Good morning, everyone, and welcome to our First Quarter 2017 Earnings Conference Call. I am Arnold Donald, President and CEO of Carnival Corporation & plc. Thank you all for joining us this morning. Today, I am joined by our Chairman, Micky Arison via phone from Europe as well as David Bernstein, our Chief Financial Officer; and Beth Roberts, Senior Vice President, Investor Relations. Here with me here in Miami. 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. Our company is off to a good start again this year with adjusted earnings of $0.38 per share exceeding the midpoint of our guidance by $0.05. Our first quarter results combined with our strong book position enabled us to increase the midpoint of our previous guidance range by $0.15 and raise our full year earnings expectations leaving us well positioned to deliver for the year. Year-over-year for the first quarter despite a $0.13 drag from fuel and currency both moving against us, strong operational improvement contributed $0.10 per share to the bottom line, which when combined with $0.02 of accretion from our share repurchase program enabled us to exceed the high end of our guidance range for the quarter. Our business, any business is all about the people. Our consistently strong financial performance is only possible because of the extraordinary efforts of our employees worldwide to exceed our GAAP expectations and to deliver memorable vacation experiences as well as our travel agent partners who support our brands around the globe. It was reinforcing to see constant currency revenue yield growth this quarter of roughly 3.8% and that's on top of the 4.7% improvement achieved in the first quarter last year. We continue…

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 will start today with a summary of our 2017 first quarter results then I'll provide some insights on booking trends and finish up with an update on our full year 2017 guidance. Our adjusted EPS in the first quarter was $0.38. This was $0.05 above the midpoint of our December guidance. The improvement was all operational driven by increased net ticket revenue yields which benefited from stronger pricing on closing bookings on both sides of the Atlantic, while higher than guidance net cruise cost excluding fuel due to the timing of certain expenses between the quarters was offset by favorability in a variety of other areas. Now let's look at our first quarter operating results versus the prior year. Our capacity increased almost 4%. The North American brands were up over 5% while the European, Australia and Asian brands also known as our EAA brands were up almost 2%. Our total net revenue yields were up 3.8%. Now let's break apart the two components of net revenue yields, net ticket yields were up 4.1 %, this increase was driven by our North American brands deployment in the Caribbean as well as our EAA brands deployments in both Europe and the Caribbean. Net onboard and other yields increased 2.9% with increases on both sides of Atlantic. Net cruise costs per ALBD excluding fuel were up 3.2% driven by the timing of O&M, dry dock and G&A expense. As they have previously indicated, the best measure of net cruise cost per ALBD excluding fuel is on a full year basis as the timing of expenses between the quarters often varies from the year to…

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

Thank you. [Operator Instructions] Our first question comes from the line of Robin Farley with UBS. Please proceed.

Great, hopefully, you can hear me okay. I couldn't help but noticed that the full year raise for earnings and yield is basically just the amount that you see, your first quarter guidance by. So, I was wondering if given the strength that you're seeing with bookings you through the quarter what's on the books will continue through the quarter. It seems like there would potentially be upside to the rest of your full year guidance maybe you could just select a little bit of color on that? And I don’t know if you have any thoughts instead of demand from European passengers versus North American as we get later into the year? Thanks.

Okay. Thank you, Robin. We're always giving our best estimate at a given point in time and we're certainly doing that now, and we've got a long way to go till the end of the year and obviously we are going to do our best to beat the guidance as we always do. We have plucked up a little bit above what you see in terms of current fuel and currency and the gains in the first quarter, but we are also factoring in some contingencies for every impact we might see yet in the year.

Okay, that's actually always going to be provided by, if you had any thoughts about sort of demand brought by geography just here I know lot of the strength you set in Q1 was driven by Caribbean demand? And that will be rough of rest in Q3, so just if you had any thoughts on the other pieces? And maybe including, it sounds like obviously your guidance always fractures in that things may not be perfect through the year and so wondering, if you built in a lot because there were some of the political situation in China that's causing you to be more conservative that kind of thing? Thanks.

