royal caribbean cruises ltd

Royal Caribbean Cruises Ltd .

2 0 0 0 A N N U A L R E P O R T

Royal Caribbean Cruises Ltd. entertained more than two mil l ion guests on

global cruise vacations in 2000 with Royal Caribbean International and

Celebrity Cruises – a 20-percent increase over the previous year. Our modern

fleet, impeccable service and global itineraries appeal to significant demographic

groups in age and income. As capacity r ises in 2001 with four new ships and

9,250 double-occupancy berths, Royal Caribbean International will reign as the

world ’s largest contemporary cruise brand with 33,050 berths while Celebrity

Cruises wil l be the fastest-growing premium brand with 14,300 berths. The

opportunity for success i s . . .

1

L I M I T L E S S

Two ships – our 11th and 12th new vessels since 1995 – made auspicious

debuts at the turn of the century, beginning with Celebrity Cruises’ flagship

Millennium. It blends the sophisticated elegance of a bygone era with

state-of-the-art technology, being the first ship in the cruise industry

powered by environmentally friendly, smokeless gas-turbine engines.

2

(Dollars in thousands, except per share data)

F i n a n c i a l H i g h l i g h t s

2000 1999 1998

Revenues $2,865,846 $2,546,152 $2,636,291

Operating Income 569,540 480,174 488,735

Net Income 445,363 383,853 330,770

Earnings Per Share* $ 2.31 $ 2.06 $ 1.83

Shareholders’ Equity $3,615,915 $3,261,156 $2,454,758

(* diluted)

3

F i n a n c i a l H i g h l i g h t s

8988 91 92 94 95 97 98 9990 93 96 00

567 76

0

698

1,11

3

1,17

1

1,18

4 1,35

7

1,93

9

2,63

6

2,54

6

2,86

6

1,01

3

523

8988 91 92 94 95 97 98 9990 93 96 00

42

4

52

107 13

7 149

151 17

5

331

384

61

14

445

8988 91 92 94 95 97 98 9990 93 96 00

348

348

404

404

400

400

733

733 84

684

6 965

965 1,08

51,

085

2,01

92,

019

2,45

52,

455

3,26

13,

261 3,

616

3,61

6

464

464

295

295

REVENUES

NET INCOME

SHAREHOLDERS’ EQUITY

($ millions)

4

O U R Y E A R

WE HAVE WHAT I CONSIDER THE BEST FLEET IN THE

INDUSTRY WITH THE BEST CREWS ON THE SEVEN SEAS.”

“

5

RICHARD D. FAIN

Chairman and CEO

DEAR SHAREHOLDERS:

In the year 2000, Royal Caribbean Cruises Ltd. set a number of records with Net Income reaching $445 million and guests served

reaching the two-million mark. We increased our capacity by more than 16 percent and were able to fill that increased capacity

without reducing our yields, despite some clear signs of slowing in the economy. Equally important, we took a number of steps that

we believe will better position us to compete for a growing piece of that enormous pie – the global vacation market.

One of our most important considerations as we move forward is to continue attracting new customers to cruising and to our

brands. In the United States, 88 percent of the population has never cruised, and overseas, the percentage is much higher. Our

continued success in expanding our market to new and different customers is definite evidence of our ability to reach this

enormous untapped potential.

A NEW MILLENNIUM

We made pivotal moves in 2000 to meet our growth program. We introduced the second of three new classes of ships in our

current newbuilding program; formed a sales and marketing alliance supporting growth in the United Kingdom and Europe; and

put in place strategic initiatives in Alaska and South America to expand those markets. The third new class of ships will be unveiled

this spring with Royal Caribbean International’s Radiance of the Seas, a sleek, 90,000-ton vessel with a yacht-like bow and unheard

of amounts of glass.

In 2000, we took another significant step in what I believe is a historic era for the cruise industry. We greeted the new millennium

with Celebrity Cruises’ new Millennium. This is the first of four ships in the 91,000-ton Millennium class, and it created much

excitement during its summer debut in Europe. I do not think I exaggerate in saying Millennium raised the bar on elegance in cruising.

