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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the first quarter earnings
conference call. (Operator Instructions) I would like now to turn the conference over to
Howard Frank, Vice Chairman and Chief Operating Officer. Please go ahead, sir.
Howard S. Frank
Good morning, everyone. With me this morning is Micky Arison, Chairman and CEO of
Carnival Corporation; David Bernstein, Senior Vice President and Chief Financial Officer; and
Beth Roberts, our Vice President of Investor Relations.
We are going to start the program off with David taking you through the first quarter and
then I will try to give you some color on what the rest of the year looks like.
David Bernstein
Thank you, Howard. I will begin the conference call by reading the forward-looking
statements. 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 Carnivals
earnings press release, and its filings with the Securities and Exchange Commission.
For the first quarter 2008 our EPS is $0.30 per share which is above the midpoint of our
latest guidance in the 10-K by $0.03 per share. The 10-K guidance was $0.26 to $0.28
diluted EPS. This resulted from lower than expected fuel prices worth about a penny per
share; the positive impact of currency worth about a half of penny per share; various other
cruise costs which in total were worth almost $0.02 per share; and all of this was partially
offset by the fact that we excluded the fuel supplement on existing bookings from first
quarter revenue which cost almost a penny per share.
Let me elaborate a little on the status of the fuel supplement program which we announced
last November. As you know, the Florida Attorney General is conducting a review of our fuel
supplement program as well as programs at other cruise lines. We believe that our fuel
supplement complies with all applicable laws and we have been fully cooperating with this
review.
Last week, Royal Caribbean announced an agreement with the Florida Attorney General that
expressly permits a fuel supplement but provides onboard credits for the fuel supplement on
bookings existing as of the date of their announcement of the fuel supplement program. We

continued to discuss our fuel supplement program with the Florida Attorney General. We
believe that the facts and circumstances surrounding our existing bookings are different
than Royal Caribbean because our brochures disclose to guests the possibility that a fuel
supplement could be assessed in addition to the advertised price and that such a
supplement would apply to all booked guests.
However, the accounting treatment for recognizing revenue is such that where a significant
uncertainty exists as to the revenue realization such as the review by the Florida Attorney
General, revenue should not be recorded. Therefore we deferred recognition of the fuel
supplement pertaining to existing bookings from our revenue in the first quarter. In order to
be consistent between our current guidance and our first quarter actual results, we took the
conservative approach and excluded approximately $40 million of fuel supplement
pertaining to existing bookings for the full year from our net revenue yield and our EPS
guidance for 2008. The $40 million equates to 0.3 percentage points on yields or $0.05 per
share.
Before I go on let me set the stage. The remainder of my comments will be versus our
December guidance provided during our last conference call. Our EPS came in at the
midpoint of the December guidance which was $0.29 to $0.31 per share as all the pulses
and minuses netted out. While we missed slightly on the revenue side, we achieved our cost
guidance and had small favorable variances in depreciation, taxes and various other items.
Net revenue yields increased 6.2% in the first quarter. This was slightly below the range of
our previous guidance of 6.5% to 7.5% which we gave three months ago. The exclusion from
revenue of the fuel supplement on existing bookings which I previously discussed accounted
for 0.2 percentage points. The remaining difference was primarily driven by the lower than
expected onboard and other net revenue yields. In the 10-K which we filed in late January we
indicated that we had seen some softness in onboard revenues at certain of our
contemporary brands.
On the cost side, cruise costs per available berth day were up 12.9% for the first quarter,
which was within the range of our previous guidance of 12.5% to 13.5% which we gave in
December. Higher than expected fuel costs were offset by other expense items.
Looking more closely at our first quarter operating results, our capacity increased 10.5% for
the first quarter with the majority of the increase going to our European brands. Our
European brands grew 20.6% including Ibero Cruises, while our North American brands grew
5.7%. As indicated before, net revenue yields in current dollars increased 6.2% versus the
prior year.
Now lets take a look at the two components of net revenue yields: Cruise passenger ticket
yields and onboard and other yields. For net cruise passenger ticket yields, we saw an
improvement of 7.7% in current dollars and 4.8% in local currency. Our North American

