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On Tuesday, Carnival Corporation (NYSE:CCL) reported its third quarter earnings and discussed the following topics in its earnings conference call. Take a look.
The Promotional Environment
Felicia Hendrix – Barclays: Good morning and good afternoon to Beth and Micky. First question is, Howard, I wonder if you could just touch on for a moment the promotional environment. We know it’s been heavy throughout this year. But as you’re looking towards the first half of ’13, just wondering if you could tell us what that looks like. Are you seeing a decline need to stimulate demand through promotions?
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Howard S. Frank – Vice Chairman and COO: Well, this is – Felicia, it’s a question that covers a number of different brands, but broadly speaking, I think it’s fair to say that in order to keep demand going, we have been and will continue to have a fairly heavy spend in promotions and sales. That seems to be driving the business, and if we do it smart and we do it selectively, I think that’s fine for us. But that’s been going on for quite some time. It really hasn’t changed. Now, look that will vary by brand. Some brands experiencing more demand right now; other brands, little bit slack demand depending on the markets that they are in, but they are pretty smart guys and as they see – if they see any kind of revenue fall-off or booking fall-offs, they are out there with their promotions in order to stimulate the market. (Indiscernible) answer the question any better than that.
Felicia Hendrix – Barclays: No, that’s actually helpful I guess to the crux of it. I appreciate that. Then just in terms of visibility, obviously, you said second – we all know when you look out that far, but has your visibility improved? I guess what I am really asking is what is the booking curve look like, is the nature of the business still very close-in? I’m again not so concerned about the rest of this year, but as we look to early ’13, is it still very close-in or is the booking curve getting extended it a little bit?
Howard S. Frank – Vice Chairman and COO: For certain brands it’s still close-in. You’re starting to see some evidence of it pushing out more recently because of the recent increase in bookings over the last quarter, but it’s still closer-in than it has been historically, so we’re starting and that’s been the pattern. It’s more or so the pattern in the European brands, we’re seeing it more on the European brands, but we’re also seeing a little bit of it, but not quite as much in the American brands.
Robin Farley – UBS: I wanted to clarify with you, Howard and then I have a question. I’m just looking at kind of the incremental rather than the cumulative booking. You made a comment about the last six weeks that the first half of 2013 looks higher. Was that in volume or in price or was that both? I don’t know if I completely caught the specifics of that?
Howard S. Frank – Vice Chairman and COO: Let me go back and check, but I think certainly it was in volumes and I think it will depend on the market, David, would tell you.
David Bernstein – SVP and CFO: We did comment in the press release. It was up 9% for the last six weeks excluding Costa, prices were in line with last year’s level and over the same period for Costa, we said 9% increases at lower prices.
Robin Farley – UBS: Then just looking at Costa and what’s happened this year, obviously, it looks like your full year guidance didn’t change that much for Costa, right; but sort of the non-Costa brands, it’s gotten a little bit and Costa yields maybe still being down that 15% to 20% for the year. Can you quantify how much of that you expect to be occupancy decline for the Costa brands this year versus price, because just thinking about recovery in 2013 that the occupancy, it’s easier to see that coming back without having to even think about raising prices, just kind of thinking about that part of the recovery?
Howard S. Frank – Vice Chairman and COO: Yeah, I think – and David is looking up the occupancy declines year-over-year. But when we look at that when we go beyond into the second quarter and third quarters and fourth quarters, a good piece – I think we’re looking for both prices and occupancy increases. Clearly, we expect occupancies to get back to more normal levels for the Costa brand. But I think we’re also expecting increase in pricing because of the easier comparisons. But a good chunk of what we lost was – in 2012 a good part of what we lost was occupancy, because we stop – we lost all the bookings during wave season once it started. For Costa, they didn’t really get back into the market any significant way later on in the spring and then still not in a very significant way. So, it was a tough year for marketing for Costas. So, it has been a struggle. But we’re starting to see the turnaround, but we won’t start to really see the numbers until the second quarter of 2013.
Micky Arison – Chairman and CEO: The occupancy drop was 5% for the year, but it was over 11% and almost 6% for the second and third quarters. There was very significant occupancy hits in the second and third quarters and third quarter obviously the most important.
Howard S. Frank – Vice Chairman and COO: Yeah. As I mentioned in the fourth quarter, we’re back with the same occupancies year-over-year, so you can see that’s the biggest hit within that second and third quarter.
Micky Arison – Chairman and CEO: We’re virtually flat within the fourth quarter with occupancy.
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