Carnival Corporation & plc Fourth Quarter E...
Carnival Corporation & Plc Reports Fourth Quarter and Full Year
Earnings
MIAMI, Dec. 18 -- Carnival Corporation & plc today reports earnings for
the fourth quarter and full year ended November 30, 2009. The earnings of
Carnival Corporation and Carnival plc have been consolidated, and this
statement includes consolidated results on a U.S. GAAP basis.
Q4 and Full Year Highlights
- Q4 revenues decreased by $96m to $3.2bn versus $3.3bn in the
prior year, primarily driven by lower cruise ticket prices
- Q4 net revenue yields in constant dollars decreased 10.4% (down
8.6% in current dollars) which was better than September guidance of down
11 to 13% compared to the prior year
- Fuel price decreased 15% to $458 per metric ton versus $538 per
metric ton in the prior year
- Q4 earnings per share (diluted) of $0.24 compared to $0.47 for
the prior year
- Full year earnings per share (diluted) of $2.24, compared to
$2.90 for the prior year
Outlook
- Occupancy levels for 2010 are currently in line with 2009,
and on a cumulative basis 2010 pricing is slightly behind last year at
this time
- Since September, booking volumes and pricing are running well
ahead of last year's lower levels
- The company now expects net revenue yields on a constant dollar
basis for full year 2010 to be flat to up slightly (2 to 3% increase in
current dollars)
- Net cruise costs excluding fuel for the full year 2010 are
expected to be down approximately 1 to 2% compared with the prior year on
a constant dollar basis
- Forecasted fuel costs for the full year 2010 are expected to
increase $368 million compared to 2009, costing $0.46 per share
- Full year 2010 earnings per share (diluted) expected to be in the
range of $2.10 to $2.30, compared to $2.24 for 2009
- Q1 earnings per share (diluted) expected to be in the range of
$0.08 to $0.12 versus $0.33 in Q1 2009 due primarily to higher fuel costs
Chairman and Chief Executive Officer Micky Arison commenting on these
results:
"We weathered the most challenging economic environment in the company's
history exceptionally well. In 2009, Carnival was the most profitable leisure
travel company, which is testament to the strength and quality of our global
portfolio of highly recognized brands and their management teams. On
significantly reduced global travel demand, net revenue yields for our North
American brands fell 13 percent while our European brands' yields fell a more
modest 6 percent (in constant dollars). Despite an 8 percent capacity
increase, the stronger performance of our European brands in this economic
environment reinforces our strategy to expand our European presence, which
will continue in 2010 with four of six newbuilds scheduled for our European
brands. In addition, through effective global cost containment initiatives we
achieved $170 million of savings since the start of the year, which partially
offset the pressure on net revenue yields."
"During the fourth quarter, we placed our first new ship order in two
years which demonstrates our continued confidence in the future of our
industry."
"We are optimistic that the attractive pricing we have in the marketplace
and pent-up demand for vacation travel will continue to stimulate strong
booking volumes and lead to a solid wave season. We remain focused on cost
controls and expect to reduce non-fuel costs on a per unit basis in 2010 (in
constant dollars). Our lean and efficient operating structure leaves us well
positioned as the global economy recovers."
MEDIA CONTACT INVESTOR RELATIONS CONTACT
Carnival Corporation & plc Carnival Corporation & plc
Tim Gallagher 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.
GMT (10:00 a.m. EST) today to discuss its 2009 fourth quarter and full year
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
Carnival Corporation & plc is the largest cruise vacation group in the
world, with a portfolio of cruise brands in North America, Europe and
Australia, comprised of Carnival Cruise Lines, Holland America Line, Princess
Cruises, The Yachts of Seabourn, AIDA Cruises, Costa Cruises, Cunard Line,
Ibero Cruises, Ocean Village, P&O Cruises and P&O Cruises Australia.
Together, these brands operate 93 ships totaling more than 180,000 lower
berths with 13 new ships scheduled to be delivered between January 2010 and
May 2012. 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 Fourth Quarter and Full Year
Earnings
Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) reported net income
of $193 million, or $0.24 diluted EPS, on revenues of $3.2 billion for its
fourth quarter ended November 30, 2009. Net income for the fourth quarter of
2008 was $371 million, or $0.47 diluted EPS, on revenues of $3.3 billion.
