Carnival Corp & plc Fourth Quarter Results
Carnival Corporation & plc Reports Significantly Higher Full Year Earnings
Carnival Corporation & plc today reported its results for the fourth quarter and
full year ended November 30, 2014. The results of Carnival Corporation and
Carnival plc have been consolidated and include results on a U.S. GAAP and non-U.S.
GAAP basis.
Full Year and 4Q Highlights
* FY 2014 non-GAAP earnings per share (diluted) of $1.96, compared to $1.58
for the prior year
* 4Q net revenue yields increased 2.8% (constant dollars) compared to the
prior year, which was better than September guidance, up 1.5 to 2.5%
* 4Q net cruise costs excluding fuel per available lower berth day ("ALBD")
decreased 1.7% (constant dollars) compared to the prior year, which was in
line with September guidance, down 1 to 2%
* 4Q non-GAAP (diluted) earnings per share of $0.27, compared to $0.04 for the
prior year
2015 Outlook
* At this time, cumulative advance bookings for the first three quarters of
2015 are ahead of the prior year at slightly higher prices
* FY 2015 net revenue yields are expected to be up approximately 2% (constant
dollars) compared to the prior year
* FY 2015 net cruise costs excluding fuel per ALBD are expected to be up
approximately 3% (constant dollars) compared to the prior year
* FY 2015 non-GAAP earnings per share (diluted) are expected to be in the
range of $2.30 to $2.60, compared to $1.96 for 2014
* 1Q 2015 non-GAAP earnings per share (diluted) are expected to be in the
range of $0.07 to $0.11, compared to $0.00 in 1Q 2014
President and Chief Executive Officer Arnold Donald commenting on these
results:
"Full year earnings were significantly higher than the prior year primarily due
to strong profit improvement at both our Carnival Cruise Lines and Costa
Cruises brands. We enjoyed some early wins from our collaboration efforts that
contributed to our improved results, particularly for onboard revenues. We
worked hard to contain costs and achieved an almost five percent reduction in
fuel consumption for the year as we continue to implement energy conservation
measures. We also made a number of strategic decisions in fleet investments
that will position us well for the future."
"Last quarter operating profit more than doubled due to higher ticket prices
and onboard spending combined with lower costs, also exceeding previous
guidance."
"The current base of business for 2015 builds confidence in our expectation of
continuing yield growth with acceleration in yield improvement starting in the
second quarter."
"Based on our current 2015 guidance, we expect to achieve a 50 percent
improvement in earnings compared to 2013 and are firmly on a path toward
delivering double-digit returns on invested capital."
MEDIA CONTACT INVESTOR RELATIONS CONTACT
Roger Frizzell Beth Roberts
001 305 406 7862 001 305 406 4832
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 2014 fourth quarter and full year results.
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 company in the world, with a
portfolio of cruise brands in North America, Europe, Australia and Asia,
comprised of Carnival Cruise Lines, Holland America Line, Princess Cruises,
Seabourn, AIDA Cruises, Costa Cruises, Cunard, P&O Cruises (Australia) and P&O
Cruises (UK).
Together, these brands operate 100 ships totaling 212,000 lower berths with ten
new ships scheduled to be delivered between 2015 and 2018. Carnival Corporation
& plc also operates Holland America Princess Alaska Tours, the leading tour
companies 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. Additional
information can be found on www.carnival.com, www.hollandamerica.com,
www.princess.com, www.seabourn.com, www.aida.de, www.costacruise.com,
www.cunard.com, www.pocruises.com.au and www.pocruises.com.
Carnival Corporation & plc Reports Significantly Higher Full Year Earnings
MIAMI, Dec. 19, 2014 -- Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK)
announced non-GAAP net income for the full year 2014 of $1.5 billion, or
$1.96 diluted EPS, compared to non-GAAP net income of $1.2 billion, or
$1.58 diluted EPS, for the prior year. Full year 2014 U.S. GAAP net income was
$1.2 billion, or $1.59 diluted EPS, which included unrealized losses (non-cash)
on fuel derivatives of $268 million and $20 million of net charges. Full year
2013 U.S. GAAP net income was $1.1 billion, or $1.39 diluted EPS, which
included net unrealized gains (non-cash) on fuel derivatives of $36 million and
impairments and other charges of $190 million.
