Carnival Corp & plc Second Quarter Results
CARNIVAL CORPORATION & PLC REPORTS
SECOND QUARTER RESULTS
Carnival Corporation & plc today reported its results of operations for the second
quarter ended May 31, 2013. The results of Carnival Corporation and Carnival plc have been
consolidated, and this statement includes consolidated results on a U.S. GAAP basis.
2Q Highlights
- 2Q revenues were $3.5b, in line with the prior year
- 2Q net revenue yields in constant dollars decreased 1.9%
- Excluding fuel, constant dollar net cruise costs per available lower berth day
("ALBD") increased 8.8% primarily due to timing of dry-dock expenses, vessel repair
costs and non-recurring items which benefitted the prior year
- 2Q fuel consumption per ALBD decreased 5.7% compared to the prior year
- 2Q Non-GAAP (diluted) earnings per share of $0.09, compared to $0.20 for the
prior year
- 2Q U.S. GAAP (diluted) earnings per share of $0.05 included net unrealized
losses on fuel derivatives of $31m
2013 Outlook
- At this time, cumulative advance bookings for the remainder of 2013 are
behind the prior year at prices below the prior year levels
- Net revenue yields on a constant and current dollar basis for FY 2013 are
expected to be down 2 to 3% compared to the prior year, in line with May guidance
- Excluding fuel, net cruise costs per ALBD for FY 2013 are expected to be
higher by 3.5 to 4.5% on a constant and current dollar basis
- FY 2013 non-GAAP earnings per share (diluted) expected to be in the range of
$1.45 to $1.65, compared to $1.88 for 2012
- 3Q 2013 non-GAAP earnings per share (diluted) expected to be in the range of
$1.25 to $1.33, compared to $1.53 in 3Q 2012
Chairman and Chief Executive Officer Micky Arison commenting on these results:
"Our 90,000 global team members are dedicated to delivering an outstanding vacation
experience to 10 million guests each year. The level of quality, variety and innovation
available throughout our fleet has never been greater and our guests are reaping the
benefits of truly exceptional vacation values. We are working to more broadly communicate
that message through stepped up consumer and trade marketing efforts, as well as
strengthened engagement of our travel agent partners. We believe these initiatives,
combined with slower supply growth, will lead to increased yields."
"In addition, we remain focused on reducing our fuel dependence. By year end, we will
achieve a 23 percent cumulative reduction in fuel consumption since 2005 and expect our
research and development efforts in fuel saving technologies to continue to bear fruit. We
have strengthened our management teams in maritime and technical ship operations and
product delivery, as well as marketing and communications. We expect the combination of
these efforts will drive improved return on invested capital over time."
MEDIA CONTACT INVESTOR RELATIONS CONTACT
Jennifer de la Cruz Beth Roberts
001 305 599 2600, ext. 16000 001 305 406 4832
Analyst conference call
The company has scheduled a conference call with analysts at 10:00 a.m. EDT (3:00 p.m.
BST) today to discuss its 2013 second quarter results. This call can be listened to live,
and additional information can be obtained, via Carnival Corporation & plc's Web site at
http://www.carnivalcorp.com and http://www.carnivalplc.com.
Carnival Corporation & plc
Carnival Corporation & plc is the largest cruise company in the world, with a
portfolio of cruise brands in North America, Europe, Australia and Asia, comprised of
Carnival Cruise Lines, Holland America Line, Princess Cruises, Seabourn, AIDA Cruises,
Costa Cruises, Cunard, Ibero Cruises, P&O Cruises (Australia) and P&O Cruises (UK).
Together, these brands operate 102 ships totaling 209,000 lower berths with seven new
ships scheduled to be delivered between May 2014 and April 2016. Carnival Corporation &
plc also operates Holland America Princess Alaska Tours, the leading tour company in
Alaska and the Canadian Yukon. Traded on both the New York and London Stock Exchanges,
Carnival Corporation & plc is the only group in the world to be included in both the S&P
500 and the FTSE 100 indices.
