October 25, 2020

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Carnival Corporation & plc Provides a Business Update

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MIAMI, Oct. eight, 2020 /PRNewswire/ — Carnival Company & plc (NYSE/LSE: CCL NYSE: CUK) gives a organization update.

Carnival Company & plc President and Main Govt Officer Arnold Donald noted, “We have occur whole circle from initiating a suspension in the early days of the pandemic, to transitioning the fleet into a pause position, right sizing our firm and, now, embarking on the phased resumption of guest operations, underway in two of our environment top cruise models, Costa in Italy and AIDA in Germany. We have accelerated the sale of much less successful ships, enabling us to capitalize on pent up demand from customers on minimized capability and structurally lessen our price tag foundation, when retaining our most funds building assets. We are having aggressive actions controlling the equilibrium sheet and cutting down capability to situation us to climate this disruption and also emerge a leaner, far more successful company, reinforcing our sector top situation.”

Resumption of Guest Operations

In the facial area of the worldwide effects of COVID-19, the company paused its guest cruise operations in mid-March. The company resumed restricted guest operations previous month, with Costa Cruises (“Costa”) successful voyages on two of its ships, Costa Deliziosa and Costa Diadema. The company is continuing the restricted resumption of its guest cruise operations with sailings on added Costa ships soon, as very well as with sailings on AIDA Cruises (“AIDA”) which are expected to begin up coming 7 days. These models are commencing the firm’s expected gradual, phased-in resumption of guest cruise operations. The initial cruises will go on to acquire position with altered passenger capability and enhanced well being protocols created with federal government and well being authorities, and steerage from our roster of health care and scientific authorities.

Other models and ships are envisioned to return to provider more than time to deliver company with unmatched joyful holidays in a way dependable with the firm’s optimum priorities, which are compliance, environmental security and the well being, protection and very well-being of its company, crew, shoreside workforce and the persons in the communities its ships pay a visit to. Numerous of the firm’s models supply the the vast majority of their company from the geographical region in which they operate. In the current ecosystem, the company believes this will advantage it in resuming guest cruise operations.

Health and fitness and Security Protocols

Operating with worldwide and nationwide well being authorities and health care authorities, Costa and AIDA have a complete set of well being and cleanliness protocols to assist facilitate a safe and sound and balanced return to cruise holidays. Equally models are furnishing company with in depth facts about enhanced protocols, which are modeled right after shoreside well being and mitigation pointers as presented by every brand’s respective region, and authorised by the flag condition, Italy. Protocols will be up to date primarily based on evolving scientific and health care understanding related to mitigation techniques.

Costa is the initially cruise company to earn the Biosafety Rely on Certification from Registro Italiano Navale (“RINA”). The certification course of action examined all features of lifetime onboard and ashore and assessed the compliance of the technique with techniques aimed at the prevention and handle of bacterial infections. Costa’s complete set of steps and techniques implemented on the ships that resumed operations, deal with essential places this kind of as crew well being and protection, the booking course of action, guest actions, leisure and dining, and health care treatment on board, as very well as pre-boarding, embarkation and disembarkation operations, which involves tests for all company prior to embarkation.

The company is inspired that the Facilities for Condition Control’s (“CDC“) No Sail Purchase was prolonged by only a person month to October 31, 2020, the very same day as the industry’s conclude of voluntary suspension of passenger operations. For numerous months, cruise traces have worked with authorities around the globe to develop unprecedented community well being protocols and are hopeful these steps will direct to a gradual, phased resumption of cruising by the conclude of the calendar year. There is continuous dialogue ongoing in the United States for a possible cruise restart and the company is hopeful that the sector is in a situation to collaborate with the CDC and administration to resume cruising from the United States this calendar year.

A lot more broadly, as the comprehending of COVID-19 proceeds to evolve, the company has been performing with a selection of environment-top community well being, epidemiological and coverage authorities to assist its ongoing efforts with enhanced protocols and techniques for the return of cruise holidays. These advisors will go on to deliver steerage primarily based on the hottest scientific evidence and ideal procedures for security and mitigation.

