Good morning, everyone, and welcome to our Fourth Quarter 2016 Earnings Conference Call. I am Arnold Donald, President and CEO of Carnival Corporation & plc. Thank you all for joining us this morning and a heartfelt Happy Holidays everyone. Today, I am joined by our Chairman, Micky Arison; by David Bernstein, our Chief Financial Officer; and by Beth Roberts, Senior Vice President, Investor Relations. Before I begin, please note that some of our remarks on this call will be forward-looking. Therefore, I must refer you to the cautionary statement in today’s press release. We finished the year with another record quarter of adjusted earnings, which were $0.17 share, or 34% higher than our prior year, exceeding the midpoint of guidance by $0.10 per share and leading to the highest full year earnings in our company's history. We achieved full year 2016 adjusted earnings of $2.6 billion or $3.45 per share, that's $500 million, or 28% per share higher than last year and more than double 2013 earnings of $1.55. More importantly, we achieved return on invested capital of 9% and doubled our 2013 return on invested capital of 4.5%. We are pleased to have delivered by our shareholders doubled earnings and doubled return on invested capital in just three short years. Strong operational improvement contributed $0.55 per share to the bottom-line year-over-year, which when combined with $0.14 of accretion from our share repurchase program, enabled us to exceed the high end of our original December guidance range of $3.10 to $3.40 per share. And that's despite an $0.18 drag from fuel and currency, both moving against us. The strong results are a credit to the commitment and to the passion of our 120,000 team members, which when coupled with the support from our valued travel agent partners enabled us to…

Thank you, Arnold. Before I begin please note all of my references to revenue ticket prices and cost metrics will be in constant currency unless otherwise stated. I will start today with a summary of our 2016 fourth quarter results. Then I'll provide some insights on current booking trends and finish up with some color on our 2017 December guidance. Our adjusted EPS for the fourth quarter was $0.67; this was $0.10 above the midpoint of our September guidance. The improvement was almost all operational driven by a number of factors $0.04 came from net ticket revenue yields which benefited from stronger pricing on closing bookings on both sides of the Atlantic, while the remaining $0.06 was an accumulation of a variety of items such as improved fuel consumption and lower depreciation expense. Now let's turn to the fourth quarter operating results versus the prior year. Our capacity increased over 4%. In North American brands were up almost 3%, while the European Australia and Asian brands also known as our EAA brands were up over 6%. Our total net revenue yields were up 4.1%. Now let's break apart the two components of net revenue yields, net ticket yields were up 5.2 %, this increase was driven by North American brands deployment in the Caribbean and Alaska as well as our EAA brands deployments in Europe. That Onboard and other yields increased 1.3% in line with our guidance as our currency initiatives continue to pay dividends while our brands develop new initiatives for 2017 and beyond. Net cruise costs per ALBD excluding fuel were up 1% which was in line with our September guidance. In summary, our fourth quarter adjusted EPS was $0.17 higher than the prior year driven by higher net revenue yields worth $0.17 and the accretive impact of…

Thank you, David. And now operator let's open it up for questions.

Thank you. [Operator Instructions] Our first question comes from the Steve Wieczynski with Stifel. Please proceed.

Hey, good morning guys. So, could you -- if you look at your yield guidance for next year of basically 2.5%, could you give a little more color and break that down in terms of what you guys are looking for both on the price and the -- the new onboard side as well?

Directionally, onboard with the comparable in terms of percent change year-to-year and comparable to prior year.

Okay. And then second question around the -- your booked position, you said you're in a better position at this point for 2017 than you were for this point in -- for 2016. Can you give a little more color on that? and maybe give a little bit more color into some of your geographies as well next year specifically talk about what you're seeing with some China even though it is a pretty short booking window?

Yes, I'd say with China, things are looking great, but as you know it’s a B2B business. And -- but we feel very comfortable in China. We obviously, ended up with good returns this year. We're expecting good returns again next year. But things are very positive. But it is B2B, so we feel we have additional charters and sub-charters to complete and we have this -- see the year through. Dave you want to add?