Carnival Corporation & plc Reports Second Quarter Results
MIAMI, June 25, 2013 -- Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK)
announced non-GAAP net income of $72 million, or $0.09 diluted EPS for the second quarter
of 2013 compared to non-GAAP net income for the second quarter of 2012 of $159 million, or
$0.20 diluted EPS. For the second quarter of 2013, reported U.S. GAAP net income, which
included net unrealized losses on fuel derivatives of $31 million, was $41 million, or
$0.05 diluted EPS. For the second quarter of 2012, reported U.S. GAAP net income, which
included unrealized losses on fuel derivatives of $145 million, was $14 million, or $0.02
diluted EPS. Revenues for the second quarter of 2013 were $3.5 billion, in line with the
prior year.
Carnival Corporation & plc Chairman and CEO Micky Arison noted that second quarter
earnings were slightly better than May guidance due primarily to the timing of selling and
administrative expenses.
Key metrics for the second quarter 2013 compared to the prior year were as follows:
- On a constant dollar basis, net revenue yields (net revenue per available
lower berth day or "ALBD") decreased 1.9 percent for 2Q 2013. Gross revenue yields
decreased 3.1 percent in current dollars.
- Net cruise costs excluding fuel per ALBD increased 8.8 percent in constant
dollars, primarily due to the timing of dry-dock expenses, vessel repair costs and
non-recurring items which benefitted the prior year. Gross cruise costs including fuel
per ALBD in current dollars decreased 0.1 percent.
- Fuel prices decreased 9.7 percent to $683 per metric ton for 2Q 2013 from $756
per metric ton in 2Q 2012.
- Fuel consumption per ALBD decreased 5.7 percent in 2Q 2013 compared to the
prior year.
During the second quarter, the company took delivery of Princess Cruises'
3,560-passenger Royal Princess, the first of a new class of ships for Princess. Royal
Princess debuted with a spectacular naming ceremony in Southampton, England on June 13
that captured world-wide attention. The ceremony was presided over by the ship's
godmother, Her Royal Highness The Duchess of Cambridge. Royal Princess launched with many
exciting new features including an over-water SeaWalk, and nightly performances of dancing
fountains and music shows in the ship's central pool area, as well as plush private
poolside cabanas.
Additionally, Carnival Sunshine entered service in May following an unprecedented $155
million modernization that added all the features and facilities of Carnival Cruise Lines'
Fun Ship 2.0 product enhancement program. Fun Ship 2.0 is transforming the Carnival
brand's on-board experience through celebrity partnerships including comedian George
Lopez, who serves as the brand's creative director for comedy, and Food Network
personality and chef Guy Fieri, who developed a complimentary burger venue called Guy's
Burger Joint, as well as brand partnerships with EA Sports and Hasbro. Also, earlier this
month Carnival Cruise Lines completed $115 million in upgrades and repairs to Carnival
Triumph. The ship successfully reentered service in Galveston, Texas last week, featuring
various Fun Ship 2.0 dining and bar innovations, including BlueIguana Cantina, RedFrog Rum
Bar and Alchemy Bar, among others.
2013 Outlook
At this time, cumulative advance bookings for the remainder of 2013 are behind the
prior year at prices below the prior year levels. Since the end of March, fleetwide
booking volumes for the next three quarters, excluding Carnival Cruise Lines, are running
higher than the prior year at higher prices. Booking volumes for Carnival Cruise Lines
during the same period are running behind the prior year at lower prices.
Arison noted, "Our 90,000 global team members are dedicated to delivering an
outstanding vacation experience to 10 million guests each year. The level of quality,
variety and innovation available throughout our fleet has never been greater and our
guests are reaping the benefits of truly exceptional vacation values. We are working to
more broadly communicate that message through stepped up consumer and trade marketing
efforts, as well as strengthened engagement of our travel agent partners. We believe these
initiatives, combined with slower supply growth, will lead to increased yields."
Arison also stated, "In addition, we remain focused on reducing our fuel dependence.
By year end, we will achieve a 23 percent cumulative reduction in fuel consumption since
2005 and expect our research and development efforts in fuel saving technologies to
continue to bear fruit. We have strengthened our management teams in maritime and
technical ship operations and product delivery, as well as marketing and communications.
We expect the combination of these efforts will drive improved return on invested capital
over time."
The company expects full year net revenue yields, on a constant and current dollar
basis to be down 2 to 3 percent compared to the prior year, in line with the May guidance.
