10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2007

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
	OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number: 1-11884

ROYAL CARIBBEAN CRUISES LTD.

(Exact name of registrant as specified in its charter)

	Republic of Liberia		98-0081645
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1050 Caribbean Way, Miami, Florida 33132

(Address of principal executive offices) (zip code)

(305) 539-6000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x Accelerated filer o Non-accelerated filer o

	Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes o		No x

There were 223,376,450 shares of common stock outstanding as of October 12, 2007.

ROYAL CARIBBEAN CRUISES LTD.

TABLE OF CONTENTS

Page

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements 1

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations  11

Item 3. Quantitative and Qualitative Disclosures About Market Risk  24

Item 4. Controls and Procedures  24

PART II. OTHER INFORMATION

Item 1. Legal Proceedings  25

Item 6. Exhibits 25

SIGNATURES 26

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share data)

	Quarter Ended
	September 30,
	2007	2006
Passenger ticket revenues	$1,423,179	$1,211,758
Onboard and other revenues	530,413	425,093
Total revenues	1,953,592	1,636,851
Cruise operating expenses
Commissions, transportation and other	356,471	289,462
Onboard and other	148,218	123,167
Payroll and related	153,106	130,039
Food	87,062	74,606
Fuel	140,655	126,077
Other operating	263,732	200,815
Total cruise operating expenses	1,149,244	944,166
Marketing, selling and administrative expenses	199,169	163,745
Depreciation and amortization expenses	122,345	109,331
Operating Income	482,834	419,609
Other income (expense)
Interest income	5,704	4,472
Interest expense, net of interest capitalized	(85,270)	(71,824)
Other expense	(8,268)	(6,885)
	(87,834)	(74,237)
Net Income	$ 395,000	$ 345,372
Earnings Per Share:
Basic	$1.85	$1.66
Diluted	$1.84	$1.63
Weighted-Average Shares Outstanding:
Basic	213,039	208,129
Diluted	214,295	213,526

The accompanying notes are an integral part of these consolidated financial statements.

1

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited, in thousands, except per share data)

	Nine Months Ended
	September 30,
	2007	2006
Passenger ticket revenues	$3,360,586	$3,006,928
Onboard and other revenues	1,297,459	1,069,443
Total revenues	4,658,045	4,076,371
Cruise operating expenses
Commissions, transportation and other	844,784	720,460
Onboard and other	316,792	267,945
Payroll and related	432,686	370,800
Food	236,044	205,898
Fuel	384,070	360,307
Other operating	741,736	573,863
Total cruise operating expenses	2,956,112	2,499,273
Marketing, selling and administrative expenses	578,547	518,681
Depreciation and amortization expenses	360,021	313,513
Operating Income	763,365	744,904
Other income (expense)
Interest income	16,655	11,789
Interest expense, net of interest capitalized	(251,266)	(196,136)
Other income	3,821	26,742
	(230,790)	(157,605)
Net Income	$ 532,575	$ 587,299
Earnings Per Share:
Basic	$2.50	$2.79
Diluted	$2.49	$2.70
Weighted-Average Shares Outstanding:
Basic	212,667	210,239
Diluted	214,170	224,078

The accompanying notes are an integral part of these consolidated financial statements.

2

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	As of
	September 30,	December 31,
	2007	2006
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$      411,906	$      104,520
Trade and other receivables, net	337,889	185,886
Inventories	88,796	76,969
Prepaid expenses and other assets	221,680	134,529
Total current assets	1,060,271	501,904
Property and equipment, net	12,274,180	11,429,106
Goodwill	772,816	721,514
Other assets	1,058,551	740,564
	$15,165,818	$13,393,088
Liabilities and Shareholders’ Equity
Current liabilities Current portion of long-term debt	$      558,618	$      373,422
Accounts payable	192,424	193,794
Accrued expenses and other liabilities	644,494	408,209
Customer deposits	1,175,262	896,943
Total current liabilities	2,570,798	1,872,368
Long-term debt	5,350,523	5,040,322
Other long-term liabilities	589,040	388,823
Commitments and contingencies (Note 6)
Shareholders’ equity
Preferred stock ($.01 par value; 20,000,000 shares authorized;
none outstanding, September 30, 2007 and December 31,     2006)	-	-
Common stock ($.01 par value; 500,000,000 shares authorized;
223,365,773 and 222,489,872 shares issued,    September 30, 2007 and December 31, 2006)	2,234	2,225
Paid-in capital	2,935,123	2,904,041
Retained earnings	4,076,028	3,639,211
Accumulated other comprehensive income (loss)	65,592	(30,802)
Treasury stock (11,016,185 and 10,985,927 common shares at   cost, September 30, 2007 and December 31, 2006)	(423,520)	(423,100)
Total shareholders’ equity	6,655,457	6,091,575
	$15,165,818	$13,393,088

The accompanying notes are an integral part of these consolidated financial statements.

3

ROYAL CARIBBEAN CRUISES LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited, in thousands)

	Nine Months Ended
	September 30,
	2007	2006
Operating Activities
Net income	$ 532,575	$ 587,299
Adjustments:
Depreciation and amortization	360,021	313,513
Accretion of original issue discount on debt	1,354	17,578
Changes in operating assets and liabilities:
Increase in trade and other receivables, net	(146,569)	(11,437)
Increase in inventories	(11,532)	(11,629)
Increase in prepaid expenses and other assets	(60,020)	(18,923)
(Decrease) increase in accounts payable	(4,730)	8,811
Increase in accrued expenses and other liabilities	212,871	43,162
Increase in customer deposits	273,372	74,877
Accreted interest paid on LYONs repurchase	-	(121,199)
Other, net	2,711	25,982
Net cash provided by operating activities	1,160,053	908,034
Investing Activities
Purchases of property and equipment	(1,225,065)	(1,019,462)
Purchases of notes from First Choice Holidays PLC	-	(100,000)
Other, net	43,033	(13,204)
Net cash used in investing activities	(1,182,032)	(1,132,666)
Financing Activities
Net proceeds from issuance of debt	1,904,979	1,806,215
Debt issuance costs	(10,134)	(8,804)
Repayments of debt	(1,515,101)	(1,276,673)
Dividends	(66,339)	(63,543)
Proceeds from exercise of common stock options	16,932	19,161
Purchase of treasury stock	-	(164,582)
Other, net	(1,818)	8,011
Net cash provided by financing activities	328,519	319,785
Effect of exchange rate changes on cash	846	-
Net increase in cash and cash equivalents	307,386	95,153
Cash and cash equivalents at beginning of period	104,520	125,385
Cash and cash equivalents at end of period	$ 411,906	$ 220,538
Supplemental Disclosure
Cash paid during the period for:
Interest, net of amount capitalized	$ 190,995	$ 276,785

The accompanying notes are an integral part of these consolidated financial statements.

4

ROYAL CARIBBEAN CRUISES LTD.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

As used in this document, the terms “Royal Caribbean,” the “Company,” “we,” “our” and “us” refer to Royal Caribbean Cruises Ltd., the term “Celebrity” refers to Celebrity Cruise Lines Inc., the term "Pullmantur” refers to Pullmantur S.A. and the terms “Royal Caribbean International,” “Celebrity Cruises,” “Pullmantur Cruises,” “Azamara Cruises” and “CDF Croisieres de France” refer to our five cruise brands. “The Scholar Ship” refers to our education program at sea for graduate and undergraduate students. In accordance with cruise vacation industry practice, the term “berths” is determined based on double occupancy per cabin even though many cabins can accommodate three or more passengers.

Note 1. Basis for Preparation of Consolidated Financial Statements

We believe the accompanying unaudited consolidated financial statements contain all normal recurring accruals necessary for a fair presentation. Our revenues are seasonal and results for interim periods are not necessarily indicative of results for the entire year.

The interim unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2006.

Note 2. Business Combination

On November 14, 2006, we completed our acquisition of Pullmantur S.A. (“Pullmantur”), a Madrid-based cruise and tour operator. We purchased all of the capital stock of Pullmantur for €436.3 million, or approximately $558.9 million. For reporting purposes, we have included Pullmantur’s results of operations on a two-month lag for the quarter and nine months ended September 30, 2007.

The acquisition was accounted for as a business combination using the purchase method of accounting under the provisions of Statement of Financial Accounting Standards No. 141, “Business Combinations”. The purchase price was allocated to tangible and identifiable intangible assets acquired and liabilities assumed based on their estimated fair values at the acquisition date, with the excess allocated to goodwill. Approximately €343.2 million or $439.7 million was allocated to goodwill and approximately €189.4 million or $242.6 million was allocated to acquired intangible assets. Approximately €168.6 million or $216.0 million of the acquired intangible assets was assigned to the value associated with the awareness and reputation of the Pullmantur brand among its customers and is considered an indefinite life intangible asset. Amortizable intangible assets identified of approximately €20.8 million or $26.6 million have a weighted-average useful life of approximately 4.8 years.