Yes, overall, Steve I went through in my notes all the different areas of the globe, both for the North American brands as well as the EAA brands. Arnold touched on China. Remember China is a late booking market and as a result of that it is early, and Australia which I didn't mention, we are in good shape in Australia as well. It is a small piece of our business, not nearly as large as the other piece that I mentioned. So, overall booking trends are good and we're very encouraged.

And that's across the Board Steve.

Okay. So, have you looked at your booked position for the full company right now versus where it was last year, it's -- would you use the word significantly ahead?

What we said the overall book position and our is well ahead at considerably higher prices.

Okay, got you. Thanks a lot guys.

Thank you.

Our next question comes from the line of Felicia Hendrix with Barclays. Please proceed.

Hi, good morning. Thanks for taking my questions. So, just to kind of stay and how you are thinking about the globe and your -- and how you are going to -- how you could perform next year. Obviously, the outlook on the Caribbean is positive, but we -- despite you and some of your competitors and travel agents, also talking about the Caribbean looking positive for next year, there still seems to be concern about some of the supply increases particularly in the second and third quarter. So I was just wondering if you could address the demand that you're seeing in the Caribbean despite the increased supply and why you're so confident that you'll see growth there next year.

Sure. Good morning Felicia.

Morning.

Yes, I guess the industry capacity of all is going to be up 6% next year in the Caribbean and we're going to be up 5% roughly. But again, we actually have less inventory to book now than we did this point in time last year. So, we feel very strong at this point. We still have to get through wave season, it's still early. But things are looking very positive. And all of our indicators -- our brands have done a great job of creating demand, especially on Carnival brand continue to outperform the Caribbean and did again this year. For us, we have added some new capacity, primarily in the form the Carnival Vista. The ship is spectacular. She is going to command premium yields and premium booking position and have demonstrated that already. So, we are very confidence. The other good news is we have a large base, especially in Carnival brand. Previous cruise scores that will introduce our new ship because we don't tend to it every year. We have a large base of previous cruisers set to book with us. So, our the pendent on cruise while we still need new recruits is not over-weighted. So, we feel very confident at this point based on what we see in the Caribbean.

Thanks. And Arnold while I have you, I thought your comment and you're committed to returning double-digit ROIC within the next two years despite the current FX and fuel headwinds was impressive. So, just wondering if you could help us understand maybe somethings that you would be doing beyond your already identified cost savings to ensure that goal?

Yes. No, absolutely. I think first of all, it is a headwind that have obviously currency and few -- both move against U.S. at the same time which has rarely have ever happened before. And it's happening with a pretty significant impact obviously. But said that we also have a lot of momentum on a number of fronts. Not just in cost and payment, but in driving yield and then with some small capacity addition that helps us as well. But we had multiple pass all along. When we declared double-digit, fuel prices were much higher than they were the last few years and we are now looking at next year at basically being on balance net of fuel in currency where we were when we declared double-digit returns as capital. So, we have no reason to back off from that goal. We have multiple pathways including obviously increased yields, but also in terms of managing more efficiently. Then all the tools we have in place. We have new management tool in place that will begin to kick-in and we'll see the full effect on about half of our brands by 2018. We've done a lot of work and the brands have in creating additional demand. We have a lot more cruise scores in our base of previous cruise scores. We have much more collaboration and coordination communication across our brands to not only contain cost, to help us manage cost as you see reflected in the cost guidance, but also frankly to share best practices and drive yield further. So, we have a number of things in place. We have a lot of momentum and we are committed and we will deliver.

Thanks. And then just finally housekeeping, Beth, I was just -- Beth, can you give us the D&A and interest expense guidance for the first quarter and -- of 2017 and the full year of 2017 and the quarterly capacity increases?

Interest is running about $50 million a quarter, $200 million for the year that's net of capitalized, net of income. Depreciation is running $450 million in the first quarter, $1.850 billion for the year. And quarterly derivative are running $47 million in first quarter, $185 million for the year, that's the realized derivative. And the quarterly capacity projections are 4% for the first quarter, 3.6% for the second, 1.2% for the third, 2.5% -- 2% even for the fourth quarter for 2.5% on the year.

Thank you so much.

Our next question comes from the line of Tim Conder with Wells Fargo Securities. Please proceed.

