The paragraph is from a Carnival Corporation earnings conference call for the fourth quarter of 2024, where the operator introduces the call and hands it over to Beth Roberts, Senior Vice President of Investor Relations. Beth Roberts introduces the participants, including CEO Josh Weinstein, CFO David Bernstein, and Chair Mickey Harrison. She provides a disclaimer about forward-looking statements and explains that financial metrics mentioned will be in constant currency and adjusted unless otherwise specified. All figures are non-GAAP measures, with a reconciliation available in the press release. She then turns the call over to Josh Weinstein, who states that the company had a strong finish to the year.

The paragraph highlights the remarkable achievements of a travel and leisure company's team, which surpassed expectations by delivering record revenues for the seventh consecutive quarter. The company saw significant year-over-year improvements in net income and exceeded expected financial performance, driven by strong demand across its portfolio. Full-year revenues reached a record $25 billion, with operating cash flow also at a historic high. The company noted a robust demand environment, leading to price increases for major brands and stronger yields, alongside improved cost-saving measures and reduced inflationary pressures. Onboard spending increased sequentially throughout the year.

The company has made significant financial progress, achieving 80% of its 2026 targets for EBITDA per ALBD and ROIC after just one year, with expectations of continued growth. In 2024, ROIC is projected to reach 11%, indicating value creation for shareholders. Looking ahead to 2025, yield growth is expected to surpass historical rates, contributing an additional $400 million to the bottom line. Despite reduced inventory, booking volumes for 2025 and 2026 are at record levels, with higher prices and occupancy rates than the previous year. Efforts have led to strong advanced bookings, particularly in North American and European segments, setting new records.

The paragraph discusses the strong booking and pricing performance for core deployments compared to the previous year, despite having less inventory for 2025. Customers are encouraged to book soon due to limited availability. The improved results for 2024 and future sailings are attributed to enhanced operational execution across the brands, rather than just the introduction of new ships. Several new ships, like Carnival Jubilee, a Princess Cruises flagship, and Cunard's Queen Anne, were introduced but the majority of yield growth came from existing ships. Yield growth in 2024 saw a 10% increase over 2023 due to heightened demand facilitated by improved marketing and execution strategies targeting specific markets, resulting in significant increases in both new and repeat cruise guests.

The paragraph discusses the ongoing success and future plans of a company's marketing efforts in the cruise industry. The company is seeing growth in web visits and search results, exceeding their capacity growth, with improved yield management optimizing bookings and revenue. New marketing campaigns featuring creative themes have boosted bookings, notably during Black Friday to Cyber Monday. Upcoming campaigns are planned for various cruise brands during the peak booking period. The company is also focusing on increasing global awareness of cruise travel and enhancing destination strategies to attract more guests. They aim to leverage their extensive Caribbean assets, which have high guest satisfaction, to further drive demand.

Josh Weinstein expresses excitement about the future of Carnival Cruise Lines' new destinations, particularly Celebration Key, set to open in six months. This destination will be highly accessible and eco-friendly, as it's only reachable by their cruises. Carnival is also enhancing and renaming Half Moon Key to Relax Away Half Moon Key, reflecting its tranquil experience. By summer 2026, a new pier will allow two ships, including XL class ships, to dock on this revitalized private island. These destinations aim to attract new cruise consumers, with marketing efforts already underway to promote these exclusive offerings. Both locations will offer guests unique and complementary Caribbean experiences.

The paragraph highlights the company's achievements and future goals. They expect to meet their 2026 EBITDA target by 2025 and aim to increase ROIC close to 12%. They've made progress in generating demand, guest loyalty, and pricing strategies while advancing sustainability efforts, achieving a 17.5% reduction in greenhouse gas emissions intensity since 2019. Despite growth, they've lowered absolute emissions by nearly 10%. Financially, they've paid down over $8 billion in debt, reduced interest expenses, and are on track to achieve investment-grade leverage metrics by 2026. The company credits its team members, travel agents, loyal guests, investors, and partners for this success.