5

Note 3. Earnings Per Share

A reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share data):

	Quarter Ended		Nine Months Ended
	September 30,		September 30,
	2007	2006	2007	2006
Net income	$395,000	$345,372	$532,575	$587,299
Interest on dilutive convertible notes	-	1,641	-	17,096
Net income for diluted earnings per share	$395,000	$347,013	$532,575	$604,395
Weighted-average common shares    outstanding	213,039	208,129	212,667	210,239
Dilutive effect of stock options and restricted stock awards	1,256	1,433	1,503	1,745
Dilutive effect of convertible notes	-	3,964	-	12,094
Diluted weighted-average shares    outstanding	214,295	213,526	214,170	224,078
Basic earnings per share:	$1.85	$1.66	$2.50	$2.79
Diluted earnings per share:	$1.84	$1.63	$2.49	$2.70

Diluted earnings per share did not include options to purchase 3.5 million and 3.3 million shares for the third quarters of 2007 and 2006, respectively, and 2.9 million and 3.3 million shares for the first nine months of 2007 and 2006, respectively, because the effect of including them would have been antidilutive.

Note 4. Long-Term Debt

In January 2007, we issued €1.0 billion, or approximately $1.3 billion, of 5.625% senior unsecured notes due 2014 at a price of 99.638% of par. The net proceeds from the offering were used to retire the €701.0 million, or approximately $906.5 million, outstanding balance on our unsecured bridge loan facility obtained to finance our acquisition of Pullmantur. The remainder of the net proceeds, approximately €289.0 million, or approximately $374.8 million, was used to repay a portion of the outstanding balance on our unsecured revolving credit facility.

In February 2007, we entered into interest rate swap agreements that effectively change €1.0 billion of fixed rate debt with a weighted-average fixed rate of 5.625% to EURIBOR-based floating rate debt. We also entered into cross currency swap agreements that effectively changes €300.0 million of floating EURIBOR-based debt to $389.1 million floating LIBOR-based debt.

In March 2007, we entered into a $589.0 million unsecured term loan due through 2014 at a rate of 4.215%. The contractual interest rate under this loan agreement varies with our debt rating. In April 2007, we drew in full the $589.0 million available under this unsecured term loan. The proceeds were used towards the purchase of Liberty of the Seas, which was delivered in April 2007.

In June 2007, we amended and restated our unsecured revolving credit facility to increase the amount available from $1.0 billion to $1.2 billion, reduce the effective interest rate to LIBOR plus 0.485%, change the 0.175% commitment fee to a 0.140% facility fee and extend the maturity date from March 27, 2010 to June 29, 2012.

6

Note 5. Shareholders' Equity

We declared and paid cash dividends on our common stock of $0.15 per share during the first two quarters of 2007 and 2006. We declared cash dividends on our common stock of $0.15 per share during the third quarters of 2007 and 2006. The dividends for the third quarters of 2007 and 2006 were paid in October 2007 and October 2006, respectively.

Note 6. Commitments and Contingencies

Capital Expenditures. As of September 30, 2007, the expected delivery dates and planned berths of our ships on order are as follows:

Ship	Expected Delivery Date	Approximate Berths
Royal Caribbean International:
Freedom-class:
Independence of the Seas	2nd Quarter 2008	3,600
Project Genesis:
Unnamed	3rd Quarter 2009	5,400
Unnamed	3rd Quarter 2010	5,400
Celebrity Cruises:
Solstice-class:
Celebrity Solstice	4th Quarter 2008	2,850
Celebrity Equinox	3rd Quarter 2009	2,850
Celebrity Eclipse	2nd Quarter 2010	2,850
Unnamed	3rd Quarter 2011	2,850
	Total Berths	25,800

The anticipated aggregate cost of these ships is approximately $7.0 billion, of which we have deposited $499.6 million as of September 30, 2007. Approximately 16.2% of the aggregate cost was exposed to fluctuations in the euro exchange rate at September 30, 2007. As of September 30, 2007, we anticipated overall capital expenditures, including the seven ships on order, will be approximately $1.3 billion for 2007, $1.8 billion for 2008, $2.0 billion for 2009, $2.2 billion for 2010 and $1.0 billion for 2011.

Litigation. In April 2005, a purported class action lawsuit was filed in the United States District Court for the Southern District of Florida alleging that Celebrity Cruises improperly requires its cabin stewards to share guest gratuities with assistant cabin stewards. The suit sought payment of damages, including penalty wages under the U.S. Seaman’s Wage Act. In March 2006, the Southern District of Florida dismissed the suit and held that the case should be arbitrated pursuant to the arbitration provision in Celebrity’s collective bargaining agreement. In June 2007, following an appeal by the plaintiff to the United States 11th Circuit Court of Appeals, the Court of Appeals affirmed the District Court’s order dismissing the suit. In August 2007, the Court of Appeals denied the plaintiff’s petition for re-hearing and petition for re-hearing enbanc. We are not able at this time to estimate the impact of this proceeding on us. However, we believe that we have meritorious defenses and we intend to vigorously defend against this action.

7

In January 2006, we partially settled a pending lawsuit against Rolls Royce and Alstom Power Conversion, co-producers of the Mermaid pod-propulsion system on Millennium-class ships, for the recurring Mermaid pod failures. Under the terms of the partial settlement, we received $38.0 million from Alstom and released them from the suit, which remains pending against Rolls Royce. The $38.0 million settlement resulted in a gain of $36.0 million, net of reimbursements to insurance companies, which we have recorded within other income in our consolidated statements of operations for the nine month period ended September 30, 2006.

In January 2006, a purported class action lawsuit was filed in the United States District Court for the Southern District of New York alleging that we infringed rights in copyrighted works and other intellectual property by presenting performances on our cruise ships without securing the necessary licenses. The suit seeks payment of damages, disgorgement of profits and a permanent injunction against future infringement. In April 2006, we filed a motion to sever and transfer the case to the United States District Court for the Southern District of Florida. The motion is pending. We are not able at this time to estimate the impact of this proceeding on us.

In June 2006, a federal court jury in New York awarded Celebrity Cruises approximately $193.0 million, exclusive of pre-judgment interest and attorneys fees, in a lawsuit against Essef Corp. for damages stemming from a 1994 outbreak of Legionnaires' disease on one of Celebrity's ships. In January 2007, the trial court rejected that portion of the jury's award attributed to Celebrity's claim for loss of Celebrity's enterprise value and ordered a new trial to redetermine the amount of lost profits sustained by Celebrity. A retrial was held in June 2007 and the jury awarded Celebrity Cruises approximately $15.0 million. When combined with approximately $10.0 million of the original award not subject to a retrial, Celebrity has been awarded a total of approximately $25.0 million in the lawsuit, exclusive of pre-judgment interest and attorneys fees. The verdict is subject to appeal and, due to the ongoing nature of the proceedings, the ultimate financial impact to Celebrity is undetermined at this time. As a result no portion of this award has been reflected in our financial statements.

In July 2006, a purported class action lawsuit was filed in the United States District Court for the Central District of California alleging that we failed to timely pay crew wages and failed to pay proper crew overtime. The suit seeks payment of damages, including penalty wages under the U.S. Seaman’s Wage Act and equitable relief damages under the California Unfair Competition Law. In December 2006, the District Court granted our motion to dismiss the claim and held that it should be arbitrated pursuant to the arbitration provision in Royal Caribbean’s collective bargaining agreement. In January 2007, the plaintiffs appealed the order to the United States Ninth Circuit Court of Appeals. We are not able at this time to estimate the impact of this proceeding on us. However, we believe that we have meritorious defenses and we intend to vigorously defend against this action.

The Miami District Office of the U.S. Equal Employment Opportunity Commission (“EEOC”) has alleged that certain of our shipboard employment practices do not comply with U.S. employment laws. In June 2007, the EEOC proposed payment of monetary sanctions and certain remedial actions. We are reviewing the matter with the EEOC, and no legal proceedings have been initiated. We do not believe that this matter will have a material adverse effect upon our financial condition, results of operations or liquidity.

We are routinely involved in other claims typical within the cruise vacation industry. The majority of these claims are covered by insurance. We believe the outcome of such claims, net of expected insurance recoveries, will not have a material adverse effect upon our financial condition, results of operations or liquidity.

8

Other. Under the Brilliance of the Seas operating lease, we have agreed to indemnify the lessor to the extent its after-tax return is negatively impacted by unfavorable changes in corporate tax rates and capital allowance deductions. These indemnifications could result in an increase in our lease payments. We are unable to estimate the maximum potential increase in such lease payments due to the various circumstances, timing or combination of events that could trigger such indemnifications. Under current circumstances, we do not believe an indemnification in any material amount is probable.

Some of the contracts that we enter into include indemnification provisions that obligate us to make payments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes, increased lender capital costs and other similar costs. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business. There are no stated or notional amounts included in the indemnification clauses and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses. We have not been required to make any payments under such indemnification clauses in the past and, under current circumstances, we do not believe an indemnification in any material amount is probable.

If any person other than A. Wilhelmsen AS. and Cruise Associates, our two principal shareholders, acquires ownership of more than 30% of our common stock and our two principal shareholders, in the aggregate, own less of our common stock than such person and do not collectively have the right to elect, or to designate for election, at least a majority of the board of directors, we may be obligated to prepay indebtedness outstanding under the majority of our credit facilities, which we may be unable to replace on similar terms. If this were to occur, it could have an adverse impact on our liquidity and operations.

