25th Sep 2012 14:15
CARNIVAL CORPORATION & PLC REPORTS THIRD QUARTER RESULTS
Carnival Corporation & plc today reported its results of operations for thethird quarter ended August 31, 2012. The results of Carnival Corporation andCarnival plc have been consolidated, and this statement includes consolidatedresults on a U.S. GAAP basis.3Q Highlights
* 3Q net revenue yields in constant dollars decreased 5.3% (decreased 2.1%
excluding Costa) compared to the prior year
* Excluding fuel, constant dollar net cruise costs per available lower berth
day ("ALBD") decreased 3% for 3Q compared to the prior year
* 3Q changes in currency exchange rates reduced earnings by $0.09 per share
compared to the prior year * 3Q Non-GAAP (diluted) earnings per share of $1.53, compared to $1.69 of U.S. GAAP diluted earnings per share for the prior year * 3Q U.S. GAAP (diluted) earnings per share of $1.71 includes unrealized gains on fuel derivatives of $136m
Outlook
* Since June, fleetwide booking volumes and pricing trends for the remainder
of 2012 and first half of 2013 have continued to strengthen
* For the remainder of 2012 and first half of 2013, cumulative advance
bookings excluding Costa are still behind the prior year at slightly lower
prices. Cumulative advance bookings for Costa have improved but are still
five occupancy points behind the prior year at lower prices
* Net revenue yields (constant dollars) for FY 2012 are expected to be flat
to down slightly excluding Costa, and decline 3% (constant dollars) including Costa * Net cruise costs excluding fuel per ALBD for FY 2012 are expected to be down slightly compared with the prior year on a constant dollar basis
* For full year 2012, higher revenue yield expectations and improvement in
costs compared to June guidance have been offset by $0.13 per share of
unfavorable changes in fuel prices and currency exchange rates
* Full year 2012 non-GAAP earnings per share (diluted) expected to be in the
range of $1.83 to $1.87, compared to June guidance range of $1.80 to $1.90
* 4Q 2012 non-GAAP earnings per share (diluted) expected to be in the range
of $0.07 to $0.11, compared to $0.28 in 4Q 2011
Chairman and Chief Executive Officer Micky Arison commenting on these results:
"The significant efforts of our brand management teams were successful inpartially mitigating thedecline in cruise ticket prices. Onboard revenue yields(constant dollars excluding Costa) improved three percent during the quarter.Our brand managements' continued focus on cost containment contributed to athree percent reduction in cruise costs (constant dollars excluding fuel) aswell as a six percent reduction in fuel consumption on a unit basis."
Arison also noted that the company repurchased two million shares valued at $67 million during the third quarter, demonstrating a continued commitment to returning excess free cash flow to shareholders.
"Looking forward, we remain committed to a measured pace of newbuilds and achieving a strategic balance of supply and demand in established markets." Arison added, "Our lower capital commitments should result in significant excess free cash flow in the coming years which we intend to return to shareholders."
"The pace of booking volumes remains healthy enabling us to continue to catch up on occupancy levels, while pricing has gradually improved. Both of these trends leave us well positioned for a recovery in cruise ticket prices beginning in the second quarter of 2013."
MEDIA CONTACT INVESTOR RELATIONS CONTACTJennifer de la Cruz Beth Roberts001 305 599 2600, ext. 16000 001 305 406 4832Analyst conference call
The company has scheduled a conference call with analysts at 3:00 p.m. BST (10:00 a.m. EDT) today to discuss its 2012 third 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 & plcCarnival Corporation & plc is the largest cruise company in the world, with aportfolio 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 100 ships totaling 203,000 lower berths withseven new ships scheduled to be delivered between March 2013 and March 2016. Carnival Corporation & plc also operates Holland America Princess Alaska Tours,the leading tour company in Alaska and the Canadian Yukon. Traded on both theNew York and London Stock Exchanges, Carnival Corporation & plc is the onlygroup in the world to be included in both the S&P 500 and the FTSE 100indices. Carnival Corporation & plc Reports Third Quarter Results MIAMI, Sept. 25, 2012 -- Carnival Corporation & plc announced non-GAAP net income of $1.2 billion, or $1.53 diluted earnings per share, for the third quarter of 2012. Reported U.S. GAAP net income, which includes unrealized gains on fuel derivatives of $136 million, was $1.3 billion, or $1.71 diluted earnings per share. Net income forthe third quarter of 2011 was $1.3 billion, or $1.69 diluted earnings pershare. Revenues for the third quarter of 2012 were $4.7 billion compared to$5.1 billion for the prior year.Carnival Corporation & plc Chairman and CEO Micky Arison noted that thirdquarter non-GAAP earnings were better than anticipated in the company's Juneguidance due primarily to a combination of higher than expected revenue yieldsand lower than expected costs, partly due to the timing of certain expenses.Commenting on the third quarter, Arison said, "The significant efforts of ourbrand management teams were successful in partially mitigating the decline incruise ticket prices. Onboard revenue yields (constant dollars excluding Costa)improved three percent during the quarter. Our brand managements' continuedfocus on cost containment contributed to a three percent reduction in cruisecosts (constant dollars excluding fuel) as well as a six percent reduction infuel consumption on a unit basis."
