TIDMCCL
CARNIVAL CORPORATION & PLC REPORTS SECOND QUARTER 2023 EARNINGS AND SETS SIGHTS
ON 2026 SEA CHANGE PROGRAM
MIAMI, June 26, 2023 -- Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK)
reports second quarter 2023 earnings and sets sights on 2026 SEA Change Program.
· U.S. GAAP net loss of $407 million, or $(0.32) diluted EPS, and adjusted net
loss of $395 million, or $(0.31) adjusted EPS, above the better end of the March
guidance range of $425 to $525 million net loss for the second quarter of 2023
(see "Non-GAAP Financial Measures" below).
· Adjusted EBITDAfor the second quarterof 2023 was $681 million, at the high
end of the March guidance range of $600 million to $700 million (see "Non-GAAP
Financial Measures" below).
· Record second quarter revenue of $4.9 billion.
· The company saw continued acceleration of demand, with total bookings made
during the quarter reaching a new all-time high for all future sailings.
· Total customer deposits reached an all-time high of $7.2billion (as of May
31, 2023), surpassing the previous record of $6.0 billion (as of May 31, 2019)
by over $1 billion, a 26% increase compared to the prior quarter.
· Cash from operations and adjusted free cash flow were positive in the second
quarter of 2023. The company expects continued growth in adjusted free cash flow
to be the driver for paying down debt over time (see "Non-GAAP Financial
Measures" below).
· Second quarter 2023 ended with $7.3 billionof liquidity following the
prepayment of over $1 billion in near term variable rate debt.
· The company is introducing its SEA Change Program, a set of key performance
targets designed to achieve important strategic goals over a three-year period
ending in 2026.
Carnival Corporation & plc's Chief Executive Officer Josh Weinstein commented,
"We reached a meaningful inflection point for revenue this quarter, with net
yields surpassing 2019's strong levels, and we achieved positive operating
income, cash from operations and adjusted free cash flow."
Weinstein continued, "We are already executing on our strategy to grow revenue
by taking up ticket prices, even while maintaining record onboard spending
levels, building occupancy and growing capacity."
Weinstein added, "Based on continued strength in pricing, we delivered
outperformance in the second quarter and raised our expectation for revenue in
the second half, which coupled with the interest expense benefit we are
capturing from deleveraging will bring another $275 million dollars to the
bottom line for the year."
Weinstein noted, "With bookings and customer deposits hitting all-time highs, we
are clearly gaining momentum on an upward trajectory. We are focused on the
durable revenue growth and margin improvement that will deliver on our SEA
Change Program and propel us on the path to delevering and investment grade
leverage metrics."
Second Quarter 2023 Results and Statistical Information
· Operating income for the second quarter of 2023 was $120 million, turning
positive for the first time since the resumption of guest cruise operations and
marking a significant milestone.
· Adjusted EBITDAfor the second quarter of 2023 was $681 million, at the high
end of the March guidance range of $600 million to $700 million.
· Record second quarter revenue of $4.9 billion.
· While gross margin yields were down compared to 2019, the company achieved a
significant milestone of net yields in constant currency surpassing 2019 levels,
above March guidance by 3.2% in constant currency (see "Non-GAAP Financial
Measures" below).
· Cruise costs per available lower berth day ("ALBD") increased 8.3% as
compared to the second quarter of 2019.
· In constant currency, adjusted cruise costs excluding fuel per ALBD (see
"Non-GAAP Financial Measures" below) increased 13.5% compared to the second
quarter of 2019 and were above the high end of March guidance primarily due to
the timing of expenses between the quarters. Costs were higher as compared to
2019 as a result of higher dry-dock related expenses, higher advertising
investments to drive revenue for 2023 and beyond, incentive compensation
increases reflecting expected improvements in the company's current and long
-term performance, as well as partially mitigating the impacts of a high
inflation environment.
· Total customer deposits reached an all-time high of $7.2billion (as of May
31, 2023), surpassing the previous record of $6.0 billion (as of May 31, 2019)
by over $1 billion, driven by strong demand, bundled package offerings and pre
-cruise sales, and a 26% increase compared to the prior quarter.
Bookings
The company saw continued acceleration of demand, with total bookings made
during the quarter reaching a new all-time high for all future sailings. Booking
volumes for the second quarter exceeded the first quarter's booking volumes,
which was the previous record high.
Weinstein noted, "Our momentous wave period, typically a first quarter event,
started in record breaking fashion at the end of the fourth quarter, set a
record in the first quarter, actually accelerated in the second quarter and has
continued into the third quarter. Booking volumes have been tremendous and we
are gaining momentum with favorable pricing trends, which reflects improved
commercial execution and returns on our advertising investments. The booking
lead times for our North America and Australia ("NAA") segment are now further
out than we have ever seen, while lead times for our Europe segment continue to
lengthen and are now within 10 percent of 2019 levels, which is an improvement
of 10 points from the last quarter. In fact, our European brands' bookings taken
this past quarter for second half 2023 sailings for European deployments
achieved double digit percentage increases in both volume and price compared to
2019. Clearly the strength of our portfolio of world class brands is now
shifting into high gear."
The company's cumulative advanced booked position for the remainder of 2023 is
at higher ticket prices in constant currency, despite headwinds from the loss of
St. Petersburg as a marquee destination due to the suspension of cruises to
Russia (normalized for future cruise credits), as compared to strong 2019
pricing and a booked occupancy position that is near the high end of the
historical range. (The company's current booking trends are compared to booking
trends for 2019 as it is the most recent full year of guest cruise operations.)
