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Carnival Corp Quarterly Financial Statement

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In the SEC 8K filed 6/18/20, GAAP Net Loss of $4.4B for Q2. Liquidity of $7.6B as of 5/31/20. Guest Deposits of $2.9B as of 5/31/20. Est cash burn of $650M per month rest of 2020. Each of us can do the forecast arithmetic as we choose. Very challenging for CCL.

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In the SEC 10Q for 2/29/20, Total Shareholders Equity was $24.29B. With the Q2 GAAP Net Loss of $4.4B, Total Shareholders Equity would be $19.9B on 5/31/20. Again, each of us can do our own forecast arithmetic as we choose.

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Cruise ships by taking people on cruises.  They have been idle since mid March.  Of course they are going to take a bath at this time. My fear is that many, like Carnival Corp will not survive. 

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The 650 million  monthly cash burn does not include deposits that need to be refunded either. And with the latest round of cancellations through September I bet a lot more will choose the refund instead of a FCC.

Some sort of reorganization and consolidation is coming for all the cruise lines.

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If, in the extreme case, all $2.9B of Guest Deposits were to be refunded, the Liquidity of $7.6B would be reduced to $4.7B, all other things being equal. Simple arithmetic .... 4.700/650 = 7.23 ... months until zero cash ... all other things being equal. But, of course, CCL could always keep selling ships, to raise additional cash, assuming that there are buyers for such ships. This is where things become complicated at best.

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They'll simply float more bond offerings (at crazy high interest rates) as often and as long as necessary. I suspect there will always be buyers at those rates. Even the US government has proven crazy high deficits can just keep increasing... keep kicking the can down the road!

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12 minutes ago, Lido - Lanai said:

They'll simply float more bond offerings (at crazy high interest rates) as often and as long as necessary. I suspect there will always be buyers at those rates. Even the US government has proven crazy high deficits can just keep increasing... keep kicking the can down the road!

in a research note Thursday, analyst Timothy Conder of Wells Fargo wrote that he expects Carnival to “imminently look to raise an additional $4-$5 [billion] of capital to take the company through [fiscal year 2021] under a “No Sail” order in which it’s burning about $650 million a month.

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Posted (edited)

It would be interesting to see the breakdown attributable to each cruise line of that $650M monthly cost.  Then financing costs by cruise line.  After that the last 8 quarterly P&L's by cruise line.  Also age of cruise line fleets and any reserves that the auditors will ask to be placed on the financials in respect of litigation.  Also anticpated sale proceeds from the sale for scrap or otherwise of older cruise ships in each of the Carnival Corp subs.

 

The combo of those may give us an indication of whether or not Carnival Corp will pull the plug and let one or more of their subsidiary cruise lines slip into bankruptcy in order to help bail out the parent Corp.

 

No doubt there is a legion of accountants, lawyers, and restructuring advisors going through each cruise line and doing exactly this.  Very difficult times for the industry.  I doubt very much whether cruising will start up before the end of the year, possibly longer.

 

This is strictly a numbers exercise. No mystery, no emotion.

Edited by iancal

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40 minutes ago, HaveWeMetYet said:

The 650 million  monthly cash burn does not include deposits that need to be refunded either. And with the latest round of cancellations through September I bet a lot more will choose the refund instead of a FCC.

Some sort of reorganization and consolidation is coming for all the cruise lines.

Of note is  there is “only” 475 million in deposits for cruises scheduled this year.  The remaining amount of $2.4 billion is for 2021/22 cruises so they can drag that out a long time.  One thing that is a little amazing is that based on these numbers they have paid out $2 billion in customers deposits since their last filing.

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7 minutes ago, iancal said:

It would be interesting to see the breakdown attributable to each cruise line of that $650M monthly cost.  Then financing costs by cruise line.  After that the last 8 quarterly P&L's by cruise line.  Also age of cruise line fleets and any reserves that the auditors will ask to be placed on the financials in respect of litigation.  Also anticpated sale proceeds from the sale for scrap or otherwise of older cruise ships in each of the Carnival Corp subs.

 

The combo of those may give us an indication of whether or not Carnival Corp will pull the plug and let one or more of their subsidiary cruise lines slip into bankruptcy in order to help bail out the parent Corp.

 

No doubt there is a legion of accountants, lawyers, and restructuring advisors going through each cruise line and doing exactly this.  Very difficult times for the industry.  I doubt very much whether cruising will start up before the end of the year, possibly longer.

I agree, I am sure they are discussing every possibility no matter how remote.  I am sticking with my June 2021 date for cruising in any meaningful amount.

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Posted (edited)

I believe we will have a very good indication in three months when the next quarterly statement is released AND there will be another estimate of when cruising may commence.  Until then.......anything can happen.

 

I agree with KirkNC.  I cannot see cruising commence before 6/21.  Nothing has changed with regard to the virus.  There is at least as much risk today getting on a cruise ship as there was in March.   Some politicians are claiming that we have beaten this thing.  Ridiculous statements and even more preposterous that anyone would believe this.  This is absolutely contrary to what the public heath experts are saying.  Who would your believe?

Edited by iancal

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51 minutes ago, NavArch64 said:

 But, of course, CCL could always keep selling ships, to raise additional cash, assuming that there are buyers for such ships. 

 

"Disposal" of 6 within 90 days:

 

"Carnival Corporation has announced that in connection with its capacity optimization strategy, the company intends to accelerate the removal of ships in fiscal 2020 which were previously expected to be sold over the ensuing years.

 

The company announced it already has preliminary agreements for the disposal of six ships, but did not name them. Those ships are expected to leave the fleet in the next 90 days, Carnival said, adding that it is currently working toward additional agreements".

 

https://www.cruiseindustrynews.com/cruise-news/23109-carnival-to-retire-at-least-six-ships-in-next-90-days.html

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24 minutes ago, SeaHunt said:

 

"Disposal" of 6 within 90 days:

 

"Carnival Corporation has announced that in connection with its capacity optimization strategy, the company intends to accelerate the removal of ships in fiscal 2020 which were previously expected to be sold over the ensuing years.

 

The company announced it already has preliminary agreements for the disposal of six ships, but did not name them. Those ships are expected to leave the fleet in the next 90 days, Carnival said, adding that it is currently working toward additional agreements".

 

https://www.cruiseindustrynews.com/cruise-news/23109-carnival-to-retire-at-least-six-ships-in-next-90-days.html

 

24 minutes ago, SeaHunt said:

 

"Disposal" of 6 within 90 days:

 

"Carnival Corporation has announced that in connection with its capacity optimization strategy, the company intends to accelerate the removal of ships in fiscal 2020 which were previously expected to be sold over the ensuing years.

 

The company announced it already has preliminary agreements for the disposal of six ships, but did not name them. Those ships are expected to leave the fleet in the next 90 days, Carnival said, adding that it is currently working toward additional agreements".

 

https://www.cruiseindustrynews.com/cruise-news/23109-carnival-to-retire-at-least-six-ships-in-next-90-days.html

We know the names: Fantasy, Ecstasy etc.

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