Carnival Corporation & plc (CCL) 14 Jul 202020 Q2 Earnings call transcript

Good morning, everyone, and welcome to our Business Update Conference Call. I’m Arnold Donald, President and CEO of Carnival Corporation & Plc. Today, I’m joined telephonically by our Chairman, Micky Arison; as well as David Bernstein, our Chief Financial Officer; and Beth Roberts, Senior Vice President, Investor Relations. Thank you all for joining us this morning.

Now before I begin, please note that some of our remarks on this call will be forward-looking. you cautionary refer press in must release. I to statement the today’s Therefore, to has global that days is believe It hard it voluntarily operations since paused been across our fleet. we XXX just time, we’ve In that relatively returned XXX,XXX guests over home. short and crew total, the over. We’ve is over before repatriate members, repatriated XX,XXX we’ll already month XX,XXX in hopefully as We of and euros billions dollars, process well. and and cruise future credits sterling of billions those of currencies guest refunds expected to moved and remainder We ships with within position full in in status, pass be the XX the month. similar a the next while reached the ships the We’ve for disposition agreements order. in of XX nine of vessels, negotiating delivery delay on XX new maturity agreements. secured $XX waivers XX covenant We working over to over capital, and billion different secure extend debt in with over and while lenders scientists cruising with preparing the Germany. development and medical inform our cruise and of return now we are engaged return to in experts of imminent world to protocol, the around for We’ve

of from So staggered circle we’ve come resumption. full voluntary entering planning of pause a

be company, other this. well each We year. what for Now I our go handled team than over places after at for looked shareholders a are we we time. more our still collectively couldn’t existing experience honored XXX we as to each guests, the looked and has more and we We’ve how of positioned stand proud our attractive returns

company. efficient leaner, will more a We emerge

support crew, agencies XX/X to challenging guests travel handling other circumstances, travel ships they countless situation. care are and number to and changing all with working becoming environment. guests, and to crew, to sympathy the times the coordinating – confidence have They incredible our thanks thanks guests, unprecedented themselves globally, times their shoreside thanks by to the investors industry. and team taking by large. our trying crew to times outreaches, and those expectations while constantly for buyers. our who partners have while all globe ports, to with and these of for and professionals around our and evolving Thanks the whose in our thanks for world our our of for first I Thanks for loved truly clearly Look, expressed myriad heartfelt volumes have of while to members through our expressed inquiries unprecedented and exceed government those context each have are So the care those of who us, suffered challenging their suffered love. for deepest protecting ones shoreside personal a staying are concern then from brands expressing authorities my support travel the to their or other, continuing of repatriate at directly all huge of and extremely and new to tourism calls they and with of personnel extend individually investors. who the Thanks partners, taking for our confidence the vendors, our guest

times, it at been it not has frankly, only company, challenging, our For painful. been but has

aggressively to we’ve We many the around not managed other livelihood both us depend aware our began and are only world, COVID their a on small employees, manifest, many businesses journey those that journey throughout. people large. for so and on but and own And a since well-being, been we’ve

context issued. this early team before and of the well family, and in priorities shoreside. days We’d the in here current team recently the in and in over environmental and communities highest changing shelter place the home. worked This pandemic, global always and health, the are operations a We our end, initiated over our order our members the guests, before voluntary protection of Carnival in is execution the planning on well-being the their own sailings half order action our using than compliance, limited availability different we vessels timeframe extremely the our transport repatriating cases, top a even closed given challenging. first, no-sail that chartering got to task, expiring of in and was members and shipboard safely team in which, was beyond July September, therefore, the a implemented taken Our U.S. focused CDC planes pause guests fluid was borders late and real and and XX. the through responsibility, we the XXX,XXX being the our touch they our shipboard daunting air, extended safety and barrier the that many the U.S. of of of in XX,XXX course, done including U.S., our Again, return CDC to homes pause through was no-sail our then constantly XXX In more may home safely tirelessly job teams countries. to

we that’s far, our and ships, So half process. sailed in over miles nearly nautical repatriation XXX,XXX XX fleet this

a capital our withstand We deposit retention fleet. around our securing preservation, wind to also guests on focused an financial included extended down motivating to quickly of cash pause. runway provide sufficient That and effort the

our billion investment-grade ensure our legal to bearing to time access sustain funding the while able work pause. $X.X prolonged David support team so was prudent close of credit when forward our in Now always to to long-term raising initial certainly days doing company capital painful to cost was in And still the raise way the a it of And our nonstop markets secure and capital. markets were finance a capital with financially the path viability. initially a manage team a meaningful early at were rating, in and the it We from to for many. an that

our as balance been billion an $X.X Historically, investment-grade have managed In current balance additional you we’ve strong and environment, our supplementing brands a majority dilution. number advantage, we across the with at capital, $X.X attractive sheet to liquidity an secured a were that sheet, a the basis, access Now know, national because billion our countries rates. credit along of rating. to an able of minimizing strong of of raise additional on

Our success balance a of company maintaining the providing softer shareholders. been differentiator, for national strength and in a our and strong our sheet has brands landing a the

interest further our still rate just overall of flexibility the fact, we going In X%, despite meaningful blended retain manage and is recent forward expansion to debt, uncertainty.

