CUK - Earnings call transcript Q4 2018 | Carnival Corporation & plc

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Arnold Donald

Good morning, everyone and welcome to our Fourth Quarter 2018 Earnings Conference Call. I'm Arnold Donald, President and CEO of Carnival Corporation & Plc. Thank you all for joining us this morning and a sincere happy holidays to everybody. Today, I'm joined by our Chairman, Micky Arison, by David Bernstein, our Chief Financial Officer and by Beth Roberts, Senior Vice President, Investor Relations.

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, our have prepared team important our you. to fellow Collectively, people, all with members call an I'd of to share it this milestone, like achieved take on my remarks as opportunity and very a Five invested by capital. end years a XXXX of deliver we to established double-digit ago, target the return on record return quarter share history, on pleased of adjusted in I to that year third we and with achieved earnings the am record earnings adjusted to another capital invested our leading year. double-digit of while earnings, year full-year the finishing very have growth, consecutive fifth highest consecutive company's our shareholders our who a scale. beyond excess I doubling executing above of measured just and sincerely return create industry-leading on members growth, team strategy invested leveraging through years in XXX,XXX in tripling on per thank share more our our earnings a to while of capital five adjusted than for went our near and to capacity deliver demand It $XX in the Moody's repurchases, a from respectively. and of share capitalization, billion and accomplished billion of was and also achieving growth and efforts while Minus AX was which credit $XX dividend market shareholders return that to all increase opportunistic A S&P through their strong drove ratings for Germany of time. like Egypt Turkey and geopolitical to retain all France over ability tensions It destinations was including our a geopolitical people's also plethora attacks period conflicts, their high-yielding like effort travel, that actual in enabled rising our of of the us to willingness some of execute and headwinds affecting despite the to world, impacting some the the disruptions like times were there Maria key in like like and countries hurricane were including regions around in of Europe Korea, of Brexit, and supply temporary with Typhoon stoppage scares, Caribbean. in uncertainty Talim, industry There and malaise to over-concentration at travel disasters in economic disease natural China trade and cases some would in consternation community caused even These headwinds investment that we deliver. doubt fact in the and amongst was like their and I'd Again, with results. it that commitment their agent still globally, record-breaking all value the that when strong our and overcame passion our enabled and partners, combined performed, team to thank support of travel our of

sustained of into on positioned the return way guest single capital day, expectations journey invested pave had double-digit and is and grow many time. helped those over the return built return better invested the double-digit areas on on on sustain have left invested exceeding While we’ve capital contributions from foundation that to to every capital

and that to going areas long, to creating forward a strategy excess I'd cruise yet you dividends in ago, there is coverage to take first continuing few. little our very of continue increasing list cruise. will your pay not globally capacity would press growth that Five core already the was guest by demand had to high measured is like experience. if years While highlight enhance of you just consideration for our make cruised, to Central want

had public positive proactive has effort clearly relations Our a impact.

capture consistently those of brands they entire the media industry, what were and five our XX% all in been of over industry, believe the number we at just media today have efforts ago. [indiscernible] cruise While multiples are positive of years mentions our positive absolute

for for our Shakira P&O of for Line, Cruise [ph] Oprah just spotlight efforts personalities, with with The potential respective Queen Winfrey brands a audience name a have them like brought Costa, Holland and Our greater to the Her brands, Shack new Cruises to America, marketing shared many few. well-known to Majesty who for cruise Carnival

U.S. we networks, market, among U.K. apprentice, Cruise Vacation reached brands Gran Dec proprietary But and Ant ITV Voyager U.K., story-telling our already travel way Ellen the in Airing six units, to and Garcia, there, the The by on the world. more reality than own places, also Spanish and XXX and have including created shows the on featured using original television and which including around Creation, counting. are [indiscernible] La connects Ocean Our million major The Show, around views show, for most content Sorpresa share authentic the stop with TV Treks cultures the speaking The seasons TV our with program travel popular were series on world the programs its the celebrity Jeff and people, Corwin, Josh all in powerful sea we DeGeneres didn't new

Seabourn app voice OceanView operator and All bring guests same our billion network for Shipbuilding to Mobile. impressions up also America CSSC, Cuba, Cuba. programs these positive first directly the the and opening cruise history-making our exciting our news very Through time, now destination over with local XX to with brands captured guests global We future. our mobile OceanView in planned our joint company. an the U.S. forming cruise of cruise Holland television more a through option the XX Line, State Carnival media made China we from historic own Corporation and or through to our the of sign more of U.S. years agreement At can on Cruise became be Line, new venture U.S. found three over operating

in market potential company to in us has our become guest as be largest the innovation forward build More history China, relationship largest the to at we the which Ocean the and Medallion, CES, keynote world. cruise patented to with the the trade help debut first experience industry the significant travel the become long-term of ever which to made enabled to show the technology look source world, for over in importantly, time cruise we

