Micky Arison - Chairman and Chief Executive Officer Howard Frank - Vice Chairman and Chief Operating Officer David Bernstein - Senior Vice President and Chief Financial Officer Beth Roberts - Vice President of Investor Relations

Felicia Hendrix – Barclays Capital Robin Farley - UBS Tim Conder – Wells Fargo Steve Kent - Goldman Sachs Janet Brashear – Sanford Bernstein Greg Badishkanian - Citigroup David Leibowitz – Horizon Asset Management Kevin Milota – JP Morgan Rick Lyall – John W. Bristol Assia Georgieva - Infinity Research

Welcome to the Carnival Corporation fourth 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.

Good morning everyone. We are calling all from not-so-sunny Miami this morning. With me this morning are David Bernstein, Beth Roberts, Micky Arison, Chairman and Chief Executive Officer and myself. To start the call off I am going to turn it over to David and he will take you through some of the color for the fourth quarter results. David?

Thank you, Howard. I will begin the call by reading the forward-looking statement. During this conference call we will make certain forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and assumptions which may cause the actual results, performances or achievements of Carnival to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. For further information, please see Carnival’s earnings press release and its filings with the Securities and Exchange Commission. For the fourth quarter 2009 our EPS was $0.24 per share versus $0.47 in the prior year. The fourth quarter came in above the midpoint of our September guidance by $0.06 per5 share. This was driven by stronger than expected net revenue yields which benefited us to the tune of $0.04. Onboard and other revenue contributed $0.03 as we continued to experience sequential improvement in onboard revenue trends. Ticket prices came in $0.01 better on slightly stronger than anticipated close-in pricing. Overall, net revenue yields in local currency were down 10% almost 1.5 points better than the midpoint of our September guidance. In addition, a variety of cost saving measures and other factors benefited us to the tune of $0.02. Looking at our fourth quarter operating results versus the prior year, our capacity increased 7.6% for the fourth quarter of 2009 with the majority of the increase once again going to our European brands. Our European brands grew 9.5% while our North American brands grew 5.7%. As I previously mentioned, overall net revenue yields in local currency declined 10% in the fourth quarter of 2009 versus the prior year. Now let’s look at the two components of net revenue yields. For net ticket yields we saw a yield decline of 12% in local currency. Our North American brands were down 14% driven by declines in all itineraries. Our European brands were down 9% in local currency on higher capacity also driven by declines in all itineraries. However, it should be noted 1/3 of the decline was due to the exceptionally high yields we achieved on the last few voyages of 2008 of the QE2 just prior to her leaving the fleet. Excluding the impact of the QE2 net ticket yields would have been down 6% which is in line with our European brands’ experience for the first nine months of this year. For net onboard and other yields, we reported a yield decline of 5.7% in local currency. We saw declines in a majority of our brands around the world. Net onboard and other yields in our European brands were down less than in our North American brands, a trend similar to those experienced in net ticket revenue yields. For the first this year we saw an increase in two of the onboard revenue categories; shops and photo. The rest of the major categories were down but for the most part it was an improving trend from the prior two quarters. In summary, given the economic environment we were pleased with our yield performance this quarter. In addition we were very happy to see sequential improvement in onboard and other revenue yields in the fourth quarter as compared the second and third quarters. On the cost side, our cruise costs per available lower berth day excluding fuel were down 2% versus the prior year. Our operating companies once again did an excellent job controlling costs. Fuel prices this quarter were 15% lower than last year saving us $66 million or $0.08 per share. Now let’s take a look at the full year 2009. Our EPS was $2.24, which was essentially at the low end of our original guidance we gave one year ago of $2.25 to $2.75 per share. The midpoint of that guidance was $2.50 which was based on a fuel assumption of $295 per metric ton. If you adjusted our actual EPS which was based on an average fuel price of $363 per metric ton for the December fuel assumption our EPS would have been $2.51 per share. Therefore, excluding fuel we hit the midpoint of our guidance. Given the amount of uncertainty in the world last December I think that was a great accomplishment. For 2009 full year our capacity was up 5.4%. The net revenue yields for 2009 in local currency were down 10%. This was at the low end of our guidance we gave one year ago which was down 6-10%. During 2009 our revenue yields were impacted due to the travel restrictions to Mexico due to the flu virus and we saw more pressure on onboard revenue yields than we expected a year ago as a result of the ongoing recession and its impact on our guests. For the full year, cruise costs per available lower berth day in local currency and excluding fuel were essentially flat. Costs were $170 million better than our original guidance last December as our operating companies continue to do a great job this year with their cost containment programs. In summary, for the full year 2009 we posted solid earnings in what Micky accurately described as the most challenging economic environment in the company’s history. Our cost containment initiatives offset the pressure on our revenue yields. As a side note, I would like to mention we were very pleased with the European brands’ performance in 2009 who despite an 8% capacity increase managed to achieve a relatively moderate yield decline in an extremely difficult economic period. For 2009, our European brands represented only 33% of our capacity but contributed 49% of our operating income. My hat goes off to the management of those brands. Turning to 2010 outlook, I will skip the net revenue yields as Howard will discuss that in a few moments. Cruise costs per available lower berth date for the full year again excluding fuel and in local currency are projected to be down 1-2%. The decline is driven by tight cost controls and lower dry dock costs. While I am happy to say we expect lower unit costs we will not rest there. As always we will continue to look for more opportunities to improve. Based on the current spot price for fuel using two-states closing price, fuel prices for the full year are projected to be $472 per metric ton for 2010 versus $363 per metric ton in 2009 costing us an additional $368 million or $0.46 per share. Furthermore, the dollar has weakened versus the Euro and Sterling so in the end fuel and currency are driving up our costs and therefore in current dollars and including fuel our costs are expected to be up 4-6%. While the FX rate movement increases our costs it also increases our revenue so given these rates the year-over-year profit improvement from currency is expected to be an increase of $60 million or $0.08 per share. At this point I will turn the conference call over to Howard.