Thank you. A couple of here Beth, first of all, a little more color backing -- it's been hit on the first two questions here, the geographic color. David you talked about the European occupancy for the EAA brands as well ahead at nicely higher prices that. Can you break that down a little bit between med and X-Men and then and then just -- again sort of recap in your and your thought process on the EAA brands looking into the Caribbean?

Yes. The -- hang on one second; let me get the details for the EAA brands.

While he is looking the overall position next year and Med for the industry, it's going to be pretty good, because basically there will be a probably half of the reduction in Med next year. Go ahead David.

Yes. Overall, the comment, did you break it down. It's very similar for both markets as I mentioned for the year occupancy is well ahead and the prices are nicely higher for both Med as well as North American for the EAA brands.

Okay. It sounded fairly similar year-over-year the north.

The EAA and the Caribbean I had indicated was I could see was lower than the prior year, prices that are in line.

Okay. And it sounded similar also some more breakdown color for the North American brands, both Med and outside of the Med.

At this point in time for the North American brands, the Med with the reduced occupancy in the Med, the pricing in the Med seems to be doing much better into Northern Europe in terms of being up more than Northern Europe.

Okay. And then gentlemen just given your overall commentary about that the higher booked occupancy and pricing, would -- should we anticipate -- grant the wave is important, but should we anticipate that you obviously won't need as much bookings during wave on a year-over-year basis all else equal in the same trajectory at this point?

We have less to sell, as Arnold indicated, than we did at this time last year despite the capacity increase. So, clearly, it's a zero-sum game and we can only book so much, we only have so much capacity, so we do need less during wave and the remainder of the year for 2017 and we'll be looking to push pricing up and try to continue to do better than our guidance.

Okay. And then lastly I know it's less than 24 hours, but it's been kind of quiet thankfully on the terrorist incidents front, but the incident yesterday in Germany, less than 24 hours, just any very early feedback indications from that? I know kind of ebbs and flows for a week after an event, but any thoughts there?

Just general comments. We had a couple of incidents I guess, the German situation and the situation in Turkey. But the reality is that we weathered those storms for the past several years and as long as the world continues in the general state it is, people have chosen to continue to travel and long as people travel, we're going to be in good shape. If things were ever to obviously get exacerbated and people were afraid to travel than we'll have a challenge, but that has not happened recent times with all the various incidents that have occurred and so we have no reason at this point in time to have a higher level of concern.

Thank you all. Happy Holidays and congratulations again on a great 2016.

Okay. Thank you. Happy Holidays to you too.

Our next question comes from the line of Harry Curtis with Harry Curtis, Nomura Instinet. Please proceed.

Hi, good morning everyone. I wanted to focus on next year's free cash flow. The first question is, is there any repurchase of shares baked into your 2017 earnings guidance? And is there any -- or to what degree have you built in any uplift from your new revenue management system into the 2017 guidance?

Okay. Concerning stock repurchase, right know we have about $400 million remaining on the current amount we have designated for that. We will continue to buy back on optimistic basis. And we'll see if we get through that amount over the next period of time and the Board will revisit and see what will be the next step investment because this is clearly the Board decision. So, that's the basic story on that. We do it optimistically, so we don't have a plan per se in terms of factored into guidance. What was the second part of your question?

Well, I wanted to see if the revenue management system was also baked into your yield guidance for next year.

It is. We only have about 30% of the inventory for the six brands that have the new tool. Currently we manage because obviously we're well ahead on booking, so it's only effect so much of 2017, but by 2018, we'll have the full impact for the inventory in those six brands. But we already benefited somewhat from the sharing the best practices across the brands and the development of the two and the sharing of what they do. So, the answer is yes, it is factored in as one of many factors that contribute yield.

And Harry -- go ahead.

And my -- yes, go ahead, sorry David.

You asked about cash flow for 2017, at the midpoint of our guidance, the cash flow from operation should be close to the $5 billion mark. We do have about $3 billion in CapEx for 2017. So, we do have roughly $2 billion of free cash flow. Our existing dividend is close to $1 billion, so we do have some extra money over and above the dividend to return to shareholders as well as we have some room in our credit metrics to continue to potentially increase that and return free cash flow more to shareholders.

You know…

For 2017, go ahead.

No, you go ahead.

