Q2 2024 Carnival Corp & PLC Earnings Call

June 25, 2024

Greetings and welcome to the Carnival Corporation and plc conference call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad.

Operator: Greetings, and welcome to the Carnival Corporation and PLC conference call. At this time, all participants are in a listen-only mode.

Operator: Greetings and welcome to the Carnival Corporation and PLC's conference call. At this time, all participants are in a listen-only mode.

Operator: A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Beth Roberts, Senior Vice President, Investment Relations. Thank you, Beth.

Operator: A brief question-and-answer session will follow the formal presentation. If anyone who requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded.

As a reminder, this conference is being recorded.

Beth Roberts: It is now my pleasure to introduce your host, Beth Roberts, Senior Vice President and Professor Relations.

Speaker Change: It is now my pleasure to introduce your host Beth Roberts Senior Vice President Investor Relations. Thank you Beth you may begin.

Beth Roberts: Thank you, Beth. You may begin.

Unnamed: Thank you.

Beth Roberts: Thank you good morning, and welcome to our second quarter 2024 earnings Conference call I'm.

Beth Roberts: You may begin. Thank you. Good morning, and welcome to our second quarter 2024 earnings conference call. I'm joined today by our CEO, Josh Weinstein; our Chief Financial Officer, David Bernstein, and our Chairman, Nick Years.

I'm joined today by our CEO, Josh Weinstein, our Chief Financial Officer, David Bernstein, and our chair Mcpherson.

Unnamed: Before we begin, please note that some of our remarks on this call will be forward-looking. Therefore, I will refer you to the forward-looking statement in today's press release. All references to ticket prices, net per diems, 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, Evada, net income, earnings for 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.

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 forward looking statement in today's press release, all references to ticket prices net for dams that yields an adjusted cruise costs without fuel will be in constant currency unless otherwise stated.

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 forward-looking statement in today's press release. All references to ticket prices, net per diems, net yields, and adjusted cruise costs without fuel will be in constant currency unless otherwise stated.

Beth Roberts: References to Per Diem's and Yale's will be on a next basis. Our comments may also reference Cruise Costs Without Fuel, EVADOT, Net Income, Earnings Per Share, Free Cash Flow, and ROI, all of which will be on an adjusted basis unless otherwise stated. All these references are non-GAAP financial measures, see in our earnings pressure.

Beth Roberts: References to premiums and yields will be on a net basis.

Beth Roberts: Our comments May also reference cruise costs without fuel EBITDA net income earnings per share free cash flow and ROIC C. All of which will be on an adjusted basis unless otherwise stated.

Beth Roberts: All of these references are non-GAAP financial measures defined in our earnings press release, a reconciliation to the most directly comparable U S. GAAP financial measures and other associated disclosures are also contained in our earnings press release and in our Investor presentation.

Beth Roberts: A Reconciliation to the Most Directly Comparable U.S. Gap, Financial Measures, 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, fresh release, and investor presentations are available. With that, I'd like to turn the call over to Josh.

Unnamed: A reconciliation to the most directly comparable US GAAP financial measures and other associated closures are also contained in our earnings press release and in our investor presentation.

Unnamed: Please visit our corporate website, where our earnings press release and investor presentation can be found.

Speaker Change: 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.

Joshua Weinstein: With that, I'd like to turn the call over to Josh. Thanks, Beth. Inside of two years, we've made incredible strides in improving our commercial operations, strategically reallocating our portfolio composition, formulating growth plans, and strengthening even further our global team ship and shore, the best in the business. All the back of these efforts, we've closed yet another quarter delivering records. This time across revenues, operating income, customer deposits, and booking levels exceeding our guidance on every measure. Yield increased over 12% in Q2, over one and a half points more than March guidance as we continue to drive strong per diem growth, up over 6%.

Josh Weinstein: Thanks, Beth. In just under two years, we've made incredible strides in improving our commercial operations. Strategically Reallocating Our Portfolio Composition, Formulating a Growth Plan, and strengthening even further our global team ship and shore the best in the business. Off the back of these efforts, we've closed yet another quarter delivering records, this time across revenues, operating income, customer deposits, and booking levels, exceeding our guidance on every measure. Yields increased over 12% in Q2, 1.5 points more than March guidance, as we continue to drive strong per diem growth, up over 6%.

Josh: Thanks Beth.

Josh: That is two years, we've made incredible strides in improving our commercial operations strategically reallocating our portfolio composition.

Josh: Formulating growth plans.

Josh: And strengthening even further our global team shipping sure the best in the business.

Josh Weinstein: And this is on over 10% more passenger cruise days, which is a combination of capacity growth and sailing at historical occupancy. Our European brands experienced extraordinary yield improvement again this quarter, up over 20%, while North America continued to improve on last year's highs, up a healthy 7%. We hit record second-quarter adjusted EBITDA, roughly $150 million more than guidance. Additionally, on a per ALBD basis to highlight operational improvement and even with significantly higher fuel prices.

Josh: Off the back of these efforts we've closed yet another quarter delivering records. This time across revenues operating income customer deposits and booking levels exceeding our guidance on every measure.

Josh: Yields increased over 12% in Q2 over one and a half points more the March guidance as we continue to drive strong per diem growth up over 6%.

Joshua Weinstein: And this is on over 10% more passenger cruise days, which is a combination of capacity growth and sailing at historical occupancy levels. Our European brand experienced extraordinary yield improvement again this quarter, up over 20%. While North America continued to improve on last year's price, up a healthy 7%. We hit record second quarter adjusted EBITDA, roughly $150 million more than guidance. Encouragingly, on a per-ALBD basis to highlight operational improvement, and even with significantly higher fuel prices, adjusted EBITDA not only surpassed the second quarter of 2019; it was also our highest second quarter mark in over 15%.

Josh: This is an over 10% more passenger cruise days, which is a combination of capacity growth and sailing at historical occupancy levels.

Josh: Our European brands experienced extraordinary yield improvement again, this quarter up over 20%, while North America continued to improve on last year's highs.

Josh: A healthy 7%.

Josh: Hit record second quarter, adjusted EBITDA, roughly $150 million more than guidance incurred.

Encouragingly on a per a L. D D bases to highlight operational improvement and even with significantly higher fuel prices.

Josh Weinstein: Adjusted EBITDA not only surpassed the second quarter of 2019, but it was also our highest second quarter mark in over 15, coupled with flat cruise costs excluding fuel on a unit basis, which David will elaborate on. We delivered $500 million more to the bottom line year over year and outperformed our earnings guidance by $170 million.

Josh: Adjusted EBITDA not only surpassed by the second quarter of 2019. It was also our highest second quarter Mark in over 15 years.

Joshua Ian Weinstein: 10 years. Coupled with Black Cruise Cuff excluding fuel on a unit basis, which David will elaborate on, we delivered $500 million more to the bottom line year over year and outperformed our earnings guidance by $170 million. Based on continued strong demand trends, we are also taking up our expectations for the full year by $275 million, driven by double-digit yield growth. Now this would get us to double-digit ROIC this year. And while that will be a strong outcome for 2024, it is nowhere near what our business is capable of delivering. Our current booking trends are a testament to that.

Josh: Coupled with flat cruise costs, excluding fuel on a unit basis, which David will elaborate on we delivered $500 million more to the bottom line year over year.

Josh: It outperformed our earnings guidance by $170 million.

Josh Weinstein: Based on continued strong demand trends, we are also taking up our expectations for the full year by $275 million, driven by double-digit yield growth. Now this would get us to double-digit ROIC this... And while that will be a strong outcome for 2024, it is nowhere near what our business is capable of delivering. Our current booking trends are a testament to that. We are hitting records on top of previous records, which clearly tells us that the strength and demand we have been building is continuing into next year. In the near term, pricing on bookings taken in the second quarter has continued to run considerably higher for each of the third and fourth quarters. And again, that's on top of record per diems last year.

Josh: Based on continued strong demand trends. We are also taking up our expectations for the full year by $275 million driven by double digit yields krish.

Speaker Change: This would get us to double digit or who I see this year.

Speaker Change: Well that will be a strong outcome for 'twenty 'twenty four it is nowhere near what our business is capable of delivering.

Our current booking trends are a testament to that.

Joshua Weinstein: We are hitting records on top of previous records, which clearly tells us the strength in demand we have been building is continuing into next year and beyond. In a near term, pricing on bookings taken in the second quarter has continued to run considerably higher for each of the third and fourth quarters. And again, that's on top of record per DM last year. This strength has enabled us to take up yield guidance for the year by another 75 basis points. We expect to deliver consistent mid-single-digit per DM growth through the balance of the year, which would mark eight consecutive quarters that we are achieving mid-single-digit or higher per DM improvements.

Speaker Change: We are hitting records on top of previous records, which clearly tells us the strength and demand. We have been building is continuing into next year and beyond.

Speaker Change: In the near term pricing on bookings taken in the second quarter has continued to run considerably higher for each of the third and fourth quarters and again, that's on top of record for Dms last year.

Josh Weinstein: This strength has enabled us to take up your guidance for the year by another 75 days. We expect to deliver consistent mid-single-digit per diem growth for the balance of the year, which would mark eight consecutive quarters that we achieve mid-single-digit or higher per diem improvement. Our continued focus on optimizing our yield curve is not just a near-term benefit. We entered the second quarter with much less 2024 inventory to sell, and we have been able to lean even more into future periods.

Speaker Change: This strength has enabled us to take up your guidance for the year by another 75 basis points.

Speaker Change: We expect to deliver consistent mid single digit per diem growth because the balance of the year, which would mark eight consecutive quarters that we are achieving mid single digit or higher per diem improvements.

Joshua Weinstein: Our continued focus on optimizing our yield curve is not just a near-term benefit. We entered the second quarter with much less 2024 inventory to sell and have been able to lean even more into future periods. Accordingly, in the last three months, not only did we take more bookings for post-2024 standings than we did for in-year standings, we set yet another record for the most future bookings ever taken during the second quarter. The unprecedented level of demand for 2025 standings coupled with lack capacity growth next year translates into meaningful pricing power. And while it is still early for 2025, both price and occupancy are already ahead of where we were last year, leaving us in a position of strength with less inventory remaining for 2025.

Speaker Change: Our continued focus on optimizing our yield curve is not just a near term benefit we entered the second quarter with much less 'twenty 'twenty four inventory to sell and have been able to lean even more into future periods. Accordingly in the last three months not only did we take more bookings.

Josh Weinstein: Accordingly, in the last three months, not only did we take more bookings for post-2024 sailings than we did for in-year sailings, but we set yet another record for the most future bookings ever taken during the second... The unprecedented level of demand for 2025 stalings, coupled with flat capacity growth next year, translates into meaningful pricing power, and while it is still early for 2025, both price and occupancy are already ahead of where we were last, leaving us in a position of strength with less inventory remaining for 2025. It also shows in our more than $8 billion in customer deposits, which shattered last year's record by $1.1 billion. You have heard me say this before; this is not pent up.

Speaker Change: For post 2020 for sampling that we did for in year savings, we set yet another record for the most future bookings ever taken during the second quarter.

Speaker Change: Unprecedented level of demand for 2020 five sailings, coupled with flat capacity growth next year translates into meaningful pricing power.

Speaker Change: And while it is still early for 2025, both price and occupancy are already ahead of where we were last year, leaving us in a position of strength with less inventory remaining for 'twenty or 'twenty five.

Joshua Weinstein: It also shows in our more than $8 billion of customer deposits, which shattered last year's record by $1.1 billion. You have heard me say this before. This is not pent-up demand. It is the compounding effect of building increased consideration in our cruise brands over time and improvement in our yield management techniques to translate that demand into higher ticket prices. And it is further evidence of the strength of our consumer. Encouragingly, we are enjoying consistent growth in both repeat guests and new guests, with each segment of 10% this quarter over last year. We also continue to actively manage our portfolio to further accelerate our underlying execution improvements.

Speaker Change: It also shows in our more than $8 billion of customer deposits, which shattered last year's record by $1.1 billion.

Speaker Change: You have heard me say this before this is not pent up demand is the compounding effect of building increased consideration in our cruise brands over time and improvement in our yield management techniques to translate that demand into higher ticket prices and it is further evidence of the strength of our.

Josh Weinstein: It is the compounding effect of building increased consideration for our cruise brands over time and improvement in our yield management techniques to translate that demand into higher ticket prices, and it is further evidence of the strength of our brands. Additionally, we're enjoying consistent growth in both repeat guests and new guests, with each segment up 10% this quarter over last year. We also continue to actively manage our portfolio to further accelerate our underlying execution improvements. As previously announced, early next year, we will sunset the P&O Cruises Australia brand, selling the 28-year-old Pacific Explorer and transferring P&O Australia's two remaining vessels to Carnival Cruises.

Speaker Change: Our consumer <unk>.

Currently we're enjoying consistent growth in both repeat guests and new guests with each segment up 10% this quarter over last year.

Speaker Change: We also continue to actively manage our portfolio to further accelerate our underlying execution improvements.

Joshua Weinstein: As previously announced, early next year we will sunset the P&O Cruises Australia brand, telling the 28-year-old Pacific Explorer and transferring P&O Australia's two remaining vessels to Carnival crew. Lewis Line. Of course, we will still retain our leading presence in the Australian market, carrying over 60% of all Aussie cruisers. It is a great market for us, especially since the Australian summer coincides with the Northern Hemisphere winter, enabling our seasonal ships to capitalize on two summer periods. And now, we get to optimize our presence in this market by consolidating into Carnival Cruise Line. Not only will we gain operational, administrative, and back off its scale, we will ultimately have greater deployment flexibility compared to a dedicated Australian brand.

Speaker Change: As previously announced early next year, we will sunset the piano cruises, Australia brand selling the 28 year old Pacific explore and transferring piano, Australia has two remaining vessels to carnival cruise lines.

Josh Weinstein: Of course, we will still retain our leading presence in the Australian market, carrying over 60% of all Aussies... It is a great market for us, especially since the Australian summer coincides with a northern hemisphere winter, enabling our seasonal ships to capitalize on two summer periods. And now we get to optimize our presence in this market by consolidating into Carnival. Not only will we gain operational, administrative, and back-office scale, but we will ultimately have greater deployment flexibility compared to a dedicated Australian brand. At the same time, this move will further boost capacity for our highest returning brand, bringing the total to nine new ships joining Carnival Cruise Line since 2019.

Of course, we will still retain our leading presence in the Australian market.

Airing over 60% of all Aussie cruisers. It is a great market for us, especially since your Australian summer coincides with the northern hemisphere winter, enabling our seasonal shifts to capitalize on to summer periods.

Speaker Change: Now we get to optimize our presence in this market by consolidating into Carnival cruise line now.

Speaker Change: Not only will we gain operational administrative and back office scale, we will ultimately have greater deployment flexibility compared to a dedicated Australian brand.

Joshua Weinstein: At the same time, this move will further boost capacity for our highest returning brand, bringing the total to nine new ships joining Carnival Cruise Line fleet since 2019, including the successful ship of three vessels from Costa Cruises. These actions, combined with the two XL class ships scheduled for delivery in 2027 and 2028, will grow Carnival Cruise Line's capacity by about 50% over 2019. By 2028, the Carnival brand will represent 37% of our portfolio, up from 29%. As we continue to reshape our portfolio to maximize ROIC. Of course, our amazing destination experience, Celebration Key, purpose built for Carnival Cruise Line, will soon support that growth and bolster returns to incremental revenue uplift, coupled with improved fuel efficiency given its strategic location.

Speaker Change: At the same time this move will further boost capacity for our highest returning brands, bringing the total to nine new shifts joining carnival cruise line's fleet since 2019, including the successful shift of three vessels from Costa cruises.

Josh Weinstein: Including the successful delivery of three vessels from Costa Cruises. These actions, combined with the two XL class ships scheduled for delivery in 2027 and 2028, will grow Carnival Cruise Line's capacity by about 50% over 2019. By 2028, the Carnival brand will represent 37% of our portfolio, up from 29%. As we continue to reshape our portfolio to maximize ROI, Of course, our amazing destination experience celebration, purpose-built for Carnival Cruise Line, will soon support that growth and bolster returns through incremental revenue uplift coupled with improved fuel efficiency given its strategic location.

