CARNIVAL CORPORATION & PLC
REPORTS SUMMARY FIRST QUARTER RESULTS
AND OTHER MATTERS
MIAMI (March 19, 2020) -
Carnival Corporation & plc (the “Corporation”) (NYSE/LSE: CCL;
NYSE: CUK) disclosed summary financial information for the quarter
ended February 29, 2020, in
connection with previously disclosed financing activities to
improve its liquidity position.
First Quarter 2020 Summary
Information
- U.S. GAAP net loss of $(781)
million, or $(1.14) diluted
EPS, for the first quarter of 2020, compared to U.S. GAAP net
income for the first quarter of 2019 of $336
million, or $0.48 diluted EPS.
First quarter 2020 net loss includes $932
million of goodwill and ship impairment charges, reduced by
net gains on ship sales.
- First quarter 2020 adjusted net income of $150 million, or $0.22 adjusted EPS, compared to adjusted net
income of $338 million, or
$0.49 adjusted EPS, for the first
quarter of 2019. First quarter 2020 adjusted net income excludes
net charges of $932 million for the
first quarter of 2020 and net charges of $2
million for the first quarter of 2019.
- The impact of COVID-19 on the first quarter 2020 net loss is
approximately $0.23 per share, which
includes cancelled voyages and other voyage disruptions, and
excludes the impairment charges described above. Other previously
disclosed voyage disruptions, noted during the Corporation’s
December earnings conference call, also impacted first quarter 2020
results by approximately $0.12 per
share.
- Total revenues for the first quarter of 2020 were $4.8 billion, higher than $4.7 billion in the prior year.
Outlook
For the first half of 2021, booking volumes since the
Corporation's last conference call in mid-December through
March 1, 2020, have been running
slightly higher than the prior year. Also for the first half of
2021 and during the two weeks ended March
15, 2020, the Corporation booked 546,000 Occupied Lower
Berth Days (“OLBD”), albeit considerably behind the prior year
pace. As of March 15, 2020,
cumulative advanced bookings for the first half of 2021, are
slightly lower than the prior year.
Wave season started strong with booking volumes for the three
weeks ending January 26, 2020,
running higher than the prior year for the remaining three quarters
of the year on a comparable basis. For the seven week period
beginning January 26, 2020 and ending
March 15, 2020, booking volumes for
the remainder of the year were meaningfully behind the prior year
on a comparable basis as a result of the effects of COVID-19. As of
March 15, 2020, cumulative advanced
bookings for the remainder of 2020, are meaningfully lower than the
prior year at prices that are considerably lower than the prior
year on a comparable basis, reflecting the impact of COVID-19.
The Corporation previously announced a voluntary, temporary
pause of its global fleet operations across all brands. The
Corporation believes the ongoing effects of COVID-19 on its
operations and global bookings will have a material negative impact
on its financial results and liquidity. The Corporation also
believes the effects of COVID-19 on the shipyards where its ships
are under construction, will result in a delay in ship deliveries.
The Corporation is taking additional actions to improve its
liquidity, including capital expenditure and expense reductions,
and pursuing additional financing. Given the uncertainty of the
situation, the Corporation is currently unable to provide an
earnings forecast, however it expects a net loss on both a U.S.
GAAP and adjusted basis for the fiscal year ending November 30, 2020.
Capital Resources
As of February 29, 2020, the
Corporation had a total of $11.7 billion of liquidity. This included
$3.0 billion of immediate
liquidity plus $2.8 billion from
four committed export credit facilities that are available to fund
the originally planned ship deliveries for the remainder of this
year and $5.9 billion from committed
export credit facilities that are available to fund ship deliveries
originally planned in 2021 and beyond. On March 13, 2020, the Corporation fully drew down
its $3.0 billion multi-currency
revolving credit agreement (“Facility Agreement”). The Corporation
borrowed under the Facility Agreement in order to increase its cash
position and preserve financial flexibility in light of current
uncertainty in the global markets resulting from the COVID-19
outbreak.
