Good morning, everyone. And welcome to our Third Quarter 2018 Earnings Conference Call. I'm Arnold Donald, President and CEO of Carnival Corporation & Plc. Today, I'm joined by our Chairman, Micky Arison; as well as David Bernstein, Chief Financial Officer, and Beth Roberts, our Senior Vice President, Investor Relations. Before I begin, please note that some of our remarks on this call will be forward-looking. Therefore, I must refer you to the cautionary statement in today’s press release. We delivered a record third-quarter earning $1.7 billion on revenues of 5.8 billion, the highest quarterly performance in the history of our company. Adjusted earnings of $2.36 per share were higher than last year's record breaking result of $2.29 and $0.09 above the midpoint of June guidance. Once again, our operating performance overcame fueling currency moving against us this time by a further $0.02 per share compared to our June guidance, bringing the total drag to $0.08 for the quarter compared to the prior year. Strong execution will deliver a further $0.09 of improvement to the bottom-line this year compared to our June guidance, more than overcoming a further $0.06 drag from fueling currency, enabling us to increase our full-year guidance by $0.03 from a range of $4.15 to $4.25 to $4.21 to $4.25. Again, these results are testament to the effort of my fellow very passionate team members across our company globally who go above and beyond every day and of course also a testament to the tens of thousands of travel professionals who so enthusiastically support our brands. On another note, since we released our sustainability report this quarter, it is appropriate to point out the combined efforts of our 120,000 plus team members also furthers our strong commitment to sustainability, helping to achieve a 26% unit reduction in carbon…

Thank you, Arnold. Before I begin, please note all of my references to revenue, ticket prices and cost metrics will be in constant currency, unless otherwise stated. I'll start today with a summary of our 2018 third quarter results then I'll provide an update on our full year 2018 guidance and finish up with some insights on booking trends and a few other items to consider for 2019. As Arnold indicated, our record adjusted EPS for the third quarter was $2.36. This was $0.09 above the midpoint of our June guidance. The improvement was primarily driven by two things, $0.06 from increased net ticket yields, which benefited from stronger pricing on closing bookings on both sides of the Atlantic and $0.03 from lower net cruise cost excluding fuel due to the timing of costs between the quarters. Now let's look at our third quarter operating results versus the prior year. Our capacity increased 1.7%. Our North America and Australia segments were commonly known as our NAA brands were up approximately 3%, while our Europe and Asia segment, more commonly known as our EA brands were down about 1%, driven by two ship sales earlier in the year. Our total net revenue yields were up 2.9%. Now let's break apart the two components of net revenue yield. Net ticket yields were up 2.2%. This was driven by a number of factors. First an increase in our NAA brands in Alaska on like for like itineraries which had higher yields than last year's record levels. Second, increases in yields for our NAA itineraries in Europe. And third, increases in yields for our EA brands in Europe and China. These increases were partially offset by a decrease in our NAA brands itineraries in the Caribbean as included in our previous guidance due to…

Thank you, David. Operator, please open the line for questions.

[Operator Instructions] We will get to our first question on the line from the line of Steve Wieczynski from Stifel. Please go ahead.

A couple of questions here with you. So, I guess somewhat confusing part of your commentary is around the booking since the first half of September, which you mentioned are both upon on pricing load versus what you have seen since June, and I know you talked about that mostly related to the Caribbean and the easy comparisons there because of the hurricane activity. So I guess the question is, when you look at 2019 and I think David helped us here a little bit, but was there any way to get a -- give us a little bit better picture of what maybe the rest of the world kind of looks like and maybe a little more detail versus what David said, kind of excluding the Caribbean? What I'm getting here is trying to get a clear picture of like-for-like markets, if that makes sense?

