Ladies and gentlemen, thank you for standing by. And welcome to the Royal Caribbean Cruises Limited 2015 Fourth Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. I would now like to turn the conference over to Mr. Jason Liberty, Chief Financial Officer. Please go ahead, sir.

Thank you, Paula. Good morning and thank you for joining us today for our fourth quarter earnings call. Joining me here in Miami are Richard Fain, our Chairman and Chief Executive Officer; Adam Goldstein, President and Chief operating Officer; Michael Bayley, President and CEO of Royal Caribbean International; and Carol Cabezas, our Vice President of Investor Relations. During this call, we will be referring to a few slides which have been 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 filing and other disclosures. Also, 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. Unless I state otherwise, all metrics are on a constant currency adjusted basis. Richard will begin by providing a strategic overview of the business. I will follow with a recap of our fourth quarter and full year results. I will then provide an update on the current booking environment, and will end with full-year and first quarter guidance for 2016. We will then open up the call for your questions. Richard? Richard D. Fain - Chairman & Chief Executive Officer: Thank you, Jason, and good morning, everyone. As you may have heard from Jason's voice, he has a cold this morning. So I'll use this opportunity to wish him a speedy recovery and ask him to sit on the other side of the room. In any event, I'm pleased to have this opportunity to share more about our results in 2015…

Thank you, Richard. I will begin by taking you through our results for the fourth quarter. We have summarized our fourth quarter results on slide two. For the quarter, we generated adjusted net income of $0.94 per share, which was $0.04 above our guidance. Net revenue yields were up 4.9%, which was at the high end of our expectations. A combination of new hardware, a stronger Caribbean and a successful new winter season in China helped drive the robust year-over-year improvement. Costs were 70 basis points better than guidance for the quarter, with net cruise costs excluding fuel down 4.7%. I will now discuss full year results, which we have summarized on slide three. This year, we had record earnings and exceeded the $1 billion mark. Adjusted net income was $1.07 billion, resulting in adjusted earnings per share of $4.83. These record earnings also mark a second consecutive year of 40-plus-% growth in earnings. Revenue yields increased 3.5% for the full year. Yield improvements in the Caribbean, Europe and China more than offset weakness in Latin America. Onboard revenue yield did not disappoint with a year-over-year improvement of 4%. The combination of new hardware, more onboard revenue venues on our upgraded ships and VOOM, the fastest Internet at sea, drove the majority of this improvement. We delivered a second consecutive year of cost improvement on a per-unit basis with net cruise costs excluding fuel down 0.6%. These cost improvements occurred in non-guest facing areas, mainly through identifying further synergies amongst our brands and leveraging scale in our back-office. Now, I'd like to update you on what we are seeing in the demand environment. I will start by taking you through first quarter trends. 63% of Q1 capacity is in the Caribbean, 23% is in the Asia Pacific region and approximately…

The floor is now open for questions. Your first question comes from Tim Conder of Wells Fargo Securities.

Thank you, everyone. A couple of questions here. One, could you give us a little bit more color on the bookings and pricing, specifically the cadence over the last 120 days, say, from Canada and China? And then anything on that related to the Zika virus, have you seen that show up in any way in the recent bookings over the last couple of weeks? And then finally, could you just review the no discounting policy? Richard, you mentioned that that was streamlined to nothing within 30 days. Was it tiered before? Was there like a 10-day, 30-day, 60-day, if you could just review what it was and to now streamlined into the 30 days? Thank you.

Hi, Tim. So as it relates to bookings over the past 120 days, they basically have had a similar cadence to last year. Now, obviously, markets like China that are later in the booking cycle can influence that. So if you look at what the cadence has been for North America and Europe, it's been slightly higher versus same time last year. So our book position would be slightly better if you were to account for the mix shift change in China. As it relates to Canada, there's nothing I would say that's specific that we've seen that is different from those trends. And again, as it relates to China, it's coming in as we would expect it to.

