Arnold Donald - Chief Executive Officer David Bernstein - Chief Financial Officer Beth Roberts - Vice President, Investor Relations Micky Arison - Chairman

Felicia Hendrix - Barclays Joel Simkins - Credit Suisse Steven Kent - Goldman Sachs Steve Wieczynski - Stifel Harry Curtis - Nomura Jaime Katz - Morningstar Assia Georgieva - Infiniti Research Tim Conder - Wells Fargo Securities Robin Farley - UBS Nick Thomas - Merrill Lynch Stuart Gordon - Berenberg Jamie Rollo - Morgan Stanley Ian Rennardson - Jefferies

Good morning. This is Arnold Donald, CEO of Carnival Corporation & plc. I’d like to thank you all for joining us for our Third Quarter 2014 Earnings Conference Call. Today I am joined by David Bernstein, our Chief Financial Officer; and Beth Roberts, our Vice President of Investor Relations. Although, our Chairman, Micky Arison is traveling today, he is on the phone with us. Before I begin, please note that because some of our remarks on this call will be forward-looking, I must refer you to the obligatory cautionary statement in today’s press release. This is an exciting time for our corporation. Last quarter we indicated that we felt like we were turning the corner and our third quarter confirmed that we have. The 15% earnings improvement achieved in the third quarter and the increased guidance expected an even stronger improvement in full year earnings is truly a credit to our global team. I am especially pleased to see yields inflect positively in the third quarter, and we are well-positioned to continue that trend. There is a notable lengthening in the booking curve, particularly across our European brands and bookings taken during the last quarter are running ahead at higher prices in both North America and Europe for the first half of next year. As it relates to effectively leveraging our scale to drive revenue and contain costs, our efforts and communicating, collaborating and coordinating across our brands are beginning to take hold, producing a few smaller early wins and showing progress in areas that would deliver in 2015 and beyond. We should have more to say in that arena next quarter. We are wrapping up our planning process which has me very excited about our business going forward. Fuel and environmental related investments will temporarily impact our costs progress primarily in 2015. Frankly, I am personally impatient to realize even stronger results more quickly, but it is clearly in all of our best interest to make the investments in environmental stewardship and energy saving technology that we are planning for next year. Not only do we view sustainability as the core guiding principle, these one-off expenses next year will yield financial benefits to us for many years to come. As you know, higher fuel prices had a meaningful impact on our business model, accounting for 5 point reduction in return on invested capital to-date. Without mitigation, the impending eco requirements were originally expected to have a further $0.35 reduction on earnings when effective in 2015. We plan to aggressively roll out our new technology developed over the last three years limiting the cost impact of eco to approximately $0.10 in 2015 and virtually eliminating any impact whatsoever by 2017 while protecting the environment. At the same time, we have a series of technology initiatives in progress related to energy efficiency in areas like propulsion, lighting and air conditioning to name a few that we will continue to roll out during the resulting accelerated dry dock schedule. These initiatives have a quick payback period as we continue to steadily reduce few consumption in the years to come. It is gratifying to say we have reduced our fuel consumption by another 5% this year and 25% since 2007, meeting our stated goal of delivering a 20% reduction in carbon emissions ahead of schedule while saving more than 1 billion gallons of fuel and $2.5 billion of fuel cost during that period. This efficiency improvement is a testament to the breadth of efforts undertaken to reduce the consumption on more of the existing fleet and the energy efficient advances that have been designed into the new ships delivered during this time period. During the third quarter, we’re also pleased with the steady progress that both our Carnival and Costa brands have made. Carnival Cruise Lines was recognized in YouGov 2014 mid-year Buzz Rankings Report as the most improved in consumer perception among all brands in the U.S., a nice affirmation of the success of the combination of recent marketing and product initiative as well as the effective public relation. Our teams put a lot of effort into achieving the sharp turnaround and it’s gratifying to see their effort recognized. We’ve had great success with Seuss at Sea and Camp Ocean for the kids and for the adults with our Concert Series Carnival LIVE. Carnival LIVE has presented 24 concerts over 18,000 of our guests and will present 25 more concerts by year end with over 12,000 tickets already sold. In addition, we recently renewed the Great Vacation Guarantee, a hassle-free program that provides 110% refund if you’re dissatisfied. As you might expect, we’ve had very few who have requested that refund. In fact, our guest satisfaction has increased substantially since we launched Fun Ship 2.0 in the fall of 2011. We have now added 300 Fun Ship 2.0 experiences across the Carnival Cruise Line fleet. For the Costa brands, we have seen a steady improvement in both yields and profitability as well as the doubling of trust and confidence in brand perception in the core markets. We are well positioned for continued success in 2015 as we welcome the Costa Diadema to the fleet to be celebrated in November 7th during a special christening event in Genoa, Italy with the ship’s Godmother selected from participants and a worldwide travel agent competition. Two days earlier on November 5th in Fort Lauderdale, Princess will also celebrate its newest cruise ship which entered service in May, the Regal Princess, with the naming ceremony featuring the original cast members of the TV series, The Love Boat, as Godparents. 2015 marks the 50th anniversary of Princess Cruises and there are a plethora of special activities planned for our guests throughout the year. In July, Princess announced plans to build another new ship which will enter service in 2017. The vessel will carry 3600 passengers and feature the successful design platform introduced by sister ships, Royal Princess and the aforementioned Regal Princess. In keeping with our company’s strategy of measured capacity growth, this will be our only newbuild in 2017. And we also have plans underway to sell the smaller Ocean Princess. And speaking of celebrations, the Queen Mary 2, 10-year anniversary celebrations last quarter included James Taylor entertaining Cunard guests on a transatlantic crossing. In July, Cunard, which remains the aspirational cruise experience for many around the world, was recognized as number one among the top megaship cruise liners in Travel and Leisure’s annual reader survey for the world’s best award 2014. During the quarter, we furthered our efforts to stimulate demand across the globe. I’m particularly pleased with our public relations efforts and really want to recognize the efforts of all our public relations teams across the company. We enjoyed a significant increase in our share of voice globally. In fact, in the most recent quarter, our positive mentions doubled based on the many operational and guest improvements being implemented by all our brands. While we made a great stride in getting our message out, there are many additional opportunities ahead for us. Also with respect to stimulating demand, China continues to be a focus for emerging market development where we expect double-digit growth over the next few years. We expect China to some day be the largest cruise market in the world. We are already the largest cruise operator in Mainland China, having been the first to enter the market through our Costa brand in 2006. Our China operations have been profitable and continued to improve as we increase yields and add more capacity. Next year, we will again lead the industry with four ships home porting in Mainland China and 12 marketing offices in the region. At all levels, the Chinese government and government affiliate organizations including the Ministry of Transport, the National Tourism Administration, the municipal and port authorities in for example, Shanghai and Tianjin, and the China Cruise & Yacht Industry Association have demonstrated impressive vision, and have worked hard to pave the way for the development of the cruise industry in China, reflecting the high importance we place on future growth with China to support our brands with strategic initiatives and coordinate our growth strategy in China. Our Chief Operations Officer, Alan Buckelew will relocate to Shanghai and manage his full corporate responsibilities from there. Again, the third quarter was strong. Our guidance for the year is up significantly. We are making real progress across many fronts, and we are excited about our prospects of returning to double-digit return on invested capital in the next three to five years. And with that, I’d like to turn it over to David to take you through our financial results and updated guidance. David?