Note 7. Comprehensive Income

Comprehensive income includes net income, foreign currency translation adjustments and changes in the fair value of derivative instruments that qualify as cash flow hedges. The cumulative changes in fair value of the derivatives are deferred and recorded as a component of accumulated other comprehensive income until the hedged transactions are realized and recognized in earnings. Comprehensive income was as follows (in thousands):

	Quarter Ended			Nine Months Ended
	September 30,			September 30,
	2007	2006		2007	2006
Net income	$395,000	$345,372		$532,575	$587,299
Changes related to cash flow derivative hedges	57,172		(21,992)	94,941		9,459
Currency translation adjustment	4,474		-	1,453		-
Total comprehensive income	$456,646	$323,380		$628,969	$596,758

9

Note 8. Recent Accounting Pronouncements

In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No.109” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in the tax return. We adopted FIN 48 on January 1, 2007. The adoption will not have a material impact on our 2007 consolidated financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standard (“SFAS”) No. 157, “Fair Value Measurements.” SFAS 157 defines fair value, establishes a formal framework for measuring fair value and expands disclosures about fair value measurements. SFAS 157 is effective the first fiscal year beginning after November 15, 2007. We are currently evaluating the impact of SFAS 157, but do not expect the adoption will have a material impact on our consolidated financial statements.

In February 2007, the FASB issued SFAS 159, “The Fair Value Option for Financial Assets and Financial Liabilities.” Under SFAS 159, entities will have the option to measure certain financial instruments and other items at fair value that are not currently required to be measured at fair value. This statement expands the use of fair value measurement and applies to entities that elect the fair value option at a specified election date. SFAS 159 is effective the first fiscal year beginning after November 15, 2007. We are currently evaluating the impact of SFAS 159, but do not expect the adoption will have a material impact on our consolidated financial statements.

10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements under this caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this document constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995. Words such as “expect,” “anticipate,” “goal,” “project,” “plan,” “believe,” “seek” and similar expressions are intended to identify these forward-looking statements. Forward-looking statements do not guarantee future performance and may involve 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:

• general economic and business conditions;

• vacation industry competition and changes in industry capacity and overcapacity;

• the impact of tax laws and regulations affecting our business or our principal shareholders;

• the impact of changes in other laws and regulations affecting our business;

• the impact of pending or threatened litigation;

• the delivery of scheduled new ships;

• emergency ship repairs;

• negative incidents involving cruise ships including those involving the health and safety of passengers;

• reduced consumer demand for cruises as a result of any number of reasons, including geo-political and economic uncertainties and the unavailability of air service;

• fears of terrorist attacks, armed conflict and the resulting concerns over safety and security aspects of traveling;

• the impact of the spread of contagious diseases;

• the availability under our unsecured revolving credit facility, cash flows from operations and our ability to obtain new borrowings and raise new capital on terms that are favorable or consistent with our expectations to fund operations, debt payment requirements, capital expenditures and other commitments;

• changes in our stock price or principal shareholders;

• the impact of changes in operating and financing costs, including changes in foreign currency, interest rates, fuel, food, payroll, insurance and security costs; and

• weather.

11

The above examples are not exhaustive and new risks emerge from time to time. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For a further discussion of risk factors related to our business, see Part I, Item 1A. Risk Factors in our annual report on Form 10-K for the year ended December 31, 2006.

This report should be read in conjunction with our annual report on Form 10-K for the year ended December 31, 2006.

Terminology and Non-GAAP Financial Measures

Available Passenger Cruise Days (“APCD”) are our measurement of capacity and represent double occupancy per cabin multiplied by the number of cruise days for the period.

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

Gross Yields represent total revenues per APCD.

Net Cruise Costs represent Gross Cruise Costs excluding commissions, transportation and other expenses and onboard and other expenses (each of which is described below under the Overview heading). In measuring our ability to control costs in a manner that positively impacts net income, we believe changes in Net Cruise Costs to be the most relevant indicator of our performance. A reconciliation of historical Gross Cruise Costs to Net Cruise Costs is provided below under Summary of Historical Results of Operations. We have not provided a quantitative reconciliation of projected Gross Cruise Costs to projected Net Cruise Costs due to the significant uncertainty in projecting the costs deducted to arrive at this measure. Accordingly, we do not believe that reconciling information for such projected figures would be meaningful.

Net Debt-to-Capital is a ratio which represents total long-term debt, including current portion of long-term debt, less cash and cash equivalents (“Net Debt”) divided by the sum of Net Debt and total shareholders' equity. We believe Net Debt and Net Debt-to-Capital, along with total long-term debt and shareholders' equity are useful measures of our capital structure. A reconciliation of historical Debt-to-Capital to Net Debt-to-Capital is provided below under Summary of Historical Results Operations.

Net Revenues represent total revenues less commissions, transportation and other expenses and onboard and other expenses (each of which is described under the Overview heading).

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 it is the most relevant measure of our pricing performance because it reflects 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. A reconciliation of historical Gross Yields to Net Yields is provided below under Summary of Historical Results of Operations. We have not provided a quantitative reconciliation of projected Gross Yields to projected Net Yields due to the significant uncertainty in projecting the costs deducted to arrive at this measure. Accordingly, we do not believe that reconciling information for such projected figures would be meaningful.

12

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.

Overview

Our revenues consist of the following:

• Passenger ticket revenues consist of revenue recognized from the sale of passenger tickets and the sale of air transportation to and from our ships.

• Onboard and other revenues consist primarily of revenues from the sale of goods and/or services onboard our ships not included in passenger ticket prices, cancellation fees, sales of vacation protection insurance, pre- and post-cruise tours, Pullmantur’s land-based tours and hotel and air packages. Also included are revenues we receive from independent third party concessionaires that pay us a percentage of their revenues in exchange for the right to provide selected goods and/or services onboard our ships.

Our cruise operating expenses consist of the following:

• Commissions, transportation and other expenses consist of those costs directly associated with passenger ticket revenues, including travel agent commissions, air and other transportation expenses, port costs that vary with passenger head counts and related credit card fees.

• Onboard and other expenses consist of the direct costs associated with onboard and other revenues. These costs include the cost of products sold onboard our ships, vacation protection insurance premiums, costs associated with pre- and post-cruise tours and related credit card fees. Concession revenues have minimal costs associated with them, as the costs related to these activities are incurred by the third party concessionaires.

• Payroll and related expenses consist of costs for shipboard personnel.

• Food expenses include food costs for both passengers and crew.

• Fuel expenses include fuel and related delivery and storage costs, net of the financial impact of fuel swap agreements.

• Other operating expenses consist primarily of operating costs such as repairs and maintenance, port costs that do not vary with passenger head counts, vessel operating lease costs, Pullmantur’s land-based tours, vessel related insurance and entertainment.

We do not allocate payroll and related costs, food costs, fuel costs or other operating costs to the expense categories attributable to passenger ticket revenues or onboard and other revenues since they are incurred to provide the total cruise vacation experience.

13

Summary of Historical Results of Operations

We experienced an improved demand environment during the third quarter of 2007 compared to the same period in 2006, resulting in a 4.1% increase in Net Yields. Our increase in capacity of 13.7% combined with a 5.0% increase in Gross Yields resulted in an increase in total revenues of 19.4% for the third quarter of 2007 compared to the same period in 2006. The increase in total revenues was partially offset by an increase in expenses primarily due to the increase in capacity and the acquisition of Pullmantur. As a result, our net income was $395.0 million or $1.84 per share on a diluted basis for the third quarter of 2007 compared to $345.4 million or $1.63 per share for the third quarter of 2006.

Highlights for the third quarter of 2007 include:

• Total revenues increased by approximately 19.4% to $2.0 billion from total revenues of $1.6 billion for the same period in 2006. Net Yields increased by approximately 4.1% compared to the same period in 2006.

• Net Cruise Costs per APCD increased by approximately 6.4% compared to the same period in 2006.

• Net Debt-to-Capital increased to 45.2% as of September 30, 2007 compared to 41.2% as of September 30, 2006. Similarly, our Debt-to-Capital ratio increased to 47.0% as of September 30, 2007 compared to 42.4% as of September 30, 2006.

• We launched our new cruise brand CDF Croisieres de France which will serve the French market and will begin sailings in May 2008. In 2008, Holiday Dream will be redeployed from Pullmantur Cruises to CDF Croisieres de France and will sail under the name Bleu de France.

• We redeployed Blue Moon from Pullmantur Cruises to Azamara Cruises to sail under the name Azamara Quest.

• The Scholar Ship, our education program at sea for graduate and undergraduate students, commenced its first semester. We lease a 29,000-ton ocean liner under a vessel operating lease agreement that was renovated into the program’s first campus at sea.

Our revenues are seasonal based on the demand for cruises. Demand is strongest for cruises during the summer months and holidays.

