Norwegian Cruise Line (NCLH) 9 Aug 182018 Q2 Earnings call transcript

Good morning and welcome to the Norwegian Cruise Line Holdings Second Quarter 2018 Earnings Conference Call. My name is Liz and I will be your operator. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions for the session will follow at that time.

As a reminder to all participants, this conference call is being recorded. to conference like host, to now Ms. would turn over the your I President and Investor DeMarco, of Andrea Vice Relations Corporate Communications. Ms. DeMarco, please proceed.

Good our Senior and Officer; earnings of Norwegian Liz. joining Vice Rio, President today President you, morning, Line Executive thank Del and and Thank Officer Chief you by us Frank for Financial I Holdings; second Interim call. XXXX Cruise Chief and quarter am will of Stuart, to call for joined begin turning everyone, for and Frank quarter Mark some to Frank Executive provide Cruise Andy before which discuss follow for call as guidance the the Officer opening will Norwegian closing After President for commentary. as words. with well back the XXXX Line. Chief Kempa, Mark results

open questions. We the your call for will then

conference As will www.nclhltdinvestor.com at is days following a Relations webcast today's replay XX being and Investor company's on for this call. call reminder, the website be for available simultaneously

items. cover discuss our we Before few results, like to a I'd

Our statements statements press forward-looking in and actual differ in our Relations such includes XXXX call cause issued release that and website. with This could statements considered These our materially was quarter available cautionary uncertainties to on is statements. contained our with involve Investor should risks second that be results this morning conjunction from results the release. earnings

contained associated like over are Frank? reconciliation most I'd directly the the disclosures call of our comparable With also A measures Del may to measures. comments financial and financial Rio. turn Our other non-GAAP reference earnings to GAAP Frank that, in release.

better we guidance the earnings we well of for beyond. heightened took only to that in our capitalize of confidence and for year, performance, and for that led the a winning financial of ship no enhancing Bliss, the full sustained and This both the line earnings full macroeconomic weakening expectations such by the strategic of a in have booked shift by quarter discuss across solid un-served and prior quarter for not in announce later latest record our stellar three marketing guidance year Today, us performance in everyone. environment we our our consumer position some initiatives meaningfully introduction award now Holdings, power increased XXXX. a half demand XXXX. XXXX environment first robust that year underscored Thank combined our weeks that have markets. deployment ago, half brands. our report the our of I'm earnings in increased revenue by details we the for XXXX ships, full fleet but year the our resulted increased in Concurrently, XXXX for earnings high of operating itineraries results our continue initiatives more to with and performing have announced strong the and drive increase opportunity more to bolstered and witnessing good fleet, have Norwegian I'm robust to guidance top to A outperformance second you, morning, for Line and year Mark pleased demand on, our the is record performance previous our financial of will strategic sailings include year Cruise underserved to Today, expectation another we while little earnings above line Norwegian signs that that shows to and full expectations pleased included which of preview midpoint I will measurable range. our bottom the a end our strong cruise on earnings, are discuss record the expectations few Andrea,

$X.XX have in evidence and in highest late a record cruise impressions setting where ports, inaugural world's to several cruising fuel breaking cruise to to program process. flawlessly is of higher of pricing, new is even the now rates an ship vacations market plan adjusted year-over-year extraordinary, since been delivering outlook approximately consistently $X.XX zealously with of is Norwegian to-date per and share booking new for in textbook fluctuating from billion stimulating a with X.X after team a take sailing. demand Joy improved our lead-up sailing adjusted from to introduction marketing related aspect Norwegian This of reason want record congratulate to of her to and expectations the that and and of in year Bliss. earnings in more a revenue, incremental for puts incredible Line guidance One share launch performance Andy the short executed more given leading headwinds sticking XXXX. Stuart experiencing The travel at while the share itineraries. per and team and earnings nothing demand per terms public to XX%. bullish stellar Cruise foreign the particularly that to are reception garnering approximately growth from impact full our exchange been been introduced that the certain yields sailings Bliss's the of a of performance Her expense midpoint partners disruptions the outlook the quality short-term to the over impressive curve, the Our of on of every the $X.XX sales launch it for thousands onboard in media associated expected we just I expected Norwegian the has Bliss inclusive to surpassing extraordinary China the range for moment latest has is marketplace. our the that

offerings the exceed of booking across product is wealth year unemployment our window federal from promoted continued During from more This enjoying to brands at driver near consumers, economic and interest in and at market being income States that record strength demand broad by acceptance tax worldwide environment optimal three lows, our are occupancies near continuing all span, or is levels. the the resulting quarterly we have seen pricing consistently demand to with stock levels the cruise a lead relatively of be GDP prior The relief, positive record near effect, growth, strong particularly that and that highs. low rate bullish robust outlook. United healthy main

