Q3 2024 Carnival PLC Earnings Call

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Operator: Greetings, and welcome to the Carnival Corporation & plc Q3 2024 Earnings Call. At this time, all participants are in a listen-only mode. A 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. I would now like to turn the call over to your host, Beth Roberts, Senior Vice President, Investor Relations. Thank you. You may begin.

Speaker Change: Greetings and welcome to the Carnival Corporation PLC 3rd quarter 2024 earnings call. At this time, I'll participate in a listen only mode. A question and answer session will follow the formal presentation. If anyone with your require operator assistance during the conference, please press stars zero on your telephone keypad.

Speaker Change: As your mind or this conference is being recorded, I would now like to share the call over to your host, Beth Roberts, Senior Vice President, and Beth relations. Thank you. You may begin.

Beth Roberts: Thank you. Good morning, and welcome to our Q3 2024 Earnings Conference Call. I'm joined today by our CEO, Josh Weinstein, our Chief Financial Officer, David Bernstein, and our Chair, Micky Arison. Before we begin, please note that some of our remarks on this call will be forward-looking. 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, EBITDA, net income, 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: Thank you. Good morning and welcome to our third quarter 2024 earnings conference call.

Beth Roberts: I'm joined today by our CEO Josh Weinstein.

Beth Roberts: Our Chief Financial Officer David Burstine.

Speaker Change: And our chair, Mickey Erson. 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.

Speaker Change: All references to ticket prices, net premiums, net yields and adjusted cruise costs without fuel will be in constant currency unless otherwise stated.

Speaker Change: References to Vrdians and yields will be on a net basis.

Speaker Change: Our comments may also reference cruise calls without fuel, even the net income, free cash flow in our IP.

Speaker Change: All of which will be on a adjusted basis unless the otherwise stated. All these references are non-gaped financial measures defined in our earnings press release, a reconciliation to the most directly comparable U.S. gap financial measures, and other associated disclosures are also contained in our earnings press release in our investor presentation.

Beth Roberts: A reconciliation to the most directly comparable US GAAP 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 press release and investor presentation can be found. With that, I'd like to turn the call over to Josh.

Speaker Change: Please visit our corporate website where our earnings specialist investor presentation can be found. With that, I'd like to turn the call over to Josh.

Josh Weinstein: Thanks, Beth. Before I begin, I'd like to express my support and heartfelt sympathy for all those impacted by Hurricane Helene this past week. Our thoughts and prayers are with you. With that, I'll turn to our prepared remarks. As September comes to an end and we close out the year, I am happy to report that we are delivering well in excess of 2024 expectations. We've also built an even stronger base of business for 2025. We're off to an unprecedented start to 2026. Our Q3, by all accounts, was phenomenal, breaking multiple records and outperforming on every measure. Revenues hit an all-time high of almost $8 billion. $1 billion more than last year's record level. Record EBITDA exceeded $2.8 billion, up $600 million over last year and $160 million over guidance.

Josh Weinstein: Thanks for watching!

Speaker Change: Before I begin, I'd like to express my support and heartfelt sympathy for all those impacted by Hurricane Haleen this past week.

Speaker Change: Our thoughts and prayers are with you.

Josh Weinstein: With that, I'll turn to our prepared remarks.

Josh Weinstein: At September comes to an end and we close out the year. I am happy to report that we are delivering well in excess of 2024 expectations.

Josh Weinstein: We've also built an even stronger base of business for 2021 and we're off to an unprecedented start to 2022.

Josh Weinstein: Our third quarter by all the camps was Banada, breaking multiple records and outperforming on every measure.

Josh Weinstein: Revenue is an all-time pie of almost eight billion dollars. A billion more than last year's record level.

Josh Weinstein: record EBITDA, exceeded 2.8 billion dollars, up $600 million over last year, and $160 million over guidance.

Josh Weinstein: We delivered over 60% more net income than the year prior, achieving double-digit ROIC as of the end of our Q3. These improvements were driven by high margin, same-ship yield growth across all major brands, not driven by capacity growth. It resulted in EBITDA and operating income on a unit basis up 20% and 26% respectively, to levels we've not seen in the last 15 years. Strong demand enabled us to increase our full-year yield guidance for the third time this year. Consistent with our historical emphasis on efficiency, we also improved our cost guidance, which enabled us to drive more revenue to the bottom line. With around 99% of our 2024 ticket revenue already on the books, we're poised to deliver record EBITDA of $6 billion, almost $600 million above our prior peak, and $400 million above the original guidance we set in December.

Josh Weinstein: And we delivered over 60% more net income than the year prior, achieving double-digit RYC as of the end of our third quarter.

Josh Weinstein: These improvements were driven by high margin, same ship, yield growth across all major brands, not driven by capacity growth.

Josh Weinstein: And it resulted in EBITDA and operating income on a unit base of 20% and 26% respectively to levels we've not seen in the last 15 years.

Josh Weinstein: Strong demand, enable us to increase our full year yield guide for the third time this year.

Josh Weinstein: and consistent with our historical emphasis on efficiency.

Josh Weinstein: We also include our card guidance which enable us to drive more revenue to the bottom line.

Josh Weinstein: With a round 99% of our 2024 ticket revenue all ready on the books. We're points to deliver record e-bidop of $6 billion.

Josh Weinstein: Almost $600 million above our tire peak, and $400 million above the original guy is set in December.

Josh Weinstein: ROIC is expected to end the year at 10.5%, a point and a half better than our original December guidance, and almost double last year's ending point. Looking forward, the momentum continues as we actively manage the demand curve. At this point in time, 2025 is at historical highs on both occupancy and price. All core deployments are at higher prices than the prior year. Every brand in our portfolio is well-booked at higher prices in 2025, demonstrating the ongoing benefit of our demand generation efforts throughout our optimized portfolio. Our base loading strategy is continuing to work well, allowing us to take price thanks to having pulled ahead on occupancy. In fact, in the last three months, our 2025 booked positions price advantage versus last year has actually widened for the full year and for each quarter individually.

Josh Weinstein: RLIC is expected to end the year at 10 and a half percent of point and a half better than our original December guide. And almost double last year's ending point.

Josh Weinstein: Looking forward, the momentum continues as we actively managed the demand curve. At this point in time, 2020 buys the historical high on both occupancy and press. All court appointments are at higher prices than the prior year.

Josh Weinstein: Every grant in our portfolio is well booked at higher prices in 2025. Demonstrating the ongoing benefit of our demand generation efforts throughout our optimized portfolio.

Josh Weinstein: Our base voting strategy is continuing to work well, allowing us to take price, thanks to having told ahead on occupants.

Josh Weinstein: In fact, in the last few months, our 2020-5-booked physician's price advanced each verse last year has actually widened for the full year and for each quarter individually.

Josh Weinstein: With nearly half of 2025 already booked, we feel confident in maintaining our trajectory. While early days, the benefit of our enhanced commercial performance is carrying nicely into 2026 as we just achieved record booking volumes in the last 3 months for sailing that far out. This incredibly strong book position for 2024, 2025, and 2026 drove record Q3 customer deposits towards $7 billion. That's along with continued growth in pre-cruise purchases of onboard revenue. It's also gratifying to note that onboard spending levels were not only up strong again this quarter, our year-over-year improvement in onboard per diems actually accelerated from the prior quarter. In essence, all demand indicators are continuing to move in the right direction, and we have so much more in the pipeline to sustain this momentum, including the North American premiere of the highly successful Sun Princess in just a few weeks.

Josh Weinstein: And with nearly half of 2025 already booked, we feel confident in maintaining our trajectory.

Speaker Change: Well, early days, the benefit of our enhanced commercial performance is cherry nicely into 2020's set, as we just achieved record-socking volume in the last three months for sailing that far out.

Speaker Change: This incredibly strong book position for 2024, 2025, and 2026 drove record-third-quarter customer deposits to a $27 billion dollars. And that's a law that can change your growth in precursors' purchases of armed board revenue.

Speaker Change: It's all the gratifying to know that onboard spending levels were not holding up strong again this quarter. Our year-over-year improvement in onboard-per-dem actually accelerating from the prior quarter.

Speaker Change: In a...

Speaker Change: All the band indicators are continuing to move in the right direction. And we have so much more of the pipeline to sustain this moment.

Speaker Change: including the North American premier of the highly successful Sun Princess in just a few weeks.

Josh Weinstein: This will be followed by the introduction of her sister ship, Star Princess, the second next-generation Princess ship coming online in a year. We also continue to invest in the existing fleet with major modernization programs like AIDA Evolution expected to deliver additional revenue uplift over the coming years. As you know, we're not just going to be buoyed by our ships. I can't wait for the introduction of our game-changing Bahamian destination, Celebration Key. Its five portals built for fun will open in July 2025, but it really ramps up in 2026 when Celebration Key serves as a premium call for 19 Carnival Cruise Line ships. Rest assured, we're already planning for our phase two landside development to fully leverage the use of the four berths we're building.

Speaker Change: This will be followed by the Introduction of Persistership, Star-Princess.

Speaker Change: The second next generation of Princess Ship coming online in a year.

Speaker Change: We also continue to invest in the existing fleet.

Speaker Change: With major modernization programs, like IEA Evolution, expected to deliver additional revenue uplift over the coming years.

Speaker Change: As you know, we're not just going to be buried by our ship. I can't wait for the introduction of our game changing by Amy and Destination Celebration King.

Speaker Change: It's five quarters, built for fun, will open it in July 2025, but it really ramps up in 2026 when celebration keeps.

Speaker Change: We serve as a premium call for 19 part of a cruise line ships.

Speaker Change: And rest assured, what all ready planning for our Phase 2 land type development to fully leverage the use of the four births we're building.

Josh Weinstein: In 2026, there's also the mid-year introduction of a 2-berth pier at Half Moon Cay, our naturally beautiful and pristine beach, consistently rated among the top private islands in the Caribbean. These two destinations will be available to even our largest ships, further reducing fuel costs and our environmental footprint at the same time. Stay tuned, as we'll be sharing more exciting reveals about Half Moon Cay in the next few months. We're also stepping up our marketing efforts in Q4, which David will touch on. Our elevated marketing investment has been working as we continue to drive demand well in excess of our capacity growth with year-to-date web visits up over 40% versus 2019, paid search up more than 60%, and natural search up over 70%.

Speaker Change: In 2026, there's also the mid-year introduction of a tuber of fear that has been keyed are naturally beautiful and pristine, which can consistently rated among the top private island in the grid.

Speaker Change: These two destinations will be available to even our largest ships.

Speaker Change: For the reducing fuel cost and our environmental footprint at the same time, stay tuned as we'll be sharing more exciting radios about half new key in the next few months.

Speaker Change: We're also stepping up our marketing efforts in the fourth quarter, which David will touch you.

David Burstine: Our elevated marketing investment has been working as we continue to drive the man. Well, the next step of our capacity growth, with year-to-date web visits, up over 40% versus 2019.

David Burstine: pay search up more than 60 percent and natural search up over 70 percent. Our brains are generating on their creative marketing and constantly finding ways to attract more attention to the amazing product and execution with all ready to look around.

Josh Weinstein: Our brands are iterating on their creative marketing and constantly finding ways to attract more attention to the amazing product and execution we already deliver on board. It is continuing to pay off as we chip away at the unwarranted price disparity to land-based vacations. All of these activities, along with strong support from our travel agent partners, have allowed us to once again take share from land-based peers as we attract even more new-to-cruise guests. In fact, new to cruise and repeat guests were up double-digit percentages over last year. Now, turning to our balance sheet. We expect to continue on our path toward investment grade and have a clear line of sight for further debt pay down, having recently finalized our order book through 2028. We have just three ships spread over the next four years.

Speaker Change: And it is continuing to pay off as we chip away as the unborned Christ the Spirit, the land-based vacations.

Speaker Change: All of these activities, along with strong support from our travel agent partners, have allowed us to once again take care of land-based peers as we attract even more new cruise guests. In fact.

Speaker Change: So, it's new to crews and we suggest for a double digit percentage is over last year.

Speaker Change: Now, turning to our balance, we expect to continue on our path for an investment grade and have a clear line of sight for further death pay down. Having recently finalized our order book through 2022.

Josh Weinstein: That's one ship delivery in 2025, none in 2026, and one ship in each of 2027 and 2028. This limited order book should also position us well to continue to create demand in excess of capacity growth. Our continued focus on high-margin, same-ship yield growth should deliver improving EBITDA off of this year's record levels. Of course, strong and growing free cash flow and further debt reduction provide a consistent formula for ongoing improvement in our leverage metrics and a continuation in the trajectory we have experienced already this year, resulting in a two-turn improvement in debt to EBITDA in just nine months. We have certainly come a long way in a relatively short amount of time. In just two years, we've already more than doubled our revenue and are going from negative EBITDA to an expected all-time high of $6 billion this year.

Speaker Change: We have just three ships spread over the next four ships. That's one ship delivery in 2025, in 1926, and one ship in each of 2027 in 2028.

Speaker Change: This limited order book should also position us well to continue to create the man in excess of capacity growth. Our continued focus on high margin, same ship yield growth, should deliver improving EBITDA off of this year's record levels.

Speaker Change: Of course.

Speaker Change: Strongly growing free cash flow and further debt reductions provided in system forms law, for ongoing improvement in our leverage metrics.

Speaker Change: And a continuation in the trajectory we have experienced already this year, resulting in a true term improvement in debt to give it that in just nine months.

Speaker Change: We have certainly come a long way getting relatively short amount of time.

Speaker Change: In just two years, we've already more than doubled our revenue and are going from negative EBITDA to an unexpected all-time high of $6 billion this year.

Josh Weinstein: This remarkable achievement is all thanks to our global team. They continue to outperform as we progress through 2024, and they are also setting us up for a successful 2025. It is their continued execution that has put us firmly on the path to achieving our SEA Change targets. Just as important, they once again powered our ability to deliver unforgettable happiness to nearly 4 million guests this past quarter by providing them with extraordinary cruise vacations while honoring the integrity of every ocean we sail, place we visit, and life we touch. With that, I'll turn the call over to David.

Speaker Change: This remarkable achievement is all thanks to our global team.

Speaker Change: They can continue to outperform as we progress through 2024 and they are also setting us up for a successful 2020 bond.

Speaker Change: It is there to continue execution that has put us firmly on the path to achieving our key change target.

Jeff: And Jeff is important.

Jeff: They once again powdered our ability to deliver unforgettable happiness.

Jeff: To nearly 4 million guests this past work, But providing them with extraordinary presentation.

Speaker Change: What honoring the integrity of every ocean we sail, please move visit and live we touch.

David Bernstein: Thank you, Josh. I'll start today with a summary of our 2024 Q3 results. Next, I will provide the highlights of our Q4 September guidance, some color on our improved full-year guidance, along with a few other things to consider for 2025. I'll finish up with an update on our refinancing and deleveraging efforts. Let's turn to the summary of our Q3 results. Net income exceeded June guidance by $170 million as we outperformed once again. The outperformance was essentially driven by two things. First, favorability and revenue were $40 million, as yields came in up 8.7% compared to the prior year. This was seven-tenths of a point better than June guidance, driven by close-in strength in ticket prices, as well as onboard and other spending.

Jeff: With that, I'll turn the call over to you today.

Jeff: Thank you, Josh. I'll start today with a summary of our 2024 Third Quarter Results.

Speaker Change: Next, I will provide the highlights of our fourth quarter September guidance.

Speaker Change: Some color on our improved full-year guidance, along with a few of the things to consider for 2025. Then I'll finish up with an update on a refinancing and delivering efforts.

Speaker Change: Let's turn to the summary of a third quarter result.

Speaker Change: NETAIN come exceeded June guidance by 170 million dollars as we outperformed once again. The outperformedments were essentially driven by two things.

Speaker Change: First, favorability in revenue worth $40 million, as yields came in up 8.7% compared to the prior year. This was 7-10 of a point better than June guidance driven by close-end strength in ticket prices, as well as on board and other spending.

David Bernstein: Second, cruise costs without fuel per available lower berth day, or ALBD, improved slightly compared to the prior year and were nearly 5 percentage points better than June guidance, which was worth over $125 million. The Q3 benefited from cost-saving opportunities, accelerated easing of inflationary pressures, benefits from one-time items, and the timing of expenses between the quarters. Most of the Q3 cruise cost benefits will flow through as an improvement to our full-year September guidance. Per diems for the Q3 improved nearly 6% versus the prior year, driven by higher ticket prices and improved onboard spending on both sides of the Atlantic. At the same time, our European brands on their path back to higher occupancy levels saw outsized growth in occupancy of 5 percentage points as compared to the Q3 2023.

Speaker Change: 2. Cruise costs without fuel for available lower birth date, or ALDB, improves slightly compared to the prior year, and we're nearly 5 percentage points, better than June guidance, which was worth over $120 million dollars.

Speaker Change: The third quarter benefits from cost-saving opportunities, accelerated easing of inflationary pressures, benefits from one-time items, and the timing of expenses between the quarters.

Speaker Change: Most of the third quarter cruise cost benefits will flow through as an improvement to our full year September guidance.

Speaker Change: For DMs for the third quarter, Improvenably 6% versus the prior year driven by higher ticket prices and improved onboard spending on both sides of the Atlantic.

Speaker Change: At the same time, are European brands on their paths back to higher eye-cooking feel of these people?

Speaker Change: So our outside growth and occupancy of 5 percentage points as compared to the third quarter of 2023. For the third quarter, we reported record setting operating results.

David Bernstein: For Q3, we reported record-setting operating results with strong demand delivering record revenues, record yields, record per diems, and record operating income. Now, two things to highlight about our Q4 September guidance. The positive trends we saw in Q3 are expected to continue in Q4. Yield guidance growth for Q4 is set at 5% over the prior year. The difference between the yield guidance for Q4 and the Q3 yield improvement of 8.7% is the result of a tougher prior year comparison, as Q4 2023 per diems were up over 10% versus just 5% for Q3 2023. Having said that, it is great to see that we anticipate continued strong yield growth in Q4 and that it is driven primarily by price.

Speaker Change: With strong demand of delivering record revenues, record yields, record prevailing, and record operating income.

Speaker Change: Now two things to highlight about a fourth quarter September guide.

Speaker Change: The positive trends we saw in the third quarter are expected to continue in the fourth.

Speaker Change: You'll guidance growth from the fourth quarter is set at five percent over the prior year.

Speaker Change: The difference between the yield guidance for the fourth quarter, and the third quarter yield improvement of 8.7% is the result of a tougher prior year of comparison as fourth quarter of 12.23 kdms will up over 10 percent.

Speaker Change: First is just 5% for the third quarter of 2023.

Speaker Change: How can you shut that? It is great to see that we anticipate continued strong yield growth in the fourth quarter, and as it is driven primarily by Christ.

David Bernstein: Cruise costs without fuel per available lower berth day for Q4 are expected to be up 8%, like Q1 2024, which was up 7.3%. Both quarters are impacted by higher dry dock days and higher advertising expense as planned, and we did have about USD 25 million of anticipated Q3 costs shift to Q4. As I have said many times, relative to cruise cost per ALBD, judge us on the full year and not the quarters, as we often see certain cost items like dry dock expense, advertising, and other items have different seasonalizations between the quarters from year to year. 2024 is a great example of this, where cruise costs without fuel per ALBD were up 7.3% in Q1, essentially flat in Q2, improved slightly in Q3, and are expected to be up approximately 8% in Q4.

Speaker Change: Cruise costs without fuel per available low-per-day for the fourth quarter are expected to be up 8%. Like first quarter of 2024, which was up 7.3%.

Speaker Change: Both quarters are impacted by higher dry.bage and higher advertising expenses plan. And we did have about 25 million of anticipated third quarter costs shipped to the fourth quarter. As I have said many times, relative to cruise costs for ALBD.

Speaker Change: Judges on the full year and not the quarters, as we often see certain cross-bidens, like dry-dot-expense, advertising, and other items, have different seasonalizations between the quarters from year to year.

Speaker Change: 2024 is a great example of this, where cruise costs without fuel per LBD.

Speaker Change: We're up 7.3% in the first quarter, essentially flat in the second quarter, improved slightly in the third quarter, and are expected to be up approximately 8% in the fourth quarter. Turning to our improved full-year September guides.

David Bernstein: Turning to our improved full-year September guidance. Net income for September guidance is set at $1.76 billion, a $210 million improvement over our June guidance. This improvement was driven by three things. First, an improvement in yields to 10.4% by flowing through the $40 million revenue benefit from the Q3. Second, a one-point improvement in cruise costs per ALBD to approximately 3.5% from flowing through $100 million of the $125 million cost benefit from the Q3, with $25 million re-seasonalized to the Q4, as I previously mentioned. Third, a benefit from fuel price and currency worth $70 million. The strong 10.4% improvement in 2024 yields is a result of an increase in all the component parts, higher ticket prices, higher onboard spending, and higher occupancy at historical levels, with all three components improving on both sides of the Atlantic.

Speaker Change: Net income for September guidance is set at $1.76 billion, a $210 million improvement over our June guidance.

Speaker Change: This improvement was driven by three things. First, an improvement in yields to 10.4 percent by flowing through the 40 million dollar revenue benefit from the third quarter.

Speaker Change: 2.

Speaker Change: A one point improvement includes cost per ALBD to approximately 3.5%.

Speaker Change: from flowing through $100 million of the $120 million cost benefit from the third quarter, with 25 million receipts and lies to the fourth quarter as I previously mentioned.

Speaker Change: And third, a benefit from fuel pricing currency worth 70 million dollars.

Speaker Change: The strong 10.4% improvement in 2024 yields is a result of the increase in all the component parts.

Speaker Change: Higher ticket prices, higher onboard spending, and higher occupancy as historical levels. With all three components improving on both sides of these landing.

David Bernstein: Now a few things for you to consider for 2025. We are forecasting a capacity increase of just seven-tenths of a percent compared to 2024. We are well-positioned to drive 2025 pricing higher with less inventory remaining to sell than the same time last year. We are also looking forward to the introduction of our game-changing Bahamian destination, Celebration Key, in July 2025. We anticipate that Celebration Key will be a smash hit with our guests and provide an excellent return on our investment. However, we do expect that the operating expenses for the destination will impact our overall year-over-year cost comparisons by about half a point. In 2025, we are expecting 688 dry dock days, an increase of 17% versus 2024, which will also impact our overall year-over-year cost comparison by about three-quarters of a point. I will finish up with a summary of our refinancing and deleveraging efforts.

Speaker Change: Now, a few things for you to consider for 2020.

Speaker Change: We are forecasting a capacity increase of chef's 7-10th of a percent compared to 2024.

Speaker Change: We are well positioned to drive 2025 pricing higher with less inventory remaining to sell than the same time last year.

