Company Announcements

Carnival PLC - Carnival Corporation 3Q 2024 Earnings

 

CARNIVAL CORPORATION & PLC REPORTS RECORD-SETTING OPERATING RESULTS, OUTPERFORMS THIRD QUARTER GUIDANCE AND RAISES FULL YEAR 2024 GUIDANCE FOR THE THIRD TIME

 

MIAMI, Sept. 30, 2024 -- Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) announced financial results for the third quarter 2024 and provided an updated outlook for the full year and an outlook for fourth quarter 2024.

    --  Third quarter net income was $1.7 billion, an increase of over 60
        percent compared to 2023 and adjusted net income1outperformed June
        guidance by $170 million.
    --  Third quarter revenues hit an all-time high of $7.9 billion, up $1.0
        billion compared to the prior year.
    --  Record operating income of $2.2 billion exceeded 2023 levels by $554
        million.
    --  As a result of strong demand and cost saving opportunities, raised its
        full year 2024 adjusted EBITDA1guidance to approximately $6.0 billion,
        up over 40 percent compared to 2023 and better than June guidance by
        nearly $200 million.
    --  The cumulative advanced booked position for full year 2025 is above the
        previous 2024 record with prices (in constant currency) ahead of prior
        year.

"We delivered a phenomenal third quarter, breaking operational records and outperforming across the board. Our strong improvements were led by high-margin, same-ship yield growth, driving a 26 percent improvement in unit operating income, the highest level we have reached in fifteen years," commented Carnival Corporation & plc's Chief Executive Officer Josh Weinstein.

"We are poised to deliver record operating performance for full year 2024, with adjusted EBITDA now expected to cross $6 billion and adjusted return on invested capital 1 to be approximately 10.5 percent. Strong demand enabled us to increase our full year yield guidance for the third time this year and we improved our cost guidance driving more revenue to the bottom line," Weinstein added.

"Looking forward, the momentum continues as our enhanced commercial execution drives demand well in excess of our capacity growth, leaving us well positioned with an even stronger base of business for 2025, a record start to 2026 and firmly on the path toward our SEA Change targets," Weinstein noted.  

Third Quarter 2024 Results

    --  Net income was $1.7 billion, or $1.26 diluted EPS, an increase of $662
        million compared to 2023. Adjusted net income of $1.8 billion, or $1.27
        adjusted EPS1, was higher than June guidance by $170 million driven by
        outperformance in both yield and cost.
    --  Record operating income of $2.2 billion exceeded 2023 levels by $554
        million or 34 percent.
    --  Record adjusted EBITDA of $2.8 billion increased over 25 percent
        compared to 2023 and outperformed June guidance by $160 million.
    --  Third quarter revenues hit an all-time high of $7.9 billion, with record
        net yields1 (in constant currency) and record net per diems1 (in
        constant currency) both significantly exceeding 2023 levels.
    --  Gross margin yields increased by 19 percent compared to 2023 and net
        yields (in constant currency) exceeded 2023 levels by 8.7 percent.
            --  Gross margin per diems were up 16 percent compared to 2023. Net
                per diems (in constant currency) were up nearly 6 percent
                compared to 2023 with both ticket prices and onboard spending up
                mid-single digits.
    --  Cruise costs per available lower berth day ("ALBD") increased 3.4
        percent compared to 2023. Adjusted cruise costs excluding fuel per ALBD1
        (in constant currency) decreased compared to 2023 and were significantly
        better than June guidance driven by cost saving opportunities,
        accelerated easing of inflationary pressures, benefits from one-time
        items and the timing of expenses between the quarters.
    --  Total customer deposits reached a third quarter record of $6.8 billion,
        surpassing the previous third quarter record of $6.3 billion as of
        August 31, 2023, despite lower capacity growth.

Bookings

"With nearly half of 2025 booked and less inventory remaining for sale than the prior year, we are leveraging strong demand to achieve record ticket pricing (in constant currency). Our brands continue to deliver robust bookings momentum, with all our brands ahead on price for 2025 sailings, based on the success of their demand generation efforts along with the exciting offerings and unparalleled experiences we consistently provide our guests. Likewise, 2026 is off to an unprecedented start achieving record booking volumes in the last three months," Weinstein noted.

During the third quarter, booking volumes remained robust for 2025 sailings at higher prices (in constant currency) compared to the prior year.

The cumulative advanced booked position for full year 2025 is above the previous 2024 record with prices (in constant currency) ahead of prior year.

