Good morning. My name is Celeste and I will be your conference operator today. At this time I would like to welcome everyone to the year-end earnings release conference call for Royal Caribbean Cruise Lines. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question and answer session. (Operator Instructions). Thank you. Mr. Rice, you may begin your conference.

Thank you, Celeste, and good morning, everyone. I would like to thank you for joining us this morning for our fourth quarter earnings call. With me here today are Richard Fain, our chairman and chief executive officer, Adam Goldstein, President of Royal Caribbean International, Dan Hanrahan, President of Celebrity and Azamara Cruises, and Greg Johnson, our associate vice president of Investor Relations. As we have done in the past, we have posted slides on our investor website, www.rclinvestor.com, which we will be referring to during this call. Before we get into our results and the business overview I would like to remind you of our forward-looking statement, which you will see on the first slide. During this call we will be making comments which are forward-looking statements and are subject to change based on the items listed on our website, in disclosures, and our SEC filings. Additionally, we will be discussing certain financial measures which are non-GAAP as defined by Regulation G and reconciliation of these items can be found on our website. To start, Richard will comment on the current economic environment and our operating priorities for 2008. I will then take you through our financial results, discuss the current booking environment, and provide you with our 2008 forward guidance. Adam and Dan will then follow with more specific comments about their brands. Richard?

Thanks, Brian, and good morning, everyone. As always, I am pleased to be able to review what’s going on in our business, but it’s especially pleasurable to do so when we have good news. Obviously everyone is focused on the current turmoil in the economy and in the financial markets. And like everyone else, we have a highly imperfect crystal ball. But unlike everyone else, we also have a large percentage of forward bookings which provides us with some additional insight into what’s happening and is likely to happen. Clearly our results in our forward bookings are much better than one would assume from reading the general economic news. Who would have expected that our fourth quarter yields would have risen over 3%? For that matter, who would have predicted in this economy that our current booking patterns pretend the fourth largest yield increase in as long as we’ve been tracking the statistic? We’ve always acknowledged that our business is not immune to recession, but we believe that our business – while it’s not recession-proof – is recession-resistant. We feel the effects when the consumers begin to slow their spending, but we have somewhat of a cushion down side relating to that. During turbulent times consumers focus even more on value. They focus on getting more vacation for their money. Even during soft economic cycles people continue to vacation, but they also demand exceptional value. Cruising continues to be the best value in the vacation industry and the fixed price nature of the purchase becomes even more appealing during tough times like these. As a result, we have never seen the type of correlation in our revenues in the economic cycles that many people assume would be determinative. Furthermore, we have another factor that we think helps us. In addition…

Thank you, Richard. As we discussed in our press release and you will see on the second slide, revenues for the fourth quarter of 2007 increased to $1.5 billion from $1.2 billion in 2006. Net income for the quarter increased to $70.8 million or $0.33 per share compared to our previous guidance of $0.32 to $0.37 per share. For the fourth quarter of 2006 we reported net income of $46.6 million or $0.22 per share. Our earnings per share were within our guidance range. Unfortunately, a 19% increase in fuel prices offset the benefits we saw from the strong closing demand. Now I would like to go to the comparable results, excluding Pullmantur. We had another good solid quarter despite the mounting uncertainty with broader economy our close-in business remained remarkably strong and yields came in much better than anticipated. Our costs were higher due to rising fuel prices and higher than forecasted load factors. On page three you can see that our guidance on a comparable basis was for yields to increase in a range of around 2% and we actually generated an increase of 3.2%. As was the case in the third quarter, we had the highest yields in our company’s history for the quarter. Our load factors were one percentage point higher than our expectation, although slightly below last year due to deployment shifts. Our pricing leverage was particularly strong with close-in bookings. If you will turn to slide four you will see our year-over-year change in pricing for bookings made within 90 days of sailing for each month of 2007. There has been a healthy trend of improvement throughout the year and I think this is a terrific example of the resilience we have seen with our brands despite pressures on overall consumer spending. Now going…

