Carnival plc : - Carnival Corp & plc Second Quarter Results
06/22/2012| 09:20am US/Eastern
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CARNIVAL CORPORATION & PLC REPORTS SECOND QUARTER RESULTS
Carnival Corporation & plc today reported its results of operations for
the second quarter ended May 31, 2012. The results of Carnival Corporation and
Carnival plc have been consolidated, and this statement includes consolidated
results on a U.S. GAAP basis.
2Q Highlights
- 2Q net revenue yields in constant dollars decreased 1.4% (increased 1.1%
excluding Costa) compared to the prior year
- 2Q results included non-recurring items of $17m from insurance
proceeds in excess of net book value and $17m received from a litigation
settlement
- Excluding fuel and non-recurring items, constant dollar net cruise costs
per available lower berth day ("ALBD") decreased 2.2%
- 2Q fuel prices increased 12% versus 2Q 2011, costing the company an
additional $0.09 per share
- 2Q Non-GAAP (diluted) earnings per share of $0.20, compared to $0.26 for
the prior year
- 2Q U.S. GAAP (diluted) earnings per share of $0.02 included unrealized
losses on fuel derivatives of $145m
2012 Outlook
- Since March, fleetwide booking volumes have continued to improve and are
running well ahead of the prior year at lower prices
- For the remainder of the year, cumulative advance bookings excluding
Costa are three occupancy points behind the prior year at slightly lower
prices, while cumulative advance bookings for Costa are at lower
occupancies and lower prices compared with the prior year
- Net revenue yields (constant dollars) for FY 2012 are expected to be
down slightly excluding Costa, and decline 3 to 4% (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
- Changes in currency exchange rates and fuel prices for FY 2012 are
expected to increase FY 2012 earnings by $0.30 per share compared to
March guidance
- Full year 2012 non-GAAP earnings per share (diluted) expected to be
in the range of $1.80 to $1.90, compared to March guidance range of
$1.40 to $1.70, and $2.42 for 2011
- 3Q 2012 non-GAAP earnings per share (diluted) expected to be in the
range of $1.42 to $1.46, compared to $1.69 in 3Q 2011
Chairman and Chief Executive Officer Micky Arison commenting on these
results:
"Cruise ticket prices (excluding Costa) held firm close to sailing which,
combined with stronger than expected onboard revenues, drove yields above
prior year levels. Our North American brands performed well, achieving a 3
percent revenue yield improvement compared to the prior year, which more than
offset slightly lower yields for our Europe, Australia and Asia brands
(excluding Costa). In addition, continued focus on cost controls and fuel
consumption helped to mitigate the impact of higher fuel prices in the
quarter."
"The increase in booking volumes indicates that a progressive recovery is
well underway and we are catching up following the slowdown in bookings during
wave season, our peak booking period. The attractive pricing we have in the
marketplace is clearly stimulating demand, especially for the Costa brand. We
are pleased to see the resurgence in consumer demand for Costa, which is a
testament to the brand's long-standing reputation for quality built over many
decades."
"The long term fundamentals of our business remain sound. As we look
toward the future, we are excited by the prospect for continued global
expansion beyond our established markets in North America and Western Europe.
We are pursuing multiple opportunities to develop emerging cruise markets
including positioning a second Costa ship in China and through a series of
Princess cruises dedicated to the Japanese market in 2013."
MEDIA CONTACT INVESTOR RELATIONS CONTACT
Jennifer 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. BST
(10:00 a.m. EDT) today to discuss its 2012 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
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 101 ships totaling 204,000 lower berths
with seven 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 the New York and London Stock Exchanges, Carnival Corporation & plc is
the only group in the world to be included in both the S&P 500 and the FTSE
100 indices.
Carnival Corporation & plc Reports Second Quarter Results
MIAMI, June 22, 2012 -- Carnival Corporation & plc (NYSE/LSE: CCL; NYSE:
CUK) announced non-GAAP net income of $159 million, or $0.20 diluted earnings
per share for the second quarter of 2012. Reported U.S. GAAP net income, which
includes unrealized losses on fuel derivatives of $145 million, was $14
million, or $0.02 diluted earnings per share. Net income for the second
quarter of 2011 was $206 million, or $0.26 diluted EPS. Revenues for the
second quarter of 2012 were $3.5 billion compared to $3.6 billion for the
prior year.
