MIAMI, June 25, 2024 /PRNewswire/ -- Carnival Corporation & plc ((NYSE/LSE: CCL, NYSE:CUK) announced financial results for the second quarter 2024 and provided an updated outlook for the full year and an outlook for third quarter 2024. Second quarter net income improved by nearly $500 million compared to 2023 and adjusted net income outperformed March guidance by nearly $170 million (see "Non-GAAP Financial Measures" below). Record second quarter operating income of $560 million, nearly five times 2023 levels, on record second quarter revenues of $5.8 billion. Raised full year 2024 net yield guidance (in constant currency) to approximately 10.25 percent on continued strong demand and raised full year adjusted net income guidance by approximately $275 million. Cumulative booked position for the remainder of 2024 continues to be the best on record in both price (in constant currency) and occupancy. While early, cumulative booked position for full year 2025 is even higher than 2024 in both price (in constant currency) and occupancy. Total customer deposits reached an all-time high of $8.3 billion, surpassing the previous record by $1.1 billion. "We have made incredible strides in improving our commercial operations, strategically reallocating our portfolio composition and formulating growth plans, while strengthening even further our global team, the best in the business. Off the back of that effort, we closed yet another quarter delivering records, this time across revenues, operating income, customer deposits and booking levels, exceeding our guidance on every measure," commented Carnival Corporation & plc's Chief Executive Officer Josh Weinstein. "Based on continued strong demand trends, we are taking up our expectations for the year with net yields now forecasted to top ten percent and propelling us towards double-digit returns on invested capital. On our upwardly revised guidance, we will be on average around two-thirds of the way to achieving our three 2026 SEA Change targets after just one year. With two years remaining, it certainly gives us even more conviction in achieving these deliverables," Weinstein added. Second Quarter 2024 Results Net income was $92 million, or $0.07 diluted EPS, an increase of nearly $500 million compared to 2023. Adjusted net income of $134 million, or $0.11 adjusted EPS, outperformed March guidance by nearly $170 million, driven by higher ticket prices, higher onboard spending and the timing of expenses between quarters (see "Non-GAAP Financial Measures" below). Record second quarter operating income of $560 million, nearly five times 2023 levels. Record second quarter adjusted EBITDA of $1.2 billion, increasing over 75 percent compared to 2023 and outperforming March guidance by approximately $150 million (see "Non-GAAP Financial Measures" below). Record second quarter revenues of $5.8 billion, with record net yields (in constant currency) and record net per diems (in constant currency) both significantly exceeding 2023 levels (see "Non-GAAP Financial Measures" below). Gross margin yields increased by nearly 50 percent compared to 2023 and net yields (in constant currency) exceeded 2023 levels by over 12 percent. Net per diems (in constant currency) were up over 6 percent compared to 2023, driven by both higher ticket prices and higher onboard spending. Cruise costs per available lower berth day ("ALBD") increased 4.0 percent compared to 2023. Adjusted cruise costs excluding fuel per ALBD (in constant currency) were in line with prior year and better than March guidance in part due to identified cost savings with most of the favorability driven by the timing of expenses between the quarters (see "Non-GAAP Financial Measures" below). Total customer deposits reached an all-time high of $8.3 billion, surpassing the previous record by $1.1 billion ($7.2 billion as of May 31, 2023). Bookings "We are very pleased with the continued acceleration of demand for 2025 and beyond, which builds upon the fantastic achievements in 2024 thus far. This positive trajectory is a testament to the successful execution of our demand generation efforts and the delivery of exceptional vacation experiences once onboard," Weinstein noted. The company continues to experience strong bookings momentum driven by record booking volumes for 2025 sailings. While still early, the cumulative advanced booked position for full year 2025 is even higher than 2024 in both price (in constant currency) and occupancy. With less inventory remaining for sale for the remainder of 2024, the company achieved considerably higher prices (in constant currency) on bookings taken during the second quarter compared to the prior year, which is aligned with the company's yield management strategy. In fact, pricing for both its North America and Australia ("NAA") and Europe segments is running ahead of the prior year for each of the third and fourth quarters of 2024. Driven by the company's efforts to elongate the booking curve and favorable pricing trends, the company's cumulative booked position for the remainder of 2024 continues to be the best on record, with occupancy still nicely above 2023 levels at considerably higher prices (in constant currency). 