Revenues for the full year 2014 were $15.9 billion compared to $15.5 billion
for the prior year. Cash from operations for the full year 2014 totaled $3.4
billion compared to $2.8 billion in 2013.
Carnival Corporation & plc President and Chief Executive Officer Arnold Donald
noted, "Full year earnings were significantly higher than the prior year
primarily due to strong profit improvement at both our Carnival Cruise Lines
and Costa Cruises brands. We enjoyed some early wins from our collaboration
efforts that contributed to our improved results, particularly for onboard
revenues. We worked hard to contain costs and achieved an almost five percent
reduction in fuel consumption for the year as we continue to implement energy
conservation measures. We also made a number of strategic decisions in fleet
investments that will position us well for the future."
Commenting on the fourth quarter Donald stated, "Last quarter operating profit
more than doubled due to higher ticket prices and onboard spending combined
with lower costs, also exceeding previous guidance." During the quarter, the
Carnival Cruise Lines brand achieved a significant increase in revenue yields
despite a highly competitive environment in the Caribbean. Additionally,
Costa's Asia operations achieved double-digit revenue yield improvement on a
capacity increase in that region.
New ship introductions during the quarter generated substantial media coverage
and positive buzz including the star-studded North American debut of Regal
Princess which featured a reunion of the Love Boat cast and numerous guest
stars who appeared on the hit TV show, as well as the delivery of Costa Diadema
at a stunning and festive inaugural in Genoa, Italy. The company also recently
placed orders with Italian shipbuilder Fincantieri for three innovative new
ships for its Carnival Cruise Lines, Holland America Line and Seabourn brands
to be delivered in 2018. In addition, the company recently sold three of its
smaller vessels - Costa Celebration, Grand Holiday and Ocean Princess.
Key metrics for the fourth quarter 2014 compared to the prior year were as
follows:
* Revenues of $3.72 billion compared to $3.66 billion in the prior year.
* On a constant dollar basis, net revenue yields (net revenue per available
lower berth day or "ALBD") increased 2.8 percent for 4Q 2014, which was better
than the company's September guidance, up 1.5 to 2.5 percent. Gross revenue
yields decreased 0.2 percent in current dollars.
* Net cruise costs excluding fuel per ALBD decreased 1.7 percent in constant
dollars, which was in line with September guidance, down 1 to 2 percent. Gross
cruise costs including fuel per ALBD in current dollars decreased 5.3 percent.
* Fuel prices declined 13 percent to $584 per metric ton for 4Q 2014 from $671
per metric ton in 4Q 2013 and were better than the September guidance of $635
per metric ton.
* Fuel consumption per ALBD decreased 4.8 percent in 4Q 2014 compared to the
prior year.
* Non-GAAP net income was $210 million, or $0.27 diluted EPS, before U.S. GAAP
unrealized losses (non-cash) on fuel derivatives of $277 million, or $0.36
diluted EPS, and other charges of $35 million, or $0.04 diluted EPS.
2015 Outlook
At this time, cumulative advance bookings for the first three quarters of 2015
are ahead of the prior year at slightly higher prices. Since September, booking
volumes for the first three quarters of 2015 are running ahead of last year's
levels at slightly lower prices driven by transactional currency impacts.
Donald noted, "The current base of business for 2015 builds confidence in our
expectation of continuing yield growth with acceleration in yield improvement
starting in the second quarter."
Based on current booking trends, the company forecasts full year 2015 net
revenue yields, on a constant dollar basis, to be up approximately 2 percent
compared to the prior year. First quarter revenue yields (constant dollars) are
expected to be slightly higher than the prior year and improve during the
remainder of 2015.
The company expects net cruise costs excluding fuel per ALBD, on a constant
dollar basis, for full year 2015 to be up approximately 3 percent primarily due
to higher dry-dock costs, advertising expenses and product enhancements. Based
on current spot prices for fuel, forecasted fuel costs for the full year 2015
are expected to decrease $475 million compared to 2014, net of fuel
derivatives, benefiting the company by $0.61 per share. This is forecasted to
be partially offset by unfavorable movements in currency exchange rates worth
$0.20 per share (includes both translational and transactional currency
exchange impacts). Taking the above factors into consideration, the company
forecasts full year 2015 non-GAAP diluted earnings per share to be in the range
of $2.30 to $2.60, compared to 2014 non-GAAP diluted earnings of $1.96 per
share.
