CCL - Earnings call transcript Q3 2017 | Carnival Corporation & plc

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Arnold Donald

Good morning, everybody, and welcome to our Third Quarter 2017 Earnings Conference Call. I'm Arnold Donald, President and CEO of Carnival Corporation & Plc. Thank you all for joining us this morning. Today, I'm joined by our Chairman, Micky Arison via phone from New York; as well as David Bernstein, our Chief Financial Officer; and 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,

whom the Caribbean Corporation, Irma, for Florida the of loyal as of Harvey, you On deepest the I own well-being and As know, after concern for native Hurricanes especially are the as can like storm of and all our our a hurricanes important the in our some course us. of earthquake to United well cruise our industry, are I remain family, of Mexico guests. southern the passes. by relate partners, region, business would number as States, those Texas, my lived through including where employees, the Carnival affected Maria, and to behalf that very the Mexico, to I and with New well of Orleans, as extend Being hardships

be have for to We providing have and who impacted. relief those been continue active in been

through headquarters We business will both for by after bear to Caribbean Miami, Especially who immediately coming and volunteer like members, here those our of volunteer have shore-side ensuring in were express and Arison ship provided meaningful is strong. months. our also the around which the going Foundation, uninterrupted efforts that rebuilding team many Micky Meanwhile, to pulled bring Caribbean, the shipboard, those and these to Florida, the who in it’s continuity, events impacted help destinations support those the matched members. several assured, who by we man Texas, and ensure relocate important operations. appreciation to critically and sincere in important to I course crew to Family for country in generosity to is Caribbean Madeleine and continue employees in our through together and open and of for hurricanes. our and business the for the note my already would our supplies the quickly contributions to Be resources providing ongoing made

crew Our of the ensured disruptions. the phenomenal in experience guest members face unavoidable who voyage a

including in the our Harvey, in Talim, it created these despite despite affirms demand to brands exceptional XXXX employees record Turkey, us of that brands like Korea, company's Hurricane the our increase enables our and world-leading despite Hurricane guest return around through performance Maria, despite experiences I support despite China, partners. the I all the travel for challenges us making cruise challenges more our is strong again Hurricane of all midpoint as operating not destinations premium And Irma, who the possible we number course XXX,XXX of the in and agents month $X.XX. a supplier guidance moving of disruptions our despite of achievements That last Typhoon this chosen December. one, and expectations by well by against our the to professionals is per guidance fashion would fuel range the and is earnings Now, of full-year our high $X.XX challenges, without be sustained travel partner consistently recent strong a to and be results. both of $X.XX on us previous That travel than just share. XX% midpoint by $X.XX. broad contributed last proud the inherent higher $X.XX third calls improvement enabling record-setting categories efforts restrictions conviction which line. the of Society XXX,XXX even our was, travel us Year-over-year of agent nearly ability is like in adjusted we deliver by XXXX year's testimony strong challenges we earnings year's honored share and guidance valued of deliver prior weather of our to disruptions, full-year Despite our cruise of concerning ongoing more when of range. invested operational end achieved team geopolitical a is and turning financial headwinds more power topic unforeseen world-leading and per partners, we to the another the That’s the third our most June third-quarter the the guidance than $X.XX year performance American the of $X.XX daunting per themselves. record million in quarter, results, mentioned, some of faced for quarter, to just a currency established combined, raise despite above preventing agent year, double-digit above to across were the strong and with range the be but itself, many award in full-year recognized still with to our of could This bottom share the range last day-in our not exceed financial the strong our than collective ranking to port Look, significantly $XXX environments. the high-end itinerary also between travel despite And exceeded day-out, including last beyond world capital members.

on features Shi beginning to are position for very sailing popular made designed guest interactive Star luxurious accomplishment first the capital, family also China. basketball She as on well our efficient all-star further and received boutiques. widely double-digit more Richard program, with his We ship include karaoke features deliver partners an her continue alike any and the Hao Zhu on of our gaming by Michelin that throughout season China, exciting inaugural that has another wife, nearly China. Chen; tailored largest remain dining large distribution Majestic invested meters along unique NBA space China an sustain tailor the us Majestic from replacing Other of path embarked scores. Sheng experience Gong during ceremony showcasing enrichment track as former high serving we cruise been very international maiden including program welcoming for square chef, the to Discovery; and shopping Princess, national Ming cruise and We guest return ambassadors for with mainly vessels, Yao achieved over covered both Camp Shanghai levels its a ship XXXX Princess in luxury Li, ones Ye our time. very satisfaction teams, less mahjong enhancement born players rooms; both Shanghai Occupancy with while and as have area. strategically a efficient on by been China's

on well our sale to the announced our sale the by demonstrated expected with removing historical as Pearl, March. of We leave of year. to to neoClassica, fleet expected recently Costa April As of next our one average April, our leave and next as two Adonia, pace remain ships fleet Pacific P&O per

deployed less time. For write-off have which on assets intention currently with that with in are Australia, assets taken a of the vessels efficient those efficient over replacing we end, more

and in in taking write-down Australia for both we brand. goodwill brands on Additionally line Australia onboard, our P&O the trademark are other generates Australia, with in Australia. P&O a yields, ticket and revenue

a less efficient Australia have operating of and disproportionate number However, assets. in they a cost higher

in $X globally, ongoing and our efforts and on to growth. of cash year course, non-cash we flow Of Also in cruise stimulate event roughly to measured further during a to demand this billion. is our we well quarter, project fact of the write-down excess continue capacity the record progressed