The paragraph outlines the key achievements and financial results for a cruise company in the fourth quarter of 2024. It emphasizes the company's success in delivering memorable experiences while maintaining environmental integrity. David Bernstein reports that net income exceeded expectations by $126 million due to increased revenue, controlled costs, and favorable interest and tax expenses, though partially offset by higher fuel prices. The company saw record revenues, yields, per diems, adjusted EBITDA, and customer deposits, driven by strong demand, higher ticket prices, and onboard spending. Additionally, refinancing and deleveraging efforts are set to be discussed further.

In 2024, the company achieved an 11% yield improvement, which significantly outpaced a 3.5% cost increase, leading to higher margins and cash flow. This resulted in an EBITDA of $6.1 billion and $6 billion in operational cash, allowing for over $5 billion in debt payments, including the prepayment of more than $3 billion, and a reduction of their overall debt to $27.5 billion by the end of the year. The net debt to EBITDA ratio improved to 4.3, advancing towards investment-grade leverage metrics. Looking ahead to 2025, they expect yield growth driven by higher ticket prices, onboard spending, and occupancy, with anticipated cost increases slightly impacting earnings per share. They are strategically managing upcoming debt maturities and interest rates to optimize their financial position.

The paragraph discusses the financial outlook for a company in 2025, focusing on the introduction of a new Bahamian destination, Celebration Key, expected to be popular and profitable despite affecting operating expenses. There is an anticipated increase in dry dock days and various cost impacts from inflation, advertising, and efficiency initiatives. Depreciation, interest expense, fuel prices, and currency exchange rates also contribute to financial projections. The European Union's increased carbon emission regulation will raise fuel expenses. Overall, the company projects a net income of over $2.3 billion for 2025, a $400 million improvement versus 2024, translating to an increase of 28 cents per share.

The paragraph discusses the company's strong financial performance driven by robust brand demand and effective operations, boosting confidence in achieving investment-grade leverage metrics. This is part of a strategy to transfer value from debt holders to shareholders. During a Q&A, Josh Weinstein credits the company's success over the past two years to restructuring efforts, having the right leadership, and enhancing commercial focus, particularly in revenue management and marketing. The company has increased advertising and strengthened brand-trade relationships, positioning itself well for future growth, including expectations for a successful 2025.

The paragraph discusses the active management and strategic allocation of assets within the foundation's portfolio, including reallocating ships and winding down the P&O Australia brand to optimize returns. Investments in people and revenue management tools, as well as a focus on destination strategy and onboard spending (OBR), are highlighted as key initiatives to drive progress toward 2025. The speaker expresses enthusiasm about these efforts, particularly in enhancing onboard spending. Matthew Boss asks David Bernstein for a detailed breakdown of net cruise costs excluding fuel components and advice on how to reasonably project yields versus cruise costs over multiple years.

The paragraph discusses financial aspects related to Celebration Key, including a 3.7% expense increase. This increase is broken down into specific factors: Celebration Key expenses, increased dry dock days, one-time benefits from 2024, and a combination of inflation and higher advertising, offset by efficiency initiatives. The speaker emphasizes the greater impact of yield improvements over cost improvements and the company's focus on maintaining cost consciousness while investing in advertising and revenue management to boost yields and margins. Matthew Boss acknowledges the explanation, and Ben Chaiken from Azero Securities asks about the customer awareness and marketing status of Celebration Key, which is still in its early stages according to Josh Weinstein, as it hasn't launched yet.

The paragraph discusses a strategy to enhance and promote Carnival's cruise destinations to attract more guests, including non-cruisers. Ben Chaiken inquires about an "enhanced destination strategy," mentioning Celebration Key and the Pier at Half Moon Cay. Josh Weinstein responds by emphasizing the importance of creating destinations that are so appealing they influence vacation decisions towards cruising. Traditionally, Carnival hasn't effectively highlighted its destinations, but aims to change that by raising awareness and excitement about locations like Celebration Key and upgrading Relax Away at Half Moon Cay.