Thank you, Arnold. Before I begin, please note all of my references to revenue and cost metrics will be in local currency, as this is a much more meaningful measure of our business trends. I will start today with a summary of our excellent third quarter results and then give you more detail on our improved 2014 full year guidance. And while it is early, I will finish up with some preliminary insights into what we are seeing for 2015. Our non-GAAP EPS for the third quarter was a $1.58. I’m excited to report that this was $0.17 above the midpoint of our June guidance, driven essentially by three things. First, better than expected net revenue yields worth $0.11, which was evenly split between ticket and onboard and other yields. Second, lower than expected net cruise cost without fuels worth $0.03, and third, lower fuel prices worth $0.02. We were pleased to see that net revenue yields and net ticket yields both turned positive in the third quarter, which we believe is the beginning of the positive trends we’ve been expecting. On the cost side, the slightly lower than expected net cruise cost without fuel was simply due to the timing of certain expenses between third and fourth quarter. Now, let’s look at our third quarter operating results versus the prior year. Our capacity increased 2%. The North American brands were up almost 4%, while our European, Australia and Asia brands also known as our EAA brands were essentially flat. Our total net revenue yields in the third quarter were up almost 2% despite lower occupancy. Although I’m happy to say that occupancy was almost a point higher than we had anticipated in our June guidance. Now, let’s break apart to two components of net revenue yields. Net ticket yields were up almost 1% and this was driven by our EAA brands being up 4%, resulting from improvements at our Continental European brands and double-digit increases in China. Our North American brands were down just over 1% due to the continued promotional pricing environment in the Caribbean. However, the yields were better than we had anticipated in our June guidance both in terms of price and occupancy. Net onboard and other yields increased over 5% despite lower occupancy, with increases on both sides of the Atlantic and across the board in almost all categories. This increase was considerably more positive than we anticipated in our June guidance. It was a great quarter for onboard revenue. Net cruise costs per available lower berth day excluding fuel, was up 0.5 point, and that was less than our June guidance due again to the timing of certain expenses. In summary, third quarter non-GAAP EPS was $0.20 higher than the prior year, driven by improved net revenue yields worth $0.09, the 2% capacity increase, favorable exchange rates, improved fuel consumption, and lower fuel prices. Now looking forward at our fourth quarter yield expectations. With the overwhelming majority of the quarter booked at this point at higher prices, we are well-positioned to achieve our fourth quarter total net revenue yield guidance of up 1.5% to 2.5%. This is due in part to our expectation that the North American brands net ticket yields will turn positive consistent with what we discussed on the June conference call. Remember the EAA brands turn positive in the second quarter. Given the overall positive yield trends in the back half of 2014, we now expect full year 2014 net revenue yields to be flat with the prior year. Turning to the cost side. With the majority of the year now complete, we have narrowed the range on our full year cost guidance. We now expect net cruise costs excluding fuel per ALBD to be up slightly. Putting these factors together, our 2014 non-GAAP EPS guidance is $1.84 to $1.88 per share with the midpoint that is $0.19 higher than our June guidance. Essentially we flowed through the better than expected third quarter yields worth $0.11 and increased our fourth quarter revenue yield forecast slightly. We also benefited by $0.04 from the net impact of fuel prices and currency. While it’s still early, I am going to provide you with some color on what we’re seeing for 2015. At this point, cumulative fleet-wide bookings for the first half of 2015 are ahead at higher prices. Now let’s look at the booking patterns for each of our two major business segment for the first half of 2015. First, for our North American brands. The Caribbean is ahead on both price and occupancy and represents 56% than the first half of 2015 capacity, while other North American brand deployments combined, which includes the early part of the seasonal European program are also ahead on both price and occupancy. Booking volumes during the last quarter have been good, ahead of the prior year at nicely higher prices. Secondly, our EAA brands are also ahead on occupancy but prices that are just about in line with the prior year. Booking volumes during the last quarter are higher than the prior year at slightly higher prices. With increased net ticket yields expected for both our business segments for the fourth quarter of 2014 and positive early booking patterns for the first half of 2015, we are confident that we will see solid yield improvements for 2015. As we usually do, we will provide detailed yield guidance for 2015 during our December conference call. Having completed our planning meetings with all our brands for 2015, the cost picture is taking shape. As we indicated in the press release, we expect net cruise costs per available lower berth days to be up around 3% for 2015. The majority of the increase is due to significantly higher dry-dock days in 2015, as we are working hard to accomplish a number of things. First, installing exhaust gas cleaning systems, or EGCS, more commonly known scrubbers, which will reduce the impact of the new 2015 eco requirements. Second, installing new fuel efficiency technology to reduce fuel consumption. And third, completing the vessel enhancements we announced last year. As we look further out to 2016, we expect that the majority of the higher dry-dock costs in 2015 will be reversed since we currently anticipate a lower level of dry-dock days in 2016. I am pleased to report that the various cost initiatives that we are working on for 2015 and beyond are beginning to take shape and are expected to completely offset inflation in 2015. However, we won’t rest there. Over the years we have developed an excellent track record of cost control, and we will continue to focus on leveraging our scale and reduce costs further in 2015 and beyond. As Arnold indicated, we are aggressively rolling out the EGCS on our ships. The currency schedule calls for EGCS to be installed on 16 ships before the beginning of fiscal year 2014 and 42 ships are expected to have commissioned EGCs by the end of fiscal year 2015. We expect these efforts to mitigate the vast majority of the impact from the new ICA requirement. As we indicated in the press release, we currently estimate that the new requirements will cost us about $0.10 in 2015. Going forward, we expect about half of this to disappear in 2016 and the remainder should just about disappear in 2017 as the result of the installation of EGCs on additional ships. And now operator, we’re ready to open up the call for questions.

