REG-Carnival PLC: Carnival Corporation 3Q 2024 Earnings
30/09/2024 14:30
CARNIVAL CORPORATION & PLC REPORTS RECORD-SETTING OPERATING RESULTS,
OUTPERFORMS THIRD QUARTER GUIDANCE AND RAISES FULL YEAR 2024 GUIDANCE FOR THE
THIRD TIME
MIAMI, Sept. 30, 2024 -- Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK)
announced financial results for the third quarter 2024 and provided an updated
outlook for the full year and an outlook for fourth quarter 2024.
* Third quarter net income was $1.7 billion, an increase of over 60 percent
compared to 2023 and adjusted net income1 outperformed June guidance by $170
million.
* Third quarter revenues hit an all-time high of $7.9 billion, up $1.0 billion
compared to the prior year.
* Record operating income of $2.2 billion exceeded 2023 levels by $554
million.
* As a result of strong demand and cost saving opportunities, raised its full
year 2024 adjusted EBITDA1 guidance to approximately $6.0 billion, up over 40
percent compared to 2023 and better than June guidance by nearly $200 million.
* The cumulative advanced booked position for full year 2025 is above the
previous 2024 record with prices (in constant currency) ahead of prior year.
"We delivered a phenomenal third quarter, breaking operational records and
outperforming across the board. Our strong improvements were led by
high-margin, same-ship yield growth, driving a 26 percent improvement in unit
operating income, the highest level we have reached in fifteen years,"
commented Carnival Corporation & plc's Chief Executive Officer Josh Weinstein.
"We are poised to deliver record operating performance for full year 2024,
with adjusted EBITDA now expected to cross $6 billion and adjusted return on
invested capital1 to be approximately 10.5 percent. Strong demand enabled us
to increase our full year yield guidance for the third time this year and we
improved our cost guidance driving more revenue to the bottom line," Weinstein
added.
"Looking forward, the momentum continues as our enhanced commercial execution
drives demand well in excess of our capacity growth, leaving us well
positioned with an even stronger base of business for 2025, a record start to
2026 and firmly on the path toward our SEA Change targets," Weinstein noted.
Third Quarter 2024 Results
* Net income was $1.7 billion, or $1.26 diluted EPS, an increase of $662
million compared to 2023. Adjusted net income of $1.8 billion, or $1.27
adjusted EPS1, was higher than June guidance by $170 million driven by
outperformance in both yield and cost.
* Record operating income of $2.2 billion exceeded 2023 levels by $554 million
or 34 percent.
* Record adjusted EBITDA of $2.8 billion increased over 25 percent compared to
2023 and outperformed June guidance by $160 million.
* Third quarter revenues hit an all-time high of $7.9 billion, with record net
yields1 (in constant currency) and record net per diems1 (in constant
currency) both significantly exceeding 2023 levels.
* Gross margin yields increased by 19 percent compared to 2023 and net yields
(in constant currency) exceeded 2023 levels by 8.7 percent. * Gross margin per
diems were up 16 percent compared to 2023. Net per diems (in constant
currency) were up nearly 6 percent compared to 2023 with both ticket prices
and onboard spending up mid-single digits.
* Cruise costs per available lower berth day ("ALBD") increased 3.4 percent
compared to 2023. Adjusted cruise costs excluding fuel per ALBD1 (in constant
currency) decreased compared to 2023 and were significantly better than June
guidance driven by cost saving opportunities, accelerated easing of
inflationary pressures, benefits from one-time items and the timing of
expenses between the quarters.
* Total customer deposits reached a third quarter record of $6.8 billion,
surpassing the previous third quarter record of $6.3 billion as of August 31,
2023, despite lower capacity growth.
Bookings
"With nearly half of 2025 booked and less inventory remaining for sale than
the prior year, we are leveraging strong demand to achieve record ticket
pricing (in constant currency). Our brands continue to deliver robust bookings
momentum, with all our brands ahead on price for 2025 sailings, based on the
success of their demand generation efforts along with the exciting offerings
and unparalleled experiences we consistently provide our guests. Likewise,
2026 is off to an unprecedented start achieving record booking volumes in the
last three months," Weinstein noted.