Oprah As ship is and calling Paradise herself ticket to highly Havana. consideration Eurodam huge anticipated, largest price attractive with created America of in Carnival Departing Havana U.S. the cruises launching Carnival and awareness Alaska on Cruise Holland sailing featured board from from partnership is Line and capturing began premium. beginning Tampa, the the a Magazine, in with over sailing series summer. today O

for and recently with the strategy first experience demand than of broadcast year to an shows up TV NBC Ocean XXX second with Corwin year, Davidson make Awards theories Andrea debuts production. their date. garnered award-winning XX-minute on audience on reaching The with with of Saturday, with Feczko season ABC on from new the and premieres XX. positive been Telly original and beginning increase our of expand Season season programming ABC Treks Tommy for NBC. travel on cruise extended Voyager a Jeff vacations Garcia to over and Josh shows three viewership more our Creation of continues strong Building inaugural million XX the XXX the Our Vacation This week. to in awareness on two September ratings have these following

the proprietary in ocean pipeline of launch powered January. streaming experience more have Electronics with We OceanView our for Consumer the to cruise globally, platform efforts digital own channel, increase announced is our many at show by beginning OceanView. in considerations the

at OceanView guests and our as million live network OceanView as with on on latest Eyes. on GO proprietary streaming relations fleet. series, new sea. portfolio brand. to launch City. Our will will accelerate with celebrate of platforms, Ultimately, in promises TV, inclusive channel expands XX/X our as ocean will for XX OceanView event new compelling Fire engagement and digital a with and well established Amazon two Further, annually leveraging engagement this corporation’s innovation, content with On original including our free public Roku, digital base extend across will our York and cruise our land industry-leading our expand Apple The Thursday major shipboard experiential go scale, it Local Thursday, New and we

with digital as sea. portfolio beyond new into Square Electronics screens our command showcase fans, opportunity of everyone, innovative and gaming platform available growing at experience gaming PlayOcean Come select of gaming join taps categories check available on-board at in come At interest selection on the players it of in platform played original of the cruise at interactive announced play us This please we gamers, land our Consumer casino and also person. featuring and there. home powered can through giving games a new gaining we mobile Like to including So be the most to the games and original and is by by brand by Times mobile experiences a anytime, anywhere. expands new out PlayOcean the Show. ocean take will offering PlayOcean, platforms also event, the in mobile OceanView, that engage ships.

slots important Ocean with powered our another created billion Medallion-class impressions ocean phenomenal by Ocean leveraging scale also experience, has Medallion, is we're launch the awareness media way of which innovative platforms. course, to experience date. XX featuring over implementation, through before Of is our Even upcoming

ship a from months We the Regal year, Princess, transformational vacation Royal Later our just experience. debut on will Medallion Medallion-class this of Ocean sailing Princess. are first by now the away pilot featuring followed

next Another step offering our up fourth following already of become who planned scale. total Ocean management's refinement The six period, XXXX. development by delivery in the Medallion to progressing the platform revenue terms best-in-class guest our by bringing high X In the ship will learning personalized the end overall year and brands least, ships class not ocean will multi-month travel is very tools. both The from highly certainly at helped will maximize strategy, our and pricing Last of cross-brand process XXXX, these benefit has further well. and profit of experience collaboration.

to industry the are our efforts leading On leverage track. side, scale cost our on

decisions and in that will we accelerate in few While continue year doubt no a on have we investment be to one-time reflected made results. some cost to I future focus this areas, managing

of All for and already this of well both are time on half XXXX. the point getting us as positions price At well XXXX, this ahead in occupancy. we to first

increase and truly the to experiences with resonating better is our for create latest while providing even excited to guest, are our about demand strategy cruise globally. efforts guest and consideration We

mobile so our innovations Ocean PlayOcean, the guest ocean continue like experience OceanView We experience platform, and network. our our portfolio, platform, the have including our new XXXX beyond, gaming opportunities again: transformational in Medallion, proprietary streaming proprietary digital new momentum featuring, new many to

launch more season management and for The second yield the content shows, award-winning of digital of our television course our original proprietary new three productions, two system.

are would shareholders to last total years, $XXX turn purposefully further returns capital. continued opportunistic to like in in for this annually call we on portfolio awareness designed to world-leading time, record million past return year-to-date, flows buybacks nearly demand growing. invested With the of the year, cash accelerated and David. track dividends cruise and efforts in increase the $X $X.X At in of these confidence building distributing over to billion brands, to of double-digit share achieve I through enabling remain same the on that, All to our billion sustainable while two

David Bernstein

Thank you, Arnold.

XXXX cost and Then begin, in my provide I our summary quarter all please metrics to prices I Before otherwise unless results. of will will today references note, on stated. for a start consider XXXX with some ticket was with full-year finish our constant be will other a XXXX XXXX. on I guidance, EPS revenue I’m update to up currency to our third of record trends adjusted pleased and third the booking $X.XX. items say, insights few an quarter and a for

$X.XX the from on The was yields sides $X.XX benefit Atlantic, closing as this indicated, of driven, stronger pricing of and midpoint the Arnold to a above the favorable ongoing ticket primarily was while net As increased on-board bookings from variety continue initiatives. of guidance. our revenue both on June yields other improvement benefited

benefited $X.XX also by the of and We fuel impact from net currency. price

let’s turn Now results operating our third versus year. prior quarter to the

X%, North Our brands up were known Asian increased while The American over capacity the European, and almost EAA brands were Australia, X%. also X.X%. as brands up our