Speaker Change: We are also looking forward to the introduction of our Dean-Changing Behemian Destination Celebration Key in July 2025.

Speaker Change: We anticipate that celebration key will be a smash hit with our guests and provided excellent return on our investment.

Speaker Change: However, we do expect that the operating expenses for the destination will impact our overall year-over-year cause comparisons by about half a point.

Speaker Change: In 2025, we are expecting 688 dry.ds, an increase of 17% versus 2024, which will also impact our overall year-over-year cost comparison by about three quarters of a point.

Speaker Change: I will finish up with a summary of our refinancing and de-labraging efforts.

David Bernstein: With record Q3 EBITDA of $2.8 billion, our efforts to proactively manage our debt profile continue. Since June, we prepaid another $625 million of debt, bringing our total prepayments to $7.3 billion since the beginning of 2023. Additionally, we successfully upsized the borrowing capacity on our revolving credit facility by nearly $500 million, bringing the total undrawn commitment to $3 billion, back to its 2019 level. Furthermore, we will continue to look for more opportunistic refinancings over time. Our leverage metrics will continue to improve in 2024 as our EBITDA continues to grow and our debt levels improve. Using our September guidance EBITDA of $6 billion, we expect better than a two-turn improvement in net debt to EBITDA leverage compared to year-end 2023, approaching 4.5x and positioning us two-thirds of the way down the path to investment-grade metrics.

Speaker Change: With records third quarter e-bina of 2.8 billion, our efforts to proactively manage our debt profile content.

Speaker Change: Since June, we pre-paid another $625 million of debt, bringing our total pre-payments to $7.3 billion since the beginning of 2023.

Speaker Change: Additionally, we successfully upsize the borrowing capacity on a revolving credit facility by nearly $500 million, bringing the total underlying commitment to $3 billion back to its 2019 level.

Speaker Change: Furthermore, we will continue to look for more opportunistic refinancing over time.

Speaker Change: Our leverage metrics will continue to improve in 2024 as our ePADOT continues to grow and our debt levels improve.

Speaker Change: using our September guidance EBITDA of $6 billion.

Speaker Change: We expect better than a two-term improvement in net debt to UBDile leverage compared to year end 2023.

Speaker Change: Approaching 4.5 times compositioning us 2-thirds of the way down the path to investment grade metrics.

David Bernstein: Looking forward, we expect substantial free cash flow driven by our ongoing focus on operational execution and among the lowest new build order book in decades to deliver continued improvements in our leverage metrics and our 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. Now, operator, let's open up the call for questions.

Speaker Change: Looking forward, we expect substantial free cash flows driven by our ongoing focus on operational execution, and among the lowest new build-of-word-of-book index dates to deliver continued improvements in our leverage metrics and our balance sheet.

Speaker Change: Moving us further down the road to rebuilding our financial fortress, while continuing the process of transferring value from deadholders back to shareholders.

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

Operator: Thank you. At this time, we'll 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 queue. 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 keys. In order to allow for as many questions as possible, we ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of Matthew Boss with JP Morgan. Please proceed with your question.

Speaker Change: Thank you. At this time, we'll be conducting a question and an 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.

Speaker Change: You may press star 2 if you'd like to remove your questions from the queue. For part of the Species and Speaker equipment, it may be necessary to pick up your hands up before pressing the star keys.

Speaker Change: In order to allow first many questions as possible, we ask you to keep one question and one follow-up. Thank you. Our first question comes from the line of Matthew Boss, which AP Morgan, please proceed with your question.

Matthew Boss: Great. Thanks, and congrats on another really nice quarter.

David Bernstein: Thanks, Matt.

Matthew Boss: Great thanks and congrats on another really nice quarter.

Matthew Boss: Josh, on the continued momentum, maybe could you elaborate on the stronger base of business for 2025 and the record start to 2026 that you cited? Maybe if you could touch on volume and pricing trends that you're currently seeing across regions and maybe specifically in Europe.

Matthew Boss: Thank you very much.

Matthew Boss: So, Josh, on the continued momentum, maybe could you elaborate on the stronger base of business for 2025 and the record start to 2026 that you cited? Maybe if you can touch on volume and pricing trends that you're currently seeing across regions and maybe specifically in Europe.

David Bernstein: Sure. Probably broad-based is the best way to talk about the strength in what we're seeing on 2025. The book position is higher for both North America and our European brands, and that's consistent across the quarters as well. We're positioned very well. Our brands have been doing a great job of pulling forward the booking curve, and now we get to take price, which is the goal. It's very encouraging. We are

Josh Weinstein: Sure, so I'm probably broad based is the best way to talk about the strength in what we're seeing on 20.25

Speaker Change: The book position is higher for both North America and European brands and that's consistent across the quarters as well.

Speaker Change: So we're positioned very well our grants have been doing a great job of pulling forward the booking curve and now we get to take price, which is the goal. So it is very encouraging, you know, we're about, we're about two-thirds book when you look at next 12 months. So we're not, we're not pretty and be able to place.

Josh Weinstein: We're about two-thirds booked when you look at the next 12 months. We're in a pretty enviable place.

Beth Roberts: Matt, did you have a follow-up?

Speaker Change: i

Matthew Boss: Yeah, thanks. Maybe just a follow-up would be on the balance sheet, if you could speak to capital priorities from here, just given the free cash flow generation and some of the changes that you've made?

Paola: Matches your Paola

Speaker Change: Yeah, thanks. So maybe just a follow-up would be on the balance sheet. If you could speak to capital priorities from here, just given the free cash flow generation and some of the changes that you've made.

David Bernstein: Basically, our priority one, two, and three is debt reduction. We have the goal of becoming investment grade. We do expect to see both the reduction in our debt levels as well as the improvement in our EBITDA achieve investment-grade metrics as part of our SEA Change program towards the end of 2026. We've got plenty of time to think about other alternatives beyond that.

Speaker Change: So you know basically, you know, a priority 1, 2 and 3 is debt reduction.

Speaker Change: You know, where you have the goal of becoming a investment grade and we do expect to see both the reduction in our debt levels as well as the improvement in our EBITDA, the chief investment grade metrics is part of our C Change Program towards the end of 2020-6.

Speaker Change: And so we've got plenty of time to think about other alternatives beyond that.

Matthew Boss: Great. Congrats again. Best of luck.

David Bernstein: Thank you.

Josh Weinstein: Thank you.

Speaker Change: Great, congrats again, that's the block.

Operator: Thank you. Our next question comes from the line of Steven Wieczynski with Stifel. Please proceed with your question.

Speaker Change: Thank you.

Speaker Change: Thank you. Our next question comes in the line of Steve Wizzinski with Steve O. Please proceed with your questions.

Steven Wieczynski: Yeah. Hey, guys. Good morning, congratulations on the strong Q4 and the outlook. Josh or David, this might be something of a short-sighted question. David, you touched on this a little bit in your prepared remarks, but if we think about the Q4 yield guidance, it looks to us like it might be a little bit lower versus the implied guidance for the Q4 that you gave back in June. Just wondering if there's anything from a, whether it's a pricing perspective or any geography or brand, that it is showing any, I don't want to use the word softness, but I guess I have to use that word, or weakening in pricing during the Q4, or are you guys just taking a more conservative view around onboard spending over the next couple of months?

Steve Wizzinski: Yeah, hey guys good morning and congratulations on the strong quarter in the outlook So so Joshua David this might be some of a short cited question and David you touched on this a little bit in your prepare remarks But if we kind of think about the fourth quarter yield guidance it looks like it might be a little bit lower versus

Speaker Change: The implied guidance for the fourth quarter back in, that you gave back in June. So just wondering if there's anything from, you know, whether it's a pricing perspective or any geography or brand, you know, that is showing any, I don't want to use the word, softness, but I guess I have to use that word.

Speaker Change: You know, or weakening and pricing during the fourth quarter or, you know, are you guys just taking a more conservative view around on board spending over the next, you know, the next couple months?

Josh Weinstein: Hey, Steven. This is Josh Weinstein. Actually, I'm not sure of your math, but there was really no change from where we were in June guidance when it comes to the Q4 on the yield side. We always said when we came out with our guidance, frankly, in December, we were challenged a lot, particularly on the Q4, and people didn't think we'd be able to actually reach breakeven year-over-year because the Q4 of 2023 was so strong. Now we're talking about 5%, and we feel good about that.

Speaker Change: Hey Steve, this is this is Josh actually I'm not sure you're math but there was really no change from where we were in June guidance when it comes to the fourth quarter

Speaker Change: I'm a year old, so I didn't, you know, we always said

Speaker Change: When we came out with our guidance, frankly, in December, we were challenged a lot, particularly on the fourth quarter, and people didn't think we'd be able to actually reach, you know, break even year over year, because the fourth quarter of 23 was so strong. So now we're talking about 5% and we feel we feel good about that.

Steven Wieczynski: Okay. Gotcha. Josh, want to ask about the 2025 and 2026 bookings. You talked about how you're already 50% booked for next year and in a pretty good position, it seems like already for 2026. Just wonder if you think about your booking window, has it expanded too much? Saying that differently, are you nearing a point where you might be leaving money on the table if demand stays status quo from here? Following up on that question, just wondering if you've seen demand accelerate for bookings, maybe more in late 2025 and 2026 that are going to be touching Celebration Key.

Speaker Change: Okay, gotcha. And then Josh, want to ask about the 25 and 26 bookings and you talked about how you're already 50% bookters.

Speaker Change: For next year

Josh Weinstein: And it's a pretty good position. It seems like already for 2,026. So just, you know, just wondering if you think about your, you know, your, your booking window, you know, it has it expanded too much. You know, we're saying that differently, are you, are you nearing a point where you might start, you know, leaving, you know, you might be leaving money on the table if the man kind of stays.

Speaker Change: status quo from here and then you know following up on that question just you know just one of you be seen demand accelerated for you know for bookings maybe you know more in late 25 and 26 that are going to be touching celebration key.

Josh Weinstein: Sure. It's a great point on the booking curve. The goal is not an ever-increasing booking curve. It's to maximize the revenue that we're going to generate by the time we sail. I would say this is a brand-by-brand, itinerary-by-itinerary build up. I would say that almost all of our brands are higher year over year. There's one that's not, and that's an active decision to pull back because we want to make sure we're not leaving price on the table, exactly to your point. Despite the fact that overall we're in a record position, we are looking at that obviously with a lot more clinical eye and making sure we're doing the right thing to optimize that revenue. When it comes to Celebration Key, clearly there's a premium and it's going to benefit us.

Speaker Change: Sure, so at the great point on the booking curve, you know, the goal is not an ever-increasing booking curve. It's the massive buzz revenue that we're going to generate by the time we say it.

Speaker Change: I would say this is a brand-by-brand, I tend to worry, you know, build up. And I would say that almost all of our brands are pretty much our higher year over year. There's one that's not, and that's an active decision to pull back because we want to make sure we're not leaving price on the table. It's that way to your point.

Speaker Change: So despite the fact that overall we're in a record position, we are looking at that, you know, obviously a lot more.

Speaker Change: clinical eye and making sure we're doing the right thing to optimize that revenue.

Speaker Change: When it comes to celebrating key, clearly there's a premium and it's going to benefit us in particular. It's the 2026 ongoing story when we get to ramp up to about.

Josh Weinstein: In particular, it's a 2026 ongoing story when we get to ramp up to about 20 ships, which is going to be pretty fantastic. The fact that we're doing all of this, that we've been able to talk about with 2024 and even into H1 of 2025, it's got nothing to do with Celebration Key. This is just based on the natural demand and all the commercial activities that we're doing and delivering on board. That's supporting real strong revenue increases.

Speaker Change: 20 ships, which is going to be pretty fantastic. And the fact that we're doing all of this, that we've been able to talk about with 2024, and even into the first half of 25, it's got nothing to do with celebration cake.

Speaker Change: This is just based on the natural demand and all the commercial activities that we're doing and delivering on board and that's supporting real strong revenue increases.

Steven Wieczynski: Gotcha. Thanks for that, Josh. Really appreciate it. Congrats, guys.

Speaker Change: Gotcha, thanks for the joy to appreciate it, congrats guys.

Josh Weinstein: Thank you.

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

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

Robin Farley: Great. Thank you. I know it's too early to give guidance for 2025.

Josh Weinstein: You're going to ask anyway. You're going to ask anyway.

Robin Farley: Great. Thank you. I know it's too early to give guidance for 2025. But you're going to have to pay for it. Well, let me just ask it this way, which I think is harmless. You know, given everything you're saying about the book position for 2020 and 5 and even 2026, being at record level.

Robin Farley: Well, let me just ask it this way, which I think is harmless. Given everything you're saying about the booked position for 2025 and even 2026 being at record levels, is it fair to say that you're off to a better start for 2025 than a typical year? Hopefully that's an innocent way to ask it. I also did just want to clarify on the expense. David, I heard when you mentioned the $25 million of expense that was borrowed that will show up in Q4, that kind of shifted that $25 million. Was there a separate amount, and I apologize if I missed this, that was a one-time cost save this year that we should think about coming back in 2025? I just wanted to catch what that amount was and even what it was for, if you would share that. Thanks.

Speaker Change: Is it fair to say that you're off to a better start for 2025 than a typical?

Speaker Change: year. So hopefully that's an innocent way to ask it. And then I also did just want to clarify on the expense. I gave it, I heard when you mentioned the 25 million of expense that was sort of borrowed from, you know, that will show up in Q4 that kind of shifted that 25 million. But was there a separate amount, and I apologize if I missed this, that was a, was a, was a one-time, cost saved this year that we should think about coming back.

Speaker Change: In 2025, I've just wanted to catch what that amount was and even what it was for us if you would tear that. Thanks.

Josh Weinstein: Okay. I will actually very directly answer your question. We are starting off even better for 2025 than we did for 2024, which is shaping up to be a record year. We are higher in occupancy and we're higher in price. The brands are doing a great job of really trying to optimize that booking curve and revenue generation. That's not guidance, but it's a point in time and that's where we are.

Speaker Change: Okay. So I will actually very directly answer your question. So we are starting off even better for 25 than we did for 2024, which is shaping up to be a record year. We are higher in occupancy and we're higher in price.

Speaker Change: And the brands are doing a great job of really trying to optimize that book in curve and revenue generation. So that's not guidance, but it's a point in time, and that's where we are.

David Bernstein: As far as the second question is concerned, yeah, there were a couple of reasons why we reduced costs by the full points of the year. One included some one-time benefits. Wasn't huge, probably about $20 million of the $100 million related to some pension credits and a few other little things for the year.

Speaker Change: As far as the second question is concerned, there were a couple of reasons why we reduced cost by the full point city. One included some one-time benefits. Wasn't huge, probably about $20 million of the $100 million, related to some pension credits and a few other little things.

Robin Farley: Okay, great. Thank you.

Josh Weinstein: Thanks, Robin.

Speaker Change: for the year.

Speaker Change: Okay, great. Thank you. Thanks Rob.

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

Speaker Change: Thank you. Our next question comes from line of Ben Tegin with Missy Ho Securities. Please proceed with your question.

Ben Chaiken: Hey, good morning. On the cost side, EBITDA flow-through has been stronger than expected. It was almost 60%. Costs have been better generally for the majority of the year. Can you talk about some of the cost saves, margin opportunities you're finding? Is this simply better leveraging a fleet that is now leaner subsequent to some of the asset sales over the past few years? Is it cost that you're actively pulling out of the business or both? Thanks.

Ben Tegin: Hey, good morning. On the car side, EBITDA 4-3's been...

Speaker Change: You know, stronger than expected, it was almost 60%.

Speaker Change: You know, cost have been better.

Ben Tegin: Generally, for the majority of the year, can you talk about some of the cost-saves, margin opportunities you're finding? Is this simply better leveraging a fleet that is now leaner, subsequent to some of the asset sales? Over the past few years, or is it cost that you're actively pulling out of the business, or both, thanks?

David Bernstein: No, it's not cost that we're pulling out of the business. What we're seeing is hundreds of small items across the board, across many brands. Things like crew travel savings, other port savings opportunities, as well as a lot of sourcing savings, cost innovation, better leveraging our scale across all the brands. That probably represented about half of the $100 million cost savings that we rolled through for the full year.

Speaker Change: No, it's not cost, it will put pull and get into business. I mean, what we're seeing is hundreds of small items across the board, across many brands. Things like...

Speaker Change: Crew travel savings, other ports.

Speaker Change: Port Saving's opportunities as well as a lot of sourcing savings, cost innovation.

Speaker Change: Better leveraging our scale across all the brands and that probably represented about half of the $100 million cost savings that we have rolled through for the full year.

Ben Chaiken: Got it. That's helpful. I guess for Josh, higher level, you folded P&O Australia into the Carnival brand this year. I know it was somewhat smaller scale, do you think there's other opportunities to streamline the portfolio in a similar way going forward? Thanks.

Josh Weinstein: Hi, that's helpful. And then I guess for Josh, higher level, you folded Pino Australia into the carnival brand this year. I know it was somewhat smaller scale, but you think there's other opportunities to streamline the portfolio in a similar way going forward. Thanks.

Josh Weinstein: I'd never say never take things off the table. I think this is one of those decisions that just made a lot of sense and something that we felt pretty passionately about executing quickly. We'll continue to review our portfolio brand by brand, ship by ship. Right now, we feel real good about how we're entering 2025.

Josh Weinstein: Ummm.

Josh Weinstein: You know, I've never seen never taking things off the table. I think this is one of those decisions that just made a lot of sense and something that we felt pretty passionately about executing quickly. We'll continue to review our portfolio brand-by-brand chip-by-ship, but right now we feel real good about how we're entering in 2025.

Ben Chaiken: Thanks.

Josh Weinstein: Thank you.

Operator: Thank you. Our next question comes from the line of James Hardiman with Citi. Please proceed with your question.

Speaker Change: Thank you. Our next question comes from the line of James Hartman with City. Please proceed with your question.

James Hardiman: Hey, good morning. Wanted to dig into some of the cost commentary you gave us, David. 3.5% growth for this year, that seems like it's getting better, obviously, with some cost saves and maybe better inflation. I think you called out about a half a point next year for Celebration Key and another 75 bps from dry docks. I guess, are there any call-outs on the other side of that equation? I don't think our starting point should be in that 5% range if we were to just take the 3.5% this year and add those two call-outs. Maybe talk us through sort of what the base level of inflation is as we think about 2025 and any other sort of positive factors that'll help offset some of the negative ones for next year.

James Hartman: Hey, good morning. I wanted to dig in to some of the costs commentary you gave us.

Speaker Change: So three and a half percent growth for this year that seems like getting better. Obviously with some cost-aves and maybe better inflation. I think you called out about a half of point next year for celebration key in another 75 bits.

Speaker Change: I guess, are there any call out on the other side of that equation? I don't think our starting point should be, you know, in that 5% range, if we were to just take the three and a half this year and add those two.

Speaker Change: Callouts. Maybe talk us through sort of what the base level of inflation is as we think about 2025 and any other sort of positive factors that will help us set in the negative once

David Bernstein: Well, if you know exactly what inflation's going to be over the next 15 months, let me know, we're still trying to figure that out. There is some level of inflation that continues in our business. We'll include that within our guidance when we provide in December. Plus, we continue to work on cost-saving opportunities. As I said in the June call, even though we have the best cost metrics in the business, we still believe there are opportunities in our business to further leverage our scale and to work through those opportunities as we did in Q2 and Q3. We'll continue to do so. We'll include some of that in our guidance, which will offset some of inflation. Stay tuned.

Speaker Change: Don't worry, son.

Speaker Change: If you know exactly what inflation is going to be over the next 15 months, let me know. But we're still trying to figure that out. There is some level of inflation that continues in our business. We'll include that within our guidance when we provide in December plus. We continue to work on cost-saving opportunities.

Speaker Change: You know, as I said in the June call, even though we have the best.

Speaker Change: You know, cost metrics in the business.

Speaker Change: We still believe there are opportunities in our business to further leverage our scale and to work through those opportunities as we did in the second and the third quarter. And we'll continue to do so and we'll include some of that.

Speaker Change: In our guidance, which will offset some of the inflation.

David Bernstein: The two things that I gave in my prepared remarks were relative to the dry docks and the cost of Celebration Key are pretty well fixed at this point. I wanted to highlight those in the prepared remarks.

Speaker Change: So, but the two things that I gave in my prepared remarks were relative to the dry docs and the cost of celebration key are pretty well fixed at this point, and so we wanted to highlight those in the prepared remarks.

James Hardiman: Got it. Then, obviously sounds like everything's going pretty well from a demand perspective. Maybe speak to one of the questions that we keep getting is the potential for the widening conflict in the Middle East to negatively impact your business. To some degree, it would seem to help that much of that region was already vacated in 2024. I guess the hope was that that would be a 2025 tailwind. That now seems off the table. Just maybe speak to how, if at all, you expect that region to impact your business next year.

Speaker Change: Got it. And then, you know, obviously sounds like everything's going pretty well from the demand perspective. Maybe speak to, you know, one of the questions that we keep getting is...

Speaker Change: The potential for the widening conflict in the Middle East to negatively impact your business. I mean, that's nice.

Speaker Change: To some degree it would seem to help that much of that region was already vacated in 2024. I guess the hope was that that would be a 25-tailwind, that now seems off the table. But just maybe speak to how, if at all, you expect that region to impact your business next year.

Josh Weinstein: We weren't banking on it getting better. Hope to God that it doesn't get worse. Thoughts are with everybody in the Middle East region and hoping for peace. Our business isn't really contingent on it. It's not a major source market for us, and we're not going to the region. Unless it were to escalate to something significantly wider than the Middle East, our ships are mobile, and we're in source markets that are phenomenal for us, with lots of potential.

Speaker Change: So, you know, we weren't banking on it getting better and you know hope that it doesn't get worse, you know, thoughts were, you know, everybody in the Middle East region and hoping for peace.

Speaker Change: But our business isn't really contingent on it, it's not a major source market for us and we're not going to the region. So unless it were to escalate to something significantly wider than the Middle East, you know, our ships are mobile, and we're in source markets that are phenomenal for us with lots of potential.

James Hardiman: Got it. Thanks, guys.

Josh Weinstein: Thank you.

Speaker Change: Got it. Thanks, dad.

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

dad: Thank you.

Speaker Change: Thank you. Our next question comes from the line of Patrick Skulls, with true security. Please receive a big question.

Patrick Scholes: Hey. Good morning, everyone.

Josh Weinstein: Hey, Patrick.

Patrick Scholes: Morning. My first question, you talked about dry docks increasing next year. Can you give us a little more possible granularity on dry dock increases or decreases for perhaps some quarters by quarter for next year for modeling purposes? Thank you.

Patrick Skulls: Hey, good morning, everyone. My first question you talked about dry dox increasing next year. Can you get a little more?