Yes, I'll do that and I think I'll just take the opportunity now to do a broader comment on bookings and yield. We do achieve a premium on new ships, but you guys have to remember we have nine brands serving differentiated markets. And there is a range of yields across the brands which also influence overall yields, especially in booking periods. So while you get a yield benefit within a brand that doesn't necessarily translate into a mix benefit to overall yields. So to give you an example for brand that is below the corporate averaging yield brings on a new ship and that new ship has a premium, but the premium is still below the corporate fleet average. The brand does better on yield, but overall corporate yields are negatively impacted. While we're making more earnings because essentially even if average yields are held back by mix, we still are growing earnings. Now of course, and we create demand to drive yield across every ship and all the brands and we are receiving an earnings benefit as new ships are more efficient. So, we focus more on returns and earnings than yield. And when looking at booking trends, there is a plethora of things you have to consider, when you look at yield, especially year-to-year comparisons. So demand, other than demand including relative capacity changes among the brands like I just talked about. Itinerary changes both destination and duration, management of the booking curve, each brand optimizing its own booking curve, timing of charters, mix of value packages which impact on board ticket price which is in bookings -- ticket prices of bookings versus onboard yield, which comes later when guests are onboard. And just to give you a little flavor I'll let David comment on the rest of world, because I know people are concerned for some reason around capacity, but Western Caribbean has the highest capacity increase in the Caribbean for us, but collectively across our brands is up. Carnival is the only brand maybe in the industry that is year round in the Caribbean with capacity year round. And Carnival has increase in capacity next year and is up on occupancy and on yields in the Caribbean. And so when you look at a yield for us, it’s a composite of a lot of different moving parts, and in the end, we are focused obviously on driving earnings ultimately and the fact is, with capacity, we are less reliant on absolute yield movement. But obviously, we are still going to focus on growing yields. So with that, David, go ahead and talk a little bit about the rest of the world.

I did in my prepared remarks I mean I was very clear in terms of all the major programs were up in terms of pricing for the quarter in terms of booking trends, except the Caribbean. Now, one is the things that I want to make sure everybody understands is the booking period we’re talking about is the first, bookings for the first half of 2019. So during that period, we're almost 40% in the Caribbean. And if you go back to what we were talking about in June, we said bookings volumes prices were in line and now yes, we did say booking volumes prices were down. But back in June, we were talking about the back half of 2018, we had the Caribbean only represented like 26% or 27% of the total in the back half of '18; and as the Caribbean represents a bigger percentage, you just see the weighted-average. Now, we have now lapped the booking issues in the Caribbean, the weather impact, and we talked about having September the booking prices on the booking volumes were higher. And so, the comparisons are different last year was weather impacted. And so we're in a much better position as we move forward. When you look at the full year 2019, there's a lot of positive there, I mean you look at the European program for the full year. And we booked ahead of the prior year on occupancy at higher prices and the same thing is true for Alaska, and these are markets where, when you look at the capacity increase our 4% capacity increase or 4.7% next year, we do have quite a bit of capacity increase in both Europe and Alaska, and we're seeing great booking trends, we're ahead at higher prices. So, we're very confident and that's what gave us the conclusion, as I said in my notes that we expect solid revenue yield improvement in 2019.

Okay got you, that’s a lot of good color thanks guys. And one more quick question, I’m not sure you’re going to answer it but, David you talked about, I think in your commentary you talked about how when you look at kind of the full year next year for '19. I can't remember the exact adjective you used, but some are long of healthy yield growth, and you talk about the first half being a little bit weaker relative to last year back half of the year being very strong. So I guess when we sit back and 12 months from now, is it still possible that you can -- you'll be able to grow the full year of yields in a similar position to what you could do or what you're going to do this year?

We’re certainly going to work very hard to do just that and every brand is focused on that. And that’s clearly what we’re working on. At this point, we’re not giving guidance for next year or anything but we know you guys have just trying to give you some directional insight. David.

So, one of the things that we're talking about for the first half of next year is, the fact that we had very, very strong comparisons from prior year comparisons. You know in the first quarter of 2018, we achieved net revenue yield growth of nearly 4%. The Caribbean was nearly half of our deployment in the first quarter, and since it was so well booked last year in the fall when, it had very minimal impact from the weather disruptions. So we did have nicely higher yields and that's a headwind in the comparison in the first quarter of 2019. So, we are expecting sequential yield improvement in the Caribbean in the fourth quarter and again in the first quarter, and that's with significant capacity increases in both quarters in the Caribbean. And when you look at the second quarter, we achieved net revenue yields that were nearly up 5% and that was with a challenging Caribbean and that was more than offset by yield growth of 8% in all other programs. So the first half of 2018 was a great yield improvement for us and with those challenging comparisons and not lapping the Caribbean booking impact until the second quarter, we gave you our best guess for the first half of the year. But as I said, we do expect solid GAAP net revenue yield improvements in 2019 and will give you more color on that in December.