The company also expects full year net cruise costs excluding fuel per ALBD to be higher
by 3.5 to 4.5 percent compared to the prior year on a constant and current dollar basis.
Taking the above factors into consideration, the company forecasts full year 2013
non-GAAP diluted earnings per share to be in the range of $1.45 to $1.65, compared to 2012
non-GAAP diluted earnings of $1.88 per share.
Third Quarter 2013 Outlook
Third quarter constant dollar net revenue yields are expected to be down 3.5 to 4.5
percent compared to the prior year. Net cruise costs excluding fuel per ALBD for the third
quarter are expected to be higher by 8.5 to 9.5 percent on a constant dollar basis
compared to the prior year, the majority of which is due to costs associated with the
previously announced vessel enhancement initiatives and increased marketing expenses, as
well as higher pension plan contributions.
Based on the above factors, the company expects non-GAAP diluted earnings for the
third quarter 2013 to be in the range of $1.25 to $1.33 per share versus 2012 non-GAAP
earnings of $1.53 per share.
Selected Key Forecast Metrics
Full Year 2013 Third Quarter 2013
Year over year change: Current Dollars Constant Dollars Current Dollars Constant Dollars
Net revenue yields (2.0) to (3.0) % (2.0) to (3.0) % (2.0) to (3.0) % (3.5) to (4.5) %
Net cruise costs excl. fuel / ALBD 3.5 to 4.5 % 3.5 to 4.5 % 9.5 to 10.5 % 8.5 to 9.5 %
Full Year 2013 Third Quarter 2013
Fuel price per metric ton $671 $671
Fuel consumption (metric tons in thousands) 3,270 810
Currency: Euro $1.32 to EUR1 $1.33 to EUR1
Sterling $1.56 to GBP1 $1.56 to GBP1
Conference Call
The company has scheduled a conference call with analysts at 10:00 a.m. EDT (3:00 p.m.
BST) today to discuss its 2013 second quarter results. This call can be listened to live,
and additional information can be obtained, via Carnival Corporation & plc's Web site at
http://www.carnivalcorp.com and http://www.carnivalplc.com.
Carnival Corporation & plc is the largest cruise company in the world, with a
portfolio of cruise brands in North America, Europe, Australia and Asia, comprised of
Carnival Cruise Lines, Holland America Line, Princess Cruises, Seabourn, AIDA Cruises,
Costa Cruises, Cunard, Ibero Cruises, P&O Cruises (Australia) and P&O Cruises (UK).
Together, these brands operate 102 ships totaling 209,000 lower berths with seven new
ships scheduled to be delivered between May 2014 and April 2016. Carnival Corporation &
plc also operates Holland America Princess Alaska Tours, the leading tour company in
Alaska and the Canadian Yukon. Traded on both the New York and London Stock Exchanges,
Carnival Corporation & plc is the only group in the world to be included in both the S&P
500 and the FTSE 100 indices.
Cautionary Note Concerning Factors That May Affect Future Results
Carnival Corporation and Carnival plc and their respective subsidiaries are referred
to collectively in this release as "Carnival Corporation & plc," "our," "us" and "we."
Some of the statements, estimates or projections contained in this release are
"forward-looking statements" that involve risks, uncertainties and assumptions with
respect to us, including some statements concerning future results, outlooks, plans, goals
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. We have tried, whenever possible, to
identify these statements by using words like "will," "may," "could," "should," "would,"
"believe," "depends," "expect," "goal," "anticipate," "forecast," "future," "intend,"
"plan," "estimate," "target," "indicate" and similar expressions of future intent or the
negative of such terms.