Thank you David. Let me take you through some color and some more details on the 2010 outlook. With six ships being delivered to our fleet this year our cruise capacity will increase by approximately 7.7%. Holland America’s New Amsterdam and Seabourn Sojourn will add 3.6% capacity to our North American brands and Costa’s Deliciosa, AIDA Blue, P&O’s Azura and Cunard’s Queen Elizabeth which will be delivered later in the year will add 11.9% to our European brand capacity in 2010. So 2010 promises to be a very busy year for all of our cruise companies. With continued strength in booking patterns during the last 13 weeks, occupancies on a capacity adjusted basis for the first nine months of 2010 are now at approximately the same levels as last year. Booking volumes during this past quarter for North American and European brands covering the first three quarters of 2010 are each up over 40% versus the easier comparisons to last year. But these bookings are also strong on an absolute basis. Actually, on an absolute basis these are the strongest bookings we have seen in our history. Having said that, pricing for cruises still have not recovered as much as we would like and perhaps that is a reflection of the uncertain economic picture for 2010. Still, in selected areas of the business we have seen more demand and have been able to move pricing higher in certain trades. Our US premium brands are showing increasing pricing strength which is a significant reversal from 2009. This also suggests that with the strengthening of the US economy and the rise in the equity markets the higher end customer is feeling better about taking their vacations and the superior value of cruise vacations is driving a lot of business our way. Breaking the recent 13-week booking pattern down by markets, for the North American brands, other than for Mexican Riviera cruises, pricing for all other itineraries are up year-over-year with particular strength in Europe cruises for spring and summer of 2010. Also long and exotic cruise pricing is nicely up year-over-year, a nice reversal from last year. For Mexican Riviera cruises booking volumes are higher year-over-year but as a result of the soft Southern California economy combined with negative perceptions for Mexican tourism, these itineraries have been challenged. We don’t believe Mexican Riviera pricing will worsen for the year as booking volumes have been strong. Capacity allocated to the Mexican Riviera itineraries is under 10% of North American brand capacity in 2010 and we expect further capacity reductions in this trade in the future. Given the continuing strength in bookings which has resulted in occupancies catching up with last year we are now expecting North American brand revenue yields will be higher by 2-3% for the entire year 2010. For our Europe brands which are absorbing a 12.2% capacity increase for the first nine months of 2010 pricing on recent bookings across all European brands is moderately lower than a year ago. In some measures the lower pricing is part of the yield management strategy to drive higher volumes and extend out the booking curve, especially for the continental European brands which had a 19.4% capacity increase during the first nine months. European itinerary pricing which is the majority of the Europe brand capacity is only slightly lower than a year ago. European brand pricing for Brazil programs this winter has been weak as a result of the significant capacity increases in Brazil with the recent strength of European brand bookings we are expecting European yields for all 2010 to be slightly lower on a local currency basis and higher on a current dollar basis. We believe this is a very good result given the significant capacity increase that we have had for our European brands in 2010. Now let me turn to our earnings guidance for 2010. We expect to drive top line revenue growth of approximately 10% for 2010 with the 7.7% increase I referred to before in our fleet wide capacity together with the increase in forecasted current dollar revenue yields of 2-3%. Current dollar cruise costs excluding fuel are expected to be flat to up slightly. The 2010 guidance also assumes a currency exchange rate for Euro at $1.45 and Pound Sterling at $1.63 and the price for fuel at $472 per metric ton which is the approximate price we are paying this week. So while cruise pricing in 2010 is firming and top line growth will be strong, fuel costs for 2010 at current prices will result in a year-over-year increase of fuel of $368 million or $0.46 per share which David referred to. This taken together with the $0.08 benefit from the