Carnival Corporation & plc Chairman and CEO Micky Arison noted that non-
GAAP earnings were better than anticipated in the company's March guidance due
primarily to a combination of higher than expected revenue yields and lower
than expected costs, partly attributed to non-recurring items, in the second
quarter.
Commenting on the second quarter, Arison said, "Cruise ticket prices
(excluding Costa) held firm close to sailing which, combined with stronger
than expected onboard revenues, drove yields above prior year levels. Our
North American brands performed well, achieving a 3 percent revenue yield
improvement compared to the prior year, which more than offset slightly lower
yields for our Europe, Australia and Asia brands (excluding Costa). In
addition, continued focus on cost controls and fuel consumption helped to
mitigate the impact of higher fuel prices in the quarter."
Key metrics for the second quarter 2012 compared to the prior year were as
follows:
- Second quarter results included $17 million, or $0.02 per share, of
insurance proceeds in excess of net book value which were previously
expected to be received in the third quarter, and $17 million, or
$0.02 per share, received from a litigation settlement.
- On a constant dollar basis net revenue yields (net revenue per
available lower berth day, "ALBD") decreased 1.4 percent for
2Q 2012, which was better than March guidance, down 2.5 to 3.5 percent.
Excluding Costa, net revenue yields increased 1.1 percent for
2Q 2012, which was also higher than March guidance of flat to down
slightly. Gross revenue yields decreased 4.2 percent in current dollars.
- Net cruise costs per ALBD excluding fuel and non-recurring items
decreased 2.2 percent in constant dollars, better than March
guidance of flat to down 1.0 percent. Gross cruise costs per ALBD
including fuel and non-recurring items decreased 3.6 percent in current
dollars.
- Fuel prices increased 12 percent to $756 per metric ton for
2Q 2012 from $673 per metric ton in 2Q 2011, costing the company an
additional $71 million. Fuel prices were slightly lower than March
guidance of $772 per metric ton.
- In March, the company entered into zero cost collars for
an additional 19 percent of its estimated fuel consumption for the
second half of fiscal 2012 through fiscal 2013, bringing the total
covered to 38 percent over this period. The company also has
zero cost collars in place that cover 19 percent of its estimated fuel
consumption for fiscal 2014 and 2015. For further information on the
company's fuel derivatives program see "Fuel Derivatives" below.
- Three new ships were delivered during the second quarter,
Costa Fascinosa, AIDAmar and Carnival Breeze, each featuring a
variety of unique and exciting innovations which have generated
strong consumer and media interest.
2012 Outlook
Since March, fleetwide booking volumes have continued to improve and are
running well ahead of the prior year at lower prices. For the last seven
weeks, booking volumes excluding Costa have increased 8 percent versus the
prior year, while booking volumes for Costa over the same time period are up
25 percent. For the remainder of the year, cumulative advance bookings
excluding Costa are three occupancy points behind the prior year at slightly
lower prices while cumulative advance bookings for Costa are at lower
occupancies and lower prices compared with the prior year.
Looking forward, Carnival Corporation & plc Chairman and CEO Micky Arison
commented, "The increase in booking volumes indicates that a progressive
recovery is well underway and we are catching up following the slowdown in
bookings during wave season, our peak booking period. The attractive pricing
we have in the marketplace is clearly stimulating demand, especially for the
Costa brand. We are pleased to see the resurgence in consumer demand for
Costa, which is a testament to the brand's long-standing reputation for
quality built over many decades."
Excluding Costa, the company forecasts full year 2012 net revenue yields,
on a constant dollar basis, to be down slightly. Including Costa, the company
expects a decline in net revenue yields of 3 to 4 percent (constant dollars).
The company has slightly reduced the mid-point of its 2012 yield guidance as
the price incentives required to drive the booking volumes needed to close the
occupancy gap was more than had been previously anticipated for the second
half of the year. Full year 2012 revenue yields for the North American brands
are expected to be in line with the prior year. Full year 2012 revenue yields
for the European brands, excluding Costa, are expected to be lower than the
prior year.
