[Operator Instructions] Our first question today is coming from Robin Farley from UBS.

Just wanted to ask about something a little bit away from the results today, although my follow-up, I do have a question about the release. Just looking in the market, there's a transaction with an all-inclusive Caribbean resort chain that one would assume others in the industry maybe considered or looked at. I don't know if you have any thoughts you can share. Maybe it's not about that specific portfolio, but just your thoughts about synergies or would something like that make sense for Carnival or just any view on that? And then I do have a follow-up on the release.

Robin, wow, first question, not even about us. All right. So I'll just talk about us. I won't talk about somebody else's transaction. I'd say it probably sounds a little bit like a broken record here, but we are just laser-focused on improving our cruise business. We are very proudly a cruise company, and everything we do is to enhance the cruise experience for our guests. And so we -- our portfolio of 8 brands, we feel we're in a great position given the momentum we've got and the things that we've got to come to be able to improve the business on the assets that we've got. Now clearly, I'm not saying we don't have land-based assets in our portfolio. We do, but they're really ancillary to the cruise experience, things like Celebration Key, RelaxAway, Half Moon Cay, and our unmatched position in Alaska. Those are all really bolt-ons to make the cruise product even better, and they're high returning. We're focused on the returns. We're focused on the cruise business. So there you go.

Okay. Great. And then just for my follow-up, just the booking outlook in the release, I'm just curious if you can help clarify. It talked about '27 price and load being at record levels. It didn't say higher, and that may be fine, that may be part of the yield management strategy. But then in talking about '28, it does say higher occupancy and price. So I'm just wondering if I'm interpreting that right about 2027 that it's maybe at the same levels.

No, no, 2027 is higher. I'm sorry, yes, we're dancing on a pinhead. So sorry, '27 occupancy and price is higher, yes.

Our next question today is coming from James Hardiman from Citi.

Congrats on a really strong and maybe even surprisingly strong quarter here. I guess my first question, I mean, it sounds like the last -- sure thing. It sounds like the last 3 months of bookings were really good for you guys, which is particularly noteworthy given the fact that the macro and the geopolitical headlines haven't really gotten any better. And I don't think airfare prices have gotten dramatically better. So maybe help us connect those 2 dots. I mean, do we think that some of this is specific to your business model where a lot of your customers are maybe closer to departure ports and so airfare doesn't matter as much, or European customers care less? We've talked about that sort of distinction in the past, Europeans to European destinations and then maybe Americans to European destinations. Or do we think there's just fatigue with all of these headlines and people are saying, "I'm going to go on my vacation, hell or high water," and we're now beginning to see that.

Yes. No, I think all of those are pretty fair points, to be honest with you. I mean, taking a step back, June was an inflection point in the booking momentum, and it was positive year-over-year, and then we saw a nice acceleration in both July and August. I think to some extent, there is a normalization of what the world is throwing at people. There is a growing change in the mentality of Americans, which is just catching up to Europeans, as we've talked about before, that vacations are sacrosanct. And they will take them in good times and in bad. If you have a job, you get a break and you need that vacation. And so we are an amazing value for people if the consumer confidence isn't great, if there is pressure from things like price of gasoline, if there's other inflation, if there's concerns about fill-in-the-blank because that's all we hear about nowadays. And we're a great value. We give a great experience, and we make it convenient for people. So we really do feel like our strategy is working. It can work in great times, and it can work in times that aren't so great, and that's what you're seeing now.

Got it. And then, Josh, in your prepared remarks, you talked about the fact that Europe for the first time will tie the Caribbean for the largest deployment region. It sounds like there's a bigger narrative there. I feel like I've been saying for a decade that eventually the pendulum might shift back towards Europe and at least for you guys that, that's happening. So maybe speak to what you're seeing on both sides of the Atlantic. Are you concerned about what's going on with respect to Caribbean capacity into 2027?