Thank you. (Operator Instructions) The first question comes from the line of Felicia Hendrix with Barclays. Please go ahead. Felicia Hendrix - Barclays: Hi. Good morning. Thank you for taking my question. David, since you ended on cost, I’ll start my question there. Thank you for all the color regarding the increase -- regarding -- related to the higher dry dock days and what’s driving that? You mentioned this a little bit in your prepared remarks but I’m wondering if you could just give us some color about what is going on with your just underlying cost structure ex this dry dock cost driver? What’s going on with your current ongoing cost saving initiatives? And is there any way that those might further offset this cost guidance that you provided us with today?

Felicia, about two-thirds of the cost increases, I said, was relating to dry dock and the other third was really an investment in various areas of the business in terms of things like deployment and occupancy and other things, which are driving the remainder of the increase. And on the flipside, I think as Arnold indicated lot of the leveraging our scale and the efficiencies are taking hold and we’re expecting to see that completely offset inflation. We’re still working very hard, that’s our direction at this point and as we made greater strides, we’ll update all our projections and forecasts accordingly.

Felicia, as we offset the inflation with some of the initiatives that we have, we’re looking aggressively. We’re not afraid to invest if we see a line of sight return from that investment. So we aren’t afraid to reinvest to the business to drive yields and to drive revenues. So you’ve got a mix going on there some of the cost increases in vessels. Felicia Hendrix - Barclays: Okay. Thanks. That’s helpful. And Arnold, there was a comment in the release that you made your recording statement that you’re gaining momentum towards your goal of achieving double-digit returns in ROIC over time. I was just wondering if you could talk more about that comment over what time -- obviously, we’re not looking for specific date. I know you not going to give one but are you thinking about over the next two to three years or are you looking at longer than that?

We’re looking at three to five years to get to double-digit returns. So we have a large business here, system hits with fuel increases and other things. But we definitely see the path in the next three to five years to get to double-digit return on invested capital. Felicia Hendrix - Barclays: Okay. Super helpful. Thank you. And then just David, one last housekeeping, your occupancy rate in the quarter actually came in lower than we are expecting. And we were estimating kind of this strategy that you’re using and then near-term to kind of navigate through the tough promotional environment in the Caribbean. I'm just wondering, how should we think about occupancy rate in the fourth quarter? And in 2015, do you think this strategy will continue? It sounds like things are getting better in the Caribbean for you. Thank you.

Sure. Well, I’m not sure. Our occupancy rate came in 1.7 points below the prior year, which as I think I indicated in my notes was a bit better than we had anticipated. So we were able to do much better. That was part of the yield improvement that we saw in the third quarter. And as we move forward, I think, I talked about this on the last conference call that holding price and giving up some occupancy is purely a tactic. We will continue to work through that. If the tactic makes sense, we’ll utilize it. But I think as I indicated just a moment ago, as part of our cost increase one of the things was higher occupancy relating to the variable cost of food and port charges, etcetera. So we’re hopeful that as we move forward, part of that yield improvement is the higher occupancy for 2015. Felicia Hendrix - Barclays: Great. Thank you very much.

Thank you. Our next question comes from the line of Joel Simkins with Credit Suisse. Please go ahead. Joel Simkins - Credit Suisse: Good morning, everyone. Obviously, you guys are very positive on the Chinese market, and that’s certainly been developing over a number of years here. I guess, can you sort of juxtapose what you’re seeing perhaps in Macau, and does that give you any pause as it relates to sort of continuing to add capacity in and around China?

I think Macau is the destination for those who like gaming, and we are actually in a true cruise product. And so today, those selling on our cruises, actually our casino opportunities to date have not been strong on our ships, because they are really going for a cruise. They have families, etcetera. So I’m not exactly sure we’re referencing in Macau, but in terms of the cruise opportunity, the Chinese government has shown a lot of vision. They’ve made developing the cruise industry a priority. And with their support, companies like ourselves have a tremendous opportunity to tap into what is a huge market possibly and we’ve enjoyed early success and plan to build on it. Joel Simkins - Credit Suisse: And one quick follow-up if I may Arnold. I guess if you’re to sort of peg a 1% of your yield improvement and sort of the improvement in booking activity for 2015 directly to some of the revitalization that you’ve done over the last year or so, particularly on the Carnival brand, I mean what percentage you think is contributing towards that improvement?

