Carnival (CCL) - 2025 Q3 - Quarterly Results

Executive Summary & Highlights Carnival Corporation & plc achieved record financial performance in Q3 2025, exceeding guidance, driven by strong demand and strategic initiatives, while setting a positive outlook for future growth Third Quarter 2025 Performance Overview Carnival Corporation & plc achieved all-time high financial results in Q3 2025, with record net income and revenues, exceeding guidance and raising the full-year 2025 outlook. Strong demand and onboard spending drove significant improvements in net yields and adjusted return on invested capital - Achieved all-time high net income of $1.9 billion and adjusted net income of $2.0 billion, surpassing previous records[1][7] - Delivered record revenues of $8.2 billion, marking the tenth consecutive quarter of record revenues[7][8] - Net yields (in constant currency) improved by 4.6% on a same-ship basis, outperforming June guidance[3][8] - Adjusted return on invested capital reached 13%, the highest in nearly 20 years[4] Strategic Achievements & Future Outlook The company successfully launched its new exclusive destination, Celebration Key, which received positive guest reviews. The strong booking momentum for 2026 and 2027, coupled with ongoing efforts to increase net yields, positions Carnival for continued growth and improved margins - Welcomed the new exclusive destination, Celebration Key, set to host eight million guest visits next year[4] - Cumulative advanced booked position for 2026 remains strong, in line with 2025 record levels and at historical high prices (in constant currency)[7] - Management believes there is ample opportunity to increase same-ship net yields and further close the price-to-value gap against land-based vacation alternatives[5] Third Quarter 2025 Financial Results Carnival Corporation & plc reported record net income, adjusted net income, and revenues for Q3 2025, driven by strong operational performance and demand Key Financial Metrics Carnival reported record net income and adjusted net income for Q3 2025, exceeding previous records and guidance. Revenues also reached an all-time high, driven by strong demand. The company's adjusted EBITDA also hit a record high Third Quarter 2025 Key Financial Metrics | Metric | Q3 2025 (USD) | Change vs. 2024 (USD) | Previous Record (USD) | Outperformance vs. June Guidance (USD) | | :-------------------------------- | :------------ | :-------------------- | :-------------------- | :------------------------------------- | | Net Income (USD) | $1.9 billion | +$116 million | 2019 | - | | Adjusted Net Income (USD) | $2.0 billion | - | 2019 (nearly 10% higher) | +$182 million | | Diluted EPS (USD) | $1.33 | - | - | - | | Adjusted EPS (USD) | $1.43 | - | - | - | | Revenues (USD) | $8.2 billion | +$250 million | - | - | | Adjusted EBITDA (USD) | $3.0 billion | - | - | - | Operational Performance Indicators Operational performance in Q3 2025 showed strong net yield growth, outperforming guidance, while cruise costs increased. Notably, fuel consumption per ALBD decreased due to efficiency efforts, and customer deposits reached a new record Third Quarter 2025 Operational Performance Indicators | Metric | Q3 2025 | Change vs. 2024 | Outperformance vs. June Guidance | | :------------------------------------------------ | :------ | :---------------- | :------------------------------- | | Gross Margin Yields (%) | 6.4% higher | - | - | | Net Yields (Constant Currency, %) | 4.6% higher | - | +1.1 points | | Cruise Costs per ALBD (%) | 4.6% increase | - | - | | Adjusted Cruise Costs Excl. Fuel per ALBD (Constant Currency, %) | 5.5% increase | - | +1.5 points better | | Fuel Consumption per ALBD (%) | 5.2% decrease | - | - | | Record Customer Deposits (USD) | $7.1 billion | - | - | Bookings & Future Outlook Carnival Corporation & plc reports strong booking trends for 2026 and 2027, with increased volumes and historically high prices, leading to a raised full-year 2025 financial outlook