Aligned with the company's yield management strategy, and while still early, the
cumulative advanced booked position for full year 2024 is above the high end of
the historical range at strong prices.
2023 Outlook
For the full year 2023, the company expects:
· Adjusted EBITDA of $4.10 billion to $4.25 billion, above March guidance's
range and with a midpoint increase of $175 million
· Includes approximately $0.5 billion unfavorable impact from fuel price and
currency compared to 2019
· Continued sequential improvement in each quarter in adjusted EBITDA per
ALBD as compared to 2019, driven by maintaining net per diems above 2019 levels
while closing the gap in occupancy to 2019 levels (see "Non-GAAP Financial
Measures" below)
· Occupancy of 100% or higher
· Net per diems of 5.5% to 6.5% (in constant currency) two and a half points
higher than March guidance, based on the acceleration of its strong demand
profile
· Adjusted cruise costs excluding fuel per ALBD (in constant currency) one and
a half points higher than March guidance, due to a slower expected ramp down in
inflationary pressures than previously estimated, incentive compensation
increases reflecting expected improvements in the company's current and long
-term performance and continued increases in advertising investments
For the third quarter of 2023, the company expects:
· Adjusted EBITDA of $2.05 billion to $2.15 billion, a significant improvement
compared to the second quarter of 2023 and adjusted net income of $0.95 billion
to $1.05 billion
· Occupancy of 107% or higher
The company expects net yields compared to 2019 (in constant currency) to be
positive for the second half of the year, despite the headwinds from the loss of
St. Petersburg as a marquee destination due to the suspension of cruises to
Russia.
See "Guidance" and "Reconciliation of Forecasted Data" for additional
information on the company's 2023 outlook.
SEA Change Program
Carnival Corporation & plc is introducing its SEA Change Program, a set of key
performance targets designed to reflect the achievement of important strategic
goals over a three-year period ending in 2026, including:
· Sustainability - More than 20% reduction in carbon intensity compared to
2019, improving upon the company's industry leading fuel-efficiency and pulling
forward its stated 2030 carbon intensity reduction goal by several years
· EBITDA - 50% increase in adjusted EBITDA per ALBD compared to 2023 June
guidance,representing the highest level in almost two decades
· Adjusted ROIC - 12% adjusted Return on Invested Capital ("ROIC"), more than
doubling adjusted ROIC from 2023 to 2026, and representing the highest level in
almost two decades. Adjusted ROIC excludes goodwill and intangibles to compare
against historical performance (see "Non-GAAP Financial Measures" below)
By the end of 2026, the company is expecting to approach investment grade
leverage metrics.
The company's targets are built on measured net capacity growth of less than
2.5% compounded annually from 2023. To achieve these three-year targets, the
company will continue with its focus across the portfolio on a range of
initiatives to drive net yield growth while maintaining its industry leading
cost base and fuel efficiency to continue to improve margins and grow adjusted
free cash flow, which the company believes will enable further debt reduction
over time.
Weinstein noted, "These financial targets are anchored on optimizing capital
allocation through measured capacity growth and will set our course back to
strong profitability and investment grade leverage metrics. We are gaining
momentum with continued strength in demand. We are excited about all the
opportunities ahead and the potential to create outsized value for our
shareholders as we work towards our 2026 targets."
Financing and Capital Activity
Carnival Corporation & plc Chief Financial Officer David Bernstein noted, "We
reached a meaningful turning point this quarter as we began deleveraging our
balance sheet and are already $1.4 billion dollars off our peak debt. We believe
with over $7 billion of liquidity, our improving EBITDA and our return to
profitability in the second half of 2023, we are very well positioned to pay
down debt maturities for the foreseeable future. We remain disciplined in making
capital allocation decisions, and our lowest orderbook in decades provides a
pathway for further deleveraging."
Cash from operations and adjusted free cash flow were positive in the second
quarter of 2023 and both are expected to be positive for the second half of the
year. The company expects continued growth in adjusted free cash flow to be the
driver for paying down debt over time.
The company has taken the following actions to address its debt portfolio since
February 28, 2023:
· Opportunistically paid down over $1 billion of variable rate debt mostly
with 2023 and 2024 maturities, that carried above average rates compared to the
rest of its debt portfolio
· In June, paid down $300 million of 2024 maturities
· Aligned its interest coverage covenant at a ratio of not less than 2.0:1.0
for testing dates from May 31, 2024 until May 31, 2025, across substantially all
its debt instruments with an interest coverage covenant
Following these actions, fixed rate debt now represents approximately 80% of the
company's debt portfolio, which provides protection from rising interest rates.
During the second quarter, the company repaid $1.8 billion of debt principal
including the remaining $0.2 billion outstanding under its revolving credit
facility. The company ended the second quarter of 2023 with $7.3 billion of
liquidity, including cash and borrowings available under the revolving credit
facility.
Simplifying Structure, Removing Senior Layers and Aligning Around Its Brands
with Rejuvenated Leadership
The company continues its drive to return to strong profitability by optimizing
its organizational and leadership structure to ensure continued momentum and to
help expedite the achievement of its long-term goals. The company realigned
around a simplified structure that removes layers between Corporate and its
brands. The leadership of its six largest brands, representing over 90% of the
company's expected capacity at year-end, now report directly to Weinstein (up
from one brand representing less than a third of the company's capacity
reporting directly to Weinstein), with three of the six brands continuing to
support smaller-capacity brands for scale and efficiency. The enhanced structure
enables its brands to operate with greater speed and responsiveness to market
demands and opportunities. Additionally, building on the company's leadership
rejuvenation efforts, 7 of Weinstein's 12 direct reports are new to the role
(since the pause in guest cruise operations).
