CARNIVAL CORPORATION & PLC PROVIDES FOURTH QUARTER 2021 BUSINESS UPDATE
U.S. GAAP net loss of$2.6 billion and adjusted net loss of$2 .0 billion for the fourth quarter of 2021.- Fourth quarter 2021 ended with
$9.4 billion of liquidity. - For the cruise segments, revenue per passenger cruise day (“PCD”) for the fourth quarter of 2021 increased approximately 4% compared to a strong 2019. The increase was driven in part by exceptionally strong onboard and other revenue.
- As of
November 30, 2021 , 61% of the company’s capacity was operating with guests on board and it expects the full fleet to be back in operation in the spring of 2022. - Cumulative advanced bookings for the second half of 2022 and first half of 2023 are at the higher end of historical ranges and at higher prices, with or without future cruise credits (“FCC”), normalized for bundled packages, as compared to 2019 sailings.
- Customer deposits increased $360 million in the fourth quarter of 2021, marking the third consecutive quarter the company has seen an increase in customer deposits.
- Through its debt management efforts, the company has refinanced over
$9 billion to date, reducing its future annual interest expense by approximately$400 million per year and extending maturities, optimizing its debt maturity profile. Carnival Corporation’s CDP score for climate change improved to a B from a C in recognition of enhanced disclosures, including the establishment of its 2030 sustainability goals and 2050 aspirations.
Donald added, “Our cash from operations turned positive in the month of November, and we expect consistently positive cash flow beginning in the second quarter of 2022 as additional ships resume guest cruise operations. We enter the year with
Fourth Quarter 2021 Results and Statistical Information
- For the cruise segments, revenue per PCD for the fourth quarter of 2021 increased approximately 4% compared to a strong 2019. The increase was driven in part by exceptionally strong onboard and other revenue.
- Occupancy in the fourth quarter of 2021 was 58%, which was better than the 54% in the third quarter of 2021.
- Available lower berth days (“ALBD”) for the fourth quarter of 2021 were 10.2 million, which represents 47% of total fleet capacity. ALBDs are expected to be 14.1 million for the first quarter of 2022, which represents 63% of total fleet capacity.
Donald noted, “We achieved 4% higher revenue per passenger day in our fourth quarter compared to a strong fourth quarter of 2019, while at the same time ramping up occupancy and capacity. In fact,
The company’s monthly average cash burn rate for the fourth quarter of 2021 was
The gradual resumption of the company’s guest cruise operations continues to have a material impact on all aspects of its business, including the company’s liquidity, financial position and results of operations. The company expects a net loss for the first half of 2022 and a profit for the second half of 2022 on both a
Resumption of Guest Cruise Operations
Donald added, “With over 60% of our capacity now in operation and the remainder planned by spring, we are well positioned for our seasonally strong summer period.”
Since resuming its guest cruise operations in
Planned Ships in Service at the End of Each Month |
||||||
Number of Ships |
% of Berth Capacity |
Total Passenger Capacity (Lower Berths) (a) |
||||
2021: November |
50 |
61% |
240,460 |
|||
December |
57 |
67% |
251,230 |
|||
2022: January |
57 |
66% |
254,890 |
|||
February |
60 |
68% |
254,890 |
|||
March |
66 |
75% |
255,160 |
|||
April |
82 |
90% |
255,160 |
|||
May |
91 |
98% |
255,160 |
|||
June |
94 |
100% |
255,160 |
|||
(a) Total passenger capacity increases for newbuild deliveries through |
While the company will benefit from the disposal of 19 smaller, less efficient ships since the beginning of the pause in guest cruise operations, the company is forecasting net cruise costs (see Explanations of Non-GAAP Financial Measures) without fuel per ALBD in 2022 to be significantly higher than 2019. This is driven by a portion of our fleet being in pause status for part of the year, restart related expenses, the cost of maintaining enhanced health and safety protocols and inflation. We anticipate that most of these costs and expenses will end in 2022 and will not reoccur in fiscal 2023. In 2022, fuel consumption is forecasted to be 2.9 million metric tons. The blended spot price for fuel is currently
The company has worked closely with health and medical experts globally and nationally, as well as with authorities in destination countries, to put in place comprehensive health and safety protocols for protection against and mitigation of COVID-19 across the entire cruise experience for all of the company’s nine brands. This includes cross-industry learnings and best practices based on the proven health and safety record of industry-wide sailings, and input from top scientists and public health, epidemiological and policy experts. Protocols have been and will continue to be updated based on evolving scientific and medical knowledge related to mitigation strategies. Details about enhanced protocols, including the latest information and requirements for each of the company’s brands, is available on their websites.