brands were up a strong 7.1% driven by the recovery in the Caribbean. Excluding Ibero
Cruises, which we began consolidating in the fourth quarter of last year, our European
brands achieved a 1.3% increase in local currency passenger ticket yields.
Im also glad to report that Costas yields in China improved significantly in the first quarter,
as they did in the third and fourth quarters of last year, driven both by price and occupancy,
which resulted from our decision to shift our sourcing strategy for Costa Asia. Based on the
improved performance in December we had announced that we were adding a second shift
to Costa Asia one year from now.
In onboard and other yields, we saw a reported yield improvement of 1.5% in current dollars
but a yield decline of 0.7% in local currency. However, if you adjust the consistent brand and
you exclude Ibero Cruises, Windstar and Swan Hellenic, the year-over-year yield change in
local currency is up slightly 0.2% with declines in our contemporary brands being offset by
increases in other brands.
We have factored in our recent experience in onboard revenue into our revenue guidance for
the year. However, keep in mind that we do not have the same visibility into future onboard
revenue yields as we have into ticket yields where we can analyze advance bookings.
On the cost side, our cruise costs per available lower berth day for the first quarter as I said
before were up 12.9% versus the prior year while in local currency it was up 9.8%. However,
the increases were driven by fuel prices and dry-docks. Fuel prices this year were higher
than the first quarter of last year, costing an additional $156 million or $0.19 per share. We
had ten dry-docks in the first quarter of this year versus four in the first quarter of last year,
which cost an additional $21 million. Therefore excluding dry-docks and fuel in local currency
cruise costs per available berth day were flat despite significant inflationary pressures in
food, wages, crew travel, and other areas of our controllable expenses, the cost per
available berth day remained flat for the quarter.
Turning to our 2008 outlook, I will skip the net revenue yield outlook as Howard will discuss
that in a few moments. As far as our crews cost per available berth day is concerned for the
full year in current dollars it is expected to be in the range of 8.5% to 9.5%. However,
excluding fuel and in local currency it is expected to be down slightly. For the full year based
on the forward curve, fuel prices are projected to be $525 per metric ton for 2008 versus
$361 per metric ton in 2007, costing us an additional $532 million or $0.65 per share.
However keep in mind that fuel prices continue to be very volatile. Overall for 2008 we are
forecasting controllable expense unit costs excluding fuel and currency slightly down and
exceeding our long-term target of unit cost growth between flat to one half the rate of
inflation.
At this point I will turn the call back over to Howard.

Howard S. Frank
Thank you David. Let me start by talking about the booking environment since the beginning
of the year. As we began 2008, cumulative bookings and revenue yields across all brands as
we indicated in our previous call were nicely ahead of last year. While bookings during the
2008 wave season have been slightly lower than in 2007, that was to be expected as our
cumulative bookings at the beginning of the year were well ahead and there was less cabin
inventory left to sell.
Another contributing factor to the slightly lower volume of bookings during wave season is
ticket pricing; during wave season bookings were set at higher levels and of course its also
likely that the slowing economy, particularly in North America but perhaps in Europe as well,
was also a factor in the slowdown in booking volumes. Because bookings were strong
coming into wave season and wave seasons bookings were only modestly lower than last
year our booking picture at the present time is still quite strong with bookings and pricing
still running nicely ahead year-on-year.
What we didnt anticipate in our revenue yield forecast as David discussed for 2008 was a
slowdown in onboard revenues, which was a principal factor in our reduced first quarter
revenue yields and which we have now factored into our yield guidance for the remainder of
2008. As David mentioned, 2008 revenue yield guidance was also lowered because of the
deferral of the fuel supplement revenue related to the bookings we had at the time the
supplement was introduced as result of the Florida Attorney Generals review of this whole
issue.
We do believe we have experienced a soft economy during the first quarter of 2008 and
whether its recession or just a flat economy its not critical to our analysis. It seems we are
going through an almost a perfect storm: an unprecedented decline in house prices not seen
in the last 30 years, financial markets in complete turmoil with banking liquidity substantially
frozen, fuel prices at their highest historical levels in history, a weakening U.S. dollar,
continuing rise in unemployment and the inflation and the worst consumer confidence in
recent years.
Taking all these factors into consideration, we have reduced our revenue yield outlook for
the remainder of 2008 to recognize reduced revenue yield primarily resulting from the
slowdown in the onboard spending pattern. But it seems clear now that the slowing
economy is having some effect in our booking patterns, it is also clear to us that consumers
are still planning to take vacations, although some seem to be trading down to less
expensive, more value priced vacations and thats why cruises are also popular.
The value proposition of largely all inclusive cruise vacations versus more expensive land
vacations is greater now than ever before and it is for this reason that we believe our
business will outperform other leisure companies during periods in which there is a soft or