14

The following table presents historical operating data as a percentage of total revenues:

	Quarter Ended		Nine Months Ended
	September 30,		September 30,
	2007	2006	2007	2006
Passenger ticket revenues	72.8	74.0	72.2	73.8
Onboard and other revenues	27.2	26.0	27.8	26.2
Total revenues	100.0%	100.0%	100.0%	100.0%
Cruise operating expenses
Commissions, transportation and         other	18.2	17.7	18.1	17.7
Onboard and other	7.6	7.5	6.8	6.6
Payroll and related	7.8	7.9	9.3	9.1
Food	4.5	4.6	5.1	5.1
Fuel	7.2	7.7	8.3	8.8
Other operating	13.5	12.3	15.9	14.0
Total cruise operating expenses	58.8	57.7	63.5	61.3
Marketing, selling and administrative      expenses	10.2	10.0	12.4	12.7
Depreciation and amortization expenses	6.3	6.7	7.7	7.7
Operating income	24.7	25.6	16.4	18.3
Other income (expense)	(4.5)	(4.5)	(5.0)	(3.9)
Net income	20.2%	21.1%	11.4%	14.4%

Selected historical statistical information is shown in the following table:

	Quarter Ended		Nine Months Ended
	September 30,		September 30,
	2007	2006	2007	2006
Passengers Carried	1,054,422	957,019	2,932,981	2,698,770
Passenger Cruise Days	7,277,757	6,428,544	19,711,739	17,749,885
APCD	6,668,881	5,865,782	18,526,888	16,543,430
Occupancy	109.1%	109.6%	106.4%	107.3%

Gross Yields and Net Yields were calculated as follows (in thousands, except APCD and Yields):

	Quarter Ended		Nine Months Ended
	September 30,		September 30,
	2007	2006	2007	2006
Passenger ticket revenues	$1,423,179	$1,211,758	$3,360,586	$3,006,928
Onboard and other revenue	530,413	425,093	1,297,459	1,069,443
Total revenues	1,953,592	1,636,851	4,658,045	4,076,371
Less:
Commissions, transportation and other	356,471	289,462	844,784	720,460
Onboard and other	148,218	123,167	316,792	267,945
Net revenues	$1,448,903	$1,224,222	$3,496,469	$3,087,966
APCD	6,668,881	5,865,782	18,526,888	16,543,430
Gross Yields	$ 292.94	$ 279.05	$ 251.42	$ 246.40
Net Yields	$ 217.26	$ 208.71	$ 188.72	$ 186.66

15

Gross Cruise Costs and Net Cruise Costs were calculated as follows (in thousands, except APCD and costs per APCD):

	Quarter Ended		Nine Months Ended
	September 30,		September 30,
	2007	2006	2007	2006
Total cruise operating expenses	$1,149,244	$944,166	$2,956,112	$2,499,273
Marketing, selling and administrative    expenses	199,169	163,745	578,547	518,681
Gross Cruise Costs	1,348,413	1,107,911	3,534,659	3,017,954
Less:
Commissions, transportation and other	356,471	289,462	844,784	720,460
Onboard and other	148,218	123,167	316,792	267,945
Net Cruise Costs	$843,724	$695,282	$2,373,083	$2,029,549
APCD	6,668,881	5,865,782	18,526,888	16,543,430
Gross Cruise Costs per APCD	$ 202.19	$ 188.88	$ 190.79	$ 182.43
Net Cruise Costs per APCD	$ 126.52	$ 118.53	$ 128.09	$ 122.68

      Net Debt-to-Capital was calculated as follows (in thousands):

		As of
		September 30,
	2007		2006
Long-term debt, net of current portion	$ 5,350,523		$ 4,181,502
Current portion of long-term debt	558,618		268,638
Total debt	5,909,141		4,450,140
Less: Cash and cash equivalents	411,906		220,538
Net Debt	$ 5,497,235		$ 4,229,602
Total shareholders’ equity	$ 6,655,457		$ 6,043,134
Total debt	5,909,141		4,450,140
Total debt and shareholder’s equity	12,564,598		10,493,274
Debt-to-Capital	47.0%		42.4%
Net Debt	5,497,235		4,229,602
Net Debt and shareholder’s equity	$ 12,152,692		$ 10,272,736
Net Debt-to-Capital	45.2%		41.2%

16

Outlook

Fourth Quarter 2007

We anticipate the following estimates for the fourth quarter of 2007. For purposes of comparison to the fourth quarter of 2006, “comparable” estimates exclude Pullmantur.

We expect Net Yields will increase approximately 9% compared to 2006, and on a comparable basis will increase approximately 2%.

We expect Net Cruise Costs per APCD to increase in the range of 8% to 9% compared to 2006, and on a comparable basis to increase approximately 2%. Excluding fuel, we expect Net Cruise Costs per APCD to increase approximately 10%, and on a comparable basis to increase approximately 2%.

If fuel prices for the fourth quarter of 2007 remain at the level of current “at-the-pump” prices including any hedge impacts, fuel expenses for the fourth quarter of 2007 will be $137.0 million or $440 per metric ton. We are currently 42% hedged for the fourth quarter of 2007 and estimate that a 10% change in the market price of fuel would result in an $8.0 million change in fuel costs for the fourth quarter of 2007, after taking into account existing hedges.

We expect a 13.6% increase in capacity, driven by the acquisition of Pullmantur, and the April delivery of Liberty of the Seas. On a comparable basis we expect a 4.7% increase in capacity.

Depreciation and amortization is expected to be in the range of $125.0 million to $130.0 million and interest expense is expected to be in the range of $83.0 million to $88.0 million.

Based on the expectations contained in this Outlook section, and assuming that fuel prices remain at the level of current “at-the-pump” prices, we expect fourth quarter 2007 earnings per share to be in the range of $0.32 to $0.37.

Full Year 2007

We anticipate the following estimates for the full year 2007. For purposes of comparison to full year 2006, “comparable” estimates exclude Pullmantur.

We expect Net Yields to increase approximately 3% compared to 2006, and on a comparable basis to be relatively flat.

We expect Net Cruise Costs per APCD to increase in the range of 5% to 6% compared to 2006, and on a comparable basis to be relatively flat. Excluding fuel, we expect Net Cruise Costs per APCD to increase in the range of 7% to 8% compared to 2006, and on a comparable basis to be flat to an increase of approximately 1%.

We expect a 12.4% increase in capacity in 2007, driven by the acquisition of Pullmantur, the April delivery of Liberty of the Seas, and a full year of operating Freedom of the Seas. On a comparable basis, we expect a 4.8% increase in capacity.

Depreciation and amortization is expected to be in the range of $485.0 million to $490.0 million, and interest expense is expected to be in the range of $334.0 million to $339.0 million.

17

Based on the expectations contained in this Outlook section, and assuming that fuel prices remain at the level of current “at-the-pump” prices, we expect full year 2007 earnings per share to be in the range of $2.80 to $2.85.

First Quarter and Full Year 2008

We anticipate the following estimates for the first quarter and the full year 2008. Pullmantur will be included in 2007 and 2008, thus, we will no longer exclude Pullmantur from our estimates.

We expect Net Yields to increase in the mid-single digits for the first quarter of 2008. While it is still too early to quantify projections for the full year 2008, management is optimistic that the current demand environment will result in positive yield performance for the full year.

If fuel prices for 2008 remain at the level of current “at-the-pump” prices including any hedge impacts, fuel expenses for the first quarter of 2008 and the full year 2008 will be $132.0 million or $436 per metric ton and $560.0 million or $452 per metric ton, respectively. We are currently 44% hedged for the first quarter of 2008 and 38% hedged for the full year 2008. We estimate that a 10% change in the market price of fuel would result in a $7.0 million change in fuel costs for the first quarter of 2008 and a $35.0 million change for the full year 2008, after taking into account existing hedges.

Quarter Ended September 30, 2007 Compared to Quarter Ended September 30, 2006

Revenues

Net revenues increased 18.4% in 2007 compared to the same period in 2006 primarily due to a 13.7% increase in capacity and 4.1% increase in Net Yields. The increase in capacity was primarily due to the acquisition of Pullmantur and the addition of Liberty of the Seas, which entered service in May 2007. The increase in Net Yields was primarily due to the addition of Pullmantur’s tour business which adds revenues without corresponding capacity and an increase in ticket prices. Occupancy in 2007 was 109.1% compared to 109.6% for the same period in 2006. Gross Yields increased 5.0% in 2007 compared to 2006 primarily due to the same reasons discussed above for Net Yields.

Concession revenues, included within onboard and other revenues, increased to $69.4 million in 2007 compared to $62.9 million for the same period in 2006 primarily due to the addition of Liberty of the Seas and the acquisition of Pullmantur, partially offset by changes in passenger spending as a result of changes in itineraries.

Expenses

Net Cruise Costs increased 21.4% in 2007 compared to the same period in 2006 primarily due to a 13.7% increase in capacity and a 6.7% increase in Net Cruise Costs per APCD. The increase in Net Cruise Costs per APCD was primarily due to increases in other operating expenses and marketing, selling and administrative expenses. Other operating expenses increased primarily due to the addition of Pullmantur’s tour business which adds costs without corresponding capacity. The increase in marketing, selling and administrative expenses was primarily attributed to costs associated with the addition of Pullmantur and to a lesser extent timing of marketing expenses. Gross Cruise Costs increased 21.7% in 2007 compared to the same period in 2006 primarily due to the same reasons discussed above for Net Cruise Costs.

18

Depreciation and amortization expenses increased 11.9% in 2007 compared to the same period in 2006. The increase was primarily due to the addition of Liberty of the Seas, the addition of the Pullmantur fleet, and depreciation associated with ship revitalizations.

Other Income (Expense)

Gross interest expense increased to $95.3 million in 2007 from $77.8 million for the same period in 2006. The increase was primarily attributable to a higher average debt level offset by a slight decrease in interest rates. Interest capitalized during 2007 increased to $10.0 million from $6.0 million during the same period in 2006 primarily due to a higher average level of investment in ships under construction.

