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Norwegian Cruise Line (NCLH)

Participants
Andrea DeMarco Senior Vice President, Investor Relations, Corporate Communications and ESG
Frank Del Rio President and Chief Executive Officer
Mark Kempa Executive Vice President and Chief Financial Officer
Brandt Montour JPMorgan
Steve Wieczynski Stifel
Robin Farley UBS
Vince Ciepiel Cleveland Research
Jaime Katz Morningstar
Stephen Grambling Goldman Sachs
Ivan Feinseth Tigress Financial
Call transcript
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Operator

Good morning, and welcome to the Norwegian Cruise Line Holdings Fourth Quarter and Full Year 2020 Earnings Conference Call. My name is Josh, 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. [Operator Instructions] 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 Vice Relations, of ESG. DeMarco, President Andrea Senior Investor Corporate and Communications Ms. DeMarco, please proceed.

Andrea DeMarco

will joining Vice will Chief commentary, call. I’m Thank Thank to today Holdings; by Kempa, quarter good Executive and Rio, the joined President of to Mark begin full after call us President Norwegian Mark Del for Financial Line and and handing earnings you, Frank fourth and for and Officer for Officer. Frank results XXXX opening morning, the with which year Frank before remarks. our Executive Josh, you the everyone. follow discuss Chief for quarter closing back call Cruise

will We the questions. open then call for your

conference company’s is on this webcast www.nclhltdinvestor.com. at call Investor website simultaneously the being As a Relations reminder,

for slide call also be also Both on which will references We presentation following make and during will for the this call, Relations may presentation available today’s call. our replay website. conference XX Investor days found a be

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

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

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

Frank Del Rio

like our joining as shown has challenging eventual weeks response the to I an pricing commentary few of pandemic. incredible for be of loved you, environment, month our booking view last the global overall today our particular to hope we what’s which as what morning. to on service. earnings and that and healthy that look recent good an strength your Thank safe. we The call, XXXX the focus would and us as Similar COVID-XX and will may today prepare everyone ones in remained say progress had To well understatement. return Andrea, our that

entire adapt halt to our and our of one was instead be it After That difficult safely history. a toughest the returning multifaceted to doubt, without of in in upward company’s bringing became ability taking pandemic. set disappointment a the nimbleness well home. decisive of March and These challenges even As quickly XX to XXXX, by hardship last successful more the year than complex literally proactive foundation the actions our more breaking year a XXXX a guests’ which year. we changed year included actions great XXXX had followed overnight trajectory, and to by and our to by on overcome was XX,XXX and record for our rely plus presented most a however the and swift fleet logistics

of do gives markets are our so and to establishing quickly We of challenge billion team again reduced over payment time our me perseverance and same adapt, the excess our health again. safety all our let and finding incredibly to through have I’m XX for bolstered XX,XXX continue tremendous the edge past and resilience crew Panel. our repatriating and and for will and what liquidity flawlessly the of members improve The many. by unprecedented totally challenges. enabled $X while them dedication innovate to the Sail who the our to came transitioning grateful company execute demonstrated profoundly of co-founding Healthy multiple Next of in faced standards confidence and efforts states various proud while of cutting in we team capital to vessels members transactions and our with industry

world, As how we both transpired it the extraordinary much survey is the and the in our few has update. around just to public health consider current in last situation months America since

As expected, the resulting lockdown fourth the highs restrictions. stricter in to caseload quarter record drove renewed resurgence of and travel global virus

number today increase During systems authorized – being online align. across been A coming have ramping programs that in in distribution, vaccination this the for since the the forward breakthrough time, up needed vaccines globally emergency will though, doses decline was are defeat currently perhaps use. while the was administered were several manufacturing, mid-January, only as globe million the simultaneously most are where important of that to daily. Fast X pandemic healthcare to over caseloads and

that for the primarily the reality, us to downside does direction continue In Public restart not on will but experts while we’re the directionally, in of sure, decline headed what cruise three So we’re to eventual caseload cruising. do predict put industry? that already right reasons. an in health

the significant a of and First, population already been has infected recovered. portion

we of ongoing halt scientists yet The not to completely woods. And made. must and far moving of out move not all caution health three the the and will public number are of troublesome of these we remain the are into variance from we of environment. spread lastly, the of right increase. rapidly to will rapid protection Second, vaccine to spring factors individuals quarter third continued but while with a are is crisis expected combine fluidity progress two that sometime the adapt to the and variables the herd the less between soon begin the being summer the and vigilant And establishing in that during to over, durability slowdown, main vaccinated we direction, immunity season. ready All could

few shoots. next weeks. the lines halt, Our resumed industry some in cruise has to recently operations European nascent Europe to are one since planning caused service cruise temporarily quarter first green encouraging seen several After to have or the return resurgence in

late Sail that seeing to decreases European So the doing hope guests international will likely border Germany. cross and EU spring, and essentially include The in new will additional liquidity, we our detail expand we to Italy governance to from call. financial anticipated we’re on the nationals as expectation initiatives, crisis, we prevalence XXXX. quarter, in nationals recent service the providing social what virus more sailings amendments, touch remaining and advancements manageable $X.X third first by we to X as is key actions our SlideX, which races the and can in fourth Slide have deferral of debt a additional our in two on on Shifting approximately mark continue our quarter, we quarter level. resulting call, control. which and the CDC’s presentation. continued Subsequent earnings progress outlined Order in later to capital October, flexibility return conditional to milestones can to the several On I focused of environmental, These this issuance be the on last found navigate billion company’s of of undertaken include