These actions combined with the two X L class ships scheduled for delivery in 2027 and 2028.

Speaker Change: Carnival cruise lines capacity by about 50% over 2019 by.

Speaker Change: By 2028, the Carnival brand will represent 37% of our portfolio up from 29% as we continue to reshape our portfolio to maximize our Oh I see.

Speaker Change: Of course, our amazing destination experience celebration key purpose built for Carnival cruise line will soon support that growth and bolster returns through incremental revenue uplift coupled with improved fuel efficiency given its strategic location.

Joshua Weinstein: We're introducing voyages to Celebration Key beginning in the second half of 2025 and ramp up to 18 ships calling Celebration Key in 2026. This quarter, we also delivered Queen Anne, Cunard's 4th Queen, with an amazing naming celebration in Liverpool, England, Cunard's birthplace. The streets of Liverpool were walled with tens of thousands of people joining the festivities as the city of Liverpool became the ship's official godparents. It was a historic moment and the first time an entire city ever christened a ship. The event generated overwhelming coverage and, as intended, broke booking records on the back of it.

Josh Weinstein: We're introducing voyages to Celebration Cay beginning in the second half of 2025 and ramping up to 18 ships calling it home in 2022. This quarter, we also delivered Queen Anne, Cunard's fourth queen, with an amazing naming celebration in Liverpool, England, on Cunard's birthday. The streets of Liverpool were filled with tens of thousands of people joining the festivities as the city of Liverpool became the ship's official garden.

Speaker Change: We're introducing voyages the celebration keep beginning in the second half of 2025 and ramp up to 18 ships, calling celebration key in 2020 six.

Speaker Change: This quarter, we also delivered Queen Anne Qunar, its fourth Queen with an amazing naming celebration in Liverpool, England, Qunar birth place the streets of Liverpool, where wall with tens of thousands of people joining the festivities as the city of Liverpool became the ships official godparents.

Speaker Change: It was a historic moment and the first time, an entire city ever Kristen a ship.

Josh Weinstein: It was a historic moment and the first time an entire city ever christened a show. The event generated overwhelming coverage and, as intended, broke booking records on the back end. The New Queen is a step forward in every way for Cunard, while still retaining the DNA of British elegance and refinery that the brand is known for. We enjoyed another high-profile naming event for a princess in Barcelona with godmother Hannah Waddington of Ted Lasso.

Speaker Change: The event generated overwhelming coverage and as intended broke booking records on the back of it.

Joshua Weinstein: The new Queen is a step forward in every way for Cunard's, while still retaining the DNA of British elegance and refinery that the brand is known for. We enjoyed another high-profile naming event for some princess in Barcelona with godmother Hannah Wattington of Ted Lasso fame. Some princess has had great media coverage leading up to and following the naming ceremony, with particular focus on its expansive specialty dining and beverage offerings and one of a kind magic castle experience. Some princess, the first of its class, has also been a big hit with guests as evidenced by outsized yield and high guest satisfaction scores.

Speaker Change: The new Queen is a step forward in every way for Qunar, while still retaining the DNA of British elegance and refinery that the brand is known for.

Speaker Change: We enjoyed another high profile naming of that for some princess in Barcelona, with godmother Hanno Waddington of Ted last little thing.

Josh Weinstein: Some Princess had great media coverage leading up to and following the naming ceremony, with particular focus on its expansive specialty dining and beverage office and one-of-a-kind Magic Castle Experience. Some Princess, the first of its class, has also been a big hit with guests, as evidenced by outsized yields and high guest satisfaction. Last but not least, we held a naming event for Carnival Firenza in Long Beach, California, home of Carnival's second ship, featuring fun Italian style, with Godfather Jonathan Bennett fresh off his Broadway stint starring in Spammable, welcoming fun Italian style to the West Coast, generated nearly 2.5 billion media impressions to date, and, of course, triggered a step up in book sales.

Speaker Change: Dumb Princess has had great media coverage, leading up to and following the naming ceremony with particular focus on its expansive specialty dining and beverage offerings and one of a kind magic castle experience.

Speaker Change: Princess the first of its class has also been a big hit with guests as evidenced by outsized yield and high guest satisfaction scores.

Joshua Weinstein: Last but not least, we held a naming event for Carnival Ferendi in Long Beach, California, home for Carnival's second ship featuring fun Italian style. With godfather Jonathan Bennett fresh off his Broadway stint starring in Spamins. Welcome to Fund Italian Style to the West Coast, generated nearly 2.5 billion media impressions to date, and of course, triggered a step-up in buildings. While these amazing new ships all contributed to the strong yield improvement we generated in the second quarter, even excluding them, yields on our existing fleet are double digits, demonstrating fundamental strength on a same ship basis. In addition, we completed the rollout of Starlink this quarter, another revenue-upless opportunity and a real game changer for our onboard connectivity experience, enabling us to deliver the same high-speed, Wi-Fi service available on land throughout our fleet.

Speaker Change: Last but not least we held the naming event for carnival forensic and long Beach, California home for Carnival second ship featuring fun Italian style with Godfather, Jonathan Bennett fresh off his Broadway stent starring in Spamalot well.

Speaker Change: Welcoming fun Italian style to the West coast generated nearly $2 5 billion media impressions to date and of course triggered a step up in bookings.

Josh Weinstein: While these amazing new ships all contributed to the strong yield improvement we generated in the second quarter, even excluding, yields on our existing fleet were double digits, demonstrating fundamental strength on a same ship basis. In addition, we completed the rollout of Starlink, Another Revenue Uplift Opportunity and a Real Game Changer for our Onboard Connectivity Experience, enabling us to deliver the same high-speed Wi-Fi service available on land throughout our ships. Not only does this technology provide our guests with more flexibility to stay connected, it enables our crew to stay in touch with friends and loved ones, and it enhances our onboard operational systems. It is a win-win.

Speaker Change: While these amazing new ships all contributed to the strong yield improvement we generated in the second quarter, even excluding them.

Speaker Change: On our existing fleet were up double digits, demonstrating fundamental strength on a same ship basis.

Speaker Change: In addition, we completed the rollout of Starlink this quarter, another revenue uplift opportunity and a real game changer for onboard connectivity experience, enabling us to deliver the same high speed Wi Fi service available on land throughout our sleep.

Joshua Weinstein: Not only does this technology provide our guests with more flexibility to stay connected, it enables our crew to stay in touch with friends and loved ones, and it enhances our onboard operational systems; a win, win, win. All told, our consistent track record, our book position, our focus on commercial activity improvement, our portfolio management, and the yet to be realized future benefits will receive from our celebration key destination development, build increased confidence in achieving the low to mid-single digit yield growth that out in our long-term targets. In fact, based on our upwardly revised guidance, we will be on average two-thirds of the way to achieving our three, twenty-twenty-six B-changed targets, even though for ALBD of $69, twelve percent ROIC, and a twenty percent reduction in carbon intensity after just one year.

Speaker Change: Not only does this technology provide our guests with more flexibility to stay connected.

Speaker Change: Naples, our crews to stay in touch with friends and loved ones and it enhances our onboard operational systems are we.

Speaker Change: Win win win.

Josh Weinstein: All told, our consistent track record, our book position, our focus on commercial activity improvement, our Portfolio Management, and the yet to be realized future benefits we'll receive from our Celebration Key Destination Development build increased confidence in achieving the low to mid-single-digit yield growth set out in our long-term targets. In fact, based on our externally revised guide, we will be, on average, two-thirds of the way to achieving our three 2026 speed change targets. Elizabeth Dove for an ALBD of $69.

Speaker Change: I'll talk a consistent track record our book position.

Speaker Change: Our focus on commercial activity improvement.

Speaker Change: Our portfolio management, and the yet to be realized future benefits will receive from our celebration key destination development bills increased confidence in achieving the low to mid single digit yield growth.

Speaker Change: And our long term targets.

Speaker Change: Correct.

Speaker Change: Based on our upwardly revised guidance, we will be on average two thirds of the way to achieving our 320 26 do you change targets EBITDA for a L. B D of $69, 12% Rois fee and a 20% reduction in carbon intensity after just.

Josh Weinstein: 12% ROIC and a 20% reduction in carbon intensity after just one year. With two years remaining, it gives us even greater confidence in achieving our targets. At the same time, we continue to aggressively manage down debt and interest expense while reducing the complexity of our capital structure, which David will elaborate on. The number of actions we've taken to improve our balance sheet this quarter puts us further down the path of our return to investment grade credit ratings over time. It's hard to believe, but in just over a month, it will have been two years since I had the privilege of stepping into the role of CEO.

Speaker Change: One year with two years remaining it gives us even greater confidence in achieving our target at.

Joshua Weinstein: With two years remaining, it gives us even greater confidence in achieving our targets. At the same time, we continue to aggressively manage down debt and interest expense while reducing the complexity of our capital structure, which David will elaborate on. The number of actions we've taken to improve our balance sheet this quarter puts us further down the path on our return to investment-grade credit ratings over time.

Speaker Change: At the same time, we continue to aggressively manage down debt and interest expense, while reducing the complexity of our capital structure, which David will elaborate on.

David: The number of actions, we've taken to improve our balance sheet. This quarter puts us further down the path on a return to investment grade credit ratings over time.

Joshua Weinstein: It's hard to believe, in just over a month, it will have been two years since I had the privilege of stepping into the role of CEO. I am very proud of all we've accomplished in such a short time. Credit for our achievements goes to our global team 160,000 strong. Everyone has worked very hard to deliver yet another strong quarter, solidifying an amazing twenty-twenty-four and setting us up well to top it in twenty-twenty-five. Equally important, they've all had a hand in delivering amazing vacation experiences and unforgettable happiness to three million get-again this quarter. So our two are amazing teams. Thank you.

David: It's hard to believe in just over a month. It would have been two years since I had the privilege of stepping into the role of CEO.

Josh Weinstein: I am very proud of all we've accomplished in such a short time. Credit for our achievements goes to our global team, 160,000 strong. Everyone has worked very hard to deliver yet another strong quarter, solidifying an amazing 2024 and setting us up well to top it in 2025. Equally important, they've all had a hand in delivering amazing vacation experiences and unforgettable happiness to 3 million guests this course. To our amazing team, thank you. And, of course, we couldn't do it without the support from our amazing travel agent partners and so many other stakeholders. Thanks to all. With that, I'll turn the call over to David. Thank you, Josh.

David: I am very proud of all we've accomplished in such a short time.

David: Credit for our achievements go to our global team 160000 strong.

David: Everyone has worked very hard to deliver yet another strong quarter.

David: <unk>, an amazing 'twenty, 'twenty, four and setting us up well to top it in 2025.

David: Equally important they have all had a hand in delivering amazing vacation experiences and unforgettable happiness 3 million guests yet again this quarter.

David: Their work to our amazing team.

Joshua Weinstein: And of course, we couldn't do it without the support from our amazing travel agent partners and so many other stakeholders. Thanks to all of you.

David: And of course, we couldn't do it without the support from our amazing travel agent partners and so many other stakeholders. Thanks to all of you.

David Bernstein: With that, I'll turn the call over to David. Thank you, Josh. I'll start today with a summary of our twenty-twenty-four second quarter results. Next, I'll provide the highlight of our third-quarter June guidance and some color on our improved full-year guidance. Then I'll finish up with an update on our refinancing and de-leveraging efforts.

Speaker Change: With that I'll turn the call over to David.

David: Thank you Josh I'll start today with a summary of our 'twenty 'twenty four second quarter results.

David Bernstein: I'll start today with a summary of our 2024 second quarter results. Next, I'll provide the highlights of our third quarter June guidance and some color on our improved full year guidance. Then I'll finish up with an update on our refinancing and deleveraging efforts. Now, let's turn to a summary of our second quarter results. Our bottom line exceeded March guidance by nearly $170 million as we outperformed once again. The outperformance was essentially driven by three things.

David: Next I'll provide a highlight of our third quarter June guidance and some color on our improved full year guidance.

David: Then I'll finish up with an update on our refinancing and deleveraging efforts.

David Bernstein: Let's turn to the summary of our second quarter results. A bottom line exceeded in March guidance by nearly $170 million as we outperformed once again. The outperformance was essentially driven by three things. First, favorability and revenue worth almost $65 million as yields came in up over 12 percent compared to the prior year. This was more than a point-and-a-half better than March guidance, driven by close insurance and ticker prices, as well as on-board spending. Second, cruise costs with outfueled per available lower birthday or ALBD came in flat compared to the prior year and were three points better than March guidance, which was worth over $85 million.

David: Let's turn to the summary of our second quarter results.

David: Ah Barnum line exceeded March guidance by nearly $170 million as we outperformed once again.

David: The outperformance was essentially driven by three things.

David Bernstein: First, favorability in revenue worth almost $65 million as yields came in up over 12% compared to the prior year. This was more than a point and a half better than March Guidance, driven by close-in strength in ticket prices, as well as on-board spending. Second, cruise costs without fuel per available lower birthday or ALBD came in flat compared to the prior year and were three points better than March guidance, which was worth over $85 million.

David: First favorability in revenue worth almost $65 million.

David: It came in up over 12% compared to the prior year.

David: This was more than a point and a half better than March guidance, driven by close in strength in ticket prices as well as onboard spending.

David: Second.

David: Cruise costs without fuel per available lower birthday, or a L. P. D came in flat compared to the prior year and were three points better than March cadence, which was worth over $85 million.

David Bernstein: Some cost savings were identified during the quarter, which flowed through as improvements to what full-year June guidance. However, most of the favorability and cruise costs for the second quarter was due to the timing of expenses between the quarters. And third, other operational improvements slightly offset by higher fuel prices and currency were worth $20 million. Per dams for the second quarter improved 6 percent versus the prior year, driven on both sides of the Atlantic by considerably higher ticket prices and improved on-board spending. At the same time, are European brands on their path back this store a clock hip and seat sore outside growth in their occupancy of over 10 percentage points as compared to the second quarter of 2023.

David: Some cost savings were identified during the quarter, which flowed through as improvements to our full year June guidance. However.

David Bernstein: Some cost savings were identified during the quarter, which flowed through as improvements to our full-year June guidance. However, most of the favorableability and cruise costs for the second quarter were due to the timing of expenses between the quarters and third. Other operational improvements slightly offset by higher fuel prices and currency will be worth $20 million. Per diems for the second quarter improved 6% versus the prior year, driven on both sides of the Atlantic by considerably higher ticket prices and improved onboard spending.

David: Most of the favorability in cruise costs for the second quarter was due to the timing of expenses between the quarters.

David: And third other.

David: Other operational improvements slightly offset by higher fuel prices and currency.

David: Worth $20 million.

David: Premiums for the second quarter improved 6% versus the prior year driven on both sides of the Atlantic by considerably higher ticket prices and improved to onboard spending.

David: At the same time, our European brands and they pass back the historical occupancy so outside growth in their occupancy up over 10 percentage points as compared to the second quarter of 2023.

David Bernstein: At the same time, our European brands on their path back to historical occupancy saw outside growth in their occupancy of over 10 percentage points as compared to the second quarter of 2023. Our second quarter was fantastic across the board, with strong demand delivering record revenues, record yields, record per diems, and record operating income. Now one thing to highlight about our third quarter tune guide. The positive trends we saw in the second quarter are expected to continue in the third. Yield guidance for the third quarter is set at a strong 8%.

David Bernstein: Our second quarter was fantastic across the board, which strong demand delivering record revenues, record yields, record per dams, and record operating income. Now one thing to highlight about our third quarter-tune guidance. The positive trends we saw in the second quarter are expected to continue in the third. Deal guidance for the third quarter is set at a strong 8 percent. The difference between the yield guidance for the third quarter and the second quarter yield improvement of over 12 percent is simply the result of the greater occupancy opportunity we had in the second quarter 2024 as we began sailing within our store clock in the second half of 2023.

David: Our second quarter was fantastic across the board with strong to me and delivering record revenues record yields record pretty Ams and record operating income.

David: Now one thing to highlight about our third quarter two guidance.

The positive trends, we saw in the second quarter are expected to continue in the third.

David: Yield guidance for the third quarter is set at a strong 8%.

