TIDMCCL
Exhibit 99.1
CARNIVAL CORPORATION & PLC
PROVIDES FIRST QUARTER 2023 BUSINESS UPDATE
MIAMI (March 27, 2023) - Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK)
provides first quarter 2023 business update.
* U.S. GAAP net loss of $693 million, or $(0.55) diluted EPS, and adjusted
net loss of $690 million, or $(0.55) adjusted EPS, better than the December
guidance range of $750 to $850 million net loss for the first quarter of
2023 (see "Non-GAAP Financial Measures" below).
* Adjusted EBITDA for the first quarter of 2023 was $382 million, better than
the December guidance range of $250 million to $350 million, despite a $31
million unfavorable impact from fuel price and currency rates since
December guidance.
* Revenue in the first quarter of 2023 was $4.4 billion, representing 95% of
2019 levels.
* The company experienced the highest booking volumes for any quarter in its
history, breaking booking records for both the North America and Australia
("NAA") and Europe segments.
* Total customer deposits reached a first quarter record of $5.7 billion (as
of February 28, 2023), surpassing the previous first quarter record of $4.9
billion (as of February 28, 2019) by 16%.
* Cash from operations turned positive in the first quarter of 2023. The
company expects continued growth in cash from operations to be the driver
for paying down debt over time.
* First quarter 2023 ended with $8.1 billion of liquidity.
Carnival Corporation & plc's Chief Executive Officer Josh Weinstein commented,
"In the first quarter, we outperformed our guidance on all measures. We
achieved record first quarter net per diems, exceeding the high end of our
guidance, driven by improving ticket prices and sustained growth in onboard
revenue, while delivering an additional seven points of occupancy on higher
capacity compared to the prior quarter." (See "Non-GAAP Financial Measures"
below)
Weinstein continued, "We are enjoying a phenomenal wave season, achieving our
highest ever quarterly booking volumes and breaking records in both North
America and Europe. Our strong performance has extended into March and we
expect this favorable trend to continue based on the success of our efforts to
drive demand."
Weinstein added, "We remain focused on executing our overarching strategy of
driving net yield growth, while maintaining our industry-leading cost base.
With adjusted free cash flow for the year expected to be positive, our revolver
renewal behind us, more committed export credit financings in hand, a reduced
capex profile going forward and over $8 billion of liquidity, we believe we are
well positioned to pay down near term debt maturities from excess liquidity and
therefore have no intention to sell equity (except in connection with our
advantageous and non-dilutive stock swap program)."
First Quarter 2023 Results and Statistical Information
First quarter 2023 results exceeded the company's guidance due to stronger
pricing and onboard spending, higher occupancy and favorable timing of
operating costs.
* Adjusted EBITDA (see "Non-GAAP Financial Measures" below) for the first
quarter of 2023 was $382 million, better than the December guidance range
of $250 million to $350 million, despite a $31 million unfavorable impact
from fuel price and currency rates since December guidance.
* Continuing to close the gap to a strong 2019:
+ Revenue in the first quarter of 2023 was $4.4 billion, representing 95%
of 2019 levels. This was better than the fourth quarter of 2022, which
was 80% of 2019 levels, an improvement of 15 percentage points.
+ Occupancy in the first quarter of 2023 was 91%, higher than December
guidance. Occupancy increased by seven percentage points compared to
the prior quarter, on higher capacity.
* Cruise costs per available lower berth day ("ALBD") increased 3.3% as
compared to the first quarter of 2019.
* In constant currency, adjusted cruise costs excluding fuel per ALBD (see
"Non-GAAP Financial Measures" below) increased 5.9% compared to the first
quarter of 2019, continuing its sequential quarterly improvement and better
than the December guidance of up to 6.5% to 7.5%. Costs remain higher as
compared to 2019 as a result of higher advertising investments to drive
2023 revenue as well as partially mitigating the impacts of a high
inflation environment.
* Total customer deposits reached a first quarter record of $5.7 billion (as
of February 28, 2023), surpassing the previous first quarter record of $4.9
billion (as of February 28, 2019) by 16%, driven by strong demand, bundled
package offerings and pre-cruise sales.
Bookings
Weinstein noted, "We are well booked for the remainder of the year at higher
prices (normalized for FCCs), which coupled with continued strength in onboard
revenue, supports our improving outlook for the remainder of the year. We
expect the extension of booking lead times, combined with our investment in
advertising, to position us even better in 2024 and beyond."
