MIAMI, March 22,
2022 /PRNewswire/ -- Carnival Corporation & plc
(NYSE/LSE: CCL; NYSE: CUK) provides first quarter 2022 business
update.
- U.S. GAAP net loss of $1.9
billion and adjusted net loss of $1.9
billion for the first quarter of 2022.
- First quarter 2022 ended with $7.2
billion of liquidity, including cash, short-term investments
and borrowings available under the company's revolving credit
facility.
- For the cruise segments, revenue per passenger cruise day
("PCD") for the first quarter of 2022 increased approximately 7.5%
compared to a strong 2019. This increase was driven by
exceptionally strong onboard and other revenue.
- As of March 22, 2022, 75% of
the company's capacity had resumed guest cruise
operations.
- The company expects to have each brand's full fleet back in
guest cruise operations for its respective summer season where it
historically generates the largest share of its operating
income.
- The company believes monthly adjusted EBITDA will turn
positive at the beginning of its summer season.
- Since the middle of January, the company has seen an
improving trend in weekly booking volumes for future sailings.
Recent weekly booking volumes have been higher than at any point
since the restart of guest cruise operations.
- The company announced that three additional ships are
expected to leave the fleet in 2022 in connection with its ongoing
fleet optimization strategy. In total, this represents the planned
removal of 22 smaller-less efficient ships since the beginning of
the pause in guest cruise operations.
- Building on the company's strong governance framework and
its continued commitment to sustainability, the Boards of Directors
appointed the company's President and Chief Executive Officer
Arnold Donald to the role of Chief
Climate Officer.
First Quarter 2022 Results and
Statistical Information
- For the cruise segments, revenue per PCD for the first quarter
of 2022 increased approximately 7.5% compared to a strong 2019.
This increase was driven by exceptionally strong onboard and other
revenue.
- During the first quarter of 2022, as a result of the Omicron
variant, the company experienced an impact on bookings for its
near-term sailings, including higher cancellations resulting from
an increase in pre-travel positive test results, challenges in the
availability of timely pre-travel tests and the disruption Omicron
caused on society overall during this time. Therefore, occupancy in
the first quarter of 2022 was 54%, a 20% increase in guests carried
over the prior quarter.
- Available lower berth days ("ALBD") for the first quarter of
2022 were 13 million, which represents 60% of total fleet capacity,
increasing from 47% in the fourth quarter of 2021.
Carnival Corporation & plc President, Chief Executive
Officer and Chief Climate Officer Arnold
Donald noted, "Despite the impact of Omicron, guests carried
grew by nearly 20 percent in the first quarter compared to the
prior quarter, while simultaneously increasing revenue per
passenger cruise day and driving an improvement in adjusted EBITDA.
We expect monthly adjusted EBITDA to turn positive by the beginning
of our summer season as we build occupancy and return more ships to
service."
Donald added, "We believe we have positioned the company well to
withstand volatility on our path to profitability and have been
working hard to resume operations as a stronger and more
sustainable operating company, to maximize cash generation and to
deliver double digit returns on invested capital over time."
Despite the impact resulting from the Omicron variant during the
first quarter, the company's adjusted EBITDA (see non-GAAP
Financial Measures) improved due to its ongoing resumption of guest
cruise operations. The company believes that adjusted EBITDA will
continue to improve with the ongoing resumption of guest cruise
operations and continues to expect improvement in occupancy
throughout 2022 until it returns to historical levels in 2023. The
company believes monthly adjusted EBITDA will turn positive at the
beginning of its summer season.
The company ended the first quarter of 2022 with $7.2 billion of liquidity, including cash,
short-term investments and borrowings available under the revolving
credit facility. The company invested $400
million in capital expenditures (net of export credit
facilities) during the first quarter of 2022, which included the
delivery of three of the four larger-more efficient ships expected
to be delivered in 2022. In addition, the company repaid
$500 million of debt principal and
incurred $400 million of interest
expense, net during the quarter.
Carnival Corporation & plc Chief Financial Officer
David Bernstein noted, "We ended the
first quarter of 2022 with $7.2 billion of liquidity. Looking forward,
we believe we remain well positioned given our liquidity and the
continued improvement expected in adjusted EBITDA, along with the
expected build in customer deposits, as we progress toward resuming
full fleet operations."
