Good morning. My name is Shaira, and I will be your conference operator today. At this time, I would like to welcome everyone to the Royal Caribbean Cruises Ltd. Second Quarter Earnings Call. [Operator Instructions] Thank you. Mr. Jason Liberty, you may begin.

Thank you, Shaira. Good morning. I'd like to thank you for joining us today for our second quarter earnings call. Joining me here in Miami are Richard Fain, our Chairman and Chief Executive Officer; Brian Rice, our Vice Chairman.; Adam Goldstein, President and CEO of Royal Caribbean International; Michael Bayley, President and CEO of Celebrity Cruises; and Ian Bailey, Vice President of Investor Relations. During this call, we will be referring to a few slides, which we have posted on our Investor website, www.rclinvestor.com. Before we get started, I would like to refer you to our notice about forward-looking statements, which is on our first slide. 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 by providing a business overview and discussing the profitability initiatives that we announced this morning. I will follow up with a brief recap of our second quarter results. Bryan will provide an update on the business environment. I will then walk you through our earnings expectations for the remainder of the year. And Adam and Michael will provide an update on their respective brands. I will then open the call up for questions. Richard?

Thanks, Jason, and thanks to all of you for joining us this morning. As always, it's a pleasure to have this opportunity to provide a bit more color on our results for the quarter and on our perspective going forward. I also am ready to admit that it's more fun to do that today when I believe we're building positive momentum. And we're setting the stage for taking our returns to the next level. As noted in our release, the second quarter exceeded our forecast on both revenues and expenses. And the full year also looks like it will be even marginally better than our most recent guidance. The most significant feature of our recent guidance changes actually is probably something we don't mention as a cause. The only changes we refer to when we talk about changes in guidance are the fire and the foreign exchange changes. But everybody knows that in the first half of 2013, the industry suffered under the unrelenting pressure of a deluge of negative publicity. That pressure has clearly hurt our bookings and unfortunately, to a greater extent than we originally understood. It's also true, as many of you reported, that in recent weeks, competitive pricing has gotten more intense. Thus, the fact that we don't even list these factors as driving lower yields means that in other respects, our yields are even stronger than we originally predicted. I believe that this shows how strong our business model is. And it suggests that current yields are anomalously low. Furthermore, as excruciating as that media coverage was, and has been, we can already see indications that, that factor is waning. And this is most encouraging as we look forward. I think most of you understand that the recent incidents in our industry are an aberration…

Thank you, Richard. On the second slide, we have summarized our results from the second quarter. We generated net income of $0.11 per share, which was within the guidance range we provided on our April call, despite incurring $0.12 per share in unanticipated charges from the Grandeur of the Seas fire and a correction for the liability for reward redemptions related to our Affinity credit card. I will discuss both of these items in more detail in a moment, but at a high-level better-than-expected onboard spending and the early benefits from our profitability initiative helped to offset a significant portion of these unexpected charges. EPS adjusted for these 2 items was $0.23 per share. As you know, over the Memorial Day weekend, we experienced a fire in an industrial area on the Grandeur of the Seas resulting in the cancellation of sailing [ph], 4 of which were in the second quarter. As we previously disclosed, the impact is expected to be $0.10 per share, of which $0.05 is included in our second quarter results. We also took an unexpected charge related to the redemption rate of rewards earned on our Affinity credit card, which decreased Q2 net income by $0.07 per share. Like many organizations, we offer an Affinity credit card that allows the cardholders to earn points for every dollar spent, which can be redeemed through rewards such as bottles of wine, spa treatments, onboard credits and cruises, among other items. Until those points are redeemed, we recognize the liability based on the estimated redemption rate. There was an error in the way we estimated the forecast redemptions, and this resulted in a onetime cumulative charge, which reduced our quarter's yield by about 1 percentage point. Net revenue yield increased 2.8% on a constant-currency basis for the quarter with…