Optimizing the Foreseeable future Fleet

The company expects future capability to be moderated by the phased re-entry of its ships, the removing of capability from its fleet and delays in new ship deliveries. Considering the fact that the pause in guest operations, the company has accelerated the removing of ships in fiscal 2020 which were earlier envisioned to be offered more than the ensuing decades. The company now expects to dispose of 18 ships, ten of which have now remaining the fleet. In total, the 18 ships stand for close to 12 p.c of pre-pause capability and only 3 p.c of working cash flow in 2019. The sale of much less successful ships will final result in future working expense efficiencies of close to two p.c for every obtainable lessen berth working day (“ALBD”) and a reduction in gas usage of close to a person p.c for every ALBD. The company expects only two of the 4 ships at first scheduled for shipping in 2020, subsequent the get started of the pause, to be delivered prior to the conclude of fiscal 2020, such as Enchanted Princess which was delivered previous 7 days. The company at this time expects only 5 of the 9 ships at first scheduled for shipping in fiscal 2020 and 2021 to be delivered prior to the conclude of fiscal calendar year 2021. The company at this time expects 9 cruise ships and two scaled-down expedition ships of the 13 ships at first scheduled for shipping prior to the conclude of fiscal calendar year 2022 to be delivered by then. 

Primarily based on the actions taken to day and the scheduled newbuild deliveries as a result of 2022, the firm’s fleet will be far more successful with a roughly 13 p.c larger common berth sizing for every ship and an common age of 12 decades in 2022 compared to 13 decades, in every case as in comparison to 2019.

Update on Bookings 

When the company believes bookings in the initially fifty percent of 2021 replicate anticipations of the phased resumption of its guest cruise operations and expected itinerary adjustments, as of September 20, 2020, cumulative advanced bookings for the 2nd fifty percent of 2021 capability at this time obtainable for sale are at the greater conclude of the historical assortment. The company believes this demonstrates the extended-phrase possible demand from customers for cruising. Pricing on these bookings are lessen by mid-single digits compared to the 2nd fifty percent of 2019, on a comparable foundation, reflecting the effect of future cruise credits (“FCC”) from earlier cancelled cruises being used. The company proceeds to acquire bookings for the two 2021 and 2022.

The company is furnishing versatility to company with bookings on sailings cancelled by letting company to get enhanced FCCs or elect to get refunds in funds. Improved FCCs maximize the value of the guest’s authentic booking or deliver incremental onboard credits. As of September 20, 2020, close to forty five p.c of company affected by the firm’s schedule adjustments have acquired enhanced FCCs and close to fifty five p.c have requested refunds. 

Complete customer deposits equilibrium at August 31, 2020, was $two.4 billion, the the vast majority of which are FCCs, in comparison to total customer deposits equilibrium of $two.nine billion at May perhaps 31, 2020. The drop in customer deposits is dependable with previous anticipations. As of August 31, 2020, the current portion of customer deposits was $two.1 billion with $.one billion relating to fourth quarter sailings. Somewhere around 60 p.c of bookings taken in the course of the 3 months ended September 20, 2020 were new bookings as opposed to FCC re-bookings, irrespective of negligible promotion or marketing and advertising.

Not too long ago, Yield Optimization and Demand Analytics (“YODA”), the firm’s slicing-edge dynamic selling price suggestions and stock management system, was picked as a finalist for an Operations Investigation award termed the Franz Edelman. As a company concentrated on generating unforgettable activities for its company, it really is really an achievement to be recognized as a finalist to this award along with providers like Intel, IBM, and Walmart.

Escalating Liquidity 

Carnival Company & plc Main Financial Officer and Main Accounting Officer David Bernstein noted, “As of the conclude of the 3rd Quarter, we had more than $eight billion of obtainable funds and added funding alternatives to opportunistically more improve our liquidity profile. We have lately begun to improve our cash framework with the early extinguishment of financial debt on favorable financial conditions and the extension of financial debt maturities. In addition, with the re-launch of our fleet, we saw a very good option to improve our equilibrium sheet with an fairness giving. So previous month we declared an at-the-market or ATM fairness giving system. However, once we thoroughly resume guest cruise operations, we hope our funds move possible will make a route to more bolster our equilibrium sheet and return us to an expenditure grade credit rating score more than time.”

Due to the pause in guest operations, the company has taken major actions to protect funds and safe added funding to maximize its liquidity. Considering the fact that March, the company has raised $12.5 billion as a result of a sequence of funding transactions, such as the subsequent transactions given that May perhaps 31, 2020:

  • Borrowed an combination principal amount of money of $two.eight billion in two tranches under a initially priority senior secured phrase mortgage facility on June 30, 2020.
  • Issued $one.three billion combination principal amount of money of 2nd priority senior secured notes in two tranches on July 20, 2020.
  • Entered into Financial debt Holiday getaway amendments, deferring particular principal repayments if not thanks as a result of March 2021. (Certain export credit rating companies have presented a 12-month financial debt amortization and economical covenant getaway (“Financial debt Holiday getaway”)).
  • Accomplished a registered direct giving of ninety nine.two million shares of Carnival Corporation’s common inventory and applied the proceeds to repurchase $886 million of its 5.75% Convertible Senior Notes thanks 2023 on August 10, 2020.
  • Issued $900 million combination principal amount of money of 2nd priority senior secured notes on August 18, 2020.
  • In September 2020 we entered into an fairness distribution agreement with product sales agents pursuant to which we may well, from time to time, give and provide shares of Carnival Corporation’s common inventory obtaining an combination giving selling price of up to $one. billion as a result of the product sales agents (the “ATM Giving”). As of October two, 2020, we offered 23 million shares for web proceeds of $352 million under the ATM Giving.
  • In September 2020, we borrowed $610 million under an export credit rating facility.