Thank you, Brian, and good morning, everyone. We are pleased with the fourth quarter results, particularly the close-in booking strengths that Royal Caribbean International experienced throughout the fourth quarter, as well as the overall positive tone of our current business. As Brian noted, we are only a few weeks into the wave period, so our visibility remains limited to the back half of the year. It’s nevertheless gratifying to note that virtually all of our products in all four quarters of 2008 are in a favourable pricing position on a year-over-year basis. Our mission is to generate the required volume at the prices we are currently commanding. Our third Freedom Class ship, Independence of the Seas, is scheduled for delivery on April 17th. She will operate from South Hampton, UK, for the summer seasons. The reception of the UK market on her scheduled deployment has been terrific and all signs point to a successful first season. The remaining three of our four Radiance Class ships will undergo their diesel engine installations over the next several months. By June all four ships will be consuming less fuel and purchasing fuel less expensively than they were prior to the installations. This will be an important milestone in our ongoing efforts to control fuel and other costs. Finally, a quick update on our internationally sourced products. We have enjoyed favourable load factors this winter in Australia, Asia, Brazil, and the Dominican Republic. The three Vision Class ships that are delivering these programs will all enjoy significant year-over-year net ticket revenue increases. We will look to improve on-board revenue and costs as we gain experience with these programs. The international acceptance of our brand and product delivery bode well for the future of Royal Caribbean International. Dan?

Thank you, Adam, and good morning, everyone. As you have heard from Brian and now Adam, we are pleased with Celebrity’s fourth quarter results, as well as with our results for all of 2007. The momentum we have going into the new year has been corroborated in a couple of very recent and very interesting travel agent surveys. I sit as a chair of the marketing committee for CLIO, which is the Cruise Line Industry Association, and reported the survey results at the annual press conference in New York two weeks ago. Over 500 travel agents participated in that survey, which was conducted at the beginning of January of this year. Among many questions they were asked for their outlook for 2008. Ninety percent predicted 2008 would be as good or better than 2007. In a press release dated January 18th Cruise Holidays, which is the oldest and largest cruise specialty retailer in North America, conducted a travel trend survey amongst their agents and found that 87% of the agents are optimistic about 2008. The positive results we are seeing are being reinforced by the distribution system. Two-thousand-seven was a good year for the Celebrity brand and 2008 is shaping up to be even stronger. We will have a full year of our new Azamara brand, which is starting to gain real attraction on the market. We are pleased with our position in the deluxe market and that Azamara is helping our overall financial performance. We’ve been previewing our newest ship, Celebrity Solstice, which launches in the fourth quarter to rave reviews. The response from the distribution systems and the consumer is very positive. Solstice, like Azamara, will advance the overall financial performance of the brand. As Richard, Brian, and Adam have mentioned, we remain focused on our cost efforts. We also complete our diesel installations, which allow us to burn less fuel and purchase at lower costs. We begin, although for a relatively short time in 2008, to enjoy the economies of scale that Celebrity Solstice will bring. In 2009 we will have the full benefit of Celebrity Solstice and half the year of Celebrity Equinox. Brian?

Thanks, Dan. Celeste, we’d now like to open the call for questions.

(Operator Instructions). We’ll pause for just a moment to compile the Q&A roster. Your first question comes from the line of Michael Savner with Banc of America Securities. Michael Savner – Banc of America Securities: Good morning. Two quick questions if I could. First, could you comment a little bit, Brian, on on-board spending trends? Obviously yesterday Carnival made a little bit of news by mentioning the on-board spending among the higher-end brands seemed to be slowing a little bit. Can you comment at all if you’re seeing a similar type trend and if the answer is no can you maybe lead us down the road to kind of figure out what the leading indicators would be that if you start to see a little bit of slowdown in the consumer where would you likely see that first? Is it on-board spending, is it bookings on some of your shorter itineraries?