The company is very encouraged with the improving demand environment, kicked
off by an early start to wave season (peak booking period) on very strong Black
Friday and Cyber Monday booking volumes. The company experienced the highest
booking volumes for all future sailings for any quarter in its history. Both
the company's NAA and Europe segments broke records, contributing to the
company's record-breaking quarter. Consistent with previous comments, during
the first quarter of 2023 the company continued its increased advertising
activities, supporting its booking volumes.
The booking window has continued to return to historical patterns, providing
further confidence in the continued strengthening of the demand environment and
facilitating improving revenue yields over time. The company's NAA segment's
booking curve mirrored peak 2019 levels, while the company's Europe segment
continued to see an extension of its booking curve, which is over 80% recovered
compared to 2019 levels.
The company's cumulative advanced booked position for the remainder of 2023 is
at higher ticket prices in constant currency, normalized for future cruise
credits ("FCCs"), as compared to strong 2019 pricing and a booked occupancy
position that is solidly in the higher 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.)
2023 Outlook
For the full year 2023, the company expects:
* Adjusted EBITDA of $3.9 billion to $4.1 billion
+ Includes approximately $0.5 billion unfavorable impact from fuel price
and currency compared to 2019
+ Sequential improvement in each quarter in adjusted EBITDA per ALBD
compared to 2019, driven by closing the gap in occupancy to 2019 levels
while achieving net per diems above 2019 levels
* Occupancy of 100% or higher, returning to historical levels this summer
* Adjusted cruise costs excluding fuel per ALBD (in constant currency) one
point higher than December guidance, reflecting an expected increase in
occupancy levels and strategic decisions taken during the quarter
For the second quarter of 2023, the company expects:
* Adjusted EBITDA of $600 million to $700 million, a significant improvement
compared to the first quarter of 2023
* Occupancy of 98% or higher
+ A seven percentage point gap (or less) from 2019
+ An improvement from a 13 percentage point gap for the first quarter of
2023 compared to 2019
* Net per diems of 2.5% to 3.5% (in constant currency) above 2019 levels
+ Net per diems reflect the changing brand mix and cabin mix as compared
to the first quarter
+ Net yields (see "Non-GAAP Financial Measures" below) of $160, higher
than first quarter of $149, which reflects continuing net yield
improvement
* Adjusted cruise costs excluding fuel per ALBD higher than first quarter of
2023, reflecting an expected increase in occupancy levels and higher
dry-dock related expenses
See "Guidance" for additional information on the company's 2023 outlook.
Financing and Capital Activity
Carnival Corporation & plc Chief Financial Officer David Bernstein noted, "We
believe our debt balance has peaked this quarter and will reduce over time
based on our ample liquidity position of $8.1 billion and the expected cash
flow strength of our business."
Cash from operations turned positive in the first quarter of 2023. The company
expects continued growth in cash from operations to be the driver for paying
down debt over time.
During the quarter, the company obtained two new export credit facilities,
bringing the total committed financing related to ship deliveries scheduled for
delivery through 2025 to $3.2 billion. These export credit facilities provide
the company with the ability to finance its newbuild program at preferential
interest rates.
(in billions) 2023 2024 2025
Future export credit facilities at February 28, $ $ $
2023 0.3 2.2 0.7
The company continues its efforts to proactively address its debt profile. The
company successfully arranged a new $2.1 billion multi-currency revolving
credit facility (the "New Revolver"). The New Revolver will replace the
existing $2.9 billion multi-currency revolving credit facility upon its
maturity in August 2024. The New Revolver has an initial term of one year,
commencing in August 2024, with two one-year extension options. The New
Revolver also contains an accordion feature, allowing for additional
commitments up to an aggregate of $2.9 billion.
During the first quarter the company invested $1.1 billion in capital
expenditures, repaid $0.7 billion of debt principal and incurred $0.5 billion
of interest expense, net. The company ended the first quarter of 2023 with $8.1
billion of liquidity, including cash and borrowings available under the
revolving credit facility.