Lower net revenue yield expectations have been offset by greater than
anticipated cost reductions. The company expects net cruise costs, excluding
fuel, per ALBD for the full year 2012 to be down slightly compared with the
prior year on a constant dollar basis. In addition, lower fuel prices (net of
forecasted realized losses on fuel derivatives) partially offset by changes in
currency exchange rates are expected to increase full year 2012 earnings by
$0.30 per share compared to March guidance.
Taking all the above factors into consideration, the company forecasts
full year 2012 non-GAAP diluted earnings per share to be in the range of $1.80
to $1.90, compared to the March guidance range of $1.40 to $1.70 per share and
2011 non-GAAP earnings of $2.42 per share.
Arison stated, "The long term fundamentals of our business remain sound.
As we look toward the future, we are excited by the prospect for continued
global expansion beyond our established markets in North America and Western
Europe. We are pursuing multiple opportunities to develop emerging cruise
markets including positioning a second Costa ship in China and through a
series of Princess cruises dedicated to the Japanese market in 2013."
Third Quarter 2012 Outlook
Third quarter constant dollar net revenue yields excluding Costa, are
expected to decrease 3 to 4 percent (including Costa, expected to decrease 6
to 7 percent) compared to the prior year. Net cruise costs excluding fuel per
ALBD for the third quarter are expected to be down slightly on a constant
dollar basis compared to the prior year. In addition, changes in currency
exchange rates partially offset by lower fuel prices (net of forecasted
realized losses on fuel derivatives) are expected to reduce third quarter
earnings by $0.03 per share compared to the prior year.
Based on the above factors, the company expects non-GAAP diluted earnings
for the third quarter 2012 to be in the range of $1.42 to $1.46 per share
versus 2011 non-GAAP earnings of $1.69 per share.
Selected Key Forecast Metrics
Full Year 2012 Third Quarter 2012
Current Constant Current Constant
Year over year change: Dollars Dollars Dollars Dollars
Net revenue yields (5) to (6)% (3) to (4) % (9.5) to (10.5)% (6) to (7)%
Net cruise costs
excl. fuel /
ALBD (2.5) to (3.5)% (0.5) to (1.5)% (4) to (5)% (0.5) to (1.5)%
Full Year 2012 Third Quarter 2012
Fuel price per metric ton $677 $620
Fuel consumption
(metric tons in thousands) 3,379 834
Currency: Euro $1.29 to euro 1 $1.27 to euro 1
Sterling $1.58 to 1 pounds Sterling $1.57 to 1 pounds Sterling
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 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 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 101 ships totaling 204,000 lower berths
with seven 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 the New York and London Stock Exchanges, Carnival Corporation & plc is
the only group in the world to be included in both the S&P 500 and the FTSE
100 indices.
Cautionary Note Concerning Factors That May Affect Future Results
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. We have tried,
whenever possible, to identify these statements by using words like "will,"
"may," "could," "should," "would," "believe," "depends," "expect,"
"anticipate," "forecast," "future," "intend," "plan," "estimate," "target,"
"indicate" and similar expressions of future intent or the negative of such
terms. Because forward-looking statements involve risks and uncertainties,
there are many factors that could cause our actual results, performance or
achievements to differ materially from those expressed or implied in this
release. Forward-looking statements include those statements that may impact,
among other things, the forecasting of our non-GAAP earnings per share
("EPS"); net revenue yields; booking levels; pricing; occupancy; operating,
financing and tax costs, including fuel expenses; costs per available lower
berth day; estimates of ship depreciable lives and residual values; liquidity;
goodwill and trademark fair values and outlook. These factors include, but are
not limited to, the following: general economic and business conditions;
increases in fuel prices; accidents, the spread of contagious diseases and
threats thereof, adverse weather conditions or natural disasters and other
incidents affecting the health, safety, security and satisfaction of guests
and crew; the international political climate, armed conflicts, terrorist and
pirate attacks, vessel seizures, and threats thereof, and other world events