Yes, it would be very difficult to say, to isolate variables like that. What I can tell you is that we have definitely gained momentum across the brands in terms of best practices. We haven’t finished our revenue management project, but already we’ve had lift on isolated itineraries across brands as they collaborate appropriately. Also on onboard revenue, some of the onboard revenue lift we’ve experienced has come from again great collaboration across the brands, identifying best practices. We see that continuing to build in even more dramatic fashion than we’ve experienced to-date because we’ve only touched the tip of the iceberg today. Joel Simkins - Credit Suisse: Thank you.

Thank you. The next question comes from the line of Steven Kent with Goldman Sachs. Please go ahead. Mr. Kent, your line is open. Steven Kent - Goldman Sachs: Yeah. A couple -- can you hear me?

Yes, Steven, we can hear you. Steven Kent - Goldman Sachs: Okay. So I guess just on Joel’s question. On the China opportunity, what has changed there do you think that you’re willing -- more willing to commit ships and human capital to the market, especially putting COO and I am assuming some other management people there, because in the past China has been a little bit more difficult and that hasn’t been a home run? And then separately, Arnold, because you just mentioned this, the cross collaboration which has been a big focus of yours on that onboard spend, could there be more to go as you start to integrate some of those great ideas and maybe you could share some of the specific best practices that you’ve seen? And then one final thing -- and I’m sorry I ask this fairly frequently, why not set a more specific cost target for the next couple of years? You now sort of set an ROIC target of three to five years, why not set something more on the expense front? Thank you.

Okay. Thank you, Steven. So your first question concerning China, we began investing in China in 2006. The Costa brand, as I mentioned, in the introduction here was the first brand to do so in China. And things take time to develop and we have been successful in developing our business there and others have come in now as well. What’s changed in addition to that, first was it just takes time to develop a market. But what’s changing in addition to that is that the government has it as a priority now. The Chinese government has a plan for development of a cruise industry in China and that means, you are getting tremendous support and opportunity to participate led by the various governments whether it’s the Central Government or the provincial or the municipal governments like in Shanghai and Tianjin. And so all of that bodes well, we are beginning to gain momentum. Distribution system is learning how to market a product such as a cruise product. You are beginning to see players in China look at building the domestic brand, which we think will be real powerful at to developing that market. So that’s basically what is going on in China, and then getting enough scale that it does take cost, obviously, to build brands and to build the presence, and now, obviously, with the number of ships we have there now and the ones we are going to add, we are beginning to get scale so the opportunity for greater profitability is there. So that’s the quick answer on China.

Yeah. Let me just add one other point on that. Steve, we have talked about this before, historically, as Arnold said, we started in ’06 and we were investing in China, which was a nice way of saying we were losing money, we broke even in ’12, we made money in ’13 and ’14, we saw double-digit yield increases in China and the performance of our ships in China has been excellent and so we are very excited about the opportunity as we move forward. To your second question…

No. Concerning onboard revenue, your second question, in terms of is there additional opportunity? Absolutely, we had a 5% lift in onboard revenues in this quarter to suggest that we will have a 5% lift every quarter from hereon on out, we will probably not be anywhere near the right thing to say. But, clearly, we see opportunity in specific areas. We had an area in casino, we had area in beverage upgrades and restaurants upgrade opportunities. There are host of others. But we are just at the tip of that in terms of really harvesting what is possible there. And then you last question.

Was relating to the specific cost target heading back…

Yeah. In terms of giving you a specific number on costs, as we mentioned, directionally, we see as offsetting inflation, that’s a $75 million to $80 million number on to itself. We haven’t finished all of the projects yet. We are in the middle with the airlines in terms of our airline RFPs. Obviously, we are not going to give a number on that because we are on negotiation with them as we speak that will be wrapping up soon. And I think we will have more to say in the fourth quarter. But in terms of saying a specific target, the reality is, we are going to reinvest in the business too. So, I think, we will give you one-off as we determine them and we will share with you what we’re reinvesting in at the appropriate time and whether or not we think we will pay it off. Thank you, Steve. Steven Kent - Goldman Sachs: Okay. Thank you.

Thanks.

Thank you. The next question comes from the line of Steve Wieczynski with Stifel. Please go ahead. Steve Wieczynski - Stifel: Yeah. Good morning, guys. So, David, going back to your cost guidance for 2015 and 2016, I guess. Is it fair to say, I mean, if we simplify this that basically in ’15 and ’16, if you stripped out your dry-dock costs, you are basically looking at flat over that two-year period?

Roughly, speaking, that’s a good estimate. But I will say, one other thing that we have to decide on for 2016 is whether we have additional product enhancements or investments. As Arnold said before, he is not afraid to make some good ROE investments to improve yield to improve the operating income because that’s where we are most focused on. So absent that, yes, the math is similar to what you are describing, but yet, there are lot of decisions yet to be made. Steve Wieczynski - Stifel: Okay. Got you. And then, Arnold, seems like the Carnival brand itself is started to get a little bit momentum here? Can you maybe help us think about the recovery in that brand and how you, is it moving quicker than you guys would have thought, is it lagging, maybe also and I don’t know if you will give this, but where is the booking window for just the Carnival brand and maybe pricing relative to all the triumph -- the triumph incident?