Sure. Look in all of the remaining quarters of the year, we are expecting yield increases, and we are expecting good yield increases on both sides of the Atlantic. So, we do see good demand for both the European passenger as well as the North American passengers. And as far as the China and Korea situation is concerned, we are doing our best, it’s early this just happens, it’s unfortunate as Arnold indicated the itinerary disruptions. But keep in mind that we've got itinerary -- we’ve had itinerary disruptions before we’ve made some changes, and we've done our best to include what we believe the potential impact is in our guidance.

Thank you. Our next question comes from the line of Steve Wieczynski with Stifel. Please proceed.

So, can I ask a question little bit differently in terms of what Robin has asked, but I guess when you look at the yield guidance, I mean I can’t remember the last time you guys raised your yields guidance so early in the year. So I guess the question is when you look back to December what markets really have changed so much in such a short-period of time to give you the comfort to raise that range so quickly?

Well, I think first of all just keep in mind, we are now into wave season and through wave season before we weren’t, so you really have to see how things are going to play out. So, we've got a lot more information now, but we still have a long way to go. But based on what we see, we have the confidence that we share with you. By market a lot of people were concerned about the Caribbean and relative capacity changes on all that, and once again, we kind of demonstrated that we feel we are creating enough demand for the capacity that we have and are able to continue to see relative outperformance in the Caribbean. Alaska is also strong and David may have a comment. Europe is -- the North America brands for Europe are ahead on booking and ahead on pricing, so they are doing well as well as the A brands are doing well.

Again, I just probably would reiterate everything Arnold said. I mean it was an excellent wave season and so we felt confident with the additional information to raise the guidance 0.5 point at this point in time.

Okay got it and then second question, I don’t know if you'll answer this or not, but in the release you talked about your book position being very strong at this point related to last year. Can you maybe help us think about that little bit more from a quantitative prospective meeting? How much inventory is actually left to sell this year versus last year? Can you put numbers around that at all?

There is a little bit less left to sell for the reminder of the year than there was at this time last year. We had indicated that we're well ahead on occupancy and the booking curve has continued to move further out and we feel very good about the overall book position at this point.

Thank you. Our next question comes from the line of Felicia Hendrix of Barclays. Please proceed.

If you could just stay on the booking curves on topic for one second, can you help us understand given the length of the booking curve perhaps? How booked you're for 2018 versus this time last year?

We're ahead of the prior year for 2018. but keep in mind that it is very early/ And so I would not read too much into that in terms of 2018, but we're ahead.

Okay, that’s good to hear. And then Arnold in your prepared remarks unless I miss something, you didn’t really talk about the new CRM net yield system that you have implemented. And I'm just wondering, what are the most important aspects of that that will be evidenced to our as investment community that analysis your financials? And is there any way to quantify what that can do to your net yield? I know the impact is more in 2018 and 2019 and this year, but is there any where to that could be quantify for us?

We're not quantifying at this time, but what I can tell you directionally is about 30% of the inventory on the fixed brands and on that new revenue management to would be impacted in 2017, more in the 85% to 90% in 2018 of their inventory will be impacted. The results have been really good. Evidence of us for that is when the two suggests a different approach than the revenue science that would have taken without the two. And so early on, they're seeing things which may some go back and double and triple check to and we keep controls and what not. But it's really been helpful and we have absolutely seeing increased yield from the teams utilizing the two. One of the most powerful things above the two though, it doesn’t when I used an adjustment of the two fits let's so do it and it’s the cause of right question inquiry and the right conversation. And now revenue management teams across the brands are in real-time collaboration, nonstop, and that alone with either without two enhancements will be beneficial, but with the two has been really powerful. So, I think we will maybe try to quantify some stuff they want. The two runs as core to volume, small amount of inventory right now and what again in different environments with the different conditions and different points in the booking curve over period of time and continue refinance. But it’s no question it's helping us on yield right now.

