CARNIVAL CORPORATION & PLC REPORTS ALL-TIME RECORD REVENUE AND DEMONSTRATES STRONG THIRD QUARTER 2023 EARNINGS MOMENTUM
U.S. GAAP net income of$1.07 billion , or$0.79 diluted EPS, and adjusted net income of$1.18 billion , or$0.86 adjusted EPS, exceeded the June guidance range (see "Non-GAAP Financial Measures" below).- Adjusted EBITDA of
$2.22 billion also exceeded the June guidance range (see "Non-GAAP Financial Measures" below). - Third quarter revenues hit an all-time high of
$6.9 billion . - Continued strength in close-in demand enabled the company to increase its net per diems guidance for full year 2023 by one percentage point to up approximately 7.0 percent compared to 2019 (in constant currency).
- Booking volumes during the third quarter and the month of September continued at significantly elevated levels.
- The company's cumulative advanced booked position for full year 2024 is well above the high end of the historical range at higher prices (in constant currency) than 2023 levels.
- Total customer deposits reached a third quarter record of
$6.3 billion . - The company now expects fuel consumption per available lower berth day ("ALBD") for full year 2023 to be nearly 16 percent lower than 2019, better than previously expected.
- The company reduced its debt by nearly
$4 billion from its peak in the first quarter of 2023 and ended the third quarter with$5.7 billion of liquidity.
"We delivered over
Weinstein continued, "The outperformance was driven by strength in demand, with both our
Weinstein added, "I continue to be encouraged with our revenue trajectory heading into next year as we see no signs of slowing from our consumers."
Third Quarter 2023 Results
- For the first time since the resumption of guest cruise operations,
U.S. GAAP net income turned positive, generating$1.07 billion , or$0.79 diluted EPS, marking a significant milestone. Adjusted net income of$1.18 billion , or$0.86 adjusted EPS, exceeded the June guidance range of$0.95 billion to$1.05 billion . - Adjusted EBITDA of
$2.22 billion also exceeded the June guidance range of$2.05 billion to$2.15 billion . - Third quarter revenues hit an all-time high of
$6.9 billion . - While gross margin yields were down compared to 2019, net yields (in constant currency) exceeded strong 2019 levels (see "Non-GAAP Financial Measures" below).
- Occupancy in the third quarter of 2023 was 109 percent, better than the company's expectations and a return to historical levels.
- Gross margin per diems were down compared to 2019. Net per diems (in constant currency) exceeded 2019 levels, overcoming headwinds from the removal of
St. Petersburg, Russia as a marquee destination and were approximately one percentage point above the midpoint of the June guidance range (see "Non-GAAP Financial Measures" below).
- Cruise costs per ALBD increased 8.9 percent as compared to the third quarter of 2019. Adjusted cruise costs excluding fuel per ALBD (in constant currency) increased 15 percent compared to the third quarter of 2019, in line with June guidance (see "Non-GAAP Financial Measures" below).
- Total customer deposits reached a third quarter record of
$6.3 billion , surpassing the previous third quarter record of$4.9 billion (as ofAugust 31, 2019 ), by 28 percent.
Bookings
Booking volumes during the third quarter continued at significantly elevated levels, setting a new third quarter record for total bookings during the quarter. Weinstein noted, "We are maintaining strong momentum and continuing to build demand through our improved commercial execution. Booking volumes during the quarter were running nearly 20 percent above 2019 levels and multiples of our capacity growth, which has continued into September. This has helped us extend the booking curve even further, with our North American brands exceeding historical highs and our European brands essentially achieving pre-pause levels."
The cumulative advanced booked position for full year 2024 is well above the high end of the historical range at higher prices (in constant currency) than 2023 levels. This aligns with the company's yield management strategy to base load bookings, lengthen the booking curve and optimize net yields. Weinstein added, "Our booked position for 2024 is further out than we have ever seen and at strong prices. With less remaining inventory to sell, despite a five percent increase in capacity, we are well positioned to drive pricing higher and deliver strong yield improvement in 2024."
