Howard S. Frank - Vice Chairman, Chief Operating Officer and Member of Executive Committee Micky M. Arison - Chairman, Chief Executive Officer, Chairman of Executive Committee, Chairman of Carnival Plc and Chief Executive Officer of Carnival Plc Arnold W. Donald - Director, Chairman of Compensation Committee, Member of Health, Environmental, Safety & Security Committee and Member of Nominating & Governance Committee David Bernstein - Chief Financial Officer and Senior Vice President Beth Roberts - Vice President of Investor Relations

Felicia R. Hendrix - Barclays Capital, Research Division Gregory R. Badishkanian - Citigroup Inc, Research Division Harry C. Curtis - Nomura Securities Co. Ltd., Research Division Ian Rennardson - Jefferies & Company, Inc., Research Division Jamie Rollo - Morgan Stanley, Research Division Lena Thakkar - HSBC, Research Division Assia Georgieva Jaime M. Katz - Morningstar Inc., Research Division Timothy A. Conder - Wells Fargo Securities, LLC, Research Division Robin M. Farley - UBS Investment Bank, Research Division Nicholas Thomas - BofA Merrill Lynch, Research Division Nicholas Thomas - Nomura Securities Co. Ltd., Research Division

Ladies and gentlemen, thank you for standing by. Welcome to the Second Quarter 2013 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded, Tuesday, June 25, 2013. I would now like to turn the conference over to Howard Frank, Vice Chairman and COO. Please go ahead, sir. Howard S. Frank: Thank you, Andre. Good morning, everyone. With me this morning is Micky Arison, our Chairman and CEO, at least he'll be the CEO until sometime this early July; along with Arnold Donald, who is also here this morning on the call. And Arnold, of course, as you know from the announcement, will be our CEO beginning sometime in early July. David Bernstein and Beth Roberts are also with me as well. And let's start this morning off with some comments by Micky in terms of the changes that have been made. Micky? Micky M. Arison: Thank you, Howard. Most of you will have seen the organizational announcement that we released this morning. I just want to make a few brief comments to reinforce what was said in the statement. I have decided, and the board has agreed, that this is a good time to split the roles of Chairman and CEO for Carnival Corp. I'm not going anywhere. I will remain Chairman, and my plan is to continue in that role for the foreseeable future. You can be assured that I will continue to do everything I can to add value to all our shareholders and in fact, to all our stakeholders. I am very committed to the continued success of the company and all of its brands. I will work closely with the board and our management team to guide the next phase of our growth, and I'm excited about the future. I will continue to dedicate my experience and my energy to it. I've been discussing this with the board for some time now, and we have had a robust transition plan in place, with a deep bench of excellent internal executives in our brands and corporate functions, plus a very strong group of individuals on our board. So we were well positioned to make this decision. We announced today that our board member, Arnold Donald, will become CEO starting next month. I believe Arnold is the best person for this job. He has been an asset to the -- he will be an asset to the future of this organization, and I'm very pleased that he's agreed to take on this role and will drive the company to the next level. Howard, our Vice Chairman and COO, will continue in that role. He will continue to bring his many years of experience to the operation of the company, and he and I will work closely with Arnold to generate the growth and performance that everyone expects from our company. As stated in our release, Arnold's experience, qualifications make him well suited for the CEO role. He has a unique combination of board-level knowledge of our company and personal experience building and leading successful businesses. I know he will be successful in his new role as CEO. Many of you will have a chance to meet him in the coming weeks and months. And I'd like to invite Arnold to make a few statements. Arnold W. Donald: Thank you, Micky, and good morning, everyone. As you all know, Micky is a great leader, and in collaboration with Howard, you've witnessed him build with his team the largest and most successful leisure travel business in the world. And I'm personally honored and I'm very enthused to have the opportunity to join and operationally lead the team here at Carnival in our next stage of growth. My experiences in operating businesses and as a board member certainly gives me the appreciation that it will be very necessary for me to spend some time getting into much greater depth on the company's operations, finance, marketing and strategy, but I am optimistic for an accelerated onboarding process and being able to make a contribution as CEO relatively quickly, thanks to having the advantage of some level of understanding of the company from my governance role in many years of close observation. I know a lot of the key people in this organization well, having seen them present at board meetings and other reviews for board members and having spent time with them personally concerning their roles and their points of view. Those experiences give me strong confidence that Carnival Corporation & plc has a great team, excellent fundamentals as a business, a very bright future, and we are well equipped to address over time any challenges facing our industry. I'm looking forward to helping -- to more profitably, consistently deliver on our promise of an exceptional, joyful vacation experience at a great value as perceived by our 10 million plus passengers yearly, reinforcing our company's strength, expanding globally the appeal of our Carnival lines and over time driving our return of invested capital at higher levels. I'm very much looking forward to meeting with our investors, our policymakers, our business partners around the world in the next several months, and I want to assure you that I expect to be accountable, that I believe as the current management team does, in transparency and responsiveness when it comes to important relationships our company has. And I'm very much again looking forward for the chance to meet with you over time. I'm fully committed to creating value for our investors and all the stakeholders that Carnival serves, and I'm very eager to start in the next few days. Thank you. Howard S. Frank: Thank you, Arnold. This is Howard, again. Let me -- let's go back to the usual format, and David will take you through the color for the second quarter. David?