X.X%. yields revenue net total Our were up

Alaska, record-setting our Caribbean, fuel partially North yield. X.X% quarter $X.XX of and net increases were Now other decreases quarter Atlantic. year's increased as Net in Europe. than prices with brands the let’s by was China the ticket impact adjusted brands of deployment our X.X%. previous yields of improvement on-board with last currency deployment well increase program in by third repurchase our was a as This Europe, deployment better offset costing operational being increases and net break impact in $X.XX. and the third record sides of offset apart the accretive a These both previously yields and on were EPS driven partially summary, strong unfavorable In American $X.XX EAA indicated. by stock as both up our the of two Net revenue components

non-cash of charge $XXX in in This million driven less X% of of ship a US impairment nature our Australia. realign results, given goodwill, strategically our GAAP include did to our adjusted was charges represents The from with decision results results and charge. quarter third trademark the our Our included but by business our the than excluded asset. charge

to our provide you guidance. with XXXX I full-year on update Next, want an

earnings We our previous are guidance increasing our full-year midpoint in of an increase range. resulting expectations to the

$X.XX earnings $X.XX. net we full-year recent revenue along well expenses Hurricane in Talim offset cost expectation cruise that reflection XXXX, the in in guidance Maria and the excluding For back of increased $X.XX a disruptions, Irma, earnings voyage impact $X.XX net South other is our enough was Sea, half both the which The Typhoon is as from Harvey, fuel. seen to strength year, in of with to is increase of China the yield now to the and an have the

a Hurricanes net for Our revenue an includes September point compared is guidance of Typhoon increase, of approximately the X%, increase June yield guidance impact. to approximately half and X.X% which or

which Excluding the the almost and we a X.X% the strength Hurricanes June our been Typhoon’s higher guidance, nearly impact than increase or of X.X would have in of yield is business. our reflection our recent believe

Typhoon. The environmental results Hurricanes guidance excluding voyages pension an cost September expenses, X.X%, litigation is and to other Our and costs, in per the X.X decrease for guidance plan X.X%. approximately driven remaining and ALBD the and cruise net driven the to increase by due compared certain cancelled June fuel of investments areas. ALBDs from increase approximately in of expenses to by additional is a

year booking XXXX Since of Now half the ahead trend. let’s first bookings the been nicely year including impacted by of to At point-in-time, the at the cumulative turn at XXXX of that for hurricane, of volumes basically ahead bookings prices. XXXX booking weeks half first last for higher few well the of still have news this flow prices. the last running were from higher is prior June,

fluid. circumstances the early is and are it However, still

position. down book drill let’s into the Now cumulative

occupancy well occupancy is higher year First, prior brand. the year of North on program of but other American higher for is all at nicely the ahead prices. slightly our at prices, deployments prior of Caribbean ahead The

EAA our for Second, brand.

deployments European is seasonal and at occupancy Caribbean For program, ahead higher prices. slightly nicely

a all other few price to and well items deployments, occupancy consider are just for For And XXXX. other ahead.

are X.X%. capacity of a We increase forecasting

yield be business expense improvement, it billion Given expect increase the that for We we years. existing capacity to percentage-wise has will depreciation our anticipate $X.XX amounts capital billion expense XXXX. more to around drive for than of of and XXXX our areas currently other past the in few in versus invested $X.XX we depreciation as do vessel

earnings believe early, goal it double-digit And now our to well achieving Although and we continued return turn will back in XXXX. are growth is over we capital on Arnold. that positioned the invested for I call

Arnold Donald

Thank David. you, Operator, open call questions. please for the

Operator

[Operator Instructions] And line our with UBS. Robin Please your first question of comes question. from Farley the with proceed

Robin Farley

little will remarkable normal, just given about, can I disruption maybe ask and kind just of your I stick about not uncertainty, given a was that to of some There last a itineraries Great. Caribbean would think go concern that Eastern I three trends that this I are would bit maybe you bookings to clear back the booking the if impacting but two about the more your all is booked of weeks? which topics lot position. one Arabian it’s to is the how new when first, talk wonder recent or the guidance maybe for in like

Arnold Donald

Good morning, Robin. your Thank question. you for

I whatnot. there sunshine all, region, there ports, in overall is the fully point just so are majority many so it the and many what out of important are operational, to in and them that beautiful of First of but beaches, vast ports those we the think call Caribbean, in and excursions is

there’s alternative ports frequently five There frequented impacted. we lots So substantially heavily of been have planning can - itinerary that about do. is

Maarten’s hit they than were the They are focused severe and when to fast. up people those running ports the in you a hurricane St. getting on after Maarten's the Okay. resilient. things in are and where places well, storms And few hit, myself date better know with those St are very other and past. was there as things five ports, days I the The

when me St. the it districts months island. after power took hit, they had Maarten’s, the few back Louis in hit to told back For days example on the storm bunch get just a power a time. them of three this They on

cautiously or them even many so before own destinations shape. places, of they And year, will the and go, are great running the season. which end places and those we will can are places there the optimistic, in well all most them those without ports, peak But up be of for our

I weeks to have or but we so I'm the are lot And of comment, X% the experienced not have cancellations. cancellations, and going second, we your of and seen lots question positive. four cancellations make are last David to not a about now frankly running a three get right have so things like

I So, about comment David the will have weeks. X, last X

David Bernstein

have we picking quarter, know we It the you the impact quarter that my in we is been the again. impact been on and are the fourth guidance in But a clearly, time bookings any for will the last you these of be up are well fourth days going said level to Hurricanes, few weeks hopefully start notes, have of fourth booked trends include flow flow it’s got very to what quarter. quiet our and news been booked of impacted, well as some bookings reduce, Robin but news in booking and and coming of the I will flow try there our have days, there’s the for news bookings, lot expect we to