As of August 31, 2020, the company has a total of $eight.2 billion of funds and funds equivalents.

At present, the company is unable to forecast when the total fleet will return to ordinary operations, and as a final result, unable to deliver an earnings forecast. The pause in guest operations proceeds to have a content negative effects on all features of the firm’s organization, such as the firm’s liquidity, economical situation and benefits of operations. The company expects a web reduction on the two a U.S. GAAP and altered foundation for the quarter and calendar year ending November 30, 2020.

The firm’s regular monthly common funds burn up price for the 3rd quarter 2020 was $770 million, which was in line with the expected regular monthly funds burn up price. The company expects the regular monthly common funds burn up price for the fourth quarter of 2020 to be close to $530 million. This benefits in an common regular monthly burn up price for the 2nd fifty percent of the calendar year of $650 million as earlier disclosed. This price involves close to $250 million of ongoing ship working and administrative bills, performing cash adjustments (excluding adjustments in customer deposits), interest expense and committed cash expenditures (web of unfunded export credit rating facilities) and also excludes scheduled financial debt maturities as very well as other funds collateral to be presented. The company proceeds to discover prospects to more lessen its regular monthly funds burn up price.

The company estimates non-newbuild cash expenditures in the course of the fourth quarter of 2020 to be close to $130 million. As of August 31, 2020, the firm’s scheduled financial debt maturities are as follows:

(in billions)

4Q 2020

1Q 2021

2Q 2021

3Q 2021

4Q 2021

Principal Payments (a)

$

one.

$

.5

$

.three

(b)

$

.6

$

.two

(b)

(a)

Excluding the revolving facility. As of August 31, 2020, borrowings under the Revolving Facility were $three. billion, which were drawn in March 2020 for an initial phrase of 6 months. The maturities for these borrowings were prolonged in September 2020 for an added 6 months as a result of March 2021. We may well re-borrow this kind of amounts issue to pleasure of the disorders in the revolving facility agreement.

(b)

The company has principal equilibrium of $.5 billion and $.eight billion of financial debt outstanding as of August 31, 2020, if not thanks as a result of 2032, for which covenant waivers expire in the course of the 2nd quarter 2021 and fourth quarter 2021, respectively. The company is performing on extending these covenant waivers. If the covenant waiver extensions are not acquired, the company would be expected to prepay the outstanding principal equilibrium.

Financial Statements

Refer to the Sort 10-Q dated October eight, 2020 for the firm’s 3rd quarter 2020 consolidated economical statements.

Convention Get in touch with 
The company has scheduled a conference phone with analysts at 10:00 a.m. EDT (three:00 p.m. BST) nowadays to deliver a organization update. This phone can be listened to dwell, and added facts can be acquired, by way of Carnival Company & plc’s internet site at www.carnivalcorp.com and www.carnivalplc.com.

Carnival Company & plc is a person of the world’s most significant leisure journey providers with a portfolio of 9 of the world’s top cruise traces. With operations in North The usa, Australia, Europe and Asia, its portfolio features – Carnival Cruise Line, Princess Cruises, Holland The usa Line, P&O Cruises (Australia), Seabourn, Costa Cruises, AIDA Cruises, P&O Cruises (British isles) and Cunard.

Further facts can be discovered 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 Take note Relating to Things That May perhaps Influence Foreseeable future Results

Carnival Company and Carnival plc and their respective subsidiaries are referred to collectively in this document as “Carnival Company & plc,” “our,” “us” and “we.” Some of the statements, estimates or projections contained in this document are “forward-looking statements” that require challenges, uncertainties and assumptions with respect to us, such as some statements regarding future benefits, operations, outlooks, plans, aims, track record, funds flows, liquidity and other situations which have not but transpired. These statements are meant to qualify for the safe and sound harbors from liability presented by Part 27A of the Securities Act of 1933 and Part 21E of the Securities Exchange Act of 1934. All statements other than statements of historical specifics are statements that could be considered forward-looking. These statements are primarily based on current anticipations, estimates, forecasts and projections about our organization and the sector in which we operate and the beliefs and assumptions of our management. We have attempted, every time doable, to discover these statements by using text like “will,” “may well,” “could,” “need to,” “would,” “believe,” “is dependent,” “hope,” “goal,” “foresee,” “forecast,” “job,” “future,” “intend,” “plan,” “estimate,” “concentrate on,” “show,” “outlook,” and very similar expressions of future intent or the negative of this kind of conditions.