Hi, Michael. It’s Adam. I’ll take that question. Our on-board revenue expectations are covered in the guidance that we’ve just given you. In the fourth quarter our on-board revenue performance was slightly higher than what we had expected. There are too few data points in 2008 really to see any changes in that trend. I think to your second question we would naturally see things more in the ticket revenue because we’re looking forward, whereas on the on-board revenue we can only really relate to sailings that have already occurred. So I would take more our guidance with respect to ticket revenue is more indicative of what’s out there in the future. Michael Savner – Banc of America Securities: Terrific. Thanks. And then a second question, I think this one is for Brian. We noticed on your balance sheet a pretty big surge in pre-paid expenses sequentially year over year, I even think on a historical basis. Can you just give us some clarity of what’s included there and why that’s changed?

Sure, Michael. Most of that is related to derivative positions that we have. The way we have to account for that is it’s an increase of both the asset and the liability. Both our fuel derivatives and our FX on our new ships we’ve had some pretty good performance on. That’s the primary driver that you’ll see on the balance sheet. Michael Savner – Banc of America Securities: Terrific. Thanks very much.

Your next question comes from the line of Tim Conder with Wachovia. Tim Conder – Wachovia Capital Markets: Thank you. Yes, just a couple of questions. Continuing the first on the on-board. You over the last year or two have started taking advance bookings for things like shore excursions and other events. Anything, Adam or Dan or Brian, that you can derive from that maybe as far as forward booking on on-board indications? And then secondly, could you, Brian, maybe detail what the 4X benefit was overall in the fourth quarter and ’07?

Tim, this is Adam. On your first question, although shore excursions are an important ship-board revenue stream it’s not important enough to be a bell weather for what’s going to happen overall with ship-board revenue? It is our intention over time to add the opportunity to book more of the on-board revenue stream products and services, but we’re not there yet. So I don’t think you can glean much from what’s happening with shore ex alone. Tim Conder – Wachovia Capital Markets: Okay.

Tim, on the FX, we really haven’t broken out the quantification benefits of that. I can comment that unlike our primary competitor where they have brands and really focus on specific markets, FX is really part of the equation as we’re making our revenue management decisions and where we want to source business from. So as a consequence it’s not as easy for us other than for the Pullmantur brand, if you will, to really do a comparison year over year on the FX changes. But I think – Greg’s nodding at me – if you want to follow up with him after the call he might be able to take you through. Tim Conder – Wachovia Capital Markets: Okay. And then lastly, could you expand a little bit Brian? You’d mentioned in the fourth quarter there was some slow investments that were made by the company in certain items.

I think most of that is just shoring up some of our systems with Pullmantur on Royal Caribbean brand made entry into Asia and setting up offices there. It’s nothing too large and it’s pretty much part of our plan, but I’d say it’s been attributed to timing differences when the expenditures actually hit. Tim Conder – Wachovia Capital Markets: Okay. Great. Thank you, gentlemen.

Your next question comes from the line of Robin Farley with UBS. Robin Farley – UBS: Thanks. A couple quick questions. One is just getting back to the on-board revenues for a moment. I notice that Q4 was slightly higher than you expected. Can you comment on any change specifically in the month of December versus earlier in the quarter and any difference in December on certain brands versus others?

We are commenting on on-board on a macro basis as we usually do and we didn’t see anything particular in any one of the three months of the fourth quarter that were notably different from the other. So on an overall basis Q4 came in slightly stronger than expectations. The other thing I’ll add to that, and I don’t think this is a surprise to you, is that in general the strength that we’ve seen has been more clear on the net ticket revenue side than on the net ship-board revenue side in the recent quarters. Also, because they’re comparable to last year and that ticket revenue for these quarters are easier. Robin Farley – UBS: Okay. Great. And then in terms of expenses in ’08, the guidances that ex fuel, they’ll be up 1% to 2%. Can you talk about what are the drivers of that, obviously outside of fuel, what are the drivers of your expenses in ’08?