Just where I was going with this is I'm just trying to get a sense of if your share repurchase appetite in 2017 could be as strong as it was in 2016?

That's going to be board decision as I mentioned we have above $400 million left and we will continue to buy as we have in the past.

Okay, I will keep trying.

What I can tell you Harry little color on your other question on the revenue management system is obviously we just put in place and there will be continuous learning so we think overtime contribution from another team absolutely love working with the two.

Very good. Thanks.

Thanks.

Our next question comes from the line of James Hardiman with Wedbush Securities. Please proceed.

Hi, good morning. Thanks for taking my call. I hope you can give us a little bit more color on the Cuba you had made the announcement that the fathom is transitioning back to P&O, I guess what does that mean for the impact travel experiment and then I guess what happens next, I don’t think, we've gotten an official announcement in terms of the other Brand and when and how many will be going to Cuba, but we are hoping to get an update there?

Good morning, James. Happy Holidays. So first of all, we’re going to Cuba again we are really privileged that we were the first in doing -- pave the way for the rest of the industry we still as I mention in the opening remarks or have more calls to Cuba than any other major U.S. Cruise Company. So we feel very good about our position in Cuba. Along with everyone else, we submitted our request for additional sailing through beginning of June period and thereafter as just the planning cycle in Cuba and we are in a process of receiving the authorizations from Cuba as we speak here now about that. But we have every intention of cruising to Cuba we have expectation one or more of our brands will be approved from June time period on until May s I mentioned we have more sailing team than anyone else. In terms of the Fathom, Adonia was basically a sort of internal charter on the brand charter to just average to concept and so obviously its position us to introduce in Cuba and we are going to probably – we are going to go with larger ships and multiple brands in Cuba with regard to the DR we are also going with multiple brands for Fathom, so Fathom is being expanded across the number of brands in DR. The only ground experienced have resonated greatly with the guest and we will take some of the onboard supplement don't you and travel on to the other brands but emphasis of course is the on the ground experiences in DR and continue to have the opportunity for travelers they have that travel experience and for DR to reap the benefits of the impact of having those travels working alongside impact clear as already in the DR they are doing great work.

Great. And one of the same lines remind us why the first quarter trend looks to be short of the fiscal full year trend fiscal 2017 trend, I think its 1.5% to 2.5% for the first quarter versus 2.5% for the year, I don’t know if that has anything to do with Cuba or even if Cuba is factored into your yield guidance in any way?

It’s nothing to do with Cuba, go ahead David.

Yes, it’s just mid-point for the first quarter is 2% versus 2.5% approximately for the year. The first quarter had tougher comparisons in the prior year but keep in mind were only talking about a 0.5% here and so we give your best guess for each and every member.

Great. And I guess just lastly just want to still go back to China obviously you made it pretty clear that China is more about generating positive returns and yields but it's early, maybe just directionally do you think the yields are going to be down again for 2017, is there even a chance that they could grow? And I guess what are the contributing factors there are obviously capacity in China is to be much more manageable in 2017 versus 2016. Seems that you guys are pretty bullish about the improvement in your distribution, but how should I think about that?

Well, First of all, you touched on couple of other points there. We have expanded distribution that improves the B2B aspect of what we are doing there. But we're going to have tougher comparisons in the first half of the year in China with yields and so based on what happened in the last half of the year, you might expect yields to be down in the first half of the year comparison basis, but then your expectations are that it will be up in the second half of the year. So, on balance will see wetlands but China for us is a volume growth story, it’s a return story. The yield that we have experienced this past year are certainly still generating good returns we see possibility for increasing yields, but our focus again is continuing high-level occupancy that we have, continue delivering a great experience the Chinese guests to be in positions to expand.

Great. Thanks, guys and Happy Holidays.

Happy Holidays.

Thank you.

Our next question comes from the line of Jaime Katz with Morningstar. Please proceed.

Hi good morning. Thanks for taking my questions. So it seems like you guys are about to launch some sort of new technology initiative at CES and I'm curious given on that CapEx is a little bit higher than we originally anticipated next year, is there is there any sort of level of CapEx associated with whatever new initiatives you guys are going to launch or is there any sort of multiyear costs that we should be thinking about going forward?