Nine Months Ended September 30, 2007 Compared to Nine Months Ended September 30, 2006

Revenues

Net revenues increased 13.2% in 2007 compared to the same period in 2006 primarily due to a 12.0% increase in capacity and a 1.1% increase in Net Yields. The increase in capacity was primarily due to the acquisition of Pullmantur, the addition of Freedom of the Seas, which entered service in June 2006 and the addition of Liberty of the Seas, which entered service in May 2007. The increase in Net Yields was primarily due to the addition of Pullmantur’s tour business which adds revenues without corresponding capacity partially offset by decreases in ticket prices and onboard spending. The decreases in ticket prices and onboard spending were primarily attributed to lower demand and general economic conditions affecting the discretionary spending of our customers experienced primarily during the first quarter of 2007. Occupancy in 2007 was 106.4% compared to 107.3% for the same period in 2006. Gross Yields increased 2.0% in 2007 compared to 2006 primarily due to the same reasons discussed above for Net Yields.

Concession revenues, included within onboard and other revenues, increased to $185.9 million in 2007 compared to $171.4 million for the same period in 2006 primarily due to the addition of Freedom of the Seas, the addition of Liberty of the Seas, and the acquisition of Pullmantur, partially offset by changes in passenger spending as a result of changes in itineraries.

Expenses

Net Cruise Costs increased 16.9% in 2007 compared to the same period in 2006 primarily due to a 12.0% increase in capacity and a 4.4% increase in Net Cruise Costs per APCD. The increase in Net Cruise Costs per APCD was primarily attributed to increases in other operating expenses. Other operating expenses increased primarily due to the addition of Pullmantur’s tour business which adds costs without corresponding capacity. The increase in Net Cruise Costs per APCD was partially offset by the decrease in fuel expenses compared to the same period in 2006. Total fuel expenses (net of the financial impact of fuel swap agreements) for 2007 decreased 1.6% per metric ton. As a percentage of total revenues, fuel expenses were 8.3% and 8.8% in 2007 and 2006, respectively. Gross Cruise Costs increased 17.1% in 2007 compared to 2006 primarily due to the same reasons discussed above for Net Cruise Costs.

19

Depreciation and amortization expenses increased 14.8% in 2007 compared to the same period in 2006. The increase was primarily due the addition of the Pullmantur fleet, the addition of Freedom of the Seas, the addition of Liberty of the Seas and depreciation associated with ship revitalizations.

Other Income (Expense)

Gross interest expense increased to $280.4 million in 2007 from $215.5 million for the same period in 2006. The increase was primarily attributable to a higher average debt level and, to a lesser extent, higher interest rates. Interest capitalized during 2007 increased to $29.1 million from $19.3 million during the same period in 2006 primarily due to a higher average level of investment in ships under construction.

Other income decreased to $3.8 million from $26.7 million for the same period in 2006 primarily due to the partial settlement in January 2006 of a pending lawsuit against Rolls Royce and Alstom Power Conversion, co-producers of the mermaid pod-propulsion system on Millennium-class ships, for the recurring Mermaid pod failures. Under the terms of the partial settlement, we received $38.0 million from Alstom and released them from the suit, which remains pending against Rolls Royce. The $38.0 million settlement resulted in a gain of $36.0 million, net of reimbursements to insurance companies.

Liquidity and Capital Resources

Sources and Uses of Cash

Cash flow generated from operations provides us with a significant source of liquidity. Net cash provided by operating activities was $1.2 billion for the first nine months of 2007 compared to $908.0 million for the same period in 2006. This increase was primarily a result of an increase in customer deposits of approximately $273.4 million and an increase in accrued expenses and other liabilities of approximately $212.9 million. The increase was also due to approximately $121.2 million in payments of accreted interest on the LYONs repurchase in the first nine months of 2006 that did not recur in the first nine months of 2007. This increase was partially offset by a decrease in net income of approximately $54.7 million, an increase in trade and other receivables of approximately $146.6 million and an increase in prepaid expenses and other assets of approximately $60.0 million.

Net cash used in investing activities was $1.2 billion for the first nine months of 2007 compared to $1.1 billion for the same period in 2006. The increase was primarily due to an increase in capital expenditures of approximately $205.6 million partially offset by the purchase of $100.0 million of notes from First Choice Holidays PLC during the first nine months of 2006 that did not recur in the first nine months of 2007. Our capital expenditures increased to approximately $1.2 billion for the first nine months of 2007 from $1.0 billion for the same period in 2006, primarily due to the purchase of Pacific Star and the increase in number of ships under construction.

Net cash provided by financing activities was $328.5 million in the first nine months of 2007 compared to $319.8 million for the same period in 2006. The change was primarily due to an increase in repayments of debt of approximately $238.4 million partially offset by an increase in proceeds from debt issuances of approximately $98.8 million during the first nine months in 2007 compared to the same period in 2006. The change was also partially offset by $164.6 million of treasury stock purchased in the first nine months of 2006 that did not recur in the first nine months of 2007. During the first nine months of 2007, we received net proceeds of €990.9 million, or approximately $1.3 billion, from a bond

20

offering consisting of approximately €1.0 billion, or approximately $1.3 billion, of 5.625% senior unsecured notes due 2014. In addition, we received $589.0 million through an unsecured term loan due through 2014 to purchase Liberty of the Seas and drew $20.0 million on our unsecured revolving credit facility. During the first nine months of 2007, we made debt repayments on various loan facilities and capital leases, including a payment of approximately $906.5 million to retire the €701.0 million outstanding balance on our unsecured bridge loan facility. In addition, we made approximately $465.0 million in payments towards our unsecured revolving credit facility and a payment of approximately $61.2 million to repay term loans secured by two Celebrity ships. Approximately $28.9 million of the $61.2 million payment represents a payment made in advance of scheduled maturity. During the first nine months of 2007, we received $16.9 million in connection with the exercise of common stock options and paid cash dividends on our common stock of $66.3 million. Net Debt-to-Capital increased to 45.2% as of September 30, 2007 compared to 41.2% for the same period in 2006.

Interest capitalized during the first nine months of 2007 increased to $29.1 million from $19.3 million for the same period in 2006 due to a higher average level of investment in ships under construction.

Future Capital Commitments

As of September 30, 2007, we had on order one Freedom-class ship and two Genesis-class ships for Royal Caribbean International, and four Solstice-class ships designated for Celebrity Cruises, for an aggregate additional capacity of approximately 25,800 berths. The anticipated aggregate cost of the seven ships on order is approximately $7.0 billion, of which we have deposited $499.6 million as of September 30, 2007. Approximately 16.2% of the aggregate cost of the ships was exposed to fluctuations in the euro exchange rate at September 30, 2007.

As of September 30, 2007, we anticipated overall capital expenditures, including the seven ships on order, will be approximately $1.3 billion for 2007, $1.8 billion for 2008, $2.0 billion for 2009, $2.2 billion for 2010 and $1.0 billion for 2011.

21

Contractual Obligations and Off-Balance Sheet Arrangements

As of September 30, 2007, our contractual obligations were as follows (in thousands):

	Payments due by period
		Less than 1	1-3	3-5	More than 5
	Total	year	years	years	years
Long-term debt obligations(1)	$5,860,509	$556,618	$944,538	$1,000,010	$3,359,343
Capital lease obligations(1)	48,632	2,000	4,038	3,323	39,271
Operating lease obligations(2)(3)	576,933	67,053	119,939	352,376	37,565
Ship purchase obligations(4)	5,539,666	779,088	4,093,064	667,514	-
Other(5)	403,787	83,123	127,054	58,170	135,440
Total	$12,429,527	$1,487,882	$5,288,633	$2,081,393	$3,571,619

(1)	Amounts exclude interest.
(2)	We are obligated under noncancelable operating leases primarily for a ship, offices, warehouses and motor vehicles.

(3) Under the Brilliance of the Seas lease agreement, we may be required to make a termination payment of approximately £126.0 million, or approximately $258.1 million based on the exchange rate at September 30, 2007, if the lease is canceled in 2012. This amount is included in the 3-5 years column.

(4) Amounts represent contractual obligations with initial terms in excess of one year.

(5) Amounts represent future commitments with remaining terms in excess of one year to pay for our usage of certain port facilities, marine consumables, services and maintenance contracts.

Under the Brilliance of the Seas operating lease, we have agreed to indemnify the lessor to the extent its after-tax return is negatively impacted by unfavorable changes in corporate tax rates and capital allowance deductions. These indemnifications could result in an increase in our lease payments. We are unable to estimate the maximum potential increase in such lease payments due to the various circumstances, timing or combination of events that could trigger such indemnifications. Under current circumstances we do not believe an indemnification in any material amount is probable.

Some of the contracts that we enter into include indemnification provisions that obligate us to make payments to the counterparty if certain events occur. These contingencies generally relate to changes in taxes, increased lender capital costs and other similar costs. The indemnification clauses are often standard contractual terms and are entered into in the normal course of business. There are no stated or notional amounts included in the indemnification clauses and we are not able to estimate the maximum potential amount of future payments, if any, under these indemnification clauses. We have not been required to make any payments under such indemnification clauses in the past and, under current circumstances, we do not believe an indemnification in any material amount is probable.