Arnold Donald

were middle other things the storm, period during things - looking weren't they concerning distracted again just and that but bookings booking, obviously positive returning time, with the are I the obviously, on the recent the of that’s - of impacted are comment early. as for and storms tell on a - people would people

Caribbean pretty stays is plenty to way, job media the see part but if certain our that are negative people for that be make places back is a quickly. reason there going things riding know There will of and to so there it’s of the in and in no downer, obviously those have impacted that ships is that even we and great places to go think coming in to the We it a keys back. are already Robin

Robin Farley

to unrelated your some topic, understand other maybe one China have write-down Australia, on of I the of And just great. about in question seasonally your anything impairment or changing That’s you part charge the to changes think an supply literally your ships the and like because just in Australia or just does with change the in nothing there operations? like year, are itineraries the write-down

Arnold Donald

per were se, for and which run that around the write-down some vessels was reason vessels trademark Australia, those of to the and of higher that’s efficient less the it, clearly goodwill then those related brand also they and P&O the had lack disproportionate the with efficient less had bulk The and of in less given itineraries costs number scale. ships that efficient a Australia

strong more in time. time continue to will be, efficient vessels time so is the and has that, less with will Australia strictly to those related related them for Australia over of that. summer between has replace market, capacity. of in you know ourselves there the opposite but out back and come two will move put course plan efficient vessels was terms time, over looking we and are ships for a forth and to China write-down seasons high we kind an and locations, that ships So efficient nothing will two forward the with the us write-down over to others of is more in but do The was season China, been to over

Robin Farley

helpful. and you. Great very Thank

Arnold Donald

Thank you.

Operator

next Our proceed of comes Steve question. Wieczynski Please with line from question Stifel. the with your

Steve Wieczynski

good Arnold. Hi good guys, morning morning

a book your the last you over as you incentivized, done job know customers years I fall wave good really season, you have to know guess out you of of So, guys into couple earlier. extending the essentially more

a and booking wave a back normal right a delayed So is, possible year's cruise of season to more could guys Caribbean bit go kind around season given the I you guess consumers question now? think this wave do be hesitation

Arnold Donald

thank again. Well I

reason place people there. a it to to of are to to know say right the happen, to wait many no is but is so it to it middle is go places our in hard is go, the wonderful what sure is Caribbean make and that there going We job ultimately

all XX own were in We have Mexico unaffected, unaffected. ports were plus ports plus plus that destination, our the

So to there go. is plenty of places

have a disruption will we for little here. see, we few the So, weeks did

still media are we to season. this and and still so have fluid season, Hurricane we are We in be pay to attention in

and hopefully the to they The was So just so Maarten’s, of we and things I recovery to in places wide-open XXXX now. good will then fast course wonderful media previous into are go. I I all Plus the begin have year are have, Nassau. mentioned show Bahamas there. in in we’ve we the going was already in right St. I years. looked next in Nassau last less Friday sell we and now were ahead to had inventory was

Steve Wieczynski

guess the next for that year for around around I coming market color kind obviously is Thanks and you’re capacity into could marketplace bans China a now there be the now work there thinking as move potentially travel moving and you down, year you're in I to question, Japan travel next then in is but of to how going and we maybe right out news kind now, of travel know the rumors through, right now, there fill us just to great. bans? can there and be right of you XXXX there know over is about you that still to is but lot decree Okay, second that ban trying

Arnold Donald

as, is one there to occurrences, we to do had opening year, there's China. geopolitical going stuff happens Every do, Chinese Korea been get approval we some we is Southeast ships there in but going the we issues, of All year year than some not do Every of for other here disease it are be to there now of reconfigure a And good our those it that and China don't to through we news that do to not are as bans itineraries few like we plan is for in year, just It places know will we capacity in if course deviations figure grow can down Thailand, I just it in but other rattled need we and do - were no be manage only all change year are so will specific that less which will stuff and Right will out cyclones, we overcapacity that to to and prepared world, able some scares. that business challenges. they we’re but the the reason sailings there as right X% places, to hurricanes. is in if you now. the again know, have see market. is is, going and we maybe out some just every off Asia maybe normal, consider you to Every every be far sailings Sure. is typhoons, Then state turns obviously what Vietnam, year-out planning and normal of in there should have are we as for and that. there domestic year-in technically to see extended to have Japan. what but do, to manage and the occur, can

Steve Wieczynski

color. the for Thanks Appreciate great. Okay it.

Arnold Donald

you. Thank

Operator

Our proceed line with the Felicia Hendrix comes your of with from Barclays. Please next question question.

Felicia Hendrix

for in into Hi, good you just wanted release thank how your obviously of there earnings. full the been and uncertainty lot morning this has a to has prepared because been comments heading

bit hole expect we see to stimulated due about, hands you this stimulate there a come, a and you again, the on maybe the will what’s ring discounting two Carnival, to media Florida the is and phones how picking I’m is some some misperception to bit the your touch for of sit far the Caribbean waiting on know to I'm strategic just should you Carnival about have going distracted, or and law to demand sure promotional volume, call a so is is planning a be had to available you what’s talked Texas, and up, aren't you markets but not, you your just that’s going also there booking could booking about - lot so if kind kind through lower wondering major activity? of we talked have know demand So probably wondering, more

