Good morning. My name is Thea 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 2018 Earnings Call. After the speakers' remarks there will be a question-and-answer session. I would now like to introduce Chief Financial Officer, Mr. Jason Liberty. Mr. Liberty, the floor is yours.

Thank you, operator. Good morning and 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, and Carola Mengolini, 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 filings and other disclosures. Please note that we do not undertake to update the information in our filings as circumstances change. Also, we will be discussing certain non-GAAP financial measures, which are adjusted as defined and a reconciliation of all non-GAAP historical items can be found on our website. Unless we 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 up with a recap of our second quarter results, provide an update on the booking environment and then provide an update on our full year and third quarter guidance for 2018. We will then open up the call for your questions. Richard?

Thank you, Jason, and good morning, everyone. It's been another record-breaking quarter and a record-breaking year, and I'm happy to give some additional color on our business. Simply put, we started the year feeling very optimistic that we could nicely improve over what was an amazingly successful 2017. Since then, we've grown only more positive about our direction and about the prospects for the rest of this year and next. Now, while we tend to focus on the year as a whole, it is still interesting to look back on how our internal forecasts for the individual quarters have evolved over the last six months or so. Our current quarterly expectations for 2018 are higher in each of the four quarters than they were when we put our initial forecast together last January. I tell you, that's a nice feeling. Of course, the drivers of that yield strength are always in flux, but the fact that we are seeing overall improvement in each quarter of the year over our original expectations is a real confidence builder. Looking at the total picture, revenue continues to excel, cost remain firmly under control, and our below-the-line items are doing beautifully. The second quarter benefited from unexpected strength in last-minute bookings, and as usual, some markets performed better and some worse-than-expected. The second quarter also benefited from some substantial timing differences relating to costs and other items. In fact, roughly half of the quarter's beat was simply due to timing differences, which will reverse in the second half. Again, we manage our business more on an annual basis than a quarterly one, and these types of quarterly swings are irrelevant to our business. This quarter's timing differences on expenses is more than usual, but still within simple operational parameters. From a business point-of-view the…

Thank you, Richard. I will begin by talking about our results for the second quarter of 2018. These results are summarized on slide two. For the quarter, we generated adjusted earnings of $2.27 per share, which is approximately $0.39 higher than the midpoint of our guidance and 33% higher than same time last year. Our net revenue yields were up 2.8% for the quarter, which is approximately 105 basis points higher than the midpoint of our previous guidance. The beat was driven by stronger-than-anticipated close-in demand and better-than-expected onboard revenue spend. Onboard areas such as beverage, specialty dining and Internet helped deliver a 5.5% year-over-year increase in onboard revenue. Net cruise costs excluding fuel were up 1.1% for the quarter, which is 390 basis points better than expected, driven mainly by timing. Roughly half of our earnings beat for the quarter was due to these timing differences in costs. This is an unusually large shift, but as we have often said, we manage our costs on an annual basis rather than a quarterly basis. It just so happens that this quarter had a surfeit of timing changes, but it has little relevance to our view for the full year. So the positive cost variance that occurred in the second quarter will simply reappear as an increase in our costs in the back half of the year. In addition to better revenue and costs within the quarter, we also experienced an outperformance below the line, which was driven mainly by our joint ventures. A stronger dollar and higher fuel prices negatively impacted the quarter by $0.04 a share. On the shareholders front, we paid $128 million in dividends during the quarter, and since our last call we have repurchased $300 million in shares. So in summary, strong close-in demand, better onboard…

. The first question will come from Steve Wieczynski with Stifel. Steven Moyer Wieczynski - Stifel, Nicolaus & Co., Inc.: Hey, guys. Good morning and congrats on a great quarter. I guess the first question is around your guidance for the back half of the year and maybe you'll disagree with us here, but it seems like you might be being a little bit conservative around the third quarter yield guide, especially since you just beat the second quarter by 100 basis points at the midpoint. And maybe you're being a little bit more realistic around your fourth quarter implied guide. I guess the question is, are you being a little cautious here around the Caribbean close-in activity given consumers could be more nervous around weather this fall or is there something else we need to be thinking about? But given how much capacity you have in Europe and Alaska in the third quarter, we would have thought that the yield guide for 3Q could have been slightly higher than what it is.

