Carnival PLC - Carnival Corporation 3Q 2025 Earnings
Exceeds guidance and raises full year 2025 outlook for the third time this year
-- Achieved all-time high net income1of $1.9 billion and adjusted net
income1,2of $2.0 billion .
-- Raised full year 2025 adjusted net income guidance for the third quarter
in a row due to improved net yields2and effective cost & balance sheet
management; now expected to be up nearly 55 percent year over year.
-- Delivered record revenues1of $8.2 billion , a record for the tenth
consecutive quarter, and all-time high net yields1(in constant currency)
outperforming June guidance due to strong close-in demand.
-- Cumulative advanced booked position for 2026 remains strong, in line
with 2025 record levels and at historical high prices (in constant
currency).
-- Refinanced $4.5 billion of debt during the quarter, simplifying its
capital structure and prepaid an additional $0.7 billion of debt.
"This was a phenomenal quarter delivering all-time high net income and our tenth consecutive quarter of record revenues. Strong demand and onboard spending drove a 4.6% improvement in net yields (in constant currency), all of which was achieved on a same ship basis," commented
"Adjusted return on invested capital
2,3
reached 13% for the first time in nearly 20 years, a clear testament to the continued improvement in our operational execution—driven not only by consistently strong performance from
"We also welcomed our game changing new exclusive destination, Celebration Key, to rave guest reviews and overwhelming media coverage. It joins our unparalleled footprint of seven
"Even with our rapid progress, we believe we have ample opportunity to increase same ship net yields and further close the unbelievable price-to-value gap versus land based vacation alternatives, pushing margins and returns even higher over time," Weinstein said.
Third Quarter 2025 Results
-- Record net income1 of $1.9 billion , or $1.33 diluted EPS, an improvement
of $116 million compared to 2024, surpassing the previous record set in
2019.
-- Record adjusted net income1 of $2.0 billion , or $1.43 adjusted EPS2,
outperformed June guidance by $182 million led by strong close-in demand
and effective cost management, surpassing the previous record set in
2019 by nearly 10 percent.
-- Record adjusted EBITDA1,2 of $3.0 billion .
-- Record revenues1 of $8.2 billion , up over $250 million compared to the
prior year on lower capacity.
-- Gross margin yields were 6.4 percent higher than 2024.
-- All-time high net yields (in constant currency) were 4.6 percent
higher than 2024 and outperformed June guidance by 1.1 points.
-- Cruise costs per available lower berth day ("ALBD") increased 4.6
percent compared to 2024. Adjusted cruise costs excluding fuel per ALBD2
(in constant currency) increased 5.5 percent compared to 2024, 1.5
points better than June guidance.
-- Fuel consumption per ALBD decreased 5.2 percent compared to the prior
year due to the company's efforts and investments to continuously
improve the energy efficiency of its operations.
-- Record third quarter customer deposits of $7.1 billion surpassed the
previous record at August 31, 2024 .
___________________________ 1 Record for any quarter. 2 See "Non-GAAP Financial Measures." 3 Trailing 12-months.
Bookings
"Since May, booking trends have continued to strengthen with higher booking volumes than last year and far outpacing capacity growth. This momentum affirms the success of our brands' demand generation efforts and the amazing experiences we continue to deliver, driving excess demand and ongoing pricing strength. With nearly half of 2026 booked, which is in line with 2025 record levels (at the same time last year) but now at historical high prices (in constant currency) for both our
2025 Outlook
For the full year 2025, the company expects:
-- Net yields (in constant currency) up approximately 5.3 percent compared
to 2024, 0.3 percentage points better than June guidance.
-- Adjusted cruise costs excluding fuel per ALBD (in constant currency) up
approximately 3.3 percent compared to 2024, better than June guidance.
-- Adjusted net income up nearly 55 percent compared to 2024 and better
than June guidance by $235 million .
-- Adjusted EBITDA of approximately $7.05 billion , up 15 percent compared
to 2024 and better than June guidance.
For the fourth quarter of 2025, the company expects:
-- Net yields (in constant currency) up approximately 4.3 percent compared
to record 2024 levels, consistent with the company's prior expectation.
-- Adjusted net income up over 60 percent compared to the fourth quarter
2024.
