CARNIVAL CORPORATION MIAMI, June 28, 2016 /PRNewswire/ -- Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) announced adjusted net income of $370 million, or $0.49 diluted EPS for the second quarter of 2016 compared to adjusted net income for the second quarter of 2015 of $193 million, or $0.25 diluted EPS. For the second quarter of 2016, U.S. GAAP net income, which included unrealized gains on fuel derivatives of $242 million and $7 million of other expenses, was $605 million, or $0.80 diluted EPS. For the second quarter of 2015, U.S. GAAP net income was $222 million, or $0.29 diluted EPS. Revenues for the second quarter of 2016 were $3.7 billion compared to $3.6 billion for the prior year.
Carnival Corporation & plc President and CEO Arnold Donald stated, "Our strong second quarter demonstrates continued momentum as we again achieved a near doubling of adjusted earnings per share. Our ongoing effort to drive demand for our brands in excess of our measured capacity growth has led to increased revenues and helped maintain the mid-point of our full year earnings guidance despite the recent currency movements and rises in fuel prices that combined represent a negative $0.17 per share."
Donald also noted several major milestones that will contribute to the future of the company including the re-mastering of Queen Mary 2, the opening of Holland America's Denali square complex in Alaska and the introduction of AIDA Cruises' AIDAprima, Holland America Line's Koningsdam, and Carnival Cruise Line's Carnival Vista. In addition, building on a legacy of pioneering achievements, Carnival Corporation became the first cruise company to begin operating voyages from the US to Cuba in more than four decades through its Fathom brand -- a historic moment that captured worldwide media coverage.
Key metrics for the second quarter 2016 compared to the prior year were as follows:
-- On a constant currency basis, net revenue yields (net revenue per
available lower berth day or "ALBD") increased 3.6 percent for the 2Q
2016, which was better than the company's guidance of up 1.5 to 2.5
percent. Gross revenue yields increased 1.3 percent.
-- Net cruise costs excluding fuel per ALBD decreased 1.9 percent in
constant currency, compared to March guidance, up 0.5 to 1.5 percent due
to the timing of expenses between quarters. Gross cruise costs including
fuel per ALBD in current dollars decreased 5.4 percent.
-- Changes in fuel prices (including fuel derivatives) and currency
exchange rates contributed $0.04 per share to second quarter earnings.
2016 Outlook
At this time, cumulative advance bookings for the remainder of the year are well ahead of the prior year at slightly higher prices. Since March, bookings for the remainder of the year are at higher prices with volumes running lower than last year because there is less inventory remaining for sale than at this time in 2015.
The company expects full year 2016 net revenue yields on a constant currency basis to be up approximately 3.5 percent versus the prior year, compared to March guidance of approximately 3 percent. The company now expects full year 2016 net cruise costs excluding fuel per ALBD to be up approximately 1.5 percent compared to the prior year on a constant currency basis, better than March guidance of approximately 2.0 percent. Changes in fuel prices (including fuel derivatives) and currency exchange rates are expected to reduce full year earnings by $0.17 per share compared to March guidance.
Taking the above factors into consideration, the company expects full year 2016 adjusted earnings per share guidance to be in the range of $3.25 to $3.35, compared to March guidance of $3.20 to $3.40 and 2015 adjusted earnings of $2.70 per share.
Donald noted, "This is shaping up to be another strong year for our company as we expect over 20 percent earnings growth and are approaching a nine percent return on invested capital. We have accelerated progress toward our stated goal of achieving the double digit return threshold and have accelerated distributions to shareholders. We recently raised our dividend by 17 percent to over $1 billion per year. Since October, we have repurchased nearly $1.9 billion in shares under our stock repurchase program. Yesterday, our Board of Directors approved our third $1 billion share repurchase authorization demonstrating confidence in our outlook and reinforcing our commitment to return value to shareholders."
Third Quarter 2016 Outlook
Third quarter constant currency net revenue yields are expected to be up 2 to 3 percent compared to the prior year. Net cruise costs excluding fuel per ALBD for the third quarter are expected to be 6 to 7 percent higher on a constant currency basis compared to the prior year driven by the timing of advertising expense and the re-mastering of Queen Mary 2 in dry-dock. Changes in fuel prices (including fuel derivatives) and currency exchange rates are expected to increase third quarter earnings by $0.01 per share compared to the prior year.
Based on the above factors, the company expects adjusted earnings for the third quarter 2016 to be in the range of $1.83 to $1.87 per share versus 2015 adjusted earnings of $1.75 per share.