Well, so I'll answer a Europe question and then a Caribbean question. The Europe question is this isn't new for us. This has been a growing piece of the business and the strategy, particularly in Northern Europe, as I mentioned in my prepared remarks, which is just amazing destinations for both North Americans and Europeans. And so our brands have a great foothold there. We actually have more European sailings outside of the Med than in the Med, and we love that position. It's also longer seasonality. we can push into the shoulders more because that's what guests are looking for, which fits well. With respect to the Caribbean, I've said this in different ways. I'll say it, give me 2 options. Option #1 is no growth in the Caribbean. Option #2 is, if you look at 2027, something like 37% growth over a 3-year period. I'm going to go with option A. Option A would make my life easier, make a lot of people's lives easier. But it's not taking away from the fact that the Caribbean is an amazing part of our portfolio. And we are absolutely committed to it forever. And hence, the investments that we've made in our Paradise Collection. Carnival Cruise Line has been the leader in the Caribbean all-year sailing forever, and we expect that to continue. Does it face pressure when there's that kind of capacity coming at one time? Yes, it does. And we've seen it before, and we get through it. We just got through the third quarter of this year, yields up, I'd say, fairly nicely. We're looking at the full year up almost 3% on a normalized basis, including our Caribbean portfolio against the backdrop of a pretty volatile world. So I'd say all of that's fitting together really nicely.

Next question is coming from Brandt Montour from Barclays.

So back to 2027, I was just curious, Josh, if you want to kind of paint a picture on how the customer -- how your booking customer feels about booking that far out and specifically related -- relating this year kind of 6 months into Iran looking at 1 year out versus 1 year ago, 6 months into tariffs booking out to '26. Have you seen any differences there? And then which brands or which cohorts are you seeing that differential?

Yes. I won't get into specific brands and customer bases of the brands. But what I would say is every crisis is different. And certainly, this crisis was different from last year. We thought we'd have a great opportunity to lap the volatility from last year. But obviously, what happened in the spring was a much longer burn for the consumer and for just the macroeconomic backdrop. And so we did have a lot of different patterns that were coming through in the second quarter, some of which spilled over into the third quarter. And as we've been going through, it's been getting better certainly. But the impact it had on the long-haul flights, the exotic cruises, the things that we talked about that are going to have an impact in the first quarter, they're not insurmountable, but it certainly was more of a challenge than when we were thinking about last year at the same time and what it meant. At the same time, we really saw almost a double down on Europe for next year, particularly in the third quarter, which is the biggest part of the European deployment. So there was certainly a large cohort of people in the spring into the early summer that said, "Right, we're not going this year, but we are going next year." And so that bodes very well for 2027. So the flavors are always going to be different. It's our job to figure that out and the teams pivot really well, adjust their booking strategies, voyage by voyage, deployment by deployment. And like we said, we do believe that coming out of all of that, we'll still be able to experience solid yield next year.

That's great. And then just a quick follow-up, maybe not so quick. But I think everybody on this call knows how to look through your release and see the core operating KPIs and how well you're doing. Obviously, EPS takes into account fuel and that's much more volatile. So I'll just sort of ask the quarterly kind of question here, but it's 6 months into this conflict and fuel kind of doing what it's doing, any change or update to the philosophy longer term or the conversation internally thinking about potentially looking at hedging at some point in the future?

Yes. Thanks for getting that out of the way, Brandt. So only when fuel is up, right? That's the only time people ask. It's a very fair question to ask because it does have the ability to reduce volatility in any given year. As we've looked at our business and we've looked at this financially as well, we do believe that, that's a short-term band-aid that sometimes pays off, sometimes it doesn't. But the reduction in the volatility to us isn't worth paying banks or counterparties to effectuate those types of trades. And that's why we have been maniacally focused on our consumption rates. And you heard some statistics from David in his prepared remarks, but the fact that our consumption rate is down 26% since 2019, 13% than just 3 years ago. That is where our focus is, and that's where we're going to actually save the money because fuel for the medium term, at least, is always going to be an input cost. And the best way you can combat the input cost is to use less of it. And so our teams have done an absolutely remarkable job of continuing to innovate, both on itineraries and the technology to really make that happen. And I couldn't be prouder of that work. It is also good for the planet, and it's tremendous for our bottom line.