currency will result in a $0.38 drag on 2010 earnings. Taking all these factors into consideration we have set full-year guidance at $2.10 per share to $2.30 per share with the midpoint of $2.20. Now turning to first quarter guidance which is $0.08 to $0.12 per share, down from $0.33 a share from 2009 first quarter. Top line revenue growth for the first quarter is also expected to increase by approximately 10%. Driving this is a 9.9% increase in capacity days together with current dollar revenue yields which are expected to increase slightly in the flat to up 1% range. Current dollar cruise costs excluding fuel are expected to be up 1-2%. Fuel costs based on $474 per metric ton price for the first quarter will result in higher year-over-year fuel costs in the quarter of $160 million or approximately $0.20 per share. The balance in the difference in earnings from the 2009 first quarter results from the 2009 first quarter having about $0.04 per share below the line nonrecurring gains. Beyond the first quarter 2010 assuming fuel prices hold at the forecasted levels, quarterly comparisons will get easier. You will recall fuel prices began to rise in the second half of 2009 so year-over-year earnings comparisons should become easier as the second half of the year unfolds. Also because we book our cruises so far in advance, the benefit of the more recently higher ticket prices will have a greater impact in the second half of 2010. That combined with the easier comparisons for fuel prices should begin to result in a year-over-year earnings improvement beginning in the second half of 2010. Now let me give you some color on booking patterns in each of the next three quarters and some data points. This is looking at the first quarter where fleet wide capacity is forecasted to be higher by 9.9% as I indicated before. Of that 5.3% is in North America and 14.9% is in Europe for our European brands. On a fleet wide basis for the first quarter occupancies are at the same levels as last year, slightly higher for the North American brands and slightly lower for Europe brands. However, the slightly lower occupancy for Europe is not surprising given the 15% capacity expansion for the European brands in the quarter. At this point we have very little inventory left to sell in North America and in Europe. Looking at just North American brands by themselves they are 62% in the Caribbean in the first quarter, about the same as last year; 11% in the Mexican Riviera cruises which is down slightly from 12% last year and the balance of their itineraries are in various other trades including long and exotic cruises. Currently pricing for North American brand Caribbean cruises is moderately lower than last year with pricing for Mexican cruises down more significantly than the prior year. Pricing for long and exotic cruises has strengthened during the last quarter and are now only slightly lower than the year-ago price. For European brands they are 27% in the Caribbean versus 32% last year; 27% in Europe versus 24% last year; 17% in South America versus 11% last year; 11% in Asia versus 12% last year with the balance in various other itineraries. Europe brand pricing for Europe cruises is down slightly from a year ago and Caribbean cruises are moderately down from a year ago. Europe brand world cruise pricing is nicely up from a year ago. In South America there has been a significant increase and improved capacity in Brazil from our Costa and Ibero cruise brands as well as competitor capacity and prices are down significantly from the year ago. By the time the first quarter closes we expect European brand local currency fleet wide pricing to be 3-4% lower than a year ago but slightly higher on a current dollar basis. Now turning to the second quarter. Fleet wide capacity in the second quarter is expected to increase 8.8%; 4% in North America and 14.5% in Europe. As a result of the significant booking volumes during the current quarter fleet wide occupancies for the second quarter are about at the same levels as last year and similar to the first quarter, slightly ahead in North America and slightly behind in Europe. North American brand capacity in the second quarter is 56% in the Caribbean, up from 54% last year; 10% in Mexican Riviera cruises which is about the same as last year and the balance in various other itineraries including Alaska and European shoulders, long and exotics and Panama Canal cruises. Caribbean pricing for the second quarter for North American brands is slightly lower than a year ago and Mexican Riviera pricing is slightly lower. Pricing for Alaska and Europe shoulders are at