Patrick Skulls: possible grain of larity on dry docked increases or decreases for perhaps some quarters. Bye quarter for next year for my awarding purposes. Thank you.

Josh Weinstein: I don't have all that detail handy, Patrick, but if you call Beth, I'm sure she can provide the details.

Speaker Change: So I don't have all that detail handy on Patrick, but if you call that, I'm sure she can provide it.

Patrick Scholes: Okay. Beth, we will call you. Thank you. Second, I see there's some news out about a new cruise pier at Half Moon Cay. Do you have any longer-term plans above and beyond just a pier for Half Moon Cay, such as water parks and the like down the road?

Speaker Change: That's what we will call you. Thank you. And then second I see there's some news out about a new cruise pier at Half Moon K.

Jim: Do you have any longer-term plans above and beyond just a peer for happy and okay, such as water parks and the like, Jim the Road?

Josh Weinstein: Well, I'll give you a yes and a no. Do we have more plans? Absolutely. Do we want a water park? Absolutely not.

Speaker Change: So, I'll give you a yes and a no. So, do we have more plans? Absolutely. Do we want to water park? Absolutely not.

Josh Weinstein: Okay.

Josh Weinstein: The difference between Half Moon Cay and what we're building at Celebration Key is Celebration Key is really that five portals of fun, and looking to be that entertainment center. What we have at Half Moon Cay is one of the most naturally beautiful white sand beach, crescent-shaped islands in the Caribbean, and that's a true private destination and something that we want to enhance. We will be talking about that more over the coming months. I won't steal Christine's thunder, but good things coming. They're going to make that a pretty amazing destination in and of itself for a completely different reason.

Speaker Change: So, the difference between celebration and key and what we're building at the hub end.

Speaker Change: It's a part of me, but the difference between half of him came what we're building in celebration key is celebration key is really that five portals of fun

Speaker Change: and looking to be that entertainment center. What we have at a half moon key is one of the most naturally beautiful light sand beach crescent shaped islands in the Caribbean. And that's a true private destination and something that we want to enhance.

Speaker Change: And we will be talking about that more over the coming months, I won't steal Christine's thunder, but good things coming that are going to make that a pretty amazing destination in of itself for a completely different region.

Patrick Scholes: Great. Sounds great. Thank you. All set.

Speaker Change: Great. Sounds great. Thank you. Awesome.

Operator: Thank you. Our next question comes from the line of Brandt Montour with Barclays. Please proceed with your question.

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

Brandt Montour: Good morning, everybody. Thanks for taking my questions. Just starting off, we haven't really touched on SEA Change and your 3-year targets there. We got a little bit of an update in the release. I guess the question is, Josh, with this new 2024 full-year guidance, obviously, we can calculate the progress you're making, and we can look at that number and imply some KPIs, yields, costs to get to those targets. It's implying a pretty narrow spread between those two and would give us the sense that if we harken back to what you gave us in the Investor Day, which we were thinking for per diems that were sustainable and costs that were sustainable, that we would think you could do better.

Brandt Monttor: Good morning everybody. Thanks for taking my questions. So just starting off, you know, we haven't really touched on sea change and your three-year targets there.

Brandt Monttor: We kind of got a little bit of an update in the release. You know, I guess the question is, Josh, with this new 24-4-year guidance, obviously we can calculate, you know, the progress you're making and we can look at that number.

Speaker Change: and sort of imply some KPIs yields cost to get to those targets in its...

Speaker Change: I'm applying a pretty narrow spread between those two and would...

Speaker Change: Give us a sense that if we've harkin' back to your, you know, what you gave us in the investor day, which we were thinking for Perdiam's, that we're sustainable and cost, that we're sustainable that.

Brandt Montour: I guess if you could just, I know that that was a long-winded way of asking the same question that you've already gotten twice, if you could just give us a sense for how you think about the business in the current operating environment, given all the positive commentary you've said today vis-a-vis those longer-term targets.

Speaker Change: that you know we would think you could do better. So I guess if you could just I know that that was a long-winded way of asking the same question that you've already gotten twice. But if you could just give it a sense for how you think about the business in the current operating environment given all the positive commentary you've said today, these are these those longer term targets.

Josh Weinstein: Well, I think the teams around the world are doing a phenomenal job. If you think about it, in December, we were saying up 8.5 points on percent on yield, up 4.5% on cost, which gets us to 9% ROIC. Now we're saying up almost 10.5% on yield, only up 3.5% on cost. That gets us to 10.5% on ROIC. Clearly, we're outperforming the expectations. It gets us about 75% of the way there for two of the metrics, the EBITDA per ALBD and the ROIC after one year with two years remaining. Carbon is progressing as expected, and we're about 50% there after one year. The teams aren't doing all those things to make targets. They're doing those things to make their guests happy and provide great business results. The outcome is going to be hitting those targets.

Speaker Change: Well, I think the teams around the world are doing a phenomenal job, and you think about it.

Speaker Change: In December, we were saying up 8.5 points on a percent on yields up 4.5% on cost, which gets us to 9% ROI seed. And now we're saying of almost 10.5% on yields, only up 3.5% on cost, it gets us to 10.5%.

Speaker Change: on our LIC. So clearly we're all performing the expectations it gets us about 75% of the way there for...

Speaker Change: Two of the metrics, the EBITDA, per ALBD, and the RLIC.

Speaker Change: After one year with two years remaining, you know, and carbon is progressing as expected. We're about 50% there after one year.

Speaker Change: You know, the teams aren't doing all those things to make targets or doing those things to make their guests happy and provide, you know, great business results. And the outcome is going to be hitting those targets. Do I want to hit them early? Yes, do I want to get farther than that? Absolutely.

Josh Weinstein: Do I want to hit them early? Yes. Do I want to get farther than that? Absolutely. We'll take that in stride, and we'll probably talk more when we get to December guidance, so you can put that in context of where we'll end in 2025 and then take it from there.

Speaker Change: We'll take that and strive and we'll probably talk more when we get to December guidance and you can put that in context. We're going to end in 2025 and then take it from there.

Brandt Montour: Okay. Thanks for that. Then just to follow up, maybe, Josh, if you could address the broader land-based leisure demand environment. What we're seeing elsewhere is not what cruise is seeing. We see steady, slow, somewhat softer normalization. We don't get any of that from you in your commentary today. I guess, we understand why it's happening, but if the rest of the world is narrowing a little bit toward narrowing, let's say, your gap from the top, do you see any of that affecting your consumers' behavior and willingness to spend and pricing sensitivity?

Speaker Change: Okay, thanks for that. And then just to follow up, maybe Josh, if you could address the broader...

Josh Weinstein: land-based, you know, leisure demand environment, you know, we're seeing elsewhere.

Speaker Change: Not what Cruz is seeing, you know, you kind of see sort of steady, slow somewhat softer normalization. You know, we don't get any of that from you and your commentary today. I guess, you know, we understand why it's happening, but if the rest of the world...

Speaker Change: You know, narrowing a little bit toward, you know, and narrowing your, let's say, your gap from the top. Do you see any of that affecting your consumers behavior and willingness to spend and sort of price and sensitivity?

Josh Weinstein: Yeah. We are still a remarkable value to land-based alternatives. Maybe land-based is softening because we're doing better. Who knows? You'd have to ask them that. I can't tell you their business. We have a tremendous value. We are doing a better job of getting our word out, better marketing, more eyes on the industry, more eyes on us. Our new-to-cruise this past quarter was up about 17% year over year. That's not by accident. That's because our brands are really focused on driving that demand profile. I don't have a crystal ball, and I can't tell you what the world's going to look like a year from now, two years from now.

Speaker Change: Yeah, we

Speaker Change: We are still a remarkable value to lamb-based alternatives. Maybe they're maybe, maybe lamb-based is offening because you know, we're doing better. Who knows?

Speaker Change: You have to ask them that, I can't tell you that they're business, but we have a tremendous value. We are doing a better job of getting our word out, better marketing, more eyes on the industry, more eyes on us, our new to crews.

Speaker Change: this past quarter was up about 17% year over year. That's not my accident. That's because our brands are really focused on driving, driving that's a manual file.

Josh Weinstein: I can tell you, if we keep focusing on commercial execution and doing the right things and doing them better, then there's a long runway because the one thing that's never been a question is can we execute on board and deliver a great experience? That's always been the case. It's just a matter of how we convince people to come with us who never have, and I think we're doing a good job on that.

Speaker Change: You know, I don't have a crystal ball and I can't tell you what the world's going to look like, you know, a year from now two years from now, but I can tell you if we keep focusing on commercial execution and doing the right things and doing them better, then there's a long runway because the one thing that's never been a question.

Speaker Change: Is can we execute on board and deliver a great experience? And that's always been the case. It's just a matter of how we can convince people to come with us who have never have. And I think we're doing a good job on that.

Brandt Montour: Great. Congrats on the quarter.

Josh Weinstein: Thank you. I guess I'd be remiss if I didn't shout out the travel agents because all they do is amplify our voice in a tremendous way. That success that we're seeing in building that demand profile is really hand-in-hand with their success, and we appreciate their efforts.

Speaker Change: Great, congrats on the quarter. Thank you.

Speaker Change: I guess I'd be remiss if I didn't shout out the travel agents because all they do is amplify our voice in a tremendous way. And so that success that we're seeing and building that demand profile is really hand in hand with their success and we appreciate their efforts.

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

Speaker Change: Thank you. Our next question comes from a line of Connor coming him with Amelia's research. Please proceed with your question.

Conor Cunningham: Everyone, thank you. Maybe sticking with the comments on new to cruise. When you look at your 2025 bookings, are you seeing new to cruise and new to brand accelerate? If you could just touch on just the younger demographic. I think I asked you that last quarter, but it seems like a pretty big mega trend for you over the long term. Thanks.

Connor: Everyone, thank you. Maybe sticking with that comment on new to crews. Can you? I mean, look at your 25 bookings. Are you seeing new to crews in new to brand accelerate? And if you could just touch on just the younger demographic, I think I asked you that last quarter, but it seems like a pretty big mega trend for you over the long term. Thanks.

Josh Weinstein: Well, sorry, I just got distracted. As far as what the demand profile is for the future bookings, we don't really talk about that in advance, but we're happy to talk about it when we get to our results, and we can talk about what the breakdown is for the profile of the folks who sailed. Suffice it to say, everything I'm saying is not ending in 2024 with respect to our efforts to keep optimizing and keep getting better at execution, keep driving that demand profile, and casting that net as widely as we can. We have almost no capacity growth. All of that increased demand is just going to result in who wants to pay the most to get on our ships. That's what we're driving for.

Speaker Change: Sorry, I just got distracted, as far as what the demand profile is for the future bookings, we don't really talk about that in advance, but we're happy to talk about it when we get to our...

Speaker Change: Our results, and we can talk about what the breakdown is for the profile of the folks who sailed. But suffice is to say everything I'm saying is not ending in 2024 with respect to our efforts to keep optimizing and keep getting better at execution, keep driving that demand profile and catching that net as widely as we can.

Speaker Change: You know, we have almost no capacity growth. So all of that increased demand is just going to result in, who wants to pay the most to get on our ships. And that's what we're driving for.

David Bernstein: Yeah. As far as the age profile is concerned, I think we touched on this last quarter. If you look back at all of our brands over the last 10, 12 years or so, the average age for most of the brands really hasn't changed. Now, of course, the repeat guests who sailed a decade ago are 10 years older, but the average age of our guests. We are attracting a lot of new young people. Some of our brands, like Carnival Cruise Line, has an average age of 41 years old. That's a brand. Obviously, millennials these days are, I think it's 43 or 44 years old or younger. That does represent over half the population in the United States. Carnival's got over half of its guests who are millennials because the average age is 41 or younger.

Speaker Change: And as far as the age for a fight up is concerned, I think we touched on this last quarter. I mean if you look back at all of our brands over the last 10, 12 years or so, the average age for most of the brands really hasn't changed. Now of course the repeat guests.

Speaker Change: who sailed the decade ago or 10 years old, but the average age of our guests. So we are attracting a lot of new young people in some of our brands like Carnival Cruise Line says it's an average age of like 41 years old. So, you know, that's a brand, obviously, millennials these days.

Speaker Change: or I think it's 43 or 44 years old or younger. And that does represent half the over half the population in the United States. But you know, carnivals got over half of its guests who are millennials because the average age is 41 or younger.

Josh Weinstein: I would say, I think I said this on either the last call or the call before. We love Boomers, right? We love Gen X. If you think about our portfolio approach, we have brands like Holland America, like Cunard, where that is where they're trying to push that demand profile because it's folks with a very good income, a very good retirement base, and a lot of time to take cruises that can go 14 nights, 21 nights world cruises. We love the fact that we're pushing harder into that millennial generation, and we're getting that interest and that demand profile, but we don't want that to the exclusion of really leaning into the other generations for what we have to offer.

Speaker Change #100: I would say, I think I said this on either the last call I would call before.

Speaker Change #100: We love boomers.

Speaker Change #101: Right and we love John Adams. I mean, if you think about our portfolio approach, you know, we have brands like Holland America, like Q&A, where that is where they're trying to push that demand profile, because it's folks with...

Speaker Change #101: [inaudible] cruises that can go 14, 9, 21, 9, World Cruises. So we love the fact that we're pushing harder into that millennial generation and we're getting that interest and that demand profile, but we don't want that to the exclusion of really leaning into the other generations for what we have to offer.

Conor Cunningham: Helpful. On Celebration Key, I know you've gotten a lot of questions on that. Just, it is opening in mid of next year. Is it creating the halo effect that you would have expected? Are people asking for it? Maybe they ask it a little bit different. I think you mentioned 19 ships are going to touch there. Are those ones selling out quicker than you would have expected, reverse relative to history in general? Thank you.

Celebration Key: I'm Celebration Key and I've got a lot of questions on that just

Speaker Change #103: You know, it is opening, you know, in mid of next year, you know, is it creating the halo effect that you would have expected? Like, our people asking for it, or maybe maybe they're asking a little bit different. I think you mentioned 19 ships.

Speaker Change #103: We're going to touch there. Like are those ones selling out quicker than you would have expected? Like the first relative.

Josh Weinstein: Unfortunately, because every Carnival ship is going, there's no test case. Season.

Speaker Change #104: It's a history in general. Thank you. Unfortunately, because every corner of the ship is going, there's no, you know, there's no test case. But, um, so, yes, we are seeing a premium for it. We are seeing people that are seeking it out. And the good thing is it hasn't even opened yet. So, you know, we think the rubber is really going to hit the road once we can deliver the experience and really show people what, uh...

Conor Cunningham: Yeah.

Josh Weinstein: Yes, we are seeing a premium for it. We are seeing people that are seeking it out. The good thing is it hasn't even opened yet. We think the rubber is really going to hit the road once we can deliver the experience and really show people what it can do.

Conor Cunningham: Appreciate it. Thank you.

Josh Weinstein: Thank you.

Speaker Change #104: What it can do.

Operator: Thank you. Our next question comes from the line of David Katz with Jefferies. Please proceed with your question.

Speaker Change #104: Thank you.

Speaker Change #105: Thank you. Our next question comes in the line of David Kass with Jeffries. Please proceed with your question.

David Katz: Hi. Morning, everyone. Thanks for taking my question.

Josh Weinstein: Yeah.

David Katz: Hi. I appreciate all the details so far. It's interesting when we look across our coverage, there are some smaller pockets of weakness that consumers have started to demonstrate here and there. This is a broadly based positive quarter, and I just wanted to double-click on the issue of, are there any small pockets, any areas of consumer behavior that we should just keep an eye on as we go forward that are, again, embedded in what appears to be a pretty broad-based strong quarter and outlook?

David Kass: Hi, I'm Mording everyone. Thanks for taking my question.

David Kass: Hi, hi, hi, hi, I'm

David Kass: I appreciate all the details so far and, you know, it's interesting when we look across our coverage. You know, there are some smaller pockets of weakness that, you know, consumers have started to demonstrate here and there.

Speaker Change #107: And this is a broadly-based, you know, positive quarter, and I just wanted to double-click on the issue of, you know, are there, you know, any, you know, small pockets, any, you know, any areas of consumer behavior that we should just keep an eye on.

Speaker Change #107: As we go forward, that are, you know, again embedded in what appears to be a pretty broad-based, you know, strong quarter and outlaw.

Josh Weinstein: Yeah, no, I appreciate the question. I guess I'm happy that I just have to say no. What we're seeing is in fact broad-based. We're seeing that demand for all the brands pretty much across the portfolio. We're seeing it in the booking trends that we've talked about. The onboard spending levels were 7% up year over year. Just off the top of my head. Am I off by a point? Something like that.

Speaker Change #108: I appreciate the question, I guess I'm happy that I just have to say no.

Speaker Change #109: You know what we're seeing is in fact broad-based. We're seeing that demand for all the brands pretty much across the portfolio.

Speaker Change #109: We're seeing it in the booking trends that we've talked about, the onboard spending. You know, the onboard spending levels are we're 7% up year over year.

David Bernstein: It's a lot more than Q2.

Speaker Change #109: So I've stopped my head from my off-by-point at some like that. More than this second quarter. So we're about 6.7 percent. I'm more pretty as a row of 6.7 percent a year over year, which is an acceleration versus the increase that we saw a second quarter versus the prior year. So all the things that you look at is that the man profile changing or is the state of the consumer changing. I can't speak to macro economics because it's a lot going on in the world, but at least with what we have to offer people they're happy to pay and to participate. And we think that's a great thing and we think that goes back to all the things that we've been talking about for the last few years about what we want to focus to make sure that we are doing a better and better job this time goes on.

Josh Weinstein: Yeah, 6.7%. Onboard per diems were up 6.7% year over year, which is an acceleration versus the increase that we saw Q2 versus the prior year. All the things that you look at, say, is that demand profile changing or is the state of the consumer changing? I can't speak to macroeconomics because there's a lot going on in the world, but at least with what we have to offer, people are happy to pay and to participate. We think that's a great thing. We think that goes back to all the things that we've been talking about for the last two years about where we want to focus and make sure that we are doing a better and better job as time goes on.

David Katz: Perfect. If I can, just as my follow-up, are you able to observe or record any trade-down dynamics where part of the demand you're seeing is a consumer who's traded out of something else and into a cruise vacation?

Speaker Change #110: Perfect. And if I can just just my follow-up, are you able to observe or record you know any trade-down dynamics where you know part of the demand?

Speaker Change #110: You know, you're seeing as, you know, a consumer who's, you know, traded out of something else and into a cruise vacation.

Josh Weinstein: No, nothing that we've seen that says that. I think it's the opposite. It's we're doing a better job of convincing them that this is something they want to do, not because they're trading down from something, but that they want to experience what we have to offer.

Speaker Change #111: No, nothing that we've seen that says that, I mean, I think it's the opposite, it's we're doing a better job of convincing them, this is something they want to do, not because they're trading down from something but that they want to experience what we have to offer.

David Katz: Okay. I apologize for the questions.

Speaker Change #112: Okay, and I apologize for the, you know, the questions my ratings are going to be there. I did a good question. I did a good question. Very fair. Congrats on the quarter.

Josh Weinstein: No, I think they were good questions.

David Katz: Okay, got it.

Josh Weinstein: Very fair.

David Katz: Congrats on the quarter. Yep.

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

Speaker Change #113: Thank you. Our next question come to an line of Jamie Katz with more Morningstar. Please wish you a good your question.

Jaime Katz: Hi, good morning. I'm curious if you have any update on, I guess, the Chinese consumer. Is it trending as you would like, or Asia Pacific in general? Because the data that's been coming out of the region has been a little bit lumpy, and it was obviously something that was pretty meaningful prior to the pandemic. Thanks.

Jamie Katz: Hi, good morning. I'm curious if you have any updates on the Chinese consumer, is it trending, as you would like, or Asia Pacific in?

Jamie Katz: in general, just because the data that's been coming out of the region has been a little bit lumpy. And it was obviously something that was pretty meaningful prior to the pandemic. Thanks.

Josh Weinstein: Hi, Jaime. It wasn't very meaningful for us prior to the pandemic. In the grand scheme of things, it was a few percentage points of our capacity that was really dedicated to China. We have, as I've been pretty open about, I'm ecstatic that it's reopened to international cruising. It's not something that we're pursuing at this time and have not. With respect to the region overall, when it comes to Japan, Taiwan, and other regions, that's going well. People liked cruising with us before, they continue to enjoy it now.

Speaker Change #115: It wasn't very meaningful for us prior to the pandemic and the grand scheme of things. It was a few percentage points of our capacity that was really dedicated to China. We have, as I've been pretty open about, I've been able to do that.

Speaker Change #115: I'm ecstatic that it's reopened to international cruising, I wanted to be very successful for our competitors, but it's not something that we're pursuing at this time and have not.

Speaker Change #115: With respect to the region overall, when it comes to Japan, Taiwan and other nations that's going well, people like cruising with us before and they continue to enjoy it now.

Jaime Katz: Yeah, I was just curious if there was any movement with outbound travel more so than anything else.

Speaker Change #116: Yes, I'm just curious if there was any movement with outbound travel more so than anything else. As far as occupancy in the European brands, is there a little bit of room left in that for upside or has the gaps sort of closed on that?

Josh Weinstein: Yeah.

Jaime Katz: As far as occupancy in the European brands, is there a little bit of room left in that for upside, or has the gap sort of closed on that?

Josh Weinstein: Overall, we're back to historical norms, which is a range. It's not a number. I'd say all of our brands, to varying degrees, have the ability to maybe drift a little higher here and there. It's not going to be a big driver of our improvement as we look forward. It's really going to be from driving price, which is where we're focused. There's always an opportunity to make some tweaks and find some more occupancy.

Speaker Change #117: Hey, baby, overall we're back to historical norms, which is a range, it's not a number. And I'd say all of our brand's to varying degrees have the ability to, you know, maybe dressed a little higher here and there.

Speaker Change #117: It's not going to be a big driver of our improvement as we look forward. It's really going to be from driving price, which is where we're focused. But there's always an opportunity to make some tweaks and find some more occupants.

Jaime Katz: I don't think you guys had mentioned anything on any hurricane impact, but any insight to the cost of that disruption, if you have it, would be helpful. Thanks.

Speaker Change #118: And I don't, I don't think you guys had mentioned anything on any hurricane impact, but any insight to the cost of that disruption, if you have it, would be helpful. Thanks.

Josh Weinstein: Yeah. Ours is insignificant compared to the impact that it’s having on the region, which, first and foremost, we should take a second to just think about. Putting that aside, it’s a few million USD for us. It’s not anything of significance.

Speaker Change #119: Yeah, I mean, our arses, it's a...