As a normal part of our business, depending on market conditions, pricing and our overall growth strategy, we continuously consider opportunities to enter into contracts for the building of additional ships. We may also consider the sale of ships. We continuously consider potential acquisitions and strategic alliances. If any of these were to occur, they would be financed through the incurrence of additional indebtedness, the issuance of additional shares of equity securities or through cash flows from operations.

22

Funding Sources

As of September 30, 2007, our liquidity was $1.6 billion consisting of approximately $0.4 billion in cash and cash equivalents and $1.2 billion available under our unsecured revolving credit facility. We have contractual obligations of approximately $1.5 billion due during the twelve-month period ending September 30, 2008. We anticipate these contractual obligations could be funded through a combination of cash flows from operations, drawdowns under our available unsecured revolving credit facility, the incurrence of additional indebtedness and the sales of equity or debt securities in private or public securities markets. Although we believe our existing unsecured revolving credit facility, cash flows from operations, our ability to obtain new borrowings and/or raise new capital or a combination of these sources will be sufficient to fund operations, debt payment requirements, capital expenditures and other commitments over the next twelve-month period, there can be no assurances that these sources of cash will be available in accordance with our expectations.

In June 2007, we amended and restated our unsecured revolving credit facility to increase the amount available from $1.0 billion to $1.2 billion, reduce the effective interest rate to LIBOR plus 0.485%, change the 0.175% commitment fee to a 0.140% facility fee and extend the maturity date from March 27, 2010 to June 29, 2012. Other structural enhancements provided for in the amended and restated revolving credit facility include, among others; an extension option that provides for, subject to lender approval, one year extensions at the first two anniversary dates of the facility, and an accordion feature that allows us to increase the facility size to $1.5 billion during the life of the facility.

Our financing agreements contain covenants that require us, among other things, to maintain minimum net worth, fixed charge coverage ratio and limit our net debt-to-capital ratio. We were in compliance with all covenants as of September 30, 2007.

If any person other than A. Wilhelmsen AS. and Cruise Associates, our two principal shareholders, acquires ownership of more than 30% of our common stock and our two principal shareholders, in the aggregate, own less of our common stock than such person and do not collectively have the right to elect, or to designate for election, at least a majority of the board of directors, we may be obligated to prepay indebtedness outstanding under the majority of our credit facilities, which we may be unable to replace on similar terms. If this were to occur, it could have an adverse impact on our liquidity and operations.

23

Item 3. Quantitative and Qualitative Disclosures About Market Risk

In February 2007, we entered into interest rate swap agreements that effectively change €1.0 billion of fixed rate debt with a weighted-average fixed rate of 5.625% to EURIBOR-based floating rate debt. We also entered into cross currency swap agreements that effectively changes €300.0 million of floating EURIBOR-based debt to $389.1 million floating LIBOR-based debt. Other than this change there have been no significant developments or material changes with respect to our exposure to the market risks previously reported in our annual report on Form 10-K for the year ended December 31, 2006.

For a further discussion of certain market risks related to our business, see Part II, Item 7A. Quantitative and Qualitative Disclosures About Market Risk in our annual report on Form 10-K for the year ended December 31, 2006.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chairman and Chief Executive Officer and Executive Vice President and Chief Financial Officer, we carried out an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined in Exchange Act Rule 13a-15(e), as of the end of the period covered by this quarterly report and concluded that those controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 and 15d-15 during the quarter ended September 30, 2007 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

It should be noted that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there is only reasonable assurance that our controls will succeed in achieving their goals under all potential future conditions.

24

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

As reported in our annual report on Form 10-K for the year ended December 31, 2006, a purported class action lawsuit was filed in April 2005 in the United States District Court of the Southern District of Florida alleging that Celebrity Cruises improperly requires its cabin stewards to share guest gratuities with assistant cabin stewards. The suit sought payment of damages, including penalty wages under the U.S. Seaman’s Wage Act. In March 2006, the Southern District of Florida dismissed the suit and held that the case should be arbitrated pursuant to the arbitration provision in Celebrity’s collective bargaining agreement. In June 2007, following an appeal by the plaintiff to the United States 11th Circuit Court of Appeals, the Court of Appeals affirmed the district court’s order dismissing the suit. In August 2007, the Court of Appeals denied the plaintiff’s petition for re-hearing and petition for re-hearing enbanc.

Item 6. Exhibits

10.1 Amended and Restated Trust Agreement dated September 21, 2007 between Royal Caribbean Cruises Ltd. and Northern Trust, N.A.

10.2 Cruise Policy effective as of October 3, 2007 for Members of the Board of Directors of Royal Caribbean Cruises Ltd.

31 Certifications required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities and Exchange Act of 1934.

32 Certifications pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code.

25

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

  ROYAL CARIBBEAN CRUISES LTD.

(Registrant)

	/s/ Brian J. Rice
		Brian J. Rice
		Executive Vice President and
		Chief Financial Officer
Date: October 22, 2007		(Principal Financial Officer)

26

EX-10

Exhibit 10.1

TRUST AGREEMENT

This Trust Agreement is amended and restated this _21 day of _September , 2007, by and between Royal Caribbean Cruises Ltd. (“Company”) and Northern Trust, NA (“Trustee”);

WHEREAS, Company currently employs Richard D. Fain (“Employee”) as its Chairman and CEO and has entered into an employment agreement (the “Agreement”) with Employee dated as of March 31, 2007;

WHEREAS, Company has incurred and expects to incur liability under the Agreement with respect to Employee;

WHEREAS, Company established a trust (the “Trust”) and has contributed to the Trust assets that shall be held therein, subject to the claims of Company’s creditors in the event of Company’s “Insolvency,” as herein defined, until paid to Employee and his beneficiary(ies) in such manner and at such times as specified in the Agreement;

WHEREAS, it is the intention of the parties that this Trust shall constitute an unfunded arrangement and shall not affect the status of the Agreement as an unfunded plan maintained for the purpose of providing deferred compensation for Employee as a member of a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended; and

WHEREAS, it is the intention of Company to make contributions to the Trust to provide itself with a source to assist it in meeting its liabilities under the Agreement;

NOW, THEREFORE, the parties do hereby amend and restate the Trust and agree that the Trust shall continue to be comprised, held and disposed of as follows:

Section 1. Continuance of Trust.

(a)       Company has deposited with Trustee in trust certain shares of common stock of Company, par value $0.01 per share, which is the principal of the Trust to be held, administered and disposed of by Trustee as provided in this Trust Agreement.

(b) The Trust hereby established shall be irrevocable.

(c)       The Trust is intended to be a grantor trust, of which Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended (the “Code”), and shall be construed accordingly.

(d)       The principal of the Trust, and any earnings thereon, shall be held separate and apart from other funds of Company and shall be used exclusively for the uses and purposes of Employee and general creditors as herein set forth. Employee and his beneficiary(ies) shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Agreement and this Trust Agreement shall

PHBF1\411332\2

be mere unsecured contractual rights of Employee and his beneficiary(ies) against Company. Any assets held by the Trust will be subject to the claims of Company’s general creditors under federal and state law in the event of Insolvency, as defined in Section 3(a) herein.

(e)       Company, in its sole discretion, may at any time, or from time to time, make additional deposits of cash or other property in trust with Trustee to augment the principal to be held, administered and disposed of by Trustee as provided in this Trust Agreement. Neither Trustee nor Employee shall have any right to compel such additional deposits.

(f)        Trustee shall have no duty to enforce any funding obligations of Company, and the duties of Trustee shall be governed solely by the terms of the Trust without reference to the terms of the Agreement.

Section 2. Payments to Employee and His Beneficiary(ies).

(a)       Company shall deliver to Trustee a schedule (the “Payment Schedule”) that indicates the amounts payable in respect to Employee (and his beneficiary(s)), that provides a formula or other instructions acceptable to Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Agreement), and the time of commencement for payment of such amounts. Except as otherwise provided herein, Trustee shall make payments to Employee and his beneficiary(s) in accordance with such Payment Schedule. Trustee shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Agreement and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by Company.

(b)       The entitlement of Employee or his beneficiary(ies) to the benefits under the Agreement shall be determined by Company or such party as it shall designate under the Agreement, and any claim for such benefits shall be considered and reviewed under the procedures set out in the Agreement.

(c)       Company may make payment of benefits directly to Employee or his beneficiary(ies) as they become due under the terms of the Agreement. Company shall notify Trustee of its decision to make payment of benefits directly prior to the time amounts are payable to Employee or his beneficiary(ies). In addition, if the principal of the Trust, and any earnings thereon, are not sufficient to make payments of benefits in accordance with the terms of the Agreement, Company shall make the balance of each such payment as it falls due. Trustee shall notify Company where principal and earnings are not sufficient to make a payment under the Payment Schedule.

(d) The Payment Schedule is attached hereto as Schedule A.

PHBF1\411332\2

090207

2

Section 3.         Trustee Responsibility Regarding Payments to Trust Beneficiary When Company Is Insolvent.

(a)       Trustee shall cease payment of benefits to Employee and his beneficiary(ies) if Company is Insolvent, subject to the provisions of paragraph (b) of this Section. Company shall be considered “Insolvent” for purposes of this Trust Agreement if (i) Company is unable to pay its debts as they become due, or (ii) Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code.