Thank you, Jason. As you saw in our press release, overall business trends are generally in line with our prior expectations. The midpoint of our net yield guidance is down about 50 basis points for the year. But on a $7 billion revenue base, this represents about $30 million. So these changes really are on the margin. About half of the reduction relates to the Affinity card liability adjustment that Jason spoke about. Excluding this adjustment, we actually outperformed our forecast in the first half of the year. For the second half of the year, we have lowered our revenue forecast by just under 1 percentage point due to lower expectations in China and some impact from the pricing environment in the Caribbean. In aggregate, our booked load factors and pricing are both up slightly for the full year. Since our last call, bookings have been slightly higher than last year after adjusting for capacity. Europe is developing about as we anticipated. And we are expecting net yield increases in the mid-single-digits for the year. Our Pullmantur brand is one exception here. And as Richard noticed, the brand will be putting much more emphasis on developing its business in Latin America. We have seen stronger year-over-year demand out of North America for European sailings, and have increased our sourcing accordingly. You may recall that we reduced our European capacity by 10% this year. We believe this decision has served us well and enabled us to maintain pricing integrity. The territorial island dispute between China and Japan has forced us to drop Japanese ports of call from our itineraries. And in total, we have had to modify 30 sailings. These modifications have resulted in some churn in our book of business, as well as some volatility in the booking behaviors in…

Thank you, Brian. I will now walk you through the outlook for the year, which takes into consideration the business environment update you just heard. If you look at Slide 3, we have provided an EPS roll forward from our April guidance to today. As you can see, from a business perspective, we are about in line with our expectations from April. The Affinity card liability adjustment and reduced expectations in the Caribbean and China have been offset by stronger-than-anticipated onboard spending and cost program. A significant driver of the change in our earnings range was clearly the strength of the U.S. dollar especially versus the Australian dollar and Brazilian real. Typically changes in exchange rates and fuel prices have provided an offsetting relationship, but the recent tension near the Suez Canal has recently disrupted this relationship. If you will turn to Slide 4, you will see our updated guidance for the full year. Net yields are expected to increase 2% to 3% on a constant-currency basis, which is a 50 basis point reduction since our April guidance and less than 1 percentage point lower than our previously implied guidance for the second half of the year. As Brian mentioned, while there are puts and takes on a business perspective, the key drivers of the change relate to the ongoing territorial dispute between China and Japan, pricing actions that have modestly weakened our Caribbean business, which I'm sure you have seen in your pricing surveys, and the impact relating to our Affinity card. While the territorial dispute between China and Japan has impacted our performance, the China market continues to be profitable. On a cost perspective, we expect our net cruise x fuel to be up 1% to 2% on a constant-currency basis, which is 100 basis points better than…

Thank you, Jason. As you have heard from my colleagues on balance, our corporate business outlook for the year is relatively unchanged. It is unfortunate that the territorial dispute between China and Japan has not yet reached an amicable resolution. And as a result, we are still running modified Chinese cruises for the season that do not include port calls in Japan as intended. While demand in the region is still reasonable, and we are reaching our desired occupancy levels, we have reduced our ticket revenue expectations for the remainder of the summer season. On the other hand, the modifications we have made to our China ships, especially those that improved the retail stores, have driven strong onboard revenue performance throughout the season to-date. Jason noted strong onboard revenue performance for the fleet in general in the second quarter across the primary onboard revenue streams. This has been a major initiative for our brands over the last year or 2. And it is gratifying to see it pay off. Some of this improvement, which Michael will elaborate on in a moment, emanates from our revitalization initiatives including pervasive Wi-Fi and significantly increased bandwidth. Some of it is from introducing products and services such as a wider array of beverage packages, the reintroduction of art auction and taking the wedding program in-house. Finally, the onboard teams have heightened their focus on seizing opportunities to drive onboard revenue even as we have reached multi-year highs and get satisfaction. Quantum of the Seas will enter the fleet just over 15 months from now. We are very pleased with her initial bookings since we opened for sale at the end of May. Quantum has already reached the projected load factor for her 2014, '15 winter season that we have set as a target for…