During the third quarter, booking volumes remained robust for 2025 sailings at
higher prices (in constant currency) compared to the prior year.
The cumulative advanced booked position for full year 2025 is above the
previous 2024 record with prices (in constant currency) ahead of prior year.
_____________________________
1 See "Non-GAAP Financial Measures" at the end of this release for additional
information.
2024 Outlook
For the full year 2024, the company expects:
* Net yields (in constant currency) up approximately 10.4 percent compared to
2023, better than June guidance, based on continued strength in demand.
* Adjusted cruise costs excluding fuel per ALBD (in constant currency) up
approximately 3.5 percent compared to 2023, approximately 1 percentage point
better than June guidance driven by cost saving opportunities, accelerated
easing of inflationary pressures and benefits from one-time items.
* Adjusted EBITDA of approximately $6.0 billion, up over 40 percent compared
to 2023 and better than June guidance by nearly $200 million.
* Adjusted return on invested capital ("ROIC") of approximately 10.5 percent,
an improvement of approximately 5.0 percentage points compared to 2023 and
half a point better than June guidance.
For the fourth quarter of 2024, the company expects:
* Net yields (in constant currency) up approximately 5.0 percent compared to
particularly strong 2023 levels.
* Adjusted cruise costs excluding fuel per ALBD (in constant currency) up
approximately 8.0 percent compared to the fourth quarter of 2023 due primarily
to higher dry-dock days and higher investment in advertising.
* Adjusted EBITDA of approximately $1.14 billion, up 20 percent compared to
the fourth quarter of 2023.
See "Guidance" and "Reconciliation of Forecasted Data" for additional
information on the company's 2024 outlook.
Financing and Capital Activity
"We have continued to improve our leverage metrics and balance sheet with
strong cash generation and continued debt reduction. We are pleased these
efforts were recognized by both S&P and Moody's with their recent credit
rating upgrades. For 2024, we expect better than a two turn improvement in net
debt to adjusted EBITDA1 compared to 2023, approaching 4.5x, well on our way
to investment grade. In fact, this year's adjusted free cash flow1 is expected
to be over $3.0 billion," commented Carnival Corporation & plc's Chief
Financial Officer David Bernstein.
The company continued its efforts to proactively manage its debt profile.
Since June 2024, the company prepaid another $625 million of debt, bringing
its total prepayments to $7.3 billion since the beginning of 2023.
Additionally, the company has now fully utilized the accordion feature of its
revolving credit facility, increasing the borrowing capacity by nearly $500
million and bringing the total undrawn commitment to $3.0 billion. The company
ended the quarter with $4.5 billion of liquidity, including cash and
borrowings available under the revolving credit facility.
During the third quarter, Fitch initiated its coverage of the company with a
BB credit rating with a positive outlook. The company is now rated by all
three major internationally recognized rating agencies. Additionally, S&P
upgraded its credit rating to BB with a stable outlook and Moody's upgraded to
B1 with a positive outlook. The company believes this is a testament to its
improved leverage metrics and continuing journey to investment grade ratings.
The company continues to strategically direct new capacity towards its highest
returning brand with the recent order of three additional ships to Carnival
Cruise Line for delivery in 2029, 2031 and 2033. These ships will become the
largest ships in the company's fleet and will carry more passengers than any
other cruise ship to date. The company is following through on its measured
capacity growth strategy of one to two ships per year on average, including
just three ships scheduled for delivery through 2028. This will enable the
company to utilize its substantial free cash flow to strategically improve its
balance sheet by significantly reducing its leverage levels over the next
several years.
The company obtained a new export credit facility, bringing its total
committed financings related to ship deliveries to $3.4 billion, continuing
its strategy to finance its newbuild program at preferential interest rates.
_____________________________
1 See "Non-GAAP Financial Measures" at the end of this release for additional
information.
Other Recent Highlights
* Named by TIME as one of the World's Best Companies of 2024 and by Forbes as
one of America's Best Employers for Women in 2024.