Resumption of Guest Cruise
Operations
Donald noted, "Since resuming guest cruise operations, we
delivered more than 2.2 million exceptional vacations while
achieving historically high guest satisfaction scores. With 75
percent of our capacity having resumed guest cruise operations, we
are well on our way back to full cruise operations and we are
planning to return the balance of the fleet by our summer seasons.
Achieving these operational milestones while facing headwinds
including Delta and Omicron variants and changing regulations and
protocols —particularly at our scale— makes the efforts of our
team, ship and shore, all the more impressive."
Donald continued, "In addition, we furthered our fleet
optimization efforts by taking delivery of three larger-more
efficient ships during the quarter, Costa Toscana and
AIDAcosma, the company's fifth and sixth ships powered by
LNG and Discovery Princess. We also announced the removal of
another three smaller-less efficient ships, bringing the total to
22 ships, significantly reducing our rate of capacity growth. Upon
returning to full operations, nearly 25 percent of our capacity
will consist of newly delivered ships, which we believe will
expedite our return to profitability and improve our return on
invested capital."
As of March 22, 2022, 75% of the
company's capacity had resumed guest cruise operations as part of
its ongoing return to service. The company's enhanced COVID-19
protocols have helped it become among the safest forms of
socializing and travel, with far lower incidence rates than on
land. The company expects to have each brand's full fleet back in
guest cruise operations for its respective summer season where it
historically generates the largest share of its operating
income.
Upon returning to full cruise operations, the company's ongoing
fleet optimization strategy combined with its LNG efforts and other
innovative initiatives to drive energy efficiency are forecasted to
deliver a 10% reduction in fuel consumption per ALBD and a 9%
reduction in carbon emissions per ALBD on an annualized basis
compared to 2019.
While the company will benefit from the removal of smaller-less
efficient ships and the delivery of larger-more efficient ships,
the company expects adjusted cruise costs excluding fuel per ALBD
(see Non-GAAP Financial Measures) for the full year 2022, to be
significantly higher than 2019. This is driven by a portion of its
fleet being in pause status for part of the year, restart related
expenses, an increase in the number of dry-dock days, the cost of
maintaining enhanced health and safety protocols and inflation. The
company anticipates that many of these costs and expenses will end
in 2022 and will not reoccur in 2023. Additionally, the company
expects to see a significant improvement in adjusted cruise costs
excluding fuel per ALBD from the first half of 2022 to the second
half of 2022 with a low double-digit increase for the full year
2022 compared to 2019.
The ongoing resumption of the company's guest cruise operations
and the increased uncertainty given the current invasion of
Ukraine, including its effect on
the price of fuel, are collectively having a material impact on its
business, including the company's liquidity, financial position and
results of operations. The company continues to expect a net loss
for the second quarter of 2022 on both a U.S. GAAP and adjusted
basis. However, the company expects a profit for the third quarter
of 2022. For the full year 2022, the company expects a net
loss.
Update on Bookings
Donald added, "Given the recent strengthening in booking volumes
coupled with the closer-in booking patterns, we expect an extended
wave season. In fact, we gained occupancy even in the month of
March with fleetwide occupancy nearing 70 percent and several
sailings already exceeding 100 percent."
Since the middle of January, the company has seen an improving
trend in weekly booking volumes for future sailings. Recent weekly
booking volumes have been higher than at any point since the
restart of guest cruise operations.
During the first quarter, the company increased its booked
occupancy position for the second half of 2022, albeit not at the
same pace as a typical wave season due to the Omicron variant. As a
result, cumulative advance bookings for the second half of 2022 are
at the lower-end of the historical range. However, the company
believes it is well situated with its current second half 2022
booked position given the recent improvements in booking volumes
and its continued expectation that occupancy will build throughout
2022 and return to historical levels in 2023. Normalized for
bundled packages, prices on bookings for the second half of 2022
continue to be higher, with or without future cruise credits
("FCCs"), as compared to 2019 sailings.
Cumulative advanced bookings for the first half of 2023
continues to be both at the higher end of the historical range and
at higher prices, with or without FCCs, normalized for bundled
packages, as compared to 2019 sailings. (Due to the ongoing
resumption of guest cruise operations, the company's current
booking trends will be compared to booking trends for 2019
sailings.)