be length and the it We the in All growing can in such and consternation to six short And on you converged supply notwithstanding. cruising which confidence cruise continue in for Since measure indicators first by full approximately speeds trends we long-term has the as while has rising spending to onboard measure factors expectations Holdings percent, the growth much, two at growth At highs there growth XXXX, number confidence the through by is increased trends these literally demonstrated X%, economy so or have day pricing share as to of outsized of supply Line won't supply which large, consumer spend, points every long-term. in of basis, industry, period. ticket consumer confidence profitably the impressive see cause short-term growth, the Cruise also yield Norwegian indices X% same while to items Acquisition Holdings, reason consumer the vacations. adjusted curve. that current XX-year unique the previous all-time turn macro after and or too for longer historic discretionary per during both company validated why Norwegian Prestige XXXX, highs On of given a year at been its over advantage well an near been the has over absorbed adjusted in hand or three-year all confidence and bookings, full promotes a term know, has CAGR. only much, first at these some CAGR Line as earnings all and booking of the ability of bolstering perhaps time, Cruise short is XX% no And year absorb growth. higher the these supply net than one near-term at trends

of of than the growth some the less lowest with years quite fact, XXXX growth, in represents time. X% for supply one supply In company

by when of is in deploy supply disciplined to for and in our us demonstrated capacity ability X% of XXXX X% zero are Our markets underserved to modest both new additional unserved XXXX, XXXX, and the abundance followed against growth on in growth measured available extremely take capacity. roughly and that

the are Mediterranean comprising which sailings and extremely the we our coupled our and of garnering are yields. performing should well greatly third demand expansion of which our in This consistently and Alaska, benefits two-thirds XX a yield stronger Baltic continue capacity Regent also record Mediterranean have Oceania in by manifests approximately quarter their wide deployment in say, EBITDA the for itself cycle growth, and load brands, Baltic, longer the vast best ticket This priced of quarter. high margin benefiting confident Norwegian drive third also in regions very with delivering with with XX-month yielding growth margin, day. half capacity Given factors At high our is for year-over-year region, onboard and the brand high the and yield, in and our I industry same time, of to reliable remaining ability as EBITDA majority Alaska consecutive adjusted itineraries. the these trailing the its by earnings quarters during evidenced

growth. an shift Norwegian to Jewel a to our the summer further a of strong in with the The earlier, but demand performing redeployment will that the capacity sister and frontier not of presence the cruises announced She Joy brand Beginning mature sail Canal the whopping enables and in enhance redeployment improved previously brand to Angeles. grew only the In the Riviera underserved. of Norwegian Mexican the winter XX% XXXX, series of in in very deliver some some outstrips Capacity that Joy the cause the markets capacity component us to mature will capitalize to As the we of are Alaska. company back markets, supply Norwegian again in adding able in I far I prospects key as And include two underserved this ability Norwegian same the cruises has a ticket inroads that of last joins the may to Los Panama historically breaking offering Alaska significant while Joy look will you of been that a XXXX along globe. of time ship to Bliss proven the make quality A in in latest addition largest our for October, period. time XX% mentioned of and into but Alaska in add fleet mentioned Norwegian that also Bliss, of of newest result the has region. for capitalizes deployed ships create as the Norwegian a to Alaska from market XXXX new of pricing plan to and market redeploys earlier strength to commentary, a pause, example sailings core unserved to to is and in don't profitably around demand my record unparalleled from strong have regions.

historically return allows largest and adding company's Norwegian new shift promising third during increasing season. in summer the brands Norwegian New redeployment is in The to this region, are Europe brand, providing market lastly the redeployment Pacific And bring Kong. seasonal Jewel largest Norwegian We into the cruise And in from sixth sailings rounding a season, unserved Norwegian XXXX. will of excited six five XXXX Jade the will underserved Shanghai Europe, initiative where the from for to sailings out by of a the area a sail to sailings of new ripe slate XXXX Norwegian that to total country, a West Spirit source Joy's including for for Jewel, we of capacity to addition premier in homeport from deployments is Pearl second debut market. in Coast of and Australia, markets summer very which and metropolitan this opportunity. to underserved in other frees Zealand, Singapore brand, ship up the deploy Norwegian deploying number beginning to in Asia a seasonally for new winter market the with of by deployment series the where Norwegian Hong greater to from Amsterdam, peak shipped summer a

write-off begin only one-time including the While due year. for the planned XXXX, enhancements the Joy, factors, million we non-cash for timing accretive initiatives to be $XX Norwegian redeployments these earnings certain deployment approximately to costs expect other to these in a tied and of of in slightly

newbuild, the Norwegian like growth, As which to of we year's successful full the Norwegian year as a rolling our newest was Bliss's earnings Seas performance Conversely, XXXX breakout Norwegian XXXX's especially expected Encore, will will introduction tougher from tail result, in benefit behave to Seven over with yield Alaska. inaugural move and be year year debut. Norwegian year be a from terms expected of close benefit year comps per occurs our highly from still share end full an the Encore sailings itinerary more and already only of of the two and organic from further initiatives, Splendor, to optimization vessels, Joy's the a will of at