Update on Bookings
Donald added, “Booking volumes continue to build for the remainder of 2022 and well into 2023 and we are achieving those early bookings with strong demand and pricing.”
Cumulative advanced bookings for the second half of 2022 and first half of 2023 are at the higher end of historical ranges and at higher prices, with or without FCCs, normalized for bundled packages, as compared to 2019 sailings. Booking volumes for the same periods during fourth quarter of 2021 were higher than the third quarter of 2021. Over the last few weeks, we have experienced an initial impact on bookings related to near-term sailings as a result of the Omicron variant. (Due to the gradual resumption in guest cruise operations, the company’s current booking trends will be compared to booking trends for 2019 sailings.)
Total customer deposits increased $360 million to
Refinancing
During the fourth quarter of 2021 the company refinanced
- Borrowed
$2.3 billion under a new term loan facility and repaid$2.0 billion , effectively extending maturities to 2028 and reducing interest expense by$135 million annually. - Issued
$2.0 billion aggregate principal amount of senior unsecured notes due 2029, intended to refinance 2022 maturities. - Extended existing loan maturities totaling approximately
$650 million originally due in 2022 and 2023, to various dates in 2023 through 2026.
As of
(in billions) |
2022 |
2023 |
2024 |
|||||||||
Principal payments on outstanding debt (a) |
$ |
1.9 |
$ |
2.8 |
$ |
1.9 |
||||||
(a) Excluding the revolving credit facility. As of |
Sustainability Update
Donald noted, “We are operating the only five large cruise ships in the world currently powered by LNG and we will shortly take delivery of our sixth. Upon returning to full cruise operations, our LNG efforts combined with other innovative efforts to drive energy efficiency are forecasted to deliver a 10% reduction in unit fuel consumption on an annualized basis compared to 2019, a significant achievement on our path to decarbonization.”
Donald added, “We have announced our net zero aspirations by 2050. We are focused on making a real impact on the environment by decreasing our unit fuel consumption today, even reducing the potential need for carbon offsets.”
The company is focused on advancing its six critical sustainability focus areas – climate action; circular economy; sustainable tourism; good health and well-being; diversity, equity and inclusion; and biodiversity and conservation. Among these priorities, the company is committed to continuing its reduction of carbon emissions and has aspirations to achieve net carbon-neutral ship operations by 2050, well ahead of current
The company’s specific efforts include:
- Measuring and evaluating its emissions performance to ensure ongoing improvement
- Despite experiencing capacity growth of approximately 25% from 2011 to 2019, absolute carbon emissions peaked in 2011 through improvements in energy efficiency
- Achieved its 2020 carbon intensity reduction goal of 25% on a per unit basis
- Committed to delivering a 40% reduction in carbon intensity on a per unit basis by 2030, relative to its 2008 baseline
- Innovating to drive energy efficiency
- Invested over
$350 million in energy efficiency improvements since 2016 - Energy efficiency improvements, fleet optimization and itinerary management are expected to drive a 10% improvement in fuel consumption per ALBD in the company’s first full year of guest cruise operations compared to 2019
- Led the industry in the development of LNG ships
- The company’s five LNG ships are the only contemporary or premium LNG cruise ships currently operating in the world, and it has six more LNG ships on order. Together, these 11 ships will represent 20% of its future capacity
- Developed the first port with shore power capability for cruise ships, which has expanded to 21 ports and growing
- Over 45% of the company’s fleet is equipped to connect to shore power while in port with a goal of reaching at least 60% of the fleet by 2030
- Pioneered the use of Advanced Air Quality Systems on board its ships to aid in the reduction of sulfur emissions
- Partnering with key organizations and stakeholders on research and development to support carbon emissions reduction efforts
- First cruise company to join the Getting to
Zero Coalition - Partnering to evaluate and pilot maritime scale battery technology and methanol powered fuel cells on its ships
- Working with Classification Societies and other stake holders to assess hydrogen, methanol, eLNG and biofuels as future low carbon fuel options for cruise ships
- Planning to conduct assessments with fuel suppliers to evaluate the feasibility of introducing bio-LNG fuel products into its supply chain
For more detailed information on the company’s 2030 sustainability goals and 2050 aspirations, see the company report issued on www.carnivalsustainability.com.