The paragraph discusses a conference call where Ben Chaiken and Steve Wieczynski ask questions about a cruise company's plans and financial projections. The company emphasizes their new offerings, "Relax Away" and "Celebration Key," which provide different experiences to cruise passengers, highlighting natural beauty and a tropical paradise. They are looking to enhance these experiences without heavy investments. On the financial side, Steve Wieczynski points out that the company's yield guidance for 2025 might be conservative given strong booking and pricing momentum for next year. He asks for clarification on yield forecasts, comparing it to the underestimated initial yield guidance from the previous year. Josh Weinstein is addressed to respond to Wieczynski's questions.

The speaker expresses relief at finally hearing from someone they were concerned about, as they were worried when the person wasn't first in line. They emphasize that their goal is to provide informed guidance, which they have managed to exceed, resulting in a successful year with notable performance improvements. The speaker highlights the importance of occupancy and pricing in achieving revenue, noting that onboard spending has been excellent. They assure that their revenue goals align with the concerns raised. The conversation then turns to future targets, specifically mentioning anticipated achievements concerning EBITDA per ALBD by 2025, alongside potential advancements in ROIC and carbon reduction goals by the following year.

The paragraph presents a discussion about setting long-term financial targets and how they are important as motivational goals for both the company and investors. Josh Weinstein expresses support for establishing such targets and hopes to achieve their 2026 goals ahead of schedule, although challenges like carbon targets remain. Steve Wieczynski asks about cost management throughout the year, to which David Bernstein responds by noting expected higher costs in the second and third quarters due to increased dry dock days, with lower costs anticipated in the fourth quarter.

The paragraph discusses the guidance and expectations for a company, with a focus on potential changes and uncertainties. Steve Wieczynski thanks the company for their guidance, and Robin Farley from UBS asks about specific factors affecting the guidance, particularly regarding Celebration Key and its impact on ticket prices and onboard spending. Josh Weinstein responds, indicating that Celebration Key is accounted for in their guidance, but its contribution is limited for now and will grow in significance by 2026. The company is seeing expected booking premiums. Additionally, Farley inquires about the impact of callable debt on EPS guidance, noting that there's $3 billion in expensive debt callable next year, and assumes lower interest costs aren't yet factored in.

In the paragraph, David Bernstein discusses potential annual interest expense savings if refinancing efforts are successful, estimating potential savings of twenty to twenty-five cents, equivalent to around 280 million dollars. There are opportunities to address high-interest debts, especially in the first half of the year, which could lead to additional savings depending on market interest rates. Robin Farley acknowledges this information. Subsequently, James Hardiman from Citi asks Josh Weinstein about the sustainability of the company's organic growth, questioning whether it's due to industry factors or company-specific actions, but Josh admits that there's no precise way to quantify the contribution of each factor.

The paragraph discusses the positive trajectory of the cruise industry as it becomes more mainstream, noting a significant improvement in "same ship" sales with nearly 10% yields. The speaker highlights that their company previously had a lower revenue growth rate compared to competitors, but now is among the top, suggesting increased pricing potential for their experiences. The speaker believes their offerings are undervalued compared to land-based experiences, citing the "price to experience ratio" as skewed in favor of cruises. They mention Disney's investment shift towards cruises as validation of this potential. James Hardiman then refers to expected increases in per diems and yield guidance for the year, with Celebration Key expected to boost performance in the latter half of the year.

The paragraph is from a call discussing the potential impact of additional passenger charges in Mexico on the business. Josh Weinstein addresses concerns about these new charges by stating that he does not believe the decision is final. He explains that they were not consulted about the changes, suggesting a lack of communication and understanding of the implications. He acknowledges the respect he has for the Mexican president but notes that she may have been misinformed or unaware of the consequences. Patrick Scholes inquires about the percentage of itineraries involving stops in Mexico, but that specific information is not included in Weinstein's response.