Next question is coming from Matthew Boss from JPMorgan.

It's Amanda Douglas on for Matt. So Josh, relative to the normalized yield growth of 2.7% expected for this year, could you speak to puts and takes to consider as we look ahead to '27, including if you see any constraints to bookings apart from the first quarter dynamics that you cited and tailwinds to consider from your destination portfolio and modernization initiatives?

Thanks for the question, Amanda. We talked about the first quarter because it does just stick out for us a little bit because of the knock-on impact of the spring volatility. I don't actually think that there's too much to talk about. I mean, clearly, we love our deployment strategy. We think the combination of our European base, the Alaska portfolio that we've got, including the land side to help. And then obviously, the Caribbean is going to remain important. And all of those have got to do their part to help us on the yield growth. And so we'll certainly talk more in December about how we think about 2027 and some of the ins and outs. But overall, we feel very good about the trajectory.

And just as a follow-up, could you also speak to the strength of onboard spending trends that you're seeing real time or any signs of pause or change in the consumers' behavior relative to 3 months ago?

Yes. No, if anything, onboard has just accelerated. So we see continued strength from the consumer. And always with an asterisk because of the way we do packages and bundles and things of that nature, you always should look at the total revenue because of how things might fall between ticket and onboard. But overall, just to reiterate, no, we haven't seen the slowdown. The onboard trajectory has been really quite strong.

Next question is coming from Trey Bowers from Wells Fargo.

I'll start with kind of a macro question and pivot a little bit from yields for a second. Now that you guys are investment grade, any thoughts as we think longer term? I know maximizing ROIC investments is the priority. But with the balance sheet in such good shape, is there any thought around just trying to expand kind of the capacity growth slightly?

Yes. I mean, look, our capacity growth is pretty fixed for the next half decade. So that's where we are. If there were opportunities that came around that are one-off unique things, I'd always look at it, and that's part of the job, but I think that's where we are. Is there more opportunity as we get further into the 2030s for more ships? Yes. I still think it will fit within our 1 to 2 ship a year construct. And if we were ever going to deviate from that, certainly be something that we share with our stakeholders.

Great. And then as a follow-up, just as you guys mentioned again the Q1 cadence, is the exit rate we saw coming out of Q3 and Q4 on kind of a like-for-like yield basis, the right way to think about Q1? Or is it just given the dynamics of the timing of the wave season, is that expected to be a bit of a downtick from where we exit the year?

Yes. Sorry, we're not going to -- we're starting to deviate into guidance for 2027, which we're not going to do. I'd just note that we feel good overall about 2027, particularly as you get away from Q1 into the latter part of the year. I'm not foreshadowing anything about Q1 other than it's got a little bit of a different profile. And so we'll talk more about that in December.

Next question is coming from Xian Siew from BNP Paribas.

Maybe following up a little bit on Caribbean. If we look at the capacity deployment mix, it seems like Caribbean capacity might be slightly down next year. But at the same time, you have kind of that growing private destination attendant guest mix. So I guess like maybe those 2 combined, I would think, bode well for pricing, but any thoughts on how we should think about that? Puts and takes for Caribbean?

Yes. I think you got to deconstruct it a little bit. I mean some of the decrease in our capacity is Princess is moving out and sending a ship to Japan, which is going to be great for us. But Princess is generally a premium brand. So when you pull a premium brand out, that has a different impact than others in the deployment region. But -- so there's little changes here and there. But generally speaking, for the Caribbean, we're pretty consistent in the actual underlying core capacity. And we are going to be able to flex both Celebration Key and RelaxAway because both now have their full marine infrastructure built out, which means we can maximize the marine side of those assets, which is why the throughput is going to be up nicely year-over-year for those 2 destinations.

