Good morning. My name is Kathy, and I will be your conference operator today. At this time, I would like to welcome everyone to the Royal Caribbean Cruises Limited Third Quarter Earnings Call. [Operator Instructions] I would now like to turn the conference over to Jason Liberty, Chief Financial Officer. Please go ahead, sir.

Good morning. I would like to thank you for joining us today for our third 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'd 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 our other disclosures. Additionally, we will be discussing certain non-GAAP financial measures, which are adjusted as defined, and a reconciliation of these items can be found on our website. Richard will begin by providing a strategic overview of the business. I will follow with a recap of our third quarter results and will provide an update of the business environment. Adam and Michael will provide a more detailed update on our key markets and products, and then I will walk you through our outlook for the remainder of the year. We will then open the call up for your questions. Richard?

Thank you, Jason. And good morning, everybody. Obviously, it's a pleasure to be announcing better-than-expected earnings, while increasing our guidance for the full year and providing some early indicators for 2014. More importantly, today's results represent another important milestone on our continued journey towards higher returns on our investments and to our shareholders. For years, we've been saying that achieving our financial objectives entails both improving revenue as well as reducing costs. Over this period, we've been investing in our brands, and it's nice to see the results beginning to come through. I'd like to take a moment and review where we are with respect to both our revenue and our cost objectives. Starting with revenue, the third quarter marked the 14th quarter in a row that we have achieved yield improvements, and we're confident that the fourth quarter will make it 15 in a row. Furthermore, although it is early in the booking cycle, our current projections point to 2014 being the fifth consecutive year that we will post further yield improvements. Of course, you all know that these yield increases have been less than we would have liked due to factors beyond our control. But the fact that we continue to consistently post yield improvements in the face of the recent black swan events provides clear evidence that our strategy is working. We've invested heavily in revitalizing our ships, expanding our marketing globally and transforming our IT systems. Our guest surveys show that satisfaction levels with our product are at an all-time high, and our employee engagement surveys continue to impress. All of this drives higher yields, and these improving yields show that our investments are paying off. It's taken longer than we would have liked to get here because we've had to deal with more and bigger…

Thank you, Richard. Before we get into our operating results, I would like to mention that, as expected, we have incurred some restructuring and related charges related to our various profitability initiatives. These total $12.2 million in the third quarter and $13.9 million year-to-date. These charges relate mainly to restructuring and consolidation of parts of our global operation. Accounting rules dictate that the timing of when we take these charges, so we will be incurring some additional charges in future quarters. For example, severance charges are recorded when an employee is notified, while lease termination gets recorded when we no longer are utilizing the facility. This is all detailed in our 10-Q that will be filed later today. Our profitability improvement initiatives will continue so it is possible we will incur some onetime costs in the future in our efforts to drive improved performance. When assessing our performance on a comparative basis, we believe these charges are not as meaningful and are not indicative of future operating performance. Accordingly, we have introduced adjusted earnings measures that exclude such exceptional charges. Now let's look at our third quarter results, which will have -- which we have summarized on Slide 2. Unless I state differently, all metrics will be on a constant-currency basis and will exclude restructuring and related charges. For the quarter, we generated net income of $1.71 per share, which exceeded the range we provided on our July call, despite a $0.09 per share impact from the unexpected canceled sailings of Celebrity Millennium. Net revenue yield increased 2.6% for the quarter, which was better than our guidance of an increase of 1% to 2%. If you exclude the canceled Millennium sailings in Alaska, yields would have been 40 basis points higher, or up 3% for the quarter. Ticket pricing on…

Thank you, Jason. Richard and Jason have summarized the outlook for our Caribbean product range. While visibility is limited, at this point, we expect our Caribbean yields to be approximately flat to slightly down on a year-over-year basis in 2014. We are currently booked ahead of last year for first quarter Caribbean sailings and behind for the remaining quarters of 2014. Our long history and market leadership position in the Caribbean will serve us well as we put additional sales and marketing focus towards our 2014 Caribbean revenue target. The fact that the remainder of our product portfolio is booking at an encouraging pace and at encouraging rates, will also serve to enable such focus. Furthermore, our global footprint for customer sourcing provides a variety of strategic and tactical avenues for promoting our Caribbean offerings across and within countries. 2013 has been a challenging year for our industry, featuring significant adverse publicity, much of which has featured Caribbean cruising in a negative light. Given the reality of extraordinary customer satisfaction and assuming no further negative event, we anticipate a more positive consumer attitude towards cruising by the end of the first quarter as the industry laps the beginning of the onslaught of negative media coverage. We acknowledge there is heightened interest in the fact that our capacity growth in the Caribbean and that of the overall industry will be approximately 13% in 2014 versus approximately 2% growth in 2013 over 2012. Interestingly, our Caribbean yield change this year over last year and our preliminary Caribbean yield change outlook for 2014 are roughly equal. This supports our view that while the capacity growth percentage is a relevant factor in the overall equation, it's just one of many factors that will determine sector performance. For example, next year, most of the industry's…