Medallion Company for has company Top recognition our our recognized Companies has favorable the received efforts travel Most billion by category. impressions for and Ocean won XX XX being globally as far, the media of So including innovation one in Innovative Fast

increase the and going our can experience particularly guest potential elevate forward have opportunity believe even like of efforts enabling the far Medallion Class the our delivery to more easy we're other personalized guests in ocean Princess, keyless ship, technology experience forums anytime, ocean shore the and for we marketing, with many websites second targeted experience guest empowerment is now Mobile so Class the delivery including guests clearly on-demand Medallion has to way the new but cruise out App, forums, just the our In of CRM to process awareness experience, about Wi-Fi. globally, expedited have And absolute one Class follow entry, and and resonating with cost first be onboard improved Regal increased brands, Across beverage food travel operational just Princess, Caribbean is room of an agent activated full enhanced new sales. like and add rolling redesigned side on-board and on new While technology, clear anywhere, capabilities, our by of our collectively services, reduce and for the greater. all contributes which quarter including finding, crew. features We guest of revenues, partners, milestones. boarding, to in both enabled Medallion technology crystal ship best state enhance

the been particularly of Our further and State-Of-The-Art half deployed Yoda the yield in company across facilitate to XXXX management second revenue growth, beyond. half to has

great through Carnival reinvestment our whole efforts and fleet X.X for like strides make like new brands or Fun of for new terminals further Dubai of or cold Cuba like Ship experience the wide and signature destinations cruise Barcelona continue Our the excellence to America. guest whether multibillion-dollar

our capacity course in strategy fleet essential ongoing measurers are Of replenishment demand our to excess to efforts create of growth.

ships our Over believe XX efficient we time runway resilient have reduce in our from leverage cost, five State-Of-The-Art momentum. vessels of a exiting same $XXX building to nine we continue at more we scale just the less to ahead the years the achieving more return And we savings over And last years. welcome cumulative efficient larger more fleet million five fleet.

in significantly around Ship We including day. Shore, opening Maritime a our operations through many we real the State-Of-The-Art State-Of-The-Art had Arison globe notable support simulators opened to engine centers training hours curriculum maritime also the sustainability in XX cutting time to room achievements edge Netherlands, and pleat delivering our the three, and expanded of bridge and provide Center efforts,

our get natural we to on first of more even environmentally three history by ever fuel front, solely made be able environmental consumption ship cruise unit the ahead gas. years target and sailing liquefied friendly On we powered just our exceeded with week of schedule XX% reduction this

last fully are committed improvement years have against foundation We The to transformative to five continuous been considerable achieving environment, breakthrough results security. build safety in a and health, great on. It's odds.

greater In fact sound stronger on model business the built an on ever more even returns fleet resilience investment top having even sheet. our balance today of into than is

invested forward. capital. will a growing leading we same continues said, on in We achieved change growth relative we scale compounded and of model annual X.X%. going the journey while components demand stay earnings of our to deliver capacity cost our return excess create grew double digit on To X% path. annually. sustained less the leveraging years industry our the In five measured to contribution the may from That increases bit X%, As average capacity past than than on a while greater attaining growth average

a fleet replenishment all a those slight in guidance capacity And try -- of purposefully second and improvement are we're we're increase this experiencing and this, result half. the double-digit quarter are designed Going Difficulty] to significant our second and achieve as [Technical greater… efforts forward, our brands. …Europe for factoring where year to stronger sourcing of into we expecting the

Felicia Hendrix

trying just I'm to -- you're provided some they're are be industry which in is again I your do specific of year. of yet, kind the two your and given provided they've marketplace outlooks differences for are than is what's brands seeing, but to what fair? I'm understand, I'm like next might going in just guidance on the Continental at from -- Because trying or through Okay. seems mean specific EA in and going peers bullish brands haven't they and the that ultimately on what between kind capacity in what's uncertainty have the it seeing of what which your And what this call company more coming to increasing perhaps it's very

David Bernstein

I representation. well. the you uncertain Europe That's a Continental as environment repeated fair economic I’d say when that, have just in would

Felicia Hendrix

are And just and I'm stuff seeing quarter, wondering have we last the you you all but -- if when know some seeing that and yes, Okay. significant through you a heard from you're retail reported? there things -- change and we've

Arnold Donald

other significant focused a anything. change think return say on really is invested wouldn't capital. I on earnings the Again, Felicia, and or I difference, No, we're

capacity grow that's the And to so, as increases, driving towards. we European brands are the and so higher going in okay, we're earnings, even have what