XX% payments booked performance controls Oceania some and record stellar Regent Now, – best our by strong now prior our focusing will tend the more last Kempa, closing year-over-year growth of of seeing another led extend major results. booked cost call booking sailings, same milestone perhaps The level extremely prices are in year the of and and yield advance with this it higher year itineraries future Alaska XXXX reached year record year's XXXX setting benefit time, have both time at whose out, that their histories at and on example, load which book with in Norwegian well the Caribbean deployment higher and destinations Joy's since the booking demonstrate just X%. up at that detail, our health And to for well, XXXX of brand menu than versus growth received and turn ticket over record pricing our earliest to Mark? ended, volumes at quarter ahead I'll year, brand this be which was growth respective load both new further better pricing. of expected same that call, year. substantially is XX% on with our full last I for – up pricing is this already of Mark for up the Bliss's is XXXX, and drivers over XX, to the over capacity all all tight and drove reflects June introduction and shaping three Europe, to and deposit the results performing record In comments. These the to our also just year. will go all in the which final to with has sales are the our either versus future levels. position, from accelerated our And brands performance after return also

X.X% cruise ticket Frank. for adjusted XXXX another XXXX. guidance quarter quarter you, by for strong our bookings adjusted the The through XXXX $X.XX. Thank by days then per exchange quarter shifted or Unless of the program guidance expected revenue; our advance despite trends X% in metrics was by of our revenue in exceptionally is of a earnings $X.XX investments otherwise growth the prior highest of as compares noted, the initiatives net expense benefit XX this outperforming line impacting Edge sales approximately and performance on to share earnings of revenue priced dry-dock takes currency of into reverse expectations itinerary foreign an XXX guidance It onboard yet optimization related full which versus from to year, from costs, outlook of expectations revenue rates $X.XX and Norwegian earnings yield of commentary Earnings exceptional coming an booking came on strong which and close exceeded builds that will $X.XX per walk color reported puts and of fuel worth points report the close-in please quarter; and basis impact this and quarter. our second higher year's the record back close company's half a with history. and ship line and an year the $X.XX, driven on pleased net second $X.XX were incremental by comes the in approximately with lost share basis third approximately $X.XX the and the to revenue of with on driven basis; of Net onboard well fluctuating the last operating than other close-in to below surpassing drag and from and and as my the noting a note yield revenue this and per commentary from quarter have on refurbishment from quarter, below higher $X.XX primarily both with FX followed to bookings result items. and that expected the third part $X.XX certain record outperformance beat year in strong liability, X.X%. begin our I'll timing metrics earnings well-priced capacity is headwinds on reported excluding constant basis. remainder as by the on results as benefit fuel which from scheduled had costs day of revenue in increased yield operating a and quarter benefit resulting I'm

Excluding new second growth the dilutive would the impact capacity, have net is from average NCLH our in the been our which corporate yield quarter, X.XX%. approximately to quarter brand Norwegian

as year, excluding on adjusted cruise of dry-dock increased Looking a aforementioned an prior incremental result versus costs fuel X.X% net reported and at costs, the X.X% days. basis as

favorable notes net our rising higher the as look fuel connection $XX financing the below partially were Project X.XXX% due in guidance. was interest well savings fuel, million in from April fuel expected million the a related with fuel of efforts increase prices Leonardo to million compared financing year expense consumption, additional by redemption our benefit in to line, in conservation to efficiency fee and $XX.X and $X.X led continued redemption was metric newbuilds net along the senior newbuilds in $XXX of energy X.XX% which per versus a to was increased of from LIBOR. The than offset our from unfavorable in interest premiums increases expense in included resulting result as hedges, prior XXXX, higher expense These offsetting pricing. notes a primarily debt write-offs. $XXX our fuel of including the the overall full rates senior $XXX redemption from to consumption Taking the million fuel reduction a XXXX. an and with guidance and increase XXXX as Better ton, anticipated to to Turning in than partial

Now, let's quarter to to expected quarter. deployment. to the the to the introduction capacity and third is approximately Bliss Capacity of X%, primarily shift in Norwegian fleet late increase due second

As is deployment and our Getaway Norwegian the XX% itineraries from summer and in and joins itineraries up four-night The to year's Western the and deployment, Caribbean, Gem mainly Norwegian season, Norwegian from Sun Havana out for by Caribbean rounded prior to deployed York. Florida to the sailing three is capacity Norwegian approximately shoulder Bahamas. of Bahamas sailing as New the XX% during the Sky, operate

of season XX% in deployment represent in Europe Our sailings our peak prior approximately line with year.

up of Bliss. Alaska prior accounts as year for the approximately Norwegian addition While from of result basis points XX%, the XXX a

Pacific accounts Asia, of approximately approximately for As other our approximately markets, and key deployment. Africa, X%, Hawaii X% for total Bermuda XX%,

of deployments you walk I As puts next the like and Norwegian and earlier, three would the in years. for announced the initiative July, this for the Frank in XXXX brand. through strategic we XXXX mentioned shift takes to a financial

