CARNIVAL CORPORATION & PLC PROVIDES THIRD QUARTER 2022 BUSINESS UPDATE
U.S. GAAP net loss of$770 million and adjusted net loss of$688 million for the third quarter of 2022.- Adjusted EBITDA for the third quarter of 2022 was over
$300 million , turning positive for the first time since the resumption of guest cruise operations and marking a significant milestone. - Revenue increased by nearly 80% in the third quarter of 2022 compared to second quarter 2022, reflecting continued sequential improvement.
- Occupancy in the third quarter of 2022 increased 15 percentage points from the prior quarter.
- Since the announcement of the company's relaxed protocols in mid-August, aligning the company towards land-based vacation alternatives, booking volumes for all future sailings are considerably higher than strong 2019 levels.
- Third quarter 2022 ended with
$7.4 billion of liquidity, including cash and borrowings available under the company's revolving credit facility.
Weinstein noted, "During our third quarter our business continued its positive trajectory, achieving over
Weinstein continued, "Since announcing the relaxation of our protocols last month, we have seen a meaningful improvement in booking volumes and are now running considerably ahead of strong 2019 levels. We expect to further capitalize on this momentum with renewed efforts to generate demand. We are focused on delivering significant revenue growth over the long-term, while taking advantage of near-term tactics to quickly capture price and bookings in the interim."
Weinstein added, "With a transformed fleet, an unmatched portfolio of well recognized brands, unparalleled scale in an under-penetrated industry and an incredibly talented global team, we have the ability to drive durable revenue growth through pricing improvements over time. We believe this will provide significant free cash flow and accelerate our return to strong profitability and investment grade credit ratings."
Third Quarter 2022 Results and Statistical Information
- Revenue increased by nearly 80% in the third quarter of 2022 compared to second quarter 2022, reflecting continued sequential improvement. For the cruise segments, revenue per passenger cruise day ("PCD") for the third quarter of 2022 decreased compared to a strong 2019.
- Onboard and other revenue per PCD for the third quarter of 2022 increased significantly compared to a strong 2019.
- PCDs for the third quarter of 2022 were 17.7 million, representing a 55% increase from the prior quarter.
- Occupancy in the third quarter of 2022 increased 15 percentage points from the prior quarter.
- Available lower berth days ("ALBD") for the third quarter of 2022 were 21.0 million, which represents 92% of total fleet capacity, increasing from 74% in the second quarter of 2022.
- Adjusted EBITDA for the third quarter of 2022 was over
$300 million , turning positive for the first time since the resumption of guest cruise operations and marking a significant milestone.
Total customer deposits were
Guest Cruise Operations
Weinstein noted, "With our return to guest cruise operations essentially complete, we are now relentlessly focused on driving top line growth and returning to strong profitability. We believe the strategic changes we have already made to our fleet resulting in a younger and more efficient fleet, coupled with our recent portfolio optimization efforts including COSTA® by CARNIVAL®, will provide strong tailwinds along our path to profitability."
As of
Based on the evolving nature of COVID-19 and the company's ongoing collaboration with local and national public health authorities, the company's brands continue to responsibly relax their COVID-19 related protocols ("relaxed protocols") aligning the company towards land-based vacation alternatives. This generally includes greatly reduced or eliminated testing requirements and significantly broadens the demand pool by welcoming unvaccinated guests. These relaxed protocols generally became effective throughout September and are subject to local destination regulations.
The company saw a continuation of its 2022 sequential improvement in adjusted cruise costs excluding fuel per ALBD in constant currency (see "Non-GAAP Financial Measures" below) in the third quarter of 2022 and expects to see continued improvement in the fourth quarter of 2022 with a low double-digit increase as compared to the fourth quarter of 2019 driven in part by higher advertising expense to drive 2023 revenue. While the company's year-to-date adjusted cruise costs excluding fuel per ALBD during 2022 has benefited from the sale of smaller-less efficient ships and the delivery of larger-more efficient ships, this benefit is offset by a portion of its fleet being in pause status for part of the year, restart related expenses, an increase in the number of dry dock days, the cost of maintaining enhanced health and safety protocols, inflation and supply chain disruptions. The company anticipates that many of these costs and expenses will end in 2022.