One particularly notable feature is the ship’s specialty restaurant, The Olympic. Using the antique, carved-walnut panels from the 1911

sister ship to Titanic, this room creates an almost palpable feeling of reliving a bygone day in luxurious ocean travel.

Millennium also features the first application of smokeless gas-turbine engines ever on a cruise ship. These engines are not only quieter

and smoother than diesel; they greatly reduce emissions of nitrous oxide and sulfur oxide (among what are known as greenhouse

gases). We have committed to this environmentally friendly technology in at least eight newbuilds.

New advertising campaigns have tripled visits to our Web sites and enticed consumers with our global itineraries and luxurious

onboard amenities. Staterooms with private verandas, for example, number about 600 to 750 per new ship, whereas in 1995, not

a single ship in the entire industry had as many as 300 cabins with balconies. In shipboard technology, we were the first to install

Internet centers fleetwide in 2000 with royal caribbean online, and we will have Online@CelebrityCruises fully deployed by the

end of 2001.

SCIENCE LABS AT SEA

In the other branch of our cruise family, we knew that Royal Caribbean International’s revolutionary 142,000-ton Voyager of the Seas

in 1999 would be a tough act to follow – and then we saw Explorer of the Seas. The ship turned out beautifully and, once again,

generated enormous positive praise from guests, travel agents and the press. It is rare when a new ship attracts this much

attention – and very gratifying when it is all this positive. Explorer of the Seas also features the first state-of-the-art oceanographic

and atmospheric laboratories on a cruise ship, created in partnership with the University of Miami and government agencies. We

are proud of the unprecedented opportunity for research that this will give scientists.

Shipyards were not our only construction sites in 2000. We opened a beautiful two-story addition that quadrupled the space in our

Guest Sales and Services Center in Wichita, Kansas, where we now handle 60 percent of the six million-plus annual calls to

Reservations. We moved into a new Logistics Center in Pembroke Park, Florida, to receive and process hotel supplies, and under the

same roof, we created a Shipboard Configuration Center to test computer systems prior to installation on ships. In nearby

Hollywood, we will open a new 18,000-square-foot rehearsal center for Royal Caribbean entertainment productions in July 2001.

EXPANDING OUR REACH

In a business all about going places, we were unusually active in 2000. We strengthened our distribution channels in the

United Kingdom and Europe, enhanced our Alaska vacations, introduced two ships to South America, and broadened our

reach to five U.S. ports.

With plans to deploy five ships in Europe in summer 2001, we invested approximately $300 million for convertible preferred

stock in First Choice Holidays, a British tour operator with an extensive network of retail travel outlets. If converted, the

preferred stock would represent approximately 20 percent of First Choice’s current common stock. We also entered a 50/50

joint venture with First Choice Holidays to operate an independent cruise line marketed to Europeans. In the spring of 2002,

Viking Serenade will commence operations under a new cruise brand.

6

JACK L. WILLIAMS

President

Royal Caribbean International

RICHARD J. GLASIER

Executive Vice President

and Chief Financial Officer

Royal Caribbean Cruises Ltd.

RICHARD E. SASSO

President

Celebrity Cruises

( from left to right)

We also formed Royal Celebrity Tours, based in Seattle, to offer our guests a variety of escorted tours of Alaska’s wilderness, beginning

in 2001. Eventually, Royal Celebrity Tours will be expanded to European and worldwide destinations. For the pre- and post-cruise

Alaska vacation tours, we have designed and built a twin pair of the world’s largest double-deck, domed railcars.

In warmer climates, Celebrity Cruises’ Mercury and Royal Caribbean International’s Splendour of the Seas sailed to South America for

a new winter itinerary in Brazil, Argentina and around Cape Horn to Chile. Closer to home, we assumed a year-round presence at

central Florida’s Port Canaveral with three- and four-night cruises by Sovereign of the Seas. We also began short cruises from Seattle

on a seasonal basis and laid plans for ships to sail seven-night itineraries from three ports along the Gulf of Mexico – Galveston,

Tampa and New Orleans.