And pricing, Jason, on those bookings, similar, holding in there pretty well or any things you noticed are higher?

Well, on the Canada side, I would just take our commentary as it relates to the Caribbean. We are in a very good book position. We are in a very good price position as it relates to the North American consumer. In China, obviously, we're guiding for our yields to be slightly down. A lot of that again is driven by us further expanding into the other seasons and also expanding into secondary markets and ports. Michael W. Bayley - President & Chief Executive Officer, Royal Caribbean International: Hi, Tim. It's Michael. With regards to the question on Zika, to date we've really seen no impact whatsoever. It's been really immaterial. I mean, obviously, it's all over the media and we see it. But to date, we haven't had any material impact. Richard D. Fain - Chairman & Chief Executive Officer: And Tim, on the question of the discounting policy, the previous policy had, depending on the length of the cruise, we had different periods. So in some cases, we said there'd be no discounting within the last 10 days, in some last 20, some last 30 and some the last 40. And people weren't sure which applied to which and we thought it was easier both from the public's point of view, but also a key driver of this is from our own revenue managers' point of view. And so it's important that we have a clear policy that everybody understood and could follow. And we decided to expand it to 30 days across the board except for the three nights and four nights.

Okay. Okay. Thank you. Thank you, very helpful. And one more clarification there on the cadence over the last 120 days. Just on the pricing, the cadence, given your booked position in that, have you seen that pricing in China in particular, trends in the last 120 days, has that improved, remained stable? There's just been some mixed messages, I think, out there in the market a little bit. Michael W. Bayley - President & Chief Executive Officer, Royal Caribbean International: Yeah. Hi, Tim, it's Michael. Yeah, I think China 2016 is a different kind of configuration from China 2015 because, as Jason had mentioned, we've got a deeper push into the secondary ports with one of our ships with broader seasons and we've got more capacity in Q1 and Q4. So it's a different kind of configuration. And our inventory is being released in a slightly different way in 2016 than 2015. I think as Jason had mentioned, we're feeling that our bookings are coming in as expected. Richard D. Fain - Chairman & Chief Executive Officer: Tim, let me just add one thing, I know you know this, but for some of the others. When we talk about the broader season, Quantum of the Seas was unusual in, for the first time we were doing year-round in China. Previously, we've only been there seasonally. So what we've decided was it was a year-round opportunity. And while we don't get as much in the winter in China as we get in the summer in China like any other market, we do well in the winter. But when you average it in, it brings down the average. But as it relates to overall, China actually is helping us in our improvement in 2016.

Gentlemen, thank you very much. Appreciate it.

Your next question comes from Felicia Hendrix of Barclays.

Hi. Thanks for taking my questions. I did have a question on China, so while we're on that topic, let's stick there. So we have strong demands, we have a little bit of a different cadence this year because you're in the first quarter and fourth quarter, which is seasonally priced. You're also in – have a different mix, which you just mentioned, but overall, demand is strong and you guys said that yields are up low-single digits driven by China, so that's all good. What I was hoping you could clarify is that we get a lot of questions just about the charter companies, the charter agents and the status there. I think the view is that some of the charter agents are losing money on the China cruises in general. I was just wondering whether or not that's actually true. And if there are issues, what is Royal Caribbean doing, if anything, to fix that? And then, also, I'm just wondering if you're seeing any differences in how different Chinese brands are performing there versus your brand. In other words, how are you differentiated? You did mention that you guys performed better than everyone else in the market? Thanks. Michael W. Bayley - President & Chief Executive Officer, Royal Caribbean International: Hi, Felicia. Just to correct one point, yields are slightly down in China this year 2016 versus 2015 based upon all of the different elements that we just talked about. With regards to charter companies, it's quite a mix in relation to our total distribution. But over time, obviously, we've been changing the mix of our distribution and we continue that journey. So literally every single year we're doubling the number of agents who are selling Royal Caribbean in the China market. And of course, we're broadening…

Thank you for that and you did not deserve the demotion that Jason gave you earlier in the call. Michael W. Bayley - President & Chief Executive Officer, Royal Caribbean International: I'll be speaking to him shortly.