See "Guidance" for additional information on the company's 2025 outlook, "Non-GAAP Financial Measures" and "Reconciliation of Forecasted Data."
Financing
"With our current refinancing strategy nearly complete, we've continued taking decisive actions to strengthen our balance sheet by simplifying our capital structure, reducing interest expense and managing our future debt maturities," commented
During the quarter, the company continued its refinancing strategy to reduce interest expense and manage its maturity towers, while reducing secured debt by nearly
During the quarter, Moody's upgraded the company's credit rating and maintained a positive outlook. The company believes this is a reflection of its improved leverage metrics and its strong momentum.
The company ended the quarter with
________________________ 1 See "Non-GAAP Financial Measures."
Other Recent Highlights
-- Successfully opened Celebration Key, the company's new exclusive
destination on Grand Bahama Island , featuring the largest freshwater
lagoon in the Caribbean and the world's largest swim up bar.
-- Carnival Cruise Line hosted nearly half a million guests at Celebration
Key, sailing from nine different homeports on 16 ships since its opening
in July.
-- Princess Cruises welcomed Star Princess, sister to the successful Sun
Princess,which was previously awarded Condé Nast Traveler's 2024 Mega
Ship of the year in the United States (learn more here).
-- Holland America Line was recognized as both the Best Large Ship Ocean
Cruise Line and Best Mid-Sized Ship Ocean Cruise Line in Travel +
Leisure's 2025 World's Best Awards (learn more here).
-- Cunard launched its new campaign, "Why cruise when you can Cunard,"
inviting guests to experience its iconic blend of style, elegance and
uncompromising luxury (learn more here).
-- Named by Forbes as one of America's Best Employers for Women (learn more
here) and one of the Best-in-State Employers for Florida in 2025 (learn
more here).
-- Released its 15th annual sustainability report, "Doing Business
Responsibly from Ship to Shore," detailing the company's continued
progress towards its sustainability goals and strategic refinements to
its sustainability roadmap (learn more here).
Guidance
(See "Non-GAAP Financial Measures" and "Reconciliation of Forecasted Data")
4Q 2025 Full Year 2025
Year over year change Current Constant Current Constant
Dollars Currency Dollars Currency
Net yields Approx. 6.4% Approx. 4.3% Approx. 6.2% Approx. 5.3%
Adjusted cruise costs Approx. 5.5% Approx. 3.2% Approx. 4.4% Approx. 3.3%
excluding fuel per ALBD
4Q 2025 Full Year 2025
ALBDs (in millions)(a) 24.1 96.5
Fuel consumption in metric tons 0.7 2.8
(in millions)
Fuel cost per metric ton consumed
(excluding European Union $ 598 $ 615
Allowance ("EUA"))
Fuel expense (including EUA $ 0.45 $ 1.84
expense) (in billions)
Depreciation and amortization $ 0.73 $ 2.79
expense (in billions)
Interest expense, net of
capitalized interest and interest $ 0.30 $ 1.31
income (in billions)
Adjusted EBITDA (in billions) Approx. $1.34 Approx. $7.05
Adjusted net income (loss) (in Approx. $300 Approx. $2,925
millions )
Adjusted earnings per share - Approx. $0.23 Approx. $2.14
diluted (b)
Weighted-average shares 1,313 1,312
outstanding - basic
Adjusted weighted-average shares 1,403 1,402
outstanding - diluted (b)
(a) See "Notes to Statistical Information"
Diluted adjusted earnings per share includes the add-back of dilutive
(b) interest expense related to the company's convertible notes of $18 million
for the fourth quarter of 2025 and $71 million for full year 2025.
