Carnival Corp & plc Third Quarter Earnings
CARNIVAL CORPORATION & PLC REPORTS THIRD QUARTER EARNINGS
Carnival Corporation & plc today reports earnings for the third quarter
ended August 31, 2011. The earnings of Carnival Corporation and Carnival plc
have been consolidated, and this statement includes consolidated results on
a U.S. GAAP basis.
3Q Highlights
- 3Q revenues increased by $531m to $5.1b versus $4.5b in the
prior year, due primarily to the combination of increased capacity and
higher revenue yields
- 3Q net revenue yields in constant dollars increased 2.6% (up
7.2% in current dollars) compared to the prior year
- 3Q results included a charge of $0.02 per share related to the
sale of Costa Marina, which was not anticipated in the company's June
guidance
- Excluding fuel and the Costa Marina charge, 3Q 2011 constant
dollar net cruise costs per available lower berth day ("ALBD") increased
1.9%
- Fuel prices increased 45% to $686 per metric ton for 3Q 2011
versus $473 per metric ton in 3Q 2010
- 3Q EPS (diluted) of $1.69, compared to $1.62 for the prior year
- The company recently repurchased 14.5m shares of Carnival
Corporation & plc stock at a total investment of $445m
2011 Outlook
- At this time, cumulative advance bookings for the remainder
of 2011 and the first half of 2012 are at higher prices with slightly
lower occupancies compared to the prior year
- Net revenue yields for FY 2011 are expected to increase 2.0% in
constant dollars (increase 4.0% in current dollars)
- Net cruise costs excluding fuel per ALBD for FY 2011 are
expected to be up 1.0% on a constant dollar basis
- Forecasted fuel costs for FY 2011 are expected to increase $542m
compared to FY 2010, costing an additional $0.69 per share
- FY 2011 EPS (diluted) expected to be in the range of $2.40 to
$2.44, compared to $2.47 for FY 2010
- 4Q EPS (diluted) expected to be in the range of $0.26 to $0.30,
compared to $0.31 in 4Q 2010
Chairman and Chief Executive Officer Micky Arison commenting on these
results:
"Cruise ticket prices for our peak summer season remained strong close
to sailing driving a 2.6 percent yield improvement (constant dollars). Our
North American brands performed well, achieving an almost six percent yield
increase, while our European, Australian and Asian brand yields fell two
percent (constant dollars) due primarily to the geo-political unrest in the
Middle East and North Africa. Higher revenue yields helped offset a 45
percent increase in fuel prices, leading to improved quarterly profits."
"Despite the uncertain economic environment, we have a strong base of
business for the first half of 2012, and booking trends during the third
quarter have been solid. The increased level of importance consumers are
placing on value continues to drive demand for our cruise products."
"The current share repurchase program demonstrates our confidence in the
earnings power of our global cruise brands. Reduced capital commitments due
to the slower pace of our shipbuilding program, along with our strong
balance sheet and solid investment grade credit ratings, leave us well
positioned to opportunistically return cash to shareholders."
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 3:00 p.m.
BST (10:00 a.m. EDT) today to discuss its 2011 third quarter earnings. This
call can be listened to live, and additional information can be obtained,
via Carnival Corporation & plc's Web site at www.carnivalcorp.com
and www.carnivalplc.com.
Carnival Corporation & plc is the largest cruise vacation group 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 (UK) and P&O Cruises (Australia).
Together, these brands operate 101 ships totaling approximately 200,000
lower berths with 10 new ships scheduled to be delivered between April 2012
and March 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 THIRD QUARTER EARNINGS
MIAMI, Sept. 20, 2011 -- Carnival Corporation & plc (NYSE/LSE: CCL;
NYSE: CUK) reported net income of $1.3 billion, or $1.69 diluted EPS, on
revenues of $5.1 billion for its third quarter ended August 31, 2011. Net
income for the third quarter of 2010 was $1.3 billion, or $1.62 diluted EPS,
on revenues of $4.5 billion.
Carnival Corporation & plc Chairman and CEO Micky Arison noted that
earnings were better than anticipated in the company's June guidance due to
the combination of higher than expected revenue yields and lower than
expected costs in the third quarter.
