Carnival Corporation & plc (CCL) 26 Jun 232023 Q2 Earnings call transcript

Good morning. This is Josh Weinstein. Welcome to our Second Quarter 2023 Earnings Call. I'm joined today by our Chair, Micky Arison; our Chief Financial Officer, David Bernstein; and our Senior Vice President of Investor Relations, Beth Roberts.

Before I begin, please note that some of our remarks on this call will be forward-looking. to statement you release. today's refer I’ll the in cautionary press Therefore, are over quarter this hit milestones is last exception. There we've and the many two years, no past

quarter. much in there to fact, was the In second celebrate

bookings yield all-time We reached a from customer that, strong to inflection and all point operations, of achievements, highs and And top just income, cash those surpassing flow positive. with on were for levels. operating XXXX revenue meaningful for net hit cash adjusted we deposits. free Adding

And are which experiencing going efforts team dedicated shore. phenomenal started a revenue, year. delivered a early, through XXX,XXX for our members EBITDA, still ship of and quarter demand This adjusted midway line, remarkably, credit is outperformance and still to we second bottom amazing wave in strength in the gained season, strength, strong the the and the

currency Net growth gap to drove as we compared yields in maintaining on in onboard quarter, prices while constant the close second the XXXX continuing XXXX, to record ticket turned cruise occupancy. positive above and revenue

while we occupancy. over able per the net X.X% were midpoint up better quarter. in guidance, X.X the constant second of which currency fact diems This achieve than forecasted in to was In meeting XXXX our points were

will significantly currency. our than in in the elaborate revenue while the on yields points per again our net pricing, of David guidance maintaining diems which Based continued be over guidance occupancy in higher supporting half higher by we net our X.X in which our on. cost This raised of XXXX XXXX expectation growth will in second half for strength have also over the constant increase is second expectations,

XX% benefit for thanks back are fuel the $XXX capturing are deleveraging. a XX% expense bottom in from the the in well from interest as to the to currency we quarter. EBITDA bringing first of levels, in XXXX and second strength million to ALBD told, basis constant and as On revenue, All we quarter per we year, the price holding to XXXX another progressed line our

for be quarter quarter. and We to the hit back about XX% the expect way the fourth for third all

are $X.XX of billion above range. of prior high-end billion the our adjusted guidance now We to expecting EBITDA $X.XX

I booking second our reached quarter, high As quarter, the our achieved first all-time levels an would we the volumes mentioned, normally in in peak record exceeding which period. be

both than XX% strength in our volumes Booking our Demand XXXX, growth capacity rate is the for Atlantic. brands. is and carried continued double-digit higher to outpacing strengthen brands experienced volumes of European North on XXXX were comparable at booking growth. And to sides into multiple which in has now booking America a the We of volumes has our June. demand that's

the our are booking ever catching revenue levels. books, on as base to brands strong strategically XXXX the is curve a XXXX over With as we up is it European America, essentially North for have far and we of In while building behind of us XXXX. seen are out XX% quickly year now this

significantly customer $X.X deposits our at position also an also of this our of are high levels. our for booked fact, stands billion. Reflecting higher In peak at performance, $X billion XXXX all-time prior record than

and our push onboard spend multiples the grew more measured bundled forward booking are growth over Customer pull wallet. quarter guests' out Onboard and quarter as of we as added sales. and vacation once an strategy charts more times onboard, of to our enabling the XX% delivers spending capacity of elevating deposits again lead this off strategically through prior us capture were packages the our pre-cruise revenues benefit once

visibility only recurring ticket revenue and to predictability strategy spend, onboard laser are the enhances base. brands pull our Our our and both which focused of on forward

now time in on given over XX-month onboard revenues advance booked sailing. next of and one-third the the have XX% any books at of of We over

Our demand in generation are swing. full efforts

cumulative Our quarter XXXX’s us second already guests brand in to levels. sailed exceeded with to new cruise the new have who and number of

Our up from natural in XX% new is search with affirming a success awareness last increase driving an over quarter, our the is consideration. performance which up of board XX% XXXX, marketing increase across campaigns and the

quarter. Our with and efforts over this increase a are lead the which Search XXXX, XX% Paid just success also is increase generation our working in Clicks XX% double nearly accommodate last To the increased same support the it having we've the staff with can XX% see recent months. demand sales our sales by and impact is time, grown profile, also over in we trade. At

of agent guests. I've I've partners includes us all our to to we The critical be who sales significantly support said order excel And year-over-year successful, before, us that that widen to activities. in are great rebound the continuing is for channels need volumes and certainly pipeline As for up increase trade sales got front. XX% in we with on travel news our cruise new training, and as engagement, helping to

but sequential strength our us, course, trade these will demand continue. in important By our any seeing of to we in our is our are advertising suggest improvement well. off. only benefit not paying as KPIs investments The advertising in measure, And increase decision partners investment the

