Earnings Call: Q4 2020

Jan 11, 2021

Good morning, everyone, and welcome to our business update conference call. I'm Arnold Donald, President and CEO of Carnival Corporation and PLC. Today, I'm joined telephonically by our Chairman, Mickey Arison as well as David Bernstein, our Chief Financial Officer and Beth Roberts, Senior Vice President, Investor Relations. Donciccias. Thank you all for joining us this morning. Before I begin, please note that some of our remarks on this call will be forward looking. Don. Therefore, I must refer you to the cautionary statement in today's press release. I know I'm certainly not alone when I say glad to put 2020 behind us. Clearly, 2020 was unprecedented. Don. On the other hand, it also proved to be a true testament to the resilience of our company. I am really proud of how well we weathered the Dorn, and I'm very grateful to all of those who helped make it happen, particularly our Carnival family, both shipboard and shoreside. Don, and believe me, it took all hands on deck to return over 260,000 guests home, to repatriate on 90,000 crew members to process 1,000,000,000 of dollars, euros and pounds of guest refunds and 1,000,000,000 in future cruise credits on order. To move our entire fleet into full pause status, to develop new cruise protocols and put them to the test as we resume on Cruise operations in both Italy and in Germany to extend debt maturities and amend agreements with over 20 lenders on for cumulative $19,000,000,000 of new capital. We ended the year with $9,500,000,000 in cash, Donne, and we have the liquidity in place to sustain ourselves throughout 2021, even Donnie. Now we executed a significant rationalization of our fleet, reducing capacity by 13%. Don. As a result, we are less reliant on new to cruise, thanks to our recurring base of repeat guests. That represents a source of nearly 8 Don, with 1,000,000 guests each year, which will now be spread over a smaller fleet. Our strategic capacity reduction also delivers a on structurally lower cost base. Just by the fact that the 19 ships leaving the fleet are smaller and less Donshipps. We benefit by a 2% reduction in unit costs and a 1% reduction in unit fuel consumption going forward. Donne. Our efforts to right size our shoreside operations reduces our cost further as well as our continued focus on finding Assis across our ship operations. And of course, over time, we will achieve an additional on a strong financial performance. We're pleased to announce that we're pleased to announce that we're pleased to announce that we're pleased to announce that we're on Carnival Mardi Gras. Boat, the 1st roller coaster at sea onboard Mardi Gras, has already generated significant media attention Dunn for Carnival Cruise Line, garnering 100 of millions of media impressions just in the last few months, as has the Donkommi, Mary 2 for Cunard, which was the focal point in the recent star studded film, Let Them All Talk, capturing over 7 on 1,000,000,000 Media Impressions. We further strengthened our Board of Directors, adding to an already experienced and on a strong Board with the addition of a new independent Board member with a comprehensive background in compliance. Don. We strengthened our management team, promoting Josh Weinstein to Chief Operations Officer. Josh Dushy's uniquely suited for this role, having previously led Carnival U. K. And prior to that, serving as our Corporate Treasurer Donner and prior to that, serving in a role in our legal department. And together with the rest of the leadership team, Don. You will serve a key role as we continue to aggressively streamline our operations for effectiveness and Donsi. We are honoring our commitment to diversity and inclusion, and in fact, half of our operating Donnell. We once again continue to make advancements in our sustainability efforts, reducing food waste Dunn, accelerating the reduction in single use plastics, amongst other goals. One of the most rewarding aspects of 2020 clearly on with the strong fundamental demand for our brands. The forward booking trends we have consistently experienced throughout this period Donne, in spite of the extended pause in our operations, in spite of our minimal advertising effort and even in spite of the abundance of negative global on growth of our company. And we have not only seen tremendous support for our brands from our loyal guests, it is also on a very encouraging to see demand from new guests. Upon resuming service, we believe we are well positioned to optimize that pent up demand on leading brands around the world. Now as we've mentioned on our last couple of updates, our company is uniquely positioned for a phased resumption on Cruise Travel, given our multiple national brands, which can each be restarted independently. Now