Total customer deposits increased to $3.7
billion as of February 28,
2022 from $3.5 billion as of
November 30, 2021.
Sustainability Update
Donald noted, "We are gaining momentum along our journey toward
continuous improvement. We are working toward full adoption of the
recommendations of the Task Force on Climate-Related Financial
Disclosures ("TCFD") and have reinforced our strong governance
framework with enhancements to further support climate related
strategic decision making and risk management processes."
Donald added, "We are building on our history of strong
achievements in decarbonization which date back to 2007. Having
peaked our carbon footprint more than a decade ago, we have
delivered a significant reduction in carbon intensity through 2019.
Since 2019, we have accelerated our decarbonization efforts and
have also made great strides in our circular economy focus area
through food waste and single-use plastic reductions, which are now
tracking well ahead of our goals."
Continuing the company's focus and progress on
decarbonization
The company's focus on decarbonization began in 2007 through an
effort to reduce its fuel consumption and minimize its greenhouse
gas emissions. Driven by its efforts over the last 15 years, the
company's absolute carbon emissions peaked in 2011, despite
significant capacity growth since that time. The company's current
decarbonization goals focus on reducing carbon emissions per ALBD
and the company is committed to a transition to absolute carbon
emissions reduction goals as part of its aspiration to be net
carbon-neutral by 2050. The company's ongoing efforts include
optimizing its fleet with the removal of smaller-less efficient
ships and the addition of larger-more efficient ships, investing in
projects that improve the energy efficiency of its existing fleet,
designing more energy efficient itineraries and investing in port
and destination projects to support these efforts. The company
continues to evaluate and implement changes to its various annual
planning processes to further expand its focus on
decarbonization.
Strengthening climate-related risk oversight in the company's
governance framework
Building on its strong governance framework the company has
implemented the following governance changes:
- The Boards of Directors appointed the company's President and
Chief Executive Officer Arnold
Donald to the role of Chief Climate Officer. Through this
role, he leads the identification of climate-related risks and
opportunities and oversees how these are embedded in the company's
strategic decision-making and risk management processes.
Arnold Donald and the Boards of
Directors are responsible for the oversight of climate-related
matters and are directly supported by members of the company's
senior management team.
- The company created a Strategic Risk Evaluation ("SRE")
Committee to identify, mitigate and monitor climate-related risks
and opportunities. The SRE Committee consists of members of
executive management and advisors and reports to the Chief Climate
Officer.
Supporting a circular economy
The company delivered on its commitment to reduce the food waste
generated onboard its ships by 10%, achieving a more than 20%
decrease in food waste per person in December 2021 (relative to its 2019 baseline),
and to reduce its 2021 single use plastic items purchased by 50%
(relative to its 2018 baseline). Additionally, the company
continues to implement its new food waste processing technology
strategy, and is nearing completion of the installation of over 600
food waste bio-digesters across its fleet.
Other Recent Highlights
- Carnival Cruise Line celebrated its 50th birthday on
March 11, 2022 with Sailabrations
cruises.
- Carnival Corporation was named a Best Place to Work for LGBTQ+
Equality by the Human Rights Campaign Foundation for the sixth
consecutive year.
- Cunard announced the name of the newest ship joining its fleet,
Queen Anne. This will mark
the first time since 1999 that Cunard will have four ships at
sea.
Selected Forecast
Information
Available Lower Berth Days ("ALBDs")
The company's ALBD forecast consists of contracted new ships,
announced removals and planned restart schedule.
|
Actuals
|
|
Forecast
|
|
Full Year
2022
|
(in
millions)
|
1Q
2022
|
|
2Q
2022
|
|
3Q
2022
|
|
4Q
2022
|
|
ALBDs
|
13.3
|
|
16.6
|
|
21.6
|
|
22.3
|
|
73.7
|
Fuel
The company's fuel consumption forecast for the remainder of the
year is 2.2 million metric tons. The blended spot price for fuel is
currently $795 per metric ton.
Depreciation and Amortization
The company's depreciation and amortization forecast for the
remainder of the year is $1.7
billion. The 2022 full year forecast, which includes
year-to-date actuals, is $2.3
billion.
