Josh Weinstein: Yes. Yes. Well, let me start with that we have it’s tiny in the grand scheme of things still. I mean, we’re because you’re talking about Carnival Cruise Line, which doesn’t have a lot of short programs et cetera with it. They don’t really start booking. So it’s a tiny amount now. We’ll give color as we get 2024 in that respect. So we’ll come back to that. With respect to your other points, we’ve said this is this is a big investment. This is half a billion dollar type of investment. And we can do that obviously, in 2025. We only have one ship. And we have none in 2026. So we think this is the right way to optimize our resources and really benefit the Carnival brand and you’ve heard us say 18 ships from day one.
So we are very, very excited about that. I don’t want to get ahead. I really want to do a good job of disciplining myself to not get ahead of Christine Duffy, who really wants to and should talk about what this experience is going to be like and more to come in 2024. And I can’t wait for you to listen to Christine and hear all about it.
Dan Politzer: Got it. And then just if I could squeeze in, one quick housekeeping, Panorama that was I think out of service a little bit in the fourth quarter in the first quarter. Is there any way to just quantify the impact of that?
Josh Weinstein: In the grand scheme of things, it’s probably a couple of pennies …
David Bernstein: …between, like maybe one penny in the fourth quarter and a couple in the first.
Dan Politzer: Got it. Thanks so much and happy holidays.
Josh Weinstein: Thanks, Frank. We have time for one last question.
Operator: We have a question from Assia Georgieva with Infinity Research. Please proceed.
Assia Georgieva: Congratulations guys on a great Q4. So happy that we’re back to looking at deals as opposed to per diems in the 10.5% was a great metric, but the 7.8% I like better. So I apologize. But again, I wanted just to finally get back to where we’re looking at the more usual metrics. Given that we have a very healthy outlook in terms of yields in Q1, Q2 drydocks, I think I at least understand well. So we have a good view into EBITDA throughout the year. David, would you mind taking us through sort of the debt and interest expense burdens that you may be trying to modify including as part of the C-change program by fiscal year-end 2024.
David Bernstein: Sure. So to start with, you saw our interest expense guidance in the press release. It was close to $100 million less than 2023. And keep in mind that while we did pay down quite a bit of debt, the average balance for the year is for 2024 is probably like $2.5 billion less than 2023. So that will lower interest expense by $200 million, but also keep in mind that we have less cash on the books and with declining interest income rates that probably is offsetting the savings by about $100 million. So, that’s why it’s a net decline of about $100 million in interest expense on a year-over-year basis. Looking at the debt level, I actually said this in my notes, in 2024, we are looking at about – I think it’s $2.1 billion of scheduled maturities.
But we will be replacing that debt with the $2.3 billion of export credits that we take on. So – but in addition to that, we have built in some prepayments of debt into our guidance. And as I said, we are evaluating that. So we do expect to see debt to go down in 2024. However, we do expect to see strong deleveraging from a metrics perspective because our EBITDA grows substantially. So our debt to EBITDA will also improve.
Assia Georgieva: Makes perfect sense. And just as a quick follow-up before I ask my second question, if I may. Would we be looking at the refinancing as opposed to repayment?
David Bernstein: So we are looking at both. As far as we expect to continue to prepay debt and to continue the deleveraging. But on top of that, we also expect to look at some potential refinancing which really would drive the interest cost down. And so we’ll see how – what opportunities are presented to us in 2024. And if it makes sense, we’ll take advantage of them.
Assia Georgieva: That sounds great. And so, if I can ask my second question, and I don’t think anyone has touched on this. Given geopolitical pressures, and we are comparing – used to be comparing 2023 to 2019 when we have St. Petersburg, which clearly the Eastern Baltics have been kind of off the books. Now we have an issue with the Middle East and cusp the scanner, I believe, is in the Persian Gulf, but will be one of the ships that will have to come back to Europe in going through a straight that is have been targeted by Yemeni military cells. Any thoughts on this or?
Josh Weinstein: Obviously, our first priority is going to be safety and we have – that’s already on our radar screen and we’ve got Middle East mitigation plan should we need it, but keep in mind this is months away. And so we’ll do the right thing. But there’s always something. I hate to say it that way, but there is always something, and our brand…
Assia Georgieva: I’ve been around long enough, 26 years. So there is always something Josh, I agree.
Josh Weinstein: Yes. So, all right, I think with that we do have to end it, but I’d say Happy Holidays to everybody, and thank you very much. Have a good new year.
Operator: That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines. Have a great day. Thank you.