Europe, obviously so guidance, and we're given And yield in this capacity, But to you're in we're invested takes want guidance going think point uncertainties and economies But less the of increase get in point. for us But of increases. where to earnings that's to the front this we terms the increases. that prudent of capital. greater challenges in on our referenced of strive be return at on yield reliant time, guidance that were with in terms obviously, at in and we some to wave

Felicia Hendrix

Okay. that Thank you. interest number, you whenever fine. just that's Beth have And

Beth Roberts

million. $XX Its

Felicia Hendrix

you. Thank okay. XX,

Operator

to line very question. Thank Bernstein our Research. Beckel go your with much. David on you question ahead with We'll from go the right next Please

David Beckel

a thanks a for Hey, lot question.

and a and I'm robust that was Just a be up yields probably Last bit to than than changes little two, XXXX so now QX. sort of, sort which potential QX interpreted than -- was, half the guidance bit paraphrasing, less of obviously a be a to expected that bit you the less step in lower following maybe quarter, in you're indicated on little what with first guidance with and but , little most expectation. indicating by

changed that and wondering just then now exactly between view? informs a I'm conservative So, more what

Arnold Donald

point. we we we the to we Again guidance changes on conservative feel at I than be changed. We're more time have say this mean, it had the giving last well would have capital. on the even increases view less year we're a in focused earnings -- mean, invested But with fill about were and have at have, really I point year. year. Nothing on don't we to confident return best this I we next capacity have occupancy, -- that was ahead we

so, And strength. we're seeing actually

we're changed, we so – – conservative And aren’t than we we more not were whatever. don't nothing's before,

David Bernstein

because because be for than gave that first less we've of visibility the December, We we we but guidance indicated we would secondly, we give had the the more do doing. that quarter. But our guidance which visibility. never fourth for months bookings, three in we number had guidance quantified exact less are the half now had what And have we

– said nothing changed. So Arnold as nothing's

David Beckel

Understood.

Arnold Donald

thought even in point in time. Except we than a booking position we at are better that

David Beckel

your specifically you of bookings is has, suggested at that books Yoda that volumes point that to into made informed the increase point, price business year? or the active book So the of, an is that following on better heading this that on in assume position, of year, it or fair at sort you trade-off the expense

Arnold Donald

I more It the tool. frequent and inquiry But a it builds half terms tool adjustments it results. will show [ph] think, up allows in Yoda fundamentally, and up of a the frequent is more in more powerful XXXX real from us of impacting as bottom. second

So it the it's to as key not versus et of specifics, in looking itineraries you're at what cetera itinerary, management you builds thousands up ship, by know and by – brands of just it yield nine is. and

a with bundle, at there the that's from affinity capacity sure certain tool how in where standpoint, lot along overall in certain, of have up, have versus they terms a with a end our best we variables. experience shot to groups, How other cetera, bookings for the allocated what point and this much revenue the but given on at, to curve, time. that management, booking point want is of with board decisions. of may there's So are bundling of itineraries, in be the dynamics moving driven guidance you But scientists there increase et much lot on ticket, and those of at for we'll some I'm a charters,

David Beckel

have of U.K. just dedicated And a question and concern you could, I I impact quick the the to of it. want – a Brexit line. there’s last about Got lot if

to confirm, demand specific you from market? Just or intent that any seen in weakening purchase have

Arnold Donald

don't by the reality We at is get but brand point no. time, brand, this

David Beckel

Okay. Thank you.

Arnold Donald

Thank you.

Operator

to line next Please with Nomura get Curtis from right we'll ahead. the Harry of Instinet. the our And question on line go

Harry Curtis

good Hey, morning.

the First how is through your question look of does and European is what sourced, that business percentage year?

Arnold Donald

sure Europe, is it's total the of not from for about our but in probably what exactly XX% total quarter So, year. guests in that by come that's that

Harry Curtis

Okay.