Selected Key Forecast Metrics
Full Year 2016 Third Quarter 2016
-------------- ------------------
Current Constant Current Constant
Currency Currency
Year over year change: Dollars Dollars
------- -------
Net revenue yields Up Approx 3.5% (1.0) to
slightly 0.0% 2.0 to 3.0%
Net cruise costs excl. fuel / ALBD Up
slightly Approx 1.5% 4.0 to 5.0% 6.0 to 7.0%
Full Year 2016 Third Quarter 2016
-------------- ------------------
Fuel price per metric ton $280 $339
Fuel consumption (metric tons in
thousands) 3,270 810
Currency: Euro $1.10 to EUR1 $1.10 to EUR1
Sterling $1.38 to BPS1 $1.32 to BPS1
Australian dollar $0.74 to A$1 $0.74 to A$1
Canadian dollar $0.76 to C$1 $0.77 to C$1
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 2016 second quarter 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 leisure travel company in the world, and among the most profitable and financially strong in the industry. With a portfolio of 10 cruise brands in North America, Europe, Australia and Asia, comprised of Carnival Cruise Line, Fathom, Holland America Line, Princess Cruises, Seabourn, AIDA Cruises, Costa Cruises, Cunard, P&O Cruises (Australia) and P&O Cruises (UK).
Together, these brands operate 101 ships visiting over 700 ports around the world and totaling 225,000 lower berths with 15 new ships scheduled to be delivered between 2016 and 2020. 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&P500 and the FTSE 100 indices.
Additional information can be found on www.carnival.com, www.fathom.org, 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 our outlook including, among other things, the forecasting of our net revenue yields; booking levels; pricing; occupancy; operating, financing and tax costs, including fuel expenses; currency exchange rates; net cruise costs excluding fuel per available lower berth day; estimates of ship depreciable lives and residual values; liquidity; goodwill, ship and trademark fair values and adjusted earnings per share. 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:
-- Incidents, such as ship incidents, security incidents, the spread of
contagious diseases and threats thereof, adverse weather conditions or
other natural disasters and the related adverse publicity affecting our
reputation and the health, safety, security and satisfaction of guests
and crew;
-- Economic conditions and adverse world events affecting the safety and
security of travel, such as civil unrest, armed conflicts and terrorist
attacks;
-- Changes in and compliance with laws and regulations relating to
environment, health, safety, security, tax and anti-corruption under
which we operate;
-- Disruptions and other damages to our information technology and other
networks and operations, and breaches in data security;
-- Ability to recruit, develop and retain qualified personnel;
-- Increases in fuel prices;
-- Fluctuations in foreign currency exchange rates;
-- Misallocation of capital among our ship, joint venture and other
strategic investments;
-- Future operating cash flow may not be sufficient to fund future
obligations and we may be unable to obtain financing;
-- Deterioration of our cruise brands' strengths and our inability to
implement our strategies;
-- 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;
-- Inability to implement our shipbuilding programs and ship repairs,
maintenance and refurbishments on terms that are favorable or consistent
with our expectations and increases to our repairs and maintenance
expenses and refurbishment costs as our fleet ages;
-- Failure to keep pace with developments in technology;
-- Geographic regions in which we try to expand our business may be slow to
develop and ultimately not develop how we expect and our international
operations are subject to additional risks not generally applicable to
our U.S. operations;
-- Competition from and overcapacity in the cruise ship and land-based
vacation industry;
-- Economic, market and political factors that are beyond our control,
which could increase our operating, financing and other costs;
-- Changes in global consumer confidence and impacts to various foreign
currency exchange rates as a result of the vote in the UK to withdraw
from the European Union ("EU");
-- Friction in travel, changes to international tax treaties and changes to
laws and regulations that could result from the exit of the UK from the
EU;
-- Litigation, enforcement actions, fines or penalties;
-- Lack of continuing availability of attractive, convenient and safe port
destinations on terms that are favorable or consistent with our
expectations;
-- Union disputes and other employee relationship issues;
-- Decisions to self-insure against various risks or the inability to
obtain insurance for certain risks at reasonable rates;
-- Reliance on third-party providers of various services integral to the
operations of our business;
-- Business activities that involve our co-investment with third parties;
-- 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;
-- Our shareholders may be subject to the uncertainties of a foreign legal
system since Carnival Corporation and Carnival plc are not U.S.
corporations;
-- Small group of shareholders may be able to effectively control the
outcome of shareholder voting;
-- Provisions in Carnival Corporation's and Carnival plc's constitutional
documents may prevent or discourage takeovers and business combinations
that our shareholders might consider to be in their best interests and
-- The DLC arrangement involves risks not associated with the more common
ways of combining the operations of two companies.