recessionary economy. Yet with all this consumers are still booking their vacations, albeit
less expensive value-oriented vacations, and that is what we offer.
Do we think the recession will affect the business? The answer is of course yes, but as we
have said many times in the past our business had shown tremendous resilience in our
declining economy and we expect it will do so this time as well. Its also important to keep in
mind that 40% of our revenue and 35% of our capacity comes from other parts of the world
with stronger currencies, which will be a further positive factor in our financial performance
for 2008.
Europe is our second-largest market and while a slowing U.S. economy will affect the
European economies, Europes social systems provide a strong underpinning for European
consumers who place a very high priority in taking their vacations. Our European cruise
brands are performing quite well.
As we indicated in the press release, we have reduced 2008 EPS guidance range to $3 to
$3.20, which is a $0.10 reduction from previous guidance. The $0.10 reduction is comprised
of a number of factors including lower expected revenue yields, the deferral of the fuel
supplement revenue I previously discussed, the higher forecasted fuel cost for the remainder
of the year and a 10% benefit from the strengthening of foreign currencies. Our revenue
yield guidance for 2008 has been increased to 5.5% to 6.5% from 4.5% to 5.5% largely as a
result of the stronger euro and Australian currencies and on a local currency basis it has
decreased 2% to 3% from 3% to 4% since previous guidance.
Let me take you through now the individual quarters as we look forward and give you a brief
outline on how they are shaping up. In the second quarter, companywide capacity is up
8.3% over 2007 and there is only a small amount of inventory left to sell in the second
quarter. Overall occupancy is slightly ahead of last year with pricing nicely up year-over-year.
Our Northern American cruise brand capacity is up 3% in the second quarter; 52% of that
capacity is Caribbean, down from 55% in 2007. Mexican Riviera is 13% versus 11% in 2007,
and the remaining capacity is spread amongst various other itineraries.
North American occupancy is up 1.5 points year-over-year and pricing is well ahead of last
year. All brands are performing well with Caribbean pricing rebounding nicely from 2007.
Mexican Riviera pricing is approximately flat and pricing of most of other itineraries are
higher year-over-year with the exception of the Alaska season which is slightly down. We
currently forecast second quarter North American yields to be nicely up year-over-year.
For our European brands, second quarter capacity is up 23% on a year-over-year basis.
Europes second quarter occupancy on an overall basis is running slightly behind 2007 with
pricing slightly ahead. Europe capacity 59% in European itineraries which is up 7 points from
52% in last year; 16% in the Caribbean approximately the same as last year, 11% in

TransAtlantic, which is also approximately the same as last year and rest of the fleet is in
various itineraries.
Europe itinerary pricing is up year-over-year and pricing in all other itineraries is relatively
flat with the prior year. We are currently forecasting European second quarter revenue yields
on a local currency basis to be approximately flat year-over-year.
As indicated in the press release on a company-wide basis we are currently forecasting
yields in the second quarter to be in the 6.5% to 7.5% range; on a local currency basis that
would be 2.5% to 3.5%. The stronger yields are driven primarily by stronger Caribbean
pricing.
Local currency revenue guidance for the second quarter is slightly lower than previously
thought as it incorporates the lower estimate in onboard revenues that we talked about as
well as the deferral of the revenue related to the fuel supplement that we also previously
discussed.
Based on the forward price for fuel of $528 metric ton, the increase in second quarter fuel
costs is approximately a $161 million over 2007 second quarter or $0.20 per share. Taking
all these variables into consideration, EPS for the second quarter is now expected to be in
the range of $0.42 to $0.44 versus $0.48 year-ago second quarter.
Now let me discuss the third quarter as it is shaping up today. On a companywide basis
capacity for Q3 is up 8.8%; at this time overall third quarter occupancy is up slightly year
over year and pricing is well ahead. North American capacity is up 2% year over year,
primarily resulting from the delivery of Carnival Splendor and HALs Eurodam in the early
summer; 36% of North American third quarter capacity is in Caribbean, which is down from
40% last year; 29% in Alaska which is about the same as last year; and 22% Europe versus
18% last year. The remaining of the itineraries are in various other markets.
North American occupancies were 6 points higher than a year ago and pricing is nicely
ahead of last year. Caribbean occupancy and yields are well ahead year over year. Alaska
and Europe occupancies were slighter down with slighter lower pricing for Alaska and flat
pricing for Europe sailing. As a result of the strong occupancy and pricing for our Caribbean
itineraries we are currently estimating North America brand revenue yield to come in nicely
higher than the third quarter of 2007.
Now turning to Europe. On European brands with the delivery of the Aidabella, for Aida
Cruises and Ventura ship this spring and the Ocean and the Queen Victoria which was
actually delivered at the beginning of this fiscal year, Europe brand capacity is up 24%, in
the third quarter, Europe brand capacity is substantially all based in the Mediterranean and
Northern Europe during the summer quarter.