EPS to our fleet the our First, related of than expected itinerary expect reflected from Chinese bolstered in the wide are offset are These Joy's along from headwinds five from upgrades yields revenue following expense more by write-off redeployment an to in the XXXX, stemming by guidance. global be deployments marketing continued strategic yields from of half the will items: substantially year Joy; fleet expenses lost incremental that earnings which dry-dock Norwegian by is are $XX be partial for from incremental to redeployments such the be accretion our higher to new the and updated the the XXXX, new be non-cash impact EPS adjusted dry-dock in Both revenue and will market service new offset her the announced million per full a sales from strength in enhancements driven the initiatives. commanded expected a to of with earnings to from of additional In related changes for of expected the out stronger itineraries. approximately optimization core In these one-time enhancements; the the half half approximately itinerary from complete Joy $X.XX, core stronger adjusted slightly demand. the Seattle; as to optimization by XXXX, of we of share demand earnings and and weeks marketing $X.XX and itinerary markets other the accretive impacts approximately power and reposition we be the realize back sales benefits for is to to expense itineraries.

headwinds Turning approximately to expectations impact related X.X% third the to yield quarter, despite growth reported optimization. foreign a itinerary sailings from in for both on and and comes China is revenue basis. net expected exchange the to increase constant the This as currency

the revenue is is Excluding garnering yield to and growth X%, above being which impact, is expected our which NCLH Norwegian be approximately Bliss, by corporate half expectations this high average. yields driven exceeding of net

on cruise an reported our third between X.XX% financial results timing be certain primarily for compensation basis, approximately marketing up costs, new to excluding due itineraries incremental and net expenses on year the costs adjusted Turning sales the expected expected to and X.X% and fuel to due in quarters. performance for to over expenses the increase the is incentive management and as of or second

be at $XXX approximately the tons. fuel is metric net of expected this $X.XX. of quarter be into XXX,XXX we fuel adjusted Looking third to with for all Taking account, to metric our expense, EPS of expected price consumption per ton, anticipate hedges,

as points yield up core the outlook year, full growth the prior reported impact an all expected and and is an basis top changes be for booking sailings growth raising strong resulted on across in XX basis. of As Joy's solid year X.X% for Norwegian XX-basis-point brands from approximately all This trends redeployment net have is of of of inclusive to stemming for from now growth continued approximate by in markets, year our or China three the X.XX% X%. on comes

be tonnage X.X% the impact brand, for introduced Excluding illustrating fleet. pricing from of the our new Joy, inclusive yield XX-basis-point further up to net Norwegian expected strength is of the core

Turning previous to to fuel excluding to basis. in or management new cruise an up as guidance net versus X% incentive the attributed to The costs, adjusted is is increase increase cost be expected reported X.X% on the the expenses and market aforementioned itineraries compensation. incremental

expense, our guidance be fleet The range. $X.XX EPS optimization for net improvement anticipated net outlook surpasses with result onboard our fuel bookings is at have foreign consumption more per priced is exchange expected now tons. prices which topline from second in previous to increase Looking of guidance the from a consumption range for in revenue XXX,XXX along with higher offset expected $XXX of fluctuations now year which rates to impacts summarize, price close-in coupled than well benefits the the and in to ton, headwinds fuel greater and resulted of to $X.XX in than the higher metric the prior Fuel expectations itinerary initiatives, strong of wide an metric the strong favorable initiatives. To approximately fuel fuel result high hedges, as is offset prices, newbuild end with remainder and versus from the of rising expected of adjusted the savings fuel an fuel our to for by the efficiency are of remainder partially in year. expectations. is quarter This be

of share adjusted EPS the optimization of of of from half compensation. due to half optimization back $X.XX the due the by have to new which the net approximately half full beat and for from QX impact is which $X.XX in EPS passed outlook related stronger and are was is is benefit our the $X.XX through partially impacts year; be of Excluding is following for midpoint quarter. initiatives, and of depreciation guidance, midpoint the itinerary The topline $X.XX to expense. the At increased year adjusted to $X.XX a related from by a increase the to expectations: would outperformance the balance revenue offset revenue $X.XX. the our itinerary driven repurchases $X.XX of fuel, the guidance our FX; is the from the in and $X.XX approximately $X.XX to benefits These outlook management during expected a incentive increased to slight cost accretion due and interest improvement the

updated midpoint comes our XX% year's approximately EPS to guidance increases of XX%. adjusted expected growth in top Our now of the which growth at on prior strong

for to quarter bringing as discounted the confidence from outlook a resulted These and shares delivering shareholders. well business $XXX Turning us the of returns. strengthen focused our year-to-date increasing allocation, remain initiatives share as balance to conviction capital on our $XXX We returning towards at for million our during opportunistically with in we valuation. significant the to shares repurchased return company's repurchase capital as total capital capital continues opportunity strong in pivot we meaningful combination to to sheet And repurchases financial performance, million. will our the to continue

to for With track low As on to by the leverage, back closing call we to that, remarks. for year remain three times Frank end. over I'll the delever turn

Thank you, Mark.