Environmental, Social and Governance ("ESG")
Expanding shore power capabilities to improve fleet energy efficiency
In April 2023, AIDA Cruises reached a milestone when AIDAsol became the first
cruise ship in its fleet to connect to shore power facilities in four out of the
five ports during its voyage. Additionally, AIDAmar and AIDAsol were the first
two cruise ships to be supplied simultaneously with renewable shore power in a
German port. As of year end, based on the company's itineraries, less than 5% of
the ports it calls on offer shore power connections while 57% of the fleet is
shore power enabled. The company continues to work with local port authorities
in many locations to support their shore power development efforts.
Advancing Sustainability Initiatives
In April 2023, the company released its 13th annual sustainability report,
"Sustainable from Ship to Shore," detailing industry-leading initiatives and
momentum across environmental, social and governance focus areas. The report
describes significant progress made by the company toward its aspirations of
carbon neutral operations by 2050 and a circular economy model focused on waste
reduction, recycling and management. Having peaked in absolute carbon emissions
in 2011 despite 31% capacity growth since that time, the company is on track to
achieve a 40% reduction in carbon intensity by 2030 vs 2008, and has pulled
forward its stated 2030 carbon intensity reduction goal by several years, now
targeting more than a 20% reduction in carbon intensity by the end of 2026 vs
2019. This is the result of its four-part decarbonization strategy: fleet
optimization; energy efficiency; itinerary efficiency; and new technologies and
alternative fuels. Collectively, these strategic initiatives are expected to
drive a 15% reduction in fuel consumption per available lower berth day in 2023,
along with a 15% reduction in emissions per ALBD, both relative to 2019. The
company has continued to deliver on its commitment to advancing a circular
economy, achieving a 30% decrease in food waste per person in 2022 and is making
significant progress towards its interim goal to achieve 40% per person food
waste reduction by 2025 relative to its 2019 baseline.
Additionally, the company completed its first inventory of Scope 3 "value-chain"
emissions associated with purchased goods and services, fuel and energy
distribution/delivery, and waste management, among others. Using the Greenhouse
Gas ("GHG") Protocol standard, in the future, the company will track these
emissions annually vs a full-year 2019 operations baseline, which will support
the company's decarbonization efforts and provide transparency on its progress.
Other Recent Highlights
· Carnival Corporation was recognized on Forbes' annual listing of Best
Employers for Diversity for the fifth consecutive year.
· Carnival Cruise Line was voted Best Ocean Cruise Line in USA Today's 10Best
Readers' Choice Awards, and named one of America's Best Brands for Social Impact
by Forbes and recognized for its overall trustworthiness and values, social
stances, sustainability and community support.
· Carnival Veneziaofficially joined the Carnival Cruise Line fleet, becoming
the first ship to feature "Fun Italian Style," combining Italian themes with
Carnival's signature fun with Jay Leno as the brand's very first godfather.
· Holland America Line celebrated its 150th anniversary and Costa Cruises
celebrated its 75th anniversary.
· Costa Cruises signed an agreement to start using bio-liquefied natural gas
("LNG") powered trucks to transport supplies needed by its cruise ships.
· Carnival Corporation continues to expand next generation internet across its
fleet with the installation of SpaceX's Starlink on both Seabourn expedition
ships and Holland America's Koningsdam, following its introduction on Carnival
Cruise Line and AIDA ships.
Guidance
(See
"Reconciliation of
Forecasted
Data")
3Q 2023 Full
Year
2023
Change compared to Current Constant Current Constant
2019 Dollars Currency Dollars Currency
Net per diems 2.0% to 3.5% to 4.0% to 5.5% to
3.0% 4.5% 5.0% 6.5%
Adjusted cruise 12.5% 14.5% to 8.0% to 10.0% to
costs excluding to 15.5% 9.0% 11.0%
fuel 13.5%
per ALBD
3Q 2023 Full Year
2023
ALBDs (in millions) 23.8 91.3
(a)
Capacity growth vs 4.6% 4.5%
2019
Occupancy 107% or 100% or
percentage (a) higher higher
Fuel consumptionin 0.7 2.9
metric tons (in
millions)
Fuel cost per $ 620 $ 660
metric ton consumed
Fuel expense (in $ 0.5 $ 1.9
billions)
Depreciation and $ 0.6 $ 2.4
amortization (in
billions)
Interest expense, $ 0.5 $ 1.95
net of capitalized
interest and
interest income (in
billions)
Adjusted EBITDA (in $2,050 $4,100 to
millions) to $4,250
$2,150
Adjusted net income $950 to $(250) to
(loss) (in $1,050 $(100)
millions)
Adjusted earnings $0.70 to $(0.20)
per share $0.77 to
$(0.08)
Weighted-average 1,390 1,263
shares outstanding
-
diluted
Currencies (USD to
1)
AUD $ 0.68 $ 0.68
CAD $ 0.76 $ 0.76
EUR $ 1.09 $ 1.09
GBP $ 1.28 $ 1.25
(a) See "Notes to
Statistical
Information"
Sensitivities 3Q 2023 Remainder
(impact to adjusted of 2023
net
income (loss) in
millions)
1% change in net $ 51 $ 90
per diems
1% change in $ 22 $ 45
adjusted cruise
costs
excluding fuel per
ALBD
1% change in $ 7 $ 11
currency exchange
rates
10% change in fuel $ 46 $ 89
price
100 basis point - $ 38
change in variable
rate
debt (including
derivatives)
Capital
Expenditures
The company's
annual
capital
expenditures,
which include
year-to-date
actuals for
2023, are as
follows:
(in billions) 2023 2024 2025 2026
Contracted $ 1.8 $ 2.4 $ 0.9 $ -
newbuild
Non-newbuild 1.5 1.7 1.7 1.7
Total (a) $ 3.3 $ 4.1 $ 2.6 $ 1.7
(a) Future capital expenditures will fluctuate with foreign currency
movements relative to the U.S. Dollar. These figures do not include
potential ship additions that the company may elect in the future.