(b)       At all times during the continuance of this Trust, as provided in Section 1(d) hereof, the principal and income of the Trust shall be subject to claims of general creditors of Company under federal and state law as set forth below.

(1)       The Board of Directors and the Chief Executive Officer of Company shall have the duty to inform Trustee in writing of Company’s Insolvency. If a person claiming to be a creditor of Company alleges in writing to Trustee that Company has become Insolvent, Trustee shall determine whether Company is Insolvent and, pending such determination, Trustee shall discontinue payment of benefits to Employee or his beneficiary(ies).

(2)       Unless Trustee has actual knowledge of Company’s Insolvency, or has received notice from Company or a person claiming to be a creditor alleging that Company is Insolvent, Trustee shall have no duty to inquire whether Company is Insolvent. Trustee may in all events rely on such evidence concerning Company’s solvency as may be furnished to Trustee and that provides Trustee with a reasonable basis for making a determination concerning Company’s solvency.

(3)       Trustee may appoint an independent accounting, consulting or law firm to assist Trustee in making any determination of solvency required by Trustee under this Section. In such event, Trustee may give consideration to the report submitted by such firm when Trustee makes its determination of solvency. Trustee shall also be responsible for the prudent selection of such firm.

(4)       If at any time the Board of Directors or the Chief Executive Officer of Company notifies Trustee or Trustee has determined that Company is Insolvent, Trustee shall discontinue payments to Employee or his beneficiary(ies) and shall hold the assets of the Trust for the benefit of Company’s general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of Employee or his beneficiary(ies) to pursue their rights as general creditors of Company with respect to benefits due under the Agreement or otherwise.

(5)       Trustee shall resume the payment of benefits to Employee or his beneficiary(ies) in accordance with Section 2 hereof only after Trustee has determined that Company is not Insolvent (or is no longer Insolvent). In connection with its determination, Trustee may rely on an order from the U.S. Bankruptcy Court or other court of competent jurisdiction.

PHBF1\411332\2

090207

3

(c)       Provided that there are sufficient assets, if Trustee discontinues the payment of benefits from the Trust pursuant to paragraph (b) of this Section and subsequently resumes such payments, the first payment following such discontinuance, to the extent not inconsistent with an order from the U.S. Bankruptcy Court or other court of competent jurisdiction, shall include the aggregate amount of all payments due to Employee or his beneficiary(ies) under the terms of the Agreement for the period of such discontinuance, less the aggregate amount of any payments made to Employee or his beneficiary(ies) by Company in lieu of the payments provided for hereunder during any such period of discontinuance, all in accordance with the Payment Schedule, which shall be modified by Company as necessary to comply with the provisions of this paragraph (c).

Section 4. Payments to Company.

Except as provided in Section 3 hereof, Company shall have no right or power to direct Trustee to return to Company or to divert to others any of the Trust assets before all payment of benefits has been made to Employee and his beneficiary(ies) pursuant to the terms of the Agreement. Trustee shall be entitled to rely conclusively upon Company’s written certification that all such payments have been made.

Section 5. Investment Authority.

(a)       Trustee may invest in securities (including stock or rights to acquire stock) or obligations issued by Company. Subject to paragraphs (b), (c) and (d) of this Section, all rights associated with assets of the Trust shall be exercised by Trustee or the person designated by Trustee, and shall in no event be exercisable by or rest with Employee.

(b)       Company shall have the right at any time, and from time to time in its sole discretion, to substitute assets of equal fair market value for any asset held by the Trust. This right is exercisable by Company in a nonfiduciary capacity without the approval or consent of any person in a fiduciary capacity.

(c)       Company may issue written investment guidelines to Trustee from time to time and, subject to those guidelines (if any) and to paragraphs (b) and (d) of this Section, Trustee may invest in property of any kind. Trustee shall have no responsibility for determining whether Company’s exercise of the right described in paragraph (b) of this Section has been properly exercised or for any investment losses that may result from its exercise.

(d)       Company may, by written notice to Trustee, assume ongoing investment responsibility for any portion (but not for all) of the Trust assets (and shall be deemed to have assumed such responsibility with respect to any shares of Company stock held in the Trust), in which event Trustee shall act with respect to such assets only as directed by Company and shall have no investment review responsibility therefor.

(e)       Trustee shall not make any investment review of, consider the propriety of holding or selling, or vote other than as directed by Company, any assets of the Trust Fund

PHBF1\411332\2

090207

4

for which Company shall have investment responsibility in accordance with this Section 5, except that if Trustee shall not have received contrary instructions from Company, Trustee shall invest for short-term purposes any cash in its custody in bonds, notes and other evidences of indebtedness having a maturity date not beyond five years from the date of purchase, United States Treasury bills, commercial paper, bankers’ acceptances and certificates of deposit, and undivided interests or participations therein, and participations in regulated investment companies for which Trustee or its affiliate is the adviser.

Section 6. Disposition of Income.

During the term of this Trust, all income received by the Trust, net of expenses and taxes, shall be accumulated and reinvested.

Section 7. Accounting by Trustee.

(a)       Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between Company and Trustee. Within 60 days following the close of each calendar year and within 30 days after the removal or resignation of Trustee, Trustee shall deliver to Company a written account of its administration of the Trust during such year or during the period from the close of the last preceding year to the date of such removal or resignation, setting forth all investments, receipts, disbursements and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such year or as of the date of such removal or resignation, as the case may be.

(b)       In the absence of the filing in writing with Trustee by Company of exceptions or objections to any such account within 120 days from the date of the receipt of the account by Company, Company shall be deemed to have approved such account; in such case, or upon the written approval by Company of any such account, except with respect to any reasonable allegation or complaint of negligence or willful misconduct against Trustee, Trustee shall be released, relieved and discharged with respect to all matters and things set forth in such account as though such account had been settled by the decree of a court of competent jurisdiction.

Section 8. Responsibility of Trustee.

(a)       Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, provided, however, that Trustee shall incur no liability to any person for any action taken pursuant to a direction, request or approval given in writing by Company, unless Trustee knows or should know that such direction, request or approval is either not contemplated by

PHBF1\411332\2

090207

5

or not in conformity with the terms of this Trust. In the event of a dispute between Company and a party, Trustee may apply to a court of competent jurisdiction to resolve the dispute.

(b)       If Trustee undertakes or defends any litigation arising in connection with this Trust, Company agrees to indemnify Trustee against Trustee’s costs, expenses and liabilities (including, without limitation, attorneys’ fees and expenses) relating thereto and to be primarily liable for such payments. If Company does not pay such costs, expenses and liabilities in a reasonably timely manner, Trustee may obtain payment from the Trust.

(c)       Trustee may consult with legal counsel (who may also be counsel for Company generally) with respect to any of its duties or obligations hereunder.

(d)       Trustee may hire agents, accountants, actuaries, investment advisors, financial consultants or other professionals to assist it in performing any of its duties or obligations hereunder.

(e)       Trustee shall have, without exclusion, all powers conferred on trustees by applicable law, unless expressly provided otherwise herein, provided, however, that if an insurance policy is held as an asset of the Trust, Trustee shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy (as distinct from conversion of the policy to a different form) other than to a successor Trustee, or to loan to any person the proceeds of any borrowing against such policy.

(f)        Notwithstanding any powers granted to Trustee pursuant to this Trust Agreement or to applicable law, Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Code.

(g)       Company (which has the authority to do so under the laws of its state of incorporation) shall indemnify Northern Trust, NA, and defend it and hold it harmless from and against any and all liabilities, losses, claims, suits or expenses (including attorneys’ fees) incurred by Northern Trust, NA pursuant to a legal action against it or Company with respect to (1) its carrying out its responsibilities or providing services under this Trust Agreement, or its status as Trustee, or by reason of any act or failure to act under this Trust Agreement (provided, in each case, that Trustee acted at all times in a manner consistent with the standard set forth in paragraph (a) of this Section), except to the extent that any such liability, loss, claim, suit or expense arises directly from Trustee’s negligence or willful misconduct in the performance of responsibilities specifically allocated to it under the Trust Agreement, or (2) a determination by the Internal Revenue Service or by the U.S. Department of Labor, as applicable, that the Agreement fails to qualify as a top-hat plan exempt from Parts 2, 3, and 4 of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as amended. This paragraph (g) shall survive the termination of this Trust Agreement.

(h)       Trustee shall not be liable for any delay in performance, or non-performance, of any obligation hereunder to the extent that the same is due to forces beyond

PHBF1\411332\2

090207

6

Trustee’s reasonable control, including but not limited to any industrial, juridical, governmental, civil or military action; acts of terrorism, insurrection or revolution; nuclear fusion, fission or radiation; failure or fluctuation in electrical power, heat, light, air conditioning or telecommunications equipment; or acts of God.

Section 9. Compensation and Expenses of Trustee.

All administrative and Trustee’s fees and expenses shall be paid from the Trust.

Section 10. Resignation and Removal of Trustee.

(a)       Trustee may resign at any time by written notice to Company, which shall be effective 60 days after receipt of such notice unless Company and Trustee agree otherwise.

(b)       Trustee may be removed by Company at any time by written notice to Trustee, which shall be effective 60 days after receipt of such notice or upon shorter notice accepted by Trustee.