Given the seasonality of its business, the company expects a net loss and breakeven to slightly negative adjusted EBITDA for the fourth quarter ending
Bookings
Booking volumes for all future sailings during the third quarter of 2022 saw a continuation of the accelerated booking volumes during the second quarter of 2022, closing the gap to strong 2019 levels. Since the announcement of the company's relaxed protocols in mid-August, aligning the company towards land-based vacation alternatives, booking volumes for all future sailings are considerably higher than strong 2019 levels. (The company's current booking trends will be compared to booking trends for 2019 sailings as it is the most recent full year of guest cruise operations.)
Cumulative advance bookings for the fourth quarter of 2022 are below the historical range and at lower prices, primarily due to future cruise credits ("FCCs"), as compared to 2019 sailings.
Cumulative advance bookings for full year 2023 are slightly above the historical average and at considerably higher prices, as compared to 2019 sailings, normalized for FCCs.
Financing and Capital Activity
During the third quarter of 2022, the company completed a
Additionally, the company exchanged
Sustainability
Carnival Chief Maritime Officer
In
Global fleet upgrades will improve energy and fuel efficiency and support sustainability goals
In
- Comprehensive upgrades to each ship's hotel HVAC systems
- Technical systems upgrades on each ship
- State-of-the-art LED lighting systems
- Remote monitoring and maintenance of energy usage and performance
The Service Power Package upgrades are part of the company's ongoing energy efficiency investment program, in which the company has invested over
Other Recent Highlights
- Seabourn took delivery of Seabourn Venture, the line's first purpose-built ultra-luxury expedition ship.
Carnival Cruise Line's booking activity forMonday, August 15 nearly doubled the level for the equivalent day in 2019 after announcing the relaxed protocols.Carnival Cruise Line received the 2022 Seatrade Cruise Award in the Investment in People Award category for their DEI, Learning and Community initiatives.- Carnival continues to lead in destination port development including
Carnival Cruise Line's recently announced economic opportunities for itsGrand Bahama Cruise Port Development , which is opening in late 2024 and will generate an estimated 1,000 local jobs. Holland America Line launched its "See the World from Your Doorstep" campaign, highlighting the cruise line's leadership in longer duration round-trip cruises fromU.S. homeports, as it sees a higher interest for these kinds of voyages.Carnival Corporation released its 12th annual sustainability report, detailing the key initiatives and progress made in 2021 toward its 2030 sustainability goals and 2050 aspirations.
Selected Forecast Information
Available
The company's ALBD forecast consists of contracted new ships, announced sales and planned restart schedule.
Actuals |
Forecast |
Full Year |
|||||||
(in millions) |
1Q 2022 |
2Q 2022 |
3Q 2022 |
4Q 2022 |
|||||
ALBDs |
13 |
17 |
21 |
22 |
73 |
Fuel
The company's fuel consumption forecast for the remainder of the year is 724 thousand metric tons. The blended spot price for fuel is currently
Depreciation and Amortization
The company's depreciation and amortization forecast for the remainder of the year is
Interest Expense, Net of Capitalized Interest
The company's interest expense, net of capitalized interest forecast for the remainder of the year is
Outstanding Debt Maturities
As of
(in billions) |
2022 |
2023 |
2024 |
2025 |
||||
Principal payments on outstanding debt (a) |
$ 1.0 |
$ 2.4 |
$ 2.3 |
$ 4.3 |
(a) |
Excludes the revolving credit facility. As of |
Refer to Financial Information within the Investor Relations section of the corporate website for further details on its Debt Maturities, which will be available upon filing the Form 10-Q: https://www.carnivalcorp.com/financial-information/supplemental-schedules
Capital Expenditures
The company's annual capital expenditure forecast, which includes year-to-date actuals for 2022, is as follows:
(in billions) |
2022 |
2023 |
2024 |
2025 |
|||
Contracted newbuild |
$ 4.1 |
(a) |
$ 2.3 |
$ 1.5 |
$ 0.9 |
||
Non-newbuild |
1.1 |
1.9 |
2.0 |
2.0 |
|||
Total (b) |
$ 5.2 |
$ 4.2 |
$ 3.5 |
$ 2.9 |
(a) |
Includes three newbuild deliveries during the first quarter of 2022 and one newbuild delivery during the third quarter of 2022. |
(b) |
Forecasted capital expenditures will fluctuate with foreign currency movements relative to the |
Conference Call
The company has scheduled a conference call with analysts at
Additional information can be found on www.carnivalcorp.com, www.carnivalsustainability.com, www.carnival.com, www.princess.com, www.hollandamerica.com, www.pocruises.com.au, www.seabourn.com, www.costacruise.com, www.aida.de, www.pocruises.com and www.cunard.com.