Outstanding Debt Maturities
As of May 31, 2023, the company's outstanding debt maturities are as follows:
(in billions) 2023 2024 2025 2026
First Lien $ 0.0 $ 0.1 $ 2.6 $ 0.0
Second Lien - - - 1.2
Export Credits 0.6 1.2 1.1 1.1
All other (a) 0.2 1.2 0.5 2.1
Total Principal payments on outstanding debt $ 0.8 $ 2.4 $ 4.3 $ 4.5
(a) Subsequent to May 31, 2023, the company
repaid $300 million of 2024 maturities.
Committed Ship Financings
(in billions) 2023 2024 2025
Future export credit facilities at May 31, 2023 $ 0.1 $ 2.2 $ 0.7
Refer to Financial Information within the Investor Relations section of the
corporate website for further details on the company's Debt Maturities, which
will be available upon filing the Form 10-Q:
https://www.carnivalcorp.com/financial-information/supplemental
-schedules (https://c212.net/c/link/?t=0&l=en&o=3904213
-1&h=2646437517&u=https%3A%2F%2Fwww.carnivalcorp.com%2Ffinancial
-information%2Fsupplemental
-schedules&a=https%3A%2F%2Fwww.carnivalcorp.com%2Ffinancial
-information%2Fsupplemental-schedules)
Conference Call
The company has scheduled a conference call with analysts at 10:00 a.m. EDT
(3:00 p.m. BST) today to discuss its earnings release. This call can be listened
to live, and additional information can be obtained, via Carnival Corporation &
plc's website at www.carnivalcorp.com and www.carnivalplc.com.
Carnival Corporation & plc is the largest global cruise company, and among the
largest leisure travel companies, with a portfolio of world-class cruise lines -
AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Holland America Line,
P&O Cruises (Australia), P&O Cruises (UK), Princess Cruises, and Seabourn.
Additional information can be found on www.carnivalcorp.com, www.aida.de,
www.carnival.com, www.costacruise.com, www.cunard.com, www.hollandamerica.com,
www.pocruises.com.au, www.pocruises.com, www.princess.comand www.seabourn.com.
For more information on Carnival Corporation's industry-leading sustainability
initiatives, visit www.carnivalsustainability.com.
MEDIA CONTACT INVESTOR RELATIONS CONTACT
Jody Venturoni Beth Roberts
+1 469 797 6380 +1 305 406 4832
Cautionary Note Concerning Factors That May Affect Future Results
Some of the statements, estimates or projections contained in this document are
"forward-looking statements" that involve risks, uncertainties and assumptions
with respect to us, including some statements concerning future results,
operations, outlooks, plans, goals, reputation, cash flows, liquidity and other
events which have not yet occurred. These statements are intended to qualify for
the safe harbors from liability provided by Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934, as amended. All
statements other than statements of historical facts are statements that could
be deemed forward-looking. These statements are based on current expectations,
estimates, forecasts and projections about our business and the industry in
which we operate and the beliefs and assumptions of our management. We have
tried, whenever possible, to identify these statements by using words like
"will," "may," "could," "should," "would," "believe," "depends," "expect,"
"goal," "aspiration," "anticipate," "forecast," "project," "future," "intend,"
"plan," "estimate," "target," "indicate," "outlook," and similar expressions of
future intent or the negative of such terms.
Forward-looking statements include those statements that relate to our outlook
and financial position including, but not limited to, statements regarding:
· Pricing · Adjusted net income (loss)
· Booking levels · Adjusted EBITDA
· Occupancy · Adjusted earnings per share
· Interest, tax and fuel · Adjusted free cash flow
expenses
· Currency exchange rates · Net per diems
· Goodwill, ship and · Net yields
trademark fair values
· Liquidity and credit · Adjusted cruise costs per ALBD
ratings
· Investment grade leverage · Adjusted cruise costs excluding fuel per ALBD
metrics
· Estimates of ship · Adjusted return on invested capital
depreciable lives and
residual values
Because forward-looking statements involve risks and uncertainties, there are
many factors that could cause our actual results, performance or achievements to
differ materially from those expressed or implied by our forward-looking
statements. This note contains important cautionary statements of the known
factors that we consider could materially affect the accuracy of our forward
-looking statements and adversely affect our business, results of operations and
financial position. Additionally, many of these risks and uncertainties are
currently, and in the future may continue to be, amplified by our substantial
debt balance as a result of the pause of our guest cruise operations. There may
be additional risks that we consider immaterial or which are unknown. These
factors include, but are not limited to, the following:
· Events and conditions around the world, including war and other military
actions, such as the invasion of Ukraine, inflation, higher fuel prices, higher
interest rates and other general concerns impacting the ability or desire of
people to travel have led, and may in the future lead, to a decline in demand
for cruises, impacting our operating costs and profitability.
· Pandemics have in the past and may in the future have a significant negative
impact on our financial condition and operations.
· Incidents concerning our ships, guests or the cruise industry have in the
past and may, in the future, negatively impact the satisfaction of our guests
and crew and lead to reputational damage.