Environmental, Social and Governance ("ESG")
Piloting the use of alternative fuels and biofuels
The company continues to focus on innovation in its commitment to
decarbonization by evaluating and piloting the use of alternative fuels and
biofuels. During the quarter, Costa Cruises and AIDA Cruises announced a
partnership with a leading methanol producer which aims to enhance the supply
of and necessary infrastructure for methanol. Suitably sourced green methanol
is considered a lower-carbon fuel which virtually eliminates particulate matter
and sulfur oxides. This partnership builds on the company's progress throughout
2022, which included the completion of two successful pilots using a blend of
marine biofuel made from 100% sustainable raw materials. These biofuels can be
used in existing ship engines without modifications to the engine or fuel
infrastructure, including on ships already in service.
Laura Weil appointed Chair of the Audit Committees
As of February 1, 2023, Laura Weil became the Chair of the Audit Committees.
Ms. Weil has extensive financial, strategic information technology and
operating skills, which make her highly qualified to lead the Audit Committees.
She will serve as the successor of Richard J. Glasier, who will not seek
re-election to the Boards of Directors at the 2023 Annual Meetings of
Shareholders and will retire from the Boards with effect from the conclusion of
the 2023 Annual Meetings of Shareholders. As of April 2023, the company's
Boards will be comprised of eleven members, nine of whom are independent
directors, four of whom are female and one of whom is ethnically diverse.
Other Recent Highlights
* The company sold Seabourn Odyssey and expects to record a gain on the sale.
* Carnival Corporation & plc was named by Newsweek as One of America's
Greatest Workplaces for Diversity 2023.
* Carnival Cruise Line was recognized as one of the 25 Best Companies for
Latinos to Work in 2023 by Latino Leaders Magazine.
* Costa Cruises was honored at the Excellence Cruise Awards as Best Cruise
Line for a First Cruise, Best Value for Money and Excellence in
Sustainability.
Guidance
(See "Reconciliation of Forecasted Data")
2Q 2023 Full Year 2023
Change compared to 2019 Current Constant Current Constant
Dollars Currency Dollars Currency
Net per diems 0.0% to 1.0% 2.5% to 3.5% 1.0% to 2.0% 3.0% to 4.0%
Adjusted cruise costs excluding 8.0% to 9.0% 10.5% to 6.5% to 7.5% 8.5% to 9.5%
fuel per ALBD 11.5%
2Q 2023 Full Year 2023
ALBDs (in millions) (a)
22.3 91.3
Capacity growth vs 2019 3.1 % 4.5 %
Occupancy percentage (a) 98% or higher 100% or higher
Fuel consumption in metric tons (in millions) 0.7 2.9
Fuel cost per metric ton consumed $ $
645 650
Fuel expense (in billions) $ $
0.5 1.9
Depreciation and amortization (in billions) $ $
0.6 2.4
Interest expense, net of capitalized interest and $ $
interest income (in billions) 0.5 2.0
Adjusted EBITDA (in millions) $600 to $700 $3,900 to $4,100
Adjusted net income (loss) (in millions) $(525) to $(425) $(550) to $(350)
Adjusted earnings per share $(0.42) to $(0.34) $(0.44) to $(0.28)
Currencies (USD to 1)
AUD $ $
0.67 0.67
CAD $ $
0.73 0.73
EUR $ $
1.07 1.07
GBP $ $
1.22 1.22
(a) See "Notes to Statistical Information"
Sensitivities (impact to adjusted net income (loss) in 2Q 2023 Remainder of 2023
millions)
1% change in net per diems $ $
38 127
1% change in adjusted cruise costs excluding fuel per $ $
ALBD 23 68
1% change in currency exchange rates $ $
2 14
10% change in fuel price $ $
50 146
100 basis point change in variable rate debt (including $
derivatives) - 67
Capital Expenditures
The company's annual capital expenditure forecast, which includes year-to-date
actuals for 2023, is as follows:
(in billions) 2023 2024 2025 2026
Contracted newbuild $ $ $ $
1.7 2.4 0.9 -
Non-newbuild
1.5 1.7 1.7 1.7
Total (a) $ $ $ $
3.2 4.1 2.6 1.7
a. Forecasted capital expenditures will fluctuate with foreign currency
movements relative to the U.S. Dollar.
Outstanding Debt Maturities
As of February 28, 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
1.1 1.5 1.4 1.3
All other
0.6 1.0 0.5 2.1
Total Principal payments on outstanding debt $ $ $ $
(a) 1.8 2.5 4.5 4.6
a. Excludes borrowings of $0.2 billion under the $2.9 billion multi-currency
revolving credit facility at February 28, 2023, which matures in August
2024.