Cautionary Note Concerning Factors That May Affect Future Results
Some of the statements, estimates or projections contained in this document are "forward-looking statements" that involve risks, uncertainties and assumptions with respect to us, including some statements concerning future results, operations, outlooks, plans, goals, reputation, cash flows, liquidity and other events which have not yet occurred. These statements are intended to qualify for the safe harbors from liability provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts are statements that could be deemed forward-looking. These statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and the beliefs and assumptions of our management. We have tried, whenever possible, to identify these statements by using words like "will," "may," "could," "should," "would," "believe," "depends," "expect," "goal," "aspiration," "anticipate," "forecast," "project," "future," "intend," "plan," "estimate," "target," "indicate," "outlook," and similar expressions of future intent or the negative of such terms.
Forward-looking statements include those statements that relate to our outlook and financial position including, but not limited to, statements regarding:
• |
Pricing |
• |
|
• |
Booking levels |
• |
Liquidity and credit ratings |
• |
Occupancy |
• |
Adjusted earnings per share |
• |
Interest, tax and fuel expenses |
• |
Return to guest cruise operations |
• |
Currency exchange rates |
• |
Impact of the COVID-19 coronavirus global pandemic on our financial condition and results of operations |
• |
Estimates of ship depreciable lives and residual values |
Because forward-looking statements involve risks and uncertainties, there are many factors that could cause our actual results, performance or achievements to differ materially from those expressed or implied by our forward-looking statements. This note contains important cautionary statements of the known factors that we consider could materially affect the accuracy of our forward-looking statements and adversely affect our business, results of operations and financial position. Additionally, many of these risks and uncertainties are currently, and in the future may continue to be, amplified by COVID-19. It is not possible to predict or identify all such risks. There may be additional risks that we consider immaterial or which are unknown. These factors include, but are not limited to, the following:
- COVID-19 has had, and is expected to continue to have, a significant impact on our financial condition and operations. The current, and uncertain future, impact of COVID-19, including its effect on the ability or desire of people to travel (including on cruises), is expected to continue to impact our results, operations, outlooks, plans, goals, reputation, litigation, cash flows, liquidity, and stock price.
- Events and conditions around the world, including war and other military actions, such as the current invasion of
Ukraine , inflation, higher fuel prices, higher interest rates and other general concerns impacting the ability or desire of people to travel, have led, and may in the future lead, to a decline in demand for cruises, impacting our operating costs and profitability. - Incidents concerning our ships, guests or the cruise industry have in the past and may, in the future, impact the satisfaction of our guests and crew and lead to reputational damage.
- Changes in and non-compliance with laws and regulations under which we operate, such as those relating to health, environment, safety and security, data privacy and protection, anti-corruption, economic sanctions, trade protection and tax have in the past and may, in the future, lead to litigation, enforcement actions, fines, penalties and reputational damage.
- Factors associated with climate change, including evolving and increasing regulations, increasing global concern about climate change and the shift in climate conscious consumerism and stakeholder scrutiny, and increasing frequency and/or severity of adverse weather conditions could adversely affect our business.
- Inability to meet or achieve our sustainability related goals, aspirations, initiatives, and our public statements and disclosures regarding them, may expose us to risks that may adversely impact our business.