Arnold Donald

some ahead so this largely this with not we call booked point obviously in already, at that if will this Well well for an that at quarter that well pricing. ahead situation are at and economic that’s a point, and has decision, on time make been on case. at looking the point Fourth we stimulate to pricing fluid point, but they not bookings were we’re

ships media. good media, obviously the to have lot lots to the do and people the lots our They social right plan a ship doing people social of of as in are outside Canadian, make in we stimulate to media on on on Our get news well we ships, ships and the yield out as to via is we aware. our folks now with the of people the first the continue sailing are deliver certain in social media

they that looks they the takes or we storm, one see as the Florida whatever, it so the every You for agents Caribbean of course, geographic of storms but highlighted whole something a of impact were a many where less CNN travel and in is and Texas whatever one the mentioned, shutdown might the they there island themselves, Caribbean course even or they be media are Caribbean, head part mean on island because in and is cases or right, way. gone in Midwest and I offices in there their closed, that sensitivity think

have we and job. so fluid. true and that see our purposefully to far is have to what we that something people have and That’s and just that’s to is so doing we that we are offer picture will do combat And it the

I we you goes, is, to inventory ahead and price what have can tell is, we and point sell this it discount. in will big We we but have it engaged see time, next to less at this are on any at in bookings point what how year, haven’t

David Bernstein

is aware And several before that take can our everybody the closed. XX we travel guest. with we There is than talked Caribbean make where are more and partners have as are sure been working open to a only about our that Arnold ports fully

indicated. and it encouraged So, are monitor a is we will we situation very it Arnold and as fluid

go we what do as decisions necessary. and make along is will We

Felicia Hendrix

analyze we've that been, people you of Thank proxy lot have people just, Katrina and for of and major aftermath, two as have these a been been right. storms, all to using impact as of and lot the a trying then

took fourth there at Carnival year a bunch directly there a but a Carnival from and and the And a of of was half following charges, Katrina. after hit to Katrina it’s for Katrina the then the time industry negative impact unanticipated this about so residual directly $X.XX was the but a quarter,

is and us that think why for that investors you this it two be kind to understand how differentiate should be solely situations maybe the just you us? time XXXX, the can could the So, cruise in curve and you of of not strong this or may different booking help performance of XXXX why because is similar just

Arnold Donald

we that have some Well I give is different that will we he are much hand. comments give obviously, is more create comments, But us harder lived all, will and ask since first to of demand. working much thing I to Micky first one for momentum, then too, some

there that’s going date existed a a more creation So huge that back and a picture from then, on is difference. to demand lot

and much We have of you the difference, and are for dynamics a also to the going going destinations The with bigger lots lift embarkation in necessarily embarkation versus whole bunch around then. which on is as is momentum versus time disproportionately in impacted this air of a the XXXX get so case back back wasn't stuff in there. were year, transit

situation to far a is are they continue having I fact so trading the perform. informing The the that but any there that And think that you are regard, demand. But we situation then but to today. what historical that huge, Micky, some is. The help about who and a we today kind share are big fluid difference, a now us have still cruise-goers that comments another and of positioned all difference know, you then point we in want this also larger much a fair proactively base at and biggest fact previous the far real present allows might so of perspective. to season, with picture people have we said is so understand where still hurricane is working so And media a

Micky Arison

about but one San ship over out class of in and losing port there date, operate XXX is only so hopefully and have totally we difference far obviously a Juan Katrina a is [ph] as home we weeks. with huge key port few Juan the experienced what is a Well again still open home port, question Sea to China in San ships we than will that lost that a home a different be

would well for three Houston New weekend mention. ships operated couple had for a bit and very years chartered Houston isn't try handful remember up we absolutely to basically the the a an similar. cancellations we to with closed a of have say, was full ships Orleans you of it. government did example, as Houston make that of that to next sailed with You

and about entire Carnival, send, can is people am for a supplies the of the to find say hurricanes. cautious as these not falling ships different responded. though So, they talking totally they I NCL. I of isn’t am Caribbean, I to can were little about we over the to the six to I what we rest have government industry And Royal have season to evacuate, don't, to a to extremely out said, proud unlike the it that the themselves was clearly am have trying what what was send, can talking bit of way am so they Arnold I I everybody reacted how what proud situation, but the Everybody happens over, way just and can really be they and hurricane season. I help, chartering New the say industry helping that would those Orleans, alone like I add out about where

Arnold Donald

you, Thank Micky.

Felicia Hendrix

is booked guys you chance Thank how tell you. And us any will XXXX? you there for are

David Bernstein

historical You a we can kind for high-end where good historical always just, know close we you that give you by are. of quarter averages and which to of are you averages, feel the use those the give we

Felicia Hendrix

much. so you Thank Great.

Arnold Donald

Thank Felicia. you,

Operator

Please from question with Our question. comes next Citigroup. the proceed line your of Greg Badishkanian with

Greg Badishkanian

Great, thank you.

questions. two So

like start year, First, there where obviously are point just is to occupancy, wanted didn’t year, normal? there to to pattern know that is get well be and recover is well some you pricing would nervous another booking for strong or turn you there as date follow-up, return a out you you won’t the ahead booked Thanksgiving on where where a a next XXXX to

Arnold Donald

Hi Greg, good returns. maximize that true own your we optimized a yield morning. of they It booking bunch all and to Thank have for have their and different question. brands curves is you

date we all are not the happening and a they when little where along obviously curve daily date. bit It's when and a are There's so. we and things so of more on hurricanes watching And one disruption that's But obvious way and are like make the adjustments. you constantly. you're necessary drop-dead booking monitoring how the where the beyond that the patience stuff, returning for quickly will have

in We have our of all reflected guidance. that

For the early was we concerning can what is quarter tell told for it and you and we you. all XXXX, have

Greg Badishkanian

Okay.