Arison also noted that the company repurchased two million shares valued at $67 million during the third quarter, demonstrating a continued commitment to returning excess free cash flow to shareholders.
Key metrics for the third quarter 2012 compared to the prior year were as follows:
* Changes in currency exchange rates for 3Q 2012 compared to the prior year
have reduced both net revenue yields and net cruise costs excluding fuel per
available lower berth day, "ALBD" by almost 4 percent each and cost the company $0.09 per share. * On a constant dollar basis net revenue yields (net revenue per ALBD)
decreased 5.3 percent for 3Q 2012, which was better than June guidance of
down 6 to 7 percent. Excluding Costa, constant dollar net revenue yields
decreased 2.1 percent for 3Q 2012, which was also better than June guidance
of down 3 to 4 percent. Gross revenue yields decreased 9.2 percent in current
dollars driven by unfavorable currency exchange rates compared to the prior
year.
* Net cruise costs per ALBD excluding fuel decreased 3 percent in constant
dollars, better than June guidance of down 0.5 to 1.5 percent, partly due to
the timing of certain expenses. Gross cruise costs per ALBD including fuel
decreased 8.2 percent in current dollars driven by unfavorable currency
exchange rates compared to the prior year.
* Fuel prices decreased almost 4 percent to $659 per metric ton for 3Q 2012
from $686 per metric ton in 3Q 2011. However, fuel prices were higher than
June guidance costing an additional $18 million, net of realized losses on
fuel derivatives.
Arison indicated that in keeping with the company's previously stated strategyof introducing two to three new ships per year, the company has seven new shipsscheduled for delivery between 2013 and 2016, some of which will replaceexisting capacity reductions from possible sales of older ships. Arison alsonoted that the company expects to direct capacity growth toward the continueddevelopment of emerging cruise markets. The company has almost tripled itsguest sourcing from emerging cruise markets in the past five years. For 2013,the company will capitalize on the increasing popularity of cruising in Asiawith the deployment of a second Costa ship in China and the launch of a newPrincess Cruises program for the Japanese market. Arison stated, "Looking forward, we remain committed to a measured pace ofnewbuilds and achieving a strategic balance of supply and demand in establishedmarkets." Arison added, "Our lower capital commitments should result insignificant excess free cash flow in the coming years which we intend to returnto shareholders."Outlook Since June, fleetwide booking volumes and pricing trends for the remainder offiscal 2012 and first half of 2013 have continued to strengthen. For the lastsix weeks, booking volumes excluding Costa have increased 9 percent versus theprior year at prices in line with last year's levels. Over the same period,booking volumes for Costa have also increased 9 percent albeit at lower prices.For the remainder of the year and first half of 2013, cumulative advancebookings excluding Costa are still behind the prior year at slightly lowerprices. For Costa, cumulative advance bookings have shown considerableimprovement but are still five occupancy points behind the prior year at lowerprices over the same period. Arison commented, "The pace of booking volumes remains healthy enabling us tocontinue to catch up on occupancy levels, while pricing has gradually improved.Both of these trends leave us well positioned for a recovery in cruise ticketprices beginning in the second quarter of 2013." 