That's a great and helpful and we look forward to more information on that and just that housekeeping. Can you give us the second quarter and full year G&A and interest expense guidance and then just review the capacity increases for the remaining quarters of the year and the full year? Thanks.

Sure. Depreciation in the quarter 460 million to the second quarter, full year depreciation should be about a $1.850 billion, interest expense running 50 million in the quarter, total interest expenses 200 million. It hasn't really changed that much and in terms of capacity growth by quarter we have 3.6% in the second quarter, 2% in the third, 2.1 in the fourth.

And overall for the year I think 2.9.

Thank you. Our next question comes from the line of Greg Badishkanian with Citigroup. Please proceed.

So two questions. First one sort of 2018 you mentioned bookings were well ahead or ahead, how about ATVs or pricing, the other side of that equation? I am assuming those are ahead too, right?

Yes, current.

And just on China, so how are the Chinese consumers really reacting to the South Korean travel ban whether it's you're hearing from your travel agent that bookings are impacted or you're seeing increase in cancellation. Is there any reaction to maybe adding an extra day fee versus an extra port in Japan just little bit of color on kind of how the consumers reacting?

Sure, keep in mind that China today is still more of a B2B business and so a lot of the movement happens at the distribution level terms of where they took groups of vacationers. So in any event, it’s early, we have disruptions as David mentioned often around the world. So, we're placing with a sea day or second port in Japan in some cases you know that can be advantageous to us and sometimes have engaged advantages sort of yes. We are not a ferry, lot of times people wanting to go to Korea to shop and so I'm sure they're individuals that be disappointed that you know they can't go to Jeju to shop like they'd intended to, but we replace that with other ports our great experience on board we're hopeful that we can manage to get satisfaction. The issues still becomes in terms of the distribution, can we effectively persuade them within the same groups of people or will they switch, who they send and what's the impact of that.

And is it still first you know when you look at the first half being down, second half being up in terms of net yields. Is that -- could we still expect you know second half being up in that yields in China.

You know it's still too early to be sure, but we're hopeful that yields will be positive in the back half of the year and we're monitoring the situation, our team is absolutely working hard to make sure that we deliver.

Thank you. Our next question comes from the line of Jaime Katz with Morningstar. Please proceed.

So, I'm curious one of your competitors last quarter said they were comfortable where the length of the booking window was, and it sounded like there was maybe some concerned that there would be revenues that were left on the table, if they continue to lengthen any further. Can you talk about maybe where you feel you guys are with the lengths over the booking curve and whether you would prefer to sort of stay where it is to optimize your revenue capture or continue to sort of lengthen from current length?

Our competitors are land based vacation, but I'm assuming you're talking about some of the other cruise company. But in any event, the issue on the just implementing the booking curve look, we are always trying to maximize the revenue and to do that where you want to be at a different point in the booking curve will vary all the time and has a lot to do with a bunch of things from itinerary mix to source market mix et cetera, et cetera. So, we are always trying to optimize that so we can maximize revenue. At this point, we wouldn’t arbitrarily try to further lengthen the booking curve, but we wouldn’t necessarily try to shorten it either. We're just monitoring and using our new revenue management two for the six brands and existing two for the other brands to help us sort that out. But our goal is to maximize revenue, not to have the longest booking curve.

Okay, and then as far as the new itinerary is going to Cuba, has there been any progress on sort of port infrastructure build outs to get some of the newer ships there, any movement just recently with the government and the changes that have happened in the government here as well?

No, not that I am aware of at this point in time, obviously, our numbers of ships going for the first time including Paradise for us which we are very excited about it, as I mentioned in my opening comments. So, we are sending largest ships Paradise probably the largest ship from the U.S. in Cuba going. And so, it won't happen overtime, they are going to pace and take their time, but again there is a lot of change already occurring there. Additional cruise companies are now going to Cuba after our initial four-way with Adonia and Fathom brand and so things are increasing and it will just have to continue to work with them and go at the pace they want to go.