Currencies (USD to 1) 4Q 2025 Full Year 2025
AUD $ $ 0.63
0.66
CAD $ $ 0.72
0.72
EUR $ $ 1.13
1.18
GBP $ $ 1.32
1.35
Sensitivities (impact to adjusted net income (loss) in millions) 4Q 2025
1% change in net yields $
45
1% change in adjusted cruise costs excluding fuel per ALBD $
29
10% change in fuel cost per metric ton (excluding EUA) $
42
100 basis point change in variable rate debt $
9
1% change in currency exchange rates $
6
Capital Expenditures
For the fourth quarter of 2025, newbuild capital expenditures are
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.costacruises.com , www.cunard.com , www.hollandamerica.com , www.pocruises.com , www.princess.com and www.seabourn.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 statements concerning future results, operations, strategy, 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, but are not limited to, statements that relate to our outlook and financial position, as well as, statements regarding:
• Pricing • Adjusted EBITDA • Booking levels • Adjusted EBITDA per ALBD • Occupancy • Adjusted EBITDA margin • Interest, tax and fuel expenses • Adjusted earnings per share • Currency exchange rates • Net debt to adjusted EBITDA •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 ROIC 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, pandemics, inflation,
higher fuel prices, higher interest rates and other general concerns
impacting the ability or desire of people to travel could lead to a
decline in demand for cruises as well as have significant negative
impacts on our financial condition and operations.
-- Incidents concerning our ships, guests or the cruise industry may
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 lead to litigation, enforcement
actions, fines, penalties and reputational damage.
-- Factors associated with climate change, including evolving and
increasing regulations, increasing concerns about climate change and the
shift in climate conscious consumerism and stakeholder scrutiny, and
increasing frequency and/or severity of adverse weather conditions could
have a material impact on our business.
-- Inability to meet or achieve our targets, goals, aspirations,
initiatives, and our public statements and disclosures regarding them,
including those related to sustainability matters, may expose us to
risks that may adversely impact our business.
-- Cybersecurity incidents and data privacy breaches, 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 have adversely impacted and may in the future
materially adversely impact our business operations, the satisfaction of
our guests and crew and may lead to fines, penalties and 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 suppliers who are integral to the operations of our
businesses. These suppliers 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 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. 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,
2025 2024 2025 2024
Passenger ticket $ $ 5,239 $ 13,366 $ 12,609
5,430
Onboard and 2,723 2,657 6,925 6,474
other
Total Revenues 8,153 7,896 20,292 19,083
Cruise and tour
operating
expenses:
Commissions,
transportation 973 958 2,603 2,510
and other
Onboard and 883 866 2,154 2,043
other
Payroll and 636 575 1,915 1,812
related
Fuel 451 515 1,384 1,546
Food 398 393 1,124 1,099
Other operating 1,044 995 2,858 2,796
Total Cruise and
tour operating 4,385 4,303 12,037 11,805
expenses
Selling and
administrative 779 763 2,442 2,366
expense
Depreciation and
amortization 717 651 2,064 1,898
expense
Operating Income 2,271 2,178 3,748 3,013
Interest income 15 19 34 77
Interest
expense, net of (317) (431) (1,034) (1,352)
capitalized
interest
Debt
extinguishment (111) (13) (366) (78)
and modification
costs
Other income (2) (10) (14) (35)
(expense), net
Income Before 1,857 1,743 2,368 1,626
Income Taxes
Income tax (6) (8) (30) (13)
expense, net
Net Income $ $ 1,735 $ 2,338 $ 1,613
(Loss) 1,852
Earnings Per
Share
Basic $ $ $ $
1.41 1.37 1.78 1.27
Diluted $ $ $ $
1.33 1.26 1.71 1.21
Weighted-Average
Shares 1,313 1,267 1,311 1,266
Outstanding -
Basic
Weighted-Average
Shares 1,402 1,399 1,401 1,398
Outstanding -
Diluted
CARNIVAL CORPORATION& PLC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except par values)
