Q4 2021 Carnival Corp & Carnival PLC Business Update Call

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Good morning, and happy holidays, everyone. Welcome to our business update conference. I am Arnold Donald, President and CEO of Carnival Corporation, and PLC and today I'm joined telephonically by our Chairman Micky Arison. As well as by David Bernstein, our Chief Financial Officer, and by Beth Roberts, Senior Vice President Investor Relations.

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I am Arnold Donald President and CEO of Carnival Corporation, and plc and today I'm joined telephonic lead by our Chairman Micky Arison.

As well as by David Bernstein, Our Chief Financial Officer, and by Beth Roberts Senior Vice President Investor Relations.

Thank you all for joining us this morning. Before I begin, please note that some of our remarks on this call will be forward-looking. Therefore, I must refer you to the cautionary statement in today's press release. What a difference a year. We are clearly on our way back to full crews operations with 50 ships now serving guests as we end the fiscal year. And that's up from just one ship one short year ago. We've already returned over 65 crew members to our shifts and resuming operations over 1.2 million guests and counting that sail with us.

Thank you all for joining us this morning. Before I begin, please note that some of our remarks on this call will be forward-looking. Therefore, I must refer you to the cautionary statement in today's press release. What a difference a year. We are clearly on our way back to full crews operations with 50 ships now serving guests as we end the fiscal year. And that's up from just one ship one short year ago. We've already returned over 65 crew members to our shifts and resuming operations over 1.2 million guests and counting that sail with us.

Before I begin please note that some of our remarks on this call will be forward.

Therefore, I must refer you to the cautionary statement.

Today's press release.

What a difference a year.

We are clearly on our way back full crews operations with 50 ships now serving guests as we end the fiscal year.

Well I'm, just one ship one short year ago.

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Members to our shifts and resuming operations.

1.2 million guests and counting.

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Now we've achieved that while delivering an exceptional guest experience with historically high net promoter scores. These are strong accomplishments, especially in light of the uncertainty we faced just one year ago went back when vaccines were not available and effective protocols to mitigate the spread of the virus were still evolving.

These are strong accomplishment, especially in light of the uncertainty we see just one year ago went back themes were not available any protocols to mitigate the spread of the virus we're steadily bulb.

Today, our team members and the vast majority of BFS have received vaccines and many have received boosters. We have is in fact, the protocols for COVID-19, and its very enabling occupancy to progress toward historical levels. In fact, occupancies at our Carnival cruise line, Brian which currently operates that generate that amongst similar to its normally publish itinerary, are now  approaching 90% and that's after the impact of the variant on near term book.

Today, our team members and the vast majority of BFS have received vaccines and many have received boosters. We have is in fact, the protocols for COVID-19, and its very enabling occupancy to progress toward historical levels. In fact, occupancies at our Carnival cruise line, Brian which currently operates that generate that amongst similar to its normally publish itinerary, are now  approaching 90% and that's after the impact of the variant on near term book.

We have is in fact, the protocols for COVID-19, and its very enabling occupancy sort of progressed toward historical levels. In fact, occupancies at our Carnival cruise line, Brian. We currently operate that generate that amongst similar to its normally publish that generic.

approaching 90% and that's after the impact of the variant on near term book.

Again, Carnival cruise line continues to outperform with both occupancy and pricing strength. Even at this early stage as a company, we are now generating meaningful cash flow at the ship level to date and growth, helping the plant startup costs with the remaining fleet. Total customer deposits have grown by over $1.2 billion from the prior year-end levels as our book position continues to build and to strength.

Carnival cruise line continues to outperform with both occupancy and pricing strength.

Even at this early stage as a company we are now generating meaningful cash flow at the ship level to date and growth, helping the plant startup costs with the remaining fleet.

Total customer deposits have grown by over.

One $2 billion from the prior year end levels as our book position.

<unk> continues to build and to strength.

Importantly, we ended the year with $9.4 billion of liquidity and that's essentially the same liquidity levels last year, but with significantly improved cash flow generation ahead. As the aforementioned ship operating cash flows and costumer deposits continue to grow. With 68% of our capacity now in operation and the remainder planned by spring. We're well-positioned for the summer season, where we historically have the lion's share of our operating. Throughout 2021, we said that we expected the environment to remain dynamic and it certainly has.

Importantly, we ended the year with $9.4 billion of liquidity and that's essentially the same liquidity levels last year, but with significantly improved cash flow generation ahead. As the aforementioned ship operating cash flows and costumer deposits continue to grow. With 68% of our capacity now in operation and the remainder planned by spring. We're well-positioned for the summer season, where we historically have the lion's share of our operating. Throughout 2021, we said that we expected the environment to remain dynamic and it certainly has.

The aforementioned ship operating cash flows and cause of them or.

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With 68% of our capacity now in operation and the remainder planned by spring.

We're well-positioned for the summer season, where we historically have the lion's share of our operating. Throughout 2021, we said that we expected the environment to remain dynamic and it certainly has.

Summer season, where we historically have the lion's share of our operating.

Throughout 2021, we said that we expected the environment to remain dynamic and it certainly.