And then can I just clarify I think there was some commentary saying that the CAGR of the capacity growth was 4.5% for the 2021 was that for the specific brands or for the fleet?

That's our overall fleet-wise capacity growth and of course that number could vary it because we are focused obviously on a yield environment for us to grow we have to deal with the increased yield, we are not can be in a growth just through capacity because of the large base we have and so will what we need to do right now we are trying the curve trading demand that we are able to maintain and will suspend that than that capacity growth would be certainly capacity lot of continue with yield improvements if it's some reason that we all change or they changed and we've looked at some accelerating retirements because we are committed to measure capacity growth that are in our brands that allows us to increase yield until borrowing increased financial performance. That are the aspect about us that's a little different from the other folks and the industry is set. We have a lot of geography to spread our capacity over including new geographies potential like China and the Cuba and then we’ve made brands. So, we have ten different brands. And so that growth was is really modest.

Thank you. Our next question comes from the line of James Hardiman with Wedbush Securities. Please proceed.

I thought we could drill down geographically a bit here. I guess first at the Caribbean obviously the concern there was that after couple years of flattish capacity. 2017 we're seeing more moderate capacity growth. I guess from what you seen so far and obviously so far so good with respect to the first quarter. But maybe some of those capacity increases have been necessarily in reflect to being you numbers yet. But overall, how you're seeing the industry digests that incremental capacity, if you look out over your bookings, the reminder of the year? And then with respect to Europe, seems like things are getting better. How much for that just lapping some of the geopolitical events from last year? And how much of it is ultimately sustainable maybe some of these economies finally getting a little bit better seeing better demand?

One another thing that is interesting about the cruise business is we have never been able to show a strong coloration between the performance of the business and economies. So, we do well in recession periods and we do well in growth periods, obviously stronger economics undoubtedly our tailwind. But we haven’t really been able to correlate performance directly to economies. Have been said that back to original coming about the Caribbean, as you mentioned, our capacity growth is higher than shouldn’t have been in the past few years. We haven't to get through the year, but right now we're well ahead on bookings, we’re well ahead on pricing, and obviously the results through the first quarter were very strong and those itineraries have been completed. So, we're doing very well in the Caribbean, and we expect to continue to do well. In terms of Europe I would say overall, again it's a combination of creating demand, measuring capacity growth to our brands in the European arena and just strong brand marketing on the prior of the North American brands for their European itineraries. And so, we're doing well and we've got way ahead on price and we're ahead on bookings.

And the only thing I'll add is that the capacity growth, it is bigger in the second and third quarter then the full year for the Caribbean, but when we take a look at this in our book position and our expectation in that quarter, we do anticipate good solid pricing or yield growth in the Caribbean in all four quarters.

Great and then couple of questions on the new administration and how that might impact your business or not. It sounds like you're full steam ahead with respect to Cuba, there've been grumbling that the Trump Administration may want to roll some of the progress under the Obama Administration with Cuba back a little bit. How do you think about that? Do you see that as a legitimate risk? And I don't know under Trump Administration is the actual listing of the embargo with significantly less slightly and does that impact further investment there that you’re going to need to really grow that as a viable market? And then its travel ban, we've been hearing from other parts of the travel industry that international visitation to the U.S. had taken a hit. I don't think that would impact your business or the broader cruise industry best I can tell, but speak to that to whatever extent that's relevant.