And then we talked a little bit about pricing for '27, how bookings have been ahead. But maybe on the cost side, you've done a really good job of controlling costs. Anything we should think about in terms of costs into next year, anything different than maybe your algo or kind of the success you've been having this year?

There's nothing in particular that's notable for 2027. As you can see in '26, we've been working hard to reduce costs and to find ways to save money through sourcing and other means. And our operating companies have been working hard to find efficiencies in their business as well. And we'll continue to step that up and to do more in 2027. But there's nothing in particular too meaningful to drive the cost one way or the other.

Next question today is coming from Patrick Scholes from Truist Securities.

Could you give us a little bit more color on the 7% onboard and other revenue growth in the quarter? Specifically, within that growth, how much did you see from last year's open Celebration Key and how much was more from the actual onboard itself? And how would we -- within your 4Q net yield guide, how much would you attribute from Celebration Key and how much from the core -- ex-Celebration Key?

So the third quarter onboard and revenue was really broad-based across all categories, and it was also across all brands on both sides of the Atlantic. So as Josh talked about before, we are not seeing any slowdown in the strength of the consumer. I think our bundled packages are helping to contribute to the onboard revenue. We're seeing more than 50% of our revenues prebooked. So we're getting the benefit of the second wallet meaningfully onboard. And so as a result, as Josh said before, onboards have been very strong. And as far as the fourth quarter is concerned, I mean, we give guidance in total and yields. Josh mentioned to judge us on the total because of all the packages and things we offer, breaking down the 2 components isn't as meaningful as it used to be. And we gave you our yield guidance for the fourth quarter, and it's as strong as the third. So we're looking forward to it.

Next question today is coming from Steve Wieczynski from Stifel.

Josh, so as we think about the PROPEL targets, that would indicate you guys are targeting about, let's say, about $3.50 a share in earnings as we go out to 2029. 2026, we kind of know now is going to be what, $2.20 a share in earnings. So that's implying about 20% earnings growth a year through 2029. I mean you've mentioned in the past you guys don't forecast for the world to be perfect, but with oil prices, war, Caribbean pricing, potential headwinds and others. I mean as we sit here today, is that 20% earnings growth still pretty realistic in your view? And I mean, look, I assume so given you signed off on these targets. But just want to get your kind of high-level thoughts around that.

Yes. No, fair question. Obviously, from a -- let's start with the operational. And operationally, we are doing -- I would think this was a pretty good year against the backdrop that we were given. And so yields up almost 3% on a normalized basis in a year where there is the biggest geopolitical crisis we've seen in, I would argue, decades. That's a pretty good sign that the demand is robust and our brands are doing a really good job. Fuel prices, we do not know. You're right. We don't know what's going to happen in the future. They're going to go up, they're going to go down. I do know we can control consumption well and continue to drive that down, which is part of how we're going to improve the earnings profile. And our teams, we got to shoot high, right? And we got to think about the different types of things that we can do, not only on the demand generation side, but being innovative on the cost side, especially when our capacity is moderate growth, as you know, to be smarter and more efficient in everything we do. And I think our teams are absolutely capable of figuring those things out. Some of the trajectory that we've got is, frankly us, I think, getting a little bit ahead on the collaborative nature of the things that we can do internally to really leverage our scale on a fuller basis, take advantage of the technologies that are out there now and are continuing to evolve. So I'm not pretending it's not going to be hard work, but it's hard work that I think we're all excited to take on, and we've got pretty good road maps to get there. Now if fuel would cooperate, that would make it a hell of a lot easier. But clearly, we can't count on that.

Understood. Okay. Josh, here's a question I don't think you're going to answer, but I'm going to try it anyway. So...

Thank you for the preface.

