Jim:      Mr. Fain, welcome to Mad Money.

Richard:       Hi, Jim. Nice to be here.

Jim:   Now, you are… this is a great conference call, I have to tell you, because you talk about, I have to quote this… “admittedly we are providing our guests more value than we would like to these days”… and “pricing continues to be miserable. But at least it seems to be at a miserable level that is stable”… alright, tell us how you can come out and tell the truth like that and then give us the idea that miserable could actually be… how is miserable good? How did that happen?

Richard:       Yes, I know that it sounds unusual. Maybe it is unusual for somebody to be honest. But the fact is, everybody thought that it had been so bad and I think that is why the shares have been so terribly oversold. The fact is that we continue to fill our ships, not at the top prices that we would like to be doing. But at a stable level, that obviously as we come out of this recession, puts us into an even better position to do well. So, even though it was much less of a quarter that I was hoping for, and this year looks to be earning only half of what we did last year. It is still so much better than anybody would have expected from a company like ours in a discretionary business, and the future looks good. I thought it was a good time.

Jim:   One of the thesis that we have been working under is the market bottomed in March, because it forecasted a turn in the economy. And the turn, I thought was subtle, but the more work I do on April numbers of companies like yours, I realize that April actually was a relatively strong month in this country. You are pretty much on board with that, aren’t you?

Richard:       We have really said that the market seems to have stabilized. And obviously when you come down off of a really steep downward trend, and then you are able to stabilize, that is a precursor to going up. And that is where I think we will be going.

Jim:   Alright, there is kind of like a Book of Job thing going on with Royal, just when things looked like they were bouncing back you got the swine flu. Are we actually mentally over that in this country already?

Richard:       Well, we hope so. Obviously it is the sort of thing that we look at very closely, and everybody is very attuned to. But I think that what you are now seeing is that people realize that it may not as be as serious as was first feared. I think it was right to overreact. The right way to deal with a something serious like a possible illness, is to overreact to it. But now we are getting a little more information, and I think that that should make us all feel a little better.

Jim:   Absolutely, Mr. Fain, one of the things that the shorts tell me is that look they never could borrow, they are in trouble. You got a 12 year fixed at 5.82%. That is actually what I regard as what triple A companies could borrow at, isn’t it?

Richard:       It is not bad. You know, I was asked what do you do when something like this happens to improve your liquidity. And in some respects, it is too late when the liquidity situation happens. The reason that our liquidity situation is good is because we took action a year ago, two years ago, three years ago in some cases. And that is why we are able to pull off this kind of financing, even in today’s market.

Jim:   Okay, one of the things that you describe and I want our viewers to know, you talk about how you make money from customers. And it seems like you make money, it is like pennies now, vs. dimes and nickels a couple of years ago. Isn’t it?

Richard:       I think that we continue to see money from all different sources. And I think we are seeing people are paying less now, but not that much less. And our onboard spending has maybe a little bit down, but really just a small amount. So I think this gives me comfort for the future.

Jim:   Now, one of the things that I have found amazing, and I do not know your industry well enough, but I live to learn from CEO’s. You say at one point Alaska was hot, and then another area gets hot, and then another area. How does it, how do you find out what is hot? And how do you have the ships ready for what is hot?

Richard:       Well, first of all the good news is that we get a lot of our business in advance. So we have a good deal of visibility, the word that you used, well into the future. So we can see months in advance how people are reacting. And the other thing that is unique about our business, and it is totally unique, is our assets move. If Alaska is hot, we can go to Alaska. If Alaska cools down as it has, we have the ability to move elsewhere. And one of the things that is happening is the overseas markets are beginning to virgin. So, we have been so focused on the United States that we have not spent as much time as looking abroad. And what we see is that our product is very attractive to them. Cheap to them because their currency has become more valuable. It is a great opportunity and a great flexibility.

Jim:   Alright, let me ask you one last question. It has always bothered me, look I was a hedge fund manager and I used to short stocks all the time, why is it… look I know that you are discretionary, but I also know your price point, which is a lot cheaper than a lot of vacations but yet people still take vacations… why is it that anytime the economy goes bad, they have decided to just pound your stock into oblivion? Is there something that I am missing given that your balance sheet is okay and the numbers are okay? Tell me what I am missing.

Richard:       Well, you probably have not made money betting against us. Actually you are the expert on stocks, our focus is running the best cruise line that we know how. And all I can say is that whey you bet against us, you better be sure what you are doing. Because by and large we have proven you wrong.

Jim:   Right, because there is not a lot… look I know last year was tough, but there is not a lot of companies that I follow that are up as much as you are in 2009. Congratulations, it was nice to talk to you.

Richard:       Thank you very much, nice to be here.