Sure. I think on your -- on your first point around Cuba. What's regulating Cuba right now is Cuba. So, they're determining, how many ships are coming and which ships and what time and all of that. Should the Trump administration take a different position than exists today then we'll have to deal with that. Today to be honest with you Cuba, you can't find it in outnumbers, it's the one ship Adonia now will have Paradise going, which will be a little bit bigger ship, but still that's one ship not sailing every week even to Cuba. And so, it's going to be hard to find the numbers given the scale of our business. So, it's really building for the future and we'll see what happens. I learned a long time ago never to try to predict regulation or legislation or what an administration would do or won't do and we'll just have to play it all the time. We obviously believe that people having the ability to travel is the good thing and we hope that steps will be taken to encourage travel rather than from restriction. So, we'll see how it plays out, but at this point in time, we're sailing ahead. In terms of the travel ban more broadly or similar kind of comment, first of all we haven't really been able to measure any impact from the noise around the travel ban or the actual bans themselves at this point in time. The only thing that can really directly impact us is severe restriction of travel, because we are discretionary travel and if people can't travel that will impact us. But we haven't seen anything to-date, we aren't anticipating anything, but obviously we would adapt and react our assets or mobile, that’s one of the duties of our business. You know can have disruptions like China, them advising their citizens not to go to Korea and impacting no travel to Korea, and then we just redeploy and manage around.

Thank you. Our next question comes from the line of Harry Curtis with Nomura. Please proceed.

Quick question for David on nomenclature. What's better well ahead or considerably higher?

You know considerably higher is better than well ahead, but we're just trying to give you directionally some color on the overall picture.

And you're throwing us a curve. So my first question is related to a comment that you made in the press release talking about reaching consumers through multiple touch points. I don't know what, to what degree there's any interaction between that and the CRM system, but can you talk about the expanded channels that you are -- that you're pursuing and whether or not it has more of an impact on revenue or on the cost side?

Okay, thank you. When we talk about multiple touch points, the goal is we're like with any advertising is just to keep your brand and in this case we want to keep cruise in a positive way, out in front of people all the time. So that when they're thinking about a vacation, they have that unique idea of what about the cruise, so that's that object how do we do that, we do it through all the traditional marketing and approaches with the brands taken and not traditional ones they take digital marketing, traditional advertising, media et cetera. We do it through the events with the new ships and ships are big promotional opportunity and every time we have a new ship and inaugural event where we get position wise out there. We do it through the things like also the consumer electronics ensuring being the key note there that's a whole bunch of different media audiences that cruise now gets highlighted into the positive ways. So if someone who was being in the New York Times now goes to their technical publications, they are talking about cruise, they are talking about the New York Times down in cruise, so it's just reaching frequency. Most fundamental advertising concept there is, but doing in a way that's powerful, that's positive, that adds to understanding and hopefully entire to steep with the consider. Cost versus revenue our marketing costs are up a bit over the last few years some of the savings we've been honestly we've reinvested to drive yield to trade demand and drive yield, but basically a lot of this reallocating the balance we were spending from one type of approach to another and then we've heavily leverage our public relation that as you can tell from everything have gone. So, it's not just the matter of producing the TV shows for example or producing an ad like the Super Bowl ad we did, but it's all of the public relations efforts around that, so leverage the impact of those executions.

Very good, and just wanted to shift gears really quickly to discuss free cash flow 2017 should be another strong year of free cash flow after all of your CapEx? You've got a very strong leverage ratio. Do you think that 2017, once again it balanced the share repurchase with dividends the way you did last year or do you see a better return buying more stock this year given your attracted multiple relative to any other consumer stock out there?

That will be a Board decision obviously at the time, but just philosophically we try to stay in a search ratio of dividend payout, turning some because dividends you're going to do those forever and hopefully and so that you want to make decision that you want to get some ratio there. And so we target a ratio on dividend payout and then the balanced we like to give back to the shareholders and stock repurchase.

Go ahead.

So, I was going to say the target ratio that we have targeted historically and we've reiterated is about a 40% to 50% payout ratio and so we're constantly looking that where it will be talking to the board about the dividends and the remainder it's not just the free cash flow, but we've said a number of times that with the strong balance sheet we can return free cash flow and more to shareholders, and our expectation is we will do that overtime.

Thank you. Our next question comes from the line of David Beckel with Bernstein Research. Please proceed.

Last quarter you had indicated that you are less than 50% book for China at that period of time, can you give us an update on 2017 China bookings.