While doing our utmost to prepare ourselves commercially for our future growth, we must also prepare ourselves financially. We

ended 2000 with liquidity of about $1 billion. In addition, we felt it timely and prudent to raise an additional $1 billion from the

issuance of senior notes and zero-coupon convertible debt to support our newbuilding construction program.

LOOKING FORWARD

We can already see that the year 2001 will be challenging. With our own capacity increasing 22 percent and the competition also

growing at double-digit rates, we expect pricing to be extremely competitive. To counter this, we have what I consider the best fleet

in the industry with the best crews on the seven seas. Our plan is to continue to work hard to maintain this key advantage. At the same

time, we are investing in enhanced programs to improve our service to the crucial travel-agent community and significantly upgrade

our Customer Relationship Management programs to help us attract and keep our strong customer base. Technology will be an

important component of these efforts as we devote resources and energy in this vital area.

None of these achievements would be possible without the unified efforts of many people. I am grateful to the professional travel

agents who bring vacationers to our ships and to the Board of Directors who steer our Company on its forward-looking course.

I especially thank the 25,000 men and women of Royal Caribbean International and Celebrity Cruises who are daily examples of our

Anchored in Excellence program. Thank you for the energy, enthusiasm and creativity that are fueling our collective success.

Sincerely,

Richard D. Fain

Chairman and CEO

7

8

Twelve of the 19 ships in the combined fleet of Royal Caribbean International

and Celebrity Cruises were five years old or younger in 2000, and four more

ships with a total of 9,250 berths will arrive in 2001. Altogether, 10 new vessels

are scheduled for delivery between 2001 and 2004 from three European

shipyards – an investment of more than $4 billion. These boldly innovative

ships in three distinct classes – Voyager, Millennium and Radiance – are

equipped with onboard amenities that appeal to all cruise vacationers

demanding the very best.

THOROUGHLY MODERN

O U R F L E E T

10

O U R B R A N D S

STRONG IDENTITIES

11

Both of our brands appeal to strong, growing demographic groups in age and income.

Royal Caribbean International represents the healthy, active vacation, creating unexpected

experiences that bring out the adventurous side of people. Celebrity Cruises earns

unanimous acclaim for its five-star gourmet dining and luxurious spas.

12

SELLING WORLDWIDE

O U R P A R T N E R S

13

Important to our strategy for long-term growth is the development of new cruise products and new

markets. Our field-sales force works closely with travel agents whose knowledgeable, professional

service links us to consumers. We invested approximately $300 million to create a sales and marketing

alliance with First Choice Holidays, a major British tour operator. This will strengthen our guest

sourcing and distribution channels in Europe and the United Kingdom.

14

O U R G U E S T S

Cruising remains the highest-rated vacat ion product , yet only about

12 percent of the U.S. population has ever cruised. Two-thirds of first-time

cruisers say cruising is better than other vacations. We strive to build loyalty

among our past guests, including the two million people who sailed in 2000,

when we achieved 104 percent occupancy and a record 13 million passenger

cruise days – 1.4 million greater than our previous record.

HIGHEST SATISFACTION

16

BEYOND MEASURE

O U R S E R V I C E

17

Whenever a guest sails with Royal Caribbean International or Celebrity Cruises, the one constant has

always been near-flawless, personalized service by our shipboard staff. With our Anchored in

Excellence program, guests are at the center of everything we do.

18

ENDLESS INNOVATIONS

O U R A M E N I T I E S

19

Whether guests thirst for adventure or yearn for creature comforts, we meet their vacation

needs with the most innovative ships afloat. On Voyager-class ships, guests can enjoy rock-

climbing walls and ice-skating rinks, and on Explorer of the Seas, they can gain hands-on

science education through interactive exhibits called Exploration Centers. Celebrity

Cruises’ Millennium, the first of four ships in its class, features the largest spa and

penthouse suites at sea.