* Opened a new innovative Fleet Operations Center in Hamburg, Germany to
support its European brands.
* Announced the expansion of Half Moon Cay. This popular private island will
be enhanced to include an expanded beach, dining and beverage experiences
along with a new pier that will allow the company's larger ships to visit.
* In anticipation of Celebration Key's debut in July 2025, Carnival Cruise
Line opened bookings for the destination's new exclusive retreat, Pearl Cove
Beach Club, which will offer a premium experience for guests with a large
selection of supervillas, cabanas and shore excursions.
* Carnival Conquest, AIDAdiva and AIDAluna became the first cruise ships to
connect to shore power at PortMiami, the Port of Stockholm and the Port of
Oslo.
* AIDA Cruises successfully piloted a new advanced blended biofuel, which is
specifically intended for the maritime industry and lowers greenhouse gas
emissions compared to conventional fossil fuels.
* Seabourn Pursuit was named in a historic expedition ceremony, debuting its
new itineraries visiting the Kimberley region in Australia.
Guidance
(See "Reconciliation of Forecasted Data")
4Q 2024 Full Year 2024
Year over year change Current Dollars Constant Currency Current Dollars Constant Currency
Net yields Approx. 7.0% Approx. 5.0% Approx. 11.0% Approx. 10.4%
Adjusted cruise costs excluding fuel per ALBD Approx. 9.5% Approx. 8.0% Approx. 4.0% Approx. 3.5%
4Q 2024 Full Year 2024
ALBDs (in millions) (a) 24.0 95.6
Capacity growth compared to prior year 3.1 % 4.7 %
Fuel consumption in metric tons (in millions) 0.7 2.9
Fuel cost per metric ton consumed (excluding European Union Allowance ("EUA")) $ 590 $ 658
Fuel expense (including EUA expense) (in billions) $ 0.43 $ 1.98
Depreciation and amortization (in billions) $ 0.67 $ 2.57
Interest expense, net of capitalized interest and interest income (in billions) $ 0.41 $ 1.68
Adjusted EBITDA (in billions) Approx. $1.14 Approx. $6.0
Adjusted net income (loss) (in millions) Approx. $60 Approx. $1,760
Adjusted earnings per share - diluted (b) Approx. $0.05 Approx. $1.33
Weighted-average shares outstanding - basic 1,296 1,273
Weighted-average shares outstanding - diluted 1,301 1,398
(a) See "Notes to Statistical Information"
(b) Diluted adjusted earnings per share includes the add-back of dilutive interest expense related to the company's
convertible notes of $94 million for full year 2024. The add-back expense is antidilutive to the fourth quarter of 2024
calculation and accordingly has been excluded.
Currencies (USD to 1) 4Q 2024 Full Year 2024
AUD $ 0.68 $ 0.67
CAD $ 0.74 $ 0.74
EUR $ 1.12 $ 1.09
GBP $ 1.33 $ 1.28
Sensitivities (impact to adjusted net income (loss) in millions) 4Q 2024
1% change in net yields $ 42
1% change in adjusted cruise costs excluding fuel per ALBD $ 27
1% change in currency exchange rates $ 5
10% change in fuel price $ 42
100 basis point change in variable rate debt (including derivatives) $ 12
Capital Expenditures
For the fourth quarter of 2024, newbuild capital expenditures are $0.2 billion
and non-newbuild capital expenditures are $0.6 billion. These future capital
expenditures will fluctuate with foreign currency movements relative to the
U.S. Dollar. In addition, these figures do not include potential stage
payments for ship orders that the company may place in the future.
Conference Call
The company has scheduled a conference call with analysts at 10:00 a.m. EDT
(3:00 p.m. BST) today to discuss its earnings release. This call can be
listened to live, and additional information including the company's earnings
presentation and debt maturities schedule, 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.