Looking forward, Donald stated, "Based on our current 2015 guidance, we expect
to achieve a 50 percent improvement in earnings compared to 2013 and are firmly
on a path toward delivering double-digit returns on invested capital."
First Quarter 2015 Outlook
First quarter constant dollar net revenue yields are expected to be flat to up
1.0 percent compared to the prior year. Net cruise costs excluding fuel per
ALBD for the first quarter are expected to be 5.5 to 6.5 percent higher on a
constant dollar basis compared to the prior year and are higher than full year
guidance mostly due to the timing of expenses between quarters. Current
currency exchange rates and fuel prices net of fuel derivatives are expected to
benefit first quarter earnings by $130 million compared to the prior year, or
$0.16 per share. Based on the above factors, the company expects non-GAAP
diluted earnings for the first quarter 2015 to be in the range of $0.07 to
$0.11 per share, compared to 2014 non-GAAP earnings of $0.00 per share.
Selected Key Forecast Metrics
Full Year 2015 First Quarter 2015
Current Constant Current Constant
Year over year change: Dollars Dollars Dollars Dollars
Net revenue yields approx. (1) % approx. 2 % (2.0) to (3.0) % 0.0 to 1.0 %
Net cruise costs excl. fuel / ALBD approx. 0 % approx. 3 % 2.0 to 3.0 % 5.5 to 6.5 %
Full Year 2015 First Quarter 2015
Fuel price per metric ton $ 436 $ 421
Fuel consumption (metric tons in thousands) 3,170 780
Currency:
Euro $1.23 to €1 $1.23 to €1
Sterling $1.57 to £1 $1.57 to £1
Australian dollar $0.83 to A$1 $0.83 to A$1
Conference Call
The company has scheduled a conference call with analysts at 10:00 a.m. EST (3:
00 p.m. GMT) today to discuss its 2014 fourth quarter and full year results.
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 company in the world, with a
portfolio of cruise brands in North America, Europe, Australia and Asia,
comprised of Carnival Cruise Lines, Holland America Line, Princess Cruises,
Seabourn, AIDA Cruises, Costa Cruises, Cunard, P&O Cruises (Australia) and P&O
Cruises (UK).
Together, these brands operate 100 ships totaling 212,000 lower berths with ten
new ships scheduled to be delivered between 2015 and 2018. Carnival Corporation
& plc also operates Holland America Princess Alaska Tours, the leading tour
companies 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. Additional
information can be found on www.carnival.com, www.hollandamerica.com,
www.princess.com, www.seabourn.com, www.aida.de, www.costacruise.com,
www.cunard.com, www.pocruises.com.au, and www.pocruises.com.
Cautionary Note Concerning Factors That May Affect Future Results
Carnival Corporation and Carnival plc and their respective subsidiaries are
referred to collectively in this release as "Carnival Corporation & plc,"
"our," "us" and "we." Some of the statements, estimates or projections
contained in this release are "forward-looking statements" that involve risks,
uncertainties and assumptions with respect to us, including some statements
concerning future results, outlooks, plans, goals and other events which have
not yet occurred. These statements are intended to qualify for the safe harbors
from liability provided by Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. All statements other than
statements of historical facts are statements that could be deemed
forward-looking. These statements are based on current expectations, estimates,
forecasts and projections about our business and the industry in which we
operate and the beliefs and assumptions of our management. We have tried,
whenever possible, to identify these statements by using words like "will,"
"may," "could," "should," "would," "believe," "depends," "expect," "goal,"
"anticipate," "forecast," "project," "future," "intend," "plan," "estimate,"
"target," "indicate" and similar expressions of future intent or the negative
of such terms.
