Good morning. My name is Beneda, and I will be your conference operator today. At this time, I would like to welcome everyone to the Royal Caribbean Cruises Ltd. Fourth Quarter Earnings Call. (Operator instructions) Thank you. Mr. Rice, you may begin your conference.

Thank you, Beneda, and good morning everyone. I'd like to thank each of you for joining us this morning for our fourth quarter earnings call. With me here today are Richard Fain, our Chairman and Chief Executive Officer; Adam Goldstein, President and CEO of Royal Caribbean International; Dan Hanrahan, President and CEO of Celebrity Cruises; and Ian Bailey, our Vice President of Investor Relations. During this call, we will be referring to a few slides, which we have posted on our website, www.rclinvestor.com. Before we get started, I would like to refer you to our notice about forward-looking statements. During this call, we will be making comments that are forward-looking. These statements do not guarantee future performance and do involve risks and uncertainties. Examples are described in our SEC filings and other disclosures. Additionally, we will be discussing certain financial measures, which are non-GAAP as defined, and a reconciliation of these items can be found on our website. Richard will begin with his comments about our strategic direction. I will follow with a brief recap of our results, comment on the demand environment and provide our forward guidance. Adam and Dan will then talk more about our brands, and then we will be happy to open the call for your questions. Richard?

Thanks, Brian, and thank you all for joining us this morning. Many of you know that I actually enjoy these quarterly calls to discuss what is happening at our company and in our industry. But to be perfectly frank some calls are more enjoyable than others, and this particular discussion is probably one of my most enjoyable ever. I would like to quickly review where we’re and how we got here, then I would like to focus on how we see the coming year shaping up. Obviously 2010 turned out to be a much better year than we expected. We initially gave guidance in the range of $2.10 per share based on a lackluster economy. Unfortunately, we were right about the economy, but our results did much better ending the year at $2.51 a share. Most important to me was that this improvement came about for all the right reasons strong brands driving higher prices, good cost control driving lower expenses, and better operating performance driving good progress in our credit metrics and in our returns on capital. Looking to 2011, the WAVE period is off to a good start. Our revenue management systems are actually remarkably good at discerning trends and consumer demands, and we saw this trajectory taking shape last fall. That is why we were able to project the 2011 would be such a record year. Since then our bookings have continued roughly along the path we expected with maybe a slight upward bias and the strong start to WAVE has confirmed our expectations. In addition to economic influences, the importance of strong brands performing well is often relegated to a subordinate role in conference calls such as these. But in fact they are the real drivers of our long-term success. I remain convinced that this is…

Thank you Richard. I would like to start by going through our fourth quarter results, which we summarized on the second slide. In the fourth quarter we had a $39 million increase in net income to $42.7 million, or $0.20 per share versus $0.02 per share in 2009. Net yields improved 4.2% on a constant currency basis, and because the US dollar was stronger during the fourth quarter our as reported yields improved 3.2%. During the quarter, we also had several weather-related incidents, which negatively impacted our yield performance. Absent these disrupted voyages, yields came in as expected. Net cruise costs per APCD were flat versus the same time last year and better than our guidance of up approximately 2%. On a constant currency basis, these costs were up 1% as compared to our guidance of up approximately 3%. Our brands continue to do an excellent job striking the right balance between delivering an outstanding guest experience and controlling costs. Fuel costs came in about $4 million better than expected driven by further reductions in consumption. Turning to slide three, you can see for the full year we produced net income of $547.5 million, or $2.51 per share, and in our cash flow statement you can see cash from operations nearly doubled to $1.7 billion. Total revenues improved by nearly $900 million and net yields increased 4.4% on a constant currency basis. Net cruise costs were down for the third year in a row dropping another 1.3% on a constant currency basis. Fuel expenses were well controlled despite volatile pricing thanks to our consumption savings initiatives and our fuel hedging program. I do think it is noteworthy that since 2005 we have been able to reduce our energy consumption per APCD by 15%. Moving on to the booking environment, we’re…

