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Royal Caribbean Cruises Ltd. Global Bunkering – A Cruise Lines Perspective

Royal Caribbean Cruises Ltd. Global Bunkering – A Cruise Lines Perspective. World Fuel Oil Summit May 28, 2010. Cruise Industry Fundamentals Provide better vacation value than land resorts Focus on guest satisfaction to grow repeat business Compete on a global market for cruise passengers

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Royal Caribbean Cruises Ltd. Global Bunkering – A Cruise Lines Perspective

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  1. Royal Caribbean Cruises Ltd. Global Bunkering – A Cruise Lines Perspective World Fuel Oil Summit May 28, 2010

  2. Cruise Industry Fundamentals Provide better vacation value than land resorts Focus on guest satisfaction to grow repeat business Compete on a global market for cruise passengers Ability to move our assets to different part of the world to maximize revenue Differentiation from land based resorts

  3. 0.5 Transportation Companies’ Fuel Spend • Fuel as a % of total operating expense • Fuel spend - 2007 • $USD Billions • 30% • 28% • RCL’s fuel cost is a significant portion of operating cost • RCL’s absolute spend on fuel is not as large as other transportation companies • 21% • 13% • 12% • 10% • 9% * Includes fuel and utilities – “Locomotive fuel & power expense” ** FedEx’s fiscal year ends May 31, Source: Annual reports

  4. Components of RCL Fuel Strategy • Fuel strategy • key elements • Description 1 • Long Range Demand Planning • Model Demand by Port 36 months out for hedging • Firm up models 6-12 months out for procurement • Secure guaranteed supply of fuel • Negotiate for most competitive contract price • Opportunistically use the spot in certain markets • Determine optimal supply location 2 • Procurement 3 • Logistics • Coordinate nomination and delivery of fuel • Provide critical communication link between vessel and supplier • Manage ships demand with local availability 4 • Risk management & trading • Contract for fixed price supply to protect from volatility • Enter into financial hedges to protect from volatility • Physical (barrels) and/or financial (paper) trading 5 • Establishing consumption budgets • Monitoring actual consumption • Driving conservation strategies • Demand management

  5. ۞Support vessels > 350 ports ۞Regularly purchase fuel in ~60 ports ۞Aggregate ~60% in 6 key supply ports Regional Fuel Demand Northwest Europe 30,000 / 35,000 Vancouver 25,000 / 38,000 U.S. East Coast 100,000 / 13,000 Seattle 25,000 / 1,000 Mediterranean 220,000 / 60,000 Asia 38,000 / 1,000 Florida 210,000 / 35,000 California 55,000 / 25,000 Middle East 6,000 / 9,000 Caribbean 260,000 / 25,000 Brazil 20,000 / 2,000 Uruguay 8,000 / 1,000 Australia 22,000 / 1,000 Fuel Types IFO / MGO Qty in Metric Tons Chile 1,000 / 3,000 Argentina 4,000 / 6,000

  6. Emissions Regulations Impact Cruise ships spend extended periods in regulated shipping areas:

  7. Emissions Mitigation • Improve fuel efficiency • More fuel efficient newbuild design • Adjusting vessels speed and itinerary • Optimizing maintenance (hull, prop, engines, HVAC, etc.) • Driving efficiency culture through all operations (lighting – water, guest – crew) • Alternative fuels & energy sources • Solar • Biodiesel • Evaluated many others (shore power, fuel cell, wind, etc.) • Abatement Technologies • In the process of testing promising technologies • Issues with both open & closed looped systems • Water treatment is a major issue for cruise ships

  8. Fleet Bunker Consumption • Pioneered use of Light Cycle Oil (LCO) and Biodiesel in Gas Turbine Vessels (Radiance and Millennium Class)

  9. Increasing Fuel Efficiency Fuel Consumption (Metric tons per 1000 pax per day) • Focus on reducing fuel consumption • Installed diesel generators on Millennium and Radiance classes for low power demand • Various projects implemented across the fleet • Window film to reduce heat • Silicon hull paint • Trim Optimization • Slow steaming by adjusting hours in certain ports

  10. Fuel Hedging Initiatives Percent of fuel consumption hedged 50% 53% 40%

  11. Decreasing Net Cruise Costs $ per APCD

  12. RCL’s Competitive Advantages RCL Advantages • Strong Brands • Superior Fleet • Cost Culture Evolution • Fuel Hedging

  13. RCCL Fleet • RCL fleet consists of 40 Ships over all brands • 4 of 10 Classes were the largest cruise ships when built, 3 of the 4 currently largest ship classes • Oasis is the first vessel to break 200,000 gross tons • Millennium / Radiance class were the first cruise ships to be powered entirely by gas turbines & then by 100% biodiesel

  14. Royal Caribbean International

  15. Celebrity Cruise Lines

  16. Oasis Class – 2009 Central Park Boardwalk Aqua Theater Loft Suites Royal Promenade Rising Tide Bar Zip Line Pool and Sports Zone Vitality at Sea Spa and Fitness Center

  17. Solstice Class – 2008 Lawn Club/Real Grass Corning Museum of Glass Studio Larger Cabins 86% Balconies World-Class Restaurants Innovative Spa and Fitness Center

  18. 60% 50% Oasis Class 40% Solstice % of Total Capacity Class 30% 20% Freedom & Voyager 10% 0% 2009 2010 2011 Superior Hardware Premium Hardware as a % of Total By 2011 Over 50% of RCL’s fleet will consist of Voyager, Freedom, Solstice and Oasis Class vessels

  19. Resilient during 2009 Strong value proposition Very diversified guest sourcing Improving outlook for 2010 Net Yield improvement 3% - 6% 2010 EBITDA of $1.5B* * (based upon midpoint of January 28th, 2010 guidance) 2010 Outlook

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