- Breaches in data security and lapses in data privacy as well as disruptions and other damages to our principal offices, information technology operations and system networks and failure to keep pace with developments in technology may adversely impact our business operations, the satisfaction of our guests and crew and may lead to reputational damage.
- The loss of key employees, our inability to recruit or retain qualified shoreside and shipboard employees and increased labor costs could have an adverse effect on our business and results of operations.
- Increases in fuel prices, changes in the types of fuel consumed and availability of fuel supply may adversely impact our scheduled itineraries and costs.
- We rely on supply chain vendors who are integral to the operations of our businesses. These vendors and service providers are also affected by COVID-19 and may be unable to deliver on their commitments which could impact our business.
- Fluctuations in foreign currency exchange rates may adversely impact our financial results.
- Overcapacity and competition in the cruise and land-based vacation industry may lead to a decline in our cruise sales, pricing and destination options.
- Inability to implement our shipbuilding programs and ship repairs, maintenance and refurbishments may adversely impact our business operations and the satisfaction of our guests.
The ordering of the risk factors set forth above is not intended to reflect our indication of priority or likelihood.
Forward-looking statements should not be relied upon as a prediction of actual results. Subject to any continuing obligations under applicable law or any relevant stock exchange rules, we expressly disclaim any obligation to disseminate, after the date of this document, any updates or revisions to any such forward-looking statements to reflect any change in expectations or events, conditions or circumstances on which any such statements are based. Forward-looking and other statements in this document may also address our sustainability progress, plans and goals (including climate change and environmental-related matters). In addition, historical, current and forward-looking sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
CARNIVAL CORPORATION & PLC |
|||||||
Three Months Ended |
Nine Months Ended |
||||||
2022 |
2021 |
2022 |
2021 |
||||
Revenues |
|||||||
Passenger ticket |
$ 2,595 |
$ 303 |
$ 4,753 |
$ 326 |
|||
Onboard and other |
1,711 |
243 |
3,577 |
295 |
|||
4,305 |
546 |
8,329 |
621 |
||||
Operating Costs and Expenses |
|||||||
Commissions, transportation and other |
565 |
79 |
1,141 |
116 |
|||
Onboard and other |
537 |
72 |
1,060 |
94 |
|||
Payroll and related |
563 |
375 |
1,601 |
834 |
|||
Fuel |
668 |
182 |
1,577 |
398 |
|||
Food |
259 |
52 |
586 |
80 |
|||
Ship and other impairments |
— |
475 |
8 |
524 |
|||
Other operating |
787 |
381 |
2,118 |
786 |
|||
3,379 |
1,616 |
8,092 |
2,832 |
||||
Selling and administrative |
625 |
425 |
1,774 |
1,305 |
|||
Depreciation and amortization |
581 |
562 |
1,707 |
1,681 |
|||
4,585 |
2,603 |
11,573 |
5,817 |
||||
Operating Income (Loss) |
(279) |
(2,057) |
(3,244) |
(5,196) |
|||
Nonoperating Income (Expense) |
|||||||
Interest income |
24 |
3 |
34 |
10 |
|||
Interest expense, net of capitalized interest |
(422) |
(418) |
(1,161) |
(1,253) |
|||
Gain (loss) on debt extinguishment, net |
— |
(376) |
— |