I know. You can basically just say no comment after I ask this. Look, I know you don't want to give guidance at this point for next year. But if we go back and we think about kind of how you started your guidance ranges for -- I think it was the last 2 years, you kind of started those in a what we would call kind of a negative yield cost spread. David gave us a little bit of help in terms of cost for '27. But as we think about next year, should we be thinking about the way you kind of start '27 and that negative yield cost spread as you sit here today? Again, I don't think you're going to answer that, but I'm going to try it.

I won't answer it. Nice try. I won't answer it. I would say I fully expect it to fit into the algorithm that we provided for our PROPEL targets. So -- but let's see how we go.

Our next question today is coming from Ben Chaiken from Mizuho Securities -- from Mizuho.

I guess, Josh, I want to touch on the European deployment comments. You gave us some interesting commentary about the size of the market relative to the Caribbean. And I could be mistaken, but it also sounds like there's a shift in itinerary as well, leveraging cooler weather experiences versus beach, which I think is new. Maybe you could expand on what you're seeing and the opportunity and then kind of a modeling follow-up.

Sure. Yes, talking about deployment here. And I don't think it's new. I think that Europe, particularly Northern Europe, is on the wish list of many North Americans. And frankly, with our European brands, it's the backyard for Germany, for the U.K., for -- even for Italy, which has a very strong presence from Northern Europe. And Northern Europe is -- it could be Baltic states, it could be Sweden, it could be the fjords, it could be actually getting all the way to Iceland and back. I mean there's just a lot of opportunity for things that are on people's list. And one of the things that we have noticed is that if people are looking for a beach vacation, we can satisfy them very well with what we do in the Caribbean. But there's a contingent that is looking particularly in the summer to explore Europe, and they can do it with us all around that European territory. We do believe that Northern Europe has been more beneficial for us over the past couple of years probably, and we expect that to continue. And it's not really a change. I guess probably we're emphasizing it a little bit more, particularly because there was a lot of questions about Europe because of the disruption in the spring. So it is something, though, that we feel very, very committed to for pretty much all of our brands. Even Carnival, when they're going over for refits and they have to get to Europe, that's a great itinerary for them while they're there.

Okay. And then maybe on another shot on goal regarding costs next year. If I'm not mistaken -- or maybe I can frame it this way. If I'm not mistaken, I think '26 had a few different onetime costs in it. There was some logistics moving crew around. I think you had kind of some Celebration Key overflow from FY '25. Is it fair to say that this year had something in the range of, I don't know, 130 to 150 basis points of one-timers in the number? That may not occur next year.

Probably a little over, yes, a little over 1 point. But keep in mind that this year's Celebration Key operated the full year. Half Moon Cay had a half a year of operation. And so we're also in a situation, but we're talking just a couple of tenths of a point. Next year, we will have 5 Evolution ships in dry dock compared to 2 this year. But overall, that may shift some of the costs around, but we are very confident in next year and our cost structure, given everything we're doing to control costs, find sourcing savings and find efficiencies in our business that will see controlled costs in 2027.

Our next question today is coming from Conor Cunningham from Melius Research.

I was hoping you could just level set a little bit about what a normalized CapEx profile looks like for the company for now. I mean, again, new builds are pretty limited. So just on the non-newbuild side, what that could potentially look like? I realize that a lot of it's like high return on investment, but just any building blocks there would be super helpful.

Yes. Well, like the P&L, we're not giving guidance for CapEx for 2027 yet. But we have said this before, our non-newbuild CapEx for 2026 is $2.4 billion. And we do expect to see a little bit of a step-up in that number as we go forward because of -- I mentioned the 5 Evolution ships next year versus 2 this year. So we are expecting to see a step-up in the amount. But we'll give more guidance in December on that as well.

But that is a structural -- like we should expect that to be like a structural higher thing through the end of the decade as you have less new builds. Correct?

It's obviously very early to give multiple year guidance, but we do expect to see somewhat higher than the $2.4 billion a year for the next few years.