Thank you very much. We'll get to our next question on the line from the line of David Beckel with Bernstein Research. Please go ahead.

So, it sounds like much of the concern around pricing is focused on the Caribbean still, but would it be fair to say since the last quarter that the conditions in the Caribbean in terms of demand and pricing are at least as good or better than they were last quarter? In other words, are things improving?

Yes, I think we keep saying that overall the yields we're achieving each quarter are improving, we see a sequential improving trend in yields and we see a sequential improving trends in the bookings it's just that, given the timing of the event and the way we will book from a booking perspective, we don't lap last year's comparisons as I said until September and from an actual yield perspective we're not going to see a lapping until the second quarter.

And then as I mentioned a lot of other variables involved in terms of mix of brands et cetera, when you talk about a region like the Caribbean, and so we see lots of evidence of strength and we don’t typically give brand by brand guidance or anything or even information. But I've already mentioned for example the Carnival brand which is the largest brand we have in the Caribbean has higher capacity for next season, is up in occupancy and up in yield already. And in the Western Caribbean, it is high capacity increase but up in yields. So, the Caribbean is strong and we've had record years there Carnival continues to outperform. We have a lot of other dynamics that are going they are making average yield number look a certain way as I tried to articulate earlier, but overall the Caribbean is strong. We do have some difficult comparisons, but we're growing our earnings there and we will continue to grow.

And as a quick follow-up to that you did make a great point about mix and non-comparable factors. If you were to strip some of the most obvious mix and brand and itinerary factors out, how would the position of the Caribbean look for first half? You've already commented on Carnival obviously.

I would just say in the last three months, we are booking more Caribbean because it's a bigger part of the base in the first half, and we are expecting sequential improvement in yield in the Caribbean at the end of the day. So, what you are seeing in that last three months is a greater concentration of Caribbean business booked.

And we will proceed to our next question on the line from the line of Jared Shojaian with Wolfe Research. Please go ahead.

So I want to go back to that first half '19 yield guidance. Your book position right now, you are ahead at prices that are in line, I mean I would think that should get better as time goes on if the guidance is implying about 2% or less than 2% you are planning for the fourth quarter. So can you just help me understand sort of the puts and takes there versus -- are you sort of guiding to what you have on the books right now and not really assuming that you get any sort of benefit from pricing starting to improve just with easier comparisons? Or how are you really thinking about that?

So basically, when you look at the first half of the year, given the historical ranges of where we are at -- and for the first quarter at this point we have always said 50% to 70% is booked and for the second quarter 30% to 50%. So what's on the books we said, it was the higher end of those ranges. So we are over half booked for the first half of the year, and that half is essentially as we said is with prices in line. So what we are looking at is, as we move forward to get to the yield improvement that we are guiding is the expectation that the bookings that will be coming in will be better than the prior year and we will get to a point that where, like we said something less than the fourth quarter revenue yield. There is also the onboard that’s part of the factor and remember, we manage the business not for one line item but manage the business to optimize the total net revenue yield between both passengers and onboard. And so, that’s part of the factor as that goes into the whole guidance.

Can you just talk about some of the differences you're seeing right now with your bookings and pricing for North American sourcing versus foreign sourcing? I mean it seems like the U.S. consumer is really strong right now. Are you seeing better trends from North American sourcing versus foreign sourcing right now? Or is it fairly similar?

We are seeing good strong bookings on both side of the Atlantic in terms of sourcing. I gave the comment in terms of the various markets in terms of where we book today. On both sides we see similar trends in the Caribbean but good solid strength in all of the other itineraries around the globe for around for all of our brands in both segments.

One last just quick clarification for me, it sounds like you guys are expecting second half '19 yields to be better on a year-over-year basis than the first half. Is that correct?

Yes, we did not say that. We just said solid net revenue yield growth for the year and we will give you more detail on the full year in December. We're very little booked at this point.

And we will go to our next question on the line from the line of Jaime Katz with Morningstar Research. Go ahead.