Operating results in the fourth quarter were better than the company's
September guidance driven by stronger than expected revenue yields, primarily
onboard, as well as lower operating costs.
The company reported net income for the full year ended November 30, 2009
of $1.8 billion, or $2.24 diluted EPS, compared to net income of $2.3
billion, or $2.90 diluted EPS, for the prior year. Revenues for the full year
2009 were $13.2 billion compared to $14.6 billion for the prior year.
Micky Arison, Carnival Corporation & plc Chairman and CEO, commenting on
full year results said, "We weathered the most challenging economic
environment in the company's history exceptionally well. In 2009, Carnival
was the most profitable leisure travel company, which is testament to the
strength and quality of our global portfolio of highly recognized brands and
their management teams. On significantly reduced global travel demand, net
revenue yields for our North American brands fell 13 percent while our
European brands' yields fell a more modest 6 percent (in constant dollars).
Despite an 8 percent capacity increase, the stronger performance of our
European brands in this economic environment reinforces our strategy to
expand our European presence, which will continue in 2010 with four of six
newbuilds scheduled for our European brands. In addition, through effective
global cost containment initiatives we achieved $170 million of savings since
the start of the year, which partially offset the pressure on net revenue
yields."
Key metrics for the fourth quarter of 2009 compared to the prior year
were as follows:
- On a constant dollar basis net revenue yields (net revenue
per available lower berth day) decreased 10.4 percent for Q4 2009 which
was better than our September guidance of down 11 to 13 percent. Net
revenue yields in current dollars decreased 8.6 percent due to favorable
currency exchange rates. Gross revenue yields in current dollars
decreased 9.6 percent.
- Excluding fuel, net cruise costs per available lower berth day
("ALBD") for Q4 2009 were 2.0 percent lower on a constant dollar basis.
- Including fuel, net cruise costs per ALBD for Q4 2009 decreased
5.6 percent on a constant dollar basis (decreased 3.5 percent in current
dollars). Gross cruise costs per ALBD in current dollars decreased 6.1
percent.
- Fuel price decreased 15 percent to $458 per metric ton for Q4
2009 from $538 per metric ton in Q4 2008 and was in line with the
September guidance of $465 per metric ton.
Arison added, "During the fourth quarter, we placed our first new ship
order in two years which demonstrates our continued confidence in the future
of our industry." The new 3,690-passenger ship for Carnival Cruise Lines will
be the third ship in the Dream-class and is set to enter service in June
2012.
Earlier this month, the company furthered its strategy to expand its
European presence when it announced that Princess Cruises' 710-passenger
Royal Princess will transfer to P&O Cruises (UK) in the spring of 2011 and
will be renamed Adonia. And just last week, P&O Cruises Australia completed
the inaugural celebration of Pacific Jewel in Sydney harbor, which was one of
Australia's most highly publicized cruise events.
Outlook
Booking volumes continue to be strong and occupancy levels for 2010 are
currently in line with 2009. On a cumulative basis, 2010 pricing is slightly
behind last year at this time. However, since September, pricing is running
well ahead of last year's lower levels, as a result the company expects to
show yield improvement in the second half of 2010.
Looking forward, Arison noted, "We are optimistic that the attractive
pricing we have in the marketplace and pent-up demand for vacation travel
will continue to stimulate strong booking volumes and lead to a solid wave
season. We remain focused on cost controls and expect to reduce non-fuel
costs on a per unit basis in 2010 (in constant dollars). Our lean and
efficient operating structure leaves us well positioned as the global economy
recovers."
The company forecasts a 2 to 3 percent increase in net revenue yields on
a current dollar basis for the full year 2010 as a result of favorable
movements in currency exchange rates. On a constant dollar basis, the company
expects full year net revenue yields to be flat to up slightly.
The company expects net cruise costs excluding fuel for the full year
2010 to be down approximately 1 to 2 percent compared to the prior year on a
constant dollar basis due primarily to lower dry-dock costs and tight cost
controls. Based on current spot prices for fuel, forecasted fuel costs for
the full year are expected to increase $368 million compared to 2009, costing
$0.46 per share. This is forecasted to be partially offset by favorable
movements in currency exchange rates worth $0.08 per share.