Well, I'll start off and thank you for the – thanks for the second quarter beat. I would say as it relates to our guidance, whether it's in the quarter or for the fourth quarter or for the balance of the year, this is kind of based off of where we see our book position, how bookings are coming in. I would not – and I would caution the word conservative, I would just say that we really do try to provide our guidance based off of the best information we have at the time.

Steve, I think I'd like to just add. Remember, last year we had a particularly exuberant third quarter and when we made our forecast for the quarter, we're ahead, actually, of – the guidance we're giving out now is actually ahead of where we thought we would be at the beginning of the year. So the year's actually progressed very nicely. The second quarter beat was really a surprise to us. That can happen. You do have quarters where there's a sudden surge in last minute bookings and that did happen in this last quarter. And that's lovely. But it's absolutely unpredictable and, frankly, it's a little bit – it was a surprise to us. Steven Moyer Wieczynski - Stifel, Nicolaus & Co., Inc.: Okay, great. Thanks, guys. And then second question, I know you bought back $300 million worth of stock since your last call. But can you maybe help us understand how you guys are thinking about using that – the remaining authorization going forward? And Richard, I'm going to ask you a personal question, but can you help us understand why you unwound your 10b5-1? Appreciate it.

Okay. I'll start off with the $300 million. As we've said for some time, the way that we look at share repurchasing as opportunistically and I think you will continue to see us behave in that way. So there's not any type of specific timing. Obviously we are always conscious about our debt structure or our capital structure and our leverage ratios and kind of making sure that we maintain our discipline as being investment-grade credit. But that's kind of more – that combined with us as being opportunistic on the share price is how we will continue to proceed on the share repurchase side. And I'll let Richard answer his personal question.

Thank you, Jason. Thank you, Steve. I don't usually like to comment on these things, but I think it's not a surprise to anybody that I would put in place some sort of regular program to sell as just from a – on a state point of view. And I put that in place quite a while ago. But when the share price went to levels that, frankly, I couldn't understand, I just couldn't continue to maintain that. Frankly, this has happened in the past. We do see this. The market anticipates things differently than we do and we've seen the market in the past drop down and stuff like that, and frankly, a few times that's happened and I've gone in and bought. I can't now. I'm not allowed to because of the 10b something program, but I certainly didn't have to continue to sell and so I stopped that. Steven Moyer Wieczynski - Stifel, Nicolaus & Co., Inc.: That's great color. Thanks, guys. Appreciate it.

Thanks, Steve.

The next question will come from Harry Curtis with Instinet.

Hey. Good morning, everyone. Just a follow-up on the first question. In the Caribbean the rest of the year, just overall, do you have a lot left to sell in the third or fourth quarter? I mean how much variability could there be, for example, if there were storms in the fourth quarter? And I'm assuming that you've built some cushion in for that.

Yes, well, one area, I mean I think that's exactly right. When you look at on a quarter – especially at the time of a call, I mean we're certainly north of 95% booked for the third quarter and it's pretty linear going to the fourth quarter. And so I think obviously going into this our confidence is strong but, again, it's based off of the best information we have at this point in time. And that's why we did take up our yield guidance for the back half of the year by 25 basis points.

Very good. And the second question really looks into supply growth by your major markets next year. When you and I chatted a while back about the Caribbean, for example, you mentioned that the Caribbean supply growth next year is going to be relatively flat to down a little bit, but that Europe was going to be seeing the largest increase. So my question is, particularly in Europe, can you give us some early color on how Europe looks, especially from U.S. customers, given that level of capacity growth? Are you feeling pretty comfortable that that will be absorbed?