Booking Trends Booking trends have continued to strengthen since May, with higher volumes exceeding capacity growth. The company has built a strong base for 2026 with bookings in line with 2025 record levels but at historically high prices, and 2027 bookings are off to a record start - Booking volumes since May have been higher than last year and are outpacing capacity growth[9] - Nearly half of 2026 is booked, consistent with 2025 record levels at historical high prices (in constant currency) for both North America and Europe segments[9] - 2027 has achieved record booking volumes during the third quarter[9] Full Year and Fourth Quarter 2025 Outlook Carnival has raised its full-year 2025 adjusted net income guidance for the third consecutive quarter, now expecting a nearly 55% year-over-year increase. The outlook for Q4 2025 also projects significant growth in adjusted net income and improved net yields - Full year 2025 adjusted net income guidance raised for the third consecutive quarter, now expected to be up nearly 55% year over year[7][12] - Full year 2025 adjusted EBITDA is expected to be approximately $7.05 billion, up 15% compared to 2024 and better than June guidance[12] - Fourth quarter 2025 adjusted net income is expected to be up over 60% compared to Q4 2024[12] - Full year 2025 net yields (in constant currency) are expected to be up approximately 5.3% compared to 2024, 0.3 percentage points better than June guidance[12] Financing & Balance Sheet Management Carnival Corporation & plc actively managed its debt through refinancing and prepayments, simplifying its capital structure and improving leverage metrics, leading to a credit rating upgrade Debt Refinancing and Capital Structure Carnival continued its aggressive refinancing strategy, opportunistically refinancing over $11 billion of debt and prepaying another $1 billion this year. This has simplified its capital structure, reduced interest expense, and managed future debt maturities, including a $4.5 billion refinancing in Q3 - Refinanced $4.5 billion of debt during the quarter, simplifying its capital structure and prepaid an additional $0.7 billion of debt[7] - Opportunistically refinanced over $11 billion of debt and prepaid another $1 billion this year[10] - Issued two senior unsecured notes: $1.2 billion at 4.125% due 2031 and $3.0 billion at 5.75% due 2032, and entered into a $400 million loan[10] Credit Rating and Leverage Metrics The company's improved leverage metrics led to a credit rating upgrade by Moody's. Carnival is nearing its near-term target of achieving investment-grade leverage metrics and aims to drive its net debt to adjusted EBITDA ratio to under 3x - Moody's upgraded the company's credit rating and maintained a positive outlook[11] - Achieved a 3.6x net debt to adjusted EBITDA ratio as of August 31, 2025, an improvement from 4.7x as of August 31, 2024[12] - Targeting a net debt to adjusted EBITDA ratio of under 3x[10] - Ended the quarter with $26.5 billion of total debt[12] Other Recent Highlights Carnival Corporation & plc celebrated new destination and ship launches, received significant brand recognition, and published its 15th annual sustainability report New Destinations & Ship Launches Carnival successfully opened Celebration Key, its new exclusive destination, hosting nearly half a million guests. Princess Cruises also welcomed its new ship, Star Princess, a sister to the award-winning Sun Princess - Successfully opened Celebration Key on Grand Bahama Island, featuring the Caribbean's largest freshwater lagoon and the world's largest swim-up bar[13] - Carnival Cruise Line hosted nearly half a million guests at Celebration Key since its July opening, sailing from nine homeports on 16 ships[13] - Princess Cruises welcomed Star Princess, sister to the successful Sun Princess, which was awarded Condé Nast Traveler's 2024 Mega Ship of the year[13] Brand Recognition & Sustainability Several Carnival brands received notable recognition, including