to countries. anticipated there decision unfortunately layup up postponed, to we cruise by new and a for the initiative certainty headwinds, health is suspension. With ports us So service board certain that reluctance a and around public confirmed to beyond up new crew caused reduce restaffing of the made to most their all service. status, phased additional relaunch This timing been on the crew and programs, until difficult back hope several restrictions, a marketing their to begin variant, ready world lift important of to the much X,XXX rollout lockdowns and a met work, travel than change eager took ready from time the crew a cases the QX return to headwinds usual to to and for contracted of to we to ship to rested, was authorities These vessels it ramping a course, the had of status slower decision initiated takes on opportunity activities. rotate days was key rise of with members most repatriate with notably, manning of crew return which emergence vaccination to reenter term XX made home select vessels and continued combined with the highs closure

Next, actions then an on. we a call. plan, to bolster the liquidity strategic continue which update to Mark incremental taken in action And on have our later financial execute we the little will provide

which along and with Turning Panel illustrated Healthy on roadmap health the other X, is to of Slide to to relaunch, safe authorities globe we cruising. Sail CDC across public with for the the our and healthy resumption the governments work continue to and prepare

our tracing, public state-of-the-art guidelines on implementing safety the from technology rigorous for technical other we new and streamlining world, officials as our CDC make for as progress drills continue around standards, we digital safety with and contract health to already the health well As eMustering including enhancing technology. advancements, await additional

Sail of crew we Healthy in by our to Panel XX and ship’s keep confident protocols developed While are the guests ability the safe. the

rescission expanded we secure expect procurement believe protocol widely are of crew view with combined is to strategy waters guests quarantine key Thankfully, from may the for on depending the the suspension the and along will that cautiously communities vaccines. XXXX. on optimistic defense to we be Throughout of now vaccines of That roadmap an on and safety of in appreciate well the of and virus this visit. status assess await when world measures process. the operating a a Our the vaccinated step the ports other lockdowns travel tool. the We to announcement COVID-XX are A mitigate Canadian be cruising in next order ships frontline preventive already we certainly in then, reintroduction authorities through availability. is possible. most we health in remain physical factors. to allows We to operate by that Canadian in We Particular approach XXXX. that several the of mix with introduction, destinations the and industry Alaska risk repeal combination subsequent world. experienced to also Canadian health. Alaskan rescinded travel other acknowledge protective time of restrictions, with importance around distancing powerful communication be multi-layered prevalence industry our include public the to vaccine of infection. tool, And port pandemic, benefit in And powerful able travel vessels in requirements our allow and initiative, the constant recent improvement has the cruises the to the the resume, protective the to and the by may and with cruise February has that meantime, established and developed such a sign-based provide protocols we forms will as would COVID-XX our by along society Ports crew various the coverings risk available as measures, of today powerful want be accustomed led which from the delegation will to, based we restrictions, vaccination today and a greatly board restrict in of has to we and face the mitigate results for

machine, to marketing in guided know, step to begin third our leading which our versus The our and fill as sales industry strategy. market you reactivating sales fill discount roadmap is by to is

pandemic the have We this and and back half strong XXXX the demand beyond. environment, generating for especially revalidated of XXXX of demand effectiveness into the strategy in

we a plan. process discipline finalize sales up once and efforts will resume resumption and voyage of initial marketing We ramping

of our there to certain timing service, the our resumption cruise voyages. before a gradual once is and Lastly, approach to on and return continue return in regions others. to could Depending phased vessels of expect we the certainty,

of example, seasonality in season the our operating with the XX is this during year the given key operations, Europe, our initial XX a of of Therefore, deployment role vessel will vessels. peak the of deployment our ships seasonality in likely a play our summer region. typical For concentrated in

experience so the all-important trends, reduction demand our future agent despite temporary marketing Slide full the X, for uncertainties the of to partners. how of absence in booking demonstrate can we broad you travel cruise investments Our complement of vacations, generating on demand continue the see travel sector, the strong and

line by future and XX% by impacted shift half of for second February the factor booking brands encouraged and marketing load across over by impact very bookings. levels, early of we credits in XXXX Volumes and for pent strong and by still are value on new ranges the XX% despite pleased voyages. investments over below the And all XXXX, activity cash the while pre-pandemic of voyages. where voyages. driven canceled bonus added our sequentially diluted to very the November December demand continues XXXX, timing For the as an improved in cycle, from uncertainty Pricing these XXXX cruising is the during around cruise up continued limited booking and resumption January three to of focus be our of added with of historical bookings

of strong so we investments, is results case voyage XXXX is are day which world for of is opening per our even point the For A global mid levels sale pricing yielding half all vessels future the that pre-pandemic for travel currently single sold limited at cruise XX in marketing of out experiencing of and general Cruises, in with digits, cruise, certificates. dilutive our to fact, our our global ahead the to first abode record Consumer of ships, excluding we collections. up with outside well with and but future inline when XXXX public. demand one each XXXX, and of are itinerary launches XX for load award-winning appetite our factor impact brands within Oceania

approximately the addition affluent I’d to cruise but achievement financial subsides. back expansion multiple and bookings the We long up has versus in from during last guests. remarks, impact new voyages, even along turn a advance all once to to of the came past from this with a that for we demand of This our resulted update. for to now, the significant further for mature In closing also for double of and records which exotic be curve the is first same over in to to loyal I’ll with months the voyages pent for believe demonstrates guests, severe like have exists call Mark time one-third announced quarter, recent brand booking our pandemic cruisers, booking now demand the fourth the coupled time Mark? year. later sale provide this opening

