Welcome to the Carnival Corporation second quarter earnings conference call. During the presentation all participants are in a listen-only mode. Afterwards we will conduct a question-and-answer session. (Operator Instructions) It is now my pleasure to turn the conference over to Mr. Howard Frank, Vice Chairman and Chief Operating Officer of Carnival Corporation. Please go ahead, sir.

Good morning everyone. This is Howard Frank speaking and I together with Micky Arison are here in Genoa, Italy having just taken delivery of the new Seabourn Odyssey a few hours ago. I am at Costa Cruise Line offices and Pier Luigi Foschi, Chairman and CEO of Costa in our continental European cruise companies is here on the call with us. In Miami, David Bernstein, our CFO, is there together with Beth Roberts, our VP of Investor Relations. I will turn the call over to David to give you the color on the second quarter financial results and then David will toss it back to me and I will give you some comments on what the outlook looks like. David?

Thank you, Howard. I will begin the conference call by reading the forward-looking statement. During this conference call we will make certain forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties or other factors, which may cause the actual results, performances or achievements of Carnival to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. For further information, please see Carnival’s earnings press release and its filings with the Securities and Exchange Commission. For the second quarter our earnings per share were $0.33 versus $0.49 for the prior year. The second quarter came in above the mid-point of our March guidance by $0.02 per share. This was driven by a variety of cost-saving measures, timing of certain SG&A expenses and reduced fuel consumption which benefited us to the tune of $0.05 as a result of tight cost controls and cost saving initiatives while better than expected pricing on close in bookings benefited us to the tune of $0.03. All of this was partially offset by higher fuel prices costing $0.02. The impact from disruption of our Mexican cruises in response to the CDC’s recommendation against nonessential travel in Mexico due to the flu which cost us $0.03 and a shortfall from expectations in net on-board and other revenue yields that cost us about $0.01. Overall for the second quarter our total revenue yields came in towards the lower end of the range, down 9.8% in constant dollars versus March guidance of down 8-10% driven primarily by the impact of the flu. Given the uncertain times and the flu disruption, I think the operating companies did an excellent job beating our guidance. Looking at our second quarter operating results versus the prior year, our capacity increased 5.9% for the second quarter…

Thank you David. To start this morning I would like to mention that given the challenges during 2009 it has been gratifying to see the Carnival business model holding up so well during perhaps what is the most significant slow down in the world economy in our lifetime. The positive take away for us during this historically significant period is that the strategy of attractively pricing our cruise vacations in order to maintain our high levels of occupancy has continued to enable us to attract new customers and to achieve solid profit margins. Also during 2009 we have taken further steps to reduce operating and shore side costs which David discussed which will continue to benefit us in the future periods. So as we emerge from this global economic slow down we believe we will be a far stronger and more profitable business than before. Before I move on to my quarterly comments I would also like to touch upon our strategy of maintaining a strong balance sheet with high levels of liquidity. This has enabled us to successfully navigate through this very difficult economic environment which as you know also included the bank liquidity crisis and the freezing of the credit markets. Our low leverage ratio and solid investment grade rating provide us with the ability to access credit facilities at costs considerably below current capital market rates. David talked about the various financings we have accomplished during the last several months. That gives us maximum flexibility as we emerge from the recession. Now to the booking environment. Since the beginning of this year our booking volumes for the back half of the year have been running approximately 16% ahead of 2008 volumes. As we indicated in our press release since March the bookings volumes are now running 26%…

(Operator Instructions) The first question comes from the line of Felicia Hendrix – Barclays Capital. Felicia Hendrix – Barclays Capital: I have a question for you on the EIB loan. I was wondering if you could walk us through the structure of that. The rate and the terms. Were there any guarantees? I’m just wondering is there any significance to starting to be able to borrow from the EIB? Will we see that again in the future?