_____________________________
1 See "Non-GAAP Financial Measures" at the end of this release for additional information.

2024 Outlook

For the full year 2024, the company expects:

    --  Net yields (in constant currency) up approximately 10.4 percent compared
        to 2023, better than June guidance, based on continued strength in
        demand.
    --  Adjusted cruise costs excluding fuel per ALBD (in constant currency) up
        approximately 3.5 percent compared to 2023, approximately 1 percentage
        point better than June guidance driven by cost saving opportunities,
        accelerated easing of inflationary pressures and benefits from one-time
        items.
    --  Adjusted EBITDA of approximately $6.0 billion, up over 40 percent
        compared to 2023 and better than June guidance by nearly $200 million.
    --  Adjusted return on invested capital ("ROIC") of approximately 10.5
        percent, an improvement of approximately 5.0 percentage points compared
        to 2023 and half a point better than June guidance.

For the fourth quarter of 2024, the company expects:

    --  Net yields (in constant currency) up approximately 5.0 percent compared
        to particularly strong 2023 levels.
    --  Adjusted cruise costs excluding fuel per ALBD (in constant currency) up
        approximately 8.0 percent compared to the fourth quarter of 2023 due
        primarily to higher dry-dock days and higher investment in advertising.
    --  Adjusted EBITDA of approximately $1.14 billion, up 20 percent compared
        to the fourth quarter of 2023.

See "Guidance" and "Reconciliation of Forecasted Data" for additional information on the company's 2024 outlook.

Financing and Capital Activity

"We have continued to improve our leverage metrics and balance sheet with strong cash generation and continued debt reduction. We are pleased these efforts were recognized by both S&P and Moody's with their recent credit rating upgrades. For 2024, we expect better than a two turn improvement in net debt to adjusted EBITDA 1 compared to 2023, approaching 4.5x, well on our way to investment grade. In fact, this year's adjusted free cash flow 1 is expected to be over $3.0 billion," commented Carnival Corporation & plc's Chief Financial Officer David Bernstein.

The company continued its efforts to proactively manage its debt profile. Since June 2024, the company prepaid another $625 million of debt, bringing its total prepayments to $7.3 billion since the beginning of 2023. Additionally, the company has now fully utilized the accordion feature of its revolving credit facility, increasing the borrowing capacity by nearly $500 million and bringing the total undrawn commitment to $3.0 billion. The company ended the quarter with $4.5 billion of liquidity, including cash and borrowings available under the revolving credit facility.

During the third quarter, Fitch initiated its coverage of the company with a BB credit rating with a positive outlook. The company is now rated by all three major internationally recognized rating agencies. Additionally, S&P upgraded its credit rating to BB with a stable outlook and Moody's upgraded to B1 with a positive outlook. The company believes this is a testament to its improved leverage metrics and continuing journey to investment grade ratings.

The company continues to strategically direct new capacity towards its highest returning brand with the   recent order of three additional ships to Carnival Cruise Line for delivery in 2029, 2031 and 2033. These ships will become the largest ships in the company's fleet and will carry more passengers than any other cruise ship to date. The company is following through on its measured capacity growth strategy of one to two ships per year on average, including just three ships scheduled for delivery through 2028. This will enable the company to utilize its substantial free cash flow to strategically improve its balance sheet by significantly reducing its leverage levels over the next several years.

The company obtained a new export credit facility, bringing its total committed financings related to ship deliveries to $3.4 billion, continuing its strategy to finance its newbuild program at preferential interest rates.

_____________________________
1 See "Non-GAAP Financial Measures" at the end of this release for additional information.

Other Recent Highlights  

    --  Named by TIME as one of the World's Best Companies of 2024 and by Forbes
        as one of America's Best Employers for Women in 2024.
    --  Opened a new innovative Fleet Operations Center in Hamburg, Germany to
        support its European brands.
    --  Announced the expansion of Half Moon Cay. This popular private island
        will be enhanced to include an expanded beach, dining and beverage
        experiences along with a new pier that will allow the company's larger
        ships to visit.
    --  In anticipation of Celebration Key's debut in July 2025, Carnival Cruise
        Line opened bookings for the destination's new exclusive retreat, Pearl
        Cove Beach Club, which will offer a premium experience for guests with a
        large selection of supervillas, cabanas and shore excursions.
    --  Carnival Conquest, AIDAdivaand AIDAluna became the first cruise ships to
        connect to shore power at PortMiami, the Port of Stockholm and the Port
        of Oslo.
    --  AIDA Cruises successfully piloted a new advanced blended biofuel, which
        is specifically intended for the maritime industry and lowers greenhouse
        gas emissions compared to conventional fossil fuels.
    --  Seabourn Pursuit was named in a historic expedition ceremony, debuting
        its new itineraries visiting the Kimberley region in Australia.