this has already proven to be Don, Continental European Source and for AIDA, which is roughly 95% German sourced. Donker. Our other brands like P&0 U. K, which is 98% British sourced P&0 Australia, which is more than 99% Australia, New Zealand Diversource and Carnival Cruise Line, which is 92% U. S. Sourced, all present further opportunity. Additionally, the fact that these Don. Our Dine. Of course, we will continue to utilize the 6 destinations we own and operate, Don, including our 2 highly regarded private items in the Caribbean, Princess Quay and Half Moon Donneke. Half Moon Key, for the 20th consecutive year, was rated by Port Hole Magazine in its Reader Choice Awards as the on behalf of the Private Island. We continue to work diligently to resume operations in the U. S, including, of course, ongoing discussions with the on CDC. At the same time, we're working toward resuming operations in many other parts of the world, including Asia, on Australia and, of course, the U. K. And we're working hard to do so in a way that serves the best interest of Public Health. Our highest responsibilities and therefore our top priorities are always on the call. Compliance, environmental protection and the health, safety and well-being of our guests, of the people Donne's we touch and serve and of our Carnival family, our team members, Ship Board and Shoreside. Donner. We've dealt with many types of viruses previously and already have effective protocols in place onboard our ships, Don, including screening measures, medical centers and enhanced sanitation procedures, which prevent and reduce spread once brought on board from land. Don. Clearly, however, this virus is unique. And as you know, we've been working with leading medical and on science experts around the globe to develop new and enhanced protocols and procedures based on the best available science to specifically address the risks associated with COVID-nineteen. We expect these protocols on to continue to evolve as society's understanding of COVID-nineteen strengthens. And as we are demonstrating with both Dosto and Aida, which have received high satisfaction scores from our valued guests who have appreciated the changes Don. We intend to initially resume operations with a small percentage of the fleet. So for our initial voyages, we've chosen a sale with low occupancy levels, Donne, enabling us to gain valuable experience with our enhanced safety protocols. Now we're working toward having all of our ships on the call today. I'm Arnold, I'm back in service by the end of the year. The development of low cost testing, the continued advent of therapies and Don. The pace of the distribution of vaccines will certainly influence the pace of our recovery. As the industry leader, maintain a strong balance Doncicchi, has historically been a key strength for our company and a differentiator for our shareholders. Accordingly, we secured the necessary to issue additional debt. Having secured the necessary financing to get through 2021, we will turn our attention Dodge to improving the balance sheet and reducing interest on our path back to investment grade credit. Now we Dahn, stressed out the delivery schedule, pushing out newbuild capital, and more importantly, we have just one ship for delivery in fiscal 2024 and just on one ship for delivery in fiscal 2025. That will significantly reduce capital expenditures during those years, enabling us to pay down debt. Now all of these efforts are in keeping with our primary financial objective Dungsveftakken, managing the balance sheet and reducing capacity. We are well positioned to capitalize on pent up demand and to emerge a leaner, Don, a more efficient company reinforcing our industry leading position. Throughout these challenging Dines. We've received overwhelming support. So again, thank you to our valued guests. Donne. Thank you to our dedicated members of the Carnival family. Thank you to our travel and Partners, and thank you to our other stakeholders for their ongoing support. And especially, Donker. Thank you to our investors for their continued confidence in us and in our future. With that, I will turn the call over to David. Thank you, Arnold. I'll start today with an update on booking trends. Then I'll provide Our monthly average cash burn rate along with a summary of our 4th quarter cash flows and then finish up with some insights Don. Turning to booking trends. At this point in time, our cumulative advanced bookings for the second half of Comparable pricing on these bookings for the second half of twenty twenty one and the first half Don. Thank you, Arnold. Thank you, Arnold. Thank you, Arnold. Thank you, Arnold. Thank you, Arnold. Thank you, Arnold. Thank you, Arnold. Thank you, Arnold. Thank you, Arnold. Thank