Q4 2023 Carnival Corp & Carnival PLC Business Update Call

December 21, 2023

Beth Roberts: Good morning. This is Beth Roberts, SVP Investor Relations. Welcome to our Fourth Quarter 2023 Earnings Conference Call. I'm joined today by our CEO, Josh Weinstein, our Chief Financial Officer, David Bernstein; and our Chair, Micky Arison. Before we begin, please note that some of our remarks on this call will be forward-looking. Therefore, I will refer you to the cautionary statement in today's press release. All references to ticket prices, net per diem, net yields and adjusted cruise costs without fuel will be in constant currency unless otherwise stated. References to per diems and yields will be on a net basis. Our comments may also reference cruise costs without fuel, EBITDA, net income, net loss, earnings per share, free cash flow and ROIC all of which will be on an adjusted basis, unless otherwise stated. All these references are non-GAAP financial measures defined in our earnings press release. A reconciliation to the most directly comparable U.S. GAAP financial measure and other associated disclosures are also contained in our earnings press release and in our investor presentation. Please visit our corporate website where our earnings press release and investor presentation can be found. With that, I'd like to turn the call over to Josh.

And restaurant relations weapons, REIT fourth quarter 2023 earnings conference call.

Speaker Change: I'm joined today by our CEO, Josh Weinstein, our Chief Financial Officer, David Bernstein, and their chair Vicki Erickson.

Beth Roberts: Before we begin, please note that some of our remarks on this call will be forward-looking. Therefore, I will refer you to the cautionary statement in today's press release. All references to ticket prices, net per diem, net yields and adjusted cruise costs without fuel will be in constant currency unless otherwise stated. References to per diems and yields will be on a net basis. Our comments may also reference cruise costs without fuel, EBITDA, net income, net loss, earnings per share, free cash flow and ROIC all of which will be on an adjusted basis, unless otherwise stated. All these references are non-GAAP financial measures defined in our earnings press release. A reconciliation to the most directly comparable U.S. GAAP financial measure and other associated disclosures are also contained in our earnings press release and in our investor presentation. Please visit our corporate website where our earnings press release and investor presentation can be found. With that, I'd like to turn the call over to Josh.

Speaker Change: Before we begin please note that some of our remarks on this call will be forward looking therefore I worked for use in the cautionary statement in today's press release.

Speaker Change: All references to ticket prices not for D. M net yield and adjusted cruise costs without fuel will be in constant currency unless otherwise stated.

Speaker Change: References to break the EMS and yield will be on a net basis.

Beth Roberts: Our comments may also reference cruise costs without fuel, EBITDA, net income, net loss, earnings per share, free cash flow and ROIC all of which will be on an adjusted basis, unless otherwise stated. All these references are non-GAAP financial measures defined in our earnings press release. A reconciliation to the most directly comparable U.S. GAAP financial measure and other associated disclosures are also contained in our earnings press release and in our investor presentation. Please visit our corporate website where our earnings press release and investor presentation can be found. With that, I'd like to turn the call over to Josh.

Our comments May also reference cruise costs without fuel EBITDA net income net loss earnings.

Speaker Change: Earnings per share free cash flow and ROIC.

Speaker Change: All of which will be on an adjusted basis unless otherwise stated.

Speaker Change: All of these references are non-GAAP financial measures defined in our earnings press release a.

Speaker Change: A reconciliation to the most directly comparable U S GAAP financial measure and other associated disclosures are also contained in our earnings press release and in our Investor presentation.

Speaker Change: Please visit our corporate website, where earnings press release, and Investor presentation can be found with that I'd like to turn the call over to Josh. Thank you Beth.

Please visit our corporate website, where earnings press release, and Investor presentation can be found with that I'd like to turn the call over to Josh.

Josh Weinstein: Thank you, Beth. It's safe to say we ended the year on a high note and closed another quarter with record revenues, record booking levels and record customer deposits. In fact, we consistently set records in all 4 quarters this past year. We also achieved per diem, EBITDA and net income for the fourth quarter that all exceeded the high end of our September guidance range with cruise cost ex fuel in line with expectations. Fourth quarter yields continued on a positive trajectory, significantly higher than a very strong 2019 and even higher than we had anticipated and enabled us to overcome 4 years of high cost inflation to deliver per unit EBITDA that eclipsed 2019 holding fuel and currency constant. It was encouraged to see both North American and European brand occupancy levels exceed 101% in the fourth quarter. With per diems for our North American brands up double digits over 2019, and our European brands just shy of a double-digit increase. We delivered per diem improvements of more than 7 points for the full year with even stronger acceleration in Q4 and while closing the double-digit occupancy gap at the start of the year to reach historical levels for the second half of 2023. An absolute spending on board was consistent across all 4 quarters as we drove improvement in ticket prices.

Josh Weinstein: It's safe to say we ended the year on a high and closed another quarter with record revenues record booking levels and record customer deposits. In fact, we consistently set records in all four quarters this past year.

Josh Weinstein: We also achieved for <unk>.

Josh Weinstein: EBITDA and net income for the fourth quarter that all exceeded the high end of our September guidance range with cruise cost ex fuel in line with expectations.

Josh Weinstein: Fourth quarter yield continued on a positive trajectory significantly higher than a very strong 2019, and even higher than we had anticipated and.

Josh Weinstein: Fourth quarter yields continued on a positive trajectory, significantly higher than a very strong 2019 and even higher than we had anticipated and enabled us to overcome 4 years of high cost inflation to deliver per unit EBITDA that eclipsed 2019 holding fuel and currency constant.

Josh Weinstein: And enabled us to overcome four years of high cost inflation to deliver per unit EBITDA that eclipsed 2019, holding fuel and currency comps.

Josh Weinstein: It was encouraged to see both North American and European brand occupancy levels exceed 101% in the fourth quarter. With per diems for our North American brands up double digits over 2019, and our European brands just shy of a double-digit increase. We delivered per diem improvements of more than 7 points for the full year with even stronger acceleration in Q4 and while closing the double-digit occupancy gap at the start of the year to reach historical levels for the second half of 2023. An absolute spending on board was consistent across all 4 quarters as we drove improvement in ticket prices.

Josh Weinstein: It was encouraging to see both north American and European brand occupancy levels exceed 101% in the fourth quarter with per diem for our North American brands up double digits over 2019, and our European friends, just shy of a double digit increase.

Josh Weinstein: We delivered Purdue improvements of more than seven points for the full year with even stronger acceleration in Q4.

Josh Weinstein: While closing the double digit occupancy gap at the start of the year to reach historical levels for the second half of 2023.

Josh Weinstein: Absolute spending outboard was consistent across all four quarters as we drove improvement in ticket prices.

Josh Weinstein: We delivered $85 million more to the bottom line in the fourth quarter than forecasted, which pushed us through to positive adjusted income for the year. Strong EBITDA and cash from operations also propelled us on our journey to reduce the debt load necessitated during the pause in operations. We made debt payments of $6 billion this year alone. And we still have well over $5 billion of liquidity, on top of strong and improving cash flow, which will contribute to further debt reduction over time. All of this leaves us firmly placed on our path back to achieve investment-grade leverage metrics by 2026. And most importantly, our brands delivered happiness to over 12 million guests this year. Laying the foundation upon which all of our SEA Change targets are built.

Josh Weinstein: Strong EBITDA and cash from operations also propelled us on our journey to reduce the debt load necessitated during the pause in obligations.

Josh Weinstein: We made debt payments of $6 billion this year alone and.

Josh Weinstein: And we still have well over $5 billion with liquidity.

Josh Weinstein: On top of strong and improving cash flow.

Josh Weinstein: Which will contribute to further debt reduction over time.

Josh Weinstein: All of this leaves us firmly placed on our path back to achieve investment grade leverage metrics by 2026 and <unk>.

Josh Weinstein: Importantly, our brands deliver happiness to over 12 million guests this year.

Josh Weinstein: The foundation upon which all of our change targets are built.

Josh Weinstein: Turning to bookings. We reached an all-time high in booking volumes for the 2 weeks around Black Friday and Cyber Monday and ended the year in the best booked position we have ever seen on both price and occupancies setting 2024 off to an amazing start. We now have nearly 2/3 of the business on the books for 2024 and at considerably higher prices. And during the fourth quarter, we essentially maintained the significant occupancy advantage we have built for 2024 going into the quarter, while improving year-over-year price position of our booked business even further. At this point, much of the first half is already behind us, with approximately 85% of the business on the books, we've essentially closed with double-digit occupancy gap to historical levels on higher capacity and at higher prices.

We reached an all time high in booking volumes for two weeks around Black Friday, cyber Monday and ended the year in the best booked position, we have ever seen on both price and occupancy setting 'twenty 'twenty four off to an amazing start we now have nearly two thirds of the business on the books for 'twenty 'twenty four.

Josh Weinstein: Sure and that considerably higher prices.

Josh Weinstein: And during the fourth quarter, we essentially maintained significant occupancy advantage, we had built for 'twenty 'twenty four going into the quarter.

Improving year over year price position of our book business even further.

Josh Weinstein: At this point much of the first half is already behind us with.

Josh Weinstein: With approximately 85% of the business on the books, we have essentially closed the double digit occupancy gap to historical levels on higher capacity and at higher prices.

Josh Weinstein: For our peak summer period, all major products are better booked at higher prices benefiting from improving trends in both occupancy and price during the fourth quarter. Our yield management strategy, the baseload bookings has clearly set us up for another record year. And again, we have seen no sign of our business slowing. The book position for our North American brands remains as far out as we have ever seen and well ahead of last year at pricing that is considerably higher. Our European brands just delivered record fourth quarter booking volume at considerably higher prices and with a booking window now fully back to historical norms. As expected, our European brands are poised to become an even greater contributor to our 2024 operating improvement.

Josh Weinstein: All major products are better booked at higher prices benefiting from an improving trend in both occupancy and rate during the fourth quarter.

Josh Weinstein: Our yield management strategy. The Baseload bookings has clearly set us up for another record year and again, we have seen no sign of our business slowing.

Josh Weinstein: The book position for our North American brands remain as far out as we have ever seen and well ahead of last year.

Josh Weinstein: <unk> that is considerably higher.

Josh Weinstein: Our European brands, just delivered record fourth quarter booking volume at considerably higher prices.

Josh Weinstein: Our European brands just delivered record fourth quarter booking volume at considerably higher prices and with a booking window now fully back to historical norms. As expected, our European brands are poised to become an even greater contributor to our 2024 operating improvement.

Josh Weinstein: And with the booking window now fully back to historical norms.

Josh Weinstein: As expected our.

Josh Weinstein: European brands are poised to become an even greater contributor to our 2024 operating improvements.

Josh Weinstein: At the same time, we are continuing to pull forward onboard revenue through bundling and P&O cruise sales. This strategy, coupled with even more features onboard our newer shifts for our guests to enjoy positions us well for further onboard revenue growth next year. Also, we expect occupancy for the full year to return to historical levels on 5% higher capacity while delivering nicely higher per diem building on this year's record results. In 2023, we captured over 3.5 million new-to-cruise guests and remain well positioned to continue to take share from land-based alternatives. In other words, we are gaining momentum in our ability to close the unwarranted value gap to land-based alternatives. And to aid in that effort, we can further [inaudible] the fact that while many land-based alternatives have pulled back on service levels. We still deliver incredible service to our guests, thanks to our amazing crew. This pair is exceedingly well with the expansive amount of guest-pleasing amenities offered onboard our newer fleet.

Josh Weinstein: We are continuing to pull forward onboard revenue through bundling and pre cruise sales.

Josh Weinstein: Strategy, coupled with even more features onboard our newer ships for our guests to enjoy.

Positions us well for further onboard revenue growth next year.

Josh Weinstein: So we expect occupancy for the full year to return to historical levels.

Josh Weinstein: 5% higher capacity, while delivering nicely higher per diem building on this year's record results in.

Josh Weinstein: In 2023, we captured over 3.5 million new-to-cruise guests and remain well positioned to continue to take share from land-based alternatives. In other words, we are gaining momentum in our ability to close the unwarranted value gap to land-based alternatives. And to aid in that effort, we can further [inaudible] the fact that while many land-based alternatives have pulled back on service levels. We still deliver incredible service to our guests, thanks to our amazing crew. This pair is exceedingly well with the expansive amount of guest-pleasing amenities offered onboard our newer fleet.

Josh Weinstein: In 2023, we captured over three and a half million new to cruise guests and remain well positioned to continue to take share from land based alternatives in other words, we are gaining momentum and our ability to close the boat oriented value gap for land based alternatives and to aid in that effort.

Josh Weinstein: We can further chance with the fact that while many land based alternatives have pulled back on service level, we still deliver incredible service to our guests thanks to our amazing.

Josh Weinstein: These parents exceedingly well with the expansive amount of guest pleasing amenities offered onboard our diversity.

Josh Weinstein: In fact, while almost 4 years have passed since the pause in our operations, our fleet actually came out of the pause a year younger through our fleet optimization efforts. This past year alone, we benefited from 3 fantastic new ships including Carnival Celebration and P&O Cruises Arvia, both of which are flagships for their respective brands yet leverage our scale as the 7 and 8 vessels in our popular and exceptionally efficient series of Excel class ships, and we welcome seaborne Pursuit, our second expedition ship. Seaborne has truly raised the bar for expedition cruising in extreme luxury. And while not technically new, Carnival Cruise Line also welcome Carnival Venezia into its fun Italian-style platform via the transfer from Costa and it has been going gangbusters. It's the biggest example yet of how we leverage our scale and we'll be doubling down when we bring over her sister ship Carnival Firenze in 2024.

Our fleet actually came out of the park a year younger through our fleet optimization efforts.

Josh Weinstein: This past year alone, we benefited from three that plastic new shifts, including Carnival celebration in P&L cruises are.

Josh Weinstein: Both of which are flagships for their respective brands that leverage our scale at the seven and eight vessels in our popular and exceptionally efficient theories of X L class ships and we welcome seaborne pursuit, our second expedition ship.

Josh Weinstein: Seaborne has truly raised the bar for expedition cruising in extreme luxury.

Not technically new Carnival cruise lines also welcome Carnival, the Netsuite Intuit spun Italian style platform via the transfer from Costa and it has been going gangbusters. It's the biggest example, yet of how we leverage our scale.

Josh Weinstein: We'll be doubling down, but we bring over her sister ship Carnival forensic and 'twenty 'twenty four looking.

Josh Weinstein: Looking forward, this year is set to match the excitement level with the introduction of Carnival Jubilee a new icon for Carnival Cruise Line and which no doubt will be the pride of Texas as she has her inaugural home in Galveston. The innovative Sun Princess the first of its class and a real game changer for Princess. And Queen Anne, a new flagship for Queen Anne and its first new ship in 14 years. With all of these additions, roughly 30% of our capacity will be newly delivered ships. We also made meaningful headway on other strategic asset projects. We began construction on Celebration Key which will be the largest and closest exclusive destination in our destination portfolio and a real game changer for Carnival Cruise Line. We'll bring 18 Carnival ships departing from 9 home ports to Celebration Key. And while we are still about 1.5 years from go-live, we are already ramping up the awareness and the excitement around this fantastic destination.

Josh Weinstein: New icon for Carnival cruise line, and which no doubt will be the pride of Texas and she has her inaugural fone and Galveston.

Josh Weinstein: The innovative sub Princess the first of its class any real game changer for principal.

Josh Weinstein: And Queen Anne.

New flagship for Qunar and its first new ships in 14 years.

With all of these additions roughly 30% of our capacity will be newly delivered ships.

Josh Weinstein: We also made meaningful headway on other strategic asset projects.

Josh Weinstein: We also made meaningful headway on other strategic asset projects. We began construction on Celebration Key which will be the largest and closest exclusive destination in our destination portfolio and a real game changer for Carnival Cruise Line. We'll bring 18 Carnival ships departing from 9 home ports to Celebration Key. And while we are still about 1.5 years from go-live, we are already ramping up the awareness and the excitement around this fantastic destination.

Josh Weinstein: We began construction on celebration cheap, which will be the largest and closest exclusive destination in our destination portfolio and a real game changer for Carnival cruise line.

Josh Weinstein: We'll bring 18 carnival ships departing from nine home ports, the celebration keep them well.

Josh Weinstein: We are still about a year and a half from go live we are already amping up the awareness and excitement around this fantastic destination.

Josh Weinstein: We've also started the process for a significant upside in guest traffic at Half Moon Cay our exclusive and beautiful pristine island destination in the Bahamas with the creation of a peer side berth that can accommodate even our largest vessels. We've begun work with our Grand Bahamas shipyard partners, on the construction of 2 floating dry docks, one of which will have the largest lifting capacity in the world. This will result in significant benefit in the future as we reduce travel time, preserve revenue days, and, at the same time, reduce our fuel consumption. As you know, we've also been investing more in advertising over the last 18 months, and it has definitely paid off with elevated awareness and consideration for our brand and record booking levels and revenue results.

Josh Weinstein: We've begun work with our Grand Bahama Shipyard partners on the construction of two loading drydocks, one of which will have the largest lifting capacity in before.

This will result in significant benefit in the future as well.

We've reduced travel time preserve revenue days and at the same time reduce our fuel consumption.

Josh Weinstein: In fiscal 2023, our web visits were up over 35%. Our paid search was up roughly 50% and our natural search was up almost 75%, all many, many multiples of our 5% capacity growth. In the fourth quarter, we carried more new-to-cruise, and more new-to-brand guests than we did in the fourth quarter of 2019. Given our success on generating demand at this point in time, we plan to maintain a similar level of advertising on a unit basis in 2024 compared to 2023, optimizing around each brand. This will help us continue to build demand and bookings well outside of the current year. We're working aggressively to keep our strong momentum going through wave season and beyond. Just to list a few examples, Costa recently launched spectacular new campaign in its core markets, focusing on moments, where guests are less speechless. Poland America launched a sequel to its highly successful time of your life campaign and AIDA just kicked off its new campaign experience yourself differently in conjunction with the holiday. Carnival will launch a new marketing campaign highlighting Celebration Key in time to wave P&O Cruises new campaign, holiday like never before, launches Christmas Day in the U.K. and Cunard has planned to welcome fit for our Queen to introduce Queen Anne early next year, which is short to capture huge fanfare. We've been talking about upping our game across the commercial space and we've made good progress. Of course, we're not done. And as you'd expect, we never will as there is always room to improve.

Josh Weinstein: Paul many many multiples of our 5% capacity growth.

In the fourth quarter, we carried more due to crews have more new to brand gap than we did in the fourth quarter of 2019.

Josh Weinstein: Given our success in generating demand at this point in time, we plan to maintain a similar level of advertising on a unit basis in 'twenty 'twenty four compared to 'twenty to 'twenty three optimizing around each brand.

Josh Weinstein: This will help us continue to build demand and bookings well outside of the current year.

Josh Weinstein: We're working aggressively to keep our strong momentum going through wave season and beyond.

Josh Weinstein: Just to list a few examples, Costa recently launched spectacular new campaign in its core markets, focusing on moments, where guests are less speechless. Poland America launched a sequel to its highly successful time of your life campaign and AIDA just kicked off its new campaign experience yourself differently in conjunction with the holiday. Carnival will launch a new marketing campaign highlighting Celebration Key in time to wave P&O Cruises new campaign, holiday like never before, launches Christmas Day in the U.K. and Cunard has planned to welcome fit for our Queen to introduce Queen Anne early next year, which is short to capture huge fanfare. We've been talking about upping our game across the commercial space and we've made good progress. Of course, we're not done. And as you'd expect, we never will as there is always room to improve.

Josh Weinstein: Just to list a few examples Costa recently launched a spectacular new campaign in its core markets focusing on Beaumont, where guests are left speechless.

Josh Weinstein: Americans launched a sequel to its highly successful time of your life campaign and I eat it just kicked off its new campaign experience yourself differently in conjunction with the holidays.

Josh Weinstein: Carnival will launch a new marketing campaign, highlighting celebration key and time for waves.

Josh Weinstein: Piano cruises, new campaign holiday like never before launch as Christmas day, and the U K and Qunar was planned a welcome fit for a Queen introduced Queen Anne early next year, which is short capture huge paying for it.

Josh Weinstein: We've been talking about upping, our game across the commercial space and we've made good progress.

Of course, we're not done and as you'd expect we never will because there is always room to improve.

Josh Weinstein: There's much more to come as we roll out advancements to our yield management tools and lead generation techniques, continue to invest in sales and sales support and build on already strong relationships with our trade partners. Turning to costs, as we previously indicated, unit cruise cost ex fuel for 2024 are expected to be higher than inflation due to the impact of closing the occupancy gap and the higher volume from dry dock days. David will walk you through in more detail. With that said, we have been working aggressively to mitigate inflation through our cost optimization initiatives, including leveraging our scale. In some cases, we're investing today for future benefits. Just to cite a couple of examples of initiatives underway, we're essentially complete with the rollout of Starlink across the fleet. This will produce more than a 20% reduction in cost per megabit in 2024 and significantly increase our bandwidth pipeline, resulting in both better guest experience and higher onboard revenues, a clear win-win. And with our new vendor-neutral platform, we are positioned to quickly capture cost savings in future years.

Josh Weinstein: Built on already strong relationships with our trade partners.

Josh Weinstein: Turning to costs as we previously indicated unit cruise costs ex fuel for 'twenty 'twenty four are expected to be higher than inflation due to the impact of closing the occupancy gap and the higher volume for dry dock.

Josh Weinstein: Turning to costs, as we previously indicated, unit cruise cost ex fuel for 2024 are expected to be higher than inflation due to the impact of closing the occupancy gap and the higher volume from dry dock days. David will walk you through in more detail. With that said, we have been working aggressively to mitigate inflation through our cost optimization initiatives, including leveraging our scale.

Josh Weinstein: David will walk you through in more detail, but that said, we have been working aggressively to mitigate inflation through our cost optimization initiatives, including leveraging our scale.

David Bernstein: In some cases, we're investing today for future benefits just decided a couple of examples of initiatives underway.

Josh Weinstein: In some cases, we're investing today for future benefits. Just to cite a couple of examples of initiatives underway, we're essentially complete with the rollout of Starlink across the fleet. This will produce more than a 20% reduction in cost per megabit in 2024 and significantly increase our bandwidth pipeline, resulting in both better guest experience and higher onboard revenues, a clear win-win. And with our new vendor-neutral platform, we are positioned to quickly capture cost savings in future years.