And of course, I did correct myself immediately. Michael W. Bayley - President & Chief Executive Officer, Royal Caribbean International: A little too late.

You did.

A little too late, yeah, yeah.

Yeah. Hey, Jason, thank you for the cadence of the costs in the quarter. That was one of my questions. But to add on to that, if you look at how your costs trended in 2015 versus your original guidance for the full year, they came in better than expected, or lower than expected. So I was wondering what drove that? And do you think you can achieve a similar result in 2016?

Well, I think that there's – the first thing I want to start off as it relates to 2015 is this is really a corporate enterprise-wide effort on trying to identify cost improvements. And so as I've said in the past, it's not one thing, it's thousands of little things that we do. The leadership, for example, Adam has given around supply chain and that team, the consolidation of our marine organization, and finding more efficiencies in our back-office is really what we just do day-to-day when we use the lens of Double-Double. And so that is ongoing and continuing. There are a lot of headwinds in costs in 2016. Obviously, as we expand our mix into Asia, the cost of operating there is higher. There are some more upfront costs on the sales and marketing side as we're delivering two new ships this year. And also having VOOM, the fastest Internet bandwidth at sea also has a high cost to it. So there are a lot of headwinds, but our efforts to try to continue to identify opportunities is never ending. But I think we think the 1% or less guidance is really our best view based off of all our plans that we have to-date to manage cost effectively in 2016.

Thanks. Richard D. Fain - Chairman & Chief Executive Officer: Felicia, I'll just add something. I do think that Jason's focus on this is very helpful, but all of our leaders here, Adam, Lisa, Michael, the others are really very focused on it. I'd also just maybe take the opportunity to talk a little bit about the timing of it during the year. You know I've said this in previous calls; we manage on an annual basis. And one thing that's a little unique about our business that, I think, distinguishes us from many others is that we have some significant big costs that we can shift around in terms of timing. So we would look at a booking pattern to say whether we ought to drydock a ship in March or April or September or October or what have you. And when we make those decisions, we simply don't pay attention internally to whether that falls in this quarter or that quarter. But those kinds of, what we think of as, immaterial tweaking to get the best outcome, particularly as it relates, for example, if I take a drydocking, we might find that for whatever reason we were just booking better at the end of September than early October, and we would just decide to shift the drydock from one quarter into another. From an operating point of view, they're immaterial. And those kinds of changes can actually help us in bringing our overall cost number down. But I fully recognize that, as it relates to individual quarters, they will distort the numbers. And unfortunately, that's simply a fact of life, and we think our best strategy is to continue to focus on the year. We want to – if it's cheaper for us to do it in March than April, we'll do it in March rather than April, and the Double-Double. And the Double-Double has really been very helpful. You talked about our cost containment over the last number of years now. The Double-Double is actually a very helpful concept that everybody can focus on and move towards that common goal. So I think that's why we've had the results that we've had. But I do acknowledge it does relate to bumps in any given quarter or period.

Thanks for that color. Jason, for some glitch reason, I can't see the slides. So if this is on the slides, I just was wondering if you could walk us through the bucket of currencies. What are the weightings for the second quarter and the full year?

We will have, in our filing, that breakdown. But I know for the full year, our two largest exposures will be in the pound, in the yuan, then Australian dollar, Canadian dollar, and then the euro. That will be the cadence for the year. And then, obviously, there are some changes and they're based off of the sourcing or the deployment during the course of the year. So for example, there is more exposure to the Southern Hemisphere markets like Brazil and Australia in the wintertime, and in the summertime you're more exposed to Europe. So you have more pound, euro as well as yuan because it's more of a peak period for the Chinese consumer.

