REG-Carnival PLC: Carnival 4Q Preliminary Financial Info

CarnivalAnnouncement

11/01/2021 14:20

Carnival Corporation & plc Provides Preliminary Financial Information For The
Fourth Quarter

MIAMI, Jan. 11, 2021 /PRNewswire/ -- Carnival Corporation & plc (NYSE/LSE:
CCL; NYSE: CUK) provides preliminary financial information for the fourth
quarter ended November 30, 2020.
* U.S. GAAP net loss of $2.2 billion and adjusted net loss of $1.9 billion for
the fourth quarter of 2020.
* Fourth quarter 2020 ended with $9.5 billion of cash and cash equivalents.
* Cash burn rate in the fourth quarter 2020 was slightly better than expected
due to the timing of capital expenditures.
* The company has accelerated the removal of 19 less efficient ships, 15 of
which have already left the fleet.
* Cumulative advanced bookings for the first half of 2022 are ahead of 2019,
despite minimal advertising or marketing.
Carnival Corporation & plc President and Chief Executive Officer Arnold Donald
noted, "2020 has proven to be a true testament to the resilience of our
company. We took aggressive actions to implement and optimize a complete pause
in our guest cruise operations across all brands globally, and developed
protocols to begin our staggered resumption, first in Italy for our Costa
brand, then followed by Germany for our AIDA brand. We are now working
diligently towards resuming operations in Asia, Australia, the UK and the U.S.
over the course of 2021."

Donald added, "With the aggressive actions we have taken, managing the balance
sheet and reducing capacity, we are well positioned to capitalize on pent up
demand and to emerge a leaner, more efficient company, reinforcing our
industry leading position." 

Resumption of Guest Operations

Costa Cruises ("Costa") and AIDA Cruises ("AIDA") have resumed limited guest
cruise operations and other brands and ships are expected to return to service
over time to provide guests with unmatched joyful vacations in a manner
consistent with the company's highest priorities, which are compliance,
environmental protection and the health, safety and well-being of its guests,
crew, shoreside employees and the people in the communities its ships visit.
The initial cruises will continue to take place with adjusted passenger
capacity and enhanced health protocols developed with government and health
authorities, and guidance from our roster of medical and scientific experts.
Many of the company's brands source the majority of their guests from the
geographical region in which they operate. In the current environment, the
company believes this will benefit it in resuming guest cruise operations.

Health and Safety Protocols

The company has been working with a number of world-leading public health,
epidemiological and policy experts to support its ongoing efforts with
enhanced protocols and procedures to help protect against and mitigate the
impact of COVID-19 during cruise vacations. These advisors will continue to
provide guidance based on the latest scientific evidence and best practices
for protection and mitigation.

Working with governments, national health authorities and medical experts,
Costa and AIDA have a comprehensive set of health and hygiene protocols that
has helped facilitate a safe and healthy return to cruise vacations. These
enhanced protocols are modeled after shoreside health and mitigation
guidelines as provided by each brand's respective country, and approved by all
relevant regulatory authorities of the flag state, Italy. Protocols will be
updated based on evolving scientific and medical knowledge related to
mitigation strategies. Costa is the first cruise company to earn the Biosafety
Trust Certification from Registro Italiano Navale ("RINA"). The certification
process examined all aspects of life onboard and ashore and assessed the
compliance of the system with procedures aimed at the prevention and control
of infections.

The company is also working directly with the Centers for Disease Control and
Prevention ("CDC") on the development of protocols necessary to resume
cruising from the United States. The company, in conjunction with its
advisors, is currently evaluating the requirements set forth in the CDC's
Framework for Conditional Sailing Order effective as of October 30, 2020. The
framework consists of several initial requirements that cruise ship operators
will need to follow prior to resuming guest operations. Further, the framework
is subject to additional technical instructions and orders from the CDC and
may change based on public health considerations. While the framework
represents an important step in our return to service, many uncertainties
remain as to the specifics, timing, and cost of implementing the requirements.
The company continues to work closely with governments and health authorities
in other parts of the world to ensure that its health and safety protocols
will also comply with the requirements of each location.