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
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 business update. 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.com and 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 expenses * Adjusted free cash flow
* Currency exchange rates * Net per diems
* Goodwill, ship and trademark fair * Net yields
values
* Liquidity and credit ratings * Adjusted cruise costs per ALBD
* Estimates of ship depreciable lives and * Adjusted cruise costs excluding fuel
residual values per ALBD
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 are also affected by
COVID-19 and 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
February 28,
2023 2022
Revenues
Passenger ticket $ 2,870 $ 873
Onboard and other 750
1,563
1,623
4,432
Operating Expenses
Commissions, transportation and other 251
655
Onboard and other 209
484
Payroll and related 506
582
Fuel 365
535
Food 136
311
Ship and other impairments
- 8
Other operating 557
743
Cruise and tour operating expenses 2,030
3,311
Selling and administrative 530
712
Depreciation and amortization 554
582
3,114
4,604
Operating Income (Loss) (1,491)
(172)
Nonoperating Income (Expense)
Interest income
56 3
Interest expense, net of capitalized interest (368)
(539)
Other income (expense), net
(30) (32)
(397)
(514)
Income (Loss) Before Income Taxes (1,888)
(686)
Income Tax Benefit (Expense), Net
(7) (3)
Net Income (Loss) $ $ (1,891)
(693)
Earnings Per Share
Basic $ $ (1.66)
(0.55)
Diluted $ $ (1.66)
(0.55)
Weighted-Average Shares Outstanding - Basic 1,260 1,137
Weighted-Average Shares Outstanding - Diluted 1,260 1,137
CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except par values)
February 28, November 30, 2022
2023
ASSETS
Current Assets
Cash and cash equivalents $ 5,455 $ 4,029
Restricted cash
15 1,988
Trade and other receivables, net
514 395
Inventories
448 428
Prepaid expenses and other
710 652
Total current assets
7,144 7,492
Property and Equipment, Net 39,359 38,687
Operating Lease Right-of-Use Assets, Net
1,246 1,274
Goodwill
579 579
Other Intangibles
1,158 1,156
Other Assets
2,501 2,515
$ 51,985 $ 51,703
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ $
200 200
Current portion of long-term debt
2,264 2,393
Current portion of operating lease liabilities
156 146
Accounts payable
1,022 1,050
Accrued liabilities and other
1,951 1,942
Customer deposits
5,495 4,874
Total current liabilities 11,088 10,605
Long-Term Debt 32,672 31,953
Long-Term Operating Lease Liabilities
1,148 1,189
Other Long-Term Liabilities
908 891
Shareholders' Equity
Common stock of Carnival Corporation, $0.01 par value; 1,960
shares authorized; 1,246 shares at 2023 and 1,244 shares at 12 12
2022 issued
Ordinary shares of Carnival plc, $1.66 par value; 217 shares
at 2023 and 2022 issued 361 361
Additional paid-in capital 16,635 16,872
Retained earnings (accumulated deficit)
(434) 269
Accumulated other comprehensive income (loss)
(1,972) (1,982)
Treasury stock, 130 shares at 2023 and 2022 of Carnival
Corporation and 71 shares at 2023 and 72 shares at 2022 of (8,433) (8,468)
Carnival plc, at cost
Total shareholders' equity
6,170 7,065
$ 51,985 $ 51,703
CARNIVAL CORPORATION & PLC
OTHER INFORMATION
OTHER BALANCE SHEET INFORMATION (in millions) February 28, 2023 November 30, 2022
Liquidity (a) $ $
8,105 8,635
Debt (current and long-term) $ $
35,135 34,546
Customer deposits (current and long-term) $ $
5,696 5,089
(a) November 30, 2022 liquidity includes cash, restricted cash from the 2028
Senior Priority Notes which became unrestricted in December, and borrowings
available under the revolving credit facility.