Forward-looking statements include those statements that may impact, among
other things, the forecasting of our non-GAAP earnings per share; net revenue
yields; booking levels; pricing; occupancy; operating, financing and tax costs,
including fuel expenses; net cruise costs per available lower berth day;
estimates of ship depreciable lives and residual values; liquidity; goodwill,
ship and trademark fair values and outlook. Because forward-looking statements
involve risks and uncertainties, there are many factors that could cause our
actual results, performance or achievements to differ materially from those
expressed or implied in this release. This note contains important cautionary
statements of the known factors that we consider could materially affect the
accuracy of our forward-looking statements and adversely affect our business,
results of operations and financial position. It is not possible to predict or
identify all such risks. There may be additional risks that we consider
immaterial or which are unknown. These factors include, but are not limited to,
the following:
* general economic and business conditions;
* increases in fuel prices;
* incidents, the spread of contagious diseases and threats thereof, adverse
weather conditions or other natural disasters and other incidents affecting the
health, safety, security and satisfaction of guests and crew;
* the international political climate, armed conflicts, terrorist and pirate
attacks, vessel seizures, and threats thereof, and other world events affecting
the safety and security of travel;
* negative publicity concerning the cruise industry in general or us in
particular, including any adverse environmental impacts of cruising;
* geographic regions in which we try to expand our business may be slow to
develop and ultimately not develop how we expect;
* economic, market and political factors that are beyond our control, which could
increase our operating, financing and other costs;
* changes in and compliance with laws and regulations relating to the protection
of persons with disabilities, employment, environment, health, safety,
security, tax and other regulations under which we operate;
* our inability to implement our shipbuilding programs and ship repairs,
maintenance and refurbishments on terms that are favorable or consistent with
our expectations;
* increases to our repairs and maintenance expenses and refurbishment costs as
our fleet ages;
* lack of continuing availability of attractive, convenient and safe port
destinations on terms that are favorable or consistent with our expectations;
* continuing financial viability of our travel agent distribution system, air
service providers and other key vendors in our supply chain and reductions in
the availability of, and increases in the prices for, the services and products
provided by these vendors;
* disruptions and other damages to our information technology and other networks
and operations, and breaches in data security;
* failure to keep pace with developments in technology;
* competition from and overcapacity in the cruise ship and land-based vacation
industry;
* loss of key personnel or our ability to recruit or retain qualified personnel;
* union disputes and other employee relation issues;
* disruptions in the global financial markets or other events that may negatively
affect the ability of our counterparties and others to perform their
obligations to us;
* the continued strength of our cruise brands and our ability to implement our
strategies;
* additional risks to our international operations not generally applicable to
our U.S. operations;
* our decisions to self-insure against various risks or our inability to obtain
insurance for certain risks at reasonable rates;
* litigation, enforcement actions, fines or penalties;
* fluctuations in foreign currency exchange rates;
* whether our future operating cash flow will be sufficient to fund future
obligations and whether we will be able to obtain financing, if necessary, in
sufficient amounts and on terms that are favorable or consistent with our
expectations;
* risks associated with our dual listed company arrangement;
* uncertainties of a foreign legal system as Carnival Corporation and Carnival
plc are not U.S. corporations and
* the ability of a small group of shareholders to effectively control the outcome
of shareholder voting.
Forward-looking statements should not be relied upon as a prediction of actual
results. Subject to any continuing obligations under applicable law or any
relevant stock exchange rules, we expressly disclaim any obligation to
disseminate, after the date of this release, any updates or revisions to any
such forward-looking statements to reflect any change in expectations or
events, conditions or circumstances on which any such statements are based.
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in millions, except per share data)
Three Months Ended Twelve Months Ended
November 30, November 30,
2014 2013 2014 2013
Revenues
Cruise
Passenger tickets $2,745 $2,697 $11,889 $11,648
Onboard and other 941 929 3,780 3,598
Tour and other 32 33 215 210
3,718 3,659 15,884 15,456
Operating Costs and Expenses
Cruise
Commissions, transportation and other 520 526 2,299 2,303
Onboard and other 127 153 519 539
Fuel 464 549 2,033 2,208
Payroll and related 491 480 1,942 1,859
Food 245 244 1,005 983
Other ship operating 620 638 2,445 2,589
Tour and other 30 30 160 143
2,497 2,620 10,403 10,624
Selling and administrative 547 532 2,054 1,879
Depreciation and amortization 407 403 1,635 1,588
Ibero goodwill and trademark impairment charges - - - 13
3,451 3,555 14,092 14,104
Operating Income 267 104 1,792 1,352
Nonoperating(Expense) Income
Interest income 2 3 8 11
Interest expense, net of capitalized interest (76) (82) (288) (319)
(Losses) gains on fuel derivatives, net (280) 31 (271) 36
Other (expense) income, net (8) 1 4 (8)
(362) (47) (547) (280)
(Loss) Income Before Income Taxes (95) 57 1,245 1,072
Income Tax (Expense) Benefit, Net (7) 9 (9) 6
Net (Loss) Income ($102) $66 $1,236 $1,078
(Loss) Earnings Per Share
Basic ($0.13) $0.09 $1.59 $1.39
Diluted ($0.13) $0.08 $1.59 $1.39
Non-GAAP Earnings Per Share-Diluted (a) $0.27 $0.04 $1.96 $1.58
Dividends Declared Per Share $0.25 $0.25 $1.00 $1.00
Weighted-Average Shares Outstanding - Basic 776 775 776 775
Weighted-Average Shares Outstanding - Diluted 776 777 778 777
(a) See the U.S. GAAP net income to non-GAAP net income reconciliations in the Non-GAAP Financial Measures
included herein.
CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except par values)
November 30,
2014 2013
ASSETS
Current Assets
Cash and cash equivalents $ 331 $ 462
Trade and other receivables, net 332 405
Insurance recoverables 154 381
Inventories 364 374
Prepaid expenses and other 322 315
Total current assets 1,503 1,937
Property and Equipment, Net 32,773 32,905
Goodwill 3,127 3,210
Other Intangibles 1,270 1,292
Other Assets 859 760
$ 39,532 $ 40,104
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 666 $ 60
Current portion of long-term debt 1,059 1,408
Accounts payable 626 639
Claims reserve 262 456
Accrued liabilities and other 1,276 1,126
Customer deposits 3,032 3,031
Total current liabilities 6,921 6,720
Long-Term Debt 7,363 8,092
Other Long-Term Liabilities 960 736
Shareholders' Equity
Common stock of Carnival Corporation, $0.01 par value; 1,960 shares
authorized; 652 shares at 2014 and 651 shares at 2013 issued 7 7
Ordinary shares of Carnival plc, $1.66 par value; 216 shares at 2014 358 358
and 2013 issued
Additional paid-in capital 8,384 8,325
Retained earnings 19,242 18,782
Accumulated other comprehensive (loss) income (616) 161
Treasury stock, 59 shares at 2014 and 2013 of Carnival Corporation
and 32 shares at 2014 and 2013 of Carnival plc, at cost (3,087) (3,077)
Total shareholders' equity 24,288 24,556
$ 39,532 $ 40,104
CARNIVAL CORPORATION & PLC
OTHER INFORMATION
Three Months Ended Twelve Months Ended
November 30, November 30,
2014 2013 2014 2013
STATISTICAL INFORMATION
ALBDs (in thousands) (a) 19,170 18,813 76,000 74,033
Occupancy percentage (b) 101.9% 102.1% 104.1% 105.1%
Passengers carried (in thousands) 2,623 2,511 10,566 10,061
Fuel consumption in metric tons (in thousands) 794 819 3,194 3,266
Fuel consumption in metric tons per ALBD 0.041 0.044 0.042 0.044
Fuel cost per metric ton consumed $ 584 $ 671 $ 636 $ 676
Currencies
U.S. dollar to €1 $ 1.27 $ 1.35 $ 1.34 $ 1.32
U.S. dollar to £1 $ 1.60 $ 1.60 $ 1.66 $ 1.56
U.S. dollar to Australian dollar $ 0.88 $ 0.94 $ 0.91 $ 0.98
CASH FLOW INFORMATION
Cash from operations $ 637 $ 475 $ 3,430 $ 2,834
Capital expenditures $ 906 $ 337 $ 2,583 $ 2,149
Dividends paid $ 194 $ 194 $ 776 $ 1,164
(a) ALBD is a standard measure of passenger capacity for the period that we use
to approximate rate and capacity variances, based on consistently applied
formulas, that we use to perform analyses to determine the main non-capacity
driven factors that cause our cruise revenues and expenses to vary. ALBDs
assume that each cabin we offer for sale accommodates two passengers and is
computed by multiplying passenger capacity by revenue-producing ship operating
days in the period.
(b) In accordance with cruise industry practice, occupancy is calculated using
a denominator of ALBDs, which assumes two passengers per cabin even though some
cabins can accommodate three or more passengers. Percentages in excess of 100%
indicate that on average more than two passengers occupied some cabins.