Arnold Donald

brands European European year the around. that confirmed pretty That's versus some

Harry Curtis

And of earnings somewhat looking in X% earnings $X.XX for capacity. And in I'm getting year from contribution X.X% we're guidance fuel fuel at after the growth the next higher base? I'm little bigger new – despite both only the and is me in of lift you a stock, yield the bit really that Okay. out that performance your growth benefit or your disappointed a more net – lift seems not it back on benefit to your up FX

Arnold Donald

that, medium You again, foundation time. But beat timing line ahead higher the to it be near-term is guidance that. term. our little the of when over growth of exactly et all as that's time, can we're a the the capacity course, earnings comes you know for bottom we of than what this on cetera don't I have at might X% But the in. is And those the double-digit to working best And be going things that. assure we over factor

David Bernstein

time did previous capital that mentioned have things the number a we in of and we Harry on this made we one And calls. of have investments is over

bit which we impacted So that these depreciation capacity, are believe pay went-up dividends. time more you're investments, the will a referring numbers to the over than which and

I think looking in So his future. Arnold shape very in as indicated prepared good we're the comments in forward

Harry Curtis

with turn given stock? billion year on see sheet stock most want like at And to much dividend buy So after you the your have using cash just really do pretty the CapEx to balance you're CapEx? flow. to a quick what How in you degree your X.X back of the flow operating capacity much next you feel do to you that question buyback cash real already bulge because to

David Bernstein

to with X.XX. year debt a of Well, we ended EBITDA ratio the

on have balance So sheet we side. some room the do

the a And so we look guidance for no times. together which is as at way you if end you XXXX, above we it's guidance, buybacks our the year assuming slightly put take would two the know

We million remaining XXX have the authorization. almost on

beyond forward. did a flows is that that, complete year forecast changes. then let is to I – But by you we'll authorization. discussing expenditure the mention, brought me Board the want the Board. buyback the be to up years one the with going and cash capital decision the the give just So have numbers you and clearly, flexibility expenditures capital And and we the because thing And explain

release X.X, just CapEx to December. it for simply as is in had our it's XXXX delayed press in we XXXX it's the XXXX, than of delayed for for but delivery So number before, from XXXX XXXX for keep billion, AIDAnova November seen numbers X.X was the X.X mind and probably mentioned and X.X. The higher we the it's you've

first in the year. anticipated the So that we the just XXXX fiscal into of new CapEx fell month

numbers other as feedback CapEx for, we have giving -- capital were because got non ships typically new that well up. also the contracted as The newbuild We some improvements. was that CapEx cap gone out our were the

And our so went ship, new a every time we numbers annual up. ordered CapEx

we've to total that and what is, done CapEx order we've anticipate to we we've plan the So projections. the new in included ships tried

we hopefully the forward. So numbers you'll go future will the get that closer we see much in as be

Harry Curtis

Thanks David and everyone. thanks

Arnold Donald

you. Thank

Operator

you. get with to of our go We'll Wieczynski next line the Stifel. Steve from question Thank on the Please ahead. line

Steven Wieczynski

you. and guys to happy morning Hey all good of holidays

here to I some of I some of get this most And if the point another call think parts groups this because European stuff. know in retail seen panic But morning. tour think there's certain where to at didn’t start out So you up that's it's I whether Europe. or there have you question of provider weakness I we're sick got getting our ask questions

want whatever last brands European to in whether material So onboard yeah, some you you look last you it's at. in your little might I differently, there trends P&O, know ask want at? that to want this month of weeks, or but bit key AIDA Costa, couple out to frame to you changes call of the whatever Have time of any in the you I guess want look terms seen

Arnold Donald

all No, line not or is, grow in going absorbing to the with at are some economies have obviously those challenges bottom very than fleet that they've Continental going been are it's European everything average we from there so be for the and numbers on of you. all. guys, you what told to capacity. with brands I in us, earnings the kinds They're still things, share a Europe capital. would in and Europe better we but our -- relative EA say invested all end our on turbulent to impacts, On broadly, ever average basis, earning that, we are and the strong. growing just that you growing But return they're focused

grow different in absorbing Our end up. we the Europe capacity makeup to grow Europe and others and is yields in their But industry. absorbing well. than see, the working we'll where earnings. the to some see we'll and is doing they're They're of end going is they're it

Steven Wieczynski

some as you Okay, kind wondering Is And in question conservative view off more years bit of to uncertainty a that if great. is of well. comparisons, tougher also way trends. economic global embedded a maybe but very of that? metrics, only what's that given fair taking coming and know in second not characterize of the in just onboard, guess general a that your little there that couple maybe And you're I Thanks. yield around you're obviously and terms would for guidance be I'm strong on-board

David Bernstein

that the slightly by this slightly is passenger way on-board and seen net historically generally the getting year. and net the put economic is for whole haven't increase way or other is they you the below, we the we is onboard above X% ticket The overall environments X% in the What tickets. together have impacted to Yes.

said think in I X%-ish I've as We another forward typically use typically of on-board work sort do hard past. and the that. to guidance very we than we do go number So, this and better

Arnold Donald

booking and and different along ticket between brands whatnot. curve try as move blurring they a there's Yes, combinations their and on-board

what and a Obviously, work come up yield. in on we we've pre-wave, in the double-digit have with is clearly is see forecast, beat just to hard team this to can it ticket bit yield on-board, -- on overtime earnings our But -- and whatever have we growth capital. we and little So, continued we what we better we that's we a but return promised but growth about. on given which on you, visibility -- for the invested factor guidance foundation