Robin, it’s Brian. I think one of the things that I really didn’t get into that I think is important to mention because there has been such a focus on our cost management which really stimulated last, first quarter we saw a little bit of softness on the demand side and it’s really stuck with our management team. Particularly in North America, we’re seeing a tremendous amount of leverage as our brands have really gained traction as we’re adding capacity. While we don’t want to break out what we call the comparable in ’07, I will tell you that we’re looking at billing flat expenses on our North American brands in ’08. A lot of the investments that we’re putting in for next year and just driving inflation is some start up initiatives and having some new markets and marketing associated with that and creating the infrastructure. Obviously we’re not immune to some of the inflationary pressures that are out there. We talked about fuel and the impact that fuel has on this, but that somewhat drives throughout the whole P&L that have surcharges that are being passed on on freight. Comes in with our crew acquisition and movement. So obviously we’re feeling a lot of those pressures, but our management team has really been focused on it and trying to find offsets to the pressures that are mounting. Robin Farley – UBS: Thanks. And then a last question real quick is, Pullmantur has been reported on a three-month lag. Now that it’s been a year since the acquisition will that lag stop with that line up of your reporting quarters?

Robin, we’ve said all along that our first priority was to get Pullmantur on consistent systems with Royal Caribbean and I can tell you that within the last month our IT team has done a great job and worked really hard to get our reservation system on a common platform for cruises and we are in the process of switching Pullmantur over to our accounting system. We want to ensure that all of those transitions occur smoothly. We haven’t pegged a date when we’re due to catch up, but we’ll certainly make sure that everybody’s aware of that. I can tell you that the net effect of that catch up will be an entry into other income and expense. It’s not going to be where we’re going to have to affect the entire P&L. Robin Farley – UBS: Okay. Great. Thank you.

Your next question comes from the line of Hakan Ipecki with Merrill Lynch. Hakan Ipecki – Merrill Lynch: Thank you. Two questions. The first one is, most of the impacts of the fuel supplements on your yield guidance and what sort of assumptions do you have with respect to Steptons (sic)?

We’re not breaking it out. I can tell you we’re in the process internally within our revenue management team really trying to understand that from the consumer standpoint we believe that the solution largely is a price increase. We have talked about the fact that we have a very solid order book with very healthy per diems on there. Obviously the fuel supplement is included in that. I think it’s fair to say that we are getting a portion of that. It’s helping us offset our fuel costs, but obviously there is an elasticity effect. It’s not an exact science to be able to attend (sic) what is happening. Hakan Ipecki – Merrill Lynch: I see. So is it fair to say you’re assuming 100% acceptance at this point, but if anything happens on pricing that will move it either up or down?

I think it’s fair to assume that what we do is we have very sophisticated analysis that we’re looking at this on a by-itinerary basis. Some areas we’re seeing more acceptance of it than others, but what we’re looking at is what we have on the books and what we’re forecasting based on current booking trends is our ability to sell our future inventory at. That’s how we come up with our yield guidance. It’s not that specifically broken out (inaudible) ticket price. Hakan Ipecki – Merrill Lynch: Thanks. And the other question is with respect to capacity. I think relative to what you have said in the last call, there’s been a slight drop in the ’08 capacity, I think from 6.4% to 5.1%. What’s driving that? And then can you provide us the quarterly capacity growth for ’08?

I can tell you the major shift in ’08 has been some additional dry dock that we’ll be doing for Pullmantur. You saw the announcement of Sovereign of the Seas going to Pullmantur. That effectively because we’ll be converting the ship board to be more appropriate to the Pullmantur brand. And we had I believe one other specific longer dry dock than we had indicated for Pullmantur. Greg can certainly take you through the details of that. If you wouldn’t mind following up with him. Hakan Ipecki – Merrill Lynch: Absolutely. And is it fair to assume that those dry docks will be happening in the latter part of the year given your cost guidance first quarter versus the back half of the year?

I believe there’s a large one in the spring and then the Sovereign would be much later in the year. Again, I think Greg can give you the specific time period. Hakan Ipecki – Merrill Lynch: Okay. Thank you.

