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Two analyst, one expert and top management from six sector firms examine the leisure products & theme parks sector in this special 38-page Leisure Products & Theme Parks issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info523.htm.

TWST: How would you differentiate, from an investment standpoint, between Carnival and Royal Caribbean at this point?

Mr. Conder: Well, Carnival (NYSE:CCL) is in everyone’s view the leader in the industry as it relates to size, profitability and having the best balance sheet. Royal Caribbean (NYSE:RCL) is the number two player in the industry. They have the youngest fleet in the industry. If you look at the way their leverage is structured from an operating leverage standpoint and then factor in the financial leverage that the company has - especially in an improving environment such as the one we’re seeing in the cruise industry right now and that we anticipate to continue over the next couple of years - this is a stock that you definitely want to have in your portfolio. That’s because you benefit from the high combined leverage that Royal Caribbean has relative to the other major players.

TWST: What’s driving the improvement in the cruise industry?

Mr. Conder: There are a couple of factors. Out of September 11, you saw the major companies push back and delay some of the ship deliveries that were in process anywhere from three to six months. That helped smooth out some of the capacity additions that were coming onstream. Additionally, there have been some bankruptcies over the last year to 18 months that have helped that situation. The industry had to stimulate demand and get things going post-September 11, which they did.

TWST: When you say stimulate demand, did the companies do that by offering deals and promotions?

Mr. Conder: They did it by offering very deeply discounted prices, in some instances 20%-35% below where they were just prior to September 11. That has definitely stimulated demand. We’ve subsequently seen a very sharp recovery in the industry pricing environment. Currently it is down in the neighborhood of 0%-7% on a year-over-year basis. We anticipate that pricing will continue to recover on a gradual basis throughout 2002 and going out into 2003. If you factor in the capacity coming onstream for the industry, you can make a case for a very nice continued rebound in earnings.

TWST: Has the profile of the cruise customer changed over the last few years?

Mr. Conder: Overall, I would say that it hasn’t changed materially. But you do see the cruise companies moving successfully toward the shorter haul cruise markets — i.e., those markets where customers can take a three-, four- or five-day cruise versus the historical week-long cruise. You are seeing that appeal to people who want to try cruising; instead of having to spend a whole week, they can just try spending a long weekend. Also, the industry is getting repeat cruisers and is penetrating new customer markets. When you look at it, it’s still a very underpenetrated industry in the US. And when you factor in Europe, which is about 10 years behind the industry growth curve, we see very positive long-term fundamentals for the industry, especially given the consolidation that has occurred over the last several years.

TWST: When you talk about new products, are you talking about new golf clubs or are there additional products?

Mr. Conder: It’s primarily golf clubs and golf balls. The fact that Callaway has all its products available now should allow the company to gain some market share at retail this year. Even though it’s early on, those products appear to be selling reasonably well at the retail level relative to the company’s competitors.

This special issue includes:

1) Leisure Activity & Recreational Products - In an in-depth (2,900 words) Analyst Interview, Timothy A. Conder, Vice President at.G. Edwards & Sons, examines the outlook for the sector including and shares specific stock recommendations.

2) Leisure Activity & Recreational Products - In an in-depth (3,700 words) Analyst Interview, Dean Gianoukos, Analyst that follows the leisure industry at J.P.Morgan Chase, examines the outlook for the sector including and shares specific stock recommendations.

3) Outlook for Them Parks - In an in-depth (4,500 words) Expert Interview, Dennis L. Speigel, President of International Theme Park Services, Inc., examines the outlook for the sector including and shares specific stock recommendations.

4) CEO interviews (average 2,500 words). Top management of six sector firms examine the outlook for their firm and the sector.