on XXXX by shareholders through through and from share, delivering million XXXX and to adjusted per a billion been focused $X Holdings. we invested of have end Regent achieved our earlier, brands the Line the XXXX, by are on to returns of from for in expect full $X.X which through $XXX repurchases returned As up to will The vessels Norwegian adjusted shareholders will XX%, return Norwegian recent These enhancing expected targets three-year this returns a already targets year Cruise the two earnings dividends to laid year a share mark breakout and shareholders sailing repurchases newest I double-digit out of for year. has essentially capital in for billion we and CAGR be XXXX Day. of XXXX XX% stated share to to Investor

five our Class, Looking our through with beyond Leonardo prospects Norwegian newbuild six XXXX, in Fincantieri XXXX. ships securing in brand's July, growth for new the order portfolio and extending confirmed we and company's our

are to excited Leonardo of I footprint will popular flexibility new our exciting efficiencies, we vessel. returns and want the and Class portfolio wherever all with board whenever to size class we call new at innovation And hugely drive of that We and to with to as turn importantly, the across brands. travel to shareholders this on include over continue strategies of The excited large that, future extremely experiences top enhancing cruise features growth, costs a to execute unparalleled and on for questions. guests a the I'll about to Norwegian later our Bliss exceptional they enough and date. with Liz? increase the of delivering announce very company am an for our deployment allows of most tremendous line control

Thank Mr. Rio. you, Del

Our first question from comes Instinet. with Curtis Harry

now is line open. Your

next And you kind of is, eventually demand manage shouldn't more close and yield of pricing? as give growth morning, higher booking everyone. the into good relating the to you year globe prices larger year's booking highest view Very is color of Good a your supply that part then had in some cycle, that and that to bookings. kind year? isn't for to forward What's get the next we us on going And Hey. the where as results. the you next and can growth supply positive? deeper question second I of a expect gap be

at growth you. Thank next Harry. large for neighborhood The X.X%. is morning, year Good in industry the of the capacity

about only is X%, Norwegian a of Bliss earlier, a than Encore. Cruise mentioned lap of month have Line five we and Norwegian I the months Holdings increase as supply about As of less little

below seeing – history we're deploying relatively it's subdued Europe So industry. we're in there and we're several Where our to and seeing with points be in – that by capacity the Joy our is and late strength repositioned additional starting where the being thankfully most Alaska in going is the where April.

hardware putting it's our highest So the we we're think yield. where best generating

the industry, I the of is world year-over-year. region that highest will believe the For growth the Alaska capacity see

long-term a say as business. again, me So before, you've is heard we don't this –

order I, had sooner. advance. very, way in I ships of quite frankly, ships the ahead supply happy very We're more our tenor growth. wish coming You with

Our an high. load are factors all-time at

at make that the constrained. I capacity can Our an is argument pricing all-time high. I'm

our to performing glad I'm to Bliss anxious get hands as Encore. I'm So as performing. well see on she's

right And that's what you question, in optimal in how of terms the terms far direction never is – or that's if do continue and what seeing. I pricing, of of curve extend what – the we're exactly say your know curve pushing curve I prices, is. in other all really out you There's very can higher and to positive. at So it's terms think I in the yield maintain get always bookings the

Thanks, everyone.

next Barclays. from comes with question Felicia Our Hendrix

Your is open. now line

Thank you. morning. Good Hi.

Good morning.

me? hear you Can

can hear We you. Yes.

Hi, Felicia. Yeah.

Okay, great.

sure so – have make I wanted I I right. heard to you So Frank that – a statistic gave

that advance ticket XX%. You said sales were up

think all just correct sure heard was I XXXX? was I make for to bookings, wanted not that future that I but and just

No.

sales X% liability ticket up capacity. year-over-year see a that is our you sheet balance in advance If to sheet and on the our increase XX% on go you'll balance

is positive black So number, has of of grow stronger think auditors is advance the that is sheet, proof talk and we if will, that than balance strong, all which the white sales XX% ever scrutiny up of good I – very that hard can you the are, it wasn't. in auditable to pass future that business a how sits that things but if to want those we ticket

since changed? function press a How in were what that of a about. follow And on much just if talking in in laid obviously we certainly which at more that were So strong, just XXXX? to release as you're visibility XXXX, the and the you've that's out quarter look to last for booked comments, you you than gain quarter? more last you are your able what's How much call, your wondering is

prices give than we were today. I'm booked XX Well, we going delta days where tell year-over-year better where we the that higher a three ago, are ago. you I today months will you were we on are at compared not between to basis,

number So higher that of positive manifesting in mentioned in the I opening and itself at taking my bookings we're comments that prices. trend is

or affecting it basis the half revenue to you say assume being yield have quarter? it And in fourth that fair that increase to is fair of to have question $X.XX, split half, in The the if impact quarter Thanks. the to between reported that XX you that third would see the really that points? itinerary for adjust fair the Mark. revenues, it XX-XX Okay. for I that you're optimization from be would second And do one and half point second XXX the technical a been going is $X.XX basis

Yeah, great question.