Steven Wieczynski

one great. I what think is I question. us David quick you getting together if guess Thanks. And housekeeping there guess you you at about put can guidance fuel help maybe can obviously together? your I mean, Okay, when time -- and little to trying last bit look a at collapsed it's weeks, that you you out prices week the in more, what two figure put or over fuel maybe were essentially so at I'm obviously, point just

David Bernstein

at ago. the spread moment it know couple one is fuel moved -- Keep mind, as fuel Brent in price. there's we considerably. $XX. Yes, crack our days was Brent a I just also of factor, has that determining was in well

those you look do at of calculations. your So, before both

Steven Wieczynski

Thanks. Understood. holidays Happy guys.

Arnold Donald

Happy holidays.

Operator

Robin Thank question line get on you. our line of We'll the from right to ahead. next UBS. Go with Farley the

Robin Farley

you. struggling little Thank bit-- I'm Great. a

Arnold Donald

Hi Robin.

deep this Normally would heard call you by the You're in now. someone have time.

Robin Farley

know I'm happened. sure I what not

change? something activity will you that recur? XXX basis Something a trend in, been of several that -- I think the in that's midpoint, close it come to quarters you -- little that is by recurring obviously your for sort there is much exceeded XXX at like points think last going the results is not that basis points to think or driving closing about guidance plus how was the that has bit you

Arnold Donald

and by David happen comment as comment things working now as us, Robin with well. I'll let Frankly so every there are that know many a year. you unknown make I'll

to you this anticipate, things more happen, a prudent year. more are seems things, to guidance always And it we my seems can't anticipate but the If And so prudent. or will same. whether things in our going that point never If I'll guidance general that that's know that fewer things happen. what going the so super to unknown going at in that David let and anticipate And we be be find statement, And less future's happened, make it's to conservative. comment. hold guidance or the been

David Bernstein

the Yes, little on pieces, on-board we on-board into visibility other the the and break probably of the XX% for if apart XX%-ish other accounted going have and the very or you and quarter. improvement

factor fortunately business our hard and we and did So, we've drove of on other on-board worked a better that's just which the and it.

Robin Farley

That's Did as in And Thank in they you softer high your some as did maybe sourcing calling brands, they helpful. little Or there. other you Or did your expectations the just Great. a exceed come as uncertainty you. were follow-up, the out continental on also expectation? better in basis come QX? a they than anticipated? a constant

Arnold Donald

say prepared the was I remarks that both on did bookings my sides at So in stronger Atlantic. close in

Robin Farley

And – the so that it in just not includes U.K.? includes Continental,

Arnold Donald

yeah… Yeah,

Robin Farley

yeah. Okay,

Arnold Donald

as Europe. …both, as well North America

Robin Farley

Okay. not just meant But and U.K… I brand also, the I Continental the

Arnold Donald

Yeah.

Robin Farley

pay delay, Okay. this would do And penalty shipyard for the under Great, force impact the AIDAnova is yard I helpful. where earnings surprised it the words very the to usually not No. impact then be in that's was cover would earnings that? just EPS just minor, question. an impact The you. from see usually other a a last when an

Arnold Donald

rules damage the book the There but value damages, net liquidated the liquidated we ship say payment. they to reduce that by have are Yeah, accounting the do. of

go doesn't we P&L through losses. it So unfortunately by those made and whole – but the

Robin Farley

Okay. thank you Great, Thanks. very much.

Arnold Donald

Thank you, holiday. Robin. Happy

Operator

ahead your the Shojaian Wolfe Research. on from Thank line Jared right you. question. We'll from go our question to with next Please get

Jared Shojaian

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

Arnold Donald

morning. Good

Jared Shojaian

mix less comments appreciate would still yield taking still your I delivery made how and ship the capacity leaves about of every between growth your yields. yield think some to I on yield should higher reliant system differences are you accretive that but that there you're be brands, of growth You each

given already are your Just weighted more system contemporary segment. yields that to the

to and is do So, relative a step-up I growth and disagree tailwind the capacity guess you incremental XXXX this the prior in on thought? you beyond or yield that give the with years, shouldn't question side