Thank you, Howard. Before I begin, please note that as some of our remarks on this conference call will be forward looking, I will refer you to the cautionary statements in today's press release. Also, all of my references to revenue and cost metrics will be in local currencies unless otherwise noted as this is a much more useful measure of business trends. Our non-GAAP EPS for the second quarter was $0.09 per share. The second quarter came in $0.03 above the midpoint of our May guidance, driven primarily by the timing of SG&A expenses between second quarter and the remainder of the year. Now let's look at our second quarter operating results versus the prior year. Our capacity increased 1%. The Europe, Australia and Asia brands, known as our EAA brands, were up 4.6%, driven by increases in AIDA and Costa, while our North American brands were down 1% as a result of more dry-dock days in the second quarter compared to the prior year. Our total net revenue yields in the second quarter declined almost 2%. Now let's look at the 2 components of net revenue yields. Our net ticket yields declined 2.7%. Our EAA brands were down 3.8%, driven by declines in Northern European brands, partially offset by increases at Costa and P&O Cruises Australia. The North American brands were down 1.8%, driven primarily by promotional discounting at Carnival Cruise Lines. Net onboard and other yields increased 0.5%. The small increase in net onboard and other yields that we saw in the first quarter continued in the second quarter. On the cost side, net cruise cost per available lower berth day, excluding fuel, were up almost 9% versus the prior year. This increase was slightly less than we expected in our May guidance. The 9% increase from last year was driven by Carnival Triumph's repair costs, non-recurrence of last year's one-time litigation and other settlements, incremental insurance costs and more dry-dock days compared to the prior year. As a result of our ongoing efforts to reduce fuel usage, our consumption for available lower berth day declined almost 6% this quarter, which is much more than we had anticipated earlier in the year and saved us $0.05 per share versus the prior year. Fuel savings this quarter -- fuel prices this quarter were down almost 10% versus the prior year, which saved us an additional $0.08 per share. In summary, the second quarter non-GAAP EPS was $0.11 lower than 2012 earnings of $0.20 per share, driven by higher net cruise costs without fuel, lower net revenue yields, which were partially offset by lower fuel expenses. During the second quarter, we took the opportunity to increase our fuel derivative coverage. We now have 0 cost collars to protect our P&L against fuel price spikes for about 40% of our consumption for the remainder of 2013 through 2016, and 25% for 2017. In addition, during the second quarter, we also took the opportunity to narrow the foreign sealing bands on a few of our outstanding collars. In our earnings press release, you can see the complete list of our current derivative position for each year. Now turning to our 2013 outlook. I will skip the net revenue yields as Howard will discuss that shortly. For the full year, net cruise costs, excluding fuel, for ALBD are forecasted to be up 3.5% to 4.5% versus the prior year. This is the same as our interim May guidance, about 1 percentage point higher than our March guidance, driven by increased selling and administrative expenses as certain of our brands expect to increase their marketing spend in the back half of 2013. On a final note, for 2013, at the midpoint of our guidance range, we expect our cash from operations to be $2.7 billion, and our net capital investment is forecasted to be $2.1 billion. At $0.25 per share, our regular quarterly dividend represents $775 million of cash being returned to shareholders on an annual basis. Therefore, we expect that cash from operations will cover substantially all of our CapEx and our regular quarterly dividend. At this point, I will turn the call back over to Howard. Howard S. Frank: Thank you, David. I will comment separately on the call about the progress we made at Carnival Cruise Lines and Costa Cruises, but first let me bring you up to date on the last 11 weeks of bookings since the end of March. For this discussion, I've taken Carnival Cruise Lines' bookings information out of the mix, which I'll also comment on separately. All of the pricing information I will be discussing is using constant currencies. Fleet-wide bookings during the last 11 weeks, from the end of March covering the next 3 quarters, are running higher year-over-year at higher prices, and as I said, this excludes Carnival. The North American brands' bookings and pricing during this 11-week period are higher. And for EAA brands, bookings and pricing are also higher versus the prior year. We see the EAA booking pattern as a particularly encouraging sign, especially given the continued softness in European economies. Our Carnival Cruise Lines' bookings and pricing over the last 11 weeks are both lower year-over-year in a high-single-digits, low-double-digits range, respectively. During the last 6 weeks, there has been a gradual improvement in Carnival's booking volumes and pricing, and we are hopeful that this trend will continue. With the successful reintroduction of the Carnival Triumph in Galveston 2 weeks ago, we believe this will serve as a bottoming inflection point, and we are expecting Carnival's Cruise Lines pricing to gradually improve over time. Regular booking is down by major trades as in -- for North America brands, Caribbean itinerary booking volumes for the last 11 weeks covering the next 3 quarters, and this excludes Carnival, are slightly lower year-over-year at slightly higher prices. Alaska bookings, again excluding Carnival, are significantly higher at lower prices. And European itinerary bookings for North America brands, and this, of course, excludes Carnival as well, are slightly lower at nicely higher prices. By major trades for EAA brands, European itinerary booking volumes, and that's approximately 60% of EAA capacity, are significantly higher at higher prices, a very encouraging sign. Caribbean itinerary volumes for EAA brands, which are just under 10% of EAA capacity, are running behind last year but also at nicely higher prices. Now let me comment on the cumulative booking status for each of the third, fourth quarters of 2013 and Q1 of 2014. For the third quarter, on a fleet-wide basis at the present time, occupancies are slightly behind last year at slightly lower prices. North American brand occupancies, and this excludes Carnival, are slightly behind at flattish pricing. Alaska pricing is behind last year, and North American brand -- European itinerary pricing is higher versus last year. Carnival Cruise Lines' pricing is lower on all of its major itineraries versus last year. EAA brand occupancies for the third quarter, which are largely in Europe trades, are slightly behind last year at lower pricing. Occupancies for our Asian and Australian businesses are nicely higher year-over-year, with slightly higher pricing. The performance of Costa in China is particularly encouraging given the doubling of its capacity in Asia during the quarter. As we said in the press release for the third quarter, we are forecasting revenue yields to be lower by 3.5% to 4.5%. If we take Carnival out of that mix, revenue yields will be lower in the 1.5% to 2.5% range. For the fourth quarter on a fleet-wide basis, excluding Carnival, cumulative occupancies are slightly lower at slightly lower pricing for North American brands. Excluding Carnival again, occupancies are lower at higher prices. Carnival Cruise Lines' occupancies for the fourth quarter are also lower at higher prices -- slightly higher prices. For EAA brands, occupancies are flattish year-over-year at lower prices. Costa brand occupancies for the fourth quarter are nicely higher at lower prices. This is the first time during the last several quarters that Costa has been ahead of the closer end booking curve this early in the booking process. We read this as a very positive sign and are expecting Costa to have a nice increase in revenue yields in the fourth quarter. For the first quarter of 2014, data is very preliminary but the picture shows that on a fleet-wide basis, and this includes Carnival, occupancies are lower year-over-year at higher prices. North American brands occupancies, again including Carnival, are lower year-over-year at nicely higher prices. EAA brands occupancies are also lower at slightly higher prices, but this information is early, and I wouldn't read too much into it. Now let me just make some separate comments about the Carnival Cruise Lines brand, if you will. The impact of the ship incidents earlier this year on the Carnival brand has resulted in Carnival having to make a significant reduction in its profit forecast for the remainder of this year. Carnival-forecasted year-over-year profit decline is estimated to have a $0.50 per share effect on the company's year-over-year results. Of this, approximately $0.27 is primarily due to lower revenue yields, $0.16 results from lost sailings and repair costs relating to the Carnival Triumph refurbishment, increase costs for Carnival's vessel enhancement programs, and a higher planned marketing spend in the second half of the year for Carnival Cruise Lines amounted to $0.07 a share. And that builds to the $0.50 decline in year-over-year results. As I said earlier, we do believe a successful reintroduction of the Carnival Triumph early this month, together with the ship enhancements, will be made -- will be the catalyst for the Carnival turnaround. I should add that the Carnival brand is very resilient, with a very large number of past guests that understand the great fun experience and value of a Carnival vacation. Almost 4.5 million guests sail with Carnival every year and have a great vacation. We are confident that as time passes, this brand will come back stronger than ever. Having said that, our advisers are saying that the recovery will be gradual, and it will take 2 to 3 years for the Carnival brand to fully recover. But the good news is that it appears that the recovery has started. Based on recent surveys, consumer perception of the brand has significantly improved since the incidents back in March, and we expect this trend to continue once confidence builds back in the brand. We will need to cycle through a full year before we begin to see positive pricing comparisons, which should begin in the second half of 2014. I also want to take this moment to thank the travel agent community for their support of Carnival Cruise Lines during this period. Travel agents know that Carnival provides great fun-packed vacations to a wide spectrum of consumers, families, adults, adult couples, singles and retirees and at very affordable prices. Many of our travel agent partners have been very supportive of Carnival during this challenging period, and for that, we are very grateful. On the other side of the Atlantic, Costa Cruises' market recovery continues. The company is forecasting a return to profitability this year from a loss in 2012. Michael Thamm has made a number of changes to the management team, and we are starting to see the results of those efforts. The perception of the brand in the Italian market, which is its largest market, has significantly improved from last year and continues to trend in a positive direction. Recent year-over-year booking volumes and pricing have been strong, and it appears that the cost to recovery is well underway. Of course, a major challenge in Europe right now is the weakened economies, especially in Italy and Spain, but we still expect to grow year-over-year revenue yields for Costa in 2013. Second quarter revenue yields for Costa were higher year-over-year as David mentioned, and we expect Costa revenue yields for the third and fourth quarters to also be higher. From an overall perspective, while the year 2013 is disappointing for our company, we believe the worst is over, and a gradual recovery to our business is starting to build. In North America, our premium and luxury brands will have a solid performance in 2013. However, it is clear that more needs to be done to strengthen consumer demand for taking cruise vacations. So beginning in the second half of the year, we are planning to increase marketing spend across all North American brands and expect this to continue into 2014. Let me bring you up to date on several recent management changes at the company. Roger Frizzell joined us just yesterday as a Senior VP of Corporate Communications. Roger will be very helpful to us in working in our media relations, as well as developing a corporate communications plan. Roger joins Carnival after a very successful track record at several major companies, including Pacific Gas and Electric, American Airlines, Hewlett-Packard and AT&T. Captain David Christie has also joined the corporate management team as a Senior Vice President, Maritime Quality Assurance. David was instrumental in establishing our CSMART simulated training facility in Almere in the Netherlands and is leading the effort on behalf of the corporation to build our new global training facility, which will also be located in the Netherlands. This new training facility will include 5 bridge and 4 engine room simulators, as well as additional training and classroom facilities for our ship and shore-side staff. We believe this new Carnival education and training center of excellence will be the largest and most comprehensive maritime facility in the world. Captain Mike Kaczmarek has moved over full time as Vice President of our Corporate R&D Technology group. This group has been responsible for developing the new scrubber technology, which is now successfully operated under a pilot program on one of our ships. We are planning to install the scrubbers on 2 more ships later this year, and we expect to begin a full rollout of scrubbers installations on our ships in 2014. We have a number of other R&D projects underway primarily focused on fuel savings technology, including the piloting of a bubble system on one of our ships later this year to improve the ship's hydrodynamics. And later in 2014, we are pilot testing using LNG on one of our ships. We have made significant R&D investments over the last several years and the results have been gratifying, with fuel savings in 2013 forecasted to be at 5%. We have also begun to search for a Corporate Executive Vice President to oversee the various maritime departments in the corporate organization, and this includes our corporate maritime policy, our maritime quality assurance, and -- which includes CSMART and our maritime auditing group. This executive will also have a see-through line of sight to the senior maritime executives in each of the operating companies. These corporate management changes are part of our plan to move towards a more consistent maritime and technical policies and practices throughout the worldwide fleet. We have also made a number of changes to our management teams at Costa and Carnival U.K., and we are confident that under Michael Thamm and David Dingle's leadership, our European businesses will continue to improve in 2014. At Carnival Cruise Lines, the marine and technical management teams has recently been augmented with the additions of Richard O'Hanlon, a former U.S. Navy Admiral, as Vice President of Nautical and Safety Operations; and Mark Jackson, a former Coast Guard Captain, as Vice President of Technical Operations. Turning to our newbuild program, our current schedule includes 7 new ships to be added to the fleet between now and 2016. Two of the ships are for the AIDA brand, the strongest-performing brand in the fleet. And the remaining 5 ships on order are spread across 5 of our other major brands. We believe these new ships, which have a capacity of 50% to 70% higher than the existing ships in their respective fleets, are far more fuel efficient and will help to improve our return on invested capital for the company. We plan to add ships to our fleet only where we believe we can generate higher overall ROI for the brand. In other words, ships that will improve the brand's operating margins without negatively affecting the margins on the existing ships in the brand. At the same time, we continue to seek buyers for certain of our older and smaller ships, and those efforts are ongoing. So with those comments, Micky, Arnold and the rest of the team is here to answer any questions you might have. Andre, can I turn it over to you now?