Taking all the above factors into consideration, the company forecasts
full year 2010 earnings per share to be in the range of $2.10 to $2.30 fully
diluted, compared to $2.24 for 2009.
First Quarter 2010
First quarter constant dollar net revenue yields are expected to decline
in the 3 to 4 percent range (flat to up slightly on a current dollar basis),
compared to the prior year. The company expects sequential improvement in net
revenue yields as the year progresses. Net cruise costs excluding fuel, for
the first quarter are expected to be down 2 to 3 percent compared to the
prior year on a constant dollar basis. However, forecasted fuel costs for the
first quarter are expected to increase $160 million compared to the prior
year, costing $0.20 per share.
Based on current fuel prices and currency exchange rates, the company
expects earnings for the first quarter of 2010 to be in the range of $0.08 to
$0.12 per share, down from $0.33 per share in 2009 which included $0.04 of
nonrecurring gains.
In the first quarter, the company will continue its European expansion
when it takes delivery of two new ships, AIDA Cruises' 2,192-passenger
AIDAblu which is set to debut in Europe, and Costa Cruises' 2,260-passenger
Costa Deliziosa which will be the first cruise ship to be inaugurated in
Dubai.
Selected Key Forecast Metrics
-----------------------------
Full Year 2010 First Quarter 2010
Current Constant Current Constant
Dollars Dollars Dollars Dollars
Change in:
Net revenue yields 2 to 3 % 0 to 1 % 0 to 1 % (3) to (4) %
Net cruise cost per ALBD 4 to 6 % 2 to 4 % 9 to 11 % 5 to 7 %
Full Year 2010 First Quarter 2010
Fuel price per metric ton $472 $474
Fuel consumption (metric tons
in thousands) 3,380 810
Currency
Euro $1.45 to (euro) 1 $1.45 to (euro) 1
Sterling $1.63 to (pound) 1 $1.63 to (pound) 1
The company has scheduled a conference call with analysts at 10:00 a.m.
EST (3:00 p.m. GMT) today to discuss its 2009 fourth quarter and full year
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 and
Australia, comprised of Carnival Cruise Lines, Holland America Line, Princess
Cruises, The Yachts of Seabourn, AIDA Cruises, Costa Cruises, Cunard Line,
Ibero Cruises, Ocean Village, P&O Cruises and P&O Cruises Australia.
Together, these brands operate 93 ships totaling more than 180,000 lower
berths with 13 new ships scheduled to be delivered between January 2010 and
May 2012. 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 which may impact, among other things, the forecasting of Carnival
Corporation and plc's earnings per share, net revenue yields, booking levels,
pricing, occupancy, operating, financing and/or tax costs, fuel expenses,
costs per available lower berth day, estimates of ship depreciable lives and
residual values, liquidity, goodwill and trademark fair values, outlook or
business prospects. These factors include, but are not limited to, the
following: general economic and business conditions, including fuel price
increases, high unemployment rates, and declines in the securities, real
estate and other markets, and perceptions of these conditions, may adversely
impact the levels of Carnival Corporation & plc's potential vacationers'
discretionary income and net worth and this group's confidence in their
country's economy; fluctuations in foreign currency exchange rates,
particularly the movement of the U.S. dollar against the euro and sterling;
the international political climate, armed conflicts, terrorist and pirate
attacks and threats thereof, and other world events affecting the safety and
security of travel; competition from and over capacity offered by cruise ship
operators and providers of other vacation alternatives; lack of acceptance of
new itineraries, products and services by Carnival Corporation & plc's
guests; changing consumer preferences; Carnival Corporation & plc's ability
to attract and retain qualified shipboard crew and maintain good relations
with employee unions; accidents, the spread of contagious diseases and the
threats thereof, adverse weather conditions or natural disasters, such as
hurricanes and earthquakes, and other incidents (including, but not limited