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 INCOME
(UNAUDITED)
(in millions, except per share data)
Three Months Ended Six Months Ended
May 31, May 31,
------- -------
2016 2015 2016 2015
---- ---- ---- ----
Revenues
Cruise
Passenger tickets $2,696 $2,628 $5,414 $5,260
Onboard and other 978 927 1,901 1,816
Tour and other 31 35 42 44
--- --- --- ---
3,705 3,590 7,357 7,120
----- ----- ----- -----
Operating Costs and Expenses
Cruise
Commissions, transportation
and other 495 481 1,077 1,067
Onboard and other 123 114 240 225
Payroll and related 502 469 994 936
Fuel 196 333 383 650
Food 248 242 495 482
Other ship operating 667 734 1,271 1,332
Tour and other 27 31 41 47
--- --- --- ---
2,258 2,404 4,501 4,739
Selling and administrative 532 491 1,083 1,020
Depreciation and amortization 437 406 861 807
--- --- --- ---
3,227 3,301 6,445 6,566
----- ----- ----- -----
Operating Income 478 289 912 554
--- --- --- ---
Nonoperating (Expense) Income
Interest income 2 2 3 4
Interest expense, net of
capitalized interest (57) (57) (108) (114)
Gains (losses) on fuel
derivatives, net (a) 171 (13) (65) (181)
Other income, net 13 5 8 15
--- --- --- ---
129 (63) (162) (276)
--- --- ---- ----
Income Before Income Taxes 607 226 750 278
Income Tax Expense, Net (2) (4) (3) (7)
--- --- --- ---
Net Income $605 $222 $747 $271
==== ==== ==== ====
Earnings Per Share
Basic $0.81 $0.29 $0.99 $0.35
===== ===== ===== =====
Diluted $0.80 $0.29 $0.98 $0.35
===== ===== ===== =====
Adjusted Earnings Per Share-
Diluted (b) $0.49 $0.25 $0.88 $0.45
===== ===== ===== =====
Dividends Declared Per Share $0.35 $0.25 $0.65 $0.50
===== ===== ===== =====
Weighted-Average Shares
Outstanding - Basic 751 778 758 777
=== === === ===
Weighted-Average Shares
Outstanding - Diluted 753 780 761 780
=== === === ===
(a) During the three months ended May 31, 2016 and 2015, our gains (losses) on fuel derivatives, net include net unrealized gains of $242 million and $34 million and
realized (losses) of $(71) million and $(47) million, respectively. During the six months ended May 31, 2016 and 2015, our (losses) on fuel derivatives, net include net
unrealized gains (losses) of $96 million and $(78) million and realized (losses) of $(161) million and $(103) million, respectively.
(b) See the U.S. GAAP net income to adjusted net income reconciliations in the Non-GAAP Financial Measures included herein.
CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except par values)
May 31, November 30,
2016 2015
---- ----
ASSETS
Current Assets
Cash and cash equivalents $519 $1,395
Trade and other receivables, net 334 303
Insurance recoverables 108 109
Inventories 315 330
Prepaid expenses and other 324 314
--- ---
Total current assets 1,600 2,451
----- -----
Property and Equipment, Net 33,244 31,818 (a)
Goodwill 3,019 3,010
Other Intangibles 1,305 1,308 (a)
Other Assets 683 650
--- ---
$39,851 $39,237
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $410 $30
Current portion of long-term debt 836 1,344
Accounts payable 667 627
Accrued liabilities and other 1,653 1,683
Customer deposits 4,275 3,272
----- -----
Total current liabilities 7,841 6,956
----- -----
Long-Term Debt 8,183 7,413
Other Long-Term Liabilities 1,036 1,097
Shareholders' Equity
Common stock of Carnival Corporation, $0.01 par value; 1,960 shares
authorized; 654 shares at 2016 and 653 shares at 2015 issued 7 7
Ordinary shares of Carnival plc, $1.66 par value; 216 shares at 2016
and 2015 issued 358 358
Additional paid-in capital 8,605 8,562
Retained earnings 20,320 20,060
Accumulated other comprehensive loss (1,648) (1,741)
Treasury stock, 99 shares at 2016 and 70 shares at 2015 of Carnival Corporation
and 26 shares at 2016 and 27 shares at 2015 of Carnival plc, at cost (4,851) (3,475)
------ ------
Total shareholders' equity 22,791 23,771
------ ------
$39,851 $39,237
======= =======
(a) On December 1, 2015, we adopted the Financial Accounting Standards Board's Service Concession Arrangements amended
guidance and, accordingly, reclassified $70 million from Property and Equipment, Net to Other Intangibles on our November 30,