FUEL DERIVATIVES
At November 30, 2014, our outstanding fuel derivatives consisted of zero cost
collars on Brent crude oil ("Brent") to cover a portion of our estimated fuel
consumption as follows:
Percent of Estimated
Transaction Barrels Weighted-Average Weighted-Average Fuel Consumption
Maturities(a) (b) Dates (in thousands) Floor Prices Ceiling Prices Covered
Fiscal 2015
November 2011 2,160 $ 80 $ 114
February 2012 2,160 $ 80 $ 125
June 2012 1,236 $ 74 $ 110
April 2013 1,044 $ 80 $ 111
May 2013 1,884 $ 80 $ 110
October 2014 1,920 $ 79 $ 110
10,404 51%
Fiscal 2016
June 2012 3,564 $ 75 $ 108
February 2013 2,160 $ 80 $ 120
April 2013 3,000 $ 75 $ 115
8,724 42%
Fiscal 2017
February 2013 3,276 $ 80 $ 115
April 2013 2,028 $ 75 $ 110
January 2014 1,800 $ 75 $ 114
October 2014 1,020 $ 80 $ 113
8,124 39%
Fiscal 2018
January 2014 2,700 $ 75 $ 110
October 2014 3,000 $ 80 $ 114
5,700 28%
(a) Fuel derivatives mature evenly over each month within the above fiscal
periods.
(b) We will not realize any economic gain or loss upon the monthly maturities
of our zero cost collars unless the average monthly price of Brent is above the
ceiling price or below the floor price.
FUEL PRICE SENSITIVITY
Based principally on the current Brent price and the correlation between marine
fuel and Brent prices, full year 2015 forecasted fuel expenses are expected to
decrease $475 million, net of derivatives, compared to 2014. We mitigate a
portion of our exposure to changes in fuel prices through the use of Brent zero
cost collars. The actual fuel we used on our ships is marine fuel. Our internal
analyses of historical data calculates that our marine fuel and Brent prices
move in tandem at this time. The following sensitivity table is based on this
calculation. However, the relationship between our marine fuel and Brent prices
and its impact on this calculation can change daily.
The full year 2015 non-GAAP EPS Guidance impact from possible changes to the
$63 per barrel Brent price used in our December Guidance is as follows:
Forecasted Realized
Losses on (Unfavorable) Favorable
Brent Spot Prices Fuel Prices Fuel Expenses Fuel Derivatives Impact on 2015 Non-GAAP
per barrel per Metric Ton (in millions) (in millions) EPS Guidance
$ 80 $ 542 $ 1,718 $ 5 $ (0.23)
$ 70 $ 478 $ 1,515 $ 97 $ (0.09)
$ 63 $ 436 $ 1,382 $ 163 -
$ 60 $ 414 $ 1,313 $ 197 $ 0.05
$ 50 $ 350 $ 1,110 $ 297 $ 0.18
$ 40 $ 286 $ 907 $ 397 $ 0.31
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES
Consolidated gross and net revenue yields were computed by dividing the gross
and net cruise revenues by ALBDs as follows (dollars in millions, except
yields) (a)(b):
Three Months Ended November 30, Twelve Months Ended November 30,
2014 2014
Constant Constant
2014 Dollar 2013 2014 Dollar 2013
Passenger ticket revenues $ 2,745 $ 2,795 $ 2,697 $ 11,889 $ 11,787 $ 11,648
Onboard and other revenues 941 954 929 3,780 3,765 3,598
Gross cruise revenues 3,686 3,749 3,626 15,669 15,552 15,246
Less cruise costs
Commissions, transportation and other (520) (532) (526) (2,299) (2,277) (2,303)
Onboard and other (127) (129) (153) (519) (516) (539)
(647) (661) (679) (2,818) (2,793) (2,842)
Net passenger ticket revenues 2,225 2,263 2,171 9,590 9,510 9,345
Net onboard and other revenues 814 825 776 3,261 3,249 3,059
Net cruise revenues $ 3,039 $ 3,088 $ 2,947 $ 12,851 $ 12,759 $ 12,404
ALBDs 19,170,347 19,170,347 18,812,573 75,999,952 75,999,952 74,032,939
Gross revenue yields $ 192.29 $ 195.54 $ 192.73 $ 206.17 $ 204.63 $ 205.94
% (decrease) increase vs. 2013 (0.2)% 1.5% 0.1% (0.6)%