Speaker Change #120: In-significant compared to the impact that it's having on the region, which, you know, first and foremost, we should take a second to just think about, but putting that aside, you know, it's a few million dollars for us. It's not anything of significant.

Jaime Katz: Excellent. Thanks.

Josh Weinstein: Yeah.

Operator: Thank you. Our next question comes from the line of Assia Georgieva with Infinity Research. Please proceed with your question.

Speaker Change #120: Next one, thanks.

Speaker Change #121: Thank you. Our next question comes from a line of ASEA, Georgia, about with Infinity Research. Please receive it a question.

Assia Georgieva: Good morning, guys. Congratulations on a great quarter. I'll just delve into the few quick questions that I have. Occupancy is still not fully caught up relative to fiscal 2019. Isn't that by itself already a yield opportunity?

Speaker Change #122: Good morning, guys. Congratulations on a great quarter and I will just delve into the few quick questions that I have. Occupancy is still not fully caught up throughout the fiscal 2019. Isn't that by itself already a year-up opportunity?

Josh Weinstein: Yeah, like I said, we operate in a range for occupancy, and we are within our range, but there's certainly the opportunity to push that a little bit more. It's just not going to be the biggest driver of how we can improve the revenue picture going forward.

Speaker Change #123: Like I said, we operate in a range for occupancy and we are within our range, but there's certainly the opportunity to push that a little bit more. It's just not going to be the biggest driver of how we can improve the revenue picture going forward.

Assia Georgieva: Maybe a quick question for David. Fuel costs seem to be quite a bit higher relative to what we were estimating because we track for 180, 380 at MGO. Could that possibly be related to shore power in the Baltics, Denmark, Germany ports that are offering shore power, Sweden, et cetera? Is that part of the play there?

Speaker Change #123: And maybe a quick question for David, if your cost seemed to be a little bit higher relative to what we were estimating, because we tracked, I have followed 183 AD at NGL. Could that possibly be related to shore power in the Baltics, you know, Denmark?

David: Germany boards that are offering short power, you know.

David: Sweden etc. is that part of the place there?

David Bernstein: No, because our shore power, when we buy it, is actually not included in the fuel expense. It's included in port expenses because we purchase it at the port. That would not have been an impact. I'm not sure what you're looking at and what you're tracking. But Beth can give you some websites to look at, which maybe will improve your tracking overall.

David: No, because our shore power, when we buy it, is actually not included in the fuel expenses included in port expenses, because we purchased it at the port.

Speaker Change #125: So that would not have been an impact. So I'm not sure what you're looking at and what you're tracking. But you know, Beth can give you some websites to look at, which maybe will improve your tracking overall.

Assia Georgieva: That would be great. Beth, I'm sorry I'll bother you on this one. Basically, my second question, given the acceleration in EBITDA generation, and how far ahead you're with the SEA Change program, is it possible at this point to order a sister ship for 2027, 2028 delivery, whether it's for a Princess brand or a Carnival brand?

Speaker Change #125: That would be great and best. I'm sorry, I'll bother you on this one. Basically, my second question.

Speaker Change #126: Given the acceleration in EBITDA generation, in how far ahead you are with the C change program, is it possible at this point too?

Speaker Change #127: Order a sister ship for 2027-2028 delivery whether it's for a princess brand or a carnival brand

Josh Weinstein: No. Our order book is set through 2028. We feel very good about that. As you know, we did order what we call Project Ace which is that next generation for Carnival, but that doesn't start until 2029. The focus of all that EBITDA generation is really its cash flow, and we're going to use the headroom with the reduced capital expenditures to pay down debt.

Speaker Change #128: Now, our order book is set through 2028. We feel very good about that. And as you know, we did order, you know, what we call Project Ace, which is that next generation for Carnival, with that doesn't start until 2029.

Speaker Change #128: You know, the focus of all that EBITDA generation is really it's cash flow and we're going to use the headroom with a reduced capital expenditures to pay down debt.

Assia Georgieva: Josh, in terms of the debt tranches, we're going after the highest cost of debt, correct?

Speaker Change #129: So, just in terms of the trenches, we're going after the highest cost of that, correct?

Josh Weinstein: Well, as long as it's got a good NPV, if we want to pay it down. There's a lot of factors. Yeah, go ahead.

Speaker Change #130: Well, as long as it's got a good MPV if we want to pay it down, so there's a lot of factors that go ahead. It's going to say it's really a combination of three.

David Bernstein: I was going to say, it's really a combination of three things that we look at. One is the cost of the debt. We do have two double-digit issuances out there. Both are callable in 2025. That should help our overall. We'll look at refinancing those in the early part of next year. We also look at the maturity towers. We're well set through 2026 on maturity towers. They're very well managed. The towers in 2027 and 2028, we'll be looking at refinancing some of that, as well as looking at secured versus unsecured debt. Our goal is to get to be completely unsecured. We'll manage that over time as we move forward.

Speaker Change #130: We look at one is the cost of the debt and we do have two double-digit issuance is out there, both are callable in 2025, so that should help our overall economy.

Speaker Change #130: We'll look at refinancing those in the early part of the next year. We also look at the maturity towers. We'll well set through 26 on the 30 towers, they're very well managed.

Speaker Change #130: But the towers in 27 and 28 will be looking at refinancing some of that, as well as looking at secured versus unsecured debt. Because our goal is to get to be completely unsecured, but we'll manage that over time as we move forward.

Assia Georgieva: David, that was basically my question, highest cost versus secured towers.

Speaker Change #130: And David, that was basically my question, you know, high-askers versus secured hours.

David Bernstein: I'm sorry.

Assia Georgieva: It's a balancing act, I imagine.

David Bernstein: Correct.

Speaker Change #131: So it's a balancing act I imagine.

Assia Georgieva: All right. Lastly, if I may ask, somebody is encroaching on your Galveston, Texas, port and building a terminal there. What do you think about that? They already have a presence in Miami and are doing Port Canaveral, et cetera. An unnamed competitor who do not have to report to us on ROIC or other metrics. How do you feel about sort of the, what I call the encroachment?

Speaker Change #131: Correct.

Speaker Change #132: I'm sorry, I'm sorry, I'm sorry, I'm sorry.

Speaker Change #133: All right, and lastly, if I may ask, somebody is encroaching on your Galveston Xusport and building a terminal there. What do you think about that? They already have a presence in Miami, and are doing ports, can I have a separate, unnamed competitor who do not have to report to some ROIC or other metrics?

Josh Weinstein: I don't think about it as an encroachment. We are 2% of the overall vacation market. If it's the company I think you're talking about, it's a small part of the overall cruise market. Growing, but small. There's the demand profile, as long as we do our jobs with our world-class portfolio of brands, we'll be just fine. I got to cut you off, though. You did three questions, and the operator only said one. Sorry.

Speaker Change #133: How do you feel about serve the what I call the encroachment?

Speaker Change #134: I don't think about it as an encroachment. You know, we are 2% of the overall vacation market. And if it's the company, I think you're talking about it's a small part of the overall cruise market. Growing, but small.

Speaker Change #134: And so there's the man profile as long as we do our jobs with our world-class portfolio brands, we'll be just fine.

Speaker Change #135: Thank you. Our next question comes from the line of Dan Pollitzer with Wells Fargo. Please proceed with your question.

Operator: Thank you. Our next-

Josh Weinstein: Well done, though.

Operator: Question comes from the line of Daniel Politzer with Wells Fargo. Please proceed with your question.

Daniel Politzer: Hey, good morning, everyone. Thanks for taking my questions. Josh, I do want to follow up on the Q4 yield comment. I know you mentioned there really wasn't much, if any, actually any change to your prior guide. As we think about the Q3 came in better, David cited better closing demand and onboard driving the beat. I mean, is there any reason that wouldn't be in the cards for the Q4? Are there near-term demand hiccups or noise, whether it's the news cycle or election, that could be maybe driving additional conservatism?

Dan Pollitzer: Hey, good morning, everyone. Thanks for taking my question.

Dan Pollitzer: Josh, I do want to fall upon the fourth quarter yield comment. I know you mentioned that there really wasn't much, if any, actually, any change to your prior guide.

Speaker Change #137: As we think about, you know, the third quarter came in better, gave excited, better, close in demand and on board driving the beat. I mean, is there any reason that wouldn't be in a car for the fourth quarter or are there near-term demand hiccups or noise, whether it's the new cycle or a lecture in that could be maybe driving additional conservatism?

Josh Weinstein: Look, we try to give you our best estimate of what's going to happen. Do we always try to outperform? Absolutely. That's the goal. There's nothing in particular about Q4 other than what you said. I mean, right, the next month, a lot of attention's going to be focused on something other than what's normal. It happens every 4 years. We'll see what kind of impact that has. The business is still going strong, and we expect a lot of ourselves.

Speaker Change #138: Look, we try to give you our best estimate of what's going to happen. And do we always try to outperform, absolutely, you know, that's the goal. There's nothing in particular about the fourth quarter other than what you said. I mean, right the next month, a lot of attention is going to be focused on something other than, you know, which normal happens every four years. So we'll see what kind of impact that has, but what the business is still going strong. And we expect a lot of ourselves.

David Bernstein: Yeah. Also keep in mind, with 99% of the ticket revenue for the year already on the books, there's not a lot left to sell.

Speaker Change #139: And also keep in mind, 99% of the ticket revenue for the gear already on the books is not allowed to sell.

Josh Weinstein: Yeah.

Daniel Politzer: Right. No, that makes sense. Just for my follow-up, in a couple of weeks, you're hosting some investors aboard Sun Princess. Any way to kind of think about maybe framework and maybe kind of the key topics we should focus on? It seems like there's a lot of progress on SEA Change, your Celebration key, maybe some of these cost opportunities or savings from easing inflation. What are kind of the key high-level focus points we should be thinking about? Thanks.

Speaker Change #140: Right, no, that makes sense. And this is for my follow-up.

Speaker Change #141: You know, in a couple of weeks, you're hosting some investors aboard some princess.

Speaker Change #142: You know, any way this kind of think about maybe framework is and maybe kind of the key topics we should focus on. It seems like there's a lot of progress on, you know, key change, your celebration key. Maybe some of these call-stop opportunities or savings from easing inflation. But what are the kind of the key high-level field disappoints we should be thinking about? Thanks.

Josh Weinstein: Look, it's been about 15 months since we got together for the first time to talk about what our priorities were and announce SEA Change. I think it's a good opportunity for us to just kind of level set on where we are in everything, and hopefully, as you see it, the way we see it, which is the progress that we're making across the board. We also get an opportunity to showcase the Princess brand and specifically the Sun Princess, which is just a true game changer for Princess, and I'd say for the premium market. She's a remarkable ship, and the team on board does a remarkable job.

Speaker Change #143: Although it's been...

Speaker Change #144: It's been about 15 months since we got together for the first time to talk about what our priorities were and announce each change.

Speaker Change #145: I think it's a good opportunity for us to just kind of level set on where we are and everything and hopefully as you see it, the way we see it, which is the progress that we're making across the board.

Speaker Change #146: We also get an opportunity to showcase the Princess brand.

Speaker Change #146: and specifically the sum princess, which is a just a true game changer for princess. And I'd say for the premium market, she's a remarkable ship and the team on board does a remarkable job.

Josh Weinstein: You'll also get an opportunity not just to hear from me and David, but you'll be able to hear from the president of that brand and to actually meet the presidents of pretty much all of our brands who will be there with us. Good opportunity for you to get a little bit more educated and inundated by all things Carnival Corporation.

Speaker Change #146: And you'll also get an opportunity, not just to hear from me.

Speaker Change #146: But you'll end David, but you'll be able to hear from the president of that brand and to actually meet the presidents of pretty much all of our brands who will be there with us. So good opportunity for you to get a little bit more educated and inundated by all things Carnival Corporation.

Daniel Politzer: That's great. Thanks so much, and congrats on a nice quarter.

Josh Weinstein: Thanks a lot, Dan.

Speaker Change #147: That's great. Thanks so much in congrats on our nice quarter. Thanks a lot, then.

Operator: Thank you. Our next question comes from the line of Chris Stathopoulos with SIG. Please proceed with your question.

Speaker Change #148: Thank you. Our next question comes from the line of Chris Thathelappelos with SIG. Please pursue your question.

Chris Stathopoulos: Good morning. Thanks for taking my question. Josh, I'm going to ask the demand question here in a different way. As we think about global travel and tourism and think about different segments, if you will, within the ecosystem, lodging, airlines. Hearing sort of a different dynamic here as we think about demand, certainly within lodging, lower to middle-income consumers, some concerns around price sensitivity, a little bit of a mixed bag in airlines. In cruise lines, this is unique here, with what feels like this sort of persistent demand and just kind of ongoing momentum, if you will. Now, I was wondering if you could rank order it, but think about the moving pieces as to the why. There's the new to cruise piece, I would say perhaps the later reopening of certain markets, strong US dollar, discount to land-based trips, base loading.

Chris Thathelappelos: The warning thanks for taking my question. So Josh, I'm going to ask the demand question here in a different way as we think about.

Chris Thathelappelos: global travel and tourism and think about different

Speaker Change #150: segments, if you will, within the ecosystem, so lodging airlines.

Speaker Change #151: Hearing a different dynamic here as we think about demand, certainly within lodging, lower to middle and consumer concerns around price sensitivity.

Speaker Change #152: Little bit of a mixed back in airlines. In cruise lines, this is unique here.

Speaker Change #152: With what feels like this sort of persistent demand and just kind of ongoing momentum, if you will, now I was wondering

Speaker Change #153: If you could rank order, I think about the moving pieces as to the walk-in. So there's the new to cruise piece, I would say, perhaps the later reopening of certain markets, growing US dollar discount to land-based trips, base loading.

Chris Stathopoulos: If you could help provide some context as we think about the moving parts of demand here. There is still some debate around whether this is any pent-up demand here, which I think is just not the case, or is this actual base load going forward? Thanks.

Speaker Change #154: To just give you could help us provide some context as we think about the moving parts of demand here. There's still some debate around whether this is any pent-up demand here, which I think is just not the case or what act we, you know, is this actual base load going forward? Thanks.

Josh Weinstein: Well, I guess the most affirmative thing I'll say is I completely agree with you. It's not pent-up demand anymore. We've been sailing for over three years now. I think that has come and gone. I'm not going to answer your question by rank ordering. I would say that when it comes to all of the industry, I think we're all doing a pretty good job at that demand generation and creation and getting awareness, getting people interested in cruising who maybe have never thought about it before. With respect to us, there is a lot of activity going on at all of our brands to really just try to do better and better at blocking and tackling when it comes to the commercial operations, right? Generating new creative, generating more eyeballs in performance marketing, looking for and then being looked at by the right potential customer.

Speaker Change #155: Well, I guess the most affirmative thing I'll say is I completely agree with you. It's not pent up the man anymore.

Speaker Change #156: We've been sailing for over three years now, so I think that that is

Speaker Change #156: That is coming, you know?

Speaker Change #157: I'm not going to answer your question by rank ordering, but I would say that when it comes to all of the industry, I think we're all doing a pretty good job at that demand generation in creation, getting awareness, getting people interested in cruising, who maybe have never thought about it before, with respect to us.

Speaker Change #157: You know, there is a lot of activity going on at all of our brands, so really just try to do better and better at blocking the tackling.

Speaker Change #157: when it comes to the commercial operations, right? Generating.

Speaker Change #157: You know, new creative, generating more eyeballs in performance marketing, looking, looking for and then, you know, being looked at by the right, by the right potential customer, driving people to our trade partners, driving people to our websites, doing everything we can to just get the word out and get them interested. And I think that's part of, you know.

Josh Weinstein: Driving people to our trade partners, driving people to our websites, doing everything we can to just get the word out and get them interested. I think that's part of what's driving us in a pretty significant way.

Chris Stathopoulos: Okay. As my follow-up, David, my math here, I have about a point and a quarter on the adjusted NCCs for next year, and we can come up with our own assumptions, as you said, on inflation. As we think about the other moving pieces here, puts and takes on the advertising side, I think it said that it's expected to be elevated in Q4. Is there a reason? Or how should we think about next year? Do we need this level of advertising per ALBD to continue? Is it part of the base load book plan, or can we expect that to sort of get softer, if you will, as that initiative continues to take hold? Thanks.

Speaker Change #157: What's driving us in a pretty significant way?

Speaker Change #157: Okay, and then it's my follow-up David so

David: My math here I have about a point and a quarter on the adjusted NCCs for next year and we can come up with our own assumptions as you said on inflation. Because we think about the other moving pieces here puts and takes on the advertising side.

Speaker Change #158: I know I think it's expected to be elevating for Q. Is there a reason?

Speaker Change #159: Or how should we think about next year and do we need this level of advertising for LBD to continue?

Speaker Change #160: Is it part of the base load book plan or can we expect that to sort of get softer if you will, as that initiative, continues to take hold. Thanks.

David Bernstein: Yeah. The advertising, as well as many other decisions, are things that we really need to talk about over the next month or two in the planning process, which we're in the midst of doing. We'll give guidance in December relative to all of those items. It would be premature for us to be making a decision today exactly what we want to do, particularly for next summer or the back half of next year in advertising. We'll give you more insight into that in three months.

Speaker Change #161: Yes, so the advertising as well as many other decisions, so things that we really need to talk about over the next month or two in the planning process, which we're in the...

Speaker Change #162: In the midst of doing, and we'll keep guidance.

Speaker Change #162: in December relative to all of those items. It would be premature for us to be making a decision today exactly what we want to do, particularly for, you know, next summer or the back half of the next year and advertising. So we'll give you more insight into that in three months.

Josh Weinstein: I'd just add a couple of things. One is, remember, we just talked about a record-setting 2026 booking period. We're not just booking for the short term, we're booking for the long term. Advertising is a combination of getting people to consider things for the longer term and getting the ships filled as we need to in the shorter term. The metric of just looking at it on an ALBD basis is useful for benchmarking, but it's not too scientific. It's really about how much bookings we want to generate and how we think we need to spend to go get it. I think we're doing a good job.

Speaker Change #162: I just added a couple of things. One is

Speaker Change #162: You know, remember, we just talked about a record setting 2026 booking period. So we're not just, you know, we're not just booking for the short term. We're booking for the long term and advertising is a combination of, you know, you know, getting people to consider things for the longer term and getting the shifts filled as we need to in the shorter term.

Speaker Change #162: So the metric of just looking at it on an ALBD basis is

Speaker Change #162: It's useful for benchmarking, but it's not too scientific. It's really about how much bookings we want to generate, and how we think we need to spend to go get it. And I think we're doing a good job. And when you do a look at us at a benchmark basis, even though we're higher than we were back in 2019, I think a couple of percent higher year over year, we're still quite a bit lower than most, if not everyone. So we'll continue to be thoughtful about it and do what we think we need to do to drive the business.

Josh Weinstein: When you do look at us at a benchmark basis, even though we're higher than we were back in 2019, and I think a couple of percent higher year over year, we're still quite a bit lower than most, if not everyone. We'll continue to be thoughtful about it and do what we think we need to do to drive the business. I think we got time for one more.

Chris Stathopoulos: Thank you.

Josh Weinstein: Yeah. Thank you. I think we got time for one more, if there are any more, operator.

Speaker Change #163: I think we got time for one more. Yeah, thank you. I think we got time for one more if there are any more operating.

Operator: Thank you. Our final question comes from the line of Fred Wightman with Wolfe Research. Please proceed with your question.

Speaker Change #164: Thank you. Our final question comes from a line at Fred Whiteman with Wolf Research. Please proceed with your question.

Fred Wightman: Hi, guys. Thanks for sneaking us in. I just wanted to come back to new-to-cruise, Josh. I think you said that was up 17% this quarter. Last quarter that was up 10%, so it's a pretty big acceleration for a brand that's as big as you guys are. Can you touch on what drove that? Was there a reallocation of some of the ad spend? Maybe how you think strategically that could sort of increase that penetration stat from 2% to something larger as a percentage of total vacation spend. Thanks.

Fred Whiteman: I'm yours.

Fred Whiteman: Thanks for your speaking. I just wanted to come back to New Decorate's Josh. I think you said that was up 17% the this quarter last quarter. That was up 10% so it's a pretty big acceleration for a brand. It's as big as you guys are, keep touch on what drove that was it was there a reallocation of some of the ad spend and maybe how you think strategically.

Speaker Change #166: That could sort of increase that penetration stat from 2% of something larger as the percentage of total vacation spends. Thanks.

Josh Weinstein: Yeah. There's no one thing that's going to be the answer for driving new to cruise either. It is that same combination of better advertising, the trade doing a great job, and better usability of our websites. I'd say Alaska, in particular for this past year, was off the charts, was absolutely phenomenal, and that tends to skew higher to new to cruise because if you're going to go see Alaska, which everybody should go do, the only way you can go see it is by a cruise ship to really appreciate it. The only way you should do that is by one of our brands because they do it amazingly. We have more permits for Glacier Bay than anybody else, and we have the shoreside footprint that nobody else has and can replicate. That has served us very well.

Speaker Change #167: Yeah, so there's no one thing that's going to be the answer for driving you to cruise you there is that same combination of better advertising the trade doing a great job.

Speaker Change #168: But our usability of our website, you know, I'd say Alaska in particular for this past year was off the charts. It was absolutely phenomenal and that tends to skew higher to new crews because if you're going to go see Alaska, which everybody should go do, the only way you can go see it is by a cruise ship to really appreciate it. And the only way you should do that is by one of our brands because they do it amazingly. And we have more permits for Glacier Bay than anybody else. And we have the shore side.

Speaker Change #168: What print that nobody else has and can replicate. So that has served as very, very well. And I'd say it's, you know, the same things that you've heard me talk about in the press quarters. I hope you'll continue to talk about it in the quarters to come about to do in the basic better.

Josh Weinstein: I'd say it's the same things that you've heard me talk about in the past quarters that hopefully I'll continue to talk about in the quarters to come about just doing the basics better.

Fred Wightman: Thank you.

Josh Weinstein: I appreciate it. Well, thank you everybody for joining us, and I look forward to talking again in a few months for those of you that I don't see next week. Take care.

Speaker Change #169: Thank you.

Speaker Change #170: I appreciate it. Well, thank you everybody for joining us and look forward to talking again in a few months for those of you that I don't see next week. Take care.

Operator: Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation. Greetings, and welcome to the Carnival Corporation PLC Q3 2024 earnings call. At this time, all participants are in a listen-only mode. A 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. I would now like to turn the call over to your host, Beth Roberts, Senior Vice President, Investor Relations. Thank you. You may begin.

Speaker Change #171: Thank you, this concludes the late conference call you may disconnect your lines at this time. Thank you for your participation.