Thank you, Adam, and good morning, everyone. I'm very pleased to be on the call with you today. Next month will mark my 1 year as the President and CEO of Celebrity Cruises. The timing of this call is good because this is the time that our new strategy for improving Celebrity Cruises' profitability is beginning to show its impact. I spent the first part of my year evaluating the brand, its positioning and the opportunity for improvement. We've developed a new profitability program plan, which we have been executing for most of this year, and which seems to be working. But the core of this strategy is firming up a strong brand essence around our premium, modern luxury positioning. And targeting the right affluent consumer through more targeted marketing and greater utilization of data, analytics and segmentation, we have focused our efforts on attracting guests that will more highly value the Celebrity Cruises' proposition, thereby meaningfully increasing our pricing. Over the past several months, we have significantly increased our sales and marketing activity in key North American markets with a focus on our target customer. This has proven to be successful. Of course, raising pricing is a key part of the equation. Another fundamental we are acutely focused on is managing our cost. And I feel as though we are making very good progress in this area. Our focus is on very strong cost management along with our strategy of improving ticket yield, resulting in superior financial performance for the Celebrity Cruises brand. Our ability to deliver also takes advantage of our outstanding hard work, our positioning and the delivery of exceptional customer experience. I'm very pleased that over the past 12 months, Celebrity Cruises has been the recipient of multiple awards. One example we are particularly proud of…

Thank you, Michael. With that, I will ask Shaira to open up the call for a question-and-answer session. Shaira?

[Operator Instructions] Your first question comes from Greg Badishkanian with Citigroup.

Encouraging to see that the Caribbean and Europe are -- seem to be pretty healthy. And my question is just as we look to the back half of the year maybe just looking at the last few weeks as a guide here, has the level of industry discounting and promotions, has that accelerated or has that been pretty consistent?

Greg, it's Adam. I would say it's been overall pretty consistent. I mean, clearly throughout recent months, there have been a lot of promotional -- there has been a lot of promotional activity. We've discussed in the past that -- and basically expect to see promotional activity throughout the revenue cycles. And I would not say that anything has dramatically accelerated in the last few weeks.

Good. And then just a follow-up question just on Europe, if I could. Pricing up mid-single-digit, that's pretty solid. What's the primary driver there? Is it the capacity reduction or you're actually seeing some increases in demand and maybe just the consumer was waiting to closer to the sailing date to book their cruise in Europe. And obviously, you have the North American component, sourcing component as well. Can you tell us like kind of what's maybe the biggest driver of that?

Okay. Well, to sort of take your questions in reverse there, we understand the European booking behaviors. And as with pretty much every area of the world, people tend to book closer to the cruise if the cruise is nearer to where they live. So it isn't unusual this year that Europeans would be booking their Q3 cruises, for example, closer to the time than North Americans, for whom that booking decision will be a very significant decision that they would take further out. So I wouldn't say that, that is any kind of new driver of what's transpiring in Europe this summer. The 10% capacity decrease that we as a company have in Europe, I'm sure has had something to do because -- with this -- because for example, in the Southern European countries where their decrease was -- and capacity was even more pronounced, we've been able to handle the challenges of the marketplace better than we probably would have otherwise been able to do if we had our previous capacity there. So there's definitely an interrelationship between how we've managed our capacity down and our ability to generate positive yield for this year. And we look forward to in the future. Hopefully, Europe will progress back towards where it was a few years back.

Greg, I would just add that the largest capacity decreases were in the Mediterranean. And that's where we're seeing the largest increases in the yields, both in the West and the Eastern Med. And I think, given the current situation, we are happy that we reduced that capacity.

Your next question comes from the line of Robin Farley with UBS.

To clarify, the $0.07 of charge here for the Affinity liability, the calculation error, can you just sort of address how many quarters prior does that cover? I guess, that $0.07 in theory was like yield over stated in previous quarter. So just trying to think about what quarters that might have been. And then in Richard's opening comments, he mentioned that competitive pricing has gotten more intense in the last few weeks. And I assume that's primarily Caribbean. Just thinking about whether your guidance is sort of looking at what's on your books today. And you talked about that being up versus -- does that include the impact of what business competitiveinclude the impact of what business competitive pressure that's gotten more intense in the last few weeks if that continues? Or is it just kind of where -- a snapshot of where you are today on the books?