Thank you, Adam. And good morning, everyone. We spent the last several years developing a very well-diversified portfolio from a sourcing and deployment standpoint. And a large portion of our deployment is performing very well. We are very pleased that Alaska and Europe look to provide us with continued pricing improvements in 2014. Our investments in key European and global source markets is generating strong performance for our European product, enabling us to achieve solid gains in our pricing. Demand for European itineraries has been very strong from all of our core markets, including the United States and the United Kingdom and Ireland, and we are well positioned for another year of yield growth. Over the past 12 weeks, our European bookings have outpaced last year by over 25%, while pricing is higher than same time last year. We've added a collection of 7-night round trip and open-dual Mediterranean itineraries, which are combinable into 14, 21 and 28-day sailings on the Celebrity Cruises brand, which are being well-received by the market and advance bookings have surpassed our expectations. We are also very pleased with the performance of Oasis of the Seas, which will have a mini-European season in 2014. Key to our strength in Europe is our recognition of the importance of simplifying the European cruise proposition particularly for our American guests. This year, Celebrity Cruises and Royal Caribbean International relaunched our ChoiceAir program, which includes Low Airfare Guarantees, Assured Arrival, Your Choice Flights and 24/7 Support. This program has been particularly well received, with significantly more air bookings for the European sailings than the same time last year. The key value, of course, of our ChoiceAir program is that it increases the stick rates of our cruise booking, providing a higher level of confidence in our projections as we look forward. Early bookings for the overall Europe portfolio have been very encouraging, with our load factors trending ahead of last year in the mid-single-digit range and higher ticket per diem for every month of the season. Overall, Europe will represent about 22% of our global offering in 2014 and will drive more in terms of revenue share. Alaska, which represents a smaller part of our overall deployment, is very meaningful in the third quarter where it accounts for 10% of our overall capacity and even more on a revenue basis. Alaska has been a solid performer for us over the past couple of years, and we've been maintaining similar yields to those achieved during our record 2011 season. In 2013, we introduced Celebrity Solstice into Alaska, which performed extremely well. Bookings and pricing for 2014 Alaska sailings have been trending ahead of last year and we are anticipating further yield growth for the season. Both Alaska and Europe products operate during our crucial Q2 and Q3 peak season. And early indications for 2014 is their performance is shaping up very nicely. Jason, back to you.

Thank you, Michael. Taking into account all we have just told you about the various markets and products, I would now like to take you through our updated guidance. Slide 4 reconciled our current 2013 EPS guidance with the guidance we provided in July. As you can see, strong revenue performance is improving our outlook for the year and has more than offset the impact from the canceled Millennium sailings. Slide 5 summarizes our full year guidance. As you can see, we expect our net revenue yields to finish on top -- on the top end of our previous guidance for an increase of approximately 3%. Our cost outlook remains unchanged from July with an increase in net cruise costs excluding fuel of 1% to 2%. We have included $920 million of fuel expense for the year, a reduction of $3 million versus our July calculations. The modest reduction since July is primarily the result of further consumption reduction efforts, but it also reflects a minor reduction in fuel due to the Millennium outage. Our at-the-pump price calculations are in line with July. So as a result of all this, we have increased our adjusted earnings per share expectations to be between $2.30 and $2.35 for the year despite these challenges. On Slide 6, we have recapped our guidance for the fourth quarter. Net yields are expected to be up 2% to 3%, and net cruise costs excluding fuel is expected to increase 1% to 2%. Earnings per share are expected to be in the range of $0.15 to $0.20 per share. Based on the current booking environment and the benefits derived from our profitability improvement program, we currently expect 2014 to be consistent with Street consensus of $3.06 per share. As Richard mentioned, despite inflationary pressures, rising reinsurance costs and continued investments in the product, marketing and technology, we still remain committed to our net cruise costs excluding fuel of being better than flat in 2014. With that, I will ask our operator, Kathy, to open up the call for a question-and-answer session.

