Carnival Corp & plc Fourth Quarter Earnings
Carnival Corporation & plc Reports Fourth Quarter and Full Year Earnings
MIAMI, Dec. 21, 2010 -- Carnival Corporation & plc today reports earnings
for the fourth quarter and full year ended November 30, 2010. The earnings of
Carnival Corporation and Carnival plc have been consolidated, and this
statement includes consolidated results on a U.S. GAAP basis.
4Q and Full Year Highlights
- 4Q revenues increased by $215m to $3.5b versus $3.3b in the prior
year, driven by a 4.9% capacity increase and higher revenue yields
- 4Q net revenue yields in constant dollars increased 3.9% compared
to the prior year, which was better than September guidance of up 2.5
to 3.5% compared to the prior year
- 4Q was impacted by recently announced voyage disruptions, which
reduced earnings by $0.07 per share
- Excluding fuel and voyage disruptions, constant dollar net cruise
costs per available lower berth day ("ALBD") were down 1.1%
- 4Q earnings per share (diluted) increased almost 30% to
$0.31, compared to $0.24 for 4Q 2009
- Full year earnings per share (diluted) of $2.47, compared to
$2.24 for the prior year
2011 Outlook
- Since last September, booking volumes continued to be strong and
prices for those bookings are higher than last year
- Net revenue yields on a constant dollar basis for full year 2011
are expected to increase by 3 to 4%
- Net cruise costs per ALBD excluding fuel for full year 2011 are
expected to be flat compared with 2010 on a constant dollar basis
- Forecasted fuel costs for the full year 2011 are expected to
increase $134m compared to 2010, costing $0.17 per share
- Full year 2011 earnings per share (diluted) expected to be in the
range of $2.90 to $3.10, compared to $2.47 for 2010
- 1Q 2011 earnings per share (diluted) expected to be in the range
of $0.15 to $0.19, compared to $0.22 in 1Q 2010. The 1Q 2010 included
the favorable impact of $0.10 per share of unusual items
Chairman and Chief Executive Officer Micky Arison commenting on these
results:
"All-in-all, 2010 was an encouraging year with improved business
trends from a gradually recovering economy. We achieved an 11 percent
increase in net income on 7 percent higher revenues. We recovered almost 3
points of revenue yield (constant dollars) from 2009's levels, while improved
processes and efficiencies led to a 3 percent reduction in unit costs
excluding fuel."
"Cash from operations increased 14 percent to reach $3.8 billion, more
than enough to fund our expansion program which peaked this year at a capital
investment of $3.6 billion. We also reinstated the dividend early in 2010 at
an initial rate of $0.10 per quarter."
"Booking trends have continued to improve for both our North American and
European brands, particularly for our peak summer season. We are optimistic
these positive trends are an indicator of a strong wave season, our heaviest
booking period which begins in early January. Given the recent cold weather
and snow, particularly in the Northern U.S. and Europe, there is no better
time to book a cruise vacation."
"Based on the above guidance, we estimate our cash from operations will
exceed $4 billion in 2011, while our capital investment commitments decrease
to $2.6 billion. We expect to generate significant free cash flow in 2011 and
beyond, which should provide us ample opportunities to return additional cash
to shareholders over time."
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 2010 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
http://www.carnivalcorp.com and http://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, Australia
and Asia, comprised of Carnival Cruise Lines, Holland America Line, Princess
Cruises, Seabourn, AIDA Cruises, Costa Cruises, Cunard Line, Ibero Cruises,
P&O Cruises (UK) and P&O Cruises (Australia).
Together, these brands operate 98 ships totaling more than 191,000 lower
berths with 10 new ships scheduled to be delivered between March 2011 and May
2014. 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
MIAMI, Dec. 21, 2010 -- Carnival Corporation & plc (NYSE/LSE: CCL;
NYSE: CUK) reported net income of $248 million, with earnings per share
increasing almost 30 percent to $0.31 diluted EPS, on revenues of $3.5
billion for its fourth quarter ended November 30, 2010. Net income for the
fourth quarter of 2009 was $193 million, or $0.24 diluted EPS, on revenues of
$3.3 billion.