Optimizing the Future Fleet

The company expects future capacity to be moderated by the phased re-entry of
its ships, the removal of capacity from its fleet and delays in new ship
deliveries. Since the pause in guest operations, the company has accelerated
the removal of ships in fiscal 2020 which were previously expected to be sold
over the ensuing years. The company now expects to dispose of 19 ships, 15 of
which have already left the fleet. In total, the 19 ships represent
approximately 13 percent of pre-pause capacity and only three percent of
operating income in 2019. The sale of less efficient ships will result in
future operating expense efficiencies of approximately two percent per
available lower berth day ("ALBD") and a reduction in fuel consumption of
approximately one percent per ALBD. The company recently took delivery of two
ships and expects only one more ship to be delivered in fiscal 2021 compared
to five ships that were originally scheduled for delivery in fiscal 2021.

Based on the actions taken to date and the scheduled newbuild deliveries
through 2022, the company's fleet will be more efficient with a roughly 14
percent larger average berth size per ship and an average age of 12 years in
2022 versus 13 years, in each case as compared to 2019.

Update on Bookings 

Carnival Corporation & plc President and Chief Executive Officer Arnold Donald
noted, "The booking trends that we have consistently experienced throughout
this period affirm the strong fundamental demand for our brands which will
facilitate our staggered resumption and support the long-term growth of our
company."

At December 20, 2020, cumulative advanced bookings for the second half of 2021
are within the historical range. Additionally, the cumulative advanced
bookings for the first half of 2022 are ahead of 2019. (Due to the pause in
guest cruise operations in 2020, the company's future booking trends will be
compared to 2019.) The company believes the continued build in cumulative
advanced bookings for this twelve month period ending May 2022 demonstrates
the long-term demand for cruising. The company highlights this level of
bookings was achieved with minimal advertising and marketing.

The company is providing flexibility to guests with bookings on sailings
cancelled by allowing guests to receive enhanced future cruise credits
("FCCs") or elect to receive refunds in cash. Enhanced FCCs increase the value
of the guest's original booking or provide incremental onboard credits. As of
November 30, 2020, approximately 45 percent of guests affected by the
company's schedule changes have received enhanced FCCs and approximately 55
percent have requested refunds. 

Total customer deposits balance at November 30, 2020, was $2.2 billion, the
majority of which are FCCs, compared to the total customer deposits balance of
$2.4 billion at August 31, 2020. The decline in customer deposits is less than
previous expectations. As of November 30, 2020, the current portion of
customer deposits was $1.9 billion with minimal bookings relating to first
quarter of 2021 sailings. Approximately 60 percent of bookings taken during
the quarter ended November 30, 2020 for fiscal year 2021 were new bookings as
opposed to FCCs re-bookings, despite minimal advertising or marketing.

Increasing Liquidity 

Carnival Corporation & plc Chief Financial Officer David Bernstein noted, "We
ended the year with $9.5 billion in cash and have the liquidity in place to
sustain ourselves throughout 2021, even in a zero-revenue environment. While
we raised capital mainly through debt this year, in the last few months we
opportunistically strengthened our capital structure by raising $2.5 billion
through at-the-market equity offering programs and by the early conversion of
$1.5 billion of convertible debt. As we return to full operations, our cash
flow will be the primary driver to return to investment grade credit over
time, creating greater shareholder value."

Due to the pause in guest operations, the company has taken significant
actions to preserve cash and secure additional financing to increase its
liquidity. Since March, the company has raised $19 billion through a series of
transactions, including the following transactions since August 31, 2020:
* Borrowed $3.0 billion under export credit facilities in September, October
and December 2020.
* Completed $1.0 billion "at-the-market" equity offering program ("ATM") that
was announced in September 2020.
* Completed $1.5 billion ATM that was announced in November 2020.
* Retired $590 million of its convertible notes through the issuance of common
stock in November 2020.
* Issued $2.0 billion of senior unsecured notes in November 2020.
As of November 30, 2020, the company has a total of $9.5 billion of cash and
cash equivalents. During fiscal 2021, the company expects to enter into
financial transactions to optimize its capital structure which may include
opportunistically enhancing liquidity.

Currently, the company is unable to predict when the entire fleet will return
to normal operations, and as a result, unable to provide an earnings forecast.
The pause in guest operations continues to have a material negative impact on
all aspects of the company's business, including the company's liquidity,
financial position and results of operations. The company expects a net loss
on both a U.S. GAAP and adjusted basis for the first quarter and full year
ending November 30, 2021.

