "Constant-Currency" by applying the average prior year period exchange rates for each of the corresponding months of the reported and/or forecasted period, so as to calculate what the results would have been had exchange rates been the same throughout both periods.  We do not make predictions about future exchange rates and use current exchange rates for calculations of future periods.  It should be emphasized that the use of Constant-Currency is primarily used by us 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. 

Our DOUBLE-DOUBLE Program refers to the multi-year program designed to help us better communicate and motivate our employees about our business goals by articulating longer-term financial objectives. Under the program, we are targeting Adjusted EPS of $6.78 in 2017 (double our 2014 Adjusted EPS of $3.39) and ROIC of 10% in 2017 (compared to ROIC of 5.9% in 2014).

Gross Cruise Costs represent the sum of total cruise operating expenses plus marketing, selling and administrative expenses.

Gross Yields represent total revenues per APCD.

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. 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.  Net Cruise Costs excludes the net gain related to the 51% sale of the Pullmantur and CDF brands, restructuring charges and other initiative costs related to our Pullmantur right-sizing strategy and other restructuring initiatives.

Net Revenues represent total revenues less commissions, transportation and other expenses and onboard and other expenses.   

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 they are the most relevant measures of our pricing performance because they reflect 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. Net Yields excludes initiative costs related to the sale of the Pullmantur and CDF brands.

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.

 

For additional information see "Adjusted Measures of Financial Performance" below.

Royal Caribbean Cruises Ltd. (NYSE: RCL) is a global cruise vacation company that owns and operates three global brands: Royal Caribbean International, Celebrity Cruises

and Azamara Club Cruises.  We are a 50% joint venture owner of the German brand TUI Cruises, a 49% shareholder in the Spanish brand Pullmantur and a minority shareholder in the Chinese brand SkySea Cruises. Together, these brands operate a combined total of 49 ships with an additional twelve on order as of September 30, 2017.  They operate diverse itineraries around the world that call on approximately 535 destinations on all seven continents.  Additional information can be found on www.royalcaribbean.com, www.celebritycruises.com, www.azamaraclubcruises.com, www.tuicruises.com, www.pullmantur.es, or www.rclinvestor.com.

Certain statements in this release relating to, among other things, our future performance constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995.  These statements include, but are not limited to: statements regarding revenues, costs and financial results for 2017 and beyond and expectations regarding the timing and results of our Double-Double and 20/20 Vision initiatives.  Words such as "anticipate," "believe," "could," "driving," "estimate," "expect," "goal," "intend," "may," "plan," "project," "seek," "should," "will," "would," and similar expressions are intended to help identify forward-looking statements.  Forward-looking statements reflect management's current expectations, are based on judgments, are inherently uncertain and are subject to risks, uncertainties and other factors, which 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 economic and geopolitical environment on key aspects of our business, such as the demand for cruises, passenger spending, and operating costs; our ability to obtain new borrowings in amounts sufficient to satisfy our capital expenditures, debt repayments and other financing needs; incidents or adverse publicity concerning the travel industry generally or the cruise industry specifically; concerns over safety, health and security aspects of traveling; unavailability of ports of call; the uncertainties of conducting business internationally and expanding into new markets and new ventures; changes in operating and financing costs; the impact of foreign exchange rates, interest rate and fuel

price fluctuations; vacation industry competition and changes in industry capacity and overcapacity; the impact of new or changing regulations on our business; emergency ship repairs, including the related lost revenue; the impact of issues at shipyards, including ship delivery delays, ship cancellations or ship construction cost increases; shipyard unavailability; and the unavailability or cost of air service.

More information about factors that could affect our operating results is included under the captions "Risk Factors" in our most recent quarterly report on Form 10-Q and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our most recent annual report on Form 10-K and our recent quarterly report on Form 10-Q, copies of which may be obtained by visiting our Investor Relations website at www.rclinvestor.com or the SEC's website at www.sec.gov. Undue reliance should not be placed on the forward-looking statements in this release, which are based on information available to us on the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Adjusted Measures of Financial Performance

This press release includes certain adjusted financial measures as defined under Securities and Exchange Commission rules, which we believe provide useful information to investors as a supplement to our consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles, or US GAAP.

The presentation of adjusted 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 US GAAP. These measures may be different from adjusted measures used by other companies. In addition, these adjusted measures are not based on any comprehensive set of accounting rules or principles. Adjusted measures have limitations in that they do not reflect all of the amounts associated with our results of operations as do the corresponding US GAAP measures.

A reconciliation to the most comparable US GAAP measure of all adjusted financial measures included in this press release can be found in the tables included at the end of this press release.  We have not provided a quantitative reconciliation of (i) projected Total revenues to projected Net Revenues, (ii) projected Gross Yields to projected Net Yields, (iii) projected Gross Cruise Costs to projected Net Cruise Costs and projected Net Cruise Costs Excluding Fuel and (iv) projected Net Income and Earnings per Share to projected Adjusted Net Income and Adjusted Earnings per Share because preparation of meaningful US GAAP projections of Total revenues, Gross Yields, Gross Cruise Costs, Net Income and Earnings per Share would require unreasonable effort. Due to significant uncertainty, we are unable to predict, without unreasonable effort, the future movement of foreign exchange rates, fuel prices and interest rates inclusive of our related hedging programs.  In addition, we are unable to determine the future impact of restructuring expenses or other non-core business related gains and losses which may result from strategic initiatives. These items are uncertain and could be material to our results of operations in accordance with US GAAP. Due to this uncertainty, we do not believe that reconciling information for such projected figures would be meaningful.