Speaker Change #172: Music Music

Speaker Change #172: Music

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Speaker Change #173: Greetings and welcome to the Carnival Corporation PLC 3rd quarter 2024 earnings call. At this time, I'll participate in a listen only mode, a question and answer session will follow the formal presentation. If anyone who requires operator assistance during the conference, please press stars zero on your telephone keypad.

Speaker Change #173: As your mind or this conference is being recorded, I would now introduce on the call over to your host, Beth Roberts, Senior Vice President, and Beth relations. Thank you. You may begin.

Beth Roberts: Thank you. Good morning, and welcome to our Q3 2024 Earnings Conference Call. I'm joined today by our CEO, Josh Weinstein, our Chief Financial Officer, David Bernstein, and our Chair, Micky Arison. Before we begin, please note that some of our remarks on this call will be forward-looking. Therefore, I will refer you to the 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, EBITDA, net income, 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: Thank you. Good morning and welcome to our third quarter 2024 earnings conference call.

Speaker Change #174: I'm joined today by our CEO Josh Weinstein, our Chief Financial Officer David Birdstein.

Speaker Change #175: And our chair, Mickey Erson, before we begin, please note that some of our marks on this call will be forward-looking. Therefore, I will refer you to the forward-looking statement in today's press release.

Speaker Change #175: All references to ticket prices, net premiums, net yields and adjusts his cruise costs without fuel will be in constant currency unless otherwise stated.

Speaker Change #175: References to Virginians and yields will be on a net basis.

Speaker Change #175: Our comments may also reference cruise calls without fuel, even though net income, free cash flow in our IP.

Speaker Change #175: All of which will be on a adjusted basis unless the otherwise dated. All these references are not gap financial measures defined in our earnings press release, a reconciliation to the most directly comparable U.S. gap financial measures, and other associated disclosures are also contained in our earnings press release in our investor presentation.

Beth Roberts: A reconciliation to the most directly comparable US GAAP 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 press release and investor presentation can be found. With that, I'd like to turn the call over to Josh.

Speaker Change #175: Please visit our corporate website where our earnings, especially as soon as your presentation, can be found. Without and like to turn the call over to Josh.

Josh Weinstein: Thanks, Beth. Before I begin, I'd like to express my support and heartfelt sympathy for all those impacted by Hurricane Helene this past week. Our thoughts and prayers are with you. With that, I'll turn to our prepared remarks. As September comes to an end and we close out the year, I am happy to report that we are delivering well in excess of 2024 expectations. We've also built an even stronger base of business for 2025, and we're off to an unprecedented start to 2026. Our Q3, by all accounts, was phenomenal, breaking multiple records and outperforming on every measure. Revenues hit an all-time high of almost $8 billion, $1 billion more than last year's record level. Record EBITDA exceeded $2.8 billion, up $600 million over last year and $160 million over guidance.

Josh Weinstein: Thanks, Beth. Before I begin, I'd like to express my support and heartfelt sympathy for all those impacted by Hurricane Alina this past week.

Josh Weinstein: Our thoughts and prayers are with you.

Josh Weinstein: With that, I'll turn to our prepared remarks.

Speaker Change #176: As September comes to an end and we close out the year, I am happy to report that we are delivering well in excess of 2024 expectations.

Speaker Change #176: We've also built an even stronger base of business for 2025 and we're off to an unprecedented start to 2022.

Speaker Change #176: Our third quarter, by all the camps, was Banada, breaking multiple records and outperforming on every measure.

Speaker Change #176: Revenue is in all-time high of almost 8 billion dollars, a billion more than last year's record level.

Speaker Change #176: record EBITDA, exceeded 2.8 billion dollars, up $600 million over last year, and $160 million over guidance.

Josh Weinstein: We delivered over 60% more net income than the year prior, achieving double-digit ROIC as of the end of our Q3. These improvements were driven by high margin, same ship yield growth across all major brands, not driven by capacity growth. It resulted in EBITDA and operating income on a unit basis of 20% and 26% respectively, to levels we have not seen in the last 15 years. Strong demand enabled us to increase our full-year yield guidance for the third time this year. Consistent with our historical emphasis on efficiency, we also improved our cost guidance, which enabled us to drive more revenue to the bottom line.

Speaker Change #176: And we delivered over 60% more than a year prior, achieving double digits R and YC as a BM of our third court.

Speaker Change #176: These improvements were driven by high margin, same ship, yield growth across all major brands, not driven by capacity growth.

Speaker Change #176: And it resulted in EBITDA and operating income on a unit base of 20% and 26% respectively. To levels we've not seen in the last 15 years.

Speaker Change #176: Strong demand, enable us to increase our full year yield guidance for the third time this year.

Speaker Change #176: and consistent with our historical emphasis on efficiency.

Speaker Change #176: We also include our class guidance, which enable us to drive more revenue to the bottom line.

Josh Weinstein: With around 99% of our 2024 ticket revenue already on the books, we're poised to deliver record EBITDA of $6 billion, almost $600 million above our prior peak and $400 million above the original guidance we set in December. ROIC is expected to end the year at 10.5%, a point and a half better than our original December guidance, and almost double last year's ending point. Looking forward, the momentum continues as we actively manage the demand curve. At this point in time, 2025 hits a historical high on both occupancy and price. All core deployments are at higher prices than the prior year. Every brand in our portfolio is well-booked at higher prices in 2025, demonstrating the ongoing benefit of our demand generation efforts throughout our optimized portfolio. Our base loading strategy is continuing to work well, allowing us to take price thanks to having pulled ahead on occupancy.

Speaker Change #176: With a route 99% of our 2024 ticket revenue all ready on the books, we're going to deliver a record e-bidot of $6 billion. Almost $600 million of our prior peak, and $400 million of the original guy is set in December.

Speaker Change #176: RLIC is expected to end the year as 10 and a half percent of point and a half better than our original December guidance. And almost double last year's ending point.

Speaker Change #176: Looking forward, the momentum continues as we actively manage the demand curve.

Speaker Change #176: At this point in time, 2025 is the historical high on both occupancy and press. All court appointments are at higher prices than the prior year.

Speaker Change #176: Every brand in our portfolio is well booked at higher prices in 2025. Demonstrating the ongoing benefits of our demand generation efforts throughout our optimized portfolio.

Speaker Change #177: Our base voting strategy is continuing to work well, allowing us to take price, thanks to having told ahead on oxygen.

Josh Weinstein: In fact, in the last three months, our 2025 booked positions price advantage versus last year has actually widened for the full year and for each quarter individually. With nearly half of 2025 already booked, we feel confident in maintaining our trajectory. While early days, the benefit of our enhanced commercial performance is carrying nicely into 2026 as we just achieved record booking volumes in the last three months for sailing that far out. This incredibly strong book position for 2024, 2025, and 2026 drove record Q3 customer deposits towards $7 billion. That's along with continued growth in pre-cruise purchases of onboard revenue. It's also gratifying to note that onboard spending levels were not only up strong again this quarter, our year-over-year improvement in onboard per diems actually accelerated from the prior quarter.

Speaker Change #177: In fact, in the last few months, our 2025 Book Physicians Price Advanced Edge first last year had actually widened for the full year and for each quarter in division.

Speaker Change #177: And with nearly half of 2025 already booked, we feel confident in maintaining our trajectory.

Speaker Change #177: Well, early days, the benefit of our enhanced commercial performance is cherry nicely into 2020's steps, as we just achieved record-looking volumes in the last three months for sailing that RF.

Speaker Change #177: This incredibly strong book position for 2024, 2025, and 2026 drove record 3rd quarter customer deposits for 7 billion pounds.

Speaker Change #178: And that's the law to change your growth in precursors' purchases of ob or revenue.

Speaker Change #178: It's off the gratifying to know that onboard spending levels were not only up strong again this quarter. Our year over year improvement in onboard for the actual accelerating from the prior quarter.

Josh Weinstein: In essence, all demand indicators are continuing to move in the right direction, and we have so much more in the pipeline to sustain this momentum, including the North American premiere of the highly successful Sun Princess in just a few weeks. This will be followed by the introduction of her sister ship, Star Princess, the second next-generation Princess ship coming online in a year. We also continue to invest in the existing fleet with major modernization programs like AIDA Evolution expected to deliver additional revenue uplift over the coming years. As you know, we're not just going to be buoyed by our ships. I can't wait for the introduction of our game-changing Bahamian destination, Celebration Key. Its five portals built for fun will open in July 2025. It really ramps up in 2026 when Celebration Key serves as a premium call for 19 Carnival Cruise Line ships.

Speaker Change #178: In a...

Speaker Change #178: All the band-in-negators are continuing to move in the right direction. And we have so much more of the type like to sustain this moment.

Speaker Change #178: including the North American premiere of the highly successful dumb princess in just a few weeks.

Speaker Change #178: This will be followed by the Introduction of Persistership, Star-Princess.

Speaker Change #178: The second next-generation princess ship coming online in a year.

Speaker Change #178: We also continue to invest in the existing pre-

Speaker Change #178: With major modernization programs, like IEA Evolution, expected to deliver additional revenue uplift over the coming years.

Speaker Change #179: As you know, we're not just going to be buoyed by our ship. I can't wait for the introduction of our game-changing behavior and definition, celebration key.

Speaker Change #179: It's five quarters, built for fun, well, open it in July 2025, but it really ramps up in 2026 when celebration keeps.

Josh Weinstein: Rest assured, we're already planning for our phase II landside development to fully leverage the use of the four berths we're building. In 2026, there's also the mid-year introduction of a two-berth pier at Half Moon Cay, our naturally beautiful and pristine beach, consistently rated among the top private islands in the Caribbean. These two destinations will be available to even our largest ships, further reducing fuel costs and our environmental footprint at the same time. Stay tuned, as we'll be sharing more exciting reveals about Half Moon Cay in the next few months. We're also stepping up our marketing efforts in Q4, which David will touch on.

Speaker Change #180: We serve as a premium call for 19 part of a cruise line shifts.

Speaker Change #180: And rest assured, we're all pretty planning for our case to land side development to fully leverage the use of the four births we're building.

Speaker Change #180: In 2026, there's also the major introduction of a tuber of fear that has been keyed are naturally beautiful and pristine, which can consistently rated among the top private island in the grid.

Speaker Change #180: These two destinations will be available to even our largest ships.

Speaker Change #180: For the reducing fuel cost and our environmental footprint at the same time, stay tuned as we'll be sharing more exciting radules about half new key in the next few months.

Josh Weinstein: Our elevated marketing investment has been working as we continue to drive demand well in excess of our capacity growth with year-to-date web visits up over 40% versus 2019, paid search up more than 60%, and natural search up over 70%. Our brands are iterating on their creative marketing and constantly finding ways to attract more attention to the amazing product and execution we already deliver on board. It is continuing to pay off as we chip away at the unwarranted price disparity to land-based vacations. All of these activities, along with strong support from our travel agent partners, have allowed us to once again take share from land-based peers as we attract even more new-to-cruise guests. In fact, both new-to-cruise and repeat guests were up double-digit percentages over last year. Now, turning to our balance sheet.

Speaker Change #180: We're also stepping up our marketing efforts in the fourth quarter, which David will touch.

David: Our elevated marketing investment has been working as we continue to drive demand. Well, the next step of our capacity growth. With year-to-date web visits up over 40% versus 2019, pay search up more than 60% and national search up over 70%.

David: Our brains are iterating on the creative marketing and constantly finding ways to attract more attention to the F-based and product and execution with all ready to live from book.

Speaker Change #181: And it is continuing to pay off as we ship away as the unborned Christ this marriage, the land-based vacations.

Speaker Change #181: All of these activities, along which strong support from our travel agent partners, have allowed us to once again take care of a land-based pierce as we attract even more due to cruise gas. In fact,

Speaker Change #182: So, if you do the crews and we teach you that for a double digit percentage is over last year.

Josh Weinstein: We expect to continue on our path toward investment grade and have a clear line of sight for further debt paydown, having recently finalized our order book through 2028. We have just three ships spread over the next four years. That's one ship delivery in 2025, none in 2026, and one ship in each of 2027 and 2028. This limited order book should also position us well to continue to create demand in excess of capacity growth. Our continued focus on high margin, same ship yield growth should deliver improving EBITDA off of this year's record levels. Of course, strong and growing free cash flow and further debt reduction provide a consistent formula for ongoing improvement in our leverage metrics and a continuation in the trajectory we have experienced already this year, resulting in a two-turn improvement in debt to EBITDA in just nine months.

Speaker Change #183: Now, turning to our balance, we expect to continue on our path for the investment grade and have a clear line of sight for further death data, having recently finalized our order book through 2028. We have just three ships spread over the next four years.

Speaker Change #183: That's one ship delivery in 2025, 1926, and one ship in Egypt of 2027 in 2020.

Speaker Change #183: This limited order book should also position us well to continue to create the man in excess of capacity growth. Our continued focus on high margin, same ship yield growth, should deliver improving EBITDA of this year's record levels.

Speaker Change #183: Of course.

Speaker Change #183: Strongly growing free cash flow and further debt reduction provided consistent forms for our ongoing improvement in our leverage metrics. And a continuation in the trajectory we have experienced already this year, resulting in a true turn improvement in debt to be with us in just nine months.

Josh Weinstein: We have certainly come a long way in a relatively short amount of time. In just two years, we've already more than doubled our revenue and are going from -EBITDA to an expected all-time high of $6 billion this year. This remarkable achievement is all thanks to our global team. They continue to outperform as we progress through 2024, and they are also setting us up for a successful 2025. It is their continued execution that has put us firmly on the path to achieving our SEA Change targets. Just as important, they once again powered our ability to deliver unforgettable happiness to nearly 4 million guests this past quarter by providing them with extraordinary cruise vacations while honoring the integrity of every ocean we sail, place we visit, and life we touch. With that, I'll turn the call over to David.

Speaker Change #183: We have certainly come a long way, getting relatively short out of time.

Speaker Change #184: In just two years, we've already more than doubled our revenue and are going from negative EBITDA to an unexpected all-time high of $6 billion this year.

Speaker Change #184: This remarkable achievement is all thanks to our global team.

Speaker Change #184: They continue to outperform as we progress through 2024 and they are also setting us up for a successful 2025.

Speaker Change #184: It is there to continue execution that has put us firmly on the path to achieving our key change targets.

Justin: And Justin important.

Speaker Change #186: They once again powdered our ability to deliver unspergainable happiness.

Justin: To nearly 4 million guests this past work by providing them with extraordinary expectations.

Speaker Change #187: What honoring the integrity of every ocean we sail, please move visit and like we touch.

David Bernstein: Thank you, Josh. I'll start today with a summary of our Q3 2024 results. I will provide the highlights of our Q4 September guidance, some color on our improved full-year guidance, along with a few other things to consider for 2025. I'll finish up with an update on our refinancing and deleveraging efforts. Let's turn to the summary of our Q3 results. Net income exceeded June guidance by $170 million as we outperformed once again. The outperformance was essentially driven by two things. Favorability and revenue were $40 million, as yields came in up 8.7% compared to the prior year. This was seven-tenths of a point better than June guidance, driven by close-in strength in ticket prices, as well as onboard and other spending.

Speaker Change #187: With that, I'll turn the call over to Dave.

Dave: Thank you, Josh. I'll start today with a summary of our 2024 3rd quarter results.

Dave: Next, I will provide the highlights of our fourth quarter September guidance.

Dave: Some color on our improved four-year guidance, along with a few other things to consider for 2025. Then I'll finish up with an update on a refinancing and de-leveraging efforts.

Dave: Let's turn to the summary of a third quarter result.

Dave: Net income exceeded June guidance by $170 million as we outperformed once again. The outperformance was essentially driven by two things.

Dave: First, favorability in revenue worth $40 million as yields came in up 8.7% compared to the prior year.

Dave: This was seven tenths of a point better than June guidance driven by close and strength in ticket prices, as well as on board and other spending.

David Bernstein: Second, cruise costs without fuel per available lower berth day, or ALBD, improved slightly compared to the prior year and were nearly 5 percentage points better than June guidance, which was worth over $125 million. The Q3 benefited from cost-saving opportunities, accelerated easing of inflationary pressures, benefits from one-time items, and the timing of expenses between the quarters. Most of the Q3 cruise cost benefits will flow through as an improvement to our full-year September guidance. Per diems for the Q3 improved nearly 6% versus the prior year, driven by higher ticket prices and improved onboard spending on both sides of the Atlantic. At the same time, our European brands on their path back to higher occupancy levels saw outsized growth in occupancy of 5 percentage points as compared to Q3 2023.

Dave: 2. Cruise costs without fuel for available lower birth date, or ALDD, improves slightly compared to the prior year, and we're nearly 5 percentage points, better than June guidance, which was worth over $120 million dollars.

Dave: The third quarter benefited from cost-saving opportunities, accelerated easing of inflationary pressures, benefits from one-time items, and the timing of expenses between the quarters.

Dave: Most of the third quarter cruise cost benefits will flow through as an improvement to our full year September guidance.

Speaker Change #189: For DMs for the third quarter, improving at least 6% versus the prior year driven by higher ticket prices and improved onboard spending on both sides of the Atlantic.

Speaker Change #190: At the same time, are European brands on their paths back to higher eye-kick and feel of these people?

Speaker Change #190: So our outside growth in occupancy of 5 percentage points as compared to the third quarter of 2023. For the third quarter, we reported record setting operating results.

David Bernstein: For Q3, we reported record-setting operating results, with strong demand delivering record revenues, record yields, record per diems, and record operating income. Now, two things to highlight about our Q4 September guidance. The positive trends we saw in Q3 are expected to continue in Q4. Yield guidance growth for Q4 is set at 5% over the prior year. The difference between the yield guidance for Q4 and the Q3 yield improvement of 8.7% is the result of a tougher prior year comparison, as Q4 2023 per diems were up over 10% versus just 5% for Q3 2023. Having said that, it is great to see that we anticipate continued strong yield growth in Q4 and that it is driven primarily by price.

Speaker Change #190: With strong demand over the recker revenues, recker yields, recker prevailing, and record operating income.

Speaker Change #190: Now two things to highlight about a fourth quarter September guide.

Speaker Change #190: The positive trends we saw in the third quarter are expected to continue in the fourth.

Speaker Change #191: You'll guide us growth from the 4th quarter is shed at 5% over the prior year.

Speaker Change #192: The difference between the yield guidance for the fourth quarter and the third quarter yield improvement of 8.7% is the result of a tougher prior year of comparison as fourth quarter, 2022, 3% per day will be up over 10%.

Speaker Change #192: First is just 5% for the third quarter of 2023.

Speaker Change #192: Having said that, it is great to see that we anticipate continued strong yield growth in the fourth quarter, and that it is driven primarily by Christ.

David Bernstein: Cruise costs without fuel per available lower berth day for Q4 are expected to be up 8%, like Q1 2024, which was up 7.3%. Both quarters are impacted by higher dry dock days and higher advertising expense as planned, and we did have about $25 million of anticipated Q3 costs shipped to Q4. As I have said many times, relative to cruise cost per ALBD, judge us on the full year and not the quarters, as we often see certain cost items like dry dock expense, advertising, and other items have different seasonalizations between the quarters from year to year.

Speaker Change #192: Cruise costs without fuel per available low-per-day for the fourth quarter are expected to be up 8%. Like first quarter of 2024, which was up 7.3%.

Speaker Change #192: Both quarters are impacted by higher dry updates and higher advertising expenses plan. And we did have about 25 million of anticipated third quarter costs shipped to the fourth quarter.

Speaker Change #192: As I have said many times, relatives to cruise costs per LBD.

Speaker Change #192: Judges on the full year and not the quarters, as we often see certain cross-fighting, like dry-dark expense, advertising, and other items, have different seasonalizations between the quarters from year to year.

David Bernstein: 2024 is a great example of this, where cruise costs without fuel per ALBD were up 7.3% in Q1, essentially flat in Q2, improved slightly in Q3, are expected to be up approximately 8% in Q4. Turning to our improved full-year September guidance. Net income for September guidance is set at $1.76 billion, a $210 million improvement over our June guidance. This improvement was driven by three things. First, an improvement in yields to 10.4% by flowing through the $40 million revenue benefit from Q3. Second, a one-point improvement in cruise cost per ALBD to approximately 3.5% from flowing through $100 million of the $125 million cost benefit from Q3, with $25 million re-seasonalized to Q4, as I previously mentioned. Third, a benefit from fuel price and currency worth $70 million.

Speaker Change #192: 2024 is a great example of this, where cruise costs without fuel per LBC.

Speaker Change #192: We're up 7.3% in the first quarter, essentially flat in the second quarter, improved slightly in the third quarter, and are expected to be up approximately 8% in the fourth quarter.

Speaker Change #192: Turning to our improved full-year September guide.

Speaker Change #192: Net income for September guidance is set at $1.76 billion, a $210 million improvement over our June guidance.

Speaker Change #192: This improvement was driven by three things. First, an improvement in yields to 10.4% by flowing through the $40 million revenue benefit from the third quarter.

Speaker Change #192: 2.

Speaker Change #192: A one point improvement includes cost per ALBD to approximately 3.5% from flowing through $100 million of the $120 million cost benefit from the third quarter, which $25 million receives an rise to the fourth quarter as a previously mentioned.

Speaker Change #192: And third, a benefit from fuel-pricing currency worth 70 million dollars.

David Bernstein: The strong 10.4% improvement in 2024 yields is a result of the increase in all the component parts, higher ticket prices, higher onboard spending, and higher occupancy at historical levels, with all three components improving on both sides of the Atlantic. Now, a few things for you to consider for 2025. We are forecasting a capacity increase of just 0.7% compared to 2024. We are well-positioned to drive 2025 pricing higher with less inventory remaining to sell than the same time last year. We are also looking forward to the introduction of our game-changing Bahamian destination, Celebration Key, in July 2025. We anticipate that Celebration Key will be a smash hit with our guests and provide an excellent return on our investment. However, we do expect that the operating expenses for the destination will impact our overall year-over-year cost comparisons by about half a point.

Speaker Change #192: The strong 10.4% improvement in 2024 yields is a result of the increase in all the component parts.

Speaker Change #192: Higher ticket prices, higher onboard spending, and higher occupancy as historical levels. With all three components improving on both sides of these landing.

Speaker Change #192: Now a few things for you to consider for 2020.

Speaker Change #192: We are forecasting a capacity increase of chef's 7-10th of a percent compared to 2024.

Speaker Change #192: We are well positioned to drive 2025 pricing higher with less inventory remaining to sell than the same time last year.

Speaker Change #192: We are also looking forward to the introduction of our day changing the human destination celebration key in July 2025.

Speaker Change #192: We anticipate that celebration key will be a smash hit with our guests and provided excellent return on our investment.

Speaker Change #192: However, we do expect that the operating expenses for the destination will impact our overall year-over-year pause comparisons by about half a point.