Given the large capacity increase in Europe at this juncture occupancies are slightly lower
year-over-year, with local currency pricing higher. We are forecasting European local
currency revenue yields to be approximately flat by the time the third quarter closes.
Overall for the third quarter, we expect revenue yields when I say overall combining North
America and Europe, we expect revenue yields on a local currency basis to be higher than
2007s third quarter because of the more difficult comparison to 2007 third quarter yields
last year and factoring in a modest reduction in yields to reflect the impact of the slowing
North American economy, we are forecasting an increase in local revenue yields for the
quarter, but not as high as the increases in the first half of the year.
Now turning to the fourth quarter, companywide capacity for the fourth quarter is up 8.7%
over 2007; booking data for the fourth quarter is still in the early stages so I caution not to
read too much into the information. Overall, fleetwide occupancies are running about 4
points higher on a year-over-year basis with pricing also well ahead year-over-year.
In North America, fourth quarter capacity is up 5% with 42% in the Caribbean versus 46% a
year ago down 12% in Europe versus 10% in 2007, 12% Mexican Riviera, which is
approximately the same as last year and the balance spread amongst various other
itineraries. North American occupancies are running approximately 3 points ahead year-onyear with pricing nicely up as well. Caribbean occupancy and pricing are ahead of last year.
Mexican Riviera occupancy is flat versus last year, and pricing is slightly ahead. Europe
pricing is down year-over-year on a slight increase in occupancy. So the North American
fourth quarter booking picture at this point is quite good.
Capacity for our European brands is up 18% in the fourth quarter. European fourth quarter
capacity is 77% for European itineraries versus 81% a year ago, 10.5% in TransAtlantic is up
from 8.3% a year ago and the balance spread amongst remaining itineraries
Europe brand occupancies are running approximately 3.5 points ahead year-on-year with
pricing also nicely ahead at this junction. Occupancy and pricing for European and
TransAtlantic cruises are up year-over-year. Again I caution not to read too much into this
information, as the fourth quarter is typically one of the most challenging quarters in the
cruise business and there is still a long way to go before the quarter is complete.
For the second half of the year as a whole we are forecasting a year-over-year increase in
revenue yield, but similar to the third quarter the increase will be lower than the first half of
the year, largely because of more difficult comparisons with the stronger yield performance
in the second half of 2007.
With those comments, that completes my story. We will turn it back over to you to open it up
for questions; I ask that you limit your questions to two per person so we can give
everybody an opportunity to ask questions. Thank you.

Question-and-Answer Session
Operator
Your first question comes from Robin Farley - UBS.
Robin Farley - UBS
I have two questions. The first is just on the comments about onboard spend. It sounds like
youre saying it continues to be just the broader market brands and you havent see it in the
other brands yet. I dont know if you can give anymore color on is it across all the items of
onboard spend or is it sort of more one area versus the other? Just trying to get a little more
insight into that.
The second question is just about the proposed regulations for CBT changes. It sounds like
the decisions can end up being kind of reasonable and favorable, but just wondering what
your expectations are there in terms of timing now?
Micky Arison
As far as onboard revenue, yes. It stayed within the context of the contemporary brands as
we disclosed in the K. We havent seen it in the premium brands. Its pretty much across the
board. I would say if you look specifically at certain areas it would be kind of what you would
expect; if people arent buying homes or looking for homes and decorating homes they are
likely to buy less art than they would if they were buying homes and decorating their homes.
So, the art revenue may be down more than average.
On the other hand, people are taking vacations and going to places for the first time and are
continuing to buy shore excursions so shore excursions would be down less or not down at
all.
So, while there are anomalies within generally its pretty much across the board in the
contemporary brands. As far as the CBT decision, we dont know what thats going to be; we
are hopeful that it will not be impactful to our business as you said.
Operator
Your next question comes from Felicia Hendrix - Lehman Brothers.
Felicia Hendrix - Lehman Brothers
Howard, I just wanted to understand some of your comments relative to the detail you give
last quarter and understand the phenomenon behind the change in terms of the

discrepancy. In this quarter you said that North American occupancy in the second quarter
and the third quarter were up about 1.5 points and 1.6 points respectively right?
Howard S. Frank
Yes.
Felicia Hendrix - Lehman Brothers
That compares to what you said last quarter of up 6 and up 7. So, I am just trying to
understand the change there?
Howard S. Frank
Well in Q2, I think its clear that its a zero sum game, so at point your occupancy, well way
ahead three months ago, your occupancy the amount you can be ahead as you close out the
quarter is going to substantially reduce. I think Q3 is evidence of some slowdown that weve
seen in the booking patterns that I discussed and as a result of that I think that is what we
are factoring into our yield outlook.
But fortunately for us Q3 was well booked and the patterns in Q3 continues and pricing
continues to be very good. So, we feel pretty confident that we will close out the quarter
with up yields as I indicated.
Micky Arison
I think you have to remember if youre looking at a graph of where occupancy is and where
you are going to end up, it ends up at zero. So, the reality is that graph has to narrow as you
get closer and also the reality is when you look at second quarter, we are almost at the end
of the graph and for third quarter we are also very far along the graph. So, it has to narrow
substantially.
Felicia Hendrix - Lehman Brothers
That is what I wanted to check. Just a housekeeping question, your share count this quarter
was 814 million; lower than I had thought it would have been. Did you buy back any shares
in the quarter?
Beth Roberts
It would be anti-dilution. The convertibles in the first quarter [inaudible] was dilutive, which
reduced the share count in the first quarter.
Felicia Hendrix - Lehman Brothers