David Bernstein: We're essentially complete with the rollout of starling across the fleet.

David Bernstein: This will produce more than a 20% reduction in cost per megabit in 'twenty 'twenty, four and significantly increase our bandwidth pipeline, resulting in both better guest experience and higher onboard revenues a clear win win.

David Bernstein: And with our new vendor neutral platform, we are positioned to quickly capture cost savings in future years we've.

And with our new vendor neutral platform, we are positioned to quickly capture cost savings in future years

Josh Weinstein: We've also launched our maritime asset strategy transformation or what we refer to internally as MAS. MAS is a centralized system developed to optimize the management of equipment and machinery across all brands and all of our ships. MAS will allow us to leverage spare parts more effectively across the entire fleet and optimize our maintenance schedules and practices, all of which will strengthen our efficiency and reduce unplanned maintenance over time. While we won't see the P&L benefits from MAS this year as we ramp up implementation in 2024, we expect a multiyear benefit well in excess of $100 million that really begins to ramp up in 2026. All of the efforts we're making to drive revenue and manage costs are expected to lead to a 4-point margin improvement in 2024.

David Bernstein: We've also launched our maritime asset strategy transformation.

David Bernstein: Or what we refer to internally as mast.

David Bernstein: Bob is a centralized system developed to optimize the management of equipment and machinery across all brands and all of our ships.

David Bernstein: This will allow us to leverage spare parts more effectively across the entire fleet and optimize our maintenance schedules and practices.

David Bernstein: All of which will strengthen our efficiency and reduce unplanned maintenance overtime.

David Bernstein: While we won't see the P&L benefits for math this year as we ramp up the implementation in 2024 weeks.

We expect a multi year benefit well in excess of $100 million that really begins to ramp up in 2026.

David Bernstein: All the efforts, we're making to drive revenue and manage Pas are expected to lead to a four point margin improvement in 2024.

Josh Weinstein: We're guiding to record EBITDA of over $5.5 billion which is 30% higher than 2023. Thanks to a strong second half of 2023, we're already tracking ahead of our plan to achieve SEA Change, our 3-year financial targets calling for the highest ROIC and EBITDA for ALBD in nearly 2 decades, and our 2024 guidance delivers another step change toward these deliverables. EBITDA per berth day is expected to be up by more than 25% over our target starting point, hence, more than halfway to the 50% increase expected in our SEA Change targets. Today's guidance will also deliver 9% ROIC, a 4-point increase from the starting point of our target. This leaves just 1.5 point annual increases in 2025 and 2026, to hit our 12% target. Not surprisingly, our brand dedicated to a single market, Carnival, AIDA and P&O Cruises in the U.K. are again leading the charge with the highest ROIC levels in the company. And with regard to our greenhouse gas target included in our 2026 SEA Change program, our GHD intensity in 2024 is expected to be just shy of the 20% reduction from 2019 or targeted. It is worth noting, this was a 2030 goal we had already pulled forward by 4 years. We have been and continue to work aggressively to reduce our environmental footprint and fuel costs at the same time. This deep commitment has not only resulted in industry-leading fuel efficiency, it has also resulted in lower absolute GHG emissions. Our absolute emissions are over 10% lower than the 2011 peak and that's despite capacity growth of 30% since then.

David Bernstein: Thanks to a strong second half of 2023, we're already tracking ahead of our plan to achieve C change our three year financial targets, calling for the highest our licensee in EBITDA or a L. B D in nearly two decades.

David Bernstein: Our 'twenty 'twenty four guidance deliberate another step change towards these deliverables EBITDA per birthday is expected to be up by more than 25% over our target starting point and it's more than halfway to the 50% increase expected in a sea change targets.

Today's guidance, but also deliver 9% rois.

Josh Weinstein: Today's guidance will also deliver 9% ROIC, a 4-point increase from the starting point of our target. This leaves just 1.5 point annual increases in 2025 and 2026, to hit our 12% target. Not surprisingly, our brand dedicated to a single market, Carnival, AIDA and P&O Cruises in the U.K. are again leading the charge with the highest ROIC levels in the company. And with regard to our greenhouse gas target included in our 2026 SEA Change program, our GHD intensity in 2024 is expected to be just shy of the 20% reduction from 2019 or targeted. It is worth noting, this was a 2030 goal we had already pulled forward by 4 years. We have been and continue to work aggressively to reduce our environmental footprint and fuel costs at the same time. This deep commitment has not only resulted in industry-leading fuel efficiency, it has also resulted in lower absolute GHG emissions. Our absolute emissions are over 10% lower than the 2011 peak and that's despite capacity growth of 30% since then.

David Bernstein: Four point increase from the starting point of our target.

David Bernstein: This leaves just one and a half point annual increases in 2020, five and 'twenty 'twenty six to hit our 12% target.

David Bernstein: Not surprisingly our brand dedicated to a single market Carnival, Aida and piano cruises in the U K are again, leading the charge with the highest levels in the company.

David Bernstein: And with regard to our greenhouse gas targets included in our twenties 26 D change program. Our G. H E intensity in 'twenty 'twenty four is expected to be just shy of the 20% reduction from 2019, we're targeting.

David Bernstein: Worth, noting this was a 2030 call we had already pulled forward by four years.

David Bernstein: Have been and continue to work aggressively to reduce our environmental footprint and fuel costs at the same time.

David Bernstein: The deep commitment has not only resulted in industry, leading fuel efficiency. It has also resulted in lower absolute G. H G. English.

David Bernstein: Our absolute emissions are over 10% lower than the 2011, Pete and that's despite capacity growth of 30% since then.

Josh Weinstein: Last year, we also exceeded our industry-leading shore power capability goals. We are ahead of the curve and now have twice as many ships capable of shore power than there are ports around the world available to plug in. Again, I credit all of these important achievements to our people, ship and shore. Collectively, they continue to outperform, allowing us to make good headway on our SEA Change target. We're poised for another step change in operating improvement this year with nearly 2/3 of the business on the books at considerable higher prices, ongoing momentum from improvements across the commercial space, the amazing vacation experiences we deliver day in, day out at way too good of a relative value to land-based alternatives and an even greater experience gap, all while growing onboard revenues and managing costs. All of this combined sets us up well to deliver another year of record revenues and record EBITDA.

David Bernstein: We are ahead of the curve and now have twice as many ships capable of shore power than there are ports around the world available plug ins.

David Bernstein: Again, I credit all of these important achievements to our people shipping sure.

David Bernstein: Collectively they continue to outperform allowing us to make good headway on our sea change of heart.

David Bernstein: We're poised for another step change in operating improvement this year.

With nearly two thirds of the business on the books at considerably higher prices ongoing momentum from improvements across the commercial space.

David Bernstein: The amazing vacation experiences, we deliver day in day out at way too good of a relative value demand based alternatives and an even greater experienced staff.

David Bernstein: All while growing onboard revenues managing costs.

David Bernstein: All of this combined.

David Bernstein: This up well to deliver another year of record revenues and record EBITDA.

Josh Weinstein: Our cash flow strength, coupled with excess liquidity, the return of credit card reserves in a few weeks and the lowest order book in decades will allow us to continue to actively manage down debt and aggressively reduce interest expense over time. It will also propel us on our path to deleveraging, investment-grade credit rating and higher ROIC. I remain confident in our continued execution with an unparalleled portfolio of best-in-class brands and amazing fleet that just keeps getting better and better, and our greatest assets are people.

David Bernstein: Will allow us to continue to actively manage down debt and aggressively reduce interest expense over time.

David Bernstein: He will also propel us on a path to deleverage.

David Bernstein: Great credit ratings and higher Rois.

David Bernstein: I remain confident in our continued execution with them.

David Bernstein: Unparalleled portfolio of best in class brands, and amazing fleets that just keeps getting better and better.

David Bernstein: And our greatest asset our people.

Josh Weinstein: This has been a truly remarkable year, and we've come a long way in an incredibly short amount of time. I would like to thank our team members, ship and shore the best in all of travel and leisure for delivering unforgettable happiness to over 12 million guests this year by providing them with extraordinary cruise vacations. For honoring the integrity of every ocean we sail, place we visit and life we touch. And thank you for the strong support from our travel agent partners as well as our loyal guests, destination partners, investors and many other stakeholders. With that, I'll turn the call over to David.

David Bernstein: I would like to thank our team members ship and shore, the best and all the travel and leisure were delivering unforgettable happiness to over 12 million guests. This year by providing them with extraordinary cruise vacations, while honoring the integrity of every ocean. We sell places we visit and life we touch.

David Bernstein: And thank you for the strong support from our travel agent partners as well as our loyal guests.

David Bernstein: Destination partners investors and many other stakeholders with that I'll turn the call over to David.

David Bernstein: Thank you, Josh. I'll start today with a summary of our 2023 fourth quarter and full year results. Next, I will provide a recap of our refinancing and deleveraging efforts during 2023. And finish off with some color on our 2024 full year and first quarter December guidance. Our fourth quarter bottom line exceeded the better end of our guidance range as we outperformed our September guidance. The $85 million improvement was driven by favorability in revenue from higher ticket prices as net per diems were up over 10%, 3 points better than the midpoint of our September guidance range. In fact, fourth quarter revenues of $5.4 billion were a fourth quarter record and net yields were up nearly 8% as compared to 2019, a great way to close out the year and another indication that we do not see a slowdown in our consumers.

David Bernstein: Next I will provide a recap of our refinancing.

David Bernstein: Leveraging average during 2023 and finish up with some color on our 2020 for full year and first quarter December guidance.

David Bernstein: Fourth quarter bottom line.

David Bernstein: Our end of our guidance range.

David Bernstein: Our September guidance.

David Bernstein: 5000.

Credit markets, driven by favorable revenue from higher ticket prices.

Speaker Change: Personally I'm sorry, Chris.

Speaker Change: Three point study of a moot point of our September guidance.

Right.

Speaker Change: Quarter revenues of $5 4 billion for a fourth quarter record, but they also were up 8% to 20.

A great way to close out the year.

Speaker Change: There are indications.

Speaker Change: Absent a slowdown of our consumers.

David Bernstein: For the full year, thanks to the tremendous efforts of our team members, ship and shore, we closed the books on 2023 with positive adjusted net income. That is an archive from our March guidance as we delivered over $550 million to the bottom line, which was partially offset by a drag of fuel price and currency exchange rates of over $100 million. The improvement was driven by delivering a 7.5% increase in net revenue per diem versus 2019, which was over double the 3.5% midpoint of our March guidance while closing the double-digit occupancy gap at the start of the year to reach historical occupancy levels. Absolute spending per diems onboard were consistent across all 4 quarters as we drove improvements in ticket prices on both sides of the Atlantic and ended the year with net yields of nearly 1% over 2019.

Speaker Change: The efforts of our team members shipped offshore.

Speaker Change: The books on 2023% of adjusted revenue.

Speaker Change: That is a far cry from our March guidance.

Speaker Change: Hi hungry.

The $4 to the bottom.

Speaker Change: Which was.

Speaker Change: Partially offset by a drag from fuel price and currency exchange rates of over a hungry.

Speaker Change: Yeah.

Speaker Change: Oh, it was driven by delivering that.

Speaker Change: Remember half percent.

Speaker Change: Right.

Speaker Change: Versus 'twenty two.

Speaker Change: For example, three of them.

Speaker Change: And a half or so forth.

Speaker Change: Point of our March guidance, while closing.

Speaker Change: October was the gap.

Speaker Change: Starting with the desire to reach historical occupancy levels.

Speaker Change: Absolutely Crazy.

Speaker Change: Currently Amazon going are consistent across all four quarters actually drove improvements in ticket prices on both sides are going to finance it.

Speaker Change: Well the.

Speaker Change: One Chris over 20 languages.

David Bernstein: Next, I will provide a recap of our refinancing and deleveraging efforts during 2023. As Josh indicated, our full year 2023 strong EBITDA of $4.2 billion and strong cash from operations of $4.3 billion, propelled us on our journey to pay down debt and reduced the debt effort necessitated by the pause in guest cruise operations. During 2023, we made debt payments of $6 million and ended the year with just over $30 billion of debt which is $3 billion better than we forecasted just 9 months ago during our March conference call and almost $5 billion of the first quarter peak, transferring enterprise value from debt holders to shareholders. During 2023, we proactively addressed our debt profile as we successfully started our refinancing and deleveraging program. We accelerated our debt repayment efforts and aggressively manage down our interest expense.

Speaker Change: Leveraging efforts during 2023.

Speaker Change: It's Josh on the total.

Speaker Change: 2023 strong EBITDA.

Speaker Change: $4 2 billion.

Speaker Change: Strong cash from operations of $4 3 billion.

Speaker Change: Propels us on our journey.

Speaker Change: Okay.

Speaker Change: Yeah.

Speaker Change: Aided by the pause that's cruise operations.

During 2023.

Speaker Change: That's a $6 billion.

Speaker Change: With just over 30.

Speaker Change: Yeah.

Speaker Change: Great.

Speaker Change: Forecast of just nine months ago during our March conference call.

Speaker Change: Almost I tell you what the first quarter.

Speaker Change: Spring and are quite high.

Speaker Change: Cardholders to Sheryl.

David Bernstein: In 2023, we effectively stretched out a 2025 maturity on favorable terms by replacing it with a $1.3 billion term loan B facility to 2027 and a $500 million offering of senior secured notes through 2029. This refinancing, along with our optimism about our future and the return of customer deposit reserves gave us the confidence to accelerate our debt repayment by calling $1.2 billion of our highest cost debt. In addition, we opportunistically prepaid $2.8 billion of additional debt for a total of $4 billion of debt repayments, including the $1.2 billion of debt cost. Our credit card processes returned to us $800 million of credit card reserves and we now expect an additional $800 million to be returned this current quarter, representing substantially all of the remaining credit card reserves at year-end. We took actions in both 2022 and early in 2023 to increase the fixed rate percentage of our debt portfolio to over 80%, up significantly from our 58% fixed levels at the end of 2021, which provided us protection from rising interest rates.

We successfully started our refinancings.

Speaker Change: Deleveraging program.

Speaker Change: Salaried advice.

Speaker Change: First on the <unk>.

Speaker Change: The rest of them.

Speaker Change: Our interest expense.

Speaker Change: 2023.

Speaker Change: Stretched out 2025 maturity.

Speaker Change: For a whole terms by replacing it.

Speaker Change: One 3 billion term loan B facility.

Speaker Change: 27.

Speaker Change: $500 million offering of senior.

Speaker Change: The secured notes due 2029.

Speaker Change: So along with our optimism about our future and the return of customer deposit reserves.

Speaker Change: Our confidence to accelerate our plan.

Speaker Change: I call it 1.2.

Speaker Change: I S cost.

Speaker Change: Integration.

Speaker Change: Opportunistically pre paid $2 8 billion of additional class.

Speaker Change: Total up for failure.

Prepayments.

Speaker Change: The $1 2 billion.

Speaker Change: Cool.

Speaker Change: Quite processes return to us hungry for Oregon credit card reserve.

Speaker Change: We now expect an additional 800 million to be returned as current quarter.

Speaker Change: Representing substantially all of the credit card reserve.

Speaker Change: All right.

We took actions in both 2022 or early in 2023.

Fix shrink for Savage public that's quite folio to over 80%.

Speaker Change: Up significantly from 58% fixed level.

Speaker Change: 'twenty, one which provided us protection from rising interest rates.

David Bernstein: Our overall average interest rate is just over 5.5%. All these actions to address our debt profile alongside our improved business performance, drove $200 million of interest savings compared to our March guidance. Our maturity towers have been well managed in 2026 with just $2.1 billion of debt maturities next year, $2.2 billion in 2025 and $3.2 billion in 2026. And looking forward, we will continue to evaluate refinancing opportunities and opportunistically prepay additional debt. So in 2024, we will be replacing higher cost fixed rate debt with lower-cost export credit financing as we take delivery of ships during 2024.

Speaker Change: All these actions to address our debt profile alongside our improved business performance drove 200 million interest savings.

On March five.

Speaker Change: Our maturity towers have been well managed in 2026, which is $2 1 billion of debt maturities next year.

Speaker Change: Sure.

Speaker Change: 23.

Speaker Change: Three points.

Speaker Change: 2026.

Speaker Change: I'm looking forward.

Speaker Change: To evaluate refinancing opportunities.

Sure.

Speaker Change: Additional debt.

Speaker Change: So in 2024.

Speaker Change: Higher cost fixed rate debt.

Speaker Change: Lower cost export credit financing.

Speaker Change: Delivery of ships during 2024.

David Bernstein: Our leverage metrics will also continue to improve throughout 2024 as our EBITDA continues to grow. Now turning to our 2024 full year December guidance. We are forecasting a capacity increase of about 5.5% compared to 2023. We are expecting to deliver strong 2024 net yield improvement with our guidance forecasting an increase of approximately 8.5% for the full year 2024 when compared to 2023. And that is on top of our improved 2023 results where we delivered a 7.5% increase in net revenue per diem versus 2019. The strong improvement in 2024 net yields is a result of the increase in all the component parts, higher ticket prices, higher onboard spending and higher occupancy with all 3 components improving both sides of the Atlantic.

Speaker Change: EBITDA continues to grow.

Speaker Change: Now turning to our 2024 fold year December guidance.

Speaker Change: We are forecasting a capacity increase.

Speaker Change: Each of about 5.5% compared to 2023.

Speaker Change: We were expecting to deliver a strong 2024.

Speaker Change: Okay.

Speaker Change: Guidance forecast.

Speaker Change: Approximately 5% for the full year 2024.

For 2023.

Speaker Change: That was on top of our improved 2023 results, where we delivered seven 5% increase.

Speaker Change: Revenue.

Versus 2019.

Speaker Change: Our strong 2020.

Speaker Change: As a result.

All the component parts.

Speaker Change: Higher prices higher onboard spending.

Speaker Change: Alright.

Speaker Change: With all three components.

Speaker Change: Okay.

David Bernstein: We are well positioned to drive 2024 ticket pricing higher with significantly less inventory remaining to sell as the same time last year despite a capacity increase of over 5%. Occupancy for the full year 2024 is on track to return to historical levels. Keep in mind, 2019 was a high watermark for occupancy. For 2024, we forecast to be well within our historical occupancy range as we balance pricing value to optimize total revenues and achieve record yields. Now turning to costs. Cruise costs without fuel per available lower berth day per ALBD, is currently expected to be up approximately 4.5% for 2024 versus 2023.

Speaker Change: Frequently less toy.

Speaker Change: So on the phone.

Speaker Change: Last year, despite a capacity increase of older Hi, Chris.

Speaker Change: Occupancy for the posting of 'twenty 'twenty four is on track to return to historical levels.

Speaker Change: Keep in mind 20 months without a high watermark for occupancy.

Speaker Change: 24 forecast well within our historical occupancy range.

Balance price and volume.

<unk> total revenues.

Speaker Change: Right.

Speaker Change: Now turning to costs.

David Bernstein: Now turning to costs. Cruise costs without fuel per available lower berth day per ALBD, is currently expected to be up approximately 4.5% for 2024 versus 2023.

Cruise costs without fuel per available lower bird.

Speaker Change: Okay.

Speaker Change: Currently expected to be up approximately four and a half.

Speaker Change: 2024 versus 2023.

David Bernstein: Broadly speaking, there are 4 main drivers of the cost change. First, our forecast is for decelerating inflation but nonetheless, inflation with an average 3.5% increase across all our cost categories globally. Second, with occupancy returning to historical levels, the impact on cost should be 1.5 to 2 percentage points higher in 2024 as compared to 2023. Third, in 2024, we are expecting 586 dry dock days, an increase of 14% versus 2023, which is expected to impact our overall year-over-year cost comparisons by about 3/4 of a point. And four, countering these headwinds, we expect these cost increases will be somewhat mitigated by a couple of points, given the economies of scale from our capacity growth, which is enhanced by taking delivery of larger, more efficient ships, along with various other cost optimization initiatives.

Speaker Change: There are four drivers of the cost.

First our Ford class.

Speaker Change: Hello, everyone approach them.

Speaker Change: Nonetheless inflation with an average three and a half questions increase across all our cost categories globally.

Speaker Change: Second with occupancy returning to historical levels.

Speaker Change: Gosh, one and a half to two percentage points higher in 2024 compared to 2023.

David Bernstein: Third, in 2024, we are expecting 586 dry dock days, an increase of 14% versus 2023, which is expected to impact our overall year-over-year cost comparisons by about 3/4 of a point. And four, countering these headwinds, we expect these cost increases will be somewhat mitigated by a couple of points, given the economies of scale from our capacity growth, which is enhanced by taking delivery of larger, more efficient ships, along with various other cost optimization initiatives.

Speaker Change: Third.

2024, we are expecting 506 dry dock days, an increase of 14% versus 2023.

Speaker Change: As expected.

Speaker Change: Overall year over year.

Speaker Change: Cost comparison by about three quarters of a point.

Speaker Change: Core counseling.

Speaker Change: We expect these cost increases were somewhat mitigated by a couple of points.

Speaker Change: Hi, this is <unk>.

Speaker Change: From a cross sell to growth, which is of course, taking delivery of larger more efficient ships along with various other cost optimization initiatives your consumption per hail.

From a cross sell to growth, which is of course, taking delivery of larger more efficient ships along with various other cost optimization initiatives

David Bernstein: Fuel consumption per ALBD is expected to decrease another 4%, and that is on top of the 15.5% reduction achieved from 2019 to 2023. And that impact of fuel price and currency is expected to favorably impact 2024 by $90 million with lower fuel pricing favorable by $94 million while the change in currency exchange rates slightly goes the other way. And finally, a few things to note about the outsized increases in the first quarter 2024. A higher net yield guidance for first quarter 2024 of 16.5% versus the full year, 8.5% is driven by the larger improvement in first quarter occupancy. Let's not forget that we did not reach historical occupancy levels until the second half of 2023. So there is much more occupancy-driven net yield opportunity in the first half.

Speaker Change: The decrease.

4%.

That is on top of that.

Speaker Change: Personal perception.

Speaker Change: 20 months.

Speaker Change: For 2023.

Speaker Change: Oh, well unpack, what's real question currency is expected to favorably impact.