Guidance

(See "Reconciliation of Forecasted Data")


              4Q 2024                           Full Year 2024

Year over     CurrentDollars  ConstantCurrency  CurrentDollars  ConstantCurrency
year change

Net yields    Approx. 7.0%    Approx. 5.0%      Approx. 11.0%   Approx. 10.4%

Adjusted
cruise costs  Approx. 9.5%    Approx. 8.0%      Approx. 4.0%    Approx. 3.5%
excluding
fuel per ALBD



 


                            4Q 2024                    Full Year 2024

ALBDs (in millions)(a)      24.0                       95.6

Capacity growth compared to 3.1 %                      4.7 %
prior year

Fuel consumption in metric  0.7                        2.9
tons (in millions)

Fuel cost per metric ton
consumed (excluding         $                     590  $                     658
European Union Allowance
("EUA"))

Fuel expense (including EUA $                    0.43  $                    1.98
expense) (in billions)

Depreciation and            $                    0.67  $                    2.57
amortization (in billions)

Interest expense, net of
capitalized interest and    $                    0.41  $                    1.68
interest income (in
billions)

Adjusted EBITDA (in         Approx. $1.14              Approx. $6.0
billions)

Adjusted net income (loss)  Approx. $60                Approx. $1,760
(in millions)

Adjusted earnings per share Approx. $0.05              Approx. $1.33
- diluted (b)

Weighted-average shares     1,296                      1,273
outstanding - basic

Weighted-average shares     1,301                      1,398
outstanding - diluted




(a) See "Notes to Statistical Information"

    Diluted adjusted earnings per share includes the add-back of dilutive
    interest expense related to the company's
(b) convertible notes of $94 million for full year 2024. The add-back expense is
    antidilutive to the fourth quarter of 2024
    calculation and accordingly has been excluded.



 


Currencies (USD to 1) 4Q 2024 Full Year 2024

AUD                   $       $                           0.67
                      0.68

CAD                   $       $                           0.74
                      0.74

EUR                   $       $                           1.09
                      1.12

GBP                   $       $                           1.28
                      1.33



 


Sensitivities (impact to adjusted net income (loss) in millions)     4Q 2024

1% change in net yields                                              $
                                                                     42

1% change in adjusted cruise costs excluding fuel per ALBD           $
                                                                     27

1% change in currency exchange rates                                 $
                                                                     5

10% change in fuel price                                             $
                                                                     42

100 basis point change in variable rate debt (including derivatives) $
                                                                     12



Capital Expenditures

For the fourth quarter of 2024, newbuild capital expenditures are $0.2 billion and non-newbuild capital expenditures are $0.6 billion. These future capital expenditures will fluctuate with foreign currency movements relative to the U.S. Dollar. In addition, these figures do not include potential stage payments for ship orders that the company may place in the future.

Conference Call  

The company has scheduled a conference call with analysts at 10:00 a.m. EDT (3:00 p.m. BST) today to discuss its earnings release. This call can be listened to live, and additional information including the company's earnings presentation and debt maturities schedule, can be obtained via Carnival Corporation & plc's website at www.carnivalcorp.com and www.carnivalplc.com .

Carnival Corporation & plc is the largest global cruise company, and among the largest leisure travel companies, with a portfolio of world-class cruise lines – AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Holland America Line, P&O Cruises (Australia), P&O Cruises (UK), Princess Cruises, and Seabourn.

Additional information can be found on www.carnivalcorp.com , www.aida.de , www.carnival.com , www.costacruise.com , www.cunard.com , www.hollandamerica.com , www.pocruises.com.au , www.pocruises.com , www.princess.com   and www.seabourn.com . For more information on Carnival Corporation's industry-leading sustainability initiatives, visit www.carnivalsustainability.com .

Cautionary Note Concerning Factors That May Affect Future Results

Some of the statements, estimates or projections contained in this document   are "forward-looking statements" that involve risks, uncertainties and assumptions with respect to us, including some statements concerning future results, operations, outlooks, plans, goals, reputation, cash flows, liquidity and other events which have not yet occurred. These statements are intended to qualify for the safe harbors from liability provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts are statements that could be deemed forward-looking. These statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and the beliefs and assumptions of our management. We have tried, whenever possible, to identify these statements by using words like "will," "may," "could," "should," "would," "believe," "depends," "expect," "goal," "aspiration," "anticipate," "forecast," "project," "future," "intend," "plan," "estimate," "target," "indicate," "outlook," and similar expressions of future intent or the negative of such terms.