I am going to have to talk to you about that after because we go through that anti-dilution
math and we still had -- okay, I will just get you offline.
Operator
And our next question comes from the line of Timothy Conder - Wachovia.
Timothy Conder - Wachovia
Regarding the fuel, David, just to clarify again, $40 million you pulled out of your assumption
for the balance of the year, or is that for the full year encompassing the first quarter?
David Bernstein
The $40 million is for the full year encompassing the first quarter. Q1 was $5 million in the
balance of the year. Remember Q1 was just the month of February and then the $35 million
is the balance of the year.
Timothy Conder - Wachovia
You would anticipate that being spread according to historical revenue spreads in the
quarter?
David Bernstein
Of course it was related to existing bookings on November 7th, when we announced the
program so it may not be spread between the second, third and fourth quarter in accordance
with all revenues because the second quarter would have been more booked than the third
and the fourth at that time.
Timothy Conder - Wachovia
Okay, and again that was the 30 basis points of yield that reduced your yield a nickel for the
full year, correct?
David Bernstein
Correct.
Timothy Conder - Wachovia
Second question is related to funding; you have some debt coming due; obviously you have
got new builds of ships and you are always rolling over some of the debt. Historically you
have been able to tap some export/import credit facilities. Given the state of the global

credit markets, can you give us an update or some thoughts as to what you guys are
working on from that perspective?
Micky Arison
Sure. Basically weve completed in total ten Italian export credits, five of which are drawn
and five are yet to be drawn. We had done two German, one has been drawn and one is yet
to be drawn. In total for 2008 basically we have enough committed credit to make it through
the balance of the year for the ship commitments and also the refunding.
It doesnt mean we are not potentially going to do some more opportunistic financing but we
dont necessarily need to do anything for the balance of the year.
Timothy Conder - Wachovia
What was the total of that and any terms on that type of debt, I mean your maturity range,
interest rates?
Micky Arison
This is clearly where our A minus rating is of great benefit to us. We are hearing obviously
from banks and others that makes it much, much easier to continue to do deals with us at
very, very favorable rates. So these are the times were our stubbornness about maintaining
ratings really has helped us.
David Bernstein
As far as your maturities and rates, typically the export credits as you can see in the
financials have been 12 year amortizing loans and some of the ones that we have drawn
have actually all started with a four in terms of the interest rate; something between like
450 and 475. The future ones are in the same general region; some a little higher, some a
little lower but all starting with the four.
Timothy Conder - Wachovia
Whats the total David of the five drawn and five undrawn?
David Bernstein
I dont remember the exact figure but most them are roughly around 350 million per loan on
average.
Timothy Conder - Wachovia

Micky, again, the A minus credit rating is sweet. Thank you.


Operator
Your next question comes from Hakan Ipecki - Merrill Lynch.
Hakan Ipecki - Merrill Lynch
Thank you. With growing capacity in Europe it seems that there is some concern from the
agents on the availability and pricing of airfares or air fare lists from U.S. to Europe. Do you
share that concern and is there anything you can do to offset any negative impact?
Micky Arison
Yes, we do share that concern; on the other hand we do have committed on our air seat
programs committed air seats and committed air prices on our air seat program and we are
fine in that area. Where we are a little bit concerned is people historically have purchased
their own air and whether they would be able to get them at reasonable prices. We are not
as concerned about availability as we are cost, and hopefully it just doesnt take too many
people out of the marketplace.
As Howard reported, as of right now our booking situation is pretty good and so while its a
concern it hasnt seemed to have impacted us very much.
Hakan Ipecki - Merrill Lynch
I see. As a follow on to the pricing trends, it seems that of all the regions Caribbean seems to
be doing the best, obviously there are some easy comps there, but does it change the way
you think about your seat allocations for the next few years? Could we see some capacity
moving back to the Caribbean or are you better off to moving it into Europe or other
emerging markets?
Micky Arison
While the Caribbean has rebounded, I think its clear that yields are much higher in Europe
and Alaska than they are in the Caribbean. I doubt that you will see movement any
differently than you have seen for the last year or so.
Howard S. Frank
And understand that that a lot of those decisions are done on a brand-by-brand basis and
those executives look at the yield and their different itineraries and try to combo what they
think is the right mix between Caribbean, Alaska, Europe and other.

Operator
Your next question comes from Tim Ramskill - Dresdner.
Tim Ramskill - Dresdner
Obviously there is some uncertainty surrounding the fuel surcharges you have discussed
today, but can you just give us some indication whether you would consider extending the
size of the fuel surcharge given where the oil price is?
Secondly just to be clear in terms of your reduction in net yield guidance by 1 percentage
point, how much of that is due to retail onboards and how much is due to not being able to
recognize currently the fuel supplement?
Howard S. Frank
Because of the sensitivity of our discussions with the Attorney Generals Office, wed rather
not talk too much about the issue of what were going to do going forward until weve
concluded those discussions. As far as the impact, Ill turn it over to David.
David Bernstein
We reduced overall guidance by 1%. I had said before 0.3 percentage points was due to the
fuel supplement and the other 0.7 points was due to the changes we made as Howard
indicated in ticket, revenue yields, as well as onboard revenue yield.
Howard S. Frank
But, the large piece of it was onboard.
Micky Arison
Also important to reiterate that weve increased yield guidance on an actual basis so when
analysts are comparing our constant dollars to someone elses actuals if they increase it, its
probably because of currency as well.
Operator
Your next question comes from [inaudible] Conde Asset Management.
Unidentified Analyst
Can you just reiterate- did you purchase any shares in the quarter or no?