Speaker Change: 2024 by $90 million with lower fuel prices.

94 million, while the change in currency exchange rates slightly.

Speaker Change: Either way.

Speaker Change: Finally, a few calls people are worried about outsized increases in the first quarter 2024.

Speaker Change: Our higher guidance for first quarter 2024, six and a half.

Speaker Change: <unk> versus the full year.

Speaker Change: So it's driven by the larger improvement in the.

Speaker Change: First quarter occupancy.

Speaker Change: Let's not forget that we did not reach historical occupancy levels until the second half of 2023.

So there is much more occupancy driven the opportunity in the first half.

David Bernstein: On the cost side, the higher cruise cost without fuel per available lower berth day guidance for the first quarter of 2024 and 9.5% is driven by 4 main factors. First, the largest improvement in occupancy will occur in the first quarter. And while it drives greater yield increases in the first quarter, it also drives greater cost increases, which means a total of 3% to 4% cost drag in the quarter. Second, while dry dock costs impact our full year guidance, the seasonality of dry dock costs in the first quarter 2024 as compared to the prior year drives a cost increase of about 1.5 points for this quarter. Third, the seasonality of advertising expense and a variety of other expenses between the quarters differs in 2024 as compared to 2023, which will put a total cost increase of approximately 3 points into this quarter. Advertising alone is 1 of the 3 points. And fourth, like the full year inflation mitigated by economies of scale from our capacity growth, along with various other cost optimization initiatives. Given the higher first quarter cruise costs without fuel per available lower berth day, the implied guidance for the cost in the second to the fourth quarter is approximately 3%.

Speaker Change: Whose cost without an offer available to offer guidance for the first quarter of 2024, 95%.

All right.

First of all.

Speaker Change: The largest improvement.

Speaker Change: He will occur in the first quarter.

Wireless drives greater.

Speaker Change: The first quarter. It also drives greater cost increases, which means a total of three to four point cost right.

Speaker Change: Right.

Speaker Change: Second.

David Bernstein: Second, while dry dock costs impact our full year guidance, the seasonality of dry dock costs in the first quarter 2024 as compared to the prior year drives a cost increase of about 1.5 points for this quarter. Third, the seasonality of advertising expense and a variety of other expenses between the quarters differs in 2024 as compared to 2023, which will put a total cost increase of approximately 3 points into this quarter. Advertising alone is 1 of the 3 points. And fourth, like the full year inflation mitigated by economies of scale from our capacity growth, along with various other cost optimization initiatives. Given the higher first quarter cruise costs without fuel per available lower berth day, the implied guidance for the cost in the second to the fourth quarter is approximately 3%.

Speaker Change: I'll drive out cost.

Speaker Change: Full year guidance.

Speaker Change: Our dry dock costs in the first quarter 2024, as compared to the prior year strikes a cost increase of about one and a half points for this quarter.

Sure.

Speaker Change: Our advertising expense.

Speaker Change: Other expenses between the quarters.

Speaker Change: As in 2024 as compared to 2023, which will put a total cost increase of approximately three points this quarter.

Speaker Change: Advertising alone is one of the three points.

Hum.

Speaker Change: Full year inflation.

Speaker Change: Economies of scale.

Speaker Change: Capacity growth along with various other cost optimization initiatives.

The higher first quarter cruise costs without fuel per ml.

Okay.

Speaker Change: Quite guidance cost for the fourth quarter.

Speaker Change: 3%.

David Bernstein: In summary, putting all these factors together, our net income guidance for the full year 2024 is approximately $1.2 billion with EBITDA forecasted at $5.6 billion a significant improvement from 2023. For those of you who are modeling EPS, let's not forget that when you calculate diluted EPS, you need to add back the $94 million of interest expense related to the company's convertible notes. Our improved financial results and our successful refinancing and deleveraging efforts in 2023, along with our 2024 December guidance leaves us firmly placed on our path to achieve our 2026 SEA Change goal, moving us further down the road to rebuilding our financial fortress and delivering long-term shareholder value. And now, operator, let's open up the call for questions.

Speaker Change: All these factors together.

Speaker Change: Net income guidance for the full year 2024 is approximately $1 2 billion.

Speaker Change: With that forecast.

Speaker Change: One 6 billion.

Speaker Change: Second improvement from 2020 through it.

Speaker Change: But those of you who are modeling.

Speaker Change: Let's not forget that one.

Speaker Change: We calculate.

Yes.

Speaker Change: I think the 94 million of interest expense related to the company's convertible notes.

Speaker Change: Our financial results on our successful refinancing and deleveraging our post 2023, along with our 2024 at the former guidance.

Speaker Change: Firmly placed on our path to achieve our 2026.

Speaker Change: So.

Furthermore, on the road.

Speaker Change: Our financial forecast.

Speaker Change: Long term shareholder that.

Well, operator, let's open up the call for questions.

Operator: Thank you. If you would like to register a question, ´please press the one four on your telephone. You will hear a three prompt to acknoledge your request. If your question has been answered, then you would like to withdraw your registration, please press the one, followed by the three. Once again, to register a question, please press the one four on your telephone. One moment, please, for the first question. Our first question comes from Steve Wieczynski with Stifel.

Speaker Change: If you would like to register a question. Please press the one four on your telephone you will hear a three pronged towards larger request. If your question has been answered then you would like to withdraw your registration. Please press. The one followed by the three once again to register a question. Please press the one four on your telephone one moment. Please.

Speaker Change: For the first question.

Speaker Change: Our first question comes from Steve was in ski with Stifel. Please proceed.

Steven Moyer Wieczynski: Hey, guys. Good morning and Happy Holidays to all of you. So Josh or David, if we think about the yield guidance for the year, just based on the fact that your occupancy should return to somewhat normal levels. And then pricing has momentum at this point? It seems to be pretty strong or healthy across the majority of your geographies. It seems like that plus 8.5% yield guidance might end up being somewhat conservative when we have this call a year from now. So, I guess the question is, can you give us a little color about the - more of the makeup of your yield forecast? And it seems like you might be taking a somewhat conservative view around onboard trends and then potentially underestimating the opportunity around taking close-in pricing.

Steve: Somewhat normal levels and then you know pricing has momentum at this point it seems to be pretty strong or healthy across the majority of your of your geographies.

It seems like that plus feet in a 5% yield guidance might end up being a.

Steve: Somewhat conservative when we have this call a year from now so.

Steve: I guess the question is can you give us a little color about the <unk>.

Steve: The make up of the <unk>.

Steve: <unk> forecast it seems like you might be taking a somewhat conservative view around on more trends and then potentially underestimating the opportunity around <unk>.

Steve: In close in pricing.

Josh Weinstein: Steve, happy holidays to you, too. So, I hope you're right, and I look forward to the call in a year. Look, we've given our good faith estimate on how we're seeing the world right now. We come in with a good amount of visibility because of how well booked we are. And as you said, we have seen accelerating momentum in the volume and the price. So, we're very pleased with the trajectory that we've been seeing. Obviously, this is also before wave. We do have a little bit of a disadvantage of doing this in December versus end of January into February. So, all I can tell you is we've baked in what we see, and we always want to outperform. I mean, obviously, that's a given. So, I think the best thing I can tell you is we'll talk in March with wave under our belt. Having said that, wave hasn't ended since last year. So, we'll continue to ride as long as we can.

Speaker Change: As Steve Happy holidays to you too so I hope you're right I look forward to the call in a year.

Speaker Change: But we've given our are our good faith estimate on how we're seeing the world right now.

Speaker Change: We come in with a good amount of visibility because of how well booked we are as you said, we have seen accelerating momentum.

Speaker Change: In the interim.

Speaker Change: And the volume and the price. So we're very very pleased with the trajectory.

Speaker Change: No. We've been seeing obviously this is also before wave and we do have a little bit of a disadvantage of doing this in December.

Versus you know end of January into February so.

Speaker Change: All I can tell you is we've we baked in what we see and we always want to outperform and obviously that's a that's a given so I think best thing I can tell you is we'll talk in March with with wave under our belt.

Speaker Change: Having said that wave hasn't ended since last year or so.

Steven Moyer Wieczynski: Let me ask that a different way then, Josh. So, if we think about what you guys are embedding in terms of onboard. Is it fair to assume you are being pretty conservative with the way onboard should shake out in '24? Basically, meaning you potentially could see a little bit of a slowdown in onboard or are you still guys kind of assuming that onboard remains as robust as it has been?

Speaker Change: Let me let me that's at a different way then Josh. So so if we think about it we think about what you guys are embedding in terms of onboard.

Speaker Change: Is it fair to assume you are being pretty conservative with with the way onboard should shake out in 'twenty, four basically meaning you potentially could see.

Speaker Change: Little bit of a slowdown in onboard or are.

Speaker Change: Are you still guys kind of assuming that the onboard remains as robust as it has been.

Josh Weinstein: We're coming off a great performance when it comes to onboard, and we expect our onboard per diems to be increasing in 2024 versus 2023. Brands are doing a real good job of pulling forward more spend, providing differentiated experiences. So, we absolutely expect an increase in '24 versus '23.

Speaker Change: Pulling forward more spend providing differentiated experiences. So we absolutely expect an increase in 24 versus <unk> versus 'twenty three.

Steven Moyer Wieczynski: Okay. Got you. And then real quick, one more question, if I could. David, in terms of the cost, you gave some pretty good color around the impact to everything that's going into the first quarter and why it's so high - as we think about the rest of the year, the cadence of costs, I think you said, if we think about the third - the second quarter through the fourth quarter, those should all be around 3%. I just want to make sure I heard that right. And if there is anything in 2Q through 4Q that we should be thinking about that might move one of those quarters one way or the other?

Speaker Change: Okay got you and then real quick one more question if I could David in terms of the costs. You gave you gave some pretty good color around the impact to the you know everything is going into the first quarter and why it's why it's so high.

David Bernstein: Move one of those quarters, one way or the other.

David Bernstein: Yes. No. So, I was not trying to give individual guidance for each quarter. What I was trying to do is say that the 3 quarters collectively together would average 3%. We will see some year-over-year differences versus 2023. A great example of that is that the dry dock days will be down in second quarter, but they'll be up in forth. So, there will be differences. There's also advertising, seasonalization differences and other things. So, I was not trying to say 3% every quarter, just 3% on average for the 3.

I was not trying to give individual guidance for each quarter. What I was trying to do is saying that the three quarters collectively together would average 3%. We will see some you know year over year differences versus 2023, you know a great example of that is that the dry dock days will be down.

David Bernstein: Second quarter, but there'll be nothing for it. So there will be differences. There's also advertising seasonal as Asian differences and other things. So I was not trying to say, 3% every quarter just 3% on average for the three.

Steven Moyer Wieczynski: Okay. That is great. Thank you very much, guys. Happy Holidays. I appreciate it and great quarter.

Josh Weinstein: Thank you very much.

Operator: Our next question comes from Brandt Montour with Barclays. Please, proceed.

Speaker Change: Please proceed.

Brandt Antoine Montour: Great. Thanks, everyone and congratulations on the results this morning. So Josh, you gave us an update on the SEA Change long-term targets and the drastic improvement towards that target that you've made so far in '23 and then '24 expected. And I guess fuel has been a nice tailwind. If you take fuel out and maybe just focus on your yield growth target within '24 guidance, is that in line with your internal expectations for that 3-year ramp? Or how do you think about it?

Speaker Change: So Josh you gave us an update on the sea change long term targets and the drastic improvement towards that target and that you've made so far in 'twenty three and then 24 expected and I guess you know fuel has been a nice tailwind if you take a few out and maybe just focus on your your yield.

Gross target within 24 guidance is that in line.

Speaker Change: With your internal expectations for that three year ramp and how do you think about it.

Josh Weinstein: Yes. I think it's fair to say that when we talked about it in June for the first time and we laid out what will it take? We talked about the fact that - getting back to historical occupancy we expect pretty much all of that in '24 versus where we were in '23. And that's as far as we can tell, that's exactly how it's going to play out. And on top of that, we predict price - we estimate pricing to be up low to mid-single digits every year, '24, '25, '26. And so, we feel like we are - we entered the year a little bit ahead given how we ended the second half of 2023, and we'll keep pushing forward.

Speaker Change: It would take we talked about the fact that seem to be getting back to you.

Speaker Change: Historical occupancy.

Speaker Change: We expect pretty much all of that in 'twenty four versus 'twenty, where we were in 'twenty three and that's as far as we can tell that's exactly how it's going to play out and on top of that we predict price, we estimate pricing to be up low to mid single digits every year 'twenty four 'twenty five 'twenty six.

Speaker Change: So we feel like we are we entered the year little bit ahead, given how we ended the second half of 2023 and keep pushing forward.

Brandt Antoine Montour: Okay. Great. Thanks for that. And then you said you were 2/3 booked for '24 that struck me is incredibly impressive. I mean if you could give us a sense of what that would have been in prior years, but also the crux of the question is, that base-loading strategy, do you think that impacted your pricing meaningfully versus what it would have been if you had just kept the sort of historical booking curve? And as you go into January in wave season, you've never been this booked. So, has that changed your strategy with pricing as you move through wave?

Speaker Change: You said you were two thirds books for 24 that struck me is is incredibly impressive I mean, if you could give us.

Speaker Change: What that would have been in prior years, but also the crux of the question is did that base loading strategy.

Speaker Change: Do you think that impacted your pricing meaningfully versus what it would have been if you had it just kept the sort of historical booking curve and then as you go into treatment ended January and wave season.

Speaker Change: <unk> never been this book so has that changed your strategy with pricing as you move through wave.

Josh Weinstein: So, this is playing out as we would expect it to play out by pulling forward all the volume, it gives us better control over our pricing environment and our ability to keep pricing at an elevated level. And so, it's literally playing out as it should. This is - we are 10 points higher than we were when we entered the Q1 of '24, 10 points higher year-over-year. It's higher than 2019 as well which is a very long normalized booking window. And it's important that we do that, right? I mean, let's keep in mind, being 10 points above last year is good progress, but we expect to end our occupancy significantly higher than last year. So, that's all feeding into the strategy. And pricing is playing along. As I tried to say in my notes, I'm not sure how clear it was. When we entered the fourth quarter of this year, we were about 10 points higher than prior year in the occupancy position and prices were higher. As we made our way through the quarter, we've managed to pretty much keep that occupancy advantage and prices on everything that's booked is now considerably higher. So, it is working the way we anticipated.

Better control over our pricing environment, and our ability to keep pricing at an elevated level and so it's literally playing out.

Speaker Change: Is it should this is we are we are 10 points higher than we were when we entered the Q1 'twenty 410 points higher year over year, it's higher than 2019 as well.

Speaker Change: But.

Speaker Change: Which is a very long normalized booking window.

Speaker Change: And it's important that we do that right I mean, let's keep in mind, you know being 10 points above last year is is good progress, but we expect to and our occupancy is significantly higher than last year. So that's all feeding into the strategy and pricing is playing along is as I tried to say in my notes I'm not sure how how clear it was you know when we.

Entered the fourth quarter.

Speaker Change: Of this year, we were we're about 10 points higher.

Speaker Change: Than the prior year and the occupancy position and prices were higher as we've made our way through the quarter.

Speaker Change: We've managed to pretty much keep that occupancy advantage and prices on everything that's booked is now considerably higher so it is working the way we anticipated.

Brandt Antoine Montour: Crystal clear. Thanks again.

Josh Weinstein: Excellent. Thanks, Brandt.

Operator: Our next question comes from James Hardiman with Citi. Please proceed.

Speaker Change: Our next question comes from James Hardiman with Citi. Please proceed.

James Hardiman: Hey, good morning, guys. Thanks for taking my question. So, I'm going to ask, I think, Steve's question in a slightly different way. There was a lot of conjecture that you would only give first quarter guidance, similar to last year. Obviously, your peers are at a bit of an advantage because they get that first month of wave as they try to assess what the demand environment looks like. Obviously, you gave us the full year guide anyway as we interpret that guide then take us through that thought process and whether or not that plays into sort of your level of conservatism being effectively ahead of wave?

James Hardiman: Hey, good morning, guys. Thanks for taking my question so.

I'm going to ask I think Steve's question in a slightly different way.

James Hardiman: There was a lot of conjecture.

You would only give a first.

James Hardiman: First quarter guidance similar to last year, obviously your peers are at a bit of an advantage because they get that first month of wave.

James Hardiman: As they try to assess what the demand environment looks like obviously, you gave us the full year guide anyway.

Speaker Change: We interpret that Guy then you now take us through that thought process and whether or not that plays into sort of your level of conservatism.

Speaker Change: Being.

Guy: We had a wave.

Josh Weinstein: Yes. Well, we are effectively back to normal. This is what we used to do before the last few years, and I think it was quite important that we get back into this cadence. Now good news, we are highest book we've ever been. So, we do have more visibility than even we had before 2020. So, I think that's setting us up well to be able to be in a pretty good position to give you this preliminary guidance for 2024. Obviously, we have - I have high expectations in my brands and what I expect them to achieve, including during wave. And you got to remember, the whole focus of wave this year, we have the benefit of being able to focus on different things. Last year in wave, a lot of what we were trying to accomplish and our brands we're trying to accomplish was just filling the ships because we were in such a different position from an occupancy perspective. This time, we actually get to go through wave and really be more strategic in how we are trying to advance the needle, not just on the short-term, but on the longer-term. So, I think it sets us up well. And I keep asking David to change the fiscal year-end and like can we please start on January 1st, like everybody else. But apparently, that's a lot of work. So, we're not going to do that.

Guy: You know effectively back to normal.

Guy: This is what we used to do before before the law.

Last few years and I think it was quite important that we get back into this.

Guy: And to this case.

Guy: Cadence now good news, we are highest book we've ever been so we do have more visibility than even we had before.

Guy: Before 2020, so I think of that setting us up well to be able to be in a pretty good position to give you to give you. This preliminary guidance for 2024, obviously, we have I have high expectations.

The cases in my brands and what would I expect them to achieve including during wave and you got to remember the whole focus of wave. This year, we have the benefit of being able to focus on different things.

Guy: Last year in waves a lot of what we were trying to accomplish in our brands. We are trying to accomplish was just filling the ships because we're such a different position from an occupancy perspective. This time, we actually get to go through wave and.

Really be more strategic in how we are trying to advance the needle not just on the short term, but on the longer term. So I think it sets us up well and I keep asking David to change the fiscal year end in like can we please start on January one so like everybody else, but apparently that's a lot of work. So we're not going to do that.

James Hardiman: Got it. And then, there was a comment in the prepared remarks about not only are you seeing better new-to-cruise numbers but better new-to-brand numbers relative to 2019. Josh, you talked about having confidence in your brands, but that latter point seems like a big one, right? So much of the conversation just seems to be about the cruise industry. But maybe talk to what you think might be a Carnival specific story as in terms of improving consideration among people that are already into cruising.

Speaker Change: There was a there was a comment in the prepared remarks.

About not only are you seeing better.

Speaker Change: New to cruise numbers, but but better new to brand.

Speaker Change: Numbers relative to 2019, Josh you talked about having confidence in your brands, but that that latter point it seems like a big one right. So so much of the.

Speaker Change: It just seems to be about the cruise industry.

Speaker Change: But maybe talk to what you think might be a carnival specific story is in terms of <unk>.

Speaker Change: Improving consideration among people that are that are already into crazy.

Josh Weinstein: Yes. I think our brands are doing phenomenally in really understanding who that target audience is and how to speak to them with their creative marketing. And then on the performance side, just making sure that, that consideration and awareness gets converted into bookings. So we gave - I said in my prepared remarks, we've got several campaigns that are either started or about to start. We've got a few examples you can click through on the prepared materials of slides that have been put up. They're doing a great job at captivating the market. And I think getting cut through not just with new-to-brand and new-to-cruise on the value that we have. And it's - unfortunately, for us, as much as we've improved on the pricing front in 2023, it's still a big gap versus land. So all of those things are wind at our backs, and I expect more of that over time.

Speaker Change: I said in my prepared remarks, we've got several campaigns that are either started or about to start.

Speaker Change: We've got a few examples you can click through the prepared materials are slides that have been put out.

Speaker Change: They're doing a great job of captivating the market and I think getting cut through not just with new to new to brand new to brand new to cruise on the value that we have.

And it's unfortunately for us as much as we've improved on the pricing front in 2023.

It's still a big gap versus land. So all of those things are wind at our backs and and I expect more of that overtime.

James Hardiman: Got it. Thanks, guys. And good luck during wave.

Josh Weinstein: Thank you.

Operator: Our next question comes from Jaime Katz with Morningstar. Please, proceed.

Speaker Change: She comes from Jamie Katz with Morningstar. Please proceed.

Speaker Change: <unk>.

Jamie Katz: Good morning, thank you. I'm hoping you can talk a little bit about changes to the sourcing strategy. I know it shifted back a little bit more to North American cruisers in the last couple of years. But, given the strength in the European market or the fact that they might be closing the gap, should we expect that to move back to a normal mix?

Jamie Katz: I'm, hoping you can talk a little bit about changes to the sourcing strategy I know, it's shifted back a little bit more I can't 10, North American producers.

Jamie Katz: The last couple of years, but given the strength in the European market and the fact that they might be closing the gap should we expect that to move back to a normal mix.

Josh Weinstein: Well, good morning, Jaime. So, I think we should kind of take a step back and think about our portfolio and how we operate. We've got dedicated brands to European markets with P&O Cruises in the U.K., and AIDA in Germany, Costa, not just for Italy, but really Italy, Spain and France. And all of those are either the biggest in their market or the second biggest in the case of Costa across the Mediterranean. And we didn't deviate from our strategy when it comes to our dedicated market brands. And so, they have continued to view those markets as the right thing to be in, in the long-term, and we absolutely support that. And we're starting to see the strength of that really come through, as we've started talking about the last few quarters. With respect to our North American brands, Carnival has been and will continue to be America's cruise line, and they're knocking the cover off the ball. And there hasn't been that much dramatic change when it comes to sourcing for Holland America and Princess other than the fact that for Princess, they had so much sourcing that was really geared towards markets that have been slow to open in Asia, et cetera. So, we've repositioned. We've done a bit of that. But I think we are very well positioned to take the strength of the European consumer and the U.K. consumer and continue to ride that into 2024.

Jami: Think we should kind of.