Yes, so first, as you – in our shoes, and you're talking about outward periods, especially like 2019 and saying that we're at record levels on a rate and volume basis, your further out products are certainly in that consideration. And Europe is certainly in that consideration and the consumer that books further out is really the North American consumer. I would say that if we could probably do 2018 over again, which probably would mean setting our deployment in 2016, we would certainly want to have more capacity in Europe than in other products because strength in North American consumers for Europe is exceptionally strong and we've even seen even further strength year-over-year from the European consumer for European products. So while next year capacity is elevated in Europe relative to the other products, we certainly believe that demand is there to meet that supply or more exceed that. And that's right. That is in our book position very much in the consideration is the North Americans booking in advance. A lot of time they do that because of air fare. They book in advance for their European vacations for the following year.

Got it, okay. Thanks very much.

The next question will come from Felicia Hendrix with Barclays.

Hi. Good morning. Thank you. So Jason, you raised the second half net yield guidance by 25 basis points. I'm just wondering are you seeing or was that driven more by upside you're seeing in the third quarter or in the fourth quarter?

Yes, it's actually the balance of both. As Richard said, both quarters are higher than we had anticipated them being, and of course, some of the trends that we're seeing, especially around Europe, is underpinning our confidence in those increases in those quarters, this quarter and next quarter.

Okay and even though things are better and you just called out Europe, so I think people are still having kind of conceptual issues with the third quarter in Caribbean, given the double-digit increase there. So are you seeing anything that gives you any kind of concern in terms of promotional environment from competitors or is achieving pricing there being more challenging than you expected?

I mean it's pretty – I think it's interesting when you look at the Caribbean really through the course of this year. I know there's been a lot of chatter about it or concerns about it. But the Caribbean is really booked as we expected for this year and I think you have things obviously as we add more shorter product that is something that can weigh on yields. But when you look at the like-for-like outside of what we talked about last time, which was Puerto Rico, it's continuing to book in line with our expectations, which we had from earlier this year.

Okay, great.

Yes, you know Felicia, it's interesting because you talk about conceptual issues and we do understand that. So we have to relate back to our own forecasts and what our own expectations have been and we're really just seeing both for this year, which you asked on next year, which I know you're also interested in, we're just looking at really quite strong markets. And we're just not – our own forecast just are a little more bullish about how that's doing and as I say, we're coming in, you specifically mentioned the third quarter, we're coming in actually a little ahead of where we thought we would be at this time.

Thanks. And then I just have some housekeeping, Jason. Just as we think about our modeling for 2019, is there a way you can give us some parameters for what D&A and interest might look like once Silversea is consolidated? And then also, we've just been getting a lot of questions about the other income line in your P&L. It was about $50 million higher than we expected. What was that?

Yes, sure. So on the interest and D&A side, the interest side, you can annualize the $0.06 and the $0.06 is based off of the purchase price date, which was July 31. So that you can annualize. On the D&A side, it's too early to comment on that because we need to go through the purchase accounting activities to build up the balance sheet for Silversea onto our books and that's something that will impact what the D&A will be. So we will come back to everybody, likely in the third quarter call, on some expectations as well as also what yields will look like and costs will look like for the balance of this year and some dialogue about that in the following year. On the other income side, this really relates to a series of – or a few gains that relate to our joint ventures and that's really what's driving that year-over-year difference in the other income and expense line.

Is that a one-time thing or should we think about that going forward?

I would look at that as mainly a one-time thing in the quarter.

Okay, great. Thank you so much.

You got it.

The next question will come from David Beckel with Bernstein Research.

Hey, thanks for the question. I was wondering if you could talk a little about just consumer sentiment. This is another Caribbean question, so sorry about that. But I think some of the concerns around the consumer were with respect to the perception of the quality of the destinations and then maybe not wanting to be in the Caribbean for fear of another bad hurricane season. Are you seeing a turnaround in terms of consumer sentiment at all about the region and the health of the region and have you seen any evidence of hesitance to be in the Caribbean during hurricane season?