Howard S. Frank
We did purchase early in the quarter about $82 million worth of shares.
Unidentified Analyst
Has the economic environment changed enough to make you rethink any of your ship
delivery schedules or potential timeframe for additional orders?
Micky Arison
No, were continuously talking to the yards about delivery times and depending on the
needs of the various brands so you may see minor tweaks, a month here or a month there
but overall Id answer that no.
Operator
Your next question comes from David Leibowitz - Burmingham.
David Leibowitz - Burmingham
Firstly, what about retirement of vessels that are within the fleets, or moving them to joint
ventures or things of that nature, is there anything we can talk to, to that point?
Micky Arison
There are no plans at the current time to retire any ships or put them into a joint venture. As
you know, David, we acquired 75% of Ibero Cruises last year and we have moved one of the
older Carnival ships into that venture, The Celebration, and there will be a second ship to go
into that business in 2009. Some of the older, smaller ships if we can find good buyers for
them because its really de minimus actually in terms of what we are talking about in terms
of our own capacity.
Howard S. Frank
There are only about five or six ships that were built prior to 1988 in our fleet. Its a small
number.
David Leibowitz - Burmingham
When the new Panama Canal is hopefully completed in either in 2011 or 2012, is that going
to change your itineraries as a consequence?
Howard S. Frank

Well, they will clearly give more flexibility to the post-Panamax ships particularly the ones
that are on the West Coast. I dont think it will be a major issue for us, but it will give us
greater flexibility to move post-Panamax, what is presently post-Panamax ships from one
coast to the other the way we do Panamax ships now.
David Leibowitz - Burmingham
Thank you very much.
Operator
Our next question comes from the line of Assia Georgieva - Infinity Research.
Assia Georgieva - Infinity Research
Congratulations on very good results in a tough environment. Can you give us some more
color as to the booking trends by European passengers? Obviously a big percentage of your
source markets and it is my understanding that they dont fall as neatly into wave season
and the trends that we see in North America. And again you mentioned that some of the
weakness from the U.S. economy is spreading into Europe. Have you seen any specific
evidence or you are just being cautious?
Howard S. Frank
Assia, let me handle the last question. We had seen some evidence but it is very recent of
the slowdown a little bit similar to what we have seen in North America and Europe. Whether
its economic driven or otherwise is not clear. Having said that, to respond to your first
question, our booking in Europe has been very, very strong and are significantly up year-onyear. We have several new ships entering service as I indicated, booking are strong for those
ships. I think we are in quite good shape in Europe but in kind of forecasting out yields as I
indicated, even though we are ahead in some cases on European yields right now or
European pricing, our brands are suggesting, given the patterns that we are seeing in
Europe that we will be coming relatively flat on yields in Europe by the time these quarters
are closed.
Assia Georgieva - Infinity Research
Alaska doesnt seem to be doing so well this year and if I recall last year wasnt that strong.
Any specific reason or just cyclicality there?
Micky Arison
Alaska is doing fine, it was doing fine last year. I think part of the issue is that summer
demand has skewed more towards Europe and I think it has been an issue. The $50 head tax

I think has been an issue. Clearly Alaska is not growing the way other markets are growing
and I think it has been impacted by the $50 head tax. I suspect that it will continue not to
grow at the pace of other premium markets like Europe based on that and other factors.
Obviously you do have to position the ships through the Panama Canal to Alaska and I think
the companies have been conservative in doing that based on what happened with the
referendum.
But overall its fine, I mean it continues to be a very, very good premium market for us.
Operator
Your next question comes from Mark Reid - Land Bank.
Mark Reid - Land Bank
Can you say anything about your bookings visibility? Are you finding that people are booking
later in now perhaps in the last couple of months as there is greater uncertainty in their lives
and what does that mean for Q4 going into 2009?
The second question is source markets within the U.S. economy, are you seeing any regional
imbalances for instance, is Florida much weaker than California?
Micky Arison
First of all, our booking curve is as far out as it has ever been historically and that has been
the case since about the middle of last year. And it hasnt come in at all as far we can tell.
Anecdotally we are ahead in the fourth quarter, anecdotally we are ahead in the first quarter
of 09, so the booking curve is as far out as it has ever been.
A lot of what we are saying unfortunately relates to reading the Wall Street Journal and other
newspapers. Clearly we are more concerned about Florida than California because of that.
The housing situation in those markets is far worse than anywhere else in the country, I
think. So, we are impacted by all of this; we are impacted by what happens in the market;
we are impacted by Bear Stearns and you call tell based on what we are talking about. The
reality is the bottom line our booking pattern is as Howard described it and our booking is as
good as it has ever been. So, we will continue to truck along here.
Howard S. Frank
By the way, Southern California housing is also in a pretty significant decline right now
following Florida and we havent seen in terms of our California sailings any significant issue
at this point.
Mark Reid - Land Bank