Jami: Take a step back and think about our portfolio and how we operate you know we've got a dedicated brands to European markets with piano cruises in the U K and Aida in Germany cost not just for Italy, but really Italy, Spain, and France and all of those are either the.

Jami: The biggest in their market or the second biggest in the case of constant across the Mediterranean.

Jami: We didn't deviate from our strategy.

Jami: When it comes to our our dedicated market brands and so they have continued to view those markets is the right thing to be doing in the long term and we absolutely support that and we're starting to see the strength of that really come through as we've started talking about the last few quarters.

Jami: With respect to our North American brands.

Jami: You know carnival has been and will continue to be America's cruise line and they're they're knocking the cover off the ball.

Jami: And there hasn't been that much dramatic change when it comes to sourcing.

Jami: For Holland America, and Princess other than the fact that for Princess They had so much sourcing that was really geared towards.

Markets that have been slow to open.

Jami: In Asia et cetera, So we've repositioned we've done a bit of that but but I think we're very well positioned to take the strength of the European consumer in the U K consumer and continue to ride that into 2024.

Jamie Katz: Okay. And then, there was a lot of positive commentary obviously, on this call. So, I'm curious if there's anything left out there that concerns you that you would like to share with the audience?

Josh Weinstein: No. Great question. No, thank you.

Speaker Change: Great question.

Jamie Katz: [laughter] Okay. You're welcome. Thanks, Happy Holidays.

Josh Weinstein: You too.

Operator: Our next question comes from Patrick Scholes with Truist. . Please proceed.

Patrick Scholes: Hi, good morning, everyone.

Josh Weinstein: Good morning, Patrick.

Patrick Scholes: Good morning. Josh, I am not going to ask you if you were planning on touching fuel this time, but I -

Speaker Change: But yeah.

Josh Weinstein: [laughter] Thank you, Patrick. Sometimes you should listen to us sometimes not but.

Josh Weinstein: [laughter] Thank you, Patrick.

Patrick Scholes: Sometimes you should listen to us, sometimes not, but here we are. I want to hear from you what trends of late, especially around Black Friday, Cyber Monday, you've seen with new-to-cruise, is that becoming a larger part of the booking mix? And if so, what would be the impact on your margins? I imagine new-to-cruise typically - call the 800 number of books direct, which probably saves you travel agency commissions. Can you just talk about those trends and the potential impact on revenues and costs? Thank you.

Speaker Change: Sometimes you should listen to us sometimes not but.

Speaker Change: Yeah.

Speaker Change: Uh huh.

Speaker Change: I wanted to hear from you.

Speaker Change: What.

Speaker Change: <unk>.

Speaker Change: Of late.

Speaker Change: Especially around <unk>.

Last Friday, cyber Monday, you've seen with new.

New to cruise is that becoming a larger.

Speaker Change: Part of the booking mix and if so what would be the.

Speaker Change: Impact on you know on your margins.

Speaker Change: New to cruise typically called the 800 number of books, correct, which probably saves you travel agency commissions.

Speaker Change: Just talk about those trends and the potential impact on our revenues.

Speaker Change: Revenues Abbas thank you.

Josh Weinstein: Thank you. So, candidly, I don't have - literally for the period that you're referencing the Cyber Monday and Black Friday. I don't have a breakdown of new-to-cruise versus new-to-brand versus brand loyalists. I do have the fourth quarter, obviously, which includes some of that where our new-to-cruise is obviously up significantly year-over-year, 51%. And so that is part of the strategy, right? taking - that was sale, I'm sorry, that was a sale. But taking a greater share of folks who have never cruised before is part of the strategy to increase overall demand, get them in our pipeline and allow us to raise pricing over time for, frankly, everybody.

Abbas: Brand loyalists.

Abbas: I do have the fourth quarter, obviously, which include some of that where are new to cruise is obviously <unk>.

Abbas: Significantly year over year, 51%.

Abbas: And so.

Abbas: That is that as part of the strategy right taking.

Abbas: Taking a oh pardon me I'm, sorry that was sale.

Abbas: But take a taking.

Abbas: Taking a greater share of folks who have never cruised before is part of the strategy to increase overall demand get them in our pipeline and allow us to raise pricing over time for frankly everybody.

Josh Weinstein: With respect to what's the most cost efficient. Obviously, coming direct on the web is always going to be the most cost effective. I wouldn't make a categorization though that new-to-cruise comes in a particular way. Because it really depends on the characteristics of the new-to-cruise guests themselves, what brand it is, what's the itinerary length et cetera. Now clearly, a lot of new-to-cruise will over-index on the shorter cruises because they're trying it out for the first time, and that lends itself to maybe also a younger crowd, which is more comfortable just playing around on the net and doing things direct. But I mean, frankly speaking, historically, and I expect this to continue, our trade partners are absolutely critical in driving new-to-cruise to us. And we've relied on them for decades to do that, and we will rely on them for decades more. And they have done a great job of really catching up to where we've been in the curve. And year-over-year, they're showing great strength as well.

Abbas: What's the most cost efficient obviously coming direct on the web is always going to be the most cost effective I wouldn't make a categorization, though that new to cruise comes in a particular way because it really depends on the characteristic of the new to cruise guests themselves what brand. It is what's the itinerary lengths.

Abbas: Now clearly a lot of new to cruise will over index on the shorter cruises because they're trying it out for the first time and that lends itself to maybe also a younger crowd, which is more comfortable just playing around on the net and doing things direct but I mean, frankly speaking historically and I expect us to continue our trade partners.

Abbas: <unk> are absolutely critical in driving new to cruise to us.

Abbas: And we've relied on them for decades to do that and we will rely on them for decades more and they have done a great job of really catching up to where we've been in the curve and and year over year, they're showing great strength as well.

Patrick Scholes: Okay. Thank you very much.

Josh Weinstein: Thanks, Patrick.

Operator: Our next question comes from Robin Farley with UBS. Please proceed.

Robin Farley: Great. Thank you. I wanted to circle back to your yield guidance and just looking at the recovery in occupancy to previous levels being maybe 600 to 700 basis points kind of implies that your per diem guidance is maybe less than 2% growth. So I just - I don't know if I'm doing the math wrong there, if there's anything to clarify. And then also, you've talked about the price on the books for next year being considerably higher, but your yield guidance for the year, it's just nicely higher, which I think the David Bernstein glossary is like - would be a deceleration in -

Robin Farley: Wanted to circle back to your yield guidance.

And just looking at the recovery in occupancy.

Robin Farley: Previous levels being maybe six to 700 basis points. It kind of implies that your per diem guidance is maybe less than 2% growth. So I just I don't know if im doing the math wrong here, if there's any anything to clarify and then also you've talked about.

Robin Farley: The price on the books for next year being considerably higher but.

Robin Farley: Yield guidance for the year, it's just nicely higher which I think David Bernstein glossary.

Robin Farley: It would be a deceleration.

Josh Weinstein: [laughter] I'm laughing at the glossary. Yes, I keep going, Robin.

Robin Farley: So.

Robin Farley: I'm happy that the glossary, yeah keep going Robyn.

Robin Farley: If I'm interpreting glossary correctly, I think that implies sort of a deceleration in the price there. So, is that just because the onboard growth rate, while up is lower, and so, that brings like considerably a higher price to just nicely higher yield? Or maybe my glossary definition is wrong, but maybe you could help us with that and with the math on the per diem to predicament.

Robin Farley: Because the onboard growth rate, while up is lower and so that brings like considerably a higher price to just nicely higher yield or maybe Mike glossary definition is wrong, but maybe you could help us with.

Robin Farley: With that and with the math on that it's a pretty intelligent way.

Josh Weinstein: Thanks, Robin. Well, actually, David said it in the prepared remarks, I thought he said it pretty well. So David, do you want to repeat what you said?

Speaker Change: As David said it in the prepared remarks, I thought he said it pretty well so David you want to repeat what you said, yes. So you know keep in mind that 2019 was the high watermark for occupancy and we look back to like 2005 in the historical occupancy levels were in the range of 104 to 107.

As David said it in the prepared remarks, I thought he said it pretty well so David you want to repeat what you said,

David Bernstein: Yes. So, keep in mind that 2019 was the high watermark for occupancy. And we look back to like 2005 and the historical occupancy levels were in the range of 104% to 107%. So, what we're saying is we will be solidly back to historical occupancy levels, but we weren't saying we're going to be back to the high watermark of 2019. So, keep that in mind. The other thing about the considerably higher versus the nicely higher. Keep in mind that last March when we gave guidance, we had thought that our expectation for per diem increases was about 3.5%, and we wound up 7.5%. And so, we saw some very strong pricing in the back half of the year. And as a result of that, on a year-over-year comparison basis, a book position may be considerably higher. But what we're looking to see is at least nicely higher pricing on a per diem basis built into our guidance. So, when you put those 2 factors together, hopefully, you can understand how we built our guidance.

David Bernstein: Percent. So what we're saying is we will be solidly back to historical occupancy levels, but we weren't saying, we're going to be back to the high watermark of 2019.

David Bernstein: So keep that in mind, the other thing about the considerably higher versus the nicely higher keep in mind that you know last March when we gave guidance we had thought that or.

David Bernstein: Our expectation for per Diem increases was about 3.5% and we wound up at seven and a half per se. So we saw some very strong pricing in the back half of the year and as a result of that on a year over year comparison basis.

David Bernstein: [laughter] position may be considerably higher but what we're looking to see is at least nicely higher pricing on a per DM basis built into our guidance. So when you put those two factors together hopefully you can understand how we built our guidance.

Josh Weinstein: Yes. And the thing I'd add - let me just add one thing, Robin, which is, our focus is on generating the most revenue possible when that ship leaves on its cruise. And that's going to be a combination of optimizing that price and occupancy relationship. So, there's no magic to getting back to 2019 high watermark of 107%. And we play in the fringes, we play in that 104% to 107% to make sure that when you combine that ending point along with the pricing, it's the happiest we can be.

Speaker Change: So let me just add one thing Robin which is our focus is on generating the most revenue possible when that ship leaves on its crews and that's going to be a combination of optimizing that price and occupancy relationship. So there's no magic to getting back to 2019 high watermark of.

Speaker Change: 107% and.

Speaker Change: And we play in the fringes, we play in that 104% to 107% to make sure that when you combine that ending point along with the pricing.

It's a happy as we can be.

Robin Farley: I understood that occupancy, right, that you don't manage to a certain occupancy once you're in that range. But just that the price comment that you're - what you're saying on the books being considerably up versus the nicely up, does seem to imply that you would be expecting a deceleration from current levels. And so, I mean, maybe the answer is you're just being conservative, but I just, if that's correct in interpreting considerably moving to nicely as being a lower rate of growth. So, that's -- I guess that's what I'm trying to clarify.

Speaker Change: Yep.

The price comment.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: But what youre seeing on the books being considerably up versus a nicely up.

Speaker Change: It does seem to imply that you would be expecting a deceleration from.

Speaker Change: Current levels.

Speaker Change: So I mean, maybe the interest you just being conservative, but I just if if that if that's correct in interpreting considerably moving to nicely as.

Speaker Change: Being a lower rate of growth that's I guess, that's what I'm trying to clarify.

Josh Weinstein: So, one thing to stress, right? We just came out with the fourth quarter, which everybody is glossing over real quick, but it was up 10.5 points in price. That's what we're going to lap when we get through 2024. If you think about our booked business, we have the most to go in the fourth quarter, not surprisingly, so far as the stout. So, as we build towards that and we cycle through the first quarter and the second quarter, where we're the most booked, we just have to fill and get over a larger hurdle, which we expect to do. But we have to take that whole thing into the equation when we're giving full year guidance.

Speaker Change: That's what we're going to lap when we get through 2024, if you think about our booked business. We have the most to go in the fourth quarter not surprisingly so far this out so as we build towards that and we cycled through the first quarter and in the second quarter were the most book, we just have to fill and get over a larger hurdle, which we.

Speaker Change: Expect to do but we have to take that whole thing into the equation, when we're giving full year guidance.

Robin Farley: That makes perfect sense. Thank you. And then just one last clarification. On your SEA Change on the expense side, you've talked about the 3-year being up low single digit in like '24, '25, '26 each year. This year up - or 2024 guidance up 4.5%, probably above low single-digit kind of implies very low expense growth in '25 and '26. Is that how we should think about? In other words, there's not a change in your - the 3-year average would be up low single digit, even though it's up a bit more in '24 than that would suggest. And again, possibly you're just being conservative, but I don't know if you had a thought on how we should think about how much better that would be - would have to be in '25 and '26 to keep your SEA Change expense target? Thank you.

Speaker Change: In my 24, 25 26 each year.

Speaker Change: Q4, or 2024 guidance up four 5%.

Speaker Change: Probably.

Speaker Change: Above low single digits kind of implies.

Speaker Change: Very very low expense growth and 25 and 26 is that how we should think about in other words, there is not a change in your the.

Speaker Change: Three year average would be up low single digit even though its up a bit more in 'twenty. Four then that would suggest and again, possibly you're just being conservative but I don't know if you have a thought on how we should think about how much better that.

Speaker Change: Would be in 2000 would have to be at 25 and 26 to keep your sea change expense targets. Thank you.

David Bernstein: Sure. So, when we were presenting our SEA Change program, I guess, it was in June, we were talking about the fact that low single digits, but I did say we'd have some outsized impacts in 2024 due to occupancy, both on the yield and on the cost. So, the 4.5%, I also had indicated that occupancy would probably cost 1.5 to 2 points this year. So, we are in that low single digits equation that was built into the model. So, I feel like we are very well positioned. And as Josh indicated, we're ahead of where we expected to be on our way towards achieving those targets.

Speaker Change: When we were presenting a sea change program I guess it was Oh you know in June we were.

Speaker Change: Talking about the fact that low single digits, but I did say, we'd have some outsized impacts in 2024 due to occupancy both on the yield and on the cost. So the 4.5% I also had indicated that occupancy would probably cost a point and half to two points. This year. So.

Speaker Change: We are you know.

Speaker Change: In that low single digits equation that was built into the model. So I feel like we are very well positioned and as Josh indicated we're ahead of where we expect it to be on our way towards achieving those targets.

Josh Weinstein: I would say, Robin, I didn't seem to get the call without you trying to get ahead of '24 guidance and looking at '25.

Robin Farley: [laughter] Well, but I almost didn't get in the last five minutes of the call. I'm glad I got it in. So, thank you.

Josh Weinstein: No problem.

Operator: Our next question comes from Dan Politzer with Wells Fargo. Please proceed.

Daniel Brian Politzer: Hey, good morning, everyone. And thanks for taking my questions. I just actually wanted to touch on the fourth quarter a little bit more. The uptick in revenues on pricing certainly was impressive. Can you maybe unpack that a little bit more? I mean, was that really just Carnival centric line? Or was it Europe or North America more broadly? Or was this alternatively related to your strategy of more base loading and maybe benefiting from some of the compression we've seen?

Dan Pulitzer: The uptick in revenues on pricing certainly was impressive can you maybe unpack that a little bit more I mean was that really just you know the carnival centric line.

Dan Pulitzer: Or was it Europe or North America more broadly or was this you know alternatively related to your strategy of more base loading and maybe benefiting from some of the compression we've seen.

Josh Weinstein: This was portfolio wise. So, we're very pleased with where we were we headed into the fourth quarter. David, I don't know if you want to give any color.

Dan Pulitzer: With where we where are we headed into into the fourth quarter.

Speaker Change: I don't know if you want give any color yeah, no I mean, you're right. It was all brands and we saw strength in bookings and you know our brands did a great job yield managing the revenue and taking price up and so as a result of that you saw the end result.

I don't know if you want give any color

David Bernstein: Yes. No, I mean, you're right. It was all brands, and we saw strength in bookings. And our brands did a great job yield managing the revenue and taking price up. And so, as a result of that, you saw the end result.

Daniel Brian Politzer: Got it. And then, Grand Bahama, I know you started to talk a little bit more about that. Are there any parameters you can give us there in terms of capacity per day, amenities, the CapEx or return profile you're looking at? And also, I know you started to see some booking activity that's going there. Are you receiving premiums on those bookings? I think you mentioned like hundreds of sailings in the release.

Speaker Change: You mentioned like 100 hundreds of sailings in the release.

Josh Weinstein: Yes, let me start with that. We have - it's tiny in the grand scheme of things still. I mean, because you're talking about Carnival Cruise Line, which doesn't - has a lot of short programs, et cetera, that don't really start booking. So, it's a tiny amount now. We'll give color as we get through 2024 in that respect. So, we'll come back to that. With respect to your other points, we've said this is a big investment. This is $0.5 billion type of investment. And we can do that, obviously, in 2025, we only have 1 ship, and we have none in 2026. So, we think this is the right way to optimize our resources and really benefit the Carnival brand and you've heard us say, 18 ships from day 1. So, we are very, very excited about that. I don't want to get ahead. I really want to do a good job of disciplining myself to not get ahead of Christine Duffy, who really wants to and should talk about what this experience is going to be like and more to come in 2024. And I can't wait for you to listen to Christine and hear all about it.

Speaker Change: Let me start with that we have it's it's tiny in the Grand scheme of things still I mean, because you're talking about carnival cruise line, which.

Speaker Change: You know it doesn't have a lot of short programs et cetera that don't that don't really start booking so it's a tiny amount now.

Speaker Change: We'll give color as we as we get through 2024 in that respect so we'll come back to that with respect to your other points. You know we've said. This is this is a big investment. This is this is half a billion dollar type of investment.

Speaker Change: And we can do that obviously in 2025.

Speaker Change: We have one chip and we have none in 2026, and we think this is the right way to optimize our resources and really benefit the carnival brand and you've heard US say 18 chips from day. One. So we are very very excited about that I I don't want to get ahead, I really want to do a good job of disappointing myself to not get ahead of Christine Duffy who re.

Speaker Change: Really wants to and should.

Talk about what this experience is going to be like and more to come in 2024, and I can't wait for you to listen to Christine and hear all about it.

Daniel Brian Politzer: Got it. And then, just if I could squeeze in one quick housekeeping. Panorama, that was, I think, out of service a little bit in the fourth quarter and in the first quarter. Is there any way to just quantify the impact of that?

Speaker Change: And in the Grand scheme of things, it's probably a couple of pennies between between like.

Josh Weinstein: In the grand scheme of things, it's probably a couple of pennies.

David Bernstein: Between like maybe one penny in the fourth quarter and a couple in the first.

Speaker Change: Maybe one penny in the fourth quarter and a couple in the first.

Daniel Brian Politzer: Got it. Thanks so much and Happy Holidays.

Speaker Change: Thanks, Frank we have time for one last question.

Josh Weinstein: Thanks. Frank, we have time for one last question.

Frank we have time for one last question.

Operator: We have a question from Assia Georgieva with Infinity Research. Please proceed. with the Lucky ones.

Operator: We have a question from Assia Georgieva with Infinity Research. Please proceed.

Assia Georgieva: Got to be the lucky one. Congratulations, guys on a great Q4. So happy that we're back to looking at deals as opposed to per diems in the 10.5% was a great metric, but the 7.8%, I liked better. So, I apologize. But again, I wanted just to finally get back to where we're looking at the more usual metrics. Given that we have a very healthy outlook, in terms of yields in Q1 and Q2. Dry docks, I think, I at least understand well, so we have a good view into EBITDA throughout the year. David, would you mind taking us through sort of the debt and interest expense burdens that you may be trying to modify including as part of the SEA Change program by fiscal year-end 2024?

Assia Georgieva: Congratulations guys on a great Q4.

So happy that were back to looking at deals as opposed to part D. EMS and then half percent was a great metric, but the 7.8% they like better.

Assia Georgieva: So.

Speaker Change: I apologize but.

Speaker Change: Again I wanted to just to finally get back to where we were looking at are the more useful metrics.

Given that we have a very healthy outlook in terms of yields in Q1 Q2.

Drydocks and I think I I at least and just handle now so we have a good view into EBITDA.

Speaker Change: Throughout the year.

Speaker Change: David would you mind, taking this to sort of the debt and interest expense burden that you made.

David Bernstein: It may be trying to modify including as part of the sea change program by fiscal year end 2024.

David Bernstein: Sure. So, to start with - you saw our interest expense guidance in the press release. It was close to $100 million less than 2023. And keep in mind that while we did pay down quite a bit of debt. The average balance for the year is for 2024 is probably like $2.5 billion less than 2023. So, that will lower interest expense by $200 million. But also keep in mind that we have less cash on the books. And with declining interest income rates, that probably is offsetting the savings by about $100 million. So, that's why it's a net decline of about $100 million in interest expense on a year-over-year basis. Looking at the debt level, I actually said this in my notes, in 2024, we are looking at about, I think it's $2.1 billion of scheduled maturities but we will be replacing that debt with the $2.3 billion of export credits that we take on. But in addition to that, we have built in some prepayments of debt into our guidance. And as I said, we are evaluating that. So, we do expect to see debt to go down in 2024. However, we do expect to see strong deleveraging from a metrics perspective because our EBITDA grows substantially. So, our debt-to-EBITDA will also improve.

Speaker Change: To start with you know you saw our interest expense guidance in the press release it was a.

Speaker Change: Close to $100 million less than 2023, and keep in mind that Wow, we did pay down.

Speaker Change: Quite a bit of debt the average balance for the year is.

Speaker Change: For 2024 is probably like two and a half billion less than 2023, so that that will lower interest expense by 200 million, but also keep in mind that we have less cash on the books.

Speaker Change: And with declining interest income rates that probably it's offsetting the savings by about 100 million. So that's why it's a net decline of about $100 million in interest expense on a year over year basis.

Speaker Change: Looking at the debt level I actually said this in my notes.

Speaker Change: In 2024, we are looking at about.

Speaker Change: About two points I think it's $2 1 billion of scheduled maturities, but we will be replacing that debt with the $2 3 billion of export credits that we take on so but in addition to that we have built in some prepayments of debt into our guidance.

Speaker Change: And as I said, we are evaluating that so we do expect to see that to go down in 2024. However, we do expect to see strong Hum deleveraging from a metrics perspective, because our EBITDA grows substantially so our debt to EBITDA will also improve.

Assia Georgieva: Makes perfect sense. And just as a quick follow-up, before I ask my second question, if I may. Would we be looking at the refinancing, as opposed to repayment?