Mark Kempa

the prepared to modify our My control, as our strategy on pandemic and what our plan, will Frank. areas COVID-XX global on we can proactive continues we you, taken we focus needed. roadmap focus measures continue action beginning additional to illustrates evolve the to continued quarter. of The today execution well are and X, Slide the as adapt the focus of our Thank remarks plan and relaunch. three since as of and fourth action to

and capital expenditures, First, expenditures, non-essential reduction initiatives, furloughs marketing we shoreside extended salary and have reduced operating of three for further including near-term expenses, number deferral team or capital expenses of the of reduction reductions members.

expenditures years each reduced the XXXX we and In capital for fact, XXXX. by approximately XX% of

quarter finalize deferral new €XXX we of shipyard of the the end building related addition, through In million payments of XXXX. the first

facilities secured XXXX also to pride June end relief debt to million extends of due secured to of credit Jewel have we on and flexibility were also XXXX certain of maturity the the through improving following XX, able near-term for covenant additional pride Norwegian credit Second, our the America defer profile suspend amortization the This facility. Jewel our senior in through testing senior We facilities payments America, for amended order of provide for and made and secured actions. facility. We significant $XX financial senior maturity progress covenants. prior year through to credit

secured million $XXX backed amortization first payments we XXX% agency of through originally due quarter payments, our representing export for our Second, XXXX. of deferrals of approximately credit the ECA

We end received waivers our fourth ECA of quarter also of covenant XXXX the facilities. the on through

and [indiscernible] relationships credit behind support longstanding We our from have agencies Hermes. our export with strong tremendous us

period. In transactions. of equity proceeds nine-month these the a partnership Our fourth raised an five enough significant quarter, we XXXX two shipyard. due pandemic their offering was In capital. oversubscribed as net million December, can’t The of we to November, of action additional over unsecured focus ECA and through the million ongoing times is the our $XXX unprecedented times. securing X.XXX% role And this successful in in during them commercial of we’ve accessed a ability To-date, thank and lenders, final senior shares. continued for offering. weather million XX capital ordinary an we executed $XXX Their as plan assistance well our and we notes highly issued playing area in markets

nearly As work to the including execute incremental not who drawdown the been accomplishment $XXX pandemic, a billion, early of million clock hard without tremendous teams, last raised on revolver year. we and of accounting legal our finance, have would of of the the worked result, cash This treasury, $X.X have these initiatives. since tirelessly the onset the possible around

and our also have you We from team our our business we management of long-term in and experienced company. an support the incredible Slide conviction having outpouring and again, in potential thank investors of our for deferrals enough response secured can’t the million, payments minimal debt resulting we service X, the XXXX. quarter, maturity of debt approximately our crisis. debt remainder Since the for to amortization the of of profile and $XXX in third outlines improvement model

our X, liquidity liquidity, to Turning current Slide provides illustrative profile.

the payable was included which of includes total refunds are as customer at that Our deposit end. of approximately $X.X billion, liquidity year-end accounts portion in quarter

approximately safety also estimated anticipated health have We investments collateral other million obligations. and $XXX and for

we factors through health result and enabling and a as plan. execute various approximately illustrative our a investment our safety continue net fluid billion, we profile. combined navigate our requirements this and of liquidity service continuously us through investments $X.X earmark we protocols, the work to variability improve and liquidity to forma return in These on on environment in basis While this anticipate our refine to to in pro wanted

the progress controllable As for reduce cash watermark cash. operating the of representing rate in normalized XX% crews expenses pandemic, low in and further have the nearly significant a we our reduction cash day conserve out to work team in reducing our levels. Since continues expenses and made to with burn, burn day beginning versus

included burn a included in to expenses million. early related investments vessels Frank per cash was earlier. $XX monthly average preparing million This month potential and XXXX, and approximately to due events limited For additional service increase the or associated marketing return fourth discussed as rate quarter, approximately to our $XXX

elevated result burn $XXX non-recurring ramped the Once quarter in which is expenses first as million complete, newbuild one-time the the we to costs $X modification million average per efforts and As crew. of and incurred expect covenant to in reduce the remain the burn it and cost cash waivers preparations debt average approximately over combined relaunch-related per debt resume. and quarter, the we repatriation we months. at next relaunch-related month, our a deferrals month of service million non-debt with temporarily resulted that for $XXX we excluding Approximately approximately approximately down when to – recurring additional ramp including the or return of repatriate payment expenses, are have expect down XX remain cash crew extensions, billion of decrease levels suspensions, $XX liquidity until rate

take continue will we to costs a reintroducing as to voyages resume order conserve to disciplined cash. We approach thoughtful in and

at balance cash While the the same to new need drive time, bookings.