On Cosomo, what the update is, when that port will be reopened?
Micky Arison
Last I heard is we are about a month or two ahead of schedule. We predicted a fall of 08
opening and I think right now it looks like early fall. That will give us a nice boost in the
Caribbean, actually.
Operator
Our next question comes from the line of Bob Simonson - William Blair.
Bob Simonson - William Blair
Good morning. Just a couple of numbers questions. Do you have an update or any change in
your expectations for interest and deprecation this year?
Beth Roberts
Interest should be towards the lower end of our original guidance range which was 360 to
380. D&A is also towards the low end of our previous guidance range of $1.290 billion to
$1.310 billion.
Bob Simonson - William Blair
How about CapEx for this year and next?
Beth Roberts
CapEx is $3.2 billion for 08 and $3.5 billion for 09.
Bob Simonson - William Blair
Very good. Thanks.
Operator
Your next question comes from Rick Lyall - John W. Bristol.
Rick Lyall - John W. Bristol
First of all, can you talk to the elements of controllable costs that provide a favorable outlook
for the balance of the year? It looks like you front loaded your dry-dock costs, is that
contributing to it?

The second speaks to Mickys comment about the conservatism. Is it time given your
valuation in dividend yield which is not too far off from your financing costs to consider a
more aggressive repo? Thank you.
David Bernstein
Well, as far as the costs are concerned, the dry-docks its not that we are front loading it has
to just do with scheduling of the dry-dock and there generally isnt much scheduling in the
third quarter because that is of course the strongest season for us. So youve got a lot more
dry-dock scheduled in the first quarter and it was up $21 million. Thats one of the reasons.
Basically, if you actually look over the year we had indicated the controllable costs in the
first quarter were relatively flat and in the second quarter the same thing and for the full
year. So the controllable costs are relatively flat for all four quarters of the year.
Howard S. Frank
Rick, to some degree we benefit from the fleet expansion as well as the larger ships coming
into the fleet which have better cost metrics.
Micky Arison
Particularly in Europe where the scale effect is bigger because the brand is smaller, it has a
bigger scale effect for us.
David Bernstein
And weve got all of the operating units out there looking at costs saving measures in every
respect whether it would be in food or other areas where they can without any noticeable
service change, reduce costs on an ongoing basis.
As far as the buyback program is concerned, we have said publicly before that we are going
to be opportunistic in buying back shares but within our current credit rating. As you can see
in todays credit market with the way the world is going today having a strong credit rating
as Micky indicated before is a top priority given our financing needs. We have been able to
utilize that strong credit rating to complete all the financing we need for this year.
So in todays world our A- is even more important to us than it was ever before and so we
will continue to look at a buyback program. Were going to focus and make sure we maintain
that credit rating and continue to evaluate that over time.
Micky Arison
Otherwise Rick you are 100% right.

Operator
Our next question comes from the line of David Leibowitz with Burmingham.
David Leibowitz - Burmingham
Quickly, the shore excursion part of the cruise not shore excursion, but the short part of
the cruise tours where the passengers are spending a few days pre or post are they
improving for you as a source of revenue? Or are you finding that the tightening in the
overall economy is affecting that part of the business?
Micky Arison
I am not aware of an issue on cruise shore bookings. Its obviously early to tell because we
dont get into that business in anyway until the end of May, but advanced bookings, as far
as I know, are basically on par with expectations and we were good last year. I really cant
comment on that. We may be in a better position to talk about that at the end of the third
quarter but right now we dont see anything.
David Leibowitz - Burmingham
Also the premium, the luxury end of the business. Is there more you could be doing beyond
just having one new ship coming in for Seaborne?
Howard S. Frank
its important to understand that the luxury market is a very small market. I mean a lot of
times you get analysts who kind of compare luxury cruise product to what is perceived to be
luxury hotel product like Four Seasons and Ritz-Carlton. Its really not. I mean the luxury
cruise market is up there with [Hotel du Comp] and the very upper end of boutique hotels
that cost $1,000 plus per day. Of course even Ritz-Carlton has conventions, meetings which
doesnt exist in the luxury cruise product. Sts a very small market, so growing it by one ship
per year for Seaborne, for example, is a pretty aggressive growth rate and if a lot of the
luxury competitors jump into that and grow it, well find ourselves struggling.
The reality is when we made that decision, no one in the luxury market had announced a
new build for a very long period of time and in fact ships were withdrawn; Radisson Seven
Seas at the time withdrew a ship, Crystal withdrew a ship. So, the reality is its a market that
has in my opinion great potential for a very, very small segment and we have to grow it
cautiously and the industry has to grow it cautiously.
Howard S. Frank