Commenting on the third quarter, Arison said, "Cruise ticket prices for
our peak summer season remained strong close to sailing driving a 2.6
percent yield improvement (constant dollars). Our North American brands
performed well, achieving an almost six percent yield increase, while our
European, Australian and Asian brand yields fell two percent (constant
dollars) due primarily to the geo-political unrest in the Middle East and
North Africa. Higher revenue yields helped offset a 45 percent increase in
fuel prices, leading to improved quarterly profits."
Key metrics for the third quarter 2011 compared to the prior year were
as follows:
- Third quarter results included a charge of $0.02 per share
related to the sale of Costa Marina, which was not anticipated in the
company's June guidance.
- On a constant dollar basis net revenue yields (net revenue per
available lower berth day-"ALBD") increased 2.6 percent for 3Q 2011,
which was better than the company's June guidance, up 1.0 to 2.0
percent. Net revenue yields in current dollars increased 7.2 percent
due, in part, to favorable currency exchange rates. Gross revenue yields
increased 6.8 percent in current dollars.
- Net cruise costs excluding the Costa Marina charge and fuel per
ALBD increased 1.9 percent in constant dollars, and was better than June
guidance, up 2.5 to 3.5 percent, partly due to the timing of expenses.
Gross cruise costs including fuel per ALBD in current dollars increased
11.7 percent.
- Fuel prices increased 45 percent to $686 per metric ton for 3Q
2011 from $473 per metric ton in 3Q 2010 and was higher than June
guidance of $670 per metric ton.
Continuing with its strategic growth initiatives, during the third
quarter the company announced it had reached agreements for the construction
of three new cruise ships - one 132,500-ton vessel for its Costa Cruises
brand and two 125,000-ton ships for its AIDA Cruises brand. The ships will
be the largest ever constructed for these two cruise lines.
Outlook
At this time, cumulative advance bookings for the remainder of 2011 and
the first half of 2012 are at higher prices with slightly lower occupancies
compared to the prior year. Since June, booking volumes for the remainder of
the year and the first half of 2012 have run ahead of the prior year at
slightly higher prices.
Arison noted, "Despite the uncertain economic environment, we have a
strong base of business for the first half of 2012, and booking trends
during the third quarter have been solid. The increased level of importance
consumers are placing on value continues to drive demand for our cruise
products."
Arison also noted the company recently repurchased 14.5 million shares
of Carnival Corporation & plc stock at a total investment of $445 million.
"The current share repurchase program demonstrates our confidence in the
earnings power of our global cruise brands. Reduced capital commitments due
to the slower pace of our shipbuilding program, along with our strong
balance sheet and solid investment grade credit ratings, leave us well
positioned to opportunistically return cash to shareholders," Arison stated.
The company continues to expect full year net revenue yields, on a
constant dollar basis, to increase 2.0 percent, in line with its June
guidance, up 1.5 to 2.5 percent. Net revenue yields on a current dollar
basis are expected to increase 4.0 percent for the full year 2011 compared
to 2010.
The company expects net cruise costs excluding fuel per ALBD for the
full year 2011 to be up 1.0 percent on a constant dollar basis, at the
higher end of its June guidance range, flat to up 1.0 percent, primarily due
to the charge related to the sale of Costa Marina.
In addition, changes in fuel prices and currency exchange rates are
expected to reduce full year 2011 earnings by $0.06 per share compared to
the company's June guidance. Based on the current spot prices for fuel, fuel
costs for the full year 2011 are now expected to increase $542 million
compared to 2010, costing an additional $0.69 per share.
Taking all the above factors into consideration, the company now
forecasts full year 2011 fully diluted earnings per share to be in the range
of $2.40 to $2.44, compared to 2010 earnings of $2.47 per share.
Fourth Quarter 2011
Fourth quarter constant dollar net revenue yields are expected to
increase 1.0 to 2.0 percent (up 1.5 to 2.5 percent on a current dollar
basis) compared to the prior year. Net cruise costs excluding fuel per ALBD
for the fourth quarter are expected to be down 3.0 to 4.0 percent on a
constant dollar basis (down 2.5 to 3.5 percent on a current dollar basis)
compared to prior year. Fuel costs for the fourth quarter are expected to
increase $171 million compared to the prior year, costing an additional
$0.22 per share.