· Changes in and non-compliance with laws and regulations under which we
operate, such as those relating to health, environment, safety and security,
data privacy and protection, anti-corruption, economic sanctions, trade
protection, labor and employment, and tax have in the past and may, in the
future, lead to litigation, enforcement actions, fines, penalties and
reputational damage.
· Factors associated with climate change, including evolving and increasing
regulations, increasing global concern about climate change and the shift in
climate conscious consumerism and stakeholder scrutiny, and increasing frequency
and/or severity of adverse weather conditions could adversely affect our
business.
· Inability to meet or achieve our sustainability related goals, aspirations,
initiatives, and our public statements and disclosures regarding them, may
expose us to risks that may adversely impact our business.
· Breaches in data security and lapses in data privacy as well as disruptions
and other damages to our principal offices, information technology operations
and system networks and failure to keep pace with developments in technology may
adversely impact our business operations, the satisfaction of our guests and
crew and may lead to reputational damage.
· The loss of key team members, our inability to recruit or retain qualified
shoreside and shipboard team members and increased labor costs could have an
adverse effect on our business and results of operations.
· Increases in fuel prices, changes in the types of fuel consumed and
availability of fuel supply may adversely impact our scheduled itineraries and
costs.
· We rely on supply chain vendors who are integral to the operations of our
businesses. These vendors and service providers may be unable to deliver on
their commitments, which could negatively impact our business.
· Fluctuations in foreign currency exchange rates may adversely impact our
financial results.
· Overcapacity and competition in the cruise and land-based vacation industry
may negatively impact our cruise sales, pricing and destination options.
· Inability to implement our shipbuilding programs and ship repairs,
maintenance and refurbishments may adversely impact our business operations and
the satisfaction of our guests.
· Failure to successfully implement our business strategy following our
resumption of guest cruise operations would negatively impact the occupancy
levels and pricing of our cruises and could have a material adverse effect on
our business. We require a significant amount of cash to service our debt and
sustain our operations. Our ability to generate cash depends on many factors,
including those beyond our control, and we may not be able to generate cash
required to service our debt and sustain our operations.
The ordering of the risk factors set forth above is not intended to reflect our
indication of priority or likelihood.
Forward-looking statements should not be relied upon as a prediction of actual
results. Subject to any continuing obligations under applicable law or any
relevant stock exchange rules, we expressly disclaim any obligation to
disseminate, after the date of this document, any updates or revisions to any
such forward-looking statements to reflect any change in expectations or events,
conditions or circumstances on which any such statements are based.
Forward-looking and other statements in this document may also address our
sustainability progress, plans and goals (including climate change and
environmental-related matters). In addition, historical, current and forward
-looking sustainability- and climate-related statements may be based on
standards and tools for measuring progress that are still developing, internal
controls and processes that continue to evolve, and assumptions and predictions
that are subject to change in the future and may not be generally shared.
CARNIVAL CORPORATION&
PLC
CONSOLIDATED
STATEMENTS OF INCOME
(LOSS)
(UNAUDITED)
(in millions, except
per share data)
Three Months Ended Six Months Ended
May 31, May 31,
2023 2022 2023 2022
Revenues
Passenger ticket $ 3,141 $ 1,285 $ 6,011 $ 2,158
Onboard and other 1,770 1,116 3,332 1,866
4,911 2,401 9,343 4,024
Operating Expenses
Commissions, 619 325 1,274 576
transportation and
other
Onboard and other 549 314 1,033 523
Payroll and related 601 533 1,183 1,038
Fuel 489 545 1,024 910
Food 325 191 636 327
Ship and other - - - 8
impairments
Other operating 875 774 1,619 1,331
Cruise and tour 3,457 2,683 6,768 4,713
operating expenses
Selling and 736 619 1,448 1,149
administrative
Depreciation and 597 572 1,179 1,126
amortization
4,791 3,874 9,394 6,988
Operating Income 120 (1,473) (52) (2,964)
(Loss)
Nonoperating Income
(Expense)
Interest income 69 6 124 9
Interest expense, net (542) (370) (1,082) (738)
of capitalized
interest
Gain (losses) on debt (31) - (31) -
extinguishment, net
Other income (17) 6 (47) (26)
(expense), net
(522) (358) (1,036) (755)
Income (Loss) Before (402) (1,831) (1,087) (3,719)
Income Taxes
Income Tax Benefit (5) (3) (13) (6)
(Expense), Net
Net Income (Loss) $ (407) $ (1,834) $ (1,100) $ (3,726)
Earnings Per Share
Basic $ (0.32) $ (1.61) $ (0.87) $ (3.27)
Diluted $ (0.32) $ (1.61) $ (0.87) $ (3.27)
Weighted-Average 1,263 1,140 1,261 1,139
Shares Outstanding -
Basic
Weighted-Average 1,263 1,140 1,261 1,139
Shares Outstanding -
Diluted
CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except par values)
May 31, November 30,
2023 2022
ASSETS
Current Assets
Cash and cash equivalents $ 4,468 $ 4,029
Restricted cash 18 1,988
Trade and other receivables, net 449 395
Inventories 438 428
Prepaid expenses and other 833 652
Total current assets 6,206 7,492
Property and Equipment, Net 39,584 38,687
Operating Lease Right-of-Use Assets, Net 1,310 1,274
Goodwill 579 579
Other Intangibles 1,163 1,156
Other Assets 3,030 2,515
$ 51,873 $ 51,703
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ - $ 200
Current portion of long-term debt 1,789 2,393
Current portion of operating lease liabilities 161 146
Accounts payable 1,042 1,050
Accrued liabilities and other 1,951 1,942
Customer deposits 6,892 4,874
Total current liabilities 11,835 10,605
Long-Term Debt 31,921 31,953
Long-Term Operating Lease Liabilities 1,208 1,189
Other Long-Term Liabilities 1,044 891
Shareholders' Equity
Common stock of Carnival Corporation, $0.01 par 12 12
value; 1,960 shares authorized; 1,250 shares at 2023
and 1,244 shares at 2022 issued
Ordinary shares of Carnival plc, $1.66 par value; 361 361
217 shares at 2023 and 2022 issued
Additional paid-in capital 16,684 16,872
Retained earnings (accumulated deficit) (841) 269
Accumulated other comprehensive income (loss) (1,903) (1,982)
Treasury stock, 130 shares at 2023 and 2022 of (8,449) (8,468)
Carnival Corporation and 73 shares at 2023 and 72
shares at 2022 of Carnival plc, at cost
Total shareholders' equity 5,865 7,065
$ 51,873 $ 51,703
CARNIVAL CORPORATION & PLC
OTHER INFORMATION
OTHER BALANCE SHEET INFORMATION(in millions) May 31, 2023 November 30, 2022
Liquidity (a) $ 7,336 $ 8,635
Debt (current and long-term) $ 33,710 $ 34,546
Customer deposits (current and long-term) $ 7,161 $ 5,089
(a) November 30, 2022 liquidity includes restricted cash from the 2028 Senior
Priority Notes which became unrestricted in December.