Your next question comes from the line of Steve Kent with Goldman Sachs. Steve Kent – Goldman Sachs: Hi, good morning. Can you just talk about some of the mix changes? More Alaska, more Europe, less Caribbean. I know the itineraries for this year for ’08, does that continue into ’09 generally? But more importantly, are you getting the same pricing pick up in those higher end cruise itineraries. And then the same on the Freedom Class ships where you were getting a very good premium for a while too. Is that still holding up?

Hi, Steve. It’s Adam. I mentioned earlier that the Caribbean market has been a strong driver of our current yield performance increases. So it was a strong contributor to the very positive results in the fourth quarter and it is also an important part of the guidance that we’ve given for the first quarter. The share of the Caribbean is going down about five points on a corporate basis from just over 50% to just under 50% of our total mix. And the other ones tend to be going up slightly accordingly. We are expecting positive yield performance for all the major product groups. That includes Europe, whether the 23% capacity increase both for us and, coincidentally, for the industry as well. We still expect, highlighted by the performance of Independence of the Seas, to maintain slightly positive yields there. So there is not a material differentiation in yield performance by region. Steve Kent – Goldman Sachs: And then the Freedom Class ships still getting that strong pricing premium relative to the rest of the fleet?

Yes. The Freedom Class ships continue to drive premium versus the rest of our fleet. Steve Kent – Goldman Sachs: Okay. Thank you.

Your next question comes from the line of Bob Simonson with William Blair. Robert Simonson – William Blair & Company: Good morning. Greg, do you have the capacity change by quarter yet for ’08?

Bob, yes I do and I can give that to you guys after the call. Robert Simonson – William Blair & Company: Okay. And just a point of elaboration again on that on-board revenues. When you use different methods to incentivize the agents, one of them is to offer perhaps on-board credits. When does that actually show up in the numbers in terms of your guidance? If you’ve given more of them or less of them would that influence how you look at the total yield assumption?

Bob, this is Dan. We do use on-board credits to incent consumers to buy, but that’s factored into our thinking already. So our yield guidance that we’ve given contemplates the fact that that may be one of the pricing levers that we pull. Robert Simonson – William Blair & Company: Okay. Very good. Thank you.

Your next question comes from the line of Felicia Hendrix with Lehman Brothers. Felicia Kantor Hendrix – Lehman Brothers: Hi, good morning, guys. Question on your fuel. The fuel prices that we track have shown actually a decline in the first quarter. I’m just wondering why you increased the hedges for the remainder of the year and, I don’t know if it’s too early to tell, but you did give us some kind of, you gave us a magnitude of benefits from your surcharges now, but for fuel decreases is there a way that we can kind of anticipate what that might cost you going forward?

Felicia, it’s Brian. I think one of the things, just in terms of our hedging strategy, we try not to adjust our strategy based on what we’re seeing in terms of pricing fluctuations week over week. We’re really not trying to speculate on the price of fuel. Our hedging really is, if you will, an insurance policy that we’re taking out. We want to limit our exposure if fuel prices continue to escalate, but we also want to be able to participate in any savings if fuel prices come down. And we’ve said that we think being hedged 40% to 60% is really the appropriate amount for us on a 12-month go-forward basis. That’s how we’re approaching our hedging strategy. I’m sorry, the second part of your question was? Felicia Kantor Hendrix – Lehman Brothers: Well, I was just wondering if you could give us some kind of metric whereby we can gauge if fuel prices move against you what that would cost you vis-a-vis the hedges.

Felicia, I think we have given up here the impact of what the 10% change would be. Felicia Kantor Hendrix – Lehman Brothers: Okay. So that’s with the hedges. Okay.

That includes the impact of the hedges. Now, of course, if we, as Brian says, we’re hedging as we go forward. So if some old hedges fall off, but in fact if you follow what we’ve done in the past that statistic has been pretty accurate, pretty useful gauge of what’s actually happening. Felicia Kantor Hendrix – Lehman Brothers: Okay. Thank you. And then just housekeeping. There was a $12 million gain in operating income. I was wondering if you could tell us what that was.