David Bernstein: The difference between the yield guidance for the third quarter and the second quarter yield improvement of over 12% is simply the result of the greater occupancy opportunity we had in the second quarter of 2024 as we began sailing within our historical occupancy range in the second half of 2023. It is great to see that we anticipate continued strong per diem growth in the third quarter, which we are forecasting will drive the majority of the 8% yield. Turning to our improved full-year June guide. June guidance for net income is $1.55 billion, an improvement over our March guidance of approximately $275 million.

David: The difference between the yield guidance for the third quarter and the second quarter yield improvements of over 12% is simply the result of the greater occupancy opportunity. We had in the second quarter 'twenty 'twenty four as we began scaling within or historical occupancy range in the second half of 2023.

David: Hi.

David Bernstein: It is great to see that we anticipate continued strong pretty and growth in the third quarter, which we are forecasting will drive the majority of the 8 percent yield improvement.

David: It is great to see that we anticipate continued strong premium growth in the third quarter, which we are forecasting will drive the majority of the 8% yield improvement.

David Bernstein: Turning to our improved full year June guidance. June guidance for net income is $1.55 billion in improvement over our March guidance of approximately $275 million. Stathoulopoulos. This improvement was driven by three things. First, three quarters of a point increase in yields to approximately ten and a quarter percent, based on the considerably higher prices we have been seeing in booking trends so far this year, and the continued strength in demand we anticipate going forward. All of this is expected to drive an increase in net revenue of about $190 million. Second, as I previously mentioned, we identified costs that we flow through to a full-year June guidance.

David: Turning to our improved full year June guidance.

David: June guidance for net income is $1.55 billion, an improvement over our March guidance of approximately $275 million.

David Bernstein: This improvement was driven by three things. First, a three-quarters of a point increase in yields to approximately 10 and a quarter percent based on the considerably higher prices we have been seeing in booking trends so far this year and the continued strength in demand we anticipate going forward. All of this is expected to drive an increase in net revenue of about $190 million.

David: This improvement was driven by three things.

First three quarters of a point increase in yields to approximately 10 in a quarter percent based on the considerably higher prices, we have been seeing in booking trends. So far this year and the continued strength in demand we anticipate going forward.

David: All of this is expected to drive an increase in net revenue of about $190 million.

David: Circuit.

David Bernstein: As I previously mentioned, we identified cost savings that we flowed through to a full year June guide. However, they will be partially offset by higher variable compensation driven by our forecast for improved operating income. We are flowing through $25 million of cost savings for the pool. And third, an improvement in net interest expense of nearly $60 million, driven by our second quarter refinancing, repricing, and debt prepayment activities. The strong 10.25% improvement in 2024 yields is a result of the increase in all the component parts.

David: As I previously mentioned, we identified cost savings that we flowed through to our full year June guidance.

David Bernstein: However, they will be partially offset by higher variable compensation driven by our forecast for improved operating income. Next, we are flowing through 25 million of cost savings for the full year. And third, an improvement in net interest expense of nearly $60 million driven by our second quarter refinancing, reprising, and debt prepayment activities. The strong ten and a quarter percent improvement in 2024 yields is a result of the increase in all the component parts. Higher ticket prices, higher on board spending, and higher occupancy at historical levels, with all three components improving on both sides of the Atlantic.

David: However, they will be partially offset by higher variable compensation driven by our forecast for improved operating income.

Speaker Change: Yeah, we are flowing through 25 billion of cost savings for the full year.

Speaker Change: And third an improvement in net interest expense of $60 million, driven by our second quarter refinancing repricing and debt prepayment activities.

Speaker Change: The strong 10.25% improvements in 2020 for yields is a result of the increase in all the component parts.

David Bernstein: Higher ticket prices, higher onboard spending, and higher occupancy at historical levels with all three components improving on both sides of the Atlantic. We recognize that even within our industry-leading cost structure, there will always be cost opportunities which we can focus on and harvest over time. While we identified cost-saving opportunities during the second quarter, we will not stop there. We will continue our endless quest for greater efficiency in our cost structure. I will finish up with a summary of our refinancing and deleveraging. During the second quarter, we generated cash from operations of $2 billion and free cash flow of $1.3 billion.

Speaker Change: Your ticket prices higher onboard spending and higher occupancy at historical levels with all three components improving on both sides of the Atlantic.

David Bernstein: We recognize that even with our industry-leading cost structure, there will always be cost opportunities which we can focus on in harvest over time. While we identify cost saving opportunities during the second quarter, we will not stop there. We will continue our endless quest for greater efficiency in our cost structure.

Speaker Change: We recognize that even within our industry leading cost structure.

Speaker Change: I always be cost opportunities, which we can focus on and harvest over time.

Speaker Change: While we identify cost savings opportunities during the second quarter, we will not stop there we will continue our endless quest for greater efficiency in our cost structure.

David Bernstein: I will finish up with a summary of our refinancing and e-leveraging efforts. During the second quarter, we generated cash from operations of $2 billion and free cash flow of $1.3 billion. We took delivery of one spectacular new chef, Queen Anne, and drew on her associated export credit facility, continuing our strategy to finance our new bill program at preferential interest rates. Our efforts to proactively manage our depot file continues throughout the quarter. We prepaid $1.6 billion of secured term loan facilities. We also reprised approximately $2.75 billion of the same secured term loan facilities. We issued $535 million of unsecured notes to 2030, re-penancing our unsecured notes to 2026, extending those maturities and reducing interest expense.

Speaker Change: I will finish up with a summary of our refinancing and deleveraging efforts during the second quarter, we generated cash from operations of $2 billion and free cash flow of $1 3 billion. We took delivery of one spectacular new ship Queen Anne and drew on her associated export.

David Bernstein: We took delivery of one spectacular new ship, Queen Anne, and drew on her Associated Export Credit Facility, continuing our strategy to finance our new bill program at preferential interest rates. Our efforts to proactively manage our debt profile continued throughout the quarter. We prepaid $1.6 billion of secured term loan facilities, and we also repriced approximately $2.75 billion of the same secured term loan facility.

Speaker Change: Credit facility, continuing our strategy to finance, our Newbuild program.

Speaker Change: Preferential interest rates.

Speaker Change: Our efforts to proactively manage our debt profile continued throughout the quarter.

Speaker Change: We prepaid $1 6 billion of secured term loan facilities.

Speaker Change: We also repriced approximately $2 75 billion of the same secured term loan facilities and we issued $535 million.

David Bernstein: And we issued 535 million of unsecured notes to 2030, refinancing our unsecured notes to 2026, extending those maturities and reducing interest expense. These transactions simplified our capital structure, reduced net interest expense in the second quarter by $10 million, and will reduce net interest expense for 2024 by $55 million and $85 million on an annualized basis. Our decision to prepay $1.6 billion of debt during the second quarter was based on our strong liquidity, our improved financial performance, and our optimism about the future.

Speaker Change: Unsecured notes due 'twenty 30 refinancing our unsecured notes due 2026, extending those maturities and reducing interest expense.

David Bernstein: These transactions simplified our capital structure, reduced net interest expense in the second quarter by $10 million. We will reduce net interest expense for 2024 by $55 million and $85 million on an annualized basis. Our decision to prepay $1.6 billion of debt during the second quarter was based on our strong liquidity, our improved financial performance, and our optimism about the future. We will continue to look for more opportunistic refinancing over time. Our leverage metrics will continue to improve throughout 2024 as our EBITDA continues to grow and our debt levels improve.

Speaker Change: These transactions simplified our capital structure reduce net interest expense in the second quarter by $10 million.

Speaker Change: We will reduce net interest expense for 2024 by $55 million and $85 million on an annualized basis.

Speaker Change: Our decision to prepay, one 6 billion of debt during the second quarter was based on her strong liquidity.

Speaker Change: <unk> financial performance and our optimism about the future.

Speaker Change: We will continue to look for more opportunistic refinancings overtime.

David Bernstein: We will continue to look for more opportunistic refinancing opportunities over time. Our leverage metrics will continue to improve throughout 2024 as our EBITDA continues to grow and our debt levels improve. Using our June guidance EBITDA of $5.83 billion, we expect a two-term improvement in net debt-to-EBITDA leverage compared to year-end 2023, approaching 4.5 times and positioning us two-thirds of the way down the path to investment-grade metrics. Looking forward, we expect substantial free cash flow driven by our ongoing operational execution and the lowest new build order book in decades to deliver continued improvements in our leverage metrics and balance, moving Now Operator, let's open the call for questions.

Speaker Change: Leverage metrics will continue to improve throughout 2024 as our EBITDA continues to grow.

Debt levels improve youth.

David Bernstein: Andrew. Using our June guidance EBITDA of $5.83 billion, we expect a two-turn improvement in net debt to EBITDA leverage compared to year end 2023, approaching 4.5 times and positioning us two-thirds of the way down the path to investing great metrics. Looking forward, we expect substantial free cash flow driven by our ongoing operational execution and the lowest new build order book in decades to deliver continued improvements in our leverage metrics and balance sheet, moving us further down the road to rebuilding our financial fortress while continuing the process of transferring value from debt holders back to shareholders.

Speaker Change: Using our June guidance EBITDA of 5.83 billion, we expect that to turn improvement in net debt to EBITDA leverage compared to year end 2023 approaching four five times and positioning us to search the way down the path to investment grade metrics.

Speaker Change: Looking forward, we expect substantial free cash flow driven by our ongoing operational execution.

Speaker Change: The lowest Newbuild order book in decades to deliver continued improvements in our leverage metrics and balance sheet moving us further down the road to rebuilding our financial fortress, well continuing the process of transferring value from debt holders back to shareholders.

Operator: Now, operator, let's open the call for questions.

Speaker Change: Now operator, let's open the call up for questions.

Operator: Thank you.

Speaker Change: Thank you we will now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question Ken.

Operator: Thank you. We will now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue.

Operator: We will now be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tunnel indicates your line is in the question queue. You may press start two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator: You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star. Our first question comes from the line of Matthew Boss with J.P. Morgan. Please go ahead with your question. Great, thanks and congrats on a really nice question. Thank you very much.

Speaker Change: You May press star two if you'd like to remove your question from the queue.

Speaker Change: Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star.

Speaker Change: Our first question comes from the line of Matthew Boss with Jpmorgan. Please go ahead with your question.

Matthew Boss: Our first question comes from the line of Matthew Boss with JP Morgan.

Matthew Robert Boss: Please go ahead with your question. Great, thanks, and congrats on a really nice quarter. Thanks very much, Matt.

Matthew Robert Boss: Great. Thanks, and congrats on a really nice corner.

Thanks, very much Matt.

Josh Weinstein: So, Josh, maybe you could elaborate on the global momentum that you're seeing, notably any callouts in Europe, and then just given the booked position for 2025, which you cited as higher than 24 a year ago, how does that translate to the forward progression of pricing power and just the promotional backdrop, maybe versus historical periods in your view? Sure. So global momentum. I think that's probably the key term. It is global momentum.

Joshua Weinstein: So, Josh, maybe could you elaborate on the global momentum that you're seeing, notably any call outs in Europe?

Speaker Change: Josh maybe could you elaborate on the global momentum that you've seen notably any callouts in Europe, and then just given the booked position for 2025, which you cited is higher than 24, a year ago, how does that translate to the forward progression of pricing power and just the promotional backdrop maybe versus historical.

Joshua Weinstein: And then just given the book position for 2025, which you cited as higher than 24 a year ago, how does that translate to the forward progression of pricing power and just the promotional backdrop, maybe versus historical periods in your view? Sure. So, a global momentum, I think that's probably the key term. It is global momentum. And so, we're seeing strength from our North American brands, from our European brands.

Speaker Change: [noise] periods and in your view.

Josh: Sure. So our global momentum I think that's probably the key term it is a global momentum and so we're seeing strength from our North American brands from a from a European brands have you started hearing me say probably about six quarters ago.

Josh Weinstein: And so we're seeing strength from our North American brands, from our European brands, as you know, you started hearing me say probably about six quarters ago. Diversity, sometimes it helps, and sometimes you have to wait a little bit, because different places come out of different situations at different times.

Joshua Weinstein: You started hearing me say probably about six quarters ago, diversity sometimes it helps, and sometimes you got to wait a little bit because different places come out of different situations at different times. And this is the strength that we're seeing right now in this portfolio. And we're really hitting it on all cylinders, which is really gratifying. North America, the booking curve is higher than it's ever been; in Europe, it's highest in the last 15 years. So, the teams are doing a really good job of speaking to the consumer, pricing things right, and getting people on our ships and happy.

Josh: Diversity, sometimes it helps and sometimes you got to wait a little bit because different places come out of different situations in different times and this is the strength that we're seeing right now in this portfolio and we're really hitting on.

Josh Weinstein: And this is the strength that we're seeing right now in this portfolio. And we're really hitting it on all cylinders, which is really gratifying. You know, in North America, the booking curve is higher than it's ever been in Europe, it's highest in the last 15 years.

Josh: On all cylinders, which is which is really gratifying North America. The booking curve is higher than it's ever been in Europe. Its highest in the last 15 years. So the teams are doing a really good job of speaking to the consumer pricing things right and getting people on our ships and happy.

David Bernstein: So the teams are doing a really good job of speaking to the consumer, pricing things right, and getting people on our ships and happy. As far as 2025 goes, you know, this is the first year that where we currently are, where we've been able to stop fighting fires in the short term while figuring out how to also extend the booking curve and trying to do both of those things at once, which is not an easy balance for revenue managers to have to do and for brands to do.

Matthew Robert Boss: As far as 2025 goes, you know, this is the first year that where we currently are, where we've been able to stop firefighting in the short term while figuring out how to also extend the booking curve and trying to do both of those things at once, which is not an easy balance for revenue managers to have to do in the brands to do. So, I do feel like we are firmly positioned on, although it is early days. As you heard us say on the call, you know, being ahead in bookings and ahead in pricing is a good place to be, and our team can really focus on optimizing that longer term period, which is exactly what they're doing.

Josh: As far as 2025 goes you know this is the first year.

Josh: Where we currently are where we've been able to stop firefighting in the short term while figuring out how to also extend the booking curve and trying to do both of those things at once which is not an easy balance for revenue managers to have to do in the brands to do so I do feel like we are we are firmly positioned although it is early.

David Bernstein: So I do feel like we are firmly positioned, and although it is early days, as you heard us say on the call, being ahead in bookings and ahead in pricing is a good place to be, and our team can really focus on optimizing that longer-term period, which is exactly what is great color, best of luck. Thank you. Our next question comes from the line of Steve Wozinski with Stifel. Please proceed with your question. Hey guys, good morning.

Josh: Days as you you've heard us say on the call.

Josh: You know being ahead in bookings are ahead in pricing is a good place to be and our team can really focus on optimizing that longer term period, which is exactly what they're doing.

Steven Wieczynski: It's a great color; best to block. Thank you.

Speaker Change: That's great color best of luck. Thank you.

Speaker Change: Thank you. Our next question comes from the line of Steve <unk> with Stifel. Please proceed with your question.

Steven Wieczynski: Our next question comes from the line of Steve Wiesensky with Default. Please proceed with your question. Thank you guys, good morning. So, Josh, look, I know it's still early on, but your commentary around 2025 bookings is really encouraging at this point. To add on to the last question, could you elaborate a little bit more about where you're seeing that strength in 2025?

Speaker Change: Hey, guys good morning.

David Bernstein: So Josh, you know, look, I know it's still early on, but your commentary around 2025 bookings is, you know, really encouraging at this point. And, you know, to add on to the last question there, could you elaborate a little bit more about where you're seeing that strength in 2025, is the strong demand pretty much across the board? You know, or are there certain brands or itineraries that are showing, you know, more strength versus, you know, others? Yeah, at this point, I'll just tell you it's global. It's the brands, and it's the deployments.

So Josh you know look I know, it's still early on but your commentary around 2020 bookings is it was it was really encouraging at this point and.

To add onto the last question there I mean could you elaborate a little bit more about.

Speaker Change: You know where youre seeing that strength.

Speaker Change: In 2025 is the strong demand pretty much.

Joshua Weinstein: Is the strong demand pretty much across the board, or are there certain brands or itineraries that are showing more strength versus others?

Speaker Change: The board or are there certain brands or itineraries that are showing.