Speaker Change:

Speaker Change: Would we be looking at a refinancing as opposed to repayment.

David Bernstein: So, we are looking at both. As far as - we expect to continue to prepay debt and to continue the deleveraging. But on top of that, we also expect to look at some potential refinancing, which really would drive the interest cost down. And so, we'll see how what opportunities are presented to us in 2024. And if it makes sense, we'll take advantage of them.

Speaker Change: And to continue the deleveraging, but on top of that we also expect to look at some potential refinancing, which really would what would drive the interest costs down.

Speaker Change: And so we'll see how what opportunities presenters are presented to us in 2024, and if it makes sense, we'll take advantage of them.

Assia Georgieva: Sounds great. And so, if I can ask my second question, and I don't think anyone has touched on this. Given geopolitical pressures and we are comparing - used to be comparing 2023 to 2019 when we have St. Petersburg, which clearly, the Eastern Baltics have been kind of off the books. Now we have an issue with the Middle East and [inaudible] , I believe, is in the Persian Gulf. But will be one of the ships that will have to come back to Europe and going through a strait that is has been targeted by Yemeni military south. Any thoughts on this or -

I don't think anyone has touched on this.

Speaker Change: Given geopolitical pressures and are.

Speaker Change: We are comparing.

Speaker Change: Used to be comparing between 23 to 2019, when we had seen peers bike, which.

Speaker Change: Clearly D eastern Baltics have been kind of off the books.

Now we have an issue with the middle East.

Speaker Change: And.

Speaker Change: Gosh, the scanner I believe is in the Persian Gulf, but will be one of the ships that will have to come back to Europe in going to.

You know a strain that is.

It has been targeted by E M E military Ah.

Speaker Change:

Speaker Change: South.

Speaker Change: And we sell to them, yes or.

Josh Weinstein: Obviously, our first priority is going to be safety. And we have - that's already on our on our radar screen, and we've got mitigation plan should we need it. But keep in mind, this is months away. And so, we'll do the right thing. But there's always something I hate to say it that way, but there is always something and our brands -

Speaker Change: Obviously, we you know our first priority is going to be safety.

Speaker Change: We have we that's already on our on our radar screen and we've got mitigation plans should we need it but keep in mind. This is months away.

Speaker Change: And so we will we'll do the right thing.

Speaker Change: But there's always something.

Speaker Change: Hate to say it that way, but there is always something and I've been around long enough. You know 26 years. So there is always some like Josh I agree.

Hate to say it that way, but there is always something

Assia Georgieva: I've been around long enough, 26 years. So, there is always something, Josh, I agree.

Josh Weinstein: All right. I think with that, we do have to end it, but I'd say Happy Holidays to everybody, and thank you very much. Have a good new year.

Operator: That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines. Have a great day. Thank you.

Speaker Change: Uh huh. Uh huh. [music]. Okay. [music]. Yes. [music]. Yeah. [music]. Okay. [music]. Okay. Yes. Yes. [music]. Thanks. Okay. Okay. [music]. Okay. Sure. Yes. Okay. Thank you. Thank you. Okay. [music]. No. Great. [music]. Yes. Okay. Okay. Okay. Okay. Thank you. Thank you. Okay. Thank you. [music]. Thanks. Okay. Okay. Yes. Okay. Okay. Yes. Yes. Okay. Yes. [music]. Okay. [music]. Okay. Okay. Good morning, This is Beth Roberts. <unk> Investor Relations. Our fourth quarter 2023 earnings conference call. I'm joined today by our CEO cash Wang our. Our Chief Financial Officer, David Bernstein, and our chair Vicki Erickson. Before we begin please note that some of our remarks on this call will be forward looking therefore I work for you. Using our cautionary statements in today's press release. All references ticket prices macro Dan. And adjusted cruise costs without fuel will be in constant currency unless otherwise stated. References to break the EMS and yield will be on a net basis. Our comments May also reference cruise costs without fuel EBITDA net income.

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Speaker Change: Good morning, This is Beth Roberts.

<unk> Investor Relations.

Beth Roberts: Our fourth quarter 2023 earnings conference call.

Beth Roberts: I'm joined today by our CEO cash Wang our.

Speaker Change: Our Chief Financial Officer, David Bernstein, and our chair Vicki Erickson.

Speaker Change: Before we begin please note that some of our remarks on this call will be forward looking therefore I work for you.

Speaker Change: Using our cautionary statements in today's press release.

All references ticket prices macro Dan.

Speaker Change: And adjusted cruise costs without fuel will be in constant currency unless otherwise stated.

Speaker Change: References to break the EMS and yield will be on a net basis.

Speaker Change: Our comments May also reference cruise costs without fuel EBITDA net income.

Speaker Change: Our earnings per share free cash flow and <unk>, all of which will be on an adjusted basis unless otherwise stated. Are these references are non-GAAP financial measures defined in our earnings press release. Conciliation to the most directly comparable U S GAAP financial measure and other associated disclosures are also contained in our earnings press release and in our Investor presentation. Please visit our corporate website, where earnings press release, and Investor presentation can be found with that I'd like to turn the call over to Josh. You bet it's. It's safe to say we ended the year on a high and closed another quarter with record revenues record booking levels and record customer deposits. In fact, we consistently set records in all four quarters this past year. We also achieved for <unk>. EBITDA and net income for the fourth quarter that all exceeded the high end of our September guidance range with cruise cost ex fuel in line with expectations.

Speaker Change: Are these references are non-GAAP financial measures defined in our earnings press release.

Conciliation to the most directly comparable U S GAAP financial measure and other associated disclosures are also contained in our earnings press release and in our Investor presentation.

Please visit our corporate website, where earnings press release, and Investor presentation can be found with that I'd like to turn the call over to Josh.

Josh Weinstein: You bet it's.

Josh Weinstein: We also achieved for <unk>.

EBITDA and net income for the fourth quarter that all exceeded the high end of our September guidance range with cruise cost ex fuel in line with expectations.

Fourth quarter yields continued on a positive trajectory significantly higher than a very strong 2019, and even higher than we had anticipated. And enabled us to overcome four years of high cost inflation to deliver per unit EBITDA that eclipsed 2019, holding fuel and currency constant. It was encouraging to see both north American and European brand occupancy levels exceed 101% in the fourth quarter with per Dms for our North American brands up double digits over 2019, and our European friends, just shy of a double digit increase. We delivered Purdue improvements of more than seven points for the full year with even stronger acceleration in Q4. While closing the double digit occupancy gap at the start of the year to reach historical levels for the second half of 2023 and <unk>. Absolute spending outboard was consistent across all four quarters as we drove improvement in ticket prices. We delivered $85 million more dollars to the bottom line in the fourth quarter than forecasted which pushed us to positive adjusted income for the year.

Josh Weinstein: And enabled us to overcome four years of high cost inflation to deliver per unit EBITDA that eclipsed 2019, holding fuel and currency constant.

It was encouraging to see both north American and European brand occupancy levels exceed 101% in the fourth quarter with per Dms for our North American brands up double digits over 2019, and our European friends, just shy of a double digit increase.

Josh Weinstein: We delivered Purdue improvements of more than seven points for the full year with even stronger acceleration in Q4.

Josh Weinstein: While closing the double digit occupancy gap at the start of the year to reach historical levels for the second half of 2023 and <unk>.

Josh Weinstein: Absolute spending outboard was consistent across all four quarters as we drove improvement in ticket prices.

Josh Weinstein: We delivered $85 million more dollars to the bottom line in the fourth quarter than forecasted which pushed us to positive adjusted income for the year.

Josh Weinstein: Strong EBITDA and cash from operations also propelled us on our journey to reduce the debt load necessitated during the pause in obligations. Made debt payments of $6 billion this year alone. And we still have well over $5 billion with liquid. On top of strong and improving cash flow. Which will contribute to further debt reduction over time. All of this leaves us firmly placed on our path back to achieve investment grade leverage metrics by 2026. And most importantly, our brands deliver happiness to over 12 million guests. This year laying the foundation upon which all of our sea change targets are built. Turning to bookings, we reached an all time high in booking volumes for the two weeks around Black Friday, cyber Monday and ended the year in the best booked position, we have ever seen on both price and occupancy setting 2024 off to an amazing start we now have nearly two thirds of the business. On the books for 2024 and at considerably higher prices. And during the fourth quarter, we essentially maintained significant occupancy advantage, we had built for 'twenty 'twenty four going into the quarter.

Josh Weinstein: Made debt payments of $6 billion this year alone.

Josh Weinstein: And we still have well over $5 billion with liquid.

Josh Weinstein: On top of strong and improving cash flow.

Josh Weinstein: Which will contribute to further debt reduction over time.

Josh Weinstein: All of this leaves us firmly placed on our path back to achieve investment grade leverage metrics by 2026.

Josh Weinstein: And most importantly, our brands deliver happiness to over 12 million guests. This year laying the foundation upon which all of our sea change targets are built.

Josh Weinstein: Turning to bookings, we reached an all time high in booking volumes for the two weeks around Black Friday, cyber Monday and ended the year in the best booked position, we have ever seen on both price and occupancy setting 2024 off to an amazing start we now have nearly two thirds of the business.

Josh Weinstein: On the books for 2024 and at considerably higher prices.

Josh Weinstein: And during the fourth quarter, we essentially maintained significant occupancy advantage, we had built for 'twenty 'twenty four going into the quarter.

Josh Weinstein: While improving year over year price position of our book business even further. At this point much of the first half is already behind us. With approximately 85% of the business on the books, we have essentially closed the double digit occupancy gap to historical levels on higher capacity and at higher prices. For our peak summer period. Major projects are better booked at higher prices benefiting from an improving trend in both occupancy and rate during the fourth quarter. Our yield management strategy. The Baseload bookings has clearly set us up for another record year and again, we have seen no side of our business slowing. The book position for our North American brands remain as far out as we have ever seen and well ahead of last year at pricing that is considerably higher. Our European brands, just delivered record fourth quarter booking volume at considerably higher prices and. And with the booking window now fully back to historical norms. As expected. European brands are poised to become an even greater contributor to our 2020 for operating improvements. At the same time.

At this point much of the first half is already behind us.

Josh Weinstein: With approximately 85% of the business on the books, we have essentially closed the double digit occupancy gap to historical levels on higher capacity and at higher prices.

For our peak summer period.

Josh Weinstein: Major projects are better booked at higher prices benefiting from an improving trend in both occupancy and rate during the fourth quarter.

Josh Weinstein: Our yield management strategy. The Baseload bookings has clearly set us up for another record year and again, we have seen no side of our business slowing.

Josh Weinstein: The book position for our North American brands remain as far out as we have ever seen and well ahead of last year at pricing that is considerably higher.

Josh Weinstein: Our European brands, just delivered record fourth quarter booking volume at considerably higher prices and.

And with the booking window now fully back to historical norms.

Josh Weinstein: As expected.

European brands are poised to become an even greater contributor to our 2020 for operating improvements.

Josh Weinstein: At the same time.

Josh Weinstein: We are continuing to pull forward onboard revenue through bundling and pre cruise sales. This strategy coupled with EBIT Board features onboard our newer ships for our guests to enjoy it positions. Positions us well for further onboard revenue growth next year. Also we expect occupancy for the full year to return to historical levels. 5% higher capacity, while delivering nicely higher per diem building on this year's record results in. In 2023 recaptured over three and a half million new to cruise guests and remain well positioned to continue to take share from land based alternatives in other words, we are gaining momentum and our ability to close the boat oriented value gap for land based alternatives and to aid in that effort. We can further champion the fact that while many land based alternatives have pulled back on service levels, we still deliver incredible service to our guests thanks to our amazing. This appears exceedingly well with the expansive amount of guest pleasing amenities offered onboard our diversity. In fact, while almost four years have passed since the pause in our operation. Our fleet actually came out of the park a year younger.

Josh Weinstein: Positions us well for further onboard revenue growth next year.

Josh Weinstein: Also we expect occupancy for the full year to return to historical levels.

Josh Weinstein: 5% higher capacity, while delivering nicely higher per diem building on this year's record results in.

Josh Weinstein: In 2023 recaptured over three and a half million new to cruise guests and remain well positioned to continue to take share from land based alternatives in other words, we are gaining momentum and our ability to close the boat oriented value gap for land based alternatives and to aid in that effort.

We can further champion the fact that while many land based alternatives have pulled back on service levels, we still deliver incredible service to our guests thanks to our amazing.

Josh Weinstein: This appears exceedingly well with the expansive amount of guest pleasing amenities offered onboard our diversity.

Josh Weinstein: In fact, while almost four years have passed since the pause in our operation.

Josh Weinstein: Our fleet actually came out of the park a year younger.

Fleet optimization. This past year alone we benefited from three that plastic new ships. <unk> Carnival celebration and piano cruises. Both of which are flagships for their respective brands that leverage our scale at the seven and eight vessels in our popular and exceptionally efficient series of XL flagships, and we welcomed seaborne pursuit. Our second expedition ship. Seaborne has truly raised the bar for expedition cruising in extreme luxury. Well not technically to Carnival cruise lines also welcome Carnival, the Netsuite Intuit spun Italian style platform via the transfer from Costa and it has been going gangbusters. It's the biggest example, yet of how we leverage our scale and we'll be doubling down, but we bring over her sister ship Carnival for rent. In 2024 looking. Looking forward. This year is set to match the excitement level with the introduction of Carnival Jubilee. New icon for Carnival cruise line, and which no doubt will be the pride of Texas as she has her inaugural fone and Galveston. The innovative sub Princess the first of its class any real game changer for principal.

Josh Weinstein: This past year alone we benefited from three that plastic new ships.

Josh Weinstein: <unk> Carnival celebration and piano cruises.

Josh Weinstein: Both of which are flagships for their respective brands that leverage our scale at the seven and eight vessels in our popular and exceptionally efficient series of XL flagships, and we welcomed seaborne pursuit.

Josh Weinstein: Our second expedition ship.

Josh Weinstein: Seaborne has truly raised the bar for expedition cruising in extreme luxury.

Josh Weinstein: Well not technically to Carnival cruise lines also welcome Carnival, the Netsuite Intuit spun Italian style platform via the transfer from Costa and it has been going gangbusters. It's the biggest example, yet of how we leverage our scale and we'll be doubling down, but we bring over her sister ship Carnival for rent.

Josh Weinstein: In 2024 looking.

Josh Weinstein: Looking forward. This year is set to match the excitement level with the introduction of Carnival Jubilee.

New icon for Carnival cruise line, and which no doubt will be the pride of Texas as she has her inaugural fone and Galveston.

Josh Weinstein: The innovative sub Princess the first of its class any real game changer for principal.

Josh Weinstein: And Queen Anne. New flagship for Qunar and its first new ship in 14 years. With all of these additions roughly 30% of our capacity will be newly delivered ships. We also made meaningful headway on other strategic asset projects. We began construction on celebration Chi, which will be the largest and closest exclusive destination. Destination portfolio and a real game changer for Carnival cruise line. We'll bring eight Jeep carnival ships departing from nine home ports the celebration key. We are still about a year and a half from go live we are already amping up the awareness and excitement around this fantastic destination. We've also started the process for a significant upside in guest traffic at half Moon Cay are exclusive and beautiful pristine island destination in the Bahamas, where the creation of a pure side birth that can accommodate even our largest vessels. Begun work with our Grand Bahama shipyard apartments on the construction of two floating drydock. One of which will have the largest lifting capacity in before this. This will result in significant benefit in the future as we reduced travel time preserve revenue days and at the same time reduce our fuel consumption.

Josh Weinstein: New flagship for Qunar and its first new ship in 14 years.

Josh Weinstein: With all of these additions roughly 30% of our capacity will be newly delivered ships.

We also made meaningful headway on other strategic asset projects.

We began construction on celebration Chi, which will be the largest and closest exclusive destination.

Josh Weinstein: Destination portfolio and a real game changer for Carnival cruise line.

Josh Weinstein: We'll bring eight Jeep carnival ships departing from nine home ports the celebration key.

Josh Weinstein: We are still about a year and a half from go live we are already amping up the awareness and excitement around this fantastic destination.

We've also started the process for a significant upside in guest traffic at half Moon Cay are exclusive and beautiful pristine island destination in the Bahamas, where the creation of a pure side birth that can accommodate even our largest vessels.

Josh Weinstein: Begun work with our Grand Bahama shipyard apartments on the construction of two floating drydock.

Josh Weinstein: One of which will have the largest lifting capacity in before this.

Josh Weinstein: This will result in significant benefit in the future as we reduced travel time preserve revenue days and at the same time reduce our fuel consumption.

Josh Weinstein: As you know we've also been investing more in advertising over the last 18 months and it has definitely paid off with elevated awareness and consideration for our brand and record booking levels and revenue results. In fiscal 'twenty to 'twenty three our web visits were up over 35% our paid search was up roughly 50% and our natural search was up almost 75%. Paul many many multiples of our 5% capacity growth. In the fourth quarter, we carried board due to crews have more new to brand than we did in the fourth quarter of 2019. Given our success in generating demand at this point in time, we plan to maintain a similar level of advertising on a unit basis in 2024 compared to 2023 optimizing around each brand. This will help us continue to build demand and bookings well outside of the current year. We are working aggressively to keep our strong momentum going through wave season and beyond. Just to list a few examples KAUST, our recently launched spectacular new campaign in its core markets focusing on Beaumont, where guests are left speechless. In the Americas largest equal to its highly successful time of your life campaign and Aida just kicked off its new campaign experience yourself differently in conjunction with the holiday season Carney.

Josh Weinstein: In fiscal 'twenty to 'twenty three our web visits were up over 35% our paid search was up roughly 50% and our natural search was up almost 75%.

Josh Weinstein: Paul many many multiples of our 5% capacity growth.

Josh Weinstein: In the fourth quarter, we carried board due to crews have more new to brand than we did in the fourth quarter of 2019.

Josh Weinstein: Given our success in generating demand at this point in time, we plan to maintain a similar level of advertising on a unit basis in 2024 compared to 2023 optimizing around each brand.

This will help us continue to build demand and bookings well outside of the current year.

Josh Weinstein: We are working aggressively to keep our strong momentum going through wave season and beyond.

Josh Weinstein: Just to list a few examples KAUST, our recently launched spectacular new campaign in its core markets focusing on Beaumont, where guests are left speechless.

Josh Weinstein: In the Americas largest equal to its highly successful time of your life campaign and Aida just kicked off its new campaign experience yourself differently in conjunction with the holiday season Carney.

Josh Weinstein: Carnival will launch a new marketing campaign, highlighting celebration key and time for waves. Piano cruises, new campaign holiday like never before largest Christmas day, and the U K at Qunar was planned a welcome fit for a Queen introduce Queen Anne early next year, which is sure capture huge pain. We've been talking about upping, our game across the commercial space. Made good progress. Of course, we're not done and as you'd expect we never will. Always room to improve. There's much more to come as we rollout advancements to our yield management tools and regeneration techniques continue to invest in sales and sales support. And build an already strong relationships with our trade partners. Turning to costs. As we previously indicated unit cruise costs ex fuel for 2024 are expected to be higher than inflation due to the impact of closing the occupancy gap and the higher volume for dry dock. David will walk you through in more detail with that said, we have been working aggressively to mitigate inflation through our cost optimization initiatives, including leveraging our scale.

Josh Weinstein: Piano cruises, new campaign holiday like never before largest Christmas day, and the U K at Qunar was planned a welcome fit for a Queen introduce Queen Anne early next year, which is sure capture huge pain.

Josh Weinstein: We've been talking about upping, our game across the commercial space.

Josh Weinstein: Made good progress.

Josh Weinstein: Of course, we're not done and as you'd expect we never will.

Josh Weinstein: Always room to improve.

Josh Weinstein: There's much more to come as we rollout advancements to our yield management tools and regeneration techniques continue to invest in sales and sales support.

Josh Weinstein: And build an already strong relationships with our trade partners.

Josh Weinstein: Turning to costs.

Josh Weinstein: As we previously indicated unit cruise costs ex fuel for 2024 are expected to be higher than inflation due to the impact of closing the occupancy gap and the higher volume for dry dock.

Josh Weinstein: David will walk you through in more detail with that said, we have been working aggressively to mitigate inflation through our cost optimization initiatives, including leveraging our scale.

David Bernstein: In some cases, we're investing today for future benefits just decided a couple of examples of initiatives underway. We're essentially complete with the rollout of Starlink across the fleet. This will produce more than a 20% reduction in cost per megabit, and 2024 and significantly increased our bandwidth pipeline, resulting in both better guest experience and higher onboard revenues a clear win win. And with our new vendor neutral platform, we are positioned to quickly capture cost savings in future years. We've also launched our maritime asset strategy transformation. Or what we refer to internally as matched. Matt is a centralized system developed to optimize the management of equipment and machinery across all brands and all of our ships. <unk> will allow us to leverage spare parts more effectively across the entire fleet and optimize our maintenance schedules and practices. All of which will strengthen our efficiency and reduce unplanned maintenance overtime. We won't see the P&L benefits from that this year as we ramp up implementation in 2020 four.

David Bernstein: We're essentially complete with the rollout of Starlink across the fleet.

David Bernstein: This will produce more than a 20% reduction in cost per megabit, and 2024 and significantly increased our bandwidth pipeline, resulting in both better guest experience and higher onboard revenues a clear win win.

David Bernstein: And with our new vendor neutral platform, we are positioned to quickly capture cost savings in future years.

David Bernstein: We've also launched our maritime asset strategy transformation.

David Bernstein: Or what we refer to internally as matched.

David Bernstein: Matt is a centralized system developed to optimize the management of equipment and machinery across all brands and all of our ships.

David Bernstein: <unk> will allow us to leverage spare parts more effectively across the entire fleet and optimize our maintenance schedules and practices.

David Bernstein: All of which will strengthen our efficiency and reduce unplanned maintenance overtime.

We won't see the P&L benefits from that this year as we ramp up implementation in 2020 four.