approximately the same levels as last year with occupancies well ahead. Combined pricing for North American brands at the current time is running slightly behind the year ago levels but significantly higher than where the second quarter closed last year. The pricing gap has closed significantly as a result of the strong booking volumes during the last 13 weeks and given the continued strength in bookings we are forecasting North American brand revenue yields will be higher in the second quarter from the year-ago levels. Europe brands in the second quarter are 57% in Europe versus 59% a year ago; 11% in Transatlantic which is about the same as last year with the balance of the capacity in various other itineraries including Caribbean, Orient Pacific, World Cruises, etc. Pricing for Europe itinerary cruises is modestly behind a year ago with pricing on most of the cruises moderately behind year-ago levels. With the 14% capacity increase in the second quarter the lower pricing was not unexpected. U.K. brands including P&O and Cunard are showing pricing ahead year-over-year which is a very positive sign. Continental Europe brand pricing with its 23% increase in capacity during the second quarter is running behind last year. However, given the strength of European booking volume, we expect the pricing gap to narrow and by the time the second quarter closes we expect Europe brand pricing on a local currency basis to be at approximately the same levels as last year and on a current dollar basis up significantly from last year. On a fleet wide basis we are forecasting yields in the second quarter to be slightly higher on a local currency basis and more significantly higher on a current dollar basis. Now turning to some color on the third quarter, capacity in the third quarter is expected to increase by 6.1% in total; 3.7% of that is North America and 8% will be the capacity increase for our European brands. Third quarter data is still in its early stages of development so I caution not to read too much into this information. Having said that, early indications for third quarter booking trends are encouraging. Overall occupancies in the third quarter are running slightly ahead of last year with North American slightly stronger than Europe. North American brand capacity in the third quarter is 43% in the Caribbean versus 36% a year ago; 25% in Alaska down from 28% a year ago; 17% in Europe versus 19% a year ago with the balance in various other itineraries including Mexican Riviera and long and exotic cruises. Prices for Caribbean cruises in the third quarter is lower than a year ago but still nicely ahead of where the third quarter closed last year and more importantly Caribbean occupancies are stronger than year-ago numbers. Alaska pricing is lower than a year ago but with the reduced capacity in Alaska pricing appears to be firming. Pricing for Europe cruises is slightly down from a year ago with occupancies well ahead of last year. At this point pricing for North American brands on an overall basis is at or about the same levels as a year ago and well ahead where the third quarter closed last year. Speaking of Alaska, we previously indicated that further reductions in Alaska deployments were being considered by our operating company. The recent announcements by Holland America and Princess to withdraw the Royal Princess and Holland America Ryndam from Alaska capacity in 2011 is consistent with these previous statements. We are hopeful we can work with the governor of Alaska and the legislature of Alaska to address the problems with the head tax and the other higher costs resulting from the Alaska Initiative. We do regret the negative impact these withdrawals will have on our business partners in Alaska and the many communities in the state that depend on the economic benefits our cruise passengers bring to these communities. Turning to European brands, in the third quarter Europe brands are 97% in Europe itineraries which is about slightly up from last year. Similar to the second quarter pricing for Europe itineraries is running behind last year but continues to show some firmness, unlike previous quarters with only an 8% increase in European brand capacity in the third quarter occupancy levels are running even with last year which is also a positive sign and that is on a capacity adjusted basis. Much of the third quarter revenue picture will depend on the strength of the 2010 Wave season although as I indicated, early signs from third quarter bookings has been encouraging so far. With that said, I am going to turn it over to the operator and we will take some questions.