Other Recent Highlights
Carnival Corporation’s CDP score for climate change improved to a B from a C in recognition of enhanced disclosures, including the establishment of its 2030 sustainability goals and 2050 aspirations. CDP is the leading global independent platform that evaluates climate change disclosure.Carnival Corporation named by Forbes as one of the World’s Best Employers and as one of the World’s Top Female-Friendly Companies of 2021.Carnival Corporation named by Inc. as one of America’s Best-Led Companies of 2021.Rotterdam ,Holland America Line’s newest ship, departed on its maiden voyage fromAmsterdam .Costa Cruises took delivery of its newest ship,Costa Toscana , the company’s fifth ship powered by LNG.Carnival Cruise Line announced that its third Excel-class ship, Carnival Jubilee, will be delivered in 2023 and based inGalveston, Texas .AIDA Cruises and Antenne Deutschland launched a new radio station, AIDAradio.Carnival Cruise Line introduced Funderstruck, a new marketing campaign highlighting the heightened joy and fun experienced together on a Carnival cruise.
Conference Call
The company has scheduled a conference call with analysts at
Additional information can be found on www.carnivalcorp.com, www.carnivalsustainability.com, www.carnival.com, www.princess.com, www.hollandamerica.com, www.pocruises.com.au, www.seabourn.com, www.costacruise.com, www.aida.de, www.pocruises.com and www.cunard.com.
Cautionary Note Concerning Factors That May Affect Future Results
Some of the statements, estimates or projections contained in this document are “forward-looking statements” that involve risks, uncertainties and assumptions with respect to us, including some statements concerning future results, operations, outlooks, plans, goals, reputation, cash flows, liquidity and other events which have not yet occurred. These statements are intended to qualify for the safe harbors from liability provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts are statements that could be deemed forward-looking. These statements are based on current expectations, estimates, forecasts and projections about our business and the industry in which we operate and the beliefs and assumptions of our management. We have tried, whenever possible, to identify these statements by using words like “will,” “may,” “could,” “should,” “would,” “believe,” “depends,” “expect,” “goal,” “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:
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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 amplified by and will continue to be amplified by, or in the future may be amplified by, COVID-19. It is not possible to predict or identify all such risks. There may be additional risks that we consider immaterial or which are unknown. These factors include, but are not limited to, the following:
- COVID-19 has had, and is expected to continue to have, a significant impact on our financial condition and operations. The current, and uncertain future, impact of COVID-19, including its effect on the ability or desire of people to travel (including on cruises), is expected to continue to impact our results, operations, outlooks, plans, goals, reputation, litigation, cash flows, liquidity, and stock price.
- World events impacting the ability or desire of people to travel have and may continue to lead to a decline in demand for cruises.
- Incidents concerning our ships, guests or the cruise vacation industry have in the past and may, in the future, impact the satisfaction of our guests and crew and lead to reputational damage.
- Changes in and non-compliance with laws and regulations under which we operate, such as those relating to health, environment, safety and security, data privacy and protection, anti-corruption, economic sanctions, trade protection and tax have in the past and may, in the future, lead to litigation, enforcement actions, fines, penalties and reputational damage.
- Factors associated with climate change, including evolving and increasing regulations, increasing global concern about climate change and the shift in climate conscious consumerism and stakeholder scrutiny, and increases to the frequency and/or severity of adverse weather conditions could adversely affect our business.
- Inability to meet or achieve our sustainability related goals, aspirations, initiatives, and our public statements and disclosures regarding them, may expose us to risks that may adversely impact our business.