Okay. Super helpful. And then maybe a silly question, but I'm just trying to understand the commentary around the shift in European and whatnot. But I would think that European cruises are just a natural higher ADR versus other areas in some aspects. So as -- like is there just a mix benefit in the commentary that you're talking about from a booked position into '27 and '28? Or is it -- are you talking about it on a like-for-like basis if the itinerary deployments were the same overall? I realize that's a little nuanced, but yes.

It's a difficult question to answer because you've got different shifts. I mean, different times of the year, we get very different yields in different places. But overall, what we're always trying to do is optimize our revenue as well as our profit or operating income. And so we have shifted ships around in order to do that.

Yes. And I'd say that the 2 guiding principles we have when we're making our deployment decisions is, one, where ultimately do these guests want to go and what's the most accretive for the business. And so we trust -- I'd say, trust us, we're doing it for the right reasons for both guest satisfaction and the bottom line for the company.

I would hope so, but thank you.

Next question today is coming from Lizzie Dove from Goldman Sachs.

Congrats on great results. I wanted to ask about your private destination strategy. I think in the presentation, it looks like your Celebration Key visits will be up about 30% next year, RelaxAway and Isla Tropicale almost 50%. And so I know you've already made a lot of great investments there, already a great offering and amenities. But is there a desire over the longer term to kind of do more and expand further with any of those destinations?

I think there might be some little things we can do here and there for Isla Tropicale. Might be some more improvements we can make over time for RelaxAway. But that's -- we feel very comfortable about those positions. Celebration Key, we are certainly maxed out in the current build that we've got on the land side, and we have the ability to build more, and we've talked about that in a pretty theoretical way with you all before. I do hope and expect that we'll be able to talk about what's Phase 2 for Celebration Key to be able to provide even more to even more guests over time, but it's premature to talk about that.

Got it. Okay. And then I guess kind of maybe final shot on goal at this, but I was going back to look at your PROPEL guidance back on what you talked about on the Q1 call. And something I found interesting then was, obviously, you said yield growth would outpace cost growth, but you made a comment that as you drive operational efficiencies and realize scale benefits and whatnot, that there'll be decelerating cost growth throughout the period. Now I know that's through 2029. But could you maybe just talk about that and when you kind of gave that guidance at the time for decelerating cost growth, if there's kind of a turning point for that or just how to think about some of those savings, appreciating you've already kind of outperformed on costs, but yes.

Yes. I mean I was going to start with, well, we're already pulling some of that forward, right? And I think the team is doing a really good job of not sticking to the algorithm for the sake of the algorithm, but really trying to do what we can and so pulling some of that forward. So we'll talk more about specific cost guidance when we get into 2027. But from a trajectory standpoint and what we think we can achieve for PROPEL, that still holds, but we'll talk about specifics in any particular year when we give guidance, and we're not there yet. Operator, I think we have time for one more call.

Certainly. Our final question today is coming from Assia Georgieva from Infinity Research.

Congratulations on a great quarter. I understand that there might be still some issues with Q1 because of the summer events and because the winter quarters can be sloppier as we like to call them. But it does seem that '27 might be an above -- how should I put it, historical track of about 2% yield improvement. Is that fair to say? I know in the press release, you were saying it will be a record year, but even a 10 basis point yield improvement will technically be a record yield. So I just wondered relative to the 2% historical benchmark, is that what you're thinking at this point? Or could we be higher because of that Europe shift in demand?

Thank you for the question. I appreciate you giving it one last shot for the team on trying to get us to give more guidance, but we're not going to. And so we'll talk more about 2027 in 3 months when we get on the call.

I appreciate that. I had to try.

Yes, yes. Well done. Well done. Well, thank you, everybody, for participating, and we will talk to you again in 3 months. And before we get off, I'd just like to shout out again to the team for doing a remarkable job against a very complicated backdrop. So thank you very much for a job well done. Take care.

Thank you. That does conclude today's teleconference. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.