Net revenue yields $ 158.53 $ 161.09 $ 156.63 $ 169.09 $ 167.88 $ 167.56
% increase vs. 2013 1.2% 2.8% 0.9% 0.2%
Net passenger ticket revenue yields $ 116.07 $ 118.05 $ 115.43 $ 126.18 $ 125.14 $ 126.23
% increase (decrease) vs. 2013 0.5% 2.3% 0.0% (0.9)%
Net onboard and other revenue yields $ 42.46 $ 43.04 $ 41.20 $ 42.90 $ 42.75 $ 41.33
% increase vs. 2013 3.1% 4.5% 3.8% 3.4%
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 by ALBDs as follows (dollars in millions, except costs per
ALBD) (a) (b):
Three Months Ended November 30, Twelve Months Ended November 30,
2014 2014
Constant Constant
2014 Dollar 2013 2014 Dollar 2013
Cruise operating expenses $ 2,467 $ 2,503 $ 2,590 $ 10,243 $ 10,184 $ 10,481
Cruise selling and administrative
expenses 545 554 530 2,046 2,035 1,871
Gross cruise costs 3,012 3,057 3,120 12,289 12,219 12,352
Less cruise costs included above
Commissions, transportation and other (520) (532) (526) (2,299) (2,277) (2,303)
Onboard and other (127) (129) (153) (519) (516) (539)
Losses on ship sales and ship
impairments, net (17) (19) - (2) (5) (178)
Restructuring expenses (18) (18) - (18) (18) -
Net cruise costs 2,330 2,359 2,441 9,451 9,403 9,332
Less fuel (464) (464) (549) (2,033) (2,033) (2,208)
Net cruise costs excluding fuel $ 1,866 $ 1,895 $ 1,892 $ 7,418 $ 7,370 $ 7,124
ALBDs 19,170,347 19,170,347 18,812,573 75,999,952 75,999,952 74,032,939
Gross cruise costs per ALBD $ 157.12 $ 159.46 $ 165.85 $ 161.69 $ 160.77 $ 166.83
% decrease vs. 2013 (5.3)% (3.8)% (3.1)% (3.6)%
Net cruise costs per ALBD $ 121.55 $ 123.04 $ 129.74 $ 124.35 $ 123.70 $ 126.05
% decrease vs. 2013 (6.3)% (5.2)% (1.3)% (1.9)%
Net cruise costs excluding fuel per ALBD $ 97.35 $ 98.83 $ 100.54 $ 97.60 $ 96.95 $ 96.23
% (decrease) increase vs. 2013 (3.2)% (1.7)% 1.4% 0.8%
(See next page for Notes to Non-GAAP Financial Measures.)
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)
Non-GAAP fully diluted earnings per share was computed as follows (in millions,
except per share data) (b):
Three Months Ended Twelve Months Ended
November 30, November 30,
2014 2013 2014 2013
Net income - diluted
U.S. GAAP net (loss) income $ (102) $ 66 $ 1,236 $ 1,078
Losses on ship sales and ship impairments, net (c 17 - 2 163
Trademark and other impairment charges (d) - - - 27
Restructuring expenses (d) 18 - 18 -
Unrealized losses (gains) on fuel derivatives (e) 277 (31) 268 (36)
Non-GAAP net income $ 210 $ 35 $ 1,524 $ 1,232
Weighted-average shares outstanding - diluted (f) 776 777 778 777
Earnings per share - diluted
U.S. GAAP (loss) earnings per share $ (0.13) $ 0.08 $ 1.59 $ 1.39
Losses on ship sales and ship impairments, net (c) 0.02 - - 0.21
Trademark and other impairment charges (d) - - - 0.03
Restructuring expenses (d) 0.02 - 0.02 -
Unrealized losses (gains) on fuel derivatives (e) 0.36 (0.04) 0.35 (0.05)
Non-GAAP earnings per share $ 0.27 $ 0.04 $ 1.96 $ 1.58
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 segments' financial performance.
These measures enable us to separate the impact of predictable capacity
changes from the more unpredictable rate changes that affect our business;
gains and losses on ship sales and ship impairments, net; and restructuring
expenses that are not part of our core operating business. We believe these
non-GAAP measures provide useful information to investors and expanded
insight to measure our revenue and cost performance as a supplement to our U.S.
generally accepted accounting principles ("U.S. GAAP") consolidated
financial statements.