we Importantly, debt. to issue have capacity additional

the or time. potential monetize are reduce liquidity assets Beyond to additional over that, provide to we also debt potentially our burden evaluating non-core

for that prepared We XX are months. a the confident next wide of we for are scenarios range

timeframe beyond into late with a other will months scenario. next of measures, combined painful workforce efforts, this responsibilities. employee liquidity our that sustain face of even the global Concerning shareholders, through to in enable actions In the beyond revenue, interest employees, side of the period while year, conservation many cash necessary compromising pandemic. no our others we impact meaningful Additional future on to during deferring make ourselves impact to conservation, without honoring zero-revenue were it our were the the able our fiscal financial us of cash forestall to XX of reductions the

given expect significantly also once worked to higher well. expenditures nonessential And significantly $X while the continue new provide return course, CapEx time and near-term to differ in to ships and returns newbuild generation billion reduced of of cash environment. marketing as to greater reduced we over excess have we capital costs also, we We sailing,

beyond. the year deliveries and of to XXXX planned into fiscal fact, XXXX five, originally fiscal expenditures fiscal over two reduce In nine ship down billion expect of three next, as we through capital deferring end to from this and $X

have So shared cash reduction leave the cruising, our aggressively A current once reduced our burn total less fleet resumed to ships. nearly efficient in capacity. a have fleet, a ships of expected XX we more and efficient representing are we do X% to

same also are on company developing and more and work to our staffing full-scale At time, to we are to leaner return in we the focused new manner. expect more are when to the We reorganizing requirements, operations, we as we a enhanced streams efficient Even don’t same efficient. addressing return work stronger, to protocols. emerge the

had and brought protocols from types the place Now and the medical we’ve our which once viruses Historically, measures, reduce including in in onboard onboard ships, we’ve centers land. sanitation procedures, effective of with prevent screening spread dealt past. many

we had our market again, of had share incidents. than incidents, share of less our pandemic, we than this During market less

case the attention. as of largest often the being in the However, industry, disproportionate video amount this we a had

evidenced as that, how to said this virus and the this. the having global unique is discovering is by address Now shutdown, most together world effectively

interests what We’re existing working of public protocols best diligently to the serve health. determine to will enhancements our

working our And, risks, for we’re health exposure experiences guests norovirus. risk and in being activities with inputs. such with on of gathering, the advisors, And example, clearly land. it external Now commitment past include interest working, end, medical Once agencies. operate the are going we in world willing informed discussions world-renowned will in happening we’re and of we sail will to best and the with other any again, similar their we we’re global have to are in by be often we achieve that a achieved on health. engaged and scientists we But that as that risk will active to which are utilizing our so similar And epidemiologists greater regard, appropriate earnings. clear, when society to less which course, feel shoreside just basis, authorities collective people not public prior risk experts to honor engaging country-by-country versus determine will our incur the accept to around In as, forward. is a protocols

demand as seems portion others any associated already Upon address an optimize I’ve world. time. as this science is latent our in addition Having our since on be the resuming specifically are available service, In the asset. best moment, brands of them, based pent-up cruises well-positioned to at national to to risks as the there brands with we’re And with as a around the to Germany, closest well we leading to mentioned, resuming are portfolio this COVID-XX. very procedures at dialog active by Italy clearly

to is source; which own to Europe, is in which source; UK, residents most nearly which Cruise brands reintroduce XX% continental nations which Carnival European is P&O social is restrict Line, XX% U.S. gathering, more Australian we than Australia, P&O Costa very and their are roughly German XX% source, New XX% that and initially like exclusively. source; well-positioned. XX% Zealand they With the As source; cruise, reactivation are British is including likely AIDA,

cruise that would strengthened duration back fact brands today’s environment. the Clearly, the success access of prevalence all Additionally, for drive in characterized come possibility by once. any are to these markets not shorter at will cruises ready

we intend a operations to to us make fleet, small with percentage cruise on will are early reliant demonstrating less resume of days. inherently AIDA, new the As which the with we in

on ships adequate a frequency and expect a guests expect every to repeat to of repeat X active than average, guests, that’s globally, more two-thirds of our XX to nearly more demand an almost shifts million year the cruises, with million fill adequate cruises demand in Again, database staggered years among Now two-plus to nearly field restart. be we we restart. than in staggered be each

we’re Our time, cash of the overriding manage financial generation. At help to focused is which same forward on the will to staggering going yields. maximize objective capacity, reintroduction

this and leverage only occupancy we outcomes. cycle: Now to this third to short two we’ve is the will can down we long-term levers had and historically, pull lever best more the relevant demand Capacity a will environment, even rate. third since be capacity. In have produce in real-time the

near-term than expenditures line fleet we months. efficient overall earliest, second the we’ll capital the into continue prospects cost quarter operations capacity capacity. summary, We efficient introduce XX% date, and forward, less given brought reduced size not a basis we’ll on appropriately efficient and newer, be time more vessels more demand and transitioned overall will our our base. long-term with by XXXX, generation. levels capacity, bright, are far we’ve billion our reduced over costs to and over our and down prolonged pause $X to and return we’ve we’ve vessels so. especially actions inherently XX shared shoreside In We’ve until average at do in we fleet age. moderated $X taken lowered Our billion operating We’ve XXXX we’ll Based over the to our on by a rightsized more the average with next and larger roughly annualized reduced an have bird going

We new aggressively deferring assets, while deliveries. are actively ship shedding

$XX billion liquidity additional a to another in zero-revenue scenario. have secured over full-year withstand We of

working are Germany set with on to We cruising. resume aggressively protocols,

generation, efficient return a pay us and We will emerge strong more to cash investment-grade leaner, optimize position a debt to rating credit company over down to time.

returns serves we we resume guest operations, to public the so do vacation and In turn we time, to over to way best I’ll to hard strong to we working guests guest call David. We’re in working a and the operations With extraordinary interest our to health. that, are our that continue over shareholders. ensure hard do time, resume when expect of to deliver experiences

you, Thank Arnold.