2015 Consolidated Balance Sheet.
CARNIVAL CORPORATION & PLC
OTHER INFORMATION
Three Months Ended Six Months Ended
May 31, May 31,
------- -------
2016 2015 2016 2015
---- ---- ---- ----
STATISTICAL
INFORMATION
ALBDs (in thousands)
(a) 19,693 19,307 38,983 37,891
Occupancy percentage
(b) 104.1% 102.8% 104.1% 102.9%
Passengers carried
(in thousands) 2,781 2,608 5,340 5,071
Fuel consumption in
metric tons (in
thousands) 808 810 1,623 1,593
Fuel consumption in
metric tons per
thousand ALBDs 41.0 41.9 41.6 42.0
Fuel cost per metric
ton consumed $243 $411 $236 $408
Currencies
U.S. dollar to euro $1.13 $1.10 $1.11 $1.13
U.S. dollar to
sterling $1.44 $1.52 $1.44 $1.53
U.S. dollar to
Australian dollar $0.75 $0.78 $0.73 $0.79
U.S. dollar to
Canadian dollar $0.78 $0.81 $0.75 $0.81
CASH FLOW INFORMATION
(in millions)
Cash from operations $1,883 $1,515 $2,681 $2,286
Capital expenditures $1,636 $439 $1,966 $1,381
Dividends paid $227 $194 $459 $388
Notes to Statistical Information
(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.
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 May 31, Six Months Ended May 31,
-------------------------- ------------------------
2016 2016
---- ----
Constant Constant
2016 Dollar 2015 2016 Dollar 2015
---- ------ ---- ---- ------ ----
Passenger ticket
revenues $2,696 $2,699 $2,628 $5,414 $5,496 $5,260
Onboard and other
revenues 978 979 927 1,901 1,921 1,816
--- --- --- ----- ----- -----
Gross cruise
revenues 3,674 3,678 3,555 7,315 7,417 7,076
----- ----- ----- ----- ----- -----
Less cruise costs
Commissions,
transportation and
other (495) (493) (481) (1,077) (1,097) (1,067)
Onboard and other (123) (123) (114) (240) (243) (225)
---- ---- ---- ---- ---- ----
(618) (616) (595) (1,317) (1,340) (1,292)
---- ---- ---- ------ ------ ------
Net passenger
ticket revenues 2,201 2,206 2,147 4,337 4,399 4,193
Net onboard and
other revenues 855 856 813 1,661 1,678 1,591
--- --- --- ----- ----- -----
Net cruise revenues $3,056 $3,062 $2,960 $5,998 $6,077 $5,784
====== ====== ====== ====== ====== ======
ALBDs 19,693,362 19,693,362 19,306,832 38,983,272 38,983,272 37,890,712
========== ========== ========== ========== ========== ==========
Gross revenue
yields $186.55 $186.78 $184.15 $187.65 $190.27 $186.76
% increase vs. 2015 1.3% 1.4% 0.5% 1.9%
Net revenue yields $155.21 $155.50 $153.29 $153.87 $155.90 $152.65
% increase vs. 2015 1.2% 1.4% 0.8% 2.1%
Net passenger
ticket revenue
yields $111.78 $112.03 $111.20 $111.25 $112.85 $110.66
% increase vs. 2015 0.5% 0.7% 0.5% 2.0%
Net onboard and
other revenue
yields $43.43 $43.48 $42.09 $42.61 $43.05 $41.99
% increase vs. 2015 3.2% 3.3% 1.5% 2.5%
------------------- --- --- --- ---
Three Months Ended May 31, Six Months Ended May 31,
-------------------------- ------------------------
2016 2016
----
Constant Constant
2016 Currency 2015 2016 Currency 2015
---- -------- ---- ---- -------- ----
Net passenger
ticket revenues $2,201 $2,267 $2,147 $4,337 $4,532 $4,193
Net onboard and
other revenues 855 860 813 1,661 1,691 1,591
--- --- --- ----- ----- -----
Net cruise revenues 3,056 3,127 2,960 5,998 6,223 5,784
----- ----- ----- ----- ----- -----
19,693,362 19,693,362 19,306,832 38,983,272 38,983,272 37,890,712
ALBDs
===
Net revenue yields $155.21 $158.80 $153.29 $153.87 $159.63 $152.65
% increase vs. 2015 1.2% 3.6% 0.8% 4.6%
Net passenger
ticket revenue
yields $111.78 $115.12 $111.20 $111.25 $116.26 $110.66
% increase vs. 2015 0.5% 3.5% 0.5% 5.1%
Net onboard and
other revenue
yields $43.43 $43.68 $42.09 $42.61 $43.37 $41.99
% increase vs. 2015 3.2% 3.8% 1.5% 3.3%
------------------- --- --- --- ---
(See Notes to Non-GAAP Financial Measures.)