Yes. Thanks, Jamie for the question. First of all, the capital is been employed in that initiative is kind of part of low level 3% to 5% of our total capital spending that we look at basically research and development innovation. And so we have invested along the way all this time, as we delivered the earnings we delivered in that manner to position us and have the opportunity to introduce this particular -- truly it’s a guest experience it’s driven by technology, but the technology obviously to the guest will be invisible and we're excited about the potential. The guest ultimately will decide and we're prepared, but fundamentally for your planning purpose, we look at 3% to 5% level of innovation and research and development investment in capital and we feel that is appropriate for company of our scale and it gives us plenty of dollars to try to create breakthroughs which we think obviously this current introduction that will be reviewed -- revealed on January 5th.

Okay. And then I think yesterday you guys put out press release saying that new ship in 2019 would be going to Carnival was originally planned to go to maybe P&O Cruises Australia, I am recalling correctly, so I'm curious if there are any new conclusions surrounding the Australian market on given that you're moving the new hardware back to that Caribbean which has clearly been performing very well?

Australia remains a big growth market for our cruise growing 20% so I don’t know how many years 10 years plus. So, it was a very strong cruise market. When we make decisions like that, you just have to keep in mind, it's very holistic. There are a gazillion variables that go into play. One obviously Carnival Brand is doing very, very well here in this States, but also we have multiple home ports in the U.S. We distribute fleet around U.S. for Carnival and certain places takes certain ships, certain places kind of certain size ships and so on. And balancing all that out makes the difference. And similarly to in Australia, certain size ships can fit and when we look at the destinations, but we've had so much success with Carnival, we're looking at expanding the opportunity for Carnival brand while at the same time, still giving really guest-ready and guest-preferred hard well in Australia market. So, there's only so many shipyards, we've only built so many ships a year and we have to allocate things and we're always trying to optimize. But it's holistic decision involving a lot of variables, deployment, itinerary, relative yield contribution, a number of things.

Thanks.

And the second part we announced was the Carnival Splendor moving to P&O Australia. So, we are continuing to grow that brand within Australia.

Thank you guys. Happy holidays.

Hey, Happy Holidays.

Our next question comes from the line of Greg Badishkanian with Citigroup. Please proceed.

Great. Thanks. So, just to kind of follow-on to James' question on China. It kind of sounded like net yields for full year 2017 would maybe around flattish year-over-year, at least not far off from flat year-over-year either way. Is that correct? And then also how much of the China business is locked in at this point for 2017?

Yes. So, just remember that China represents even with increased next an introduction of the Majestic Princess first built ship for China and our Princess line will introduce, will represent less than 6% of our capacity. So, just keep that in mind. We'll see where yields end up, okay. Again, it’s a B2B business and in terms of guidance, of course, we put it in, we don't give brand-by-brand and total geography-by-geography yield. So, I won't do it for China either. But we're giving you good description I think of once you kind of get that. The message we like you guys to hear clearly is that is return under the business and with all the concerns we expressed this year on China as well as concerns expressed in lots of other areas and whatnot. You can see what we're able to deliver and ultimate results. We're very, very bullish on China long-term. We have great partners and CSSC and we -- our relationship there is growing stronger and stronger. We're moving forward together to help build longstanding sustainable cruise industry in China, which has been declared in the five-year plan by the Chinese government. So, we're bullish, but it’s a slow walk. We can only send so many ships and so on and so we feel really confident overall.

And the second part of the question, you had asked about where we stand in China. Given the historical averages where we booked and give or take generally speaking we start the year roughly about half book, but I did indicate before that China is a much later booking market, every country is different. And so they are closer in booking market less than that overall.

Right. All right. And then that all makes sense, thank you. And then the North American passengers going to Europe, I know that's still small part of your overall mix in Europe for itineraries in Europe its only about 10% that you source from North America but with the broad strength that we've seen, could that have a significant impact and benefit for you if that continues and I understand that the attack in Germany may have a negative impact, but it does seem like that the trend is -- has been pretty strong recently?

