CCL (Corp) 10-K

[NavArch64]

The principal considerations for our determination that performing procedures relating to the impact of COVID-19 on the Company’s liquidity is a critical audit matter are the significant judgment by management when developing the estimate of future liquidity requirements; this in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s estimate of future liquidity requirements, and assumptions related to (i) the expected continued gradual resumption of guest cruise operations; (ii) the expected, sustained increase in revenue per passenger cruise day through a combination of both passenger ticket and onboard revenue; (iii) the expected gradual increase in occupancy levels during the resumption of guest cruise operations; (iv) the expected continued spend to maintain enhanced health and safety protocols and to support the resumption of guest cruise operations, including completing the return of crew members to its ships; and (v) maintaining collateral and reserves at reasonable levels.   Price, Waterhouse, Coopers

[jeh10641]

I bought 100 shares of CCL based on future operations. I will on to it for a while. Already got $100 of OBC for being a shareholder.

 

Jim

[USN59-79]

5 hours ago, jeh10641 said:

I bought 100 shares of CCL based on future operations. I will on to it for a while. Already got $100 of OBC for being a shareholder.

 

Jim

Win some, lose some.  The stock was down $1.18 today, so today you lost $118 on your CCL shares.

[Sea42]

8 hours ago, USN59-79 said:

Win some, lose some.  The stock was down $1.18 today, so today you lost $118 on your CCL shares.

Well, only if they sell and if they did sell, they had the $100 OBC, so a loss of $18.

[Calypso54]

There where a couple of good articles yesterday related to the filing. They discuss the large increase in cancellations for the 1st & 2nd qtr and damping demand for 3rd & 4th. It was interesting that one article listed fear of covid and the other the hassle factor (testing & masks) as the main reason. But, both do not believe CCL will achieve profitability this year.

[kangforpres]

More Casino offers!

[OlsSalt]

Hassles are tangible, and reported here almost daily. Lengthy quarantine up to forced premature disembarkation is real.  Fear of covid, as experienced by the current "variants," is far more intangible. Which one will be the industry model?

[rkacruiser]

CCL's 10-K filing ought not to be surprising.  (What the OP posted was a very small segment of the entire filing.)  There are so many uncertainties.  Vaccinated guests acquiring break through Covid and their posts concerning being quarantined, changing testing requirements, more cruise lines requiring a Covid vaccine booster to sail, what will the Federal Reserve's actions mean for a household's finances, the uncertainty of what will happen in the Ukraine:  the filing is realistic.  Not pleasant to read if one is an investor.  But, for those of us who have been investors  for many years, it's not the time to head for the lifeboats.  At least in my opinion.  

 

Isn't this the season of the year that travel agents call the "Wave Season" for new bookings?  I suspect the 2022 season will be called the "Ripple Season" for new bookings.  

[smbt1]

The most telling bit of information is after comparing the 10k with the last 10Q. That CCL had about 1.3 billion in revenue and 1.8 billion in operating expenses. So even with the quarter pre-Omicron when things were starting to look up CCL still lost .5 billion during that quarter on operations, and about 2.6 billion in the 4th quarter over all when debt payments and other expenses were included.  At that rate they have about 12 months with current assets, before they would need to raise more.

 

 

[rkacruiser]

17 hours ago, smbt1 said:

So even with the quarter pre-Omicron when things were starting to look up CCL still lost .5 billion during that quarter on operations,

 

Remember that there has been an increase in the number of ships in revenue service.  As more ships return to service, operating expenses are going to increase.  There is a need to obtain more revenue from those sailings that are or will be taking place.  

 

If I recall correctly from the most recent quarterly conference call with analysts, onboard spending is good.  Keep buying those drink packages, gamble the night away, have many dinners at the specialty restaurants, etc.!  

[Mary229]

3 minutes ago, rkacruiser said:

  Keep buying those drink packages, gamble the night away, have many dinners at the specialty restaurants, etc.!  

I wonder how much of that reflects the winter season when people are beach hopping.  The tourist/adventurer during the spring and summer may have a different spending pattern. I do believe they will have increased revenue from shore excursions though.  But you are right the new revenue model is for more prepaid amenities. 

[rkacruiser]

8 minutes ago, Mary229 said:

I wonder how much of that reflects the winter season when people are beach hopping.  The tourist/adventurer during the spring and summer may have a different spending pattern.

 

Good points!  I do recall a conversation with a bartender during one cruise that said that guests during that season of the year generally did not spend as much at his watering hole than during other cruise seasons.  Cannot swear on what cruise that conversation took place however.  

[JRG]

On 1/27/2022 at 2:43 PM, NavArch64 said:

The principal considerations for our determination that performing procedures relating to the impact of COVID-19 on the Company’s liquidity is a critical audit matter are the significant judgment by management when developing the estimate of future liquidity requirements; this in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s estimate of future liquidity requirements

 

What this is saying to the readers is that it was difficult and subjective (for the auditors) to make a determination (provide an opinion) on the company's future liquidity needs because the auditors could not rely on managements judgement on the Covid-19 impact items.

 

It is an issue of on-going concern if it continues year over year.   

 

 

[iancal]

On 1/28/2022 at 10:58 AM, OlsSalt said:

Hassles are tangible, and reported here almost daily. Lengthy quarantine up to forced premature disembarkation is real.  Fear of covid, as experienced by the current "variants," is far more intangible. Which one will be the industry model?

We are tentatively looking at a spring  land trip and/or a fall land trip.

 

We typically like to include a cruise and start looking at cruise itineraries etc. as part of looking at land itineraries.  Even if we do move forward we will not be booking anything until a a week-ten days out.

 

This time...not even considering a cruise for either trip.   It is one thing to be subject to those unknowns while on land, quite another to deal with any consequences while on a ship.   

 

I can easily understand the cruise line dilemma in forecasting revenue.   It would be interesting to know the average post deposit cancel rate now vs. pre covid timeframe.

[rkacruiser]

8 hours ago, JRG said:

It is an issue of on-going concern if it continues year over year. 

 

I understand what you are thinking.  But, what financial forecasts of any company during their analysts' calls or their 10-K reports can be considered "gospel"?  

[smbt1]

12 minutes ago, rkacruiser said:

 

I understand what you are thinking.  But, what financial forecasts of any company during their analysts' calls or their 10-K reports can be considered "gospel"?  

Most of the time there is a more predictable forecast based upon track record compared to the current situation which is pretty much in unknown territory.

[jeh10641]

Somebody made the comment that you only make or lose money if you sell a stock. I agree. I invest for longer term returns not the quick profit or loss. I am happy with the direction CCL is taking. More ships online now than when I bought into the company.