Felicia, that was tied mainly to FX gains that we had. Felicia Kantor Hendrix – Lehman Brothers: Okay. Thank you. That’s it.

Okay.

Your next question comes from the line of Steve Wieczynski with Stifel Nicolaus. Steven Wieczynski – Stifel Nicolaus & Company: Hey, good morning, guys. Real quick question for Adam. Just real quick, Adam, in terms of once Independence moves over to South Hampton this summer, what kind of demand have you seen so far for that ship? Just because a ship of that size has never really been seen in that region before.

The demand that we’ve seen so far is terrific. As I alluded to earlier, the immediate reception when we announced her intended deployment to the UK market about almost a year ago was very positive and has never abated. So we have built up experience over recent years. First we had Legend of the Seas operating that program for a couple of years. This past year Navigator of the Seas and now Independence, and Independence is performing very well even in relation to the strong performance of Navigator of the Seas this past year. Steven Wieczynski – Stifel Nicolaus & Company: Okay. Great. Thanks.

Steve, if I could just add to that because I think it gives me an opportunity to comment in general. People look at the big ships and talk about (inaudible) something emphatically different. In fact, placing Navigator with Independence only added about a 15% capacity. So we’ve really been fairly consistently evolutionary in these types of things. And it’s not as though, as in that case or in other cases, we have these dramatic jumps in ship sizes in most cases. Steven Wieczynski – Stifel Nicolaus & Company: Okay, great. Thanks, guys.

Your next question comes from the line of Scott Barry with Credit Suisse. Scott Barry – Credit Suisse: Hi. You mentioned the pricing on the books across all four quarters is up year over year. And you said you’re seeing some shrinkage in the book-to-departure window. Could you comment on where you are in terms of booked low factor across each four quarters, whether you’re ahead or behind? Thanks.

Thanks, Scott. What we’ve traditionally done is given an outlook on two, maybe three quarters out. We’re trying, I think, simply because of all the uncertainty in the marketplace to give you a little bit more insight into what’s happening in wave. The graph certainly provides you with, I think, directionally where we are in Q1 and Q2. What we’ve said is the second half of the year, and I would say that we’re not seeing fundamental differences by quarter, that we’re pretty much where we were a year ago for the second half and, yes, pricing is up very nicely in the second half. I would also point out that although seven are comparable we’re probably seeing load factors, certainly for the last decade, at the higher levels than we’ve seen in the past. I think obviously there’s different products are behaving differently. I’ve seen some analysts commenting where they’ve see some discount in certain markets. I think you’re always going to expect to see that as we’re constantly making trade-offs between rate and volume. But when you aggregate it all up on the volume side we’re basically where we were a year ago and on the rate side we’re (inaudible). Scott Barry – Credit Suisse: Okay. Great. And then your forecasts obviously assumes a fairly stable revenue environment. Maybe you could comment on how flexible your non-fixed expense cost structure is and whether you thought about or what you can do to maybe offset a weaker revenue environment if it does manifest itself later this year.

Well, I think two things. When you say we’re forecasting a certain economic environment, we again take what’s on our books and we’re also digesting what is happening in the marketplace on a perpetual basis. We’re trying to do more than just read what happened last week. We’re trying to understand the trends and what that may bode for the future and that’s all integrated in our yield forecast that we provided. I think the best way to talk about what we can do on the cost side is to point back to last year. In the first quarter of last year we had a yield decline, as I recall, in the range of about 4% and we were able to come in significantly under our cost guidance. We have a management team now that’s very focused on cost – Scott Barry – Credit Suisse: Yeah, I’m not sure where you’re coming up with under your cost guides. Maybe on a comparable basis, but really, Pullmantur is part of the business now and it looks like, based on what I’m seeing, that your cost guidance has pretty consistently been above, your cost performance has pretty consistently been above your cost guidance historically.