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 EBITDA
• Booking levels • Adjusted earnings per share
• Occupancy • Adjusted free cash flow
• Interest, tax and fuel expenses • Net debt to adjusted EBITDA
• Currency exchange rates • Net per diems
• Goodwill, ship and trademark fair values • Net yields
• Liquidity and credit ratings • Adjusted cruise costs per ALBD
• Investment grade leverage metrics • Adjusted cruise costs excluding fuel per ALBD
• Estimates of ship depreciable lives and residual values • Adjusted return on invested capital
• Adjusted net income (loss)
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. These factors include, but are not limited
to, the following:
* Events and conditions around the world, including geopolitical uncertainty,
war and other military actions, 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 as well as negative impacts to 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-money laundering, anti-corruption, economic
sanctions, trade protection, labor and employment, and tax may be costly and
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 targets, goals, aspirations, initiatives,
and our public statements and disclosures regarding them, including those that
are related to sustainability matters, may expose us to risks that may
adversely impact our business.
* Breaches in data security and lapses in data privacy as well as disruptions
and other damages to our principal offices, information technology operations
and system networks and failure to keep pace with developments in technology
may adversely impact our business operations, the satisfaction of our guests
and crew and may lead to reputational damage.
* The loss of key team members, our inability to recruit or retain qualified
shoreside and shipboard team members and increased labor costs could have an
adverse effect on our business and results of operations.
* Increases in fuel prices, changes in the types of fuel consumed and
availability of fuel supply may adversely impact our scheduled itineraries and
costs.
* We rely on supply chain vendors who are integral to the operations of our
businesses. These vendors and service providers may be unable to deliver on
their commitments, which could negatively impact our business.
* Fluctuations in foreign currency exchange rates may adversely impact our
financial results.
* Overcapacity and competition in the cruise and land-based vacation industry
may negatively impact our cruise sales, pricing and destination options.
* Inability to implement our shipbuilding programs and ship repairs,
maintenance and refurbishments may adversely impact our business operations
and the satisfaction of our guests.
* 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.
* Our substantial debt could adversely affect our financial health and
operating flexibility.
The ordering of the risk factors set forth above is not intended to reflect
our indication of priority or likelihood. Additionally, many of these risks
and uncertainties are currently, and in the future may continue to be,
amplified by our substantial debt balance incurred during the pause of our
guest cruise operations. There may be additional risks that we consider
immaterial or which are unknown.
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 Nine Months Ended August 31,
August 31,
2024 2023 2024 2023
Revenues
Passenger ticket $ 5,239 $ 4,546 $ 12,609 $ 10,557
Onboard and other 2,657 2,308 6,474 5,640
7,896 6,854 19,083 16,197
Operating Expenses
Commissions, transportation and other 958 823 2,510 2,097
Onboard and other 866 752 2,043 1,785
Payroll and related 575 585 1,812 1,768
Fuel 515 468 1,546 1,492
Food 393 364 1,099 1,000
Other operating 995 928 2,796 2,546
Cruise and tour operating expenses 4,303 3,921 11,805 10,688
Selling and administrative 763 713 2,366 2,162
Depreciation and amortization 651 596 1,898 1,774
5,718 5,230 16,070 14,624
Operating Income (Loss) 2,178 1,624 3,013 1,572
Nonoperating Income (Expense)
Interest income 19 59 77 183