Interest Expense, Net of Capitalized Interest
The company's interest expense, net of capitalized interest
forecast for the remainder of the year is $1.1 billion. The 2022 full year forecast, which
includes year-to-date actuals, is $1.5
billion.
Outstanding Debt Maturities
As of February 28, 2022, the
company's outstanding debt maturities are as follows:
(in
billions)
|
|
2022
|
|
2023
|
|
2024
|
|
2025
|
Principal payments on
outstanding debt (a)
|
|
$
1.6
|
|
$
2.9
|
|
$
2.1
|
|
$
4.5
|
|
|
(a)
|
Excludes the revolving
credit facility. As of February 28, 2022, borrowings under the
revolving credit facility were $2.7 billion, which mature in
2024.
|
Capital Expenditures
The company's annual capital expenditure forecast for 2022,
which includes year-to-date actuals, is as follows:
(in
billions)
|
2022
|
|
2023
|
|
2024
|
|
2025
|
Contracted
newbuild
|
$
4.4
|
(a)
|
$
2.6
|
|
$
1.7
|
|
$
1.0
|
Non-newbuild
|
1.6
|
|
1.6
|
|
2.0
|
|
2.0
|
Total (b)
|
$
6.0
|
|
$
4.2
|
|
$
3.7
|
|
$
3.0
|
|
|
(a)
|
Includes three newbuild
deliveries during the first quarter of 2022.
|
(b)
|
Forecasted capital
expenditures will fluctuate with foreign currency movements
relative to the U.S. Dollar.
|
|
|
Conference Call
The company has scheduled a conference call with analysts at
10:00 a.m. EDT (2:00 p.m. GMT) 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 one of the world's
largest leisure travel companies with a portfolio of nine of the
world's leading cruise lines. With operations in North
America, Australia, Europe and Asia, its portfolio features – Carnival Cruise
Line, Princess Cruises, Holland America Line, P&O
Cruises (Australia),
Seabourn, Costa Cruises, AIDA Cruises, P&O Cruises (UK)
and Cunard.
Additional information can be found on www.carnivalcorp.com,
www.carnivalsustainability.com, www.carnival.com, www.princess.com,
www.hollandamerica.com, www.pocruises.com.au, www.seabourn.com,
www.costacruise.com, www.aida.de, www.pocruises.com and
www.cunard.com.
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
|
•
Goodwill, ship and trademark fair
values
|
•
Booking levels
|
•
Liquidity and credit ratings
|
•
Occupancy
|
•
Adjusted earnings per share
|
•
Interest, tax and fuel
expenses
|
•
Return to guest cruise
operations
|
•
Currency exchange rates
|
•
Impact of the COVID-19 coronavirus
global
pandemic
on our financial condition and results of operations
|
•
Estimates of ship 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 amplified by and will
continue to be amplified by, or in the future may be amplified by,
COVID-19. It is not possible to predict or identify all such risks.
There may be additional risks that we consider immaterial or which
are unknown. These factors include, but are not limited to, the
following:
- COVID-19 has had, and is expected to continue to have, a
significant impact on our financial condition and operations. The
current, and uncertain future, impact of COVID-19, including its
effect on the ability or desire of people to travel (including on
cruises), is expected to continue to impact our results,
operations, outlooks, plans, goals, reputation, litigation, cash
flows, liquidity, and stock price.
- Events and conditions around the world, including war and other
military actions, such as the current invasion of Ukraine, and other general concerns impacting
the ability or desire of people to travel have and may lead to a
decline in demand for cruises.
- Incidents concerning our ships, guests or the cruise vacation
industry have in the past and may, in the future, 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 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 employees, our inability to recruit or retain
qualified shoreside and shipboard employees 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 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 lead to a decline in 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.
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-related
statements may be based on standards for measuring progress that
are still developing, internal controls and processes that continue
to evolve, and assumptions that are subject to change in the
future.