Three Months Ended
February 28,
STATISTICAL INFORMATION 2023 2022
Passenger cruise days ("PCDs") (in millions) (a)
20.2 7.2
ALBDs (in millions) (b)
22.1 13.3
Occupancy percentage (c) 91 % 54 %
Passengers carried (in millions)
2.7 1.0
Fuel consumption in metric tons (in millions)
0.7 0.6
Fuel consumption in metric tons per thousand ALBDs
33.4 42.5
Fuel cost per metric ton consumed $ $
730 648
Currencies (USD to 1)
AUD $ $
0.69 0.72
CAD $ $
0.74 0.79
EUR $ $
1.07 1.13
GBP $ $
1.22 1.35
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.
a. 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.
a. 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
February 28,
(in millions) 2023 2022
Net income (loss) $ (693) $ (1,891)
(Gains) losses on ship sales and impairments
(9) 7
(Gains) losses on debt extinguishment, net - -
Restructuring expenses - -
Other -
12
Adjusted net income (loss) $ (690) $ (1,884)
Interest expense, net of capitalized interest 539 368
Interest income
(56) (3)
Income tax (expense), benefit
7 3
Depreciation and amortization 582 554
Adjusted EBITDA $ 382
(962)
Three Months Ended
February 28,
2023 2022
Earnings per share $ $
(0.55) (1.66)
(Gains) losses on ship sales and impairments
(0.01) 0.01
(Gains) losses on debt extinguishment, net
- -
Restructuring expenses
- -
Other
0.01 -
Adjusted earnings per share $ $
(0.55) (1.66)
Weighted-average shares outstanding - diluted (in millions)
1,260 1,137
Three Months Ended
February 28,
(in millions) 2023 2022
Cash from (used in) operations $ $
388 (1,212)
Capital expenditures (Purchases of Property and Equipment)
(1,075) (2,730)
Proceeds from export credits
830 2,343
Adjusted free cash flow $ $
144 (1,598)
(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 Months Ended February 28,
(in millions, except per diems and yields data) 2023 2023 2019
Constant
Currency
Total revenues $ $ 4,673
4,432
Less: Cruise and tour operating expenses
(3,311) (3,142)
Depreciation and amortization
(582) (516)
Gross margin
540 1,015
Less: Tour and other revenues
(9) (29)
Add: Payroll and related
582 557
Fuel
535 381
Food
311 268
Ship and other impairments
- -
Other operating
743 759
Depreciation and amortization
582 516
Adjusted gross margin $ $ 3,468
3,284 3,366
PCDs
20.2 20.2 22.3
Gross margin per diems (per PCD) $ $ 45.49
26.81
Net per diems (per PCD) $ $ $ 155.37
162.96 167.04
ALBDs
22.1 22.1 21.3
Gross margin yields (per ALBD) $ $ 47.68
24.49
Net yields (per ALBD) $ $ $ 162.82
148.87 152.59
(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 Months Ended February 28,
(in millions, except costs per ALBD data) 2023 2023 2019
Constant
Currency
Cruise and tour operating expenses $ $ 3,142
3,311
Selling and administrative expenses
712 629
Less: Tour and other expenses
(23) (35)
Cruise costs 3,736
3,999
Less: Commissions, transportation and other (655)
(709)
Onboard and other costs (484)
(467)
Gains (losses) on ship sales and impairments
9 (2)
Restructuring expenses
- -
Other
- -
Adjusted cruise costs 2,558
2,869
Less: Fuel (535)
(381)
Adjusted cruise costs excluding fuel $ $ $ 2,177
2,334 2,388
ALBDs 22.1 21.3
22.1
Cruise costs per ALBD $ 181.25 $ 175.40
% increase (decrease) vs 2019 3.3 %
Adjusted cruise costs per ALBD $ 130.04 $ 120.08
% increase (decrease) vs 2019 8.3 %
Adjusted cruise costs excluding fuel per ALBD $ 105.78 $ $ 102.21
108.22
% increase (decrease) vs 2019 3.5 % 5.9 %
(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 Measure Use Non-GAAP Measure to
Assess
* Adjusted net income (loss) * Net income (loss) * Company Performance
and adjusted EBITDA
* Adjusted earnings per * Earnings per share * Company Performance
share
* Adjusted free cash flow * Cash from (used in) * Impact on Liquidity
operations Level
* Net per diems * Gross margin per * Cruise Segments
diems Performance
* Net yields * Gross margin yields * Cruise Segments
Performance
* Adjusted cruise costs per * Gross cruise costs * Cruise Segments
ALBD and adjusted cruise per ALBD Performance
costs excluding fuel per
ALBD
The presentation of our non-GAAP financial information is not intended to be
considered in isolation from, as 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 EBITDA provides 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 flow provides 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 diems and 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 ALBD and 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.
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.
END
(END) Dow Jones Newswires
March 27, 2023 09:15 ET (13:15 GMT)
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