Substantially all of the Corporation's assets, with the
exception of certain ships with a net book value of approximately
$6 billion as of February 29, 2020, are currently available to be
pledged as collateral.
Explanations of Non-GAAP Financial
Measures
We believe that gains and losses on ship sales, impairment
charges, restructuring costs and other gains and expenses are not
part of our core operating business and are not an indication of
our future earnings performance. Therefore, we believe it is more
meaningful for these items to be excluded from our net income
(loss) and earnings per share and, accordingly, we present adjusted
net income and adjusted earnings per share excluding these
items.
Definitions
OLBDs represent the quantity of available lower berth days
(“ALBD”) that are booked for sailing.
ALBD is a standard measure of passenger capacity for the period
that is used to approximate rate and capacity variances, based on
consistently applied formulas used to perform analyses to determine
the main non-capacity driven factors that cause cruise revenues and
expenses to vary. ALBDs assume that each cabin offered for
sale accommodates two passengers and is computed by multiplying
passenger capacity by revenue-producing ship operating days in the
period.
Cautionary Note Concerning Factors
That May Affect Future Results
Carnival Corporation and Carnival plc and their respective
subsidiaries are referred to collectively in this document as
“Carnival Corporation & plc,” “our,” “us” and “we.” 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, outlooks, plans, goals 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. 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,”
“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:
• |
Net revenue
yields |
|
• |
Net cruise costs,
excluding fuel per available lower berth day |
|
• |
Booking levels |
|
• |
Estimates of ship
depreciable lives and residual values |
|
• |
Pricing and
occupancy |
|
• |
Goodwill, ship and
trademark fair values |
|
• |
Interest, tax and fuel
expenses |
|
• |
Liquidity |
|
• |
Currency exchange
rates |
|
• |
Adjusted earnings per
share |
|
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. It is not possible to
predict or identify all such risks. There may be additional risks
that we consider immaterial or which are unknown. These factors
include, but are not limited to, the following:
- COVID-19 has negatively impacted and may continue to impact the
ability or desire of people to travel, including on cruises, and
may impact our ability to obtain acceptable financing to fund any
resulting shortfalls in cash from operations.
- World events impacting the ability or desire of people to
travel may lead to a decline in demand for cruises
- Incidents concerning our ships, guests or the cruise vacation
industry as well as adverse weather conditions and other natural
disasters may impact the satisfaction of our guests and crew and
lead to reputational damage
- Changes in and non-compliance with laws and regulations under
which we operate, such as those relating to health, environment,
safety and security, data privacy and protection, anti-corruption,
economic sanctions, trade protection and tax may lead to
litigation, enforcement actions, fines, penalties, and reputational
damage
- 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 lead to
reputational damage
- Ability to recruit, develop and retain qualified shipboard
personnel who live away from home for extended periods of time may
adversely impact our business operations, guest services and
satisfaction
- Increases in fuel prices, changes in the types of fuel consumed
and availability of fuel supply may adversely impact our scheduled
itineraries and costs
- Fluctuations in foreign currency exchange rates may adversely
impact our financial results
- Overcapacity and competition in the cruise and land-based
vacation industry may lead to a decline in our cruise sales,
pricing and destination options
- Geographic regions in which we try to expand our business may
be slow to develop or ultimately not develop how we expect
- Inability to implement our shipbuilding programs and ship
repairs, maintenance and refurbishments may adversely impact our
business operations and the satisfaction of our guests
The ordering of the risk factors set forth above is not intended
to reflect our indication of priority or likelihood.
Forward-looking statements should not be relied upon as a
prediction of actual results. Subject to any continuing obligations
under applicable law or any relevant stock exchange rules, we
expressly disclaim any obligation to disseminate, after the date of
this document, any updates or revisions to any such forward-looking
statements to reflect any change in expectations or events,
conditions or circumstances on which any such statements are
based.