Thank you Brian. Good morning everybody. Royal Caribbean International completed a year of progress in 2010 with improved revenue and cost, as well as the highly successful entry of the Allure of the Seas into service in December. We are excited to leverage our industry leading 22 ship fleet to continue developing our global business. And in fact we will be enhancing this fleet throughout 2011 under the royal advantage umbrella. As Richard mentioned, we are beginning to Oasissize [ph] the number of our ships beginning with Liberty of the Seas, which is currently on dry dock in the Bahamas. In addition to implementing the DreamWorks experience, we will debut Saturday Night Fever The Musical, add a 3-D movie capability and introduce other offerings in the areas of dining, children’s programming and customer facing technologies. They will also be revitalizing Freedom of the Seas, Radiance of the Seas, and Splendour of the Seas this year, as well as adding the DreamWorks experience to Oasis of the Seas. A year ago we cited a notable first-quarter revenue yield improvement in ships we had operating in Brazil, Australia, Dubai, Panama, Colombia, and Singapore. I am pleased to report that these same products, which primarily depend on local market sourcing are on their way to another robust year-over-year first-quarter yield improvement. These products are building our brand awareness and preference in faster-growing emerging cruise markets, while lessening our dependence on winter Caribbean market conditions. It is easy to speak about new ship features and itineraries because there are so tangible. Less obvious, but not necessarily less important are the enhancements we’re adding to our customer database, website, and Crown & Anchor Society Loyalty Program. All of these capabilities benefit from the incorporation of the latest marketing technology, and all of them are facilitating our global expansion. As Richard and Brian have noted the WAVE period is off to a promising start. We still have a lot of cruises to sell for 2011, particularly in Europe, where we’re adding three ships this summer, and therefore we have some unlimited visibility as to how the different market sectors will perform. We continue to benefit from close-in bookings where late volume is needed, and our newer products continue to sell at premium pricing to the relevant cruise competition. In closing, I would like to once again thank the men and women, who serve on our ships, for another year of delivering the wow [ph] to over 3 million Royal Caribbean guests from all over the world. Dan.

Thanks Adam. Good morning everybody. We are very excited about the upcoming year for Celebrity. As you have heard everybody before me mention, we have been pleased with the first couple of weeks of WAVE, and as always have a lot of good things happening. As you may know, we launched a series of new ads in December designed to highlight Rx [ph] and make it synonymous with the best in vacation. In fact, we have recently been recognized as one of the top cruise lines in the world in coveted annual reader’s surveys in several upscale publications such as Conde Nast Traveler, Travel + Leisure, Celebrated Living, Travel Weekly "Globe Awards” in the UK, which just last week honored Celebrity as the Best Premium Cruise Line in the United Kingdom. This is a particularly satisfying recognition as we have had only one season where we focused the ship on the UK market. I believe it speaks volume about the impact the Solstice Class ships are having on the consumer in the United Kingdom. At the recent Travel Weekly awards here in the States, we won Best Premium Cruise Line; Best Premium Cruise Ship, Best European Cruise Line. These awards are also very gratifying as they are voted on by the travel industry, including the travel agency community. The ongoing awards and press reviews continuously recognize Celebrity for beautiful ships, widely varied high-quality culinary experiences, and the amazing personalized service our crew delivers every day. Since our last call, we announced our plans to further elevate our onboard offerings on our two newest Solstice Class ships, Celebrity Silhouette and Celebrity Reflection by offering several new dining venues in and around our iconic Lawn Club, which are a continuation of our strategy to offer the best dining in the premium category.…

Thank you Dan. we would now like to open the call for your questions. As a reminder, we ask that you limit your questions to no more than two. If you have more, we would be happy to address them after the call. Beneda.

(Operator instructions) Your first question is from the line of Steven Wieczynski of Stifel Nicolaus. Steven Wieczynski - Stifel, Nicolaus & Co., Inc.: Good morning guys. I guess the first question, on your last call you basically indicated the first quarter yield you were expecting 2% to 4% up, and now you have revised that down I guess just the top end by 100 basis points, so what really caused that to come down?

Steve, the first-quarter ticket revenues are very consistent with our previous guidance. The bookings continued to come in quite strongly as we alluded to. I think the biggest difference and we referenced this in the press release, and I kind of alluded to it in my comments, as we do see a lot of volatility in the tour division. there is no corresponding capacity with that and does seem to be creating a little bit of noise both on the revenue side and the cost side. But I would say that the first quarter is shaping up extremely consistent with where we thought it would be three months ago. Steven Wieczynski - Stifel, Nicolaus & Co., Inc.: Okay. Got you. And since currently I have two questions, I ask one more.