Well, real quickly, in terms of the overall feeling about the brand. I would say that the recovery is probably the little faster than we had a right to believe it would be, but at the same time, it’s not nearly fast enough for all of us and our brand people certainly deserve a tremendous amount of credit for their product innovations and both in terms of hardware product and soft product onboard and just an excellent delivery on restoring the confidence in the brand and having people appreciate the great experience that the Carnival brand is. So we’re pleased with it but at the same time, we are not satisfied and we’re going to continue to pursue aggressively building the Carnival brand and in getting back to the historical levels. In terms of the specifics, we -- as you know, we are not going to give a lot of yield-by-yield or brand-by-brand detail. So just in general, I would say that the yields are showing some strength the Caribbean is we all know was very tough environment this year. We anticipated that in our original guidance for the year. So it was a difficult year overall in the Caribbean from a pricing environment. But the brand has navigated that well and has offset some of that with strong onboard revenue lift and we’re feeling really good about it. But as you know, we don’t give lot of brand-by-brand detail. Steve Wieczynski - Stifel: Okay. Great. Thanks a lot.

Thank you.

Thank you. The next question comes from the line of Harry Curtis with Nomura. Please go ahead. Harry Curtis - Nomura: Good morning. Can you hear me?

Yes. Harry Curtis - Nomura: Very good. I wanted to touch on CapEx for a minute and make sure that we have an accurate estimate of your CapEx in 2015 and 2016. Now that you’re going to be in probably increasing your dry dock days, David. Can you give us a sense of what your full CapEx is likely to look like in both ‘15 and ‘16?

Yeah. CapEx, roughly speaking for 2014 is $3 billion. That’s probably going to be similar to that level in 2015 and 2016. We’re obviously still going through a lot of the detail for those years and we can give you better guidance as we make some more decisions down the road. Harry Curtis - Nomura: So it sounds like there’s going to be some incremental investment in these systems and based on our estimates, does that -- it looks to me to be an incremental maybe $600 million to $700 million a year. Is that in the right ballpark?

I’m not sure what numbers you’re comparing but these are the numbers that I just quoted very close to the numbers that we have been talking about for the last six to nine months as far as my memory is concerned.

Yeah. But it does reflect the higher level of investment enhancement cost as well as scrubbers for this intervening period not just the scrubbers. Harry Curtis - Nomura: Right. That’s what I was after. And then the last question is you mentioned that by the end of ‘15 probably the low 40s, the number of ships will be complying with ICA. Ultimately how many will have to be touched within the system. Is it 70 ships, is it 75 ships. What is that number likely to be?

Directionally, the 70 numbers are our magnitude number that ultimately depends on future deployment plans and what have you but…

Through 2016.

Yeah, through 2016.

And current requirements. Harry Curtis - Nomura: Okay. So roughly 25 of your ships are newer and really don’t have to be -- have to have much…

No, no, we don’t need scrubber. We don’t need the EGCs on every vessel. It depends on where they are deployed. ICA is not a universal. So it depends where the ships are going and so some of the fleet doesn’t hit ICA-impacted destinations. Harry Curtis - Nomura: All right. So the bottomline is ….

Haven’t cleared that from a flexibility standpoint, most newbuilds will be equipped to handle the regulations just from our long-term planning standpoint. Harry Curtis - Nomura: Okay.

And when you get into future regulation…

Yeah. Go ahead. Go ahead. Harry Curtis - Nomura: Go ahead.

No, you go ahead. Harry Curtis - Nomura: Yeah. I guess, I was after is in ‘16, you’ll probably be doing another 20 to 25 ships and then you’re pretty much be done.

I think if you are trying to get a feel for it, ‘15 over two-thirds that increase, I think as David mentioned on the cost side that directional increase we’re sharing with you all right now was related to increased dry-dock days partly EGC related, partly the fuel-saving technology related. And when you go to ‘16, that will fall off and there will still be additional work to be done. So we won’t recapture all of that, but say two thirds of the cost of those increase that peak in dry-dock days for next year. Two thirds of the cost related to that will probably disappear in ’16. But we will continue the implementation, aggressive implementation of both EGCs, and the fuel-saving technologies because they have sharp payback periods. Harry Curtis - Nomura: Thanks guys.

Did that help you? Okay. Good Harry Curtis - Nomura: Yeah. Thanks very much.

Thank you.

Thank you. The next question comes from the line of Jaime Katz with Morningstar. Please go ahead. Jaime Katz - Morningstar: Good morning. I just had one quick question on China. I’m curios about what sort of headwinds you guys have on expanding the infrastructure with I guess, just the people selling the cruises there and then maybe persuading some of the consumers that your products is different than some of the other products that have been out there in the past from other vendors like Star?

I think fundamentally, there are several issues in your question. First off all, just the consuming public out of the guests, helping them understand what a cruise is, is still a challenge there. Now, early on, there are so few ships and such latent demand that it’s not a huge challenge because there are enough people there that have some familiarity that we can certainly fill the ships. The challenges as we -- as a growth suggest communicate what a cruise is and that is not just a, for in our case a gambling destination or gaming destination. So there is a challenge. Therefore, we are in the work of doing that along with our distributors there that work with us and we are beginning to have the success with that. On the other side of the coin in terms of the challenges in developing a market is a host of things, and it includes port development that needs to be extensive port of people have to have a place to go and things to do when they get there. There has to be availability of international ports where the Chinese are sort of free to go in and have the opportunity to experience and enjoy. And then there has to be supply chain development locally there to provision and provide the infrastructure. So there is a ton of work to be done, is to add an early stage which is very, very exciting and you can just see the potential and the possibility. And like I said, we are already experiencing good results and are excited. It will take time. It’s not going to happen overnight and that’s why we are sending Alan over there now because there have to be a number of areas sorted out and we’d like to have one of our top people full time there, working it everyday to position it, for what should be in the not too distant future a tremendous opportunity for the entire cruise industry and especially for Carnival Corporation. Jaime Katz - Morningstar: Are you guys finding that cruisers are acquiring, or purchasing the product more on their own or sell through to travel agent channel there? And if it is through the travel agent channel, how sizeable is that at this point?