Speaker Change: More strength versus others.

David Bernstein: So the brands are doing an extraordinarily good job of getting their messages out and getting people interested. And there's a lot of hard work behind that across the commercial space. So I wouldn't give any shout outs one way or another, because we're seeing it so broadly.

Joshua Weinstein: At this point, I'll just tell you, it's global. It's the brands, and it's the deployments. So, the brands are doing an extraordinarily good job of getting their messages out and getting people interested, and there's a lot of hard work behind that across the commercial space.

Speaker Change: Yeah at this point I will just tell you it's it's global.

Speaker Change: It's the brands and this is the deployment. So the brands are doing an extraordinarily good job of getting their messages out and getting people interested and theres a hard a lot of hard work behind that across the commercial space. So.

David Bernstein: So, I wouldn't give any shout outs one way or another because we're seeing it so broadly. Okay, and then, yeah, sorry to have a good.

Speaker Change: I wouldn't give any shout outs, one way or another because we're seeing it so broadly.

David Bernstein: Josh also talked about the portfolio modifications we made which should help in 2025 as well as the celebration key. And keep in mind, on top of that, we also don't have any capacity increase next year; it's relatively flat, so I hope that should provide us with some pricing power in 2025 as we move forward. Okay, thanks. Thanks for that, David. And a second question, you know, a bigger picture question around capital allocation. So, you know, based on how strong early demand is for, you know, for next year's bookings, it just doesn't seem like there's any slowdown at this point taking place.

Speaker Change: And then.

Speaker Change: I'm sorry, yes, so Josh also talked about the portfolio modifications.

David Bernstein: Yeah, so, you know, Josh also talked about the portfolio modifications we made, which should help in 2025, as well as Celebration Key.

Speaker Change: Modifications, we named which should help in 2020 behind as well as celebration key and keep in mind on top of that we also don't have capacity increase next year, it's relatively flat so that should provide us with some pricing power in 2025, as we move through the booking cycle.

David Bernstein: And keep in mind, on top of that, we also don't have capacity increase next year; it's relatively flat. So, I hope that should provide us with some pricing power in 2025 as we move through the booking cycle.

David Bernstein: Okay, thanks. Thanks for that, David.

Speaker Change: Okay. Thanks for that David and the second question a bigger picture question.

David Bernstein: So, I guess the question is, if we look at a year from now, and bookings continue to look solid, your revenue targets are essentially in sight, and you're even closer to an investment grade rating, is it fair to think, you know, you guys could be in a position to bring the dividend back to this story? I mean, just think it's another important milestone and something that investors are becoming, you know, more focused on. Thanks. You know, I'll probably sound like a broken record here, too.

Steven Wieczynski: And second question, you know, a bigger picture question around capital allocation. So, you know, based on how strong early demand is for, you know, for next year bookings. You know, it just doesn't seem like there's any slowdown at this point, you know, taking place.

Speaker Change: <unk> capital allocation. So you know based on how strong early demand is for you know for next year bookings you know it just doesn't seem like there's any slowdown at this point.

Speaker Change: Taking place so I guess just the question is if we look out a year from now and bookings continue to look solid your sea change targets are essentially insight and you are even closer to an investment grade rating. I mean is it fair to think that you guys could be in a position to you know to bring the dividend back to this story I mean, just think it's another important milestone in <unk>.

Joshua Weinstein: So, guess, you know, guess the question is, if we look at a year from now and bookings continue to look solid, your sea change targets are essentially inside and you're even closer to an investment grade rating. I mean, is it fair to think that you guys could be in a position to bring the dividend back to this story? I mean, just think it's another important milestone and something that investors are becoming, you know, more focused on. Thanks.

Speaker Change: Something that investors are becoming.

Speaker Change: More focused on thanks.

Joshua Weinstein: You know, I'll probably sound like a brick record, brick record here, too. You know, right now our priority is to generate all that free cash, low paydown debt, and restring from the balance sheet. And in that process, returning value from the debt side to the equity holders.

Speaker Change: I, probably sound like a broken record or near record here to you know right now our priority is generating all that free cash flow pay down debt and re strengthened the balance sheet and in that process returning value from from the debt side to the equity holders I can't I can't wait to have those conversations, but I'd say that's premature we got a lot of work to do.

David Bernstein: You know, right now, our priority is to generate all that free cash flow, pay down debt, and re-strengthen the balance sheet, and in that process, return value from the debt side to the equity holders. I can't wait to have those conversations, but I'd say that's premature.

Joshua Weinstein: I can't wait to have those conversations, but I'd say that's premature. You know, we've got a lot of work to do, and when we get there, you know, you'll be the first to know, Steve.

David Bernstein: You know, we've got a lot of work to do, and when we get there, you'll be the first to know, Steve. Okay, thanks guys. Appreciate it. Thank you. Our next question comes from the line of Patrick Scholes with Truist Securities. Please proceed with your question. Hi. Good morning. Good morning.

Speaker Change: And and.

Speaker Change: And when we get there you know you'll be the first to know.

Speaker Change: [laughter], Okay. Thanks, guys appreciate it alright.

Steven Wieczynski: Okay, thanks, guys. Appreciate it.

Unnamed: All right. Thank you.

Thank you. Our next question comes from the line of Patrick Scholes with two Securities. Please proceed with your question.

Patrick Scholes: Our next question comes from the line of Patrick's goals with true securities. Please proceed with your question. Hi. Good morning.

Patrick Scholes: Hi, good morning.

Speaker Change: Good morning.

Patrick Scholes: I have some questions on return on invested capital. First one, and then I'll have a follow-up question. What kind of ballpark return on invested capital?

Josh Weinstein: I have some questions on return on invested capital. First one, and then I'll have a follow-up question. What kind of ballpark return on invested capital do you target for Celebration Key? I wonder if you could give us some color on that.

Speaker Change: There were some questions on a return on invested capital our first one and then I'll have a follow up question.

Patrick Scholes: What kind of ballpark return on invested capital do you target for a celebration T. I Wonder if you could give us some color on that thank you.

David Bernstein: Do you target for celebration key? I want to give us some color on that.

Joshua Weinstein: Thank you. Yeah, you know, what we've talked about is, you know, you could almost look at this like a new build investment. And so from a new build perspective, we're looking for at least mid to high teams, and we'd expect no less from, you know, our land based investments as well. And obviously, the beauty of Celebration Key is it will benefit across, you know, dozens of ships over time, not one new build. Okay, I follow up question: you know, certainly with a new public, an existing company going public in the luxury river space, you know, they're doing 30% ROIC.

Josh Weinstein: Thank you. Yeah, you know, what we've talked about is, you know, you could almost look at this like a new build investment. And so from a new build perspective, we're looking for at least mid-to-high teams, and we'd expect no less from, you know, our land-based investments as well. And obviously, the beauty of celebration key is it benefits across, you know, dozens of ships over time, not just one new build.

Speaker Change: Yeah, you know what we've what we've talked about as you know you could almost look at this like a newbuild investment and so from a newbuild perspective, we're looking for at least mid to high teens, and we would expect no less from you know our land based investments as well and obviously the beauty of a celebration key as it will benefit across dozens of ships over.

Speaker Change: Time, not one newbuild.

Josh Weinstein: Okay, a follow-up question, you know, certainly with a new public company, a new existing company going public in the luxury river space, they're doing 30% ROIC. Now, granted, it's a bit of a niche, but would you ever rule out you folks getting in that line of business? You know, I certainly could envision Seaborne River Cruises being quite popular and a good crossover for your existing customers. Just some thoughts around that.

Speaker Change: Okay. A follow up question, you know certainly with our new public our new and existing company going public in the luxury River space you know, they're doing 30% ROIC now granted it's bit of a niche you know would you ever rule out you folks getting in that lineup.

Joshua Weinstein: Now granted, it's a bit of a niche, you know. Would you ever rule out, you folks getting in that line of business? You know, I certainly could envision seaborne river cruises being quite popular and a good crossover for your existing customers. Just some thoughts around that, thank you. You know, we've looked at river cruising in the past, and I wouldn't say, you know, we'll never look at it again. It's a niche, and it's rather small, and for something like us to move the needle, I have to be pretty grand. And as you've heard me say before, Patrick, you know, I think if we focus on our brands and we focus on doing all the things that we do in the normal course better, we'll make much more of an impact on this business.

Speaker Change: The business you know I, certainly could envision a seaborne river cruise has been being quite popular and a good crossover for your existing customers or just some thoughts around that thank you.

Josh Weinstein: Thank you. You know, we've looked at river cruising in the past, and I wouldn't say we'll never look at it again. It's just, it's a niche.

Speaker Change: We've looked at river cruising in the past and I wouldn't say that.

Speaker Change: Never looked at it again, it's just it's a niche and it's rather small and for something like us to move the needle and have to.

Speaker Change: It'd be pretty pretty Grand and as you've heard me say before Patrick I think if we focus on our brands and we focus on doing all the things we do in the normal course, better will make much more of an impact on this business.

Josh Weinstein: And it's rather small. And for something like us to move the needle, it'd have to be pretty, pretty grand. And as you've heard me say before, Patrick, you know, I think if we focus on our brands and we focus on doing all the things that we do in the normal course better, we'll make much more of an impact on the. Okay, Josh, I appreciate it. Thank you. Thanks, Patrick. Thank you. Our next question comes from the line of Ben Chaiken with Mizzou Hill. Please proceed with your question. Hey, good morning.

Patrick Scholes: Okay, Josh, I appreciate it. Thank you.

Josh: Okay, Josh I appreciate it. Thank you thanks Patrick.

Patrick Scholes: Thanks, Patrick. Thank you.

Speaker Change: Thank you. Our next question comes from the line of Ben Chaiken with Mizuho. Please proceed with your question.

Ben Chaiken: Our next question comes from line of Ben Chagan with Mizuhau. Please proceed with your question. Hey, good morning.

Ben Chaiken: Hey, good morning.

David Bernstein: You're two-thirds of the way to your 2026 targets with two years remaining. As you think about the remaining bridge to your targets and the toggle between costs and yields, do you feel tied to a specific yield requirement or threshold? Or is there enough opportunity on the cost side to generate the operating leverage necessary to reach your goals and then related costs will be better in the quarter? Can you maybe provide a little more, you know, greater specifics around what you're seeing or where you're getting more operating leverage than expected? And then I have one quick follow-up. Thanks.

Ben Chaiken: You're two-thirds of the way to your 2026 targets with two years remaining.

Ben Chaiken: You're two thirds of the way to your 2026 targets with two years remaining as you think about the remaining bridge to your targets in the toggle between costs and yields do you feel tied to a specific yield requirement or threshold or is there enough opportunity on the cost side to generate the operating leverage necessary to reach your goals and then related.

Ben Chaiken: As you think about the remaining bridge to your targets and the toggle between costs and yields, do you feel tied to a specific yield requirement or threshold, or is there enough opportunity in the cost side to generate the operating leverage necessary to reach your goals? And then related costs were better in the quarter.

Speaker Change: Costs were better in the quarter can.

David Bernstein: Can you maybe provide a little greater specifics around what you're seeing or where you're getting more operating leverage than expected, and then I have one quick follow-up. Thanks.

Speaker Change: Can you maybe provide a little more.

Speaker Change: Greater specifics around what you're seeing or where you're getting more operating leverage than expected and then I have one quick follow up thanks.

Joshua Weinstein: So, on the first question, you know, we're going to move forward as a company trying to focus on both certainly, you know, generating outside revenue versus our historical norms and maintaining our cost leadership position. We set out, when we set out to see change, you know, a basic math that would tell you from a pricing perspective after we get the occupancy back, we're looking at low to mid-single digit price increases on the revenue side and that's certainly what I expect and I expect that to continue, you know, well beyond sea change. We also need to do a good job of managing the cost.

Josh Weinstein: So on the first question, you know, we're going to move forward as a company trying to focus on both, certainly, you know, generating outsized revenue versus our historical norms and maintaining our cost leadership position. We set out, when we set out C-Change, you know, the basic math that would tell you from a pricing perspective, after we get the occupancy back, we're looking at low to mid single-digit price increases on the revenue side. And that's certainly what I expect.

Speaker Change: So on the first question you know, where we're going to move forward as a company trying to focus on both certainly you know generating outsized revenue versus our historical norms and maintaining our cost leadership position, we set out when we set out sea change.

Speaker Change: Our basic math that would tell you from a pricing perspective after we get the occupancy back we're looking at low to mid single digit.

Speaker Change: Price increases on the revenue side, and that's certainly what I expect and I expect that to continue.

Josh Weinstein: And I expect that to continue, you know, well beyond C-Change. We also need to do a good job of managing the cost. So I don't think we have to tether C-Change to any one particular thing.

Speaker Change: Well beyond the sea change, we also need to do a good job of managing the cost. So I don't I don't think we have to tether sea change to any one particular thing, it's just doing our jobs well across the board.

David Bernstein: So I don't think we have to tether sea change to any one particular thing. It's just doing our jobs well across the board.

David Bernstein: As far as, yeah, David, do you want to go ahead? Yeah, as far as cost is concerned. In the second quarter, remember, we did identify cost savings, but the majority of the favorability was timing between the quarters. But if you look broadly at the year, we are seeing a number of opportunities in the sourcing area, other efficiencies as well. So it is broad base. There isn't one any one particular item. Our teams are working hard all across the board, and there are hundreds of cost savings items that float into that full year savings. Got it.

Speaker Change: As far as Yeah, David you want to go ahead, yeah as far as cost is concerned in the second quarter remember, we did identify cost savings, but the majority of the favorability was timing between the quarters, but if you look broadly at the year, we are seeing a number of opportunities in the sourcing area other efficiencies.

Josh Weinstein: It's just doing our jobs well across the board. As far as, yeah, David, you want to go ahead? Sourcing Area, other officials, as well. So it is broad-based. There isn't any one particular item.

Speaker Change: As well so it is broad base there isn't one any one particular item. Our teams are working hard all across the board and there are hundreds of cost savings items that flowed into that full year savings.

David Bernstein: Our teams are working hard all across the board, and there are hundreds of cost-saving measures that flowed into that. Got it. And then, and then Josh, in the quarter, you announced that P&O Australia would sunset into Carnival. You still have a number of brands across geographies and customer preferences. Do you feel there are other areas of the portfolio you can streamline and realign? Thanks. Yeah, you know, P&O Cruises in Australia is a bit unique; it is a dedicated brand to a tremendous market, but it's a small market. And so the ability to really grow a single-source market brand of that size is not very feasible.

Josh: Got it and then and then Josh in the in the quarter, you announced the piano, Australia will sunset into Carnival, you still have a number of brands across geographies and customer preferences do you feel there are other areas of the portfolio you can streamline and realign thanks yeah.

Joshua Weinstein: And then Josh, in the quarter, you announced the PMO Australia will sunset into Carnival. You still have a number of brands across geographies and customer preferences. Do you feel there are other areas of the portfolio you can streamline in real on?

Joshua Weinstein: Thanks. Yeah, you know, PMO cruises in Australia is a bit unique. It's a dedicated brand to a tremendous market, but it's a small market. And so the ability to really grow is a single, single source market brand of that size is not very feasible. And so we're going to get a lot of operational synergy out of the moves that we made with PMO Australia. You know, we've been looking at our portfolio management for the last couple of years, as you know, moving ships from one brand to another, retiring ships, and formulating our growth plans. We'll continue to do that.

Josh: Yeah.

Speaker Change: Piano cruises.

Speaker Change: Australia is is is it is a bit unique.

Speaker Change: It is a dedicated brand to a tremendous market, but it's a small market.

Speaker Change: And so the ability to really grow as a single single source market brand of that of that size is not very feasible and so we're going to get a lot of operational synergy out of the moves that we made with P. In Australia. You know we've been we've been looking at our portfolio management for the last couple of years as you know moving ships.

Josh Weinstein: And so we're going to get a lot of operational synergy out of the moves that we made with P&O Australia. You know, we've been looking at our portfolio management for the last couple of years, as you know, moving ships from one brand to another, retiring ships, formulating our growth plans. We'll continue to do that. There's nothing on the horizon, but it's something we do on a very frequent basis to try to figure out how to optimize over time. I got it.