Okay, thanks. Are you going to give the weightings or just the order?

I'm just going to give you the order.

Okay. Great, thanks.

Okay.

Your next question comes from Steve Wieczynski of Stifel. Steven Wieczynski - Stifel, Nicolaus & Co., Inc.: Hey. Good morning, guys. So going back to China real quick, I have a two-part question. I guess first, and Jason, you've said this before I guess, when you say yields will be down in 2016, can you break that yield factor down for us? Meaning how much is ticket price versus onboard? And what I'm trying to get is, is that onboard spend holding up? And then second, Jason, you've always talked about the profitability on a per-customer basis in China and how much stronger that is versus other markets. Is that profitability on a customer basis still holding up despite the ticket prices coming back in?

Hey, Steve. So as it relates to our yields being slightly down in 2016, the weighting is more concentrated on the mix of these secondary markets and the seasonality. And then there is some pressure, as Michael talked about, on just general ticket. And obviously, when you have ships like Ovation come in, that also helps balance out some of the pressures we have on some of our older assets that are in that market, really non-Quantum-class assets. The mix between ticket and onboard is actually pretty similar. It would index a little bit higher on the onboard side because you have Quantum coming into the market. Now, the point on profitability of the Chinese guest, it is still very much there. China is one of our highest yielding markets. The product is one of our highest yielding products. It is a little bit more expensive to operate, but also we get higher yields for those products. So it is very much contributing to our yields and it's very much contributing to our profits and our margins and our business, which is why our outlook continues to be very favorable for the Chinese market. Steven Wieczynski - Stifel, Nicolaus & Co., Inc.: Okay, got you. And then second question on your buyback. I know you have $300 million left at this point. I mean, the stock is obviously under some decent pressure here today. And it's basically, if you look at your $7 suggested EPS number for next year, you're trading at, basically, sub 10 times earnings at this point. So I guess my question is probably for Richard. I mean, that $300 million is only call it 2% of your shares outstanding. How receptive will the board be when you go back to them and say, hey, we potentially…

Your next question comes from Harry Curtis of Nomura.

Hi. Just on that last point, the short-term reactions to the stock prices do provide the board an opportunity to get more aggressive. Can you give us a sense of, if you do hit your earnings targets, your EBITDA targets, what your leverage ratio is going to be at the end of the year? And how much room does that give you to perhaps use your balance sheet a bit more aggressively, because this share price at 10 times earnings, those are typically really, really good opportunities to invest in your stock?

Yeah. So Harry, I'll just comment on kind of where we see ourselves on a ratio perspective and then I'll let Richard comment on more in terms of how we interact on the board side. Richard D. Fain - Chairman & Chief Executive Officer: That's really kind of you, Jason.

My pleasure, my pleasure. But I think we see ourselves based off of the guidance that we've been given that we'll be at or slightly below our targets by the end of 2016. Now, the timing of when the rating agencies decide to provide us that rating is not only subject to the metric, but also subject to how we as a corporation are behaving and are we behaving like an investment-grade credit. So as Richard said, as we look at do we do more or less, a lot of that comes into keeping the balance of our growth, the balance of returning capital to shareholders and also becoming an investment-grade credit. And those will be key things that are always evaluated when we determine how much we will buy back or how much the program will be that we announce.

I guess (00:47:47). Go ahead. Richard D. Fain - Chairman & Chief Executive Officer: Go ahead, Harry.

Well, where I'm going with this is that there's the leverage ratio, there is also the interest coverage ratio which is probably by the end of this year going to be somewhere 8.5 times and 9 times given the low cost of your debt. And so I just want to point out that there are opportunities for companies to be really opportunistic. And it would seem that if you can do $7 a share next year that this is one of those opportunities. Richard D. Fain - Chairman & Chief Executive Officer: Yeah. And I think as you've made clear in sort of this back and forth, there are a lot of things that go into that equation. I'm going to be very cautious not to preempt the board on something that a board rightfully focuses on carefully. But I think those are the things. It's the opportunity when there is what appears to be a downturn in the share price. On the other hand, there is the need to make sure that we have the appropriate capital for our new building program. And this is, of course, a capital-intensive business. And we also do want to get to investment grade. So the board will have to balance those things. But obviously what's happening in the market will be something that we will be looking at very closely.