I’m sure. Well the EIB loan is actually a loan that will be taken out by Costa Crociere. It actually finances a couple of their ships. The loan is 550 million Euros. 200 million Euros will be drawn this year, 200 million Euros in 2010 for Costa’s next ship and then 150 million Euros in 2011. The loans are guaranteed of course by the parent company; both Carnival Corp. and Carnival PLC and it is a 15-year structure. The rate is very favorable and as we have been achieving on all of our loans it is very competitive and very favorable compared to the type of financing we would get in the capital markets today. This was a great opportunity. Actually this opportunity was a result of something that Pier Luigi Foschi, who is there in Genoa with Micky and Howard. As a result of the credit crisis of last year we all started thinking and scratching our heads about what to do as the credit markets became more difficult and Pier came up with the idea of approaching the EIB. We have been working on this since last September. It is a very unique opportunity because remember the EIB is looking for projects to stimulate growth in the European economy and these ships are going to be sailing in the Med as part of the European economy. So we have been working with them since last September and we were able to finalize the loan earlier this month. Whether there are more opportunities in the future is something we will always continue to look at as the rates are very favorable.

What allowed us to do this is the fact the company is Italian owned, Italian based with Italian flag operating in the Mediterranean so obviously the economic benefits all flow to Italy and the Mediterranean area. So it was a unique set of circumstances that may or may not be able to be repeated in the future. We don’t know. But again it was very creatively put together and with the help of Costa and [inaudible] and the EIB we were able to get it done and the Italian representative for the EIB played a very important role. Felicia Hendrix – Barclays Capital: On capacity, now we are half way through 2009 and we haven’t seen any orders in the industry for obvious reasons. That definitely bodes well for 2012. As you think about your strategy over the next few years I am wondering if you envision continued growth of your fleet or if you think we will see a lull in your ship orders over the next year or so?

I do think we have been saying we expect capacity growth beyond what is known now to slow down but I don’t expect it to stop. Clearly we have brands that have needs and in recent years or two we have had issues both with the dollar and commodity prices meaning new building prices sky rocketed. While some of our competitors ordered under those circumstances we held back and we haven’t ordered in quite some time. With everything that has happened over the last 9-12 months a lot of these commodity prices and other prices have come down significantly. Pricing is starting to resemble pricing we had when we did order. We continue to talk to yards and continue to look at opportunities and if we have the right opportunity for the right brand that meets the capacity and the pricing is right we will consider it. I do expect capacity growth will slow but it won’t stop.

The next question comes from Steve Kent - Goldman Sachs.

When I look at your results, third quarter net yield came in towards the bottom end, was towards the worse end of your guidance. Third quarter looks a little bit more difficult. For the fourth quarter it looks like you are forecasting a pretty big rebound and I was just trying to figure out why that would happen given all the things you just mentioned? Could you also just talk about what you see sort of day-to-day on the swine flu impact? It seems it goes through lulls of publicity and then gets a flash of publicity. Does that affect your bookings almost day-to-day when a ship is being quarantined off of Venezuela today and sort of how that impacts things?

First of all remember that the guidance was given before we had the Mexico travel advisory. So the fact we are able to be within guidance despite the Mexico travel advisory I think is a pretty good sign that everything else was booking better than we had anticipated. That is true for the second and to some degree a little bit of the third quarter. As far as the impact it is interesting. During the time of the advisory clearly there was a huge amount of disruption caused by that CDC advisory because of the itinerary changes. People didn’t know Carnival Cruise Lines basically changed itineraries through mid-June and people didn’t know what they would do beyond June. Basically for 3-4 weeks everything into those vessels stopped. So now we are digging ourselves out of that hole. There has been little resistance actually to going back to Mexico. We didn’t see a lot of cancellations during that period. We just saw the uncertainty of the itineraries caused this disruption. Volumes now are very good, much higher than last year, but we are digging ourselves out of a hole and are having to do it with lower pricing. As far as these isolated occurrences it is tough to explain. We have now been in touch with 23 Caribbean governments. We have gotten confirmation back from 20 of them that they will not behave in the way they have behaved with [fulman tours]. You would have to ask [fulman tours] what is going on over there but the reality is that when a ship arrives in a port with a few flu cases confirmed or unconfirmed, those cases have been isolated and the passengers have been aboard for a number of days and so symptoms would have come out and we have…

I just want to clarify a few things on the yield estimation. I think it is fair to say without the impact of the flu on the second quarter we would have come in at the mid-point of the yield forecast range we had given for the second quarter. So it really was more driven by the flu effect. While the third quarter will be down it is clear that some of these seasonal Alaska programs took a big hit in the third quarter and some other long and exotics took a big hit. I think we suffered more in the third quarter. Third quarter typically because it is seasonally our strongest quarter has the highest price points so I think we felt more of the impact of the yield erosion in the third quarter. While I think the fourth quarter will be better than the third quarter I wouldn’t say it is going to be remarkably better but it is certainly going to be improved from the third quarter. Also we are seeing some evidence and we have been able to pick up some additional yield and we are seeing some evidence of hopefully coming out of this situation or at least stabilizing the situation but hopefully coming up with some pricing improvement in some itineraries as we go forward. I think we are starting to see that for the fourth quarter. Third quarter is really basically done and not a whole lot left to see.

