NEW SYSTEMS
We continue to make steady and sustained progress in our environmental program. We now have state-of-the-art, bilge-water-treatment equipment on all 17 ships, and are testing a new system to clean gray water. Celebrity Cruises' Millennium will be the first ship in the industry to run on environmentally-benign, gas-turbine engines, which dramatically cut smokestack air emissions. All subsequent Millennium- and Vantage-class ships will have similar equipment.

Both brands received recognition for their efforts to improve environmental performance: Celebrity Cruises with an Environmental Protection (EP) rating from Lloyd's Register of Shipping; ISO 14000 certification from the International Organization of Standards; and a perfect score - its third ever - from the U.S. Public Health Service. Royal Caribbean International also gained ISO 14000 certification.

We were able to reach a settlement agreement with the U.S. government and, at long last, conclude a long and difficult probe into the Company's past environmental practices. The Company in July pled guilty to, and agreed to pay an $18 million fine for, pollution incidents in the mid-1990s. We have moved beyond these unacceptable events, and have strengthened our procedures even further to operate at the highest levels of environmental excellence.

Looking back over these last 12 months, there is no question that, as a company, 1999 moved us forward, raised us higher and made us stronger. I am very much indebted to the 20,000 men and women of Royal Caribbean International and Celebrity Cruises, and to the Company's Board of Directors, for their ceaseless efforts on behalf of our Company. It is they who create the forward motion.

Sincerely,

Richard D. Fain
Chairman and CEO