The bookings in China at the moment are still ahead of the prior year, but it's all everything that just happened is indicated with Korea and itinerary disruptions. As Arnold indicated, it creates some caution and we try to include that in our guidance and in developing full year guidance as we had indicated. So, this is in evolving market and it’s a B2B market as Arnold has walked you through. And so that next month or two will be, we'll learn a lot more and will be able to provide more information as we move forward.

Got it, and might be little on fair given how recent the travel ban is, but I was wondering how you guys thought about what steps you would take if this ban were to persist through the end of this year for example? Are there any contingency plans for example moving your home ports further start or anything like that you would be evolving to share with us?

You mean the advice that Chinese government has given to their…

Yes, if Korea is not an option for the reminder of the year?

Because you know technically it's not a travel ban, right. But anyway based on what they have said look, we think China is still one of the largest cruise market in the world, cruising is in there five year plan. We're excited about our partnership in China with CSSC, had another big signing, I mentioned with President Xi and Mattarella from Italy. So, we are very positive on China. We continue to make good money there. It's still holistically accretive to us versus our alternative deployments to the ships, so all those are positive indicators. I don’t like China forecast the regulatory stuff and all that, but in our guidance, we would assume this is going to persist through the end of this year. All indications are would be temporary. Again, it's just the matter of changing deployment. So you don't go to Jeju, you add an extra port in Japan or you have an extra sea day. And in overtime, we would be looking at other itinerary changes potentially maybe tapping more in the fly cruise and that type of things.

Thank you. Our next question comes from the line of Stephen Grambling with Goldman Sachs. Please proceed.

You alluded to this in response to Harry question, but could you quantify trends you're seeing in new to cruise passengers and how that looks across regions?

I'll give you the overall data that has some qualitative comments by regions, but overall what's happening if you leave China out of it, it's just an artifact of the construct. New to cruise is decreasing as a percent of the total and the reason it is because of the bake of those cruise before it grows and industry is limited on the capacity growth with the number of shipyards. So, you actually see, if you leave China out of it. You actually see a decline in the percent of new to cruise in a given year, okay. So, that’s the trend. Obviously for us, we're more as driven yields, our ship sail for, we have great occupancy. But we're focused on yield and so we're trying to drag demand like crazy because of the oldest economic rule there is, which is supply and demand. And so the more demand the more we can get yield, and that's what it’s about when the terms of actually physically sailing a lot more people you know where capacity constraint as an industry which is the place to be.

I don't have all the data, on the new to cruise by brand or by region, but I will say that when you look at it globally those regions or those brands that are growing faster tend to have a little bit higher new to cruise percentage, as you would imagine as you're growing the brand overall of the region overall, you have more first timers or new to cruise who are sailing on your ships during that period of time.

That's helpful color, and then I guess changing gears a little bit on that 4% capacity growth of 2021 I guess how are you planning returns return on invested capital on those ships in your pipeline relative to the overall portfolio? And could the impact of these new ships drive you to push ships into retirement sooner if it makes sense? Thanks.

Yes, sure, first of all the new ships inherently give you a higher return on invested capital in general because of the mix of scale, the density, the efficiency, just the combination of everything and so you're going to build the new ships because they're inherently more efficient and position you for a stronger return on invested capital in all kind of environments. So, new ships are coming. Your question about does it encourage you or maybe cause acceleration of retirement you know that's more market demand question because as long as the ship is giving you the economic return across that there's always return on invested capital you want it, if the guests are happy with it, obviously that's step one and has to be relative to the guests. But the guests are happy with it and you're getting an economic return you're going to keep sales and when it gets to the point where the capital you have to put into it is so great you can't get a return to maintain that ship at the guest standards and the regulatory standards or what have you, then you will retire or if you get to the point where you know you just aren't creating sufficient demand for the capacity you have you're going to retire ships. So it’s an economic decision and we're always looking at each ship to see what the return is and what the alternatives there to drive the returns and the ship is unable in any environment and we look forward to get the kind of returns we need with the return on invested capital then that ship will ultimately either be sold off or scrapped.