Forward-looking statements include those statements that relate to our outlook and financial position including, but not limited to, statements regarding:


•  Pricing                             •  Adjusted EBITDA

•  Booking levels                      •  Adjusted earnings per share

•  Occupancy                           •  Adjusted free cash flow

•  Interest, tax and fuel expenses     •  Net debt to adjusted EBITDA

•  Currency exchange rates             •  Net per diems

•  Goodwill, ship and trademark fair   •  Net yields
values

•  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 •  Adjusted return on invested capital
and residual values

•  Adjusted net income (loss)



Because forward-looking statements involve risks and uncertainties, there are many factors that could cause our actual results, performance or achievements to differ materially from those expressed or implied by our forward-looking statements. This note contains important cautionary statements of the known factors that we consider could materially affect the accuracy of our forward-looking statements and adversely affect our business, results of operations and financial position. These factors include, but are not limited to, the following:

    --  Events and conditions around the world, including geopolitical
        uncertainty, war and other military actions, inflation, higher fuel
        prices, higher interest rates and other general concerns impacting the
        ability or desire of people to travel have led, and may in the future
        lead, to a decline in demand for cruises as well as negative impacts to
        our operating costs and profitability.
    --  Pandemics have in the past and may in the future have a significant
        negative impact on our financial condition and operations.
    --  Incidents concerning our ships, guests or the cruise industry have in
        the past and may, in the future, negatively impact the satisfaction of
        our guests and crew and lead to reputational damage.
    --  Changes in and non-compliance with laws and regulations under which we
        operate, such as those relating to health, environment, safety and
        security, data privacy and protection, anti-money laundering,
        anti-corruption, economic sanctions, trade protection, labor and
        employment, and tax may be costly and have in the past and may, in the
        future, lead to litigation, enforcement actions, fines, penalties and
        reputational damage.
    --  Factors associated with climate change, including evolving and
        increasing regulations, increasing global concern about climate change
        and the shift in climate conscious consumerism and stakeholder scrutiny,
        and increasing frequency and/or severity of adverse weather conditions
        could adversely affect our business.
    --  Inability to meet or achieve our targets, goals, aspirations,
        initiatives, and our public statements and disclosures regarding them,
        including those that are related to sustainability matters, may expose
        us to risks that may adversely impact our business.
    --  Breaches in data security and lapses in data privacy as well as
        disruptions and other damages to our principal offices, information
        technology operations and system networks and failure to keep pace with
        developments in technology may adversely impact our business operations,
        the satisfaction of our guests and crew and may lead to reputational
        damage.
    --  The loss of key team members, our inability to recruit or retain
        qualified shoreside and shipboard team members and increased labor costs
        could have an adverse effect on our business and results of operations.
    --  Increases in fuel prices, changes in the types of fuel consumed and
        availability of fuel supply may adversely impact our scheduled
        itineraries and costs.
    --  We rely on supply chain vendors who are integral to the operations of
        our businesses. These vendors and service providers may be unable to
        deliver on their commitments, which could negatively impact our
        business.
    --  Fluctuations in foreign currency exchange rates may adversely impact our
        financial results.
    --  Overcapacity and competition in the cruise and land-based vacation
        industry may negatively impact our cruise sales, pricing and destination
        options.
    --  Inability to implement our shipbuilding programs and ship repairs,
        maintenance and refurbishments may adversely impact our business
        operations and the satisfaction of our guests.
    --  We require a significant amount of cash to service our debt and sustain
        our operations. Our ability to generate cash depends on many factors,
        including those beyond our control, and we may not be able to generate
        cash required to service our debt and sustain our operations.
    --  Our substantial debt could adversely affect our financial health and
        operating flexibility.

The ordering of the risk factors set forth above is not intended to reflect our indication of priority or likelihood. Additionally, many of these risks and uncertainties are currently, and in the future may continue to be, amplified by our substantial debt balance incurred during the pause of our guest cruise operations. There may be additional risks that we consider immaterial or which are unknown.

Forward-looking statements should not be relied upon as a prediction of actual results. Subject to any continuing obligations under applicable law or any relevant stock exchange rules, we expressly disclaim any obligation to disseminate, after the date of this document, any updates or revisions to any such forward-looking statements to reflect any change in expectations or events, conditions or circumstances on which any such statements are based.

Forward-looking and other statements in this document may also address our sustainability progress, plans, and goals (including climate change and environmental-related matters). In addition, historical, current, and forward-looking sustainability- and climate-related statements may be based on standards and tools for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions and predictions that are subject to change in the future and may not be generally shared.