of SEA profitability The All Three stands that per important intensity fortress. we expect XXXX towards our will progress significant of for XXXX. and carbon and our not this strong acronym our rebuilding see just indicators. from improvements each delivering financial has to confidence outlook, year reduction, current for Three but built to our performance well EBITDA key ALBD, adjusted ROIC. launch demonstrate these in and Change. sustainability above ability through items, And in levels very target SEA

measures we've and be decades intensity carbon be unprecedented. seen two the the In fact, rates two best almost will will in the financial

our company. intensity our our continues years we S, has sustainability, we goal or reducing XXXX more compared than on to plan our reduce intensity to four to priority XX%, early, carbon the decarbonization plan For by been Essentially, a carbon to deliver XXXX. be for and

to our and improving impact environmental financial performance. our improving to critical is It

[fuel peers the there. We is out [ph] gap efficient are to widening the on fleet] most already what

E, a XXXX over XX% a we in the levels, XXXX price would ALBD, holding per increase fuel compared increase constant. are our EBITDA to XX% adjusted targeting and also currency guidance. This For represent

ALBD best unit strategy on as for capacity for measures deliver yield A, finally, our expect to on adjusted of EBITDA growth. increasing revenue And we profitability we to lower yield XX% than the our to on We more cost in high execute improvement our business revenue reach already base strategy returns ROIC levels. industry through XXXX deliver leading while is the structure. from doubling maintaining and lowest investment our quality have industry growth, designed the our driven outsized

our annually, importantly, cash flow generation low of to pay us our as are sustainability which they the all are targets both growth our step goal forward leverage pulled years. down towards these capacity sheet markers profitability Essentially, use allow grounded not work continuous on These on invested investment will return three important and metrics. a and angle, to are we’ve we change grade targets rebuild X.X% just debt under expect and compounded And capital improvement. most of in measurable in balance

do make have working, and this further we while sense drive over our time. yield these happen, recognize to To a it's brand efforts build net of we to efforts, improvement, urgency,

each generation space in to help own support and drive to strategies they over vacation calls, brand with ensure roadmaps previous this been the market. on revenue on their working mentioned time, overall their and will I've actively As growth truly

potential, continue generation, to on cruise capacity building delivery base Net pricing This guest markets, experience drive as marketing resulting and hone to work target onboard curve, acquisition loyal is to the clearly that booking sized our and demand to on increase appropriately awareness amazing cost, the having large higher. the advocacy means across Scores to identified and us This and new market to guests. capability lowest the revenue allow of among optimized management target to at guests Promoter execution consideration possible market we in will generate

one-third our we during brands, removing XX% [ph]. To ensure our layer of need corporate facilitate the completed make our direct By representing management brand leadership quarter, our [ph]. happen, previously. over six structure. and now executive have is capacity of leads than engagement reporting our set This up one will and our it I the up me. and to success of more less brands between levels, to [leads] company of [organizationally] all me restructuring of a between also This and the Accordingly, from the for brand, brand I capacity global we major

To with streamlining consolidated leaders to I me also our organization. this, provide bandwidth under more functions do several fewer corporate

nimble, better direct for we and accountable work positioned opportunities. While are overall, this structure, respond to the able leaves more a same market number me smarter. organizational changes with these of reports to And to also make

executing at And across staff support, is count a down level. Excluding high sales team sales and the shoreside board the is XX% from XXXX. our

and place sure make we Corporation to recognize member's grow each part we career. team make amazing doing I work Carnival an to need that are our to

and are phenomenal. meet satisfaction employee to goal employer metrics and we in culture internal The driving on it the so is we've our And leisure's choice, initiatives long-term board of have of showing. shore really and being and improvement travel ship seen across improvement been our

our people to assets, Turning hardware. important our most from our best-in-class

the number We number in of world-class X largest each of markets cruise are actively are or for managing our X travel. brands, portfolio which diverse

optimization in highest Cruises and Following concentrated AIDA, Cruise growth our Line, brands, our and efforts, capacity been fleet returning portfolio P&O Carnival has our UK.

demand growth, ships which a by further supports delivered our XX% combined also excitement yield outlook, And still overall our capacity. have and purposeful driven nearly with we our been retained representing strong newly efforts XX accelerating from These the of in capacity improvement. reduction

of and than of we launching our style Leno. spectacular Italian with Costa’s Jay Line our the very brand Just completed Cruise Jay with naming target segment. month, fun With successful think icon Leno. the godfather, Cruise his to ship Venezia which personality, brand's personification first of comedic a unpretentious featuring Carnival ceremony Carnival this better perfectly couldn't Line gregarious transfer highly a aligns I

Lagasse, and He Lines Chief amplify Guy fits who appeal, its Chief Carnival's seamlessly and the Flavortown such with of Culinary brand O'Neal; help Emeril as Fieri. Officer, messaging himself, Mayor Carnival Officer, Shaquille ambassadors Fun Cruise

has fun X.X generated Italian billion media far, So earned style impressions.