quarter and fourth approximately of Slide to $X.X cash billion with we the equivalents. XX, Turning ended cash

proceeds Customer operating CapEx. offset $XX million burn, Our which safety refunds driven fourth and expenses, of approximately outflows $XXX raises cash $X.X includes investments. million, approximately million operating canceled $XXX by includes increased by other working voyages which and of capital cash capital and for approximately interest the billion quarter SG&A, was balance in of and cash approximately from net and health partially of net

metrics. around the voyage guidance are continued not provide of yet we prepared our the uncertainty on to all Given resumption, timing

be business in related generally presentation. year. capital found expense per newbuild have minimum best-in-class amortization, earnings on interest needed of maintain hundred run we is to expenditures dollars modeling, which required depreciation and our the few can provided our and the fleets related expect capital and expenditures on release Broadly Slide a expenditures, and speaking, still the excluding capital we million assist to However, newbuild with XX guidance

our the business while Before prioritizing also needs, on reemphasize I immediate handing to of back, we want that we our are future company. very focused call are the

medium XX and on recovery critical plan, long-term components. Slide Our three was financial which on provided focuses

continuing to expansion. to drive gradually identify to opportunities and further pre-COVID margin levels, margin rebuild while First, returned

and Frank cash back the our commentary. balance And sheet path I’ll maximize a closing optimizing charting to to Second, With that, focus provide delever. over on generation. call our to Frank? third, hand

Frank Del Rio

Thank you, Mark.

health the protect the up prepared is program, inclusion our our our preserve remains today, current our and very on we everyday and visit, like the I’d provide the face, to challenges of commitment enhancing environment update culture to an core and wrap sustainability Before destinations Despite our remarks global public we we oceans, Sustain, of which Sail while Slide on operations. of and equity diversity, our workforce at XX.

and have launched that XXXX, and our So for our in practices. diverse unconscious diversity global we inclusion to and bias, microaggression expand committed workforce hiring training

most efforts also growth are our and program, facilitate to supportive upon workforce supplier encourage maintain small across resource, strive a me and our the are – of businesses. our far to of empowering as diversity team building members this to We workplace during and been has diverse clear that part for members We We our and important the believe never crisis. globe. and team our by

the pleased the are with ranked We companies Best to our at in among we in naming companies team’s leisure development the top and travel this our large sector. list, in category among commitment overall recently and recognized XX was Employers Forbes the XX and the employer wellbeing which top to America’s

Category Just to trust Water initiatives donations in we in case goods. of to in and year, through Giving goods in as and two New are our we $XXX,XXX two the efforts past to launched that community around of impact Archipelago programs purchased our with Southwest in currently winter nearly also store the recent partnership Just online back are to we by kind Furthering provided choice. areas we canned in assist Goods, Donations the Water States to a banks in of organizing in to after beginning York ingrained organizations and located this partnership ongoing Hurricane matched day and Iota. truckloads with Colombia, volunteer community devastating we this water of demonstrate United the and paid your members, our several community our Just in year, process have are December the communities affected and food the to Miami Just to storms. of been also every X relief water the San donation in supporting further Andrés Dedication local Separately, our culture and committed City. form with of support shoreside of visit. the Tuesday, destination food we we This their JUST members, team commitment benefit local of of offering U.S. is team we family support severely give banks non-perishable

we environmental improved the to sector, score North average. in our which our proud global America B, have CDP late On second front, transport is are climate the change marine to submission than and higher

we enhancing on on transparency. continue For ESG as provide additional with focused our XXXX, to will sharing be forward you journey. we our look details to disclosures I ESG additional

to takeaways. key XX, to final Slide I’d you leave Turning a with like few

to science the as of advisors, possible. to are And safe focused refine plans with government on or First, authorities back global and a roadmap agencies as to quickly our and healthy work execution we’ll our we continue to health relaunch public cruising. return swift, our expert

strong extremely Second, across deployments load besting cruising early And margin. by for bookings are a for high continue. demand future substantial and factors, source markets positive previous with indications our XXXX all brands,

please Josh, are the call experiencing front, extremely health Thank in the well momentum you. that, questions. prospects. let’s future balance longer for focus, coupled and in Lastly, to demand we both improve be term our positive with Strong sheet. ready financial open our And execute to the on strategic and for we will plans recovery keep public priorities to our with continue we our

Operator

comes Thank Del with you, from [Operator first Mr. JPMorgan. Rio. Our Brandt question Montour Instructions]

with question. You may your proceed

Brandt Montour

Hey, Frank, questions. comments everyone. on wanted Good taking maybe just I for on my Alaska. your and back morning, to up thanks follow

Alaskan try sailings the where that much you industry’s Seattle, referenced of from assume the You I arriving leaving for of I your salvage sort guys business. to are and the of and attempt some season. do know

maybe then So on give I the remind just success of and Seattle. those out of if business portion just that’s your your in us us the Alaska could potential talks of and guess, you view

Frank Del Rio

be. what predict, the will to difficult It’s outcome

trying situation Canadian with been that spring the the in Alaska of And best. encouraged officials. until various to their XXXX We’re and noted closure do they’re government by has

the is in And certain over cruising As XX% tourism Alaska. their is for you of coastal largest know, industry tourism communities, business. third Alaskan

they them. And we Alaska operate in so be without to can this activity that’ll XXXX, years will of that’s infusion going that and go two for if be in business difficult

a jump through so let’s – hoops we hopeful, And U.S. as today water. cautiously to face Alaska optimistic, and the both side cannot waters Canadian also it we’re it’s from of and lot the operate of in

So bookings taking new we have suspended Alaska. on

delegation open I we do whole some think by led hold these industry out But the initiatives do hope Alaska the that hope – has. we Alaskan can XXXX. up for

Brandt Montour

the Great. Thanks for the in made that that. that XQ you ask think efforts about repatriate announcement the reversed. crew. also I relaunch And then you I wanted you would to that And some

I think that was as of late January, you made that announcement.