(372) |
|||
Other income (expense), net |
(81) |
(11) |
(108) |
(87) |
|||
(479) |
(802) |
(1,235) |
(1,702) |
||||
Income (Loss) Before Income Taxes |
(759) |
(2,859) |
(4,478) |
(6,898) |
|||
Income Tax Benefit (Expense), Net |
(11) |
23 |
(17) |
17 |
|||
Net Income (Loss) |
$ (770) |
$ (2,836) |
$ (4,495) |
$ (6,881) |
|||
Earnings Per Share |
|||||||
Basic |
$ (0.65) |
$ (2.50) |
$ (3.89) |
$ (6.14) |
|||
Diluted |
$ (0.65) |
$ (2.50) |
$ (3.89) |
$ (6.14) |
|||
Weighted-Average Shares Outstanding - Basic |
1,185 |
1,133 |
1,154 |
1,120 |
|||
Weighted-Average Shares Outstanding - Diluted |
1,185 |
1,133 |
1,154 |
1,120 |
CARNIVAL CORPORATION & PLC |
|||
|
|
||
ASSETS |
|||
Current Assets |
|||
Cash and cash equivalents |
$ 7,071 |
$ 8,939 |
|
Short term investments |
— |
200 |
|
Trade and other receivables, net |
360 |
246 |
|
Inventories |
420 |
356 |
|
Prepaid expenses and other |
581 |
392 |
|
Total current assets |
8,432 |
10,133 |
|
Property and Equipment, Net |
38,137 |
38,107 |
|
Operating Lease Right-of-Use Assets, Net |
1,163 |
1,333 |
|
|
579 |
579 |
|
Other Intangibles |
1,151 |
1,181 |
|
Other Assets |
2,455 |
2,011 |
|
$ 51,917 |
$ 53,344 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||
Current Liabilities |
|||
Short-term borrowings |
$ 2,675 |
$ 2,790 |
|
Current portion of long-term debt |
2,877 |
1,927 |
|
Current portion of operating lease liabilities |
139 |
142 |
|
Accounts payable |
920 |
797 |
|
Accrued liabilities and other |
1,873 |
1,641 |
|
Customer deposits |
4,470 |
3,112 |
|
Total current liabilities |
12,954 |
10,408 |
|
Long-Term Debt |
28,518 |
28,509 |
|
Long-Term Operating Lease Liabilities |
1,076 |
1,239 |
|
Other Long-Term Liabilities |
989 |
1,043 |
|
Shareholders' Equity |
|||
Common stock of |
12 |
11 |
|
Ordinary shares of |
361 |
361 |
|
Additional paid-in capital |
16,626 |
15,292 |
|
Retained earnings |
1,868 |
6,448 |
|
Accumulated other comprehensive income (loss) |
(2,024) |
(1,501) |
|
|
(8,464) |
(8,466) |
|
Total shareholders' equity |
8,379 |
12,144 |
|
$ 51,917 |
$ 53,344 |
|
|||
OTHER BALANCE SHEET INFORMATION (in millions) |
|
|
|
Liquidity |
$ 7,371 |
$ 9,378 |
|
Debt (current and long-term) |
$ 34,071 |
$ 33,226 |
|
Customer deposits (current and long-term) |
$ 4,760 |
$ 3,508 |
Three Months Ended |
Nine Months Ended |
||||||
CASH FLOW INFORMATION (in millions) |
2022 |
2021 |
2022 |
2021 |
|||
Cash from (used in) operations |
$ (344) |
$ (879) |
$ (1,553) |
$ (3,741) |
|||
Capital expenditures |
$ 538 |
$ 963 |
$ (3,759) |
$ 3,120 |
|||
STATISTICAL INFORMATION |
|||||||
PCDs (in thousands) (a) |
17,700 |
2,053 |
36,363 |
2,219 |
|||
ALBDs (in thousands) (b) |
21,015 |
3,788 |
51,004 |
4,405 |
|||
Occupancy percentage (c) |
84 % |
54 % |
71 % |
50 % |
|||
Passengers carried (in thousands) |
2,571 |
340 |
5,233 |
372 |
|||
Fuel consumption in metric tons (in thousands) |
701 |
344 |
1,899 |
852 |
|||
Fuel consumption in metric tons per thousand ALBDs |
33 |
(d) |
37 |
(d) |
|||
Fuel cost per metric ton consumed |
$ 958 |
$ 537 |
$ 836 |
$ 472 |
|||
Currencies (USD to 1) |
|||||||
AUD |
$ 0.70 |
$ 0.75 |
$ 0.71 |
$ 0.76 |
|||
CAD |
$ 0.78 |
$ 0.80 |
$ 0.78 |
$ 0.80 |
|||
EUR |
$ 1.03 |
$ 1.19 |
$ 1.08 |
$ 1.20 |
|||
GBP |
$ 1.21 |
$ 1.39 |
$ 1.28 |
$ 1.38 |
The resumption of guest cruise operations has impacted the comparability of all aspects of the company's business.