We appreciate that. Steven Wieczynski - Stifel, Nicolaus & Co., Inc.: I have a couple, but I will just ask a second one too to Richard, you talked about the new build, how much more color can you give there in terms of will this be a multiple ship order, I assume this is going to be for Royal Caribbean, and just maybe discuss where cost per berth is kind of coming in right now?

Well, thanks Steve, and good morning. I guess, I’m not surprised. We don’t normally make even as much of a statement as I already made. So I am a little reluctant to get too specific about it because we don’t have a final deal. we are still working on that, and we don’t like to talk too much of it in advance. So for most of the things you have asked I would like to hold off. I think we’re talking about it for Royal Caribbean International. It will confirm that. And our tendency in the past has to build a series of ships, but to start with more or less one option something like that, and while nothing is final that is probably the direction we would go in here. Steven Wieczynski - Stifel, Nicolaus & Co., Inc.: Okay, great. Thanks guys.

Your next question is from the line of Tim Conder of Wells Fargo Securities.

Thank you, and the first question gentlemen would be related to your guidance on net cruise cost, Brian I think you have indicated that it will be up 2%, and in the past you stated that your goal is to be equal or half the rate of inflation. could you just give any additional color there, and are there any costs maybe that have been deferred or projects that have been deferred over the last couple of years that may be are coming in here, and if so how are those more one year costs or one time in nature or just maybe some additional color on that guidance for that line-item, and then I will follow up with the second question.

Sure Tim. we did comment in the press release that there was a little bit of timing difference in the fourth quarter. Our costs came in much better in Q4 than we had guided. Some of those, particularly on the marketing side spilled over into the first quarter. you know, I would remind you we have had three consecutive years now of very good cost reductions and I think it is important we are still very committed to managing our costs very tightly, as I think both Richard and I both alluded to team has really done a great job of finding the right balance when it comes to delivering the guest experience and managing the cost. Most of what you are seeing in terms of increase in our guidance is really a lot of effort from the marketing and sales side. We have a lot of momentum in some of the international markets, and with our CRM efforts, and our web refreshes and building new websites, we really believe the long term the best way to grow our EPS and improve our credit metrics and ROIC is through revenue growth. And these are just some ways of producing that revenue enhancing activities.

So, those latter comments there, Brian, relate obviously more to the full-year is what you are saying, and…

Yes, I think it would be both the full year and also I think we really are pointed towards 2012, 2013, and the last three years have been about all the questions, all the focus has been about managing liquidity, getting credit metrics strong, and really beginning to make the right cost structure in place, which I think we have accomplished. And now a lot of this is really focused on long-term earnings accretion, and driving the revenue line, and we think these marketing investments are very wise choices at this time.

Okay. Okay, and then my second question would be I think Richard or Brian made some comments that in 2011 you talked about the efficiencies you have made over the last several years on fuel, but in 2011 you are anticipating an additional 5% fuel efficiency, is that, just to clarify that statement, is that year-over-year and is that per ALBD or APCD basis?

Yes, Tim, I will confirm both of those. It is year-over-year and it is on an APCD basis, and it is incorporated into our guidance.

Okay, great. Thank you gentlemen.

Your next question is from the line of Robin Farley of UBS.

Great. Thank you. First, I was wondering Brian if you could quantify, you talked about some of the upside in expense reduction in Q4, maybe some marketing spend and some other things pushed into Q1, can you kind of quantify for us very ballparkish, roughly what amount that was that you thought originally was going to be in Q4 and ended up getting pushed to Q1?

I’m looking back here Robin, on a net cruise cost basis we had originally said we would be up about 2%, and we ended up being about flat. So it is two percentage points on the net cruise cost per APCD. I don’t have a specific reconciliation for you, but it really was on the marketing and sales side.

Okay. So the 2 percentage points, that is what shifted into Q1.

It spills over, and then there is you probably have some in Q1 shifting into Q2 and Q3 and Q4. It is a domino effect.

Okay.