[Operator Instructions] Our first question comes from the line of Felicia Hendrix with Barclays. Felicia R. Hendrix - Barclays Capital, Research Division: Micky, I'm just wondering, as you transition to your Chairman-only role, are you immediately relinquishing all the day-to-day roles, including those related to operations, shipbuilding? Just wondering how involved you're going to be. You were deliberate in saying in your prepared remarks that you weren't going anywhere, so I'm just wondering how you view your role going forward. Micky M. Arison: Well, primarily, I do my role as doing whatever Arnold needs me to do. I'm -- my basic philosophy has been with all our CEOs, that I'm there to help them be successful. And anything that I can do to make -- to help Arnold become hugely successful and the company hugely successful, I'm prepared to do. So I obviously will continue to work on areas that I have extensive knowledge, in newbuildings and other areas, but it's really going to be a collaborative thing between me and Arnold to decide what are the best uses of my time. I'm going to be looking to Arnold to run the day-to-day corporate operation, and I may even take a couple of golf lessons. Felicia R. Hendrix - Barclays Capital, Research Division: Sounds nice. And, Arnold -- I'm kind of jealous. Arnold, congratulations to you as well. And also, since you aren't new to the company and now in the CEO role, what do you think are going to be your immediate agenda items? Arnold W. Donald: Thank you. Immediately, we're T minus 8 days or 9 days or whatever it is before I come in, but the immediate thing is to spend in-depth time with the leadership team. And we have some tentative plans as a team, Micky, I and Howard together, and we'll refine those through conversations with the rest of the leadership team. But immediately, it's to spend time with them and then ultimately, of course, to contribute to a very strong team that's already proven in the industry, has built the world's largest leisure travel business and is continuing to operate successfully and to join that team and help drive over time the return on invested capital and additional customer satisfaction. Felicia R. Hendrix - Barclays Capital, Research Division: Howard, have I burned through my questions, or can I ask one more? Howard S. Frank: You could have because you're so nice. We're going to have -- let you have one more question. Felicia R. Hendrix - Barclays Capital, Research Division: Thank you. And Howard, this one's for you. Howard S. Frank: Oh, no! Felicia R. Hendrix - Barclays Capital, Research Division: On the Carnival brand, you gave us some great color as usual. I appreciate that. But just wondering, what areas do you think you have the most work to do? Is it with the travel agents? Is it with the consumers? Is it both? And just wondering if you could walk us through some specific examples of efforts you've been making there and maybe highlight some of the near-term wins that you may have had, if any? Howard S. Frank: I think the Carnival team, the marketing team and the sales team, have been increasing their engagement with the travel agent community, and that will continue. There are more things to roll out. I think the reintroduction of the Triumph was sort of the tipping point, I think, for beginning that process. And they're very encouraged by the early responses they've been getting. And we've been seeing it actually in the booking pattern itself. The successful reintroduction of the ship in Galveston was a very positive event for the company. We've also put on a lot of communications on all the investments we've been making with the ships to get people to rebuild trust in the brand. And especially, that's important with the consumer and the first-time cruiser. That's going to take -- and that's going to go on for quite some time. So there's a multitude of efforts being made by Jerry and his team to move this forward, and you'll see a lot more unfold, I think, over the next 6 months. Micky M. Arison: If I can just add that when you're carrying 4.5 million passengers, most of them coming from the United States, meaning that upwards of 1 in 3 passengers that go on a cruise in the United States go on a Carnival Cruise, and 99% of them are coming back happy and telling their friends and getting on Facebook and Twitter and then telling people what a great time they've had. That is powerful, 90,000 folks every single week coming off those ships in the U.S. and talking about the great experience and right now, the great value they got as well. So I think that will help accelerate the comeback of the brand.