pre-pause of Lines of compared expectations. Lines second success more our Carnival management next expectations. year. Costa growing to Carnival portfolio These capacity, supports which Costa’s XX%, instant Cruise is to Cruise reduced than And XX% transferring the Italian part ship being style The of Carnival's entry transfers the fun pre-pause capacity over contributing are by Firenze, to strategy,

only this of committed gear. desired capacity markets the of Line remain strength revenue and not now clear many are the its owning recent rightsizing by dedicated effects company, which high The it's is Costa is We booking of portfolio of trends. truly brands, will also having but world-class to shifting of Carnival a added our portfolio brand to returns to for profile generate confirmed strategy pricing outsized the and specific Cruise supporting these into

taken home bookings is third double-digit the second brands, supported In compared quarter to and fact, quarters and the in fourth European with of both respect each volume porting our also for deployment in by our This our increases XXXX. live. the that for of guests nearly to puts XX% strategy brands' where our European price achieved capacity percentage

leverage our We land Caribbean monetize further industry and in are and assets the also leading Alaska. working to based

our to islands best to private guests Moon factors are expansion development and designed advantage Caribbean Half Line’s in tailored largest the voted our into Cay, We wow leaning being strategic destination Cruise deliver higher the yields Bahama port. of of Carnival and margins. yet, consistently Grand revenue It's the the Caribbean drive with to among

our carbon wide furthering located of consumption reduction deliver strategically array a to also lower It's itineraries efforts. fuel

about serve upon Our that of each already push annually. completion, year. Caribbean million brand's X.X destinations port And million will to Grand X.X guests our

of cruising these as a to motor lean plan of coaches iconic unique, lifetime, rail, even footprint We far hotels, land Glacier deliver packages We well Alaska Bay. featuring of the to the with into across assets. benefits marketing strategic unmatched own in most by itineraries also and more as an fee the all

Turning capital structure. to our

we sheet we our last begun on our billion already the indicated X.X now and As off balance are have call, deleveraging peak.

down as while prepay while balance $X.X which a still we of billion to of During over the debt, we $X retaining rebuild used billion excess our opportunistically to over time. ratchet sheet expect liquidity quarter, liquidity,

making our and book decisions pathway We allocation provides decades deleveraging. capital order in in a for disciplined further remain lowest

to well fortress. clearly are and us rebuild our strong financial gaining an positioning profitability We momentum on trajectory upward deliver

spending taking revenue We occupancy, prices, are up to on ability our already capacity. a with onboard ticket demonstrated record and maintaining while by executing grow building growing even levels, strategy

for to outrageous demand of implementing the are over capture and and hard to range We offerings XX% working time. a initiatives incremental to cruise land XX% to based unwarranted value close vacations GAAP

to support mitigate leading all penetration low so we sales unit reinvesting satisfaction advertising demand. working and are and in We of years industry are given maintain four well-positioned to build our to our levels. high while do future costs, hard And inflation,

us revenue growth path from and on are the the our focused the to Change margin our on of to SEA and deliver equity the improvement company leverage that We metrics investment durable continued and debt shift propel grade on of back enterprise holders drive holders. Program will value de-levering

without sail, partners who and can't thanking place best-in-class unforgettable the touch. I providing end vacations we deliver by shore, our our happiness integrity again agent life once and for visit, and every of ship support we their while every to our guests, travel ocean we honoring people, extraordinary cruise day

With call that, David. the I'd to over like to turn

Thank you, Josh.

in today per otherwise diems, a recap constant cumulative start and XXXX results. provide my please advanced net begin, cruise yields, with our of I'll without be note unless a second of currency quarter fuel costs position. booked our I Before all of Then will to adjusted prices, summary stated. ticket references I'll net

our finish guidance, give some our Program full-year I'll Next, color financial describing impact up our XXXX SEA the on of on position. June and Change

Josh quarter, second our outperformed in As we guidance. the indicated,

ticket For improvement high-end $XXX our March per midpoint driven higher range. the quarter, than of favorability in million the of Net guidance points at was were X.X The the our X.X%, by $XXX higher million our revenue EBITDA diems was second adjusted up guidance range. of March from prices.