But I think one way to look about this is if you look at the full year we’re coaching about 2%. Some of that is spilling over from 2010. So we’re probably more in the 1% to 2% range in terms of the absolute increase. And again that is all pretty much emphasized on the marketing and sales side. I would like to point out when it comes to our running expenses the brands are really doing a terrific job. We have had inflationary pressure out there, particularly on the food side, but they have done a great job of really managing that.

Great. And then on the net yield side, and your guidance – and this is all kind of same currency, your guidance for Q4 has been up 5%, and then I understand with the weather cancellations sort of adjusted maybe would have been 4.7%, and 4.7 really is rounded to five, but I guess I just want to ask on the margin, your closing bookings, can you give us a sense of the bookings that you are expecting, since you gave the guidance in late October versus where they came in, was that – I guess I’m just trying to get a sense of what happened with that, so this is totally aside from the weather issues.

Yes, I think you are right Robin, if we were to reconcile to the previous guidance of approximately 5, we did come in at 4.7 after adjusting for weather. When we stay around 5, our range could be 4.8 to 5.2 or something in that range. So we are really talking about splitting here. The bookings were right as we expected, again and I don’t have it in front of me. It just takes a little bit of a hiccup on the tour side or onboard revenue as well. But we have been saying now for about 2.5 years I think that the booking environment has been remarkably consistent with our expectations, and I think we would stand by that over the last three months both for the fourth quarter and as we look into 2011.

Maybe giving – I don’t know if it is possible in the future for you to give crews yield guidance without the tour to maybe adjust for some of the volatility with your visibility and things in the tour business.

Well, we will certainly look at that. It is becoming more relevant for us, it hasn’t been that big of an issue in the past. We will look to see if that is something that would be appropriate.

Okay. Thank you.

Your next question is from the line of Felicia Hendrix of Barclays Capital.

Hi, good morning guys. I have a question on your full-year guidance, which on a constant currency basis is basically unchanged, but when you had given that guidance before, you guys had talked about half of the increase in your full year outlook was coming from new hardware and then the other half was coming from what you were seeing in the industry, and just a little bit surprised that that number is unchanged on a constant dollar basis just given what you are seeing about the wave about bookings, but what some of your competitors have been saying about the industry, I was wondering if you could address that?

Felicia, it is the sake of sounding redundant and almost boring at this point. I think we got a very good handle on the demand environment, and it has been remarkably consistent. We expected to have a record working week last week in our forecast, and it turned out to be so. The demand for the new ships, the demand for the developmental products is all very consistent with our expectations. I think there tends to be – we read a lot of the reports, and we read a lot of the business journals out there, and there is a lot of week to week emotion in terms of the consumer starting to spend more, starting to hold back. And we don’t see the sort of big peaks and valleys that I think that a lot of the analyst community expects to be seeing. It has been very predictable, it has been very consistent, and I think as we said during the worst of times people are going to take their vacations, and they never completely went away the way a lot of people thought it would. I think it is very consistent with what we thought.

Okay. And then just moving to the Oasissizing and Solsticing, it is difficult to say, wondering if that endeavor is in your CapEx, current CapEx guidance and also if you could just help us think through as the ships get dry-docked to be Oasissized and Solsticed what that does to your top line and if that is in your estimates. Thank you.

I can talk on the CapEx side. We have about $250 million a year in our maintenance CapEx, and the vast majority of our current plans will clearly be involved in that. We can’t have final plans on all these, so have to say it could ebb and flow. But we have tried to take that into consideration in the guidance that we provide. Let Dan and Adam add any other comments.

Just before Dan and Adam comment on the impact on the bottom line, our forecasts CapEx obviously are much more accurate in the short-term. Longer term, they do not include new building projects. We ought to make that clear if we haven’t already, and I think we have. If we expand the program of upgrading all the hardware obviously that could have some impact. But as Brian says it is very much on the margin.

As you mentioned that if we just think about the – if you order a ship, let us just say, hypothetically you order you announce an order for a new ship tomorrow, you are not going to get that until 2014, right? So your 2013 CapEx guidance of about 350 is probably intact barring any kind of I don’t know unknown dry-docking situations and stuff like that, right?

Right, except for the sort of progress payments, but yes basically.

Okay.

