RCL
#Hi, <UNK>.
We're obviously still in our planning process on both the revenue and cost standpoint, and we will give guidance on cost next year.
But I think that you should just generally expect that our focus and rigor on cost has really seated well into the culture of the Company, and you should expect us to behave similarly going forward.
When we gave the Double-Double, and I would remind you that it is both net income and ROIC, we didn't caveat that with what actions we would take or the market takes.
We're not adjusting it for fuel, foreign exchange, share repurchases, or anything we might be doing.
We really just said it's the target.
The one ---+ the earnings per share would be impacted by share repurchases, but the ROIC, I would point out, is not impacted by share repurchases as well.
No.
We tried to be explicit.
We have two targets and they are exactly what we've said, which is adjusted earnings per share would double, that is it would get to $6.78 by ---+ for the year 2014, and ROIC would reach double digits, i.
e.
that it would be 10.0001% or better by 2017.
And those are our two targets that we're using internally.
Essentially, we will take what actions we should operationally, and the world will give us what it will give us, whether that's foreign exchange gains or losses.
It's been bad, but whatever it is, fuel, whatever it is, et cetera.
Yes.
So I think your description was accurate ---+ that we think that the price integrity program probably helps us on the rate but hurts us on the volume, and so the net effect of that in 2015 and 2016 would be negative on our total revenue.
So I think your articulation was exactly correct.
In terms of the actual occupancy that you are experiencing, especially by quarter, I think there are so many other factors that the price integrity program would not be a significant part of that, and so to the extent that it's down or up in any quarter, the ---+ that will be really driven by our yield managers and our yield-management system, not ---+ the price integrity program would be a de minimus part of that.
Hi, <UNK>, its <UNK>.
I think the way that you need to the look at it is, is that, first off, we're talking about very, very small numbers here in terms of what we believe the impact is of this program on a negative basis.
And we expect to see that continue, because, you know, these programs are continuing to rollout to more products and to more markets.
And, as we've said previously, we expect that to kind of lap and move more into a positive direction in 2017.
When we talk about the effect, we really do talk about it on occupancy basis, because, as <UNK> mentioned in his remarks, it's what we can measure.
But we do think that this is really changing the conversation with the guests who have booked and behaved in the way that we wanted them to, and also helping us extend out the booking window to position us for stronger pricing.
Thanks, <UNK>.
Hi, <UNK>.
It's <UNK>.
I'll take the Pullmantur question.
Really, the majority of the write-off or ---+ again, it was a non-cash write-off and it was relating to intangibles that were not amortirizing or depreciating in any way.
There is a portion of that, that did relate to some of the ships.
It will probably help us by a couple cents going forward, because it's not just about the write-down, it's also some adjustments in the residuals as we look at those assets going forward.
But it's a couple cents.
It's not material.
Hi, <UNK>, it's <UNK>.
I'll answer the question on the China and the distribution markup.
Yes, I think there was a period when we had the MERS outbreak in Korea, and then we had the triple typhoon impact, and then of course we had the explosion in Tianjin, so we had a period of about ---+ I'm going to guess it was about three months or so where it was a little wobbly because of all of these events.
And then, of course, we had ---+ many of the distributors had this charter or group resell relationship with us and I think many of our competitors.
So, during that period I think some of them incurred losses that didn't flow through to us.
But, of course, it impacts us because they're long-term partners, and so we've worked on strategies to help them throughout and to ensure that we're in a good place for 2016.
But it didn't really have a financial impact to us.
And, of course, the model is really quite different in China in relation to the distribution.
But one of the things that we've been actively working on is expanding the distribution and opening up that channel through various strategies, which of course is a ---+ it's a long-term play, but we feel like we're on a good track to broaden that channel.
Hi, <UNK>.
Yes, just to clarify, it's really a combination of Latin America and a little bit lighter on the Australia-New Zealand product, just due to the level of capacity.
That's in there, that's driving the differential.
Thanks, <UNK>.
Sure.