2024 Outlook For the full year 2024, the company expects: Net yields (in constant currency) up approximately 10.25 percent compared to 2023, approximately 75 basis points better than March guidance, based on continued strength in demand and with occupancy at historical levels. Adjusted cruise costs excluding fuel per ALBD (in constant currency) approximately 0.5 percentage points better than March guidance. Adjusted EBITDA of approximately $5.83 billion, up nearly 40 percent compared to 2023, and better than March guidance by approximately $200 million. Adjusted net income of approximately $1.55 billion, better than March guidance by approximately $275 million. Adjusted return on invested capital ("ROIC") of approximately 10 percent. For the third quarter of 2024, the company expects: Net yields (in constant currency) up approximately 8.0 percent compared to 2023 levels. Adjusted cruise costs excluding fuel per ALBD (in constant currency) up approximately 4.5 percent compared to the third quarter of 2023. Adjusted EBITDA of approximately $2.66 billion, up 20 percent compared to the third quarter of 2023. Adjusted net income of approximately $1.58 billion, up 35 percent compared to the third quarter of 2023. See "Guidance" and "Reconciliation of Forecasted Data" for additional information on the company's 2024 outlook. Strategic Portfolio Optimization As previously announced, the company will sunset the P&O Cruises (Australia) brand and fold the Australia operations into Carnival Cruise Line in March 2025. This realignment will further optimize the composition of the company's global brand portfolio and will strengthen its performance in the South Pacific through numerous operational efficiencies. This change is the latest in a series of strategic moves designed to increase guest capacity for Carnival Cruise Line, America's cruise line and the highest-returning brand in the company's global portfolio. This will result in the addition of nine ships to Carnival Cruise Line's fleet since 2019, including the successful shift of three vessels from sister brand Costa Cruises. Through these strategic asset reallocations and the company's commitment to restarting its moderate newbuild growth for its highest returning brands beginning with Carnival Cruise Line, the company will increase Carnival Cruise Line as a percentage of its portfolio from 29 percent as of 2019 to 37 percent in 2028. Financing and Capital Activity "Our second quarter refinancing, repricing and debt prepayment activities are all aligned with our path to investment grade as we continue to manage down debt and interest expense, while reducing the complexity of our capital structure. During the last fifteen months, we prepaid $6.6 billion of debt, which saves a significant amount of interest expense over time while reducing our secured debt by nearly 40 percent," commented Carnival Corporation & plc's Chief Financial Officer David Bernstein. "Looking forward, we expect substantial free cash flow driven by our ongoing operational execution and the lowest newbuild order book in decades to deliver continued improvements in our leverage metrics and balance sheet," Bernstein added. The company continues its efforts to proactively manage its debt profile. Since February 29, 2024, the company has: Prepaid $1.6 billion of its first-priority senior secured term loans Repriced approximately $1.75 billion of its first-priority senior secured term loan facility maturing in 2028 and approximately $1.0 billion of its senior secured term loan facility maturing in 2027 Completed a $535 million private offering of senior unsecured notes due 2030 from which the proceeds, together with cash on hand, were used to redeem its senior unsecured notes due 2026 These transactions simplified the company's capital structure and will reduce net interest expense by $55 million in 2024 and $85 million on an annualized basis. The company ended the quarter with $4.6 billion of liquidity. As of May 31, 2024, the company's outstanding debt maturities for the remainder of the year, 2025, and 2026 were $1.2 billion, $1.7 billion, and $2.8 billion. The second quarter generated cash from operations of $2.0 billion and adjusted free cash flow of $1.3 billion. The company  drew down on an export credit facility, continuing its strategy to finance its newbuild program at preferential interest rates. Other Recent Highlights  Completed the installation of SpaceX's Starlink across its fleet, transforming the onboard connectivity experience and rivaling on-land connectivity. Completed the fleetwide rollout of OneOcean, an environmental compliance and passage planning software, setting a new standard for journey and environmental planning. Released its 14th annual sustainability report, "Sustainable from Ship to Shore," detailing meaningful progress in its six sustainability focus areas and surpassing several sustainability goals well in advance. Recognized by Forbes as one of America's Best Employers for Diversity for 2024. Carnival Corporation & plc and its AIDA Cruises brand were honored with three prestigious Environmental, Social and Governance Shipping Awards for 2024. Cunard welcomed Queen Anne, the line's first new ship in 14 years, and celebrated its phenomenal naming ceremony with legendary tenor Andrea Bocelli. In