positive was revenue to X.X In achieved compared milestone of fact, yields net with record second and significant we a quarter XXXX. billion a turning as

unfavorable offset as full-year. to net adjusted that favorability impact of due between the the in million without higher from cruise our million However, partially unfavourability a other fuel, by well prices timing cost And $XX XX fuel impact was guidance currency. and factors of revenue costs quarters, will for our expenses as the

cumulative our booked advanced position. to Turning

marquee booked prices pricing, to suspension high-end the due cruises normalized our from advanced with for XXXX booked compared Russia and the is position credits cumulative to loss occupancy Petersburg a position despite range. destination higher when remainder headwinds of of to For St. the the at XXXX, is strong historical of the as cruise future that of near a

of above to in to position despite remaining sell increase X.X% a compared to capacity year. in strength the with booking achieve XXXX in less our levels, second are the XXXX great the XXXX With volumes for guidance, inventory we as half the

a the color which some expected close is XXXX at full-year to Next, as higher-end gap June quarter Full-year XXX% we guidance. range. compared occupancy higher levels or I on will each is the continue give our on of XXXX as to historical be occupancy XXXX, to the

pricing second expect On higher which saw for X.X the the to than based compared booking X.X% the XXXX, per diems to of to on strong the we we points full-year is guidance during XXXX, X.X% front, net be quarter. trends a acceleration up March

both We been onboard our Atlantic. over We strong we revenue do half on continuation revenue the the Substantially, were increased included see by ticket is of sides for our driven half second guidance. by a of trends all of guidance of second improvement have experiencing XXXX net which per previous in diems X.X in passenger points. the

expected three by are factors: point. First, performance change current various March adjusted guidance Now points cost turning reflecting SEA industry off driven half without XX% than XXXX to XX%. berth the X.X in incentive ALBD June per up costs versus long-term This Program worth was the our company's be The costs, consistent higher or now leading XXXX to and cruise available the Change improvement our a are is with of and expected in base compensation to lower for fuel programs day structure, guidance. the the full-year increases

port will which a anticipated, And we times point. believe investment. air travel crew were Second, costs, advertising crew multiple in collectively third, than seven-tenths further to inflationary two-tenths XXXX a by of the of previously a down investments of in pressures ramp freight, slower the compensation particularly point, expected benefit worth in than and due costs, area

line. is the anticipated, inflation margins by in costs X.X diem in driving far point increase While significant than XXXX. outweighs in slower cost doubt we inflation higher the XXXX our versus no improving are guidance guidance bottom been factor per a ramp There has disappointed and net down increase, a previously

talking However, much well inflation have about of situation four this the let's not and mitigating of forget we inflationary impact. our years managed are teams

June fact, around of well the press in as titled In our up in will in our day benefits per numbers. our of to are than expense, is XXXX, guidance, earlier found costs morning creativity berth take to crew you the issued the I in we the as expense time be of versus X% increases walk fuel and testament earnings significant the guidance available not globe. The amortization, ingenuity depreciation lower so less airfares. This this scale the teams, interest the can despite details release and section and through a

which However, reduce interest us and I our expense over the drove other of for XX% of year future would us by to with a $XX portion XXXX X.X rising maturities, our rates. leave combined debt, XXXX interest us increased with protecting billion approximately like rate that from variable and rates mostly to with liquidity million use to factors our prepay our point will having debt the of fixed out confidence in

we guidance. X.XX which all of to EBITDA together, is billion billion $X.XX XXXX, these for factors the high-end adjusted of expect above the Putting the full-year previous

$X.XX expected reach we quarter $X.XX the to of EPS to with be milestone in share. profitability another as return expect per third in to the XXXX We range adjusted

now our on I financial impact Change describing And our SEA position. Program the will finish of up

with for XX debt. total drew Total credits As when We the the quarter, maturities billion well report improving in debt half first XXXX we quarter of $X debt of at feel second P&O we peaked of very that as last pay believe the in over I of the I EBITDA delivery. great I the return Arvia over down time on at to profitability for we and our positioned to our billion XXXX, future. liquidity, of are peak our said beyond export are foreseeable the Cruises

in debt today's billion. year-end announced $XX our prepayments at earnings below With the now we release, to be expect total debt

Now, as SEA Program our Change using guide. looking targets XXXX beyond the

build decades, next average cash will and credits the export average $X will during operations $X order and than through of XXXX, the of year book the with billion year capital over lowest expect in at during We flow per less non-newbuild commitments optimized three per net billion three new years years. XXXX billion from annual X CapEx the next

quarter This billion export result average billion of an billion in from the credit debt flow than billion cash $X $X in billion $X of in reduction $XX reduce through over of driving over drawn in during will to total debt first debt adjusted and of period, XXXX. XX the inclusive annual financing XXXX, peak the free more reduction

significantly XX% At XXXX, a leverage the to end metrics. EBITDA of adjusted are approach expecting increase of per lower grade with investment and in we a debt level ALBD

from which almost over of shareholders, SEA improved alone and value of metrics in Program approximately represents billion an holders the reduction XX% it to ROIC debt from debt adjusted will share. transfer decades. deliver Change also enterprise $XX representing ROIC two Our of On level top of will highest $X per that, operating

presentation. second I visit for the and the release quarter our press over Before remind operator, call turn our me website you let to earnings to

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

UBS. proceed. Thank Please Our first from Farley you. [Operator Instructions] Robin with comes question

[Technical Difficulty]

me? hear you can Robin, Robin. Hey,

Yes.