2012 GuidanceExcluding Costa, the company forecasts full year 2012 net revenue yields, on aconstant dollar basis, to be flat to down slightly which is slightly betterthan previous guidance. Including Costa, the company expects a decline in netrevenue yields of 3 percent compared to its previous guidance of down 3 to 4percent (constant dollars) for the full year 2012. Full year 2012 revenueyields for the North American brands are expected to be slightly higher thanthe prior year. Full year 2012 revenue yields for the European brands,excluding Costa, are expected to be lower than the prior year. The companycontinues to expect net cruise costs excluding fuel per ALBD for the full year2012 to be down slightly compared with the prior year on a constant dollarbasis.For full year 2012, higher net revenue yield expectations and improvement incosts compared to June guidance have been offset by $0.13 per share of higherfuel prices and unfavorable changes in currency exchange rates. Taking all theabove factors into consideration, the company forecasts full year 2012 non-GAAPdiluted earnings per share to be in the range of $1.83 to $1.87, in line withthe midpoint of the June guidance range of $1.80 to $1.90 per share.Fourth quarter constant dollar net revenue yields excluding Costa, are expectedto decrease 3 to 4 percent (including Costa, expected to decrease 5 to 6percent) compared to the prior year. Net cruise costs excluding fuel per ALBDfor the fourth quarter are expected to be down 2 to 3 percent on a constantdollar basis compared to the prior year. In addition, changes in currencyexchange rates and fuel prices are expected to reduce fourth quarter earningsby $0.08 per share compared to the prior year. Based on the above factors, the company expects non-GAAP diluted earnings forthe fourth quarter 2012 to be in the range of $0.07 to $0.11 per share versus2011 non-GAAP earnings of $0.28 per share. Selected Key Forecast Metrics----------------------------- Full Year 2012 Fourth Quarter 2012 -------------- ------------------- Current Constant Current ConstantYear over year change: Dollars Dollars Dollars Dollars ------- ------- ------- -------Net revenue yields (5)% (3)% (7) to (8)% (5) to (6)%Net cruise costsexcl. fuel /ALBD (3)% (1)% (4) to (5)% (2) to (3)% Full Year 2012 Fourth Quarter 2012 -------------- -------------------Fuel price permetric ton $716 $739Fuel consumption(metric tons inthousands) 3,366 854Currency: Euro $1.28 to EUR1 $1.30 to EUR1 Sterling $1.58 to BPS1 $1.62 to BPS1 Conference Call
The company has scheduled a conference call with analysts at 10:00 a.m. EDT (3:00 p.m. BST) today to discuss its 2012 third 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 100 ships totaling 203,000 lower berths withseven new ships scheduled to be delivered between March 2013 and March 2016. Carnival Corporation & plc also operates Holland America Princess Alaska Tours,the leading tour company in Alaska and the Canadian Yukon. Traded on both theNew York and London Stock Exchanges, Carnival Corporation & plc is the onlygroup in the world to be included in both the S&P 500 and the FTSE 100indices. Cautionary Note Concerning Factors That May Affect Future ResultsCarnival 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," "indicate" andsimilar expressions 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 the Costa Concordia incident; 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 notapplicable to our U.S. operations; geographic regions in which we try to expandour business may be slow to develop and ultimately not develop how we expect;our decisions to self-insure against various risks or our inability to obtaininsurance 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 INCOME (UNAUDITED) (in millions, except per share data) Three Months Ended Nine Months Ended August 31, August 31, ---------- ---------- 2012 2011 2012 2011 ---- ---- ---- ----Revenues Cruise Passenger tickets $3,561 $3,907 $9,000 $9,336 Onboard and other 965 936 2,618 2,511 Tour and other 158 215 186 249 --- --- --- --- 4,684 5,058 11,804 12,096 ----- ----- ------ ------
Operating Costs and Expenses
Cruise
Commissions, transportation and other 613 686 1,793 1,911 Onboard and other 150 137 404 379 Fuel 541 581 1,778 1,611 Payroll and related 422 435 1,299 1,282 Food 246 257 722 728 Other ship operating 534 575 (a) 1,647 1,640 Tour and other 91 143 126 179 --- --- --- --- 2,597 2,814 7,769 7,730