[Operator Instructions] Your first question comes from the line of Steve Wieczynski with Stifel. Steven M. Wieczynski - Stifel, Nicolaus & Co., Inc., Research Division: I guess, first, this question would be for Adam. I mean, you guys talked about the Caribbean and what you're seeing so far for 2014, and that's pretty surprising how healthy that is. Adam, you talked about how a lot of your capacity next year is going to be sourced from other markets outside of that core Florida product. But if you look at that Florida product and for example Oasis or Allure, can you talk about how those types of ships are booking right now?

Well, thanks, Steve. It will -- they continue to be leaders in the cruise industry. They continue to command highly competitive rates. They are really the flagships of the industry, especially in terms of their family product offering. Obviously, our goal with those ships, like every other ship that we have, is to maximize the profitability at the margin. And we take the Caribbean outlook, as I mentioned in my commentary, quite seriously, and we'll be working very hard to promote all of our ships, including those 2 ships, to make the most of 2014. But I think in the big picture they remain, despite the fact that a number of other new ships have come into the market since Allure arrived in 2010, the leaders in the industry. Steven M. Wieczynski - Stifel, Nicolaus & Co., Inc., Research Division: Okay, great. Second question, final question would be, I guess, it's for Jason. Your outlook for next year, you're basically talking about at this point, you're seeing yield growth in the low-single digit. Can you talk about, maybe, just kind of an early outlook in terms of your cost outlook for next year as well?

Yes, just to -- Steve, just to reiterate on the cost side, our expectations on costs are for them to be better than flat in 2014, which is consistent with what we said in July.

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

Just looking at the Caribbean a little bit. I wonder if you can talk about anything incremental in the last few weeks? I mean, are you seeing competitive prices being held a little bit more and maybe occupancy being sacrificed at some competing capacity that is, maybe, taking off a little bit of price pressure? I mean, I don't know if you can comment on anything sort of incremental in the last few weeks.

Robin, I don't think that we've seen anything so greatly noteworthy in the last few weeks. I think we commented already that in general, the booking outlook in recent many weeks, not just the last few weeks, has been pretty stable, generally since the last call. So we knew and we talked about it in July that we were in a promotionally-oriented environment for the Caribbean sector. That continues to be the case, but not because of any notable change in trend that's occurred in the last few weeks.

I guess I'm trying to get a sense of whether -- you mentioned it's been stable since the last call. So would you say the level of promotion in the environment has bottomed? And I understand it won't really sort of anniversary until after February, March, but it sounds it's at least kind of bottomed in terms of the level of promotional activity?

I really don't think we're in a position to comment on that because, of course, the whole industry is involved in promotional activity. From our standpoint, what I've said is that we will be -- we take the Caribbean environment very seriously, and we are increasing our focus in general on promoting our Caribbean products over the course of the upcoming months into the WAVE. And we would expect through that focus and effort to galvanize demand. But there really hasn't been anything that has happened that's of exceptional noteworthiness in the last few weeks, and it's actually impossible to say when anything has bottomed out or peaked except in hindsight. So we're too close to recent weeks to make a comment like that.

All right, I appreciate that. Just lastly, you mentioned some of your capacity, South Florida versus other markets. Can you quantify what percent of capacity in the Caribbean is not South Florida?

We will look into that number for you and Ian will make that available to you after. I don't think we have that right off the top.

And your next question comes from the line of Badishkanian with Citigroup.

Greg Badishkanian. First, just in terms of your expectation for low-single-digit net yields for next year, what are you assuming in terms of the pricing environment over the next few months, especially kind of the Caribbean and what needs to happen to maybe see some upside to your initial outlook.

Steve, this is Brian. I think -- I'm sorry, Greg. I think we were pretty much assuming that the environment stays pretty consistent with what we've been seeing. While there's a lot of promotional activity in the marketplace, particularly in the Caribbean, it is pretty predictable at this point. It's not inconsistent with general patterns that we've seen. I think we were feeling more confident, as Michael alluded do, with where Europe is right now. But if you look at the chart that Jason showed in terms of kind of how the booking cycle works, you can see we have a lot at stake with the WAVE Period. I think the most positive news we have in terms of what can happen with the pricing environment is when we get to mid-February, we will have lapped when all the negative press began. In the nearer term, I think our comparables have become slightly easier as well because at this time a year ago, we were seeing the consequences of Superstorm Sandy and that took a little bit of a hit on booking activity. And you had to see more promotion. So I think we feel as though we have a pretty good grip on it, but there's still a lot of business to be booked.

