On Friday, Carnival Corporation (NYSE:CCL) reported its second quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Steven Kent – Goldman Sachs: Could you just talk about, when I’m looking at the way you are describing the balance of 2012, it sounds like the third quarter is going to be very weak, probably a little bit weaker than I would’ve expected or our team would’ve expected, but then the fourth quarter, using again your guidance, would suggest a very, very strong rebound in the fourth quarter to get to your full year numbers. Maybe I’m calculating that wrong David, but I just want to make sure we’re going that way. If that’s the case, what gives you the confidence on the fourth quarter that things are going to improve that dramatically from the second quarter and third quarter?
Howard S. Frank – Vice Chairman and COO: See this is Howard. Actually based on our current forecasting, we are estimating that Q3 and Q4 yields will be down in the same relative range of 3% to 4%. I said 3% to 4% down in Q3; my guess is it will be in that range in Q4 as well. So, I’m not quite sure how you did your calculation, but that’s the way our numbers work.
David Bernstein – SVP and CFO: That’s excluding Costa in both quarters what Howard just mentioned.
Steven Kent – Goldman Sachs: Yeah, but I mean if the third quarter you are negative 6% to 7% for the whole company right, for constant dollar and then for the full year you were negative 3% to 4%, so something has to happen pretty dramatically
Micky Arison – Chairman and CEO: First quarter yields were up close to 3% on a constant dollar basis. What I suggest is – I think Beth can take you through it, but I think that’s just the way the numbers work right now. But Q3 and Q4 basically look like they are going to be in line. There is always more. The further out you go right now, it’s always more difficult to predict, but I think Q3 does not – well, we’re behind, there is still not that much inventory left to sell.
Howard S. Frank – Vice Chairman and COO: But it sounds like the assumption is wrong, so maybe after the call you can follow through with Beth and see, where this.
David Bernstein – SVP and CFO: The four quarters I mean, you know 2.9% up on constant dollars in the first quarter, 1.4% down in the second and the…
Beth Roberts – VP of IR: In the back half, it’s in same range that we guided to in the third.
Micky Arison – Chairman and CEO: We’re still in the same range that we were at March 5th.
Howard S. Frank – Vice Chairman and COO: By the way, they are only modest changes yield from in North America and Europe from previous.
Micky Arison – Chairman and CEO: I think it’s important to put in context that when the incident occurred it was the second week of January, which is really the peak of the beginning of wave season and when we reported was March 5th only a few weeks into that, so we estimated how deep the hole was and…
Steven Kent – Goldman Sachs: Can you just talk about how you’re thinking about…
Howard S. Frank – Vice Chairman and COO: Q2 held up pretty well?
Steven Kent – Goldman Sachs: I am sorry Q2 was better, but you’re incentivizing more going into Q3. So, can you just talk about – what kind of programs you’re doing?
Howard S. Frank – Vice Chairman and COO: I think it’s pretty well understood that Europe has been challenging us here. I think everybody understood that particularly for the North American brands and that continues to be the case although we are well into it now and it’s pretty much full. So we pretty much know where we are.
Felicia Hendrix – Barclays Capital: Just to – I was actually going to yell that that you should wake up but it sounds like you are pretty awake even though you gave us that disclaimer.
Micky Arison – Chairman and CEO: The only thing is that I have got Queen like running in through my brain kind of.
Felicia Hendrix – Barclays Capital: So I think just to touch upon how you just answered the last question. If I remember correctly normally you are about 85% to 95% booked in the quarter that you are in and then the next quarter out you are about 55% to 75%. So just in term of the China think about your confidence in that guidance that you have provided, are you within those ranges?
Micky Arison – Chairman and CEO: We are.
Beth Roberts – VP of IR: We are in the lower end of the ranges which I think is (indiscernible) comments that we are behind the prior year. But still…
Micky Arison – Chairman and CEO: But within the ranges.
Felicia Hendrix – Barclays Capital: So within the ranges, but the low end for both the third quarter and fourth quarter.
Micky Arison – Chairman and CEO: Correct.
David Bernstein – SVP and CFO: Correct.
Felicia Hendrix – Barclays Capital: Then also to…
David Bernstein – SVP and CFO: The third quarter is – with the third there is not that much left to sell, even though we are behind maybe and maybe I pointed to there is not that much left to sell in Q3.
Felicia Hendrix – Barclays Capital: Then so obviously the fourth quarter’s range is wider and that kind of gets to my question because what we have been hearing is from the – all cruise lines, not just you, your competitors, you have been holding price for as long as you can and then discounting kind of lower – the closer you get to the cruise. So when we think about that, when we think about the fourth quarter kind of being usually historically more difficult quarter and in light with the guidance that you gave, how confident are you in that?
David Bernstein – SVP and CFO: I am confident in the guidance we gave right now. To be honest with you, I think we are going are – the numbers aren’t going to change dramatically I think for the second half of the year.
Micky Arison – Chairman and CEO: Obviously, we only give guidance that we are confident in, but you never know, we never know about hurricanes, we never know about the election season. I mean there is a lot of things that can happen between now and then, but based on everything we know today, we are very confident.
Felicia Hendrix – Barclays Capital: Is it fair to assume that in your guidance you kind of take into consideration these programs that you might be implementing to stimulate demand?
David Bernstein – SVP and CFO: They have already been implemented, yeah
Micky Arison – Chairman and CEO: They have been implemented and our volumes are up substantially as we said in the press release. So, they have been implemented and they are working and they are working very significantly, obviously, at Costa and well in the other brands as well.