Holland America Line for best large and mid-sized ship ocean cruise line, and Cunard launched a new campaign. Carnival Corporation was also recognized as a top employer and released its 15th annual sustainability report - Holland America Line was recognized as both the Best Large Ship Ocean Cruise Line and Best Mid-Sized Ship Ocean Cruise Line in Travel + Leisure's 2025 World's Best Awards[14] - Cunard launched its new campaign, 'Why cruise when you can Cunard,' emphasizing style, elegance, and luxury[14] - Named by Forbes as one of America's Best Employers for Women and one of the Best-in-State Employers for Florida in 2025[14] - Released its 15th annual sustainability report, 'Doing Business Responsibly from Ship to Shore,' detailing progress towards sustainability goals[14] Detailed Financial Guidance Carnival Corporation & plc provided comprehensive financial guidance for Q4 and full-year 2025, forecasting strong growth in net yields, adjusted net income, and adjusted EBITDA, alongside planned capital expenditures Forecasted Financial Metrics Carnival provided detailed guidance for Q4 and full-year 2025, projecting strong growth in net yields and adjusted net income. Key forecasts include significant increases in adjusted EBITDA and adjusted EPS, alongside specific assumptions for ALBDs, fuel consumption, and interest expenses Forecasted Financial Metrics for Q4 and Full Year 2025 | Metric | 4Q 2025 (Current Dollars) | 4Q 2025 (Constant Currency) | Full Year 2025 (Current Dollars) | Full Year 2025 (Constant Currency) | | :------------------------------------------ | :------------------------ | :-------------------------- | :----------------------------- | :------------------------------- | | Net Yields (YoY Change, %) | Approx. 6.4% | Approx. 4.3% | Approx. 6.2% | Approx. 5.3% | | Adjusted Cruise Costs Excl. Fuel per ALBD (YoY Change, %) | Approx. 5.5% | Approx. 3.2% | Approx. 4.4% | Approx. 3.3% | | ALBDs (Millions) | 24.1 | - | 96.5 | - | | Fuel Consumption (Millions Metric Tons) | 0.7 | - | 2.8 | - | | Fuel Cost per Metric Ton (Excl. EUA, USD) | $598 | - | $615 | - | | Fuel Expense (Billions USD) | $0.45 | - | $1.84 | - | | Depreciation and Amortization Expense (Billions USD) | $0.73 | - | $2.79 | - | | Interest Expense, Net (Billions USD) | $0.30 | - | $1.31 | - | | Adjusted EBITDA (Billions USD) | Approx. $1.34 | - | Approx. $7.05 | - | | Adjusted Net Income (Millions USD) | Approx. $300 | - | Approx. $2,925 | - | | Adjusted EPS - Diluted (USD) | Approx. $0.23 | - | Approx. $2.14 | - | Sensitivities (Impact to Adjusted Net Income (Loss) in millions) for 4Q 2025 | Sensitivity | Impact to Adjusted Net Income (Loss) (Millions USD) | | :------------------------------------------ | :----------------------------------------------- | | 1% Change in Net Yields | $45 | | 1% Change in Adjusted Cruise Costs Excl. Fuel per ALBD | $29 | | 10% Change in Fuel Cost per Metric Ton (Excl. EUA) | $42 | | 100 Basis Point Change in Variable Rate Debt | $9 | | 1% Change in Currency Exchange Rates | $6 | Capital Expenditures For the fourth quarter of 2025, Carnival anticipates significant capital expenditures, with $1.0 billion allocated to newbuilds and $0.7 billion for non-newbuild projects. These figures are subject to fluctuations based on foreign currency movements Fourth Quarter 2025 Capital Expenditures | Category | Amount (Billions USD) | | :-------------------------- | :-------------------- | | Newbuild Capital Expenditures | $1.0 | | Non-Newbuild Capital Expenditures | $0.7 | - Future capital expenditures will fluctuate with foreign currency movements relative to the U.S. Dollar and do not include potential stage payments for future ship orders[17] Company Information & Contacts This section provides details on Carnival Corporation & plc's conference call, company profile, and contact information for media and investor relations Conference Call Details Carnival Corporation & plc scheduled a conference call for analysts to discuss its earnings