(Operator Instructions) The first question comes from the line of Felicia Hendrix – Barclays Capital. Felicia Hendrix – Barclays Capital: Kind of continuing from your commentary here, I just want to understand a few things regarding your yield outlook for the full year. Because your outlook is basically in constant dollars basis net yields are going to be flat to slightly up correct for 2010? So did I hear you say for the full year North American revenue yields would be up 2-3%?

Yes. Felicia Hendrix – Barclays Capital: Then you also said starting in the second quarter fleet wide your pricing was going to be up so I am just trying to understand why the guidance seems to be so conservative based on the more detailed color you just gave.

To a large measure if you look at our first quarter guidance we were down in the 3-4% range. By the time we catch up with all that we will gradually improve yields year-over-year. Second quarter will be better obviously than the first quarter and the third quarter will be better than the second quarter. I think when you add it all up there is nothing we have filtered into that to change anything. That is basically the way the numbers actually do work. So we will have nice pricing improvement the way we are forecasting it right now. Good pricing improvement for the North American brands. Flattish to slightly up for the European brands but when you take it all together that is what it comes out to be. Felicia Hendrix – Barclays Capital: Moving on, the travel agents we talk to are telling us that since its launch the Oasis is overshadowing everything else. I was just wondering how that has affected your pricing outlook for 2010 or if it has affected it at all? Also what do you think happens when Norwegian launches the Epic this summer?

We are seeing the impact, there is an impact on Oasis on us. We probably have been feeling it for the past 6-9 months but it is hard to see how it has impacted us. If they are selling at these higher price points we think it has a whole lot less impact on our contemporary brands. If they are selling at more premium price points our premium businesses are doing quite well right now with a nice recovery from last year. So it is really hard to know with respect to the Oasis whether it is really affecting us or not. The same would be true for the Epic although it is going to be delivered later. It has a much later delivery. It has got to all be in the current bookings we are seeing because they are booking the Epic right now for the summer and our bookings for the summer are holding up quite nicely. I am sure there is always an impact of some sort but it is hard to actually try to quantify it. Felicia Hendrix – Barclays Capital: On costs, the 2010 cost outlook can you tell us what that would be before the dry docking easy comp?

It would be relatively flat excluding the reduction in dry docking. Felicia Hendrix – Barclays Capital: So your cost outlook is mainly a result of the good dry docking effect?

The decrease is yes. It is due to the dry docking and the tight cost controls allowed us to keep it flat.

The next question comes from the line of Robin Farley – UBS. Robin Farley - UBS: You have talked about the potential to order a ship for the Princess brand maybe by the end of the year or at least early 2010, would you expect to see a similar type of thing where the yard takes the currency risk similar to the Carnival Dream order? Then I have a follow-up.

Obviously we haven’t completed negotiations or we would have made an announcement. That really isn’t on the table in these negotiations. We are prepared to take a certain level of Euro exposure based on our Europe company balance sheets and we manage that exposure. So we have none for 2013 and 2014 but if you put a Princess contract for 2013 and 2014 in Euro on the books it would be a very manageable Euro risk compared to our Euro balance sheet.

We can always hedge the contract at any point we feel it is appropriate and eliminate that risk which is something we do over time.

Historically since the merger we have taken certain levels of risk because we have in effect the hedge through the balance sheet so we operate in different currency. Robin Farley - UBS: Asking about the Oasis a little bit as well, there have been a lot of talk that occupancies for the Oasis were below 100% for the first few weeks of sailing and that Royal was sort of holding price and sacrificing occupancy initially but obviously that is not a long-term strategy. I am wondering if you are seeing any impact in Q1 from if Oasis is shifting from holding that higher price which maybe was kind of a nice umbrella in terms of price in the Caribbean. If you are seeing that change in Q1 or any impact there?

Honestly we are not seeing any impact from Oasis. Howard answered that in a longer answer than I am giving you but we haven’t seen any impact. If there is an impact, and clearly we haven’t seen any, it is the additional exposure that something like Oasis gets that brings more attention to the cruise industry and the reality is we have straight mass market brands and much more affordable prices and so the net effect if anything would be positive. Beyond that we really haven’t seen any impact at all. The reality is if there is any impact on our business it is going to be Carnival Dream impacting the Carnival fleet in a similar way that Oasis might impact the Royal Caribbean fleet.

The next question comes from the line of Tim Conder – Wells Fargo. Tim Conder – Wells Fargo: The first question is somewhat a two piece related. You mentioned in some of your more premium brands you are starting to see the trade back up occur. Is that, if you look back to a prior conference call you stated you thought for the North American brands that may be a little more elongated. Is that occurring a little bit faster than you thought? In relation to that the onboard spending sequential improvement in the fourth quarter that is kind of a more of a leading indicator so that is question one. Number two, the booking curve. Howard you mentioned a strategy with what you are doing with the continental European. At the Dream analyst meeting in New York you showed a slide that for the company as a whole the booking curve approximated maybe 4.5 months. Can you update us on where that curve is for the company as a whole?

