9th Mar 2012 14:27
CARNIVAL CORPORATION & PLC REPORTS FIRST QUARTER RESULTS
Carnival Corporation & plc today reported its results of operations for thefirst quarter ended February 29, 2012. The results of Carnival Corporation andCarnival plc have been consolidated, and this statement includes consolidatedresults on a U.S. GAAP basis.1Q Highlights
* 1Q revenues increased by $163m to $3.6b from $3.4b in the prior year, due
primarily to increased capacity and higher ticket prices * 1Q net revenue yields in constant dollars increased 2.9% (up 2.3% in current dollars) compared to the prior year, which was higher than the company's December guidance
* Excluding fuel, constant dollar net cruise costs per available lower berth
day ("ALBD") increased 6.4% and included a $34 million impairment charge
related to Costa Allegra and $29 million of Costa Concordia incident
expenses
* Fuel prices increased 30% to $707 per metric ton for 1Q 2012 versus $543
per metric ton in 1Q 2011
* An insurance recoverable of $515 million for Costa Concordia was recorded,
which offset the ship write off since the ship has been deemed to be a
constructive total loss
* 1Q Non-GAAP (diluted) earnings per share of $0.02, compared to $0.19 for
the prior year * 1Q U.S. GAAP (diluted) loss per share of $0.18 included Ibero Cruises goodwill and trademark impairment charges of $173 million and net unrealized gains on fuel derivatives of $21 million
2012 Outlook
* At this time, cumulative advance bookings, excluding Costa, for the
remainder of 2012 are approximately 3 occupancy points behind the prior
year with prices slightly higher than last year's levels (constant dollars)
* Net revenue yields for FY 2012 are expected to be in line with the prior
year (constant dollars) excluding Costa, and decline 2 to 4 percent
(constant dollars) including Costa
* Net cruise costs excluding fuel per ALBD for FY 2012 are expected to be in
line with the prior year on a constant dollar basis
* Changes in currency exchange rates and fuel prices for FY 2012 are expected
to reduce FY 2012 earnings by $0.59 per share compared to 2011
* Full year 2012 non-GAAP earnings per share (diluted) expected to be in the
range of $1.40 to $1.70, compared to $2.42 for 2011
* 2Q 2012 non-GAAP earnings per share (diluted) expected to be in the range
of $0.05 to $0.09, compared to $0.26 in 2Q 2011
Chairman and Chief Executive Officer Micky Arison commenting on these results:
"All of us at Carnival Corporation & plc are deeply saddened by the CostaConcordia tragedy. Our hearts go out to everyone affected, particularly thefamilies of the deceased and missing. The global cruise industry has anoutstanding safety record and every one of our brands is committed to thewell-being of our guests and crew. Immediately following the Costa Concordiaaccident we ordered a thorough review, with the help of industry-leadingexperts, to understand what happened as well as to conduct an extensive auditof all safety and emergency response procedures across all of our cruiselines. We will work tirelessly to understand what went wrong, and make sure itnever happens again.""Our base of business for 2012 is solid and booking volumes have graduallyimproved, which we believe is a testament to consumer confidence in the cruiseindustry's long-standing record of exceptional safety. Despite the slowdown inbookings, all of our North American brands are still expecting a modest yieldimprovement in 2012 while our European brands, excluding Costa, are expectingto have slightly lower yields due in part to the slowing European economies.Overall, based on current pricing trends, any consumers holding out for deeperthan normal discounts may be disappointed." Arison also noted that thecompany's cash flow remains strong and is expected to approach $3.3 billion in2012 (including net insurance proceeds), which is sufficient to fund thisyear's capital expenditure requirements and expected dividend distributionswithout the need for additional financing. "Our company is resilient and we will continue to work through this challengingperiod. We have every confidence that we will restore consumer faith in theCosta brand and the excellent reputation Costa's management team has built forthe organization which has a deep-rooted Italian heritage spanning more than 60years. Carnival Corporation & plc expects to carry nearly 10 million guests onits global fleet this year and the long-term fundamentals of our businessremain strong as consumers continue to place tremendous importance on qualityand value when making vacation decisions. Based on our solid operating cashflow, strong balance sheet and high investment grade credit ratings we are wellpositioned for the future and remain confident in our long-term outlook."MEDIA CONTACT INVESTOR RELATIONS CONTACTJennifer de la Cruz Beth Roberts
001 305 599 2600, ext. 16000 001 305 406 4832
Analyst conference call
The company has scheduled a conference call with analysts at 3:00 p.m. GMT (10:00 a.m. EST) today to discuss its 2012 first quarter results. This call can belistened to live, and additional information can be obtained, via CarnivalCorporation & 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, Ibero Cruises, P&O Cruises (Australia) and P&O Cruises (UK).