you, Arnold. Thank you, Arnold. Thank you, Arnold. Thank you, Arnold. Thank you, Arnold. Thank you, Don. If you exclude the negative impact of future cruise credits or more commonly known as FCCs, Don. Pricing on bookings in the beginning of fiscal year 2019 is a tough comparison as that was a high watermark Domhnall. In the end, we expect to see the benefit of these bundled packages in onboard and other revenue. I would also Don. Due to the pause in guest cruise operations in 2020, the company's future booking on the call. I'm Don. And it's also promising to see that approximately 45% Don. Of the 2021 book position are guests that are new to brand with the remaining 55% of guests Don. For the Q4, our cash burn rate was $500,000,000 which was slightly better than the previous expectation Don. $530,000,000 due to the timing of capital expenditures. For the Q1, we expect our monthly average rate on. To be approximately $600,000,000 which includes restart expenditures. The average rate expected in the first quarter Don. Our next question comes from the line of Frank. Hi, good morning, everyone. I'm Arnold Don. Hi, good morning, everyone. I'm Arnold Don. Hi, good morning, everyone. I'm Donens. Next, I'll provide a summary of our 4th quarter cash flows. We are currently in solid liquidity position with $9,500,000,000 of cash on our balance sheet at the end of our fiscal year. Don. I am happy to say that this is $1,300,000,000 more cash than we had on the balance sheet at the end of the 3rd quarter. Don. During the Q4, we added to our liquidity position by completing 3 very well received capital market transactions with Cumulative net proceeds of $4,500,000,000 The 2 at the market or ATM equity offering programs Don. This was partially offset by 3 things. First, our total cash burn for the quarter Donne. Was $1,500,000,000 simply our monthly average cash burn rate of $500,000,000 per month times 3. Don. 2nd, dollars 1,500,000,000 driven by scheduled debt maturities and third, a slight Don. We are now refining customer deposits of $200,000,000 from $2,400,000,000 at the end of the 3rd quarter to $2,200,000,000 at the end of the Hiring $1,500,000,000 of our convertible notes through the issuance of common stock considerably strengthened our balance sheet Don. 2020 could be characterized as obtaining sufficient liquidity to get through the pause in guest crew's Don. However, with $9,500,000,000 of cash on hand at year end, our focus for 2021 has now Don. We will look to liability management with our Don. We still have the ability to issue more debt if and when needed. And during 2021, we may also opportunistically further on the call. And now I'll turn the call back over to Arnold. Thank you, David. Operator, please open the call for And we have a question from the line of Steve Wieczynski with Stifel. Please go ahead. Your line is open. Hey, guys. Good morning. Don. Hey, good morning, Arnold. Hey, Arnold. How are you doing? Yes. So David, I want to start with your last on. I guess I'm a little confused because you obviously you have wording in the release about how you expect to enter additional on. Financial transactions, what you just talked about. But Arnold, you also indicated you expect to have all your ships operational by year end, which I think to some folks might Seem a little aggressive. So I guess the question is around maybe why would you need to really raise anything additional at this point if you think you would be Fully operational by year end, and I hope that makes sense. First of all, just to re Don. For me, we hope to have all of our ships operational by year end. Obviously, on the line. I'm hoping what's happened so far in early 'twenty one here is just a hangover from 2020. On. We're still navigating this thing as a planet, this whole thing. So hopefully, we'll have them all on the line with you. And then I'll let David respond to the rest of your question. Go ahead, David. Yes. So Steve, And how soon? And so we're just trying to keep people aware of the fact that we do have Multiple 1,000,000,000 of dollars of debt capacity, and we can utilize that if and when needed. So we have choices and we'll monitor the situation very carefully. And some of it also depends on just Like I said before, on the timing of the restart of the operation, which at this point in time, is a little bit uncertain. Okay. Got you. And then I guess a bigger question would be just around the vaccines themselves. And Donne. I assume you guys have put some thought into, are there going to be requirements for whether it's the crew, whether it's Don. Passengers, whether it's both, that they would have to be vaccinated before they're allowed to sail? Well, As you can as you're very well aware, the full vaccine thing is at the very beginning here. And