With respect to the premium brand come back I think I indicated on the last call we started to see evidence of the premium brands being booked stronger and the ability to raise pricing on premium brand bookings and that continued through the fourth quarter. I think in my comments I said in large measure that is a result of settling of the economy if you will. While there is still the 10% unemployment issue that we have I think in large measure those premium brands market to a different demographic that is either retirees or wealthier people who are not affected by the unemployment or the economy frankly. So I think as equity markets continue to strengthen over the course of 2009 that people started to feel a bit more comfortable and started to get more confident in booking their cruise vacations. In broad terms that is what we attribute it to and nothing more than that. In terms of the booking curve that you referred to Beth is busy going through…

A couple of comments on the overall booking curve. To start with I want to point out where we are in terms of bookings for 2010 in terms of the percent of the cabins that are currently filled it is very consistent with our historical figures from 2005, 2006 and 2007. Yes, they may be below the historically strong numbers of 2008 but they really are now back to the 2005, 2006 and 2007 levels. We are in good shape. Historically in the fourth quarter we do see a reduction in the overall booking curve but this quarter we didn’t see as big of a reduction as we normally do so you could say we saw a little bit of an improvement in the booking curve as well. We feel very good about that. You mentioned the onboard. We did see a sequential improvement from the second quarter and our projections for next year include relatively flat onboard for 2010 holding at these levels in the third and fourth quarters. That is the way we put together our forecast because we don’t have that much visibility into the onboard. Tim Conder – Wells Fargo: David, just to clarify you are saying your current percentage or capacity booked is comparable to the 2005, 2006, 2007 levels but flat to slightly below where it was in 2008?

It is very interesting. We did this this week. If you do a chart of each quarter of where it was over the last five years, I think every year is within one basis point of where we are now for 2010 with the exception of 2008 which was much higher. That is where we saw 2008 and 2009 drop from 2008. If you take 2008 out of the picture it is virtually identical for all the other four of the five years.

One percentage point difference. It looks like it is back to at least historical patterns and then 2008 may be the outlier here because it was so strong in 2008 but we are back to historical patterns. As I indicated for the year and as David mentioned, we are booked on a capacity adjusted basis at the same level as we were last year so it is starting to shape up pretty well right now. Tim Conder – Wells Fargo: Again to clarify my first question or Micky your expectations for the North America trade back up cycle do you think your best guess at this point should it be similar? A little slower to the past cycle we have seen as the recovery emerges here?

Remember we took a bigger hit last year so the recovery is stronger for these premium brands and longer cruises. We took a hit last year so there was more of an opportunity to bring that back and that is what is happening. I think we took less of a hit in some other trades so we don’t have as much to come back. So that is a look at each of them on an absolute basis and that is what is happening. I think it is a very positive sign because so much of our capacity is dedicated to these higher end markets.

The next question comes from the line of Steve Kent - Goldman Sachs. Steve Kent - Goldman Sachs: Maybe you could discuss given the fact that you hit the midpoint of 2009, or you would have hit the midpoint of 2009 if you excluded fuel, have you given some reconsideration to hedging out the fuel given how dramatic it was last year or could have been dramatic last year and as you look out? The other thing, I actually just don’t know the answer to this question, is mix change due to Alaska being phased out. That historically has been a higher priced market or a premium priced market. As you move those ships into other regions is it your expectation those ships will hold that pricing or will it in fact depress the blended pricing as you move it into the Caribbean or some of the other markets?

Let me take on the hedge question. I think our feelings about fuel right now and are consistent with past years is that while we could look to do some hedging it is a short-term fix for us. It is not a long-term fix. If fuel prices go up and we have given our wide margins and our comfort with being able to absorb fuel price increases if they get dramatically higher, if they shoot up or sky rocket we always have the option of going to a fuel supplement charge. We really don’t see the necessity of starting a hedging program for us. On the issue of the mix change for Alaska, the two ships that come out clearly the strategy of taking them out is the belief is by those companies they can put them into more profitable trades. Actually one ship gets transferred to another brand. The Royal Princess goes into the P&O brand and essentially the replacement for the Artemis which we would have sold in 2011 is a smaller ship as was the Artemis and it does longer cruises and the Artemis did really well so this is to replace the Artemis. In that trade that ship is expected to do better in the P&O trade. The same thing would be true for the Ryndam which will essentially be additional capacity in Europe which has better pricing and better profitability right now than Alaska does.

The fundamental problem with Alaska is because of a variety of issues including the initiative, the cost of operation is very high and in July/August there are just a lot of alternatives to operate in areas with similar yields with higher profitability because of lower operating costs. Alaska today is now the highest cost operation we have anywhere. It was driven primarily by the initiative. Alaska prior to the initiative was basically competitive with other destinations in the summer time and became completely uncompetitive. That is what is driving these itinerary changes.