It's hard your hear a question. to little

You're coming and in out, sorry.

a is this little Hopefully bit better?

thanks. Yes,

Great.

comments up it's a ahead you but wanted In XXXX volume on quick release, clarification first about bookings. and mentioned the the to question a guidance, ask this about you I of year three it's So, just means strong Is to the XXXX strong fair in means books to that year-over-year that price XXXX price? is above just say I want up that strong briefly? that prices. clarify it assume

points growth your able three year math full yield like just on been It do there? is, seven maybe today? least of the about X constraints, and like XXXX to haven't gap and to what on just occupancy at the then of just closing, even thinking time And from points based but targets, the of growth kind get kind would I it comments given the XXXX come yield looks XX seems implied to between

you expecting us of diem increase your in XXXX? can or kind terms for price walk in implied what you're EBITDA sort increase in period, through of of guidance Thanks. that And per

Got it.

get quarter about some So, do in-depth we're levels to in at record with we're that the lot a we'll more overall we next go long brands pricing a suffice going half. give say, first and and and more at doing that What doing respect talk to happy price. you strong going XXXX, and it But at into get with book play to is, XXXX getting when good color to ahead XXXX, for. position on a are very it the job way for still the to we're to our

occupancy So, pleased been of while progress with down ratcheting still we're that course we've about talked this the very we've as the every making quarter on over year. the

what is to at very low you're and probably to know occupancy for you make it's pretty of up, we there. good. around trajectory With on sub-seven close very, about expect the respect probably but points it's the talking this year So, end three point, the targets,

to so that, operations. XXXX we're XXXX, [ph], respect real On make [XXXX, looking get we to be we've types from of price period we look make got XXXX make to we to from able time. normalized probably experience as feel to a that the single-digits top get ability We're steps increases of up XXXX, over with going in back with, profile of and of at as our I expect good XXXX] type all we – as to over that low-to-mid about back those to probably

you. Okay, great. Thank

Sure. Thanks.

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

the change morning on and outlook. quarter Good in congrats full-year the the and guys. solid Hey,

in go SEA question last So want the to Josh, actually the Program. I there back Change to

thinking too? of of we also how about can cost kind yields, kind talked on the a low-to-mid net that – like you of you’ve in growth in low spread a but way from single-digit this? kind So, yields? you're So, perspective about about think maybe maybe help are bump point think to right NCCs, about yield then And bump between point to and a that X thinking is mid-single-digit X us the to

I expect low-single-digit Well, We that from is getting to norm, which increases. you. hear basically, talking you be if nice cost Steve. know aside, back – the to anymore, don't I'm Putting to we'd to

between expect cost a side nice we differential the on what be and on we'd be So, expecting yield we'd side. the expecting what

take. There a talk of is, we're with be and there's we beyond. type it occupancy, a as and drag, to news a still through you've cost to does bit very with bad before, the And which to as in us about happy think outs, ins XXXX bit advertising good of but have thinking been little come of successful. will that the as very step-up news, We're our gets that's occupancy going which about it is heard planning

we'll plans more year. so, following as to into And concrete come we the for the get fall

that But trajectory. things so, you growth our can difference about are think expect rates. those we expect would as particular some And overall, I between there a

pretty Okay. have And don't stay you've your now already comp a costs but we're little row. the a first any about quarters pressures, I color And of today and understand good bit, you look, you I just seeing guys in those handle confused stuff, your guys a have you just year, versus mentioned the expect two on remarks need remainder sure then, around and since guess to from a more want to that raised the more make that I'm going now how you I be demand the perspective understand all, guys there guidance hope bit for prepared I – little I'm the the to in inflationary fact cost but investments like that aggressively? me, I would pay-off of advertising a So, to helpful. you you on over market what stock so costs time?

Sure.

getting occupancy it looking comments we getting XXXX, There's a it get quarter at at to things. the fourth it price where we've the spend and been getting So, up place we up take and we at. but taking has maybe can the respect to with want there's advertising to just think volume, price do the to to. a get the and getting that on that way we not And spend about want it two effective for advertising the to been doing where it it the

can will get continue honest you. to to, with to we that to we so, at be look where And see

at back look advertising to wouldn't We and gotten want one done. as to to want somehow a I So, We've something. We optimize. maximize.

we're so, sorry, there’s doing some going to here. the keep in background And – sirens

we'll So, on through depending or effectiveness. up thinking keep and ratcheting ratcheting back its that