Interest expense, net of capitalized interest (431) (518) (1,352) (1,600)
Debt extinguishment and modification costs (13) (81) (78) (112)
Other income (expense), net (10) (19) (35) (67)
(435) (559) (1,388) (1,595)
Income (Loss) Before Income Taxes 1,743 1,065 1,626 (23)
Income Tax Benefit (Expense), Net (8) 9 (13) (3)
Net Income (Loss) $ 1,735 $ 1,074 $ 1,613 $ (26)
Earnings Per Share
Basic $ 1.37 $ 0.85 $ 1.27 $ (0.02)
Diluted $ 1.26 $ 0.79 $ 1.21 $ (0.02)
Weighted-Average Shares Outstanding - Basic 1,267 1,263 1,266 1,262
Weighted-Average Shares Outstanding - Diluted 1,399 1,396 1,398 1,262
CARNIVAL CORPORATION & PLC CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in millions, except par values)
August 31, November 30,
2024 2023
ASSETS
Current Assets
Cash and cash equivalents $ 1,522 $ 2,415
Trade and other receivables, net 632 556
Inventories 492 528
Prepaid expenses and other 980 1,767
Total current assets 3,626 5,266
Property and Equipment, Net 42,380 40,116
Operating Lease Right-of-Use Assets, Net 1,383 1,265
Goodwill 579 579
Other Intangibles 1,173 1,169
Other Assets 665 725
$ 49,805 $ 49,120
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt $ 2,214 $ 2,089
Current portion of operating lease liabilities 159 149
Accounts payable 1,062 1,168
Accrued liabilities and other 2,393 2,003
Customer deposits 6,436 6,072
Total current liabilities 12,265 11,481
Long-Term Debt 26,642 28,483
Long-Term Operating Lease Liabilities 1,258 1,170
Other Long-Term Liabilities 1,042 1,105
Shareholders' Equity
Carnival Corporation common stock, $0.01 par value; 1,960 shares authorized; 1,253 13 12
shares issued at 2024 and 1,250 shares issued at 2023
Carnival plc ordinary shares, $1.66 par value; 217 shares issued at 2024 and 2023 361 361
Additional paid-in capital 16,723 16,712
Retained earnings 1,798 185
Accumulated other comprehensive income (loss) (1,894) (1,939)
Treasury stock, 130 shares at 2024 and 2023 of Carnival Corporation and 73 shares at (8,404) (8,449)
2024 and 2023 of Carnival plc, at cost
Total shareholders' equity 8,597 6,882
$ 49,805 $ 49,120
CARNIVAL CORPORATION & PLC OTHER INFORMATION
OTHER BALANCE SHEET INFORMATION (in millions) August 31, 2024 November 30, 2023
Liquidity $ 4,519 $ 5,392
Debt (current and long-term) $ 28,856 $ 30,572
Customer deposits (current and long-term) $ 6,819 $ 6,353
Three Months Ended August 31, Nine Months Ended August 31,
STATISTICAL INFORMATION 2024 2023 2024 2023
Passenger cruise days ("PCDs") (in millions) (a) 28.1 25.8 76.0 67.8
ALBDs (in millions) (b) 25.2 23.7 71.7 68.1
Occupancy percentage (c) 112 % 109 % 106 % 100 %
Passengers carried (in millions) 3.9 3.6 10.3 9.3
Fuel consumption in metric tons (in millions) 0.7 0.7 2.2 2.2
Fuel consumption in metric tons per thousand ALBDs 29.5 31.1 31.0 32.3
Fuel cost per metric ton consumed (excluding EUA) $ 670 $ 636 $ 680 $ 681
Currencies (USD to 1)
AUD $ 0.67 $ 0.66 $ 0.66 $ 0.67
CAD $ 0.73 $ 0.75 $ 0.74 $ 0.74
EUR $ 1.09 $ 1.09 $ 1.08 $ 1.08
GBP $ 1.28 $ 1.27 $ 1.27 $ 1.24
Notes to Statistical Information
(a) PCD represents the number of cruise passengers on a voyage multiplied by the number of revenue-producing ship
operating days for that voyage.
(b) ALBD is a standard measure of passenger capacity for the period that we use to approximate rate and capacity variances,
based on consistently applied formulas that we use to perform analyses to determine the main non-capacity driven factors
that cause our cruise revenues and expenses to vary. ALBDs assume that each cabin we offer for sale accommodates two
passengers and is computed by multiplying passenger capacity by revenue-producing ship operating days in the period.
(c) Occupancy, in accordance with cruise industry practice, is calculated using a numerator of PCDs and a denominator of
ALBDs, which assumes two passengers per cabin even though some cabins can accommodate three or more passengers.
Percentages in excess of 100% indicate that on average more than two passengers occupied some cabins.