Forward-looking statements include those statements that may impact, among other
things, the forecasting of our non-GAAP earnings per share ("EPS"); net revenue yields;
booking levels; pricing; occupancy; operating, financing and tax costs, including fuel
expenses; costs per available lower berth day; estimates of ship depreciable lives and
residual values; liquidity; goodwill and trademark fair values; and outlook. 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 in this release. These factors include, but are not limited to,
the following:
- general economic and business conditions;
- increases in fuel prices;
- incidents, the spread of contagious diseases and threats thereof, adverse
weather conditions or other natural disasters and other incidents affecting the
health, safety, security and satisfaction of guests and crew;
- the international political climate, armed conflicts, terrorist and pirate
attacks, vessel seizures, and threats thereof, and other world events affecting the
safety and security of travel;
- negative publicity concerning the cruise business in general or us in
particular, including any adverse environmental impacts of cruising;
- litigation, enforcement actions, fines or penalties;
- economic, market and political factors that are beyond our control, which
could increase our operating, financing and other costs;
- changes in and compliance with laws and regulations relating to the protection
of persons with disabilities, employment, environment, health, safety, security, tax
and other regulations under which we operate;
- our ability to implement our shipbuilding programs and ship repairs,
maintenance and refurbishments on terms that are favorable or consistent with our
expectations;
- increases to our repairs and maintenance expenses and refurbishment costs as
our fleet ages;
- lack of continuing availability of attractive, convenient and safe port
destinations;
- continuing financial viability of our travel agent distribution system, air
service providers and other key vendors in our supply chain and reductions in the
availability of, and increases in the pricing for, the services and products provided
by these vendors;
- disruptions and other damages to our information technology and other networks
and operations, and breaches in data security;
- failure to keep pace with developments in technology;
- competition from and overcapacity in the cruise ship or land-based vacation
industry;
- loss of key personnel or our ability to recruit or retain qualified personnel;
- union disputes and other employee relation issues;
- disruptions in the global financial markets or other events that may
negatively affect the ability of our counterparties and others to perform their
obligations to us;
- the continued strength of our cruise brands and our ability to implement our
brand strategies;
- our international operations are subject to additional risks not generally
applicable to our U.S. operations;
- geographic regions in which we try to expand our business may be slow to
develop and ultimately not develop how we expect;
- our decisions to self-insure against various risks or our inability to obtain
insurance for certain risks at reasonable rates;
- fluctuations in foreign currency exchange rates;
- whether our future operating cash flow will be sufficient to fund future
obligations and whether we will be able to obtain financing, if necessary, in
sufficient amounts and on terms that are favorable or consistent with our
expectations;
- risks associated with the dual listed company arrangement; and
- uncertainties of foreign legal systems as Carnival Corporation and Carnival
plc are not U.S. corporations.
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 release, 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.
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in millions, except per share data)
Three Months Ended Six Months Ended
May 31, May 31,
2013 2012 2013 2012
Revenues
Cruise
Passenger tickets $ 2,613 $ 2,675 $ 5,353 $ 5,439
Onboard and other 839 844 1,683 1,653
Tour and other 27 19 36 28
3,479 3,538 7,072 7,120
Operating Costs and Expenses
Cruise
Commissions, transportation and other 506 519 1,123 1,180
Onboard and other 115 128 242 254
Fuel 555 645 1,115 1,237
Payroll and related 454 435 914 877
Food 238 236 481 476
Other ship operating 603 494 (a) 1,182 1,113
Tour and other 16 (b) 21 30 35
2,487 2,478 5,087 5,172
Selling and administrative 449 431 908 852
Depreciation and amortization 391 376 780 752
Ibero goodwill and trademark impairment charges - - - 173
3,327 3,285 6,775 6,949
Operating Income 152 253 297 171
Nonoperating (Expense) Income
Interest income 3 3 5 6
Interest expense, net of capitalized interest (78) (87) (161) (175)
Unrealized losses on fuel derivatives, net (31) (145) (59) (124)
Other expense, net (5) (10) (2) (5)
(111) (239) (217) (298)
Income (Loss) Before Income Taxes 41 14 80 (127)
Income Tax (Expense) Benefit, Net - - (2) 2
Net Income (Loss) $ 41 $ 14 $ 78 $ (125)
Earnings (Loss) Per Share
Basic $ 0.05 $ 0.02 $ 0.10 $ (0.16)
Diluted $ 0.05 $ 0.02 $ 0.10 $ (0.16)
Non-GAAP Earnings Per Share-Diluted (c) $ 0.09 $ 0.20 $ 0.18 $ 0.22
Dividends Declared Per Share $ 0.25 $ 0.25 $ 0.50 $ 0.50
Weighted-Average Shares Outstanding - Basic 775 779 775 778
Weighted-Average Shares Outstanding - Diluted 777 779 777 778
(a) Includes $17 million of hull and machinery insurance proceeds for the total
loss of a ship in excess of its net book value and $17 million received from a
litigation settlement.