And if you think about it, because the new Seaborne ships are more than twice as large in
terms of capacity as the older ships we are tripling the size of the fleet in three years, which
is pretty aggressive.
David Leibowitz - Burmingham
Thank you very much.
Micky Arison
I should say though that early booking indications are really excellent. We are really very
pleased with the early indications for Seaborne Odyssey, she is booking beautifully.
Operator
Your next question comes from Edward Stanford - Cazenove.
Edward Stanford - Cazenove
On the accounting treatment of the $40 million, if and when the Florida Court makes a
decision do you just write it back in the quarter in which the decision was made?
Secondly I think you alluded to perhaps the first signs of weakness in some of the European
brands. Is that more present in volume of bookings or is it in onboard spend? If you could
give us a little more color on that please.
David Bernstein
As far as the $40 million is concerned, first of all there is no court involved. The discussions
have been with the Florida Attorney General and they are ongoing. If there was a decision
that would allow us to continue with the bookings we would recognize those that we did not
recognize in February at the time we reached an agreement with the Florida Attorney
General.
Micky Arison
What is in question is only those bookings that were on our books prior to November 6.
There is now no question about all the bookings after November 7. So the $40 million refers
to the bookings that were on our books prior to November 6 and we will either be able to
take that into income or not; were taking the conservative approach at this point and not
until there is a final determination from our discussions with the AGs office.
Howard S. Frank

And then on the issue with weakness in Europe or some signs of weakness its really very
early and its very inconsistent and it can vary significantly by each of the major markets.
Some market continues to be quite strong, others seem to be moderating, and week in and
week out because we are so close to it you do not want to be overly influenced in terms of
what you see in terms of the current booking pattern, because it may not hold up for a while.
So you may find that it could strengthen.
During this pre-Easter period its very difficult to determine whether some of this is as a
result of the early Easter and people focusing on the holiday which does happen as opposed
to any real weakness that is going on.
So, I think we will have a better sense of it but I think our business managers in each of the
European businesses basically are forecasting out good yields based on what they think is
going to happen. That is the best information we have right now.
Micky Arison
You have to put this context that our occupancy right now is about flat, our yields are about
flat and we have a huge increase in capacity; 20 plus percent increase and the industry has
a 20 plus increase in capacity here. So Id venture to say that Europe is performing
beautifully but again we are really impacted I think by everything we read.
I would say that we are a little bit aware of a slight pressure on cost which is in effect our
contemporary European brand has had a little bit of weakness in onboard, similar to
contemporary North American brands. But again, the booking pattern in Europe has been
extremely strong when you consider the amount of capacity thats been added this year.
Howard S. Frank
Bookings are substantially up year-on-year, on an absolute basis.
David Bernstein
Yeah, and they are even on a capacity adjusted.
Edward Stanford - Cazenove
Thank you.
Operator
Your next question comes from Steve Wieczynski - Stifel Nicolaus.
Steve Wieczynski - Stifel Nicolaus

I might be over analyzing this, but when you look at the onboard spending and some of the
weakness there, is it across the board in terms of all categories, or do you have the data to
see that its more of the high end stuff, the spas, that kind of stuff? Can you just comment
on that?
Micky Arison
The reality is that its pretty much across the board as I said before. We have seen more
deterioration in something like art auctions, as I said and less with shore excursion, but we
are talking percentage points. I mean, it is just 1% very, very small movements in all of
these things. I guess we were spoiled by this inflation plus a little bit consistency year over
year over year and now that were not getting it in some brands we thought we should alert
everybody, but its pretty much across the board.
David Bernstein
But understand its more focused, its more of an issue in the contemporary products, on
products other than the premium.
Operator
Your next question comes from Steve Searl - Conning Asset Management.
Steve Searl - Conning Asset Management
From a capital planning perspective, are you assuming that these convertible bonds that are
puttable this year are going to be put back to you?
David Bernstein
We have been prepared if they are put. We actually have two of them that are puttable to us
in April, the 2% puttable on April 15th. The hypers are puttable on April 29th, and if you
looked at our 10-K filing, we signed up a $1.5 billion revolver so that if they are put we have
the available liquidity to pay the put, and so we are ready. But the assumption or actually
the put right is in the hands of the holders and we will leave it up to them.
Operator
Your next question comes from Tim Conder - Wachovia.
Timothy Conder - Wachovia
Once you pass those puts, those two primary put provisions I think you have another one in
October. But once you pass those and say there is no put occurring, would you potentially be

more aggressive at that point assuming no change in everything else in your stock price and
repurchasing stock?
David Bernstein
At that point in time I would still have to reiterate what I said before relative to the stock
buyback program is that our rating is incredibly important to us and allows us the access to
the banks and the capital markets. We will buyback within the context to the rating and that
we continually look at that and evaluate it over time.
Timothy Conder - Wachovia
Whats your anticipated fuel usage? Can I have an update for 2008 as a whole? In the
quarter its not that much, but your tax of benefit was a little bit larger; anything going on
there on a year-over-year basis?
David Bernstein
As far as the tax is concerned, typically in the first quarter we do have a benefit from the
tour operations because of course those are very seasonal and pretty much shutdown in the
wintertime. So, you get a benefit from there. But in addition to that, on top of that, with
some of our Italian subsidiaries, we had a merger and we were able to recognize some tax
benefits as a result of that so thats the increase in the quarter.
We will take one more question, one more caller.
Beth Roberts
And the fuel usage was 3.260 million metric ton for the year.
Operator
There are no further questions at this time.
Howard S. Frank
Thank you all very much. We look forward to seeing you all soon. Thank you.

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