so around the world, father destinations. And so we'll let it evolve over time, and we'll make the most prudent decision Arnold on. When the time comes, but at this point, distribution remains a bit of an issue. Donne, and so we'll make a determination as things evolve. Okay. Can I ask one real quick Housekeeping question for David? David, can you help us maybe just think about what you guys are thinking from an interest perspective for 2021? So interest expense on the existing debt that we have at the end of Don. 2020 would be about $130,000,000 a month or call it $1,600,000,000 for the year. So depending on liability and management and other things, it could be a little bit of plus or minus from that number. On. Okay, great. Thanks guys. Appreciate it. Thank you. We have a question from Robin Farley with UBS. Please go ahead. Your line is open. Great. Thanks. I wonder if you could give us any sense of the timing or kind of the gating Yes. Hi, Robin. Happy New Year's to you. That's on a work in process. Phase 1 we're in with what's been communicated by the CDC. The additional on the line. Guidelines for future phases have not yet been issued by CDC. We have Weekly calls are as often as we need with them. So that remains to be seen. What I can tell you is that we're on track to be able to do whatever we need to do on a very timely manner to be able to resume cruise ultimately. So it sounds like you're waiting specifically for the CDC To issue some specific guidance around the test crews timing? Well, to answer your question about specific timing on test crews, yes, We would be waiting, but obviously, we're doing a lot of things. We've started to bring ships back into the U. S. We have Don. And bringing those ships back or meeting the criteria that is currently put out there to be in a position to then subsequently do test cruises, but to give you a specific timing on the test cruises, we would need additional guidance from CDC. Great. Thank you for that clarification. And then just one other and maybe this one's for David. How should we think about Don. And I guess what I'm asking specifically is you've talked about how even when a ship is in warm layup, you have some Crew on board, you're running the system and all of that. So is the actual cost of when that ship goes from being in warm layup to operating, Is it just sort of increasing the staffing levels? Or is there some other incremental expense? I mean, obviously, as the ship sails, it will start to burn fuel, you'll to have to provision for people, but I'm talking about is there any sort of one time cost or is it just that you staff up Yes. So, I can tell you what our experience has been with Costa and AIDA, Because with Casa and Aida, the capital expenditure was de minimis. The crew, they brought which is an expense, plane flights and testing and other protocols. You've got to spend Don. And I'll turn the call over to the operator for the Customer deposits because you're getting final payments in association with those voyages. And I think I have said before that the ongoing expenses that we experienced relating to protocols in Europe was a few 100 on. For the U. S, for the CDC, as Arnold indicated before, we're still waiting for a lot of the technical guidance that was not included, in the original conditional sale order. And so it's very difficult to estimate if there'll be anything different for the U. S. At the And our next question is from the line of James Hardiman with Wedbush Securities. Please go ahead. Your line is open. Hey, good morning. Thanks for taking my call. David, you gave us the interest expense. Could you just help us out Don. The share count, where it stands today and what you expect it to be once you're making money again on a diluted basis. Yes. So today, the outstanding share count at the end of 2020 was 1 Don. 1,087,000,000 shares. And the only other thing with the that I'll add is with the conversion The remaining converts, it would total 1,140,000,000 Got it. And then as we think about a presidential transition here in the next couple of weeks, maybe how conversation with the CDC at all. And obviously, what was a nice benefit for you guys during Don. The Obama administration was the availability of Cuba. Have you had any conversations on that front? It seems like it could be maybe an opportunity going forward. Donker. I think, first of all thanks for your question and Happy New Year. I think, first of all, look, We all stand together in trying to mitigate the spread of this virus. And whatever Don. The administration is in place. Obviously, we're going to be totally in compliance, but we just want to be an ongoing part of the solution regardless. Don. So in terms of incremental risks associated with one administration versus another, Not