Carnival Corp CCL
Q1 2013 Earnings Call Transcript

Transcript Call Date 03/15/2013

Operator: Ladies and gentlemen, thank you for standing by. Welcome to the Carnival First Quarter 2013 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. As a reminder, this conference is being recorded, Friday, March 15, 2013.

I would now like to turn the conference over to Howard Frank, Vice Chairman and Chief Operating Officer. Please go ahead, sir.

Howard S. Frank - Vice Chairman and COO: Thank you, Suzie. Good morning, everyone. First, apologies for the short notice on this call. We did, I think, in light of recent ship incident events we wanted to connect up to the investment community as soon as possible. So, we put out the press release and we've announced the call rather quickly and we wanted to get the information out there and to make sure everybody is up to date on the impact – the potential impact of these events on our business.

With me this morning is Micky Arison, our Chairman and Chief Executive Officer; David Bernstein, our Senior Vice President of Finance and Chief Financial Officer; and Beth Roberts, our Vice President of Investor Relations along with me.

To start off the call, I'll have David take you through the first quarter and then he'll send it back to me and I'll have some comments on the outlook for 2013 and also make a few comments about the recent ship incidents. David?

David Bernstein - SVP and CFO: Thank you, Howard. Before I began, please note that some of our remarks on this conference call will be forward looking. I will refer you to the cautionary statement in today's press release. Also all of my references to revenue and cost metrics will be in local currencies, unless otherwise noted as this is the more useful measure of business trend.

Our non-GAAP EPS for the first quarter was $0.08 per share. The first quarter came in $0.03 above the mid-point of our December guidance despite a $0.02 impact from Voyage disruptions and related repair cost which Howard will discuss later in his comments. The improvement was primarily driven by lower net cruise cost without fuel or $0.04 a share as a result of the timing for certain expenses primarily between the first and second quarter.

Now, let's take a look at the first quarter operating results versus the prior year. Our capacity increased 3.9%. The North American brands were up 3.1% while the Europe, Australia and Asia brands or as we call them our EAA brands were up 5.1% driven by a 17% increase in the AIDA. Our total net revenue yields in the first quarter declined 2.3% from last year strong Concordia yields that were up almost 3%.

Now let's take a look at the two components of net revenue yields. Our net ticket yields declined 3.3%. Our EAA brands were down 5.8% driven by declines in European, South American itineraries that were partially offset by increases in Caribbean itineraries.

And North American brands were down only 1.5% with two-thirds of their capacity in the Caribbean during the first quarter. For net onboard and other yields, the increase was 1% with increases in the North American brand that were partially offset by declines in the EAA brands driven by Costa.

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