Right. And you mentioned Europe. Just over the last several weeks, maybe kind of just walk us through what we've been seeing there. And also is it sort of the benefits from the contained capacity, you've got easy compares, maybe some pent-up demand. What's going to lead into the improvement in Europe in your opinion?

Greg, it's Michael. I'll answer that. I think, I commented earlier on that one of the things that we're particularly proud of is that we have invested over the past several years in really extending the reach of the brands into the global marketplace, and we're certainly seeing good demand out of all of the different regions and markets around the world. So that's been quite positive, and I think that's certainly a factor in terms of the global reach that our brands have. And the second thing is that we've seen surprisingly positive demand from the U.S. market, and we think that, that's partly as the result of some of the things that we'd be doing tactically in terms of making air and the proposition itself much easier for the customer to purchase. So I think those are certainly factors. Capacity constraints, I think that probably plays a role, but it's very difficult to try to quantify that in any real way.

Your next question comes from the line of Felicia Hendrix with Barclays.

You guys have us some color on onboards in the prepared remarks, but Richard, I just want to know what you're selling on those ships to have net onboards up 7% in the quarter. So how should we think about that going forward? I mean should we be as excited as a 7% number should indicate? Or would you like to temper our outlook there a bit?

Well, Felicia, first of all, I think you're right. I'd like to buy some of whatever it is we must be selling there. I don't know what the relevant laws are. So I'll put that aside. I think I'll ask Adam to comment specifically on some of the -- because there's quite a few different initiatives going on and how we expect them to play out.

Felicia. Well, first, of course, the progress that we've made in 2013 becomes the comparable for '14. So the progress in and of itself presents a certain challenge for ongoing year-over-year improvement. With that as background, I will say that you don't get an improvement of that sort without seeing progress in the main onboard revenue stream. So as I believe we mentioned earlier, gaming, beverage, shore excursions, retail and also some of the smaller revenue streams, internet has been doing well for us, which we wanted to see because we made a significant investment in, I think, 7 or 8x more bandwidth to the ships this year, and that seems to be paying off. So a number of the investments that we have already made, we would expect to continue to pay dividends and revenue growth into 2014 and beyond. And we continue to look under every stone for onboard revenue opportunities that don't conflict with the satisfaction of the product offering. And very similar I would say to how we feel about fuel consumption, where we continue to look for efficiency opportunities under every stone, we continue to find opportunities. So we are optimistic, looking into 2014 against the backdrop of a comparable that will be tough.

So to follow on with that, when you talk about looking to overall yield improvement in the low-single digits for 2014, as I'm quoting from the release, is that comment just on ticket revenue, or is that on overall? And if it's on overall, how should we think about the ticket revenue for next year in light of the strength of onboard?

Felicia, it's Jason. In devising that guidance, ticket is expected to also be up on the year-over-year and going into 2014. Onboard is obviously expected to go up but tempered relative to 2014, as Adam commented. But overall, we expect both lines to improve year-over-year.

Okay. That's helpful. And then just last thing, as you guys think about your cost next year, and you said it could be better or at least flat. Where are some areas where we think we might get some upside from?

Well, I think in terms of upside on the cost side, we're doing constant profitability improvement efforts to be able to meet those targets and goals. I mean, I think there are obviously items on the overall cost side on fuel and some other elements depending on pricing. But I think overall, us getting to flat -- better than flat is going to be an aggressive target that we plan to achieve.