thinking that way at all. Either way, we have to do the right thing to serve the best on public health, and I think the science ultimately will guide us all to there. With regards to other matters, Obviously, Cuba was a focal point for the Obama administration opening on. We'll see what happens with the incoming administration. We obviously will be well prepared. We were on. Very actively, we were the first ones to sail to Cuba, and we'll be well prepared Don. But we'll be prepared to, again, help people who really want to go to Cuba on. See it the best way we feel, which is arriving via cruise and then experiencing what Cuba has to offer when it opens. Got it. And then just maybe lastly for me, Don. The different brands that you employ, as we think about sort of a post vaccine environment, are you Don. We're seeing major differences in terms of demand for those different brands. Obviously, depending on the country and their state in terms Obviously, overall, demand has been very robust, and we find that very affirming for Don. The booking is much closer in than any of our other brands. But absent that, Don. There's no big dramatic differences across the brands in terms of booking patterns Donner. And there's a lot of pent up demand for crews, which is evidenced by the booking patterns. And so and we're going to have Don. 1st of all, we're going to reintroduce on a staggered basis. The fact we have national brands, as we pointed out before, plays well for us in on that regard. And the fact that we have a number of brands that are drive to markets, easier to get to and So on and so forth is another benefit and that's around the world. And so given that, we don't see dramatic influences across the brands on the call, and we see a genuine strength in what should be a robust opportunity once Cruise resumes. On. Got it. Thanks, Arnold, and thanks, David. Thank you. Our next question is from Brandt Montour with JPMorgan. Please go ahead. Your line is open. Good morning, everyone. Thanks for taking my questions. Just curious on bookings. Good morning. Don. Hopefully, you could maybe flesh out some of the cadence in bookings qualitatively, sort of interested in knowing how bookings pace is now versus pre vaccine and if that's a meaningful different pace and sort of when did you might have you seen that inflect? Don. Bookings were robust pre vaccine and have been post vaccine, so we haven't seen any Dramatic shift in that. Again, we haven't experienced a demand challenge for crews for all the reasons we pointed out, including on the large base of previous cruise scores, repeat cruises, etcetera, where the demand is really getting pent up because they've been many months without on being able to satisfy their craving for a cruise experience. But I'll let David comment more granularly on some of the booking trends, David. Yes. No, I, that's correct what you said, Arnold. And the thing that I would add to that is We're seeing good demand for Australia, for world cruises, etcetera. So it's broad based and across, Arnold. Thanks for that. That's helpful. And then one more for me is on the CDC, I was hoping that, you could help us understand the relationship between, maybe potentially As we move to the summer season and shifts tend to sail more abroad, is it at all likely that you might on the line of the call. I look to get fewer shifts outfitted and certified under the CDC guidelines, since there's not a whole lot of point to get And certified for 1 month in the spring and then go sale elsewhere, there's not going to be the same restrictions? Don. We want the freedom to operate, period. And so we'll be focused Again, being in compliance with whatever CDC regulates, obviously. We give our inputs and offer Don. Other, like science medical experts, their inputs and whatnot, but the CDC will make their Dobson, and we want the freedom to operate. Having said that, as we mentioned earlier, the fact that we are global, that a large number of our Normally, our outside the U. S. And so on, gives us additional degrees of freedom, But we also have to secure freedom to operate in other places that we've been doing a really good job so far in Europe with on the limited start ups of Costa and AIDA. But you're right, as you Don. It is an active period. So we're well positioned. We're differentiated. We have 9 world leading cruise line Don. We have national brands. As things open up in staggered ways around the world, we can take full advantage of that. On, but we like to have the freedom to operate everywhere. And I'll just add that if you look at the CDC website, you'll see Don. We brought 30 ships back into U. S. Waters. One more is expected to come back. It's in transit, Carnival Mardi Gras. Don. And those are the ships that we expect to sail in