The next question comes from the line of Janet Brashear – Sanford Bernstein. Janet Brashear – Sanford Bernstein: I wonder if you could give us a little more detail on which selected areas you see the demand strongest in the next quarter or so by market, by brand, maybe where you are getting some of the price increases?

We could spend a lot of time on that stuff and frankly it is hard to get into too much specifics other than the specifics I gave you directionally in each of the quarters by premium products in North America versus contemporary products and the trades they are trading in and the same for Europe. I think on a call like this that is about all we can do to take nine brands and put them all together and give you some sort of a directional presentation that is difficult enough.

I would say generally everywhere is doing better with two glaring exceptions; the Mexican Riviera and Brazil. Other than that, I think generally Caribbean, Europe, Australia, Asia, they are all doing a little bit better. Janet Brashear – Sanford Bernstein: As profitability ramps up in this next cycle and looking forward and presumably capacity scales back in the out years, what areas of the business model will you target for investment?

I think we look at each brand individually and their respective markets and the decision to build capacity in a market is based on their belief and our confirmation of their belief they can grow their capacity and grow it and get good returns on the additional investment and grow profitability in those markets. Each market you have to look at individually. Janet Brashear – Sanford Bernstein: I was asking not so much on capacity investment but in non-capacity investments. So assuming if you are building a little less capacity in some of these out years you have more capital to spend on other things or do other things with. I am thinking of whether cost improvements, channel investment, what sorts of areas do you want to spend your CapEx on outside of capacity?

The only area we have been spending is port infrastructure. We just opened a port in Roatan called Mahogany Bay which we think will be a huge success for us. In the scheme of things they are relatively minor investments of $30-50 million compared to the CapEx programs of $2-3 billion. But that is really the only area outside of ship new build and ship refits we can invest in.

The next question comes from the line of Greg Badishkanian – Citigroup. Greg Badishkanian - Citigroup: First, you mentioned that first quarter net yields on a currency constant basis is down 3-4%. I am wondering is that the pricing you have booked so far or what you expect the first quarter to end up at? If close-in bookings do a little bit better is that kind of where you would see the upside to that?

That is our best guestimate based on what we have on the books and you have to understand based on what we have on the books now that is a very significant part of the inventory. We have very little left to sell. We should have very good visibility on where we are.

That is the expectation for the full first quarter, the 3-4%. Greg Badishkanian - Citigroup: Also, in terms of new capacity coming online from your competitors as you speak to shipyards and do your competitive intel are you hearing of anyone else looking to contract a new ship or are you kind of the only ones that have the capacity to build new ships? Are you hearing of potentially others starting new ones?

I wouldn’t want to comment on specific names. We are aware of some discussions beyond us. Greg Badishkanian - Citigroup: The discussions you hear at much lower levels obviously than what we have seen historically or kind of similar?

Yes. Significantly lower than historically and the yards are under quite a strain right now because of that. When you go into 2013 and 2014 I think we will be seeing significantly less capacity increases both from us and our competitors.

The next question comes from the line of David Leibowitz – Horizon Asset Management. David Leibowitz – Horizon Asset Management: Getting back to the onboard spend you indicated onboard spend was up in two categories. The overall onboard spend as a result of that is up? Or is the overall onboard spend pretty much flat?

I had said for the fourth quarter the overall onboard spend was actually down 5.7% in local currency. Onboard and other yield. That was better than…if we go back to the second quarter it was down around 9-10% and then the next quarter it was down 6% and then in the fourth down 5.7%. So it was an improving trend overall and when you got into the details there were some ups and some downs but it did average 5.7% down. David Leibowitz – Horizon Asset Management: In your earnings estimates for this year are you planning to have onboard spend up, down or sideways vis a vie 2009?

Basically flat which is what I had just said in answer to another question. David Leibowitz – Horizon Asset Management: The Alaska situation, you have a lot of fixed assets up in Alaska both in Holland America and in Princess. How does that play out in your thinking going forward?

We tried to maximize those assets by consolidating our two tour companies. We did that successfully this summer in taking out costs. Unfortunately that has meant less employment. We continue to look at ways to make it as efficient as possible. We are scheduling the ships in such a way to try to utilize those assets in the best way possible but the reality is that less ships will mean less flow through of passengers through those assets and less need for third-party hotel rooms, less need for employment and so on which is unfortunate. David Leibowitz – Horizon Asset Management: Is there any reason to believe that Carnival might be looking to purchase somebody else’s fleet? Not the entire fleet but portions of different fleets where the ships would make an immediate impact on needs you might have?