Yeah. It is definitely through distributors. Technically and mostly, it’s the ships that are chartered and so the distributors charter the ship and then market it to the Chinese populous. That’s the structure today, is working just fine. It’s a good model. That model has existed in other places and eventually of course, they end up being probably direct selling the best ways off. So right now it is through a distribution network. The distribution network is well organized. There are some very large entities involved in that in China domestic companies of great scale and significant market capitalization, et cetera. So these are professional organizations that do a good job. Jaime Katz - Morningstar: Thank you so much.

Thank you. The next question comes from the line of Assia Georgieva from Infinity Research. Please go ahead. Assia Georgieva - Infinity Research: Good morning. This is Assia. Congratulations on the great Q3 results and I have another follow-up question to China. Do you see any improvement in terms of the relationship between China and Japan so that you can offer a more varied destination or experience for the Chinese passenger?

Obviously, we’re very respectful of relationships wherever we operate, and that’s outside of our scope. We do expect over time that there will be opportunities for easy exchange between those countries. And obviously we have ships all imported in Japan as well. And so we are optimistic about all that, but that’s beyond our scope as a company to be involved in those types of relationship matters. Assia Georgieva - Infinity Research: And Arnold now in Q1 that will be anniversarying the Caribbean capacity increase, do you think that in 2015 we can get back to kind of the historical yield increases of about 1.9% that we’ve seen in the past, or is it still too early to say?

I think we are not really giving obviously any yield guidance at this point for 2015. But I think directionally I would say things should look better in the Caribbean beginning in the later second quarter. And through the third quarter, it should be very good, because there will be capacity reduction in the Caribbean next year versus this year. So I think directionally it looks a more positive. But at this time, I would have to stop there, because it would be little early to go beyond that. Assia Georgieva - Infinity Research: Okay. Understand. Thank you so much.

Thank you.

Thank you. The next question comes from the line of Tim Conder with Wells Fargo Securities. Please go ahead. Tim Conder - Wells Fargo Securities: Thank you. Let me wrap up one other one on China if I may. It appears that the functional currency is still the euro at this point given that everything is under Costa. Do you see that functional currency changing in the near future as China grows significantly? And then secondly, back to the cost comments, clearly the scrubbers matters somewhat of a unique item and something that you just have to do. And it sounds like -- and correct if I am wrong, you termed that more as a one-off, which we would agree with. Future investments though, do you see those as more the ongoing part of the business in redeploying some of those cost savings?

Okay. Thank you. First of all, on the China comment on the currency, obviously we do have Costa. We also have Princess in China as well. And then I really can’t comment on the currency.

If you are talking about, Tim, the accounting functional currency for these entities, at the moment because it is part of the Costa brand, we look at it collectively together. And you are right, it is a euro functional currency. But as that grows, we will evaluate it. Today, it’s only two ships, we’re writing third ship next year to the Costa Asia Group. And so as that grows, that might be something we will reevaluate. But at the moment, we are happy with the accounting for it. Tim Conder - Wells Fargo Securities: Okay. Got it. And Princess?

And Princes, the same thing, it’s just -- it was a half a ship last year. And as that grows, it’s U.S. dollar functional currency. And as that grows, if there is a good reason, we will reevaluate it. Tim Conder - Wells Fargo Securities: Got it. Okay.

And then your question on the costs, could you repeat it please? Tim Conder - Wells Fargo Securities: Yeah. I guess, it boils down to, it sounded like the scrubbers would be -- you are viewing that more as a one-off cost given the unique changes that you are seeing in the regulation. But the rest of the investments, would you view those as sort of one-off or would that just be forward in your cost savings? You said as it stands now, half the rates are basically flat with inflation would be fair, but then would those investments then be netted against that, or would you view those more as a one-off?

Got it. So first of all, the increase in dry-dock days that went planning for 2015 evolves both the EGCS as well as some fuel technologies, fuel saving technologies. Hopefully, we will find additional fuel saving technologies, but I think it’s particular group that we are looking at is more one-off, and that’s why we will have a reduction in ’16 in the cost equivalent of the dry-dock days. A significant reduction in the cost from the peak you will see in ’15. So in that sense, it is one-off. In terms of other cost savings or other investments, we are making investments in multiple areas, whether it is a guest experience enhancement or whether it’s related to creating demand, directly through advertise or promotions, especially those kinds of things. So those we will look at on a case-by-case basis and as we see an opportunity for return, we will implement them and some are technology based enhance the guest experience are create leverage in generating demand, so it’s a host of things. So there will be some ongoing. We had a peak with that right now it’s hard to say. But what we will tell you is that, we still have a focus on cost containment and so we are confidently harvesting opportunities to reduce our costs and then we decide whether those results will go to bottom line, whether they will be reinvested to drive revenue, because it gets to the double-digit return invested capital, in the timeframe we are talking, we will have to obviously drive revenue and that is our focus. Tim Conder - Wells Fargo Securities: Great. Thank you, both.

Thank you.

Thank you. The next question comes from the line of Robin Farley with UBS. Please proceed. Robin Farley - UBS: Great. Thanks. Two question, first on China. Have you looked at partnering maybe different kind of venture with local travel companies there or is that something you’ve thought about and decided not to do or something that you’re considering? And then my other question is just on your expense guidance and I hate to focus so much on expense line, obviously the yields are -- the yield growth here is above expectations and that’s what’s going to drive so much of the return recovery, it’s really yield story. But just one smaller sub-question and just your full year guidance, I know there was some timing shift between Q3 and Q4 for your full year guidance non-fuel expense up slightly instead of being flat to up slightly, just up slightly. Is that just kind of the reinvesting in the product that you talked about? Is there anything particular there or is that just for that general reinvesting you talked about?