2023 Outlook
For the full year 2023, the company expects:
- Adjusted EBITDA of
$4.1 billion to$4.2 billion , within the June guidance range, despite the$125 million net unfavorable impact from fuel price and currency from June guidance - Occupancy of 100 percent or higher
- Net per diems (in constant currency) up approximately 7.0 percent compared to 2019, one percentage point higher than the midpoint of June guidance, based on the continued strength in close-in demand
- Adjusted cruise costs excluding fuel per ALBD (in constant currency) at the high end of June guidance range
- Fuel consumption per ALBD to be nearly 16 percent lower than 2019, better than previously expected
For the fourth quarter of 2023, the company expects:
- Adjusted EBITDA of
$800 million to$900 million - Net yields (in constant currency) up mid-single digits compared to 2019 with occupancy in line with historical levels and net per diems (in constant currency) up 7.0% to 8.0% compared to 2019
See "Guidance" and "Reconciliation of Forecasted Data" for additional information on the company's 2023 outlook.
Financing and Capital Activity
The third quarter generated cash from operations of
The company took the following actions to proactively manage its debt portfolio since
- Completed a
$1.3 billion senior secured first lien term loan B facility due 2027 and completed a$500 million private offering of first-priority Senior Secured Notes due 2029 to repay its existingU.S. dollar first-priority secured term loan facility maturing in 2025 - Called
$1.2 billion of its highest cost debt - Prepaid an additional
$1.1 billion of debt with maturities from 2024 through 2027 - On an annualized basis, saved
$200 million in gross interest expense and approximately$100 million in net interest expense as a result of lower interest income following these debt prepayments
During the third quarter of 2023, the company reduced its debt by
Other Recent Highlights
Carnival Corporation was named one of America's Best Employers for Women by Forbes for the second year.- Seabourn took delivery of Seabourn Pursuit, sister to Seabourn Venture, the line's second purpose-built ultra-luxury expedition ship.
Carnival Cruise Line named its new destination inGrand Bahama Island "Celebration Key", which is expected to open in the second half of 2025.Holland America Line had its highest booking day in the brand's 150-year history onJuly 11 .- Cunard became the company's fourth brand to enable shore power connection capability across its entire fleet.
- Cunard announced a three-year partnership with the
UK's leading film organization,British Film Institute , which will feature short films and beloved blockbusters shown exclusively on the outdoor screen onboardQueen Anne , the lines newest ship expectedApril 2024 . Carnival Corporation continues to expand next generation internet across its fleet with the installation ofSpaceX's Starlink onCosta Cruises , Cunard andP&O Cruises (UK ) ships, with plans for all of the company's capacity to have Starlink capability by the end of the first quarter of 2024.P&O Cruises (UK ) is delighted to have been chosen by publisher St James's House as the only cruise brand to be featured in King Charles III The Leadership and Vision of a Modern Monarch album.
Guidance |
||||||||
(See "Reconciliation of Forecasted Data") |
||||||||
4Q 2023 |
Full Year 2023 |
|||||||