Together, these brands operate 98 ships totaling 195,000 lower berths with 10new ships scheduled to enter service between May 2012 and March 2016. CarnivalCorporation & plc also operates Holland America Princess Alaska Tours, theleading tour company in Alaska and the Canadian Yukon. Traded on both the NewYork and London Stock Exchanges, Carnival Corporation & plc is the only groupin the world to be included in both the S&P 500 and the FTSE 100 indices.
Carnival Corporation & plc Reports First Quarter Results MIAMI, March 9, 2012 -- Carnival Corporation & plc announced non-GAAP net income of $13 million, or $0.02 diluted earnings pershare for the first quarter of 2012. Reported U.S. GAAP net loss was $139million, or $0.18 diluted loss per share, which includes a non-cash write downfor Ibero Cruises' ("Ibero") goodwill and trademark assets of $173 million andnet unrealized gains on fuel derivatives of $21 million. Net income for thefirst quarter of 2011 was $152 million, or $0.19 diluted EPS. Revenues for thefirst quarter of 2012 increased to $3.6 billion from $3.4 billion for the prioryear.First quarter 2012 results reflect Costa Concordia incident expenses of $29million, including a $10 million insurance deductible related to third partypersonal injury liabilities. During the first quarter of 2012, the company alsorecorded an insurance recoverable of $515 million (euro 384 million), whichoffset the write off of the net carrying value of Costa Concordia as the shiphas been deemed to be a constructive total loss.Carnival Corporation & plc Chairman and CEO Micky Arison noted, "All of us atCarnival Corporation & plc are deeply saddened by the Costa Concordia tragedy.Our hearts go out to everyone affected, particularly the families of thedeceased and missing. The global cruise industry has an outstanding safetyrecord and every one of our brands is committed to the well-being of our guestsand crew. Immediately following the Costa Concordia accident we ordered athorough review, with the help of industry-leading experts, to understand whathappened as well as to conduct an extensive audit of all safety and emergencyresponse procedures across all of our cruise lines. We will work tirelessly tounderstand what went wrong, and make sure it never happens again."
Key metrics for the first quarter 2012 compared to the prior year were as follows:
* On a constant dollar basis net revenue yields (net revenue per available
lower berth day, "ALBD") increased 2.9 percent for 1Q 2012 (up 3.7 percent
excluding Costa), which was higher than the company's December guidance, up
1.5 to 2.5 percent. Gross revenue yields increased 1.0 percent in current
dollars.
* Net cruise costs excluding fuel per ALBD increased 6.4 percent in constant
dollars, higher than the December guidance, up 3.5 to 4.5 percent, due to a
$34 million impairment charge related to Costa Allegra and the above referenced incident related expenses. As previously disclosed, the remaining increase from the prior year was primarily due to the higher number of dry-dock days. Gross cruise costs including fuel per ALBD in current dollars increased 6.6 percent.
* Fuel prices increased 30 percent to $707 per metric ton for 1Q 2012 from
$543 per metric ton in 1Q 2011, costing the company an additional $137
million. They were also higher than December guidance of $652 per metric
ton, costing an additional $46 million.
* The company recorded $173 million of charges related to Ibero goodwill and
trademark impairments primarily as a result of slower than anticipated
Ibero capacity growth due to the current state of the Spanish economy.
* During the first quarter, the company entered into zero cost collars for an
additional 10 percent of its estimated fuel consumption for the second half
of 2012 through fiscal 2015, bringing the total to approximately 20 percent
over the same time period. The company recognized $21 million of net
unrealized gains on its portfolio of fuel derivatives during 1Q 2012. For
further information on the company's fuel derivatives program see "Fuel
Derivatives" below.
