In preparation for CCL FQ1 2014 earnings release tomorrow, we’ve put together the recent pertinent forward looking company commentary.




  • Very pleased that the surveys show a significant recovery in the brand perception at Carnival Cruise Lines since the voyage disruptions...expect to benefit from it going forward.
  • Carnival recovery is a little bit ahead of that two to three-year timeframe that is conventional kind of thinking concerning recovery of brands that have suffered incidents.

1H 2014 TRENDS

  • Fleet-wide volumes during the last 13 weeks have been running well ahead of the prior year, outpacing capacity at prices that are lower.
  • Despite the recent high volumes, the cumulative bookings for the first half on a fleet-wide basis are still behind at lower prices.
  • Expecting lower yields in the first half
  • NA brands are impacted by challenging comps from the first half of last year, as they were booked prior to the voyage disruptions that occurred in February.  EAA brands face ongoing economic environment challenges in Southern Europe, the loss of the attractive Red Sea program and a close-in booking curve that is impacting their first half of '14.

3Q 2014

  • Cumulative fleet-wide booking status is that occupancies are similar to last year while pricing is flat.
  • While expectations for this quarter are tempered by the large capacity increase in the Caribbean, with a solid cumulative booking status, better booking patterns and the first half ramped-up advertising efforts, expect positive yields in 3Q


  • What is built into the 2014 guidance was yields up a little over 1%.
  • Some of CCL's operating companies are continuing to roll out the all-inclusive drink program, the high-end photography and other things.


  • Behind on both price and occupancy


  • Surveys were also very encouraging. They showed an improvement in brand perception.
  • Seeing lifting in yields and occupancy in Costa, but the recovery may take longer than the two to three-year norm


  • Behind on price but well ahead on occupancy.  


  • Seeing a sequential improvement in YoY pricing in each quarter from the first to the third quarter for this program.  Booking by volumes for these European programs for the last 13 weeks have been nicely higher as well.


  • The yields in Asia are a little bit below the overall corporate average. Have talked a lot about a continued expansion into Asia.
  • Returns in Asia at the moment aren't where CCL would like them to be


  • Expect cost per ALBD to be up only slightly for 2014
  • Found ways to do some of the vessel enhancement and service, thereby reducing dry-dock days in 2014.
  • Concerning advertising, CCL clearly invested heavily in Carnival, but also invested across a number of other brands to generate demand. And that is continuing into the first quarter of next year. For the full year CCL'll be substantially ahead in 2014 in total advertising spend versus 2012.
  • Expect net cruise cost excluding fuel to be flat to half of inflation in the long term...that's a good starting point for guidance for 2015 

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European Banking Monitor: Russia Moving To The Back Of The Stove

Below are key European banking risk monitors, which are included as part of Josh Steiner and the Financial team's "Monday Morning Risk Monitor".  If you'd like to receive the work of the Financials team or request a trial please email .




European Financial CDS - Swaps mostly tightened in Europe last week, as the banks took their cues from the sovereigns. Clearly the concerns over energy supply disruptions from Russia/Ukraine are shifting toward the back burner. Even Russia's Sberbank cooled off, rising just 1 bp week-over-week.


European Banking Monitor: Russia Moving To The Back Of The Stove - a.banks


Sovereign CDS – Sovereign swaps were generally tighter last week. Portugal, Italy and Spain were the big winners, tightening 21, 14 and 9 bps, respectively. Countries going the wrong way included Japan and France, both 1 bp higher. 


European Banking Monitor: Russia Moving To The Back Of The Stove - a.sov1


European Banking Monitor: Russia Moving To The Back Of The Stove - a.sov2


European Banking Monitor: Russia Moving To The Back Of The Stove - a.sov3


Euribor-OIS Spread – The Euribor-OIS spread (the difference between the euro interbank lending rate and overnight indexed swaps) measures bank counterparty risk in the Eurozone. The OIS is analogous to the effective Fed Funds rate in the United States.  Banks lending at the OIS do not swap principal, so counterparty risk in the OIS is minimal.  By contrast, the Euribor rate is the rate offered for unsecured interbank lending.  Thus, the spread between the two isolates counterparty risk. The Euribor-OIS spread tightened by 1 bps to 13 bps.


European Banking Monitor: Russia Moving To The Back Of The Stove - a.euribor


Matthew Hedrick


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Video | How to Play Inflation


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