(c)       Upon resignation or removal of Trustee and appointment of a successor trustee, all assets shall subsequently be transferred to the successor trustee. The transfer shall be completed within 60 days after receipt of notice of resignation, removal or transfer, unless Company extends the time limit.

(d)       If Trustee resigns or is removed, a successor shall be appointed, in accordance with Section 11 hereof, by the effective date of resignation or removal under paragraph (a) or (b) of this Section. If no such appointment has been made, Trustee may apply to a court of competent jurisdiction for appointment of a successor or for instructions.

(e)       The resigning or removed Trustee is authorized to reserve such amount as may be necessary for the payment of its reasonable fees and expenses incurred prior to resignation or removal. All reasonable expenses of Trustee in connection with any proceeding for appointment of a successor, settlement of Trustee’s accounts, or instructions to a successor shall be allowed as administrative expenses of the Trust. The 60-day period set forth in paragraph (c) of this Section may be extended by agreement of the parties if necessary to settle Trustee’s accounts by agreement with Company or by a court of competent jurisdiction. Company’s consent to extension of such period shall not be unreasonably withheld.

Section 11. Appointment of Successor.

(a)       If Trustee resigns or is removed in accordance with Section 10(a) or (b) hereof, Company may appoint any third party, such as a bank trust department or other party that may be granted corporate trustee powers under state law, as a successor to replace Trustee upon resignation or removal. The appointment shall be effective when accepted in writing by the new trustee, who shall have all of the rights and powers of the former Trustee,

PHBF1\411332\2

090207

7

including ownership rights in the Trust assets. The former Trustee shall execute any instrument necessary or reasonably requested by Company or the successor trustee to evidence the transfer.

(b)       The successor trustee need not examine the records and acts of any prior Trustee and may retain or dispose of existing Trust assets, subject to Sections 7 and 8 hereof. The successor trustee shall not be responsible for and Company shall indemnify and defend the successor trustee from any claim or liability resulting from any action or inaction of any prior Trustee or from any other past event, or any condition existing at the time it becomes successor trustee.

Section 12. Amendment or Termination.

(a)       This Trust Agreement may be amended by a written instrument executed by Trustee and Company. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Agreement, as certified to in writing by Company (upon which certification Trustee may conclusively rely), materially reduce the rights of Employee, as certified to in writing by Company (upon which certification Trustee may conclusively rely), or make the Trust revocable.

(b)       The Trust shall not terminate until the date on which there are no longer any assets held in the Trust or Employee and his beneficiary(ies) are no longer entitled to benefits pursuant to the terms of the Agreement, as certified to in writing by Company (upon which certification Trustee may conclusively rely). Upon termination of the Trust, any assets remaining in the Trust shall be returned to Company.

Section 13. Miscellaneous.

(a)       Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof.

(b)       Benefits payable to Employee and his beneficiary(ies) under this Trust Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process.

(c)       This Trust Agreement shall be governed by and construed in accordance with the laws of Florida.

(d)       Any action required to be taken by Company shall be by resolution of its board of directors or by written direction of one or more of its president, any vice president or treasurer or anyone designated by such person to act on behalf of Company. Trustee may rely upon a resolution or direction filed with Trustee and shall have no responsibility for any action taken by Trustee in accordance with any such resolution or direction.

PHBF1\411332\2

090207

8

(e)       In making payments to service providers pursuant to authorized directions, Company acknowledges that Trustee is acting as paying agent, and not as the payor, for tax information reporting and withholding purposes.

(f)        This Agreement shall inure to the benefit of, and be binding upon, each of the parties and their respective successors and assigns.

Section 14. Effective Date.

The effective date of this amended and restated Trust Agreement shall be September 21, 2007.

ROYAL CARIBBEAN CRUISES LTD.

Attest:

/s/ Bradley H. Stein By: /s/ Brian J. Rice

Bradley H. Stein Name: Brian J. Rice

Secretary Title: EVP & CFO

NORTHERN TRUST, NA

By: /s/ Stephen A. Lynch III

Name: Stephen A. Lynch III

Title: Senior Vice President

PHBF1\411332\2

090207

9

SCHEDULE A

PAYMENT SCHEDULE

Trustee will pay all Trust assets in a lump sum as follows and on the first to occur of the following days: (i) to Employee on the first day following the six-month anniversary of Employee’s termination of employment from Company except in the event such termination is on account of death; (ii) to Employee’s beneficiary(ies) on the 60th day following Employee’s death; or (iii) to Employee on the 60th day following the date on which Employee – before his termination of employment with the Company – incurs a disability that meets the definition of “disability” in section 409A of the Code. Company shall notify Trustee of the beneficiary(ies) that Employee has designated by written notice to Company and, if Employee has failed to designate a beneficiary(ies), Trustee shall make payment (if required by (ii) above) to the executor of Employee’s estate.

In the event Employee or his beneficiary(ies) is determined to be taxable on any amount in the Trust prior to the time of actual receipt thereof, a distribution shall be made by Trustee to Employee or his beneficiary(ies), provided that such distribution does not contravene section 409A of the Code, as directed by Company in an amount sufficient to pay such tax. An amount in the Trust shall be determined to be taxable upon the receipt by Employee or his beneficiary(ies) or Company of (i) a final determination by the United States Internal Revenue Service or state or local taxing authority which is not appealed to the courts; (ii) a final determination by a court of competent jurisdiction; or (iii) an opinion of Drinker Biddle & Reath LLP, addressed to Company, Trustee and Employee or his Beneficiary(ies), that amounts in the Trust are taxable to Employee or his beneficiary(ies) prior to actual receipt thereof. Company shall deliver a copy of any such determination, order or opinion to Trustee. The amount to be distributed shall be the amounts of tax determined by such taxing authority or court, or as calculated by Drinker Biddle & Reath LLP in connection with its opinion. Any distributions from the Trust to Employee or his beneficiary(ies) shall be applied as an offset to the benefits, if any, payable under the Agreement.

PHBF1\411332\2

EX-10

Exhibit 10.2             

Board Member Cruise Policy Owner: SVP, Revenue Management    

10/3/07     

In order to increase knowledge and understanding of the business, Royal Caribbean
Cruises Ltd (the “Company”) encourages the members of its Board of Directors
(“Board Member”) and their families to experience the Company’s product. To
encourage and administer this objective, the Company has adopted the following
Board Member Cruise Policy (the “Policy”).

Scope

The Policy applies to all Board Members.

General Rules and Policies

Board Member – A Board Member is entitled to one stateroom per year (immediate confirmation). Applicable gratuities, taxes, and fees are not included.

Board Member Immediate Family Traveling with a Board Member* – One
stateroom, per year (immediate confirmation). Applicable gratuities, taxes, and fees
are not included.

Board Member Immediate Family Not Traveling with a Board Member – One
stateroom (immediate confirmation) one time per year (not applicable if this person
has already traveled with the Board Member during the same calendar year).
Applicable gratuities, taxes, and fees are not included.

Additional Guest Traveling with Board Member – The guest may book a cabin at
15% off of the lowest available fare in the category booked, plus applicable gratuities,
taxes, and fees. Total group size may not exceed 20 staterooms. Staterooms in excess
of 20 will be subject to normal prices, terms, and conditions.

Policy Administration and Governance

Chairman– This function is responsible to approve:

§ The Policy

§ Proposed amendments/updates to the Policy

§ Exceptions to the Policy

Revenue Management Department– Responsibilities include:

§ Maintain, review, and recommend policy updates

§ Provide quarterly exception reports

* Immediate Family means spouse, children, and parents

1

Board Member Cruise Policy Owner: SVP, Revenue Management

10/3/07       

Trade Support and Services– Responsibilities include:

§ Process Board Member cruise requests in accordance with the Policy

Proposed by: /s/ Doug Santoni_________ Date: _10/4/07___________

Doug Santoni, SVP Revenue Management

Authorized by: /s/ Richard D. Fain _______ Date: _10/4/07____________

Richard D. Fain, Chairman & CEO

2

EX-31

Exhibit 31

CERTIFICATIONS

I, Richard D. Fain, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Royal Caribbean Cruises Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: October 22, 2007

/s/ RICHARD D. FAIN
	Richard D. Fain
		Chairman and
		Chief Executive Officer
		(Principal Executive Officer)

Exhibit 31

CERTIFICATIONS

I, Brian J. Rice, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Royal Caribbean Cruises Ltd.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the company’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5. The company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: October 22, 2007
	/s/ BRIAN J. RICE
		Brian J. Rice
		Executive Vice President and
		Chief Financial Officer
		(Principal Financial Officer)

EX-32

Exhibit 32

In connection with the quarterly report on Form 10-Q for the quarterly period ended September 30, 2007 as filed by Royal Caribbean Cruises Ltd. with the Securities and Exchange Commission on the date hereof (the “Report”), Richard D. Fain, Chairman and Chief Executive Officer, and Brian J. Rice, Executive Vice President and Chief Financial Officer, each certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Royal Caribbean Cruises Ltd.

Date: October 22, 2007

By: /s/ RICHARD D. FAIN
	Richard D. Fain
	Chairman and
	Chief Executive Officer
	(Principal Executive Officer)

By: /s/ BRIAN J. RICE
	Brian J. Rice
	Executive Vice President and
	Chief Financial Officer
	(Principal Financial Officer)