(b) Includes a $15 million gain from the sale of Holland America Line's former
Noordam, which was on charter to an unaffiliated entity.
(c) Excludes unrealized losses on fuel derivatives and $173 million of Ibero
impairment charges.
CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except par values)
May 31, November 30,
2013 2012
ASSETS
Current Assets
Cash and cash equivalents $ 711 $ 465
Trade and other receivables, net 408 270
Insurance recoverables 217 460
Inventories 381 390
Prepaid expenses and other 187 236
Total current assets 1,904 1,821
Property and Equipment, Net 32,481 32,137
Goodwill 3,134 3,174
Other Intangibles 1,298 1,314
Other Assets 742 715
$ 39,559 $ 39,161
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 14 $ 56
Current portion of long-term debt 2,000 1,678
Accounts payable 627 549
Dividends payable 194 583
Claims reserve 317 553
Accrued liabilities and other 857 845
Customer deposits 3,626 3,076
Total current liabilities 7,635 7,340
Long-Term Debt 7,848 7,168
Other Long-Term Liabilities 796 724
Shareholders' Equity
Common stock of Carnival Corporation, $0.01 par value; 1,960 shares
authorized; 650 shares at 2013 and 649 shares at 2012 issued 7 6
Ordinary shares of Carnival plc, $1.66 par value; 216 shares at 2013
and 215 shares at 2012 issued 358 357
Additional paid-in capital 8,284 8,252
Retained earnings 18,170 18,479
Accumulated other comprehensive loss (473) (207)
Treasury stock, 59 shares at 2013 and 55 shares at 2012 of Carnival
Corporation and 32 shares at 2013 and 33 shares at 2012
of Carnival plc, at cost (3,066) (2,958)
Total shareholders' equity 23,280 23,929
$ 39,559 $ 39,161
CARNIVAL CORPORATION & PLC
OTHER INFORMATION
Three Months Ended Six Months Ended
May 31, May 31,
2013 2012 2013 2012
STATISTICAL INFORMATION
ALBDs (in thousands) (a) 17,993 17,784 35,972 35,092
Passengers carried (in thousands) 2,364 2,334 4,669 4,596
Occupancy percentage (b) 103.3% 102.6% 103.7% 103.9%
Fuel consumption in metric tons (in thousands) 814 852 1,640 1,689
Fuel consumption in metric tons per ALBD 0.045 0.048 0.046 0.048
Fuel cost per metric ton consumed $ 683 $ 756 $ 680 $ 732
Currencies
U.S. dollar to EUR1 $ 1.30 $ 1.31 $ 1.31 $ 1.31
U.S. dollar to GBP1 $ 1.52 $ 1.59 $ 1.55 $ 1.58
U.S. dollar to Australian dollar $ 1.02 $ 1.03 $ 1.03 $ 1.04
CASH FLOW INFORMATION
Cash from operations $ 1,157 $ 1,136 $ 1,556 $ 1,458
Capital expenditures $ 1,206 $ 1,730 $ 1,447 $ 1,997
Dividends paid $ 195 $ 194 $ 777 $ 388
(a) ALBDs is a standard measure of passenger capacity for the period, which we
use to perform rate and capacity variance analyses to determine the main
non-capacity driven factors that cause our cruise revenues and expenses to vary.
ALBDs assume that each cabin we offer for sale accommodates two passengers and
is computed by multiplying passenger capacity by revenue-producing ship
operating days in the period.
(b) In accordance with cruise business practice, occupancy is calculated using a
denominator of two passengers per cabin even though some cabins can accommodate
three or more passengers. Percentages in excess of 100% indicate that on average
more than two passengers occupied some cabins.