Based on the above factors and using current fuel prices and currency
exchange rates, the company expects fully diluted earnings for the fourth
quarter 2011 to be in the range of $0.26 to $0.30 per share, compared to
$0.31 per share in 2010.
Selected Key Forecast Metrics
-----------------------------
Full Year 2011 Fourth Quarter 2011
Current Constant Current Constant
Dollars Dollars Dollars Dollars
Change in:
Net revenue yields 4.0 % 2.0 % 1.5 to 2.5 % 1.0 to 2.0 %
Net cruise costs excl.
fuel /ALBD 3.0 % 1.0 % (2.5) to (3.5) % (3.0) to (4.0) %
Full Year 2011 Fourth Quarter 2011
Fuel price per metric ton $648 $686
Fuel consumption (metric tons in
thousands) 3,400 863
Currency
Euro $1.40 to EUR1 $1.36 to EUR1
Sterling $1.61 to 1 pound $1.58 to 1 pound
The company has scheduled a conference call with analysts at 10:00 a.m.
EDT (3:00 p.m. BST) today to discuss its 2011 third quarter earnings. This
call can be listened to live, and additional information can be obtained,
via Carnival Corporation & plc's Web site at www.carnivalcorp.com and
www.carnivalplc.com.
Carnival Corporation & plc is the largest cruise vacation group 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 (UK) and P&O Cruises (Australia).
Together, these brands operate 101 ships totaling approximately 200,000
lower berths with 10 new ships scheduled to be delivered between April 2012
and March 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
Some of the statements, estimates or projections contained in this
earnings release are "forward-looking statements" that involve risks,
uncertainties and assumptions with respect to Carnival Corporation & plc,
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,"
"expect," "anticipate," "forecast," "future," "intend," "plan," "estimate"
and similar expressions of future intent or the negative of such terms.
Because forward-looking statements involve risks and uncertainties, there
are many factors that could cause Carnival Corporation & plc's actual
results, performance or achievements to differ materially from those
expressed or implied in this earnings release. Forward-looking statements
include those statements that may impact, among other things, the
forecasting of Carnival Corporation & plc's earnings per share, net revenue
yields, booking levels, pricing, occupancy, operating, financing and tax
costs, fuel expenses, costs per available lower berth day, estimates of ship
depreciable lives and residual values, liquidity, goodwill and trademark
fair values and outlook. These factors include, but are not limited to, the
following: general economic and business conditions; fluctuations in foreign
currency exchange rates; 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;
competition from and overcapacity in the cruise ship or land-based vacation
industries; accidents, the spread of contagious diseases and threats
thereof, adverse weather conditions or natural disasters and other incidents
affecting the health, safety, security and satisfaction of guests and crew;
adverse publicity concerning the cruise industry in general, or Carnival
Corporation & plc in particular, including any adverse impact that cruising
may have on the marine environment; 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 Carnival Corporation & plc operates; economic, market and
political factors that are beyond Carnival Corporation & plc's control,
which could increase its operating, financing and other costs; the ability
of Carnival Corporation & plc to implement its shipbuilding programs and
ship repairs, maintenance and refurbishments on terms that are favorable or
consistent with its expectations; increases in Carnival Corporation & plc's
repairs and maintenance expenses and refurbishment costs as its fleet ages;
the continued strength of Carnival Corporation & plc's cruise brands and its
ability to implement its brand strategies; Carnival Corporation & plc's
international operations are subject to additional risks not generally
applicable to its U.S. operations; geographic regions in which Carnival