As we its Arnold just and the XXX globe. We believe stakeholders. pause took hard days cruise recognized guest it it action our and has is quickly our swift said, been of to to protect situation the all across operations company since

Our position. a summary average some XXXX, our cash finish action main tasks our had up cash an and by overall our financial liquidity cash update today for of reducing XXXX improved plan and into monthly booking preservation position. trends, the I’ll with burn then start second-half has reduced rate I’ll provide two our insights burn on with liquidity improving rate monthly full-year our of

XXXX time, our down in advance mid the yield within applied. single-digit ranges historical to impact including the range, bookings full-year at low Turning of booking prices onboard in and the trends. cumulative to our for that point this FCCs are the remain credits At negative XXXX

of months loyalists, brand FCC’s during which guests it’s were also that Our guests promotional promising of book the is XX% XXXX activity. our new position of remainder positions, with brand see are that higher being remaining the It that that is advertising the to new have we than And reassuring the see with little being XX% rebookings. encouraging, the the essentially to approximately just particularly is two to last and suspended given book XX% volumes booking bookings, all XXXX a norm.

look Now our cash monthly at burn rate. average let’s

rate. burn guest opportunities to lower estimated continue During pause in XXXX believe are in monthly for is guests further XXXX, the million rate that second-half operations to our $XXX into operations, monthly cash the per month. average be of there the our we the to were pause If

items. Our monthly cash four burn includes rate

to per administrative a First, of and of monthly returning ongoing team the which repatriation. This portion significant shipboard month much is expenses. their and actuals, lower included operating the $XXX guests quarter million than ship estimate second of cost homes member

estimates the be will of the company. than pause Furthermore, reach third quarter combination late lower second-half second-half our the substantially work layoffs, the second because to implemented quarter and in status of fact monthly all their third addition, benefits the the quarter reduced furloughs, in across early of we quarter. generally reductions full In the second the from salary the weeks expect that ships during or

reduced, Finally, the additional as further monthly will fleet. leave estimate ships our be

Second, per $XX interest is expected expense to be approximately million month.

per is this of Third, through capital per And component expenditures to be due net our are It the fourth pause of final and forecasted to financings. of be timing for approximately the accounts credit and payable. an of an expectation in contracted capital commitments refund to operations. two The is deliveries guest prior $XXX high item month, flowing payments guest million receipt other includes $XXX million expected ship unusually approximately to month. export the

processing has apologize payable of operation, which those We for included need the point, this month voyages, of new work for to procedures our completely number to I ship ensure impacted At to several to June. an a unprecedented address who systems would to accounts at to increase and a for volume, by to to reversed wait reprogram normal need the had refund. their in fact, call to handle canceled like center already accurate had guests the employees, in home develop guests In hurdles a guests. business to itself

refund limited to to hard back expedite processing, level. worked pre-COVID we all exceptions service and have of globe around We at brands the with our very our are

insights position. our on I’ll overall provide some liquidity Now

approximately includes proceeds completing paper $X.X from government of secured billion, on added and We $X.X which million of available at by with net end the qualified cash billion. offering for XX, the Our June billion the of we liquidity to of priority that senior $XXX commercial second program quarter the $X.X term was first a liquidity in the UK. position loan

European Looking will hope financing complete both government-backed and Germany in Italy over brands we work months. to the ahead, on our that coming continue to

XXXX we work that, to will extending beyond on maturities. continue Looking

to April, time, and process has get guest pause over our Back to the the obtain to was to operations we our will opportunistically in position. to begun change. focus company weeks, sustain in liquidity thought addition, enough enhance our liquidity and In recent liquidity side. In look further the other during our March

brands operations with liquidity. company guests Now that we AIDA has specific financial flow in manner cash enjoyable a with operations, are returning and where variety time announced and the vacation ships to resumption provide resume of additional phased our guest experiences guest looking and to cruise we our positive service with over at of models, a

So available that sailings now, the the liquidity our guest Arnold. impact revenues the no with hand additional to of operations resumption liquidity the now withstand call has focus will shifted of XXXX, in projecting or into plenty turn And over to our back of no well to provide. I’ll

Thank you, open David. the please line now questions. for Operator,

for Thank Instructions] One moment you. the first question. please [Operator

with comes Stifel. Please Steve question first Our Wieczynski proceed. from

Yes. Hey, morning. good guys,

you to plus be you much levels road, it and like what higher here. guess, given business, a moving to the and back the So, get level, And I carrying picture potential the operating investment potential how the forward, think think a so-called path down of the business normal cash guys moving couple flow guess needs of looks the the free help about maybe a ongoing I whenever we debt look the years business can the gets excess cash back CapEx bigger do flow question will down to about at of grade? us forward? road, if you a free

play together. come they questions I’m refer all I’ll in going though What different to we’re just the even the as thanks Good as phone And morning, Steve, up. kind question. do of all locations, on and we’re your quarterback for is