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)
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 May 31, Six Months Ended May 31,
-------------------------- ------------------------
2016 2016
---- ----
Constant Constant
2016 Dollar 2015 2016 Dollar 2015
---- ------ ---- ---- ------ ----
Cruise operating
expenses $2,231 $2,232 $2,373 $4,460 $4,522 $4,692
Cruise selling and
administrative
expenses 530 530 489 1,079 1,092 1,016
--- --- --- ----- ----- -----
Gross cruise costs 2,761 2,762 2,862 5,539 5,614 5,708
Less cruise costs included above
Commissions,
transportation and
other (495) (493) (481) (1,077) (1,097) (1,067)
Onboard and other (123) (123) (114) (240) (243) (225)
Gain on ship sale - - 2 2 2 4
Restructuring
expenses (2) (2) (7) (2) (2) (7)
Other (c) (5) (5) - (21) (21) -
--- --- --- --- --- ---
Net cruise costs 2,136 2,139 2,262 4,201 4,253 4,413
Less fuel (196) (196) (333) (383) (383) (650)
---- ---- ---- ---- ---- ----
Net cruise costs
excluding fuel $1,940 $1,943 $1,929 $3,818 $3,870 $3,763
====== ====== ====== ====== ====== ======
ALBDs 19,693,362 19,693,362 19,306,832 38,983,272 38,983,272 37,890,712
========== ========== ========== ========== ========== ==========
Gross cruise costs
per ALBD $140.18 $140.28 $148.22 $142.08 $144.01 $150.64
% decrease vs. 2015 (5.4)% (5.4)% (5.7)% (4.4)%
Net cruise costs
per ALBD $108.46 $108.63 $117.11 $107.75 $109.10 $116.45
% decrease vs.
2015 (7.4)% (7.2)% (7.5)% (6.3)%
Net cruise costs
excluding fuel per
ALBD $98.49 $98.67 $99.88 $97.93 $99.27 $99.28
% decrease vs. 2015 (1.4)% (1.2)% (1.4)% 0.0%
------------------- ----- ----- ----- ---
Three Months Ended May 31, Six Months Ended May 31,
-------------------------- ------------------------
2016 2016
---- ----
Constant Constant
2016 Currency 2015 2016 Currency 2015
---- -------- ---- ---- -------- ----
Net cruise costs
excluding fuel $1,940 $1,930 $1,929 $3,818 $3,864 $3,763
====== ====== ====== ====== ====== ======
19,693,362 19,693,362 19,306,832 38,983,272 38,983,272 37,890,712
ALBDs
===
Net cruise costs
excluding fuel per
ALBD $98.49 $98.01 $99.88 $97.93 $99.12 $99.28
% decrease vs. 2015 (1.4)% (1.9)% (1.4)% (0.2)%
(See next page for Notes to Non-GAAP Financial Measures.)