Hi, <UNK>, its <UNK>.
As it relates to the capacity going into the Barcelona market, first off, for Harmony it's a really globally sourced product while ---+ and it doesn't really compete directly with Pullmantur and us putting some more capacity into Spain.
And, by the way, when we say you put more capacity and focus on Spain, it doesn't necessarily mean it's sailing out of the Western Mediterranean.
It could be sailing out of different places, sourcing guests from Spain.
And then when you look at the European customer, we've actually seen very good signs and trends that we're still early for the European products coming from Europe, as well as that continued strength we've seen over the past couple years from the North American consumer who has been highly attracted to European sailings.
Hi, <UNK>, it's <UNK>.
Yes, we're very pleased to welcome Jim to Royal Caribbean International a few months ago, and he's been very busy.
You may have seen ---+ we just launched our new campaign, Come Seek, for Royal Caribbean International.
That's gone literally into market this week, and hopefully you'll see us go a slightly different twist towards it.
And the way we're approaching the market with this idea of Come Seek, and the imagery and the TV commercials, radio, and digital that we're putting into the market, has tested exceptionally well, not only with existing cruisers, but probably more importantly with new to cruise.
So, part of our focus is on the new-to-cruise market, and I think you'll start to see that in the marketing that comes from Royal Caribbean International over the coming period.
And that really has been led and directed by our new CMO.
I'm quite happy to, actually.
I think one of the things that has us feeling pretty good is just how well our brands are being received in the marketplace, and Celebrity is a good example of that.
<UNK> here ---+ is here.
He can tout his ---+ and has, how his brand is doing.
But if Lisa were here she would say exactly the same.
It's really ---+ and <UNK> mentioned that he has a new ad campaign coming out, so has Lisa, and she ---+ hers has actually been out for a little longer and it's being received quite well.
So I think we are really seeing ---+ except for geographic issues like Latin America, we're really seeing our brands doing quite nicely in their respective markets.
And the Celebrity brand has been holding its own.
And I think ---+ now, it's also been affected by the geographies because it, for example, has had more volume, particularly in the Eastern Mediterranean, this year.
So you will see changes ---+ we see changes between brands.
We see a lot of changes between brands and between different geographies, which is just the normal fact of doing business, and I think we sometimes read too much into it, particularly because we've historically been so surprisingly accurate.
I think for us to come in looking like ---+ and the year is so close to being over, we're pretty confident about looking to be in the range of a 3.5% yield improvement.
That is essentially exactly where we predicted at the beginning of the year, and I wish I could say that we were that accurate.
It's simply the margin of error in these things is a little bigger than that, and we have been fortunate that the pluses have offset the minuses.
But, overall, I think that's not unusual for us, and I would expect that to continue.
Lori, we have time for more question.
<UNK>, could you clarify what you mean by ratios.
I'm sorry.
Okay.
Great.
We are still very much focused on getting to 3.75 times of net debt to EBITDA, and we see ourselves progressing towards that towards the end of next year as we consider this buyback.
So we see this buyback a little bit of a ---+ as a timing opportunity in terms of buying back shares.
I would just add, I think as <UNK> said earlier, we would reiterate ---+ our objective is to get to that investment grade.
And, obviously, almost anything that we do that involves capital, including ordering ships or buying back shares, makes it a little more difficult, but we think that the move towards investment grade is so inexorable that we can balance those things.
No.
You know, it's interesting, because one of the interesting features of our business is CapEx tends to come in big bunches, and whether a ship delivers in January or December makes a huge difference on the numbers you just quoted.
We don't tend to look at it that way.
I think ---+ we made a decision.
2017 was a year that had no ship deliveries, but then we start having deliveries again in 2018.
So I think that's simply a coincidence that 2017 worked out that way.
Great.
Thank you for your assistance, Lori, with the call today, and we thank all of you for your participation and interest in the Company.
Carol ---+ and Laura will be with her ---+ will be available for any follow-ups you might have during the day.
And I wish you all a great day.