Okay. Let’s do the China question first. In terms of partnerships, obviously, anything we do will announce at the time. Clearly, it would be safe to presume that we’re exploring all types of possibilities to see what makes the more sense and that’s one of the reasons for having Alan relocate to Shanghai and be there full time. So we’re exploring on number of possibilities. We’ll see what make sense. We’ll work with the Chinese authorities and the various private and partially stand-on enterprises that that were there. And we’ll sort it all out and we’re in the process of doing that. But if we have anything specific to announce, we’ll do it at the time. And on the expense side, go ahead David.

Yeah. On the expense side, Robin, really you’re right, we did narrow the range. With every forecast there are always some unexpected things, something positive, something negative. I guess, overall with our forecast that we gave last quarter, the trend is all generally been positive and we were very pleased with that as we raise the guidance. But there were couple of unexpected things on the cost side. We did have a pension expense that we had to take and put into the guidance in 2014. So there was couple of minor additional expenses and that’s what narrowed the range up slightly. Robin Farley - UBS: Okay. Great. Thanks. And maybe just one last question. You talked about in Q3 the strength in closing demand. Would you say that was more closing demand for Europe and China or was actually Caribbean closing showing some improvement too?

I would say the closing demand definitely included the Caribbean. There’s no question about that. But also was global, not so much to China on closing demand, because as I mentioned that’s a charter type business. But in terms of Europe and the Caribbean in particular, there were stronger closing demand. Robin Farley - UBS: Okay. Great. Thank you.

Thank you. The next question comes from the line of Nick Thomas with Merrill Lynch. Please go ahead. Nick Thomas - Merrill Lynch: Yeah. Hello there. Can you just talk a little more on these dry-dock cost and their reversal? Do I take from what you’ve said so far that you have sort of initial thinking on unit costs in 2016 is that they would actually than be down year-on-year i.e. your strategic initiatives offsetting any inflation again, but then some of these, perhaps not quite all, but some of the 2% of dry-dock costs reversing to bring unit costs down? Those dry-dock costs, can you just talk a little bit about how they interact with CapEx? My understanding was that it was sort of already CapEx for this equipment within the guidance. Just sort of outline what things are capitalized and what things go through as OpEx? And then finally on the revenue side of things looking into next year, it sounds from what you’ve said on early bookings is that the environment is actually switching around to being stronger beyond North American brands rather than your EAA brands for next year. Can you just clarify whether my read of that is accurate and provide any sort of further color as to what that’s predominantly down to Carnival brand recovery or whether it’s more granule than that? Thank you very much.

Okay. So, I’ll take some because I heard some of them and I’ve to maybe check some. So first of all, in terms of costs being down in ’16, it would be premature at this point to give full clarity for ‘16, because we don’t know we are going to learn from what we’ve done this year. We’ll learn from what we do in ‘15. And we’ll make determinations on expenses going into ’16, later in ’15, in terms of what we may choose to invest in from a driving revenue and driving the business on a sustainable fashion standpoint. So, I have no prediction on the absolute. What I can tell you though is that these costs that are occurring in ’15 were related to the dry dock that two thirds of that increase at least will disappear in ’16, will not be there. It just won’t be necessary, would have made the enhancements and it just won’t be necessary than that money. So that’s what I can tell you on that part.

And as far as the dry-dock costs themselves, during the dry dock period, we do both like expense type work as well as capital type work. So if you are installing an EGC on the ships or implementing some capital relating to fuel efficiency technology that might be some capital work. But you also have the actual cost of the dry-dock services, the dry-dock itself, the power, the water for the ship. You’ve got to prove that generally stays with the ship that gets expensed and capital because you’re not sending a thousand crew home for two weeks. So there’s a number of capital as well as expense type items that occur during the dry-dock period. And from a cost perspective, the increase was relating to the P&L cost I’m referring to.

And then with regards to your question about North America versus Europe, in terms of, is there more strength in North America and Europe or flip-flopping the strength of the markets. I would just say that we have seen the lengthening in the booking curve and higher prices in the first half of the year so far in North America. And while we’ve seen somewhat latent of the booking curve for the first half of next year in Europe, the prices are comparable pricing, so that’s probably what you are reacting to. Having said that, I wouldn’t describe that broadly as North America being stronger than Europe or vice versa. Some of it has to do with the comparisons year-to-year and just a mix. So we’ll see how it goes. We are optimistic about both markets going into 2015. Nick Thomas - Merrill Lynch: And just on that point, my comment in relation to brand within North America. Presumably given that the comps, you would be more optimistic once you are able to breakdown brand individually, would you be more optimistic specifically about the Carnival brand than the rest of the North American brands?

I think the North America brands broadly, if you lob it all together, clearly the comps will be somewhat easier weighted average because of the Caribbean situation and the Carnival situation coming off of the last couple of years, so the comps will be [come] (ph). But on the other hand, you have the Costa situation where Costa is still continuing to rebound and has some additional upside. So that’s -- haven’t look that quite that way, that would be a tough call to make off the curve. Nick Thomas - Merrill Lynch: Sure. Thank you very much.

Thank you. The next question comes from the line of Stuart Gordon with Berenberg. Please go ahead. Stuart Gordon - Berenberg: Hi. Good morning. Couple of questions, please. Could you give us some feel for the fuel efficiency programs that will be in place for next year? And to what extent they may offset the $0.10 increase in fuel that you’re expecting of the back of the changing regulation? And secondly, what fuel price you have assumed in assessing that and also on the fourth quarter guidance? Clearly, the onboard spend has been very good and you did point out not assume that every quarter. And putting together your guidance, will you more prudent in terms of thinking more along how you were looking at the third quarter, can you put out your view in the third quarter or with what you actually delivered this quarter? Thank you.