Yes, David, I think – and that also comes back to Harry's question about what we would be planning on looking forward. Last year's hurricane season was unusual on several levels, both the amount of storms, but really particularly the exact places that they went, which were particularly impactful for us. So we had the worst year we've ever had with respect to hurricanes and obviously we're not expecting that to reoccur. But it did have an impact on the consumer sentiment. It also had an impact, actually, on the forward bookings because we had a period of time last fall where bookings simply essentially dropped for that one – that period while we were in the midst of the storms and the midst of the immediate aftermath. And it did begin to recover quite quickly, but then it really did seem to have the kind of impact you're talking about that was more than we anticipated. And so we do think that it has impacted us this year, both -- I think more of the concern would be the destinations be less attractive and also would there be more storms. I think it took longer to recover, but I think we have now seen, we think, it largely recover, looking forward to lapping that period, which we'll do this fall. But I think you're right, it did take longer, it did have more of an impact, but we think that impact is very much not completely gone, but very much dissipated as of now.

That's very helpful. Thank you. And my second question, I just want to dig in a little bit on your booking curve commentary from earlier. Given the strength that you see in the market today, which obviously investors – maybe obviously investors don't agree with, why not sort of pull in the curve a little bit and increase prices at this point?

Well, we are – and the way that our revenue management practices work and we are constantly measuring our booking activity relative to our curves. So I do think we believe that we are optimally harvesting that demand as it comes in. But it is something that we continue to debate, as Richard has said in his comments, that should we, especially around certain categories, push out when we're selling some of this inventory versus bringing more and more of it onto our books earlier, is something that is constantly debated internally. But I do think that we feel that we are – it's not perfect, but optimally harvesting the demand that's coming in.

Thank you.

The next question will come from Jared Shojaian with Wolfe Research.

Hey, good morning, everyone. Thanks for taking my question.

Hey, Jared.

I want to ask about the fourth quarter yield guidance is implying about 3.5% growth, that seems like a pretty healthy exit rate of growth going into next year as the comps are easing from the hurricane hangover and as you've called out several times the demand environment still seems pretty strong. So maybe you can help me just understand if there's any reason why as it stands today that 2019 yield growth can't resemble something similar to 2018, excluding Silversea obviously. And I know you're not prepared to give had any guidance, not necessarily looking for guidance, but I'm just trying to understand if there's sort of anything we should be aware of next year as it pertains to maybe some accelerating supply in the back half of the year or any other one-time things that we need to be aware of.

Well I would, first, I think the 3.4% implied that you're talking about is a little higher than I – at least my math tells me, but I mean it's somewhere in the ballpark. I think that obviously we're lapping a lot of noise on Q4. We have a little bit more Europe in Q4 and as I think we talked about, China is doing quite well. So I think that stuff that is underpinning our confidence in the fourth quarter. I think going into the year there's a lot of great tailwinds especially as Edge comes in, which comes in the latter part of the fourth quarter. We have more Symphony in the year and then we have Spectrum and Pursuit coming into the picture. So I think there's a lot of things that are underpinning just on a hardware standpoint, yield growth and we're seeing that certainly in – in terms of confidence in the first half of the year where we obviously have more on the books than we do in the back half of the year of 2019.

Got it. That's helpful. Thank you. And Jason, I guess just on CapEx, I know you took it up by $2.5 billion. I think $1 billion was for the Silversea purchase, which leaves another $1.5 billion. And I know Silversea has a couple of new builds. But it still doesn't really seem like that should bridge the gap and then obviously FX has weakened, which should help you I would think. So what else is driving that CapEx increase?

Yes, sure. Sure. Great question. Well, so as you said, there's the $1 billion investment that we made into Silversea. There are two new builds that are on order. And then the balance, which is around $600 million really relates to investments and modernization of our fleet. Technology related investments, investments into the destinations, especially things like Perfect Day that we're planning on investing a little bit more money into. That's really – and then there's just rounding. These numbers round. So if we trip over $50 million you're rounding up.

Okay. Great. Thank you very much.

You got it, Jared. Thank you.

The next question will be from Jaime Katz with Morningstar.

Good morning. The commentary on China sounded pretty positive and you had commented on progress in expanding the distribution network. So I'm curious where you guys are in that process and what are the key steps ahead that you guys are taking to sort of maintain the momentum have you in the market?