to, ship fires and machinery and equipment failures or improper operation
thereof), which could cause, among other things, individual or multiple port
closures, injury, death, alteration of cruise itineraries or cancellation of
a cruise or series of cruises or tours; 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
protection of disabled persons, employment, environmental, health, safety,
security, tax and other regulatory regimes under which Carnival Corporation &
plc operate; increases in global fuel demand and pricing, fuel supply
disruptions and/or other events on Carnival Corporation & plc fuel and other
expenses, liquidity and credit ratings; increases in Carnival Corporation
plc's future fuel expenses from implementing approved International Maritime
Organization regulations, which require the use of higher priced low sulfur
fuels in certain cruising areas, including the proposed establishment of a
U.S./Canadian Emissions Control Area ("ECA"), which may, if established,
significantly affect the quality and price of fuel that ships will be
required to burn within this ECA; changes in financing and operating costs,
including changes in interest rates and food, insurance, payroll and security
costs; the ability of Carnival Corporation & plc to implement its
shipbuilding programs and ship maintenance, repairs and refurbishments,
including ordering additional ships for its cruise brands from shipyards, on
terms that are favorable or consistent with Carnival Corporation & plc's
expectations; Carnival Corporation & plc's counterparties ability to perform;
Carnival Corporation & plc's ability to implement its brand strategies and to
continue to operate and expand its business globally; 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; continuing financial viability of Carnival
Corporation & plc's travel agent distribution system, air service providers
and other key vendors and the availability of and increases in 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 networks and
operations; lack of continuing availability of attractive, convenient and
safe port destinations; and risks associated with the dual listed company
structure. 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 listing 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 OPERATIONS
Three Months Ended Twelve Months Ended
November 30, November 30,
------------------ -------------------
2009 2008 2009 2008
---- ---- ---- ----
(in millions, except per share data)
Revenues
Cruise
Passenger tickets $2,419 $2,526 $9,985 $11,210
Onboard and other 753 735 2,885 3,044
Other 34 41 287 392
--- --- --- ---
3,206 3,302 13,157 14,646
----- ----- ------ ------
Costs and Expenses
Operating
Cruise
Commissions,
transportation and other 448 489 1,917 2,232
Onboard and other 116 121 461 501
Payroll and related 393 364 1,498 1,470
Fuel 378 428 1,156 1,774
Food 215 208 839 856
Other ship operating 553 485(a) 1,997 1,913
Other 40 37 236 293
--- --- --- ---
Total 2,143 2,132 8,104 9,039
Selling and administrative 424 407 1,590 1,629
Depreciation and amortization 345 313 1,309 1,249
--- --- ----- -----
2,912 2,852 11,003 11,917
----- ----- ------ ------
Operating Income 294 450 2,154 2,729
--- --- ----- -----
Nonoperating (Expense) Income
Interest income 4 5 14 35
Interest expense, net of
capitalized interest (99) (106) (380) (414)
Other income, net 2 21 18 27
--- --- --- ---
(93) (80) (348) (352)
--- --- ---- ----
Income Before Income Taxes 201 370 1,806 2,377
Income Tax (Expense) Benefit, Net (8) 1 (16) (47)
--- --- --- ---
Net Income $193 $371 $1,790 $2,330
==== ==== ====== ======
Earnings Per Share
Basic $0.25 $0.47 $2.27 $2.96
===== ===== ===== =====
Diluted $0.24 $0.47 $2.24 $2.90
===== ===== ===== =====
Dividends Declared Per Share $0.40 $1.60
===== =====
Weighted-Average Shares
Outstanding - Basic 787 787 787 786
=== === === ===
Weighted-Average Shares
Outstanding - Diluted 804 806 804 816
=== === === ===
(a) Includes a $31 million gain from the sale of Cunard Line's QE2. Also
includes $18 million of expenses for supplemental premium assessments
from the company's three P&I insurance clubs covering their 2006 to
2008 policy years.
CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
November 30,
-----------------------
2009 2008
---- ----
(in millions, except par values)
ASSETS
Current Assets
Cash and cash equivalents $538 $650
Trade and other receivables, net 362 418
Inventories 320 315
Prepaid expenses and other 298 267
--- ---
Total current assets 1,518 1,650
----- -----
Property and Equipment, Net 29,870 26,457
Goodwill 3,451 3,266
Trademarks 1,346 1,294
Other Assets 650 733
--- ---
$36,835 $33,400
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $135 $256
Current portion of long-term debt 815 1,081
Convertible debt subject to current
put option 271
Accounts payable 568 512
Accrued liabilities and other 874 1,142
Customer deposits 2,575 2,519
----- -----
Total current liabilities 4,967 5,781
----- -----
Long-Term Debt 9,097 7,735
Other Long-Term Liabilities
and Deferred Income 736 786
Shareholders' Equity
Common stock of Carnival Corporation;
$0.01 par value; 1,960 shares authorized;
644 shares at 2009 and 643 shares at
2008 issued 6 6
Ordinary shares of Carnival plc; $1.66
par value; 226 shares authorized; 213
shares at 2009 and 2008 issued 354 354
Additional paid-in capital 7,707 7,677
Retained earnings 15,770 13,980
Accumulated other comprehensive
income (loss) 462 (623)
Treasury stock; 24 shares at 2009 and
19 shares at 2008 of Carnival Corporation
and 46 shares at 2009 and 52 shares at
November 2008 of Carnival plc, at
cost (2,264) (2,296)
------ ------
Total shareholders' equity 22,035 19,098
------ ------
$36,835 $33,400
======= =======
CARNIVAL CORPORATION & PLC
SELECTED INFORMATION
Three Months Ended Twelve Months Ended
November 30, November 30,
------------------ -------------------
2009 2008 2009 2008
---- ---- ---- ----
(in millions, except statistical information)
STATISTICAL INFORMATION
Passengers carried (in
thousands) 2,136 1,966 8,519 8,183
Occupancy percentage 103.2% 102.6% 105.5% 105.7%
Fuel consumption 826 795 3,184 3,179
(metric tons in thousands)
Fuel cost per metric ton (a) $458 $538 $363 $558
Currency
U.S. dollar to (euro) 1 $1.47 $1.36 $1.39 $1.49
U.S. dollar to (pound) 1 $1.63 $1.70 $1.56 $1.90
CASH FLOW INFORMATION
Cash from operations $712 $512 $3,342 $3,391
Capital expenditures $978 $630 $3,380 $3,353
Dividends paid $316 $314 $1,261
SEGMENT INFORMATION
Revenues
Cruise $3,172 $3,261 $12,870 $14,254
Other 54 83 427 561
Intersegment elimination (20) (42) (140) (169)
--- --- ---- ----
$3,206 $3,302 $13,157 $14,646
====== ====== ======= =======
Operating expenses
Cruise $2,103 $2,095 $7,868 $8,746
Other 60 79 376 462
Intersegment elimination (20) (42) (140) (169)
--- --- ---- ----
$2,143 $2,132 $8,104 $9,039
====== ====== ====== ======
Selling and administrative
expenses
Cruise $416 $397 $1,558 $1,594
Other 8 10 32 35
--- --- --- ---
$424 $407 $1,590 $1,629
==== ==== ====== ======
Depreciation and amortization
Cruise $337 $304 $1,274 $1,213
Other 8 9 35 36
--- --- --- ---
$345 $313 $1,309 $1,249
==== ==== ====== ======
Operating income
Cruise $316 $465 $2,170 $2,701
Other (22) (15) (16) 28
--- --- --- ---
$294 $450 $2,154 $2,729
==== ==== ====== ======
(a) Fuel cost per metric ton is calculated by dividing the cost of
fuel by the number of metric tons consumed.
