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"We were encouraged to see revenue yields turn positive for the first time since late 2008. Improving revenue yields combined with an 8 percent capacity increase and ongoing cost control efforts offset significantly higher fuel prices. Advance bookings are holding up reasonably well and remain in line with our expectations. We believe this will lead to earnings growth in both the third and fourth quarters. The summer season, which is our strongest and most important quarter of the year, is shaping up particularly well.”

- Micky Arison, Carnival Corporation & plc Chairman and CEO


  • Since March, booking volumes for 2H2010 have been running slightly ahead of the prior year at higher prices.
  • 2010 Guidance
    • Net revenue yields (constant dollar):  +2 to 3% (unchanged from previous guidance)
    • Net cruise costs excluding fuel per ALBD (constant dollar): -2.5 to -3.5%  (- 0.5% from prior guidance)
    • EPS: $2.25 to $2.35 (unchanged guidance, Consensus is $2.31)
    • Fuel costs: increasing $440MM YoY or $0.55 per share (previous guidance: $483MM or $0.60 per share)
  • 3Q 2010 Guidance
    • Net revenue yields (constant dollar): +5 to 6% (0 to 1% on a current dollar basis)
    • Net cruise costs excluding fuel per ALBD (constant dollar): 1 to 2%
    • EPS: $1.43 to $1.47 per share (Consensus is $1.50)
    • Fuel costs: increasing $74MM YoY or $0.09 per share


  • Volcano ash disruptions impacted yields by half a point
  • Capacity for European Brands grew 13%; NA brands grew 4%
  • Net onboard/other revenues yield: increased 3.1%
  • Given 2Q performance, onboard & other revenues yields expected to increase sequentially for reminder of the year.
  • Decline in ex. fuel net cruise cost per ALBD attributed to lower dry dock expenses, economies of scale, a low inflation environment, and timing of SG&A expenses
  • Fuel consumption per ALBD declined 3.3% in 2Q
  • $39MM charge for British pension fund drove down 3Q projections for net cruise cost excl. fuel ALBD.
  • Double-digit price increases in NA;  strong volumes for Caribbean; Alaska had lower booking volumes but higher pricing and low levels of inventory remaining
  • European: booking volumes strong with little remaining inventory
  • For last 6 weeks overall bookings are up YoY. With NA brand trends trailing those of Europe.  European consumers seem more resilient to geopolitical and economic risks
  • For 3Q
    • fleetwide capacity up 6.3%
    • Pricing in Mexican Riviera is improving
    • Expect pricing to be flat in for European brands
  • For 4Q
    • fleetwide capacity up 6.1%, up 1.7% in NA, and up 10% in Europe
    • occupancy slightly lower
    • European brands local pricing will be higher YoY.
    • revenue yields should be up 3% in current dollars
    • North American brands in the fourth quarter are 50% in the Caribbean with all other itineraries individually below 10%.
    • European brands are 73% in Europe in the fourth quarter with all other itineraries individually under 10%.
  • For 1Q 2011:
    • Overall, pricing higher YoY; occupancy slightly behind (similar to 4Q 2010 trends)
    • Caribbean pricing: higher prices on higher occupancy; same with Mexico Riviera.


  •  For 4Q, surprised at lower occupancy YoY?
    • Bookings pace is good without giving away any price, less concern on occupancy; pretty confident on yield guidance; pace has picked up up since a hiccup in May. Focused on getting better pricing.
  • Bookings trend since close of 2Q:
    • All categories except for casino were up in 2Q; expect trend to continue for rest of year.
  • Pension charge in 3Q: has been in guidance since December--may have been changed by a few million though
  • Gulf (Florida)/ Southern Europe bookings trend:
    • Gulf cruises unaffected by oil spill; slight increase in fuel consumption; no slowdown in booking pattern
    • Italy market: no change in demand; "Europe is performing fantastically"
  • Low bond yields, refinancing in future?
    • 7 export credits--even lower yields than most bonds; not interested in refinancing at this time.
  • Advance bookings breakdown:
    • As we get bigger in Europe, business will be more seasonal; lower earnings in 1Q and higher earnings in 3Q for European business
  • New build and domestic brands:
    • two orders for Carnival cruise line and two orders for Princess
    • plenty of capacity coming for NA brands
  • Premium brands in NA were a little affected by adverse environment in May (e.g. stock market decline) but not in Europe. On-board revenue yields higher - with NA brands doing better than European brands in the midst of European concerns.
  • North America new deal standards (Emissions Control Area) in middle of 2012--potential impact on fuel costs:
    • fuel costs impact will be $50-70MM dollars (worst-case scenario). (unchanged from previous guidance)
  • Discontinuing air transportation bookings:
    • Carnival cruise lines discontinued only one part of the air service--but very small impact. (other brands did not change air transportation bookings)
  • Booking curve for European and NA customers (length, inventory):
    • About same levels as last year.
    • For 3Q 2010, historically, 85-95% booked; 4Q 2010: historically, 55-75% booked; 1Q 2011: historically, 30-50% booked--still in those historical ranges.