Arnold Donald

you, to earnings know, you the that depends mix. necessarily but for on across Within is, general, a capacity on brand Not true. you purely where brand or definitely the brands in have but it

capacity So increases doesn't brands allow that earnings. some yield back in But our you and capacity those because and grow a we yield fleet. below this are you and got fleet necessarily in that more that in holding accretive, are average our it above, some as to below have still below, greater it it’s grows as average much are is

can understand math. the You

that's we variables on guidance about giving too, the in ticket of ticket a board. doesn’t There's you And XXXX actually on included So include And board, guidance. on again have versus that booking realize to other what time an if bunch have now, is more campaign. shifted we're we're to we giving because board. in you again then in not right we're reporting actual versus

capacity the because into And those certain so all all increase brands other up next just plus factors not have come et year, play, brands eat, one but capacity there’s it's not cetera. automatic that everything year would

David Bernstein

given our have side… You

Arnold Donald

our want one leave don’t on you why to I there’s grow yield, lever you but I and much understand earnings. with guys focus so this to

what business when return invested managing grow capital. capital, recorded invested the and We're and near-term focused we're And issues to growing that the when we're grow that For experience year double-digit with in and us, demand. our We the to again, on invested strong going on everything we're comes is and of capital just over timing the going going affect we're on then to return a there's return had top in capacity of very on earnings continue year capital. on we of totally and gotten returns in, on particular on and earnings – average focused a a we've very on growth we're of although stuff is all can do that point to the on, time and time over what any on to mix number. in strong invested But record that earnings confluence be double-digit happens create things clearly on capital. with at

Jared Shojaian

now strength of the gears a sales And announced Thank maybe become private XXXX. the to that thinking I the and you. then you as think compliant? the Can And just the – transaction quarter, secondary companies do how here? robust right could on And for the more more four rules XXXX whether in here. guess you that, market you near-term is Last IMO are you've XXXX really it you announced? that market the you driving then, four already in more just of new about Okay. shipped look ships switching additional sales possible beyond talk about

Arnold Donald

our as invested is, and in us to the continue will it's and if with over his then for key, invest if guests fleet the we not reality practical earning ship to capital that ship guests return relevant is the gone. We'll if will is is time. in ship be have ship on the more double-digit it's relevant The to and delivering

And rotate just XX, secondary ships out. a getting because – the so were the them there secondary market, regulations secondary to are going has And but robust XX many there's Those now of of no simply that terms to years market being because of IKEA need opportunity only the the old. are ships [ph] in question, aging they're not market. in to

have ships But capital, that. earnings ships. came time, the be to and at doing at should it So that nutshell this time. that, see number need we return same the in no that. invested But for if to had we do of problems we a if for to point a scrap on there drive don't market a would We in

Micky Arison

over So XXXX. since ships we've we XX also sold time

which a one on year the a been big the get ships and it's as ships year to we've consistently, time to predict. two likely in older the depends a market. we'd hard demand But said it's surprise. ships isn't roughly over So sell two It

Arnold Donald

But not we – to if I don't onto asset, underperforming we're but it. it, it. we able scrap that, sell going to if if do we mean, an I because not do to hold we're had would had it anticipate we to.

Jared Shojaian

much. Thank right. All you very

Arnold Donald

you. Thank

Operator

the go from We'll Please line line next ahead. get to from question the of our Citigroup. Greg Badishkanian on

Fred Wightman

some Can cruise Wightman you more guys. just net outlook If to full Hey, at actually on look for Good favorable us remind the Fred that the guide year morning. of for Greg. driving first beyond quarter It's costs we compared QX? what's outlook.

Arnold Donald

that do So get scale the together capacity it as we that. remarks, increase as you we in overall, of our mentioned prepared – the in guidance from have economies we put

efforts, where We global sourcing scale. leveraging have we're our our

more those We're full look inflation that talking about offset first the When the know, are the a than year. X.X%. year. X% had items was quarters, indicated up up, just So any you I for I at two the major are quarter full being in like

are flat. between is implies that the judge or the of vary always on that things what year-to-year, I the year there overall that year quarter us it is dock be the whether advertising rest dry for So cost like because timings relatively say quarter-to-quarter. does the

Fred Wightman

competition a that ticket could talk broader That sense. you just think lot market were stabilizing? thinking bit mention in in prices you of and if up How overall? that makes And would you then things China XQ, market I about a environment in are the industry the about wondering today? yield capacity Are

Arnold Donald

than in they China. better definitely ago know things were are plus say, a You year

just of been moved Some capacity but familiar know is system of more out, with is there's frankly lot becoming you a the cruise. distribution it -- that has

being and we out. ones China real part as two a cruise So see and again course we But ships opportunity the building very of small running that of a with and the venture today CSSC see in the small, there. a mix joint domestic there's overall

is it environment is in more market for the So now, a of future yield just certainly the yield development, right for terms is the that better. than but environment, it important is

Fred Wightman

you. Thank Great.