The company's monthly average cash burn rate for the fourth quarter 2020 was
$500 million, which was slightly better than expected due to the timing of
capital expenditures. The company expects the monthly average cash burn rate
for the first quarter 2021 to be approximately $600 million. This rate
includes ongoing ship operating and administrative expenses, working capital
changes (excluding changes in customer deposits), interest expense and capital
expenditures (net of unfunded export credit facilities) and also excludes
scheduled debt maturities as well as other cash collateral to be provided
(which may increase in the future). The company continues to explore
opportunities to reduce its monthly cash burn rate.

As of November 30, 2020, the company's outstanding debt maturities are as
follows:

 (in billions)                                                                             1Q 2021                                                                     2Q 2021                                                                     3Q 2021                                                                     4Q 2021                          
 Principal payments on outstanding debt (a)                                         $                0.5                                                        $                0.4                                                        $                0.6                                                        $                0.3                    
 Principal payments on expected export credits                                      $                  —                                                        $                  —                                                        $                0.1                                                        $                  —                    
                                                                                    $                0.5                                                        $                0.4                                                        $                0.7                                                        $                0.3                    
                                                                                                                                                                                                                                                                                                                                                                
 (a)                                            Excluding the revolving facility. As of November 30, 2020, borrowings under the revolving facility were $3.0 billion and mature through March 2021. We may re-borrow such amounts subject to satisfaction of the conditions in the revolving facility agreement.                                                

Other Information

The company is actively addressing an IT security incident affecting two of
its brands. Based on preliminary assessment and on the information currently
known, the company does not believe the incident will have a material impact
on its business, operations or financial results.

Conference Call 
The company has scheduled a conference call with analysts at 10:00 a.m. EDT
(3:00 p.m. GMT) today to provide a 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.
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," "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                            • Estimates of ship depreciable lives and residual values                                                                              
 • Booking levels                     • Goodwill, ship and trademark fair values                                                                                             
 • Occupancy                          • Liquidity and credit ratings                                                                                                         
 • Interest, tax and fuel expenses    • Adjusted earnings per share                                                                                                          
 • Currency exchange rates            • Impact of the COVID-19 coronavirus global pandemic on                                                                                
                                             our financial condition and results of operations                                                                               

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, the COVID-19 outbreak. 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, which impacts our ability to obtain
acceptable financing to fund resulting reductions in cash from operations. The
current, and uncertain future, impact of the COVID-19 outbreak, 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.
* As a result of the COVID-19 outbreak, we may be out of compliance with a
maintenance covenant in certain of our debt facilities, for which we have
amendments for the period through November 30, 2021 with the next testing date
of February 28, 2022.
* World events impacting the ability or desire of people to travel have and
may continue to lead to a decline in demand for cruises.
* Incidents concerning our ships, guests or the cruise vacation industry as
well as adverse weather conditions and other natural disasters 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.
* 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, including the recent ransomware incidents, 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.
* Ability to recruit, develop and retain qualified shipboard personnel who
live away from home for extended periods of time may adversely impact our
business operations, guest services and satisfaction.
* Increases in fuel prices, changes in the types of fuel consumed and
availability of fuel supply may adversely impact our scheduled itineraries and
costs.
* 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.

                                   CARNIVAL CORPORATION & PLC                                     
                                   NON-GAAP FINANCIAL MEASURES                                    
                                                                                                  
                                                        Three Months Ended  November 30,          
 (in millions)                                          2020                         2019         
 Net income (loss)                                                                                
 U.S. GAAP net income (loss)                        $  (2,222)                    $    423        
 (Gains) losses on ship sales and impairments              115                         (5)        
 Restructuring expenses                                      5                          10        
 Other                                                     239                           —        
 Adjusted net income (loss)                         $  (1,862)                    $    427        

Explanations of Non-GAAP Financial Measures 

Non-GAAP Financial Measures

We use adjusted net income (loss) as a non-GAAP financial measure of our
cruise segments' and the company's financial performance. This non-GAAP
financial measure is provided along with U.S. GAAP net income (loss).   

We believe that gains and losses on ship sales, impairment charges,
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.

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.

CONTACT: MEDIA, Roger Frizzell, +1 305 406 7862; INVESTOR RELATIONS, Beth
Roberts, +1 305 406 4832



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