Just or had since trends last North had, has impacted that a two, wasn't has the on if by market American this hurricanes? see weather Europe, to week going follow-up on an Europe, booking the just going to passengers it the so impact you

David Bernstein

a European American the the really sell because season, lot to the in we brands are just for not terms seasonal and There European season October. the end left the in through season of goes North less well of booked, is

would remember So, amount sales voyages. small September for we a of that expected haven't a noticed anything have you in early significantly different, those it’s just but

Greg Badishkanian

American? out booking XXXX sailings about for North Is that… European by What

David Bernstein

Nothing significant.

other anything in than noticed haven't the bookings Caribbean. We

Greg Badishkanian

Good. thank much. you very right, All

Operator

question next with Wedbush line question. Hardiman the James comes from proceed of your Our Securities. with Please

James Hardiman

bit you and port morning. referenced, little was the how ports to that, color good hoping in a color stats many all helpful XX the just Caribbean, by cruises. of impacted is to to Hi, thanks various there? for are opened you try on the tease on And that Thanks for five I There my more factors here. the that are total about call guys Arnold taking really ports what’s the get out sort heavily couple denominator talk trafficked stats

three St. I was mentioned think what one, San you the would be? other Juan, Maarten

David Bernstein

the Turk, our which we Okay, Grand have other so own ports got … is

Arnold Donald

year. San Thomas, Maarten's, the Not be ones are America Tortola. some the No much St. they are now brands, and the but top up would high brands St Dominicana, the Tortola be Dominicana. anyway, they wouldn't of And coming there the sailing in Juan, active and for - so pretty right European North later

I of that will the denominator. bit how of but answer little part a can are those, question, force you We there alternative they see your Did that to. go wanted

I total Caribbean, where I to Would we people time say call Caribbean. think period some the Western were of shut this go it, X% Eastern time. Southern impacted to really then can be ports the severely of Caribbean, is Caribbean, would in ballpark the where the they go, may have would broadly X% point we down and for

and and and like vacation that, and places fun great the again to are enjoy vast options the for open ports okay. But people plenty there So is. is something and location of experience do great that go majority things alternatives of cruising and value

James Hardiman

two impact, end of to that, any the the was very $X.XX Harvey August. And $X.XX there then questions obviously XQ Very guess I helpful. on was

you A, fourth guess think help extended, the us some to we $X.XX some how color I to is guessing us you well, can about associated, guessing that just the I’m was contributed about $X.XX? to what I quarter that the there cruises know passengers, provided think the were $X.XX some $X.XX were or assuming there on can as cruises represents, and you just as that that you give parted, but the were the to but that never impact that of buckets in I’m aid were no credits don't number various giving if there So, any majority visualize XQ I’m of that revenues

David Bernstein

fourth the to cancelled that for quarter. negative $X.XX as of booking the was impact for to third impact on we little bit The Harvey voyages, impact. the of quarter year, was were the estimated after first a Nine some than immediately but Hurricane $X.XX that to place voyages the expenses other Sure. $X.XX $X.XX of $X.XX total a lower result including the in the there all is occupancy impact, Irma, was $X.XX tiny. in Well took incurred, $X.XX and less it

James Hardiman

the lastly I bookings, month of for time is extra vary Perfect. know then think and here, September actual is how wave that any Texas just And typically of season we terms cruises? I of big generally are bookings, guess that our most impacted how idea terms those Florida and have markets then booking assuming that in significant the are in markets been busy

Arnold Donald

just seasonally. It’s Overall, a the is this period. is low normally, anyway a period low year, time a booking booking it of

helpful. way a in So that, it’s

of terms David. specifics, the In

David Bernstein

Yes, hit. look Florida around, lawn There on that I is heavily back you of were front mean, if most at South Florida and the more the and you of come down to and be needs up, everybody’s picked things areas some other than of piles Florida trees to moment that were business. some in

about continuing yes So those small are so and in expectations, business future. who are particularly few and who impacted are we’re a in Florida back very were or directly the there is positive are there and people life numbers, impacted, rest but the

Arnold Donald

Texas, see or on And slowdown at extraordinary any don't similarly we impact point. this negative

James Hardiman

guys. Thanks helpful. Extremely

Arnold Donald

Thank you.

Operator

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

Jamie Katz

morning. Good Thanks.

components wondering looks growth at it the ticket ships I’m this less so you where incentives of pulled get are not benefited guys you that that’s and has motivate yield and and like together the anecdotally is brands price over to an the basis, to on-board quarter been have than brands? least So or required second I faster any on seen growth am reported disproportionately curious whether of on consumers as about if other have the growth

Arnold Donald

get vacation great greatest value. a I a the great reality is Well is ships and that to say on incentive would that already for people our the experience is

along there but your of ease. different are special brand at own or no demand. brand The offered sort if in haven't various a are creating deals. not drive we some that combination visual offer discounting to we guys, do their Italy. on-board haven't to We and So, are of I today and curve shows that activity on we talked quite PlayOcean the things of the brands understood and and all have US that We Basically, OceanView take about very has promotions we need frankly global packaging shows, I anything some across kinds like in the ships the booking we really We brands, seen question, incentives time. but talked and for and fill that shows base of stages extreme thing; options the done we are did all in certainly you the the it about have talk and with footprint. about that doing that shows in UK, have

been exceeds do I that marketing we the on expectations demand which ships, that’s frankly word tool. guest creation think and execution remains biggest global powerful combined our most So driver of and the mouth with the

Jamie Katz

have past Okay. in And then are looking countries are may European the related out? performing calling worth weather market North years year that to any with been relative for point first that uncertainty American better there headlines, the half noticeably results given strong be at this do this as as they