Our next question comes from the line of Greg Badishkanian with Citigroup. Gregory R. Badishkanian - Citigroup Inc, Research Division: My questions are -- first, just in terms of your 2- to 3-year estimate for recovery of the Carnival brand, what assumptions are behind that, of the people that you spoke with? I don't think there's any past industry events, but did you look outside the industry, for example? Or what helped you determine that? Howard S. Frank: Yes. I mean, there were -- our consultants have basically used an analogy of 2 other non- -- Greg, non-industry events, and we're tracking the same way. In terms of consumer perception, we're tracking the same way, which was a significant fall off in brand perception and then a gradual recovery until it's 3 years out. So their view is that while we're a very different industry, it's likely that we will follow the same pattern, and that of course assumes that we get it right and we get the marketing out there right, and we get our media communications out there properly, and we continue to stay in touch with our consumers and our travel agents. So their feeling is that we should track -- and by the way, I would say up until this point, it has tracked. In some cases, a little bit better than one of the issues that -- one of the companies that had a mishap. So I think we're doing okay. It's not an exact science. It's just their best guess as to how long it will take for us to get back on -- get the brand back to where it was. Micky M. Arison: Again, that is coming from consultants who have gone through similar types of situations. But I do think the strength of the brand, the amount of market share it has in the United States and the amount of people coming back, will excel. But safety was never an issue, and I think it's important for people to understand that. And a lot of the examples that our consultants give us do have significant casualty issues associated with the brand damage. So I'm very hopeful that the recovery could be much faster than the consultants are leading us to believe. Gregory R. Badishkanian - Citigroup Inc, Research Division: And that makes all sense, by the way. And, Howard, just with respect to the recovery you mentioned over the last 6 weeks, I don't know, you speak a little bit faster sometimes than I can follow, so when you were talking about the last -- what other color did you give around that? Are bookings flat year-over-year at this point? And when -- if not, when would you expect those to be for the Carnival brand? Howard S. Frank: Well, based on a very recent couple of weeks, bookings have been up nicely for the Carnival brand. That's the most recent. And that's since the reintroduction of the Carnival Triumph. Bookings have been positive across the brand. And for the Triumph and the Magic, the 2 ships that are in Galveston, bookings have been substantially higher year-over-year. So that's kind of giving us the feeling that -- and by the way, it is the beginning, so I don't want to set up expectations here that we can't achieve. But certainly, we're very encouraged by what we see. Micky M. Arison: Right. I also should mention that the refit of the Carnival Sunshine, all the bunch of 2.0 additions, have been incorporated into the Carnival Sunshine. And... Howard S. Frank: We've been trying to [indiscernible]... Micky M. Arison: Some were added to the Triumph, a few were added to the Triumph, but all of them were put into the Carnival Sunshine. And the response from the guests of all these various new features have been just absolutely fantastic. So I think Jerry and his team, as far as upgrading the product and making Fun Ship 2.0 a really viable addition to the Carnival brand, particularly on Carnival Sunshine, has been hugely successful.