CDC those I two murmurings guidance, to folks latest so industry that now. just send the day maybe reconcile out understand to maybe and get your could things on. any guess, the you process and decision the with I And of timeline want

Frank Del Rio

Yes.

back, I It weeks, The don’t few as we the a terms our not decision believe approach CDC won’t let’s CDC few to green this of because there could would don’t simply label simply an be in that clarify we But a doesn’t that correct. expected. first know. has could be a few out, it of I guidance of pull a the to – – taking. next And in – to I that sometime know. think conditional Order we days Sail I look, and when Sail next conditional that a That days, multi-phase proved be CDC Order. future had as there of more came first things. few difficult industry is the phase expecting was it are that couple We we great days, the are light cruise, awaiting the the expectation. be in than don’t

of were in spike also the a the number cases. middle in of We

take And to heavily became initial quarter, going of focused is begin us could Caribbean in was expectation the to on so obvious industry theater place. first cruise to operations, it the which the that that maybe not

so And decision ships we and along our operate. burn reduce have back cut those thought that to ramp on marketing begun the repatriate the crew home we expenses with members we down that up could to took we difficult the cash to

that And so resume of today, the one encouraging I end at day, the in of believe six talked in experts we the prevalence Panel continuation to as place, Americans recover. get I the the X.X ago, summer, of and day, own a would all the And million tell place. greatest that Healthy are think even more you be And we indicator and can more that a see spring prevalence enter Sail including better the drop is on going country the we infected as And weeks disease in our continue of around to, dropping. we the we over we a will cases as just people world significant based were we’re we the vaccinate a cruising. to

point So direction us better into the all to a where drop restart opportunity things should operations. a those prevalence considerably giving

Brandt Montour

the for Thanks helpful. Very comments.

Operator

Thank you.

Wieczynski from question next with Stifel. comes Steve Our

with your question. You may proceed

Steve Wieczynski

Hey, good guys. money

smoke up you component that bit? signal or commentary that would to CDC the kind all of shorten of days the cruises. on about Just if get still to the there, that start Is test phase guys to need up – last that a you and Frank, to to test add clear your little kind XX could gave still you

Frank Del Rio

day there of sort a having it know waiting not it’s period, XX we’ve that, been with hard a the I them, conversations XX and days. is can think be short We that

that the But summer they’re is around a summer, generally, – light, on much think but that don’t the you the Panama where purposes, think, in are not the get specificity up, where seasonality, that less? they’re are they believe from guidelines, could stand moment that received less. in in give be like on the in we the green I ships Europe, to we it Where winter? to kind I or planning world. we’d But I They’re that are want window in for of know, the on how Mexico, depending ships depending ourselves generally the XX-day primarily less. fall we’ve more Caribbean, Canal, these Alaska.

cruises end of canceled we’ve the so through May. And

that you that future. sequential. always the March, window. of available all March start bookings is chance our – your as we everyone all we whether and agents, And all know, a of consumers, if we to the to count believe, or Once X, So cruising employees so it’s long XX-day of to operate. May. we so in travel as And we keep with cruises ecosystem, April, can cruises entering we own We fingers, there in it’s cancel crew basically

we that we’re health possibly we So always improves can. soon restart can as public and situation as hopeful the that

Steve Wieczynski

And in other into Thanks, three wanted your has then demand more bit similar you. Frank. verticals. across guess, we dig have you Got little sense. strong booking changes I a all seen preference out in across I very trends brands. of pent trends length destination? from seem age there itinerary of the brands, booking your terms And would in booking. demographic across second or indicated demographic question up has but makes I plus of that around their that XX And active terms given any brands, question And hope your be Okay. in been luxury pretty know been I consumer that the is, to the

Frank Del Rio

It does been off about mature in Steve. people early market. make And pandemic, were sense, writing the the anything it’s Look, that.

brands of being book brand, exotic contemporary the tend further further you to itineraries, the because the out upscale know, than partly itineraries, everything So people out. more book longer else equal, the as

are and both I Oceania they’ve the And booked booking so for much at mean, stage of XX% cycle. this we’re been better than continuing That’s to see nearly ever XXXX. that. Regent

typically the are vaccine XX-year are olds the the age these folks are these Oceania are XX, so range. want XX first booking And over got XX, and they the money folks Regent out. they’ve been the and consistently or And in I of out. is at who cooped olds. XX-year up getting and further and mean, and They’ve age average further the they’re than different age who they’re no go to

One, our what three bookings someday being remarks, And the but and the And that tomorrow, end People sailing, will that no canceled. are further know because or this four further been further people someday. is they’ve pandemic up. And in booking two there prepared is made out. that’s months are for booking next literally said we because curve is. now of normally double, reasons. As

more we ever future visibility So than we’ve have today business in had. our

the that our encourages of and Fundamental things cash ships new things those bookings that travel a minimis we’re a to amount people do of to back And demand to of the being to days, in the consumer, system is love at the hasn’t strong to that’s with be no of Steve. It’s worry with that pricing high is marketing I not doing new than have of to we’ve points been so terms I And bookings, get who one factors resiliency able XXX% doing consumer one me changed. of fill seas. truly value cruise. that. the saying for load most. There’s of remarkable. them. de what the these less And resiliency eager about mean, are lot ability the about to great And years, the what again, to our the question agency we’re and

Steve Wieczynski

Thanks the Appreciate color, great. it. Okay, Frank. for

Frank Del Rio

you, Thank Steve.

