CARNIVAL CORPORATION 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. 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: •Pricing
•Estimates of ship depreciable lives and residual
values
•Booking levels •Goodwill, ship and trademark fair values
•Occupancy •Liquidity and credit ratings
•Interest, tax and fuel expenses •Adjusted earnings per share
•Currency exchange rates •Impact of the COVID-19 coronavirus global
pandemic on our financial condition and results
of operations
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, the COVID-19 outbreak. 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, which impacts our ability to obtain
acceptable financing to fund resulting reductions in cash from operations. The
current, and uncertain future, impact of the COVID-19 outbreak, 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.
•As a result of the COVID-19 outbreak, we may be out of compliance with one or
more maintenance covenants in certain of our debt facilities, with the next
testing date of November 30, 2022 .
•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 as well
as adverse weather conditions and other natural disasters 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.
•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, including the recent ransomware incidents, 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.
•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.
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Table of C ontents •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.
Recent Developments
Resumption of Guest Operations
The company is uniquely positioned for a phased resumption in cruise travel
given its multiple brands which can each be restarted independently and tailored
to the environment of their respective source market.
Health and Safety Protocols
Initial cruises are taking place with adjusted passenger capacity and enhanced health protocols developed with government and health authorities, and guidance from the company's roster of medical and scientific experts. The company has been working with a number of world-leading public health, epidemiological and policy experts to support its ongoing efforts with enhanced health and safety protocols to help protect against and mitigate the impact of COVID-19 during cruise vacations. The company's brands have a comprehensive set of health and hygiene protocols that facilitate a safe and healthy return to cruise vacations. These enhanced protocols are modeled after shoreside health and mitigation guidelines as provided by each brand's respective country, and approved by all relevant regulatory authorities. Protocols will be updated based on evolving scientific and medical knowledge related to mitigation strategies. In addition to the jurisdictions associated with the restart plans noted above, the company continues to work closely with governments and health authorities in other parts of the world to ensure that its health and safety protocols will also comply with the requirements of each location.
Update on Liquidity
Refer to "Liquidity, Financial Condition and Capital Resources."
Refer to "Risk Factors" - "COVID-19 has had, and is expected to continue to have, a significant impact on our financial condition and operations, which impacts our ability to obtain acceptable financing to fund resulting reductions in cash from operations. The current, and uncertain future, impact of the COVID-19 outbreak, 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."
New Accounting Pronouncements
Refer to Note 1 - "General, Accounting Pronouncements" of the consolidated financial statements for additional discussion regarding accounting pronouncements.
Critical Accounting Estimates
For a discussion of our critical accounting estimates, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" that is included in the Form 10-K.
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Table of C ontents Seasonality
Our passenger ticket revenues are seasonal. Historically, demand for cruises has
been greatest during our third quarter, which includes the Northern Hemisphere
summer months, although 2021 will continue to be adversely impacted by COVID-19.
This higher demand during the third quarter results in higher ticket prices and
occupancy levels and, accordingly, the largest share of our operating income is
earned during this period. This historical trend has been disrupted by the pause
in global cruise operations. In addition, substantially all of Holland America
Princess Alaska Tours' revenue and net income (loss) is generated from May
through September in conjunction with
Statistical Information
Three Months Ended February
28/29,
2021 2020
Fuel consumption in metric tons (in thousands) 262 831
Fuel cost per metric ton consumed $ 392 $ 477
Currencies (USD to 1)
AUD $ 0.77 $ 0.68
CAD $ 0.78 $ 0.76
EUR $ 1.21 $ 1.10
GBP $ 1.36 $ 1.31
RMB $ 0.15 $ 0.14 We paused our guest cruise operations in
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