        CARNIVAL CORPORATION& PLC

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(UNAUDITED)

(in millions, except per share data)

                 Three Months Ended      Nine Months Ended
                 August 31,
                                         August 31,

                 2024   2023             2024             2023

Revenues

 Passenger       $      $         4,546  $      12,609$      10,557
ticket           5,239

 Onboard and     2,657  2,308            6,474            5,640
other

                 7,896  6,854            19,083           16,197

Operating
Expenses

 Commissions,
transportation   958    823              2,510            2,097
and other

 Onboard and     866    752              2,043            1,785
other

 Payroll and     575    585              1,812            1,768
related

 Fuel            515    468              1,546            1,492

 Food            393    364              1,099            1,000

 Other operating 995    928              2,796            2,546

Cruise and tour
operating        4,303  3,921            11,805           10,688
expenses

Selling and      763    713              2,366            2,162
administrative

Depreciation and 651    596              1,898            1,774
amortization

                 5,718  5,230            16,070           14,624

Operating Income 2,178  1,624            3,013            1,572
(Loss)

Nonoperating
Income (Expense)

Interest income  19     59               77               183

Interest
expense, net of  (431)  (518)            (1,352)          (1,600)
capitalized
interest

Debt
extinguishment   (13)   (81)             (78)             (112)
and modification
costs

Other income     (10)   (19)             (35)             (67)
(expense), net

                 (435)  (559)            (1,388)          (1,595)

Income (Loss)
Before Income    1,743  1,065            1,626            (23)
Taxes

Income Tax
Benefit          (8)    9                (13)             (3)
(Expense), Net

Net Income       $      $         1,074  $         1,613  $
(Loss)           1,735                                    (26)

Earnings Per
Share

Basic            $      $                $                $
                 1.37   0.85             1.27             (0.02)

Diluted          $      $                $                $
                 1.26   0.79             1.21             (0.02)

Weighted-Average
Shares           1,267  1,263            1,266            1,262
Outstanding -
Basic

Weighted-Average
Shares           1,399  1,396            1,398            1,262
Outstanding -
Diluted



 

        CARNIVAL CORPORATION& PLC

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in millions, except par values)

                                      August 31,            November 30,
                                      2024                  2023

ASSETS

Current Assets

Cash and cash equivalents             $              1,522  $              2,415

Trade and other receivables, net      632                   556

Inventories                           492                   528

Prepaid expenses and other            980                   1,767

 Total current assets                 3,626                 5,266

Property and Equipment, Net           42,380                40,116

Operating Lease Right-of-Use Assets,  1,383                 1,265
Net

Goodwill                              579                   579

Other Intangibles                     1,173                 1,169

Other Assets                          665                   725

                                      $            49,805   $            49,120

LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities

Current portion of long-term debt     $              2,214  $              2,089

Current portion of operating lease    159                   149
liabilities

Accounts payable                      1,062                 1,168

Accrued liabilities and other         2,393                 2,003

Customer deposits                     6,436                 6,072

 Total current liabilities            12,265                11,481

Long-Term Debt                        26,642                28,483

Long-Term Operating Lease Liabilities 1,258                 1,170

Other Long-Term Liabilities           1,042                 1,105

Shareholders' Equity

Carnival Corporation common stock,
$0.01 par value; 1,960 shares
authorized; 1,253                     13                    12
     shares issued at 2024 and 1,250
shares issued at 2023

Carnival plc ordinary shares, $1.66
par value; 217 shares issued at 2024  361                   361
and 2023

Additional paid-in capital            16,723                16,712

Retained earnings                     1,798                 185

Accumulated other comprehensive       (1,894)               (1,939)
income (loss)

Treasury stock, 130 shares at 2024
and 2023 of Carnival Corporation and
73 shares at                          (8,404)               (8,449)
     2024 and 2023 of Carnival plc,
at cost

 Total shareholders' equity           8,597                 6,882

                                      $            49,805   $            49,120



 

        CARNIVAL CORPORATION & PLC

OTHER INFORMATION

OTHER BALANCE SHEET          August 31, 2024  November 30, 2023
INFORMATION(in millions)

Liquidity                    $                $
                             4,519            5,392

Debt (current and long-term) $                $                      30,572
                             28,856

Customer deposits (current   $                $
and long-term)               6,819            6,353



 


                 Three Months Ended        Nine Months Ended

                 August 31,                August 31,

STATISTICAL      2024   2023               2024               2023
INFORMATION

Passenger cruise
days ("PCDs")(in 28.1   25.8               76.0               67.8
millions)(a)

ALBDs (in        25.2   23.7               71.7               68.1
millions)(b)

Occupancy        112 %  109 %              106 %              100 %
percentage (c)

Passengers
carried(in       3.9    3.6                10.3               9.3
millions)

Fuel consumption
in metric tons   0.7    0.7                2.2                2.2
(in millions)

Fuel consumption
in metric tons   29.5   31.1               31.0               32.3
per thousand
ALBDs

Fuel cost per
metric ton       $      $             636  $             680  $             681
consumed         670
(excluding EUA)

Currencies (USD
to 1)

AUD              $      $            0.66  $            0.66  $            0.67
                 0.67

CAD              $      $            0.75  $            0.74  $            0.74
                 0.73

EUR              $      $            1.09  $            1.08  $            1.08
                 1.09

GBP              $      $            1.27  $            1.27  $            1.24
                 1.28




Notes to Statistical Information

    PCD represents the number of cruise passengers on a voyage multiplied by the
(a) number of revenue-producing ship
    operating days for that voyage.