release, with live listening and additional information available on its websites - A conference call with analysts was scheduled for 10:00 a.m. EDT (3:00 p.m. BST) on September 29, 2025, to discuss the earnings release[18] - Additional information, including the earnings presentation and debt maturities schedule, is available on www.carnivalcorp.com and **www.carnivalplc.com**[18](index=18&type=chunk) Company Profile Carnival Corporation & plc is the largest global cruise company, operating a portfolio of world-class cruise lines including AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Holland America Line, P&O Cruises, Princess Cruises, and Seabourn - Carnival Corporation & plc is the largest global cruise company and among the largest leisure travel companies[19] - Its portfolio includes AIDA Cruises, Carnival Cruise Line, Costa Cruises, Cunard, Holland America Line, P&O Cruises, Princess Cruises, and Seabourn[19] Media & Investor Relations Contact information for media and investor relations is provided for inquiries - Media contact: Jody Venturoni (+1 469 797 6380)[20] - Investor Relations contact: Beth Roberts (+1 305 406 4832)[20] Cautionary Note Regarding Forward-Looking Statements This section outlines that the document contains forward-looking statements subject to risks and uncertainties, intended to qualify for safe harbor provisions Nature of Forward-Looking Statements This section clarifies that the document contains forward-looking statements, estimates, or projections that involve risks and uncertainties. These statements are based on current expectations and management beliefs, and are intended to qualify for safe harbor provisions - The document contains forward-looking statements, estimates, or projections concerning future results, operations, strategy, outlooks, plans, goals, reputation, cash flows, and liquidity[21] - These statements are intended to qualify for safe harbors from liability under Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934[21] - Forward-looking statements are identified by words such as 'will,' 'may,' 'could,' 'should,' 'would,' 'believe,' 'expect,' 'anticipate,' 'forecast,' 'project,' 'intend,' 'plan,' 'estimate,' 'target,' and 'outlook'[21] Risk Factors Various factors could cause actual results to differ materially from forward-looking statements. These risks include global events, incidents concerning ships or guests, regulatory changes, climate change impacts, cybersecurity incidents, labor issues, fuel price fluctuations, supplier reliability, foreign currency exchange rates, industry competition, and debt-related challenges - Global events such as geopolitical uncertainty, war, pandemics, inflation, and higher fuel/interest rates could decline demand for cruises[24][28] - Incidents concerning ships, guests, or the cruise industry may negatively impact satisfaction and reputation[24][28] - Changes in and non-compliance with laws and regulations (health, environment, safety, data privacy, anti-money laundering, tax) may be costly and lead to litigation[24][28] - Factors associated with climate change, including evolving regulations and consumer scrutiny, could materially impact the business[24][28] - Inability to meet sustainability targets may adversely impact the business[24][28] - Cybersecurity incidents and data privacy breaches, as well as disruptions to IT operations, could adversely impact business operations and reputation[24][28] - Loss of key team members, inability to recruit/retain qualified staff, and increased labor costs could adversely affect business[24][28] - Increases in fuel prices, changes in fuel types, and availability of supply may impact itineraries and costs[24][28] - Reliance on suppliers who may be unable to deliver on commitments could negatively impact the business[24][28] - Fluctuations in foreign currency exchange rates may adversely impact financial results[24][28] - Overcapacity and competition in the cruise and land-based vacation industry