Speaker Change: From one brand to another retiring ships formulating our growth plans, we will continue to do that there's there's there's nothing on the horizon, but it's something we do on a on a very frequent basis to try to figure out how to optimize over time.

Joshua Weinstein: There's nothing on the horizon, but it's something we do on a very frequent basis to try to figure out how to optimize over. for time. Got it.

Speaker Change: Got it thank you.

Robin Farley: Thank you. Our next question comes from the line of Robin Farley, with UBS. Please push the video question. Great. Thanks. The commentary has been very helpful, thanks in addressing a lot of the concerns out there, especially, I think, showing that slide you have showing the momentum and cue for pricing in particular. So thank you for giving that additional clarity. Just one question. There have been some headlines out there about some of the Greek islands limiting the number of ships that might call next year. And it's not even clear whether that's official or just something that is being considered.

Speaker Change: Thank you. Our next question comes from the line of Robin Farley with UBS. Please proceed with your question.

David Bernstein: Thank you. Thank you. Our next question comes from the line of Robin Farley with UBS. Please proceed with your question. Great, thanks.

Robin Margaret Farley: Great. Thanks the.

Josh Weinstein: The commentary has been very helpful, thanks, in addressing a lot of the concerns out there, especially, I think, showing that slide you have showing the momentum in Q4 pricing in particular. So, thank you for giving that additional clarity. Just one question. There have been some headlines out there about some of the Greek islands, you know, limiting the number of ships that might call there next year. It's not even clear whether that's official or just something that is being considered.

Speaker Change: The commentary has been very helpful. Thanks, and addressing a lot of the concerns out there, especially I think showing that slide you have showing the momentum in Q4 pricing in particular.

Thanks for giving that additional clarity just just one question.

Speaker Change: So the headlines out there about some of the Creek Island, you know limiting the number of ships that my call next year, and it's not even clear, whether that's official or or or just something that is being considered.

Robin Farley: It can just put some context around that, whether that would just be changing a scenery to go somewhere on a Tuesday rather than a Wednesday, as opposed to not being able to go there at all. In other words, is there anything when we think about, there have been different ice theory changes in the last year, so looking ahead to next year. Is that anything that we should be thinking about? Thanks.

Speaker Change: You just put some context around that and whether.

Speaker Change: Whether that would just be you know changing our hit rate to go somewhere on a tuesday, rather than a wednesday rate right as opposed to not being able to go there at all in other words is there any.

Speaker Change: When we think about that.

Speaker Change: Ben.

Speaker Change: Itinerary changes in the last year, so that yeah. So looking ahead to next year is that anything.

Speaker Change: That we should be thinking about thanks.

Joshua Weinstein: Sure. So obviously we have a great relationship with Greece and its local communities. And it's our job to make sure we're doing things sustainably. In fact, a lot of the news that's come up lately, these islands have had caps in place for many years, and we work with them. And we have work, and then we'll continue to work with them as we can really figure out how to coincide with their needs as well. I mean, that's our job. So I don't expect anything incredibly disruptive. Unfortunately for us, this is just part of the course. We do this all the time in lots of places, and you've seen it work successfully in places like Dubrovnik, and we'll continue to partner with local communities who want our economic benefit and move on.

Josh Weinstein: Sure. So, obviously, we have a great relationship with Greece and its local communities. And, you know, it's our job to make sure we're doing things sustainably. In fact, you know, a lot of the news that's come up lately, these islands have had caps in place for many years. And we work with them, and we have worked with them, and will continue to work with them as we can really figure out how to coincide with their needs as well. I mean, that's our job.

Speaker Change: Sure. So obviously, we have a great relationship with with Greece, and and its local communities and.

Speaker Change: It's our job to make sure we're doing things sustainably in fact.

Speaker Change: The news that's come up lately. These islands have had caps in place.

Speaker Change: For many years and we work with them and we have worked with them will continue to work with them as we can we can really figure out how to coincide with their needs as well I mean, that's our job. So I don't expect anything incredibly disruptive we unfortunately for US. This is just par for the course that we do this all the time.

Josh Weinstein: So I don't expect anything incredibly disruptive. Unfortunately for us, this is just par for the course, right? We do this all the time in lots of places.

Speaker Change: And lots of places and you've seen it work successfully in places like Dubrovnik, and and we will continue to partner with local communities, who who want our economic benefit and and move on it's a relatively I mean, if you want a context. Just so you know it's a relatively small part of our overall mix youre talking low single.

Josh Weinstein: And you've seen it work successfully in places like Dubrovnik. And we'll continue to partner with local communities who want our economic benefit and move on. It's a relatively, I mean, if you want context, just so you know, it's a relatively small part of our overall mix. You're talking, you know, low single-digit percentages, but it's important to us. And we want to show up, and we want to show up. Okay, great.

Robin Farley: It's a relatively, I mean, if you want context, just so you know, it's a relatively small part of our overall mix. You're talking low single-digit percentages, but it's important to us. And we want to show up. We want to show up well. Okay. Great. Thanks.

Speaker Change: <unk> digit percentages, but it is important to us and we want to we want to show up and want to show up well.

Speaker Change: Okay, great. Thanks.

Josh Weinstein: And just one follow-up. I think, Lesko, you might have given the different percentage growth for new to brand versus new to Cruise overall. Is that something you can give a little bit more color on this quarter as well? Thanks.

Robin Margaret Farley: And just one follow up. I think last year you might have given the different percentage growth for new to brand versus new to crews overall. Is that something you can give a little bit more color on this quarter as well? Thanks. Sure. New to crews was up 10%. New to brand was up a little bit last about 6%. So, you know, we're pretty much moving forward with all components, and as you heard, brand repeaters is also up 10%. Great.

Speaker Change: One follow up.

Speaker Change: I think last call you might have given a different percentage growth for new to brand versus.

Speaker Change: New to cruise overall is that something you can give a little bit more.

Josh Weinstein: Sure. New to Cruise was up 10%. New to Brand was up a little bit less, about 6%. So, you know, we're pretty much moving forward with all components. And as you heard, brand repeaters are also up 10%. Great, thank you. No problem.

Colorado this quarter as well thanks.

Speaker Change: Sure.

Speaker Change: New to cruise was up 10% new to brand was up a little bit less about 6%.

Speaker Change: So.

Speaker Change: We're pretty much moving forward with all components and as you heard Brian Repeaters is also up 10%.

Speaker Change: Great. Thank you.

Unnamed: Thank you.

Unnamed: What's the problem? Thank you.

Speaker Change: No problem.

Speaker Change: Thank you. Our next question comes from the line of James Hardiman.

Josh Weinstein: Thank you. Our next question comes from the line of James Hardiman with Citi. Please proceed with your question. Hey, good morning. Thanks for taking my question. So just a point of clarification, you talked about same ship yields being up double digits. Can you help us with how much of that is pricing? Obviously, you're getting some occupancy benefit there.

James Hardiman: Our next question comes from the line of James Harderman with City. Please proceed with your question. Hey, good morning.

Please proceed with your question.

James Lloyd Hardiman: Oh, Hey, good morning. Thanks.

Josh Weinstein: And then sort of, I guess the bigger picture question there is, you know, you've had mid single-digit per diem growth for eight quarters. You don't think it's pent up demand. It sounds like you made that point a couple of times, Josh.

James Hardiman: Thanks for taking my question. So, just point of clarification, you talked about same ship yield being of double digits. Can you help us with how much of that is pricing? Obviously, you're getting some occupancy benefit there. And then sort of, I guess the bigger picture question there is, you know, you've had mid single digit for DM growth for eight quarters. You don't think it's enough demand. It sounds like you made that point a couple of times, Josh.

James Lloyd Hardiman: Thanks for taking my my question so.

Speaker Change: Just a point of clarification, you talked about same ship yields being up double digits can you help us with how much of that is pricing, obviously, you're getting some occupancy benefit there and then sort of I guess a bigger picture question. There is you've had mid single digit per diem growth for eight quarters.

Speaker Change: You don't think it is pent up demand it sounds like you made that point a couple of times Josh.

Josh Weinstein: When and why do you think that ultimately decelerates? Sure. So on the same fleet, it's almost 50-50 between price and occupancy. It's a little bit more occupancy than price, but the per diems are there as well, which is really gratifying to see. As far as when our growth has to end, I wouldn't give you a timeline for that.

Speaker Change: When and why do you think that ultimately decelerate. Thanks.

Joshua Weinstein: When and why do you think that ultimately decelerate? Great, thanks. Sure, so on the same fleet, it's almost 50-50 between price and occupancy. It's a little bit more occupancy than price, but the prettyms are there as well, which is really gratifying to see.

Speaker Change: Sure. So on the same same fleet, it's almost 50 50 between price and occupancy is a little bit more occupancy than price, but with the but they're pretty EMS or are there as well, which is really gratifying to see as far as you know when when our growth has to end.

Joshua Weinstein: As far as when our growth has to end, I wouldn't give you a timeline for that. I think all of the things that we've been talking about for the last two years are still in process, and we still have a lot of room to grow. And making sure we're doing the right things as far as our creative marketing to reach the right people, the performance marketing, and making sure we're getting in front of the right people in the right ways, getting them to click through and book with us, book with our trade partners. The one great thing I'd say is, whether it's a 25-year-old ship with 2,000 guests or it's one of our newest with 5,500 guests, people love what we actually do, and we actually deliver on board, and that so gets them coming back.

Speaker Change: I wouldn't give you a timeline for that.

Speaker Change: I think all of the things that we've been talking about for the last two years.

Josh Weinstein: I think all of the things that we've been talking about for the last two years are still in process, and we still have a lot of room to grow and make sure we're doing the right things as far as our creative marketing to reach the right people, performance marketing, and making sure we're getting in front of the right people in the right ways, getting them to click through and book with us, or book with our trade partners. The one great thing I'd say is whether it's a 25-year-old ship with 2,000 guests or it's one of our newest with 5,500 guests, people love what we do, and we actually deliver on board, and that still gets them coming back. So I don't see a natural ending point as long as we're focused on the. And let me add to that because, you know, we are still tremendous value compared to land-based alternatives.

Speaker Change: We're still in process and we still have a lot of room to grow and making sure. We're doing the right things as far as our creative marketing to reach the right people the performance marketing and making sure we're getting in front of the right people in the right ways getting them to click click through and book with US book with our trade partners.

Speaker Change: The one great thing I'd say is you know whether it's a.

Speaker Change: 25 year old ship with 2000 guests or it's one of our newest with 50 5500 guess.

Speaker Change: People Love, what we actually do.

Speaker Change: We actually deliver onboard and that sort of get some coming back. So I don't I don't see a natural ending point as long as our focus on those things and let me add to that because we are still in tremendous value compared to land based alternatives.

Joshua Weinstein: So I don't see a natural ending point as long as we're focused on those things. And let me get to that because we are still in tremendous value compared to land-based alternatives. And so, as we continue to close that value gap and raise the price, we should be able to continue the progression over time. And on top of that, keep in mind that, as Josh I think mentioned on the last call, the service levels on land-based resorts have deteriorated. And on our ships, we're doing a great job keeping our guest satisfaction levels up and people that's a hassle-free vacation, and people love to cruise.

David Bernstein: And so as we continue to close that value gap and raise the price, and on top of that, you know, keep in mind that, as Josh, I think, mentioned on the last call, the service levels on land-based resorts have deteriorated. And on our ships, we're doing a great job keeping our guest satisfaction levels up. And people, it's a hassle-free vacation, and people love to cruise.

Speaker Change: And so as we continue to close that value gap.

<unk> raised the price, we should be able to continue the progression overtime and on top of that you know keep in mind that this is Josh I think mentioned on.

Speaker Change: Last call the service levels on land based resorts have deteriorated and partnerships, we're doing a great job keeping our guest satisfaction levels up and people. It's a hassle free vacation vacation and people left to crews and so we are expect to keep demand generations <unk> and <unk>.

Joshua Weinstein: And so we are expect to keep the man generations effort high, and hopefully we can continue to see price improvements.

David Bernstein: So we expect to keep demand generation's efforts high, and hopefully, we can continue to see prices. And as Josh said, prices are going to be up in 2025. In our book... Got it.

Speaker Change: Fully we can continue to see price improvements and as Josh said prices are up in 2025 and our book.

Joshua Weinstein: And as Josh said, prices are up in 2025 in our book position, and we expect to see that continue.

Speaker Change: Book position and we expect to see that continue.

James Hardiman: Got it. And then, sort of as a follow-up along the same lines, right? As we think about Europe versus NAA per diems. Obviously, Europe had a big occupancy tailwind in the last couple quarters. And it seems like that is now dissipating. You've guided per diems to be up. I think of that mid-single visit range for the Paris of the next two quarters.

Speaker Change: Got it and then sort of as a follow up along.

Josh Weinstein: And then sort of as a follow-up along the same lines, right, as we think about Europe versus NAA per diems, obviously, Europe had a big occupancy tailwind the last couple quarters, and it seems like that is now dissipating. You've guided per diems to be up, I think, at that mid-single-digit range for each of the next two quarters. Any way we could sort of splice Europe versus North America as we think about per diems? Are they pretty similar as we move forward, or is one stronger?

Speaker Change: Along the same lines as we think about.

Speaker Change: Europe versus NII.

Speaker Change: Purdue, obviously Europe had a big.

Speaker Change: Suppose the tailwind in the last couple of quarters.

Speaker Change: And it seems like that is now disappearing.

Speaker Change: You've guided for Dms to be up I think about mid single digit range for the for each of the next few quarters anyway, we could sort of life.

James Hardiman: Any way we could sort of slice the Europe versus North America as we think about per diems? Are they pretty similar as we move forward, or is one stronger than the other? Thanks. Sure. I wouldn't I wouldn't pack it in any one particular quarter, given that there's always noise and the thing that you're comparing. But I'd say that we expect both North America and you to show up on pricing over time in the normal course. You know, I think it's particularly gratifying, frankly, that the EU brands not only were able to actually catch up on the occupancy but to do so at significantly higher per diems means it's working.

Speaker Change: Versus North America, as we think about per diem.

Speaker Change: Are they pretty similar as we move forward or is one stronger than the other.

Josh Weinstein: Sure, I wouldn't I wouldn't peg it in any one particular quarter, given that there's always noise in the thing that you're comparing. But I'd say that we expect both North America and you to show up on pricing over time in the normal course. You know, I think it's particularly gratifying, frankly, that the EU brands were not only able to actually catch up on the occupancy, but to do so at significantly higher per diems means it's working.

Speaker Change: Sure.

Speaker Change: I wouldn't I wouldn't peg it in any one particular quarter given that there's always noise and the thing that you are comparing but I'd say that we expect both North America and you just show up on pricing over overtime in the normal course.

Speaker Change: I think it's particularly gratifying frankly that that the EU brands not only were able to actually catch up on the occupancy but to do so at significantly higher per Dms means it's working.

Josh Weinstein: And so, and I say the same thing for North America. I mean, yes, their per diems are a little bit lower, but at the end of the day, they've recovered quicker, and they're still maintaining mid single-digit pricing. So I think that bodes very well.

James Hardiman: And so, and I said the same thing with North America. I mean, yes, their per diems are a little bit, you know, lower. But at the end of the day, they've recovered quicker, and they're still maintaining mid-single digit pricing. So I think that boasts very well. for the future. Got it.

Speaker Change: And so and I'd say the same thing with North America, I mean, yes, there for dms or a little bit lower but at the end of the day.

Speaker Change: They've recovered quicker and they're still maintaining mid single digit pricing. So I think that bodes very well for the future.

Speaker Change: Got it appreciate it thanks James.

Josh Weinstein: Much appreciated. Thanks. Thank you. Our next question comes from the line of Brandt Montour with Barclays. Hey, good morning, everybody.

James Hardiman: Let's appreciate it.

Unnamed: Thanks, James. Thank you.

Speaker Change: Thank you. Our next question comes from the line of branch tour with Barclays. Please proceed with your question.

Josh Weinstein: Thanks for taking my question and congratulations on the quarter. Josh, I was hoping maybe you could elaborate a little bit on the revenue management strategy for 25. I know you have already.

Brandt Montour: Our next question comes from line of Brandt Montour with Barclays. Please receive your question.