David Bernstein: In 2025, we are expecting 688 dry dock days, an increase of 17% versus 2024, which will also impact our overall year-over-year cost comparison by about three-quarters of a point. I will finish up with a summary of our refinancing and de-leveraging efforts. With record Q3 EBITDA of $2.8 billion, our efforts to proactively manage our debt profile continue. Since June, we prepaid another $625 million of debt, bringing our total prepayments to $7.3 billion since the beginning of 2023. Additionally, we successfully upsized the borrowing capacity on our revolving credit facility by nearly $500 million, bringing the total undrawn commitment to $3 billion, back to its 2019 level. Furthermore, we will continue to look for more opportunistic refinancings over time. Our leverage metrics will continue to improve in 2024 as our EBITDA continues to grow and our debt levels improve.

Speaker Change #192: In 2025, we are expecting 688 dry dot days, an increase of 17% versus 2024, which will also impact our overall year-over-year cost comparison by about three quarters of a point.

Speaker Change #192: I will finish up with a summary of our refinancing and de-labraging efforts.

Speaker Change #193: With records, 3rd quarter, EBITDA of 2.8 billion are efforts to proactively manage our debt profile continues.

Speaker Change #193: Since June, we pre-paid another $625 million of debt, bringing our total pre-payments to $7.3 billion since the beginning of 2023.

Speaker Change #193: Additionally, we successfully upsize the borrowing capacity on a revolving credit facility by nearly $500 million, bringing the total undrawn commitment to $3 billion back to its 2019 limit.

Speaker Change #193: Furthermore, we will continue to look for more opportunistic refinancing over time.

Speaker Change #193: Our leverage metrics will continue to improve in 2024 as our ePADOT continues to grow and our debt levels improve.

David Bernstein: Using our September guidance EBITDA of $6 billion, we expect better than 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 investment-grade metrics. Looking forward, we expect substantial free cash flow driven by our ongoing focus on operational execution and among the lowest new build order book in decades to deliver continued improvements in our leverage metrics and our 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. Now, operator, let's open up the call for questions.

Speaker Change #193: using our September guidance EBDA of $6 billion

Speaker Change #193: We expect better than a two-term improvement in net debt to UBDile leverage compared to year end 2023.

Speaker Change #193: Approaching 4.5 times composition in us 2-3rds of the way down the path to investment grade metrics.

Speaker Change #193: Looking forward, we expect substantial free cash flow driven by our ongoing focus on operational execution, and among the lowest new build order book in decades, to deliver continued improvements in our leverage metrics and our balance sheet.

Speaker Change #193: Moving us further down the road to rebuilding our financial fortress, while continuing the process of transferring value from deadholders back to shareholders.

Operator: Thank you. At this time, we'll 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 queue. 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 keys. In order to allow for as many questions as possible, we ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of Matthew Boss with JP Morgan. Please proceed with your question.

Speaker Change #194: Now operator, let's open up the call for questions.

Speaker Change #195: Thank you. At this time, we'll 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.

Speaker Change #196: You may press star 2 if you'd like to remove your questions from the queue. For part of Specities in speaker equipment, it may be necessary to pick up your hands up before pressing the star keys.

Speaker Change #197: In order to allow first many questions as possible, we ask you to keep to one question and one follow-up. Thank you. Our first question comes from the line of Matthew Boss, which AP Morgan, please proceed with your question.

Matthew Boss: Great. Thanks, and congrats on another really nice quarter.

Josh Weinstein: Thanks, Matt.

Matthew Boss: Josh, on the continued momentum, maybe could you elaborate on the stronger base of business for 2025 and the record start to 2026 that you cited? Maybe if you could touch on volume and pricing trends that you're currently seeing across regions and maybe specifically in Europe.

Matthew Boss: Great thanks and congrats on another really nice quarter.

Matthew Boss: Thank you.

Matthew Boss: So, Josh, on the continued momentum, maybe could you elaborate on the stronger base of business for 2025 and the record start to 2022 that you cited?

Speaker Change #198: Maybe you can touch on volume and pricing trends that you're currently seeing across regions and maybe specifically in Europe.

Josh Weinstein: Sure. Probably broad-based is the best way to talk about the strength in what we're seeing on 2025. The book position is higher for both North America and our European brands, and that's consistent across the quarters as well. We're positioned very well. Our brands have been doing a great job of pulling forward the booking curve, and now we get to take price, which is the goal. It's very encouraging. We're about two-thirds booked when you look at next 12 months. We're in a pretty enviable place.

Josh Weinstein: Sure, so I'm probably broad-based as the best way to talk about the strength in what we're seeing on 20.25.

Speaker Change #199: The book position is higher for both North America and European brands, and that's consistent across the quarters as well.

Speaker Change #199: So, we're positioned very well, our brand's have been doing a great job of pulling forward the booking curve and now we get to take price, which is the goal.

Speaker Change #199: So, it is very encouraging, you know, we are...

Speaker Change #199: We're about two-thirds both when you look at next 12 months, so we're in a pretty ambivalent place.

Matthew Boss: Yeah, thanks. Maybe just a follow-up would be on the balance sheet, if you could speak to capital priorities from here, just given the free cash flow generation and some of the changes that you've made?

Speaker Change #200: Yeah, thanks. So maybe just a follow-up would be on the balance sheet. If you could speak to capital priorities from here, just give in the free cash flow generation and some of the changes that you've made.

David Bernstein: Basically, our priority 1, 2, and 3 is debt reduction, where you have the goal of becoming investment-grade. We do expect to see both the reduction in our debt levels as well as the improvement in our EBITDA achieve investment-grade metrics as part of our SEA Change program towards the end of 2026. We've got plenty of time to think about other alternatives beyond that.

Speaker Change #201: So, you know, basically, you know, a priority 1, 2, and 3 is debt reduction.

Speaker Change #202: You know, where you have the goal of becoming investment grade and we do expect to see both the reduction in our debt levels as well as the improvement in our EBITDA, the chief investment grade metrics as part of our C change program towards the end of 2026.

Speaker Change #202: And so we've got plenty of time to think about other alternatives beyond that.

Matthew Boss: Great. Congrats again. Best of luck.

David Bernstein: Thank you.

Josh Weinstein: Thank you.

Speaker Change #203: Great, congrats again, that's the block.

Operator: Thank you. Our next question comes from the line of Steven Wieczynski with Stifel. Please proceed with your question.

Speaker Change #204: Thank you.

Speaker Change #205: Thank you. Our next question comes in the line of Steve Wizzinski with Steve O'Please for a few weeks of your question.

Steven Wieczynski: Yeah. Hey, guys. Good morning and congratulations on the strong quarter and the outlook. Josh or David, this might be somewhat of a short-sighted question. David, you touched on this a little bit in your prepared remarks, but if we think about the Q4 yield guidance, it looks to us like it might be a little bit lower versus the implied guidance for the Q4 that you gave back in June. Just wondering if there's anything from a, whether it's a pricing perspective or any geography or brand that it is showing any, I don't want to use the word softness, but I guess I have to use that word, or weakening in pricing during the Q4, or are you guys just taking a more conservative view around onboard spending over the next couple of months?

Speaker Change #205: i

Steve Wizzinski: Yeah, hey guys, good morning and congratulations on the strong quarter in the outlook.

Steve Wizzinski: So Joshua David, this might be some of a short-sighted question and David, you touched on this a little bit in your prepare marks. But if we kind of think about the fourth quarter yield guidance, it looks like it might be a little bit lower versus

Speaker Change #206: The implied guidance for the fourth quarter back in, that you gave back in June. So just wondering if there's anything from whether it's a pricing perspective or any geography or brand that is showing any, I don't want to use the word, softness, but I guess I have to use that word.

Speaker Change #207: You know, or wreaking and pricing during the fourth quarter, or are you guys just taking a more conservative view around on board spending over the next couple months?

Josh Weinstein: Hey, Steve, this is Josh. Actually, I'm not sure of your math, but there was really no change from where we were in June guidance when it comes to the Q4 on the yield side. We always said when we came out with our guidance, frankly, in December, we were challenged a lot, particularly on the Q4, and people didn't think we'd be able to actually reach breakeven year-over-year because the Q4 of 2023 was so strong. Now we're talking about 5%, and we feel good about that.

Speaker Change #207: Hey Steve, this is this is Josh actually I'm not sure you're math, but there was really no change from where we were in June guidance when it comes to the fourth quarter

Speaker Change #208: I'm a year old side and you know, we always said

Speaker Change #209: When we came out with our guidance, frankly, in December we were challenged a lot, particularly on the fourth quarter. And people didn't think we'd be able to actually reach, you know, break even year over year, because the fourth quarter of 23 was so strong. So now we're talking about 5% and we feel we feel good about that.

Steven Wieczynski: Okay. Gotcha. Josh, want to ask about the 2025 and 2026 bookings. You talked about how you're already 50% booked.

Speaker Change #210: Okay, gotcha. And then Josh want to ask about the the 25 and 26 bookings and you talked about how you're already 50% bookters.

Steven Wieczynski: 2025. In a pretty good position, it seems like already for 2026. Just wonder if you think about your booking window, has it expanded too much? Saying that differently, are you nearing a point where you might be leaving money on the table if demand stays status quo from here? Following up on that question, just wondering if you've seen demand accelerate for bookings, maybe more in late 2025 and 2026 that are going to be touching Celebration Key.

Speaker Change #211: for next year and it's a pretty good position. It seems like already for 2,026. So just you know just one if you think about your you know you're you're booking window you know it has it expanded too much you know we're saying that differently are you are you nearing a point where you might start you know leaving you know you might be leaving money on the table if if the man kind of stays

Speaker Change #212: status quo from here and then you know following up on that question just you know just one of you see demand accelerated for you know for bookings maybe you know more in late 25 and 26 that are going to be touching celebration key.

Josh Weinstein: Sure. It's a great point on the booking curve. The goal is not an ever-increasing booking curve. It's to maximize the revenue that we're going to generate by the time we sail. I would say, this is a brand-by-brand, itinerary-by-itinerary build-up. I would say that almost all of our brands are higher year over year. There's one that's not, and that's an active decision to pull back because we want to make sure we're not leaving price on the table, exactly to your point. Despite the fact that overall we're in a record position, we are looking at that obviously with a lot more clinical eye and making sure we're doing the right thing to optimize that revenue. When it comes to Celebration Key, clearly there's a premium and it's going to benefit us.

Speaker Change #213: Sure, so at the great point on the booking curve, you know, the goal is not an ever-increasing booking curve. It's the massive buzz revenue that we're going to generate by the time we say it.

Speaker Change #214: I would say this is a brand-by-brand, I tend to worry, you know, build up. And I would say that almost all of our brands are pretty much our higher year over year. There's one that's not, and that's an active decision to pull back because we want to make sure we're not leaving price on the table. It's that way to your point.

Speaker Change #214: So despite the fact that overall we're in a record position, we are looking at that, you know, obviously with a lot more.

Speaker Change #214: clinical eye and making sure we're doing the right thing to optimize that revenue.

Speaker Change #215: When it comes to celebrating key, clearly there's a premium and it's going to benefit us in particular it's a 2026 ongoing story when we get to ramp up to about.

Josh Weinstein: In particular, it's the 2026 ongoing story when we get to ramp up to about 20 ships, which is going to be pretty fantastic. The fact that we're doing all of this, that we've been able to talk about with 2024 and even into H1 of 2025, it's got nothing to do with Celebration Key. This is just based on the natural demand and all the commercial activities that we're doing and delivering on board, and that's supporting real strong revenue increases.

Speaker Change #215: 20 ships, which is going to be pretty fantastic. And the fact that we're doing all of this, that we've been able to talk about with 2024 and even into the first half of 25, it's got nothing to do with celebration K.

Speaker Change #215: This is just based on the natural demand and all the commercial activities that we're doing and delivering on board and that's supporting real strong revenue increases.

Steven Wieczynski: Got you. Thanks for that, Josh. Really appreciate it. Congrats, guys.

Josh Weinstein: Thanks.

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

Speaker Change #216: Thank you. Our next question comes in line of Robin Farley with UBS. Please proceed with your questions.

Robin Farley: Great. Thank you. I know it's too early to give guidance for 2025, but.

Josh Weinstein: You're going to ask anyway.

Robin Farley: Great, thank you. I know it's too early to give guidance for 2025. But you're going to have to get any way. Well, let me just ask it this way, which I think is harmless. You know, given everything you're saying about the book position for 2020 and 5 and even 2026, being at record level.

Robin Farley: Well, let me just ask it this way, which I think is harmless. Given everything you're saying about the booked position for 2025 and even 2026 being at record levels, is it fair to say that you're off to a better start for 2025 than a typical year? Hopefully, that's an innocent way to ask it. Then I also did just want to clarify on the expense. David, I heard when you mentioned the $25 million of expense that will show up in Q4, that kind of shifted that $25 million. Was there a separate amount, and I apologize if I missed this, that was a one-time cost save this year that we should think about coming back in 2025? I just wanted to catch what that amount was and even what it was for, if you would share that. Thanks.

Speaker Change #217: Is it fair to say that you're off to a better start for 2025 than a typical?

Speaker Change #218: year. So hopefully that's an innocent way to ask it. And then I also did just look to clarify on the expense. David, I heard when you mentioned the 25 million of expense that was sort of borrowed from, you know, that will show up in Q4 that kind of shifted that 25 million. But was there a separate amount, and I apologize if I missed this, that was a was a one-time cost saved this year that we just think about coming back.

Speaker Change #218: In 2025, I just wanted to catch what that amount was and even what it was for us if you would tear that. Thanks.

Josh Weinstein: Okay. I will actually very directly answer your question. We are starting off even better for 2025 than we did for 2024, which is shaping up to be a record year. We are higher in occupancy, and we're higher in price. The brands are doing a great job of really trying to optimize that booking curve and revenue generation. That's not guidance, but it's a point in time, and that's where we are.

Speaker Change #219: Okay, so I'll actually very directly answer your question. So we are...

Speaker Change #220: Starting off even better for 25 than we did for 2024, which is shaping up to be a record year. We are higher in occupancy and we're higher in price.

Speaker Change #220: And the brands are doing a great job of really trying to optimize that book in curve and revenue generation. So that's not guidance, but it's a point in time, and that's where we are.

Robin Farley: Okay, great. Thanks.

David Bernstein: As far as the second question is concerned, yeah, there were a couple of reasons why we reduced costs by the full points of the year. One included some one-time benefits. Wasn't huge, probably about $20 million of the $100 million related to some pension credits and a few other little things for the year.

Speaker Change #221: As far as the second question is concerned, there were a couple of reasons why we reduced cost by the full point city. One included some one-time benefit. Wasn't huge, probably about $20 million of the $100 million, related to some pension credits and a few other little things for the year.

Robin Farley: Okay, great. Thank you.

Josh Weinstein: Thanks, Robin.

Speaker Change #221: Okay, great. Thank you. Thanks, Robert.

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

Speaker Change #222: Thank you. Our next question comes from line of Ben Tegin with Missy Ho Securities. Please proceed with your question.

Ben Chaiken: Hey, good morning. On the cost side, EBITDA flow-through has been stronger than expected. It was almost 60%. Costs have been better generally for the majority of the year. Can you talk about some of the cost saves, margin opportunities you're finding? Is this simply better leveraging a fleet that is now leaner subsequent to some of the asset sales over the past few years, or is it cost that you're actively pulling out of the business, or both? Thanks.

Ben Tegin: Hey, good morning. On the car side, even that fall through us then.

Speaker Change #223: You know, stronger than expected, it was almost 60 percent. You know, cost have been better generally for the majority of the year. Can you talk about some of the cost-saved, margin opportunities you're finding? Is this simply better leveraging a fleet that is now leaner, subsequent to some of the asset sales, over the past few years, or is it cost that you're actively pulling out of the business, or both, thanks?

David Bernstein: No, it's not cost that we're pulling out of the business. What we're seeing is hundreds of small items across the board, across many brands. Things like crew travel savings, other port savings opportunities, as well as a lot of sourcing savings, cost innovation, better leveraging our scale across all the brands. That probably represented about half of the $100 million cost savings that we rolled through for the full year.

Speaker Change #224: No, it's not costs that would pull and get into the business. I mean, what we're seeing is hundreds of small items across the board, across many brands. Things like...

Speaker Change #225: Crew travel savings, other ports.

Speaker Change #225: Port Saving's opportunities as well as a lot of sourcing savings, cost innovation.

Speaker Change #225: Better leveraging our scale across all the brands and that probably represented about half of the $100 million cost savings that we have rolled through for the full year.

Ben Chaiken: Got it. That's helpful. I guess for Josh, higher level, you folded P&O Australia into the Carnival brand this year. I know it was somewhat smaller scale, but do you think there's other opportunities to streamline the portfolio in a similar way going forward? Thanks.

Josh Weinstein: Hi, that's helpful. And then I guess for Josh, higher level, you folded Pino Australia into the Carnival brand this year. I know it was somewhat smaller scale, but you think there's other opportunities to streamline the portfolio in a similar way going towards.

Josh Weinstein: I'd never say never take things off the table. I think this is one of those decisions that just made a lot of sense and something that we felt pretty passionately about executing quickly. We'll continue to review our portfolio brand by brand, ship by ship, but right now we feel real good about how we're entering 2025.

Josh Weinstein: You know, I never say never taking things off the table. I think this is one of those decisions. It just made a lot of sense and something that we felt pretty passionately about executing quickly.

Speaker Change #226: We'll continue to review our portfolio, brand-by-brand ship by ship, but right now we feel real good about how we're entering in 2025.

Ben Chaiken: Thanks.

Josh Weinstein: Thank you.

Speaker Change #227: Thanks. Thank you.

Operator: Thank you. Our next question comes from the line of James Hardiman with Citi. Please proceed with your question.

Speaker Change #228: Thank you. Our next question comes from the line of James Hardeman with City. Please appreciate what your question is.

James Hardiman: Hey, good morning. Wanted to dig into some of the cost commentary you gave us, David. 3.5% growth for this year. That seems like it's getting better, obviously, with some cost saves and maybe better inflation. I know you called out about a half a point next year for Celebration Key and another 75 basis points from dry docks. I guess, are there any call outs on the other side of that equation? I don't think our starting point should be in that 5% range if we were to just take the 3.5% this year and add those two call-outs. Maybe talk us through sort of what the base level of inflation is as we think about 2025, and any other sort of positive factors that'll help offset some of the negative ones for next year.

James Hardeman: Hey, good morning. I wanted to dig in to the system of the cost commentary you gave us.

James Hardeman: So three and a half percent growth for this year, that seems like it's getting better. Obviously, it was some cost-aves and maybe better inflation. I think you called out about a half of point next year for celebration key in another 75 bits.

Speaker Change #230: I guess, are there any call out on the other side of that equation? I don't think our starting point should be, you know, in that 5% range, if we were to just take the three and a half this year and add those two.

Speaker Change #231: Callouts maybe talk us through sort of what the base level of inflation is as we think about 2025 and any other sort of positive factors that will help offset some of the negative ones for next year.

David Bernstein: Well, if you know exactly what inflation's going to be over the next 15 months, let me know, but we're still trying to figure that out. There is some level of inflation that continues in our business. We'll include that within our guidance when we provide it in December. Plus, we continue to work on cost-saving opportunities. As I said in the June call, even though we have the best cost metrics in the business, we still believe there are opportunities in our business to further leverage our scale and to work through those opportunities as we did in Q2 and Q3. We'll continue to do so. We'll include some of that in our guidance, which will offset some of inflation. Stay tuned.

Speaker Change #232: Don't worry, some...

Speaker Change #233: If you know exactly what inflation is going to be over the next 15 months, let me know. But we're still trying to figure that out. There is some level of inflation that continues in our business. We'll include that within our guidance when we provide in December plus. We continue to work on cost saving opportunities.

Speaker Change #234: You know, as I said in the dream call, even though we have the best.

Speaker Change #234: You know, cost metrics in the business.

Speaker Change #234: We still believe there are opportunities in our business to further leverage our scale and to work through those opportunities as we did in the in the second and the third quarter and we'll continue to do so and we'll include some of that

Speaker Change #234: In our guidance, which will offset some of the inflation.

David Bernstein: The two things that I gave in my prepared remarks were relative to the dry docks and the cost of Celebration Key are pretty well fixed at this point. We wanted to highlight those in the prepared remarks.

Speaker Change #234: So the two things that I gave in my prepared remarks were relative to the dry dots and the cost of celebration key are pretty well fixed at this point. And so we wanted to highlight those in the prepared remarks.

James Hardiman: Got it. Obviously sounds like everything's going pretty well from a demand perspective. Maybe speak to one of the questions that we keep getting is the potential for the widening conflict in the Middle East to negatively impact your business. To some degree, it would seem to help that much of that region was already vacated in 2024. I guess the hope was that that would be a 2025 tailwind. That now seems off the table, but just maybe speak to how, if at all, you expect that region to impact your business next year.

Speaker Change #235: And then, you know, obviously sounds like everything's going pretty well from the demand perspective. Maybe speak to one of the questions that we keep getting is

Speaker Change #236: The potential for the widening conflict in the Middle East to negatively impact your business. I mean, that's nice.

Speaker Change #237: To some degree, it would seem to help that much of that region was already vacated in 2024. I guess the hope was that that would be a 25-tailwind, that now seems off the table. But just maybe speak to how, if at all, you expect that region to impact your business next year.

Josh Weinstein: We weren't banking on it getting better and hope to God that it doesn't get worse. Thoughts are with everybody in the Middle East region and hoping for peace. Our business isn't really contingent on it. It's not a major source market for us, and we're not going to the region. Unless it were to escalate to something significantly wider than the Middle East, our ships are mobile, and we're in source markets that are phenomenal for us, with lots of potential.

Speaker Change #238: So, you know, we weren't banking on it getting better and, you know, hope to God that it doesn't get worse, you know, thoughts away, you know, everybody in the Middle East region and hoping for peace.

Speaker Change #239: But our business isn't really contingent on it, it's not a major source market for us and we're not going to the region.

Speaker Change #239: So unless it were to escalate to something significantly wider than the Middle East, you know, our ships are mobile, and we're in source markets that are fundamental for us with lots of potential.

James Hardiman: Got it. Thanks, guys.

Josh Weinstein: Thank you.

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

Speaker Change #240: Got it. Thanks, dad.

Speaker Change #241: Thank you.

Speaker Change #242: Thank you. Our next question comes from the line of Patrick Skulls with true security. Please receive a big question.

Patrick Scholes: Hey. Good morning, everyone.

Josh Weinstein: Hey, Patrick.

Patrick Scholes: Morning. My first question, you talked about dry docks increasing next year. Can you give us a little more possible granularity on dry dock increases or decreases for perhaps some quarters by quarter for next year, for modeling purposes? Thank you.