CARNIVAL CORPORATION & PLC NON-GAAP FINANCIAL MEASURES
Three Months Ended Nine Months Ended August 31,
August 31,
(in millions, except per share data) 2024 2023 2024 2023
Net income (loss) $ 1,735 $ 1,074 $ 1,613 $ (26)
(Gains) losses on ship sales and impairments (6) — (6) (54)
Debt extinguishment and modification costs 13 81 78 112
Restructuring expenses 9 1 20 16
Other — 20 — 43
Adjusted net income (loss) $ 1,751 $ 1,176 $ 1,705 $ 90
Interest expense, net of capitalized interest 431 518 1,352 1,600
Interest income (19) (59) (77) (183)
Income tax benefit (expense), net 8 (9) 13 3
Depreciation and amortization 651 596 1,898 1,774
Adjusted EBITDA $ 2,822 $ 2,221 $ 4,890 $ 3,285
Earnings per share - diluted (a) $ 1.26 $ 0.79 $ 1.21 $ (0.02)
Adjusted earnings per share - diluted (a) $ 1.27 $ 0.86 $ 1.27 $ 0.07
Weighted-average shares outstanding - diluted 1,399 1,396 1,398 1,262
(a) Diluted earnings per share includes the add-back of dilutive interest expense related to the company's convertible notes
of $25 million and $73 million for the three and nine months ended August 31, 2024.
Three Months Ended Nine Months Ended August 31,
August 31,
(in millions) 2024 2023 2024 2023
Cash from (used in) operations $ 1,205 $ 1,834 $ 5,012 $ 3,359
Capital expenditures (Purchases of Property and Equipment) (578) (837) (4,034) (2,609)
Proceeds from export credits — 140 2,314 1,157
Adjusted free cash flow $ 627 $ 1,137 $ 3,292 $ 1,906
(See Non-GAAP Financial Measures)
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)
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 August 31, Nine Months Ended August 31,
(in millions, except per diems and yields data) 2024 2024 Constant Currency 2023 2024 2024 Constant Currency 2023
Total revenues $ 7,896 $ 6,854 $ 19,083 $ 16,197
Less: Cruise and tour operating expenses (4,303) (3,921) (11,805) (10,688)
Depreciation and amortization (651) (596) (1,898) (1,774)
Gross margin 2,941 2,337 5,380 3,734
Less: Tour and other revenues (181) (172) (222) (216)
Add: Payroll and related 575 585 1,812 1,768
Fuel 515 468 1,546 1,492
Food 393 364 1,099 1,000
Ship and other impairments — — — —
Other operating 995 928 2,796 2,546
Depreciation and amortization 651 596 1,898 1,774
Adjusted gross margin $ 5,891 $ 5,894 $ 5,107 $ 14,307 $ 14,293 $ 12,099
PCDs 28.1 28.1 25.8 76.0 76.0 67.8
Gross margin per diems (per PCD) $ 104.49 $ 90.45 $ 70.80 $ 55.04
% increase (decrease) 16 % 29 %
Net per diems (per PCD) $ 209.28 $ 209.39 $ 197.64 $ 188.30 $ 188.10 $ 178.36
% increase (decrease) 5.9 % 5.9 % 5.6 % 5.5 %
ALBDs 25.2 25.2 23.7 71.7 71.7 68.1
Gross margin yields (per ALBD) $ 116.77 $ 98.50 $ 75.05 $ 54.85
% increase (decrease) 19 % 37 %
Net yields (per ALBD) $ 233.87 $ 234.00 $ 215.22 $ 199.60 $ 199.40 $ 177.73
% increase (decrease) 8.7 % 8.7 % 12 % 12 %
(See Non-GAAP Financial Measures)
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)
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 August 31, Nine Months Ended August 31,
(in millions, except costs per ALBD data) 2024 2024 Constant Currency 2023 2024 2024 Constant Currency 2023
Cruise and tour operating expenses $ 4,303 $ 3,921 $ 11,805 $ 10,688
Selling and administrative expenses 763 713 2,366 2,162
Less: Tour and other expenses (105) (112) (174) (190)
Cruise costs 4,962 4,522 13,998 12,660
Less: Commissions, transportation and other (958) (823) (2,510) (2,097)
Onboard and other costs (866) (752) (2,043) (1,785)
Gains (losses) on ship sales and impairments 6 — 6 54
Restructuring expenses (9) (1) (20) (16)
Other — — — —
Adjusted cruise costs 3,134 3,138 2,946 9,430 9,421 8,817
Less: Fuel (515) (515) (468) (1,546) (1,546) (1,492)
Adjusted cruise costs excluding fuel $ 2,619 $ 2,622 $ 2,478 $ 7,885 $ 7,876 $ 7,325
ALBDs 25.2 25.2 23.7 71.7 71.7 68.1
Cruise costs per ALBD $ 196.98 $ 190.58 $ 195.29 $ 185.97
% increase (decrease) 3.4 % 5.0 %
Adjusted cruise costs per ALBD $ 124.44 $ 124.56 $ 124.16 $ 131.56 $ 131.44 $ 129.51
% increase (decrease) 0.2 % 0.3 % 1.6 % 1.5 %