Brandt Montour: Good morning, everybody. Thanks for taking my question, and congratulations on the quarter. Joshua, so maybe you could elaborate a little bit on the revenue management strategy for 25. I know you have already.

Speaker Change: Hey, good morning, everybody and thanks for taking my question and congratulations on the quarter Josh.

Josh Weinstein: My question is more about the booking curve length, the optimal-looking curve length. You know, you're ahead again on next year's booking curve, but is there a certain point where you feel like you don't want to go any further than that, and it's not necessarily optimal? How do you think about that? Yeah, yeah. So thank you, Brent, for the congratulations. The 100% I do feel that way.

Josh: Josh I was hoping maybe you could elaborate a little bit on the revenue management strategy for 25 I know you have you have already my question is more on the booking curve length, the optimal booking curve length.

Brandt Montour: My question is more on the booking curve length, the optional head again on next year's booking curve, but is there a certain point where you feel like you don't want to go any further than that and it's not necessarily optimal? How do you think about that? Yeah, yeah. So thank you, Brandt, for the congratulations. The 100% I do feel that way, but also keep in mind, we give you up a very rolled up number when we say our occupancy is X and our booking curve is the farthest out in history. When we go through this with our teams and what they do on a daily basis, it is shipped by ships sailing by sailing brand by brand to figure out what that optimal point is.

Josh: Your your head again on next year's booking curve, but is there a certain point, where you feel like you don't you don't want to go any further than that and it's not necessarily optimal how do you think about that.

Josh Weinstein: But also keep in mind, you know, we give you a very rolled-up number when we say, you know, our occupancy is X and our booking curve is, you know, the farthest out in history. You know, when we go through this with our teams and what they do on a daily basis, it is, you know, ship by ship, sailing by sailing, brand by brand, to figure out what that optimal point is. And it could very well be that over time, for lots of reasons, you're not going to hear me say overall that we are increasing the booking curve. And that's okay.

Josh: Yeah Yeah.

Speaker Change: Brent for the congratulations.

Josh: 100% I do feel that way, but also keep in mind.

Josh: We give you up a very rolled up number when we say you know are our occupancy is X and our booking curve as you know the fall.

Josh: And in history.

Josh: When we go through this with our teams and what they do on a daily basis. It is sure.

Josh: Ship by ship sailing by sailing brand by brand to figure out what that optimal point is.

Joshua Weinstein: And it could very well be that over time, for lots of reasons, you're not going to hear me say, overall, that we are increasing the booking curve. And that's okay. Our goal is not to get it as long as possible. It's to generate as much revenue as humanly possible by the time the ship leaves for sailing. And so there's a lot that goes into that mix. It's not just base loading, but what price are you base loading it at? How are you managing your metas against each other, the balconies versus the insides? I mean, so many variables go into it on a detailed basis, and the output is what we talk about on this call.

Josh Weinstein: Our goal is not to get it as long as possible; it's to generate as much revenue as humanly possible by the time the ship leaves for sailing. And so there's a lot that goes into that mix. It's not just base loading, but what price are you base loading it at?

Josh: And it could very well be that over time.

Josh: For lots of reasons, you're not going to hear me say overall that we are increasing the booking curve.

And that's okay. Our goal is not to get it as long as possible is to generate as much revenue as humanly possible by the time, we ship leaves for sailing.

Josh: And so there's a lot that goes into that mix, it's not just base loading, but what price are you base loading. It out how are you managing your med is against each other the balconies versus the insides.

Josh Weinstein: How are you managing your matters against each other, the balconies versus the insides? I mean, so many variables go into it on a detailed basis, and the output is what we talk about on this call. So the teams are very much aligned. Optimization does not mean elongation; it means optimization.

Josh: So many variables go into it on a detailed basis and the output is what we talked about on this call. So the teams are very much aligned optimization does not mean elongation it means optimization.

Brandt Montour: So the teams are very much aligned; optimization does not mean elongation; it means optimization. That's super helpful.

Speaker Change: That's super helpful. My follow up is on three brands, Costa and Princess and Holland America. Those are three that we've been watching you guys talk about in your sort of improvement improving our licensees across those few brands I know that you've been focused on them.

Josh Weinstein: That's super helpful. My follow up is on three brands, Costa, Princess, and Holland America. Those are three that we've been watching you guys talk about in your sort of improvement, improving ROICs across those three brands. I know that you've been focused on them. How would you describe the success or versus your own benchmarks on those three brands' improvement? And are any three of them outperforming the others at this point along those guidelines?

Joshua Weinstein: My follow-up is on three brands: Costa, Princess, and Holland America. Those are three that we've been watching. You guys talk about in your sort of improving ROIC across those three brands. I know that you've been focused on them. How would you describe the success or versus your own benchmarks on those three brands' improvement? And are any three of them performing the others at this point along those guidelines? Sure. Well, I'll start with the fact that every single one of them is showing significant improvement year over year in ROIC, which I'd expect. They were all coming from a different starting point back in the pre-pause world.

Speaker Change: How would you how would you describe the success or versus your own benchmarks on those three brands improvement and are any three of them outperforming the others at this point along those guidelines.

Josh Weinstein: Sure. Well, I'll start with the fact that every single one of them is showing significant improvement year over year in ROIC, which I'd expect because they were all coming from a different starting point back in the pre-pause world.

Speaker Change: Sure well I'll start.

Speaker Change: With.

With the fact that every single one of them is showing significant improvement year over year in a row, I see which I'd expect.

Speaker Change: They were all coming from a different starting point back in the pre pause world. So.

Josh Weinstein: So, you know, one of them is actually above where they were, one of them is at where they were, and one of them is below where they were. But I'd say it's a little bit irrelevant because the brand that's actually higher, I expect it to be even higher because 2019 wasn't very good for them. So from my perspective, the good news in this is that none of them yet are at 12 percent ROIC, but all of them have the potential to do that.

Joshua Weinstein: So one of them is actually above where they were. One of them is at where they were, and one of them is below where they were. But I'd say it's a little bit irrelevant because the brand that's actually higher, I expect it to be even higher because 2019 wasn't very good for them. So, from my perspective, the good news in this is none of them yet are at 12% ROIC. All of them have the potential to do that, and we've got plans and plays for them to do that over time. So progress across the board.

Speaker Change: You know one of them is actually above where they were when I was in one of them is at where they were in one of them is below where they were but I'd say, it's a little bit irrelevant because of the brand that's actually higher I expect it to be even higher because 2019 wasn't very good for them.

Speaker Change: So from my perspective.

Speaker Change: The good news in this is.

Speaker Change: None of them, yet or a 12% ROIC.

Speaker Change: All of them have the potential to do that and we've got plans in place for them to do that over time, so progress across the board.

Josh Weinstein: And we've got plans in place for them to do that over time. So progress. Excellent. Thanks so much.

Speaker Change: Excellent. Thanks, so much.

Unnamed: Excellent.

Unnamed: Thanks so much. Thank you.

Speaker Change: Thank you. Our next question comes from the line of Conor Cunningham with Melius Research. Please proceed with your question.

Josh Weinstein: Thank you. Our next question comes from the line of Conor Cunningham with Melius Research. Please proceed with your question. Hi, everyone.

Conor Cunningham: Our next question comes from the line of Conor Cunningham with Niles Research. Please proceed with your question. Hi, everyone.

Conor T. Cunningham: Hi, everyone. Thank you just on the <unk>.

Josh Weinstein: Thank you. Just on the 10% new to cruise, I was curious if you could talk a little bit about just the changing demographics of your customers in general. You know, how much is the younger demographic engaging with the project or product?

Conor Cunningham: Thank you. Just on, I think you said 10% new to cruise.

Speaker Change: I think you said, 10% new to cruise I was curious if you could talk a little bit about just the changing demographics of your customers in general.

Joshua Weinstein: I was curious if you could talk a little bit about just the changing demographics of your customers in general. How much is the younger demographic engaging with the products or product? Is there anything that they're doing different than prior generations? Thank you. Sure. Well, that's a deep question, right? Everybody is engaging differently than they did five and ten years ago because everybody is getting more comfortable with everything digital and everything online. So that's a shift. It's not just about Millennials. It's about society. And when it comes to our mix, we've got brands that might be one or two years younger at average age than they were before the pandemic.

Speaker Change: How much is the younger demographic engaging with the projects or product.

Speaker Change: Is there anything that they're doing different than prior generations. Thank you.

Josh Weinstein: Is there anything that they're doing different than prior generations? Thank you. Sure. Well, I that's a deep question, right?

Speaker Change: Sure well.

Josh Weinstein: So everybody is engaging differently than they did, you know, five and 10 years ago because everybody is getting more comfortable with everything digital and everything online. So that's a shift. It's not just about millennials; it's about society.

Speaker Change: That's a deep question right so [laughter].

Speaker Change: Everybody is engaging differently than they did five and 10 years ago, because everybody is getting more comfortable with everything digital and everything online. So so that's a shift that is not just about millennials it's about society.

Speaker Change: And when it comes to our mix. We've got you know we've got brands that might be one or two years younger average age than they were before the pandemic. We've got some that might be a year older in the Grand scheme of things, it's not a it's not a huge swing we've got and you also got to remember with US we've got brands that really do cater to a younger generation like <unk>.

Joshua Weinstein: We've got some that might be a year older in the grand scheme of things. It's not a huge swing. We've got, and you also got to remember with us, we've got brands that really do cater to a younger generation like a Carnival, like an IEDA. And they're going to be outsized in our portfolio mix when it comes to attracting Millennials. We don't just want Millennials. So I can't say it's wrongly enough. A brand like Home America, a brand like Q&R. It is playing in a place where they need and want people that have time and money, which generally leads to an old age.

Josh Weinstein: And when it comes to our mix, we've got brands that might be one or two years younger in average age than they were before the pandemic; we've got some that might be a year older. In the grand scheme of things, it's not a huge swing. We've got, and you also got to remember with us, brands that really do cater to a younger generation, like a carnival, like an Aida.

Speaker Change: Arnold will like and Aida and they're gonna be outsized in our portfolio mix when it comes to attracting millennials.

Speaker Change: We don't just want millennials so I.

Speaker Change: I can't say it strongly enough a brand like Holland America brand like Qunar is playing in a place where they need and want people that have time and money, which generally leads to an older crowd a crowd that has time on their hands, because maybe theyre not working anymore and so I'm very I'm very happy that we're getting a broad church because we.

Josh Weinstein: And they're going to be outsized in our portfolio mix when it comes to attracting millennials. But we don't just want millennials. So I can't say it strongly enough: a brand like Holland America, a brand like Cunard, is playing in a place where they need and want people that have time and money, which generally leads to an older crowd, a crowd that has time on their hands because maybe they're not working anymore.

Conor Cunningham: We've got older crowds, a crowd that has time on their hands because maybe they're not working anymore. And so I'm very happy that we're getting a broad church because we are across the board, but make no mistake. We're happy with our mix, and we're happy to take many folks in the boomer generation and Gen X, Gen Y, Gen Z, you name it. So we want to roll. Okay, appreciate it.

Speaker Change: Our across the board, but but make no mistake, we're happy with our with our mix and we're happy to take many folks in the Boomer generation and Gen X Gen Y and Z you name. It. So so we want it all.

Speaker Change: Okay I appreciate it and then on the on the piano, Australia, you know brand being something you Sunset as you consolidate that into Carnival is there any impact on the P&L or any investment needed like during that transition time, just curious like as it goes away is there you know potentially cost headwind associated with it. Thank you sure.

Josh Weinstein: And so I'm very, I'm very happy that we're getting a broad church because we are across the board. But But make no mistake, we're happy with our mix. And we're happy to take many folks in the boomer generation and Gen X, Gen Y, Gen Z, you name it. So, we want it all. Okay, appreciate it. And on the P&L Australia, you know, the brand being Sunset, as you consolidate that into Carnival, is there any impact on the P&L or any investment needed during that transition time? Just curious, like, as it goes away, is there, you know, potentially cost, you know, headwind associated with it?

Joshua Weinstein: And I'm the P&L Australia brand being like the sunset of this. As you consolidate that into carnival, is there any impact on the P&L or any investment needed to like during that transition time? Just curious, like as it goes away, is there potentially cost had one associated with it. Thank you. Sure. You know, we're going to do some minimal cat-backs investment primarily on the ships to get the IP stacks aligned to Carnival Cruise Line, but from a guest experience standpoint, we don't have to do much with those ships, and they're great for that market. We obviously have in this particular instance because we're effectively sunsetting a brand.

Speaker Change: You know we're good at for US, we're going to do some minimal capex investment primarily on the ships to get the IP stacks along.

Josh Weinstein: Thank you. Sure. You know, we're gonna, for us, we're gonna do some minimal CapEx investment primarily on the ships to get the IT stacks aligned to Carnival Cruise Line. But from a guest experience standpoint, we don't have to do much with those ships, and they're great for that market. We obviously have, in this particular instance, because we're effectively sunsetting a brand, there are some one-time costs that we're absorbing, but they're really quite small. So there's nothing really significant to speak of.

Speaker Change: Lined to Carnival cruise line.

Speaker Change: But from a from a guest experience standpoint, we don't have to do much with those ships and they're great for that market.

Speaker Change: We obviously have in this particular instance, because we were effectively sunsetting a brand there are some onetime costs that we're absorbing but its really quite small so nothing really significant to speak of and then the flip side there'll be some operational efficiencies, which will also save cost.

Joshua Weinstein: There are some one-time costs that we're absorbing, but it's really quite small. So nothing really significant to speak of. And on the flip side, there'll be some operational efficiencies, which will also save costs from the P&L as well. Yeah. Great.

Josh Weinstein: And on the flip side, there'll be some operational efficiency, which will also save costs. Thank you. Thank you. Our next question comes from the line of Assia Georgieva with Infinity Research. Please proceed with your question. Good morning.

Speaker Change: Well.

Speaker Change: Yeah.

Speaker Change: Thank you.

Assia Georgieva: Thank you. Our next question comes from the line of ASEA, Greg Gorgiova, with Infinity Research. Please proceed with your question. Good morning, good morning, guys. Excellent quarter. Really happy. Excuse me for what you have accomplished. I had two quick questions. The first one is more on the external or competitive environment. Is David and Beth, you guys know we do this really expensive pricing surveys, which are quantitative, and we fall about 95% of the private and public companies. So we're seeing some discounting out of one of your competitors into Q4 and possibly into Q1 2025. And also seeing sort of encroaching on your territory by another brand that may be a private one.

Speaker Change: Yeah.

Speaker Change: Thank you. Our next question comes from the line of <unk>.

Speaker Change: Org Yoga with Infiniti Research. Please proceed with your question. Good morning, Good morning, guys excellent quarter, I'm really happy [noise] excuse me from what you have accomplished and I had two quick questions. The first one is more on the external world competitive environment.

Josh Weinstein: Good morning, guys. Excellent quarter. Really happy, excuse me, for what you have accomplished.

Josh Weinstein: I had two quick questions. The first one is more about the external or competitive environment. As David and Beth, you guys know, we do these really expensive pricing surveys, which are quantitative, and we follow about 95 percent of the private and public companies. So we're seeing some discounting out of one of your competitors into Q4 and possibly into Q1 2025. And also seeing a sort of encroaching on your territory by another brand that may be a private one. Would you, Josh, David, and Beth, be willing to comment as to how these external pressures may carry a potential risk for the winters?

David: <unk> is David and Beth you guys know, we do this really expensive.

David: Pricing surveys, which are quantitative and we saw about 95% of the private and public company. So we've seen.

David: Some discounting out of one of your competitors into Q4, and possibly into Q1 2025.

David: And also seeing sort of encroaching on your territory by another brand that may be a private one would you just David the best be willing to comment as to how these external pressures may carry a potential risk.

Assia Plamenova Georgieva: Would you, Josh, David, the best, be willing to comment as to how these external pressures make carry a potential risk towards the winter season. Susan? You know, I mean, you, thanks, so thanks for the, for the kind words for us. You know, as you heard, we gave you our forecast for effectively for each of the quarters by giving you the third quarter and the full year. So you can see we're expecting continued progress, continued mid single-digit type of price improvements over, over time with respect to any one competitor in the cruise space because you got to remember we're not just competing with cruise companies.