Robin, it's Jason. As it relates to the Affinity card, it is accumulative catch-up. So it does relate to the past several years. And that's how it inched up on...

And with respect to the competitive pressures, one of the comments we've made in the past is, this is a very complex business and we have swings and roundabouts in the areas all over the place. We -- no market is ever consistent over time. And you get rises and falls in periods of time. I think we have been actually remarkably accurate over time in terms of predicting what the numbers will be. But I also think that there's sometimes an overestimate of just how accurate one can be. I did mention that we have had more competitiveness in the last few weeks and -- But as Adam said, there's nothing particularly unusual about that. I think we would put that into the category in the normal swings and roundabouts. But with respect to your specific question as to whether our forward guidance is based on exactly what we're seeing now as opposed to just of the static of what our -- what's on the books today, our revenue management process is a very dynamic one. And we take into account every scrap of information we have from everywhere. And when we make our predictions for this, and an it's really intense effort that a lot of people are involved in, we take into account all the latest information that we can get from all the sources. So that would definitely include our commentary on the competitive activities. I think what you have to say is you're focusing a little bit on the negative side of what I said. And actually, there are negative things taking place in some of our markets. But the interesting thing is that overall, from a business point of view, we're actually seeing that this year has been and will be better than we thought in January or in January when we announced our earnings, in April when we give guidance and then most recently, at the end of May when we gave guidance. So I think we're trying to take into account all the factors when we give this guidance, not the static situation.

And just to clarify that -- I can appreciate how in the guidance there a lot of moving parts. So I guess I just wanted to get a sense of whether that comment about the competitive pricing getting more intense in the last few weeks, is that limited to the Caribbean?

I'll have to go back and check exactly what I said. But I think I was particularly focusing on that because we had noticed that in particular. And quite frankly, we've seen in a lot of your reports from calling around that you've seen some of that. And I think what we were trying to do was put that in the perspective of the total market. And yes, that has been more competitive in the last few weeks. And, well, the markets have reacted differently. And as you say, it's always a balance of some things going better and some things going worse. And we try and predict the best we can based on all of those factors.

Your next question comes from the line of Richard Carter with Deutsche Bank.

A couple of questions from me. Can I just explore with you just the opportunity in Europe in terms of the yield environment going forward? Can you just remind me how much are yields down since '08 in Europe? And then could you also tell me, in terms of the mid-single digit increases you're seeing, how much of that is driven by onboard spend? And I think you made the point in this quarter, obviously the improving U.S. economy has helped onboard spend in your North American business. So I just want to get a flavor for obviously we're seeing -- starting to see a bit of improvement in the European economies. And could you give me some sort of gauge in terms of what you think the opportunity there is on the onboard spend outlook going forward? And then just on the cost reductions, we obviously took our costs up back in Q1 on technology investment and marketing investment. So can you just give an update on in terms of where we are there? And is it possible to give us some sort of guidance on how much exceptional costs you're going to take here to take care of this level of cost?

Richard, it's Adam. I just wanted to start with your question with respect to shipboard revenue. There's nothing particularly notable going on with shipboard revenue as it relates to our European cruises. The improvement that we've seen is ticket price improvement.

Richard, it's Brian. The mid-single digits that I alluded to was on a ticket perspective. The commentary I did was strictly around ticket. To answer your question about where we are in Europe versus '08, we are high-single digits off where we were in '08.

High-single digits?

Yes.

So would you -- if we saw an improving European economy? And actually would you expect that to be the catalyst on the onboard spend side in Europe?

Well, Richard, other things being equal, higher ticket revenues are probably a positive for higher onboard revenues, but we will never know onboard revenues until the sailings happen. We really only talk about onboard revenues looking backwards because we're not able to book them forward.

Sure. And on the cost side?

On the cost side, Richard, this is Jason. On these profitability initiatives, we really are in the early stages of our operating planning process. So to come out with any specific impact as it relates to those costs would really be premature.