2012 Outlook
The company's expectations for 2012 will be affected by the direct and indirectfinancial consequences of the Costa Concordia incident. At this time,cumulative advance bookings, excluding Costa, for the remainder of 2012 areapproximately 3 occupancy points behind the prior year with prices slightlyhigher than last year's levels (constant dollars). Since the date of the CostaConcordia incident in mid-January through February 26, fleetwide bookingvolumes, excluding Costa, have shown improving trends but are still runninghigh single digits behind the prior year at slightly lower prices. There hasbeen less impact on the company's North American brands than European brands.Booking volumes for Costa during the same period are running significantlybehind the prior year at lower prices, however, Costa has curtailed virtuallyall of its marketing activities during this period.Looking forward, Arison stated, "Our base of business for 2012 is solid andbooking volumes have gradually improved, which we believe is a testament toconsumer confidence in the cruise industry's long-standing record ofexceptional safety. Despite the slowdown in bookings, all of our North Americanbrands are still expecting a modest yield improvement in 2012 while ourEuropean brands, excluding Costa, are expecting to have slightly lower yieldsdue in part to the slowing European economies. Overall, based on currentpricing trends, any consumers holding out for deeper than normal discounts maybe disappointed." Arison also noted that the company's cash flow remains strongand is expected to approach $3.3 billion in 2012 (including net insuranceproceeds), which is sufficient to fund this year's capital expenditurerequirements and expected dividend distributions without the need foradditional financing.Excluding Costa, the company forecasts full year 2012 net revenue yields, on aconstant dollar basis, to be in line with the prior year. Including Costa, thecompany forecasts a decline in net revenue yields (constant dollars) of 2 to 4percent. In order to maintain an orderly market, Costa has adopted a strategyof minimizing discounting and, if necessary, operating at reduced occupancylevels. Consequently, much of Costa's anticipated yield decline is expected toresult from lower occupancy levels.The company continues to expect net cruise costs excluding fuel per ALBD forthe full year 2012 to be in line with the prior year on a constant dollarbasis. Based on the current spot prices for fuel, fuel costs for the full year2012 are expected to increase $407 million compared to 2011, costing anadditional $0.52 per share. At current exchange rates, full year 2012 netincome is expected to be reduced by $57 million or $0.07 per share compared to2011.Taking all the above factors into consideration, the company forecasts fullyear 2012 non-GAAP diluted earnings per share to be in the range of $1.40 to$1.70, compared to 2011 non-GAAP earnings of $2.42 per share and the Decemberguidance range of $2.55 to $2.85 per share.Compared to its December guidance, the company has reduced the midpoint of itsearnings expectations by $1.15 per share, of which $0.65 results from a declinein earnings for the Costa brand. The balance is due to reduced expectations forthe remainder of the company, comprised of a $0.40 impact due to changes infuel prices and currency exchange rates and $0.10 from earnings (excluding fueland currency).Arison stated, "Our company is resilient and we will continue to work throughthis challenging period. We have every confidence that we will restore consumerfaith in the Costa brand and the excellent reputation Costa's management teamhas built for the organization which has a deep-rooted Italian heritagespanning more than 60 years. Carnival Corporation & plc expects to carry nearly10 million guests on its global fleet this year and the long-term fundamentalsof our business remain strong as consumers continue to place tremendousimportance on quality and value when making vacation decisions. Based on oursolid operating cash flow, strong balance sheet and high investment gradecredit ratings we are well positioned for the future and remain confident inour long-term outlook."Second Quarter 2012 OutlookSecond quarter constant dollar net revenue yields, excluding Costa, areexpected to be flat to down slightly (decrease 2.5 to 3.5 percent compared tothe prior year, including Costa). Net cruise costs excluding fuel per ALBD forthe second quarter are expected to be flat to down 1.0 percent on a constantdollar basis compared to the prior year. Fuel costs for the second quarter areexpected to increase $85 million compared to the prior year, costing anadditional $0.11 per share.Based on the above factors, the company expects non-GAAP diluted earnings forthe second quarter 2012 to be in the range of $0.05 to $0.09 per share versus2011 non-GAAP earnings of $0.26 per share.
During the second quarter, the company will take delivery of all three of its new ships for 2012, Costa Cruises' 2,984-passenger Costa Fascinosa, AIDA Cruises' 2,194-passenger AIDAmar and Carnival Cruise Lines' 3,690-passenger Carnival Breeze.