Change compared to 2019 |
Current Dollars |
Constant Currency |
Current Dollars |
Constant Currency |
||||
Net per diems |
5.5% to 6.5% |
7.0% to 8.0% |
Approx. 5.5% |
Approx. 7.0% |
||||
Adjusted cruise costs excluding fuel per ALBD |
8.5% to 9.5% |
10.0% to 11.0% |
Approx. 9.5% |
Approx. 11.0% |
4Q 2023 |
Full Year 2023 |
||
ALBDs (in millions) (a) |
23.3 |
91.3 |
|
Capacity growth compared to 2019 |
7.1 % |
4.5 % |
|
Occupancy percentage (a) |
101% or higher |
100% or higher |
|
Fuel consumption in metric tons (in millions) |
0.7 |
2.9 |
|
Fuel cost per metric ton consumed |
$ 765 |
$ 700 |
|
Fuel expense (in billions) |
$ 0.6 |
$ 2.0 |
|
Depreciation and amortization (in billions) |
$ 0.6 |
$ 2.4 |
|
Interest expense, net of capitalized interest and interest income (in billions) |
$ 0.4 |
$ 1.9 |
|
Adjusted EBITDA (in millions) |
|
|
|
Adjusted net income (loss) (in millions) |
|
|
|
Adjusted earnings per share |
|
|
|
Weighted-average shares outstanding - diluted |
1,263 |
1,262 |
|
Currencies (USD to 1) |
|||
AUD |
$ 0.64 |
$ 0.67 |
|
CAD |
$ 0.74 |
$ 0.74 |
|
EUR |
$ 1.06 |
$ 1.08 |
|
GBP |
$ 1.22 |
$ 1.24 |
(a) See "Notes to Statistical Information" |
Sensitivities (impact to adjusted net income (loss) in millions) |
4Q 2023 |
1% change in net per diems |
$ 39 |
1% change in adjusted cruise costs excluding fuel per ALBD |
$ 24 |
1% change in currency exchange rates |
$ 4 |
10% change in fuel price |
$ 55 |
100 basis point change in variable rate debt (including derivatives) |
$ 16 |
Capital Expenditures
The company's annual capital expenditures, which include year-to-date actuals for 2023, are as follows:
(in billions) |
2023 |
2024 |
2025 |
2026 |
|||
Contracted newbuild |
$ 1.9 |
$ 2.4 |
$ 1.0 |
$ — |
|||
Non-newbuild |
1.5 |
1.7 |
1.7 |
1.7 |
|||
Total (a) |
$ 3.4 |
$ 4.1 |
$ 2.7 |
$ 1.7 |
(a) |
Future capital expenditures will fluctuate with foreign currency movements relative to the |
Committed Ship Financings
(in billions) |
2023 |
2024 |
2025 |
||||
Future export credit facilities at |
$ — |
$ 2.2 |
$ 0.7 |
Outstanding Debt Maturities
As of
(in billions) |
2023 |
2024 |
2025 |
2026 |
|||
First Lien |
$ 0.0 |
$ 0.0 |
$ 0.9 |
$ 0.0 |
|||
Second Lien |
— |
— |
— |
— |
|||
Export Credits |
0.3 |
1.2 |
1.2 |
1.2 |
|||
All other |
0.2 |
0.8 |
0.2 |
2.0 |
|||
Total Principal payments on outstanding debt |
$ 0.5 |
$ 2.0 |
$ 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
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
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 |
• |
• 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 as a result of 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 war and other military actions, such as the war in
Ukraine , inflation, higher fuel prices, higher taxes, 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-corruption, economic sanctions, trade protection, labor and employment, 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 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.
- Failure to successfully implement our business strategy following our resumption of guest cruise operations would negatively impact the occupancy levels and pricing of our cruises and could have a material adverse effect on our business. 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.
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 |
Nine Months Ended |
||||||
2023 |