Thanks, Thanks guys. got you. Josh. Okay, it. Appreciate

right. All

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

Hey, good over everything morning. Hopefully is there. going okay

in New right? know, need York. to all I'm you That's

all That's you need exactly. know, to

that grade, getting EBITDA how And $X.X you generally three-year clarification investment as with think in then there. number XXXX? to math, leverage in-line X.Xx Are about for we a I Just math? right on be leverage for you're those presumably seems and would metrics adjusted about then, about to guess the target to the billion EBITDA XXXX, and two is back get also the thinking that

head. it, right you the Yes, got on

gave think you expect net at that down the to And total year going? or bunch a math paying number through billion, similar and you about balance XXXX. expect? cash finish through year it. question what's the you for XX maybe good us balance then would debt terms debt said, this then you the I where you of how what's in both And helpful. think XXXX, you year this walk see Got us of the Really cash debt

called that you total billion a think debt I What's look out reduction. net-debt basis? $X like a on

Yes.

down coming balance should cash over the James, So time. start

expect second targeting down see X% bring to were fortress, quarter our level. to as of customer at and a items, level not forecasting. just it's of into together, get rebuild and beyond we debt putting decline that and X.X%, was that to to of Remember, deposits, but trying we Pre-pause that time. do end the it sheet liquidity Remember, will financial billion other level liquidity precision goes You're our we $X.X over balance the all our our there's cash. we

that Keeping of undrawn wind good in time, be our most mind liquidity up the a to portion will revolver. of the

of have that. So, billion something or liquidity, X if only we even like it be cash billion may X of

coming So, year, precision math and see can through difficult work the is are But and by of those. we good, and – achieve the down, numbers continuing do but cash in we're level the to your all that confident balance we by is project. quarter very

of point more One clarification.

So, to, of Qs, onto status cash there's from assets, the opportunity of deposits reserve in that, sort the other balance? billion] of a mention [ph] the that and customer [X.X of the what's funds bring

Yes.

that be we ratcheting and in into end following confident should the line pretty of get year. of the will back the item are the majority year the off rest in it cash, our of that down We by that next – majority of and nicely and

So, making progress. we're good

Got Perfect. guys tomorrow. Thanks. you to Talk it.

you. Thank

next question Fred Wolfe with proceed. Please Wightman comes from Research. Our

targets Do so, And if China? Hey, the morning. guys. Good XXXX what sort are to that in there? assume you, of you baking return

is No, Fred. that assumption good Very no numbers morning, there in return China. these to we

through was that with style frankly Italian as so respect and able management Line, efforts China As at and them to we tonnage was our you know, to brand, take move our a our has was Carnival Cruise portfolio our were Costa Guests platform by the expectations to and met it matter embraced exceeded the fun of how Carnival far. fantastic, which them gone fact, Carnival

we speaking, I course, would, our frankly they're good more had yielding in a place and than the so, they And stayed believe. assets are

and be are for is, we And up years travel want Obviously, real our the companies, that sidelines we'll for the on be. feel fact for a the always that, do mobile excited our at can we're we with probably a to assets we because but international cruise great think China that. assets thing very are opening industry, we where but we're of relook few and about that's So, right to good. them going

America back where can North just what but accelerated, how recovery you in that you European see about even maybe and in cruise And seen you've the versus sense. the like half? has out then that said that guys Europe. Makes of some last today that you continued on about the exiting talked quarter improving you've It sort the sounds and to think of quarter everything trend performance based frame,

Yes.

double heard fact that European And deployments. versus the bookings, over really talking my volume about quarter, in for you had price that quarter America. specifically itineraries, this was the record brands the way, So, digits XXXX, their remarks, about the the in alongside the in last that European which thing booking brands there our prepared both for we Europe by and on I me European profile right majority this side, our encouraging of second in vast and North is was

take. less talking second It's You're more of give about probably XX% the the half or or in year.

to having or in The our catering and UK, so brands, deployed number and with that got starting Doing ships X the Italy, brand number to in in X X strategy Germany, our the strongest Europe. bear in we've strong X is specifically those really And in markets Spain. the of brand number France, fruit. really

And so, the trajectory is fantastic.

XXXX how they how in improvement were XXXX you you against when the that comparing made, first comparing second to with the were quarter the yields? second respect think against quarter, the and our about European brands the their in And quarter they versus quarter first about think

European the our XX-point a in improvement saw for brands. comparison We

have last Our up brands North American they've XX%. brands great pull catching quarters. as American too, catching improved just for the up. brands. and it's see that's several less They than we thing And everything much wildfire they're over like bad that the our They're forward. North but said, to started been to a improving really And European not

Great. Thank you.