Earnings per share in the fourth quarter was just $0.01 below the
company's September guidance despite the recently announced voyage
disruptions, which reduced earnings by $0.07 per share.
The company reported net income for the full year ended November 30, 2010
of $2.0 billion, or $2.47 diluted EPS, compared to net income of $1.8
billion, or $2.24 diluted EPS, for the prior year. Revenues for the full year
2010 were $14.5 billion compared to $13.5 billion for the prior year.
Micky Arison, Carnival Corporation & plc Chairman and CEO, commenting on
full year results said, "All-in-all, 2010 was an encouraging year with
improved business trends from a gradually recovering economy. We achieved an
11 percent increase in net income on 7 percent higher revenues. We recovered
almost 3 points of revenue yield (constant dollars) from 2009's levels, while
improved processes and efficiencies led to a 3 percent reduction in unit
costs excluding fuel."
Arison added, "Cash from operations increased 14 percent to reach $3.8
billion, more than enough to fund our expansion program which peaked this
year at a capital investment of $3.6 billion. We also reinstated the dividend
early in 2010 at an initial rate of $0.10 per quarter."
Key metrics for the fourth quarter of 2010 compared to the prior year
were as follows:
- On a constant dollar basis net revenue yields (net revenue
per available lower berth day) increased 3.9 percent for 4Q 2010, which
was better than our September guidance of up 2.5 to 3.5 percent. Gross
revenue yields in current dollars increased 1.5 percent.
- Excluding fuel and voyage disruptions, net cruise costs per
available lower berth day ("ALBD") for 4Q 2010 were down 1.1 percent on
a constant dollar basis. Gross cruise costs per ALBD in current dollars
increased 0.8 percent.
- Fuel prices increased over 6 percent to $488 per metric ton
for 4Q 2010 from $458 per metric ton in 4Q 2009 and was slightly higher
than the September guidance of $479 per metric ton.
During the fourth quarter, Cunard Line's 2,068-passenger Queen Elizabeth
was delivered and was christened by Her Majesty Queen Elizabeth II in a much
anticipated ceremony in Southampton, England. This was the sixth successful
ship delivery in 2010 furthering the company's strategy to expand its global
presence. Today, P&O Cruises (Australia) held the inaugural celebration of
Pacific Pearl, expanding its fleet to four ships. In addition, the company
took advantage of attractive shipyard prices to order three more vessels
during the year, bringing the company's order book to 10 ships to be
delivered through 2014.
2011 Outlook
Since last September, booking volumes continued to be strong and prices
for those bookings are higher than last year. At this point in time,
cumulative advance bookings for 2011 are at higher prices with slightly lower
occupancies versus last year. Based on these booking trends, the company
forecasts a 3 to 4 percent increase in constant dollar net revenue yields for
the full year 2011.
Looking forward Arison noted, "Booking trends have continued to improve
for both our North American and European brands, particularly for our peak
summer season. We are optimistic these positive trends are an indicator of a
strong wave season, our heaviest booking period which begins in early
January. Given the recent cold weather and snow, particularly in the Northern
U.S. and Europe, there is no better time to book a cruise vacation."
The company expects net cruise costs per ALBD excluding fuel for the full
year 2011 to be flat compared to the prior year on a constant dollar basis.
Based on current spot prices for fuel, forecasted fuel costs for the full
year are expected to increase $134 million compared to 2010, costing $0.17
per share. This is forecasted to be partially offset by favorable movements
in currency exchange rates worth $0.04 per share.
Taking all the above factors into consideration, the company forecasts
full year 2011 earnings per share to be in the range of $2.90 to $3.10 fully
diluted, compared to $2.47 for 2010.
Arison added, "Based on the above guidance, we estimate our cash from
operations will exceed $4 billion in 2011, while our capital investment
commitments decrease to $2.6 billion. We expect to generate significant free
cash flow in 2011 and beyond, which should provide us ample opportunities to
return additional cash to shareholders over time."
