REG-Carnival PLC: Carnival Corporation 4Q 2023 Earnings
21/12/2023 14:30
CARNIVAL CORPORATION & PLC REPORTS RECORD FOURTH QUARTER AND FULL YEAR
REVENUES WITH CONTINUED STRONG BOOKINGS AND EARNINGS MOMENTUM
Tracking ahead of SEA Change targets
MIAMI, Dec. 21, 2023 -- Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK)
reports fourth quarter and full year 2023 earnings and provides an outlook for
the full year and first quarter 2024.
Key Highlights
Full Year 2023
* Full year revenues hit an all-time high of $21.6 billion.
* Full year cash from operations was $4.3 billion and adjusted free cash flow
was $2.1 billion (see "Non-GAAP Financial Measures" below).
* U.S. GAAP net loss of $74 million and positive adjusted net income of $1
million outperformed the September guidance range (see "Non-GAAP Financial
Measures" below).
* The company made debt payments of $6 billion, reducing its debt balance by
$4.6 billion from its peak in the first quarter of 2023 and ended the year
with $5.4 billion of liquidity.
* The company entered 2024 with its best booked position on record, for both
price and occupancy
Fourth Quarter 2023
* Record fourth quarter revenues of $5.4 billion with record net per diems (in
constant currency) significantly exceeding 2019 levels and above the September
guidance range and record net yields (in constant currency) (see "Non-GAAP
Financial Measures" below).
* Booking volumes for the two weeks around Black Friday and Cyber Monday
reached an all-time high for that period.
* Total customer deposits reached a fourth quarter record of $6.4 billion,
surpassing the previous fourth quarter record of $5.1 billion (as of November
30, 2022), by 25 percent.
"We ended the year on a high note with another record-breaking quarter that
exceeded expectations and achieved positive full year adjusted net income. In
fact, we consistently outperformed in all four quarters of the year, buoyed by
a strengthening demand environment across all our brands," commented Carnival
Corporation & plc's Chief Executive Officer Josh Weinstein.
"Net yields for the fourth quarter continued on a positive trajectory, were
significantly higher than a very strong 2019 and even higher than we had
anticipated, enabling us to overcome four years of high cost inflation to
deliver five percent higher per unit EBITDA than 2019 (holding fuel and
currency constant)," Weinstein added.
"Thanks to a strong second half of 2023, we are already tracking ahead of our
plan to achieve SEA Change, our three-year financial targets calling for the
highest adjusted ROIC and adjusted EBITDA per ALBD in nearly two decades.
Based on our 2024 guidance, we expect to deliver another big step forward,
positioning us more than halfway toward realizing all our 2026 SEA Change
targets. With nearly two-thirds of 2024 on the books already, we are well
positioned to obtain another year of record revenues and adjusted EBITDA,"
Weinstein noted.
Fourth Quarter 2023 Results
* U.S. GAAP net loss of $48 million, or $(0.04) diluted EPS, and adjusted net
loss of $90 million, or $(0.07) adjusted EPS, was above the better end of the
September guidance range (see "Non-GAAP Financial Measures" below).
* Adjusted EBITDA of $946 million exceeded the September guidance range,
driven by continued strength in demand, which is driving ticket prices higher
(see "Non-GAAP Financial Measures" below).
* Record fourth quarter revenues of $5.4 billion, with record net per diems
(in constant currency) significantly exceeding 2019 levels, and above the
September guidance range and record net yields (in constant currency).
* While gross margin yields were down 4.6 percent, net yields (in constant
currency) exceeded strong 2019 levels by 7.8 percent. * Occupancy in the
fourth quarter of 2023 was over 101 percent, in line with the company's
expectations and historical levels.
* Gross margin per diems were down 2.3 percent compared to 2019, while net per
diems (in constant currency) exceeded 2019 levels by over 10 percent and were
three percentage points better than the midpoint of the September guidance
range.