U. S. Waters through the balance Don. And the remainder of the ships And our next question is from Asia Georgieva with Infinity Research. Please go ahead. Your line is open. Good morning. Happy New Year. A couple of quick questions. Happy New Year's auction. Thank you. Is there an inclination or ability to possibly restart some of the ships that are currently scheduled to Let's say, May June as opposed to at the end of March. How easy is that or is that something that is not Don. If it made sense, and first of all, we're always going to act in the best interest of Public Health, that's number 1. Number 2 is, if we have the freedom to operate sooner and Don. There were itineraries that made sense. We would not rule out here in January Introducing customized itineraries prior to those periods for brands, on. It made sense and we were able to do so. So yes, there is the possibility even with brands that have announced a pause through on a certain period of time that if the opportunities presented itself and it made sense, especially this is And Arnold, you mentioned shorter cruises, which of course make more sense. But some of the old the longer voyages over For the higher end brands, again, do you think the CDC might be open to Reconsidering their position and possibly allow longer voyages before November? Don. We'll have to see what evolves. And again, with the advent of the vaccines, With the acceleration of low cost, more rapid testing, with advancements in treatments and so on, Don. I think all of this is potentially in flux. That would definitely be the CDC's call to make. And But again, things change all the time, and we'd have to see. So I wouldn't say it's impossible. Then they may change their position. And then there's other places in the world and whatnot, Don. And they have their rules and regulations. And so there will definitely be opportunity in some places in the world to have longer on Cruise itineraries for certain and possibly here in the U. S. Prior to that date, but we'll have to see. And lastly, given your very active communications with the CDC, do you have any sort of And expected time line as to when you might be receiving further technical orders and guidance? Or are you just waiting in the day they come out Yes. I think, I learned a long time ago in different businesses, never try to protect regulatory anything Because by its nature, it's not that predictable. So we provide the information. We're in active dialogue. They'll make their Dominations and the time frame that obviously, they feel comfortable doing so, and we'll respond to that. So we don't have a date definite for future guideline release on the call. I'm from Nelmen, but we'll be prepared to act on whatever comes, whenever it comes. I think all of us will be waiting And then the last comment would be this Obviously, we're in this business for the long term. And while we all want on to resume cruising as soon as possible, because cash generation and cash maximization It's clearly the audit of Dayforce as a business at this point. The reality is we want to do it in the right way Donne and make certain that we're well prepared to be in compliance, whatever the rules and regulations are. On. But whether we start sailing in April or March or June or whenever, the real value in this obviously extends for many years and eventually we'll all be back to the great days growth in our industry and growth in earnings, growth in cash generation, etcetera. And when you look at it over time, a matter of A month here, a month there, a couple of months here or there are not determining the future value of the industry or our company. Thank you. I agree, but I've been Following the pricing for all the voyages for close to 2 decades now and kind of itching to start getting Thank you. Thank you. We have a question from Patrick Scholes with Truist. Please go ahead. Your line is open. Hi, good morning, everyone. Correct me if I'm wrong here, but I believe there was an industry meeting early last week with the CDC. And if that is correct, I'm wondering if you can share any details from that meeting. Don. No, we wouldn't share any details. There are multiple meetings with the CDC at different levels. There's technical levels, there's medical levels, there's all kinds of things. And so at this point, what Don. I can tell you is that we're in constant communication as are the other cruise lines. And also our Industry Association, CLIA, is also having dialogue as appropriate. And everybody is working together and Dump. Focused on resumption accrues in a way that fits with overall, what CDC is determining, is best on for our society. Okay, fair enough. And then a second question on the 19 on. Ships that are leaving or have left some of them have left your fleet. Can