Operator

Thank you.

next with Farley comes UBS. Robin from Our question

You may your with question. proceed

Robin Farley

the Thanks. those with, getting great. their are of kind line Okay, of you’re in operating thinking benefit Panel just cruise on just the cruise Asia I’m learnings Europe. starts whether looking the other at lines regions. that curious, and operated Thanks. other cruise some you’re have Sail the particularly and of in sharing are lines that protocols, Yes, in Healthy

Frank Del Rio

find to our XX the whether And industry that are it’s we compete don’t operating, develop us available Robin. entire much much been or very, industry, in has Europe Royal do protocols cooperative that that we to Sail Asia We the Yes. health made findings, very has the and entire Hi, we Healthy on in one and forthcoming, those the them. like, companies brands Panel, safety them Look, very share adopted issues. are industry another. with

dynamic. very healthy a good it’s So and

Robin Farley

Thanks. have out but guys this, the have. you I guess answer think to then I youngest companies fleet follow the other and have you know I some there. a Great. can quick And up, just not sold ships any

need had conversations so something interest you the that about. all that, any thought – answer no you you’ve Are at ships. is or And maybe to sell have is about or

Frank Del Rio

produce – Every fleet. the ROI on you a we pointed of youngest their value. No, we positive margins, have book out, ships good our positive do EBITDA, one

we But that we no delivery being of the believe by order very interest. third which token, vessels that to And I and Only in advantage we any we same start selling eager not didn’t three will So time. fortunate also our new is We’ve have worry during XX to XXXX. only some the the begin on – we’re We number. an assets. this during to have have of interest quarter of pandemic, smallest been taking of have zero vessels greater in about have this the take any deliveries. big

Robin Farley

you. Thank great. Okay,

Frank Del Rio

you. Thank

Operator

Our next question comes Vince Cleveland from with Ciepiel Research.

your with proceed may You question.

Vince Ciepiel

Great. would my perspective How from few and sailings your revenue about. long think a fleet get the Thanks on do that get trial whole to up assuming on for begin take sailings, success the ships fleet the again? point you running and it question. in then curious some the or you to timeline sailing, taking thinking back have updated I’m whole with up

Frank Del Rio

start know date when don’t We is. that

right prevalence are up. the As ramping the – heading The we’re in decreasing. I vaccines direction. said earlier, The directionally, is

confident the it that months, that think date start, the is our from – whatever we we enhanced take remember around We’re What ships vaccinations. are all it the the is of opened seven will world, likely have ports said by that we past six protocols, assuming that in are the seasonal. to that

ship the week. restrictions so those One requirements that ports seven so hurdles cleared. is to a assuming think months, travel six, take are the Physically, that lifted, be be of open we it’ll a roughly

to a July timeframe in have vessels up standing the start we to XXX% operative, for June, so year. us And this would of be

year we early that XXXX. can So be end by XXX%

Vince Ciepiel

still Great. you future sounds for versus noted here held. of as has up And kind think it that think represents of was half credits, to time the cruise cash. similar future and an curious of demand were being thinking outstanding, opting of also, those It your last recently, just if that FCCs last then if And time. which good XX% as credits you I we’re that ratio interesting pent XX%, I you had cruise held on still of canceled how base last well. about about curious then number and time I

Frank Del Rio

of set exact the for I gets month like I’ll we we at since sailings, the least since Everyone May recently XX. forgot a tell you but cancel cash when of of a date, that fall, do the refund. did

an longer FCC cash. no offering option of We’re the or

FCCs impact of the effect than We don’t FCCs. negatively future We to have to liquidity business. future the existing are dilutive want dilutive more any business the

So there is choice. today, no

got FCCs roughly of It back. You’ve at brand, money we your but that time by FCCs been the redeemed. in percentage level, have over terms redeemed. And all been deconsolidated of varies have issued not XX% that of age have

quarters cash of as in of who’ve of a in the rebook. as – somehow, booking. to got some bucket we not FCCs still look, there seen remains good bookings ability XX% investment So folks, are perhaps, as that And issued an FCC the world,

confidence sure great FCC a both we our they’re and think get crews. Customers want business that they to important. who an and showed I deal of their make took in support

have actively have take extend and so. or we We We them if the date, to cruise deck, extend to encourage to want the continue, also as so the a to we to as so able as people to booking their speak, do be we suspensions to redeem if And clear want soon date we sailing possible. the will FCC.

on resume revenue momentum in industry, what can best, resume selling and ticket is when yields of onboard cruising, XXXX. can we So to we our do get the do so that we at we which that we the end both cruises at back positive that the highest had

Mark Kempa

was big business. think that, a to I just book you it on of Vince, add mentioned And said, that had

absolutely You’re right.

– think really can So as and opportunities expenses, of speaking where with that time reduce efficient come costs, down that our acquisition about we that we we’ll our us because business. over get simply gives more operating going our forward, some

a such other having good it’s our sign a positive significant And said, a the booking, amount and FCCs just So on books. as like Frank booking. are any

Vince Ciepiel

Great.

a of Thanks. think sense. I makes that lot

Operator

you. Thank

question next Jaime Our comes with Katz from Morningstar.

proceed with your may You question.