David: As the winter season.

Josh Weinstein: You know, I mean, you thank you. So thanks for the for the kind words for us. You know, as you heard, we gave you our forecast for effectively for each of the quarters by giving you the third quarter and the full year. So you can see we're expecting continued progress and continued mid single-digit type of price improvements over time. With respect to any one competitor in the cruise space, because you got to remember, we're not just competing with cruise companies; we're competing with vacation companies to get the traveler thinking about taking their vacation with us. None of it should be disruptive to us in the grand scheme of things.

Speaker Change: You know I mean, thanks, so thanks for the kind words for us.

Speaker Change: You know as as you heard we gave you our forecast for effectively for each of the quarters by giving you the third quarter and the full year. So you can see we're expecting continued progress continued mid single digit type of price improvements over overtime.

Speaker Change: With respect to any one competitor in the cruise space because you got to remember we're not just competing with cruise companies, we're competing with vacation companies to get the the travel or thinking about taking their vacation with us.

Assia Georgieva: We're competing with vacation companies to get the traveler thinking about taking their vacation with us. None of it, none of it should be disruptive to us in the grand scheme of things, you know, given our size and scope, given the strength of our brands, given the continued focus that our brands have in differentiating themselves even further and providing amazing experiences. You know, it's really our job to perform no matter what some nameless brand, which I have a feeling I know which one you're talking about, how you described it. You know how they choose to operate, and if you know, we've seen this in markets all over the world.

Speaker Change: None of it none of it should be disruptive to us in the Grand scheme of things.

Josh Weinstein: You know, given our size and scope, given the strength of our brands, given the continued focus that our brands have on differentiating themselves even further and providing amazing experiences, you know, it's really our job to perform no matter what some nameless brand, which I have a feeling I know which one you're talking about, how you describe it, you know, how they choose to operate. And, if you know, we've seen this in markets all over the world. And yet here we are with record revenues, record per diems, and really great momentum. Thank you, Josh.

Speaker Change: Given our size and scope given the strength of our brands given the continued focus that our brands have in differentiating themselves, even further and providing amazing experiences.

It's really our job to perform no matter, what some nameless brand, which I have a feeling I know, which one you're talking about how you described [laughter], how they may choose to to operate and if we've seen this in markets all over the world.

Joshua Weinstein: And yet here we are with record revenues, record premiums, and really great momentum.

Speaker Change: Yet here, we are with record revenues record for Dms and really great momentum.

Joshua Weinstein: Thank you, Josh.

Speaker Change #100: Thank you Jess and a quick follow up question you.

Josh Weinstein: And a quick follow-up question. You described both ticket price and occupancy as tailwinds in Q2. And I think, again, with Europe being somewhat slower on the uptake in 2023, should we expect a continued benefit from higher occupancies, especially from European source passengers, in Q3? Or do we believe that going into Q4, Q1, and possibly next year, that benefit will disappear? start to subside a little bit just because of the ketchup that's been gone.

Joshua Weinstein: And a quick follow-up question. You described both ticket price and occupancy being tailwinds in Q2. And I think again, with Europe being somewhat slower on the uptake. In 2023, should we expect a continued benefit from higher occupancies, especially out of the European source passenger in Q3, or do we believe that going into Q4, Q1 and possibly next year, then benefit will start to subside a little, but just because of the catch up that's been going on. Yeah, you know, if you recall last year and you actually heard David earlier on the call, you know, we basically got back to historical occupancy levels in the second half of last year.

Speaker Change #101: You described them both ticket pricing occupancy being tailwind in Q2, and I think again with Europe being somewhat slower on the uptake in 2023.

Speaker Change #102: Should we expect a continued benefit from higher occupancies, and especially out of the European sourced passengers in Q3 or do we believe that are going into Q4, Q1, and possibly next year than benefit.

Speaker Change #103: Starting to subside, a little bit just because of the catch up but that's been going on.

Josh Weinstein: Yeah, you know, if you recall, last year, and you actually heard David earlier on the call, we basically got back to historical occupancy levels in the second half of last year. So there's a little bit more opportunity on the occupancy side, certainly in Q3, where we were a little farther behind in that range than we were by the time we got to Q4. But really, as we move forward into 2025 and beyond, you know, we have to we have to get the demand to keep that momentum up on the mid single-digit type of price increases that we want to push for. There will always be opportunity at the fringes.

Speaker Change #104: Yeah, you know if you recall last last year and you actually you heard David earlier on the call. We basically got back to historical occupancy levels in the second half of last year. So there's a little bit more opportunity on the occupancy side certainly in Q3, where we were a little farther behind.

Joshua Weinstein: So there's a little bit more opportunity on the occupancy side, certainly in Q3, where we were a little farther behind, you know, in that range than we were by the time we got to Q4. But really, as we move forward into 2025 and beyond, you know, we got to get the demand to keep that momentum up on the mid single-digit type of price increases that we want to push for. There will always be opportunity, the fringes, but, you know, as you've heard me say before, the reason why we're not giving you guidance on occupancy with specificity is we want to make sure that our brands are doing the right thing in managing the revenue and managing the curve.

Speaker Change #104: Yeah in that range than we were by the time, we got to Q4, but really as we look as we move forward into 2025 and beyond.

Speaker Change #104: We got to get the demand to keep that momentum up on the mid single digit type of price increases that we want to push for.

Josh Weinstein: And but you know, as you've heard me say before, the reason why we're not giving you guidance on occupancy with specificity is that we want to make sure that our brands are doing the right thing in managing the revenue and managing the curve and not simply trying to make an occupancy target to the point or decimal point at the expense of doing something they shouldn't be doing with the pricing. So our goal is very much how to generate the most yield over time, which is that combination of price and occupancy and making sure we kind of nailed the dismount there. And Josh, that makes total sense, especially the occupancy guidance.

Speaker Change #104: There will always be opportunity the fringes, but as you've heard me say before the reason why we're not giving you guidance on occupancy with specificity as we want to make sure that our brands are doing the right thing in managing the revenue and managing the curve and not simply trying to make an occupancy target to the point or a decimal point at the <unk>.

Joshua Weinstein: And not simply trying to make an occupancy target to the point or decimal point at the expense of doing something they shouldn't be doing with the pricing. So our goal is very much, how do we generate the most yield over time, which is that combination of the price and occupancy and making sure we kind of nailed the dismount there. And Josh, that makes total sense, especially on the occupancy guidance. I understand and appreciated.

Speaker Change #104: <unk> of doing something they shouldn't be doing with the pricing.

Speaker Change #104: So our goal is very much how do we generate the most yield over.

Speaker Change #104: Over time, which is a combination of the price and occupancy and making sure we kind of nailed the dismount there.

Speaker Change #105: And yes that makes total sense, especially on the occupancy guidance.

Josh Weinstein: I understand and appreciate it. So, good luck. We're expecting great things in September. Thanks very much.

Speaker Change #106: I understand and appreciate it so good luck, we're expecting great things and in September thanks, very much.

Joshua Ian Weinstein: So good luck. We're expecting great things in September.

Joshua Weinstein: Thanks very much. Thank you.

Thank you. Our next question comes from the line of Jamie Katz with Morningstar. Please proceed with your question.

Josh Weinstein: Thank you. Our next question comes from the line of Jaime Katz with Morningstar. Hi guys, good morning.

Jaime M. Katz: Our next question comes from the line of Jamie Katz with Morningstar. Please proceed with your question. Hi guys, good morning.

Jaime M. Katz: Hey, guys good morning.

Josh Weinstein: I have a quick question. Given that the environment's been so strong for you guys, what keeps you up at night?

Jamie Katz: I have a quick question.

Jaime M. Katz: Quick question given that the.

Joshua Weinstein: Given that the environment has been so strong for you guys, what keeps you up at night? Is it regulatory risk? Is there some ESG risk? Is it nothing right now? Just curious to hear sort of the other side of the tech.

Jaime M. Katz: The environment has been so strong for you guys what keeps you up at night.

Josh Weinstein: Is it regulatory risk? Is there some ESG risk? Is there nothing right now? I'm just curious to hear sort of the other side of the story.

Speaker Change #108: Regulatory risk or some ESG risks you see nothing right now I'm, just curious to hear sort of the other side of the channel.

Jaime M. Katz: Thanks.

Joshua Weinstein: Thanks. I mean, you know, anything within our control, I feel very comfortable that the team, we can manage it all, frankly. And so, you know, I don't worry much about Black Swan because you really can't spend your life worried about Black Swan, or you'll have a miserable life. So, you know, our attitude is, you know, we got to keep performing; we'll take what people throw at us and the world throws at us, and we'll adapt and modify what we need to do as needed and move on. And the greatest part about this business from that perspective is we're mobile.

Josh Weinstein: Thanks. Listen, we got through 2020, and I've got three kids, so not much keeps me up at night when it comes to this. I mean, you know, anything within our control, I feel very comfortable that the team, we can manage it all, frankly. And so, you know, I don't worry much about Black Swan, because you really can't spend your life worried about Black Swan, or you'll have a miserable life.

Speaker Change #109: We got through 2020, and I've got three kids, so not much keeps me up at night.

Speaker Change #109: When it comes to this I mean, you know.

Speaker Change #109: Within our control I feel very comfortable that the team.

Speaker Change #109: We can manage at all frankly and so.

Speaker Change #109: I don't worry much about about black Swan because you really can't spend your life worried about black Swan and you'll have a miserable life. So.

Josh Weinstein: So you know, our attitude is, you know, we got to keep performing; we'll take what people throw at us, and the world throws at us, and we'll adapt and modify what we need to do as needed, and move on. And the greatest part about this business, from that perspective, is that we're mobile. And when you have that mobility, it gives you a lot of flexibility to figure things out.

Speaker Change #109: Our attitude is we got to keep performing we'll take what people throw at us in the world throws at us and we'll adapt and modify what we need to do.

Speaker Change #109: As needed and move on and the greatest part about this business from that perspective is where mobile and when you have that mobility. It gives you a lot of flexibility to figure things out.

Joshua Weinstein: And when you have that mobility, it gives you a lot of flexibility to figure things out.

Joshua Weinstein: That's all I got.

Speaker Change #109: That's all I got thanks, Thank you.

Joshua Weinstein: Thanks.

Unnamed: Thank you.

Speaker Change #109: Yeah.

Speaker Change #110: Thank you. Our next question comes from the line of Dan Potter with Wells Fargo. Please proceed with your question.

Josh Weinstein: Thank you. Thank you. Thank you. Our next question comes from the line of Dan Politzer with Wells Fargo. Please proceed with your question. Hey, good morning, everyone.

Dan Pollitzer: Our next question comes from the line of Dan Pollitzer with Wells Fargo. Please proceed with your question. Hey, good morning everyone.

Josh Weinstein: Thanks for taking my question. First one on Celebration Key, Josh. You mentioned you're ramping up there, 18 ships calling at the port there in 2026. Can you maybe talk about the uplift that you're expecting, whether it's, you know, in the form of ticket prices, onboard spend, I know you mentioned fuel, and then, you know, to what extent is this built into those sea change targets, which you're already tracking well ahead of at this point?

Daniel Brian Politzer: Hey, good morning, everyone and thanks for taking my question.

Dan Pollitzer: Thanks for taking my question. First one on celebration key. Joshua mentioned you're ramping up there 18 chips calling on port there in 2026. Can you maybe talk about the uplift that you're expecting, whether it's, you know, in the form of ticket prices on board span. And I know you mentioned fuel, and then, you know, to what extent is this built into those sea change targets, which you're already tracking well ahead of at this point. Thanks.

Speaker Change #112: First one on celebration key Josh you mentioned, you're ramping up their 18 chips, calling calling on port there in 2026 can you maybe talk about the uplift that you're expecting whether it's in the form of ticket prices onboard spend I know you mentioned fuel and then you know to what extent is this built into those sea change targets, which you're already tracking well ahead of.

Speaker Change #113: At this point thanks.

Dan Pollitzer: Sure. Yeah. Thanks, Dan. So you nailed the three components are going to really be the things that drive the returns on Celebration Key. It's going to be incremental price because of the demand. It's going to be incremental spending on the island, which we call on board, spending in this circumstance and fuel savings because of its location. We're not breaking those out for people. But yes, Dan, so your question that did factor into really 2026 benefit for us as we think, as we were thinking through that three year plan. It's fairly minimal for next year when it comes to the uplift because it's a fairly insignificant amount of our overall capacity that's hitting it as we ramp in starting in the second half of next year.

Josh Weinstein: Thanks. Sure. Yeah, Dan. So you nailed the three components that are going to really be the things that drive the returns on Celebration Key. It's going to be incremental price because of the demand. It's going to be incremental spending on the island, which we call onboard spending in this circumstance, and fuel savings because of its location. We're not breaking those out for people.

Speaker Change #114: Sure Yeah. Thanks, Dan.

Speaker Change #115: You've nailed the three components that are going to really be the things that drive the returns on celebration key it's gonna be incremental price because of the demand it's going to be incremental spending on the island, which we call onboard spending in this circumstance and fuel savings because of its location.

Speaker Change #115: We're not breaking those out for people, but yes to answer your question that did factor into really 2026.

Josh Weinstein: But yes, to answer your question, that did factor into really 2026 benefit for us as we think through as we're thinking through that three-year plan. You know, it's fairly minimal for next year when it comes to the uplift because it's a fairly insignificant amount of our overall capacity that's hitting it as we ramp in, starting in the second half of next year. But those were the three components.

Speaker Change #115: Benefit for us as we think through as we were thinking through that three year plan, it's fairly minimal for next year. When it comes to the uplift because it's a fairly insignificant amount of our overall capacity that's hitting it as we ramp in starting in the second half of next year, but those were the three components yes.

Dan Pollitzer: But those were the three components, yeah.

Got it and then just for my follow up in terms of cost for next year I know acknowledging it's still very early but as you think about that marketing and advertising component on the one hand, you you you don't have a ton of capacity growth, but with celebration key you know starting to opening in the back end of the year, how should we kind of think about that.

Dan Pollitzer: And then just for my follow up in terms of costs for next year and acknowledging it's still very early, but you think about that marketing and advertising component on the one hand, you don't have a ton of capacity growth, but with Celebration Key, you know, starting to open in the back end of the year. How should we kind of think about that, you know, that line item relative to 2024? So it clearly is from a cost perspective. Celebration key will add cost, but hopefully, and we do anticipate that it will be a great return and the benefits on the revenue and the onboard spend side and the fuel saving side.

Josh Weinstein: Got it. And then just for my follow-up, in terms of costs for next year, and acknowledging it's still very early, but as you think about that marketing and advertising component, on the one hand, you don't have a ton of capacity growth. But with Celebration Key, you know, starting to open in the back end of the year, how should we kind of think about that, you know, that line item relative to 2024?

Speaker Change #115: That line item relative to 2024.

Josh Weinstein: So it clearly is, from a cost perspective, Celebration Key will add cost, but hopefully, and we do anticipate, That'll be a great return on the revenue and the onboard spend side and the fuel saving side. So it is, you know, we're not managing to any particular line item.

Speaker Change #116: And so it clearly is from a cost perspective celebration, Keith will add cost, but hopefully and we do anticipate that it would be a great return in terms of the benefits on the revenue and the onboard spend side and the fuel savings side. So it is you.

Dan Pollitzer: So it is, you know, we're not managing to any particular line item; we're managing to our operating income and our bottom line, and we're not afraid to invest in celebration key to make it a great success.

Speaker Change #116: We're not managing to any particular line item, we're managing to our operating income and our bottom line and we're not afraid to invest in celebration key to make it a great success, while we're on the cost for 2025, I guess the only other thing I'd add on that front is we do also we announced the <unk>.

Josh Weinstein: We're managing to our operating income in our bottom line, and we're not afraid to invest in Celebration Key to make it a great success while we're on the cost for 2025. I guess the only other thing I'd add on that front is that we also announced the AIDA evolution program, and those ships will be going into dry dock. So we will also see an increase in dry dock days in 2025, 4, which will also have a corresponding impact. And ultimately, though, we're doing that for the right reasons, as we, I think, I can't remember if we talked about this on the last call or not, but I think we did.