2022 |
2023 |
2022 |
||||
Revenues |
|||||||
Passenger ticket |
$ 4,546 |
$ 2,595 |
$ 10,557 |
$ 4,753 |
|||
Onboard and other |
2,308 |
1,711 |
5,640 |
3,577 |
|||
6,854 |
4,305 |
16,197 |
8,329 |
||||
Operating Expenses |
|||||||
Commissions, transportation and other |
823 |
565 |
2,097 |
1,141 |
|||
Onboard and other |
752 |
537 |
1,785 |
1,060 |
|||
Payroll and related |
585 |
563 |
1,768 |
1,601 |
|||
Fuel |
468 |
668 |
1,492 |
1,577 |
|||
Food |
364 |
259 |
1,000 |
586 |
|||
Ship and other impairments |
— |
— |
— |
8 |
|||
Other operating |
928 |
787 |
2,546 |
2,118 |
|||
Cruise and tour operating expenses |
3,921 |
3,379 |
10,688 |
8,092 |
|||
Selling and administrative |
713 |
625 |
2,162 |
1,774 |
|||
Depreciation and amortization |
596 |
581 |
1,774 |
1,707 |
|||
5,230 |
4,585 |
14,624 |
11,573 |
||||
Operating Income (Loss) |
1,624 |
(279) |
1,572 |
(3,244) |
|||
Nonoperating Income (Expense) |
|||||||
Interest income |
59 |
24 |
183 |
34 |
|||
Interest expense, net of capitalized interest |
(518) |
(422) |
(1,600) |
(1,161) |
|||
Debt extinguishment and modification costs |
(81) |
— |
(112) |
— |
|||
Other income (expense), net |
(19) |
(81) |
(67) |
(108) |
|||
(559) |
(479) |
(1,595) |
(1,235) |
||||
Income (Loss) Before Income Taxes |
1,065 |
(759) |
(23) |
(4,478) |
|||
Income Tax Benefit (Expense), Net |
9 |
(11) |
(3) |
(17) |
|||
Net Income (Loss) |
$ 1,074 |
$ (770) |
$ (26) |
$ (4,495) |
|||
Earnings Per Share |
|||||||
Basic |
$ 0.85 |
$ (0.65) |
$ (0.02) |
$ (3.89) |
|||
Diluted |
$ 0.79 |
$ (0.65) |
$ (0.02) |
$ (3.89) |
|||
Weighted-Average Shares Outstanding - Basic |
1,263 |
1,185 |
1,262 |
1,154 |
|||
Weighted-Average Shares Outstanding - Diluted |
1,396 |
1,185 |
1,262 |
1,154 |
CARNIVAL CORPORATION & PLC CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in millions, except par values) |
|||
|
|
||
ASSETS |
|||
Current Assets |
|||
Cash and cash equivalents |
$ 2,842 |
$ 4,029 |
|
Restricted cash |
18 |
1,988 |
|
Trade and other receivables, net |
485 |
395 |
|
Inventories |
483 |
428 |
|
Prepaid expenses and other |
855 |
652 |
|
Total current assets |
4,683 |
7,492 |
|
Property and Equipment, Net |
39,952 |
38,687 |
|
Operating Lease Right-of-Use Assets, Net |
1,277 |
1,274 |
|
|
579 |
579 |
|
Other Intangibles |
1,168 |
1,156 |
|
Other Assets |
2,098 |
2,515 |
|
$ 49,756 |
$ 51,703 |
||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||
Current Liabilities |
|||
Short-term borrowings |
$ — |
$ 200 |
|
Current portion of long-term debt |
1,780 |
2,393 |
|
Current portion of operating lease liabilities |
153 |
146 |
|
Accounts payable |
1,103 |
1,050 |
|
Accrued liabilities and other |
2,017 |
1,942 |
|
Customer deposits |
5,955 |
4,874 |
|
Total current liabilities |
11,008 |
10,605 |
|
Long-Term Debt |
29,516 |
31,953 |
|
Long-Term Operating Lease Liabilities |
1,180 |
1,189 |
|
Other Long-Term Liabilities |
1,091 |
891 |
|
Shareholders' Equity |
|||
Common stock of |
12 |
12 |
|
Ordinary shares of |
361 |
361 |
|
Additional paid-in capital |
16,699 |
16,872 |
|
Retained earnings |
233 |
269 |
|
Accumulated other comprehensive income (loss) |
(1,896) |
(1,982) |
|
|
(8,449) |
(8,468) |
|
Total shareholders' equity |
6,960 |
7,065 |
|
$ 49,756 |
$ 51,703 |
OTHER INFORMATION
|
|||
OTHER BALANCE SHEET INFORMATION (in millions) |
|
|
|
Liquidity (a) |
$ 5,730 |
$ 8,635 |
|
Debt (current and long-term) |
