Carnival Corp. (CCL) discloses summary financial information for quarter ended February

March 19, 2020 5:25 PM EDT

Carnival Corp. (NYSE: CCL) disclosed:

On March 19, 2020, Carnival Corporation & Carnival plc (the “Corporation”) disclosed summary financial information for the quarter ended February 29, 2020.

The Corporation is furnishing this Form 8-K 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.

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.

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.

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