Corporation & plc tries to expand its business may be slow to develop and
ultimately not develop how it expects; whether Carnival Corporation & plc's
future operating cash flow will be sufficient to fund future obligations and
whether it will be able to obtain financing, if necessary, in sufficient
amounts and on terms that are favorable or consistent with its expectations;
Carnival Corporation & plc counterparties' abilities to perform; continuing
financial viability of Carnival Corporation & plc's travel agent
distribution sy stem, air service providers and other key vendors in its
supply chain and reductions in the availability of, and increases in the
pricing for, the services and products provided by these vendors; Carnival
Corporation & plc's decisions to self-insure against various risks or its
inability to obtain insurance for certain risks at reasonable rates;
disruptions and other damages to Carnival Corporation & plc's information
technology and other networks and operations and breaches in data security;
loss of key personnel or Carnival Corporation & plc's ability to recruit or
retain qualified personnel; union disputes and other employee relation
issues; lack of continuing availability of attractive, convenient and safe
port destinations; and risks associated with the dual listed company
arrangement. 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, Carnival Corporation &
plc 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 INCOME
(UNAUDITED)
(in millions, except per share data)
Three Months Ended Nine Months Ended
------------------ -----------------
August 31, August 31,
---------- ----------
2011 2010 2011 2010
---- ---- ---- ----
Revenues
Cruise
Passenger
tickets $3,907 $3,478 (a) $9,336 $8,418 (a)
Onboard and
other 936 847 2,511 2,313
Tour and other 215 202 249 241
--- --- --- ---
5,058 4,527 12,096 10,972
----- ----- ------ ------
Costs and
Expenses
Operating
Cruise
Commissions,
transportation
and other 686 618 (a) 1,911 1,711 (a)
Onboard and
other 137 131 379 350
Payroll and
related 435 426 (b) 1,282 1,200
Fuel 581 396 1,611 1,209
Food 257 223 728 647
Other ship
operating 575 (c) 467 (d) 1,640 1,445
Tour and other 143 128 179 174
--- --- --- ---
Total 2,814 2,389 7,730 6,736
Selling and
administrative 421 381 1,282 1,181
Depreciation and
amortization 390 355 1,137 1,049
--- --- ----- -----
3,625 3,125 10,149 8,966
----- ----- ------ -----
Operating Income 1,433 1,402 1,947 2,006
----- ----- ----- -----
Nonoperating
(Expense)
Income
Interest income 3 3 8 10
Interest
expense, net of
capitalized
interest (96) (90) (273) (285)
Other income
(expense), net 2 (2) 21 (7)
--- --- --- ---
(91) (89) (244) (282)
--- --- ---- ----
Income Before
Income Taxes 1,342 1,313 1,703 1,724
Income Tax
(Expense)
Benefit, Net (5) (10) (8) 6
--- --- --- ---
Net Income $1,337 $1,303 $1,695 $1,730
====== ====== ====== ======
Earnings Per
Share
Basic $1.69 $1.65 $2.14 $2.20
===== ===== ===== =====
Diluted $1.69 $1.62 $2.14 $2.16
===== ===== ===== =====
Dividends
Declared Per
Share $0.25 $0.10 $0.75 $0.30
===== ===== ===== =====
Weighted-Average
Shares Outstanding
- Basic 790 789 791 788
=== === === ===
Weighted-Average
Shares Outstanding
- Diluted 792 806 793 806
=== === === ===
(a) During the fourth quarter of 2010, we changed the classification
of our port costs that vary with guest head counts to a gross
presentation from a net presentation, which resulted in an increase
in passenger ticket revenues and commissions, transportation and
other costs. The amounts reclassified and included on a gross basis
in passenger ticket revenues and commissions, transportation and
other costs were $101 million and $256 million for the three and
nine months ended August 31, 2010, respectively.
(b) Includes a $41 million expense related to the British Merchant
Navy Officers Pension Fund.
(c) Includes a $13 million charge related to the sale of Costa
Marina, which will leave the fleet in November 2011.
(d) Includes a $17 million gain from a litigation settlement related
to Queen Mary 2's propulsion pods.
CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except par values)
August 31, November 30,
2011 2010
---- ----
ASSETS
Current Assets
Cash and cash equivalents $430 $429
Trade and other receivables, net 353 248
Inventories 366 320
Prepaid expenses and other 248 247
--- ---
Total current assets 1,397 1,244
----- -----
Property and Equipment, Net 33,243 30,967
Goodwill 3,430 3,320
Other Intangibles 1,396 1,320
Other Assets 560 639
--- ---
$40,026 $37,490
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $912 $740
Current portion of long-term debt 1,196 613
Accounts payable 548 503
Accrued liabilities and other 1,084 1,094
Customer deposits 3,141 2,805
----- -----
Total current liabilities 6,881 5,755
----- -----
Long-Term Debt 7,714 8,011
Other Long-Term Liabilities and
Deferred Income 679 693
Shareholders' Equity
Common stock of Carnival Corporation,
$0.01 par value; 6 6
1,960 shares authorized; 647 shares
at 2011 and
646 shares at 2010 issued
Ordinary shares of Carnival plc,
$1.66 par value; 215 357 355
shares at 2011 and 214 shares at 2010
issued
Additional paid-in capital 8,167 8,094
Retained earnings 18,319 17,224
Accumulated other comprehensive
income (loss) 585 (254)
Treasury stock, 48 shares at 2011 and
39 shares at 2010 (2,682) (2,394)
of Carnival Corporation and 32 shares
at 2011 and ------ ------
31 shares at 2010 of Carnival plc, at
cost
Total shareholders' equity 24,752 23,031
------ ------
$40,026 $37,490
======= =======
CARNIVAL CORPORATION & PLC
OTHER INFORMATION
Three Months Ended Nine Months Ended
------------------ -----------------
August 31, August 31,
---------- ----------
2011 2010 2011 2010
---- ---- ---- ----
STATISTICAL INFORMATION
Passengers carried (in
thousands) 2,676 2,617 7,192 6,888
Occupancy percentage (a) 111.9% 111.1% 107.2% 106.2%
Fuel consumption (metric tons
in thousands) 847 838 2,537 2,473
Fuel cost per metric ton
consumed $686 $473 $635 $489
Currencies
U.S. dollar to EUR1 $1.43 $1.27 $1.40 $1.32
U.S. dollar to 1 pound $1.63 $1.52 $1.61 $1.54
U.S. dollar to Australian
dollar $1.06 $0.88 $1.03 $0.89
CASH FLOW INFORMATION
Cash from operations $1,215 $1,290 $3,016 $3,084
Capital expenditures $813 $670 $2,435 $2,838
Dividends paid $197 $79 $474 $158
(a) In accordance with cruise industry 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.
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):
Three Months Ended
------------------
August 31,
----------
2011 2011 2010
---- Constant ----
Dollar
------
Passenger ticket revenues $3,907 $3,730 $3,478
Onboard and other revenues 936 901 847
--- --- ---
Gross cruise revenues 4,843 4,631 4,325
----- ----- -----
Less cruise costs
Commissions, transportation
and other (686) (653) (618)
Onboard and other (137) (132) (131)
---- ---- ----
(823) (785) (749)
---- ---- ----
Net passenger ticket
revenues 3,221 3,077 2,860
Net onboard and other
revenues 799 769 716
--- --- ---
Net cruise revenues $4,020 $3,846 $3,576
====== ====== ======
ALBDs (b) 18,089,807 18,089,807 17,255,120
========== ========== ==========
Gross revenue yields $267.70 $255.96 $250.67
% increase vs. 2010 6.8% 2.1%
Net revenue yields $222.21 $212.57 $207.23
% increase vs. 2010 7.2% 2.6%
Net passenger ticket
revenue yields $178.06 $170.07 $165.73
% increase vs. 2010 7.4% 2.6%
Net onboard and other
revenue yields $44.15 $42.50 $41.50
% increase vs. 2010 6.4% 2.4%
------------------- --- ---
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):
Cruise operating expenses $2,671 $2,574 $2,261
Cruise selling and
administrative 413 396 373
expenses (c) --- --- ---
Gross cruise costs 3,084 2,970 2,634
Less cruise costs included in net
cruise revenues
Commissions, transportation
and other (686) (653) (618)
Onboard and other (137) (132) (131)
---- ---- ----
Net cruise costs 2,261 2,185 1,885
Less fuel (581) (581) (396)
---- ---- ----
Net cruise costs excluding
fuel $1,680 $1,604 $1,489
====== ====== ======
ALBDs (b) 18,089,807 18,089,807 17,255,120
========== ========== ==========
Gross cruise costs per ALBD $170.49 $164.17 $152.69
% increase vs. 2010 11.7% 7.5%
Net cruise costs per ALBD $125.00 $120.78 $109.24
% increase vs. 2010 14.4% 10.6%
Net cruise costs excluding
fuel $92.88 $88.66 $86.28
per ALBD