First Quarter 2011
First quarter constant dollar net revenue yields are expected to increase
by approximately 2 percent compared to the prior year. The company expects
improved net revenue yields as the year progresses. Net cruise costs per ALBD
excluding fuel for the first quarter are expected to be up 3 to 4 percent
compared to the prior year on a constant dollar basis due primarily to the
$44 million gain from the sale of P&O Cruises' (UK) Artemis in the first
quarter of 2010. Excluding the Artemis gain and fuel, net cruise costs per
ALBD for the first quarter are expected to be flat to up 1 percent on a
constant dollar basis. Forecasted fuel costs for the first quarter are
expected to increase $25 million compared to the prior year, costing $0.03
per share.
Based on current fuel prices and currency exchange rates, the company
expects fully diluted earnings for the first quarter 2011 to be in the range
of $0.15 to $0.19 per share, down from $0.22 per share in 2010. The first
quarter of 2010 included the favorable impact of $0.10 per share of unusual
items.
Selected Key Forecast Metrics
Full Year 2011 First Quarter 2011
Current Constant Current Constant
Dollars Dollars Dollars Dollars
Change in:
Net revenue
yields 3.5 to 4.5 % 3.0 to 4.0 % 0 to 1.0 % 1.5 to 2.5%
Net cruise
cost /ALBD 1.5 to 2.5 % 1.0 to 2.0 % 2.0 to 3.0 % 3.5 to 4.5%
Net cruise
cost excl.
fuel /ALBD 0 to 1.0 % (0.5) to 0.5 % 1.5 to 2.5 % 3.0 to 4.0%
Full Year 2011 First Quarter 2011
Fuel price / metric ton $527 $526
Fuel consumption (metric tons in
thousands) 3,450 835
Currency
Euro $1.32 to euro 1 $1.32 to euro 1
Sterling $1.58 to 1 UK Pound $1.58 to 1 UK Pound
The company has scheduled a conference call with analysts at 10:00 a.m.
EST (3:00 p.m. GMT) today to discuss its 2010 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
http://www.carnivalcorp.com and http://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 Line, Ibero Cruises,
P&O Cruises (UK) and P&O Cruises (Australia).
Together, these brands operate 98 ships totaling more than 191,000 lower
berths with 10 new ships scheduled to be delivered between March 2011 and May
2014. 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 & 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 regulatory issues under which Carnival
Corporation & plc operates; increases in Carnival Corporation & plc's fuel
prices from adopting International Maritime Organization regulations that
require the use of fuels with lower sulfur content for our ships; economic,
market and political factors that are beyond our control, which could
increase our 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
Carnival Corporation & plc's expectations; as Carnival Corporation & plc's
fleet increases in age its repair and maintenance expenses and refurbishment
costs will increase; the continued strength of Carnival Corporation & plc's
cruise brands and its ability to implement its brand strategies; additional
risks associated with Carnival Corporation & plc's international operations
not generally applicable to its U.S. operations; the pace of development in
geographic regions in which Carnival Corporation & plc tries to expand its
business; 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' ability to perform; continuing financial viability of
Carnival Corporation & plc's travel agent distribution system, air service
providers and other key vendors in its supply chain and reductions in the
availability of, and increases in the prices 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, operations and breaches
in data security; loss of key personnel or Carnival Corporation & plc's
ability to recruit and retain qualified personnel; violations of the Foreign
Corrupt Practices Act, UK Bribery Act or anti-money laundering regulations;