    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
(b) 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.

    Occupancy, in accordance with cruise industry practice, is calculated using
    a numerator of PCDs and a denominator of
(c) ALBDs, which assumes two passengers per cabin even though some cabins can
    accommodate three or more passengers.
    Percentages in excess of 100% indicate that on average more than two
    passengers occupied some cabins.



 

        CARNIVAL CORPORATION & PLC

NON-GAAP FINANCIAL MEASURES

                 Three Months Ended      Nine Months Ended
                 August 31,
                                         August 31,

(in millions,
except per share 2024   2023             2024             2023
data)

Net income       $      $         1,074  $         1,613  $
(loss)           1,735                                    (26)

(Gains) losses
on ship sales    (6)    —                (6)              (54)
and impairments

Debt
extinguishment   13     81               78               112
and modification
costs


Restructuring    9      1                20               16
expenses

    Other        —      20               —                43

Adjusted net     $      $         1,176  $         1,705  $
income (loss)    1,751                                    90

 Interest
expense, net of  431    518              1,352            1,600
capitalized
interest

 Interest income (19)   (59)             (77)             (183)

 Income tax
benefit          8      (9)              13               3
(expense), net

 Depreciation    651    596              1,898            1,774
and amortization

Adjusted EBITDA  $      $         2,221  $         4,890  $         3,285
                 2,822

Earnings per     $      $                $                $
share - diluted  1.26   0.79             1.21             (0.02)
(a)

Adjusted
earnings per     $      $                $                $
share - diluted  1.27   0.86             1.27             0.07
(a)

Weighted-average
shares           1,399  1,396            1,398            1,262
outstanding -
diluted




    Diluted earnings per share includes the add-back of dilutive interest
(a) expense related to the company's convertible notes
    of $25 million and $73 million for the three and nine months ended August
    31, 2024.



 


               Three Months Ended      Nine Months Ended
               August 31,
                                       August 31,

(in millions)  2024   2023             2024             2023

Cash from      $
(used in)      1,205  $         1,834  $         5,012  $         3,359
operations

Capital
expenditures
(Purchases of  (578)  (837)            (4,034)          (2,609)
Property and
Equipment)

Proceeds from  —      140              2,314            1,157
export credits

Adjusted free  $      $         1,137  $         3,292  $         1,906
cash flow      627

(See Non-GAAP Financial Measures)



 

CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)

Gross margin per diems and net per diems were computed by dividing the gross margin and adjusted gross margin by PCDs. Gross margin yields and net yields were computed by dividing the gross margin and adjusted gross margin by ALBDs as follows:


             Three Months Ended August 31,  Nine Months Ended August 31,

(in                     2024                           2024
millions,
except per   2024       Constant   2023     2024       Constant  2023
diems and
yields data)            Currency                       Currency

Total        $   7,896             $        $ 19,083$     16,197
revenues                           6,854

Less: Cruise
and tour     (4,303)               (3,921)  (11,805)             (10,688)
operating
expenses

Depreciation
and          (651)                 (596)    (1,898)              (1,774)
amortization

Gross margin 2,941                 2,337    5,380                3,734

Less: Tour
and other    (181)                 (172)    (222)                (216)
revenues

Add: Payroll 575                   585      1,812                1,768
and related

 Fuel        515                   468      1,546                1,492

 Food        393                   364      1,099                1,000

 Ship and
other        —                     —        —                    —
impairments

 Other       995                   928      2,796                2,546
operating

Depreciation
and          651                   596      1,898                1,774
amortization

Adjusted     $   5,891$   5,894  $        $ 14,307$ 14,293$     12,099
gross margin                       5,107

PCDs         28.1       28.1       25.8     76.0       76.0      67.8

Gross margin                       $                             $
per diems    $ 104.49              90.45    $   70.80            55.04
(per PCD)

% increase   16 %                           29 %
(decrease)

Net per                            $
diems(per    $ 209.28$ 209.39   197.64   $ 188.30$ 188.10$     178.36
PCD)

% increase   5.9 %      5.9 %               5.6 %      5.5 %
(decrease)

ALBDs        25.2       25.2       23.7     71.7       71.7      68.1

Gross margin                       $                             $
yields(per   $ 116.77              98.50    $   75.05            54.85
ALBD)

% increase   19 %                           37 %
(decrease)

Net yields   $ 233.87$ 234.00   $        $ 199.60$ 199.40$     177.73
(per ALBD)                         215.22