CARNIVAL
CORPORATION & PLC
|
CONSOLIDATED
STATEMENTS OF INCOME (LOSS)
|
(UNAUDITED)
|
(in millions, except
per share data)
|
|
|
Three Months
Ended
February
28,
|
|
2022
|
|
2021
|
Revenues
|
|
|
|
Passenger
ticket
|
$
873
|
|
$
3
|
Onboard and
other
|
750
|
|
23
|
|
1,623
|
|
26
|
Operating Costs and
Expenses
|
|
|
|
Commissions,
transportation and other
|
251
|
|
15
|
Onboard and
other
|
209
|
|
7
|
Payroll and
related
|
506
|
|
218
|
Fuel
|
365
|
|
103
|
Food
|
136
|
|
11
|
Ship and other
impairments
|
8
|
|
—
|
Other
operating
|
557
|
|
181
|
|
2,030
|
|
535
|
Selling and
administrative
|
530
|
|
462
|
Depreciation and
amortization
|
554
|
|
552
|
|
3,114
|
|
1,549
|
Operating Income
(Loss)
|
(1,491)
|
|
(1,524)
|
Nonoperating Income
(Expense)
|
|
|
|
Interest
income
|
3
|
|
3
|
Interest expense,
net of capitalized interest
|
(368)
|
|
(398)
|
Gains (losses) on
debt extinguishment, net
|
—
|
|
2
|
Other income (expense),
net
|
(32)
|
|
(62)
|
|
(397)
|
|
(455)
|
Income (Loss) Before
Income Taxes
|
(1,888)
|
|
(1,979)
|
Income Tax Benefit
(Expense), Net
|
(3)
|
|
6
|
Net Income
(Loss)
|
$
(1,891)
|
|
$
(1,973)
|
Earnings Per
Share
|
|
|
|
Basic
|
$
(1.66)
|
|
$
(1.80)
|
Diluted
|
$
(1.66)
|
|
$
(1.80)
|
|
|
|
|
Weighted-Average
Shares Outstanding - Basic
|
1,137
|
|
1,095
|
Weighted-Average
Shares Outstanding - Diluted
|
1,137
|
|
1,095
|
CARNIVAL CORPORATION
& PLC
|
OTHER
INFORMATION
|
|
|
BALANCE SHEET
INFORMATION (in millions)
|
February 28,
2022
|
|
November 30,
2021
|
Cash, cash equivalents
and short-term investments
|
$
6,928
|
|
$
9,139
|
Debt (current and
long-term)
|
$
34,900
|
|
$
33,226
|
Customer deposits
(current and long-term)
|
$
3,695
|
|
$
3,508
|
|
|
|
Three Months
Ended
February
28,
|
STATISTICAL
INFORMATION
|
2022
|
|
2021
|
PCDs (in thousands)
(a)
|
7,229
|
|
27
|
ALBDs (in thousands)
(b)
|
13,322
|
|
173
|
Occupancy percentage
(c)
|
54%
|
|
16%
|
Passengers carried (in
thousands)
|
1,011
|
|
5
|
Fuel consumption in
metric tons (in thousands)
|
566
|
|
262
|
Fuel cost per metric
ton consumed
|
$
648
|
|
$
392
|
Currencies (USD to
1)
|
|
|
|
AUD
|
$
0.72
|
|
$
0.77
|
CAD
|
$
0.79
|
|
$
0.78
|
EUR
|
$
1.13
|
|
$
1.21
|
GBP
|
$
1.35
|
|
$
1.36
|
The ongoing resumption
of guest cruise operations is continuing to have a material impact
on all aspects of the company's business, including the above
statistical information.
|
|
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 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
|
|
Data in the below table
is compared against 2019 as it is the most recent year of full
operations. 2021 and 2020 were impacted
by the pause and ongoing resumption of guest cruise
operations.