Has there been any change then in terms of the guidance you talked about a couple of quarters ago in terms of the marketing and the sort of technology? Is that going to be lower than what you were thinking about then?

No. On the marketing and technology side, I think our guidance there is still very consistent. I think where the cost savings are coming from are really kind of broad-based. But like I said in my earlier discussion that it's really -- it's meant [ph] not touch marketing efforts, technology or the guest experience in terms of where the cost savings were coming through the year. It's more addressing the overall global footprint of the organization.

Your next question comes from the line of Steve Wieczynski from Stifel. Steven M. Wieczynski - Stifel, Nicolaus & Co., Inc., Research Division: So Richard, your 2014 early outlook for loads and pricing, that all sounds pretty positive. Can you maybe just break down what you're seeing in terms of markets? Is that pretty much across the board? And I understand Europe, your visibility there is probably pretty low at this point, but any color there would be very helpful.

Steve, it's Brian. As you said, it's extremely early in the process. I will tell you, we're feeling pretty good about the first quarter. We have very strong load factors. Our pricing is up slightly. As we look out beyond Q2, the numbers are really too small to extrapolate. But I will say that in all our quarters in 2014, our load factors and APDs are running ahead of where they were a year ago. But again, it's way too early to extrapolate from that, particularly Europe. Steven M. Wieczynski - Stifel, Nicolaus & Co., Inc., Research Division: And then, I guess, for Adam, I know you've spent the past, I guess, day or 2 up on Capitol Hill. Can you just give some -- your kind of high-level thoughts in terms of walking away from those hearings? And I know the concern out there again is that the government could potentially go after you guys from a tax perspective. And maybe just some thoughts around that as well would be helpful.

Steve, yes, I meant to say before that if by any chance I address any of you as senator, I apologize for that. Well, clearly, we had a very interesting dialogue yesterday. The overwhelming majority of that dialogue was around consumer protection, the decision of the major cruise lines to begin voluntarily reporting of all allegations of crime wherever they may occur in the world on our ships beginning August 1. And that's what almost -- actually, that is what all of the questions were about that were asked of us. I think your note comes from the fact that at the very end, in fact, in Senator Rockefeller's closing remark, he mentioned that he would be producing or proposing a piece of legislation that would address what he terms something like the closing of a tax loophole that our industry enjoys. Obviously, we will take any proposed legislation that he comes forward with very seriously. We've been very, very transparent for many years about our tax postures since -- at least since we went public over 20 years ago. What Senator Rockefeller is apparently referring to as a loophole is something that's been fairly entrenched in U.S. tax law going back many decades, it's been carefully reviewed by Congress with very small changes made as recently as 2003. The U.S. is already anomalous, in taxing shipping [ph] income more heavily than in virtually every other developed country of the world. Our ships spend less than 10% of their time in U.S. waters. And the political environment makes any legislation difficult to achieve as we can all see every single day. So as I say, we'll take it very seriously. But I would say it's extraordinary preliminary at this point to even understand what he has in mind. So we'll see.

Your next question comes from the line of Assia Georgieva with Infinity Research.

I have one question, maybe Richard, you can help address this first. You mentioned in your comments to Robin Farley that the fiscal 2013 outlook is better now than you anticipated in January or in April. But we do have China coming down. And it seems that in addition to the Caribbean discounting, which was quite significant over the past 12 weeks, we're seeing some pretty important price declines in Alaska. So is that reference then more to pricing in Europe? Is that how we should interpret that?

Assia, it is a complex mosaic of markets that we operate in. And you're right, the China situation is impactful to us. It hurts not to be able to operate the way we had hoped to. But even with that knockdown, I have to point out that it's one of our highest per diem markets. And so -- but in terms of how it's changing our expectations, you've seen positives and negatives. And I'm not sure I would say Europe is actually -- didn't expect that much from Europe. It's performed reasonably well. South America is performing well. So I'm not sure it's any one thing. The total hasn't changed that much. And while China was a big hit, it's still a relatively small part of our total. So now balancing all of those things together, I'm not sure I would identify one thing as dramatically out of line versus the other. Brian, you want to give some color on that?