- Breaches in data security and lapses in data privacy as well as disruptions and other damages to our principal offices, information technology operations and system networks and failure to keep pace with developments in technology may adversely impact our business operations, the satisfaction of our guests and crew and may lead to reputational damage.
- The loss of key employees, our inability to recruit or retain qualified shoreside and shipboard employees and increased labor costs could have an adverse effect on our business and results of operations.
- Increases in fuel prices, changes in the types of fuel consumed and availability of fuel supply may adversely impact our scheduled itineraries and costs.
- We rely on supply chain vendors who are integral to the operations of our businesses. These vendors and service providers are also affected by COVID-19 and may be unable to deliver on their commitments which could impact our business.
- Fluctuations in foreign currency exchange rates may adversely impact our financial results.
- Overcapacity and competition in the cruise and land-based vacation industry may lead to a decline in our cruise sales, pricing and destination options.
- Inability to implement our shipbuilding programs and ship repairs, maintenance and refurbishments may adversely impact our business operations and the satisfaction of our guests.
The ordering of the risk factors set forth above is not intended to reflect our indication of priority or likelihood.
Forward-looking statements should not be relied upon as a prediction of actual results. Subject to any continuing obligations under applicable law or any relevant stock exchange rules, we expressly disclaim any obligation to disseminate, after the date of this document, any updates or revisions to any such forward-looking statements to reflect any change in expectations or events, conditions or circumstances on which any such statements are based.
Forward-looking and other statements in this document may also address our sustainability progress, plans, and goals (including climate change- and environmental-related matters), and the inclusion of such statements is not an indication that these contents are necessarily material to investors or required to be disclosed in the Company’s filings with the
CARNIVAL CORPORATION & PLC |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
2021 |
2020 |
2021 |
2020 |
||||||||||||
Revenues |
|||||||||||||||
Passenger ticket |
$ |
674 |
$ |
4 |
$ |
1,000 |
$ |
3,684 |
|||||||
Onboard and other |
613 |
30 |
908 |
1,910 |
|||||||||||
1,287 |
34 |
1,908 |
5,595 |
||||||||||||
Operating Costs and Expenses |
|||||||||||||||
Commissions, transportation and other |
153 |
41 |
269 |
1,139 |
|||||||||||
Onboard and other |
178 |
12 |
272 |
605 |
|||||||||||
Payroll and related |
475 |
217 |
1,309 |
1,780 |
|||||||||||
Fuel |
282 |
104 |
680 |
823 |
|||||||||||
Food |
107 |
9 |
187 |
413 |
|||||||||||
Ship and other impairments |
67 |
138 |
591 |
1,967 |
|||||||||||
Other operating |
560 |
169 |
1,346 |
1,518 |
|||||||||||
1,823 |
688 |
4,655 |
8,245 |
||||||||||||
Selling and administrative |
580 |
444 |
1,885 |
1,878 |
|||||||||||
Depreciation and amortization |
552 |
543 |
2,233 |
2,241 |
|||||||||||
|
226 |
— |
226 |
2,096 |
|||||||||||
3,180 |
1,676 |
8,997 |
14,460 |
||||||||||||
Operating Income (Loss) |
(1,893) |
(1,642) |
(7,089) |
(8,865) |
|||||||||||
Nonoperating Income (Expense) |
|||||||||||||||
Interest income |
2 |
3 |
12 |
18 |
|||||||||||
Interest expense, net of capitalized interest |
(348) |
(348) |
(1,601) |
(895) |
|||||||||||
Gains (losses) on debt extinguishment, net |
(298) |
(239) |
(670) |
(459) |
|||||||||||
Other income (expense), net |
(87) |
(12) |
(173) |
(52) |
|||||||||||
(731) |
(595) |