|
|
Consolidated 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 ALBD as
follows:
|
|
|
Three Months Ended
February 28,
|
(dollars in
millions, except costs per ALBD)
|
2022
|
|
2022
Constant
Currency
|
|
2019
|
Operating costs and
expenses
|
$
2,030
|
|
|
|
$
3,142
|
Selling and
administrative expenses
|
530
|
|
|
|
629
|
Tour and other
expenses
|
(22)
|
|
|
|
(35)
|
Cruise
costs
|
2,538
|
|
|
|
3,736
|
Less
|
|
|
|
|
|
Commissions, transportation
and other
|
(251)
|
|
|
|
(709)
|
Onboard and other
|
(209)
|
|
|
|
(467)
|
Gains (losses) on ship sales
and impairments
|
(7)
|
|
|
|
(2)
|
Restructuring
expenses
|
—
|
|
|
|
—
|
Other
|
—
|
|
|
|
—
|
Adjusted cruise
costs
|
2,071
|
|
|
|
2,558
|
Less fuel
|
(365)
|
|
|
|
(381)
|
Adjusted cruise
costs excluding fuel
|
$
1,707
|
|
$
1,704
|
|
$
2,177
|
ALBDs (in thousands)
|
13,322
|
|
13,322
|
|
21,299
|
|
|
|
|
|
|
Cruise costs per
ALBD
|
$
190.53
|
|
|
|
$
175.40
|
% increase (decrease)
vs 2019
|
8.6%
|
|
|
|
|
Adjusted cruise
costs per ALBD
|
$
155.50
|
|
|
|
$
120.08
|
% increase (decrease)
vs 2019
|
29.5%
|
|
|
|
|
Adjusted cruise
costs excluding fuel per ALBD
|
$
128.11
|
|
$
127.88
|
|
$
102.21
|
% increase (decrease)
vs 2019
|
25.3%
|
|
25.1%
|
|
|
|
|
|
|
|
|
(See Non-GAAP
Financial Measures)
|
|
|
|
|
|
CARNIVAL CORPORATION
& PLC
|
NON-GAAP FINANCIAL MEASURES
(CONTINUED)
|
|
|
Three Months
Ended
|
|
February
28,
|
|
November
30,
|
|
February
28,
|
(in
millions)
|
2022
|
|
2021
|
|
2021
|
Net income
(loss)
|
|
|
|
|
|
U.S. GAAP net income
(loss)
|
$
(1,891)
|
|
$
(2,620)
|
|
$
(1,973)
|
(Gains) losses on ship sales
and impairments
|
7
|
|
292
|
|
3
|
(Gains) losses on debt
extinguishment, net
|
—
|
|
298
|
|
(2)
|
Restructuring
expenses
|
—
|
|
7
|
|
—
|
Other
|
—
|
|
69
|
|
17
|
Adjusted net income
(loss)
|
$
(1,884)
|
|
$
(1,955)
|
|
$
(1,954)
|
Interest
expense, net of capitalized interest
|
368
|
|
348
|
|
398
|
Interest
income
|
(3)
|
|
(2)
|
|
(3)
|
Income tax
expense, net
|
3
|
|
(4)
|
|
(6)
|
Depreciation and
amortization
|
554
|
|
552
|
|
552
|
Adjusted
EBITDA
|
$
(962)
|
|
$
(1,060)
|
|
$
(1,014)
|
Non-GAAP Financial
Measures
We use adjusted net income (loss) and adjusted EBITDA as
non-GAAP financial measures of the company's financial performance.
We use adjusted cruise costs per ALBD and adjusted cruise costs
excluding fuel per ALBD as non-GAAP financial measures of our
cruise segments' financial performance. These non-GAAP financial
measures are provided along with U.S. GAAP cruise costs per ALBD
and U.S. GAAP net income (loss).
We believe that gains and losses on ship sales, impairment
charges, gains and losses on debt extinguishments, restructuring
costs and other gains and losses are not part of our core operating
business and are not an indication of our future earnings
performance. Therefore, we believe it is more meaningful for these
items to be excluded from our net income (loss), and accordingly,
we present adjusted net income (loss) excluding these items as
additional information to investors.
We believe that the presentation of adjusted EBITDA provides
additional information to investors about our operating
profitability by excluding certain gains 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 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 cruise costs per ALBD and adjusted cruise costs
excluding fuel per ALBD enables us to separate the impact of
predictable capacity or ALBD changes from price and other changes
that affect our business. We believe this non-GAAP measure provides
useful information to investors and expanded insight to measure our
cost performance as a supplement to our U.S. GAAP consolidated
financial statements. 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 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, as well as fuel expense to calculate adjusted cruise
costs without fuel. 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.
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.
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.
We report adjusted cruise costs excluding fuel per ALBD on a
"constant currency" basis assuming the 2022 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.
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.
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.
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SOURCE Carnival Corporation & plc