* Cruise costs per ALBD increased 12 percent as compared to the fourth quarter
of 2019. Adjusted cruise costs excluding fuel per ALBD (in constant currency)
increased 11 percent compared to the fourth quarter of 2019 and were in line
with September guidance (see "Non-GAAP Financial Measures" below).
* Total customer deposits reached a fourth quarter record of $6.4 billion,
surpassing the previous fourth quarter record of $5.1 billion (as of November
30, 2022), by 25 percent.
Bookings
"We entered the year with the best booked position we have ever seen, and now
have nearly two-thirds of our occupancy already on the books for 2024, at
considerably higher prices (in constant currency). We continue to experience
strong bookings momentum across the board, with our European brands showing
remarkable strength during the quarter with booking volumes running up well
into the double digits at considerably higher prices (in constant currency),"
Weinstein noted.
Weinstein continued, "Our yield management strategy to base load bookings is
clearly working as we pull forward booking volumes on strong pricing. We
continue to build on that momentum with our ongoing advertising investments
and lead generation efforts, increasing support from our trade partners, and
the exceptional guest experiences our team members provide onboard every day,
helping to deliver millions of cruising advocates."
Booking volumes during the fourth quarter continued at significantly elevated
levels, above both prior year and 2019 comparable periods, while recent
booking volumes for the two weeks around Black Friday and Cyber Monday reached
an all-time high for that period. Pricing on bookings during the fourth
quarter was considerably higher than prior year pricing (in constant
currency).
The cumulative advanced booked position is at considerably higher prices (in
constant currency) than 2023 levels, with each quarter of 2024 booked above
the high end of the historical range.
2024 Outlook
For the full year 2024, the company expects:
* Adjusted EBITDA of approximately $5.6 billion, over 30 percent growth
compared to 2023
* Net yields (in constant currency) up approximately 8.5 percent compared to
2023, with full year occupancy returning to historical levels and nicely
higher net per diems (in constant currency) reflecting continued strength in
pricing and onboard spending
* Adjusted cruise costs excluding fuel per ALBD (in constant currency) up
approximately 4.5 percent compared to 2023
For the first quarter of 2024, the company expects:
* Adjusted EBITDA of approximately $0.8 billion, more than double the first
quarter of 2023
* Net yields (in constant currency) up approximately 16.5 percent compared to
the first quarter of 2023 with occupancy returning to historical levels as the
company closes the remaining occupancy gap in the first half of the year
* Adjusted cruise costs excluding fuel per ALBD (in constant currency) up
approximately 9.5 percent compared to the first quarter of 2023 primarily due
to higher occupancy levels, the timing of advertising investments and dry-dock
related expenses compared to the prior year
See "Guidance" and "Reconciliation of Forecasted Data" for additional
information on the company's 2024 outlook.
Financing and Capital Activity
"During 2023, we made debt payments of $6 billion and ended the year with just
over $30 billion of debt, which is $3 billion better than we forecasted just
nine months ago during our March conference call and almost $5 billion off the
first quarter peak," noted Carnival Corporation & plc Chief Financial Officer
David Bernstein.
"And looking forward, we will continue to evaluate refinancing opportunities
and opportunistically prepay additional debt. Furthermore, we expect durable
revenue growth to drive increases in adjusted free cash flow in 2024 and
beyond, which will be the primary driver for paying down our debt balances on
our path back to investment grade," Bernstein added.
During 2023, the company generated cash from operations of $4.3 billion and
adjusted free cash flow of $2.1 billion, making a significant contribution
toward rebuilding the company's financial strength.
During the fourth quarter of 2023, the company reduced its debt by another
$725 million and for the full year made debt payments of $6 billion while
ending the fourth quarter with $5.4 billion of liquidity, including cash and
borrowings available under the revolving credit facility. In addition, the
company amended an agreement with one of its credit card processors and now
expects an additional $800 million to be returned during the first quarter of
2024, representing substantially all of the credit card reserves balance as of
November 30, 2023.