you give us a ballpark idea of what the net cash income and cash flow from those are? Thank you. You're talking about the sales right? The 19 ships we plan to exit. Yes. So No, you're saying Oh, the cash That was only 3%. We had indicated before it was 3% of operating income in 2019. I'm sorry, the proceeds. Oh, the proceeds. Oh, the proceeds. Yes. We wouldn't share that. Yes. So we don't disclose Don. The sales price of any ship, as you would imagine, that would put us in a disadvantage in future But I will say that prior to COVID-nineteen in many cases we were selling ships for 50,000,000 $60,000,000 $70,000,000 a piece, but obviously, these in these cases, we were selling Chips were somewhat less than the historical standard post COVID-nineteen. So it wasn't, it was de minimis in the grand scheme of a company with, Thank you. We have a question from Ben Chaikin with Credit Suisse. Please go ahead. Your line is open. Hey, how's it going? Hey, Ben. You talked about lower cruise from ships leaving the fleet, and I think incremental to that insinuated, I believe, some lower cost as a result of more on. Can you touch on what those improvements are? And then maybe any way to think about sizing that opportunity? And then just one more, Don. Yes. As I mentioned, with the ships exiting the fleet, they were less efficient ships. We Accelerated the exits given the fact that there was no opportunity for them to generate cash in the near term here given the pause we're in. And so the it gives us a 2% reduction in kind of base cost on based on those ships exiting and then a 1% fuel advantage as well. So that's on the ship side. On shore side and stuff, basically with this pause, obviously, we furloughed and I had to make a number of changes from a cash conservation standpoint to get our burn rate down. Don. And it's also given us the opportunity to examine, and we continue to do so, all of our operations on Shoreside to see where we can be more efficient, where we can be more effective. And that's in every aspect of the business. Don. So when you say give you a few examples, it would be the normal things you would think about. Right now, we're not advertising Donne and all that, but you look in your marketing department, you see how you're structured also, what you're spending money on and what have you. And we were on a continuous improvement before. We have been very successful through our sourcing efforts. But beyond that, even our operating procedures where we were doing a pretty good job of getting unnecessary costs out of the system. Don. And so we continue to do that. And with this pause, we've been able to take a hard look at every aspect of the and continue to do that and have found additional opportunities for improved efficiency. Got you. That's helpful. And then I think, David, in your pricing commentary, you mentioned that I don't know if I caught this right, that forward includes bundles, presumably, I guess, implication in the listing pricing there. So I think you mentioned it was not apples to apples. So is it possible Getting apples to apples pricing for what you're seeing on your forward books versus the 2019 comparison, I think? Dodge. To the onboard and other revenue, so the price that we're using in the comparison is only a portion Dodge. That's about as close as I can get it because we've allocated out the onboard and other, but you would expect to I see a big increase in onboard and other as a result of the prepurchase. So hopefully that clarifies it for you. On. We have a question from Jamie Kentsch with Morningstar. Please go ahead. Your line is open. Hey, good morning. On the line. I was just wondering if there were any interesting insights or takeaways from the 45% new to brand on the line. Bookers that you guys are seeing, are they skewing younger? Are they maybe longer lifetime customers then? Or if there's anything different than So it seems that No, we have not seen any Like dramatic trend difference in new bookers or new on cruisers than we have in the past. But David, it's like you wanted to make a comment. Go ahead, Mike. Yes. No, I was just going to add that overall, whether it The 45% or the 55%, which are brand loyalists, which by the way just a little just of the people booking cruises. We're seeing people in their 20s 30s And anecdotally, I was talking to A couple of the brands asking them about various voyages and things. And they were telling me that some of the longer voyages In early 2022, they were seeing quite a few people, 70 and up booking Don. And we were just speculating that maybe those were retired people that didn't have to worry about a work schedule, so they could plan demographics around the globe, seeing all ages booking in all products and all brands. Excellent. And then just