Okay. I'll get off the soapbox and ask an operating question then. Going back to China, Jason, if you look at your pricing like-for-like, your pricing in China is being dragged down just by the timing of the introduction of your ships. Is it fair or is it relevant to try and look at pricing on a like period for like period, particularly for example with the Quantum?

First off, we really try to have a general conversation about the region versus the market itself. And the reason for that is because China has to work with also the winter season, which means Australia and Southeast Asia need to work. So it is and it continues to contribute to the overall yield of the region. Quantum continues to perform as we expected and perform well. There has been a little bit of like-for-like pressure on the older tonnage that we have up in that marketplace. But the Quantum-class ships continue to demand a premium to the relative pricing that's in the marketplace. I also think it's important to point out – I know there's been a lot of concern about what's happening in the China marketplace with the consumer. And I think the patterns that we're seeing with the Chinese consumer continue to show that they have a strong sentiment and a very strong desire for cruise. And a lot of the pressure on pricing just has to do with a lot of capacity coming in, more seasonality in terms of the China offering, and us going into other markets, which we've talked about before.

And then my last question just has to do with, suppose the value of the renminbi continues to slide, would that, in your experience, lead to perhaps increased demand for cruises considering that you price your cruises in renminbi?

Well, I think that certainly we can get into an economic conversation. I think it could obviously create more demand for some of their exported products and that could potentially improve their wallet in which they could spend more on the cruise side. Again, I think the sentiment in China is quite good. And I think that their demand, especially for our products, have continued to march at the cadence that we had expected.

Okay. That does it for me. Thanks, guys.

Your next question comes from Jamie Rollo of Morgan Stanley. Jamie Rollo - Morgan Stanley & Co. International Plc: Yes. Thank you. A couple of questions please. First, sticking with China, roughly what was the average revenue yield premium you generated last year versus the rest of the group? And then the other question, looking at your customer deposits of $1.7 billion at the end of the year, they were actually slightly lower than a year ago, and yet you're book position is similar, you've got higher prices, you've got more capacity. I was wondering whether that's a currency impact or was that (00:52:57) if that's China or something else is causing that. Thank you.

Hi, Jamie. On the China premium side, it's not something that we talk publicly about in terms of the specific number. Obviously, we're happy with the margins and the yields we get in that market as we add more capacity in. So you could follow where the investment is going. And then on the deposit side, it's a combination of a few things. Some of that is currency related. Some of that also, as we expand our mix into China, the cadence of deposits are much closer or their payment is much closer to the time of the sailing, because it's a late booking market than it is for other markets, so that skews it a little bit. And also, there's different promotional activity we do where you might put a little bit less of a deposit down and that's really what kind of drives that differential in the customer deposit line on the balance sheet. Jamie Rollo - Morgan Stanley & Co. International Plc: Just on the yield premium, on the older three ships you've got there, are those considered a premium to the rest of the group even after the pricing pressure, or is it all Quantum driving that?

No. In terms of the premium it gets, especially relative to its class and to the average, it's a very nice premium. And also, those ships have lower asset bases, so the margins we get on them are quite good. Jamie Rollo - Morgan Stanley & Co. International Plc: And just on the TUI JV income, looks like it was down year-on-year in Q4. I know there were other items in that bucket, but what did that line do, please?

No. There are many other items in that bucket. There are other equity pick-ups. The TUI JV actually did exactly what we expected it to do. It was up quite a bit year-over-year. Also in that line item is our other joint venture, which is really in its first year, which is SkySea which had some losses mainly just due to it being its first year of operation. Jamie Rollo - Morgan Stanley & Co. International Plc: Thank you very much.