Last first quarter is what I’m referring to when we saw a down turn in the revenue environment, which is when we were really able to mitigate a lot of the cost increases. I think if you go back and look at Q1, that’s when we, Q4 we came in above our guidance, but if you look at the first three quarters of last year – Scott Barry – Credit Suisse: I assume –

-- our costs were effectively flat – Scott Barry – Credit Suisse: And I guess, Brian, I assume you’re referring to this comparable basis versus including Pullmantur.

Correct. Correct. Because I don’t have – Scott Barry – Credit Suisse: Okay. Well, I, you know, Pullmantur is part of the business, right?

Right. But it’s not in the prior year. So I can’t compare Pullmantur because they’re a tour company where you have substantial costs without any APCD (inaudible). So in order to compare ’07 to ’06 you really need to look at it on a comparable basis. Scott Barry – Credit Suisse: I’m just referring to the guidance that you gave in the first quarter of ’07. You gave net cruise cost guidance of, I believe, 4% to 5%. You came in above that level. And whether it’s due to Pullmantur or whether it’s on a comparable basis, right, Pullmantur was part of the business in the first quarter of ’07.

Correct. You’re correct. Scott, I can tell you that as I recall in the first quarter of last year, and I remember talking about this on the call, we had a difference in the components that we forecasted for Pullmantur between revenue and expenses. Scott Barry – Credit Suisse: Well, we can take it off line.

But that’s what was driving that. I can tell you overall we did see an ability to manage our costs, but I do want to caution you we’re not managing our business quarter to quarter. We’re going to do what we need for the long term and make the right investments. But I think there is a degree in which we’ve demonstrated we can offset (inaudible).

Actually, one other thing, Scott. This actually gives me a chance to just comment on surprises we didn’t discuss that and somebody called us last year too. The tour business is obviously a fundamentally different business and in many cases do more tours or less tours have significant increases in both the revenue and the expense lines, which tend to be unpredictable and have relatively modest effect with the bottom line. That is the confusion factor (inaudible) purely at the tour (inaudible) and that’s also going to be (inaudible). Scott Barry – Credit Suisse: Okay. Fair enough. Understood. Thanks.

Your next question comes from the line of Assia Georgieva (sp) with Infinity Research. Assia Georgieva – Infinity Research: Good morning. I wanted to congratulate you on an excellent job in terms of your management and forward guidance. Further to follow up on that Pullmantur question, if you look at the past year you have had the business for some time now. What are some of the problems that you’ve seen above prior expectations and then specifically some items that you can further work on in order to streamline that business and make it as efficient as your North American business?

Thanks, Assia. It’s Richard. I’ll comment. We’ve actually had a very positive experience overall. We see a lot more opportunities in terms of growing the business in markets we haven’t seen before. (inaudible) we’ve already shifted three ships into the Pullmantur brand in Spain (inaudible). We have also started a brand (inaudible) based on (inaudible) model and (inaudible) think that offers some terrific opportunities. We’re seeing some benefits also in Latin America which we think (inaudible), and of course we get the benefit of the strong Euro (inaudible). We have seen more difficulty in terms of (inaudible) platform we need to absorb that kind of (inaudible) in order to utilize the kinds of (inaudible) brand. So administratively that office type (inaudible) are much bigger than we thought they were and it’s taking us longer to turn those around. What we’re seeing them turn around, as Brian mentioned, a big change was started at the beginning of this year. So (inaudible). I think it’s taking us longer to get the back (inaudible) but we also see growth potential and the opportunity to go into new markets as better than expected (inaudible) than I was a year ago when we first (inaudible). Assia Georgieva – Infinity Research: Okay. Excellent. Thank you so much, Richard.

Your next question comes from the line of Pat Schaefer (sp) with Chartwells. Pat Schaefer – Chartwell Capital Investors: Hi, guys. You stated that booking trends have been and continue to be strong and that close-in bookings are also strong. I was hoping you could provide any colour on cancellation trends in the fourth quarter and thus far in January.