may negatively impact sales, pricing, and destination options[24][28] - Inability to implement shipbuilding programs and ship repairs/maintenance may adversely impact business operations and guest satisfaction[24][28] - Significant cash required to service debt and sustain operations, with ability to generate cash dependent on many factors[24][28] - Debt could adversely affect financial health and operating flexibility[24][28] Consolidated Financial Statements This section presents Carnival Corporation & plc's Consolidated Statements of Income (Loss), Balance Sheets, and other financial and statistical information for Q3 2025 and comparative periods Consolidated Statements of Income (Loss) The Consolidated Statements of Income (Loss) show Carnival's financial performance for the three and nine months ended August 31, 2025, compared to 2024. Key figures include total revenues, operating income, net income, and earnings per share, reflecting growth across most metrics Consolidated Statements of Income (Loss) (in millions, except per share data) | Metric | Three Months Ended Aug 31, 2025 (Millions USD) | Three Months Ended Aug 31, 2024 (Millions USD) | Nine Months Ended Aug 31, 2025 (Millions USD) | Nine Months Ended Aug 31, 2024 (Millions USD) | | :---------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Passenger ticket | $5,430 | $5,239 | $13,366 | $12,609 | | Onboard and other | $2,723 | $2,657 | $6,925 | $6,474 | | Total Revenues | $8,153 | $7,896 | $20,292 | $19,083 | | Total Cruise and tour operating expenses | $4,385 | $4,303 | $12,037 | $11,805 | | Selling and administrative expense | $779 | $763 | $2,442 | $2,366 | | Depreciation and amortization expense | $717 | $651 | $2,064 | $1,898 | | Operating Income | $2,271 | $2,178 | $3,748 | $3,013 | | Interest expense, net | $(317) | $(431) | $(1,034) | $(1,352) | | Debt extinguishment and modification costs | $(111) | $(13) | $(366) | $(78) | | Net Income (Loss) | $1,852 | $1,735 | $2,338 | $1,613 | | Basic EPS (USD) | $1.41 | $1.37 | $1.78 | $1.27 | | Diluted EPS (USD) | $1.33 | $1.26 | $1.71 | $1.21 | Consolidated Balance Sheets The Consolidated Balance Sheets present the company's financial position as of August 31, 2025, compared to November 30, 2024. It shows an increase in total assets, driven by property and equipment, and a decrease in total debt, alongside a significant increase in total shareholders' equity Consolidated Balance Sheets (in millions) | Asset/Liability/Equity | August 31, 2025 (Millions USD) | November 30, 2024 (Millions USD) | | :---------------------------------- | :----------------------------- | :------------------------------- | | Cash and cash equivalents | $1,763 | $1,210 | | Total current assets | $3,868 | $3,378 | | Property and Equipment, Net | $42,889 | $41,795 | | Total Assets | $50,831 | $49,057 | | Current portion of long-term debt | $1,417 | $1,538 | | Customer deposits | $6,691 | $6,425 | | Total current liabilities | $11,436 | $11,617 | | Long-Term Debt | $25,064 | $25,936 | | Total Shareholders' Equity | $11,928 | $9,251 | | Total Liabilities and Shareholders' Equity | $50,831 | $49,057 | Other Financial Information This section provides additional balance sheet and cash flow information. Liquidity significantly increased, total debt decreased, and customer deposits grew. Cash from operations for the three months ended August 31, 2025, increased, while capital expenditures also rose Other Balance Sheet Information (in millions) | Metric | August 31, 2025 (Millions USD) | November 30, 2024 (Millions USD) | | :-------------------------- | :----------------------------- | :------------------------------- | | Liquidity | $6,263 | $4,155 | | Debt (current and long-term) | $26,481 | $27,475 | | Customer deposits (current and long-term) | $7,146 | $6,779 | Cash Flow Information (in millions) | Metric | Three Months Ended Aug 31, 2025 (Millions USD) | Three Months Ended Aug 31, 2024 (Millions USD) | Nine Months Ended Aug 31, 2025 (Millions