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 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 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
November 30,
------------
2010 2009
---- ----
Revenues
Cruise
Passenger tickets $2,666 (a) $2,495 (a)
Onboard and other 791 753
Tour and other 40 34
--- ---
3,497 3,282
----- -----
Costs and Expenses
Operating
Cruise
Commissions,
transportation and other 561 (a) 524 (a)
Onboard and other 124 116
Payroll and related 411 393
Fuel 413 378
Food 222 215
Other ship operating 587 553
Tour and other 38 40
--- ---
Total 2,356 2,219
Selling and administrative 433 424
Depreciation and
amortization 367 345
--- ---
3,156 2,988
----- -----
Operating Income 341 294
--- ---
Nonoperating (Expense)
Income
Interest income 2 4
Interest expense, net of
capitalized interest (93) (99)
Other income (expense),
net 5 2
--- ---
(86) (93)
--- ---
Income Before Income Taxes 255 201
Income Tax Expense, Net (7) (8)
--- ---
Net Income $248 $193
==== ====
Earnings Per Share
Basic $0.31 $0.25
===== =====
Diluted $0.31 $0.24
===== =====
Dividends Declared Per
Share $0.10
=====
Weighted-Average Shares
Outstanding - Basic 789 787
=== ===
Weighted-Average Shares
Outstanding - Diluted 801 804
Twelve Months Ended
November 30,
------------
2010 2009
Revenues
Cruise
Passenger tickets $11,084 (a) $10,288 (a)
Onboard and other 3,104 2,885
Tour and other 281 287
--- ---
14,469 13,460
------ ------
Costs and Expenses
Operating
Cruise
Commissions,
transportation and other 2,272 (a) 2,220 (a)
Onboard and other 474 461
Payroll and related 1,611 1,498
Fuel 1,622 1,156
Food 869 839
Other ship operating 2,032 1,997
Tour and other 212 236
--- ---
Total 9,092 8,407
Selling and administrative 1,614 1,590
Depreciation and
amortization 1,416 1,309
----- -----
12,122 11,306
------ ------
Operating Income 2,347 2,154
----- -----
Nonoperating (Expense)
Income
Interest income 12 14
Interest expense, net of
capitalized interest (378) (380)
Other income (expense),
net (2) 18
--- ---
(368) (348)
---- ----
Income Before Income Taxes 1,979 1,806
Income Tax Expense, Net (1) (16)
--- ---
Net Income $1,978 $1,790
====== ======
Earnings Per Share
Basic $2.51 $2.27
===== =====
Diluted $2.47 $2.24
===== =====
Dividends Declared Per
Share $0.40
=====
Weighted-Average Shares
Outstanding - Basic 788 787
=== ===
Weighted-Average Shares
Outstanding - Diluted 805 804
(a) During the three months ended November 30, 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 both passenger ticket revenues and commissions,
transportation and other costs. The amounts included on a gross
basis in passenger ticket revenues and commissions, transportation
and other costs were $90 million and $346 and $76 million and $303
million for the three and twelve months ended November 30, 2010 and
2009, respectively.
CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except par values)
November 30,
2010 2009
---- ----
ASSETS
Current Assets
Cash and cash equivalents $429 $538
Trade and other receivables, net 248 362
Inventories 320 320
Prepaid expenses and other 247 298
--- ---
Total current assets 1,244 1,518
----- -----
Property and Equipment, Net 30,967 29,870
Goodwill 3,320 3,451
Other Intangibles 1,320 1,346
Other Assets 639 650
--- ---
$37,490 $36,835
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $740 $135
Current portion of long-term debt 613 815
Accounts payable 503 568
Accrued liabilities and other 1,094 874
Customer deposits 2,805 2,575
----- -----
Total current liabilities 5,755 4,967
----- -----
Long-Term Debt 8,011 9,097
Other Long-Term Liabilities and Deferred
Income 693 732
Shareholders' Equity
Common stock of Carnival Corporation; $0.01
par value; 1,960 shares authorized;
646 shares at 2010 and 644 shares at 2009
Issued 6 6
Ordinary shares of Carnival plc; $1.66 par
value; 214 shares at 2010 and 213 shares at