Sustainability
The company continues to work aggressively towards its greenhouse gases
("GHG") emission reduction goals and ambitions through innovative projects
aligned with its four-part emission reduction strategy: fleet optimization;
energy efficiency; itinerary efficiency; and new technologies & alternative
fuels. In 2023, the company:
* Reduced its absolute GHG emissions by over 10 percent as compared to its
peak year of 2011, despite capacity growth of 30 percent over the same period.
* Achieved a 15.5 percent reduction in fuel consumption per ALBD compared to
2019 and expects another four percent reduction in fuel consumption per ALBD
for full year 2024 compared to 2023.
* Now expects to achieve its 2030 GHG emission intensity reduction goal four
years early, targeting more than a 20 percent reduction in emission intensity
by the end of 2026 compared to 2019.
* Surpassed its 2030 goal to achieve shore power capability for 60 percent of
its fleet, seven years ahead of schedule; now, 64 percent of the company's
fleet has the capability to connect to shore power.
* Successfully piloted the use of biofuels as a replacement for fossil fuel on
one additional ship, bringing its cumulative completed biofuel pilots to three
ships.
* Delivered 38 percent reduction in food waste per person relative to its 2019
baseline, nearing its interim goal to reduce food waste by 40 percent per
person by 2025, and on pace toward its 2030 goal of a 50 percent reduction.
Other Recent Highlights
* Carnival Corporation's brands launched advertising campaigns with Costa
Cruises focusing on moments where guests are left speechless, P&O Cruises (UK)
highlighting the unique experiences of a cruise holiday, AIDA Cruises inviting
guests to experience oneself, and Holland America Line continuing its "Time of
Your Life" campaign.
* Carnival Corporation was named one of the World's Top Female-Friendly
Companies and one of the World's Best Employers of 2023 by Forbes, both for
the third consecutive year.
* Carnival Cruise Line took delivery of Carnival Jubilee, offering an exciting
mix of new entertainment, dining and fun to one of the line's most popular
homeports, Galveston, Texas.
* Carnival Cruise Line announced hundreds of sailings to its new destination
on Grand Bahama Island "Celebration Key" with 18 different ships departing
from nine different homeports.
Guidance
(See "Reconciliation of Forecasted Data")
1Q 2024 Full Year 2024
Year over year change Current Constant Current Constant
Dollars Currency Dollars Currency
Net yields Approx. 16.5% Approx. 16.5% Approx. 8.5% Approx. 8.5%
Adjusted cruise costs excluding fuel per ALBD Approx. 10.0% Approx. 9.5% Approx. 4.5% Approx. 4.5%
2024
1Q 2Q 3Q 4Q Full Year
ALBDs (in millions) (a) 23.1 23.9 25.2 24.0 96.2
(a) See "Notes to Statistical Information"
1Q 2024 Full Year 2024
Capacity growth compared to prior year 4.6 % 5.4 %
Fuel consumption in metric tons (in millions) 0.7 3.0
Fuel cost per metric ton consumed (excluding European Union Allowance ("EUA")) $ 665 $ 650
EUA cost per metric ton of emissions $ 75 $ 75
EUA expense (in millions) $ 3 $ 51
Fuel expense (including EUA expense) (in billions) $ 0.5 $ 2.0
Depreciation and amortization (in billions) $ 0.6 $ 2.6
Interest expense, net of capitalized interest and interest income (in billions) $ 0.45 $ 1.74
Adjusted EBITDA (in billions) Approx. $0.8 Approx. $5.6
Adjusted net income (loss) (in billions) Approx. $(0.28) Approx. $1.2
Adjusted earnings per share - diluted (a) Approx. $(0.22) Approx. $0.93
Weighted-average shares outstanding - basic 1,264 1,273
Weighted-average shares outstanding - diluted 1,264 1,398
(a) Diluted adjusted earnings per share for the full year 2024 includes the add-back of dilutive interest expense related to the company's convertible notes of $94 million. The add-back expense is antidilutive to the first quarter of 2024 calculation and accordingly has been excluded.