If something interesting became available we would of course look at it but there is nothing going on right now.

The next question comes from the line of Kevin Milota – JP Morgan. Kevin Milota – JP Morgan: Given where guidance is shaking out for 2010 and where you see free cash flow moving in 2011 and beyond how much closer are you to reinstating the dividend and when could we expect to hear something from the board on that matter?

We have a board meeting in mid-January and I think the dividend issue will be taken up by the board at that particular point in time. We have been doing some work on the dividend issue for them. They have asked for a lot of different scenarios and we are doing quite a bit of analysis on it right now. We expect we will make an announcement on the dividend issue right after the January board meeting.

The next question comes from the line of Rick Lyall – John W. Bristol. Rick Lyall – John W. Bristol: I think you said that you were adopting a slightly different yield management strategy in Europe this year over last year. Is that simply capacity driven or what is the change going on there?

I think there was anticipation given the soft economies in Europe that we would try to drive more volumes earlier in the booking process particularly in the continental European brands to try and get as much business on the books. So they priced their strategy going in this year and have been for awhile to price lower and try to get ahead of the booking curve which I think they have been successful in doing. So that is it essentially. Nothing more than that.

They didn’t have a significant drop off the North American brands did. Rick Lyall – John W. Bristol: At the Dream Analyst meeting you talked about getting back to returns on capital that were historic double digit levels. My estimate would be the US was the biggest problem and Europe held up pretty well. Do you get back by returning the US business to double digit levels is there likely to be some erosion in the Europe returns? It looks like North American can do better than Europe this year. How do the two converge to get back to double digits?

I think what we had showed on the analyst meeting at the Dream was ROI the biggest factor is yield. If I remember correctly it was that 10% yield decline for 2009 was what took us down below the double digit. If we got back that full 10% we would be back in the double digit. That is just overall yield regardless of where it comes from. North America or Europe it is the company in total.

I think it is fair to say that returns are better right now in our European cruise business than they are in the US cruise business and that has been the reason we have been steering more of our capital investments into Europe which has been a very successful strategy for us and we are very fortunate to be in the situation we are in. Four of the six ships this year go into Europe.

I did mention our European brands on my notes represented 49% of our operating income although they were only 33% of the capacity which is, as you would imagine, results in a higher ROI.

One of the unfortunate things here is everybody is looking at this as oh my goodness we are projecting a flat year. But if we had tanked like everybody else in leisure last year we would be looking at fantastic earnings growth this year. Everything is relative. Because we had the performance we had in such a difficult year it is making the comparisons tougher.

Particularly in the first quarter where we did very well last year we were down only 5% in overall yield.

The next question comes from the line of Assia Georgieva - Infinity Research. Assia Georgieva - Infinity Research: Have you analyzed holiday voyages and whether they have been a leading indicator as to late season performance in the past?

I don’t think they have and they are doing fine this year. I don’t think they have been a leading indicator to Wave. I think if there has been any leading indicator to Wave it has been how fourth quarter bookings have been and they have been very encouraging. So we are pretty optimistic about Wave. Assia Georgieva - Infinity Research: Is it possible given the pricing in booking numbers you are looking at this point and I know it is early for the third quarter but is it possible you might see high single digit yields percentage of increases in local currency?

I think it is too early to talk about. I did say we will see sequential yield improvement in the third quarter from the second quarter but I think it is too early for us to start to give guidance on third quarter yield right now. There is still so much left to book but it is encouraging and where it actually ends up we will see. Our overall 2010 guidance while we have a number for third quarter if you do some extrapolations you can quickly figure out where it would be. Assia Georgieva - Infinity Research: Would the range include a number at the high end of maybe…

Third quarter is very highly skewed to our European brands. That is when they make all their money. They have the toughest comparisons.

I am showing no further questions at this time. I will now turn the conference back to you.

Thank you everyone for listening into the call. Let me take this opportunity to wish everybody a happy holiday season, a prosperous and healthy new year. Beth waits by the phone for some of you. Have a great weekend. All the best to everyone.

Happy Holidays everybody.

Ladies and gentlemen that concludes our conference call for today. We thank you for your participation and ask that you please disconnect your lines. Have a good day.