I'm curious if you have any commentary on China, there was a little spoken too and given than one of your competitors is exiting the market. I'm curious, if there are any trend changes that you have seen in recent periods?

I would say that first of all just keep in mind China is a small percent of the total. So, we always start with that. Clearly with less capacity in China going forward it creates an easier environment to operate in. We are going to have as I mentioned Costa Benicia, which is going to be Costa's first purpose built ship for China. So as we look ahead to next year, we have less capacity in the first half of the year, more capacity in the second half of the year. But China continues to be accretive for us. We continue with the same policy we had all along that as long as overall is accretive, we will have ships there if they are not accretive we move them out and right now is still relatively small part of our total. But it’s doing well because it is accretive.

And I think it’s fair to say in the last both in my prepared remarks this quarter and last quarter, I noted that part of the net ticket yield increase was due to increase in China. So, we have seen some favorable trends in the last two quarters, and as a result of all the things, we've been doing with the travel distributors and all the changes we've been making in China. So, we feel very good about the market and its direction.

And then, can you elaborate a little bit about some fleet changes that you guys are making, you're obviously moving back into Long Beach next year with your Carnival ship and Galveston you’re revisiting with a ship that was not there. Is there still, do you guys still feel like there is a significant opportunity set to penetrate more U.S. markets that have maybe been underserved to support the demand for the oncoming capacity increases?

Clearly, one of the strengths of the Carnival brand and in our, the other U.S. based brands is being able to access more the market as a drive market. And so that’s been an ongoing approach for the brand that is proven successful, believe we're up to almost 18 different U.S. points for Carnival where they see all up in U.S. And so we continue to look for effective itineraries that guests want to go on but giving them easier access to get to the ships and it's an ongoing part about what strategy for Carnival and to some extent for our North American brands.

And it's not unusual to see us move larger ships into market as the market develops and to also give people an opportunity to go on a different ship, so it’s a normal part of the overall strategy that we've engaged in over time.

And then the housekeeping note the 4.7% capacity growth next year is with the four ships coming out, correct?

Correct.

And we will get to our next question on the line from the line of Robin Farley with UBS. Go ahead.

Just going back to your yield guidance for next year, and I think you guys have very consistently delivered yield growth like 100 to 150 basis points ahead of what your initial guidance is this year and sort of in the last two or three years. So fully appreciating the conservatism and all of that, just when we think about the comments, it sounds like September not surprisingly right things booked since then showing higher price and higher volume given the comp, and I know you are not giving guidance for the second half of next year, but maybe you can tell us how much of Q2 would typically, in other words from September forward, how much of Q2, would typically be booked? In other words if Q1 is mostly booked before the September less opportunity for the kind of what would be your yield growth in kind of the post hurricane with the benefit of the comps in it, not in Q1, but in Q2 will most of that be booked from September forward? And then the other thing I think that Arnold did say something like full-year growth would be weighted to the second half of the year, and just based on what you've said, isn't it reasonable to think that your second half year growth would be higher than the 2.5% rate that you are kind of seeing might be the top of your initial guidance, at least, simply because both you have less credit exposure again in the second half and then just also because most of that would be booked in this sort of easier comps that started two weeks ago?

Robin, good morning to you, first of all my comments were on earnings much more so than yields in terms of the second half next year that's because a lot of the fuel and currency impact that we are currently seeing, is occurring in the first half of the year, that's part of it also because we tend from a spending standpoint to spend money in advance of the season of doing wave et cetera. And so, our cost would be more weighted in the first half of the year than the back half. So, it was that comment. But real quick before David comments, just a couple of quick things, the Caribbean has been very good and is strengthening further, and I hear feel the tone that people think there is a big challenge or yield risk in the Caribbean et cetera. And the reality is, we have had multiple periods where we've been ahead on occupancy and lower on pricing, and I remember couple of years ago when people were concerned about that, and we turned out just fine, because a lot of this is also managing the booking curve is yield management. So, it's when you time and some of the other things I've mentioned, when you have charters, what your mix is of guests in terms of people who have a higher propensity to stay on board and you attract the most people on. All those things impact as well as for us our mix if we have a lot of ships coming in from brands that are lower yield overall than say Carnival brand for example our fleet average that will give us a weighted yield picture even though we are growing earnings. And over time that's what tends to wash out and correct itself you get on board revenues will contribute to yield et cetera. So, we don’t want to create any image that there is a struggle in the Caribbean because there isn't, but we have record growth we're building on strength there is details in comparisons. But then they were really focused on growing our earnings even with our yield management things that we do, and we've been delivering and we intend to deliver. So go ahead, David.