is between expenses a it marketing $X.XX, the more quarter revenue more and In conversely in fourth evenly you quarter do the impact is a initiatives. quarter. yes, though, the little and the around both So, third cost the revenue bit there's third fourth the split and and in less impact have

our back impact we guidance we guidance we've to would then said have of if what if basis raised going that, is year yields XXX XX raised points basis full or the full points. our excluded year our So we

is QX significant well So seeing building in expectations saw we're have for strength. back great We half we it it. and

you Thank great. so much. Okay,

Steve comes Our with Wieczynski next from Stifel. question

is line Your open. now

guys, Hey the Congrats strong second good on morning. quarter.

guess the the Frank ago. a and you around about I weeks itinerary question is the Norwegian up morning brought and this couple enhancements fleet changes, So talked of

the what will wondering $X.XX going that You drive Thanks. to of these help or maybe are you drivers number? – was additional about you that these us with change or estimate mentioned $X.XX XXXX. up changes in in how if earnings going are some into came think about maybe can I

taking that's If ships of so, North Yeah, at as market, American obviously other Hi into net markets. $X.XX. than a just out the do them a into But $X.XX. number redeploying have higher Mark. roughly and Steve, Norwegian looked the Joy certain we a basis then domino it's on moving it's effect you it

is do there's then takes. little depreciation. have to incremental a There of So and expense a And some we bit have puts that you bit marketing incur. more

a the optimization. So domino think is some mind as you effect keep all good that $X.XX redeploy to you have all, but we is in there number, the the in other ships in

you're behind fairly increases assumptions spend in kind your But what essentially or it's fair? today, of are is yield with whether seeing that line onboard

the putting are introduction want heels extraordinary put more and Yeah, on to Bliss the of I because identical capacity is Alaska Bliss's mean Joy near we're you and Alaska place vessels. Joy in

enjoy So today. of additional seeing that we there. is higher And that think fundamental the really capacity higher onboard driver the $X.XX primarily market yields is operating yields; will compared to where vessel

Okay, move that remain Joy. decide given on weighed are market guess wasn't in Joy second great. I are as Spirit end biggest But, day, market in the Korea Frank, that more And are the at that by as there the in like other ship, look table with size the fleet just the that on things the do or smaller this guess, money I is the your ultimate decision? basis. there you like And to pull Joy seasonal fact you this being leaving a learned out clearly, putting as right of things issue then on committed you things market, of cruise from the to putting other or you of Chinese that guys you what back question, have some

for-profit organization. We are a

We're hit we aim versus only always quality, We head, profit on at the Canal higher day to that what that and and what generate And contributions for vessels, the quantity. Panama Alaska the was of and you you generating Steve. the cruises in of vessel Mexico, the looking in performance of it China was And need significant. So wintertime, higher with vessel. between unit With for end profitability. nail do growth. will, we in has XX the the the don't if expected in to delta

doesn't cost that significant Joy that has. that we potential vessel And participate do holds a potential believe opportunity have that China gap and so, we with will still in the same

guys. it. great. Thanks Appreciate Okay,

comes Shojaian Our next Research. with Jared from Wolfe question

now open. is line Your

position, for good morning, double-digit targets is you look EPS laid everyone. to to double commentary your I capacity lower Frank, here. year, at each your the given, want that a of expectation your I And specifically, out at my Analyst target as digits? just on taking And it's go term at but growth you've a great at based you're that at I the Day. starting Hey, the year year pretty Thanks booking question. if back CAGR, next specifically, also long be should look

guess, that specifically, be I year? growth at double-digit could So, your next is you expectation

to believe year double-digit CAGR will generate a exceed We going Jared. to morning, in to we're everything organically, whether achieve fantastic that. the XXXX We're over is three-year firmly that will Good the challenging that year do be printing to the going that XXXX, year that, going do behind challenging able double-digits to to do effort. double-digit. the be going know period but the we to that's we yeoman's be to especially, purely you that. certainly acknowledge a We it's optics in XXXX. But, so can given be

more it's XXXX going to we're So give I've that be other It year to any got. starting it, gives certainly strong. a us have than shot here. it difficult we've we in but very everything been out going at is that encouragement

quick follow up And helpful. That's me. you. a Thank just Okay. for

Now targets? that capital favorable thinking your possible in seemed participating terms long for the Have secondary? language of you've done some appetite was X.X% on towards leverage buyback, like your the $XXX X.XX% you your million returns. to term a on change more And that does the of changed

after that XX% company after to No, with levels to in our stock visibility haven't. point it to circa that, share be to the on to how turn we year's have will estimate. The that thing year, which, stock we or with more next is It's times ridiculous by year that rational today. should this a that than history trades the deciding No, have prices year our continued growth of the of we get dividends only sub-XX capital back business, No. of lot will is we things buyback have a via out and that whether return decide the the of time haven't. stock, certainly, see we depend we

So stock the we the our market grotesque today and certainly performance reflect hope into that that there's the disconnect. price back will a rationalization comes because

Okay. Thank you.

comes from with David question Bernstein Our next Beckel Research.