Net revenue yields are commonly used in the cruise 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 and debit card fees. Substantially all
of our remaining cruise costs are largely fixed, except for the impact of
changing prices and food expenses, once our ship capacity levels have been
determined.
Net passenger ticket revenues reflect gross passenger ticket revenues, net of
commissions, transportation and other costs. Net onboard and other revenues
reflect gross onboard and other revenues, net of 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 segments' 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. In
addition, we exclude gains and losses on ship sales and ship impairments, net
and restructuring expenses from our calculation of net cruise costs with
and without fuel as they are not considered part of our core operating
business.
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 these measures. As such, management does not believe
that this reconciling information would be meaningful.
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)
In addition, because our Europe, Australia & Asia ("EAA") cruise brands
utilize the euro, sterling and Australian dollar to measure their results
and financial condition, the translation of those operations to our U.S.
dollar reporting currency results in decreases in reported U.S. dollar
revenues and expenses if the U.S. dollar strengthens against these foreign
currencies and increases in reported U.S. dollar revenues and expenses if
the U.S. dollar weakens against these foreign currencies. Accordingly, we
also monitor and report these non-GAAP financial measures assuming the 2014
periods currency exchange rates have remained constant with the 2013 period
rates, or on a "constant dollar basis," in order to remove the impact of
changes in exchange rates on the translation of our EAA brands. We believe
that this is a useful measure since it facilitates a comparative view of
the changes in our business in a fluctuating currency exchange rate
environment.
(b) Our consolidated financial statements are prepared in accordance with U.S.
GAAP. The presentation of our non-GAAP financial information is not
intended to be considered in isolation from, as a substitute for, or
superior to the financial information prepared in accordance with U.S.
GAAP. There are no specific rules for determining our non-GAAP current and
constant dollar financial measures and, accordingly, they are susceptible
to varying calculations, and it is possible that they may not be exactly
comparable to the like-kind information presented by other companies, which
is a potential risk associated with using these measures to compare us to
other companies.
(c) We believe that the losses on ship sales and ship impairments, net
recognized in the three and twelve months ended November 30, 2014 and 2013
are not part of our core operating business and, therefore, are not an
indication of our future earnings performance. As such, we believe it is
more meaningful for gains and losses on ship sales and ship impairments,
net to be excluded from our net income and earnings per share and,
accordingly, we present non-GAAP net income and non-GAAP earnings per share
excluding these items.
(d) We believe that the trademark and other impairment charges and
restructuring expenses recognized in the three and twelve months ended
November 30, 2014 and 2013 are special charges and, therefore, are also not
an indication of our future earnings performance. As such, we also believe
it is more meaningful for these impairment charges to be excluded from our
net income and earnings per share and, accordingly, we present non-GAAP net
income and non-GAAP earnings per share excluding these impairment charges.
(e) Under U.S. GAAP, the realized and unrealized gains and losses on fuel
derivatives not qualifying as fuel hedges are recognized currently in
earnings. We believe that unrealized gains and losses on fuel derivatives
are not an indication of our earnings performance since they relate to
future periods and may not ultimately be realized in our future earnings.
Therefore, we believe it is more meaningful for the unrealized gains and
losses on fuel derivatives to be excluded from our net income and earnings
per share and, accordingly, we present non-GAAP net income and non-GAAP
earnings per share excluding these unrealized gains and losses.
(f) For the three months ended November 30, 2014, non-GAAP diluted
weighted-average shares outstanding were 778 million, which includes the
dilutive effect of equity plans.
We have not included in our earnings guidance the impact of unrealized
gains and losses on fuel derivatives because these unrealized amounts
involve a significant amount of uncertainty, and we do not believe they are
an indication of our future earnings performance. Accordingly, our earnings
guidance is presented on a non-GAAP basis only. As a result, we did not
present a reconciliation between forecasted non-GAAP diluted earnings per
share guidance and forecasted U.S. GAAP diluted earnings per share
guidance, since we do not believe that the reconciliation information would
be meaningful. However, we do forecast gains and losses on fuel derivatives
by applying Brent prices to the derivatives that settle in the forecast
period.
SOURCE Carnival Corporation & plc
CONTACT: MEDIA CONTACT - Roger Frizzell, 1 305 406 7862; INVESTOR RELATIONS
CONTACT - Beth Roberts, 1 305 406 4832
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