Into the first quarter it sounds like things would still be negative. With the amount of supply coming on does that suggest the negatives will continue throughout 2010? Given what you are seeing so far fuel is that way and again with the amount of supply coming into 2010.

Let me take a little bit of risk by providing data for the first quarter. We simply don’t have any information for what the picture is going to look like. It is way too early to know yet. There are just so many factors that could play. The one thing we do know is our capacity is up over 9% in the first quarter and at least over the last several weeks we have been starting to track the same type of booking volumes in the first quarter under capacity adjusted basis as we did last year. So that is a positive. How long that lasts or if that is sustainable and what other hits are we going to take in the economy who knows yet. We really don’t have a really good yield forecast and even then I’m not sure how good they are until the end of the year.

Clearly the big issue is not going to be capacity. The big issue is going to be the economy and consumer confidence and what is going to happen.

That 9% you just said, you said that was capacity adjusted or not capacity adjusted?

Capacity adjusted.

When we are tracking booking volumes this year versus last year that is on a capacity adjusted basis. So it is really a percentage of capacity. It includes the 9.3% which is positive.

The next question comes from Robin Farley – UBS.

You were talking about the swine flu and a lot of different view points out there about how big of an impact that may have on yields. I think your commentary is a little more up beat than what some people might have expected. As you look out to Q1 of 2010 at that point are you still seeing the Mexican itinerary bookings behaving a little worse than the other itineraries?

Let me try this one more time. The only time we saw an impact was during the travel advisory. If you understand the volumes we are talking about over a 3-4 week period we basically stopped. Now what percentage of that was based on the flu and the fact the consumer didn’t know where we were going to cruise to was very hard to know. It was very disruptive. As soon as we announced we were going back volumes not only went back to normal but exceeded normal. So volumes were fine. However, our yield management people obviously had to react to the hole that was created and so the pricing was lower. But clearly that pricing will be moved up as that hole gets filled. The volumes were there the moment we were able to confirm what the itineraries were.

In terms of Q1 just overall company wide bookings would you say even though it is still early that the level of decline in Q1 is going to be at least better than Q3 declines this year? Is it early enough to at least say that and put kind of a worst case cap on it? Assuming no big changes from what is going on today in the travel environment.

To be honest with you I don’t know the answer to that question. We haven’t even tried to formulate what yields are going to look like in the first quarter. Intuitively I think our sense is that it won’t be as bad but I really don’t have an exact answer for you right now.

What is very encouraging is that since the end of March everything is trending upwards despite the travel advisory. Right through the travel advisory everything is trending upwards. Both volumes and yields. We are encouraged by that. Whether that will be sustainable time will tell.

We are still running behind in the fourth quarter and first quarter in terms of occupancy and we have been catching up as I indicated by a considerable amount given the recent surge in booking volume. When you get to the point where you have caught up you can start to tweak pricing in various itineraries where there is more demand. We are starting to be able to do that selectively with different brands doing it in different itineraries and we are starting to see that happen. There is certainly a positive indicator. My guess is as we get into 2010 comparisons for the first quarter will be the toughest. The second quarter is not as tough. The third quarter will probably have already fully cycled this downturn in pricing and it will start to normalize and look better in the third and fourth quarter.

The next question comes from Assia Georgieva - Infinity Research.

In terms of a way to think of on-board spend do you expect in Q3 that the European brands will have a significant mix shift to local sourcing meaning a larger percentage of European passengers versus a year ago?

I had difficulty hearing you. Could you say it once more?

Whether this year in Q3 the percentage of European passengers for European brands will be significantly larger than it has been in 2008?