And Felicia this is Dan. we have factored into our thinking the Solsticing we’re going to do. We did Constellation last year. So that is factored in. Infinity doesn’t come until the end of the year, so it won’t have much of an impact in 2011. We will see the impact in 2012 you know the word is little difficult, so apologies for that, for Solsticing. It is a little hard to say even here.

So, it is helpful you understand, but my question was just is there any impact on the top line as these ships come out of service?

I get that question. We plan for that. And these are dry docks – we’re doing these scheduled dry dock times. So we aren’t creating new dry docks. We are waiting until we are going into a scheduled dry-dock and that is right in our plan.

And Felicia, I will just add we do try to schedule the dry docks during softer season as well.

Okay. Thank you. It is very helpful.

Your next question is from the line of Sharon Zackfia of William Blair. Sharon Zackfia - William Blair & Company:

Sure. In terms of the weather, I think as long as the snowstorms are heading in the middle of the week we’re very happy. It gets to help the closure end bookings. We have anything that has affected us and really haven’t really seen much in terms of cruise disruptions in Q1. It really all hit in Q4. Sharon Zackfia - William Blair & Company: And then on the tour side?

Sharon Zackfia - William Blair & Company: Okay, and this is probably a more minor question, but there is some rumors that you might be considering discontinuing or getting rid of the Azamara business. So if you could give us an update on how you feel about that business at this point and the progress the brand is making.

I want to take that. Hi Sharon. Well, as you know we don’t normally like to comment on rumors, but I guess we have already done that in one of the context. So we will make today the exception rather than the rule. Well the exception approves the rule. I have heard those rumors, but we’re not interested in selling either the brand or the ships. These rumors come up on all of our ships and of course as you know everything is for sale at some price. But Azamara has actually had probably the biggest increase in our fleet in terms of both passenger satisfaction and pricing as we are going forward it has actually got percentage wise. It is very small in the total context, but percentage wise it has probably got one of the highest increases in our fleet. So we’re not in the market to sell either the ships or the brand. Sharon Zackfia - William Blair & Company: Okay, great. Thank you.

Your next question is from the line of Greg Badishkanian of Citigroup.

With WAVE season off to a good start, and I think it was on top of a good start last year as well, just how important is WAVE season? And if bookings are higher than last year this time for the forward year, how is that going to impact close-in bookings and how does that incorporate into your guidance?

Hi, this is Adam. We have commented in past calls usually this quarter I suppose in past years that as a percentage of the total bookings that we take during the course of a whole year the impact of WAVE is somewhat less from what it used to be years back. But it still is it still reflects a disproportionately high percentage of the overall bookings for the year from the period that starts about the second week in January and goes through late February, early March. So it is relatively significant. It obviously is key to the determination of the booking strength for Q2 and Q3. And I commented on that earlier in my prepared remarks. So we are very pleased and have been pleased at the consistently booking strength that we have seen for a number of quarters at this point. To the extent that that is still the case and WAVE remains strong that will obviously allow our revenue management team to push pricing more as we come to the sailing date. But we’re very early in the WAVE, and notwithstanding that last week was the record booking week, and this week is competitive with last week, we still have many weeks of the WAVE to go to see really what the demand generation will allow us to do in the way of pricing.

Right, thanks.

Your next question is from the line of Assia Georgieva of Infiniti Research.

Good morning. This is Assia. Brian, a question for you again on Q4 yields. If I do the calculation correctly, it seems that on a constant dollar basis, ticket was up about 3.8%. On-board was much higher at 5.2 and helped get you to that 4.2%. I'm ignoring the weather impact of 50 basis points for the moment. Is this ticket increase of 3.8 somewhat disappointing again relative to your prior guidance of 5% and given your comments that on-board is more difficult to call with the tour business et cetera?

Assia, I think just to cut to the chase, ticket revenue was exactly where we expected it to be for the quarter with the exception of weather-related incidents, which was about 50 basis points and currency fluctuation. It was remarkably consistent with our expectation, with the exception of those two items.

Okay, thank you. And my second question – I will jump forward to Q2 – we're obviously in a very active booking season for both Q2 and Q3, but still early maybe a little bit for Q3. Could you comment what Q2 trends are given that we expect a much higher seasonality and greater profitability burden on both Q2 and Q3?