So ahead the to David, address you cash want flow. might and go

Sure. Good morning, Steve.

potential $X.X ship flow. had our – of Arnold XXXX, Steve, generated cash And cash tremendous flow mentioned fact mean, know. So, one that business billion some were things you the we has in as that generation delayed. we was I deliveries the of

next you over year, we start docked have when two the here years, year time, deliveries looking out And so three next the at – three been docked this evened few our after. ship year,

of there of with fact next three way, sort per when – ships this, I’m delivery. counting about few in the And by a are delivered delivery couple and two I’m the the thinking last that weeks so, year, year, I’m of doing to I’m and year’s the ships in

year So a said, with flow can three – down Arnold we and should to cash go to flow But, the is cash two of ships we may take to target to over rating. credit investment-grade pay generation, get debt. And it time that years. number as significant a back have do excess our

that if that be could Princess. And, just, helpful? like out, the pretty for booked trying fleet year, rest is don’t and encountered Gotcha. think, I’m in this, know people press here brands. then Okay. And to I year. patterns the you – get And but trying is, to down would figure your makes bit. getting across sense? I significant what the be And I’m a as obviously, brand Any earlier there, booking just your if as hopefully, for second you I well all insight maybe question like could some is negative break those of can little our around if of booking brands bookings next guess, do a example,

see by patterns now. I’ll mean, and very right more But encouraged. encouraged of give all, I booking very we’re booking. then the detail start I’ll we first let on Well, the David

a world us a we the refund had we new sort current future and cruise cruising a we first prepare for only, very where in had chose one over with are we to of which have with really significant the is. we resumption. but people testament day, And then And of up environment cash substantial taken bookings But period. notice not to far really canceled, number credits, even a as their AIDA, that again. itineraries new have have even the portion bookings book of a X,XXX and the of an We in the obviously, sailing how good state experience value one strong a so bookings, day August on short vacation cruise they bookings given is

So lot is there a demand. pent-up of

time the with and Princess, is actually particularly, all brands You trending and in the this referenced Princess, not at other disproportionately. point industry in

reached was were attitude, in some there which and related XXXX the So of the plethora industry back to XXXX, have of with preference was consumer of terms and the in industry none of incidents the reached voyages the brands trough media number, made that a brands. in that our when

or none levels time. industry, so the others none of brands And at gone to the ours have low we in that of experienced the that

been the higher So, than the this trough in in trough period that has period.

color. the encouraging. want plenty to to a lot brands we now, of do. staggered additional strong. of a have capacity much work little should with demand So to to mean previous going David, scores cruise, of there fill doesn’t But, course, work of latent we’re we be to to That pent-up lot add to But cruising you bookings resumption cruise to And start that the right cruising, are start have don’t Once The pent-up demand. a there’s new to of the latent with demand, of have attract ships. might do. with are volumes larger going we’re

I Europe that, Yes. trying That is of a The I’ll close typically were But resumption AIDA additional trends, the only probably is And other basis. brands Arnold in The last booking brand a of which that’s are it’s situation in current out weeks. Costa looking brands, little Germany. is in very and because booking we ahead in And the cycle mentioned, has Asia. announced as comment a the other we’ve close are color, and to of Costa Italy. relative I already of across had probably the China. things potential get, on few it maybe probably that’s only short in the do last when would mean, cruising, to Europe the lot you bit some that the with call on in minute a only

I’m once – else Everybody in we in position. resume see similar is a and China ahead little is they is behind. we’ll So but sure book a bookings, those probably China, bit Europe cruising

great. Thanks, Best luck. of it. appreciate Okay, guys. I color. great That’s

you. Thank

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

Great. Thank you.

commented You that bookings capacity with used percentages are XX historical line of available phrase that’s sale. in the you for and

is So year? for just there I that think except just sold? to percent are is are wanted to So for be – everything clarify, next to about Or that ships going those that capacity you booked holding sale? back trying

Yes. Go ahead, David.

Yes.

the ships the cases, wasn’t sold, in for it being So those, of except exception announced been two. yet because haven’t most

going currently changes, system. so announcement you where of saw a itinerary very change, the sale I’ll The Majestic that because the to recent the referred cruises itinerary Alaska. a for available sale probably But that example. give Princess will Majestic in Princess, And we And just for given few its occur would shortly. currently wasn’t to be you had great available it

So few nuances. there’s a

So, just of course, in the everybody understood, it’s really sure make to lawyers had put a that nuance. but completely us

talking what’s are about you’re in ships XX-plus So that available? included

yes. Oh,

Okay. That’s…

small a It’s amount.

sure amount That’s not. or was wasn’t very limited that I some if helpful.

no. No, no,

there? lines are put EU other is countries. the lot EU seeing suggestions. is, discussions talked the a to my some various The very and know discussions out clear big difference you in guidelines along you the with your Are what Arnold, question Or beginning similar I suggesting? has already CDC then And about a with

has current the ships At with of the evolved around conversations the crew handling ships. which this the and the CDC pause exclusively pause, the during the in point, onboard

of the of course, resumption coming. of CDC, the discussions We have but, point to serious not actually with gotten cruise that’s