Absolutely. First, I mean we're very fortunate that we have a very strong brand, very strong assets and we even add more of that strength in assets when we add Spectrum next year and we have a team that has been there on the ground for a long period of time that's very experienced and what they've been able to do over the past year or two is really diversify the distribution more and more every day, which gives us more ability to manage that inventory and also sell additional products like shore excursions that we weren't able to before. And then I think obviously we want to continue to evolve that and we want to continue to evolve the destinations that are in that area. And we've been very successful with getting Chinese consumers to sail for longer periods of time to more marquee ports, for example, like Tokyo. That has been quite helpful. And also that team and that market has also focused on being more fly crews. So all those things kind of combined has put us in a very, I think, enviable position in China for a consumer that really appreciates the brand and appreciates the assets that they're going on and I think that's – has played out well for us so far this year and as I said, our outlook on 2019, again, while still early in terms of how we're seeing the bookings coming in has been quite positive.

Okay. And then on Silversea, I guess what we should be expecting is that at the end of the third quarter we'll have better fourth quarter guidance...

Yes.

...with Silversea embedded in it, so higher yields, higher costs and higher capacity growth than what is currently implied in the press release today.

Yes, that's right. That's exactly right. We will. You got it.

Thank you.

The next question will be from Robin Farley with UBS.

Great, thanks. On the Q4 sort of implied guidance, I was going to ask, it looks like the math could be anywhere from sort of a 2% to a 6% increase, but it sounded (48:06) that it would be just the last quarter always is left so wide by the full year range. And so it sounds like maybe you're thinking more kind of the midpoint of that, like the 3% to 4% range. Just wanted to clarify that. And then also just wanted to clarify, you've mentioned the Silversea interest expense is now in your EPS guidance, but is anything from Silversea in this higher yield guidance or is the higher yield guidance entirely from your existing operations?

Okay, yes. So on the Q4 side, I mean we will obviously guide when it's time. I was just commenting that the 3.4% was a little bit off my math, though I would not in any way point to it being 6% in any way. Now, as it relates to Silversea, there is – the only thing that is in our guidance as it relates to Silversea is the $0.06 in earnings impact from interest expense. So that's a – it's a negative impact to our earnings that's in our guide. There is nothing in our yield, there is nothing in our cost, there is nothing in our earnings, but as I said in my remarks, we do expect that it's going to improve our yields certainly in the fourth quarter and will also elevate our yields for the full year as this is a very high yielding product that will be incorporated into our metrics. So that's how I would – there's nothing more to read into that and of course as we add those things, we will – we typically do provide transparency in terms of what those impacts are.

Great. So the increase today in second half yields is all from Royal Caribbean core standalone pre-Silversea?

100%. There is zero Silversea contemplated in any of those numbers.

Great. Thank you for that clarification. Then also just looking at the performance because your EPS has gone up by more than just the midpoint of the yield guidance raise would suggest, and so you called out some of the things, the JV performance. Is there also some of that that's yield-driven with the TUI brand? You mentioned there were gains, but what's happening with the sort of European source demand as well?

Yeah. So in our yield guidance or in our cost guidance, TUI is not consolidated into those numbers, so it's below the line. But what's driving the outperformance on the equity side or the equity pick-up side, TUI is doing – TUI and Pullmantur are doing very well. And of course those are total European and very nationalistic sourced products. So we're very happy with how they're performing and as I also commented on our broader business, the European consumer is also continuing to show strength for cruise and they're having to compete with the North American consumer mainly for that inventory.

Thanks. And then just a final clarification on that. I know there have been questions about European capacity next year, but some of what's going to Europe are kind of like new ships for the German market that are so specific in terms of their passenger sourcing that it seems like to even talk about them in the same breath as other Royal Caribbean product in Europe makes things look I think different than they are in terms of sourcing. Can you – I don't know if you have in front of you the difference in your European increasing capacity and then how much of that is driven by this very specific nationalist product versus...