Our next question comes from the line of Harry Curtis with Nomura Securities. Harry C. Curtis - Nomura Securities Co. Ltd., Research Division: Can you give us a sense of the repair costs that you've isolated in 2013 at $0.16 a share? How much of those are likely to bleed into 2014?

The repair costs should be -- for the Carnival Triumph should be completely done. There's a little bit in the third quarter, but that will be it. Harry C. Curtis - Nomura Securities Co. Ltd., Research Division: And what about retrofit? Will that continue into 2014?

Are you talking about the vessel enhancements? Harry C. Curtis - Nomura Securities Co. Ltd., Research Division: Correct.

We had -- yes, we had talked about the vessel enhancements being a multiple year process. So there will be some of that in 2014 as well. Harry C. Curtis - Nomura Securities Co. Ltd., Research Division: Can you quantify that for me?

Not at this point. It was probably around $0.06, $0.07 a share in 2013, but we're looking -- we're working through those issues as we put together the detailed schedule for 2014. And I'll probably give you more color on that later in the year. Howard S. Frank: Yes, we're typically waiting to do that. We'll have really much better information later on in the year as we go through the individual business plans for the operating companies and see what their plan is for 2000 -- for the 2014 rollout of these investments.

Keep in mind though, that the overwhelming majority of the $600 million to $700 million that was in the press release is CapEx. There's only some small pieces that will be in the P&L. Harry C. Curtis - Nomura Securities Co. Ltd., Research Division: And then a similar question as far as marketing, you isolated that at $0.07 a share this year. Do you think that, that incremental cost stays about the same next year? Or does it go higher? Or might it come down a bit? Howard S. Frank: Harry, again, let's just wait until the end of the year when we go through the business plans and we'll -- because the -- I think each of the brands, and it's also true in Europe as well, are also looking at changes in their marketing approach. So we'll have a better sense of the overall increase in marketing for 2014, but that won't happen until sometime later in the fall. Harry C. Curtis - Nomura Securities Co. Ltd., Research Division: Okay. And then greetings, Arnold. Just -- you've been on the board for 12 years, you've got a pretty good idea of how Carnival runs. Do you see any pretty clear opportunities to improve the company's return on invested capital? Is there any low-hanging fruit that you think you might want to focus on? Arnold W. Donald: Well, as you know, there's a difference between being on the board and being in operations. So I've had close observations. I think the team in place has been a continuous improvement in terms of cost management, as well as revenue generation. So I feel strongly that we'll discover some opportunities, additional opportunities along the way. But I feel the team is performing very well right now. Howard S. Frank: Harry, just let me -- let me just jump in here for a second. I think the view is that to drive increased -- we can at the margin improve ROIs in a variety of different ways, including some of the things that we -- in terms of the newbuilds that we have that are better -- much better, more efficient ships and so on, much -- drive much higher returns. But clearly, revenue improvement is part of our plan to drive our -- we need to do that. I think we'll see some of that naturally occur as the Costa brand improves and as the Carnival brand improves. We'll start to see some benefit from that. And I think one of the thoughts that are going around in the various companies is the increase in the marketing spend I think that we're talking about is also there, is also being planned, I think, to drive better revenues on the net line. So I think those are the kinds of strategies that we're talking about right now.

Our next question comes from the line of Ian Rennardson with Jefferies. Ian Rennardson - Jefferies & Company, Inc., Research Division: I've got 2 lines of questioning for you, please, number one is regarding the new CEO role. Did you search both internally and externally for the new CEO? What is the mandate? And do we really see any material shift in policy and strategy? Do you think we'll be adding more capacity than planned? And then the second revolves around the ECA, the oil price. But 2015 is not that far away, and your 10-K tells us you've got, in a worst case, $265 million of extra cost because of the low sulfur fuel requirement. Are you in a position to talk to us about how you can mitigate that, to what degree you can mitigate that? And if you can mitigate it, what the extra CapEx might be? Micky M. Arison: Okay, let me first -- on the issue of the Chairman/CEO role, we've been talking -- I've been talking to the independent directors of the board for quite some time about where we go from here as far as corporate management and structure. We said 10 years ago in our discussions in the U.K. that we were totally committed to the DLC structure, very sensitive to U.K. governance and have moved in that direction over the years. And obviously, a key element of those discussions over the last 10 years has been splitting of the Chairman and CEO role. So I've been sensitive to that for quite some time. we've been talking about it for quite some time, myself and the -- and Stu Subotnick, who is the Lead Independent Director and Chairman of the Nominating Governance Committee, talked extensively with the committee about various candidates. We did not do a full -- we didn't hire consultants to do a full external search. We felt very, very comfortable. I recommended Arnold as a choice and Stu, and the committee immediately supported that, as well as all the independent directors. So we felt we had the right candidate. There was no reason to go beyond that, and we're -- and I'm delighted that -- we didn't know when Stu called Arnold, whether it would be something he would entertain, and we were delighted he did, and that's the way -- that's the direction we went. Clearly, this ties much greater with the U.K. governance model than the U.S., but I think, even in the U.S., it's starting to move in this direction. So that's the way it all happened. As far as ECA?