FUEL DERIVATIVES
At May 31, 2013, our outstanding fuel derivatives consisted of zero cost collars on
Brent crude oil to cover a portion of our estimated fuel consumption as follows:
Percent of Estimated
Transaction Barrels Weighted-Average Weighted-Average Fuel Consumption
Maturities (a) (b) Dates (in thousands) Floor Prices Ceiling Prices Covered
Fiscal 2013 (Q3-Q4)
November 2011 1,056 $ 74 $ 132
February 2012 1,056 $ 98 $ 127
March 2012 2,112 $ 100 $ 130
4,224 40%
Fiscal 2014
November 2011 2,112 $ 85 $ 114
February 2012 2,112 $ 88 $ 125
June 2012 2,376 $ 71 $ 116
May 2013 1,728 $ 85 $ 108
8,328 39%
Fiscal 2015
November 2011 2,160 $ 80 $ 114
February 2012 2,160 $ 80 $ 125
June 2012 1,236 $ 74 $ 110
April 2013 1,044 $ 80 $ 111
May 2013 1,884 $ 80 $ 110
8,484 39%
Fiscal 2016
June 2012 3,564 $ 75 $ 108
February 2013 2,160 $ 80 $ 120
April 2013 3,000 $ 75 $ 115
8,724 40%
Fiscal 2017
February 2013 3,276 $ 80 $ 115
April 2013 2,028 $ 75 $ 110
5,304 25%
(a) Fuel derivatives mature evenly over each month within the above fiscal periods.
(b) We will not realize any economic gain or loss upon the monthly maturities of our
zero cost collars unless the average monthly price of Brent crude oil is above the
ceiling price or below the floor price.
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES
Consolidated gross and net revenue yields were computed by dividing the gross and net cruise revenues,
without rounding, by ALBDs as follows (dollars in millions, except yields) (a)(b):
Three Months Ended May 31, Six Months Ended May 31,
2013 2013
Constant Constant
2013 Dollar 2012 2013 Dollar 2012
Passenger ticket revenues $ 2,613 $ 2,633 $ 2,675 $ 5,353 $ 5,358 $ 5,439
Onboard and other revenues 839 843 844 1,683 1,684 1,653
Gross cruise revenues 3,452 3,476 3,519 7,036 7,042 7,092
Less cruise costs
Commissions, transportation and other (506) (510) (519) (1,123) (1,123) (1,180)
Onboard and other (115) (116) (128) (242) (242) (254)
(621) (626) (647) (1,365) (1,365) (1,434)
Net passenger ticket revenues 2,107 2,123 2,156 4,230 4,235 4,259
Net onboard and other revenues 724 727 716 1,441 1,442 1,399
Net cruise revenues $ 2,831 $ 2,850 $ 2,872 $ 5,671 $ 5,677 $ 5,658
ALBDs 17,993,002 17,993,002 17,783,938 35,972,237 35,972,237 35,092,473
Gross revenue yields $ 191.84 $ 193.17 $ 197.89 $ 195.59 $ 195.78 $ 202.09
% decrease vs. 2012 (3.1)% (2.4)% (3.2)% ( 3.1)%
Net revenue yields $ 157.33 $ 158.41 $ 161.50 $ 157.64 $ 157.83 $ 161.22
% decrease vs. 2012 (2.6)% (1.9)% ( 2.2)% (2.1)%
Net passenger ticket revenue yields $ 117.09 $ 117.98 $ 121.29 $ 117.58 $ 117.74 $ 121.38
% decrease vs. 2012 (3.5)% (2.7)% (3.1)% (3.0)%
Net onboard and other revenue yields $ 40.24 $ 40.43 $ 40.21 $ 40.06 $ 40.09 $ 39.84
% increase vs. 2012 0.1% 0.5% 0.5% 0.6%
Consolidated gross and net cruise costs and net cruise costs excluding fuel per ALBD were computed by
dividing the gross and net cruise costs and net cruise costs excluding fuel, without rounding, by ALBDs as
follows (dollars in millions, except costs per ALBD) (a) (b):
Three Months Ended May 31, Six Months Ended May 31,
2013 2013
Constant Constant
2013 Dollar 2012 2013 Dollar 2012
Cruise operating expenses $ 2,471 $ 2,485 $ 2,457 $ 5,057 $ 5,060 $ 5,137
Cruise selling and administrative
expenses (c) 447 450 429 904 905 848
Gross cruise costs 2,918 2,935 2,886 5,961 5,965 5,985
Less cruise costs included in net
cruise revenues
Commissions, transportation and other (506) (510) (519) (1,123) (1,123) (1,180)
Onboard and other (115) (116) (128) (242) (242) (254)
Net cruise costs 2,297 2,309 2,239 4,596 4,600 4,551
Less fuel (555) (555) (645) (1,115) (1,115) (1,237)
Net cruise costs excluding fuel $ 1,742 $ 1,754 $ 1,594 $ 3,481 $ 3,485 $ 3,314
ALBDs 17,993,002 17,993,002 17,783,938 35,972,237 35,972,237 35,092,473
Gross cruise costs per ALBD $ 162.19 $ 163.11 $ 162.28 $ 165.71 $ 165.83 $ 170.54
% (decrease) increase vs. 2012 (0.1)% 0.5% (2.8)% (2.8)%
Net cruise costs per ALBD $ 127.68 $ 128.35 $ 125.88 $ 127.76 $ 127.88 $ 129.67
% increase (decrease) vs. 2012 1.4% 2.0% (1.5)% (1.4)%
Net cruise costs excluding fuel per ALBD $ 96.81 $ 97.48 $ 89.63 $ 96.77 $ 96.89 $ 94.44
% increase vs. 2012 8.0% 8.8% 2.5% 2.6%
(See next page for Notes to Non-GAAP Financial Measures.)