Thank you. Concerning the 10% eco impact on the higher fuel cost next year and whether some of the fuel saving technologies already in place, are that we would deploy next year doing early season dry-dock will offset that. The reality is that that 10% obviously or $0.10, excuse me, what will be pretty much eliminated going into ’16 and will be going by ’17, because of the EGC installations that we are doing. So it will go away in that context. But, obviously, we will continue to aggressively pursue not only through the Department of Technologies but also managing deployments and managing the ships on itineraries from a fuel consumption standpoint, as well as all the practices onboard. And so we will continue pursue fuel savings as we have in the past. Is there some upside in that for next year, we will have to see as we manage through, but right now we would just try to give you guys a little color, something you might not have anticipated, which was this increase in dry-dock, so we could aggressively deploy the technologies, so we can have the benefits sooner rather than later for many years to come.

Yeah. Just to give you some color on the math, given the amount of fuel, 2014 prices a 1% change in the -- in our fuel consumption or the price of fuel would be like $2.06. So we will take a 4% consumption reduction to offset the $0.10 eco that we talked about in 2015. Just and we have been talking about getting a 2% to 3% fuel consumption improvement as we move forward. And as far as the fuel price is concerned, we always use basically the current fuel prices. We locked off late last week when fuel was close to $100 a barrel in terms of Brent and fuel moves around daily and the numbers do change accordingly. As far as onboard for the fourth quarter is concerned, we did raise our onboard revenue guidance for the fourth quarter, in fact we raise both the ticket and the onboard, as I have mentioned in notes. So we were conservative, I am not assuming a repeat of 5.5 percentage point yield increase on onboard in the fourth quarter. I would love to see it repeat itself. But that’s not basic forward guidance something considerably lower in the more normalized level is baked in. Stuart Gordon - Berenberg: Okay. Thanks very much.

Thank you. The next question comes from the line of Jamie Rollo with Morgan Stanley. Please go ahead. Jamie Rollo - Morgan Stanley: Yes. Thanks. And first question is just on your 3% unit costs guidance for next year. Is that inclusive or exclusive of the costs savings that you refer to, I know, you talked about in December, I am just aware that just probably last year you guided a cost about 4% and you ending up just slightly up? And then, the other question is, how worried are you about the industry order book? Clearly, we are back to about prior peak for ’07 levels, a lot of new ships coming on, (indiscernible) your competitors, should be brought one about that? Thank you.

Your second question was a little fuzzy, if you can repeat that Jamie, I’d appreciate it.

Couldn’t quite hear you, Jamie, on your second question, we couldn’t hear you. Jamie Rollo - Morgan Stanley: Okay. Sorry about that. How worried are you about the industry order book, the amount of new ships and order, particularly by competitors? I mean, it seems to be back just about prior some of ’07 peak levels and most of it not from Carnival? Thank you.

Thank you. I will take the second one first. In terms of worried. We are not worried. We know the ships are coming as in the forecast we can see them. I think in general that still there is not a huge capacity expansion in the industry. Obviously, we are helping that by being very measured in the net capacity addition that we bring on. But we -- deployment makes the difference, depends whether ships all get deployed in a cluster in a given destination market. But generally speaking, it’s a big planet and we think that for the ships that we have -- we see coming that the market will be able to absorb and it will continue to be able to deliver results made to deliver. Go ahead David.

Sure. Just one additional comment on the -- on Arnold was answering, keep in mind that we’re expecting quite a bit of growth in the emerging markets particularly, Asia and China. So that should be able to profitably absorb a lot of that capacity and the other more established markets will see it more measured capacity increase. As far as the costs are concern, the 3% increase, two-thirds of it was dry dock, another third was some product initiatives and enhancements and that reinvesting in the product. And I indicated that a line of sight at this time we see all the leveraging our scale completely offsetting inflation. So that’s our best guess at this point in time but as I indicated in my notes, we are not going to rest. We’ll keep working if we’re able to accomplish more that would be great. We’ll let you know but this is our best guess at this point.

And then one last comment, measured capacity growth overall would clearly be very a good thing. We are not counting on what other people do, we can only control ourselves but obviously that would be a good thing.

And I guess… Jamie Rollo - Morgan Stanley: Okay.

…we are running over, I guess, operator will take one more question at this point.

Thank you. The last question comes from the line of Ian Rennardson with Jefferies. Please go ahead. Ian Rennardson - Jefferies: Thank you. Two questions for you, number one, were you much -- to get much more to fill when you gave guidance back in June than normal because the bake on yields seems very surprising in terms of its magnitude given how far into Q3 when you gave that guidance. And secondly, if you could give us an idea of how much inventory you’ve sold already for 2015 both for the U.S. and Europe? Thank you.

Sure. Well, as far as the third quarter is concerned, you really have to break it apart into a number of different pieces because about half of the increase was relating to onboard which we don’t have a lot of visibility into in advance. And we’re very grateful. Everything worked well. All the things we’re doing seem to pan out in the third quarter and we hope that that continues and we see a positive trend. On the ticket side of things, half of the increase in ticket was relating to occupancy -- higher occupancy than we had expected and the other half was higher prices than we expected. So it was very nice to see forecast that everything go in one particular direction but it was a lot of pieces that came together to create that overall increase and total was $0.11 per share.

In terms of the visibility….

And in terms of the visibility for 2015 is, I think, we’ve said many times, for the next quarter out we are roughly in generally 85% to 95% booked. When you get into the first quarter of 2015, the second quarter out we are roughly half booked and then as you go out to the second quarter, the quarter booked. So that’s how our historical number is in that where we’re roughly speaking today. Ian Rennardson - Jefferies: Okay. And that’s great. Thank you.

Thank you. Thank you all. We really appreciate your interest and I’m sure we’ll be talking to some of you in the weeks to come. But thank you very much.

Thank you ladies and gentlemen, that does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines. Thank you and have a good day.