a quick housekeeping follow-up. For depreciation for 2021, I know a lot of the ships that have come out of the 21, we're looking at roughly $2,200,000,000 which is similar to what we saw on the call. But it is a preliminary number. The difficulty in that is trying to Dunn. And we have a question from Don. Vince Cipio with Cleveland Research Company. Please go ahead. Your line is open. Great, thanks. I wanted to come back to the Don. I think as of the last call, roughly 2 thirds were still outstanding. So curious if that kind of roughly and what you think it's going to take for more of those to start to convert. And then the next part of that is, I think you previously alluded to a mid single digit type of negative impact from the FCCs coming in on the pricing side. Donnecker, and curious if that impact kind of has held and should continue to hold as more of those convert. So the last time, when I was talking about the mid single digits, I was talking about the back When you start looking at the time period that we're talking about the back Half of 'twenty one and the front half of 'twenty two, you're still in the same ballpark in terms of Including the FCCs in terms of the pricing. And as far as the FCCs, Probably it's about 45% of our customer deposits at this point are still on Don. So we still have quite a few FCCs that have yet to rebook, But that's not really very surprising. A lot of times you get families that are booking, multiple families with kids Donner. And you've got to coordinate, vacations with supervisors at work and timeframes. So we would expect these FCCs Great. That's really helpful. And maybe I wanted to think A little bit about the longer term margin opportunity. You've talked about the sale of less efficient ships, probably taking out some overhead, on the call. The arrival of newer more efficient ships, just curious what type of EBITDA margin opportunity Yes. I'd be reluctant at this point, to kind of give you that margin opportunity that would be providing guidance, And we're not in a position yet. I think by Arnold's comments indicating the Efficiencies that we expect is alluding to an improvement, but later this year perhaps to give you more guidance and details into that. But at this point, All of the cost metrics would lead you to a better margin opportunity in the future. Great. Thanks. Operator, we'll take one more question, please. Thank you. And we have a question from Stuart Gordon with Berenberg. Please go ahead. Your line is open. Yes, good afternoon. I was wondering if you could give us an approximate net debt number At the end of 2020 and ideally calendar, because I think there was some export credit facilities drawn down in December, on the fiscal side. Thanks. So, that is at the end of Don. In November 30, 2020, which our balance sheet date will be 27 $1,000,000,000 And you're correct, we did shortly thereafter, we took delivery of 2 additional ships And Drew, on the export credits associated with them, that was probably an additional, Call it $1,500,000,000 if I remember correctly, in December on the Carnival Mardi Gras and Casa Donne. Okay. Thanks. And just to follow-up, I mean, you've obviously given us some visibility on the delivery schedule And have you given any thoughts on whether you could cancel any future ship deliveries? And also what would be your anticipated fleet size in 2022 versus 2019 given the changes with the ships leaving? Okay. So in terms of the ship deliveries, I mean, we've said this many times before. I mean, we did renegotiate Delivery dates as Arnold indicated, and we got a delay in all of the ship deliveries, but There are no cancellation clauses in our new building contracts. So as a result of that, I wouldn't Any cancellation of any of the new builds on order. We started the year with 14 on order. We on. So we have 12 more in the ensuing years. And as far as capacity is concerned, Don. If you look at the end of 2022, you'll see that and we tried to do this Don. In ALBDs, our capacity at the end of 2022 would be about 5.6 percentage points higher than 2019. Don. So you're really just talking about less than 2% per year capacity growth from 2019 to 2022 Because of the new builds that came in, but remember the acceleration of the 19 ships that left the fleet. On. So it nets out to less than 2% a year. Okay. And with that Okay. Okay. Okay. And with that Okay. Thank you. On. Yes. Thank you, everyone. We really appreciate your interest. Happy New Year, be safe, on the line. I'm sure you all are. And together, we look forward to what hopefully will be on a very nice, 2021 leading to many future years of success. So thank you. Thank you so much. That concludes the call for today. We thank you for your participation and ask that you please disconnect your line.