Selected Key Forecast Metrics Full Year 2012 Second Quarter 2012 Year over Current Constant Current Constant year change: Dollars Dollars Dollars Dollars Net revenue (3.0) to (2.0) to (4.0) to (2.5) to yields (5.0)% (4.0)% (5.0)% (3.5)% Net cruise costsexcl. fuel / ALBD (0.5) to 0.5 to (2.0) to 0.0 to (1.5)% (0.5) % (3.0)% (1.0)% Full Year 2012 Second Quarter 2012
Fuel price per metric ton $766 $772 Fuel consumption (metric tons in
thousands) 3,382 863 Currency: Euro $1.32 to 1 euro $1.32 to 1 euro Sterling $1.58 to 1 pound $1.59 to 1 pound 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 2012 first quarter results. This call can belistened to live, and additional information can be obtained, via CarnivalCorporation & 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, Ibero Cruises, P&O Cruises (Australia) and P&O Cruises (UK).
Together, these brands operate 98 ships totaling 195,000 lower berths with 10new ships scheduled to enter service between May 2012 and March 2016. CarnivalCorporation & plc also operates Holland America Princess Alaska Tours, theleading tour company in Alaska and the Canadian Yukon. Traded on both the NewYork and London Stock Exchanges, Carnival Corporation & plc is the only groupin the world to be included in both the S&P 500 and the FTSE 100 indices.
Cautionary Note Concerning Factors That May Affect Future Results
Carnival Corporation and Carnival plc and their respective subsidiaries arereferred to collectively in this release as "Carnival Corporation & plc,""our," "us," and "we." Some of the statements, estimates or projectionscontained in this release are "forward-looking statements" that involve risks,uncertainties and assumptions with respect to us, including some statementsconcerning future results, outlooks, plans, goals and other events which havenot yet occurred. These statements are intended to qualify for the safe harborsfrom liability provided by Section 27A of the Securities Act of 1933 andSection 21E of the Securities Exchange Act of 1934. We have tried, wheneverpossible, to identify these statements by using words like "will," "may,""could," "should," "would," "believe," "depends," "expect," "anticipate,""forecast," "future," "intend," "plan," "estimate," "target" and similarexpressions of future intent or the negative of such terms. Becauseforward-looking statements involve risks and uncertainties, there are manyfactors that could cause our actual results, performance or achievements todiffer materially from those expressed or implied in this release.Forward-looking statements include those statements that may impact, amongother things, the forecasting of our non-GAAP earnings per share ("EPS"); netrevenue yields; booking levels; pricing; occupancy; operating, financing andtax costs, including fuel expenses; costs per available lower berth day;estimates of ship depreciable lives and residual values; liquidity; goodwilland trademark fair values and outlook. These factors include, but are notlimited to, the following: general economic and business conditions; increasesin fuel prices; accidents, the spread of contagious diseases and threatsthereof, adverse weather conditions or natural disasters and other incidentsaffecting the health, safety, security and satisfaction of guests and crew; theinternational political climate, armed conflicts, terrorist and pirate attacks,vessel seizures, and threats thereof, and other world events affecting thesafety and security of travel; negative publicity concerning the cruisebusiness in general or us in particular, including any adverse environmentalimpacts of cruising; litigation, enforcement actions, fines or penalties,including those relating to Costa Concordia's accident; economic, market andpolitical factors that are beyond our control, which could increase ouroperating, financing and other costs; changes in and compliance with laws andregulations relating to the protection of persons with disabilities,employment, environment, health, safety, security, tax and other regulationsunder which we operate; our ability to implement our shipbuilding programs andship repairs, maintenance and refurbishments on terms that are favorable orconsistent with our expectations; increases to our repairs and maintenanceexpenses and refurbishment costs as our fleet ages; lack of continuingavailability of attractive, convenient and safe port destinations; continuingfinancial viability of our travel agent distribution