Thanks, Jamie.

Your next question comes from Steven Kent of Goldman Sachs. Steven Eric Kent - Goldman Sachs & Co.: Hi. Good morning. Can you hear me? Richard D. Fain - Chairman & Chief Executive Officer: Yeah. Hi. Good morning, Steve. Steven Eric Kent - Goldman Sachs & Co.: Sorry. Just was wondering who you compare yourself to, because to only have your net cruise cost ex-fuel up 0.5% relative to really any other industry or really any other stock we have under coverage seems pretty good, and it's actually slightly below CCL's cost guidance. So on these cost headwinds – seem – I mean, you've spent a lot of time on them. I just want to understand whether there's a reason for that and why there's so much focus on it. And then separately, is your compensation linked to achieving those cost guidance forecasts? And then one other thing; for FX, the spread between your 2016 constant net yield and current net yield guidance of 200 basis points was bigger than what we were expecting. Can you just give us a little bit more color on that FX breakdown? Richard D. Fain - Chairman & Chief Executive Officer: Steven, thank you for those comments. Thank you particularly for the first comment. Yes, we think the cost performance has been excellent for a number of years now and we're quite proud of the work. And I think the fact that it comes – then at the same time that our level of guest satisfaction goes up is an important feature for us because I think it's actually relatively easy to cut costs if you don't care about the product that you deliver to your guest. But we have been raising guest satisfaction while we've been cutting cost. And as you say, this…

Hi, Steve. So obviously, the headwinds of currency have continued, especially our hedge position on fuel outpace the benefits we've been receiving from our fuel. You just look at it year-over-year, our basket of currencies is down 10% year-over-year, and that's really what's driving that differential between the as-reported and the constant currency. And some of the currencies, for example, the yuan, which had very little volatility, has become more volatile more recently as it's been unhitched from the U.S. dollar. Steven Eric Kent - Goldman Sachs & Co.: Just quickly, what share count is captured in your EPS guidance? Does it include the $500 million repurchase program?

It includes the $500 million repurchase program, but the cadence of when that happens has it generally spread throughout the year. Steven Eric Kent - Goldman Sachs & Co.: Okay. Thank you.

Operator, we have time for one more question.

Okay. Your final question comes from Robin Farley of UBS.

Great. Thank you. Two questions, actually. One is on China. You have talked about being likely to maybe add more ships there. You don't have anything announced for 2017 or after that. And I'm just wondering what your kind of most recent thoughts on that are versus where they were sort of two months or three months ago. And then outside of China, your commentary in the release talks about volume being at kind of – or load being at the same level as last year but price higher. And in October, both load and price were up. And obviously, your volume can only be up at the end of the day as much as your supply is up. So I guess I'm wondering if the lower volume now versus October just kind of relative to your book position in the prior year, is that pretty much in line with your expectations that because you're raising price that you've been expecting volume to slow between October and now? Thanks. Michael W. Bayley - President & Chief Executive Officer, Royal Caribbean International: Hi, Robin, it's Michael. Just to answer your first question on China and more ships, obviously we don't make any announcements on new ships until we make the announcements. And we're aware of announcements that have been made already for 2017. So when we're ready, we'll announce. But I think, overall, we continue to be very positive about the opportunity in China. It's the beginning of something that we think is really, really positive. So our intention is to continue to invest and grow that market.

Yeah. And, Robin, on the volume and price side, as you said, on the October call we said we were booked ahead on both rate and volume. Outside of the little hiccups we saw, as it relates to the Paris attacks and some of the geopolitical events which quickly bounced back, it has been very much in line with our expectations. And as we have a greater mix of our capacity going into China, that does skew the year-over-year comparables because it is a much closer-in booking environment. But I would describe it overall as that it's in line with our expectations.

Okay. All right, great. Thank you.

Great.

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

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