% increase   8.7 %      8.7 %               12 %       12 %
(decrease)

(See Non-GAAP Financial Measures)



CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)

Cruise costs per ALBD, adjusted cruise costs per ALBD and adjusted cruise costs excluding fuel per ALBD were computed by dividing cruise costs, adjusted cruise costs and adjusted cruise costs excluding fuel by ALBDs as follows:


               Three Months Ended August 31,   Nine Months Ended August 31,

                          2024                            2024
(in millions,
except costs   2024       Constant   2023      2024       Constant   2023
per ALBD data)
                          Currency                        Currency

Cruise and                           $                               $
tour operating $   4,303             3,921     $ 11,805              10,688
expenses

Selling and
administrative 763                   713       2,366                 2,162
expenses

Less: Tour and (105)                 (112)     (174)                 (190)
other expenses

Cruise costs   4,962                 4,522     13,998                12,660

Less:
Commissions,   (958)                 (823)     (2,510)               (2,097)
transportation
and other

 Onboard and   (866)                 (752)     (2,043)               (1,785)
other costs

Gains (losses)
on ship sales  6                     —         6                     54
and
impairments

Restructuring  (9)                   (1)       (20)                  (16)
expenses

Other          —                     —         —                     —

Adjusted       3,134      3,138      2,946     9,430      9,421      8,817
cruise costs

Less: Fuel     (515)      (515)      (468)     (1,546)    (1,546)    (1,492)

Adjusted                             $                               $
cruise costs   $   2,619$   2,622  2,478     $   7,885$   7,876  7,325
excluding fuel

ALBDs          25.2       25.2       23.7      71.7       71.7       68.1

Cruise costs   $ 196.98$ 190.58$ 195.29$ 185.97
per ALBD

% increase     3.4 %                           5.0 %
(decrease)

Adjusted
cruise costs   $ 124.44$ 124.56$ 124.16$ 131.56$ 131.44$ 129.51
per ALBD

% increase     0.2 %      0.3 %                1.6 %      1.5 %
(decrease)

Adjusted
cruise costs   $ 103.97$ 104.09$ 104.42$ 110.00$ 109.87$ 107.59
excluding fuel
per ALBD

% increase     (0.4) %    (0.3) %              2.2 %      2.1 %
(decrease)

(See Non-GAAP Financial Measures)



Non-GAAP Financial Measures

We use non-GAAP financial measures and they are provided along with their most comparative U.S. GAAP financial measure:


Non-GAAP Measure            U.S. GAAP Measure          Use Non-GAAP Measure to
                                                       Assess

•  Adjusted net income
(loss) and                  •  Net income (loss)       •  Company Performance
   adjusted EBITDA

•  Adjusted earnings per    •  Earnings per share      •  Company Performance
share

•  Adjusted free cash flow  •  Cash from (used in)     •  Impact on Liquidity
                            operations                 Level

•  Net debt to adjusted     —                          •  Company Leverage
EBITDA

•  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  •  Cruise Segments
   adjusted cruise costs    ALBD                       Performance
excluding fuel
   per ALBD

•  Adjusted ROIC            —                          •  Company Performance



The presentation of our non-GAAP financial information is not intended to be considered in isolation from, as a substitute for, or superior to the financial information prepared in accordance with U.S. GAAP. It is possible that our non-GAAP financial measures may not be exactly comparable to the like-kind information presented by other companies, which is a potential risk associated with using these measures to compare us to other companies.

Adjusted net income (loss)   and adjusted earnings per share provide additional information to us and investors about our future earnings performance by excluding certain gains, losses and expenses that we believe are not part of our core operating business and are not an indication of our future earnings performance. We believe that gains and losses on ship sales, impairment charges, debt extinguishment and modification costs, restructuring costs and certain other gains and losses are not part of our core operating business and are not an indication of our future earnings performance.

Adjusted EBITDA   provides additional information to us and investors about our core operating profitability by excluding certain gains, losses and expenses that we believe are not part of our core operating business and are not an indication of our future earnings performance as well as excluding interest, taxes and depreciation and amortization. In addition, we believe that the presentation of adjusted EBITDA provides additional information to us and investors about our ability to operate our business in compliance with the covenants set forth in our debt agreements. We define adjusted EBITDA as adjusted net income (loss) adjusted for (i) interest, (ii) taxes and (iii) depreciation and amortization. There are material limitations to using adjusted EBITDA. Adjusted EBITDA does not take into account certain significant items that directly affect our net income (loss). These limitations are best addressed by considering the economic effects of the excluded items independently and by considering adjusted EBITDA in conjunction with net income (loss) as calculated in accordance with U.S. GAAP.