Hey, Pat. It’s Dan. We haven’t seen any change in cancellations. We’ve been really pleased with the bookings. They seem to be actually sticking quite well. If we had had any kind of increased cancellations in the fourth quarter we wouldn’t have been able to produce the kind of results that we did. Pat Schaefer – Chartwell Capital Investors: And that’s been consistent thus far in January as well?

Yeah, yeah. We’re very pleased with what we’re seeing. Pat Schaefer – Chartwell Capital Investors: Okay. That’s it, Dan. Thanks.

Your next question comes from the line of Rahad Mital with BlueBay Asset Management. Rahad Mital – BlueBay Asset Management: Hi. Just two questions really. First, if you’ve seen any trends in the geographical breakup of your sales origination, either in terms of where you get more value. And secondly, on the fuel prices maybe you could give us an indication of the levels at which you’ve had it relative to attached levels last year, if that makes sense.

Hi, this is Adam. On a macro basis your question on geographical sourcing, the story of our company over these years is clearly a shift in the direction of sourcing more from international markets. In fact, if you look at 2005 to 2008 in that period as a corporation we will have gone from sourcing under 15% from outside North America to sourcing over 25% from outside North America. So that’s the macro level. We don’t see anything on a micro level in terms of what’s happening in the wave that I would say is worth commenting on. Rahad Mital – BlueBay Asset Management: So the US, for instance, isn’t any weaker than you would have expected it to be?

No. And our guidance I would say reflects that. Rahad Mital – BlueBay Asset Management: Right.

As it relates to the fuel, we don’t break out the various contracts or even the average contract that we’ve hedged at for this year or last year, but I think we’ve given you enough in terms of where we are in terms of our hedge position and what our price of fuel would be going forward, so you can probably work with that and get reasonably close in terms of the type of hedging that we’ve been able to give. Rahad Mital – BlueBay Asset Management: All right. Thank you.

Celeste, we have time for one more question, please.

Okay. Your next question comes from the line of Henrik Schultz with Kaupthing. Henrik Schultz – Kaupthing: Yes. Good morning to you. Just a couple clarifying questions related to the surcharge. Firstly, could you comment a little bit about the timing of the implementation, not in terms of whether it’s going to be implemented by the 1st of February, but whether it’s going to be recognized in terms of revenue? And also, the net effect of the travel agent compensation. Whether, for example, the compensation will be paid anyway. Some details on that, please.

Okay. As it relates to the fuel supplement you’re correct. The first sailing that it impacts is February 1st. The revenue will be recognized as with our ticket revenue in the month that it’s actually earned. So when the ship sales we’ll recognize that. In terms of travel agent compensation we did announce that when we implemented fuel surcharge for any retroactive bookings that the fuel surcharge would apply to, we would be paying, I believe it was a $12 per booking administrative fee to the travel agency who had to go out and collect that on our behalf. But there’s similar taxes and fees that we collect. There’s not a variable compensation component (inaudible) fuel supplement. Henrik Schultz – Kaupthing: But this compensation would be payable regardless of whether the fuel supplement actually sticks, I take it.

We’ve agreed to pay a $12 per booking for the agents that actually collect the $12 for us. Henrik Schultz – Kaupthing: Okay. Lastly then, could you add some details about your plan for the two-week (inaudible) going forward in terms of additional bookings from that market and also marketing expense, marketing support plans, please?

You’re talking about the recently announced joint venture? Henrik Schultz – Kaupthing: Yes.

(inaudible). It’s early days and we still have to get the (inaudible) and so I think (inaudible) that process (inaudible) joint ventures (inaudible) have the joint venture speak on its own. But it’s too early for us to comment while we’re still finalizing (inaudible). Henrik Schultz – Kaupthing: Thank you very much.

Thank you all for joining us today. If you have any further questions or any follow ups or need some additional details Greg will be available throughout the day. And we certainly wish everybody a wonderful day. Thank you.

This concludes today’s conference call. You may now disconnect.

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THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!