And Felicia, it's Richard. If I could just add a little color to that. I think a number of us had made the comment that we actually had some pleasant surprises this year. A lot of the initiatives that we have been talking about for a very long period of time came in earlier than we expected. So one of the things that happened was in the third quarter, we had the Millennium outage, which was really a body blow to us and certainly unexpected. And so I think you had alluded to in one of your reports, unusually, we didn't say, "Oh, we had this unexpected event, and it's costing us $20-odd million and so you should adjust your impact." We didn't say anything, and we've now made clear that we have more than compensated by some of the savings and some of the other things that have happened. So I think part of the reason you're hearing a little bit of hesitancy about why we did so well this year or we're going to do even -- we're going to do more next year is because we've -- by doing well, we've made the comparables more difficult. So we are determined, and I'll be precise as to say we are determined that it will be less than flat, better than flat. I always get confused with less than, but it will be better than flat. And we are determined to make that. But as I think everybody has indicated, that really is a challenge. And also on the onboard revenue side, remember we've had quite a few of the revitalizations. They've been very successful for us. And one of the areas that they've helped us is in the onboard revenue because we really have focused on adding new and better onboard revenue facilities. But that -- those revitalizations, we're nearing the end of that process, too. So I think the comparables simply become more difficult.

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

I had one question, which maybe, Brian, you can help me answer. Caribbean pricing has seemed to be down for several quarters now. And in the past, other markets have gone through these cycles, which have not necessarily correlated to a significant increase in capacity. Bermuda comes to mind, without any reasonable explanation a few years back. Do you think we're seeing some of that? Maybe the repeat passenger base is getting a little bit tired of the same itineraries? Or do you think it's more of a capacity issue?

Actually, Assia, I think it's the repeaters that are giving us the strength that we're seeing right now. If you look at the Caribbean is, in our terminology, is comprised of a lot of different product offerings. You have everything from short 3- and 4-night cruises out of South Florida. You have the core 7-night Caribbean cruises out of South Florida. You have cruises out of the Northeast and the Gulf Coast and then you also have longer Caribbean itineraries. And what we're seeing, if you drill into it, is the more, what Richard referred to as entry-level products, which would be the shorter cruises for the most part, that tends to be where you get more first-time cruisers and it's where we're probably seeing some of the most aggressive pricing. Adam talked about Oasis and Allure, those are premium-priced products and accordingly, tend to be holding their own better than what we're seeing promotionally in the marketplace overall. And I'd also point out that the long Caribbean, which is not an insignificant part of our portfolio, is actually doing better this year than a year ago when we more recently, actually, have been able to take some price increases there. So when you package it all together, it's about flat to slightly down in our projections next year. But it is made up of a lot of different components. And again, I would say, probably the press that we've experienced over the last year, that will be lapping in February, clearly had more of an impact on the first-time cruiser.

So when we parse it by type of destination and product, it is really the negative press from February that is having the most impact?

Yes, I think as we've looked at this, and Adam had this in his comments, we recognize there is a low-double-digit capacity increase next year. But our feeling is that we're absorbing that quite well, and it's dispersed into the markets that we'd like to see it, at least from our standpoint. And I think when you consider everything that's been out there in terms of the press, and we've been able to put a low-double-digit increase of capacity in there and be reasonably close to flat next year, I think that's a testimony of the core strength.

Sure. And Jason, maybe one question for you. In terms of the restructuring charges, you mentioned that you would provide us with more detail in the 10-Q to be filed later on today. Could you give us some color in terms of the length of time, number of quarters that we should continue to expect those? And whether the magnitude would be similar to what we saw in Q3, which was somewhat significant?

Assia, in terms of forward-looking periods, it's tough to commit to how long at all the profit-improvement initiatives come to bear. But the costs that specifically that we took the charge for, in Q3, in the 10-Q, what you'll see is about $10 million in Q4 and about $16 million into 2014, which will be laid out in the 10-Q. And that is specific to our global restructuring efforts that we have taken action to.

So the $10 million in Q4 and the $16 million, those $26 million, that should take care of the majority of it?

That should take care of the cost associated with our global restructuring. Yes.

Assia, I just want to make sure it was clear. That's the one initiative and, as Jason pointed out earlier, there may be some others that may have an impact. And we're really only dealing with what we knew about it today, and that's the one that's -- that he was describing.

Okay, Richard, so as we go along, there might be other incremental expenses?

Yes. Relating to other initiatives.

And your next question comes from the line of Sharon Zackfia with William Blair. Sharon Zackfia - William Blair & Company L.L.C., Research Division: Just wanted to follow up on the onboard spending because I agree, it's been tremendous kind of all year. And I guess on the 3% net yield for the full year of the guidance, what part of that is ticket at this point versus onboard? And then when you do the revitalizations, I'm assuming there is a big kind of gain on the ships, but there are other programs you've implemented, like the beverage program on Royal this year, and that seems like that's something that could continue to grow quite nicely as you increase penetration and awareness of that. So I guess, long way of saying, what's the kind of longer-term right run rate for onboard spending, given where you are in the different revitalizations as well as the program rollouts?