David Bernstein: We expect a multi year benefit well in excess of $100 million that really begin to ramp up in 2026. All of the efforts, we're making to drive revenue and vantage power are expected to lead to a four point margin improvement in 2024. We're guiding to a record EBITDA of over $5 $5 billion, which is 30% higher in 2023. Thanks to a strong second half of 2023, we're already tracking ahead of our plan to achieve featuring our three year financial targets, calling for the highest our licensee in EBITDA or a L. D. In nearly two decades, and our 2024 guidance deliberate another step change towards the east. Deliverables. EBITDA per birth date is expected to be up by more than 25% over our targets starting point, hence more than halfway to the 50% increase expected in a sea change targets. Today's guidance, but also deliver 9% ROIC. Four point increase from the starting point of our target. This leaves just wanted half point annual increases in 2025, and 2026 to hit our 12% target not. Not surprisingly our brand dedicated to a single market Carnival, Aida and piano cruises in the U K. They're leading the charge with the highest rois D levels in the company.

All of the efforts, we're making to drive revenue and vantage power are expected to lead to a four point margin improvement in 2024.

David Bernstein: We're guiding to a record EBITDA of over $5 $5 billion, which is 30% higher in 2023.

David Bernstein: Thanks to a strong second half of 2023, we're already tracking ahead of our plan to achieve featuring our three year financial targets, calling for the highest our licensee in EBITDA or a L. D. In nearly two decades, and our 2024 guidance deliberate another step change towards the east.

David Bernstein: Deliverables.

EBITDA per birth date is expected to be up by more than 25% over our targets starting point, hence more than halfway to the 50% increase expected in a sea change targets.

David Bernstein: Today's guidance, but also deliver 9% ROIC.

David Bernstein: Four point increase from the starting point of our target.

David Bernstein: This leaves just wanted half point annual increases in 2025, and 2026 to hit our 12% target not.

David Bernstein: Not surprisingly our brand dedicated to a single market Carnival, Aida and piano cruises in the U K.

David Bernstein: They're leading the charge with the highest rois D levels in the company.

David Bernstein: And with regard to our greenhouse gas targets included in our 2026 D change program or ghd intensity in 'twenty 'twenty four is expected to be just shy of the 20% reduction from 2019, we're targeting. It's worth noting this was the 2030 call we had already pulled forward by four years. Have been and continue to work aggressively to reduce our environmental footprint and fuel costs at the same time. The deep commitment is not only resulted in industry, leading fuel efficiency. It has also resulted in lower absolute ghd English. Our absolute emissions are over 10% lower than the 2011, Pete and that's despite capacity growth of 30% since then. Last year, we also exceeded our industry, leading shore power capability. We are ahead of the curve and now have twice as many ships capable of shore power than there are ports around the world available plug ins. Again, I credit all of these important achievements to our people ship insured. Collectively they continue to outperform allowing us to make good headway on our sea change part we're poised for another step change in operating improvement this year. With nearly two thirds of the business on the books at considerably higher prices ongoing momentum from improvements across the commercial space.

David Bernstein: It's worth noting this was the 2030 call we had already pulled forward by four years.

David Bernstein: Have been and continue to work aggressively to reduce our environmental footprint and fuel costs at the same time.

David Bernstein: The deep commitment is not only resulted in industry, leading fuel efficiency. It has also resulted in lower absolute ghd English.

David Bernstein: Our absolute emissions are over 10% lower than the 2011, Pete and that's despite capacity growth of 30% since then.

David Bernstein: Last year, we also exceeded our industry, leading shore power capability.

We are ahead of the curve and now have twice as many ships capable of shore power than there are ports around the world available plug ins.

David Bernstein: Again, I credit all of these important achievements to our people ship insured.

David Bernstein: Collectively they continue to outperform allowing us to make good headway on our sea change part we're poised for another step change in operating improvement this year.

David Bernstein: With nearly two thirds of the business on the books at considerably higher prices ongoing momentum from improvements across the commercial space.

The amazing vacation experiences, we deliver day in day out at way too good relative value to land based alternatives and an even greater experience gap. All while growing onboard revenues managing costs. All of this combined. This up well to deliver another year of record revenues and record EBITDA. Our cash flow strength, coupled with excess liquidity the return of credit card reserves in a few weeks and the lowest order book in decades will allow us to continue to actively manage down debt and aggressively reduce interest expense overtime. He will also propel us on a path to deleveraging. Great credit ratings and higher Rois. I remain confident in our continued execution with them. Unparallel portfolio of best in class brands. Major fleets that just keeps getting better and better. Our greatest asset our people. This has been a truly remarkable year and we've come a long way in an incredibly short amount of time I. I would like to thank our team members ship and shore the best in all of the travel and leisure were delivering unforgettable happiness to over 12 million guests. This year by providing them with extraordinary cruise vacations, while honoring the integrity of every osha, we sell places we visit and life we touch.

David Bernstein: All while growing onboard revenues managing costs.

David Bernstein: All of this combined.

David Bernstein: This up well to deliver another year of record revenues and record EBITDA.

David Bernstein: Our cash flow strength, coupled with excess liquidity the return of credit card reserves in a few weeks and the lowest order book in decades will allow us to continue to actively manage down debt and aggressively reduce interest expense overtime.

David Bernstein: He will also propel us on a path to deleveraging.

David Bernstein: Great credit ratings and higher Rois.

David Bernstein: I remain confident in our continued execution with them.

David Bernstein: Unparallel portfolio of best in class brands.

David Bernstein: Major fleets that just keeps getting better and better.

David Bernstein: Our greatest asset our people.

David Bernstein: This has been a truly remarkable year and we've come a long way in an incredibly short amount of time I.

David Bernstein: I would like to thank our team members ship and shore the best in all of the travel and leisure were delivering unforgettable happiness to over 12 million guests. This year by providing them with extraordinary cruise vacations, while honoring the integrity of every osha, we sell places we visit and life we touch.

David Bernstein: And thank you for the strong support from our travel agent partners as well as our loyal guests. Destination partners investors and many other stakeholders with that I'll turn the call over to David. Thank you Josh I'll start today with a summary of our 2023 fourth quarter and full year results. Next I will provide a recap of our refinancing and deleveraging efforts during 2023 and finish up with some color on that. 24, full year and first quarter December guidance. Fourth quarter bottom line, excluding the better end of our guidance range as we outperformed our September guidance. 85. And credit markets, driven by favorable revenue from higher ticket prices. Premiums were up over 10%. Three points better. Points of our September guidance. In fact fourth quarter revenues of $5 4 billion for a. Fourth quarter Records. Also were up 8% compared to 20. A great way to close out the year on another indication what the absolute a slowdown. Consumers. For the full year. The efforts of our team members shipped offshore. Close the books on 2023 with positive adjusted net income. That is a far cry from our March guidance.

David Bernstein: Destination partners investors and many other stakeholders with that I'll turn the call over to David.

David Bernstein: Thank you Josh I'll start today with a summary of our 2023 fourth quarter and full year results.

Next I will provide a recap of our refinancing and deleveraging efforts during 2023 and finish up with some color on that.

David Bernstein: 24, full year and first quarter December guidance.

Fourth quarter bottom line, excluding the better end of our guidance range as we outperformed our September guidance.

David Bernstein: 85.

David Bernstein: And credit markets, driven by favorable revenue from higher ticket prices.

David Bernstein: Premiums were up over 10%.

David Bernstein: Three points better.

David Bernstein: Points of our September guidance.

David Bernstein: In fact fourth quarter revenues of $5 4 billion for a.

David Bernstein: Fourth quarter Records.

David Bernstein: Also were up 8% compared to 20.

David Bernstein: A great way to close out the year on another indication what the absolute a slowdown.

David Bernstein: Consumers.

David Bernstein: For the full year.

David Bernstein: The efforts of our team members shipped offshore.

David Bernstein: Close the books on 2023 with positive adjusted net income.

David Bernstein: That is a far cry from our March guidance.

David Bernstein: Alright. Hi hungry. The $4 to the bottom line, which was partially offset by a drag from fuel price and currency exchange rates. Over $100 million. Ian. Driven by delivering several of a half percent increase y. Yep. 2019. Once you resolve with double a three and a half. Point of our March guidance, while closing with double digit occupancy gap. Started the year to reach historical occupancy levels. Absolutely spot a little crazy Amazon going. Across all four quarters as we drove improvements in ticket prices on both sides of Atlantic. And if the deal with <unk>. One Chris Hall over 20 languages. Next I will provide a recap. When you say. Leveraging efforts during 2023. It's Joshua indicated our full year 2023 strong EBITDA of $4 2 billion. Strong cash from operations of four. One 3 billion. Propelled us on our journey. Yeah. Painted by the pause gas cruise operations. During 2023. So $6 billion. With just over $30. Which is 3 billion. Forecasted just nine months ago during our March conference call. Almost I believe. First quarter. <unk>.

David Bernstein: Hi hungry.

David Bernstein: The $4 to the bottom line, which was partially offset by a drag from fuel price and currency exchange rates.

David Bernstein: Over $100 million.

David Bernstein: Ian.

Driven by delivering several of a half percent increase y.

David Bernstein: Yep.

David Bernstein: 2019.

David Bernstein: Once you resolve with double a three and a half.

David Bernstein: Point of our March guidance, while closing with double digit occupancy gap.

David Bernstein: Started the year to reach historical occupancy levels.

David Bernstein: Absolutely spot a little crazy Amazon going.

David Bernstein: Across all four quarters as we drove improvements in ticket prices on both sides of Atlantic.

David Bernstein: And if the deal with <unk>.

Speaker Change: One Chris Hall over 20 languages.

Next I will provide a recap.

Speaker Change: When you say.

Speaker Change: Leveraging efforts during 2023.

Speaker Change: It's Joshua indicated our full year 2023 strong EBITDA of $4 2 billion.

Speaker Change: Strong cash from operations of four.

Speaker Change: One 3 billion.

Speaker Change: Propelled us on our journey.

Speaker Change: Yeah.

Speaker Change: Painted by the pause gas cruise operations.

Speaker Change: During 2023.

Speaker Change: So $6 billion.

With just over $30.

Which is 3 billion.

Speaker Change: Forecasted just nine months ago during our March conference call.

Speaker Change: Almost I believe.

Speaker Change: First quarter.

Speaker Change: <unk>.

Speaker Change: Alright. Debt holders to Sheryl. Through 2023 with proactively interest like that. As we successfully started our recently. I think deleveraging program. We accelerated repayment. Now of course. Restaurant. Interest expense. 2023, we effectively stretched out a 2025 maturity on favorable terms by replacing it with a $1 3 billion term loan b facility through 2027. $500 million offering of senior secured notes due 2029. So along with optimism about our future and the return of customer deposit reserves. Confidence to Reaccelerate. By calling one 2 billion. Of our highest cost. In addition. Opportunistically prepay, two 8 billion of additional cat alright. A total of $4 billion. Repayments. The $1 2 billion of debt. Paul. Our credit card processors returned to us a hungry for volume of credit card reserves. We now expect an additional $800 million will be returned this current quarter. Representing substantially all of the remaining credit card reserve. All right. We took actions in both 2022 or early in 2023. Fixed rate percentage of our debt portfolio to over 80%.

Speaker Change: Debt holders to Sheryl.

Speaker Change: Through 2023 with proactively interest like that.

Speaker Change: As we successfully started our recently.

Speaker Change: I think deleveraging program.

We accelerated repayment.

Speaker Change: Now of course.

Speaker Change: Restaurant.

Interest expense.

Speaker Change: 2023, we effectively stretched out a 2025 maturity on favorable terms by replacing it with a $1 3 billion term loan b facility through 2027.

Speaker Change: $500 million offering of senior secured notes due 2029.

Speaker Change: So along with optimism about our future and the return of customer deposit reserves.

Speaker Change: Confidence to Reaccelerate.

Speaker Change: By calling one 2 billion.

Speaker Change: Of our highest cost.

Speaker Change: In addition.

Speaker Change: Opportunistically prepay, two 8 billion of additional cat alright.

Speaker Change: A total of $4 billion.

Speaker Change: Repayments.

Speaker Change: The $1 2 billion of debt.

Paul.

Speaker Change: Our credit card processors returned to us a hungry for volume of credit card reserves.

Speaker Change: We now expect an additional $800 million will be returned this current quarter.

Speaker Change: Representing substantially all of the remaining credit card reserve.

Speaker Change: All right.

Speaker Change: We took actions in both 2022 or early in 2023.

Speaker Change: Fixed rate percentage of our debt portfolio to over 80%.

Speaker Change: Up significantly from 58% fixed level at the end of 2021. Provided us protection from rising interest rates. Our overall average interest rate is just over 5.5% or. All of these actions to address our debt profile alongside our improved business performance. Interest savings compared to our March guidance. Our maturity towers have been well managed in 2020 shacks with just $2 1 billion of debt maturities next year. Sure. Thousand 23. Three points. 2026. And looking forward. To evaluate refinancing opportunities. The tools group. Vishal. So in 2024. Higher cost fixed rate debt. Lower cost export credit financing. Delivery of ships during 2024. Our leverage metrics will also continue to improve throughout 2024. EBITDA continues to grow. Now turning to our 2020 for full year December guidance. We are forecasting a capacity increase of about 5.5% compared to 2023. We were expecting to deliver a strong 2024. Our guidance is forecasting an increase of approximately. 5% for the full year 2024. For 2023.

Speaker Change: Provided us protection from rising interest rates.

Speaker Change: Our overall average interest rate is just over 5.5% or.

Speaker Change: All of these actions to address our debt profile alongside our improved business performance.

Speaker Change: Interest savings compared to our March guidance.

Speaker Change: Our maturity towers have been well managed in 2020 shacks with just $2 1 billion of debt maturities next year.

Speaker Change: Sure.

Speaker Change: Thousand 23.

Speaker Change: Three points.

Speaker Change: 2026.

Speaker Change: And looking forward.

Speaker Change: To evaluate refinancing opportunities.

Speaker Change: The tools group.

Vishal.

Speaker Change: So in 2024.

Speaker Change: Higher cost fixed rate debt.

Speaker Change: Lower cost export credit financing.

Delivery of ships during 2024.

Speaker Change: Our leverage metrics will also continue to improve throughout 2024.

Speaker Change: EBITDA continues to grow.

Now turning to our 2020 for full year December guidance.

Speaker Change: We are forecasting a capacity increase of about 5.5% compared to 2023.

We were expecting to deliver a strong 2024.

Speaker Change: Our guidance is forecasting an increase of approximately.

5% for the full year 2024.

Speaker Change: For 2023.

Speaker Change: That is on top of our improved 2023 results. Seven 5% increase. Revenue. Versus 2019. The strong improvement in 2020. As a result. All the component parts. Higher prices and higher onboard spending. Alright. With all three components of approval on both sides. Yes. We are well positioned to drive 2020 points higher. Higher. Okay. Sure. So while at the same time last year. The capacity increase of older Hi, Chris. Okay. 2024 is on track to return to historical levels. B mind 20 months. It was a high watermark for occupancy. 24 forecast. With him are historical occupancy range. Price and volume. Optimize total revenues. Correct. Now turning to costs. Cruise costs without fuel per available lower for L. It is currently expected to be up approximately four and a half. <unk> 24 versus 2023. Oddly spoke only there are four drivers. Drivers of the cost. First our fourth cash salary. Hello, everyone approach. One last one question. Average three and a half questions increase across all our cost categories globally. Second with occupancy returning to historical levels. Gosh, one and a half to two percentage points higher in 2024 as compared to 2020.

Seven 5% increase.

Speaker Change: Revenue.

Speaker Change: Versus 2019.

Speaker Change: The strong improvement in 2020.

As a result.

Speaker Change: All the component parts.

Speaker Change: Higher prices and higher onboard spending.

Speaker Change: Alright.

Speaker Change: With all three components of approval on both sides.

Speaker Change: Yes.

Speaker Change: We are well positioned to drive 2020 points higher.

Higher.

Speaker Change: Okay.

Sure.

Speaker Change: So while at the same time last year.

Speaker Change: The capacity increase of older Hi, Chris.

Speaker Change: Okay.

Speaker Change: 2024 is on track to return to historical levels.

Speaker Change: B mind 20 months.

Speaker Change: It was a high watermark for occupancy.

Speaker Change: 24 forecast.

With him are historical occupancy range.

Speaker Change: Price and volume.

Speaker Change: Optimize total revenues.

Correct.

Speaker Change: Now turning to costs.

Cruise costs without fuel per available lower for L.

Speaker Change: It is currently expected to be up approximately four and a half.

Speaker Change: <unk> 24 versus 2023.

Speaker Change: Oddly spoke only there are four drivers.

Speaker Change: Drivers of the cost.

Speaker Change: First our fourth cash salary.

Speaker Change: Hello, everyone approach.

Speaker Change: One last one question.

Speaker Change: Average three and a half questions increase across all our cost categories globally.

Speaker Change: Second with occupancy returning to historical levels.

Speaker Change: Gosh, one and a half to two percentage points higher in 2024 as compared to 2020.

Speaker Change: Third. 24, we are expecting. Next dry dock. 14% versus 2023. As expected. Overall. Cost comparison by about three quarters of a point. Core counseling. Yes. These cost increases will be somewhat mitigated by a couple of points. Upon initial scale from our capacity growth, which is of course, taking. Taking delivery of larger more efficient ships, along with various other cost optimization initiatives. Consumption per <unk>. The decrease. Sure Chris. That is on top of that. First of all production. From 'twenty one to 2023. What's your question. Currency is expected to favorably impact 2024 by $90 million with lower fuel prices. 94 million, while the change in currency exchange rates slightly goes the other way. Finally, a few calls about our ice cream. Sure. First quarter 2024. The higher guidance for first quarter 2024 six. First of all Paul here. So it's driven by the larger improvement first quarter occupancy. Let's not forget. Historical occupancy levels until the second half 2023. Weather was much more occupancy driven. The opportunity in the <unk>.

Speaker Change: 24, we are expecting.

Next dry dock.

Speaker Change: 14% versus 2023.

Speaker Change: As expected.

Speaker Change: Overall.

Speaker Change: Cost comparison by about three quarters of a point.

Speaker Change: Core counseling.

Speaker Change: Yes.

Speaker Change: These cost increases will be somewhat mitigated by a couple of points.

Speaker Change: Upon initial scale from our capacity growth, which is of course, taking.

Speaker Change: Taking delivery of larger more efficient ships, along with various other cost optimization initiatives.

Speaker Change: Consumption per <unk>.

Speaker Change: The decrease.

Speaker Change: Sure Chris.

Speaker Change: That is on top of that.

Speaker Change: First of all production.

From 'twenty one to 2023.

Speaker Change: What's your question.

Speaker Change: Currency is expected to favorably impact 2024 by $90 million with lower fuel prices.

Speaker Change: 94 million, while the change in currency exchange rates slightly goes the other way.

Speaker Change: Finally, a few calls about our ice cream.

Speaker Change: Sure.

Speaker Change: First quarter 2024.

Speaker Change: The higher guidance for first quarter 2024 six.

Speaker Change: First of all Paul here.

So it's driven by the larger improvement first quarter occupancy.

Speaker Change: Let's not forget.

Speaker Change: Historical occupancy levels until the second half 2023.

Speaker Change: Weather was much more occupancy driven.

The opportunity in the <unk>.

Speaker Change: Yeah. On the cost side, the higher cruise costs without fuel per available to offer guidance for the first quarter of 2024, 9.5%. All right. First the largest improvement. She will occur in the first quarter. What drives greater yield increases in the first quarter. It also drives greater cost increases, which means a total of three to four points cost drag in the quarter. Second while dry dock costs. Our full year guidance. So now you have dry dock costs in the first quarter 2024 as compared to the prior year. Strikes a cost increase of about one and a half points for this quarter. Sure. Our advertising expense. Other expenses between the quarters. 2024, as compared to 2023, which will put a total cost. Three points to this quarter. Advertising alone is one of the three points. Hum. Full year inflation. By economies of scale. Capacity growth along with various other costs. Yes. The higher first quarter cruise costs without fuel. But what birthday. Quite guidance, but the cost in the fourth quarter. 3%. In summary. All these factors together. Net income guidance for the full year 2024 is approximately $1 2 billion. EBITDA forecast.

Speaker Change: On the cost side, the higher cruise costs without fuel per available to offer guidance for the first quarter of 2024, 9.5%.

Speaker Change: All right.

Speaker Change: First the largest improvement.

She will occur in the first quarter.

Speaker Change: What drives greater yield increases in the first quarter. It also drives greater cost increases, which means a total of three to four points cost drag in the quarter.

Second while dry dock costs.

Speaker Change: Our full year guidance.

Speaker Change: So now you have dry dock costs in the first quarter 2024 as compared to the prior year.

Speaker Change: Strikes a cost increase of about one and a half points for this quarter.

Speaker Change: Sure.

Speaker Change: Our advertising expense.

Speaker Change: Other expenses between the quarters.

Speaker Change: 2024, as compared to 2023, which will put a total cost.

Speaker Change: Three points to this quarter.

Speaker Change: Advertising alone is one of the three points.

Hum.

Speaker Change: Full year inflation.

By economies of scale.

Speaker Change: Capacity growth along with various other costs.

Speaker Change: Yes.

Speaker Change: The higher first quarter cruise costs without fuel.

Speaker Change: But what birthday.

Speaker Change: Quite guidance, but the cost in the fourth quarter.

3%.

Speaker Change: In summary.

Speaker Change: All these factors together.

Speaker Change: Net income guidance for the full year 2024 is approximately $1 2 billion.

Speaker Change: EBITDA forecast.

Speaker Change: 6 billion. A significant improvement from 2020 through it. Well those of you who are modeling EPS, let's not forget that cap. Calculate. Yes. 94 million of interest expense related to the company's convertible notes. Financial results. First of all reform deleveraging our post 2023. Along with our 2024th the former guidance. Firmly placed on our path to achieve our 2026. <unk>. That's further down the road. Our financial forecast. A long term shareholder value. And well. Maria Let's open up the call for questions. Thank you. If you would like to register a question. Please press the one four on your telephone. We'll hear a three pronged toward larger request. If your question has been answered then you would like to withdraw your registration. Please press. The one followed by the three once again to register a question. Please press the one four on your telephone one moment. Please for the first question. Yeah. Our first question comes from Steve <unk> with Stifel. Please proceed. Yeah, Hey, guys, good morning, and happy holidays to all of you. So so so Josh or David if we think about the yield guidance for the year just based on the fact that your occupancy should return to.

Speaker Change: A significant improvement from 2020 through it.

Speaker Change: Well those of you who are modeling EPS, let's not forget that cap.

Speaker Change: Calculate.

Speaker Change: Yes.