So I think I alluded to before in terms of the bookings, the first quarter historically at this time 50% to 70%, and the second quarter 30% to 50%. And we've said before, we're at the high end of the historical range, so we just use the exact number for illustrating purposes there is still 30% left to go on the first quarter and 50% left to go on the second quarter. So, clearly, while they are both in line for the first half is more opportunity in the second, but as we have always said before Robin, we give you our best guess on what we think will happen. The ticket is three quarters at the total and there is also onboard, and there really isn't advanced bookings on that. So, we are giving you our best guess for the first half of the year at this point.

And my turn by the way that I wasn’t suggesting a concern about the Caribbean and I was more suggesting that you have been really conservative. But it's certainly…

I actually wasn’t speaking about you Robin, thank you.

So just bottom line is the majority of second half bookings will take place in this period of where this post September volume up double digits and pricing higher…

Yes.

Absolutely.

Yes, absolutely.

So, it seems reasonable to think that second half growth which you are not saying that I'm just throwing out there. Okay, thank you.

Thank you, Robin.

And we will go to our next question on the line from the line of Felicia Hendrix with Barclays. Please go ahead.

You guys have given us a lot of color which I think is very helpful and particularly emphasizing the point that there is nothing wrong in the Caribbean, so thank you for that. David just to reiterate this, when you gave market and segment color earlier in the call and you talked about in the first half the NAA brand, the Caribbean ahead on occupancy at lower prices and the same for the EA, that’s simply a function of kind of what you have already been talking about in the release right, but since June booking volumes for the first half have been running significantly. I mean that’s not really reflective of the improvement that you have been seeing in September, correct?

Yes, correct, it's reflective of the fact that the prior year comparison was not weather impacted and so that reflects in the comparison.

Okay great, super clear, and then Arnold when you talked about the Western Caribbean and how you are seeing an increase in occupancy and yield despite the significant increase in capacity. Was that just -- could you clarify was that for the full year? Or was that for just the first half?

It's probably for both. This for both Felicia

Business we have on the books for the full year is the first half.

Yes, exactly.

But to your point was just that look people are concerned about increases in capacity in the Caribbean and particularly in the Western Caribbean and which is not seeing there?

Yes, we have near double digit increase in capacity in the Western Caribbean and we're up on occupancy and overall yields.

And then just final, the language in the release talking about yields for the first half of '19 and how they are going to be lower than fourth quarter guidance. You guys have provided a range of 1.5% to 2.5%. I think the investment community tends to hone into the midpoint of ranges when company has given. So, is that a fair bogey like were you thinking about the midpoint when you gave that comment or the high end or the low end just to give us some parameters?

It's fair to say that all three numbers -- if I was giving guidance so I had to pick this specific guidance whether it would be a range or a midpoint that the guidance I would give today would be less than the guidance in the fourth quarter. We are not giving an exact guidance because it’s early. We just trying to directionally and to answer your question it would less than 2% midpoint would be the midpoint of the guidance we would give. But it’s too early to give an exact number at this point.

Felicia, again, I just want to emphasize that, a lot of things are driving and including capacity relative proportions of capacity from different brands. So while the yield is whatever it is we are constantly focused on growing earnings and so there are brands that are below the average for the fleet that have significant capacity increase and are achieving an improvement in yield for that brand, but because it's weighted and especially gets a destination market like the Caribbean it can pull down the overall average. But we’re still actually earning more dollars, so that’s one of many variables.

Yes, and well appreciated and just all of us, who've been looking at cruise for a 1 million years or even not, we’re all unfortunately focused on yield so.

Right.

But yes, no mix, I think everybody kind get the mix issues especially since one of your competitors has spelled that out pretty clearly over the past year or so. Okay and then so, not to get cute David, but when you say lower than the fourth quarter guidance, are we talking about significantly lower or just kind of lower?