Arnold Donald

you. Thank

Operator

you Go much. line Morningstar. from next on very the Katz question your ahead. with Thank We'll Jaime get

Jaime Katz

Hi. Good question. just have one morning. quick I

out guys spend? the learned the that that incremental Thanks. roll you curious has lessons think to yet, a from whether of the on roll mentioned you stimulated if have of I timeline any Medallion guys brand? I'm out onboard to And Ocean rest is Caribbean the it so, Princess. the if there

Arnold Donald

it's to you. Thank the We're you. And but Yeah. happy early excited about very holidays the Ocean, stages.

if air keep you we And to on but so And if one. mind, feature I the question if Apple we've and there, hard delivery consistent have revenue yes directly, to blips and time happen drop want so maybe see use yield. take on to technology, we ever in you know your you phone. seen it a make an new don't and any before have here your assessment performance all answer

don't they to you you And feature do, a great so know they If they something. share if You it's people lot and don't of they feature, as even a how But photos it use exist. love or know it know airdrop on. use once it. just people to know want an at event

to with with to and our features are with we course there get And to guest crew us has then have to it. many have activate for familiar so become used it. guest Ocean, of similarly So

scores the a see indication experience potential. satisfaction every guest scores. is elevating definitely have from is it We But crew now That experience. crew we new. And from satisfaction guest and

let we out. it know play have And to so you

have We now ship active Regal on full Princess. the

We the we ships practicing little learning you guests time with And count experience too and experiencing, a know great see have potential, we're educating go and the other early but chickens. having the when it. six, Princess to But and a seven meanwhile ready comes. to it's

Jaime Katz

Thanks.

Operator

get next on We'll Tim Securities. much. from Fargo very line Conder you to Thank Wells with our question ahead. Go the

Tim Conder

are wanted you. can by three and circle the comments on Germany you back U.K. I that not day, obviously continent. the is to of markets; on color, sourcing. continental and Europe main Italy, us topic Any Thank source U.K. give the

similar in being seeing more one lot and that are any how couple Germany, is you impacted changes in of impacted? with Italy impact budgetary uncertainty the government in So, that and last Germany are the -- months Italy, over other? of is of than And maybe type

Arnold Donald

the Okay, I'll details. David fill-in I'll start with let and

to less on double-digit that strong in number want ahead They're even emphasize last even I talking again with had capacity Europe there. we're than with of increase bookings of they've capacity a First book to is that and brands all just increase year.

So, our average even give especially go booking we strong performance, and the general, pull first David. when it pull an comment David is and it but and than ahead average number, fleet U.K. color picture. you down But can I'll is down Germany the time yield strong across is one. strong a yield strong for is our let strong, Number there less average and is nine in the with it ticket that's so on, brands, can so two yes, number that, in

David Bernstein

and on an we're So, of level of overall, capacity. well ahead increased prior the year

you are position, said, line. look a -- And Arnold in and an things trend. as considerably see forward, we you of expected book for improving are be where strong the we is of half rest year obviously cumulative the we pricing up are So, get to the said our second from we to very I when X% on see the today the position that guidance. mean, overall, yield to is

is trends, our volume positive seeing seeing affect you which uncertainty that affects a within seeing and those are uncertainty we're mentioned, strong which economic said the we've situation, does overall booking of So, very lot economic countries we consumer we're before the which business. impacting that

Tim Conder

Okay.

So, like Italy is and the problem Germany by lead then is it though of followed sounds the the that maybe U.K. [Indiscernible]?

Arnold Donald

where are capacity me Okay, they our bookings enough. increase; all, is can't were -- problem. let of no I double-digit ahead year. There emphasize last first talking We're of

to of with increases had we less even those last capacity brands year. than book We have number in double-digit

Those this grow last problem. going absolutely to over is earnings So, no year their are brands year. there

growth got in we earnings. So,

a So, there isn't really problem.

and You're soft there's and -- of happening. market, the just -- in weighting numbers averages not there's that's of but none a not there's talking demand, not problem

Okay?

Tim Conder

Okay.

there, still brands key? So, but mix, mix lower, have higher the was yield profitability as you said, that some

Arnold Donald

the get they not money of Well, fleet fleet. year-to-year, though the the they even and they may they earned to improve may average, even average if be below

So, increase more you're can an it yield. overall seeing And have in capacity, not as down. pull it still they

on as might, is it's not end impact. increases only focused so when what end time doesn't, a simple you happens. of okay, it growing by we've compare get moving you mix the but number earnings in unusual not of by the feel, think, the It's the lots with capital, oranges. and not is simple it a year, may so a of you're the definitely any there's it's and But companies, nine a comparing and because I a yield everything, as in lever Historically, you in we'll Now, you see some the the picture, to and we -- only but reason why problem. on parts. return try which with apples have The to you're there of got And invested on-boards number. even -- brands brands capacity not an of portfolio when other guys yield some have not lever

by get run we huge that. the provide we because And every we by do. run so how brand business the detail, We the as that's don't amount business of obvious details a have you for share to comparison wouldn’t brand you'd We which won't but not reasons.