Sure. Assia, we tried to be very transparent in our commentary. I said less than 1 percentage point in the back half the year. We actually lowered our ticket revenue by 90 basis points in the second half of the year. And that's a combination predominantly of China and a little bit of softness in the Caribbean. And again, I just want to emphasize, we're talking about 90 basis points. And Robin asked the question about how we do the forecast and Richard talked about a lot of the discussions and the analysis that goes into this. In some cases, where we have a better feel for a market, we will lean on more current pricing. And we'll also look at the trend analysis. And frankly, I think we anticipated that Alaska had a terrific beginning of the year. And it was unlikely to continue at that trajectory. So we projected out a little bit and handicapped that a little bit more when we gave you our April guidance. So there's a lot of work that goes into this. And I want to emphasize, we're really talking about rounding errors in terms of the sort of the change that we made. And I think the important thing is, while we took the second half revenues down 90 basis points, we've been able to more than offset that with cost savings.

I do think maybe it's -- maybe we shouldn't do this so much, but we try and point out where is where we think we've been quite a bit off. And as you pointed out, Assia, in China, that was a single big hit. But we've also got a lot of successes in other areas. And so the net result of all that is that we're actually -- the markets have, in total, have been stronger than our guidance. I think the other thing that's probably reflected in our thought process is while we're ending up slightly better than we thought, we really hoped to do a lot better than we thought. And so it's -- and from that perspective, we here are still disappointed in the outcome even if it's marginally better than the guidance because we really felt that this was a year in which we should have -- we had much more upside potential than downside.

This was great color. And my second question refers to the onboard forecast, which seems to be driving the Q3 yield guidances. And Brian, you gave me a great segue into this. So including China, you expect flat ticket and the 1% to 2% yield to come from onboard. But as we know, and as Adam just pointed out, we never know what onboard would do until the cruise is over. So is there more risk to the 1% to 2% yield guidance for Q3 than you've previously had in your guidance?

Assia, this is Jason. I think the guidance that we gave on Q3 does reflect our feelings around risk on whether it's on ticket or onboard. And I think that we -- the programs that we've implemented on the onboard perspective are not aspirational. A lot of it is structural in nature, whether it's new venues we've added onto the vessels or new contracts that we might have with our concessionaires and packages that we're offering. So it's not something that's aspirational in nature. It's actually -- there's pretty strong foundation for the improvement.

So your confidence level is similar to what it has been in the past?

Yes.

Okay. And Jason, can I ask you one technicality? In the reconciliation table between April guidance and today's guidance, there's a line item that's called net savings. Is that cost savings in the back half of the year less the yield reduction? Should I interpret that, that way?

That's right. It's basically all cost-saving efforts that we've put forward versus the revenue decline.

Your next question comes from the line of Jaime Katz with Morningstar.

I know you guys talked a little bit about what you thought debt levels would come down, how much they would come down at the end of the year. But you have a fair amount of debt coming due over the next 2 following years. Can you talk about how you're thinking about either refinancing or paying down some portion of that to kind of expedite getting back to that investment grade rating?

Sure. It's Jason again here. We are very active in multiple refinancing activities to address our upcoming maturities. And yesterday, we launched 2 facilities in the bank market. I mean, and there'll most likely be some additional activity there. So I think we're quite comfortable that in the short term, we will basically be resolving our upcoming maturities. And clearly, as we go through the forward-looking period, taking free cash flow to pay down debt will certainly be one of the alternatives that we evaluate.

Okay. So you will partially refinance part of it and partially pay down part of it, it sounds like?

That'd be right.

Okay. And then I know you guys have talked a lot about China and Japan. And I think out of a lot of other companies, we've been hearing about some weakness in Australia. I know it's a pretty small market for you, but can you talk about anything that you've seen there, maybe in whether you're seeing some weakness in pricing there?