Dan Pollitzer: While we're on the cost for 2025, I guess the only other thing I'd add on that front is we do also announce the IEDA evolution program, and those ships will be going into dry dock. So we'll also... C, an increase in dry dock days in 2025 versus 24, which will also have a corresponding impact on cost. And ultimately, though, we're doing that for the right reasons, as we, I think I can't remember if we talked about this on the last call or not. I think we did. You know, I eat as one of our highest returning brands, and we've heard, I think you're asking a question about advertising specifically as well.

Speaker Change #116: E evolution program and those ships will be going into dry dock. So you'll also see an increase in dry dock days in 2025 versus <unk> 24, which will also have a corresponding impact on cost and.

Josh Weinstein: You know, AIDA is one of our highest-returning brands, and we've gushed about them for a long time. And this is going to make significant enhancements to their existing fleet, which is a great investment for us, because we're going to get outsized returns on those investments. And then to your, I think you were asking a question about advertising specifically as well. You're right; we might have flat capacity growth. But remember, we're selling crews that go beyond the current year.

Speaker Change #116: And ultimately, though we're doing that for the right reasons as we I think I can't remember if we've talked about this on the last call or not I think we did.

Aida is one of our highest returning brands and we've got it about them for a long time and this is going to make significant enhancements to their existing fleet, which is a great investment for us because we can get outsized returns on those investments and then to your I think you were asking a question about advertising specifically as well.

Dan Pollitzer: You're right. We might have flat capacity growth. But remember, we're selling cruises that go beyond the current year. We're thinking, you know, well into the future as our brand does try to optimize whatever that booking curve is for that particular brand. I do not have a mandate or a cap or a floor on our spending for advertising, right? The key is, what are we spending it on? How's it going to be effective? Is it going to generate incremental and outsize revenue for whatever that initiative might be in the marketing space? And we go through those plans with our brands not only every year as part of the planning process, but throughout the year. I'm talking to my president to make sure we're being thoughtful.

Speaker Change #116: Youre right, we might have a flat capacity growth, but remember we're selling cruises that go beyond the current year were thinking well into the future as our brands do try to optimize whatever that booking curve is for that particular brand I do not have a.

Josh Weinstein: We're thinking, you know, well into the future as our brands try to optimize whatever that booking curve is for that particular brand. I do not have a mandate or a cap or a floor on our spending for advertising, right? The key is, what are we spending it on? How's it going to be effective?

Speaker Change #116: Our mandate or a cap or a floor on our spending for advertising right. The key is what are we spending it on how is it going to be effective is it going to generate incremental an outsized revenue for whatever that initiative might be in the marketing space and we'd go through those plans with our brands not only every year.

Josh Weinstein: Is it going to generate incremental and outsized revenue for whatever that initiative might be in the marketing space? And we go through those plans with our brands, not only every year as part of the planning process, but throughout the year, I'm talking to my presidents to make sure we're being thoughtful. And so there truly is no predetermined outcome.

Speaker Change #116: Part of the planning process, but throughout the year I'm talking to my presidents to make sure we're being thoughtful and so theres no. There truly is no pre determined outcome.

David Bernstein: And so there's no, there truly is no pre-determined outcome. I think you, as you've seen, we have significantly stepped up where we were before the pandemic to where we are now. It's been working. It's been helping to support the results that we've talked about today in the month, and that we've got, and we'll continue to look at it critically. Got it.

Speaker Change #116: As you've seen we have significantly stepped up where we were before the pandemic to where we are now.

Speaker Change #116: It's been working its been helping to support the results that we've talked about today and the momentum that we've got and we'll continue to look at it critically.

Josh Weinstein: I think, as you've seen, we have significantly stepped up from where we were before the pandemic to where we are now. It's been working. It's been helping to support the results that we've talked about today and the momentum that we've got, and we'll continue to look at it critically.

Speaker Change #117: Got it and then just one last very quick clarification, David I know you mentioned returning to <unk> metrics.

David Bernstein: And then just very one last, very quick clarification. David, I know you mentioned returning to IG metrics. I just want to make sure that there's no change in your goal of getting back to IG. I have an investment rate credit rating. No, no, no changes. We can control the metrics. We can control the decisions of the rating agencies. Got it. Thanks so much.

Speaker Change #118: I just want to make sure that there's no change in your goal of getting back to an investment grade credit rating.

Speaker Change #119: Changes, we can control are the metrics, we can't control the decisions of the rating agencies.

Speaker Change #120: Got it thanks, so much.

David Katz: Thank you. Our next question comes from the line of David Katz with Jeffries. Please proceed with your question. Morning, everyone. Thanks for taking my question. I wanted to follow on to that.

Speaker Change #119: Yeah.

Yeah.

Josh Weinstein: And then just one, one last very quick clarification. David, I know you mentioned returning to IG metrics. I just want to make sure that there's no change in your goal of getting back to IG and investment grade credit ratings. No, no changes. We can control the metrics, we can control the ratings. Got it. Thanks so much.

Speaker Change #121: Thank you. Our next question comes from the line of David Katz with Jefferies. Please proceed with your question.

David Brian Katz: Hi, Good morning, everyone. Thanks for taking my question.

Josh Weinstein: Thank you. Our next question comes from the line of David Katz with Jeffries. Please proceed with your question. Good morning, everyone.

Josh Weinstein: Thanks for taking my question. I wanted to follow on to that. Well, number one, congratulations on the quarter. I wanted to just follow up on the last question with respect to the balance sheet. And, you know, look, I think we've probably all progressed through a period where we're probably expecting a rate cut. Nonetheless, you're making some very good progress with respect to that balance sheet. Can you help us maybe shed a little light beyond just the obvious easy math around what a rate cut, you know, could or would do for you in progressing that balance sheet?

Speaker Change #123: Wanted to follow on to that.

David Katz: Well, number one, congrats on the corner. I wanted to just follow on on the last question with respect to the balance sheet. And, you know, look, I think we probably all progressed through a period we're expecting maybe a rate cut. Nonetheless, you're making some very good progress with respect to that balance sheet. Can you help us maybe shed a little light beyond just the obvious easy math around what a rate cut, you know, could or would do for you in progressing that balance sheet? Well, to start with, if you look at our whole portfolio, about 15% of our debt profile is variable-rate debt.

Speaker Change #124: Well number one congrats on the quarter.

Speaker Change #124: I wanted to just follow on on the last question with respect to the balance sheet and.

Speaker Change #125: Look I think we probably all progressed through a period, where we're expecting maybe rate cut.

Nonetheless, youre, making some very good progress with respect to the balance sheet can you help us maybe shed a little light beyond just the obvious easy math around what a rate cut.

Speaker Change #125: Or or would do for you and progressing that balance sheet.

Well to start with.

Josh Weinstein: Well, to start with, if you look at our whole portfolio, about 15% of our debt profile is very low. So, as you saw in the earnings release, a hundred basis point reduction in interest rates would benefit the back half of the year, I think $23 million or for the full year. But really, you know, from a RACA perspective.

If you look at our whole portfolio about 15% of our debt.

Profile is variable rate debt, so and as you saw in the earnings release.

David Katz: So, as you saw in the earnings release, I think it said 100 basis point reduction and interest rates would benefit the back half of the year; I think was 23 million, or for the full year, it's double that. But really, you know, from a rate cut perspective, you know, we're in an environment where, for us, we're an improving credit. and hopefully our future interest rates will come down, not just because of great cuts, because of the improving credit and the lower credit spreads. And on top of that, we would expect to do some refinancing, and those refinancing should drive our interest expense down.

Speaker Change #125: That 100 basis point reduction in interest rates would benefit the back half of the year I think it was $23 million or for the full year, it's double that.

Speaker Change #125: But really you know from a rate cut perspective.

Josh Weinstein: You know, we're in an environment where, for us, we're improving credit, and hopefully, as interest rates go down, our future interest rates will come down, not just because of rate cuts, credit, and lower credit spreads. And on top of that, we would expect to do some refinancing, and those refinancing should drive our Ben Stowne. So we do have some very good opportunities that we're looking at in the future, which should be net present value positive, and we'll keep evaluating that, and you'll hear more about refinancing.

Speaker Change #125: We remain in an environment, where for us where an improving credit.

Speaker Change #125: And hopefully as our interest rate.

Speaker Change #125: Future interest rates will come down not just because of rate cuts because of the improving credit and lower credit spreads and on top of that we would expect to do some refinancings and those refinancing should drive our interest expense down. So we do have some very good opportunities that we're looking.

David Bernstein: So we do have some very good opportunities that we're looking at in the future, which should be in that present value positive, and we'll keep evaluating that, and you'll hear more about refinancing over time.

Speaker Change #125: In the future, which should be net net.

Speaker Change #125: Present value positive and.

Speaker Change #125: We will keep evaluating that and you'll hear more about refinancing over time.

Speaker Change #126: I appreciate that and if I may follow up quickly.

Josh Weinstein: I appreciate that. And if I may follow up quickly, you know, just going back, Josh, to one of the things you talked about, it's a bit more specific, performance marketing, which was, I believe, a relatively new initiative. Could you give us an update on where that is, how it's done, you know, what's next, etc., please?

David Katz: I appreciate that.

David Katz: And if I may follow up quickly, you know, just going back, Josh, to one of the things you talked about, it's a bit more specific, you know, performance marketing. Which was, I believe, a relatively new initiative. Could you give us an update on where that is, how it's done, you know, what's next, etc. Please. Sure. So just to clarify, it wasn't a new initiative. It was just more focus and ensuring we had the right resources, the right capabilities, and the right approaches. So that that's I'd be shocked if we're if we're ever at a point in time where we're not talking about performance marketing and how do we keep.

Josh: Just going back Josh to one of the things you talked about it's a bit more specific.

Speaker Change #127: Performance marketing, which was I believe a relatively new initiative.

Could you give us an update on on where that is how it's done whats next et cetera. Please.

Josh Weinstein: Sure. But just to clarify, it wasn't a new initiative. It was just more focus and ensuring we had the right resources, the right capabilities, and the right approaches. So I'd be shocked if we're ever at a point in time where we're not talking about performance marketing and how we keep progressing with it. I mean, the world changes around us, which is going to dictate we've got to always be nimble in thinking about how we adapt to that and to the consumer and how that consumer is going to see things and digest things and making sure we're actually being as forward-thinking as we can to stay ahead of that curve. So as far as how that happens, it certainly does not happen.

Josh: Sure. So just to clarify it wasn't a new initiative. It was just more focus in ensuring we had the right, obviously, which is the right capabilities and the <unk>.

Josh: Right approaches so that that's I'd.

Josh: I'd be shocked if were different forever at a point in time, where we're not talking about performance marketing and how do we keep.

Josh: Keep progressing it I mean, the world changes around us, which is going to dictate we've got to always be nimble and thinking about how do we adapt to that and to the consumer and how that consumer is going to see things and digest things and making sure we're actually being as forward thinking as we can to stay ahead of that curve. So as.

Joshua Weinstein: Keep progressing it. I mean, the world changes around us, which is going to dictate we've got to always be nimble and thinking about how do we adapt to that and to the consumer and how that consumer is going to see things and digest things, and making sure we're actually being as forward thinking as we can to stay ahead of that curve. So, as far as how it happens, it certainly does not happen. From me, it doesn't happen from a centralized, you know, corporate group in Miami because different brands are sourcing from different source markets, different segments, etc.

Josh: As far as how it happens it certainly does not happen.

Josh Weinstein: From my point of view, it doesn't happen from a centralized corporate group in Miami because different brands are sourcing from different source markets, different segments, et cetera. So our six operating units really have teams that are focused on that for their brands to make sure we're doing it as optimally as we can. Okay, thank you.

Josh: For me it doesn't happen from a centralized corporate group in Miami because different brands are sourcing from different source markets are different segments et cetera. So our six operating units really have teams that are focused on that for their brands to make sure. We're doing it as optimally as we can.

Joshua Weinstein: So our six operating units really have teams that are focused on that for their brands to make sure we're doing it as optimally as we can.

Unnamed: Okay, thank you. Thanks.

Speaker Change #128: Okay. Thank you.

Speaker Change #129: I think we got time for one more operator.

Unnamed: I think we got time for one more operator. Thank you.

Speaker Change #130: Thank you. Our next question comes from the line of Sharon Zackfia with William Blair. Please proceed with your question.

Sharon Zackfia: Our next question comes from the line of Sharon Zaxia with William Blair. Please proceed with your question. Hi, good morning.

Speaker Change #132: Hi, Good morning, I'm convinced you go in alphabetical order on these calls.

Sharon Zackfia: I'm convinced you go in alphabetical order on these calls. I guess I wanted to ask about kind of attention between, you know, garnery and our harvesting cost savings versus reinvesting and demand creation and how you think about that. I mean, just you touched on different elements of demand creation. But I mean, historically, carnival has been known as kind of the cost leader. Is there an opportunity, as you harvest these cost savings, to kind of zap more of that gap. And the market has been perverse that Carnival does relative to the competition and how far are you willing to go there.

Beth Roberts: I guess I wanted I wanted to ask about.

Speaker Change #132: Kind of a tension between Gardner.

jacki: Guarneri and are harvesting cost savings versus reinvesting in demand creation and how you think about that I mean, jacki touched on different elements of demand creation, but.

jacki: Historically kind of been known as kind of a cost leader is there an opportunity as you harvest these cost savings to kind of adapt more of that gap and marketing spend per berth that carnival days relative to the competition and how far are you willing to go there.

Joshua Weinstein: Yeah, sure. So, as you, so we want to continue to be the cost leader. I think they're not; they don't have to be mutually exclusive, though. And so we have been bringing more cost into reinvesting in the business. And it's not just marketing. It has been marketing. I think it's what 18% per albd best versus pre 17 to 18% per albd since before the pandemic. So certainly we see the value of that. But if you think about our onboard experience and making sure we're providing amazing food alternatives and services, we're reinvesting in bandwidth. We're spending more on bandwidth than we ever have, and it's generating outside returns because people love the service.

Yes sure so.

As you heard so we want to continue to be the cost leader I think.

jacki: They're not they don't have to be mutually exclusive though and so we have been bringing more cost into reinvesting in the business and it's not just a marketing it has been our marketing I think it's about 18% per <unk> versus <unk>.

jacki: 17% to 18% per <unk>.

jacki: Since before the pandemic, so certainly where we see the value of that but if you think about our onboard experience and making sure we're providing amazing.

jacki: Food alternatives and services, we're reinvesting in bandwidth, we're spending more on bandwidth than we ever have and is generating outsized returns because people love the service its land like it's it's and it's something people are willing to pay for it. So there's there's examples up and down the P&L, where we're very happy to reinvest to drive the right behaviors to get there.

Joshua Weinstein: It's land like it's, and it's something people are willing to pay for. So there's examples up and down the P&L we're very happy to reinvest to drive the right behaviors to get the revenue that we're looking for.

jacki: Revenue that we're looking for I don't have a metrics.

Joshua Weinstein: I don't have a metrics. I don't have a metric that says this is how much we're going to do in any particular quarter or any particular year. I mean, clearly our operating margin we still got work to do. Our EBITDA margins, you know, if we get to do in guidance, it'll be about a five-point bump from last year. And it leaves us a few points short of where we were in '19. So we got more work to do, and so the team is very focused on it. And that'll come from both sides out to your point.

jacki: I don't have a metric that says this is how much we're going to do in any particular quarter or any particular year I mean, clearly our our operating margin we still got work to do our EBITDA margins.

If we if we get to June guidance, it'll be about a five point bump from last year and it leaves us a few points short of where we were in 19. So we got more work to do and so the team is very focused on it and that will come from both sides, though to your point it won't just be cutting cost we got to make sure. We're doing the right things to drive that revenue.

Joshua Weinstein: It won't just be cutting costs. We got to make sure we're doing the right things to drive that revenue.

Unnamed: New. Thank you.

Speaker Change #134: Yes. Thank you.

Unnamed: Well, thanks everybody for joining the call today, and look forward to talking to you again in September. Thank you.

Speaker Change #135: Okay, well, thanks, everybody for joining the call today and look forward to talking to you again in September.

Speaker Change #135: Thank you.

Speaker Change #136: Thank you. This concludes today's conference call you may disconnect. Your lines at this time. Thank you for your participation.

Operator: This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.