Notes to Statistical Information |
|
(a) |
PCD represents the number of cruise passengers on a voyage multiplied by the number of revenue-producing ship |
(b) |
ALBD is a standard measure of passenger capacity for the period that we use to approximate rate and capacity variances, |
(c) |
Occupancy, in accordance with cruise industry practice, is calculated using a numerator of PCDs and denominator of |
(d) |
Fuel consumption in metric tons per thousand ALBDs for 2021 is not meaningful. |
|
|||||||||||
Data in the below table is compared against 2019 as it is the most recent year of full operations since 2021 and 2020 were |
|||||||||||
Consolidated cruise costs per ALBD, adjusted cruise costs per ALBD and adjusted cruise costs excluding fuel per ALBD were |
|||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||
(dollars in millions, except costs per ALBD) |
2022 |
2022 Constant |
2019 |
2022 |
2022 Constant |
2019 |
|||||
Operating costs and expenses |
$ 3,379 |
$ 3,532 |
$ 8,092 |
$ 9,833 |
|||||||
Selling and administrative expenses |
625 |
563 |
1,774 |
1,813 |
|||||||
Tour and other expenses |
(100) |
(117) |
(169) |
(220) |
|||||||
Cruise costs |
3,904 |
3,978 |
9,697 |
11,426 |
|||||||
Less |
|||||||||||
Commissions, transportation and other |
(565) |
(803) |
(1,141) |
(2,125) |
|||||||
Onboard and other |
(537) |
(668) |
(1,060) |
(1,620) |
|||||||
Gains (losses) on ship sales and impairments |
— |
(3) |
(1) |
11 |
|||||||
Restructuring expenses |
(1) |
— |
(2) |
— |
|||||||
Other |
— |
(23) |
— |
(43) |
|||||||
Adjusted cruise costs |
2,801 |
2,480 |
7,492 |
7,648 |
|||||||
Less fuel |
(668) |
(401) |
(1,577) |
(1,204) |
|||||||
Adjusted cruise costs excluding fuel |
$ 2,133 |
$ 2,182 |
$ 2,079 |
$ 5,914 |
$ 5,986 |
$ 6,444 |
|||||
ALBDs (in thousands) |
21,015 |
21,015 |
22,727 |
51,004 |
51,004 |
65,671 |
|||||
Cruise costs per ALBD |
$ 185.77 |
$ 175.01 |
$ 190.12 |
$ 173.98 |
|||||||
% increase (decrease) vs 2019 |
6 % |
9 % |
|||||||||
Adjusted cruise costs per ALBD |
$ 133.28 |
$ 109.12 |
$ 146.89 |
$ 116.46 |
|||||||
% increase (decrease) vs 2019 |
22 % |
26 % |
|||||||||
Adjusted cruise costs excluding fuel per ALBD |
$ 101.51 |
$ 103.85 |
$ 91.49 |
$ 115.96 |
$ 117.37 |
$ 98.12 |
|||||
% increase (decrease) vs 2019 |
11 % |
14 % |
18 % |
20 % |
|||||||
(See Non-GAAP Financial Measures) |
|
|||
Three Months Ended |
|||
(in millions) |
|
|
|
Net income (loss) |
|||
|
$ (770) |
$ (1,834) |
|
(Gains) losses on ship sales and impairments |
— |
(5) |
|
(Gains) losses on debt extinguishment, net |
— |
— |
|
Restructuring expenses |
— |
1 |
|
Other |
82 |
(29) |
|
Adjusted net income (loss) |
$ (688) |
$ (1,867) |
|
Interest expense, net of capitalized interest |
422 |
370 |
|
Interest income |
(24) |
(6) |
|
Income tax (expense), benefit |
11 |
3 |
|
Depreciation and amortization |
581 |
572 |
|
Adjusted EBITDA |
$ 303 |
$ (928) |
Three Months Ended |
Nine Months Ended |
||||||
(in millions) |
2022 |
2021 |
2022 |
2021 |
|||
Net income (loss) |
|||||||
|
$ (770) |
$ (2,836) |
$ (4,495) |
$ (6,881) |
|||
(Gains) losses on ship sales and impairments |
— |
472 |
1 |
510 |
|||
(Gains) losses on debt extinguishment, net |
— |
376 |
— |
372 |
|||
Restructuring expenses |
— |
2 |
2 |
5 |
|||
Other |
82 |
— |
53 |
17 |
|||
Adjusted net income (loss) |
$ (688) |
$ (1,986) |
$ (4,439) |
$ (5,976) |
|||
Interest expense, net of capitalized interest |
422 |
418 |
1,161 |
1,253 |
|||
Interest income |
(24) |
(3) |
(34) |
(10) |
|||
Income tax (expense), benefit |
11 |
(23) |
17 |
(17) |
|||
Depreciation and amortization |
581 |
562 |
1,707 |
1,681 |
|||
Adjusted EBITDA |
$ 303 |
$ (1,033) |
$ (1,588) |
$ (3,069) |
Non-GAAP Financial Measures