% increase vs. 2010 7.6% 2.8%
------------------- --- ---
Nine Months Ended
-----------------
August 31,
----------
2011 2011 2010
---- Constant ----
Dollar
------
Passenger ticket revenues $9,336 $9,096 $8,418
Onboard and other revenues 2,511 2,457 2,313
----- ----- -----
Gross cruise revenues 11,847 11,553 10,731
------ ------ ------
Less cruise costs
Commissions, transportation
and other (1,911) (1,874) (1,711)
Onboard and other (379) (369) (350)
---- ---- ----
(2,290) (2,243) (2,061)
------ ------ ------
Net passenger ticket
revenues 7,425 7,222 6,707
Net onboard and other
revenues 2,132 2,088 1,963
----- ----- -----
Net cruise revenues $9,557 $9,310 $8,670
====== ====== ======
ALBDs (b) 52,178,866 52,178,866 49,720,444
========== ========== ==========
Gross revenue yields $227.05 $221.40 $215.83
% increase vs. 2010 5.2% 2.6%
Net revenue yields $183.17 $178.42 $174.37
% increase vs. 2010 5.0% 2.3%
Net passenger ticket
revenue yields $142.30 $138.40 $134.90
% increase vs. 2010 5.5% 2.6%
Net onboard and other
revenue yields $40.86 $40.02 $39.48
% increase vs. 2010 3.5% 1.4%
------------------- --- ---
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):
Cruise operating expenses $7,551 $7,417 $6,562
Cruise selling and
administrative 1,264 1,236 1,158
expenses (c) ----- ----- -----
Gross cruise costs 8,815 8,653 7,720
Less cruise costs included in net
cruise revenues
Commissions, transportation
and other (1,911) (1,874) (1,711)
Onboard and other (379) (369) (350)
---- ---- ----
Net cruise costs 6,525 6,410 5,659
Less fuel (1,611) (1,611) (1,209)
------ ------ ------
Net cruise costs excluding
fuel $4,914 $4,799 $4,450
====== ====== ======
ALBDs (b) 52,178,866 52,178,866 49,720,444
========== ========== ==========
Gross cruise costs per ALBD $168.93 $165.84 $155.27
% increase vs. 2010 8.8% 6.8%
Net cruise costs per ALBD $125.05 $122.86 $113.82
% increase vs. 2010 9.9% 7.9%
Net cruise costs excluding
fuel $94.18 $91.99 $89.50
per ALBD
% increase vs. 2010 5.2% 2.8%
------------------- --- ---
(See next page for Notes to Non-GAAP Financial Measures.)
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 an expanded insight to measure
our revenue and cost performance in addition to the standard U.S.
GAAP-based financial measures.
Net revenue yields are commonly used in the cruise industry 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, 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
increases in reported U.S. dollar revenues and expenses if the
U.S. dollar weakens against these foreign currencies and decreases
in reported U.S. dollar revenues and expenses if the U.S. dollar
strengthens against these foreign currencies. Accordingly, we also
monitor and report our non-GAAP financial measures assuming the
2011 periods' currency exchange rates have remained constant with
the 2010 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 growth of our
business in a fluctuating currency exchange rate environment.
There are no specific rules for determining our non-GAAP current
and constant dollar financial measures and, accordingly, it is
possible that they may not be exactly comparable to the like-kind
information presented by other cruise companies, which is a
potential risk associated with using these measures to compare us
to other cruise companies.
(b) 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.
(c) For the three and nine months ended August 31, 2011, selling
and administrative expenses were $421 million ($381 million in
2010) and $1.3 billion ($1.2 billion in 2010), respectively. For
the three and nine months ended August 31, 2011, selling and
administrative expenses were comprised of cruise selling and
administrative expenses of $413 million ($373 million in 2010) and
$1.3 billion ($1.2 billion in 2010) and Tour and Other selling and
administrative expenses of $8 million ($8 million in 2010) and $18
million ($23 million in 2010), respectively.
SOURCE Carnival Corporation
CONTACT: MEDIA, Jennifer De La Cruz, +1-305-599-2600, ext. 16000;
INVESTOR RELATIONS, Beth Roberts, +1-305-406-4832
Latest directors dealings
- 2 hours ago Johnson Matthey
- 3 hours ago Galliford Try
- 3 hours ago Galliford Try
- 3 hours ago Centrica
- 4 hours ago Smith & Nephew