Royal Caribbean Cruises Ltd.

Note 7. Earnings Per Share
Below is a reconciliation between basic and diluted earnings per share before extraordinary item under FAS 128 for the years ended December 31, 1997, 1996 and 1995 (in thousands except per share amounts):

Table

Extraordinary loss per share for the year ended 1997 for basic and diluted earnings per share was ($0.11) and ($0.10), respectively.

Note 8. Retirement Plan
The Company maintains a defined contribution pension plan covering all of its full-time shoreside employees who have completed the minimum period of continuous service, as defined in the plan. Annual contributions to the plan are based on fixed percentages of participants' salaries and years of service, not to exceed certain maximums, as defined in the plan. Pension cost was $4.9, $4.3, and $3.9 million for the years 1997, 1996 and 1995, respectively. Celebrity employees will be covered under the plan effective January 1, 1998.

Note 9. Operating Leases
The Company is obligated under noncancelable operating leases for various facilities, primarily office and warehouse space. As of December 31, 1997, future minimum lease payments under noncancelable operating leases were as follows (in thousands):

Table

Total rent expense for all operating leases amounted to $5.7, $4.9 and $4.5 million for the years 1997, 1996 and 1995, respectively.

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