August 31, November 30,
2025 2024
ASSETS
Current Assets
Cash and cash equivalents $ 1,763 $ 1,210
Trade and other receivables, net 651 590
Inventories 475 507
Prepaid expenses and other 979 1,070
Total current assets 3,868 3,378
Property and Equipment, Net 42,889 41,795
Operating Lease Right-of-Use Assets, 1,352 1,368
Net
Goodwill 579 579
Other Intangibles 1,181 1,163
Other Assets 962 775
$ 50,831 $ 49,057
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt $ 1,417 $ 1,538
Current portion of operating lease 178 163
liabilities
Accounts payable 1,173 1,133
Accrued liabilities and other 1,977 2,358
Customer deposits 6,691 6,425
Total current liabilities 11,436 11,617
Long-Term Debt 25,064 25,936
Long-Term Operating Lease Liabilities 1,201 1,239
Other Long-Term Liabilities 1,202 1,012
Shareholders' Equity
Carnival Corporation common stock,
$0.01 par value; 1,960 shares
authorized; 1,298 13 13
shares issued at 2025 and 1,294
shares issued at 2024
Carnival plc ordinary shares, $1.66
par value; 217 shares issued at 2025 361 361
and 2024
Additional paid-in capital 17,238 17,155
Retained earnings 4,395 2,101
Accumulated other comprehensive (1,715) (1,975)
income (loss)
Treasury stock, 131 shares at 2025
and 130 shares at 2024 of Carnival
Corporation and (8,364) (8,404)
72 shares at 2025 and 73 shares
at 2024 of Carnival plc , at cost
Total shareholders' equity 11,928 9,251
$ 50,831 $ 49,057
CARNIVAL CORPORATION & PLC
OTHER INFORMATION
OTHER BALANCE SHEET August 31, 2025 November 30, 2024
INFORMATION(in millions)
Liquidity $ $
6,263 4,155
Debt (current and long-term) $ $ 27,475
26,481
Customer deposits (current $ $
and long-term) 7,146 6,779
Three Months Ended Nine Months Ended
August 31, August 31,
CASH FLOW
INFORMATION(in 2025 2024 2025 2024
millions)
Cash from $ $ $ 4,700 $ 5,012
operations (a) 1,383 1,205
Capital
expenditures $ $
(Purchases of 648 578 $ 2,105 $ 4,034
Property and
Equipment)
(a) Cash from operations for the nine months endedAugust 31, 2024 includes the release of$818 million of credit card reserve funds.
Three Months Ended Nine Months Ended
August 31, August 31,
STATISTICAL 2025 2024 2025 2024
INFORMATION
Passenger cruise
days ("PCDs")(in 27.5 28.1 77.1 76.0
millions)(a)
ALBDs (in 24.6 25.2 72.3 71.7
millions)(b)
Occupancy 112 % 112 % 107 % 106 %
percentage (c)
Passengers
carried(in 3.8 3.9 10.3 10.3
millions)
Fuel consumption
in metric tons 0.7 0.7 2.1 2.2
(in millions)
Fuel consumption
in metric tons 28.0 29.5 29.4 31.0
per thousand
ALBDs
Fuel cost per
metric ton $ $ 670 $ 621 $ 680
consumed 607
(excluding EUA)
Currencies (USD
to 1)
AUD $ $ 0.67 $ 0.64 $ 0.66
0.65
CAD $ $ 0.73 $ 0.71 $ 0.74
0.73
EUR $ $ 1.09 $ 1.10 $ 1.08
1.16
GBP $ $ 1.28 $ 1.30 $ 1.27
1.35
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.
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
(b) 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 ALBDs, which assumes two passengers
(c) 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 2025 2024 2025 2024
data)
Net income (loss) $ $ $ 2,338 $ 1,613
1,852 1,735
(Gains) losses on
ship sales and 0 (6) (101) (6)
impairments
Debt
extinguishment and 111 13 366 78
modification costs
Restructuring 3 9 5 20
expense
Other 17 — 17 —
Adjusted net $ $ $ 2,625 $ 1,705
income (loss) 1,982 1,751
Interest expense,
net of capitalized 317 431 1,034 1,352
interest
Interest income (15) (19) (34) (77)
Income tax (8) 8 16 13
expense, net
Depreciation and
amortization 717 651 2,064 1,898
expense
Adjusted EBITDA $ $ $ 5,706 $ 4,890
2,993 2,822
Earnings per share $ $ $ 1.71 $ 1.21
- diluted (a) 1.33 1.26
Weighted-average
shares outstanding 1,402 1,399 1,401 1,398
- diluted (a)
Adjusted earnings $ $
per share - 1.43 1.27 $ 1.91 $ 1.27
diluted (a)
Adjusted
weighted-average 1,402 1,399 1,401 1,398
shares outstanding
- diluted (a)
(See Non-GAAP Financial Measures)
Diluted earnings per share and diluted adjusted earnings per share include
the add-back of dilutive interest expense related to the company's
(a) convertible notes of $18 million and $53 million for the three and nine
months ended August 31, 2025 , and $25 million and $73 million for the three
and nine months ended August 31, 2024 .