94 million of interest expense related to the company's convertible notes.

Speaker Change: Financial results.

First of all reform deleveraging our post 2023.

Speaker Change: Along with our 2024th the former guidance.

Speaker Change: Firmly placed on our path to achieve our 2026.

<unk>.

That's further down the road.

Speaker Change: Our financial forecast.

Speaker Change: A long term shareholder value.

Speaker Change: And well.

Speaker Change: Maria Let's open up the call for questions.

Maria: Thank you.

Maria: If you would like to register a question. Please press the one four on your telephone.

Maria: We'll hear a three pronged toward larger request. If your question has been answered then you would like to withdraw your registration. Please press. The one followed by the three once again to register a question. Please press the one four on your telephone one moment. Please for the first question.

Yeah.

Speaker Change: Our first question comes from Steve <unk> with Stifel. Please proceed.

Steve: Yeah, Hey, guys, good morning, and happy holidays to all of you. So so so Josh or David if we think about the yield guidance for the year just based on the fact that your occupancy should return to.

Steve: Somewhat normal levels, and then pricing has momentum at this point it seems to be pretty strong or healthy across the majority of your geographies. It seems like that plus feet in a 5% yield guidance might end up being. Somewhat conservative when we have this call a year from now so. I guess the question is can you give us a little color about the more of the makeup of the of your yield forecast. It seems like you might be taking a somewhat conservative view around on more trends and then potentially underestimating the opportunity around. Taking close in pricing. Yes. As Steve Happy holidays to you too so I hope you're right. I look forward to the call in a year. But we've given our good. Good faith estimate on how we're seeing the world right now. We come in with a good amount of visibility because of how well booked we are as you said, we have seen accelerating momentum. In the in the volume and the price. So we're very very pleased with the trajectory. We've been seeing obviously this is also before wave and we do have a little bit of a disadvantage of doing this in December.

Steve: It seems like that plus feet in a 5% yield guidance might end up being.

Steve: Somewhat conservative when we have this call a year from now so.

I guess the question is can you give us a little color about the more of the makeup of the of your yield forecast. It seems like you might be taking a somewhat conservative view around on more trends and then potentially underestimating the opportunity around.

Steve: Taking close in pricing.

Steve: Yes.

As Steve Happy holidays to you too so I hope you're right.

I look forward to the call in a year.

But we've given our good.

Steve: Good faith estimate on how we're seeing the world right now.

Steve: We come in with a good amount of visibility because of how well booked we are as you said, we have seen accelerating momentum.

In the in the volume and the price. So we're very very pleased with the trajectory.

We've been seeing obviously this is also before wave and we do have a little bit of a disadvantage of doing this in December.

Steve: Versus end of January into February so. All I can tell you is we've baked in what we see and we always want to outperform and obviously that's a given so I think best thing I can tell you is we'll talk in March with with wave under our belt having. Having said that wave hasn't ended since last year, so well. We will continue to ride this as long as we can. Let me, let me ask that a different way then Josh. So so if we think about if we think about what you guys are embedding in terms of onboard. Is it fair to assume you are being pretty conservative with with the way onboard should shake out in 'twenty, four basically meaning you potentially could see. Little bit of a slowdown in onboard or. Are you still guys kind of assuming that the onboard remains as robust as it has been. Yeah, you know, we're coming off a great performance when it comes to onboard and we expect our onboard for Dms to be increasing in 2024 versus 2023. Brands are doing a real good job of pulling forward more spend providing differentiated experiences. So we absolutely expect an increase in 24 versus <unk> versus 'twenty three. Okay got you and then real quick one more question if I could David in terms of the cost you gave you gave some pretty good color around the impact to the everything is going into the first quarter and why it's why it's so high.

Steve: All I can tell you is we've baked in what we see and we always want to outperform and obviously that's a given so I think best thing I can tell you is we'll talk in March with with wave under our belt having.

Having said that wave hasn't ended since last year, so well.

Steve: We will continue to ride this as long as we can.

Let me, let me ask that a different way then Josh. So so if we think about if we think about what you guys are embedding in terms of onboard.

Steve: Is it fair to assume you are being pretty conservative with with the way onboard should shake out in 'twenty, four basically meaning you potentially could see.

Steve: Little bit of a slowdown in onboard or.

Steve: Are you still guys kind of assuming that the onboard remains as robust as it has been.

Speaker Change: Yeah, you know, we're coming off a great performance when it comes to onboard and we expect our onboard for Dms to be increasing in 2024 versus 2023.

Brands are doing a real good job of pulling forward more spend providing differentiated experiences. So we absolutely expect an increase in 24 versus <unk> versus 'twenty three.

Speaker Change: Okay got you and then real quick one more question if I could David in terms of the cost you gave you gave some pretty good color around the impact to the everything is going into the first quarter and why it's why it's so high.

David Bernstein: As we think about the rest of the year the cadence of cost I think you said, if we think about the third the second quarter through the fourth quarter those should all be. Round, 3% I, just want make sure I heard that right and if there is anything in <unk> that we should be thinking about that might move one of those quarters, one way or the other. Yeah. So I was not trying to give individual guidance for each quarter. What I was trying to do is say that the three quarters collectively together would average 3%. We will see some year over year differences versus 2023, you know a great example of that is that the dry dock days will be down in second quarter, but there'll be nothing for it. So there will be differences. There's also advertising season of <unk> differences and other things. So I was not trying to say three <unk>. Sent every quarter just 3% on average for the three. Okay that is great. Thank you very much guys happy holidays, I appreciate it and great quarter. Thank you very much stickier Steve.

Speaker Change: Round, 3% I, just want make sure I heard that right and if there is anything in <unk> that we should be thinking about that might move one of those quarters, one way or the other.

Speaker Change: Yeah.

Speaker Change: So I was not trying to give individual guidance for each quarter. What I was trying to do is say that the three quarters collectively together would average 3%.

We will see some year over year differences versus 2023, you know a great example of that is that the dry dock days will be down in second quarter, but there'll be nothing for it. So there will be differences. There's also advertising season of <unk> differences and other things. So I was not trying to say three <unk>.

Speaker Change: Sent every quarter just 3% on average for the three.

Speaker Change: Okay that is great. Thank you very much guys happy holidays, I appreciate it and great quarter.

Thank you very much stickier Steve.

Speaker Change: Okay. Our next question comes from Brad Mas Tour with Barclays. Please proceed. Great. Thanks, everyone and congratulations on the results this morning. So Josh you gave us an update on the sea change long term targets and. The drastic improvement towards that target and that you've made so far in 'twenty three 'twenty four expected I guess fuel has been a nice tailwind if you take few out and maybe just focus on your your yield growth target within 24 guidance is that in line. With your internal expectations for that three year ramp or how do you think about it. Yes, I think it's fair to say that you know when we talked about it in June for the first time and we laid out what will it take we talked about the fact that excuse. Excuse me getting back to excuse me historical occupancy. We expect pretty much all of that in 'twenty four versus 'twenty, where we were in 'twenty three and that's as far as we can tell that's exactly how it is going to play out and on top of that we predict pricing. Estimated pricing to be up low to mid single digits every year 'twenty four 'twenty five 'twenty six.

Speaker Change #100: Our next question comes from Brad Mas Tour with Barclays.

Speaker Change #100: Please proceed.

Speaker Change #100: Great. Thanks, everyone and congratulations on the results this morning.

Speaker Change #100: So Josh you gave us an update on the sea change long term targets and.

Speaker Change #100: The drastic improvement towards that target and that you've made so far in 'twenty three 'twenty four expected I guess fuel has been a nice tailwind if you take few out and maybe just focus on your your yield growth target within 24 guidance is that in line.

Speaker Change #100: With your internal expectations for that three year ramp or how do you think about it.

Yes, I think it's fair to say that you know when we talked about it in June for the first time and we laid out what will it take we talked about the fact that excuse.

Speaker Change #100: Excuse me getting back to excuse me historical occupancy.

Speaker Change #100: We expect pretty much all of that in 'twenty four versus 'twenty, where we were in 'twenty three and that's as far as we can tell that's exactly how it is going to play out and on top of that we predict pricing.

Speaker Change #100: Estimated pricing to be up low to mid single digits every year 'twenty four 'twenty five 'twenty six.

And so we feel like we are we entered the year little bit ahead, given how we ended the second half of 2023 and keep pushing forward. Okay, great. Thanks for that and then. You said you were two thirds booked for 'twenty for that struck me is incredibly impressive. Just give us a sense of what that would have been in prior years, but also. The crux of the question is did that base loading strategy. Do you think that impacted your pricing meaningfully versus what it would have been if you had it just kept the sort of historical booking curve and then as you go into two ended January and wave season. <unk> never been this book so has that changed your strategy with pricing as you move through wave. So. So this is playing out as we would expect it to play out by pulling pulling forward all the volume it gives us better. Better control over our pricing environment, and our ability to keep pricing at an elevated level and so it's literally playing out as it should this is we are we are 10 points higher than we were when we entered the Q1 'twenty 410 points higher year over year, it's higher than 2019.

Okay, great. Thanks for that and then.

Speaker Change #101: You said you were two thirds booked for 'twenty for that struck me is incredibly impressive.

Just give us a sense of what that would have been in prior years, but also.

Speaker Change #101: The crux of the question is did that base loading strategy.

Speaker Change #101: Do you think that impacted your pricing meaningfully versus what it would have been if you had it just kept the sort of historical booking curve and then as you go into two ended January and wave season.

Speaker Change #101: <unk> never been this book so has that changed your strategy with pricing as you move through wave.

Speaker Change #101: So.

Speaker Change #101: So this is playing out as we would expect it to play out by pulling pulling forward all the volume it gives us better.

Speaker Change #101: Better control over our pricing environment, and our ability to keep pricing at an elevated level and so it's literally playing out as it should this is we are we are 10 points higher than we were when we entered the Q1 'twenty 410 points higher year over year, it's higher than 2019.

Speaker Change #101: As well. But which was out of it. Which is a very long normalized booking window. And it's important that we do that right I mean, let's keep in mind, you know being 10 points above last year is is good progress, but we expect to and our occupancy significantly higher than last year. So that's all feeding into the strategy and pricing is playing along as I tried to say in my notes I'm not sure how how clear it was you know when we. Entered the fourth quarter. Of this year, we were about 10 points higher. And then the prior year and the occupancy position and prices were higher as we've made our way through the quarter, we've managed to pretty much keep that occupancy advantage and prices on everything Thats booked is now considerably higher so it is working the way we anticipated. Crystal clear thanks, everyone. Excellent Thanks Brent. Uh huh. Our next question comes from James Hardiman with Citi. Please proceed. Hey, good morning, guys. Thanks for taking my question so. I'm going to ask I think Steve's question in a slightly different way. A lot of conjecture.

Speaker Change #101: But which was out of it.

Speaker Change #101: Which is a very long normalized booking window.

Speaker Change #101: And it's important that we do that right I mean, let's keep in mind, you know being 10 points above last year is is good progress, but we expect to and our occupancy significantly higher than last year. So that's all feeding into the strategy and pricing is playing along as I tried to say in my notes I'm not sure how how clear it was you know when we.

Entered the fourth quarter.

Speaker Change #101: Of this year, we were about 10 points higher.

Speaker Change #101: And then the prior year and the occupancy position and prices were higher as we've made our way through the quarter, we've managed to pretty much keep that occupancy advantage and prices on everything Thats booked is now considerably higher so it is working the way we anticipated.

Speaker Change #102: Crystal clear thanks, everyone.

Speaker Change #103: Excellent Thanks Brent.

Speaker Change #104: Uh huh.

Speaker Change #104: Our next question comes from James Hardiman with Citi. Please proceed.

Hey, good morning, guys. Thanks for taking my question so.

Speaker Change #104: I'm going to ask I think Steve's question in a slightly different way.

Speaker Change #104: A lot of conjecture.

Speaker Change #104: But you would only give. First quarter guidance similar to last year, obviously your peers are at a bit of an advantage because they get that first month of wave. As they try to assess what the demand environment looks like obviously you gave us the full year guide anyway, as we interpret that guide then. Take us through that thought process, and whether or not that plays into sort of your level of conservatism. Being effectively a headway. Well, we are effectively back to normal. This is this is what we used to do. Before before the the last few years and I think it was quite important that we get back into this. And to this. Cadence now good news, we are highest book we've ever been so we do have more visibility than even we had before. For 2020, so I think of that setting us up well to be able to be in a pretty good position to give you to give you. This preliminary. <unk> guidance for 2024, obviously, we have. Have high expectations of my brands, and what would I expect them to achieve including during wave and you got to remember the whole focus of wave. This year, we have the benefit of being able to focus on different things.

Speaker Change #104: First quarter guidance similar to last year, obviously your peers are at a bit of an advantage because they get that first month of wave.

Speaker Change #104: As they try to assess what the demand environment looks like obviously you gave us the full year guide anyway, as we interpret that guide then.

Speaker Change #104: Take us through that thought process, and whether or not that plays into sort of your level of conservatism.

Speaker Change #104: Being effectively a headway.

Speaker Change #104: Well, we are effectively back to normal. This is this is what we used to do.

Speaker Change #104: Before before the the last few years and I think it was quite important that we get back into this.

Speaker Change #104: And to this.

Speaker Change #104: Cadence now good news, we are highest book we've ever been so we do have more visibility than even we had before.

Speaker Change #104: For 2020, so I think of that setting us up well to be able to be in a pretty good position to give you to give you. This preliminary.

Speaker Change #104: <unk> guidance for 2024, obviously, we have.

Speaker Change #104: Have high expectations of my brands, and what would I expect them to achieve including during wave and you got to remember the whole focus of wave. This year, we have the benefit of being able to focus on different things.

Speaker Change #104: Last year in waves a lot of what we were trying to accomplish in our brands. We are trying to accomplish was just filling the ships because we're such a different position from an occupancy perspective. This time, we actually get to go through wave. Really be more strategic in how we are trying to advance the needle not just on the short term, but on the longer term. So I think it sets us up well and I keep asking David to change the fiscal year end in like can we please start on January one so like everybody else, but apparently that's a lot of work. So we're not going to do that. Got it and then. There was a there was a comment in the prepared remarks. About not only are you seeing better. New to cruise numbers, but but better new to brand. Numbers relative to 2019, Josh you talked about having confidence in your brands, but that that latter point it seems like a big one right. So so much of the. Conversation just seems to be about the cruise industry. But maybe talk to what you think might be a carnival specific story is in terms of. Improving consideration among people that are that are already integrating.

Speaker Change #104: Really be more strategic in how we are trying to advance the needle not just on the short term, but on the longer term. So I think it sets us up well and I keep asking David to change the fiscal year end in like can we please start on January one so like everybody else, but apparently that's a lot of work. So we're not going to do that.

Got it and then.

There was a there was a comment in the prepared remarks.

Speaker Change #104: About not only are you seeing better.

Speaker Change #104: New to cruise numbers, but but better new to brand.

Speaker Change #104: Numbers relative to 2019, Josh you talked about having confidence in your brands, but that that latter point it seems like a big one right. So so much of the.

Speaker Change #104: Conversation just seems to be about the cruise industry.

But maybe talk to what you think might be a carnival specific story is in terms of.

Speaker Change #104: Improving consideration among people that are that are already integrating.

Speaker Change #105: Yeah, I think our brands are doing phenomenally and really understanding who the target audience is and how to speak to them with their creative marketing and then on the performance side, just making sure that that consideration and awareness gets converted into bookings. So we gave up. I said in my prepared remarks, we've got several campaigns that are either started or about to start. We've got a few examples you can click through the prepared materials are slides that have been put out. They're doing a great job of captivating the market and I think getting cut through not just with new to new to brand new to brand new to cruise on the value that we have. And unfortunately for us as much as we've improved on the pricing front in 2023. It's still a big gap versus land. So all of those things are wind at our backs and and I expect more of that overtime. Got it thanks, guys and good luck during wave. Thank you. Our next question comes from Jamie Katz with Morningstar. Please proceed. <unk>. Good morning, Thank you. I'm, hoping you can talk a little bit about changes to the sourcing strategy I know, it's shifted back a little bit more to north American producers.

Speaker Change #105: I said in my prepared remarks, we've got several campaigns that are either started or about to start.

Speaker Change #105: We've got a few examples you can click through the prepared materials are slides that have been put out.

Speaker Change #105: They're doing a great job of captivating the market and I think getting cut through not just with new to new to brand new to brand new to cruise on the value that we have.

Speaker Change #105: And unfortunately for us as much as we've improved on the pricing front in 2023.

Speaker Change #105: It's still a big gap versus land. So all of those things are wind at our backs and and I expect more of that overtime.

Speaker Change #106: Got it thanks, guys and good luck during wave.

Speaker Change #107: Thank you.

Speaker Change #108: Our next question comes from Jamie Katz with Morningstar. Please proceed.

Speaker Change #108: <unk>.

Jamie Katz: Good morning, Thank you.

Jamie Katz: I'm, hoping you can talk a little bit about changes to the sourcing strategy I know, it's shifted back a little bit more to north American producers.

Jamie Katz: The last couple of years, but given the strength in the European market and the fact that they might be closing the gap should we expect that to move back to normal. <unk>. Well. Good morning, Jamie So I think we should kind of. Take a step back and think about our portfolio and how we operate you know we've got a dedicated brands to European markets, but piano cruises in the UK and Aida in Germany cost not just for Italy, but really Italy, Spain, and France and all of those are either. The biggest in their market or the second biggest in the case of costa across the Mediterranean. We didn't deviate from our strategy. When it comes to our dedicated market brands and so they have continued to view those markets is the right thing to be in the long term and we absolutely support that and we're starting to see the strength of that really come through as we've started talking about the last few quarters. With respect to our North American brands. Carnival has been and will continue to be America's cruise line and they're they're knocking the cover off the ball. And there hasnt been that much dramatic change when it comes to sourcing.

<unk>.

Jamie Katz: Well.

Speaker Change #109: Good morning, Jamie So I think we should kind of.

Jamie Katz: Take a step back and think about our portfolio and how we operate you know we've got a dedicated brands to European markets, but piano cruises in the UK and Aida in Germany cost not just for Italy, but really Italy, Spain, and France and all of those are either.

Jamie Katz: The biggest in their market or the second biggest in the case of costa across the Mediterranean.

Jamie Katz: We didn't deviate from our strategy.

Jamie Katz: When it comes to our dedicated market brands and so they have continued to view those markets is the right thing to be in the long term and we absolutely support that and we're starting to see the strength of that really come through as we've started talking about the last few quarters.

Jamie Katz: With respect to our North American brands.

Jamie Katz: Carnival has been and will continue to be America's cruise line and they're they're knocking the cover off the ball.

Jamie Katz: And there hasnt been that much dramatic change when it comes to sourcing.

Jamie Katz: For Holland America, and Princess other than the fact that for Princess They had so much sourcing that was really geared towards. Markets that have been slow to open. In Asia et cetera, So we've repositioned we've done a bit of that but but I think we're very well positioned to take the strength of the European consumer in the UK consumer and continue to ride that into 2024. Okay, and then there was a lot of positive commentary on here for you on this call. So I'm curious if there's anything left out there that concerns you that you would like to share with the audience. Thanks. No. Great question. Thank you [laughter], Okay Youre welcome Thanks happy holidays. You too. Our next question comes from Patrick Scholes with twist. Please proceed. Hi, good morning, everyone. Good morning, Patrick. Good morning, Josh I am not going to ask you. If you were planning on as you build this time, but. Yeah. [laughter] yeah. Thank you Patrick. Sometimes you should listen to us sometimes not. Yeah. Uh huh. I wanted to hear from you. Bren. Of late. Especially around. Black Friday, cyber Monday, you've seen with.

Jamie Katz: Markets that have been slow to open.

Jamie Katz: In Asia et cetera, So we've repositioned we've done a bit of that but but I think we're very well positioned to take the strength of the European consumer in the UK consumer and continue to ride that into 2024.

Speaker Change #110: Okay, and then there was a lot of positive commentary on here for you on this call. So I'm curious if there's anything left out there that concerns you that you would like to share with the audience. Thanks.

No.

Speaker Change #111: Great question.

Thank you [laughter], Okay Youre welcome Thanks happy holidays.

Speaker Change #112: You too.

Speaker Change #113: Our next question comes from Patrick Scholes with twist. Please proceed.

Patrick Scholes: Hi, good morning, everyone.

Speaker Change #114: Good morning, Patrick.

Patrick Scholes: Good morning, Josh I am not going to ask you. If you were planning on as you build this time, but.

Yeah.

Speaker Change #115: [laughter] yeah. Thank you Patrick.

Sometimes you should listen to us sometimes not.

Speaker Change #115: Yeah.

Speaker Change #116: Uh huh.

Speaker Change #117: I wanted to hear from you.

Speaker Change #117: Bren.

Speaker Change #117: Of late.

Speaker Change #117: Especially around.

Speaker Change #117: Black Friday, cyber Monday, you've seen with.

Speaker Change #117: New to cruise is that becoming a larger. Part of the booking mix and if so what would be the <unk>. Impact on. Your margins I imagine new to cruise typically called the 800 number of books, correct, which probably saves you travel agency commissions. Talk about those trends and the potential impact on <unk>. Revenues and cost thank you. Thank you so candidly I don't have literally for the period that you're referencing the cyber Monday and Black Friday, I don't have a breakdown of new to cruise versus new to brand versus. Our brand loyalists I do have the fourth quarter of Italy, which include some of that where are new to cruise is obviously up significantly year over year, 51%. And so that is that as part of the strategy right taking. Taking a oh dollar sale pardon me I'm, sorry that was sale. But taking taking. Taking a greater share of folks who have never cruised before is part of the strategy to increase overall demand get them in our pipeline. Now us to raise pricing over time for frankly, everybody. With respect to what's the most cost efficient obviously coming direct on the web is always going to be the most cost effective I wouldn't make a categorization, though that new to cruise comes in a particular way because it really depends on the characteristic of the new to cruise guests themselves what brand. It is what's the itinerary.

Speaker Change #117: Part of the booking mix and if so what would be the <unk>.

Speaker Change #117: Impact on.

Your margins I imagine new to cruise typically called the 800 number of books, correct, which probably saves you travel agency commissions.

Talk about those trends and the potential impact on <unk>.