Forward-looking statements involve those statements that relate to our outlook and economical situation such as, but not restricted to, statements regarding: 

•  Internet earnings yields

•  Estimates of ship depreciable life and residual values

•  Reserving amounts

•  Goodwill, ship and trademark good values

•  Pricing and occupancy

•  Liquidity

•  Curiosity, tax and gas bills

•  Adjusted earnings for every share

•  Forex exchange fees

•  Impact of the COVID-19 coronavirus worldwide pandemic on our economical ailment and benefits of operations

•  Internet cruise expenditures, excluding gas for every obtainable lessen berth working day

Since forward-looking statements require challenges and uncertainties, there are numerous aspects that could induce our actual benefits, overall performance or achievements to differ materially from those expressed or implied by our forward-looking statements. This take note consists of critical cautionary statements of the recognized aspects that we contemplate could materially affect the precision of our forward looking statements and adversely affect our organization, benefits of operations and economical situation. Moreover, numerous of these challenges and uncertainties are at this time amplified by and will go on to be amplified by, or in the future may well be amplified by, the COVID-19 outbreak. It is not doable to forecast or discover all this kind of challenges. There may well be added challenges that we contemplate immaterial or which are unidentified. These aspects involve, but are not restricted to, the subsequent:

  • COVID-19 has had, and is envisioned to go on to have, a major effects on our economical ailment and operations, which impacts our capability to acquire satisfactory funding to fund resulting reductions in funds from operations. The current, and uncertain future, effects of the COVID-19 outbreak, such as its effect on the capability or drive of persons to journey (such as on cruises), is envisioned to go on to effects our benefits, operations, outlooks, plans, aims, expansion, track record, litigation, funds flows, liquidity, and inventory selling price
  • As a final result of the COVID-19 outbreak, we may well be out of compliance with a upkeep covenant in particular of our financial debt facilities, for which we have waivers for the period as a result of March 31, 2021 with the up coming tests day of May perhaps 31, 2021
  • Globe situations impacting the capability or drive of persons to journey may well direct to a drop in demand from customers for cruises
  • Incidents regarding our ships, company or the cruise family vacation sector as very well as adverse climate disorders and other all-natural disasters may well effects the pleasure of our company and crew and direct to reputational harm
  • Changes in and non-compliance with legislation and regulations under which we operate, this kind of as those relating to well being, ecosystem, protection and protection, info privateness and security, anti-corruption, financial sanctions, trade security and tax may well direct to litigation, enforcement actions, fines, penalties, and reputational harm
  • Breaches in info protection and lapses in info privateness as very well as disruptions and other damages to our principal workplaces, facts technological innovation operations and technique networks, such as the the latest ransomware incident, and failure to hold speed with developments in technological innovation may well adversely effects our organization operations, the pleasure of our company and crew and direct to reputational harm
  • Capability to recruit, develop and keep qualified shipboard staff who dwell absent from home for prolonged intervals of time may well adversely effects our organization operations, guest providers and pleasure
  • Raises in gas prices, adjustments in the varieties of gas consumed and availability of gas offer may well adversely effects our scheduled itineraries and expenditures
  • Fluctuations in overseas forex exchange fees may well adversely effects our economical benefits
  • Overcapacity and level of competition in the cruise and land-primarily based family vacation sector may well direct to a drop in our cruise product sales, pricing and place selections
  • Geographic locations in which we try out to expand our organization may well be gradual to develop or finally not develop how we hope
  • Incapability to implement our shipbuilding courses and ship repairs, upkeep and refurbishments may well adversely effects our organization operations and the pleasure of our company

The buying of the chance aspects set forth higher than is not meant to replicate our sign of priority or chance. 

Forward-looking statements need to not be relied upon as a prediction of actual benefits. Subject matter to any continuing obligations under relevant regulation or any relevant inventory exchange procedures, we expressly disclaim any obligation to disseminate, right after the day of this document, any updates or revisions to any this kind of forward-looking statements to replicate any alter in anticipations or situations, disorders or instances on which any this kind of statements are primarily based.

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Resource Carnival Company & plc

MEDIA Get in touch with: Roger Frizzell, +one 305 406 7862 Investor RELATIONS Get in touch with: Beth Roberts, +one 305 406 4832

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