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

want my know the for this with left optimal table on booking there's are I pricing of guys the and some articulating bit there extending Thanks extension you talk curve. always booking little it's questions. morning. being the good I to the contemplation curve. if on, that Hey, about is taking a

talk you managing how you're can next So, that few about thinking of quarters? Thanks. the over

XX by What curve. in Yes, good really brand A, question, look next source source markets each where increase brand are they What's does booking there brand because different months? for the dynamics morning. the about, It's What are a markets. are of those in? capacity state like right, their they over the

hard holistically, to all other really give holistic answer to than brands. a it's of So, you say our

things the to getting booking as back normalized for not goal out obviously That's what demanding. leaves, the most actually been when sale ship And they're we've more Their revenue going even putting pattern, our only been a guests it. what's give also we've right? generate is to to

the variables that for say best I'd diligent to give the can answer optimize in I you very how each is got. have very, So, about is thinking that they

it It's worth statement – the encouraging your the about out. equation. not a into see we'll It's table. leaving where just to there been is of part It's very that's I point would how can far we on it stop. push say

there So, complicated factors answer because might not and satisfactory a it's for be to but are consider. you, a lot of it's

like the play on Of course. there how were that opportunities the there or is business where structure anything then, Thanks. think you'd we sort of of some going reorg to and see to you And might add and to maybe improve come forward? elaborate

Yes, sure.

the are get and the you're an unit. of going move doing ideally scale away you're and organize getting with you're there how scale, purposes from to units advantage to that then opportunities. operating the brands you're with taking And take unit think you corporation of it ability to operating the and I quickly level operating if of that because for not agility appropriate nimbleness within

being more time, say I same just giving lets nimbleness. brand's us would about did At much needs. around and able and – nimbleness the and have not of basically line looked it's the operating couple to the quicker deconsolidate direct reporting whole much it and we more me, them up speeds so, And process act into and for it flexibility a of brand's and we by directly I the give purposefully autonomy and units a –

few a up level also more to We support the pulled things to holistically. corporate brands

for both side who that our benefited notes, on [me result, we've my scale directly heard deconsolidating, in reports brands. as to the lead of effectively, in as that capacity effectively XX% brand. six] particular the through got and corporate specific So, a Presidents actually of [ph] you And nimbleness I've it's now

now they X% brand and which small, on And Line, the Holland America, very are very, full-year brands, but of great players piggybacks Carnival bigger which P&O in our Cruises are and capacities, both having with the do [Indiscernible] on well. Seaborne finally, by in can same can UK, piggyback Australia Cruise piggybacks works on it P&O Australia. a

Thanks. Excellent.

Boss question Matthew comes next from JP Our Please proceed. with Morgan.

a nice on congrats and quarter. thanks Great,

you. Thank

on little just to three-year plan SEA or So, a specifically could the speak to maybe down XX% you maybe if annual we EBITDA Change in the deeper us dig plan, Glide break embedded the help the opportunity Pass that have that today, of you that embedding outer versus visibility you're increased maybe XXXX, think level the the within improvement plan? the year-over-year about target in as we three-year given the in years

tough a question to it’s we're since not guidance Well, XXXX answer giving you yet.

XXXX. jump our about XXXX pluses we for the to is think calls, we There's in and pickup minuses top if going lot as can I say, single-digit a be a in occupancy of big on be expect would of in to a improvement. to going is start there. and earlier I'd maybe we backs So, what low-to-mid winds talked that be about which on nice of one yields price The

I've highest The history. two-thirds capacity book X.X% of We're about is, versus are shape. good in our All about. to activities in several our Cruise which that over returning those position XXXX best which last and XXXX quarters is the very were swing. talked have brand, in curve full in commercial in booking that The excited we it's Line, Carnival goes the growth that capacity we're about

pickup trajectory about expect should nice So, the XXXX. and we in good we what feel some

docks Question as not but planning security in come We to energy have reversal don't heard Now, mark, and China, Ukraine, forecast high we a types that won't do challenges. those XXXX. ball We're to there. on really St. get of hopefully, such me without back don't you've say. back, trades. Petersburg we I XXXX a concerns yielding already be is have crystal that The going can more having not dry

pluses are that pulling to and minuses, We now in There and expect are. always are there full nice we back of XXXX versus ahead. to because do step getting good trajectory a and up be So, frankly. we feel normal then where the

David, to I'm if respect … you'd to like not add with anything sure there's

is step-up calculated. similar X.X our to only that James fact to I'll The the looked you EBITDA at call, annual thing indicated, if was into towards add it of consensus, that going Josh the you billion what had that

a that can into take the look call. but you just see, at So, was that and going

you What potential of the that way the guess plan. simplified Great. And in areas layered historical is maybe follow-up, or rank plan? this as out. in now as think structure I that about Josh, more three-year maybe there then would particularly plan, say operating a about think the of as back-end we you that your a not are to and newly maybe profitability, laid just you've conservatism

For EBITDA, the in strive expect not we and we targets I to hope I I EBITDA benefit out be Look, meet will XX you'd the that's highest about CEO try. to ROIC and trajectory. unit just in account think a rank, in that into what our EBITDA the in to wouldn't a exceed to even frankly, set capacity which what good begin showing about does XX% to take years, will as number. points growth say, Getting

I in-line I back I norms. do said to expect, our get well would our to we'll historical expect with beyond. best like go And margins

best in way, the asking that's different let another So certainly probably but I'll it. to you take crack that's you. I'll it part a of it at give

luck. Best Great color. of

you. Thank

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

Good Hi. morning, everyone.