I think as we alluded to on our last call, we clearly look at the summer months as being the opportunity for the greatest yield improvements. I think that would probably fall more on Q3 in terms of where I would expect at this point in time our pick to be. I think we feel Q2 should show some healthy yield improvements. We are not prepared to give guidance for Q2 today, but I think clearly the summer will be above the average with probably Q3 being better – the best of the three. I’m sorry, the best of the two quarters during the summer. I think the numbers are shaping up as we expected in all four quarters at this point.

And given Q1 core yield guidance of 1% to 2% on a constant dollar, I call that core, so do you think that in Q2 that number would be able to accelerate to something closer to 4 to 5%? And again, I know that you…

Again, I’m not going to give you any specific guidance for Q2 at this point. One thing I will say about Q1 is we don’t have the Alaska season, some of the seasons that when we look when we go back into the recession, it really was Q3 and Q3 that were penalized the most, and I think that is part of why we see a continuing opportunity there. But again I would say at this point in time we are looking at Q3 being probably the most upside.

In terms of percentage yield change?

Correct.

Thank you, Brian.

Your next question is from the line of Harry Curtis of Nomura Securities.

Good morning, couple of quick questions. First of all, based on our estimates, you guys should be generating free cash of $2.5 billion to $3 billion between 2011 and 2013. And given your discussion about incremental ship orders, what impact do you think that's going to have on your ability to reduce debt over the next three years?

Thank you Harry. We are actually very bullish on our ability to delever our balance sheet. We do generate a tremendous amount of cash. Last year, while it was clearly improvement over ’09, I think by all standards for us was not a very good year, and we still generated 1.7 billion in cash. So I think we are quite optimistic about our ability to delever. We have much slower CapEx in 2011 and 2012. As was mentioned, it was most likely that we would not have an ability to take a new ship in 2013, so it is our intent to use that to delever, and we have gone on public record to say our objective is to become investment-grade by doing that.

That's great. And then the second question is, with the stock down 5% or more today, kind of following up on the last question, can you give us a sense of how well booked the second and third quarters are relative to this time last year?

Well, we have said that for the year both APDs and load factors were ahead of where they were a year ago. That tends to run fairly consistent throughout the year. I think we feel very good about where we are. The booking window clearly contracted substantially after the recession. It has worked its way back up on a like for like basis. it is much better, but one of the things that we have done is we have talked a little bit on this call about our global expansion, and for example in Europe a lot of our ships will do much more local sourcing then they might otherwise have done a few years ago. So that moves the booking curve out a little bit as people are booking cruises closer to home. But it is clearly right where we would expect it to be at this time.

Is there any way that you can quantify – are they 5% ahead of last year, 10%, 15%?

I don’t have the numbers and we would rather not get too specific here because frankly the more granular we get the more people read into that, and I think let us see the bigger picture of the guidance that we have provided. I would say that for the year we are well over 50% booked of our revenue that we would expect to have, and it would probably follow a linear curve as you look out into the individual quarters.

Okay, that's a help, thank you.

Your next question is from the line of Janet Brashear of Sanford C. Bernstein.

Hi, thank you. I wanted my first question to be a follow-up on the talk about the enhancements to your core fleet. The improvements that you're doing this year, could you maybe tell us how many total ships are being done in 2011 and what sorts of improvements will they drive? For example, will it be a 20% increase in the revenue potential, a 20% decrease in the cost, for example?

Janet, this is Dan. We’re doing one ship this year, and it will be at the end of the year, and not until December. So it is going to have a minimal impact on the current year. It will have a bigger impact on next year, and we don’t get into specific shifts in terms of the impact that – what the specific results of a specific ship are, but I can tell you that when we did Constellation this past year we were very happy with increased revenue that we got. The increase in cost on that are very, very minor. We have really focused on anything we do to do it within the current power level that we have on the ships with our crew. So we haven’t taken additional crew to do the things that we have to do, except for maybe a couple of waiters for new restaurants. So the cost changes have been very, very minor and it has really been all good for us, not an increase in our cost, but an increase in our revenue. And I will let Adam comment on Royal.

Great.