Speaker Change #117: Revenues and cost thank you.

Speaker Change #118: Thank you so candidly I don't have literally for the period that you're referencing the cyber Monday and Black Friday, I don't have a breakdown of new to cruise versus new to brand versus.

Speaker Change #118: Our brand loyalists I do have the fourth quarter of Italy, which include some of that where are new to cruise is obviously up significantly year over year, 51%.

Speaker Change #118: And so that is that as part of the strategy right taking.

Taking a oh dollar sale pardon me I'm, sorry that was sale.

Speaker Change #118: But taking taking.

Speaker Change #118: Taking a greater share of folks who have never cruised before is part of the strategy to increase overall demand get them in our pipeline.

Speaker Change #118: Now us to raise pricing over time for frankly, everybody.

Speaker Change #118: With respect to what's the most cost efficient obviously coming direct on the web is always going to be the most cost effective I wouldn't make a categorization, though that new to cruise comes in a particular way because it really depends on the characteristic of the new to cruise guests themselves what brand. It is what's the itinerary.

Speaker Change #118: Thanks. Now clearly a lot of new to cruise will over index on the shorter cruises because they're trying it out for the first time and that lends itself to maybe also a younger crowd, which is more comfortable just playing around on the net and doing things direct but I mean, frankly speaking historically and I expect us to continue our trade partners. <unk> are absolutely critical in driving new to cruise to us. And we have relied on them for decades to do that and we will rely on them for decades more and they have done a great job of really catching up to where we've been in the curve and. Year over year, they're showing great strength as well. Okay. Thank you very much. Thanks, Patrick. Our next question comes from Robin Farley with UBS. Please proceed. Great. Thank you. Wanted to circle back to your yield guidance and just looking at the recovery in occupancy. Previous levels being maybe six to 700 basis points. It kind of implies that your per diem guidance is maybe less than 2% growth. So I just I don't know if im doing the math wrong here, if there's any anything to clarify and then also you've talked about.

Speaker Change #118: Now clearly a lot of new to cruise will over index on the shorter cruises because they're trying it out for the first time and that lends itself to maybe also a younger crowd, which is more comfortable just playing around on the net and doing things direct but I mean, frankly speaking historically and I expect us to continue our trade partners.

Speaker Change #118: <unk> are absolutely critical in driving new to cruise to us.

Speaker Change #118: And we have relied on them for decades to do that and we will rely on them for decades more and they have done a great job of really catching up to where we've been in the curve and.

Speaker Change #118: Year over year, they're showing great strength as well.

Speaker Change #119: Okay. Thank you very much.

Speaker Change #120: Thanks, Patrick.

Speaker Change #121: Our next question comes from Robin Farley with UBS. Please proceed.

Robin Farley: Great. Thank you.

Robin Farley: Wanted to circle back to your yield guidance and just looking at the recovery in occupancy.

Robin Farley: The price on the books for next year being considerably higher but youre. Yield guidance for the year. Jeff nicely higher, which I think and David Bernstein glossary. It would be a deceleration. Okay. So. I'm laughing at the glossary, yeah keep going Robyn. So if I if I remember if I'm interpreting correctly I think that implies. The deceleration in the price there. So just is that just. Because the onboard growth rate, while up is lowered so that brings like considerably a higher price to just nicely higher yield or maybe Mike glossary definition is wrong, but maybe you can help us with that and with the math on the per diem. Thanks Robyn. David said it in the prepared remarks, I thought you said it pretty well so David you want to repeat what you said, yes. So you know keep in mind that 2019 was the high watermark for occupancy and we look back to like 2005, and the historical occupancy levels were in the range of 104 to 100. 7%. So what we're saying is we will be solidly back to historical occupancy levels, probably werent, saying, we're going to be back to the high watermark of 2019.

Robin Farley: Yield guidance for the year.

Robin Farley: Jeff nicely higher, which I think and David Bernstein glossary.

Robin Farley: It would be a deceleration.

Robin Farley: Okay.

Robin Farley: So.

Robin Farley: I'm laughing at the glossary, yeah keep going Robyn.

Robyn: So if I if I remember if I'm interpreting correctly I think that implies.

Robyn: The deceleration in the price there. So just is that just.

Robyn: Because the onboard growth rate, while up is lowered so that brings like considerably a higher price to just nicely higher yield or maybe Mike glossary definition is wrong, but maybe you can help us with that and with the math on the per diem.

Speaker Change #123: Thanks Robyn.

David said it in the prepared remarks, I thought you said it pretty well so David you want to repeat what you said, yes. So you know keep in mind that 2019 was the high watermark for occupancy and we look back to like 2005, and the historical occupancy levels were in the range of 104 to 100.

David Bernstein: 7%. So what we're saying is we will be solidly back to historical occupancy levels, probably werent, saying, we're going to be back to the high watermark of 2019.

So keep that in mind, the other thing about the considerably higher versus the nicely higher keep in mind that you know last March when we gave guidance we had thought that. Our expectation for per Diem increases was about three 5% and we wound up seven 5%. So we saw some very strong pricing in the back half of the year and as a result of that on a year over year comparison basis. <unk> position may be considerably higher but what we're looking to see is at least nicely higher pricing on a per DM basis built into our guidance. So when you put those two factors together hopefully you can understand how we built our guidance. Yeah. Let me just add one thing Robin which is our focus is on generating the most revenue possible when that ship leaves on its crews and that's going to be a combination of optimizing that price and occupancy relationship. So there's no magic to getting back to 2019 high watermark. 107%. We play in the fringes, we play in that 104% to 107% to make sure that when you combine that ending point along with the pricing. So happy as we can be.

David Bernstein: Our expectation for per Diem increases was about three 5% and we wound up seven 5%. So we saw some very strong pricing in the back half of the year and as a result of that on a year over year comparison basis.

<unk> position may be considerably higher but what we're looking to see is at least nicely higher pricing on a per DM basis built into our guidance. So when you put those two factors together hopefully you can understand how we built our guidance.

Yeah.

Speaker Change #124: Let me just add one thing Robin which is our focus is on generating the most revenue possible when that ship leaves on its crews and that's going to be a combination of optimizing that price and occupancy relationship. So there's no magic to getting back to 2019 high watermark.

107%.

Speaker Change #124: We play in the fringes, we play in that 104% to 107% to make sure that when you combine that ending point along with the pricing.

Speaker Change #124: So happy as we can be.

Understood that occupancy rate that you don't manage to a certain occupancy once winter in that range, but just that. Is that the. Price comment. Okay. Sure. But what youre seeing on the books being considerably up versus a nicely up. It does seem to imply that you would be expecting a deceleration from current levels. So I mean, maybe the interest youre, just being conservative, but I just if if that if that's correct. Correct in interpreting considerably moving to nicely. Being a lower rate of growth that's I guess, that's what I'm trying to clarify. So one thing to stress right. We just came off of the fourth quarter, which everybody's glossing over real quick but it was up 10 five points in price. That's what we're going to lap when we get through 2024, if you think about our booked business. We have the most to go in the fourth quarter not surprisingly so far this out so as we build towards that and we cycled through the first quarter than the second quarter were the most book, we just have to fill and get over a larger hurdle, which we expect to do but we have to take that whole thing into the equation when we're giving full year guidance.

Speaker Change #124: Is that the.

Price comment.

Speaker Change #124: Okay.

Speaker Change #124: Sure.

Speaker Change #124: But what youre seeing on the books being considerably up versus a nicely up.

Speaker Change #124: It does seem to imply that you would be expecting a deceleration from current levels.

Speaker Change #125: So I mean, maybe the interest youre, just being conservative, but I just if if that if that's correct.

Speaker Change #125: Correct in interpreting considerably moving to nicely.

Speaker Change #125: Being a lower rate of growth that's I guess, that's what I'm trying to clarify.

Speaker Change #125: So one thing to stress right. We just came off of the fourth quarter, which everybody's glossing over real quick but it was up 10 five points in price.

That's what we're going to lap when we get through 2024, if you think about our booked business.

Speaker Change #125: We have the most to go in the fourth quarter not surprisingly so far this out so as we build towards that and we cycled through the first quarter than the second quarter were the most book, we just have to fill and get over a larger hurdle, which we expect to do but we have to take that whole thing into the equation when we're giving full year guidance.

Speaker Change #125: <unk>. Okay that makes that makes perfect that makes perfect sense. Thank you. Thank you and then just one last clarification. And your C change on the expense side, you've talked about a three year being up low single digits. In my 24, 25 2006 each year. For 2024 guidance up four 5%. Probably. Above low single digits kind of implies. Very very low expense growth and 25 and 26 is that how we should think about in other words. There is not a change in your the three year average would be up low single digit even though its up a bit more in 'twenty. Four then that would suggest and again, possibly youre just being conservative, but I don't know if you had a thought on. How we should think about how much better that. Would be in 2000 would have to be in 2005, and 2016 to keep you see change expense target. Thank you. Sure so when. When we were presenting a sea change program I guess it was Oh you know in June we were. Talking about the fact that low single digits, but I did say, we'd have some outsized impacts in 2024 due to occupancy both on the yield and on the cost. So the four 5% I also had indicated that occupancy would probably cost a point to two points. This year. So. We are in that low single digits equation that was built into the model. So I feel like we are very well positioned and as Josh indicated we're ahead of where we expect it to be on our way towards achieving those targets.

Speaker Change #126: Okay that makes that makes perfect that makes perfect sense. Thank you. Thank you and then just one last clarification.

Speaker Change #126: And your C change on the expense side, you've talked about a three year being up low single digits.

Speaker Change #126: In my 24, 25 2006 each year.

For 2024 guidance up four 5%.

Probably.

Speaker Change #126: Above low single digits kind of implies.

Speaker Change #127: Very very low expense growth and 25 and 26 is that how we should think about in other words. There is not a change in your the three year average would be up low single digit even though its up a bit more in 'twenty. Four then that would suggest and again, possibly youre just being conservative, but I don't know if you had a thought on.

Speaker Change #127: How we should think about how much better that.

Speaker Change #127: Would be in 2000 would have to be in 2005, and 2016 to keep you see change expense target. Thank you.

Sure so when.

Speaker Change #127: When we were presenting a sea change program I guess it was Oh you know in June we were.

Speaker Change #127: Talking about the fact that low single digits, but I did say, we'd have some outsized impacts in 2024 due to occupancy both on the yield and on the cost. So the four 5% I also had indicated that occupancy would probably cost a point to two points. This year. So.

We are in that low single digits equation that was built into the model. So I feel like we are very well positioned and as Josh indicated we're ahead of where we expect it to be on our way towards achieving those targets.

I would say Robin that didn't seem to go through the call without you trying to get ahead of 24 guidance I'm looking at 25. [laughter], well, but I almost didn't get in the last five minutes of the call I'm glad I got it in. Thank you. No problem. Our next question comes from Dan Pulitzer with Wells Fargo. Please proceed. Hey, good morning, everyone and thanks for taking my questions I, just actually wanted to touch on the fourth quarter, a little bit more. The uptick in revenues on pricing certainly was impressive can you maybe unpack that a little bit more I mean was that really just the carnival centric line. Or was it Europe or North America more broadly or was this you know alternatively related to your strategy of more base loading and maybe benefiting from some of the compression we've seen. This was a portfolio wide. So we were very pleased with. With where we where we headed into into the fourth quarter. I don't know if you want to give any color yeah, no I mean, you're right. It was all brands and we saw strength in bookings and our brands did a great job yield managing the revenue and taking price up and so as a result of that you saw the end result. Got it and then Grand Bahama I know you've started to talk a little bit more about that are there any parameters you can give us there in terms of capacity per day amenities, the capex or return profile, you're looking at and also I know you're starting to see some booking activity that's going there or are you receiving premiums on those bookings.

Speaker Change #128: [laughter], well, but I almost didn't get in the last five minutes of the call I'm glad I got it in.

Speaker Change #129: Thank you.

Speaker Change #130: No problem.

Speaker Change #131: Our next question comes from Dan Pulitzer with Wells Fargo. Please proceed.

Dan Pulitzer: Hey, good morning, everyone and thanks for taking my questions I, just actually wanted to touch on the fourth quarter, a little bit more.

Dan Pulitzer: The uptick in revenues on pricing certainly was impressive can you maybe unpack that a little bit more I mean was that really just the carnival centric line.

Or was it Europe or North America more broadly or was this you know alternatively related to your strategy of more base loading and maybe benefiting from some of the compression we've seen.

Speaker Change #132: This was a portfolio wide. So we were very pleased with.

Speaker Change #132: With where we where we headed into into the fourth quarter.

Speaker Change #133: I don't know if you want to give any color yeah, no I mean, you're right. It was all brands and we saw strength in bookings and our brands did a great job yield managing the revenue and taking price up and so as a result of that you saw the end result.

Got it and then Grand Bahama I know you've started to talk a little bit more about that are there any parameters you can give us there in terms of capacity per day amenities, the capex or return profile, you're looking at and also I know you're starting to see some booking activity that's going there or are you receiving premiums on those bookings.

Speaker Change #133: You mentioned like 100 hundreds of sailings in the release. Yes. Let me start with that we have it's it's tiny in the Grand scheme of things still I mean, because you're talking about carnival cruise line, which. You know it doesn't have a lot of short programs et cetera that don't that don't really start booking so it's a tiny amount now. We'll give color as we as we get through 2024 in that respect so we'll come back to that with respect to your other points. You know we've said. This is this is a big investment. This is this is half a billion dollar type of investment. And we can do that obviously in 2025. Only have one chip and we have none in 2026. So we think this is the right way to optimize our resources and really benefit the carnival brand and you've heard US say 18 chips from day. One. So we're very very excited about that I don't want to get ahead, I really want to do a good job of disappointing myself to not get ahead of Christine Duffy, who. Really wants to and should. Talk about what this experience is going to be like and more to come in 2024, and I can't wait for you to listen to Christine and hear all about it.

Speaker Change #133: Yes.

Speaker Change #133: Let me start with that we have it's it's tiny in the Grand scheme of things still I mean, because you're talking about carnival cruise line, which.

Speaker Change #133: You know it doesn't have a lot of short programs et cetera that don't that don't really start booking so it's a tiny amount now.

We'll give color as we as we get through 2024 in that respect so we'll come back to that with respect to your other points. You know we've said. This is this is a big investment. This is this is half a billion dollar type of investment.

Speaker Change #133: And we can do that obviously in 2025.

Speaker Change #133: Only have one chip and we have none in 2026. So we think this is the right way to optimize our resources and really benefit the carnival brand and you've heard US say 18 chips from day. One. So we're very very excited about that I don't want to get ahead, I really want to do a good job of disappointing myself to not get ahead of Christine Duffy, who.

Speaker Change #133: Really wants to and should.

Speaker Change #133: Talk about what this experience is going to be like and more to come in 2024, and I can't wait for you to listen to Christine and hear all about it.

Speaker Change #134: Got it and then just if I could squeeze in one quick housekeeping Panorama that was I think out of service a little bit in the fourth quarter and the first quarter is there any way to just quantify the impact of that. And in the Grand scheme of things, it's probably a couple of pennies between between. Like maybe one penny in the fourth quarter and a couple in the first. Got it thanks, so much and happy holidays. Thanks, Frank we have time for one last question. We have a question from Assia Georgieva with Infiniti Research. Please proceed. Unlucky ones congratulations guys on a great Q4, so happy that were. We are back to looking at deals as opposed to part D EMS and. I'm half percent was a great metric, but the seven 8% they like better. Uh huh. I apologize but. Again, I wanted to just to finally get back to where we were looking at the the more useful my checks that we have a very healthy outlook in terms of yields in Q1 Q2. Drydocks. I think I I at least and just handle now. So we have a good view into EBITDA. Throughout the year.

Speaker Change #134: And in the Grand scheme of things, it's probably a couple of pennies between between.

Speaker Change #134: Like maybe one penny in the fourth quarter and a couple in the first.

Speaker Change #135: Got it thanks, so much and happy holidays.

Thanks, Frank we have time for one last question.

We have a question from Assia Georgieva with Infiniti Research. Please proceed.

Assia Georgieva: Unlucky ones congratulations guys on a great Q4, so happy that were.

Assia Georgieva: We are back to looking at deals as opposed to part D EMS and.

I'm half percent was a great metric, but the seven 8% they like better.

Speaker Change #136: Uh huh.

Speaker Change #137: I apologize but.

Again, I wanted to just to finally get back to where we were looking at the the more useful my checks that we have a very healthy outlook in terms of yields in Q1 Q2.

Speaker Change #137: Drydocks.

Speaker Change #137: I think I I at least and just handle now.

Speaker Change #137: So we have a good view into EBITDA.

Speaker Change #137: Throughout the year.

David would you mind, taking this to sort of the debt and interest expense burden that you made. Maybe trying to modify including as part of the sea change program by fiscal year end 2024. Sure so. To start with you know you saw our interest expense guidance in the press release it was a. Close to $100 million less than 2023, and keep in mind that Wow, we did pay down. Quite a bit of debt the average balance for the Aries. For 2024 is probably like two and a half billion less than 2023, so that that will lower interest expense by 200 million, but also keep in mind that we have less cash on the books and with declining interest income rates that probably it's offsetting the savings by about 100 million. So that's why it's a net decline of about $100 million in interest expense on a year over year basis. Looking at the debt level I actually said this in my notes in. In 2024, we are looking at about. About two points I think it's $2 1 billion of scheduled maturities, but we will be replacing that debt with the $2 3 billion of export credits that we take on so but in addition to that we have built in some prepayments of debt into our guidance.

David Bernstein: Maybe trying to modify including as part of the sea change program by fiscal year end 2024.

Sure so.

David Bernstein: To start with you know you saw our interest expense guidance in the press release it was a.

David Bernstein: Close to $100 million less than 2023, and keep in mind that Wow, we did pay down.

David Bernstein: Quite a bit of debt the average balance for the Aries.

David Bernstein: For 2024 is probably like two and a half billion less than 2023, so that that will lower interest expense by 200 million, but also keep in mind that we have less cash on the books and with declining interest income rates that probably it's offsetting the savings by about 100 million.

So that's why it's a net decline of about $100 million in interest expense on a year over year basis.

David Bernstein: Looking at the debt level I actually said this in my notes in.

In 2024, we are looking at about.

David Bernstein: About two points I think it's $2 1 billion of scheduled maturities, but we will be replacing that debt with the $2 3 billion of export credits that we take on so but in addition to that we have built in some prepayments of debt into our guidance.

David Bernstein: And as I said, we are evaluating that so we do expect to see that to go down in 2024. However, we do expect to see strong. Deleveraging from a metrics perspective, because our EBITDA grows substantially so our debt to EBITDA will also improve. Makes perfect sense. And just as a quick follow up before I ask my second question if I may. Hmm. Would we be looking at. Refinancing as opposed to repayment. So we are looking at both as far as we we we expect to continue to prepay debt and to continue the deleveraging, but on top of that we also expect to look at some potential refinancing which really. We drive the interest costs down. And so we'll see how what opportunities presenters are presented to us in 2024, and if it makes sense, we'll take advantage of them. It sounds great and so if I can ask my second question and. Don't think anyone has touched on this. <unk>. Given geopolitical pressures. We are comparing. Used to be comparing between 23 to 2019, when we have seen peers bike, which. Clearly D eastern Baltics have been kind of off the books. Now we have an issue with the middle East.

David Bernstein: Deleveraging from a metrics perspective, because our EBITDA grows substantially so our debt to EBITDA will also improve.

Makes perfect sense.

Speaker Change #138: And just as a quick follow up before I ask my second question if I may.

Speaker Change #138: Hmm.

Speaker Change #138: Would we be looking at.

Speaker Change #138: Refinancing as opposed to repayment.

Speaker Change #138: So we are looking at both as far as we we we expect to continue to prepay debt and to continue the deleveraging, but on top of that we also expect to look at some potential refinancing which really.

Speaker Change #138: We drive the interest costs down.

Speaker Change #138: And so we'll see how what opportunities presenters are presented to us in 2024, and if it makes sense, we'll take advantage of them.

Speaker Change #139: It sounds great and so if I can ask my second question and.

Don't think anyone has touched on this.

Speaker Change #139: <unk>.

Speaker Change #139: Given geopolitical pressures.

Speaker Change #139: We are comparing.

Speaker Change #139: Used to be comparing between 23 to 2019, when we have seen peers bike, which.

Speaker Change #139: Clearly D eastern Baltics have been kind of off the books.

Now we have an issue with the middle East.

And. Gosh the scanner. I believe is in the Persian Gulf, but will be one of the ships that we will have to come back to Europe in growing too. Is trade that is. It has been kind of get the Baie M&A military. South. And South Tim Yes, right. Yeah. Obviously, we you know our first priority is going to be safety. And we have. That's already on our on our radar screen and we've got mirrors mitigation plans should we need it but keep in mind. This is months away. And so we will we will do the right thing. But. There's always something. To say it that way, but there is always something and our brand and I've been around long enough. You know 26 years. So there is always something like Dutch I agree. So alright, I think with that we do have to end it but I'd say happy holidays to everybody and thank you very much have a good new year. That does conclude the conference call for today, we thank you for your participation and ask that you. Please disconnect your lines have a great day. Thank you.

Speaker Change #139: Gosh the scanner.

Speaker Change #139: I believe is in the Persian Gulf, but will be one of the ships that we will have to come back to Europe in growing too.

Speaker Change #139: Is trade that is.

Speaker Change #139: It has been kind of get the Baie M&A military.

South.

Speaker Change #139: And South Tim Yes, right.

Speaker Change #139: Yeah.

Speaker Change #139: Obviously, we you know our first priority is going to be safety.

Speaker Change #139: And we have.

Speaker Change #139: That's already on our on our radar screen and we've got mirrors mitigation plans should we need it but keep in mind. This is months away.

Speaker Change #139: And so we will we will do the right thing.

Speaker Change #139: But.

Speaker Change #139: There's always something.

Speaker Change #139: To say it that way, but there is always something and our brand and I've been around long enough. You know 26 years. So there is always something like Dutch I agree.

Speaker Change #140: So alright, I think with that we do have to end it but I'd say happy holidays to everybody and thank you very much have a good new year.

Speaker Change #140: That does conclude the conference call for today, we thank you for your participation and ask that you. Please disconnect your lines have a great day.

Speaker Change #141: Thank you.

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