Patrick Skulls: Hey, good morning, everyone. My first question, you talked about dry dox increasing next year. Can you give us a little more?

Patrick Skulls: possible grain of larity on dry docked increases or decreases for perhaps some quarters. Bye quarter for next year for my Holy Purpose. Thank you.

David Bernstein: I don't have all that detail handy, Patrick, but if you call Beth, I'm sure she can provide that for you.

Speaker Change #243: So I don't have all that detail handy on Patrick, but if you call that, I'm sure she can provide it.

Patrick Scholes: Okay. Beth, we will call you. Thank you. Then second, I see there's some news out about a new cruise pier at Half Moon Cay. Do you have any longer-term plans above and beyond just a pier for Half Moon Cay, such as water parks and the like down the road?

Speaker Change #244: That's what we will call you. Thank you. And then second, I see there's some news out about a new cruise pier at Half Moon K.

Speaker Change #245: Do you have any longer-term plans above and beyond just a peer for Happy Newtays, such as Water Park, and the Like?

Josh Weinstein: Well, I'll give you a yes and a no. Do we have more plans? Absolutely. Do we want a water park? Absolutely not.

Speaker Change #246: So I'll give you a yes and a no. So do we have more plans? Absolutely. Do we want to water park? Absolutely not.

Patrick Scholes: Okay.

Josh Weinstein: The difference between Half Moon Cay and what we're building at Celebration Key is Celebration Key is really that five portals of fun, and looking to be that entertainment center. What we have at Half Moon Cay is one of the most naturally beautiful white sand beach, crescent-shaped islands in the Caribbean, and that's a true private destination and something that we want to enhance. We will be talking about that more over the coming months. I won't steal Christine's thunder, good things coming that are going to make that a pretty amazing destination in and of itself for a completely different reason.

Speaker Change #246: So, the difference between celebration key and what we're building at the end.

Speaker Change #246: It's a part of the difference between half of them came what we're building in celebration key. Celebration key is really that five portals of fun.

Speaker Change #246: and looking to be that entertainment center. What we have at Half Moon Key is one of the most naturally beautiful white sand beach crescent shape islands in the Caribbean. And that's a true private destination and something that we want to enhance.

Speaker Change #246: And we will be talking about that more over the coming months. I won't steal Christine's Thunder, but good things coming. They're going to make that a pretty amazing destination in a self-requintely different region.

Patrick Scholes: Great. Sounds great. Thank you. All set.

Speaker Change #247: Great. Sounds great. Thank you. Awesome.

Operator: Thank you. Our next question comes from the line of Brandt Montour with Barclays. Please proceed with your question.

Speaker Change #248: Thank you. Our next question comes from the line of Brandt Monttor with Barclays. Please proceed with your question.

Brandt Montour: Good morning, everybody. Thanks for taking my questions. Just starting off, we haven't really touched on SEA Change and your three-year targets there. We kind of got a little bit of an update in the release. I guess the question is, Josh, with this new 2024 full-year guidance, obviously we can calculate the progress you're making, and we can look at that number and sort of imply some KPIs, yields, costs to get to those targets. It's implying a pretty narrow spread between those two and would give us the sense that if we harken back to what you gave us in the investor day, what you were thinking for per diems that were sustainable and costs that were sustainable, that we would think you could do better.

Brandt Monttor: Good morning everybody. Thanks for taking my questions. So just starting off, you know, we haven't really touched on sea change and your three-year targets there.

Brandt Monttor: We kind of got a little bit of an update in the release. You know, I guess the question is, Josh, with this new 24-4-year guidance, obviously we can calculate, you know, the progress you're making and we can look at that number.

Brandt Monttor: and sort of imply some KPIs yields cause to get to those targets and it's

Speaker Change #249: I'm applying a pretty narrow spread between those two and would...

Speaker Change #250: give us the sense that if we've taken back to you know what you gave us in the investor day, which you were thinking for perdiems, that we're sustainable and cost, that we're sustainable, that you know we would think you could do better. So I guess if you could just, I know that that was a long-winded way of asking the same question that you've already gotten twice, but if you could just give us the sense for how you think about the business in the current operating environment.

Brandt Montour: I guess if you could just I know that was a long-winded way of asking the same question that you've already gotten twice. If you could just give us a sense for how you think about the business in the current operating environment, given all the positive commentary you've said today vis-a-vis those longer-term targets.

Speaker Change #251: Given all the positive commentary you've said today, these are these those longer term targets.

Josh Weinstein: Well, I think the teams around the world are doing a phenomenal job. If you think about it, in December, we were saying up 8.5 points on percent on yields, up 4.5% on cost, which gets us to 9% ROIC. Now we're saying up almost 10.5% on yields, only up 3.5% on cost. That gets us to 10.5% on ROIC. Clearly, we're outperforming the expectations. It gets us about 75% of the way there for two of the metrics, the EBITDA per ALBD and the ROIC after one year with two years remaining. Carbon is progressing as expected. We're about 50% there after one year. The teams aren't doing all those things to make targets. They're doing those things to make their guests happy and provide great business results. The outcome is going to be hitting those targets.

Speaker Change #252: Well, I think the teams around the world are doing a phenomenal job and you know if you think about it

Speaker Change #253: You know, in December

Speaker Change #254: We were saying up eight and a half points on a percent on yields up four and a half percent on cost which gets us to nine percent ROI sheet. And now we're saying up almost ten and a half percent on yields

Speaker Change #255: Only up 3.5% on calls, it gets us to 10.5%.

Speaker Change #255: on ROIC. So clearly we're all performing the expectations. It gets us about 75% of the way there for...

Speaker Change #255: to move the metrics, the EBITDA, per ALBD, and the RLIC.

Speaker Change #255: After one year with two years remaining, you know, in carbon is progressing as expected. We're about 50% there after one year. So...

Speaker Change #256: You know, the teams aren't doing all those things to make targets, they're doing those things to make their guests happy and provide, you know, great business results and the outcome that's going to be hitting those targets. You know, do I want to hit them early? Yes, do I want to get farther than that? Absolutely, but, you know.

Josh Weinstein: Do I want to hit them early? Yes. Do I want to get farther than that? Absolutely. We'll take that in stride, and we'll probably talk more when we get to December guidance, and you can put that in context of where we'll end in 2025 and then take it from there.

Speaker Change #256: We'll take that and strive and we'll probably talk more when we get to December guidance and you could put that in context. We're well ended in 2025 and then take it from there.

Brandt Montour: Okay. Thanks for that. Just to follow up, maybe Josh, if you could address the broader land-based leisure demand environment. What we're seeing elsewhere is not what cruise is seeing. We kind of see sort of steady, slow, somewhat softer normalization. We don't get any of that from you in your commentary today. I guess, we understand why it's happening. If the rest of the world is narrowing a little bit toward and narrowing your, let's say, your gap from the top, do you see any of that affecting your consumers' behavior and willingness to spend and sort of pricing sensitivity?

Speaker Change #256: Okay, thanks for that, and then just to follow up, it may be Josh, if you could address the broader...

Speaker Change #257: land-based, you know, leisure-demand environment, you know, we're seeing elsewhere.

Speaker Change #258: Not what cruises seen, we kind of see sort of steady flow somewhat softer normalization. You know, we don't get any of that from you and your commentary today. I guess we understand why it's happening, but if the rest of the world is narrowing a little bit toward...

Speaker Change #259: You know, and narrowing your, let's say, your gap from the top, do you see any of that affecting your consumers behavior and willingness to spend and sort of pricing sensitivity?

Josh Weinstein: We are still a remarkable value to land-based alternatives. Maybe land-based is softening because we're doing better. Who knows? You'd have to ask them that. I can't tell you their business. We have a tremendous value. We are doing a better job of getting our word out, better marketing, more eyes on the industry, more eyes on us. Our new to Cruise this past quarter was up about 17% year over year. That's not by accident. That's because our brands are really focused on driving that demand profile. I don't have a crystal ball, and I can't tell you what the world's going to look like a year from now, two years from now.

Speaker Change #260: If we

Speaker Change #261: We are still a remarkable value to land based alternatives And maybe maybe that's just offending because we're doing better Who knows?

Speaker Change #262: You have to ask them that. I can't tell you they're business, but

Speaker Change #263: You know, we have a tremendous value. We are doing a better job of getting our word out, better marketing, more eyes on the industry, more eyes on us, you know, our new to crews.

Speaker Change #264: this past quarter was up about 17% year over year. That's not my accident. That's because our brands are really focused on driving, driving that's a man profile.

Josh Weinstein: I can tell you if we keep focusing on commercial execution and doing the right things and doing them better, then there's a long runway because the one thing that's never been a question is can we execute on board and deliver a great experience? That's always been the case. It's just a matter of how we convince people to come with us who have never have, and I think we're doing a good job on that.

Speaker Change #264: You know, I don't have a crystal ball and I can't tell you what the world's going to look like, you know, a year from now to a year from now, but I can tell you if we keep focusing on commercial execution and doing the right things and doing them better, then there's a long runway because the one thing that's never been a question.

Speaker Change #264: Is can we execute on board and deliver a great experience? And that's always been the case. It's just a matter of how we convince people to come with us who have never have. And I think we're doing a good job on that.

Brandt Montour: Great. Congrats on the quarter.

Josh Weinstein: Thank you. I guess I'd be remiss if I didn't shout out the travel agents because all they do is amplify our voice in a tremendous way. That success that we're seeing in building that demand profile is really hand-in-hand with their success, and we appreciate their efforts.

Speaker Change #265: Great, congrats on the quarter. Thank you.

Speaker Change #266: I guess I'd be remiss if I didn't shout out the travel agents because all they do is amplify our voice in a tremendous way. And so that success that we're seeing and building that demand profile is really hand in hand with their success and we appreciate their efforts.

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

Speaker Change #267: Thank you. Our next question comes from a line of Connor coming him with Amelia's research. Please proceed with your question.

Conor Cunningham: Everyone, thank you. Maybe sticking with the comments on new to cruise. When you look at your 2025 bookings, are you seeing new to cruise and new to brand accelerate? If you could just touch on just the younger demographic. I think I asked you that last quarter, but it seems like a pretty big mega trend for you over the long term. Thanks.

Connor: Everyone, thank you. Maybe sticking with that comment on new to crews. Can you? I mean, look at your 25 bookings. Are you seeing new to crews in new to brand Accelerate? And if you could just touch on just the younger demographic, I think I asked you that last quarter, but it just seems like a pretty big mega trend for you over the long term. Thanks.

Josh Weinstein: Well, sorry, I just got distracted. As far as what the demand profile is for the future bookings, we don't really talk about that in advance, but we're happy to talk about it when we get to our results, and we can talk about what the breakdown is for the profile of the folks who sailed. Suffice it to say, everything I'm saying is not ending in 2024 with respect to our efforts to keep optimizing and keep getting better at execution, keep driving that demand profile, and casting that net as widely as we can. We have almost no capacity growth. All of that increased demand is just going to result in who wants to pay the most to get on our ships. That's what we're driving for.

Speaker Change #268: Sorry, I just got distracted, as far as what the demand profile is for the future bookings, we don't really talk about that in advance, but we're happy to talk about it when we get to our...

Speaker Change #269: Our results and we can talk about what the breakdown is for the profile of the folks who sailed. But suffice to say everything I'm saying is not ending in 2024 with respect to our efforts to keep optimizing and keep getting better at execution, keep driving that demand profile and catching that net as widely as we can.

Speaker Change #269: You know we have almost no capacity growth so all of that increased demand is just going to result in who wants to pay the most to get on our ships And that's what we're driving for

David Bernstein: As far as the age profile is concerned, I think we touched on this last quarter. If you look back at all of our brands over the last 10, 12 years or so, the average age for most of the brands really hasn't changed. Now, of course, the repeat guests who sailed a decade ago are 10 years older, but the average age of our guests. We are attracting a lot of new young people. Some of our brands, like Carnival Cruise Line, has an average age of 41 years old. That's a brand. Obviously, millennials these days are, I think it's 43 or 44 years old or younger. That does represent over half the population in the United States. Carnival's got over half of its guests who are millennials because the average age is 41 or younger.

Speaker Change #270: And as far as the age for a fight-up is concerned, I think we touched on this last quarter. I mean, if you look back at all of our brands over the last 10-12 years or so, the average age for most of the brands really hasn't changed. Now, of course, the repeat guests.

Speaker Change #270: who sailed the decade ago or 10 years old, but the average age of our guests, so we are attracting a lot of new young people. In some of our brands, like Carnival Cruise Lines has an average age of like 41 years old. So, you know, that's a brand, obviously, millennials these days.

Speaker Change #270: or I think it's 43 or 44 years old or younger and that does represent half the over half the population in the United States, but you know, carnivals got over half of its guests who are millennials.

Josh Weinstein: Yeah, I would say, I think I said this on either the last call or the call before, we love boomers, right? We love Gen X. If you think about our portfolio approach, we have brands like Holland America, like Cunard, where that is where they're trying to push that demand profile because it's folks with a very good income, a very good retirement base, and a lot of time to take cruises that can go 14 nights, 21 nights world cruises. We love the fact that we're pushing harder into that millennial generation, and we're getting that interest and that demand profile. We don't want that to the exclusion of really leaning into the other generations for what we have to offer.

Speaker Change #270: Because the average is

Speaker Change #271: I think I said this on either the last call I'll be for.

Speaker Change #272: We love boomers.

Speaker Change #273: Right and we love John Adams. I mean, if you think about our portfolio approach, you know, we have brands like Holland America, like Q&A, where that is where they're trying to push that demand profile, because it's folks with...

Speaker Change #273: a very good income, a very good retirement base and a lot of time to take cruises that can go 14, 9, 21, 9, World Cruises. So we love the fact that we're pushing harder into that millennial generation and we're getting that interest and that demand profile, but we don't want that to the exclusion of really leaning into the other generations for what we have to offer.

Conor Cunningham: Helpful. On Celebration Key, I know you've gotten a lot of questions on that. It is opening in mid of next year. Is it creating the halo effect that you would've expected? Are people asking for it? Maybe they ask it a little bit different. I think you mentioned 19 ships are going to touch there. Are those ones selling out quicker than you would've expected versus relative to history in general? Thank you.

Celebration Key: I'm Celebration Key and I've got a lot of questions on that just.

Speaker Change #274: You know, it is opening, you know, a mid of next year, you know, is it creating the halo effect that you would have expected, like our people asking for it or maybe that's a little bit different. I think you mentioned 19 ships.

Speaker Change #274: We're going to touch there. Like are those ones selling out quicker than you would have expected, like the first relative?

Josh Weinstein: Unfortunately, because every Carnival ship is going, there's no test case. Steven.

Speaker Change #275: So, it's a history in general. Thank you. Unfortunately, because every corner of the ship is going, there's no, you know, there's no test case. But, um, so, yes, we are seeing a premium for it. We are seeing people that are seeking it out. And, and the good thing is it hasn't even opened yet. So, um, you know, we think the rubber is really going to hit the road once we can deliver the experience and really show people what, uh...

Conor Cunningham: Yeah.

Josh Weinstein: Yes, we are seeing a premium for it. We are seeing people that are seeking it out. The good thing is it hasn't even opened yet. We think the rubber's really going to hit the road once we can deliver the experience and really show people what it can do.

Conor Cunningham: Appreciate it. Thank you.

Josh Weinstein: Thank you.

Speaker Change #275: What it can do.

Operator: Thank you. Our next question comes from the line of David Katz with Jefferies. Please proceed with your question.

Speaker Change #276: I appreciate it. Thank you.

Speaker Change #276: Thank you. Our next question comes in the line of David Kaths with Jeffries. Please proceed with your question.

David Katz: Hi. Morning, everyone. Thanks for taking my question.

Josh Weinstein: Yeah.

David Katz: Hi. I appreciate all the details so far. It's interesting when we look across our coverage, there are some smaller pockets of weakness that consumers have started to demonstrate here and there. This is a broadly based positive quarter, and I just wanted to double-click on the issue of are there any small pockets, any areas of consumer behavior that we should just keep an eye on as we go forward that are, again, embedded in what appears to be a pretty broad-based strong quarter and outlook?

David Kaths: Hi, I'm Mording everyone. Thanks for taking my question.

David Kaths: Hi, hi, hi, hi, I'm

David Kaths: I appreciate all the details so far and you know it's interesting when we look across our coverage.

Speaker Change #278: There are some smaller pockets of weakness that consumers have started to demonstrate here and there. And this is a broadly-based positive quarter, and I just wanted to double-click on the issue of, you know, are there.

Speaker Change #278: You know, any, you know, small pockets, any, you know, any areas of consumer behavior that we should just keep an eye on.

Speaker Change #278: As we go forward, that are, you know, again embedded in what appears to be a pretty broad-based, you know, strong quarter and outlaw.

Josh Weinstein: No, I appreciate the question. I guess I'm happy that I just have to say no. What we're seeing is in fact broad-based. We're seeing that demand for all the brands pretty much across the portfolio. We're seeing it in the booking trends that we've talked about. The onboard spending. The onboard spending levels were 7% up year-over-year. Just off the top of my head. Am I off by a point? Something like that.

Speaker Change #279: I appreciate the question, I guess I'm happy that I just have to say no.

Speaker Change #279: You know what we're seeing is in fact broad-based, we're seeing that demand for all the brands pretty much across the portfolio.

Speaker Change #279: We're seeing it in the booking trends that we've talked about, the onboard spending. You know, the onboard spending levels are we're 7% up year over year.

David Bernstein: It's up a lot more than the Q2.

Speaker Change #279: So I've stopped my head from my off-by-point at some like that. More than this second quarter. So we're not at 6.7 percent. I'm more pretty as a row of 6.7 percent year over year, which is an acceleration versus the increase that we saw a second quarter versus the prior year. So all the things that you look at is that the man profile changing or is the state of the consumer changing. I can't speak to macro economics because it's a lot going on in the world, but at least with what we have to offer people are happy to pay and to participate, and we think that's a great thing. And we think that goes back to all the things that we've been talking about for the last two years about what we want to focus to make sure that we are doing a better and better job this time goes on.

Josh Weinstein: Yeah, 6.7%. Onboard per diems were up 6.7% year over year, which is an acceleration versus the increase that we saw Q2 versus the prior year. All the things that you look at, say, is that demand profile changing or is the state of the consumer changing? I can't speak to macroeconomics because there's a lot going on in the world, but at least with what we have to offer, people are happy to pay and to participate. We think that's a great thing. We think that goes back to all the things that we've been talking about for the last two years about where we want to focus and make sure that we are doing a better and better job as time goes on.

David Katz: Perfect. If I can just as my follow-up, are you able to observe or record any trade-down dynamics where part of the demand you're seeing is a consumer who's traded out of something else and into a cruise vacation?

Speaker Change #280: Perfect. And if I can just just my follow up, are you able to observe or record?

Speaker Change #281: You know, any trade-down dynamics?

Speaker Change #282: Where, you know, part of the demand.

Speaker Change #282: You know, you're seeing as, you know, a consumer who's, you know, traded out of something else and into a cruise vacation.

Josh Weinstein: No. Nothing that we've seen that says that. I think it's the opposite. It's we're doing a better job of convincing them that this is something they want to do, not because they're trading down-

Speaker Change #283: Now, nothing that we've seen that says that, I mean, I think it's the opposite. It's we're doing a better job of convincing them of this or something they want to do. Because they're trading out from something, but if they want to experience what we have to offer.

David Katz: Yeah

Josh Weinstein: from something, but that they want to experience what we have to offer.

David Katz: Okay. I apologize for the questions.

Speaker Change #284: Okay, and I apologize for the, you know, the questions, my ratings are there. I think they're there. There are good questions. Good question. Very fair. Congrats on the quarter.

Josh Weinstein: No, I think they were good questions.

David Katz: Okay, good.

Josh Weinstein: I think they're good questions. Very fair.

David Katz: Congrats on the quarter. Yeah.

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

Speaker Change #284: Thank you. Our next question come to an line of Jamie Cats with Morningstar. Please push you with your question.

Jaime Katz: Hi. Good morning. I'm curious if you have any update on, I guess, the Chinese consumer. Is it trending as you would like, or Asia Pacific in general? Just because the data that's been coming out of the region has been a little bit lumpy, and it was obviously something that was pretty meaningful prior to the pandemic. Thanks.

Carrie: Hi, good morning. I'm Carrie, so if you have any updates on the Chinese consumer, is it trending as you would like or age at the civics?

Speaker Change #286: in general

Jamie Cats: Just because the data that's been coming out of the region has been a little bit lumpy and it was obviously something that was pretty meaningful prior to the pandemic. Thanks.

Josh Weinstein: Yeah. Hi, Jaime. It wasn't very meaningful for us prior to the pandemic. In the grand scheme of things, it was a few percentage points of our capacity that was really dedicated to China. We have, as I've been pretty open about, I'm ecstatic that it's reopened to international cruising. I want it to be very successful for our competitors, but it's not something that we're pursuing at this time and have not. With respect to the region overall, when it comes to Japan, Taiwan, and other regions, that's going well. People liked cruising with us before, and they continue to enjoy it now.

Speaker Change #288: It wasn't very meaningful for us prior to the pandemic and the grand scheme of things. It was a few percentage points of our capacity that was really dedicated to China. We have, as I've been pretty open about, I've been able to talk to you about the

Speaker Change #289: I'm ecstatic that it's reopened to international cruising. I wanted to be very successful for our competitors, but it's not something that we're pursuing at this time and have not.

Speaker Change #289: With respect to the region overall, when it comes to Japan, Taiwan and other nations that's going well, people like cruising with us before, and they continue to enjoy it now.

Jaime Katz: Yeah. I was just curious if there was any movement with them, with outbound travel more so than anything else.

Speaker Change #290: Yeah, I'm just curious if there was any movement with them, you know.

Josh Weinstein: Yeah.

Jaime Katz: As far as occupancy in the European brands, is there a little bit of room left in that for upside, or has the gap sort of closed on that?

Speaker Change #291: with outbound travel more so than anything else, as far as occupancy in the European brands, is there a little bit of room left in that for upside or has the gap sort of closed on that?

Josh Weinstein: Maybe. Overall, we're back to historical norms, which is a range, it's not a number. I'd say all of our brands, to varying degrees, have the ability to maybe drift a little higher here and there. It's not going to be a big driver of our improvement as we look forward. It's really going to be from driving price, which is where we're focused. There's always an opportunity to make some tweaks and find some more occupancy.

Speaker Change #292: We're all back to historical norms, which is a range, it's not a number. And I'd say all of our grants to varying degrees have the ability to maybe just a little higher here and there. It's not going to be a big driver of our, you know.

Speaker Change #292: Improvement as we look forward, it's really going to be from driving price, which is where we're focused, but there's always an opportunity to make some tweaks and find some more occupants.