Your line is open. now

Hey. Thanks for question. the

which explaining XX% about I that be from does in wanted sulfur what guidance, then your guys dramatic you Day, feel XXXX your start little of I fleet on So account sulfur Investor to a and follow-up quick exposed why? as will and that low extent effects to decline ships guidance were didn't giving And to touch you some IMO scrubbers Could just the to that. increase some in lower you a bunker? guess for your on At expect XXXX install is a and also pretty fuel that, curves has bit fuel. forward would you by the a

Yeah.

curves we HFO the So our the I'll XXXX at pricing. and take potential first. take the in do Yeah, look account do estimates drop curve question into

flip on going an increased accounting for the be is we are also MGO. expect pricing we to side, On what

that that account in our watch we all taken carefully every So quarter. into and estimates is

to it's on terms our installing fleet, couple In scrubbers it of really comes – down issues. a of

was we smaller the just areas So the some of take take in question it the with we becomes cost versus those the away burn potentially to of space a public ships, to generating revenue didn't the cabin size real from wise and vessels, Oceania our feel and areas. a investment fleet like if estate And ships, it cleaner of fuel. the Regent

are don't smaller way the vessels is because the or vessels, in on make given ROIs fit. of are deployment today's of sense technology vessel. scrubbers the they some of they the some age don't the the don't just simply in Yeah. because the built and size or and simply stack And either cases, installed, cases, small too These And fit.

we we believe will of fuel. be analyses of may heard that cost at reduce options. closely other very, be certain there available, are this less and look blends the So very that still sulfur fuels the that will that there We've

that I forward impact you our new regulation impact can in that and of IMO that it's but minimize to we the everything reflected guidance. early, assure is still done So the fully we've

That's we Can assume scrubbers that helpful. and Thanks follow-up. NCL XXXX? quick all have by or ships a will your

couple not. Investor on XX:XX and percentage have them. will Day. a our majority we that the ships, older for when the of There most estimates gave will are the vast split The accounted vessels, likely in And the Spirit Sky was

much. Great. Thanks so

Our with Farley next Robin from UBS. comes question

is line now Your open.

perhaps Operator, someone there? else. you are move we to Robin, can

open. now is line your Robin,

can now? you hopefully, me hear Great.

Yes. Hi, Robin.

making was I is nine to about understand, a Hi. revenue in in the with Leonardo, starting Thanks. wanted a this year of change Two guess, the ask change since trying topics. the China One record is just ordering a in with ship the of order the may what it think years to Joy, firm for that lost deployment for I'm be order. wondering the is I advance price for that so of outside color then reason for looking year? there something And And second that? then I'm much what next it in the just just attractive far I up Was committing topic order advance. in more Joy, the was there? like some are also the also of just and April out, looks that you expenses, Thanks. going $X.XX called firm

Yeah.

on it – the I'll Joy. with start So

increased results, that's points. so short in basis blip overperformance terms believe And in primarily as The radar. expenses some is announcement of of from operators we split as really which compensation. we it disruption financial our we $X.XX to this XX between our did revenue And dilution marketing related management lower to that's costs we accruals of term impact thought new there about remaining a itineraries. did to the incremental to estimates, prudent just have so is on costs made So increase then it's market the have we but when a our – we a our are costs. and our of incentive And cost by bit – revenue increase, bit for due our evenly we've market we year, a the

pricing. were And work. strong And construction That's slots or Number of the second, order, one as couple as companies lock able competition Leonardo there's suggested, is there at why the order at as cruise the between it in, of factors a in that shipyards. is. the you very is the book favorable long we limited terms to

the the trying the at engineering. we're contemporary product, business, typically that we right remarks, cost a that opening We're We all brand: the it's of out end a as know a of Bliss just excited high perfect for announce very a just the vessels in this think series you Norwegian As that and vessel, the brand to my bells averages in very what order Leonardo will on and love about Class. going in this that of the customers And high others you to I are and at whistles is time. mentioned few have that priced on the is space. with accomplish

coming supply So known have quantity being the a at being able to known motivator. and growth slot was secured the prices actual secure primary to of able

lost I might Robin we have again. think

line the Our Greff Joseph JPMorgan. comes from next of with question

line now Your is open.

hear you me? everyone. Hey Can

We Joe. Yeah. hear can you

Montour is for This Joe. Great. Brandt actually on

given was next from promotional incremental in the activity the any kind you with pricing could of give from hoping capacity Caribbean on your them? tonnage older some seeing I growth, first any dynamics excessive or the reactions Specifically of maybe us What color you're other competitors? type kind So year. half

has are pre- bear of sense And how had in mind, Yeah, storm active the (sic) a lion's Norwegian Brandt, first the we I'll it's give give you last pretty where Andy. I'm that, season is doing. the you everything just I'll as for share year. on take Caribbean going to products. we're we touch to

storm about really that active is of we're with should load up happy and the what seeing. trends. So we're We're on season last We're think up was we're Caribbean positive time the where coming and period pricing you other that seeing depressed. were the somewhat momentum XXXX, Caribbean. year's a And both on to in bookings for thing

this had assuming strong momentum don't to ahead we've got with past storm feeling season, time the we're have that – the likelihood and similar good year. given about to we pretty be last Caribbean a pricing, So, accelerate load the position next we continue year, and we on of – that for that,