The trends have been positive overall, but we have to redo a number of itineraries along the way that has cost us in terms of opportunity in 2016. But that is all part of our business and so again on balance, we give guidance the numbers we feel are reasonable. We know the world is a volatile place and so we factor that into everything we do. But sure, anything that's positive, in end obviously helps us and the North American brands have a number of itineraries plan in Europe and our guests are looking forward to them and we're looking forward to get capturing the value for them.

Yes, great. Thank you.

Our next question comes from the line of Robin Farley with UBS. Please proceed.

Great. Most of my questions have been asked, just kind of one or two follow-ups. Just wanted to clarify on Cuba, what is in your yield guidance your EPS guidance for the year in terms of Cuba, is it just an expectation that one ship not yet specified will continue to operate there from May till the end of the year or does that include perhaps more than that?

Yes, so Robin, first of all good morning to you and I'm a little surprised, you're usually much earlier in the calls on your questions.

I don't know what happened. I'm not sure what happened either.

But I'm concerned in Cuba, look, today we have down years 700 passenger ship. So, the reality is you can barely find the numbers. But even though the ship is getting a premium price and is selling out and so on. And so as you look at it, again, Cuba will be slow expansion and so we'll have additional itineraries going there, so will have more than one brand once we get the final approvals from the Cuban authorities. But they have constraints in the number of birds and the size of the birds and what size ships you can get and so on. So, financially, to be candid with you is important and the margin is certainly important for the brands. But the most important thing is positioning for the longer haul and positioning to lift overall demand and interest in the Caribbean and ultimately because of that create additional opportunity for capturing more of the value through increase on yields. And so Cuba is a longer term play, but you have to build it today and that's what we're doing. But in terms of the financial impact on the corporation, you couldn’t find it probably.

Okay, that's helpful. And then on China and I know that obviously its early to -- and you don't want to give a specific yield guidance for the market, but just on your comment that it's -- the returns will continue to be positive, I don't know what you indicated whether returns would grow or just that they would be positive or more -- other brands. Because my questions with the Majestic going there, I think that's your first newbuild for that market and so would be a higher investment per person than the other tonnage that you have there. So, it's fair to assume right that that ship is getting a price premium to your other capacity in China. So, I guess that's why I'm surprised that that you wouldn’t feel comfortable same positive yields for the years just given that if returns would to continue to be what they are given that new ship?

Well, again, you got to look at the holistic, there is a lot going on there. You got first of all, different course, different seasons. We're one of the few companies that commit a year around, so the Tianjin market is different, the Shanghai market so on and so forth. So, there's a lots of things that moving that, but here is the real answer fundamental, I don't know I answer your question. Yes, we expect returns overall to be better in 2017 than they were in 2016 and returns have grown reasonably consistently in China. The most important thing for us is the way we do deployment. We know that the returns are better than what the deployments would have generate for us and that's the key for us and operating, so overall we're lifting our overall performance. But it does represent 5% of our capacity. So, it did in 2016 and little bit less than 6% in 2017. So, as we move forward, we're looking at building that market, but we're doing in a way where as we grow it, we're seeing higher returns than we would have seen otherwise. And there's a natural constraint on the pace of growth because we have large addressable markets everywhere in the world that are underpenetrated, everywhere in the world, including in North America. And so we can't send all the ships to China and we need new additional capacity in the other places in the world to optimize the ultimate yield and bottom-line return.

And remember Robin Majestic gets to China in July, so that's consistent with the comments made -- Arnold made about the first half versus the second half.

Okay, great. No, that's helpful. Thanks. I mean our channel check show a really nice -- strong premium for Majestic. But I understand that you don't want to commit to anything but, thank you.

Thank you, Robin.

Our next question comes from the line of Jared Shojaian with Wolfe Research. Please proceed.

Hi, good morning. Thanks for taking my question. David you indicated that about half of your 2017 capacity is booked at this point. So, my question is what kind of pricing do you need to see on the other half that's not yet booked in order to hit your 2.5% yield guidance? Is it possible that pricing could be down to get to 2.5%, is that your expectation?

First of all, I didn’t say that exactly half was booked; I said generally speaking that the historical average give or take we enter the year approximately half booked. I wasn’t trying to give you an exact number. I was just trying to do that relative to China being less than that. So, our pricing is up at this point and we do continue to expect to see pricing continue to be up in the rest of the year and finished the year on an overall basis as we say approximately 2.5%.