affecting the safety and security of travel; negative publicity concerning the
cruise business in general or us in particular, including any adverse
environmental impacts of cruising; litigation, enforcement actions, fines or
penalties, including those relating to the Costa Concordia accident; economic,
market and political factors that are beyond our control, which could increase
our operating, financing and other costs; changes in and compliance with laws
and regulations relating to the protection of persons with disabilities,
employment, environment, health, safety, security, tax and other regulations
under which we operate; our ability to implement our shipbuilding programs and
ship repairs, maintenance and refurbishments on terms that are favorable or
consistent with our expectations; increases to our repairs and maintenance
expenses and refurbishment costs as our fleet ages; lack of continuing
availability of attractive, convenient and safe port destinations; 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 pricing for, the services and products
provided by these vendors; disruptions and other damages to our information
technology and other networks and operations, and breaches in data security;
competition from and overcapacity in the cruise ship or land-based vacation
industry; loss of key personnel or our ability to recruit or retain qualified
personnel; union disputes and other employee relation issues; disruptions in
the global financial markets or other events may negatively affect the ability
of our counterparties and others to perform their obligations to us; the
continued strength of our cruise brands and our ability to implement our brand
strategies; our international operations are subject to additional risks not
generally applicable to our U.S. operations; geographic regions in which we
try to expand our 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 obtain insurance for certain risks at reasonable rates;
fluctuations in foreign currency exchange rates; whether our future operating
cash flow will be sufficient to fund future obligations and whether we will be
able to obtain financing, if necessary, in sufficient amounts and on terms
that are favorable or consistent with our expectations; risks associated with
the dual listed company arrangement and uncertainties of a foreign legal
system as we are not incorporated in the U.S. Forward-looking statements
should not be relied upon as a prediction of actual results. Subject to any
continuing obligations under applicable law or any relevant stock exchange
rules, we expressly disclaim any obligation to disseminate, after the date of
this release, any updates or revisions to any such forward-looking statements
to reflect any change in expectations or events, conditions or circumstances
on which any such statements are based.
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in millions, except per share data)
Three Months Ended Six Months Ended
May 31, May 31,
2012 2011 2012 2011
Revenues
Cruise
Passenger tickets $ 2,675 $ 2,778 $ 5,439 $ 5,430
Onboard and other 844 817 1,653 1,574
Tour and other 19 25 28 35
3,538 3,620 7,120 7,039
Operating Costs and Expenses
Cruise
Commissions, transportation
and other 519 562 1,180 1,226
Onboard and other 128 121 254 241
Fuel 645 579 1,237 1,029
Payroll and related 435 435 877 846
Food 236 241 476 472
Other ship operating 494 (a) 556 1,113 1,066
Tour and other 21 27 35 36
2,478 2,521 5,172 4,916
Selling and administrative 431 440 852 862
Depreciation and amortization 376 380 752 747
Ibero goodwill and trademark
impairment charges - - 173 -
3,285 3,341 6,949 6,525
Operating Income 253 279 171 514
Nonoperating (Expense) Income
Interest income 3 3 6 5
Interest expense, net of
capitalized interest (87) (91) (175) (177)
Losses on fuel derivatives,
net (145) (b) - (124) (b) -
Other (expense) income,
net (10) 13 (5) 19
(239) (75) (298) (153)
Income (Loss) Before
Income Taxes 14 204 (127) 361
Income Tax Benefit
(Expense), Net - 2 2 (3)
Net Income (Loss) $ 14 $ 206 $ (125) $ 358
Earnings (Loss) Per Share
Basic $ 0.02 $ 0.26 $ (0.16) $ 0.45
Diluted $ 0.02 $ 0.26 $ (0.16) $ 0.45
Non-GAAP Earnings Per
Share-Diluted $ 0.20 $ 0.26 $ 0.22 $ 0.45
Dividends Declared
Per Share $ 0.25 $ 0.25 $ 0.50 $ 0.50
Weighted-Average Shares
Outstanding - Basic 779 791 778 791
Weighted-Average Shares
Outstanding - Diluted 779 793 778 793
(a) Includes $17 million of hull and machinery insurance proceeds for the
total loss of a ship in excess of its net book value and $17 million received
from a litigation settlement.