We will give you more color on that in December, it's about to verify, and we still have a lot of work to do. And that's our best guess.

Thank you very much. I will get to our next question on the line from the line of Tim Conder with Wells Fargo Securities. Please go ahead.

Thank you. Couple of questions on the June to August, the booking commentary. How much of that was maybe impacted by base loading as you look into the early part of next year? And then obviously for the Caribbean and that potentially impacted the overall booking curve, now you’re saying the booking curve continues to expand. If we didn't have the Caribbean issue or we tended a maximum point of the booking curve to whereby see this further expanded obviously always a trade-off of pricing and expanding the booking curve. Do you view yourself and maybe the industry finally at that point where, "Hey, we're going to restrain this back because we feel we’re certainly give up too much in pricing upside"?

We’re always in pursuit of that optimized booking curve that maximizes, obviously, the earnings and it varies by destination, by brand, by source market I mean like there's a zillion variables there. And so, we're not in absolute kind of singularly focused pursuit of moving the booking curve further out that's not how we think about it all with Yoda and the collaboration of our yield price management experts. We are really just trying to optimize each one and frankly each itinerary for each ship and it comes out the way it comes out based on all the variables there.

And you characterize the base loading, I really characterize more the way Arnold is describing it is we're making good decisions to optimize the revenue when the ship sail and we try to capture bookings and pricing along the way to optimize the end game. And so that's really the goal and the goal isn't anything other than maximum revenue yield.

I guess [John] another way maybe to ask again we've seen the booking curve for the industry and everyone sort of linked now to last few years. If you have to fall down on one side of the fence is that would you expect that the further length and let’s take it to an industry perspective or would you think the industry is more in the point of potentially trying to harvest some more price?

I think that the more we create demand the more likely it is for the booking curve to inch further out and just get even better yields along the booking curves than you would have before, so I think that's more the answer the better we are at creating demand the more likely you would see it kind of inch out a bit. There is obviously some theoretical limits to that and there is somewhat our job is so that we're approaching that now, but we are really just trying to optimize along the booking curve to maximize earnings.

And then you know there are also one-off things that occur overtime like the Iona, the P&O Cruise's new ship it just started booking and it's been booking like crazy and it doesn’t get delivered until 2020, and that's included, so all of this it's just there's a lot of variables and we're trying to make good decisions to optimize the revenue yield overtime. And we got different itinerary lengths and everything which are affecting all of this, and we are just trying to give you the big picture as it rolls up. But we make decisions at a very micro-level, cruise-by-cruise, cabin category by cabin category to maximize the yield. This isn't an overriding goal one way or the other if the decisions are made in a micro level.

Okay, and lastly gentlemen thank you I appreciate that. Australia and asking that from the perspective of that market has been great for the industry for a while and then China is improving, yet we see the industry maybe shifting some seasonal capacity to Australia in the last year plus here how is your China sourcing as a percentage of global sourcing relative to your capacity in China and I guess again folding that in with the Australia piece how that's looking?

Well, on the China portion, in terms of if you leave the domestic sailing volume, you mean like fly/cruise sourcing to China. It is growing, but it's still a relatively small percent obviously of the total number of almost to 13 plus million guests, we have a year so relatively small number, but it's definitely growing and over time given the size of the market and the fact it is the largest outbound travel country in the world that we expect that to increase overtime, and we have seen it increase. You mentioned Australia, obviously, we've seen the increase in Chinese guests going to Australia and getting on ships, but we've also seen in Alaska and other places too. So that will be that comment, Australia overall continues to be a very strong market for the industry and certainly for us and we have good performance there with our P&O brand, but also our other brands that are there we made a commitment up in Brisbane which we announced in terms of cruise terminal expansion, again kind of reflecting the growth potential in Australia in a way to sustain that. So it's been a good market and we expect it to continue to be. But overtime China fly/cruise is going to be significant middle delta but also the domestic market is going to be significant over time. And we are still very proud of our relationship with CSSC as we move towards ultimately putting our joint venture into the market and sailing ships and as we look at taking all capacity that we've already announced on the 2023 and beyond through that joint venture to help China build within their five year plan, which is a sustainable long-term cruise market that ultimately could be as large as the global market is today.