I guess one quick follow-up on nine quantifications, so are the new ships I guess what I was asking are the new ships relative to other new ships in the past getting a bigger contribution than they have historically for any reasons based on planning technology et cetera? Thanks.

Yes, I would say the newer ships today are getting even better returns obviously the industry is getting a better return. So you know in the past the industry was mid single digits or lower, industry is now creeping up and in our case, for our ships absolutely we're seeing a higher return on the new ships than we would have historically seen in the past on new ships. But we're driving our overall returns higher than we had in the past as well.

Thank you. Our next question comes from the line of Tim Conder with Wells Fargo Securities. Please proceed.

Thank you. And again Arnold that's early and David and everyone congratulations. Couple of things here, just a clarification the 4% to 5% that you throughout there just to clarify that's net or gross number what you see?

You're talking about the capacity growth through…

Yes, I am sorry.

I know that assumes some retirements, it's 5% overall gross capacity growth, and just as we've always indicated, we've sold about 19 ships in the last decade, and we do have one leaving our fleet next month. And so we do anticipate that we will see a couple of ships leave the fleet overtime and we've factored that in.

So that 4.5 midpoint is a net numbers what you are saying correct.

Correct.

Okay, I know it's early, but yourselves and some competitors have laid out some capacity that itinerary already bookings open for through 2018. At this point what do you see the capacity growth outlook in some of the main regions in 2018 Caribbean. Alaska, Europe as a whole?

We unfortunately, Tim, I don’t have that detail available with us, we should have that for on the second quarter call for all of our brands.

Okay. And then two questions related to Europe, again it's unfortunate and then hopefully we don’t see any more but any impact from the incidence in London last week and capacity that would seems with people are adjusting to the new world but just any commentary there. And then it's been trying before hasn’t gone through but the EU Parliament and the base requirements for U.S. citizens just your thoughts on that it would be implemented in May that are you commissioned would approve what type of impacts would they have on North American's going to Europe?

Okay, first of all the London incident obviously very recent, we will see what kind of impact if any have has. But unfortunately, these things on a longer rare and historically what happened as we see any kind of a reaction is relatively short-lived and things bounce back and return. I have to see on this one, but I honestly don’t anticipate a lot of impact, but we're monitoring and paying attention. But again these things are not that rare anymore unfortunately and people just in my opinion do the right thing and continue to live their lives. So, on that one, the second part of your question again what was it?

EU parliaments passed a resolution or whatever that the U.S. citizens would need a visa, they come to Europe and can just use a passport trying to get some relief I guess for five countries and the EU were currently we require passport for them to come to the U.S. has been trying before I haven’t gone through, but this if would -- what are your thoughts or potential impact of that Arnold?

I think the impact would be slim to none. The reality is U.S. citizens have to have reasons to go lots of places and they get them as and vice versa all the people travel to U.S. and what have you. So, visa is not an unusual thing than travel and I think it would have a limited impact.

Thank you. Our next question comes from the line of Jared Shojaian with Wolfe Research. Please proceed.

So demand is obviously very strong year to date, if you had to parse things out between that are macro tighter supplying your core markets with China and now on the global mix, and then just cruise specific initiatives to drive more consumer interests. How would you weight these three by what you think is most impacting the yield strength right now?

I actually think what’s impacting the most is one thing you did mentioned, which is the guest experience on both the ships. And the most powerful marketing tool we have is word of mouth, our brands execute for the guests are exceptionally higher level, frankly across the industry and there is good execution for the guest. And I think collectively, that is actually driving demand more than anything. I think all the other things we do that the brands individually do, what we done at [Indiscernible] with the various television programs and PRF, it's an all back obviously add weight and the cumulative effect is the very positive thing. We’ve seen specific increase in consideration and preference for the brands tied directly to the TV programs. We're on an ABC, NBC and the other networks. So, we see the physiological impact of that. All the time we think that actually translates and the people taking the cruise or taking more cruises that would have otherwise. The macro effect a good economy is the good tailwinds I mentioned before, but also as I mentioned before, the economy is being great everywhere in the world. All economies on that grade but yet we fell see good improvement in cruise and those areas where economics is not great. And so I would say the macro has an effect but on a weighted basis versus the Beth that mentioned so far it will probably be reduced. In our case in some of our brands, I think our capacity management in Europe with Costa brand is particular had a positive impact for that brand; we use some ships into China. And in particular that brand which is kind a reduced capacity at points in time has benefited from managing capacity, proactively managing capacity. When they gets the newer shift that come in and have a even higher return that the capital basis, that brand was the continues perform, where they are doing well, they are growing earnings, they are growing yield and the way that they do that even on a bigger fashion, what's the new shift are coming in again in couple of years. So, that will be how we parse that out that, that answered your question?

