Good morning, CFOs. Carnival's finance chief discusses paying down debt and looking for cost savings after the pandemic; Mamdani's latest push to take on big business; plus, food companies dodge crackdown in RFK Jr.'s proposal on new additives.

When the Covid-19 pandemic grounded the cruise industry, high-profile outbreaks and a more than yearlong U.S. hiatus left ships empty. Cruise giants watched revenues collapse as debt loads ballooned.

At Carnival, CFO David Bernstein made a commitment to investors: He wouldn't leave until the company repaid its pandemic-era debt.

Now, nearly five years after the cruise operator's first ship returned to sea, Bernstein said he and other Carnival insiders have delivered. Moreover, debt is down $10 billion, to roughly $26 billion, since 2022, Carnival is back to investment-grade status and cash is again flowing to shareholders through dividends and buybacks.

"I finally feel like I have completed the promise I made to all those hundreds of investors that I talked to in the spring of 2020," he said. Having kept his word, the CFO plans to stay put.

With the balance sheet stabilized, I caught up with Bernstein to see what's next, from reducing costs and operating more efficiently to now running the business as a single-listed company. Here are edited excerpts of the conversation.

Carnival has been looking for cost savings. For the latest three-month period, you told analysts there are "hundreds of little things" that can be changed to improve costs. What are some examples?

First of all, AI is allowing us to be more productive. You always have some attrition, right? And as AI rolls in, and things change, somebody leaves, and you sort of say to yourself, "Do I really need to replace that person?" That's been happening for at least a year now, and we are saving money.

We are also looking at sourcing savings, from where we source, who we source from, how many of our operating companies source a particular item and renegotiating contracts. The cloud is another area. Everybody these days is spending many, many millions of dollars, even many tens of millions of dollars on this. I put together a group of a few financial people to help control this and they're finding savings by tagging things that we're underutilizing.

Is there a cost savings target?

I hate to give a specific external target for cost savings, only because I never know how the world is going to evolve. I don't know what inflation is going to be. There's too much uncertainty to say revenue is going to be this, costs are going to be that.

I will tell you, we're hoping it's below inflation. We should be able to do better than just say, inflation is 3%, and costs go up 3%.

In early May, Carnival Corp. and Carnival PLC went from a dual-listed company structure to a unified company. What brought this on and what does it change?

We first did the dual-listed structure in 2003. And it worked well, so it lasted a long time. But we got to a point where, as a result of share buybacks and stock swaps, the number of shares outstanding in PLC went down and the number of shares in Carnival Corp. went up. So, whereas, on day one, the PLC shares were over 30% of the market cap, in 2026, they represented around 10%.

Because of the shift, along with other factors, we got to a point where we said, "OK, it's smaller. It's not a negative if we do this." And we get to eliminate a few million dollars of administrative costs from trying to juggle two different regulatory environments. The only people who noticed were probably about 15 or 20 of us in corporate, because operationally, it changed nothing.

Now that you've met promises made during the pandemic, what are your priorities for investing capital?

Reinvesting cash into the business is always our number one priority. We have 10 ships on order. We continue to look at more potential orders. We're investing in exclusive destinations such as private islands.

When we get done with all of that, we still have money left over. We will grow the dividend over time as the earnings per share grows. And the rest will be returned to shareholders in the form of stock buybacks over time, opportunistically.

The Day Ahead

📆 Earnings

   -- Amcor 
 
   -- Brinker International 
 
   -- Cisco Systems 
 
   -- Performance Food Group 
 
   -- StubHub Holdings 

📈 Economic Indicators

The Bureau of Labor Statistics releases the consumer-price index for July.

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What Else Matters to CFOs

New York Mayor Zohran Mamdani has fired a new salvo in his push to take on big business on behalf of low-paid workers, backing a bill that would force Amazon, FedEx and other companies to employ delivery workers instead of using subcontractors, Lauren Weber and Esther Fung report.

The bill, introduced earlier this year in the New York City Council, would require warehouse operators to obtain licenses from the city. To receive a license, operators would have to adhere to new safety, training and employment requirements, including hiring thousands of the city's contract couriers.

The mayor's backing now blows open a political battle that's been bubbling for months since the bill's introduction. It concerns one of the most challenging parts of the delivery business in a city whose residents rely on meals and packages regularly appearing on their doorsteps: the "last mile," or the final stretch between a warehouse and a customer's home.

📰 Other headlines

   -- Food Companies Dodge Crackdown in RFK Jr.'s Proposal on New Additives 
 
   -- General Motors Sets Up $4.5 Billion Safety Net to Avoid Parts Shortages 
 
   -- Private-Credit Firms Clamp Down on Loan Sweeteners in Fear of 'Shadow 
      Defaults' 
 
   -- Why Wall Street and Nvidia Are Building an Exotic Money Pipeline for the 
      AI Boom 
 
   -- Bank of America to Deploy $250 Billion to Bolster AI and Energy 
      Infrastructure 
 
   -- Target Hires First Chief AI Officer in Retail's Latest Tech Push 
 
   -- Behind High Credit-Card Delinquencies: Stale, Charged-Off Loans 
 
   -- Longtime OpenAI Exec Brad Lightcap to Step Down 
 
   -- New York City Launches Sweeping Investigation Into Polymarket and Kalshi 
 
   -- Lockheed Martin Investing Millions to Develop Hypersonic Weapons System 
 
   -- Flight-Tracking Platform Sues Kalshi Over Flight Cancellation Prediction 
      Markets 
 
   -- Trump Threatens to Take Federal Action to Block Mamdani's 
      Pied-à-Terre Tax 
 
   -- The StubHub Customers Who Battled for Tickets -- and Battle Harder for a 
      Refund 

📈 Earnings wrap-up

   -- On Holding Tempers Outlook as Running-Shoe Sales Underwhelm 
 
   -- Smithfield Lowers Outlook on Consumer Caution, Softer Meat and Hog 
      Markets 

For more earnings news, click here.

The Big Number

The percentage decline in sales of existing homes in July over the previous month, getting the summer off to a poor start.

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