EU of going needs the to terms in thing nation a do. there, that’s general if kind there is of each what out that is things do So while EU, to

the situation. the there – country-by-country And some Germany, – ships so German deal to had the to like you to and – only because authorities, were do of in with with as go not have even why Italy we Italy And – the in our that’s for well. but ships have we German case,

that’s of so And the the business. nature just

where and have court and various with good works and to everywhere. example, work for which even them to do individual destination process. the in you So of experts be communities to that’s that authorities have individual deal to Number best by And about with there two, AIDA, cities degree and to we’ll are involve protocols going and dependent feel the relevant those we’ve way going destination this why world own health. then very informed will public the so dealing of have out by us Germany, the influenced and be acting And of and cities, again with they ports, that’s all it’s be scientists aligned, around the engaged we interests in informed that’s and confidence the informed CDC, one. the number on. the is we’re that we’re CDC about and ports our or are plethora there cities other overall medical authorities And governing and around authorities is with world by

or wants detail, lot determinant we think thing, involved important in are and industry. entire like I of willingness anything Robin, the yes, to is social the as gather compete a the So lot collectively. other, or most in all with on working that, health society’s industry environment The safety is gathering. to or so of A has And we’re first conversations But different conversations with one CDC each constituencies. it’s very the a process. because as no

able gather, in relatively that better to to about us society And what to you’re socially is information and lays of for Germany, become understanding there example, to virus, not do. what community basis, or so do the to be willing level more where seeing, low spread what the And has do the foundation things. for incident is on an

we’re of to the and at in country obviously, working on makes U.S., again. sail begin of different the of where with but But we’re all that portions in And the it that still confidence not industry. quite the rest terms so together surges along with so And and – of incidents there possible, on. it point, here in

answer. for with Great. squeeze tiny one very could Thank wonder much if clarification thorough I just you David. I that in

Sure, Robin.

your you used expression month to? what I bringing now into just what that clarify. now as referred David, then the an accounts want now more of you I that are that like, the saying over about remarks, to refunding last – or new reversing you in think, itself. course deposits of Are than you June in are you in I payable guess,

No. what That’s the fair. of not your part exactly But I answer what that question referred second will is to.

was answer. what the is I’ll you to deposits referring So – and we process I once high-level a give customer

no it of that all customer went able second And than decline quarter, $X to to the third the quarter a to that the was down didn’t a in the we the it’s longer So $X customer it relative we and think, we would we be quarter X-K billion a billion. came process AP month the the quarter. significantly to June, in ago in decline less the of we the so, – other of were in expect quarter. in $X expected that year, third AP, see deposits wound down. said back-half that end actually quarter. what occur because second said all but had we roughly billion your the but up an in in deposit, customer actually I deposits, customer during door. the go decline question the month the filed the And paid to did cash $X then at deposits in about But answer We But third about out the billion

the or the So month or time that is bit on day of to balanced – be of quarter, end that a move timing as occurs little if we we in extending third a when position. forward. the the dependent pause what Exactly we somewhat week and get should occurs that by if the the probably,

Perfect. very Thank much. you Thanks.

Thank you, Robin.

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

on capacity. AIDA of question Hi, the good the in yesterday’s morning. release, an launch adjusted passenger launch. original I the have like looks will cruises a press the have It

yesterday Times Financial were quoted your And really saying The crimp profitability. capacity on that competitors some would put constrained of in a

how across capacity what you’re looks kicking thinking and curious about that I’m like fleet? restrained So the that off,

Yes.

what of what in time of aspect focus first social this the them determined and the social in distancing within comfortable ship. all, they the that on the is particular country, proper with are for society at on venues important So distancing then is to public the point this occurs has

cabin, socially naturally you’re distanced other your in cabins. you’re from the If

different understanding venues, also cetera. social So And than close our – et places public theaters, lot in distancing restaurants, restaurants. of again as on requires there’s actually, certain like spaces of we outdoor which ships, that slightly a the the

context the the of to that’s framework So begin with.

so the example, okay? flow looking the Given that which you an distancing can to we more requirements, have requirements cases along depending drive just those That that, COVID compromise or then want in with Right anyone the plan ways it’s that the ultimately manage meters to do a that isolate we’re comfortable can event, all how reserve area like in you that time. now, there manage occupancy, might at in different of the the there we fact ensure flow, it’s can that would what Germany, it’s preferences. to And on situation. the ships have with any social you are ship, the time – individuals at do for on to congregations been And X.X drive the COVID ship. has you don’t

any mitigate ship. can possible spread you on that the So

are So the involved. dynamics that those

to we’re question is, to of So course, starting your slow, then out. a we’re straight start because answer going

to – We to have have trained. be our people

people’s how see got and set up of really social to to are. so ways have distancing behaviors lots the on. We’ve We

be occupancy. higher what with proven to is doing occupancy up we’ll we’re going as then, as lower we’re ramp long start to But to working. So

so, flow. And that’s kind of the

In up time. than that level forth of it cash terms we’ll be occupancy experience to a get out even and service how whether on and with XX% less and occupancy, period can as cash profitability, into are start occupancy, the We’ll generate then, goes. flow. see probably Initially, than of substantial can details, But so now above of we’ll are significant positive hopefully, short it. at less occupancy still XX% ramp we we and the so generate work either right But see positive points put at choke relatively on we flow. that XX% have than in ships less