$ 31,296 |
$ 34,546 |
|
Customer deposits (current and long-term) |
$ 6,261 |
$ 5,089 |
(a) |
|
Three Months Ended |
Nine Months Ended |
||||||
STATISTICAL INFORMATION |
2023 |
2022 |
2023 |
2022 |
|||
Passenger cruise days ("PCDs") (in millions) (a) |
25.8 |
17.7 |
67.8 |
36.4 |
|||
ALBDs (in millions) (b) |
23.7 |
21.0 |
68.1 |
51.0 |
|||
Occupancy percentage (c) |
109 % |
84 % |
100 % |
71 % |
|||
Passengers carried (in millions) |
3.6 |
2.6 |
9.3 |
5.2 |
|||
Fuel consumption in metric tons (in millions) |
0.7 |
0.7 |
2.2 |
1.9 |
|||
Fuel consumption in metric tons per thousand ALBDs |
31.1 |
33.4 |
32.3 |
37.2 |
|||
Fuel cost per metric ton consumed |
$ 636 |
$ 958 |
$ 681 |
$ 836 |
|||
Currencies (USD to 1) |
|||||||
AUD |
$ 0.66 |
$ 0.70 |
$ 0.67 |
$ 0.71 |
|||
CAD |
$ 0.75 |
$ 0.78 |
$ 0.74 |
$ 0.78 |
|||
EUR |
$ 1.09 |
$ 1.03 |
$ 1.08 |
$ 1.08 |
|||
GBP |
$ 1.27 |
$ 1.21 |
$ 1.24 |
$ 1.28 |
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. |
NON-GAAP FINANCIAL MEASURES |
|||||||
Three Months Ended |
Nine Months Ended |
||||||
(in millions) |
2023 |
2022 |
2023 |
2022 |
|||
Net income (loss) |
$ 1,074 |
$ (770) |
$ (26) |
$ (4,495) |
|||
(Gains) losses on ship sales and impairments |
— |
— |
(54) |
1 |
|||
Debt extinguishment and modification costs |
81 |
— |
112 |
— |
|||
Restructuring expenses |
1 |
— |
16 |
2 |
|||
Other |
20 |
82 |
43 |
53 |
|||
Adjusted net income (loss) |
$ 1,176 |
$ (688) |
$ 90 |
$ (4,439) |
|||
Interest expense, net of capitalized interest |
518 |
422 |
1,600 |
1,161 |
|||
Interest income |
(59) |
(24) |
(183) |
(34) |
|||
Income tax (expense), benefit |
(9) |
11 |
3 |
17 |
|||
Depreciation and amortization |
596 |
581 |
1,774 |
1,707 |
|||
Adjusted EBITDA |
$ 2,221 |
$ 303 |
$ 3,285 |
$ (1,588) |
|||
Three Months Ended |
Nine Months Ended |
||||||
2023 |
2022 |
2023 |
2022 |
||||
Earnings per share (a) |
$ 0.79 |
$ (0.65) |
$ (0.02) |
$ (3.89) |
|||
(Gains) losses on ship sales and impairments |
— |
— |
(0.04) |
— |
|||
Debt extinguishment and modification costs |
0.06 |
— |
0.09 |
— |
|||
Restructuring expenses |
— |
— |
0.01 |
— |
|||
Other |
0.01 |
0.07 |
0.03 |
0.05 |
|||
Adjusted earnings per share (a) |
$ 0.86 |
$ (0.58) |
$ 0.07 |
$ (3.85) |
|||
Weighted-average shares outstanding - diluted (in millions) |
1,396 |
1,185 |
1,262 |
1,154 |
|||
(a) |
Earnings per share and adjusted earnings per share for the three months ended |
Three Months Ended |
Nine Months Ended |
||||||
(in millions) |
2023 |
2022 |
2023 |
2022 |
|||
Cash from (used in) operations |
$ 1,834 |
$ (344) |
$ 3,359 |
$ (1,553) |
|||
Capital expenditures (Purchases of Property and Equipment) |
(837) |
(538) |
(2,609) |
(3,759) |
|||
Proceeds from export credits |
140 |
— |
1,157 |
2,343 |
|||
Adjusted free cash flow |
$ 1,137 |
$ (883) |
$ 1,906 |
$ (2,969) |
|||
(See Non-GAAP Financial Measures) |
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 |
Nine Months Ended |
||||||||||
(in millions, except per diems and yields data) |
2023 |
2023 Constant Currency |
2019 |
2023 |
2023 Constant Currency |
2019 |
|||||
Total revenues |
$ 6,854 |
$ 6,533 |
|
$ 16,043 |
|||||||
Less: Cruise and tour operating expenses |
(3,921) |
(3,532) |
(10,688) |
(9,833) |
|||||||
Depreciation and amortization |
(596) |
(548) |
(1,774) |
(1,607) |
|||||||
Gross margin |
2,337 |
2,453 |
3,734 |
4,604 |
|||||||
Less: Tour and other revenues |
