Carnival Corporation Ltd. Common Shares

Greetings and welcome to the Carnival Corporation first quarter 2026 earnings conference call. At this time, all participants are on a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Beth Roberts, SVP, Investor Relations. Thank you, Beth. You may begin.

Thank you. Good morning and welcome to our first quarter 2026 earnings conference call. I'm joined today by our CEO, Josh Weinstein, our CFO, David Bernstein, and our chair, Mickey Arison. Before we begin, please note that some of our remarks on this call will be forward-looking. Therefore, I will refer you to today's press release and our filings with the SEC for additional information on factors and risks That could cause actual results to differ from our expectations. We will be referencing certain non-GAAP financial measures, including yields, cruise costs without fuel, EBITDA, net income, ROIC, and related statistics for all, which are on a net basis or adjusted as defined, unless otherwise stated. A reconciliation to U.S. GAAP is included in our earnings press release and our investor presentation. References to ticket prices, yields, and cruise costs without fuel are in constant currency, unless we know otherwise. please visit our corporate website where our earnings press release and investor presentation can be found. With that, I'd like to turn the call over to Josh.

Thanks, Beth. Good morning, everyone, and thank you for joining us today. Before we begin, I do want to acknowledge the ongoing conflict in the Middle East and the profound human impact it's having on so many people. Our thoughts are with the brave men and women of our armed forces with all those affected and with the countless families and communities facing hardship during this time. Like so many around the world, we remain hopeful for a resolution that brings relief to those impacted and a lasting peace to the region. Turning to our business, we are off to an excellent start to the year. First quarter results came in ahead of guidance, thanks to higher yields and better cost performance. reflecting healthy fundamentals and solid execution across the business. Close in demand remained robust, guests continued to spend more on board, and pricing strengthened, enabling us to outperform our December guidance and deliver record first quarter revenues, net yields, operating income, EBITDA, and customer deposits. We're seeing this momentum continue in onboard and pre-cruise sales, Guests are engaging earlier in the vacation journey, purchasing more inclusive packages, excursions, and other experiences before they even step on board. That trend is contributing to higher onboard revenue and reflects the value guests place on the experiences our cruise lines deliver. We're also seeing it in our bookings. Bookings for current year sailings increased 10% year over year, adding to our record book position for the remainder of the year at historically high prices. With nearly 85% of 2026 already on the books and less inventory available than this time last year, we remain well positioned to keep improving yields as the year unfolds. Cumulative future year bookings also reached a first quarter record, adding to our continued confidence in the trajectory of the business. And as a result, we are seeing it in our customer deposits, which reached a new first quarter record of almost $8 billion, surpassing last year's high watermark by nearly 10%. Now, what stands out most is that we're achieving all of this against such an unpredictable macroeconomic and geopolitical backdrop. It says a great deal about the demand we continue to see across our portfolio of world-class cruise lines, about the team's ability to execute on our long-term strategy, and about the progress we've made in positioning the business to perform through a wide range of environments. This start to the year also supports increasing our full year outlook operationally by approximately $150 million compared to our December view. That improvement helps absorb a $500 million fuel headwind, albeit that is against a substantial EBITDA forecast of $7 billion, which David will walk you through in more detail. This quarter and our outlook are further evidence of how far this business has come over the last several years. Over that time, we have restructured the organization, reconstituted the global leadership of the corporation and our cruise lines, actively managed the portfolio and its assets, and sharpened our commercial operations. We have also just begun to better harness the power of our unmatched Caribbean and Alaskan destination footprints, improve pricing, fortify the balance sheet, and embed greater rigor across the organization. As you know, thanks to those efforts, last year we surpassed our sea change objectives in roughly half the originally outlined timeframe. We more than doubled our ROIC. delivered our highest unit EBITDA in nearly two decades, and meaningfully reduced our greenhouse gas intensity rate, all of which built momentum, and more importantly, reinforced that our approach is working. With this robust foundation in place, we are focused on the next chapter of value creation for Carnival. So today, we are introducing Propel, powering growth and returns responsibly. By 2029, we are targeting return on invested capital above 16%, earnings per share growth of more than 50% versus 2025, and the distribution of more than 40% of our cash from operations to shareholders, or approximately $14 billion. At its core, Propel is about converting strong and growing demand into higher returns, earnings, and cash flow while maintaining disciplined capacity growth and a strong balance sheet. Now, we see four primary drivers underpinning these targets. First, yield expansion. A continued focus on high quality execution across our commercial operations will drive even more growth in same ship demand, strong pricing, increased onboard spend, and earlier guest engagement throughout the booking journey. These trends are already evident in our current performance and give us confidence in our ability to drive sustained yield improvement. Second, discipline capacity growth and high returning capital allocation. Our capacity growth remains intentionally measured with only three ships scheduled to enter service during the Propel period. At the same time, we'll be investing in return generating modernization programs across many of our cruise lines, building on the success we are already seeing from IEDL Evolution. And the second cruise line announcing its program will be just next month. So stay tuned. Third, further monetizing our destination portfolio. We're expanding and enhancing our unique destination assets, including Celebration Key, Grand Bahama, Relax Away Half Moon Key, and Isla Tropical Roatan, along with our unrivaled Alaska land footprint to deliver differentiated guest experiences for while generating attractive incremental returns. Fourth, continued cost discipline. We remain hyper-focused on maintaining our industry-leading cost structure and driving operational efficiencies across the P&L. And all of this is supported by a phenomenal team and advancing technologies to enhance revenue and improve efficiency. Importantly, These propel targets will not come at the expense of financial strength, corporate responsibility, or investing in our future. We are targeting net debt to EBITDA of 2.75 times and a reduction in greenhouse gas intensity of more than 25% versus 2019 levels. For us, returns, resilience, and environmental stewardship go hand in hand. And further, our growing cash flow will enable us to meet these targets while reinvesting over $15 billion back into the business over this timeframe. With greater financial flexibility, we have the capacity to invest in our growth, to achieve our leverage target, to grow our recently reinstated dividend, and to return excess capital through an opportunistic buyback program, beginning with a $2.5 billion authorization announced today. This is a balanced approach, investing for growth, increasing shareholder returns, and doing so in a way that supports the long-term earnings power of our business. Accelerating returns is a natural result of that strategy and a reflection of the attractive fundamentals of our business. Our capacity growth remains measured while demand continues to expand as cruising becomes even more mainstream, as consumers are choosing to spend more of their hard-earned money on well-deserved and much-needed vacations, and as we remain underpenetrated relative to the broader vacation market. We are well positioned with a strategy that is grounded, focused, diversified across our portfolio and built for consistent execution over the long term. As we continue to monitor developments in the Middle East, we remain focused on executing on that strategy and delivering for our guests, for our shareholders and our other stakeholders. While external conditions will continue to evolve, What gives us confidence is our ability to deliver exceptional vacation experiences, operate efficiently, allocate capital with discipline, and grow in a measured way. Now, none of this progress happens without the dedication of our global team, the best in all of travel and leisure. I want to thank our more than 160,000 team members, both ship and shore, for their hard work in delivering these first quarter results. They go above and beyond every day to deliver unforgettable happiness to our guests by providing them with extraordinary cruise vacations while honoring the integrity of every place we visit, life we touch, and ocean we sail. I also want to thank our travel agent partners, our loyal guests, our investors, our destination partners, and all of our stakeholders for their continued support. With that, I'll turn the call over to David to walk you through the quarter and our guidance in more detail.