Adjusted cruise costs excluding fuel per ALBD $ 103.97 $ 104.09 $ 104.42 $ 110.00 $ 109.87 $ 107.59
% increase (decrease) (0.4) % (0.3) % 2.2 % 2.1 %
(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) and • Net income (loss) • Company Performance
adjusted EBITDA
• Adjusted earnings per share • Earnings per share • Company Performance
• Adjusted free cash flow • Cash from (used in) operations • Impact on Liquidity Level
• Net debt to adjusted EBITDA — • Company Leverage
• Net per diems • Gross margin per diems • Cruise Segments Performance
• Net yields • Gross margin yields • Cruise Segments Performance
• Adjusted cruise costs per ALBD and • Gross cruise costs per ALBD • Cruise Segments Performance
adjusted cruise costs excluding fuel
per ALBD
• Adjusted ROIC — • Company Performance
The presentation of our non-GAAP financial information is not intended to be
considered in isolation from, as a substitute for, or superior to the
financial information prepared in accordance with U.S. GAAP. It is possible
that our non-GAAP financial measures may not be exactly comparable to the
like-kind information presented by other companies, which is a potential risk
associated with using these measures to compare us to other companies.
Adjusted net income (loss) and adjusted earnings per share provide additional
information to us and investors about our future earnings performance by
excluding certain gains, losses and expenses that we believe are not part of
our core operating business and are not an indication of our future earnings
performance. We believe that gains and losses on ship sales, impairment
charges, debt extinguishment and modification costs, 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 debt to adjusted EBITDA provides additional information to us and
investors about our overall leverage. We define net debt to adjusted EBITDA as
total debt less cash and cash equivalents excluding a minimum cash balance
divided by twelve-month adjusted EBITDA.
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 excluding fuel. The price of
fuel, over which we have no control, impacts the comparability of
period-to-period cost performance. The adjustment to exclude fuel provides us
and investors with supplemental information to understand and assess the
company's non-fuel adjusted cruise cost performance. Substantially all of our
adjusted cruise costs excluding fuel are largely fixed, except for the impact
of changing prices once the number of ALBDs has been determined.
Adjusted ROIC provides additional information to us and investors about our
operating performance relative to the capital we have invested in the company.
We define adjusted ROIC as the twelve-month adjusted net income (loss) before
interest expense and interest income divided by the monthly average of debt
plus equity minus construction-in-progress, excess cash, goodwill and
intangibles.
Reconciliation of Forecasted Data
We have not provided a reconciliation of forecasted non-GAAP financial
measures to the most comparable U.S. GAAP financial measures because
preparation of meaningful U.S. GAAP forecasts would require unreasonable
effort. We are unable to predict, without unreasonable effort, the future
movement of foreign exchange rates and fuel prices. We are unable to determine
the future impact of gains and losses on ship sales, impairment charges, debt
extinguishment and modification costs, 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 yields, net per diems, adjusted cruise
costs excluding fuel and adjusted cruise costs excluding fuel per ALBD on a
"constant currency" basis assuming the current periods' currency exchange
rates have remained constant with the prior 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.
CONTACT: MEDIA CONTACT, Jody Venturoni, +1 469 797 6380; INVESTOR RELATIONS
CONTACT: Beth Roberts, +1 305 406 4832
SOURCE Carnival Corporation & plc
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