Arnold Donald

would just you is our general shared strong as a in we have guys. I European evidenced with enjoyed overall brands by say year what

has great. so And it overall been really

the although as to out If you in of other people Brits with that cruising cruising Germany the the because that down starting others people single and you doing like money. single out country I number the the would any that better increases think of and market than want practically a Europe, to outpace even only have is speaking, the to penetrations to countries Germany number for capacity run give in in would

strong, so, well in would be continues doing say particularly Europe. but we’re overall to I And Germany

Jamie Katz

you. Thank

Arnold Donald

you. Thank

Operator

Our line with the with of Please proceed from your question. Beckel next David Bernstein. comes question

David Beckel

a specifically what any for as for about maybe thanks a was the question, percentage can comes drive typically lot market occupancy, brand specifically, first sounds use brand percentage I is looking Carnival of bit the suffer on mid in us did Hi, the to overall of The part things you something is year? question. I drive-cruise your early cruise question Carnival damage, from guess rest will the Florida next wondering my give South like the Florida of My color out of you occupancy? the widespread, and it of okay. that but into state And destruction, that concerns maybe given are word I quite a and

Arnold Donald

Well The of already starting as able I you and go most on, coast, going ships that to and of said able back to need was ports. trees the standpoint into, offices et normal, to I Florida cetera, sort cleanup, a a said, guess. are the to direct is back the is impact and back that what primarily things, Tampa, suffered severe get there. we their people is power but down, keys We lot from as David people go ships know port Western Naples, are to to and in and again are the it’s to get stuff life place drive

give number stage at directional will don't there a by specifically, overall in this I but comment. stuff We could brand and of details Florida. think we drive So you give a be lot some overall about market the

David Bernstein

are outward, the drive the is port, is it not hour does I is market think Carnival big and whole the up and six expand people business, an to to is market I a success, drive many is Cruise of hour think important and day. XX% drive was within a part it of home Carnival times Lines of within have driver drive just of we said a Home it but the to so America it willing their part of our Port,

Arnold Donald

course Orleans, here and the Beaumont; to if get ports Galveston, the all whether people Mobile, And and ports and them. in to are can go up they Charleston, running you it's of Florida New

David Beckel

destination a that. are been where built mentioned the appreciate quite I And to or eventually infrastructure helpful. for and end you and reason was itself but running, and really port past there ports get the affected more has running, because receive of say they but question up one will was That’s that by year, some in not wasn’t desirable to another tourists? situations about up up the others, the the destinations than plan

Arnold Donald

whole That course happened city back hit Orleans because it Katrina New much. pretty took out in the of when

was what to people, back of been sand The followed unaffected of on say, unaffected, cetera. ransacked would Marine focus various in up was definitely even as the don't the I home number you know their what people what St. I There have Orleans. wind I et cleaning happens, was walked of in board number in power large the a tell Maarten’s a downtown. yet, St. - was we with said, had up. was see stuff they ship it. already that is the had, they you, look I there of in can have New and cleaned case was into that were that is but up the Maarten resilience and up, we But most So have but

excursion December were and up own that an were a other I going to the that we running in be obviously to for hurricane, visited going St. with day open we by fact was the have We did we we it, sure. there and there our is day zip-lining open number Maarten. but the in things has It excursion, to of which venture going it and

operating water ones have because it. would know beach suspect exactly the some So that that happening type and than especially even control I with one, of and we be would that. know we things excursions, what’s sooner the I

have to places doesn't if go want And are there to so, again Caribbean. we I happen overpromise, see, don’t that in the many to

Cay, Princess Cay, private Moon We Half islands. our have destinations

Bay We Honduras. in have Mahogany

number We operations, Cozumel, Grand we Turk. we have of have have a

we open own satisfaction And that are destinations. know take you guests highest over Caribbean that for there have We have all Bahamas guest places Southern scores and is the a can any open are and rated that number in ourselves completely of we of the many cetera. et Caribbean and places business,

David Beckel

so Great. Thank you much.

Arnold Donald

you. Thank

Operator

Nomura. from next Harry Please your comes of proceed with the Our Curtis line question. question with

Harry Curtis

morning everyone. good Hi,

good - can in was, morning. Florida? important hurricane of Miami relief embarkation when didn't of a of really point I get think Florida, Port or the I the side X think it’s your that points was Eastern question, sort the should answered, dark storm, resilience the Cat is and most it in in a of infrastructure generally had your X is I one of but there infrastructure is you sigh Florida Cat embarkation discuss Eastern of brunt that impact of kind a what the of because

Arnold Donald

X, damage but gives of that in many an because you there I storm, think intensity the it you unfortunately Cat are doesn't Cat X factors risk and hurricane. a a tell really so

same And at Category main a look when Category is X. got you the intact, and more Turks storm down the hit the directly they was damage. severe Caicos, much got the and had if much other example, okay. pretty time, there places At [indiscernible] For they hit for with city X to some

So on so things. depends they the how winds many of it because up Storm are the buildings connected. depends on are higher, height depends structures on are meters then lower, surge, XX it

many So things, in. different factor

So Miami. is Miami for the Port of

ports cases look quickly. anything in in take up know pretty say The hurricanes. the services. get access lift to New for question the on so area, matter would is Miami of to much to and the and you So is, in engineered many and what pretty that Orleans world could the other rest I happen. if around air you come happens ports, with even And

They any they do metropolitan for is just the would all but nature of then if difficult to the hit can over it has all, this or a say I one. that either that, area time even hit, at of Miami directly, because look as Miami major and to tend recover. as of to you very slice, First weather prepared hook storm

Harry Curtis

just then you right, the bought and have David, quarter repurchase I back? have since stock my a is end implication that If the for that the million share you question. Thank on of of housekeeping math $XXX third just over is the

David Bernstein

That’s correct.