2009 issued 355 354
Additional paid-in capital 8,094 7,920
Retained earnings 17,224 15,561
Accumulated other comprehensive (loss) income (254) 462
Treasury stock; 39 shares at 2010 and 24
shares at 2009 of Carnival Corporation
and 31 shares at 2010 and 46 shares at 2009
of Carnival plc, at cost (2,394) (2,264)
------ ------
Total shareholders' equity 23,031 22,039
------ ------
$37,490 $36,835
======= =======
CARNIVAL CORPORATION & PLC
OTHER INFORMATION
Three Months Ended
November 30,
------------
2010 2009
---- ----
STATISTICAL INFORMATION
Passengers carried (in thousands) 2,259 2,136
Occupancy percentage 103.8% 103.2%
Fuel consumption (metric tons in
thousands) 846 826
Fuel cost per metric ton (a) $488 $458
Currencies
U.S. dollar to euro 1 $1.35 $1.47
U.S. dollar to 1 UK Pound $1.58 $1.63
CASH FLOW INFORMATION (in millions)
Cash from operations $734 $712
Capital expenditures $741 $978
Dividends paid $79
Twelve Months Ended
November 30,
------------
2010 2009
---- ----
STATISTICAL INFORMATION
Passengers carried (in thousands) 9,147 8,519
Occupancy percentage 105.6% 105.5%
Fuel consumption (metric tons in
thousands) 3,319 3,184
Fuel cost per metric ton (a) $489 $363
Currencies
U.S. dollar to euro 1 $1.33 $1.39
U.S. dollar to 1 UK Pound $1.55 $1.56
CASH FLOW INFORMATION (in millions)
Cash from operations $3,818 $3,342
Capital expenditures $3,579 $3,380
Dividends paid $237 $314
(a) Fuel cost per metric ton is calculated by dividing the cost of
fuel by the number of metric tons consumed.
NON-GAAP FINANCIAL MEASURES
Gross and net revenue yields were computed by dividing the gross and
net revenues, without rounding, by ALBDs as follows (in millions,
except ALBDs and yields) (a):
Three Months Ended
November 30,
------------
2010
2010 Constant 2009
---- Dollar ----
------
Cruise revenues
Passenger tickets $2,666 $2,741 $2,495
Onboard and other 791 805 753
--- --- ---
Gross cruise revenues 3,457 3,546 3,248
Less cruise costs
Commissions,
transportation
and other (561) (579) (524)
Onboard and other (124) (125) (116)
---- ---- ----
Net cruise revenues $2,772 $2,842 $2,608
====== ====== ======
ALBDs (b) 16,824,720 16,824,720 16,042,056
========== ========== ==========
Gross revenue yields $205.48 $210.80 $202.42
======= ======= =======
% increase vs. 2009 1.5% 4.1%
=== ===
Net revenue yields $164.74 $168.92 $162.57
======= ======= =======
% increase vs. 2009 1.3% 3.9%
=== ===
Net passenger ticket
revenue yields $125.07 $128.52 $122.91
======= ======= =======
% increase vs. 2009 1.8% 4.6%
=== ===
Net onboard and other
revenue yields $39.67 $40.41 $39.67
====== ====== ======
% increase vs. 2009 0.0% 1.9%
------------------- === ===
Twelve Months Ended
November 30,
------------
2010
2010 Constant 2009
---- Dollar ----
------
Cruise revenues
Passenger tickets $11,084 $11,194 $10,288
Onboard and other 3,104 3,117 2,885
----- ----- -----
Gross cruise revenues 14,188 14,311 13,173
Less cruise costs
Commissions,
transportation
and other (2,272) (2,287) (2,220)
Onboard and other (474) (474) (461)
---- ---- ----
Net cruise revenues $11,442 $11,550 $10,492
======= ======= =======
ALBDs (b) 66,545,164 66,545,164 62,105,916
========== ========== ==========
Gross revenue yields $213.21 $215.06 $212.10
======= ======= =======
% increase vs. 2009 0.5% 1.4%
=== ===
Net revenue yields $171.94 $173.57 $168.94
======= ======= =======
% increase vs. 2009 1.8% 2.7%
=== ===
Net passenger ticket
revenue yields $132.41 $133.86 $129.91
======= ======= =======
% increase vs. 2009 1.9% 3.0%
=== ===
Net onboard and other
revenue yields $39.52 $39.72 $39.03
====== ====== ======
% increase vs. 2009 1.3% 1.8%
------------------- === ===
CARNIVAL CORPORATION & PLC
OTHER INFORMATION
NON-GAAP FINANCIAL MEASURES (CONTINUED)
Gross cruise costs, net cruise costs and net cruise costs excluding