system, air serviceproviders and other key vendors in our supply chain and reductions in theavailability of, and increases in the pricing for, the services and productsprovided by these vendors; disruptions and other damages to our informationtechnology and other networks and operations, and breaches in data security;competition from and overcapacity in the cruise ship or land-based vacationindustry; loss of key personnel or our ability to recruit or retain qualifiedpersonnel; union disputes and other employee relation issues; disruptions inthe global financial markets or other events may negatively affect the abilityof our counterparties and others to perform their obligations to us; thecontinued strength of our cruise brands and our ability to implement our brandstrategies; our international operations are subject to additional risks notgenerally applicable to our U.S. operations; geographic regions in which we tryto expand our business may be slow to develop and ultimately not develop how weexpect; our decisions to self-insure against various risks or our inability toobtain insurance for certain risks at reasonable rates; fluctuations in foreigncurrency exchange rates; whether our future operating cash flow will besufficient to fund future obligations and whether we will be able to obtainfinancing, if necessary, in sufficient amounts and on terms that are favorableor consistent with our expectations; risks associated with the dual listedcompany arrangement and uncertainties of a foreign legal system as we are notincorporated in the U.S. Forward-looking statements should not be relied uponas a prediction of actual results. Subject to any continuing obligations underapplicable law or any relevant stock exchange rules, we expressly disclaim anyobligation to disseminate, after the date of this release, any updates orrevisions to any such forward-looking statements to reflect any change inexpectations or events, conditions or circumstances on which any suchstatements are based. CARNIVAL CORPORATION & PLC CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in millions, except per share data) Three Months Ended February 29/28, Revenues 2012 2011 Cruise Passenger tickets $ 2,764 $ 2,652 Onboard and other 809 757 Tour and other 9 10 3,582 3,419 Operating Costs and Expenses Cruise Commissions, transportation and other 661 664 Onboard and other 126 120 Fuel 592 450 Payroll and related 442 411 Food 240 231 Other ship operating 619 (a) 510 Tour and other 14 9 2,694 2,395 Selling and administrative 421 422 Depreciation and amortization 376 367 Ibero goodwill and trademark impairment charges 173 (b) - 3,664 3,184
Operating (Loss) Income (82) 235 Nonoperating (Expense) Income
Interest income 3 2 Interest expense, net of capitalized interest (88)
(86)
Gains on fuel derivatives, net 21 (c) - Other income, net 5 6 (59) (78)
(Loss) Income Before Income Taxes (141) 157 Income Tax Benefit (Expense), Net 2 (5) Net (Loss) Income $ (139) $ 152 (Loss) Earnings Per Share Basic $ (0.18) $ 0.19 Diluted $ (0.18) $ 0.19
Non-GAAP Earnings Per Share-Diluted $ 0.02 (d) $ 0.19
Dividends Declared Per Share $ 0.25 $ 0.25
Weighted-Average Shares Outstanding - Basic 778 790 Weighted-Average Shares Outstanding - Diluted 778 (e) 794
(a) Includes a $34 million impairment charge related to Costa Allegra.
(b) Includes $153 million and $20 million of impairment charges related to
Ibero's goodwill and trademarks, respectively.
(c) There were no realized gains or losses on fuel derivatives.
(d) Excludes $173 million of Ibero impairment charges and $21 million of net
unrealized gains on fuel derivatives.
(e) Non-GAAP diluted weighted-average shares outstanding were 779 million,
which includes the dilutive effect of equity plans. CARNIVAL CORPORATION & PLC OTHER INFORMATION Three Months Ended February 29/28, 2012 2011 STATISTICAL INFORMATION Passengers carried (in thousands) 2,262 2,185 Occupancy percentage (a) 105.3% 105.0% Fuel consumption (metric tons in thousands) 837 828 Fuel cost per metric ton consumed $ 707 $ 543 Currencies U.S. dollar to 1 euro $ 1.31 $ 1.34 U.S. dollar to 1 pound $ 1.56 $ 1.58 U.S. dollar to Australian dollar $ 1.04 $ 1.00
(a) In accordance with cruise business practice, occupancy is calculated using
a denominator of two passengers per cabin even though some cabins can
accommodate three or more passengers. Percentages in excess of 100% indicate
that on average more than two passengers occupied some cabins.