Again…

ahead. go And then –

I to was to a earlier add just little bit an going comment.

ahead, David. Go Yes.

size of the in of ship. break-even kind terms the XX% in range, to frame Just the speaking, point Generally generation at overall somewhere depending the XX% probably picture. cash to flow of occupancy on for level ship the is the

little generation lower-end we at way are have a of be as little a generating initial flow. But those for give can’t try if probably business. scale but I to power flow positive said, below a XX work Arnold I of of the ships XXXX, start we to that provide of our will as you don’t want cash an up, we And forecast I the and of cash the our you So, and bit – guidance. example

costs if number The and account what’s the understand generate So the break-even? look have try flow. about we to actuals to flow in operate course, XX the about – XX% actuals, what of we for have to And, would XX ships ships. XXXX have probably kind I of cash top I The of to our use be ships that the XX%, had ships situation many to me a guess, ships rest the XXXX the fact is if of would in? Let say – at have I I of way, we’d much I in a flat. the rest the XX pause the flow you I only help cash how XX on pause over I we SG&A. break-even. to assume these generate did little the got cash spending cause calculations, be our as when think XXXX our And to still by as and XXXX fleet would the be don’t have were the did just shoreside was SG&A to status ships, if operating XX% we And for and our cover flow order SG&A. ships all of we And in maybe operate cash of fleet in we’re

it a power in business. of the cash generation you our of bit So context gives of flow

you, Thank David.

helpful. really That’s

I to start month. be faster. at think recovering you lot sailing is might the I get to end is back that And Genting other of the going the Asia that seems a thing that, believe to

have is into of that share? sort so And regions to to you’d willing get the any Thanks. back be there you outlined timeline guys that

You bet. We never try can’t. to predict you because regulatory,

China And have that. especially moved point, are sailing in a so, again. working we for closely, we you or like probable with But even date JV can virus to don’t said, East certain this we our start a when But to from see at obviously, partners this West.

position in like you were cautiously so, we in as market reintroduce that will cruising here a And time Asian optimistic and to well. do the be

Thank you.

you. Thank

proceed. Our Conder with next comes Tim from question Please Fargo. Wells

cost, helpful. this per you guesstimate come be where given, thank color. forth. give Gentlemen, and point, went that example rough ships relative What so and you XXXX? to David, there? back a to cost any of the be Arnold, your shoreside Very that equation at could for will – XXXX, the obviously, there ALBD color continue, should given on your that be be will you’re ex-fuel the will into you to referred Just there off not said us just would through. all Wanted or you divesting you that Benchmarking

David. ahead, Go

of this a Arnold we’ve that I really and done. both in very XXX it’s been said, difficult at days, that’s Tim, as Yes. that point. and mind, things Keep long list

difficult. So it’s very

sort do. hesitant But have whole be a work this to so lot guidance. have fleet cruises. that We’ve at extrapolate of I’d – started going be and the on the that are across point, some to initial We would we providing work that of – to AIDA

going Arnold to leaner back come efficient. as we’re more So, and said,

do that’s time cost given period short but the at this prior the of we’ve point So I would year expect some numbers, had. efficiencies versus best can I

Okay.

variables And itineraries up with have are many they ships we in, on. how on and come ramp quickly and which on so which back, we

is we there. back we’re do gazillion be know And so is, variables going there a leaner. But what to

outright Okay, industry fleet? give those ultimate will to stay divesting, us that ships the okay. scrapped will as majority to the in ships that whether or on buyer commentary – you’re the some be of any of the And global those can you

them. don’t scrap we of all, ships. We recycle first Well,

with So, any ships we what our existing a market which aren’t sold doesn’t markets, directly is that into that would do. interfere

ahead. that don’t sales Our additional if into will for basically markets ships yes, you for in uses the recycling. Go are know than add I Then in. – we’re uses go those that want our different the are to any David, color.

a few is we’re intention it’s them a this the recycled – that recycled. at to variety majority few are of for just use point. told Of purposes, a the XX, The just Yes. are

to that customers or clear, view those cruise-related for it may – washing just be services would hotel-related we it recycle, as be rephrase on versus So should machines? transport me services let

Yes.

Okay, okay.

– Okay. thinking the referring correctly when definition bookings to five sure may, And pricing, then, the there? we’re make last talk the lastly, I if about just definition you historical to years, in years, we of you’re historical just and three

we’re… think, I

now. We’re talking versus Yes. ahead, But primarily go David. pre-COVID

bookings, on Well, yes, when historical you’re the range I’m referring said assuming to Tim, you what range.

on we like think, XXXX that. I back went to

gentlemen. you, Thank Okay.