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)
Non-GAAP fully diluted earnings per share was computed as follows (in millions,
except per share data) (b):
Three Months Ended Six Months Ended
May 31, May 31,
2013 2012 2013 2012
Net income (loss) - diluted
U.S. GAAP net income (loss) $ 41 $ 14 $ 78 $ (125)
Ibero goodwill and trademark impairment charges (d) - - - 173
Unrealized losses on fuel derivatives, net (e) 31 145 59 124
Non-GAAP net income $ 72 $ 159 $ 137 $ 172
Weighted-average shares outstanding - diluted 777 779 777 778
Earnings (loss) per share - diluted
U.S. GAAP earnings (loss) per share $ 0.05 $ 0.02 $ 0.10 $ (0.16)
Ibero goodwill and trademark impairment charges (d) - - - 0.22
Unrealized losses on fuel derivatives, net (e) 0.04 0.18 0.08 0.16
Non-GAAP earnings per share $ 0.09 $ 0.20 $ 0.18 $ 0.22
Notes to Non-GAAP Financial Measures
(a) We use net cruise revenues per ALBD ("net revenue yields"), net cruise costs per
ALBD and net cruise costs excluding fuel per ALBD as significant non-GAAP financial
measures of our cruise segment financial performance. These measures enable us to separate
the impact of predictable capacity changes from the more unpredictable rate changes that
affect our business. We believe these non-GAAP measures provide useful information to
investors and expanded insight to measure our revenue and cost performance as a supplement
to our U.S. generally accepted accounting principles ("U.S. GAAP") consolidated financial
statements.
Net revenue yields are commonly used in the cruise business to measure a company's
cruise segment revenue performance and for revenue management purposes. We use "net cruise
revenues" rather than "gross cruise revenues" to calculate net revenue yields. We believe
that net cruise revenues is a more meaningful measure in determining revenue yield than
gross cruise revenues because it reflects the cruise revenues earned net of our most
significant variable costs, which are travel agent commissions, cost of air and other
transportation, certain other costs that are directly associated with onboard and other
revenues and credit card fees. Substantially all of our remaining cruise costs are largely
fixed, except for the impact of changing prices and food expenses, once our ship capacity
levels have been determined.
Net passenger ticket revenues reflect gross cruise revenues, net of (1) onboard and
other revenues, (2) commissions, transportation and other costs and (3) onboard and other
cruise costs. Net onboard and other revenues reflect gross cruise revenues, net of (1)
passenger ticket revenues, (2) commissions, transportation and other costs and (3) onboard
and other cruise costs. Net passenger ticket revenue yields and net onboard and other
revenue yields are computed by dividing net passenger ticket revenues and net onboard and
other revenues by ALBDs.
Net cruise costs per ALBD and net cruise costs excluding fuel per ALBD are the most
significant measures we use to monitor our ability to control our cruise segment costs
rather than gross cruise costs per ALBD. We exclude the same variable costs that are
included in the calculation of net cruise revenues to calculate net cruise costs with and
without fuel to avoid duplicating these variable costs in our non-GAAP financial measures.