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES
Gross and net revenue yields were computed by dividing the gross or
net revenues, without rounding, by ALBDs as follows:
Three Months Ended Twelve Months Ended
November 30, November 30,
------------------ -------------------
2009 2008 2009 2008
---- ---- ---- ----
(in millions, except ALBDs and yields)
Cruise revenues
Passenger tickets $2,419 $2,526 $9,985 $11,210
Onboard and other 753 735 2,885 3,044
--- --- ----- -----
Gross cruise revenues 3,172 3,261 12,870 14,254
Less cruise costs
Commissions, transportation
and other (448) (489) (1,917) (2,232)
Onboard and other (116) (121) (461) (501)
---- ---- ---- ----
Net cruise revenues (a) $2,608 $2,651 $10,492 $11,521
====== ====== ======= =======
ALBDs (b) 16,042,056 14,908,624 62,105,916 58,942,864
========== ========== ========== ==========
Gross revenue yields (a) $197.69 $218.72 $207.22 $241.83
======= ======= ======= =======
Net revenue yields (a) $162.57 $177.78 $168.94 $195.46
======= ======= ======= =======
Gross and net cruise costs per ALBD were computed by dividing the gross or
net cruise costs, without rounding, by ALBDs as follows:
Three Months Ended Twelve Months Ended
November 30, November 30,
------------------ -------------------
2009 2008 2009 2008
---- ---- ---- ----
(in millions, except ALBDs and costs per ALBD)
Cruise operating expenses $2,103 $2,095 $7,868 $8,746
Cruise selling and
administrative expenses 416 397 1,558 1,594
--- --- ----- -----
Gross cruise costs 2,519 2,492 9,426 10,340
Less cruise costs
included in net
cruise revenues
Commissions,
transportation and
other (448) (489) (1,917) (2,232)
Onboard and other (116) (121) (461) (501)
---- ---- ---- ----
Net cruise costs (a) $1,955 $1,882 $7,048 $7,607
====== ====== ====== ======
ALBDs (b) 16,042,056 14,908,624 62,105,916 58,942,864
========== ========== ========== ==========
Gross cruise costs per
ALBD (a) $156.93 $167.14 $151.76 $175.43
======= ======= ======= =======
Net cruise costs per
ALBD (a) $121.82 $126.20 $113.48 $129.06
======= ======= ======= =======
NOTES TO NON-GAAP FINANCIAL MEASURES
(a) We use net cruise revenues per ALBD ("net revenue yields") and net
cruise costs 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
a better gauge to measure our revenue and cost performance instead of the
standard U.S. GAAP-based financial measures. There are no specific rules for
determining our non-GAAP 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 them to compare us to other cruise companies.
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
transportation and certain other variable direct costs associated with
onboard and other revenues. 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 cruise costs per ALBD is the most significant measure 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 to
avoid duplicating these variable costs in these two non-GAAP financial
measures.
We have not provided estimates of future gross revenue yields or future
gross cruise costs per ALBD because the reconciliations of forecasted net
cruise revenues to forecasted gross cruise revenues or forecasted net cruise
costs to forecasted cruise operating expenses would require us to forecast,
with reasonable accuracy, the amount of air and other transportation costs
that our forecasted cruise passengers would elect to purchase from us (the
"air/sea mix"). Since the forecasting of future air/sea mix involves several
significant variables that are relatively difficult to forecast and the
revenues from the sale of air and other transportation approximate the costs
of providing that transportation, management focuses primarily on forecasts
of net cruise revenues and costs rather than gross cruise revenues and costs.
This does not impact, in any material respect, our ability to forecast our
future results, as any variation in the air/sea mix has no material impact on
our forecasted net cruise revenues or forecasted net cruise costs. As such,
management does not believe that this reconciling information would be
meaningful.
In addition, because a significant portion of Carnival Corporation &
plc's operations utilize the euro or sterling 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 our two non-GAAP financial measures assuming the current period
currency exchange rates have remained constant with the prior year's
comparable period 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.
On a constant dollar basis, net cruise revenues and net cruise costs
would be $2.6 billion and $1.9 billion for the three months ended November
30, 2009 and $11.0 billion and $7.3 billion for the twelve months ended
November 30, 2009, respectively. On a constant dollar basis, gross cruise
revenues and gross cruise costs would be $3.1 billion and $2.5 billion for
the three months ended November 30, 2009 and $13.5 billion and $9.8 billion
for the twelve months ended November 30, 2009, respectively. In addition, our
non-U.S. dollar cruise operations' depreciation and net interest expense were
impacted by the changes in exchange rates for the three and twelve months
ended November 30, 2009, compared to the prior year's comparable periods.
(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.
SOURCE Carnival plc
CONTACT: MEDIA: Carnival Corporation & plc, Tim Gallagher.
+1-305-599-2600, ext. 16000, or INVESTOR RELATIONS: Carnival Corporation &
plc, Beth Roberts, +1-305-406-4832
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