Okay. Thank you.

proceed. from Rollo Please Stanley. Morgan Our Jamie comes next question with

first your order cancellations to just just what it book, that order? Or doesn’t question like It you. is please. sound order Thank on delay of any My you’re you. is sort Yes. of the Thank a book? planning

hear David. didn’t the question, I quite

If please did, ahead. you go

about Yes. ships book on for just It ships kind the each two talking were like what about On I the cancellations any plus you average, for – order. delay. but no five-month expedition are sounded of There of ship cancellations you’re Jamie, delay was order versus that talking Seabourn XX delay. were a the on each were probably the we talking about

versus XXXX, nine down there had thing Jamie. a going think, is I five important to Go though. you between and ahead. the like It looks now most follow-on,

it the Well, was same really. question

canceling are cancellations, in of far, discussions any wondering Just mean, planning about if ships. you so those but I nothing you’re the yards with any

we’re No, about canceling in discussions not ships.

being already We We’re in but we’ve about avoid to deployed have ships whatnot, important The at Again, but by would regulate new deliveries just again, the ships. the by, planning time to than far like and that talked directionally ships again, demand less us, we cancelling on enough we’re we of the timing in to the far are bringing point that available ships. with actually new would at point, what more efficient hopefully that new back with to that capacity at of timing is we’re And rather that be then, out the not discussions have about on globally. disposing would efficient. of ships. yards trying

fleet, capacity in well Yes. timing, And, given as had ships that be in back I we essentially, of Arnold saying, did were the quarter second in got his it terms Jamie, as leaving XXXX, prepared the we schedule, building to XXXX. Arnold that the would what indicate remarks before was that think, of newbuild the the

the earliest. At

correct. the earliest, At

then And is other you. the question just on leverage. Thank

to much said the point. debt at expect you is over you David, of debt get equity bit next to about nine think I that billion think, to I some point down? to months. to and I a that to months return of at you investment-grade to need or $XX might more what too number market bring And six expectations sort mean, raise

the with out So, the is remarks we equity conversion stretched only converts since debt of just over time. point going over tremendous. And newbuild that that our out, that is I that my $X the $XX is back generation that converts. debt to share. billion flow a I have converts cash do will to hope pay down I schedule those price time would some of other to ability venture say And

we take our look a position. constantly So, at

ratio the if Even add second XX%. quarter the cap to in puts that the debt Our we at only in billion at end us I of was $X.X June, XX%. raised

a cash we’ll in is, debt great My expectation over the and So reasonably we’re I flow generation. down position good time. think pay with

is might of on numbers a yield factor? the to break-even, that on very question? just a need the that to XXXX, XXXX? think I low earlier ships any ships in in said guess, number you load the for bake the based or Or if Is losses the about XX% said that the you what clarify including of occupancy you layup. lower be profitability? you just I I based cold on Can level an different

guidance, did is was modeling. which in framework for the over some was obviously, And, using when I to giving and exist it your of in XX was But giving SG&A for you ships, just I actuals of just to a our case with lower Agreed. by close XX%. ship But XXXX either, company would you whole XX%, ships for as you I math, the XXX% ships do I because was XXX yes, keep wasn’t I adjust instead giving considerably this mind, ships. did they be occupancy. I which fleet those guess, it you, sail also the give to didn’t XX than –

to So, any help guidance. again, it was not model, just information to you provide to provide you

And in full theoretical would occupancy. that be modeling, at ships XX

Yes.

fill We’ve level things that got to plenty of of demand volume once resumed. are

And so for that’s not at issue level sure. that going to major a be

guys. you. Thank Thank luck, you. Okay. Good

it. Appreciate Jamie. you, Thank Okay.

with proceed. Our next Montour Brandt our comes Please question from JPMorgan.

everyone. my good for taking questions. Hey, Thanks morning,

better what industry than and dynamics to held expect industries prices I out start hospitality kind you back start marketing in wondering level? play ticket to up engines have resume operation as just at and of the was And other So up travel.

the we see. have the nature third restart. because in I Well, we’ll have just and, to But of capacity, as that of the lever nature of said the remarks, again, the

an So the going. to will going early There’s almost it’s industry, not, destination-by-destination. that pent-up in as going be be we able country-by-country to be and demand to service

demand for critical sometime I environment thing that’s talk persist positive that is it And so in as kind and for say, of to that world a into, for may that’s excess is on There looks the chance the case, a begun comes the it good creates again, supply the about as back available. the Germany over Italy cruising in will soon. happened us already obviously yield with happen even because gathering, shoreside, social like as

the our good flow. any a as in financial can the environment good fact at number well. environment a generating cash and be exist with time, have the it So should we David, going we field positive with direct introduction capacity we’re capacity think can attention. the the those paying consideration dynamics, keep to is environment that manage cash opportunity and and close that we have additional… line demand, we with the course, Obviously, that one it’s But yield where we of and,

That’s helpful.

…color add you want to that? to

No, covers pretty that – I well it. think that’s

you. Thank

Okay.

on guys. just not that you. see That’s cruises. seeing it’s cruises Thank and your you’re helpful, booking older you’re a seeing demand between differences booking. since might seeing bookings in then But imply that commentary, similar younger to versus your great most question brands new ranges, you’re of And – just

differentiation by you cohort if the for data seeing age you’re just us, cut there? if So wondering could maybe

We’re cruises. big one except trend, actually a there, general which longer seeing for not differentiation is

lots given well, difference. of the not with So, of of sort for brands, XX-day people AIDA, we I those especially at short Those demand, average as the to situation cruises all But potentially to cruises, places, brands, Am so that obviously, Costa, And that’s and places, median environment – go those age were community bulk Carnival, most problem kind had age, the on average current spread, to obviously, cruises, going well, different where the about of brands. – our of et world given as cetera? XX that time. what’s cruises the be able of go say, is the – the booking there? age, to

the cruises, at except are pattern appropriately haven’t a and of time. – XX this we with And under the XX, Hopefully, in those for booking between at so your point question. the change others, even – answers and are dynamic the which same that not longer then rate seen booking older those

excellent Thanks and much good That’s very luck. color.