Okay. And then just ask that a little bit differently, I mean you've indicated that you're in a better booked position today than you were at this time last year and then you also get the mixed benefit on yield from Seabourn Encore and maybe even get some benefit on -- from the yield management system. So, I guess why is your yield guidance 2.5% when you did 3% this year if you take out the accounting re-class. Are there -- just any headwinds that maybe I'm not appreciating or -- you just looking at this for more of a conservative approach given some of the issues that we felt throughout 2016 for the industry?

If you were to take the accounting re-class out as you referenced and looked at the guidance we gave this time last year, you'll see our guidance is actually stronger this year at this time than it was last year. Keep in mind, we haven’t gotten away season yet. We know the world is a volatile place; we just talked about it and -- even things that happened yesterday. So, we give you our best guidance realizing that the world is full of things - it's full of typhoons and cyclones and hurricane and is filled with unexpected things like Brexit or Zika or whatever. And so we give you the guidance as we did last year and if you look at it, you would say okay they are giving stronger guidance this year at this point time than they did last year, which reflects the difference and the difference is last year were hit on booking as lower price this point in time, now we're had bookings with higher prices at this time. And so you'll see us give a little strong yield guidance. Now, keep in mind also, you're coming off a higher base. The comparisons are getting tougher and tougher as we grow yields. In the end people take money to the bank not percentages, right. And so the absolute dollar increase I guess so you have to look at all that too. But bottom-line is we're confident, we -- at this point in time with the qualifiers that we haven't gotten away. The world is a strange and mysterious place and it's volatile, but factoring that in and it's been volatile the last many years and we've been delivering and that's our intention for 2017 as well.

Great. Thank you. And if I can just squeeze one more quick one in, would you characterize the demand environment today as being better than what it was two, three months ago?

The demand environment, you mean from consumers and general or from potential guests. I would say that two or three months ago, that's a good question. I would say this. Our brands continue to do an outstanding job of exceeding guest expectations when the guests are onboard and they continue to do an outstanding job of creating more demand for their particular targeted segments. And our public relations more broadly has done a good job of providing an umbrella effect of getting people to increasingly consider cruise when they are thinking about vacation holidays. The last two to three months were global business. Every year there is a recession somewhere or this or that or whatever and if you would talk in globally for our business, I could not say that the last two or three months I see a change in global consumer attitudes or anything like that consistently. What I can say is we definitely see strength and we've seen strength for a while that we're building on that and taking advantage of it.

Great. Thank you very much.

Thank you.

Operator, we have time for one more question.

Our next question comes from the line of [Indiscernible] with Infiniti Research. Please proceed.

Good morning. I'm the lucky one. Congratulations on yet another great quarter. I have kind of lost track of all the sequential beads quarter versus guidance. And that I had one quick question given that comparisons get little bit for in Q2 of next year and now for Q4 2017 given the great result that you just reported, could you qualitatively discuss the cadence of yield that you expect? You discussed China, but again, that's a small piece of the overall puzzle. So, Arnold or David, if you could just give us some sort of a direction as to the curve?

That's a very hard. There's so many moving parts and so many moving pieces particularly when you get out to the fourth quarter where we have a very small -- relatively a very small percentage book. So, we give you our best guess for the year, we give you our best guess for the next quarter. It's fair to say that given the two numbers, the remaining three quarters of the year is above the 2.5% because we have 2% for the first quarter. And at this point in time that is about as much information as we can give.

It's just difficult for the rest of us and we have even less information than you guys. So, I was sneaking that maybe it’s a bell curve that's all I was hoping for. Arnold, since you're laughing can you say yes?

I can't say yes to a bell curve. I wish things were that orderly, but they are not. But thank you for your question.

Okay, I appreciate that. Thank you again for taking my call.

As you say. Thank you.

Hey everyone, a sincere Happy Holidays. Thanks for your continued interest. We will obviously as always -- our people will work very hard to exceed the expectations we put in place and we hope everyone has a safe and wonderful holiday. And I hope some of you are taking a cruise.

Happy Holidays.

Ladies and gentlemen that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines. Have a great day everyone.