Sharon, just to take a quick breakdown in terms of for the makeup of the 3% for the year. We're expecting ticket to be up around 2% for the year, approximately 2%; and on board to be up about 7% for the year. And that, combined, averages out to about 3% for the full year.

If I can give some flavor for the onboard revenue. First of all, as it relates to revitalizations, one of the big advantages of that program is we can put in new venues, such as specialty restaurants that are revenue generating. And we can also put in new technological capabilities, like pervasive Wi-Fi, more bandwidth and what have you. So there are opportunities that come with revitalizations that are special and that have ratcheted us forward in our efforts, and they've applied to both Royal Caribbean and Celebrity. And as I mentioned in the case of Royal Caribbean International with the 5 Voyager-class ships coming up in the next few years, we'll again have those opportunities. But as you alluded in your question, we have other programmatic opportunities that don't have anything to do with revitalization that we've been very focused on that pretty much span the major revenue centers. So in various ways, we've been investing in a renewal and improvement of our casino offerings, we have reorganized our approach to the land operation, which has brought more focus to our shore excursion revenue capacity. You mentioned, I think, a couple of the beverage programs, which have resonated very well across the Royal Caribbean and Celebrity brands, and we continue to find new variations on those packaging themes that help us. We've even been able to take good advantage of those in our overall promotional offerings for the ticket plus the onboard, which is quite interesting and different from what we've done in the past. So if you look area by area, we have, in fact, pursued and implemented programmatic changes, and we continue to look for more as we go forward. Sharon Zackfia - William Blair & Company L.L.C., Research Division: And maybe asking a different way, as you look into 2014, is there any one category where you think there is still tremendous low-hanging fruit? And then, just a follow-on. The spa hasn't been mentioned in a while. Is there anything kind of systematically happening in the spa? It used to lead onboard revenue for quite while.

Sharon, it's Michael. Let me just jump in. I think one of the areas that's been good for us this year, and I think we're quite optimistic about looking into '14, is the destination experience, the land packages and shore excursions. We're certainly seeing that there seems to be a greater appetite from our customers and guests with regards to purchasing these packages. So we think there's more opportunity for us looking forward in that area. And with regards to the spa, I think that's always been a very healthy revenue for us. And I think we're in a relatively good position. We're constantly looking at pricing, the ability to push the pricing. And I think that we saw in '13 that there was some opportunity there and, certainly, in '14, we're looking at where we can take advantage of some pricing opportunities. And that's also beyond the spa, especially in areas like beverage and specialty dining. I think we found that there seems to be reasonable appetite when we do push the pricing up.

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

A couple of items here. A little bit more color, if you would, I think color on the European from the Celebrity side. But in general, any commentary, specifically on your continental sourcing? What you're seeing in the different geographic areas, Southern Europe, Germany in particular? And then, looking at your air/sea mix that you commented on earlier also, how do you see that shaping up for '13 versus '12? And then maybe, what's your thoughts as to where that could go in '14?

Okay, Tim. For Celebrity, in terms of how we're looking at Europe. We're feeling relatively optimistic. We have our Solstice Class in Europe in Q2 and Q3 and we've made no changes there. So we're seeing -- we're feeling good about the demand that we're seeing. We're certainly feeling good about the pricing that we're currently seeing. I think I commented earlier that, over the past 12 weeks, demand has been really good, up over 25% over the past 12 weeks. So the company and, certainly, Celebrity to a good share of that. So Europe, as a destination for Celebrity Cruises, is part of our key strategic thinking, and we haven't changed that in any way, and I think we're enjoying some of the fruits of that strategy and as we look into '14. As it relates to the various markets, I think Adam may be able to comment in more depth about what Royal's seeing from a Southern European, German perspective. But we're seeing a little bit of a comeback in Southern Europe and Germany. I think the brand, our brand strategy, though, is somewhat very targeted and focused. We believe that there is a rich vein of affluent customers, both certainly in Southern Europe and certainly in Germany. So we're beginning to see that coming through in our bookings. As it relates to air/sea mix, that is another part of the Celebrity strategy. We've been quite focused on building this proposition of cruise plus air and packaging putting it into the marketplace. And when you look at the air/sea mix, I don't have the percentage numbers in front of me, but if you compare '12 with '13 and '14, air/sea mix bookings, probably up in the mid- to high-double digits year-over-year. So we feel like it's a positive proposition that we got into the marketplace on air/sea.