Selling and administrative 409 421 1,261 1,282
Depreciation and amortization 383 390 1,135 1,137
Ibero goodwill and trademark
impairment charges - - 173 - --- --- --- --- 3,389 3,625 10,338 10,149 ----- ----- ------ ------Operating Income 1,295 1,433 1,466 1,947 ----- ----- ----- ----- Nonoperating Income (Expense) Interest income 2 3 8 8 Interest expense, net of capitalized interest (84) (96) (259) (273) Unrealized gains on fuel derivatives, net 136 - 12 - Realized losses on fuel derivatives (12) - (12) - Other (expense) income, net (1) 2 (6) 21 --- --- --- --- 41 (91) (257) (244) --- --- ---- ---- Income Before Income Taxes 1,336 1,342 1,209 1,703 Income Tax Expense, Net (6) (5) (4) (8) --- --- --- --- Net Income $1,330 $1,337 $1,205 $1,695 ====== ====== ====== ====== Earnings Per Share Basic $1.71 $1.69 $1.55 $2.14 ===== ===== ===== ===== Diluted $1.71 $1.69 $1.55 $2.14 ===== ===== ===== ===== Non-GAAP Earnings Per Share-Diluted $1.53 $1.69 $1.75 $2.14 ===== ===== ===== ===== Dividends Declared Per Share $0.25 $0.25 $0.75 $0.75 ===== ===== ===== ===== Weighted-Average SharesOutstanding - Basic 778 790 778 791 === === === ===Weighted-Average SharesOutstanding - Diluted 779 792 779 793 === === === ===
(a) Includes a $28 million charge related to the sales of Costa Marina and Pacific Sun, which left the fleet in November 2011 and July 2012, respectively.
CARNIVAL CORPORATION & PLC CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in millions, except par values) August 31, November 30, 2012 2011 ---- ----ASSETSCurrent Assets Cash and cash equivalents $568 $450 Trade and other receivables, net 306 263 Insurance recoverables 482 30 Inventories 364 374 Prepaid expenses and other 221 195 --- --- Total current assets 1,941 1,312 ----- ----- Property and Equipment, Net 31,972 32,054 Goodwill 3,146 3,322 Other Intangibles 1,307 1,330 Other Assets 716 619 --- --- $39,082 $38,637 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITYCurrent Liabilities Short-term borrowings $9 $281 Current portion of long-term debt 754 1,019 Accounts payable 561 576 Claims reserve 564 97 Accrued liabilities and other 970 1,026 Customer deposits 3,078 3,106 ----- ----- Total current liabilities 5,936 6,105 ----- ----- Long-Term Debt 8,289 8,053 Other Long-Term Liabilities and Deferred Income 664 647
Shareholders' Equity
Common stock of Carnival Corporation, $0.01 par value; 1,960 shares authorized; 649 shares at 2012 and 647 shares at 2011 issued 6 6 Ordinary shares of Carnival plc, $1.66 par value; 215 shares at 2012 and 2011 issued 357 357 Additional paid-in capital 8,218 8,180 Retained earnings 18,969 18,349 Accumulated other comprehensive loss (434) (209) Treasury stock, 54 shares at 2012 and 52 shares at 2011 of Carnival Corporation and 33 shares at 2012 and 2011 of Carnival plc, at cost (2,923) (2,851) ------ ------ Total shareholders' equity 24,193 23,832 ------ ------ $39,082 $38,637 ======= ======= CARNIVAL CORPORATION & PLC OTHER INFORMATION Three Months Ended Nine Months Ended August 31, August 31, ---------- ---------- 2012 2011 2012 2011 ---- ---- ---- ----STATISTICAL INFORMATION Passengers carried (in thousands) 2,804 2,676 7,400 7,192 Occupancy percentage (a) 110.8% 111.9% 106.3% 107.2% Fuel consumption (metric tons in thousands) 823 847 2,512 2,537 Fuel cost per metric ton consumed $659 $686 $708 $635 Currencies U.S. dollar to EUR1 $1.24 $1.43 $1.28 $1.40 U.S. dollar to BPS1 $1.56 $1.63 $1.57 $1.61 U.S. dollar to Australian dollar $1.02 $1.06 $1.03 $1.03 CASH FLOW INFORMATIONCash from operations $1,018 $1,215 $2,476 $3,016Capital expenditures $167 $813 $2,164 $2,435Dividends paid $196 $197 $584 $474 (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 August 31, 2012, our outstanding fuel derivatives consisted of zero cost collars on Brent crude oil to cover a portion of our estimated fuel consumption as follows:
Weighted- Weighted- Percent of Average Average Estimated Fuel Transaction Barrels Floor Ceiling Consumption
Maturities (a)(b) Dates (in thousands) Prices Prices Covered
--- ------------ -------- -------- --------Fiscal 2012-Q4 November 2011 522 $75 $135 February 2012 522 $109 $128 March 2012 1,044 $112 $132 ----- 2,088 36% ===== Fiscal 2013 November 2011 2,112 $74 $132 February 2012 2,112 $98 $127 March 2012 4,224 $100 $130 ----- 8,448 38% ===== Fiscal 2014 November 2011 2,112 $71 $128 February 2012 2,112 $88 $125 June 2012 2,376 $71 $116 ----- 6,600 29% ===== Fiscal 2015 November 2011 2,160 $71 $125 February 2012 2,160 $80 $125 June 2012 1,236 $74 $110 ----- 5,556 24% ===== Fiscal 2016 June 2012 3,564 $75 $108 15% =====
(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 crude oil is above the ceiling price or below the floor price. 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 August 31, Nine Months Ended August 31, ----------------------------- ---------------------------- 2012 2012 Constant Constant 2012 Dollar 2011 2012 Dollar 2011 ---- ------ ---- ---- ------ ----Passenger ticket revenues $3,561 $3,718 $3,907 $9,000 $9,245 $9,336Onboard and other revenues 965 997 936 2,618 2,667 2,511 --- --- --- ----- ----- -----Gross cruise revenues 4,526 4,715 4,843 11,618 11,912 11,847 ----- ----- ----- ------ ------ ------Less cruise costs
Commissions, transportation and other (613) (644) (686) (1,793) (1,848) (1,911) Onboard and other (150) (154) (137) (404) (411) (379) ---- ---- ---- ---- ---- ---- (763) (798) (823) (2,197) (2,259) (2,290) ---- ---- ---- ------ ------ ------
Net passenger ticket revenues 2,948 3,074 3,221 7,207 7,397 7,425Net onboard and other revenues 815 843 799
2,214 2,256 2,132 --- --- --- ----- ----- -----Net cruise revenues $3,763 $3,917 $4,020 $9,421 $9,653 $9,557 ====== ====== ====== ====== ====== ====== ALBDs (c) 18,613,416 18,613,416 18,089,807 53,705,889 53,705,889 52,178,866 ========== ========== ========== ========== ========== ========== Gross revenue yields $243.18 $253.33 $267.70 $216.33 $221.80 $227.05% decrease vs. 2011 (9.2)% (5.4)% (4.7)% (2.3)% Net revenue yields $202.21 $210.47 $222.21 $175.42 $179.74 $183.17% decrease vs. 2011 (9.0)% (5.3)% (4.2)% (1.9)% Net passenger ticketrevenue yields $158.34 $165.14 $178.06 $134.19 $137.72 $142.30% decrease vs. 2011 (11.1)% (7.3)% (5.7)% (3.2)% Net onboard and otherrevenue yields $43.87 $45.33 $44.15 $41.24 $42.02 $40.86
% (decrease) increase vs. 2011 (0.6)% 2.7% 0.9% 2.8%------------------------------ ----- ---
--- ---
Consolidated gross and net cruise costs and net cruise costs excluding fuel per ALBD were computed by dividing the gross and net cruise costs and net cruise costs excluding fuel, without rounding, by ALBDs as follows (dollars in millions, except costs per ALBD) (a)(b): Three Months Ended August 31, Nine Months Ended August 31, ----------------------------- ---------------------------- 2012 2012 Constant Constant 2012 Dollar 2011 2012 Dollar 2011 ---- ------ ---- ---- ------ ----
Cruise operating expenses $2,506 $2,592 $2,671 $7,643 $7,788 $7,551Cruise selling and administrative 407 424 413
1,255 1,285 1,264 expenses (d) Gross cruise costs 2,913 3,016 3,084 8,898 9,073 8,815Less cruise costs included in net
cruise revenues
Commissions, transportation
and other (613) (644) (686) (1,793) (1,848) (1,911) Onboard and other (150) (154) (137) (404) (411) (379) ---- ---- ---- ---- ---- ----Net cruise costs 2,150 2,218 2,261 6,701 6,814 6,525Less fuel (541) (541) (581) (1,778) (1,778) (1,611) ---- ---- ---- ------ ------ ------
Net cruise costs excluding fuel $1,609 $1,677 $1,680
$4,923 $5,036 $4,914 ====== ====== ====== ====== ====== ====== ALBDs (c) 18,613,416 18,613,416 18,089,807 53,705,889 53,705,889 52,178,866 ========== ========== ========== ========== ========== ==========
Gross cruise costs per ALBD $156.52 $162.05 $170.49 $165.68 $168.95 $168.93% decrease vs. 2011 (8.2)% (4.9)%
(1.9)% 0.0%