Patrick. Hi,

debt Shifting sheet, gears a about me, bit credit I at we that you would used think that to you. I'm Thank when X.X about able if realistically now? that X, does that here, card And that Where balance you accumulating? time? that billion quarter you'll balance cash. And funds last going wrong, how release had reserve processors. still forward? assume looking be be would right reduction for at think stand probably might from of should your correct Is And

Yes. Thanks, Patrick.

but in expect probably by be back way, vast asked it end on would to to call. effectively the us a to the by of different a with Somebody were end released of They we the of XXXX. rest that bit earlier XXXX the referring of it the little majority

a be that's cash process our we'd that point, expect. to continue that's and liquidity of deleveraging. So yes, And your using and to that we trajectory increased

end specifically, XQ? the which now? today you was that are X.X, is at Where what balance Okay. And of the

billion. It correspondingly. up, went At the QX, filed, end the deposits Q reserve went when up has you'll is the – of since funds see customer X.X it’s

you. Thank Okay. it. That's

Thanks, Patrick.

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

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

Are in about, investments you For to target. been ROIC are changes brands? things or obviously obvious as of do by now How of Can there you've the not three I that maybe costs current year hit wanted I in the talk there us higher. that there the thresholds bridge help cost capacity XX% maybe mix bridge to or mean and changes your it's what of are this that about that get reallocating plan, business with going you're And think about for to focusing you And improved strategic you what are things the terms your there? think on to to now? higher we brands capital, referencing? along the further that ROIC terms that on XXXX are in

strategic and a brands, marching our assumes portfolio. portfolio with from a that perspective of brands current Okay. we're Well, in it so and are the same forward

makeup it this front our was that, it of the talking in period, capacity. don't that have third will but about, closer Beth? And Line our period look Carnival to Cruise four our to We in I back within pre-pause what year the they XX%, have portfolio reallocate were XX% be such over about our action me, in a assets timeline I of was taken last you and if

XX%. about Yes, Pardon me?

XX%.

XX%.

at brand business is same accelerated and is all back, the pace that coming talking in the we been that numbers up demand which really strategy. So, certainly single generating a At highest part quarter of at the been our our which And incremental our our for returning brands. looking third being a focus time, you're of continue. expect from we've quarter, think of every performance and we've see I to about, booking you our

a got focus our through. perspective, do expect operations, So, capability our their very are fill the think their we the to our in portfolio, got to port number respect currently capacity experiences of will that really that our take shine as we've the backs to letting strategic though million to portfolio in And with amazing Grand pick-up well who they they unparalleled do ensure very based give. willing alone that that that's year have we from an because this amazing Caribbean, in I to is and commercial annual the a X.X nice our we carry for guests even footprint in an be brands business. about in million and expect We X.X folks starting with the it's everything ships on and pay wind not some footprint from will land that

peers were extent considerably have you Got we these cushion And you that a that the it. have to still the some your your to your and think based pricing to and resilience? gap, vacations. prices side consumer slowdown there certainly think do here? to turning And extent pricing in see about impacting as you then how the or stability that the To about in RevPAR, based do land the elevated talked on side. just relative on How is land lodging about uncertainties

slowdown, is especially months bookings good, we those a of benefits booked one Sure. see been we've you have for today, very we Well, because which telling on based the are and obviously, the sticky. well we don't XX next what is, very are

So that is incredibly helpful to our outlook.

land. value and a slowdown in result, ridiculous is we And far our rates because there and holiday and go. because reasons call the how we stick hotels I our a what it, outrageous be, right value. if still are bit a as that a recession, is there of down resorts, their outsized can might for dollars your out And whatever rates it favor, if take take Now, bit call I is actually and their an in gap that if airlines down a sword double-edged a to

very, that position choose flight And on porting to, up for strategy have to our of very with on top sets of people are out how they their to should of dollars. figure ship's about vacation our XX% trying don't who get a not well our home us guests that, where because to stretch

well our said is other and where our be with be pulling you, we wanting calls. bodes to quite we to particularly ahead So, This on good. of Every XXXX in experiences, us. those at factors still quite all different. for focus for travel, loading with this probably one And back, feel base recession purchase happens unemployment, one to record there's which people honest

question. We've got time for one more

Got it.

thank Sorry, you.

Thanks.

got end Yes. could time one more Operator, question, just the for I we've call. or

operator. we've So, I our lost think

the us everybody you look So, for do for those forward Investor joining that seeing to much. Day. I'll we'll And that. you you for Thank see I today. tomorrow, very Thank

Bye-bye.

conclude you Thank disconnect the call for does and your today. ask you thank line. for that participation That your you. please conference We