Harry Curtis

Okay. very much. good. Thanks Very

Arnold Donald

Thank you.

Operator

question. Our Please with next Wells of question Securities. Conder Tim the from proceed with comes your line Fargo

Tim Conder

you Caribbean angle of especially ramp bookings similar and impact the XXXX, a Chinese little on again, the consumers will you seen call the over that’s you the ask I guess thank rhetoric, for a pause seen have on just it market to given seen here. explanations last for Eastern have pricing the you the all ask and this And related bit North of in you. have and we of of on drill result impact, the the in, Korea clearly as for first one here what bookings that itineraries question you Thank I given here, for question are more I Maybe have China, that in the the a looking here particular any months? couple in watching half Asian to the

Arnold Donald

your Thanks that booking question. tensions in for or will the Yes, sure. related around seen China. any take China No, I part. we Korea trends haven't to big directly like anything North noise

pretty So one. that a is straightforward

seen So I haven't seen we - anything. haven't

David Bernstein

reiterate itineraries, business. so news that the in a going are on very understands obtained we we have seen flow important and And Caribbean take attention to general in sure to, great news in as trying what everybody of is to make Caribbean, slowdown bookings Caribbean. the are the to great the open for it close do in comments have and have, said, to we partners, the all but strong, They and the that’s have our understands we have is everybody our that is to travel talked it why ports because on-board we Caribbean completely time everything work to opportunity go sure but to Arnold many ship is previously I make won’t there out great get is we this with a a experience port great experience that

Arnold Donald

And right having are great there sailing They are time. a people now.

Tim Conder

that just reports, publications industry the And in of for gentlemen last XX%, are updated one XXXX? on saying that I and mixed again there update commentary to any one the down you industry question, China the guess thank any color is, capacity industry can okay. Okay, XXXX? There an for capacity for give you related

David Bernstein

have what the flat. for from the expectation is XXXX seen for industry, Yes, pretty we

Arnold Donald

more reality down small have industry I very because you still there an certainly embryonic a a the it up but and of Yes, is, percent market. tell an ours. to is and when is we is why represents on. market China embryonic question, tiny, be from to and overall think underway, capacity, going percent effecting is though pricing directly, It to direct pricing, but but still, It a are I understand type asked I BXB of of it market trying market you the distribution in small even I still really as a including the to All say ourselves still, distribution control, based controlling people, get dynamics that expand so typical more through channel China. are more to and a tourism relative outbound is

tiny there's huge only so now, overall is still We capacity are could Long-term relative of to evolving. everybody's is be and and many ships their market number it be ships, still gotten a going that our market. the But there. right to

flat I point. if honest XX% it be difference know this down makes at So much to in don’t you, even China with or

Tim Conder

gentlemen. again Okay color. great. Thank the you Appreciate

David Bernstein

Operator, chose over well to call well many at as the let take answer point we questions question. this we to got can, as will we more one

Operator

Jamie Morgan you. comes the Rollo proceed. from final the Stanley. line with Please question Thank of And

Jamie Rollo

for the two questions, quick just first… thanks the thanks, [indiscernible] Yes

Arnold Donald

always best last man, Hey the the they go for Jamie, ahead. save

Jamie Rollo

or from X% point I growth two cost from have you industry year big capacity basis in pressure of you just guidance, And extra docks, much just wondering year, think you at said growth please, when Thanks. apart up expect that And the so I we the about sort next for is should for am Caribbean? I dry does think a it? said or the first was I you for cost, factors last On, then than. XXXX? year on and increase next reduce on think that XXX next comment, X.X% think you depreciation so reverse X%, be cost to or think the were what do call, for figure No Caribbean capacity the on you questions

Arnold Donald

I go comment wrap will David to on will let handle I question cost your the first then and ahead. other it up,

David Bernstein

also points was year-over-year lower a in point basis increase expect dock the related and which hurricane choose investment is expense, in in wasn’t the So of a hitting X.X that year X.X dry was on Jamie dock and full ALBDs gave the other time guidance. points dry seems December, of dry was in actually of but were, side, point and you comparison the of shares. most it and on additional would other The said the the year of some the X.X it on a be cost cost, what back to related litigation June slow was a as other dock to fourth that time of it the X.X docks in examples to lot quarter, additional environmental the I to we expenses, the year dry was my areas, and our commentary the cost we and pension the some increase to the

Arnold Donald

the then the over concerning going believe. to And X% I a Caribbean, industry's little up be

are We X%. in up little over

still We And there are decent doing Did is this And some have but absolutely of have we us Caribbean, was and brand of circumstances guidance it well forward. capacity in question the the of the can the I see for Jamie? we reducing in would XXXX, you intentions think giving year, this any intensity outperformed, a at don't and Carnival we consumer creating not Caribbean overall, we attitude X% tailwind see. in that that think is going point well. did job no We reducing as did are your helping we Caribbean. capacity We answer be the we demand. up well

Jamie Rollo

Thank it you much. does. you very Thank very much. Yes

Arnold Donald

we participating. a to totally well-positioned feel capital time. Thank you everyone Thank Again return it. you. on are appreciate you know, achieve you for are and we invested in we really as We We thank do your for committed XXXX. guys to that, double-digit

Operator

your and participation you for thank does ask lines. conference gentleman that call that you conclude disconnect your for and We Ladies today. please the

Carnival Corporation & plc (CCL) 26 Sep 172017 Q3 Earnings call transcript