(172) |
(200) |
(216) |
(299) |
|||||||
Add: Payroll and related |
585 |
548 |
1,768 |
1,671 |
|||||||
Fuel |
468 |
401 |
1,492 |
1,204 |
|||||||
Food |
364 |
284 |
1,000 |
821 |
|||||||
Ship and other impairments |
— |
— |
— |
— |
|||||||
Other operating |
928 |
828 |
2,546 |
2,390 |
|||||||
Depreciation and amortization |
596 |
548 |
1,774 |
1,607 |
|||||||
Adjusted gross margin |
$ 5,107 |
$ 5,133 |
$ 4,862 |
|
$ 12,281 |
$ 11,999 |
|||||
PCDs |
25.8 |
25.8 |
25.7 |
67.8 |
67.8 |
70.8 |
|||||
Gross margin per diems (per PCD) |
$ 90.45 |
$ 95.54 |
$ 55.04 |
$ 65.05 |
|||||||
Net per diems (per PCD) |
|
$ 198.66 |
$ 189.37 |
|
$ 181.05 |
$ 169.53 |
|||||
ALBDs |
23.7 |
23.7 |
22.7 |
68.1 |
68.1 |
65.7 |
|||||
Gross margin yields (per ALBD) |
$ 98.50 |
$ 107.92 |
$ 54.85 |
$ 70.11 |
|||||||
Net yields (per ALBD) |
|
$ 216.33 |
$ 213.91 |
|
$ 180.40 |
$ 182.71 |
|||||
(See Non-GAAP Financial Measures) |
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 |
Nine Months Ended |
||||||||||
(in millions, except costs per ALBD data) |
2023 |
2023 Constant Currency |
2019 |
2023 |
2023 Constant Currency |
2019 |
|||||
Cruise and tour operating expenses |
$ 3,921 |
$ 3,532 |
|
$ 9,833 |
|||||||
Selling and administrative expenses |
713 |
563 |
2,162 |
1,813 |
|||||||
Less: Tour and other expenses |
(112) |
(117) |
(190) |
(220) |
|||||||
Cruise costs |
4,522 |
3,978 |
12,660 |
11,426 |
|||||||
Less: Commissions, transportation and other |
(823) |
(803) |
(2,097) |
(2,125) |
|||||||
Onboard and other costs |
(752) |
(668) |
(1,785) |
(1,620) |
|||||||
Gains (losses) on ship sales and impairments |
— |
(3) |
54 |
11 |
|||||||
Restructuring expenses |
(1) |
— |
(16) |
— |
|||||||
Other |
— |
(23) |
— |
(43) |
|||||||
Adjusted cruise costs |
2,946 |
2,965 |
2,480 |
8,817 |
8,933 |
7,648 |
|||||
Less: Fuel |
(468) |
(468) |
(401) |
(1,492) |
(1,492) |
(1,204) |
|||||
Adjusted cruise costs excluding fuel |
$ 2,478 |
$ 2,497 |
$ 2,079 |
$ 7,325 |
$ 7,441 |
$ 6,444 |
|||||
ALBDs |
23.7 |
23.7 |
22.7 |
68.1 |
68.1 |
65.7 |
|||||
Cruise costs per ALBD |
|
|
|
|
|||||||
% increase (decrease) vs 2019 |
8.9 % |
6.9 % |
|||||||||
Adjusted cruise costs per ALBD |
|
|
|
|
|
|
|||||
% increase (decrease) vs 2019 |
14 % |
15 % |
11 % |
13 % |
|||||||
Adjusted cruise costs excluding fuel per ALBD |
|
|
$ 91.49 |
|
|
$ 98.12 |
|||||
% increase (decrease) vs 2019 |
14 % |
15 % |
9.7 % |
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
Non-GAAP Measure |
|
Use Non-GAAP Measure to Assess |
||
• Adjusted net income (loss) and |
• Net income (loss) |
• Company Performance |
||
• Adjusted earnings per share |
• Earnings per share |
• Company Performance |
||
• Adjusted free cash flow |
• Cash from (used in) |
• 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 |
• Gross cruise costs per |
• Cruise Segments Performance |
||
• Adjusted return on invested capital |
— |
• 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
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
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
Constant Currency
Our operations primarily utilize the
and financial condition. Functional currencies other than the
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 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 - Jody Venturoni, +1 469 797 6380; INVESTOR RELATIONS CONTACT - Beth Roberts, +1 305 406 4832