Three Months Ended Six Months Ended
May 31, May 31,
STATISTICAL INFORMATION 2023 2022 2023 2022
Passenger cruise days 21.8 11.4 42.0 18.7
("PCDs") (in millions)
(a)
ALBDs (in millions) (b) 22.3 16.7 44.3 30.0
Occupancy percentage (c) 98% 69% 95% 62%
Passengers carried (in 3.0 1.7 5.7 2.7
millions)
Fuel consumption in 0.7 0.6 1.5 1.2
metric tons (in millions)
Fuel consumption in 32.5 37.9 33.0 40.0
metric tons per thousand
ALBDs
Fuel cost per metric ton $ 677 $ 869 $ 704 $ 765
consumed
Currencies (USD to 1)
AUD $ 0.67 $ 0.73 $ 0.68 $ 0.72
CAD $ 0.74 $ 0.79 $ 0.74 $ 0.79
EUR $ 1.08 $ 1.08 $ 1.08 $ 1.11
GBP $ 1.23 $ 1.29 $ 1.23 $ 1.32
Notes to
Statistical
Information
(a) PCD represents the number of cruise passengers on a voyage
multiplied by the number of revenue-producing ship operating days
for that voyage.
(b) ALBD is a standard measure of passenger capacity for the period
that we use to approximate rate and capacity variances, based on
consistently applied formulas that we use to perform analyses to
determine the main non-capacity driven factors that cause our
cruise revenues and expenses to vary. ALBDs assume that each
cabin we offer for sale accommodates two passengers and is
computed by multiplying passenger capacity by revenue-producing
ship operating days in the period.
(c) Occupancy, in accordance with cruise industry practice, is
calculated using a numerator of PCDs and a denominator of ALBDs,
which assumes two passengers per cabin even though some cabins
can accommodate three or more passengers. Percentages in excess
of 100% indicate that on average more than two passengers
occupied some cabins.
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES
Three Months Ended Six Months Ended
May 31, May 31,
(in millions) 2023 2022 2023 2022
Net income (loss) $ (407) $ (1,834) $ (1,100) $ (3,726)
(Gains) losses on ship sales (45) (5) (54) 1
and impairments
(Gains) losses on debt 31 - 31 -
extinguishment, net
Restructuring expenses 15 1 15 1
Other 11 (29) 23 (29)
Adjusted net income (loss) $ (395) $ (1,867) $ (1,085) $ (3,752)
Interest expense, net of 542 370 1,082 738
capitalized interest
Interest income (69) (6) (124) (9)
Income tax (expense), benefit 5 3 13 6
Depreciation and amortization 597 572 1,179 1,126
Adjusted EBITDA $ 681 $ (928) $ 1,063 $ (1,891)
Three Months Ended Six Months Ended
May 31, May 31,
2023 2022 2023 2022
Earnings per share $ (0.32) $ (1.61) $ (0.87) $ (3.27)
(Gains) losses on ship sales (0.04) - (0.04) -
and impairments
(Gains) losses on debt 0.02 - 0.02 -
extinguishment, net
Restructuring expenses 0.01 - 0.01 -
Other 0.01 (0.03) 0.02 (0.03)
Adjusted earnings per share $ (0.31) $ (1.64) $ (0.86) $ (3.30)
Weighted-average shares 1,263 1,140 1,261 1,139
outstanding - diluted (in
millions)
Three Months Ended Six Months Ended
May 31, May 31,
(in millions) 2023 2022 2023 2022
Cash from (used in) $ 1,136 $ 4 $ 1,525 $ (1,209)
operations
Capital expenditures (697) (491) (1,772) (3,221)
(Purchases of Property and
Equipment)
Proceeds from export credits 186 - 1,016 2,343
Adjusted free cash flow $ 625 $ (487) $ 769 $ (2,086)
(See Non-GAAP Financial
Measures)
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)
Data in the below table is compared against 2019 as it is the most recent year
of full operations due to the pause and resumption of guest cruise operations.