Currencies (USD to 1) 1Q 2024 Full Year 2024
AUD $ 0.67 $ 0.67
CAD $ 0.75 $ 0.75
EUR $ 1.09 $ 1.09
GBP $ 1.27 $ 1.27
Sensitivities (impact to adjusted net income (loss) in millions) 1Q 2024 Full Year 2024
1% change in net yields $ 34 $ 171
1% change in adjusted cruise costs excluding fuel per ALBD $ 24 $ 105
1% change in currency exchange rates $ 4 $ 21
10% change in fuel price $ 49 $ 191
100 basis point change in variable rate debt (including derivatives) — $ 62
Capital Expenditures
The company's annual capital expenditure forecast for 2024, is as follows:
(in billions) 2024 2025 2026
Contracted newbuild $ 2.4 $ 1.0 $ —
Non-newbuild 1.8 1.8 1.8
Total (a) $ 4.2 $ 2.8 $ 1.8
(a) Future capital expenditures will fluctuate with foreign currency movements relative to the U.S. Dollar. These figures do not include potential ship orders (stage payments and final delivery payments) that the company may place in the future.
Committed Ship Financings
(in billions) 2024 2025
Future export credit facilities at November 30, 2023 $ 2.3 $ 0.7
Outstanding Debt Maturities
As of November 30, 2023, the company's outstanding debt maturities are as
follows:
(in billions) 2024 2025 2026
First Lien $ 0.0 $ 0.9 $ 0.0
Second Lien 0.0 — —
Export Credits 1.2 1.2 1.2
Convertible Notes 0.4 — —
All other 0.4 0.2 2.0
Total Principal payments on outstanding debt $ 2.1 $ 2.2 $ 3.2
Refer to Financial Information within the Investor Relations section of the
corporate website for further details on the company's Debt Maturities:
https://www.carnivalcorp.com/financial-information/supplemental-schedules
Conference Call
The company has scheduled a conference call with analysts at 10:00 a.m. EST
(3:00 p.m. GMT) today to discuss its earnings release. This call can be
listened to live, and additional information can be obtained, via Carnival
Corporation & plc's website at www.carnivalcorp.com and www.carnivalplc.com.
Carnival Corporation & plc is the largest global cruise company, and among the
largest leisure travel companies, with a portfolio of world-class cruise lines
– AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Holland America
Line, P&O Cruises (Australia), P&O Cruises (UK), Princess Cruises, and
Seabourn.
Additional information can be found on www.carnivalcorp.com, www.aida.de,
www.carnival.com, www.costacruise.com, www.cunard.com, www.hollandamerica.com,
www.pocruises.com.au, www.pocruises.com, www.princess.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 net income (loss)
• Booking levels • Adjusted EBITDA
• Occupancy • Adjusted earnings per share
• Interest, tax and fuel expenses • Adjusted free cash flow
• Currency exchange rates • Net per diems
• Goodwill, ship and trademark fair 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
Because forward-looking statements involve risks and uncertainties, there are
many factors that could cause our actual results, performance or achievements
to differ materially from those expressed or implied by our forward-looking
statements. This note contains important cautionary statements of the known
factors that we consider could materially affect the accuracy of our
forward-looking statements and adversely affect our business, results of
operations and financial position. Additionally, many of these risks and
uncertainties are currently, and in the future may continue to be, amplified
by our substantial debt balance incurred during the pause of our guest cruise
operations. There may be additional risks that we consider immaterial or which
are unknown. These factors include, but are not limited to, the following:
* Events and conditions around the world, including 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.