USD) | Nine Months Ended Aug 31, 2024 (Millions USD) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Cash from operations | $1,383 | $1,205 | $4,700 | $5,012 | | Capital expenditures | $648 | $578 | $2,105 | $4,034 | Statistical Information Key operational statistics for the three and nine months ended August 31, 2025, show stable occupancy rates, slight decreases in passenger cruise days and ALBDs for the three-month period, and improved fuel efficiency. Currency exchange rates are also provided Statistical Information | Metric | Three Months Ended Aug 31, 2025 | Three Months Ended Aug 31, 2024 | Nine Months Ended Aug 31, 2025 | Nine Months Ended Aug 31, 2024 | | :------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Passenger Cruise Days (PCDs, Millions) | 27.5 | 28.1 | 77.1 | 76.0 | | ALBDs (Millions) | 24.6 | 25.2 | 72.3 | 71.7 | | Occupancy (%) | 112% | 112% | 107% | 106% | | Passengers Carried (Millions) | 3.8 | 3.9 | 10.3 | 10.3 | | Fuel Consumption (Millions Metric Tons) | 0.7 | 0.7 | 2.1 | 2.2 | | Fuel Consumption per Thousand ALBDs (Metric Tons) | 28.0 | 29.5 | 29.4 | 31.0 | | Fuel Cost per Metric Ton Consumed (Excl. EUA, USD) | $607 | $670 | $621 | $680 | Currencies (USD to 1) | Currency | Three Months Ended Aug 31, 2025 (USD) | Three Months Ended Aug 31, 2024 (USD) | Nine Months Ended Aug 31, 2025 (USD) | Nine Months Ended Aug 31, 2024 (USD) | | :------- | :------------------------------------ | :------------------------------------ | :----------------------------------- | :----------------------------------- | | AUD (USD) | $0.65 | $0.67 | $0.64 | $0.66 | | CAD (USD) | $0.73 | $0.73 | $0.71 | $0.74 | | EUR (USD) | $1.16 | $1.09 | $1.10 | $1.08 | | GBP (USD) | $1.35 | $1.28 | $1.30 | $1.27 | Non-GAAP Financial Measures & Reconciliations This section provides detailed reconciliations of Carnival Corporation & plc's non-GAAP financial measures to U.S. GAAP, along with explanations of their purpose and the methodology for constant currency reporting Reconciliation of Non-GAAP Measures to GAAP This section provides detailed reconciliations of non-GAAP financial measures, such as adjusted net income, adjusted EBITDA, gross margin yields, net yields, and adjusted cruise costs, to their most comparable U.S. GAAP measures for the three and nine months ended August 31, 2025 and 2024 Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and Adjusted EBITDA (in millions, except per share data) | Metric | Three Months Ended Aug 31, 2025 (Millions USD) | Three Months Ended Aug 31, 2024 (Millions USD) | Nine Months Ended Aug 31, 2025 (Millions USD) | Nine Months Ended Aug 31, 2024 (Millions USD) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net income (loss) | $1,852 | $1,735 | $2,338 | $1,613 | | Debt extinguishment and modification costs | $111 | $13 | $366 | $78 | | Adjusted net income (loss) | $1,982 | $1,751 | $2,625 | $1,705 | | Interest expense, net | $317 | $431 | $1,034 | $1,352 | | Income tax expense, net | $(8) | $8 | $16 | $13 | | Depreciation and amortization expense | $717 | $651 | $2,064 | $1,898 | | Adjusted EBITDA | $2,993 | $2,822 | $5,706 | $4,890 | | Diluted EPS (USD) | $1.33 | $1.26 | $1.71 | $1.21 | | Adjusted EPS - Diluted (USD) | $1.43 | $1.27 | $1.91 | $1.27 | Reconciliation of Gross Margin Yields to Net Yields (per ALBD) | Metric | Three Months Ended Aug 31, 2025 (Millions USD) | Three Months Ended Aug 31, 2024 (Millions USD) | Nine Months Ended Aug 31, 2025 (Millions USD) | Nine Months Ended Aug 31, 2024 (Millions USD) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Total Revenues (Millions USD) | $8,153 | $7,896 | $20,292 | $19,083 | | Gross Margin (Millions USD) | $3,051 | $2,941 | $6,191 | $5,380 | | Adjusted Gross Margin (Millions USD) | $6,119 | $5,891 | $15,323 | $14,307 | | ALBDs (Millions) | 24.6 | 25.2 | 72.3 | 71.7 | | Gross Margin Yields (USD per ALBD) | $124.20 | $116.77 | $85.57 | $75.05 | | Net Yields (USD per ALBD) | $249.11 | $233.87 | $211.79 | $199.60 | Reconciliation of Cruise Costs