Jaime Katz

but will morning. this theoretically, if inflated burn the over help the start hoping cash half, guess, ramping you’re XQ, guys I’m June. there’s us good going think Hi, first for I number in to that you through

to people You’re you going bring remand as the costs repeat to to those back see again. ships some them and of

some number XXX it’s the better a than month, So the as maybe a of past for these ships come some you’ve in back burn, online. out numbers given cash ongoing of

Mark Kempa

it’s Jaime, Yes, Hi, take that. I’ll Mark.

burn quarter, our XXX. the third fourth in look additional to slightly reduced really some were interest third of It’s and cash to noted. some at you activities, when elevated the down in of which – primarily due our quarter, we XXX, second So we cash quarter, levels the – and startup we

clear indication activities. Some visibility of then clear we of back the year, today, be the would that had seen is to And our going beyond those the this part startup lingering that, into well with that, the in back can levels that expectation we we’re get environment down as up. QX earlier and in absent to start

to whether when on it’s you quarter, would path in my earnest started to outlined, able false resumption. hopeful Order month again, that So look We you fourth with quarter to see quarter, it’s get probably of if levels we of remarks get once Sail the upon exercise were related to be this That’s restart that quarter we when hope. the I on back, was early be going dependent I as conditional and XXXX, based light third operate that proved we’ve again, first to but $XX clear in those second a think restart the some start roughly said of the be that and really costs. when prepared a we we today, But million were get to green that again, in But a we going at visibility. the obviously, quarter. fourth we

Jaime Katz

slide there bookings the I And the then new millennials with know you’ve past. in of a you XX% some of from cruisers. inroads a about would think was have talked XX% comment the in And lot said I that which Okay. imply were were the guys deck loyalists, made

Thanks. And so patterns the demographic across more I’m in seen fleet different you’ve curious if recent been bookers. any there has the

Mark Kempa

investments that And in that spot seen earlier, greatest plus, of for slight cohort is have coming increase across all I to the the than stock are market people retired, travel been These has we bookings partly got these is the to. who the more so as XX that are our that guests comes because from. cohorts have that vaccinated the that are cash. have a those you of been from doing will three well, ones. been percentage younger tell doing semi-retired, tend well. folks the able more folks And and been And sweet haven’t said proportion is cohort. brands They’ve they historically, total I

So the greater pent younger up I cohort, is than think demand for this cohorts. for them

Jaime Katz

you. Thank

Mark Kempa

you. Thank

Operator

you. Thank

Stephen next Grambling Our comes from with Sachs. Goldman question

your with proceed may You question.

Stephen Grambling

within still, the that? I Good CDC you. about six morning. a might change the you there’s fleet. launching months vaccine framework? occupancy but level ship And moving How parts think for the do within you current how the of at lot that full decided know to that seven Thank

Frank Del Rio

Well, is yet occupancy. has give best to the my CDC target the industry of a knowledge

that range. at assume we purposes, in the beginning that working will occupancy XX% internal own maximum the our be For

on moving So fleet them. passengers, think July the has quarter, bookings for our forward. third entire available about the say, this, today Every fleet in single book, let’s in is the there’s ship in

to going to We’re going start to start, be vessels. all XX we’re able not

a that who something one week, who be part As are I that, maybe And means will will little displaced. Riviera cancellations, But in refunds. from a booked going the in there’s will in Jewel week, like from that of be they’ll which will a Norwegian people to today, get a Norwegian the in it’s Bliss to displacement part customers be Marina or of Oceania lot that move people it the going the said, Europe. their move to Alaska, in be to of Alaska is Oceania Europe bit,

booking, be capacity ships you the QX. any as coming let’s those have move if don’t we going more date, QX, online, there forward another that And so to a we enough And say you going to displaced. the be bookings start, for are ships that start at today, we assuming took believe reduced from never are more have to less – customers bookings for take

going And discussed cruise will that there, taking but I going more Because three, were bookings, our that we what fleet. entire be And earlier therefore so were thought of some there’s that there’ll we where at forward. to guess is month bookings, that excess to do we to we starting rebalancing, And the hoping four my have will in restart book when we beginning the to always start know need that’s we’re be doing. be business when in remarks, point, if that’ll Mark do won’t you a if and we at start beginning. QX. a the waiting, And you

So the better isn’t heard issue is have don’t than worry ever. a say as things of filling them. of just about as all again, vessels, demand one longer we me But of more XXXX, earlier, described. we generating short-term business – we a And you have just term we

Stephen Grambling

of have of this be that coming days be or the on out think are layup? we guess it could about shifts related an any some control, I And think out make structure, as what within expense one you profitable. Thanks. are there could ultimately be other higher? of could structurally of that that the the coming your And should that dry more a lower operations follow-up, things Should considerations the you if changed and things that’s dock

Frank Del Rio

let answer think, I Mark that. I’ll

Mark Kempa

Yes.

XXXX dry first of A the during the that was society docks continued good classification on we the Dry think, some service stopping we you would docks. at given and completed they dry of you look going on forward, of have dock, tell once made the a capital structure That the always And through opportunity the by always there’s docks, as generally to breakaway have to periods, and in ships related And scheduled we’ve within out costs have ships make. going shoreside we of highly look that be has I we pockets a we from everything think cost, going the forward, fixed every at ship you said install their shoreside. about to ships. this, By sooner. normal, to to those us restart structure. everything on not do dry pulled cost we’ve a large, supply get said to can dry are occur certain is, and That I dock that look, benefit example able cost they class. investments be our operating. scrubbers are to getaway. because on do to going is, investments chain cost that I This But is rules. while we’re were that are we the pause I of our operations. have there and at we’re enhancements on early and is And the the some back chance structure when docks, ships reevaluate our we think, stay and – really on – to expenditures Steve, dry to what have and our looking think