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 Twelve Months Ended
November 30, November 30,
2023 2022 2023 2022
Revenues
Passenger ticket $ 3,510 $ 2,269 $ 14,067 $ 7,022
Onboard and other 1,886 1,570 7,526 5,147
5,397 3,839 21,593 12,168
Operating Expenses
Commissions, transportation and other 664 489 2,761 1,630
Onboard and other 590 468 2,375 1,528
Payroll and related 605 580 2,373 2,181
Fuel 555 580 2,047 2,157
Food 335 277 1,335 863
Ship and other impairments — 433 — 440
Other operating 879 840 3,426 2,958
Cruise and tour operating expenses 3,629 3,665 14,317 11,757
Selling and administrative 788 741 2,950 2,515
Depreciation and amortization 596 568 2,370 2,275
5,013 4,974 19,637 16,547
Operating Income (Loss) 384 (1,135) 1,956 (4,379)
Nonoperating Income (Expense)
Interest income 50 40 233 74
Interest expense, net of capitalized interest (466) (448) (2,066) (1,609)
Debt extinguishment and modification costs 1 (1) (111) (1)
Other income (expense), net (8) (57) (75) (165)
(423) (466) (2,018) (1,701)
Income (Loss) Before Income Taxes (39) (1,601) (62) (6,080)
Income Tax Benefit (Expense), Net (9) 3 (13) (14)
Net Income (Loss) $ (48) $ (1,598) $ (74) $ (6,093)
Earnings Per Share
Basic $ (0.04) $ (1.27) $ (0.06) $ (5.16)
Diluted $ (0.04) $ (1.27) $ (0.06) $ (5.16)
Weighted-Average Shares Outstanding - Basic 1,263 1,259 1,262 1,180
Weighted-Average Shares Outstanding - Diluted 1,263 1,259 1,262 1,180
CARNIVAL CORPORATION & PLC CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in millions, except par values)
November 30,
2023 2022
ASSETS
Current Assets
Cash and cash equivalents $ 2,415 $ 4,029
Restricted cash 11 1,988
Trade and other receivables, net 556 395
Inventories 528 428
Prepaid expenses and other 1,757 652
Total current assets 5,266 7,492
Property and Equipment, Net 40,116 38,687
Operating Lease Right-of-Use Assets, Net 1,265 1,274
Goodwill 579 579
Other Intangibles 1,169 1,156
Other Assets 725 2,515
$ 49,120 $ 51,703
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ — $ 200
Current portion of long-term debt 2,089 2,393
Current portion of operating lease liabilities 149 146
Accounts payable 1,168 1,050
Accrued liabilities and other 2,003 1,942
Customer deposits 6,072 4,874
Total current liabilities 11,481 10,605
Long-Term Debt 28,483 31,953
Long-Term Operating Lease Liabilities 1,170 1,189
Other Long-Term Liabilities 1,105 891
Shareholders' Equity
Carnival Corporation common stock, $0.01 par value; 1,960 shares authorized; 1,250 shares at 12 12
2023 and 1,244 shares at 2022 issued
Carnival plc ordinary shares, $1.66 par value; 217 shares at 2023 and 2022 issued 361 361
Additional paid-in capital 16,712 16,872
Retained earnings 185 269
Accumulated other comprehensive income (loss) (1,939) (1,982)
Treasury stock, 130 shares at 2023 and 2022 of Carnival Corporation and 73 shares at 2023 and (8,449) (8,468)
72 shares at 2022 of Carnival plc, at cost
Total shareholders' equity 6,882 7,065
$ 49,120 $ 51,703
CARNIVAL CORPORATION & PLC OTHER INFORMATION
November 30,
OTHER BALANCE SHEET INFORMATION (in millions) 2023 2022
Liquidity (a) $ 5,392 $ 8,635
Debt (current and long-term) $ 30,572 $ 34,546
Customer deposits (current and long-term) $ 6,353 $ 5,089
(a) November 30, 2022 liquidity includes restricted cash from the 2028 Senior Priority Notes which became unrestricted in December 2022.