Jaime Katz: I don't think you guys had mentioned anything on any hurricane impact, but any insight to the cost of that disruption, if you have it, would be helpful. Thanks.

Speaker Change #293: And I don't, I don't think you guys had mentioned anything on any hurricane impact, but any insight to the cost of that disruption if you have it would be helpful. Thanks.

Josh Weinstein: Yeah. Ours is insignificant compared to the impact that it's having on the region.

Speaker Change #294: Yeah, I mean, our arses, it's a...

Jaime Katz: Right

Josh Weinstein: which, first and foremost, we should take a second to just think about. Putting that aside, it's $a few million for us. It's not anything of significance.

Speaker Change #295: In-significant compared to the impact that it's having on the region, which, you know, first and foremost, we should take a second to just think about, but putting that aside, you know, it's a few million dollars for us. It's not anything of significance.

Jaime Katz: Excellent. Thanks.

Josh Weinstein: Yeah.

Operator: Thank you. Our next question comes from the line of Assia Georgieva with Infinity Research. Please proceed with your question.

Speaker Change #296: Thank you. Our next question comes from a line of ASEA, Georgia, about with Infinity Research. Please receive me the question.

Assia Georgieva: Good morning, guys. Congratulations on a great quarter. I'll just delve into the few quick questions that I have. Occupancy is still not fully caught up relative to fiscal 2019. Isn't that, by itself, already a yield opportunity?

Speaker Change #297: Good morning, guys. Congratulations on a great quarter in our just delving to the few quick questions that I have. Occupancy is still not fully caught up throughout the fiscal 2019. Isn't that by itself already a yield opportunity?

Josh Weinstein: Yeah. Like I said, we operate in a range for occupancy, and we are within our range, but there's certainly the opportunity to push that a little bit more. It's just not going to be the biggest driver of how we can improve the revenue picture going forward.

Speaker Change #298: Like I said, we operate in a range for occupancy and we are within our range, but there's certainly the opportunity to push that a little bit more. It's just not going to be the biggest driver of how we can improve the revenue picture going forward.

Assia Georgieva: Maybe a quick question for David. Fuel costs seem to be quite a bit higher relative to what we were estimating because we track for 180, 380 at MGO. Could that possibly be related to shore power in the Baltics, Denmark, Germany ports that are offering shore power, Sweden, et cetera? Is that part of the play there?

David: And maybe a quick question for David, if you're casting to be a little bit higher route of to what we were estimating, because we tracked, I follow 183 AD at NGL, could that possibly be related to shore power in the Baltics Denmark?

David: Germany boards that are offering short power, you know.

Speaker Change #299: Sweden, etc., is that part of the play there?

David Bernstein: No, because some our shore power, when we buy it, is actually not included in the fuel expense. It's included in port expenses because we purchase it at the port. That would not have been an impact. I'm not sure what you're looking at and what you're tracking. Beth can give you some websites to look at, which maybe will improve your tracking overall.

David: No, because some, you know, are sure power when we buy it is actually not included in the fuel expenses.

Speaker Change #300: and included in them.

Speaker Change #301: for expenses because we purchased it at, you know, at the poor.

Speaker Change #302: So, that would not have been an impact. So, I'm not sure what you're looking at and what you're tracking. But, you know, best can give you some websites to look at, which may be will improve your tracking overall.

Assia Georgieva: That would be great. Beth, I'm sorry I'll bother you on this one. My second question, given the acceleration in EBITDA generation and how far ahead you're with the SEA Change program, is it possible at this point to order a sister ship for 2027, 2028 delivery, whether it's for a Princess brand or a Carnival brand?

Best: That would be great and best I'm sorry, I'll bother you on this one. And basically my second question, given the acceleration in EBITDA generation, in how far I had year with the C change program, is it possible at this point too?

Speaker Change #304: Order a sister ship for 227-228 delivery whether it's for a princess band or a carnival band.

Josh Weinstein: No, our order book is set through 2028. We feel very good about that. As you know, we did order what we call Project Ace which is that next generation for Carnival, but that doesn't start until 2029. The focus of all that EBITDA generation is really its cash flow, and we're going to use the headroom with a reduced capital expenditures to pay down debt.

Speaker Change #305: Now, our order book is set through 2028. We feel very good about that. And as you know, we did order, you know, what we call Project Ace, which is that next generation for Carnival, with that doesn't start until 2029.

Speaker Change #306: You know, the focus of all that EBITDA generation is really its cash flow and we're going to use the headroom with a reduced capital expenditures to pay down debt.

Assia Georgieva: Josh, in terms of the debt tranches, we're going after the highest cost of debt, correct?

Speaker Change #307: So just in terms of the trenches, we're going after the highest cost of that, correct?

Josh Weinstein: Well, as long as it's got a good NPV, if we want to pay it down. There's a lot of factors. Yeah, go ahead, David.

Speaker Change #308: Well, as long as it's got a good MPV if we want to pay it down. So there's a lot of factors that go ahead. It's going to say it's really a combination of three things that we look at.

David Bernstein: I was going to say, it's really a combination of three things that we look at. One is the cost of the debt. We do have two double-digit issuances out there. Both are callable in 2025 so that should help our overall. We'll look at refinancing those in the early part of next year. We also look at the maturity towers. We're well set through 2026 on maturity towers. They're very well managed. The towers in 2027 and 2028, we'll be looking at refinancing some of that, as well as looking at secured versus unsecured debt. Our goal is to get to be completely unsecured but we'll manage that over time as we move forward.

Speaker Change #308: One is the cost of the death and we do have two double-digit issuance's out there. Both are callable in 2025, so that should help our overall, you know, when we...

Speaker Change #308: We'll look at refinancing those in the early part of the next year. We also look at the maturity towers. We'll well set through 26 on the 30 towers, they're very well managed. But the towers in 27 and 28 will be looking at refinancing some of that.

Speaker Change #308: as well as looking at secure versus unsecured debt. Because our goal is to get to be completely unsecured, but we'll manage that over time as we move forward.

Assia Georgieva: David, that was basically my question, highest cost versus secured towers.

Speaker Change #308: And David, that was basically my question, you know, high-askers versus secure hours.

David Bernstein: I'm sorry.

Assia Georgieva: It's a balancing act, I imagine.

David Bernstein: Correct.

Speaker Change #309: It's a balancing act I imagine.

Assia Georgieva: All right. Lastly, if I may ask, somebody is encroaching on your Galveston, Texas port and building a terminal there. What do you think about that? They already have a presence in Miami and are doing Port Canaveral, et cetera. An unnamed competitor who do not have to report to us on ROIC or other metrics. How do you feel about sort of what I call the encroachment?

Speaker Change #309: Correct.

Speaker Change #310: Alright, and lastly, if I may ask somebody who is in coaching, I'll...

Speaker Change #311: on your Galveston's Exusport and Building and Terminal there. What do you think about that? They already have a presence in Miami and are doing ports, can I have a similar name competitor who do not have to report to some ROIC or other metrics?

Speaker Change #312: How do you feel about serve the what I call the encroachment?

Josh Weinstein: I don't think about it as an encroachment. We are 2% of the overall vacation market. If it's the company I think you're talking about, it's a small part of the overall cruise market. Growing, but small. The demand profile as long as we do our jobs with our world-class portfolio of brands, we'll be just fine. I got to cut you off, though. You did three questions and the operator only said one. Sorry.

Speaker Change #313: I don't think about it as an encroachment. You know, we are 2% of the overall vacation market. And if it's the company, I think you're talking about it's a small part of the overall cruise market. Growing, but small.

Speaker Change #313: And so the man profile as long as we do our jobs with our world class portfolio brands will be just fine.

Operator: Thank you.

Speaker Change #314: I got to cut you off though. You did three questions and the upper one, I don't say one. Thank you. Our next question comes from the line of Dan Pollitzer with Wells Fargo. Please proceed with your question.

Josh Weinstein: Well done, though.

Operator: Our next question comes from the line of Daniel Politzer with Wells Fargo. Please proceed with your question.

Daniel Politzer: Hey. Good morning, everyone. Thanks for taking my questions. Josh, I do want to follow up on the Q4 yield comment. I know you mentioned that there really wasn't much, if any, actually any change to your prior guide. As we think about the Q3 came in better, David cited better closing demand and onboard driving the beat. Is there any reason that wouldn't be in the cards for the Q4? Are there near-term demand hiccups or noise, whether it's the news cycle or election, that could be maybe driving additional conservatism?

Dan Pollitzer: Hey, good morning, everyone. Thanks for taking my question.

Dan Pollitzer: Josh, I do want to fall up on the fourth quarter yield comment. I know you mentioned that there really wasn't much, if any, actually, any change to your prior guide.

Dan Pollitzer: As we think about, you know, the third quarter came in better, they decided better close in demand and on board driving to be. I mean, is there any reason that wouldn't be in a car for the fourth quarter or are there near-term demand hiccups or noise, whether it's the new cycle or a lecture in that could be maybe driving additional conservatism?

Josh Weinstein: Look, we try to give you our best estimate of what's going to happen. Do we always try to outperform? Absolutely. That's the goal. There's nothing in particular about the Q4 other than what you said. The next month, a lot of attention's going to be focused on something other than what's normal. It happens every four years. We'll see what kind of impact that has. The business is still going strong and we expect a lot of ourselves.

Speaker Change #315: Look, we try to give you our best estimate of what's going to happen and do we always try to outperform? Absolutely, you know, that's the goal. There's nothing in particular about the fourth quarter other than what you said. I mean, right the next month, a lot of attention is going to be focused on

Speaker Change #315: something other than, you know, which normal happens every four years. So we'll see what kind of impact that has, but the business is still going strong and we expect a lot of ourselves.

David Bernstein: Yeah. Also keep in mind, with 99% of the ticket revenue for the year already on the books, there's not a lot left to sell.

Speaker Change #316: And also keep in mind, 99% of the ticket revenue for the gear already on the books is not allowed left to sell.

Josh Weinstein: Yeah.

Daniel Politzer: Right. No, that makes sense. Just for my follow-up. In a couple of weeks you're hosting some investors aboard Sun Princess. Any way to kind of think about maybe framework and maybe kind of the key topics we should focus on? It seems like there's a lot of progress on SEA Change, your Celebration Key, maybe some of these cost opportunities or savings from easing inflation. What are kind of the key high-level focus points we should be thinking about? Thanks.

Speaker Change #317: Right, no, that makes sense. And this is for my follow-up.

Speaker Change #318: You know, in a couple weeks, you're hosting some investors, a board son, princess.

Speaker Change #319: You know, any way this kind of think about maybe framework is and maybe kind of the key topics we should focus on. It seems like there's a lot of progress on, you know, two change, your celebration key. Maybe some of these call-stop opportunities or savings from easing inflation. But what are the kind of the key high-level field disappoints we should be thinking about? Thanks.

Josh Weinstein: Look, it's been about 15 months since we got together for the first time to talk about what our priorities were and announce SEA Change. I think it's a good opportunity for us to just kind of level set on where we are in everything. Hopefully as you see it, the way we see it, which is the progress that we're making across the board. We also get an opportunity to showcase the Princess brand and specifically the Sun Princess, which is just a true game changer for Princess, and I'd say for the premium market. She's a remarkable ship and the team on board does a remarkable job.

Speaker Change #320: oh it's it's been

Speaker Change #321: It's been about 15 months since we got together for the first time to talk about what our priorities were and announce the change. I think it's a good opportunity for us to just kind of level set on where we are in everything and hopefully as you see it, the way we see it, which is the progress that we're making across the board.

Speaker Change #322: We also get an opportunity to showcase the Princess brand, and specifically the Some Princess, which is a just a true game changer for Princess, and I'd say for the premium market, she's a remarkable ship, and the team on board does a remarkable job.

Josh Weinstein: You'll also get an opportunity not just to hear from me and David, but you'll be able to hear from the president of that brand and to actually meet the presidents of pretty much all of our brands who will be there with us. Good opportunity for you to get a little bit more educated and inundated by all things Carnival Corporation.

Speaker Change #323: And you also get an opportunity, not just to hear from me, but you'll end David, but you'll be able to hear from the President of that brand and to actually meet the President of pretty much all of our brands who will be there with us. So, good opportunity for you to get a little bit more educated and inundated by all things, Carnival Corporation.

Daniel Politzer: That's great. Thanks so much, and congrats on a nice quarter.

Josh Weinstein: Thanks a lot, Dan.

Operator: Thank you. Our next question comes from the line of Chris Stathopoulos with SIG. Please proceed with your question.

Speaker Change #324: That's great. Thanks so much in congrats on our nice quarter. Thanks a lot, and

Speaker Change #325: Thank you. Our next question comes from the line of Chris Dattelopoulos with SIG. Please pursue your question.

Chris Stathopoulos: Good morning. Thanks for taking my question. Josh, I'm going to ask the demand question here in a different way. As we think about global travel and tourism and think about different segments, if you will, within the ecosystem, so lodging, airlines. Hearing sort of a different dynamic here as we think about demand, certainly within lodging, lower to middle income consumers, some concerns around price sensitivity, little bit of a mixed bag in airlines. In cruise lines, this is unique here, with what feels like this sort of persistent demand and just kind of ongoing momentum, if you will. I was wondering if you could rank order it, but think about the moving pieces as to the why. There's the new to cruise piece. I would say perhaps the later reopening of certain markets, strong US dollar, discount to land-based trips, base loading.

Chris Dattelopoulos: The warning thanks for taking my question. So Josh, I'm going to ask the demand question here in a different way as we think about.

Chris Dattelopoulos: global travel and tourism and think about different

Speaker Change #327: segments, if you will, within the ecosystem, so lodging airlines.

Speaker Change #328: Hearing a different dynamic here as we think about demand, certainly within lodging lower to middle and consumer concerns around price sensitivity, a little bit of a mixed back in airlines. In Cruise Line, this is unique here with what feels like this sort of persistent demand and just kind of ongoing momentum, if you will, now it's wondering.

Speaker Change #329: If you could rank order up, think about the moving pieces as to the wall. So there's the new to cruise peace, I would say perhaps, a later reopening of certain markets, strong US dollar, discount to land-based trips, base loading.

Chris Stathopoulos: Just if you could help provide some context as we think about the moving parts of demand here, there's still some debate around whether this is any pent-up demand here, which I think is just not the case. Is this actual base load going forward? Thanks.

Speaker Change #329: It just could help us provide some context as we think about the moving parts.

Speaker Change #330: of demand here, there's still some debate around whether this is any pent-up demand here, which I think is just not the case or what act we know is this actual base load going forward. Thanks.

Josh Weinstein: Well, I guess the most affirmative thing I'll say is I completely agree with you. It's not pent-up demand anymore. We've been sailing for over three years now. I think that has come and gone. I'm not going to answer your question by rank ordering. I would say that when it comes to all of the industry, I think we're all doing a pretty good job at that demand generation and creation and getting awareness, getting people interested in cruising who maybe have never thought about it before. With respect to us, there is a lot of activity going on at all of our brands to really just try to do better and better at blocking and tackling when it comes to the commercial operations, right? Generating new creative, generating more eyeballs in performance marketing, looking for and then being looked at by the right potential customer.

Speaker Change #331: Well, I guess the most affirmative thing I'll say is I completely agree with you. It's not pent up the man anymore

Speaker Change #332: We've been sailing for over three years now, so I think that that is...

Speaker Change #333: That is coming, God.

Speaker Change #334: I'm not going to answer your question by rank ordering, but I would say that when it comes to all of the industry, I think we're all doing a pretty good job at that demand generation in creation, getting awareness, getting people interested in cruising, who maybe have never thought about it before, with respect to us.

Speaker Change #334: You know, there is a lot of activity going on at all of our brands, so really just try to do better and better at blocking the tackling.

Speaker Change #334: When it comes to the commercial operations, right? Generating.

Speaker Change #334: You know, new creative, generating more eyeballs in performance marketing, looking, looking for and then, you know, being looked at by the right, by the right potential customer, driving people to our trade partners, driving people to our websites, doing everything we can to just get the word out and get them interested. And I think that's part of, you know.

Josh Weinstein: Driving people to our trade partners, driving people to our websites. Doing everything we can to just get the word out and get them interested. I think that's part of what's driving us in a pretty significant way.

Chris Stathopoulos: Okay. As my follow-up, David, my math here, I have about a point and a quarter on the adjusted NCCs for next year, we can come up with our own assumptions, as you said, on inflation. As we think about the other moving pieces here, puts and takes on the advertising side, I think it said that it's expected to be elevated in Q4. Is there a reason or how should we think about next year? Do we need this level of advertising per ALBD to continue? Is it part of the base load book plan or can we expect that to sort of get softer, if you will, as that initiative continues to take hold? Thanks.

Speaker Change #334: that what's driving us in a pretty significant way.

Speaker Change #334: Okay, and then it's my follow-up David so

David: My math here, I have about a point and a quarter on the adjusted NCCs for next year and we can come up with our own assumptions as you said on inflation, because we think about the other moving pieces here, puts and takes on the advertising side.

Speaker Change #335: I know I think it's expected to be elevated and for a few is there a reason?

Speaker Change #336: Or how should we think about next year and do we need this level of advertising per LBD to continue? Is it part of the base load book plan or can we expect that to sort of get softer if you will as that initiative continues to take hold? Thanks.

David Bernstein: Yeah. The advertising as well as many other decisions are things that we're really need to talk about over the next month or two in the planning process, which we're in the midst of doing, and we'll give guidance in December relative to all of those items. It would be premature for us to be making a decision today exactly what we want to do, particularly for next summer or the back half of next year in advertising. We'll give you more insight into that in three months.

Speaker Change #337: Yes, so the advertising as well as many other decisions, so things that we really need to talk about over the next month or two in the planning process, which were in the midst of doing, and we'll give guidance in December relative to all of those items.

Speaker Change #337: It would be premature for us to be making a decision today, exactly what we want to do, particularly for, you know, next summer or the back half of the next year and advertising. So we'll give you more insight into that in three months.

Josh Weinstein: I'd just add a couple of things. One is, remember we just talked about a record-setting 2026 booking period. We're not just booking for the short term, we're booking for the long term, and advertising is a combination of getting people to consider things for the longer term and getting the ships filled as we need to in the shorter term. The metric of just looking at it on an ALBD basis is it's useful for benchmarking but it's not too scientific. It's really about how much bookings we want to generate and how we think we need to spend to go get it. I think we're doing a good job.

Speaker Change #338: I just added a couple of things. One is, remember, we just talked about a record setting 2026 booking period. So we're not just, you know, we're not just booking for the short term. We're booking for the long term and advertising is a combination of, you know, getting people to consider things for the longer term and getting the shifts filled as we need to in the shorter term.

Speaker Change #338: So the metric of just looking at it on an ALBD basis is

Speaker Change #338: It's useful for benchmarking, but it's not too scientific. It's really about how much bookings we want to generate, and how we think we need to spend to go get it. And I think we're doing a good job. And when you do a look at us at a benchmark basis, even though we're higher than we were back in 2019, I think a couple of percent higher than you're over year.

Josh Weinstein: When you do look at us at a benchmark basis, even though we're higher than we were back in 2019, and I think a couple of percent higher year-over-year, we're still quite a bit lower than most if not everyone. We'll continue to be thoughtful about it and do what we think we need to do to drive the business. I think we got time for one more.

Speaker Change #338: We're still quite a bit lower than most if not everyone. So we'll continue to be thoughtful about it and do what we think we need to do to drive the business. I think we got time for one more. Yeah, thank you. I think we got time for one more if there are any more operating.

David Bernstein: Thank you.

Josh Weinstein: Yeah, thank you. I think we got time for one more if there are any more, operator.

Operator: Thank you. Our final question comes from the line of Fred Wightman with Wolfe Research. Please proceed with your question.

Speaker Change #339: Thank you. Our final question comes from a line at Fred Whiteman with Wolf Research. Please proceed with your question.

Fred Wightman: Hi, guys. Thanks for sneaking us in. I just wanted to come back to new-to-cruise, Josh. I think you said that was up 17% this quarter. Last quarter that was up 10%. It's a pretty big acceleration for a brand that's as big as you guys are. Can you touch on what drove that? Was there a reallocation of some of the ad spend and maybe how you think strategically that could sort of increase that penetration stat from 2% to something larger as a percentage of total vacation spend? Thanks.

Fred Whiteman: Thank you.

Fred Whiteman: Thanks for your speaking, I just wanted to come back to New Decorate Josh and I think you said that was up 17% this quarter last quarter that was up 10% it's a pretty big acceleration for a brand.

Speaker Change #340: It's as big as you guys are, keep touch on what drove that was there was there a reallocation of some of the ads then and maybe how you think strategically that could sort of increase that penetration stat from 2% to something larger so percentage of total vacation spans. Thanks.

Josh Weinstein: Yeah. There's no one thing that's going to be the answer for driving new-to-cruise either. It is that same combination of better advertising, the trade doing a great job, better usability of our websites. I'd say Alaska in particular for this past year was off the charts, was absolutely phenomenal, and that tends to skew higher to new-to-cruise because if you're going to go see Alaska, which everybody should go do, the only way you can go see it is by a cruise ship to really appreciate it. The only way you should do that is by one of our brands because they do it amazingly, and we have more permits for Glacier Bay than anybody else, and we have the shoreside footprint that nobody else has and can replicate. That has served us very well.

Speaker Change #341: Yeah, so there's no there's no one thing that's going to be the answer for driving you to cruise either is that same combination of better advertising the trade doing a great job

Speaker Change #342: But our usability of our website, you know, I'd say Alaska in particular for this past year was off the charts. It was absolutely phenomenal and that tends to skew hired a new cruise because if you're going to go see Alaska which everybody should go do, the only way you can go see it is by a cruise ship to really appreciate it and the only way you should do that is by one of our brands because they do it amazingly and we have more permits for glacier and anybody else and we have the shoreside.

Josh Weinstein: I'd say it's the same things that you've heard me talk about in the past quarters that hopefully I'll continue to talk about in the quarters to come about just doing the basics better.

Speaker Change #342: What print that nobody else has and can replicate. So that has served as very, very well. And I'd say it's, you know, the same things that you've heard we talked about in the press quarters. I hope we'll continue to talk about it in the quarters to come about to do in the basic better.

Fred Wightman: Thank you.

Josh Weinstein: I appreciate it. Well, thank you everybody for joining us and look forward to talking again in a few months for those of you that I don't see next week. Take care.

Speaker Change #343: Thank you.

Speaker Change #344: I appreciate it. Well, thank you everybody for joining us and look forward to talking again in a few months for those of you that I don't see next week. Take care.

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

Speaker Change #345: Thank you. This concludes the late conference call you may disconnect your lines at this time. Thank you for your participation.