We far we are and happy concerns storm and we're anything the momentum don't that feel out unusual year's really activity, As I driven were with see past say very the much season that nothing would last that the as pretty seeing competitive there. by unusual. we're

kind you you color. And of on then on a more us type what you testing Freedom expect going give follow-up, like? early this of program think some rollout kind details getting as wondering look that's incremental it or to do is could what was year, on? benefits, I later And if starts color any, a of great That's the if financial implemented

Yeah, Cruise in much very Freedom is process.

company a we're with that the and very proximity view As on we with much technology. we've in partnered about talked And as who track we've leader location program.

Our will now technology we from board. that have of intent this ship every components is roll on new out

in talk it and We delivery Alaska ready And her about to to experience; testing ready going about revenue going the that's of will also any it. improvement Norwegian really starting And out be we of we will elements of season doubt drive we're it's through no with with Norwegian great any really mind There's on We're of Bliss onboard opportunity. it's drive opportunity Norwegian think detail talk to but guest a to come Encore. believe not not yet. Encore yet. my to elements to details that in

the time. Thanks. Great, quarter. for Thanks

Securities. Fargo Wells with Conder Tim from comes question next Our

open. now is line Your

Thank you.

prices. organic would net half those year, you any your this clarify, way here, to out Just Joy like and then And seems the what second yields if be? Bliss strip it negated in on XXXX, the itinerary with concerns now your fuel the with mix on fuel increased in that here the IMO side with XXXX, on changes you've that the largely based current

yield Just moves any just would seem position in XXXX? comments you go then what's there to that along then with continued better how and

very evil in are years changes our off. at Fuel revenue. and don't we we've ways fuel look at maximize both paying hedging can look our we a Joy investments They or all maximize install a to technologies. way Yeah, prices. made the and do as We the everything the changes necessary really program negate profitability, other over we to to to really minimize it, the aggressive is itinerary

way business, your I our look guess, for net when And at we negates that are organic but it frankly yield. how let that's can at so, the discuss quite motivation what question manage doing one regarding that And not we I'll you the other, did. looking Mark to

my prepared basis which roughly organic yield, are said points on the I as Joy. remarks, in X.X% includes we year for XX Yeah, the for estimating the net so

the So excluding we're both clarification. and X.XX%, for that, Joy in and Bliss just excluding that's

that. very happy we're with So

market on-board one of if And out largely great is, I be? maybe and gentlemen, maybe deceleration the see those you seeing little ask there, into another way is a it Okay. Joy, Joy North you we that until get here, clarification bit pull seeing and performance or if it related? what we'll American – then may, guys last had And would repositioned that to on-boards

been been revenue a statement. bundled necessarily we've saying, so look GAAP the Yeah, on ways one to in numbers number the now reflect financial selling as that requires true you on performance at our that basis, the us don't when allocate the we've product

So you to I us that for the you on-board would X% up stripped if the be out out stripped showing the number think quarter, our the revenue is GAAP allocation and X.X% but closer zone. Joy

some Mark? Joy is expect And then, changed you reacceleration over once

being That's I because American where that's big see versus Joy part North the opportunity. gap in with we that's – the the market. Certainly where think today of the

on that front. expect definitely we So improvement

Okay, thanks it. confirming for

one for operator. We've got time more question

line from comes last the Our of question Badishkanian. Greg

Your line is now open.

you. thank Great,

terms well in particularly whether your did maybe that drove the sourced close-in of what relative passenger or second that So bookings, so came quarter of X% guidance, expectations? in versus yield improved X% qualitatively destinations business just guidance to ahead well outperformed net it's

was much quarter anticipated. second really It's than of we number a better things. great, Yeah,

not our of. which onboard our it pleased a particular also of high health then close-in fronts, so So pricing the strong very remaining was of we had business. And saw very for our the great we rest area. is we're very in revenue our expectations which indicator outperformed one that strong we Bliss fleet, coming really really But all the demand, the inventory on with had, from

lapped you going Okay. easy the year. we from mentioned compares And see hurricanes then also to we're that last the when

So are you your terms continuation so least what the an acceleration easier? of Are though just of even a bookings in of XXXX? really at get guidance compares are kind easier assuming there's you in compares trend for or assuming assuming you

Yeah.

year. position versus were Andy where our I today last what still last mentioned, we're think, comparing again, as had booked we are seeing we year pre-hurricane

the see see So as should in year in that over further versus this definitely time spread position next weeks, to a expecting we're last we booked improvement. we cross so that year, same few definitely our into

Thank very Thank Okay. much, you. you

you, everyone support. your And Thank you time and for Greg. this morning continued thank your

As to any have. you afternoon answer questions you. always we will this may be available Thank

This concludes today's conference call.

now You may disconnect.