Yes. Thank you, Micky. Howard did mention in his notes that we had a scrubber on -- that is successfully operating on one of our ships, and we're going to put scrubbers on 2 more ships later this year and that we then expect to roll out the scrubber installations in 2014. We may not have every single ship equipped with scrubbers by January 1, 2015, but we'll clearly prioritize those ships that have the biggest impact. So in 2015, with the new ECA, we do believe we can mitigate a significant portion of that $265 million. We may not get it all in 2015, but we will get it all shortly thereafter as we do the installation. It's about $1 million to $1.5 million per engine. You got to do at least a couple of engines on each ship. So it is a significant amount of CapEx. But the numbers that we've been giving out for CapEx do include our anticipated scrubber CapEx as well. So those are already in the numbers you've heard Beth give out.

Our next question comes from the line of Jamie Rollo with Morgan Stanley. Jamie Rollo - Morgan Stanley, Research Division: First question. I think you said for the Carnival brand that as you cycle through next year, the yields wouldn't recover till the second half. So is that sort of an informal guidance for yields of the Carnival brands be down in the first half broadly? And then the second question was on the implied yield guidance for the fourth quarter. It looks like quite a wide range of sort of between 0 and down 4%. And 0 will be a pretty big recovery from Q3's minus 4% guidance figure. I was wondering if you could talk a bit about that please and where the risk lies within that Q4 range? Howard S. Frank: Jamie, this is Howard. It wasn't really in -- the Carnival cycling through a full year before it starts to see positive pricing was not meant to be guidance. What I meant to say is that we'll begin to see in the second half of 2014 the possibility of yield improvement on the pricing that we're taking on a year-over-year basis. So it'll be because of the easier comparisons. And if you assume improvement in the perception of the brand, and that we should start to see some pricing improvement, how that falls out in 2000 -- in the third and fourth quarters remains to be seen. So I'm not suggesting that's guidance. But we're hopeful that, that will be the beginning of a positive year -- year-over-year improvement in pricing. On the issue of yield guidance, I'm going to turn it over to David.

Yes, Jamie. This is what happens when you round everything to whole percentages and all. I understand the math that you're working through. The expectation on the fourth quarter is that we'll see a little bit better than the third quarter. We are -- as Howard mentioned, we are seeing continued improvement, particularly in Costa in Europe. And as some -- those brands improve in the fourth quarter, the number will be a little bit better than third quarter. Still down, but a little bit better than third. Jamie Rollo - Morgan Stanley, Research Division: And a kind of follow-up from the previous question on scrubbers, I was under the impression they made engines a bit less fuel-efficient just on a consumption basis, obviously cleaner with sulfur. But would there be any impact on fuel consumption once they're fully rolled out?

There are some incremental operating expenses relating to the scrubbers, but there really isn't anything significant in the way of fuel consumption changes.

Our next question comes from the line of Lena Thakkar with HSBC. Lena Thakkar - HSBC, Research Division: A couple of questions. Firstly, I just wonder if you could give a little color around the comments of nicely higher. Just trying to think what that means. Is that a sort of low-single-digit number or sort of mid-single digit? It's just -- I've heard that a few times through the call and just trying to understand what that means. And secondly, if we think about Costa, I understand most of the recovery so far this year has been occupancy-driven. Are we now to assume that the remainder of the Costa recovery is therefore pricing-driven? And I wonder if you could tell us how much of -- or what sort of year-on-year improvements Costa has seen so far and if you expect that sort of a run rate for the rest of the year? Or you expect the revenue, the yield improvements to be sort of lower going forward, given that they are based on pricing rather than occupancy? Howard S. Frank: So that's the first time I've had a question about nicely higher in a while. So nicely higher is somewhere between slightly higher and significantly higher. I hope that answers your question. It is in the mid- to high-single-digits range when I talk about nicelies. It's usually north of 5%. And that's kind of how I see it. And so it's an -- if you come up with a better term for me, send me a note. On the Costa occupancy and pricing improvement, yes, it's on both sides of the ledger. And with the third -- second quarter pricing was up. I'm not sure if it was driven more by occupancy. Yields were up. I'm not sure if they're driven by occupancy and pricing. But clearly, we're seeing even further improvements -- if the -- assuming our forecasts are correct here, and their forecast -- further improvements in Q3 and Q4 over Q2 on -- and a lot of that is going to be driven by pricing.

Yes. You know what happens with Costa because each quarter was so dramatically different, you get a mix impact. Remember their pricing was down in first quarter because of the year-over-year comparison and the strong prior year. So in the back half of the year, we are definitely seeing the overall yield increase is much greater than the occupancy increase. We are seeing the pricing there as Howard indicated.

Our next question comes from Assia Georgieva with Infiniti Research.

I have a couple of questions. Again, discussing the Costa recovery, we are basically 1.5 years since the incident. At the time, you had expected the $500 million swing to profitability, and we seem to be -- to have recovered the vast majority of that. So in 2014, do you think we'll be back to regular profitability? And the second question is related. Can that serve as a model or a potential pattern for the Carnival brand? Howard S. Frank: Yes. Well, I -- first, I don't think we're -- you're right. The guidance was, I think originally, that we took a $500 million hit to operating. I don't think we've gained anything near that back. We went from a loss to a profit right now. And so we're well on our way back, but we still got plenty of room to recover on Costa. And we're hopeful we'll start to begin to see more of that in 2014. But that will even continue into 2015. So we're greatly encouraged by what we're seeing at Costa right now.

Of the $500 million, roughly $100 million of that swing was the loss capacity, which we do not expect to get back until the ship returns. We have the next delivery, which is in 2016? Howard S. Frank: The end of next year. The end of next year. Micky M. Arison: Oh, end of next year.

End of '14 -- '15. Micky M. Arison: '15, you'll get the effect of it. End of '14 ... Howard S. Frank: End of '14, the ship gets through.

And we had indicated Costa's yields for the year were down 16%. We had indicated back in December that we had expected to get about half back this year. But because of the difficult economic environment in Southern Europe, we're expecting to get back 1/4 of it. And we do expect to see continued improvements as we go along. Howard S. Frank: With respect to using Costa as an example of what will happen at Carnival, it's really hard to say because each situation was unique and different, and the markets that they trade in are largely -- are different. And Costa is still dealing with the issue of the Concordia still in the water and probably won't get onto the process for parbuckling it. And moving it out will take probably next 6 to 9 months. So they're still dealing with that issue in Italy. But remember, they market into -- and you know this well -- into Italy, Germany, France and Spain. That's their primary markets. Carnival is principally U.S. markets, and it's really -- it's too early in the process to know if the changes are going to be analogous or not in terms of -- or the improvement are going to be the same or not. I think it's just too early to know.