I believe it is about the same. Mr. Foschi says it is about the same. Mr. Foschi is sitting next to us and no body knows it better than Mr. Foschi.

Thank you Mr. Foschi. My second question, after significant price declines in May for the short Caribbean including voyages that weren’t supposed to go into Mexico, it seems there is a pick up in pricing for Q3 since the beginning of June. Can that impact the quarter relative to today’s guidance or is there too little inventory left to really move the needle?

I would have to answer that it is in our guidance. Our guidance is based on the bookings we see and the pricing we are charging and what we believe. Hopefully it is in our guidance. We do our best to do that. There isn’t a lot of inventory left but clearly there is more in Mexico only because of that hole that I just described that needs to be dug out of. Yes, because volumes are high they will tweak prices.

So you have been seeing the first couple of weeks in June have stayed consistent and something you can include in your guidance?

If it is there we have it included in our guidance.

Booking volumes have been holding up, yes.

The next question comes from Steve Wieczynski - Stifel Nicolaus.

First on the fuel question, with fuel now trending close to where you said you could put the fuel supplements back in place any thoughts of putting those back in? Any change in terms of hedging strategy?

There is no change in hedging strategies. We did put out a statement on fuel. Beth do you have that statement?

We have got it here. We had put out a statement that said at the time we suspended the fuel supplement for our six North American brands we reserved the right to reinstate them if the price of light sweet crude oil according to NYMEX should increase above $70 a barrel. Then we went on to say that while we have now exceeded that threshold and in light of the economic crisis and resulting consumer weakness we presently have no plans to institute a fuel supplement and we will continue to monitor the situation in the markets and review our position as the situation warrants.

I would prefer just to leave it at that statement.

It looks like in terms of the on-board yield they are trending closer to the actual ticket yields at this point. Have you seen on-board spending not really stabilize yet? Is that still getting worse?

I think overall the on-board spend has overall not been as add as the ticket prices. It has bounced around quarter-to-quarter a bit but it has been somewhat stable most through the months of 2009 to date. I’m not sure which numbers you are looking at but it is overall for the year within our guidance and the actual we have seen some improvement.

On-board spending in the European brands in local currency has held up reasonably well year-over-year. I think that is a positive.

Also remember in this quarter’s numbers there is some disruption from the travel advisory which created some problems with shore excursions to ports we traditionally go to.

The next question comes from Tim Conder – Wells Fargo. Tim Conder – Wells Fargo : Just a clarification on the residual effects of the flu. You expected $0.05 in the second quarter. You only took $0.03 but in your commentary on the full-year EPS it sounds like you are still expecting that full $0.10 that you outlined in the original press release. Can you kind of reconcile what appears to be the difference?

You may have misunderstood the press release. The press release said there was a nickel for the cruises we changed. They sell primarily in the second but also in the third quarter so the nickel fell over two quarters. Tim Conder – Wells Fargo : So you are still anticipating in that nickel to $0.10 total impact for the year for the whole mess?

The other piece of it is exactly what I described before. It is leading ourselves out of the hole that was created by the disruption. David do you have anything to add to that?

That is exactly it. The $0.10 was essentially $0.03 in the second and we are anticipating the other $0.07 to be in the third. Two of the existing cruises and vie for the rest of the impact. Tim Conder – Wells Fargo : In your opening commentary you talked about the good history you have in getting ongoing fuel efficiency. How do you see that playing as you look in 2010? What type of pace do you think is sustainable from that perspective?

It is very difficult to estimate the exact pace but what I can say is we are working on an awful lot of initiatives. The brands have really come together. We have an internal intranet site where we share ideas, test things, prove things out and implement them which is really improving our overall fuel consumption. The other that is also key is 2010 to a great extent is really the first year where the itineraries will have been planned in a high fuel environment. It wasn’t that long ago when we planned 2009 itineraries they weren’t planned in the extremely high fuel environment we saw in 2008 because we locked those in advance. We should get some benefit from that as well.

I think the key point is when we hit $147 fuel we took the attitude that we were going to do whatever we can to save obviously. When fuel went down to $35 we encouraged our brands to think of fuel as though it were $147 fuel and not to behave like it is $35 and to maintain the momentum we had gotten on saving fuel. You can see in the second quarter they have taken that to heart and continue to work very hard at it.