Hi Janet. As I mentioned there are four ships that we are doing notable work on. Two of them are the relatively new ships of Liberty of the Seas, and Freedom of the Seas, where we are distinctly Oasissizing them with a number of different features, and I mentioned some of those. And then as a part of our long-term approach to revitalization of older classes of ship, we’re going to be doing substantial work to the Radiance of the Seas, and to Splendour of the Seas this year. And I will echo Dan’s comment in terms of the amount of focus that there is on finding ways to keep within the prevailing cost structure, while also looking for onboard revenue generation opportunities through adding features. And then the older ships occasionally present opportunities for either adding a small number of staterooms, because we have just figured out that there are spaces on board where we can do that over the course of time, and sometimes we are able to add balconies where they weren’t previously balconies. And when we are able to do that that obviously has a positive effect on revenue. But in the great scheme of the fleet and the overall operation of the brands those are fairly minor factors.

That's helpful, thank you. Second question and final one, in terms of Mexico, what percent of itineraries in 2011 will be there? And are you seeing pushback on those itineraries given the incidents that have occurred and whether or not you are seeing that pushback? If it does become a greater issue, what would the contingency plan be for those itineraries?

Hi, it is Adam again. There should be a distinction here between the West Coast and the East Coast of Mexico. On the West Coast, we made a fairly significant decision about a year ago that we would move Mariner of the Seas out of Los Angeles, and as it happened she is on her way around South America right now for a short program in Brazil, and then eventually onto Europe for this coming summer, and then shall be in Galveston for next winter. After that we won’t have any regular capacity on the West Coast of Mexico for the foreseeable future. We love to be back there on the longer term future, but we feel like we have better opportunities for where to place our 22 ships in the near term. On the other hand in the Caribbean Gulf of Mexico area, where we’re frequently going to Cozumel, and Costa Maya and other ports, we are seeing the demand as we have been talking about throughout this call. Our biggest and newest ships and other ships are going to those ports on a regular basis, and we don’t feel that there are any obstacles with regard to demand for cruises that go to those ports.

Thank you.

Beneda, I think we have time for one more question please.

This question is from the line of David Leibowitz of Horizon Asset Management.

Good morning, a few questions – well, I'm allowed two. First question, you note on the balance sheet that your customer deposits are up roughly 20%. How much of that is price increases and how much of that is incremental cabins?

Well, capacity would be a portion of it David. Our capacity next year is up about 7.5% I believe. We are a little bit more booked, but I would say the majority about that would be pricing at this point in time.

And for Adam, what is the price premium that you believe your fleet can get versus the competition especially in the Caribbean?

I thought you would have saved that question for Dan, but since you asked it of me.

Well, I'll let Dan hop in also. If he gets a bigger premium, I'll be happy to hear that as well, obviously.

After all…

It's just that you have more throw power at the moment.

Yes. But he is overseeing the leading premium line. Anyway, I think you can tell just from the pricing that is in the market, and I know you and many of your colleagues actively track the pricing that is in the market, whether it is in the Caribbean or elsewhere. So you can see as well as we can see that Oasis Class in particular, and to a lesser extent freedom class continue to command already substantial premiums to the capacity of those out there. And while there are some more ships that will be entered into service in the industry in the next few years, they are I believe in every case now the second, or third, or fourth in an existing series of ships. So I have said on previous calls and I will say it again, we don’t see any potential new entrants into the category in the near future that would rival the types of features and communities, choices and variety that Oasis Class ships offer to our guests, and frankly other ships in our fleet offer to our guests speaking about the Royal Caribbean International brand. So we would expect to continue to command premiums roughly like the ones that you see in the market today.

Could you quantify that? My question was what percentage price premium do you believe your fleet can continue to generate vis-a-vis the competition. And I'll let Dan answer the same question.

We obviously do a lot of internal analysis to understand where we stack up against our competition, but those aren’t quantitative metrics that we would declare to the marketplace, particularly since you have about an equal capability to calculate them as we do. So we will continue to challenge you and your analysts to compete against us and our analysts.

As long as we don't have to compete against you on the ping-pong table.

Okay. I think that is an appropriate finish there. We just like to thank everybody for joining us today. As always, Ian will be available throughout the day to take any follow-up questions you might have. And again thank you for joining us and have a terrific day.

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