FUEL DERIVATIVES
At February 29, 2012, our outstanding fuel derivatives consisted of zero costcollars on Brent crude oil for a portion of our estimated fuel consumption
asfollows: Barrels Percent of (in Weighted-Average Weighted-Average Estimated Maturities (a) thousands) Floor Price Ceiling Price Fuel Consumption 2012 Q3 1,044 $ 92 $ 132 21% Q4 1,044 92 132 20% 2,088 $ 92 $ 132 Fiscal 2013 4,224 $ 86 $ 130 20% Fiscal 2014 4,224 $ 79 $ 127 20% Fiscal 2015 4,320 $ 75 $ 125 20% (a) Fuel derivatives mature evenly over each quarter within the above fiscal years. CARNIVAL CORPORATION & PLC NON-GAAP FINANCIAL MEASURES
Consolidated gross and net revenue yields were computed by dividing the gross and net cruise revenues, without rounding, by ALBDs as follows (dollars in
millions, except yields) (a) (b):
Three Months Ended February 29/28, 2012 Constant 2012 Dollar 2011 Passenger ticket revenues $ 2,764 $ 2,785 $ 2,652 Onboard and other revenues 809 811 757 Gross cruise revenues 3,573 3,596 3,409 Less cruise costs Commissions, transportation and other (661) (669) (664) Onboard and other (126) (126) (120) (787) (795) (784) Net passenger ticket revenues 2,103 2,116 1,988 Net onboard and other revenues 683 685 637 Net cruise revenues $ 2,786 $ 2,801 $ 2,625 ALBDs (c) 17,308,535 17,308,535 16,686,710 Gross revenue yields $ 206.40 $ 207.75 $ 204.30 % increase vs. 2011 1.0% 1.7% Net revenue yields $ 160.93 $ 161.81 $ 157.28 % increase vs. 2011 2.3% 2.9% Net passenger ticket revenue yields $ 121.47 $ 122.22 $ 119.11 % increase vs. 2011 2.0% 2.6% Net onboard and other revenue yields $ 39.46 $ 39.59 $ 38.17% increase vs. 2011 3.4% 3.7%
Consolidated gross and net cruise costs and net cruise costs excluding fuel perALBD were computed by dividing the gross and net cruise costs and net cruisecosts excluding fuel, without rounding, by ALBDs as follows (dollars inmillions, except costs per ALBD) (a) (b): Three Months Ended February 29/28, 2012 Constant 2012 Dollar 2011 Cruise operating expenses $ 2,680 $ 2,696 $ 2,386 Cruise selling and administrative expenses (d) 419 422 416 Gross cruise costs 3,099 3,118 2,802
Less cruise costs included in net cruise revenues cruise revenues Commissions, transportation and other (661) (669) (664) Onboard and other (126) (126) (120) Net cruise costs 2,312 2,323 2,018 Less fuel (592) (592) (450)
Net cruise costs excluding fuel $ 1,720 $ 1,731 $
1,568 ALBDs (c) 17,308,535 17,308,535 16,686,710 Gross cruise costs per ALBD $ 179.04 $ 180.10 $ 167.92 % increase vs. 2011 6.6% 7.3% Net cruise costs per ALBD $ 133.57 $ 134.16 $ 120.90 % increase vs. 2011 10.5% 11.0% Net cruise costs excluding fuel per ALBD $ 99.38 $ 99.97 $ 93.95 % increase vs. 2011 5.8% 6.4% 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 February 29/28, 2012 2011 Net (loss) income - diluted U.S. GAAP net (loss) income $ (139) $ 152 Ibero goodwill and trademark impairment charges (e) 173 - Unrealized gains on fuel derivatives, net (f) (21) - Non-GAAP net income $ 13 $ 152
Weighted-average shares outstanding - diluted (f) 778 794 (Loss) earnings per share - diluted
U.S. GAAP (loss) earnings per share $ (0.18) $ 0.19 Ibero goodwill and trademark impairment charges (e) 0.22 - Unrealized gains on fuel derivatives, net (f) (0.02) - Non-GAAP earnings per share $ 0.02 $ 0.19
Notes to Non-GAAP Financial Measures
(a) We use net cruise revenues per ALBD ("net revenue yields"), net cruisecosts per ALBD and net cruise costs excluding fuel per ALBD as significantnon-GAAP financial measures of our cruise segment financial performance. Thesemeasures enable us to separate the impact of predictable capacity changes fromthe more unpredictable rate changes that affect our business. We believe thesenon-GAAP measures provide useful information to investors and expanded insightto measure our revenue and cost performance as a supplement to our U.S.generally accepted accounting principles ("U.S. GAAP") consolidated financialstatements.Net revenue yields are commonly used in the cruise business to measure acompany's cruise segment revenue performance and for revenue managementpurposes. We use "net cruise revenues" rather than "gross cruise revenues" tocalculate net revenue yields. We believe that net cruise revenues is a moremeaningful measure in determining revenue yield than gross cruise revenuesbecause it reflects the cruise revenues earned net of our most significantvariable costs, which are travel agent commissions, cost of air and othertransportation, certain other costs that are directly associated with onboardand other revenues and credit card fees. Substantially all of our remainingcruise costs are largely fixed, except for the impact of changing prices, onceour ship capacity levels have been determined.Net passenger ticket revenues reflect gross cruise revenues, net of (1) onboardand other revenues, (2) commissions, transportation and other costs and (3)onboard and other cruise costs. Net onboard and other revenues reflect grosscruise revenues, net of (1) passenger ticket revenues, (2) commissions,transportation and other costs and (3) onboard and other cruise costs. Netpassenger ticket revenue yields and net onboard and other revenue yields arecomputed by dividing net passenger ticket revenues and net onboard and otherrevenues by ALBDs.Net cruise costs per ALBD and net cruise costs excluding fuel per ALBD are themost significant measures we use to monitor our ability to control our cruisesegment costs rather than gross cruise costs per ALBD. We exclude the samevariable costs that are included in the calculation of net cruise revenues tocalculate net cruise costs with and without fuel to avoid duplicating thesevariable costs in our non-GAAP financial measures.We have not provided estimates of future gross revenue yields or future grosscruise costs per ALBD because the quantitative reconciliations of forecastedgross cruise revenues to forecasted net cruise revenues or forecasted grosscruise costs to forecasted net cruise costs would include a significant amountof uncertainty in projecting the costs deducted to arrive at this measure. Assuch, management does not believe that this reconciling information would bemeaningful. CARNIVAL CORPORATION & PLC NON-GAAP FINANCIAL MEASURES (CONTINUED)
In addition, because our Europe, Australia & Asia cruise brands utilize theeuro, sterling and Australian dollar to measure their results and financialcondition, the translation of those operations to our U.S. dollar reportingcurrency results in decreases in reported U.S. dollar revenues and expenses ifthe U.S. dollar strengthens against these foreign currencies, and increases inreported U.S. dollar revenues and expenses if the U.S. dollar weakens againstthese foreign currencies. Accordingly, we also monitor and report thesenon-GAAP financial measures assuming the 2012 period currency exchange rateshave remained constant with the 2011 period rates, or on a "constant dollarbasis," in order to remove the impact of changes in exchange rates on ournon-U.S. dollar cruise operations. We believe that this is a useful measuresince it facilitates a comparative view of the growth of our business in afluctuating 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 tobe considered in isolation or as substitute for, or superior to, the financialinformation prepared in accordance with U.S. GAAP. There are no specific rulesfor determining our non-GAAP current and constant dollar financial measuresand, accordingly, they are susceptible to varying calculations, and it ispossible that they may not be exactly comparable to the like-kind informationpresented by other companies, which is a potential risk associated with usingthese measures to compare us to other companies.
(c) 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.
(d) For the three months ended February 29/28, 2012 and 2011, selling and administrative expenses were $421 million and $422 million, respectively. For the three months ended February 29/28, 2012 and 2011, selling and administrative expenses were comprised of cruise selling and administrative expenses of $419 million and $416 million and Tour and Other selling and administrative expenses of $2 million and $6 million, respectively.
(e) We believe that the impairment charges related to Ibero's goodwill and trademarks are nonrecurring and, therefore, are not an indication of our future earnings performance. As such, we believe it is more meaningful for the impairment charges to be excluded from our net (loss) income and (loss) earnings per share and, accordingly, we present non-GAAP net income and non-GAAP EPS excluding these impairment charges.
(f) Under U.S. GAAP, the realized and unrealized gains and losses on fuelderivatives not qualifying as fuel hedges are immediately recognized inearnings. We believe that unrealized gains and losses on fuel derivatives arenot an indication of our future earnings performance since they may notultimately be realized in our future earnings. Therefore, we believe it is moremeaningful for the unrealized gains and losses on fuel derivatives to beexcluded from our net (loss) income and (loss) earnings per share and,accordingly, we present non-GAAP net income and non-GAAP EPS excluding theseunrealized gains and losses. For the three months ended February 29, 2012,non-GAAP diluted weighted-average shares outstanding were 779 million, whichincludes the dilutive effect of equity plans.We have not included in our earnings guidance any estimates of unrealized gainsand losses on fuel derivatives because forecasting these amounts involves asignificant amount of uncertainty and are not an indication of our futureearnings performance. Accordingly, our earnings guidance is presented on anon-GAAP basis only. As a result, we did not present a reconciliation betweenforecasted non-GAAP diluted EPS guidance and forecasted U.S. GAAP diluted EPSguidance, since we do not believe that the reconciliation information would
bemeaningful.SOURCE Carnival Plc
CONTACT: Media, Jennifer De La Cruz, +1-305-599-2600, ext. 16000; or Investor Relations, Beth Roberts, +1-305-406-4832
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