A good deal of work has been done. New equipment has been installed. New technology. Power saving technology and so on. As ships go through their dry-dock period with technology we are doing a lot of retrofitting with new equipment to improve and reduce the usage of power. Silicon painting of the hulls and so forth. By the fall we will have a better sense from our operating guys what they think they can do for next year and we will go through the budgeting period but we are continuing to focus on saving on fuel.

We are continuing to make the investments necessary to save.

The next question comes from Janet Brashear – Sanford Bernstein. Janet Brashear – Sanford Bernstein : You have another Costa ship now in China. Could you give us an early read on the Asian market receptivity to that?

I’m going to give you to Mr. Foschi who is responsible for Costa Asia’s operations. Good question.

We just put in a second ship in Asia in April. The ship will operate now cruises for the Chinese market together with the other ship that was there. We see this summer season although we are more than double the capacity. In terms of occupancy it is as good as it was last year so the ship will operate full capacity where they are serving the Chinese market. This is encouraging. We are encouraged. Looking ahead it is very difficult to say because again there is a little bit of concern about the flu also there and more importantly in the winter season the demand for the local market will slow down so we have excess supply for worldwide customers mainly from Europe and Australia to fill out the ship. So far, we are very encouraged by the demand for the second ship. Janet Brashear – Sanford Bernstein : Can you tell us a little bit about your itineraries for the Chinese ship? Where they are going and how long they are on average?

On average is about five days, from 4-6 day itineraries. They sail out of Shanghai and Tianjin to serve the Beijing market. Shanghai also to serve the large Shanghai area. They typically go to Japan and South Korea. They are typically a 4-6 day cruise out of Shanghai and Tianjin to South Korea and Japan. Japan normally has two ports, with one port in South Korea. Janet Brashear – Sanford Bernstein : In the hotel industry the rev par decline has been more significant in Europe than in the U.S. and they seem to be lagging behind meaning they are trending down further and abating slower. If you are not seeing those same trends with your bookings patterns in Europe why do you suppose not?

We believe if you compare the demand for cruises in Europe versus North America you can see the same pattern as 10 years ago. Cruises interest development in Europe and so it is a very attractive proposition and is actually particularly this year and last year although of course this economic crisis is affecting everybody but cruising is in the front page of every single paper in Europe as attractive proposition for holidays than it has ever been before. That is the reason why. It is a demanded product within the holiday market, higher than it has ever been.

The next question comes from Mark Giambrone – Barrow Hanley. Mark Giambrone – Barrow Hanley: I just wanted to ask when you eliminated what you spend on your dividend you had mentioned liquidity clearly as one of the important factors in that. It sounds as those liquidity is improving substantially. I am curious where you are currently on thinking about reinstating the dividend and what other factors may play into that?

I think we said at the time it is an issue that is a Board issue that we will take up quarterly with our board. I don’t want to preempt the board in any way. I would say that clearly we would like to see a turn in earnings and cash flow before we would recommend to the board a change in policy. Again, I don’t want to preempt the board. I would rather leave it to say the board will look at it every quarter and we will gauge it based on the circumstances at that time.

I also think that the rating agencies view of the dividend will play a role in doing our analysis because we like our strong investment grade credit rating and want to maintain it. It has really helped us considerably during this very difficult period. We will have to work with the credit rating agencies as well to make sure that whatever we decide to do, if and when we do reintroduce the dividend they are going to be comfortable with it and not take us down.

The next question comes from David Leibowitz – Horizon Asset Management. David Leibowitz – Horizon Asset Management: Are all your ships okay for the next go around or do you have to invest some money?

No. They are all fine. David Leibowitz – Horizon Asset Management: Can you update us on your lawsuit about the acid problems on the QE2?

No. We are in the middle of it. I don’t think it is appropriate to comment on it.

We are in the middle of discovery right now. So it is not really appropriate to comment. David Leibowitz – Horizon Asset Management: The close down of Ocean Village, what happened to that segment of the market that you were so optimistic about a few years ago? Is this something you are going to service through P&O or is it just going to go away?