Adjusted free cash flow   provides additional information to us and investors to assess our ability to repay our debt after making the capital investments required to support ongoing business operations and value creation as well as the impact on the company's liquidity level. Adjusted free cash flow represents net cash provided by operating activities adjusted for capital expenditures (purchases of property and equipment) and proceeds from export credits that are provided for related capital expenditures. Adjusted free cash flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt.

Net debt to adjusted EBITDA   provides additional information to us and investors about our overall leverage. We define net debt to adjusted EBITDA as total debt less cash and cash equivalents excluding a minimum cash balance divided by twelve-month adjusted EBITDA.

Net per diems   and net yields enable us and investors to measure the performance of our cruise segments on a per PCD and per ALBD basis. We use adjusted gross margin rather than gross margin to calculate net per diems and net yields. We believe that adjusted gross margin is a more meaningful measure in determining net per diems and net yields than gross margin because it reflects the cruise revenues earned net of only our most significant variable costs, which are travel agent commissions, cost of air and other transportation, certain other costs that are directly associated with onboard and other revenues and credit and debit card fees.

Adjusted cruise costs per ALBD   and adjusted cruise costs excluding fuel per ALBD enable us and investors to separate the impact of predictable capacity or ALBD changes from price and other changes that affect our business. We believe these non-GAAP measures provide useful information to us and investors and expanded insight to measure our cost performance. Adjusted cruise costs per ALBD and adjusted cruise costs excluding fuel per ALBD are the measures we use to monitor our ability to control our cruise segments' costs rather than cruise costs per ALBD. We exclude gains and losses on ship sales, impairment charges, restructuring costs and certain other gains and losses that we believe are not part of our core operating business as well as excluding our most significant variable costs, which are travel agent commissions, cost of air and other transportation, certain other costs that are directly associated with onboard and other revenues and credit and debit card fees. We exclude fuel expense to calculate adjusted cruise costs excluding fuel. The price of fuel, over which we have no control, impacts the comparability of period-to-period cost performance. The adjustment to exclude fuel provides us and investors with supplemental information to understand and assess the company's non-fuel adjusted cruise cost performance. Substantially all of our adjusted cruise costs excluding fuel are largely fixed, except for the impact of changing prices once the number of ALBDs has been determined.

Adjusted ROIC   provides additional information to us and investors about our operating performance relative to the capital we have invested in the company. We define adjusted ROIC as the twelve-month adjusted net income (loss) before interest expense and interest income divided by the monthly average of debt plus equity minus construction-in-progress, excess cash, goodwill and intangibles.

Reconciliation of Forecasted Data

We have not provided a reconciliation of forecasted non-GAAP financial measures to the most comparable U.S. GAAP financial measures because preparation of meaningful U.S. GAAP forecasts would require unreasonable effort. We are unable to predict, without unreasonable effort, the future movement of foreign exchange rates and fuel prices. We are unable to determine the future impact of gains and losses on ship sales, impairment charges, debt extinguishment and modification costs, restructuring costs and certain other non-core gains and losses.

Constant Currency

Our operations primarily utilize the U.S. dollar, Australian dollar, euro and sterling as functional currencies to measure results and financial condition. Functional currencies other than the U.S. dollar subject us to foreign currency translational risk. Our operations also have revenues and expenses that are in currencies other than their functional currency, which subject us to foreign currency transactional risk.

Constant currency reporting removes the impact of changes in exchange rates on the translation of our operations plus the transactional impact of changes in exchange rates from revenues and expenses that are denominated in a currency other than the functional currency.

We report adjusted gross margin, net yields, net per diems, adjusted cruise costs excluding fuel and adjusted cruise costs excluding fuel per ALBD on a "constant currency" basis assuming the current periods' currency exchange rates have remained constant with the prior periods' rates. These metrics facilitate a comparative view for the changes in our business in an environment with fluctuating exchange rates.

Examples:

    --  The translation of our operations with functional currencies other than
        U.S. dollar to our U.S. dollar reporting currency results in decreases
        in reported U.S. dollar revenues and expenses if the U.S. dollar
        strengthens against these foreign currencies and increases in reported
        U.S. dollar revenues and expenses if the U.S. dollar weakens against
        these foreign currencies.
    --  Our operations have revenue and expense transactions in currencies other
        than their functional currency. If their functional currency strengthens
        against these other currencies, it reduces the functional currency
        revenues and expenses. If the functional currency weakens against these
        other currencies, it increases the functional currency revenues and
        expenses.

 

CONTACT: MEDIA CONTACT, Jody Venturoni, +1 469 797 6380; INVESTOR RELATIONS CONTACT: Beth Roberts,   +1 305 406 4832

SOURCE Carnival Corporation & plc