(2,433) |
(1,388) |
||||||||||||
Income (Loss) Before Income Taxes |
(2,624) |
(2,237) |
(9,522) |
(10,253) |
|||||||||||
Income Tax Benefit (Expense), Net |
4 |
15 |
21 |
17 |
|||||||||||
Net Income (Loss) |
$ |
(2,620) |
$ |
(2,222) |
$ |
(9,501) |
$ |
(10,236) |
|||||||
Earnings Per Share |
|||||||||||||||
Basic |
$ |
(2.31) |
$ |
(2.41) |
$ |
(8.46) |
$ |
(13.20) |
|||||||
Diluted |
$ |
(2.31) |
$ |
(2.41) |
$ |
(8.46) |
$ |
(13.20) |
|||||||
Weighted-Average Shares Outstanding – Basic |
1,135 |
922 |
1,123 |
775 |
|||||||||||
Weighted-Average Shares Outstanding – Diluted |
1,135 |
922 |
1,123 |
775 |
|
|||||||
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|||||||
BALANCE SHEET INFORMATION (in millions) |
2021 |
2020 |
|||||
Cash, cash equivalents and short-term investments |
$ |
9,139 |
$ |
9,513 |
|||
Debt (current and long-term) |
$ |
33,226 |
$ |
26,957 |
|||
Customer deposits (current and long-term) |
$ |
3,508 |
$ |
2,241 |
Three Months Ended |
Twelve Months Ended |
||||||||||||||
STATISTICAL INFORMATION |
2021 |
2020 |
2021 |
2020 |
|||||||||||
PCDs (in thousands) (b) |
5,960 |
(a) |
8,179 |
(a) |
|||||||||||
ALBDs (in thousands) (c) |
10,198 |
(a) |
14,603 |
(a) |
|||||||||||
Occupancy percentage (d) |
58.4% |
(a) |
56.0% |
(a) |
|||||||||||
Passengers carried (in thousands) |
851 |
(a) |
1,223 |
(a) |
|||||||||||
Fuel consumption in metric tons (in thousands) |
484 |
277 |
1,336 |
1,915 |
|||||||||||
Fuel cost per metric ton consumed |
$ |
590 |
$ |
377 |
$ |
515 |
$ |
430 |
|||||||
Notes to Statistical Information
(a) |
As a result of the pause in guest cruise operations in 2020, data for these metrics was not meaningful and was not included |
(b) |
PCD represents the number of cruise passengers on a voyage multiplied by the number of revenue-producing ship operating |
(c) |
ALBD is a standard measure of passenger capacity for the period that we use to approximate rate and capacity variances, |
(d) |
In accordance with cruise industry practice, occupancy is calculated using a denominator of ALBDs, which assumes two |
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Three Months Ended |
Twelve Months Ended |
||||||||||||||
(in millions) |
2021 |
2020 |
2021 |
2020 |
|||||||||||
Net income (loss) |
|||||||||||||||
|
$ |
(2,620) |
$ |
(2,222) |
$ |
(9,501) |
$ |
(10,236) |
|||||||
(Gains) losses on ship sales and impairments |
292 |
115 |
802 |
3,934 |
|||||||||||
(Gains) losses on debt extinguishment, net |
298 |
239 |
670 |
459 |
|||||||||||
Restructuring expenses |
7 |
5 |
13 |
47 |
|||||||||||
Other |
69 |
— |
86 |
3 |
|||||||||||
Adjusted net income (loss) |
$ |
(1,955) |
$ |
(1,862) |
$ |
(7,931) |
$ |
(5,793) |
Explanations of Non-GAAP Financial Measures
Non-GAAP Financial Measures
Net cruise cost reflects total cruise operating costs and expenses less: commissions, transportation and other; onboard and other; depreciation and amortization; and goodwill impairments.
We use adjusted net income (loss) as a non-GAAP financial measure of our cruise segments’ and the company’s financial performance. This non-GAAP financial measure is provided along with
We believe that gains and losses on ship sales, impairment charges, gains and losses on debt extinguishments, restructuring costs and other gains and losses are not part of our core operating business and are not an indication of our future earnings performance. Therefore, we believe it is more meaningful for these items to be excluded from our net income (loss), and accordingly, we present adjusted net income (loss) excluding these items.
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
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MEDIA CONTACT: Roger Frizzell, +1 305 406 7862; INVESTOR RELATIONS CONTACT: Beth Roberts, +1 305 406 4832