Well I think to some degree I wish I had David here now. To some degree the larger ships that P&O are bringing in, Ventura and Azura, will service our younger clientele. Some of that clientele can be picked up by the larger, more contemporary new P&O ships. The rest will probably go to Thompson which is operating basically similar itineraries and other international operators. Clearly while we were able to fill those ships we weren’t able to fill them at reasonable returns and so we didn’t feel we could grow the brand and if you can’t grow the brand there is no point in endlessly maintaining it. We felt that Australia was doing extremely well. We had a great, enthusiastic management team in Australia and we feel like that is an area we can grow and grow more aggressively and that is why we made the decision. David Leibowitz – Horizon Asset Management: Also, you mentioned briefly you are in Italy to take possession of the new Odyssey. Can you talk to us about Seabourn? Obviously this is a huge step with two more vessels to follow. Are you going to keep the three that you already have? What does this spell out for the luxury market as you perceive it?

At the time we signed the contract the luxury market was booming as you know. Since September the luxury market isn’t quite as strong to say the least. So the timing may not have been the best but the reality is the asset is a 30-year asset and if you believe long-term the demographics work well for the luxury market down the road these will be very good investments. The ship is absolutely magnificent, very much fitting within the Seabourn brand and the Seabourn style and I think she will be very, very well received by the marketplace and do very, very well. Time will tell whether this segment can absorb this and other competitive capacity that is coming in. It may take some time especially with the present economic situation. Long-term we are very, very comfortable. We think these are great ships and so we will bring us very good returns.

I should add I think the size of these ships which are 2.5 times the size of the existing ship give you tremendous cost metrics that we didn’t have on the small ships. It really should enhance the profitability of Seabourn even during these tough periods. We are happy we are doing this and we will see how it goes over time. The ship is absolutely stunning. We are very excited about it. I think the reaction to our Seabourn customers will be very positive. She is very well booked despite the slow economy. David Leibowitz – Horizon Asset Management: Lastly, Ibero now that you own 100% can you share with us some of the changes you hope to make there and whether you might be adding capacity, etc.?

Let me just say this. I just want to correct you. We have an agreement to acquire the other 25% but we do have to go through Spanish antitrust regulations which we are doing right now. We haven’t closed on that transaction. I will let Pier react to what we are doing structurally to change that operation.

Currently we have now presented the buy to the antitrust authority in Spain where we are waiting for the comments and decision. Ibero was part of the development that we had as a consequence of the Costa position in Spain. The Costa position in Spain was and still is regarded as a premium brand with high yields. We thought that to exploit that to the market we would have needed ever to lower the price of Costa but we came to do so or to start a new brand. So the opportunity was in the market to acquire an existing two ships company. We [repaired] ships last year. Unfortunately Spain is the most hit country in this economic downturn. They have high unemployment rate in Spain. It went up very quickly; faster than anybody anticipated. So we are now working in different market conditions while building a new company and a new brand. Capacity is up this year versus last year because we introduced the former Carnival Celebration ship in June last year but in spite of that our occupancy rates are the same versus last year. So in a difficult economic circumstance the brand is now positioned well in the market. In terms of what we have introduced since last November we have taken full control basically of the company, managing it in a different way as opposed to how it was managed in the past. We have sent a very senior, talented person from Italy to restructure the company which is now completed. There were a number of cost actions taken. For instance, now the office of Costa and the office of Iberocruceros are in the same place. We merged the call center of Iberocruceros with the call center of Costa in Barcelona. So there are a number of synergies that have already been introduced in order to reduce costs and waiting for better opportunities in the market place if given the economy we expect before or later to develop again.

As you know the Holiday will be transferred to Iberocruceros and she will then be refitted and put into the fleet at some future date.

The next question comes from Jamie Rollo – Morgan Stanley. Jamie Rollo – Morgan Stanley: How much of the fourth quarter and the first quarter have you sold now?

I don’t think we provide that information. I know you always ask those kinds of questions but I don’t think we actually give the precise numbers. We are well advanced in the fourth quarter and we have got quite a bit of inventory sold for the first quarter but still considerable amounts to go for the first quarter. That is about all I’m going to say.

It is very early for the first quarter. Jamie Rollo – Morgan Stanley: Just thinking about the strong comps that you mentioned in Q1 next year, how much of Q1 2009 was therefore sold before the September economic meltdown you referred to? How much of that was subsequently re-fared? I’m just trying to get a feeling for how much of your bookings were done at that sort of artificially high pricing?