Of course, the generally has been a key strength of ours, and we continue to aggressively manage to optimize given the ever-changing landscape. As we have demonstrated through the delta variant and now with Omicron. We have navigated near term operational challenges, while the variant has been corresponding effect on consumer confidence. Some near term booking volatility. Our book position has remained resilient.

As we have demonstrated through the delta bearing and now with Amit.

We have navigated near term operational challenges, while the variance there a corresponding effect on consumer confidence.

Some near term booking volatility.

Our book position has remained resilient.

And in the case of Delta variant already recovered. Importantly, these variants have not had a significant impact on our ultimate plan to return our full fleet to get the operations in the spring of 2022. It is clear we have maximized our return to service in 2021. We have positioned the company well to withstand the potential volatility on our path to profitability. At the same time, we have not lost sight of our highest responsibility and therefore, our top priority, which is always complaints, environmental protection, and the health safety and well being of everyone. That's our guests, people and communities we serve. And of course, our carnival family, our team members' shipboard and shore side.

And in the case of Delta variant already recovered. Importantly, these variants have not had a significant impact on our ultimate plan to return our full fleet to get the operations in the spring of 2022. It is clear we have maximized our return to service in 2021. We have positioned the company well to withstand the potential volatility on our path to profitability. At the same time, we have not lost sight of our highest responsibility and therefore, our top priority, which is always complaints, environmental protection, and the health safety and well being of everyone. That's our guests, people and communities we serve. And of course, our carnival family, our team members' shipboard and shore side.

It is clear we have maximize our return to service in 2021.

We have positioned the company well to withstand the potential volatility on our path.

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At the same time, we have not lost sight of our highest responsibility and therefore, our top priority, which is always complaints environmental protection and the health safety and well being of everyone.

That's our guess Pete.

People and communities, we touch them.

And of course, our carnival family, our team members' shipboard and shore side.

And to that end, we've achieved many important milestones along the way in our return service. For example, broadening our commitment to ESG with introduction about screen 30 sustainability goals and our 2050 aspirations. And that's building on the successful achievement of our 2020 goals. [The increase of] our ESG disclosure by incorporating SaaS, B and T Cfd framework in our sustainability report. Bolstering our compliance efforts with the addition of a new board member with valuable compliance experience. A strong addition to our board of directors and our Board compliance Committee.

For example.

Broadening our commitment to ESG with introduction about screen 30 sustainability goals and our 2050 aspiration.

And that's building on the successful achievement of our 2020 goals.

Our ESG disclosure by incorporating SaaS, B and T Cfd framework in our sustainability report.

Bolstering our compliance efforts with the addition of a new board member with valuable compliance experience.

A strong addition to our board of directors and our Board compliance Committee.

Improving our culture through emphasizing six essential behaviors and incorporating them into our ethos training and development and through everyday real-time feedback. As we are already amongst the most diverse companies in the world with our global employee base, representing over 130 countries. We're focusing our efforts on diversity and inclusion at every level and in all areas of our operations. And of course, there are many more operational milestones such as reopening our eight owned and operated private destinations [of course] facility. Princess Cay half Moon Cay, [inaudible] mahogany Bay, Amber Cove. [inaudible], Santa Cruz de Tenerife and Barcelona.

Improving our culture through emphasizing six essential behaviors and incorporating them into our ethos training and development and through everyday real-time feedback. As we are already amongst the most diverse companies in the world with our global employee base, representing over 130 countries. We're focusing our efforts on diversity and inclusion at every level and in all areas of our operations. And of course, there are many more operational milestones such as reopening our eight owned and operated private destinations [of course] facility. Princess Cay half Moon Cay, [inaudible] mahogany Bay, Amber Cove. [inaudible], Santa Cruz de Tenerife and Barcelona.

Improving our culture through emphasizing six essential behaviors and incorporating them into our ethos training and development and through everyday real-time feedback. As we are already amongst the most diverse companies in the world with our global employee base, representing over 130 countries. We're focusing our efforts on diversity and inclusion at every level and in all areas of our operations. And of course, there are many more operational milestones such as reopening our eight owned and operated private destinations [of course] facility. Princess Cay half Moon Cay, [inaudible] mahogany Bay, Amber Cove. [inaudible], Santa Cruz de Tenerife and Barcelona.

And through everyday real time feedback.

As we are already amongst the most diverse companies in the world with our global employee base, representing over 130 countries.

We're focusing our efforts on diversity and inclusion.

Every level and in all areas of our operations.

And of course, there are many more operational milestones such as reopening our eight owned and operated private destinations of course facility.

Princess Cay half Moon Cay grants hurt mahogany Bay Amber Cove.

How's the mill.

On a cruise the Tenerife and Barcelona.

All delivering an exceptional experience to over 630000 of the 1.2 million guests since resuming operations. Welcoming nine new more efficient ships across our world-leading brands, including Mardi Gras powered by LNG. Mardi Gras is nothing short of a game-changer crowd namesake brand Carnival cruise lines. Premium brands all of them are introduced the new Rotterdam. Sister ship that's very successful comes down and loops that. Princess walk-in guests aboard a new medallion class ship Enchanted Princess.