20

O U R D E S T I N A T I O N S

MYRIAD WONDERS

21

We will deploy five ships in Europe in summer 2001 as more vacationers explore ancient ports and

capitals: Athens, Barcelona, Venice, Rome, Paris, Dublin, Copenhagen, Stockholm, Helsinki and

more. In 2000, we expanded offerings in Australia and New Zealand, initiated voyages to South

America, and created Royal Celebrity Tours for land tours of Alaska beginning in 2001.

22

O U R C O M M I T M E N T

BUILDING COMMUNITY

We hope to make a difference by helping build a public swimming pool in St. Thomas and

a library in Antigua, and supporting a YWCA family center in Miami. We invite scientists

to conduct research in unique, state-of-the-art oceanographic and atmospheric labs on

Royal Caribbean International’s Explorer of the Seas.

44

B O A R D O F D I R E C T O R S

(from left to right)

EDWIN W. STEPHAN

Royal Caribbean Cruises Ltd.*

ARVID GRUNDEKJOEN

Anders Wilhelmsen & Co. A/S

JOHN D. CHANDRISChandris (UK) Limited

JANNIK LINDBAEK

International Finance Corp./Worldbank Group

EYAL OFER

Carlyle M.G. Limited

RICHARD D. FAIN


ARNE WILHELMSEN

Anders Wilhelmsen & Co. A/S

THOMAS J. PRITZKER

Pritzker & Pritzker

LAURA LAVIADA

Factoring Azteca

BERNARD W. ARONSON

Acon Investments, LLC

WILLIAM K. REILLY

Aqua International Partners

TOR ARNEBERGNightingale & Associates, Inc.

*Vice Chairman

E X E C U T I V E O F F I C E R S

RICHARD D. FAIN

Chairman and CEO,


RICHARD J. GLASIER

Executive Vice President

and Chief Financial Officer,


RICHARD E. SASSO

President,

Celebrity Cruises

JACK L. WILLIAMS

President,

Royal Caribbean International

C O R P O R A T E O F F I C E


1050 Caribbean Way

Miami, Florida 33132

Telephone (305) 539-6000

Telecommunications Display Device

(305) 539-4440

Internet http://www.royalcaribbean.com

http://www.celebritycruises.com

I N D E P E N D E N T A U D I T O R S

PricewaterhouseCoopers LLP

700 First Union Financial Center

200 South Biscayne Boulevard

Miami, Florida 33131-2330

C O M M O N S T O C K T R A N S F E R

A G E N T & R E G I S T R A R

First Union National Bank

1525 West W.T. Harris

Boulevard, Building 3C3

Charlotte, NC 28262-1153

Internet http://www.firstunion.com

C O M M O N S T O C K

Common stock of Royal Caribbean

Cruises Ltd. trades on the New York

Stock Exchange (NYSE) and the

Oslo Stock Exchange (OSE) under

the symbol “RCL.”

This report is printed on recycled paper using linseed-based inks.

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The table below sets forth the quarterly high and

low prices of the common stock on the New York

Stock Exchange:

2000 High Low

First Quarter $56 3⁄8 $25 5⁄16

Second Quarter 28 5⁄16 16 1⁄8

Third Quarter 25 15⁄16 18 9⁄16

Fourth Quarter 27 8⁄10 18 5⁄32

1999 High Low

First Quarter $40 1⁄4 $31 3⁄8

Second Quarter 44 1⁄2 31 7⁄8

Third Quarter 51 5⁄8 411⁄16

Fourth Quarter 58 7⁄8 42 5⁄8

A N N U A L M E E T I N G

The annual meeting will be held on Monday, May 14, 2001

at 9 a.m. at the Hyatt Regency, Miami, Florida.

A V A I L A B I L I T Y O F F O R M 2 0 - F

A copy of the Company’s annual report on Form 20-F

will be provided without charge upon written request to

the Company.

S H A R E H O L D E R I N F O R M A T I O N

R O YA L C A R I B B E A N C R U I S E S LT D ., 1050 C A R I B B E A N W AY, M I A M I , F L O R I D A 33132

royal caribbean cruises ltd

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