Gross margin per diems and net per diems were computed by dividing the gross
margin and adjusted gross margin by PCDs. Gross margin yields and net yields
were computed by dividing the gross margin and adjusted gross margin by ALBDs as
follows:
Three Six
Months Months
Ended Ended
May 31, May 31,
(in 2023 2023 2019 2023 2023 2019
millions,
except Constant Constant
per diems
and yields Currency Currency
data)
Total $ 4,911 $ 4,838 $ 9,343 $
9,511
revenues
Less: Cruise (3,457) (3,159) (6,768)
(6,301)
and tour
operating
expenses
Depreciation (597) (542) (1,179)
(1,059)
and
amortization
Gross margin 856 1,136 1,397 2,151
Less: Tour (35) (71) (44) (99)
and other
revenues
Add: Payroll 601 566 1,183 1,123
and
related
Fuel 489 423 1,024 804
Food 325 269 636 538
Ship and - - - -
other
impairments
Other 875 803 1,619 1,562
operating
Depreciation 597 542 1,179 1,059
and
amortization
Adjusted $ 3,708 $ 3,782 $ 3,669 $ 6,992 $ 7,148 $
7,137
gross margin
PCDs 21.8 21.8 22.8 42.0 42.0 45.1
Gross margin $ 39.21 $ 49.87 $ 33.26 $
47.70
per diems
(per PCD)
Net per $ 169.77 $ 173.15 $ 161.04 $ 166.50 $ 170.21 $
158.24
diems (per
PCD)
ALBDs 22.3 22.3 21.6 44.3 44.3 42.9
Gross margin $ 38.43 $ 52.50 $ 31.49 $
50.10
yields
(per ALBD)
Net yields $ 166.38 $ 169.69 $ 169.52 $ 157.67 $ 161.18 $
166.20
(per ALBD)
(See Non
-GAAP
Financial
Measures)
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)
Data in the below table is compared against 2019 as it is the most recent year
of full operations due to the pause and resumption of guest cruise operations.
Cruise costs per ALBD, adjusted cruise costs per ALBD and adjusted cruise costs
excluding fuel per ALBD were computed by dividing cruise costs, adjusted cruise
costs and adjusted cruise costs excluding fuel by ALBDs as follows:
Three Six
Months Months
Ended Ended
May May 31,
31,
(in millions, 2023 2023 2019 2023 2023 2019
except
costs per ALBD Constant Constant
data)
Currency Currency
Cruise and $ 3,457 $ 3,15 $ 6,768 $ 6,301
tour
operating 9
expenses
Selling and 736 621 1,448 1,250
administrative
expenses
Less: Tour and (54) (68) (77) (103)
other
expenses
Cruise costs 4,140 3,712 8,139 7,448
Less: (619) (613) (1,274) (1,322)
Commissions,
transportation
and
other
Onboard and (549) (485) (1,033) (952)
other
costs
Gains (losses) 45 16 54 14
on ship
sales and
impairments
Restructuring (15) - (15) -
expenses
Other - (20) - (20)
Adjusted 3,002 3,045 2,610 5,871 5,968 5,168
cruise costs
Less: Fuel (489) (489) (423) (1,024) (1,024) (804)
Adjusted $ 2,513 $ 2,557 $ 2,18 $ 4,847 $ 4,944 $ 4,364
cruise costs
excluding fuel 7
ALBDs 22.3 22.3 21.6 44.3 44.3 42.9
Cruise costs $ 185.7 $ 171. $ 183.51 $
173.44
per ALBD
5
4 1
% increase 8.3% 5.8%
(decrease)
vs 2019
Adjusted $ 134.6 $ 136.64 $ 120. $ 132.37 $ 134.56 $
120.34
cruise costs
per ALBD 6
9 0
% increase 12% 13% 10% 12%
(decrease)
vs 2019
Adjusted $ 112.7 $ 114.71 $ 101. $ 109.29 $ 111.48 $
101.63
cruise costs
excluding fuel 0
per 6 5
ALBD
% increase 12% 14% 7.5% 10%
(decrease)
vs 2019
(See Non-GAAP
Financial
Measures)
Non-GAAP Financial Measures
We use non-GAAP financial measures and they are provided along with their most
comparative U.S. GAAP financial measure:
Non-GAAP Measure U.S. GAAP Use Non-GAAP Measure to Assess
Measure
· Adjusted net · Net income · Company Performance
income (loss) and (loss)
adjusted EBITDA
· Adjusted · Earnings per · Company Performance
earnings per share share
· Adjusted free · Cash from · Impact on Liquidity Level
cash flow (used in)
operations
· Net per diems · Gross margin · Cruise Segments Performance
per diems
· Net yields · Gross margin · Cruise Segments Performance
yields
· Adjusted cruise · Gross cruise · Cruise Segments Performance
costs per ALBD costs per ALBD
and adjustedcruise
costs excluding
fuel per ALBD
· Adjusted return - · Company Performance
on invested
capital
("ROIC")
The presentation of our non-GAAP financial information is not intended to be
considered in isolation from, as a substitute for, or superior to the financial
information prepared in accordance with U.S. GAAP. It is possible that our non
-GAAP financial measures may not be exactly comparable to the like-kind
information presented by other companies, which is a potential risk associated
with using these measures to compare us to other companies.
Adjusted net income (loss)and adjusted earnings per share provide additional
information to us and investors about our future earnings performance by
excluding certain gains, losses and expenses that we believe are not part of our
core operating business and are not an indication of our future earnings
performance. We believe that gains and losses on ship sales, impairment charges,
gains and losses on debt extinguishments, restructuring costs and certain other
gains and losses are not part of our core operating business and are not an
indication of our future earnings performance.