Yes, I don't have it broken out. We can certainly help do that in terms of nationalistic versus non-nationalistic. But I mean what you said was well-said. There are lots of cruise lines and markets that really do not impact how Royal Caribbean or Celebrity or Azamara trades on a day-to-day basis. We are obviously very happy with how well TUI Cruises is doing, but there is the reality that there is not a passenger on TUI Cruises that sails on Royal Caribbean or Celebrity or vice versa. It's a very focused, nationalistic product that has really found a great niche for itself. But that is – I think that's exactly right. There's a lot of the supply growth that's in the consideration for the industry that does not really impact us or many of the major players.

And Robin, just to take the corollary of that, while Europe is growing a lot and some of that is, as you say, really not comparable, within that growth and within when we look at 2019, I think part of the reason that we are feeling so good about 2019 is because some of the unusual products that we now have. So Symphony of the Seas, which we will now have for the full year next year is just a homerun. Celebrity Edge is just performing brilliantly and it comes in at the end of this year but we get essentially 11 months of a new ship that's going in a very different category and everything else. And Azamara Pursuit, which actually just started working this week, is doing extremely well. So I think there are two factors, even though the total is growing significantly, as you say, part of the growth is non-comparable from a negative side, that is the German or the Pullmantur kind of passenger, but also we have some unique positives that are driving us more than simple normal supply/demand.

Okay, great. Thank you very much.

Thanks, Robin.

The next question will come from James Hardiman with Wedbush Securities.

Hi, good morning. Thanks for taking my call. So most of my questions have been answered. Maybe just a couple clarifications. On Silversea, I'm assuming we're not ready to talk about the magnitude of the yield mix benefit on next year, but maybe talk a little bit about the geographic mix impact, if that's meaningfully different than your existing fleet. And then on the other income side, obviously you don't guide to that number, but you guide to pretty much everything else. So I get to basically a flat other income for the third quarter after a massive increase in 2Q. I guess I don't know if there was any timing, obviously there were big timing shifts in costs. I didn't know if there was any big timing shifts in other income. And I guess, ultimately, did you change the back half guidance for that other income line at all, what's embedded in your full year.

Sure. So one, as it relates to Silversea, I mean we're not – I mean we closed on this a few days ago and obviously there's Chinese walls that are up during the regulatory process so we will be prepared to talk about that more on the next call. They do have a similar mix in terms of where their guests come from and where our guests come from, even though obviously the Royal Caribbean and Celebrity and Azamara source from probably a few more markets today in which Silversea will certainly be able to take advantage of. So they have a similar mix. But of course on the deployment standpoint, we today go to about 550 different destinations and Silversea goes to over 1,000. So it is a very different product going to very different destinations, which we're very excited about having them part of the family now. As it relates to other income and expense, we were expecting those in the quarter. They were a little bit better than we had expected them to be and they are not contemplated in the back half of the year. Really what's raising the guidance in the back half of the year is mainly the improvement expectations and revenue helping offset currency and fuel increases.

Got it. And then I guess just lastly for me, maybe sort of a weird question, but did you learn anything during last year's hurricane season that might change how you would head into this year's hurricane season, whether it's operationally or some of the perception that it seems like you're fighting? Obviously every hurricane season is different, but typically when you overcome a major hurdle there's going to be some learnings that you factor into what you do going forward. I didn't know if we were to see similarly awful hurricanes this year, if the impact would be any less based on any incremental steps that you've taken.

So, well, we always learn. That's one of the fun things about our business is we learn from every experience, whether it's good or bad. I think actually we felt our response last year was really ended up being quite good and probably built up a fair amount of goodwill from the way we handled it, and I'm not sure that from a purely financial point of view, we learned much that would significantly change the outcome if you had, again, a hurricane that exactly tracked our ships' itinerary and exactly hit the ports of calls on the days that they would be the most impactful. So we constantly try and learn and obviously there are always some lessons to be learned. But overall I think we felt that last year we did pretty well. I do think, though, that people should be impressed with how well the destinations responded afterwards. These were horrific events for them, but now people are reporting back and the travel agents, which are always an important source of information as well as Internet chatter, shows how well they've recovered. And I think that may help us a little bit in terms of assuaging the concern that people had that if they went to some of these destinations afterwards, they would encounter a bad experience and that simply hasn't been the case. So I think if there is a silver lining, it's that people would understand better that the islands do recover more quickly. On the other hand, if we have another really terrible season, probably that would have a negative simply because what we had last year was so extraordinary and so you wouldn't want to see anything other than that didn't repeat itself.