We use adjusted net income (loss) and adjusted EBITDA as non-GAAP financial measures of the company's financial performance. We use adjusted cruise costs per ALBD and adjusted cruise costs excluding fuel per ALBD as non-GAAP financial measures of our cruise segments' financial performance. These non-GAAP financial measures are provided along with
We believe that gains and losses on ship sales, impairment charges, gains and losses on debt extinguishments, restructuring costs and certain other gains and losses are not part of our core operating business and are not an indication of our future earnings performance. Therefore, we believe it is more meaningful for these items to be excluded from our net income (loss), and accordingly, we present adjusted net income (loss) excluding these items as additional information to investors.
We believe that the presentation of adjusted EBITDA provides additional information to investors about our operating profitability by excluding certain gains and expenses that we believe are not part of our core operating business and are not an indication of our future earnings performance as well as excluding interest, taxes and depreciation and amortization. In addition, we believe that the presentation of adjusted EBITDA provides additional information to investors about our ability to operate our business in compliance with the covenants set forth in our debt agreements. We define adjusted EBITDA as adjusted net income (loss) adjusted for (i) interest, (ii) taxes and (iii) depreciation and amortization. There are material limitations to using adjusted EBITDA. Adjusted EBITDA does not take into account certain significant items that directly affect our net income (loss). These limitations are best addressed by considering the economic effects of the excluded items independently, and by considering adjusted EBITDA in conjunction with net income (loss) as calculated in accordance with
Adjusted cruise costs per ALBD and adjusted cruise costs excluding fuel per ALBD enable us 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 investors and expanded insight to measure our cost performance as a supplement to our
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
Constant Currency
Our operations primarily utilize the
We report adjusted cruise costs excluding fuel per ALBD on a "constant currency" basis assuming the 2022 periods' currency exchange rates have remained constant with the 2019 periods' rates. These metrics facilitate a comparative view for the changes in our business in an environment with fluctuating exchange rates.
Constant currency reporting removes the impact of changes in exchange rates on the translation of our operations plus the transactional impact of changes in exchange rates from revenues and expenses that are denominated in a currency other than the functional currency.
Examples:
- The translation of our operations with functional currencies other than
U.S. dollar to ourU.S. dollar reporting currency results in decreases in reportedU.S. dollar revenues and expenses if theU.S. dollar strengthens against these foreign currencies and increases in reportedU.S. dollar revenues and expenses if theU.S. dollar weakens against these foreign currencies. - Our operations have revenue and expense transactions in currencies other than their functional currency. If their functional currency strengthens against these other currencies, it reduces the functional currency revenues and expenses. If the functional currency weakens against these other currencies, it increases the functional currency revenues and expenses.
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SOURCE
MEDIA CONTACT: Roger Frizzell, +1 305 406 7862; INVESTOR RELATIONS CONTACT: Beth Roberts, +1 305 406 4832