Net cruise costs per ALBD $115.55 $119.20 $125.00 $124.78 $126.89 $125.05% (decrease) increase vs. 2011 (7.6)% (4.6)%
(0.2)% 1.5% Net cruise costsexcluding fuelper ALBD $86.44 $90.08 $92.88 $91.67 $93.78 $94.18% decrease vs. 2011 (6.9)% (3.0)% (2.7)% (0.4)%------------------- ----- ----- ----- -----
(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 Nine Months Ended Ended August 31, August 31, ---------- ------------- 2012 2011 2012 2011 ---- ---- ---- ----Net income - diluted U.S. GAAP net income $1,330 $1,337 $1,205 $1,695 Ibero goodwill and trademark impairment charges (e) - - 173 - Unrealized gains on fuel derivatives, net (f) (136) - (12) - ---- --- --- --- Non-GAAP net income $1,194 $1,337 $1,366 $1,695 ====== ====== ====== ====== Weighted-averageshares outstanding- diluted 779 792 779 793 === === === === Earnings per share -diluted U.S. GAAP earnings per share $1.71 $1.69 $1.55 $2.14 Ibero goodwill and trademark impairment charges (e) - - 0.22 - Unrealized gains on fuel derivatives, net (f) (0.18) - (0.02) - ----- --- ----- --- Non-GAAP earnings per share $1.53 $1.69 $1.75 $2.14 ===== ===== ===== =====
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 periods' currency exchange rateshave remained constant with the 2011 periods' 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 withU.S. GAAP. The presentation of our non-GAAP financial information is notintended to be considered in isolation or as substitute for, or superior to,the financial information prepared in accordance with U.S. GAAP. There are nospecific rules for determining our non-GAAP current and constant dollarfinancial measures and, accordingly, they are susceptible to varyingcalculations, and it is possible that they may not be exactly comparable to thelike-kind information presented by other companies, which is a potential riskassociated with using these 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 and nine months ended August 31, 2012, selling andadministrative expenses were $409 million ($421 million in 2011) and $1.3billion ($1.3 billion in 2011), respectively. For the three and nine monthsended August 31, 2012, selling and administrative expenses were comprised ofcruise selling and administrative expenses of $407 million ($413 million in2011) and $1.3 billion ($1.3 billion in 2011) and Tour and Other selling andadministrative expenses of $2 million ($8 million in 2011) and $6 million ($18million in 2011), respectively.(e) We believe that the impairment charges recognized in the nine monthsended August 31, 2012 related to Ibero's goodwill and trademarks arenonrecurring and, therefore, are not an indication of our future earningsperformance. As such, we believe it is more meaningful for the impairmentcharges to be excluded from our net income and earnings per share and,accordingly, we present non-GAAP net income and non-GAAP EPS excluding theseimpairment 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 relate tofuture periods and may not ultimately be realized in our future earnings.Therefore, we believe it is more meaningful for the unrealized gains and losseson fuel derivatives to be excluded from our net income and earnings per shareand, accordingly, we present non-GAAP net income and non-GAAP EPS excludingthese unrealized gains and losses.We have not included in our earnings guidance the impact of unrealized gainsand losses on fuel derivatives because these unrealized amounts involve asignificant amount of uncertainty and we do not believe they are an indicationof our future earnings performance. Accordingly, our earnings guidance ispresented on a non-GAAP basis only. As a result, we did not present areconciliation between forecasted non-GAAP diluted EPS guidance and forecastedU.S. GAAP diluted EPS guidance, since we do not believe that the reconciliationinformation would be meaningful.
CONTACT: MEDIA, Jennifer De La Cruz, +1-305-599-2600, ext. 16000, INVESTOR RELATIONS, Beth Roberts, +1-305-406-4832
SOURCE Carnival Plc
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