Adjusted EBITDAprovides additional information to us and investors about our
core operating profitability by excluding certain gains, losses and expenses
that we believe are not part of our core operating business and are not an
indication of our future earnings performance as well as excluding interest,
taxes and depreciation and amortization. In addition, we believe that the
presentation of adjusted EBITDA provides additional information to us and
investors about our ability to operate our business in compliance with the
covenants set forth in our debt agreements. We define adjusted EBITDA as
adjusted net income (loss) adjusted for (i) interest, (ii) taxes and (iii)
depreciation and amortization. There are material limitations to using adjusted
EBITDA. Adjusted EBITDA does not take into account certain significant items
that directly affect our net income (loss). These limitations are best addressed
by considering the economic effects of the excluded items independently and by
considering adjusted EBITDA in conjunction with net income (loss) as calculated
in accordance with U.S. GAAP.
Adjusted free cash flowprovides additional information to us and investors to
assess our ability to repay our debt after making the capital investments
required to support ongoing business operations and value creation as well as
the impact on the company's liquidity level. Adjusted free cash flow represents
net cash provided by operating activities adjusted for capital expenditures
(purchases of property and equipment) and proceeds from export credits that are
provided for related capital expenditures. Adjusted free cash flow does not
represent the residual cash flow available for discretionary expenditures as it
excludes certain mandatory expenditures such as repayment of maturing debt.
Net per diemsand net yields enable us and investors to measure the performance
of our cruise segments on a per PCD and per ALBD basis. We use adjusted gross
margin rather than gross margin to calculate net per diems and net yields. We
believe that adjusted gross margin is a more meaningful measure in determining
net per diems and net yields than gross margin because it reflects the cruise
revenues earned net of only our most significant variable costs, which are
travel agent commissions, cost of air and other transportation, certain other
costs that are directly associated with onboard and other revenues and credit
and debit card fees.
Adjusted cruise costs per ALBDand adjusted cruise costs excluding fuel per ALBD
enable us and investors to separate the impact of predictable capacity or ALBD
changes from price and other changes that affect our business. We believe these
non-GAAP measures provide useful information to us and investors and expanded
insight to measure our cost performance. Adjusted cruise costs per ALBD and
adjusted cruise costs excluding fuel per ALBD are the measures we use to monitor
our ability to control our cruise segments' costs rather than cruise costs per
ALBD. We exclude gains and losses on ship sales, impairment charges,
restructuring costs and certain other gains and losses that we believe are not
part of our core operating business as well as excluding our most significant
variable costs, which are travel agent commissions, cost of air and other
transportation, certain other costs that are directly associated with onboard
and other revenues and credit and debit card fees. We exclude fuel expense to
calculate adjusted cruise costs without fuel. The price of fuel, over which we
have no control, impacts the comparability of period-to-period cost performance.
The adjustment to exclude fuel provides us and investors with supplemental
information to understand and assess the company's non-fuel adjusted cruise cost
performance. Substantially all of our adjusted cruise costs excluding fuel are
largely fixed, except for the impact of changing prices once the number of ALBDs
has been determined.
Adjusted ROICprovides additional information to us and investors about our
operating performance relative to the capital we have invested in the company.
We define adjusted ROIC as the twelve-month adjusted net income (loss) before
interest expense and interest income divided by the monthly average of debt plus
equity minus construction-in-progress, excess cash, goodwill and intangibles.
Reconciliation of Forecasted Data
We have not provided a reconciliation of forecasted non-GAAP financial measures
to the most comparable U.S. GAAP financial measures because preparation of
meaningful U.S. GAAP forecasts would require unreasonable effort. We are unable
to predict, without unreasonable effort, the future movement of foreign exchange
rates and fuel prices. We are unable to determine the future impact of gains and
losses on ship sales, impairment charges, gains and losses on debt
extinguishments, restructuring costs and certain other non-core gains and
losses.
Constant Currency
Our operations primarily utilize the U.S. dollar, Australian dollar, euro and
sterling as functional currencies to measure results
and financial condition. Functional currencies other than the U.S. dollar
subject us to foreign currency translational risk. Our operations also have
revenues and expenses that are in currencies other than their functional
currency, which subject us to foreign currency transactional risk.
Constant currency reporting removes the impact of changes in exchange rates on
the translation of our operations plus the transactional impact of changes in
exchange rates from revenues and expenses that are denominated in a currency
other than the functional currency.
We report adjusted gross margin, net per diems, adjusted cruise costs excluding
fuel and adjusted cruise costs excluding fuel per ALBD on a "constant currency"
basis assuming the 2023 periods' currency exchange rates have remained constant
with the 2019 periods' rates. These metrics facilitate a comparative view for
the changes in our business in an environment with fluctuating exchange rates.
Examples:
· The translation of our operations with functional currencies other than U.S.
dollar to our U.S. dollar reporting currency results in decreases in reported
U.S. dollar revenues and expenses if the U.S. dollar strengthens against these
foreign currencies and increases in reported U.S. dollar revenues and expenses
if the U.S. dollar weakens against these foreign currencies.
· Our operations have revenue and expense transactions in currencies other
than their functional currency. If their functional currency strengthens against
these other currencies, it reduces the functional currency revenues and
expenses. If the functional currency weakens against these other currencies, it
increases the functional currency revenues and expenses.
This information was brought to you by Cision http://news.cision.com
END
(END) Dow Jones Newswires
June 26, 2023 09:15 ET (13:15 GMT)
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