Yes, thank you. That’s helpful, I guess the other side of the new to cruise equation are the repeat guest. So how does your recapture rate of first time cruisers compare today versus historically? So in other words, are you finding that a greater percentage of people cruising for the first time want to cruise again? Do you have any data or anything you can share on that.

What I can tell you is that the base obviously of those to cruisers the first time haven't expanded and therefore an aggregate number is look like, we got a higher percentage of repeat cruises as today the thing you had in the past. And in terms of the capture rate is strong, is much stronger then it was in past, that I don’t know, I don’t think so, so it's just artifact of the numbers that the number repeat cruises is to the higher percentage today than it was in the past. The trick was always as it works with the travel professionals to help people get on the right cruise for them, okay. If they get on the right cruise and their promoter scores are super high and the repeat is a given. If they get on the wrong cruise for them obviously you know that's a double problem. Number one, they may not repeat themselves, but also they're not going back telling their friends and family and colleagues, how wonderful cruise is and that hurts us even more. So the trick is to get them on the right cruise and we're working hard to do that and we've improved that for sure.

Thank you. Our next question comes from the line of Assia Georgieva with Infinity Research. Please proceed.

Good morning guys, congratulations on the great quarter and I guess I got very lucky to sneak in two quick questions. First of all in terms of the South Korean ban which we're not going to call a ban. If it were lifted let's say in a month, aren't you very flexible in terms of adding those ports of call pretty much immediately, is that fair?

Yes, we can make changes pretty quickly, the ones that have been redirected to a port in Japan maybe not, the sea day ones almost certainly. So it's that we can reintroduce.

And as a flip side to this Majestic Princess obviously is purpose built for China, but other ships new builds could be redirected elsewhere if you see decline in returns is that fair as well?

Well, it's absolutely fair, and also Majestic Princess even though she was purpose-built for China with some modifications she'd be free to sail anywhere in the world. I mean she would fit in the Princess brand. She still fits within the Princess brand and so we do have flexibility with the ship but we don't anticipate I mean we were excited about taking Majestic to China, having the first purpose built ship there we think there's opportunity for five fly cruise as we move the ship around the Chinese they fly somewhere and then cruise on Majestic which is you know purpose built for them so we think it's going to work really well, but the reality is for some reason it didn't. She's an outstanding ship that fits in the Princess fleet and we can move her anywhere.

Great, it's great to have that flexibility. My second question is is it fair to assume for the second half of the year that and I know it's too early, especially in terms of Q4 but given comparisons and seasonality that Q3 the cadence of the quarters will probably show a Q3 that's better than Q2 and Q4?

I think it's -- we're not at this point going to give guidance on Q3 and Q4. You've got the Q1 actuals, the Q2 guidance and the full year guidance and so overall you can see what the differential is it's not that great, baked into our guidance, but we're not going to give detailed guidance by quarter.

David, thank you for avoiding that. Again thank you so much for taking my questions.

What I can tell you the team will be working really hard to make what you say come true though.

I'm trying at my end here, you know tracking for if you know the signs, so I'm with you. You have a great day and again thank you for taking my questions.

Thank you very much.

Thank you, ladies and gentlemen. That thus concludes the conference call for today. We thank you for your participation and ask that you please disconnect your lines.