you. thank Hey,

with Patrick Please Our Scholes from next comes proceed. SunTrust. question

Hi, good morning. Quick question.

that CDC you your take many point? for to to this how free would it you’re at Let’s out you ship out sail afternoon say set do weeks Realistically, that said hypothetically first of Miami. think

I’d countries it and that able a we be involved. generally happens. again, there lot to are bunch when are think, But here say would dynamics of within a depends of sail. there’s Again, days, XX speaking, – I we other

– the right keep of minimum have manning we’re terms we now. costs on ongoing So in now, to our to going ships crew

the there layup. ships warm call keep We what in have to we operating

with crew. minimum but it’s on, people have We a

be scenarios, would get I what when back But within be to protocols that time. or of prepared the we position XX of back. more are to before kind time circumstances be of we’re period if could a thumb the have be they shot Depending quarantining we a the et nail It’s knowing longer case, onboard, of kind cruise, for which could time to. crew a So on period crew go just a lot in say, required that a cetera, days would thing. we could different of a of in and

Okay. Very good. you Thank much.

last Thank question, operator. you. One

Please Barclays. Our Hendrix next Felicia proceed. question from comes with

Hi, you there. Thank in. [indiscernible]

Felicia. Hi,

Hi.

First, you this on color time. in I It’s in in to the detail a all call, helpful just both remarks. cloudy super the Q&A been prepared tremendous and for the thank want and very

mid-September. as difficult can probably Arnold, you at really So sail that, theme, this it’s you as and actually with know, the a if point, I opine for to in U.S., of

start and delays time So changed the just to But XXXX seems just starting have I’m release due that. what I’m in up at on in not affect ask going the the curve, you to language just And tad. your to booking booking wondering point a curve?

saying cash wondering were So leading almost for is I’m that you into the two-thirds and that language almost of before that too XX%? I’m if this XXXX bookings were saying just now it’s bookings much

numbers. the Okay. in add we’d than different there But XXXX has already booking been just the has we to details by bookings. you have Obviously, talking year, time, the But some again, this question. if encouraged kinds this COVID, just what might address are more at David in no point But been impacted curve be with it. booking David, about I’ll of let we to general, want the circumstances. to

Yes.

just periods. it’s So time different

time the I to period there remember the – a as was I you And remember and more excuse me, and so two-thirds. two-thirds I XX% but time don’t the the exact was opposed period distinctly. to, current referred

many One things when this you is going over terms their time, are of change of as in of and not not immediately keep mind this, all it’s that to think because FCCs, people around rebooking. turning about them get – the in shocking

before have your your was reason have quite different And have things that you still FCCs think do a cruise cruise. family, May still like vacation rebook plan of are if canceled it, yet you number a your lot the in We with about for or if to to that, applied. June, reorganized you and you April, of

we logically, of see few. quite over And So have remainder time, those FCCs do a the we’ll booked.

In majority that rebook. have fact, the provided. bookings have that majority not is to yet – the And the statistics we overwhelming in

And give is that debt? us also XXXX on your color sense. then What makes you you housekeeping, the I the been deposits what That me issue any, lot there? if lot you And you a a enough more complexion deposits? cadence just wondering for of can kind of while of for just cadence have Have for David, – of of – us customer XXXX, good XXXX. your it’s just cancellations, gave you, has secured can if and gets

Sure.

back-half overwhelming relating million $XXX to million – the XXXX. $XXX majority, cruises about indicated deposits of was to deposits so So XXXX I in that it think, the we had of

a of deposit. and capacity happen. far a mean, additional overwhelming have additional second-lien are seen those we the $X.X basis was the deposits. And the as normal, somebody secured That’s do majority people things in for secured to XXXX so plans that change occasionally, some sick, But XXXX dramatic on And pretty as additional speaking, I get and calls any cancellation the course, billion debt, get does debt. we we normal environment. in Generally occasionally do changes haven’t

Thank Okay. you.

on Great. all – I’d of Thank but invite July all like you, of Robin, you asked to All question, you right. you. Everyone, early XX.

covidsciencesummit.com. it site to register, You is can following the to go

from for producing to scientists virus. the the knowledge manage and society renowned giving Tourism can the how knowledge the gathering prevention, WTTC, to state seems to World of and epidemiology today, society where COVID-XX, to understanding is the around Council, current what effectively transmission We’re the that’s best give through Travel treatment be everything about of practically and well detection,

around perspectives. as it be, constantly be, COVID-XX. changing this point in of world best of But some to the information knowledge terms in So their in the sharing is time, will you know, at that minds

time to today. jointly thank your Carnival welcome We all and that, free It’s appreciate WTTC. I by open you at the interest and ourselves you and attend. really public questions. and Corporation the your to hosted for is With So

eventually And stronger and leaner we’re more team world. time looking challenging But than to a We’re again, I Germany very what and in forward get has couldn’t before. also using powerful we everywhere a come been that the were resuming of much through to time. be around out managing and even very our proud entire more

So thank you operator. all you, attention. your for Thank

the ask today. conference a Have That conclude thank please and your you call that for We disconnect does line. your for great everyone. participation you day,