The paragraph discusses ongoing negotiations between a cruise company and the Mexican government concerning a proposed tax on the cruise industry. The company is currently in discussions with the government to highlight the benefits they bring to Mexico and hopes to resolve the issue by the New Year. They have not factored the tax changes into their forecasts for the year and estimate minimal impact on itineraries if the tax is implemented in July 2025. Additionally, Patrick Scholes and David Bernstein briefly discuss a slight increase in passenger ticket revenue compared to commission revenues, noting it may be due to currency variations and ARC mix, but consider it insignificant.

In the paragraph, David Katz from Jefferies asks about the potential for improved cost efficiencies and how these might impact the company's financial guidance, as well as the influence of inflation on forecasting. David Bernstein responds by explaining that while they aim to improve efficiencies and have included assumptions about cost increases and inflation (under 3%) in their guidance, predicting exact outcomes is challenging. He humorously notes that forecasts are always wrong, but it's uncertain by how much or in what direction. Katz then asks about the company's historical leverage and whether achieving a leverage ratio of two times or better remains a long-term goal.

In this exchange, Josh Weinstein discusses the company's current financial strategy, focusing on achieving investment-grade metrics rather than setting a specific target like a two-time leverage ratio. He mentions ongoing discussions with the board about balancing balance sheet strength with investments and shareholder returns. David Katz thanks Josh, and the operator introduces Jaime Katz from Morningstar, who asks about strategies for the wave season. Specifically, Jaime is curious about balancing demand for 2025 with pulling forward demand from 2026, and whether less bundling and promoting could optimize pricing. Josh acknowledges the difficulty in responding to this question without revealing too much competitive information.

The paragraph discusses the company's active efforts in selling bookings for 2025 and 2026, highlighting a recent record in booking activity for 2026. It notes that while there's room for improvement, the brands are effectively managing revenue. Different brands have varying booking statuses for 2025, and individual strategies will be used during the promotional "wave" period, which is critical for boosting cruise interest. The paragraph also touches on the costs associated with Celebration Key and suggests ongoing investments in brand-building projects beyond new builds, like refurbishments for Aida, which is one of the highest returning brands alongside Carnival in their portfolio.

The paragraph discusses financial investments and future projections for various projects, such as Celebration Key and Relax Away at Half Moon Key, with expected costs in the hundreds of millions of dollars. These investments aim to support improved returns for the company. David Bernstein mentions that while the financial projections for 2025 have been stated in a press release, it is challenging to predict exact annual numbers due to various major decisions affecting those outcomes. Josh Weinstein highlights that destinations like Celebration Key and Happy New Year are unique in their size and scope and that although other destinations will see improvements, no major projects are currently anticipated beyond the potential expansion of Celebration Key.

In the paragraph, Brandt Montour asks Josh Weinstein about the current booking curve compared to the previous year and whether pricing is less robust given tougher comparisons. Josh acknowledges tougher comparisons but mentions their brands are maintaining higher occupancy at higher price points across all quarters, indicating continued momentum. Brandt also inquires about the financial impact of the Red Sea, which was initially anticipated to cost around $130 million last year. Josh explains it was closer to $100 million after analysis and clarifies that the financial recovery in 2025 won't be substantial, as the impact was already accounted for after world cruises were sold and adjustments were made.

In the paragraph, the company acknowledges the challenges faced due to the exclusion of the Red Sea from their cruise routes, impacting sales for 2025. This decision led to selling less attractive cruises, causing some struggles reflected in their financials. They expect normalization and a stronger comparison between 2026 and 2025, rather than between 2025 and 2024. Brandt Montour and Josh Weinstein discuss this issue, noting that lower yields are offsetting the lack of disruptions this year. The call concludes with holiday well wishes and an expression of gratitude to the participants.

This summary was generated with AI and may contain some inaccuracies.