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)
Adjusted fully diluted earnings per share was computed as follows (in millions, except per share data) (b):
Three Months Ended Six Months Ended
May 31, May 31,
------- -------
Net income 2016 2015 2016 2015
---- ---- ---- ----
U.S. GAAP net income $605 $222 $747 $271
Unrealized (gains) losses on fuel derivatives, net (d) (242) (34) (96) 78
Gain on ship sale (e) - (2) (2) (4)
Restructuring expenses (e) 2 7 2 7
Other (c) (e) 5 - 21 -
--- --- --- ---
Adjusted net income $370 $193 $672 $352
==== ==== ==== ====
Weighted-average shares outstanding 753 780 761 780
=== === === ===
Earnings per share
U.S. GAAP earnings per share $0.80 $0.29 $0.98 $0.35
Unrealized (gains) losses on fuel derivatives, net (d) (0.32) (0.05) (0.13) 0.10
Gain on ship sale (e) - - - (0.01)
Restructuring expenses (e) - 0.01 - 0.01
Other (c) (e) 0.01 - 0.03 -
---- --- ---- ---
Adjusted earnings per share $0.49 $0.25 $0.88 $0.45
===== ===== ===== =====
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 and other 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. 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 and other
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 a
reconciliation of forecasted
gross cruise revenues to
forecasted net cruise revenues or
forecasted gross cruise costs to
forecasted net cruise costs
because it would be too difficult
to prepare reliable U.S. GAAP
forecasts of gross cruise
revenues and gross cruise costs
without unreasonable effort.
In addition, our Europe, Australia
& Asia ("EAA") segment and Cruise
Support segment operations
utilize the euro, sterling and
Australian dollar as their
functional currencies to measure
their results and financial
condition. This subjects us to
foreign currency translational
risk. All of our North America,
EAA and Cruise Support segments'
operations also have revenues and
expenses that are in a currency
other than their functional
currency. This subjects us to
foreign currency transactional
risk.
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)
We report non-GAAP financial measures on a
"constant dollar" and "constant currency"
basis assuming the 2016 period currency
exchange rates have remained constant with
the 2015 period rates. These metrics
facilitate a comparative view for the changes
in our business in an environment with
fluctuating exchange rates.
Constant dollar reporting is a Non-GAAP
financial measure that removes only the
impact of changes in exchange rates on the
translation of our EAA segment and Cruise
Support segment operations.
Constant currency reporting is a Non-GAAP
financial measure that removes the impact of
changes in exchange rates on the translation
of our EAA segment and Cruise Support segment
operations (as in constant dollar) plus the
transactional impact of changes in exchange
rates from revenues and expenses that are
denominated in a currency other than the
functional currency for our North America,
EAA and Cruise Support segments.
---------------------------------------------
Examples:
---------
The translation of our EAA segment 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.
Our North
America segment operations have a U.S. dollar
functional currency but also have revenue and
expense transactions in currencies other than
the U.S. dollar. If the U.S. dollar
strengthens against these other currencies it
reduces the U.S. dollar revenues and
expenses. If the U.S. dollar weakens against
these other currencies it increases the U.S.
dollar revenues and expenses.
Our EAA
segment operations have a euro, sterling and
Australian dollar functional currencies but
also have revenue and expense transactions in
currencies other than their functional
currency. If their functional currency
strengthens against these other currencies it
reduces the functional currency revenues and
expenses. If the functional currency weakens
against these other currencies it increases
the functional currency revenues and
expenses.
(b) Our consolidated financial statements are
prepared in accordance with U.S. GAAP. We
have not provided a reconciliation between
forecasted adjusted earnings per share
guidance and forecasted U.S. GAAP earnings
per share guidance because it would be too
difficult to prepare reliable U.S. GAAP
guidance without unreasonable effort. The
presentation of our non-GAAP financial
information is not intended to be considered
in isolation from, as substitute for, or
superior to the financial information
prepared in accordance with U.S. GAAP. It is
possible that our non-GAAP financial
measures 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) Insignificant costs were included in the
income statement in previous periods.
(d) 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 adjusted net income
and adjusted earnings per share excluding
these unrealized gains and losses.
(e) We believe that the gain on ship sale and
restructuring expenses recognized in the
three and six months ended May 31, 2016 and
2015 and the other expenses recognized in the
three and six months ended May 31, 2016 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 the gain on
ship sale and the restructuring and other
expenses to be excluded from our net income
and earnings per share and, accordingly, we
present adjusted net income and adjusted
earnings per share excluding these items.
While we forecast realized gains and losses on fuel
derivatives by applying current Brent prices to the
derivatives that settle in the forecast period, we do not
forecast the impact of unrealized gains and losses on fuel
derivatives because we do not believe they are an indication
of our future earnings performance. Accordingly, our earnings
guidance is presented on an adjusted basis only.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/carnival-corporation--plc-reports-record-second-quarter-earnings-and-additional-1-billion-share-repurchase-authorization-300291024.html
SOURCE Carnival Corporation & plc
