CCL Filing 0000815097-24-000011

Financial Performance

Full year revenues hit an all-time high of $21.6 billion.

The company reported record full year revenues, indicating strong demand and successful operations. This is a significant achievement, reflecting the company's ability to generate revenue and recover from previous operational challenges.

Net income was positive during the third quarter, generating $1.07 billion.

The company achieved positive net income for the first time since the resumption of guest cruise operations, demonstrating improved profitability and operational efficiency. This marks a crucial turning point in the company's financial recovery.

Debt balance reduced by $4.6 billion from its peak in the first quarter of 2023.

The company successfully reduced its debt, enhancing its financial stability and reducing future interest expenses. This proactive debt management demonstrates a commitment to improving the company's financial health.

Growth & Strategy

Entered 2024 with best booked position on record for both price and occupancy.

Total customer deposits for each quarter throughout 2023 consistently surpassed the previous quarterly records.

Fleet optimization efforts resulted in the fleet being one year younger than prior to pausing cruise operations.

Management Execution

Successfully installed SpaceX's Starlink, next generation internet across fleet, expected to drive over 20% reduction in cost per megabit in 2024.

Launched Maritime Asset Strategy Transformation (MAST), a centralized system developed to optimize equipment and machinery management across brands and fleet.

Continued to work aggressively to reduce environmental footprint and fuel consumption, resulting in industry-leading fuel efficiency and a more than 10% reduction in absolute GHG emissions compared to peak year of 2011.

Risk Factors

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.

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.

Competitive Position

The company is the largest global cruise company, and among the largest leisure travel companies, with a portfolio of world-class cruise lines.

The company competes with land-based vacation alternatives throughout the world, such as hotels, resorts, theme parks, organized tours, casinos, vacation ownership properties, and other internet-based alternative lodging sites.

Based on 2023 Cruise Industry News statistics, as of December 31, 2023, the company, along with its principal cruise competitors Royal Caribbean Group, Norwegian Cruise Line Holdings, Ltd. and MSC Cruises, represented approximately 80% of the cruise industry capacity.

Operational Efficiency

Fleet optimization: delivering larger, more efficient ships as part of our ongoing newbuild program, some of which may replace existing ships in our fleet

Energy efficiency: continuing to improve our existing fleet's energy efficiency through investment in projects such as service power packages, air lubrication systems and expanding shore power capabilities

Itinerary efficiency: designing more energy-efficient itineraries, focusing on operational execution and investing in port and destination projects in strategic locations

Innovation & Technology

New technologies and alternative fuels: investing in a first-of-its-kind lithium-ion battery storage system and assessing carbon capture and storage.

We pioneered the use of Advanced Air Quality Systems on board our ships to aid in the reduction of sulfur and are promoting the use of shore power.

We have partnered with companies, universities, research bodies, non-governmental organizations, and other key organizations to help identify and scale new technologies not yet ready for the cruise industry.

Capital Allocation

Capital expenditures of $1.9 billion for our ongoing new shipbuilding program

Capital expenditures of $1.4 billion for ship improvements and replacements, information technology and buildings and improvements

Repayments of $5.9 billion of long-term debt and refinancing of $1.8 billion of long-term debt to extend maturities

ESG Initiatives

The IMO has established technical and operational measures for all ships that are intended to improve energy efficiency and reduce GHG emissions from international shipping.

We are committed to providing a healthy environment for all of our guests and crew. We collaborate with public health inspection programs throughout the world, such as the Centers for Disease Control and Prevention (“CDC”) in the U.S. and the SHIPSAN Project in the EU, to ensure that development of these programs leads to enhanced health and hygiene onboard our ships.

In 2021, we established goals for 2030 which incorporate six focus areas listed below that align with elements of the United Nation's Sustainable Development Goals and build on the momentum of our successful achievement of our 2020 sustainability goals.

Market Environment