an industry first, a city, Liverpool – Cunard's birthplace and spiritual home – was named godparent of the ship. Cunard achieved record-breaking bookings following the successful launch of Queen Anne, reporting more guests booked in May than any equivalent period on record. P&O Cruises (UK) generated significant wide-spread media attention as the headline sponsor of BAFTA (British Academy of Film and Television Arts) Television Awards for a second year in a row as part of its multi-year partnership. Celebrated spectacular naming ceremonies for Carnival Cruise Line's newest ship, Carnival Firenze, named by Jonathan Bennett fresh off his starring on Broadway in the hit show Spamalot, and Princess Cruises' most luxurious ship, Sun Princess, named by the great Hannah Waddington of Ted Lasso fame. Holland America Line debuted "Glacier Day" on its Alaska cruises, reinforcing its commitment to providing guests with awe-inspiring glacier experiences with breathtaking sights, scenic commentary, informational viewing stations and authentic Alaskan cuisine onboard. Guidance (See "Reconciliation of Forecasted Data") 3Q 2024 Full Year 2024 Year over year change Current Dollars Constant Currency Current Dollars Constant Currency Net yields Approx. 8.0% Approx. 8.0% Approx. 10.5% Approx. 10.25% Adjusted cruise costs excluding fuel per ALBD Approx. 4.5% Approx. 4.5% Approx. 4.75% Approx. 4.5%   3Q 2024 Full Year 2024 ALBDs (in millions) (a) 25.2 95.7 Capacity growth compared to prior year 6.2 % 4.8 % Fuel consumption in metric tons (in millions) 0.7 3.0 Fuel cost per metric ton consumed (excluding European Union Allowance ("EUA")) $                     675 $                     675 Fuel expense (including EUA expense) (in billions) $                    0.52 $                    2.04 Depreciation and amortization (in billions) $                    0.66 $                    2.58 Interest expense, net of capitalized interest and interest income (in billions) $                    0.42 $                    1.69 Adjusted EBITDA (in billions) Approx. $2.66 Approx. $5.83 Adjusted net income (loss) (in billions) Approx. $1.58 Approx. $1.55 Adjusted earnings per share - diluted (b) Approx. $1.15 Approx. $1.18 Weighted-average shares outstanding - basic 1,267 1,273 Weighted-average shares outstanding - diluted 1,399 1,398 (a)  See "Notes to Statistical Information" (b)  Diluted adjusted earnings per share includes the add-back of dilutive interest expense related to the company's convertible notes of $25 million and $94 million for the third quarter of 2024 and full year 2024. Currencies (USD to 1) 3Q 2024 Full Year 2024 AUD                                                                                             $                           0.66 $                           0.66 CAD $                           0.73 $                           0.73 EUR $                           1.07 $                           1.08 GBP $                           1.27 $                           1.27   Sensitivities (impact to adjusted net income (loss) in millions) 3Q 2024 Remainder of 2024 1% change in net yields $                             54 $                             97 1% change in adjusted cruise costs excluding fuel per ALBD $                             26 $                             53 1% change in currency exchange rates $                             10 $                             15 10% change in fuel price $                             50 $                             98 100 basis point change in variable rate debt (including derivatives) — $                             23 Capital Expenditures For the remainder of 2024, contracted newbuild capital expenditures are $0.1 billion and non-newbuild capital expenditures are $1.0 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 net income (loss) •  Booking levels •  Adjusted EBITDA •  Occupancy •  Adjusted earnings per share •  Interest, tax and fuel expenses •  Adjusted free cash flow •  Currency exchange rates •  Net per diems •  Goodwill, ship and trademark fair values •  Net yields •  Liquidity and credit ratings •  Adjusted cruise costs per ALBD •  Investment grade leverage metrics •  Adjusted cruise costs excluding fuel per ALBD •  Estimates of ship depreciable lives and residual values •  Adjusted return on invested capital Because forward-looking statements involve risks and uncertainties, there are many factors that could cause our actual results, performance or achievements to differ materially from those expressed or implied by our forward-looking statements. This note contains important cautionary statements of the known factors that we consider could materially affect the accuracy of our forward-looking statements and adversely affect our business, results of operations and financial position. 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 May 31, Six Months Ended May 31, 2024 2023 2024 2023 Revenues   Passenger ticket $         3,754 $         3,141 $         7,370 $         6,011   Onboard and other 2,027 1,770 3,817 3,332 5,781 4,911 11,187 9,343 Operating Expenses   Commissions, transportation and other 732 619 1,552 1,274   Onboard and other 628 549 1,178 1,033   Payroll and related 614 601 1,237 1,183   Fuel 525 489 1,030 1,024