fuel per ALBD were computed by dividing the gross cruise costs, net
cruise costs and net cruise costs excluding fuel, without rounding,
by ALBDs as follows (in millions, except ALBDs and costs per ALBD)
(a):
Three Months Ended
November 30,
------------
2010
2010 Constant 2009
---- Dollar ----
------
Cruise operating
expenses $2,318 $2,362 $2,179
Cruise selling and
administrative expenses (c) 425 434 416
--- --- ---
Gross cruise costs 2,743 2,796 2,595
Less cruise costs
included in net
cruise revenues
Commissions,
transportation
and other (561) (579) (524)
Onboard and other (124) (125) (116)
---- ---- ----
Net cruise costs 2,058 2,092 1,955
Less fuel (413) (413) (378)
---- ---- ----
Net cruise costs
excluding fuel $1,645 $1,679 $1,577
====== ====== ======
ALBDs (b) 16,824,720 16,824,720 16,042,056
========== ========== ==========
Gross cruise costs per
ALBD $163.03 $166.17 $161.66
======= ======= =======
% increase vs. 2009 0.8% 2.8%
=== ===
Net cruise costs per
ALBD $122.30 $124.29 $121.82
======= ======= =======
% increase vs. 2009 0.4% 2.0%
=== ===
Net cruise costs
excluding fuel per ALBD $97.77 $99.77 $98.22
====== ====== ======
% (decrease) increase
vs. 2009 (0.5)% 1.6%
--------------------- ===== ===
Twelve Months Ended
November 30,
------------
2010
2010 Constant 2009
---- Dollar ----
------
Cruise operating
expenses $8,880 $8,911 $8,171
Cruise selling and
administrative expenses (c) 1,583 1,587 1,558
----- ----- -----
Gross cruise costs 10,463 10,498 9,729
Less cruise costs
included in net
cruise revenues
Commissions,
transportation
and other (2,272) (2,287) (2,220)
Onboard and other (474) (474) (461)
---- ---- ----
Net cruise costs 7,717 7,737 7,048
Less fuel (1,622) (1,622) (1,156)
------ ------ ------
Net cruise costs
excluding fuel $6,095 $6,115 $5,892
====== ====== ======
ALBDs (b) 66,545,164 66,545,164 62,105,916
========== ========== ==========
Gross cruise costs per
ALBD $157.23 $157.77 $156.64
======= ======= =======
% increase vs. 2009 0.4% 0.7%
=== ===
Net cruise costs per
ALBD $115.96 $116.28 $113.48
======= ======= =======
% increase vs. 2009 2.2% 2.5%
=== ===
Net cruise costs
excluding fuel per ALBD $91.59 $91.91 $94.86
====== ====== ======
% (decrease) increase
vs. 2009 (3.4)% (3.1)%
--------------------- ===== =====
(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 a better gauge to measure our revenue and cost
performance instead of 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 variable direct costs 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.
CARNIVAL CORPORATION & PLC
OTHER INFORMATION
NON-GAAP FINANCIAL MEASURES (CONTINUED)
---------------------------------------
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, respectively, 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 a significant portion of our operations
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 our non-GAAP financial
measures assuming the 2010 periods' currency exchange rates have
remained constant with the 2009 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 functional currency 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 twelve months ended November 30, 2010,
selling and administrative expenses were $433 million
($424 million in 2009) and $1.6 billion ($1.6 billion in
2009), respectively. For the three and twelve months
ended November 30, 2010, selling and administrative
expenses were comprised of cruise selling and
administrative expenses of $425 million ($416 million in
2009) and $1.6 billion ($1.6 billion in 2009) and Tour and
Other selling and administrative expenses of $8 million
($8 million in 2009) and $31 million ($32 million in
2009), respectively.
SOURCE Carnival plc
CONTACT: MEDIA: Tim Gallagher, +1-305-599-2600, ext. 16000, or INVESTOR
RELATIONS: Beth Roberts, +1-305-406-4832
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