All delivering an exceptional experience to over 630000 of the 1.2 million guests since resuming operations. Welcoming nine new more efficient ships across our world-leading brands, including Mardi Gras powered by LNG. Mardi Gras is nothing short of a game-changer crowd namesake brand Carnival cruise lines. Premium brands all of them are introduced the new Rotterdam. Sister ship that's very successful comes down and loops that. Princess walk-in guests aboard a new medallion class ship Enchanted Princess.

Welcoming nine new more efficient ships across our world, leading brands, including Moneygram powered by LNG.

Nothing short of a game changer crowd namesake brand Carnival cruise lines.

Premium brands all of them are introduced the new Rotterdam.

Sister ship very successful comes down and loops that.

Princess walk in guests aboard a new medallion class ship Enchanted Princess.

And we'll welcome another new medallion class ship Discovery Princess early next year. And ultra-luxury brands [inaudible] will welcome seaborne adventure with this world-class expedition team and its spectacular 360-degree view submarines. For the UK, we successfully introduced Iona, [also powered] biology. So Germany, we shortly take delivery of about six LNG powered ships [inaudible]. Assistant to the also highly successful [inaudible] and for southern Europe. <unk> and LNG powered [inaudible] will replace the exit of several less efficient ships now.

And we'll welcome another new medallion class ship Discovery Princess early next year. And ultra-luxury brands [inaudible] will welcome seaborne adventure with this world-class expedition team and its spectacular 360-degree view submarines. For the UK, we successfully introduced Iona, [also powered] biology. So Germany, we shortly take delivery of about six LNG powered ships [inaudible]. Assistant to the also highly successful [inaudible] and for southern Europe. <unk> and LNG powered [inaudible] will replace the exit of several less efficient ships now.

And ultra luxury brands and people will welcome seaborne adventure with this world class expedition team and its spectacular 360 degree view submarines for the U K, we successfully introduced Iona.

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So Germany, we shortly take delivery of about six LNG powered ships I E. The top.

Assistant to the also highly successful I eat of Nova.

And southern Europe.

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replace the exit of several less efficient ships now.

Now these new ships, Mardi Gras, [Iona,] [inaudible] have joined our [Eaton Nova[ and [inaudible] to be the only five and with the addition of Aida Kosmos shortly. The only six large cruise ships in the world currently powered by LNG. Demonstrating our leading-edge decarbonization efforts. While the utilization of LNG is a positive step with environment, LNG is inherently 20% more carbon-efficient, it is not our ultimate solution. We have announced our net-zero aspiration by 2015. Where there is no no net zero carbon emissions in our industry at this time, we are working to be part of the solution.

Joined Eaton, Nova and passes Morocco to be the only five and with the addition of Aida Kosmos shortly.

Only six large cruise ships in the world currently powered by LNG.

Demonstrating our leading edge de carbonization efforts.

While the utilization of LNG as a positive step with environment.

LNG is inherently 20% more carbon efficient it is not our ultimate solution.

We have announced our net zero aspiration by 2015.

Where there is no no net zero carbon emissions in our industry. At this time, we are working to be part of the solution.

We have and expect to continue to demonstrate leadership and executing carbon reduction strategies. We are focused on decreasing our unit fuel consumption to date, reducing even the need for carbon offsets. Our decarbonization efforts have enabled us to peak our absolute carbon emissions way back in 2011. And that's despite an approximately 25% capacity growth since that time.

We are focused on decreasing our unit fuel consumption to date, reducing even the need for carbon offsets.

Our decarbonization efforts have enabled us to peak, our absolute carbon emissions way back in 2011.

And that's despite an approximately 25% capacity growth since that time.

And while today based on publicly available information, we believe we are the only major cruise operated at peak, our absolute emissions. Our entire industry is moving in the right direction. And as a company with a 25% reduction in carbon intensity already under our belt, we are well-positioned to achieve our 40% reduction goal by 2030. And we are working hard to reach that deliverable ahead of schedule.

And as a company with a 25% reduction in carbon intensity already under our belt.

We are well positioned to achieve our 40% reduction goal by 2030.

We are working hard to reach that deliverable ahead of schedule.

In addition to our cutting edge LNG efforts, we have many other ongoing efforts to accelerate decarbonization. To name just a few they include itinerary optimization and technology upgrades to our existing fleet at an investment of over $350 million in areas, such as air conditioning waste management, lighting and, of course, the list goes on. We are actively increasing our shore power capabilities. Greater than 45% of our fleet is already equipped to connect the short pump and we plan to reach at least 60% by 2030. Now we helped develop the first port with shore power capability for cruise ships, leading to the development of

To name just a few they include itinerary optimization.

And technology upgrades to our existing fleet at an investment of a little bit $350 million in areas, such as air conditioning waste management lighting and of course the list goes on.

We are actively increasing our shore power capabilities.

Greater than 45% of our fleet is already equipped to connect the short pump and we plan to reach at least 60% by 2030.

Now we helped develop a burst port with shore power capability for cruise ships, leading to the development of.