Remember you are dealing with two different booking curves now. The problem was that until September we were dealing with a much longer booking curve. So we were pretty well along for the first quarter by September of last year. If we are in the same position this year in September we will be in very good shape. I would not expect that would be the case because of the movement in the bookings. The reality is by September of last year we were very well booked for the first quarter.

We still have this close booking pattern that although we have been driving a lot of volume it has tended to fill in closer in occupancies. If we can get the last year’s level in terms of level of occupancy versus a year ago that is when you start to see pricing going up a little bit. We have the ability to move pricing and also the curve will start to move out a little bit.

Based on what Howard said earlier we have been booking since March at a rate of around 26% for the rest of the year. We have been booking at about the same pace capacity adjusted for the first quarter which is 9%. That immediately shows you the booking window that you have got this huge increase of bookings within the year and basically it is encouraging at this point that it is capacity adjusted equal at this point for the first quarter at 9%. Jamie Rollo – Morgan Stanley: On that point you have clearly found the pricing level to stimulate volumes pretty significantly. Would you go so far as to say you think cruise prices might have bottomed right now?

I think we said earlier on the call we have started tweaking prices on a variety of brands and a variety of positions. Pricing is being taken up. Yes. As I also said earlier in the call, since March we have seen both volumes increasing and yields starting to turn and start to improve. That is the direct result of tweaking prices up.

The next question comes from Scott Barry – Credit Suisse. Scott Barry – Credit Suisse: Maybe you can comment, other than the magnitude of the yield degradation are the revenue management folks at the brand level seeing any major differences with respect to this cycle versus prior cycles returning?

I think it is fair to say that they probably never experienced a cycle like this before. We have never experienced this slackening of demand in the market place that caused the degradation of the yields in our history. To be down 12-16% we have never had that before. The worst I can recall is in the 3% range or something like that. I think when that happened I think the reaction by the revenue management people typically is to get the business first. Even if they leave something on the table they want to be able to fill up the ships. That has been the model. If you leave something on the table you get it the following year so they want to fill up the ships. I think there is a tendency to try to play the price as hard as they can until they are comfortable they can fill the ship up. I think once you have full cycled this thing, as we get into let’s say a year from now, I think we should start to come out of it even if the economy doesn’t strengthen a whole lot from where it is, if it is a stable economy. We may start to see some growth and that would be positive but even if it is a stable economy we should run full cycle on the pricing I would hope by the end of the second quarter of 2010 for pricing. That is my guess right now. It is really still early to say. Scott Barry – Credit Suisse: Following up on that, I know it is maybe a bit hypothetical but if you assumed the same trajectory of volume growth that you have seen off the March lows when would you expect that book load factor would be positive year-over-year for 2010?

It wouldn’t take long.

It wouldn’t take long. Remember, a lot of the volume we are seeing is close-in volume. We are basically pacing. We are behind in the first quarter of 2010 just to be clear. We are behind and the last three to four weeks we have been able to sustain booking volumes for the first quarter that are pacing now at year-ago levels for the first quarter. We are not gaining on it. We are still behind. We are not gaining on it. This is with the 9+% capacity increase we have in the first quarter so it is a positive. What we are seeing is a positive trend but it is still not enough to get us to the same levels of occupancy. We will have to further increase and then as we get out of the third quarter towards the fourth quarter we will start to pick up the volumes again for the first quarter.

Understand that 26% is not sustainable because at some point we run out of space. The net result is we sail full. At the point that they are comfortable they are filling the ship they start increasing prices up which is what we are doing.

And the volumes will come down.

But that is already in what we have basically forecasted.

The next question comes from Rosie Edwards – MF Global. Rosie Edwards – MF Global: Two questions on pricing again. Can you give us an idea of different pricing achieved in your European and North American brands? I know Q1 the range was down 10-40% and also if you are starting to push the prices up I was just wondering why this has not led to an improvement in your guidance for the full year being that revenue yield?

Actually to answer the second part of your question I think we have increased guidance on yield for the second half. We have two factors that have played into it or are playing here. One is we took a hit on the swine flu which amounted to some $0.10 per share or $80 million. On the other side we have been able to recapture that when I said we will be up $0.14 as a result of increases in yields from our previous guidance. That is something like $110 million. So we actually have tweaked up pricing.