Tim Conder

for No, color. Okay, you. the okay. no. Thank Thanks

of earlier Lastly further to obviously, rate over to the at but excluding given and longer to here. years? clip back alone grow to fleet maybe then that retirement, should got on accelerate, fleet, reinvestment the that given a that looking you a bit comments is David, talked five DNA from scale out that just the and being next should reinvestment fleet you about ship ships the you've and have orders? order the existing looking think three maybe new therefore How we about DNA anticipate we higher that ship up Obviously, little about the your term in reinvestments.

Arnold Donald

would higher that your to how modeling. in and made is a should yet that DNA It's really be hard grow now we've exactly help percentage there's of time points than But to decisions determine a to few left but many, the say been lot a saying over expectation to make because capacity couple decisions we've a lot got of for that of that. years

Tim Conder

everyone. Christmas Thank and Happy holidays to Okay. you. Merry

Arnold Donald

Christmas. Merry you. Thank

Operator

We'll much. to with line from Infinity Thank Research. question Assia you on Georgieva the ahead. very our Go get next right

Assia Georgieva

earnings? fiscal yields, we again we QX, for Would one but European have actually higher understand If Good look a might higher see question. don't and couple might fair it morning, bookings we be great still passenger source months. need at we year? I probably say quite quick guys. a the of QX. through up a weakest occupancies XXXX, firmed cadence in the still be yields go Congratulations the we X that had X, I and QX on And more link to as that

Arnold Donald

in my So that was we – comments tougher a first indicate comparison. half I did the

do do trend getting an second a bit was the what half, see than back stronger before. in improving was we I half. we of half And so at And see being the the first which little

So paraphrasing you your are in of the year. correct

Assia Georgieva

to Well, paraphrase David and a I dig was little deeper. trying and to bit tried actually

statement? going than QX So Is a fair that be to is better QX.

Arnold Donald

expect this guidance. into we that our it what is built time That overall

Assia Georgieva

be good should And QX, getting because as that quarter new builds a in you're well?

Arnold Donald

We're is the it's very in month. getting in like impact minimal builds late just year; new a so the October,

about mind in same. that every is the careful quarter in month not a keep that, So and

mix Now as you're in the impact to get a quarter. well into going

Assia Georgieva

you Thank so much. fair. totally is That

David Bernstein

you. Thank

Beth Roberts

So operator, we will take one more call.

Operator

Certainly.

from ahead. for Our today final is Blair. right with question Go line of the Sharon William Zackfia

Sharon Zackfia

you Hi. Thank letting sneak-in. morning. me Good for

Arnold Donald

Good morning.

Sharon Zackfia

I the next Europe sure and consolidated are dynamic Good morning. I year. with but correctly? about that's versus because so Within outlook want understand quickly down mix and that lot commentary of you at of positive part to as yields for make looking perhaps that just construct clarify bringing the Europe, growing all NAA, it in a been mix the expecting Europe just be it's to if There's the of of that is to sounds yield

Arnold Donald

North by said before, speaking, on on to Europe don't to make achieve the Generally the But Atlantic the – positioned in our hard we don't well as well as are guidance and strong than by guidance give brand Arnold segment I of the we that. better business. sides both see well we're do commentary historically in as America being volumes and we working or do we actuals to

Sharon Zackfia

you. Thank Okay.

Arnold Donald

Thank you.

Arnold Donald

very all much. you Thank Okay.

to uncertain – invested we path But just of I even brands that and on growth really for all, wish bookings optimize continue capital. environment, to on going growth acknowledge environment, going a that And a reiterate on have I of XXX,XXX to want double-digit to Corporation much. capital. much, marching an like you delivering return Carnival Clearly, colleagues double-digit want and very we're We're you year. the more Thank share with some grow the the of down all holidays. given First environment. And a thank grow safe again to return earnings. promise path. on put very invested with this return our business invested down our everyone marching I we're to to on earlier to to we're you the on in the happy all uncertain earnings joyful, book here chosen at want capital

Operator

And you for ladies and gentlemen, Thank ask the And conclude these and you to everyone. everyone. have conference participation, thank for lines. call disconnect your great We today. a day

Carnival Corporation & plc (CUK) 20 Dec 182018 Q4 Earnings call transcript