Let's just take a couple of things from a Royal Caribbean International perspective. One, which is probably true for Celebrity as well, is the appetite for European cruises from the U.S. market has been pretty strong for the last month, and has contributed to the percentage of increase year-over-year that Michael has cited a couple of times this morning. We discussed in past calls whether air was an issue for U.S. guests trying to go on European cruises, and right now, what we're able -- we're very pleased with what we're seeing from the U.S. market. Coming back to Europe, we try to simplify the product offerings for our European source market in '14 as compared to the last few years. We're not doing as much inter-porting, which is finding an intermediate -- what are normally ports of call, but also having people coming on and off the ships at those ports of call. And we have, I think, rationalized our capacity so that the products and services that we have on offer in '14 are generally more attractive for our European source markets than they have been in the last couple of years, while there's been a lot of ferment in the market. So we're seeing good demand from across the various markets. Royal Caribbean will be having its first German homeported product for a number of weeks next August [indiscernible] out of Hamburg, which we're looking forward to as an experiment. And so it's a little early still. But obviously, we'll have more color for you as we go through the quarters.

Tim, it's Richard, and I'll just add, obviously, we tend to focus on the 5 brands that are 100% owned. But we, as you know, we're involved with a joint venture TUI Cruises in Germany, and it has been extremely successful. We think it's found a good niche in the -- a good position in the German market, and we have the new ship coming next spring, which we think will be -- will do very well. So that brand is also thriving.

Kathy, we have time for one more question.

And your last question comes the line of Harry Curtis with Nomura.

Just a quick question going back to the Caribbean. In the first quarter, how booked are you this year versus last year for the first quarter?

Harry, it's Adam. I believe I mentioned before in my comments that for the first quarter for the Caribbean, we are booked -- our occupancy is in a better position now than it was a year ago.

Okay, I was just wondering, are you 25% booked, 35%? Can you give that level of detail?

It would -- we would be about 2/3 booked at this point. And that's across the whole portfolio of the spectrum of shorter cruises and the longer ones as well.

The reason I'm asking is that in the Caribbean, I'm just wondering if your expectations for pricing being flat to flattish could be somewhat conservative. If the first quarter is looking fairly well-booked, I'm just thinking that the yield management for the balance of the year, when some of that capacity actually leaves the Caribbean, might suggest that your pricing could be up for the year. I'm just wondering how conservative a statement that you being flat to down a little bit in the Caribbean might turn out to be.

Harry, this is Jason. And thanks for being so optimistic. But when we came up with our guidance or our outlook for next year, it really was our best thinking. It wasn't us trying to sandbag in any way. It was a culmination of all the different things you've kind of heard on the call to come up with that level of guidance, specifically around the Caribbean.

And then last question is just going back to China for a second. On an absolute basis, how much does pricing need to lift versus the pricing that you're getting, either in Europe or the Caribbean, to justify additional capacity there?

Well, there's a lot that goes into the economics of being in any sector besides just the revenue levels. We are pleased with the revenue development that we are experiencing in Asia, understanding that in 2011, we had to work through the shock of what happened at Fukushima. And in 2013, we've had to work through the unfortunate situation of not being able to call in Japan. But from an overall revenue standpoint, and by overall, I mean not only ticket but also the onboard revenue component of Asia cruising, which is attractive for us, we're pleased with where we are. And yet we have a market situation that is clearly in its infancy in terms of branding, distribution, et cetera, et cetera. And we also still have a lot of work to do on the cost side of being things out there and also on infrastructure improvement. So the Asian situation is in a very different state of development than Europe or North America, and we're looking at all the factors and projecting forward what we might be able to do.

Just as a follow-up there, do you think that there's a reasonable chance in the next year that you might see additional equipment move to Asia that might take some of the supply pressure off the Caribbean?

Well, we're not in a position to comment on or to project forward possible deployment initiatives. We've identified that Asia is of strategic significance to the company. We're extremely pleased with the reaction in that region to our brand, Royal Carribean International in China and throughout the region, Celebrity Cruises in Australia. And so we're very interested to remain in a leading position in the industry. We'll have to see where that takes us in terms of deployment.

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

Thank you. This concludes today's conference call. You may now disconnect.