It is still within the range.

The numbers we are talking about it is hard to move the percentages, as Micky said it is still within the range. We have seen some of that. I’m not quite sure I understood the first part of your question. Rosie Edwards – MF Global: In Q1, for example, you are saying your North American brands itinerary to Alaska and Europe were down 30-40% whereas your Caribbean trips were down somewhere near 10% and Europe and prices were down 10%.

Anecdotally Europe bounced back pretty good and Alaska did not. We talked on the last call there is no question the referendum had a significant impact on what is going on in Alaska although the referendum supporters say it hasn’t. The reality is now every brand, both ours and our competitors, are withdrawing capacity for 2010. So capacity will be down significantly in 2010 while capacity in the Caribbean and Europe will be up in 2010 across the board. The only explanation for me is the referendum. While we have tried everything we can to get leadership in Alaska to address the issue to the best interest of our industry and tourism in general to Alaska we have been unsuccessful and in the end we may have to litigate. We believe this referendum was illegal and there was a recent Exxon case that kind of reinforced that it was illegal. So the Supreme Court found in favor of Exxon on a similar situation. We didn’t want to litigate. We wanted to hopefully find some leadership that agreed with us and do what is in the best interest of the industry and tourism to Alaska and employment in Alaska but we have not been successful in doing that yet. Europe bounced back pretty well. I would say though that the North American brands are carrying more non-North Americans in Europe than before. One of our competitors I think openly said that 75% of their capacity in their North American brand was non-American. That is the case. While there hasn’t been a change in nationality for our European brands there has been some for our North American brands.

The next question comes from Robin Farley – UBS.

I just wanted to clarify you made comments earlier about commodity prices regarding new ship orders. Prices are getting down to where they were when you last ordered ships. Over the last couple of years or going back a couple of years your new ship orders were primarily for European brands. Currency wasn’t such a factor. Are your comments maybe sort of warming up to the idea of new ship orders? Would that apply to North American brands as well?

I should have been more specific because when I made that comment I should have said it was on a Euro to Euro basis pricing similar to when we ordered. Not necessarily dollar to dollar basis. Obviously the yards quote on Euros and when I look at new building prices we look at Euros. Pricing right now at the yards are quoting quite similar to the Euro pricing that we ordered for both European and North American brands. Whether we would or would not would depend on returns and whether we could reach agreement with the yard at dollar prices that make sense for the U.S. brands, U.K. brands or European brands. I wouldn’t take anything off the table at this stage. We continue to talk. As I said, I think capacity growth will be slower in the 2012, 2013 and 2014 area but it won’t be zero. And it won’t be zero for the North American brands.

It will not be zero for North American?

No.

The next question comes from Tim Conder – Wells Fargo. Tim Conder – Wells Fargo : If you look at the booking curve when you went into Europe you said the Europeans generally booked in much closer than the North Americans and your goal was to push that out and you were having some success in doing that. Since last September can you kind of compare and contrast the shrinkage in the booking window for EU passengers versus North American passengers?

Generally speaking our European occupancy run a little bit slightly stronger than our U.S. occupancy.

It is very brand specific. For example, our U.K. brands tend to book longer out than our Italian brands or the German brand tends to book a little further out than the Italian brand. It is very, very brand specific. Overall, when you look at it I would say if you took the U.K. out it is quite similar to North America. The U.K. kind of moves it a little bit further out.

There is not a significant difference between both today.

Once we got into similar kinds of yield management, similar kinds of mentality about filling ships for all these brands the booking curve started to be very, very, very similar. Tim Conder – Wells Fargo : So would you say that post September you have seen based on the occupancy and the pricing commentary it is fair to say that booking curve is not condensed as much on your European sourced passengers versus the North American?

Maybe not as much but it has condensed so that it is still not significant.

Gentlemen this was our last question. I would like to thank you gentlemen for having taken all those questions. I will turn it back to the main moderator, Mr. Frank for your concluding words.

Thank you everyone for some very good questions this morning. We look forward to seeing you at various events in the future. Follow up questions, Beth is available in Miami to talk to you if there are any specific details you need. Have a good day everyone.

Ladies and gentlemen that does conclude the conference call for today. We thank you all for your participation.