Jaime, it's Adam. I think don't think of so much that we're seeing weakness. I believe we've mentioned in the previous quarters that as Australia has grown, and it's important in the industry, there's been fairly substantial industry-wide capacity increases there. We have put more ships there. And naturally, that has had some downward pressure on yields. But I would say the market this year has developed roughly in accordance with our expectations for how it would go. Australia is a very attractive southern summer market for us. We have a strong presence there with both for our Caribbean and Celebrity. We did expect pressure on yields this year from the capacity increases. And we're looking forward to be playing a prominent role on that market going forward in the future.

Your next question comes from the line of Tim Conder with Wells Fargo.

Just a couple here, little more color on the Caribbean. Can you say is that more tilted to the weakness that you've seen and the increase to competitive pressure here of late? Is that more in the close-in bookings? Are we looking out just over the curve, number one? And then in relation to that, how is your current booking curve on a company-wide global basis? And then secondly, regarding the capacity growth, looking more importantly to '15 and '16, yourselves and others in the industry have talked about keeping that at 3% to 5%. You mentioned in your press release, you've mentioned before that '12 to '16, it's 4% on average. But obviously, '15 and '16, it's around 7%. So should we anticipate that either we'll see some sales of ships and bring that net number down? Or that, again, you haven't announced anything, but beyond '16, it'll come back down to bring that more in that trend line of the 3% to 5%?

Tim, I'll take the first part of the question. Our booking window has been expanding, I think, pretty universally. I think, I just like the preference. I do think too much gets read into the booking window. But it is moving in a positive direction by most people's perceptions. And again, that's pretty much across the board. I think the Caribbean pricing pressure is, yes, I just -- I want to emphasize. I think way too much is being read into the fact that we've called out the Caribbean. We know that there's been a lot of discussion about this. Ian has been getting a lot of calls about what are we seeing in the Caribbean. So we wanted to specifically address it. We are seeing changes on the margin. And I think we will continue. As Adam alluded to, this is just part of the booking cycle. There are ups and downs and puts and takes that constantly occur. So I don't think when we've called this out, we're talking about anything structural in the Caribbean.

So is it -- again, Brian, is it more skewed close in or a little bit further out? Is it -- with that topping off close in or again looking out?

Frankly, I think it's probably more centered around the fall, which is something we would normally see this time of year. The fourth quarter is traditionally the harder period to try to sell inventory because the kids are going back to school. But it's something you expect every year. It's a dynamic that occurs. And we're not -- we constantly monitor this, and we see new promotions everyday. But again, it's nothing out of the ordinary. And it's nothing structural. I'll ask Adam or Richard to take the second part.

Yes. With respect to the second part of your question, I think it's an interesting dynamic in our business that when you do take delivery of a new ship, it's not -- it's all at once. Many industries, when you have growth, it's a thousand little pieces. And in our case, it's a very binary type of move. And so I think that does make the individual years look different. Our view is we should look at this over a period of time on a strategic basis. And our objective was to have more moderated growth going forward. And while I -- frankly, it would be nice to be able to have each year be the exact same number. That just isn't the way any opportunities come up, and it isn't the way it happens with big chunks of new ships coming. With respect to older capacity and potential dispositions, it's somewhat the same thing there. It's even more opportunistic. I think the direction we're going in, and you've seen we've been successful. Even in a very difficult market, this has been an extraordinarily difficult market in the secondhand market. And yet we've had some success there. And I think, again, that will be, because that market tends to be opportunistic, that will also be more binary and a little less predictable as to when the things happen. So we tend to look at these things strategically over a number of years. And I think that's the way we will continue to look at it.

Okay. Richard, so, yes, given the lumpiness of how the deliveries happen then, so it's still the broad intent, is you're saying -- is what you're saying, it's still the broad intent of the company? After you get past that, that things would average out in that 3% to 5% long-term goal?

Yes. We haven't -- what we said is low to mid-single digits and we -- yes, I think lumpiness is a good way to put it there. That will tend to happen in our business. Also, we're conscious of the fact that there's a big difference from a marketing point of view of whether you get a ship frankly in time to enjoy the spring and summer seasonal markets or whether you get it later in the year without that benefit. But yes, I think over time, we want a more moderate growth. And that probably means that this thing -- that to -- sorry, low to mid-single digit.