Frank Del Rio

we’ve learnings that, And past in think significant I mentioned the some pretty in area. this making our marketing we’re

the toward dollar bang digital to continue world, more the We for you transform there. get

activity booking of with amount significant spend. garnering a vis-à-vis marketing We’re less

are to and learnings. further, ask how that that, translate and of those So So as we for about every expansion? pause, then opportunity It’s think you you continue we’re doing to we’re taking combination think day cranny to cost the And down to ourselves, further be future, costs. I does this and going a margin look enhancement, going look there’s we’re nook at reduced correctly? that every in and

with have to expansion. new And our more capacity online program. We help drive efficient margin nine that’s build ship coming going

driving In in we’ve reduced. been again, has about you been leader capacity that And pricing increased industry look the the addition driving the top if to, pricing. line, at that, think always we as industry

So think expansion. provide to drive opportunity even margins help that that’s more of rebuild an going and margin to we

Stephen Grambling

so Thanks helpful. super much. That’s

Frank Del Rio

time have this morning. more for question we one Operator,

Operator

Thank you.

Our comes Ivan Financial. question Tigress Feinseth from last with

question. your proceed may with You

Ivan Feinseth

the taking definitely looks heavily people the And some like on to for the get of there light case. in to the this be was seems end question. there’s have concern really that not It industry tunnel. while you the ship. discount would my to back bright beginning It at Thank

or and people that of do more more lot people and open trips. there’s lists a to Now, demand then indication even of see people will you there’s that get who feel any for once waiting on more vaccinated you are shadow itineraries There’s are. even vaccinated up demand

Frank Del Rio

been means that Ivan. And XX this Look, year least can’t the a the that having for have year XXX% one in down has morning, is crews. question. million finite I occupancy. capacity cruise that shut industry Good And at business. crews with would thanks

a so-called So to especially, fleet. play of to That demand some withdrawal plus XX American North going there’s squeeze be going here. after supply, ships from the is exceed the

So pent demand. up got you you’ve got less supply,

their pocket. got You’ve with people money in

boom it’s of tick we’re and day. this I given than this mean, pandemics And cycle quarantine coming fact and spend, volume, faster And it. and I the bad prices. are that, the it’s restrictions astonishing is the we’re dictate fraction time can’t supply in XX-plus years, the robust is new That me able just normally we full agents up online, seeing as think to cruise not in is, since only a going the not what the to business of as the travel pricing expand, we lockdowns strength, for I’ve it at but spending industry. that to travel – a is any been business. in we’re making what’s of

the XXX% coming We other of other we we any had resorts. at And So and approaching, in as that when combat we’re we of such FCC of should I’m for operating protocols into pricing for redeemed. the including pricing, That hopeful FCC I effect front, or circumstance. FCC cruising, bothers the and sector we’re me get get a of a slightly here, need we that do flat I’ve those happy so time need see sectors just to we airlines dots I protocols place, for should operators approaching. other a And no has booked us have. a XX% much all in back starting well to travel operators to been Europe. as look, of We are put see to it been the and the to down. of of positive think put and forth be get connect to spread The our be high eager happy the I’m Asia, travel open, I vaccine are premium of of we’re happy business never Trust as in business casino future. in making XX% to day them. Those the it them. is prevalence the and well. as set say the couple want back given have I’ve And be the comprehensive industry, again. we we’re the mean, the just ahead the seen many to work, as happy the work. me, diluted virus advances starting community hotel to on

soon. see, starting I vessels to Europe going We’re think more in

And get those we’ve the so but got to we’re work at ready. and day, we’re developments, back by the to of soon all encouraged end

Thank We’re all you. ready.

Ivan Feinseth

and kind vaccinated. people lot even cruise be is the capacity. when planning right or on with capacity do ramping The not are a now, you’re the quickly, vaccinated a but determining CD to Panel, you, you’re whether also, people with and factor XX% of Healthy going XX% just comfortable Sail in of factor. people That’s you And capacity, XX% working at feel your because that up interacting ship, you’re once being

Frank Del Rio

right. That’s

Ivan Feinseth

get a higher it And to to capacity faster. of allowing you level is

Frank Del Rio

Look, I agree.

herd to to be that quicker vaccinations factor. get which by timeframe that of ultimately knew deciding all in going where we were vaccinate most we is July, we accounts, think And the the I the immunity, point August the time.

we And will pivot what that’s where the will a And is flute. anyone bodes that from So and this won’t time. sometime But summer, have what an have to one – end de facto experts to environment, ourselves a by guests you at being the to will to pandemic build the start, that can to event. that just it – the into access operate We States, start then pandemic That’s one vaccinated. thing United can to low guests, a least pivot this they have government a safely our in in scary today. have have are even listen seasonal who crew we experts. And being to being prevalence the to endemic. vaccine, at crew we agencies, we say our This with will step whole, society be that wants momentum, well. be today have as we all Canada it demonstrate April, in the of look, a to that in believe a Europe,

Ivan Feinseth

And you. luck. Thank good. Very good

Frank Del Rio

Thank you, Ivan.

Mark Kempa

Thank Ivan. you,

Frank Del Rio

May. And appreciate everyone. great truly to great coming our your today, and our And speaking to calling your you. questions, Thank thank support forward We your you industry you company. continued for look I

Operator

Thank This call. conference concludes you. today’s

now disconnect. may You