We have not provided estimates of future gross revenue yields or future gross cruise
costs per ALBD because the quantitative reconciliations of forecasted gross cruise
revenues to forecasted net cruise revenues or forecasted gross cruise costs to forecasted
net cruise costs would include a significant amount of uncertainty in projecting the costs
deducted to arrive at this measure. As such, management does not believe that this
reconciling information would be meaningful.
In addition, because our Europe, Australia & Asia cruise brands utilize the euro,
sterling and Australian dollar to measure their results and financial condition, the
translation of those operations to our U.S. dollar reporting currency results in decreases
in reported U.S. dollar revenues and expenses if the U.S. dollar strengthens against these
foreign currencies and increases in reported U.S. dollar revenues and expenses if the U.S.
dollar weakens against these foreign currencies. Accordingly, we also monitor and report
these non-GAAP financial measures assuming the 2013 periods currency exchange rates have
remained constant with the 2012 periods rates, or on a "constant dollar basis," in order
to remove the impact of changes in exchange rates on our non-U.S. dollar cruise
operations. We believe that this is a useful measure since it facilitates a comparative
view of the changes in our business in a fluctuating currency exchange rate environment.
(b) Our consolidated financial statements are prepared in accordance with U.S. GAAP.
The presentation of our non-GAAP financial information is not intended to be considered in
isolation or as substitute for, or superior to, the financial information prepared in
accordance with U.S. GAAP. There are no specific rules for determining our non-GAAP
current and constant dollar financial measures and, accordingly, they are susceptible to
varying calculations, and it is possible that they may not be exactly comparable to the
like-kind information presented by other companies, which is a potential risk associated
with using these measures to compare us to other companies.
(c) For the three and six months ended May 31, 2013 and 2012, selling and
administrative expenses were $449 million ($431 million in 2012) and $908 million ($852
million in 2012), respectively. For the three and six months ended May 31, 2013 and 2012,
selling and administrative expenses were comprised of cruise selling and administrative
expenses of $447 million ($429 million in 2012) and $904 million ($848 million in 2012)
and Tour and Other selling and administrative expenses of $2 million ($2 million in 2012)
and $4 million ($4 million in 2012), respectively.
(d) We believe that the impairment charges recognized in the six months ended May 31,
2012 related to Ibero's goodwill and trademarks are special charges and, therefore, are
not an indication of our future earnings performance. As such, we believe it is more
meaningful for the impairment charges to be excluded from our net loss and loss per share
and, accordingly, we present non-GAAP net income and non-GAAP EPS excluding these
impairment charges.
(e) Under U.S. GAAP, the realized and unrealized gains and losses on fuel derivatives
not qualifying as fuel hedges are recognized currently in earnings. We believe that
unrealized gains and losses on fuel derivatives are not an indication of our earnings
performance since they relate to future periods and may not ultimately be realized in our
future earnings. Therefore, we believe it is more meaningful for the unrealized gains and
losses on fuel derivatives to be excluded from our net income and EPS and, accordingly, we
present non-GAAP net income and non-GAAP EPS excluding these unrealized gains and losses.
For the six months ended May 31, 2012, non-GAAP diluted weighted-average shares
outstanding were 779 million, which includes the dilutive effect of equity plans.
We have not included in our earnings guidance the impact of unrealized gains and
losses on fuel derivatives because these unrealized amounts involve a significant amount
of uncertainty, and we do not believe they are an indication of our future earnings
performance. Accordingly, our earnings guidance is presented on a non-GAAP basis only. As
a result, we did not present a reconciliation between forecasted non-GAAP diluted EPS
guidance and forecasted U.S. GAAP diluted EPS guidance, since we do not believe that the
reconciliation information would be meaningful.
SOURCE Carnival Plc
CONTACT: MEDIA, Jennifer De La Cruz, 1 305 599 2600, ext. 16000 or INVESTOR RELATIONS,
Beth Roberts 1 305 406 4832
Latest directors dealings
- 10 minutes ago Central Asia Metals
- 2 hours ago Kenmare Resources (CDI)
- 2 hours ago Earnz
- 2 hours ago Wetherspoon (J.D.)
- 3 hours ago Informa