Shaira, we have time for one more question.

And your final question comes from the line of Felicia Hendrix with Barclays.

I want to take a stab at a question from a different angle. When you discuss net yields next year, I know it's early, but you did put it out there in the release when you mentioned that your objective is to generate net yield improvement. Just wondering, as you contemplated that comment, are you thinking about or are you assuming that the discounting we're seeing in the Caribbean could continue and the China, Japan conflicts could continue?

Felicia, we're basing that -- well, first, I do want to point out in my commentary, I did say despite the current pressures in the Caribbean, we are seeing year-over-year pricing improvement. And I think it's important to recognize that. In talking about 2014, again, I want to emphasize, it is still extremely early in the process. But based on the current order book that we're seeing in all quarters and the current booking trends that we're taking in for 2014 business, and as I think Richard alluded to, right now, we're taking the lion's share of our business coming in as -- for 2014. We're feeling good about making a statement and putting it out there that it should be a year-for-yield improvement. But we've not gotten any more specific than that.

Felicia, I will just address at least from a personal point of view that one of the items that you mentioned, which is the China-Japan situation. And that is unpredictable, of course. And we have no greater insight than anybody else. But if you look what is happening regionally in the area, I don't think one would read into that a lot of reasons of thinking that, that is going to suddenly resolve itself between now and then. So I think we're trying to be quite realistic about that. And I frankly think that's something we will have to deal with for a while. And at least in my own thinking, that's behind it. And yet, overall, when we're looking forward, we're feeling awfully good about the year.

That makes sense. And then Richard, while we have you, can you just clarify when you said that the year is better than you thought. I'm just a little confused because your yield guidance has essentially gone down since the high end has come down, right? And I know it's only inventory on [indiscernible]. But it's come down. So that seems to me that at the beginning of the year, you thought you'd be more towards the low end of your guidance range. Is that what you're trying to say?

No. Well, I guess what I was simply pointing out, if you look at where we said we would be for the year, the only change that we're sort of highlighting is the foreign exchange and the Grandeur. And if you then say -- we started the year not expecting the negative kind of publicity that we all, as an industry, received. In any other environment, you would look at that and say, "Oh, well, it's been a bad year from a publicity point of view." That clearly has been driving yields down. And in fact, it has had a more negative impact on our sales than we originally expected it would. And so since we're ending the year from a business point of view, essentially on balance than where we originally said, that implies that other things in the market have actually performed better. And so that's what I was referring to. It's not the totality. But it's -- we effectively got to the same position in terms of profitability from the business despite an unexpected hit from that source.

Okay. You're focused on profitability and I was thinking about yields. That's the difference. Okay. And then, Adam, just final question. I was just wondering, you've started booking the Quantum. It's been booking for a while right now. Just wondering, not looking for specific numbers, but maybe directionally, what kind of premiums you're seeing there? And has there been any impact on the Oasis and the Allure?

There hasn't been any effect on Oasis or Allure, nor would we expect any with Quantum being operating out of a New York base. We're really looking to improve our presence in the northeast catchment market. Not that there's anything wrong with Explorer of the Seas, but we're incredibly excited about what Quantum of the Seas will bring to cruising in that area and to our brand. It's too early to comment anything about Quantum yield from a share booking standpoint. The initial reaction to her adjusted for capacity was even more exciting than the initial reaction to Oasis. Now that might have been because of the time we released Oasis, the market couldn't quite comprehend what it was all about. And because of the fantastic success of the Oasis class ships, it's built up people's enthusiasm for what we might do next to even higher levels. And I think when we revealed the features of Quantum of the Seas in April, the market felt that its expectations of us were more than justified. And they can't wait to be on board. So I can really only comment on the early booking numbers. Right now, it's very promising. And with 3 of these wonderful ships coming to us over the next few years, we expect them to be a very powerful element of our fleet.

Thank you for your assistance today, Shaira. And we thank all of you for your participation and interest in the company. Ian will be available for any follow-ups you might have. And with that, I wish you all a great day.

Thank you for your time and participation in today's conference call. You may disconnect at this time.