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)
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 Nine Months Ended August 31,
31,
(in 2025 2025
millions,
except 2025 Constant 2024 2025 Constant 2024
yields data)
Currency Currency
Total $ $ $ 20,292 $ 19,083
Revenues 8,153 7,896
Less: Cruise
and tour (4,385) (4,303) (12,037) (11,805)
operating
expenses
Depreciation
and (717) (651) (2,064) (1,898)
amortization
expense
Gross margin 3,051 2,941 6,191 5,380
Less: Tour
and other (179) (181) (212) (222)
revenues
Add: Payroll 636 575 1,915 1,812
and related
Fuel 451 515 1,384 1,546
Food 398 393 1,124 1,099
Other 1,044 995 2,858 2,796
operating
Depreciation
and 717 651 2,064 1,898
amortization
expense
Adjusted $ $ $ $ 15,323 $ 15,250 $ 14,307
gross margin 6,119 6,006 5,891
ALBDs 24.6 24.6 25.2 72.3 72.3 71.7
Gross margin $ $
yields(per 124.20 116.77 $ 85.57 $ 75.05
ALBD)
Net yields $ $ $ $ 211.79 $ 210.79 $ 199.60
(per ALBD) 249.11 244.51 233.87
(See Non-GAAP Financial Measures)
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)
Cruise costs per ALBD, adjusted cruise costs per ALBD and adjusted cruise
costs excluding fuel per ALBD were computed by
dividing cruise costs, adjusted cruise costs and adjusted cruise costs
excluding fuel by ALBDs as follows:
Three Months Ended August 31, Nine Months Ended August 31,
(in millions, 2025 2025
except costs
per ALBD 2025 Constant 2024 2025 Constant 2024
data)
Currency Currency
Cruise and $ $ $
tour operating 4,385 4,303 12,037 $ 11,805
expenses
Selling and
administrative 779 763 2,442 2,366
expense
Less: Tour and (102) (105) (157) (174)
other expenses
Cruise costs 5,062 4,962 14,323 13,998
Less:
Commissions,
transportation (973) (958) (2,603) (2,510)
and
other
Onboard and (883) (866) (2,154) (2,043)
other costs
Gains (losses)
on ship sales 0 6 101 6
and
impairments
Restructuring (3) (9) (5) (20)
expense
Other (4) — (4) —
Adjusted 3,201 3,143 3,134 9,659 9,611 9,430
cruise costs
Less: Fuel (451) (450) (515) (1,384) (1,383) (1,546)
Adjusted $ $ $ $ $ $
cruise costs 2,750 2,693 2,619 8,275 8,228 7,885
excluding fuel
ALBDs 24.6 24.6 25.2 72.3 72.3 71.7
Cruise costs $ $ $ $ 195.29
per ALBD 206.11 196.98 197.97
Adjusted $ $ $ $ $
cruise costs 130.31 127.98 124.44 133.50 132.84 $ 131.56
per ALBD
Adjusted
cruise costs $ $ $ $ $ $ 110.00
excluding fuel 111.96 109.65 103.97 114.38 113.72
per ALBD
(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 U.S. GAAP Measure Use Non-GAAP Measure to
Assess
• Adjusted net income
(loss),
adjusted EBITDA, adjusted
• Net income (loss) • Company Performance
EBITDA per ALBD and
adjusted
EBITDA margin
• Adjusted earnings per • Earnings per share • Company Performance
share
• Net debt to adjusted — • Company Leverage
EBITDA
• Net yields • Gross margin yields • Cruise Segments
Performance
• Adjusted cruise costs per
ALBD • Gross cruise costs per • Cruise Segments
and 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
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, losses and expenses are not part of our core operating business and are not an indication of our future earnings performance.
Adjusted EBITDA, adjusted EBITDA per ALBD and adjusted EBITDA margin
provide additional information to us and investors about our core operating profitability, including on a per ALBD basis, 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
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 yields enable us and investors to measure the performance of our cruise segments on a per ALBD basis. We use adjusted gross margin rather than gross margin to calculate net yields. We believe that adjusted gross margin is a more meaningful measure in determining 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 yields, 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,