Yes and James, I just want to add that everything that Richard said, I mean certainly whether it's perception, whether there were some logistical issues and so forth, because of the storms and – it is remarkable how well it has recovered and the impact, every dollar to us is painful but we're really talking on the margins here and there really was kind of more the focus on Puerto Rico than on the broader Caribbean or the broader Eastern Caribbean and that was a lot of it because it's tough to get everybody in and out all in one day because a lot of the hotels were taken up by people who were using them as residence. Air fare was a little bit more challenging and that's been restored. With all that was going on and all the impact to the island, I think it is pretty remarkable how small the impact has been on the Caribbean.

By the way, it actually gives me a chance to comment because the one thing that it did, which wasn't news to many of us, but it really reinforced and demonstrated just how amazing the response of our employees was. The crew, the shore-based people in terms of responding to that did an outstanding job. So your question gives me a chance to say a thank you to them.

Yes. Okay, we have time for one more question, operator.

Yes, so the final question will come from Greg Badishkanian with Citi.

Great, thank you. So Richard, you gave some color on 2019, greater percent booked for 2019 at higher rate. There were two adjustment factors related to basically cabin and regional mix. The regional mix seemed to be – you would have to make a positive adjustment to that because you're booking in greater percentage of bookings in markets where you book later. I understand you make the adjustment to that I believe what you said. And then also in terms of a cabin mix, what type of adjustment would you need to make to that. It almost sounds like it's better than the color that you just gave, which was greater percent booked for 2019 at a higher rate. Seemed like it should be more positive in just that – those comments.

Yes, so, great, first of all, the two examples I gave were not intended to be specific to 2019. They were just examples why relying too much on this one metric can lead you down a wrong path. In fact, if you recall, in both of the last two Januaries I've said that I thought we may have just from a strategic point of view booked too much in advance and then I thought we were at record levels of bookings in coming year and I didn't expect it to rise and yet it did rise because our revenue management models told us in this environment that was the right thing. In terms of our making the choice coming back to the first of those two, do we hold back inventory more or less because of what we expect, that's a constant give and take and that's a judgment that our revenue managers make on an ongoing basis. And I didn't mean to be talking about that as it related to 2019. The other one though, and it's interesting you mentioned it, is a factor for 2019. For example, we do have more short-term bookings which would – one would expect to book later and, therefore, actually you're right, that would be an even more positive factor in terms of our outlook. So other things being equal, given more short-term capacity, you would expect your bookings to be less than last year because short-term books later. And so the fact that we are booked more despite that factor could be read, I think, appropriately as even a more positive message there. But I do want to emphasize, I was trying to give examples of the kind of reasons why that single metric shouldn't be looked at by itself, but as one of the cornucopia of information that's available to us as we make our forecasts about the next year.

Okay. That's helpful. And if we look out to the first quarter of 2019, price volume, I'm about to use the metric that you say could lead you down the wrong direction, but how does that differ from full year and then maybe differentiate the Caribbean because that's – you maybe should have easier comparisons or arguably but I – maybe it could actually be worse if people haven't been booking for the winter at this point, a little nervous about it, so maybe you can give us a bit of color on how that's (65:09).

Yes, I won't go into too much detail on the quarter, but I will say that our commentary on the full year very much relates to what we're seeing in the first quarter of 2019 as well.

Right. Okay. Good.

Great. Okay. Thank you for your assistance today, Thea, and we thank all of you for your participation and interest in the company. Carola will be available for any follow-ups you might have and we wish you all a very great day.

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