Three Months Ended Twelve Months Ended
November 30, November 30,
STATISTICAL INFORMATION 2023 2022 2023 2022
Passenger cruise days ("PCDs") (in millions) (a) 23.6 18.3 91.4 54.6
ALBDs (in millions) (b) 23.2 21.5 91.3 72.5
Occupancy percentage (c) 101 % 85 % 100 % 75 %
Passengers carried (in millions) 3.1 2.5 12.5 7.7
Fuel consumption in metric tons (in millions) 0.7 0.7 2.9 2.6
Fuel consumption in metric tons per thousand ALBDs 31.5 33.4 32.1 36.1
Fuel cost per metric ton consumed $ 759 $ 812 $ 701 $ 830
Currencies (USD to 1)
AUD $ 0.64 $ 0.66 $ 0.66 $ 0.70
CAD $ 0.73 $ 0.74 $ 0.74 $ 0.77
EUR $ 1.07 $ 1.00 $ 1.08 $ 1.06
GBP $ 1.23 $ 1.15 $ 1.24 $ 1.25
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 Twelve Months Ended
November 30, November 30,
(in millions) 2023 2022 2023 2022
Net income (loss) $ (48) $ (1,598) $ (74) $ (6,093)
(Gains) losses on ship sales and impairments (34) 431 (88) 433
Debt extinguishment and modification costs (1) 1 111 1
Restructuring expenses 3 20 19 22
Other (10) 77 33 130
Adjusted net income (loss) $ (90) $ (1,068) $ 1 $ (5,508)
Interest expense, net of capitalized interest 466 448 2,066 1,609
Interest income (50) (40) (233) (74)
Income tax benefit (expense), net 24 (3) 28 14
Depreciation and amortization 596 568 2,370 2,275
Adjusted EBITDA $ 946 $ (96) $ 4,231 $ (1,684)
Three Months Ended Twelve Months Ended
November 30, November 30,
2023 2022 2023 2022
Earnings per share - diluted (a) $ (0.04) $ (1.27) $ (0.06) $ (5.16)
(Gains) losses on ship sales and impairments (0.03) 0.34 (0.07) 0.37
Debt extinguishment and modification costs — — 0.09 —
Restructuring expenses — 0.02 0.01 0.02
Other (0.01) 0.06 0.03 0.11
Adjusted earnings per share - diluted (a) $ (0.07) $ (0.85) $ 0.00 $ (4.67)
Weighted-average shares outstanding - diluted (in millions) 1,263 1,259 1,262 1,180
(a) For the fourth quarter and full year 2023, the company's convertible notes are antidilutive and therefore are not included in diluted weighted-average shares outstanding.
Three Months Ended Twelve Months Ended
November 30, November 30,
(in millions) 2023 2022 2023 2022
Cash from (used in) operations $ 915 $ (117) $ 4,273 $ (1,670)
Capital expenditures (Purchases of Property and Equipment) (675) (1,181) (3,284) (4,940)
Proceeds from export credits — 799 1,157 3,142
Adjusted free cash flow $ 240 $ (499) $ 2,146 $ (3,468)
(See Non-GAAP Financial Measures)
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)
Data in the below table is compared against 2019 as it is the most recent year
of full operations due to the pause and resumption of guest cruise operations.
Gross margin per diems and net per diems were computed by dividing the gross
margin and adjusted gross margin by PCDs. Gross margin yields and net yields
were computed by dividing the gross margin and adjusted gross margin by ALBDs
as follows:
Three Months Ended November Twelve Months Ended November
30, 30,
(in millions, except per diems and yields data) 2023 2023 Constant Currency 2019 2023 2023 Constant Currency 2019
Total revenues $ 5,397 $ 4,781 $ 21,593 $ 20,825
Less: Cruise and tour operating expenses (3,629) (3,077) (14,317) (12,909)
Depreciation and amortization (596) (554) (2,370) (2,160)
Gross margin 1,172 1,151 4,906 5,755
Less: Tour and other revenues (50) (91) (265) (390)
Add: Payroll and related 605 578 2,373 2,249
Fuel 555 358 2,047 1,562
Food 335 262 1,335 1,083
Ship and other impairments — — — —
Other operating 879 802 3,426 3,193
Depreciation and amortization 596 554 2,370 2,160
Adjusted gross margin $ 4,093 $ 4,162 $ 3,614 $ 16,192 $ 16,449 $ 15,613
PCDs 23.6 23.6 22.6 91.4 91.4 93.4
Gross margin per diems (per PCD) $ 49.72 $ 50.89 $ 53.67 $ 61.62
Net per diems (per PCD) $ 173.60 $ 176.52 $ 159.79 $ 177.13 $ 179.94 $ 167.17
ALBDs 23.2 23.2 21.8 91.3 91.3 87.4
Gross margin yields (per ALBD) $ 50.47 $ 52.92 $ 53.73 $ 65.83
Net yields (per ALBD) $ 176.20 $ 179.16 $ 166.16 $ 177.34 $ 180.15 $ 178.59
(See Non-GAAP Financial Measures)
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)
Data in the below table is compared against 2019 as it is the most recent year
of full operations due to the pause and resumption of guest cruise operations.