Our next question comes from the line of Jamie Katz with Morningstar. Jaime M. Katz - Morningstar Inc., Research Division: You guys have mentioned marketing spending increase a couple of times already on the call. Can you talk a little bit about how you're allocating those dollars to reach the consumers and where you're getting your most bang for your buck? And then also, if you've seen any pockets of strength or weakness change in consumers globally, would you be able to offer that information? Howard S. Frank: Jamie, I think -- we're talking about a number of different brands all doing -- making changes. And I'm talking about anticipating -- increasing their spend in the marketing area. A lot of it is going to be focused on travel agents and travel agent co-op marketing, more trade advertising. A lot of it is social media and web-based marketing and is also for the consideration to going back and doing more TV. So it's a variety of these things. Having said that, we haven't seen -- we are going to start the process later on or earlier in the fall to go ahead and look at the marketing programs for each of the brands, and we'll be better able to, I think, articulate exactly what the spend is going to look like and where it's going to be allocated to. I don't know if that helps but it's still early for me to comment specifically. And your second question was -- say that again? Jaime M. Katz - Morningstar Inc., Research Division: Were there any kind of pockets of strengths or weakness as far as like geographically with consumers that you saw change over the last quarter or 2? I mean, I know Europe was mentioned as kind of looking a little bit more promising, but has anything like the North American consumer become significantly stronger or weaker? Is that too hard to parse out with the Triumph? Howard S. Frank: All I can tell you is that patterns both in North America and Europe on a year-over-year basis, pricing and volume seem to be pretty good right now. So it's a pretty positive story. I understand it more North America. I kind of scratch my head a little bit in Europe, to be honest with you, but I'll take it. It is a -- things seem to be -- I think maybe it's consumer confidence strengthening or positive things that are going on. And so we're very encouraged by what we're seeing in Europe right now.

Our next question comes from the line of Tim Conder with Wells Fargo Securities. Timothy A. Conder - Wells Fargo Securities, LLC, Research Division: A couple of things here, relating to Europe in general, if we can characterize using December as the benchmark, you first called out at that time that you had some concerns about Northern Europe. You mentioned that a little bit here in your preamble. Maybe give us some color regarding Northern Europe relative to then. And then it appears that maybe Northern Europe on a year-over-year basis is a little weaker, but Southern Europe, obviously off of an extremely low bar here, is starting to turn to the positive. So a little color on Europe, I guess, number one. And question number two would be related to the redundancies and the retrofits on the ships. It sounds like mid-'14 is when a decent amount of those where you're mitigating a lot of the risk. If you can just give us a little more color and confirmation on that.

I can start with Europe. When we went through the guidance in December, we had indicated that we expected our Northern European brands to be down. And I think I also indicated just a moment ago, we expected Costa to get back about half the yield it had previously lost. As the months and weeks passed, we did see more weakness throughout Europe than we had anticipated. And as we talked on the previous conference call, we brought down the yield guidance relative to Europe, actually in both Northern Europe and for Costa. As I said before, Costa is only expected to get back a quarter of what it previously lost. Now with that said, our -- even though our Northern European brands, the yields are going down, the yields in P&O Cruises and AIDA are still some of the highest in our fleet. They're doing -- they're performing incredibly well, and the return on investment to those brands is again above average for our fleet. So it's a directional change in reduction, but it's still -- their absolute performance is very good. Micky M. Arison: As far as mitigating risk, I would say we've done a number of things to mitigate risk immediately so that the risk level is clearly mitigated. Again, I have to reiterate that it's not a safety issue and that the items that we talked about in our press release, the CapEx, we're rolling out as much as we can in operations. Some of it will require dry docking and because of that, there may be a 2- or 3-year rollout of some items. But many are being programmed and taken care of while the ships are being in operation. So it's a variety of things. But believe me, every day, the risk is being mitigated more and more. Timothy A. Conder - Wells Fargo Securities, LLC, Research Division: Okay. Would you say, Micky, that it's fair that -- the risk of another incident I know can never be 0, but -- a repeat type of incident by mid-'14, is that a fair timetable when a lot of that will be taken away? Micky M. Arison: There's nothing you can be assured of except death and taxes, but we're doing everything we can to mitigate the risk as quickly as we can. Howard S. Frank: By the way, I would just say this, Tim, that, that risk exists not just -- you're talking about relative risk. These are essentially enhancements. We got to keep in mind, and we've said it a number of times, that Carnival Triumph's situation didn't result in anybody being even injured. So I mean, the systems worked, and that's important to remember. All we're doing now is we're enhancing -- further enhancing the systems and further -- making -- to make sure that our customers are comfortable and that we deal with the issues more quickly and more effectively so that we can get the ship back up and running should something happen. But by and large, this is just enhancements. And the rollout of this will be largely -- what you have to do is you have to manufacture a lot of this equipment before you can even install it. And then many of the -- Micky said many of the installations will be -- have to be in dry docks. Some of the installations can be done on the run. Many of the items have already been ordered, and we're waiting for delivery of it and then the installation of it. But the rollout of this will be this year, second half of this year, '14 and '15 where most of the work will be done.

And while we're rolling out the work, the more permanent work, we are putting power packs on the ships very quickly, and that will mitigate some of the risk that we talked about in terms of comfort in the unlikely event anything happens.

I just wanted to add-on to the capacity -- to the comment about Europe, Northern Europe versus the Med. I think it's fair to acknowledge that the Northern European products did have a significant capacity increase this year relative to the Med, and we do not expect that to recur in 2014. Micky M. Arison: Yes. Going back to the risk issue, I do want to reiterate what the former head of the NTSB said, the due risk of driving to the port is a lot higher than anything you do once you get on the cruise. It's probably true. The risk of getting in your shower is a lot higher, too.