And you know for Australia, last year, we talked about the strategic realignment of P&O Australia, and we have sold some ships, so the capacity will be going down in '19 for us in Australia, but we have announced the addition of ships in 2020 and 2021 to the P&O Australia brand. It is a great market for us and we are seeing a lot of fly/cruise business for many of our brands out of Australia all over the globe to Alaska to Europe and other places as well. It’s a great fly/cruise market for us.

And we will go to our next question on the line from the line of Assia Georgieva with Infinity Research. Please go ahead.

I wanted to -- I don’t think anyone mentioned that but I was very happy with the numbers. Could I just go back again to the Q1, Q2 question, so in Q1 last year we still haven’t really felt the impact of new bookings affected post the hurricanes. So Q2 will be more of a beneficiary from those easing comps. In addition in Q1, we seem to have quite a bit of capacity last year. So, is it fair to say that there is still lot of room for improvement especially for Q2? We are not going to see down or flat yields in Q1. And again possibly see with sequential strength as you mentioned strong in the strengthening upside to your current Q1 expectations still?

So, I don’t want to repeat what I already said, I mean we gave you our best guess for the first half and we gave you directional guidance and we work very hard to do our best and to optimize and there is as I said before a lot of bookings yet to come on the first and second quarter, and we will do our best to optimize that and produce some great results for the Company.

David, I have to try. And a quick housekeeping question, could we get the capacity figures for Q1 and Q2 given that we have Carnival Horizon coming in and Seabourn Ovation, et cetera?

The capacity in Q1 is up 4.7 and the capacity in Q2 is up 4.7, Q3 is 5.8, Q4 is 3.7, which gets you back to 4.7 for the year.

And operator, we have time for one more question.

Certainly, we will proceed with our final question for the day with the line from Jamie Rollo with Morgan Stanley. Please go ahead.

Great, thanks for taking my question. I think you said sequential yields getting better in the comp, helpful if you could give us some numbers or some direction about that sort of by quarter this year so we continue to see the cadence. And if I can just add on to that, I think Arnold you said, you're talking about driving earnings growth less through yield growth and from your recent orders have been much bigger for Carnival and Princess, and you’re selling perhaps more ships than usual. So can you that sort of earnings versus yield trade off and whether that means which is sort of expect to sort of level pace of yield growth going forward?

I will take the second part first, earnings versus yield, and so, again I will repeat a little bit. The bottom line is we’re absolutely focused on earnings and to get there you have to have yield, for sure. But because we have nine brands and we have a mix, we can improve a brand as I mentioned in yield but bring down the corporate average in the process if that brand evolves below the fleet average and doing so we’re still growing earnings. And so we’re clearly focused on earnings and obviously. And I know you guys strategically have to follow yield because you can’t follow the rest, but even with the yield is a huge mix for us and so that’s part of it. We’re looking at bookings in particular then you have all those other variables I mentioned because of mix between ticket versus onboard and our onboard won't show up until people actually sail, you know they have charters you have all these different things that that can affect what our yields look like during a booking period along with the mix. And you have the actual, yield management strategy itself for pricing considerations. So all of that comes into play but overall, we are absolutely focused on earnings, we have been strong and yield and are strengthening in terms of our yield management booking trends for next year have been strong and are strengthening and those would be the summary thing to say and we weren't trying to give guidance for the first half. We were just again just giving you guys some directional input with the color around why things might look the way they do. Go ahead, David.

And on the Caribbean we don't give detail percentages ever by brand by market for competitive reasons, but we have said that the second and third quarter Caribbean yields were down and for the fourth quarter, we don't expect them be down as much and we said that we expect sequential improvement in the first quarter. So we are seeing an improving trend overall on a year-over-year basis is as we move through the weather impact from the prior year.

So it's fair to say that the Caribbean price, simply looking at it by months is above where it was two years ago looking at that way?

I have, I actually don’t have all that detail. I have to actually look at the two years ago to answer that question, but you can get back to Paul.

Bu it's certainly looking better than same period last year.

Hey, everyone, thank you so much. We really appreciate it. And we look forward to continue to deliver and we look forward to our next call. Thank you.