Cruise costs per ALBD, adjusted cruise costs per ALBD and adjusted cruise
costs excluding fuel per ALBD were computed by dividing cruise costs, adjusted
cruise costs and adjusted cruise costs excluding fuel by ALBDs as follows:
Three Months Ended November Twelve Months Ended November
30, 30,
(in millions, except costs per ALBD data) 2023 2023 Constant 2019 2023 2023 Constant 2019
Currency Currency
Cruise and tour operating expenses $ 3,629 $ 3,077 $ 14,317 $ 12,909
Selling and administrative expenses 788 667 2,950 2,480
Less: Tour and other expenses (42) (76) (231) (296)
Cruise costs 4,375 3,667 17,035 15,093
Less: Commissions, transportation and other (664) (595) (2,761) (2,720)
Onboard and other costs (590) (481) (2,375) (2,101)
Gains (losses) on ship sales and 34 5 88 16
impairments
Restructuring expenses (3) (10) (19) (10)
Other — — — (43)
Adjusted cruise costs 3,153 3,196 2,586 11,969 12,130 10,234
Less: Fuel (555) (555) (358) (2,047) (2,047) (1,562)
Adjusted cruise costs excluding fuel $ 2,597 $ 2,641 $ 2,228 $ 9,922 $ 10,083 $ 8,672
ALBDs 23.2 23.2 21.8 91.3 91.3 87.4
Cruise costs per ALBD $ 188.31 $ 168.58 $ 186.57 $ 172.64
% increase (decrease) vs 2019 12 % 8.1 %
Adjusted cruise costs per ALBD $ 135.70 $ 137.58 $ 118.89 $ 131.08 $ 132.85 $ 117.07
% increase (decrease) vs 2019 14 % 16 % 12 % 13 %
Adjusted cruise costs excluding fuel per $ 111.80 $ 113.68 $ 102.44 $ 108.67 $ 110.43 $ 99.20
ALBD
% increase (decrease) vs 2019 9.1 % 11 % 9.5 % 11 %
(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 adjusted EBITDA • Net income (loss) • Company Performance
• Adjusted earnings per share • Earnings per share • Company Performance
• Adjusted free cash flow • Cash from (used in) operations • Impact on Liquidity Level
• 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 return on invested capital ("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 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 per diems, adjusted cruise costs
excluding fuel and adjusted cruise costs excluding fuel per ALBD on a
"constant currency" basis assuming the 2023 periods' currency exchange rates
have remained constant with the 2019 periods' rates. These metrics facilitate
a comparative view for the changes in our business in an environment with
fluctuating exchange rates.
Examples:
* The translation of our operations with functional currencies other than U.S.
dollar to our U.S. dollar reporting currency results in decreases in reported
U.S. dollar revenues and expenses if the U.S. dollar strengthens against these
foreign currencies and increases in reported U.S. dollar revenues and expenses
if the U.S. dollar weakens against these foreign currencies.
* Our operations have revenue and expense transactions in currencies other
than their functional currency. If their functional currency strengthens
against these other currencies, it reduces the functional currency revenues
and expenses. If the functional currency weakens against these other
currencies, it increases the functional currency revenues and expenses.
SOURCE Carnival Corporation & plc
CONTACT: MEDIA CONTACT, Jody Venturoni, +1 469 797 6380; INVESTOR RELATIONS
CONTACT, Beth Roberts, +1 305 406 4832
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