Our next question comes from the line of Robin Farley with UBS. Robin M. Farley - UBS Investment Bank, Research Division: Just your guidance excluding the Carnival brand that you talked about booking volume and pricing up for the next 3 quarters. I was wondering if you could give us a sense of if you excluded the Costa brand as well from that, whether the rest of the fleet would be up in volume price just since Costa is obviously being helped by the year-over-year comparisons. Is the rest of the fleet up in price and volume, excluding Costa as well as Carnival? Howard S. Frank: We have the information someplace, but I don't have it right at hand.

Yes. Why don't you give Beth a call after? We don't have the information cut in that many different ways right here at the table. Robin M. Farley - UBS Investment Bank, Research Division: Okay. Okay, sure. And then my other question is you talked about the reintroduction of the Triumph as kind of marking the bottoming of the Carnival brand, and I certainly understand symbolically how that would. But I wonder if you could sort of translate that into more specifically -- you mentioned volumes have been up since then, but can you talk about whether that's with prices having to be down or just sort of quantifying something a little more specific to bookings to see that, that was the bottom more than just kind of the symbolic reintroduction? Micky M. Arison: Clearly, prices have been sharp at Carnival Cruise Lines, but they -- to what -- the context of Howard's point, they haven't been sharper since the Triumph has been reintroduced. We haven't done anything to reduce price since the Triumph has been reintroduced. And I think what was important was that it was reintroduced looking fantastic with a lot of media board, a lot of hoopla in the area. And I think that created the positive spin in an area that was most impacted, which is the greater Texas, Houston area. And I think the coverage was terrific. The -- George Lopez did a great job, Guy Fieri did a great job, DJ Irie did and the whole Carnival team there, introducing some of the new Fun Ship 2.0 features and so on. And the ship looked great. So that clearly had to help.

Our next question comes from the line of Nick Thomas with Merrill Lynch. Nicholas Thomas - BofA Merrill Lynch, Research Division: I wondered whether you could first of all just provide a little bit more color within your full year yield guidance in relation to -- just trying to sort of split that out between the North American brands and the EAA brands. And also an idea on your expectations for the Carnival brand within that? And then secondly, I think a few questions ago and apology if I missed some of the color that was given around this, but a few questions ago, you indicated a degree of encouragement around what you're seeing in Europe fairly recently. Most of the data points that you gave in terms of the next couple of quarters were still sort of occupancy and pricing being down. I wondered whether you could provide a little bit more color around what it is you've been seeing more recently in Europe that leaves you more encouraged. Howard S. Frank: On the North American, Europe pricing for the year...

The full year is down 2 to 3 in total. North America in total is slightly more than the average, and Europe is slightly less than that. So they're averaging out into the middle part of that range. And Carnival Cruise Lines is down in the mid-single digits for the full year overall. So hopefully that gives you a little bit of color. And Carnival is what's driving the North American brands obviously to be down for the year. Howard S. Frank: My recollection is that the premium and luxury brands in North America have a flat yield, flattish yields year-over-year x Carnival. Nicholas Thomas - BofA Merrill Lynch, Research Division: So north -- within North America in total, that would be slightly worse than the down 2% to 3%? The Carnival brand which is broadly half of North America to be down mid-single digit, so therefore means the rest of the North American brands would still need to be sort of down broadly in line with the overall group guidance? Is that [indiscernible]?

Flattish. Howard S. Frank: Flattish. Flat. Flat.

To get to the high end of the range. Nicholas Thomas - BofA Merrill Lynch, Research Division: Okay. So presumably... Howard S. Frank: Let's -- what I suggest you do is you double back with Beth on this stuff, and she can take you through it. Nicholas Thomas - BofA Merrill Lynch, Research Division: Flattish for the rest of the North American brand is what you're saying? Howard S. Frank: Correct. Correct. Yes. On Europe, essentially, what we've seen in the last 11 weeks is an uptick in European bookings and pricing across all -- I believe substantially across all brands. I can't remember every brand there, but it's always been a very positive development in Europe. That's about all I can tell you. Nicholas Thomas - BofA Merrill Lynch, Research Division: Presumably, that's been skewed given the statement you made, what, sort of 5-ish weeks ago when you had the intra-quarter update. When at that stage, Europe was a little worse than it had been. Presumably, the comments you were making was your improvement over an 11-week timeframe. That actually quite skewed towards the latter 5 weeks post that more recent update. Is that fair to conclude? Howard S. Frank: No. I think that's a little bit of apples to oranges comparison. What I was saying 5 or 6 weeks ago, or I think what we were saying, is Europe is softer than our expectations and our guidance, our earlier guidance. This is more year-over-year bookings. And so that has shown improvement over the 11-week period, including that earlier period that we were talking about. However, it was short of where we thought it would be. So it wasn't as strong. We thought it would be stronger, but it wasn't as strong as it was based on our earlier guidance. So they're a little bit of different comparisons. Nicholas Thomas - Nomura Securities Co. Ltd., Research Division: Okay. But compared with sort of 5 weeks ago, nothing particularly material has changed versus your expectations 5 weeks ago. It's the year-on-year numbers that you've seen improving. Howard S. Frank: I think the 6 -- I can't recall exactly. We have 6 weeks data, and we have 11 weeks data. And the 6-week data didn't differ materially from the 11-week data. Micky M. Arison: Really haven't changed our expectations.

Yes, we haven't changed... Micky M. Arison: We haven't changed our expectations. Howard S. Frank: Right. So it's still [indiscernible]. Exactly. In fact. Micky M. Arison: [indiscernible] a little color of recent bookings [indiscernible] haven't changed our expectation.

We presently have no further questions at this time. Howard S. Frank: Okay. Well, thank you very much. I know there'll be follow-on questions, and Beth is around, and we appreciate it. And we look forward to -- Arnold and Micky and I, Dave and Beth look forward to seeing everybody soon. So... Arnold W. Donald: Thank you very much.

Thank you. Micky M. Arison: Thank you. Howard S. Frank: Bye bye.

Ladies and gentlemen, this does conclude the conference for today. We thank you for your participation and ask that you please disconnect your lines.