per ALBD to Adjusted Cruise Costs Excluding Fuel per ALBD | Metric | Three Months Ended Aug 31, 2025 (Millions USD) | Three Months Ended Aug 31, 2024 (Millions USD) | Nine Months Ended Aug 31, 2025 (Millions USD) | Nine Months Ended Aug 31, 2024 (Millions USD) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Cruise Costs (Millions USD) | $5,062 | $4,962 | $14,323 | $13,998 | | Adjusted Cruise Costs (Millions USD) | $3,201 | $3,134 | $9,659 | $9,430 | | Adjusted Cruise Costs Excl. Fuel (Millions USD) | $2,750 | $2,619 | $8,275 | $7,885 | | ALBDs (Millions) | 24.6 | 25.2 | 72.3 | 71.7 | | Cruise Costs per ALBD (USD) | $206.11 | $196.98 | $197.97 | $195.29 | | Adjusted Cruise Costs per ALBD (USD) | $130.31 | $124.44 | $133.50 | $131.56 | | Adjusted Cruise Costs Excl. Fuel per ALBD (USD) | $111.96 | $103.97 | $114.38 | $110.00 | Explanation of Non-GAAP Measures This section defines and explains the purpose of various non-GAAP financial measures used by Carnival, including adjusted net income, adjusted EBITDA, net debt to adjusted EBITDA, net yields, adjusted cruise costs, and adjusted ROIC. These measures provide additional insights into company and segment performance by excluding certain non-core or variable items Non-GAAP Measures and Their Use | Non-GAAP Measure | U.S. GAAP Measure | Use Non-GAAP Measure to Assess | | :------------------------------------------ | :---------------- | :----------------------------- | | Adjusted net income (loss), adjusted EBITDA, adjusted EBITDA per ALBD and adjusted EBITDA margin | Net income (loss) | Company Performance | | Adjusted earnings per share | Earnings per share | Company Performance | | Net debt to adjusted EBITDA | — | Company Leverage | | Net yields | Gross margin yields | Cruise Segments Performance | | Adjusted cruise costs per ALBD and adjusted cruise costs excluding fuel per ALBD | Gross cruise costs per ALBD | Cruise Segments Performance | | Adjusted ROIC | — | Company Performance | - Adjusted net income (loss) and adjusted earnings per share exclude certain gains, losses, and expenses not considered part of core operating business to provide information on future earnings performance[44] - Adjusted EBITDA provides information on core operating profitability by excluding non-core items, interest, taxes, depreciation, and amortization, and helps assess compliance with debt covenants[45] - Net yields measure cruise segment performance on a per ALBD basis, reflecting revenues net of significant variable costs[47] - Adjusted cruise costs per ALBD and adjusted cruise costs excluding fuel per ALBD separate capacity changes from price and other changes, providing insight into cost performance, particularly by excluding fuel expense due to its volatility[48][49] - Adjusted ROIC assesses operating performance relative to invested capital, defined as twelve-month adjusted net income before interest expense and income, divided by monthly average of debt plus equity minus construction-in-progress, excess cash, goodwill, and intangibles[50] Constant Currency Reporting Constant currency reporting is used to remove the impact of exchange rate changes on the translation of operations and transactional impacts, providing a comparative view of business changes in an environment with fluctuating exchange rates. This applies to metrics like adjusted gross margin, net yields, and adjusted cruise costs excluding fuel - Constant currency reporting removes the impact of changes in exchange rates on the translation of operations and transactional impacts from revenues and expenses denominated in a currency other than the functional currency[53] - Metrics reported on a 'constant currency' basis include adjusted gross margin, net yields, adjusted cruise costs excluding fuel, and adjusted cruise costs excluding fuel per ALBD[54] - The primary functional currencies are the U.S. dollar, Australian dollar, euro, and sterling, which subject the company to foreign currency translational and transactional risk[52]