(b) There were no realized gains or losses on fuel derivatives.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except par values)
November
May 31, 30,
2012 2011
ASSETS
Current Assets
Cash and cash equivalents $ 900 $ 450
Trade and other receivables, net 286 263
Insurance recoverables 403 30
Inventories 377 374
Prepaid expenses and other 203 195
Total current assets 2,169 1,312
Property and Equipment, Net 32,133 32,054
Goodwill 3,135 3,322
Other Intangibles 1,302 1,330
Other Assets 723 619
$ 39,462 $ 38,637
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 541 $ 281
Current portion of long-term debt 1,067 1,019
Accounts payable 532 576
Claims reserve 479 97
Accrued liabilities and other 1,009 1,026
Customer deposits 3,634 3,106
Total current liabilities 7,262 6,105
Long-Term Debt 8,392 8,053
Other Long-Term Liabilities and Deferred Income 782 647
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 8,205 8,180
Retained earnings 17,835 18,349
Accumulated other comprehensive loss (521) (209)
Treasury stock, 52 shares at 2012 and
2011 of Carnival Corporation
and 33 shares at 2012 and 2011 of
Carnival plc, at cost (2,856) (2,851)
Total shareholders' equity 23,026 23,832
$ 39,462 $ 38,637
CARNIVAL CORPORATION & PLC
OTHER INFORMATION
Three Months Six Months
Ended Ended
May 31, May 31,
2012 2011 2012 2011
STATISTICAL INFORMATION
Passengers carried (in thousands) 2,334 2,330 4,596 4,515
Occupancy percentage (a)
102.6% 104.5% 103.9% 104.8%
Fuel consumption
(metric tons in thousands) 852 861 1,689 1,689
Fuel cost per metric ton consumed $ 756 $ 673 $ 732 $ 609
Currencies
U.S. dollar to euro 1
$ 1.31 $ 1.43 $ 1.31 $ 1.38
U.S. dollar to 1 pounds $ 1.59 $ 1.63 $ 1.58 $ 1.60
U.S. dollar to Australian dollar $ 1.03 $ 1.05 $ 1.04 $ 1.02
CASH FLOW INFORMATION
Cash from operations $ 1,136 $ 1,389 $ 1,458 $ 1,801
Capital expenditures $ 1,730 $ 1,450 $ 1,997 $ 1,622
Dividends paid $ 194 $ 198 $ 388 $ 277
(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 May 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:
Percent of
Weighted- Weighted- Estimated
Barrels Average Average Fuel Consumption
Maturities (a) (in thousands) Floor Prices Ceiling Prices Covered
Fiscal
2012-Q3 & Q4
1,044 $ 75 $ 135
1,044 $ 109 $ 128
2,088 $ 112 $ 132
4,176 38%
Fiscal 2013
2,112 $ 74 $ 132
2,112 $ 98 $ 127
4,224 $ 100 $ 130
8,448 38%
Fiscal 2014
2,112 $ 71 $ 128
2,112 $ 88 $ 125
4,224 19%
Fiscal 2015
2,160 $ 71 $ 125
2,160 $ 80 $ 125
4,320 19%
(a) Fuel derivatives mature evenly over each month within the above fiscal
periods.
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 May 31,
2012
Constant
2012 Dollar 2011
Passenger ticket revenues $ 2,675 $ 2,742 $ 2,778
Onboard and other revenues 844 859 817
Gross cruise revenues 3,519 3,601 3,595
Less cruise costs
Commissions, transportation and other (519) (535) (562)
Onboard and other
(128) (131) (121)
(647) (666) (683)
Net passenger ticket revenues 2,156 2,207 2,216
Net onboard and other revenues 716 728 696
Net cruise revenues $ 2,872 $ 2,935 $ 2,912
ALBDs (c) 17,783,938 17,783,938 17,402,349
Gross revenue yields $ 197.89 $ 202.47 $ 206.60
% decrease vs. 2011 (4.2)% (2.0)%
Net revenue yields $ 161.50 $ 165.02 $ 167.39
% (decrease) increase vs. 2011 (3.5)% (1.4)%
Net passenger ticket revenue yields $ 121.29 $ 124.11 $ 127.37
% decrease vs. 2011
(4.8)% (2.6)%
Net onboard and other revenue yields $ 40.21 $ 40.91 $ 40.03
% increase vs. 2011 0.5% 2.2%
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):
Six Months Ended May 31,
2012
Constant
2012 Dollar 2011
Passenger ticket revenues $ 5,439 $ 5,527 $ 5,430
Onboard and other revenues 1,653 1,670 1,574
Gross cruise revenues 7,092 7,197 7,004
Less cruise costs
Commissions, transportation and other (1,180) (1,204) (1,226)
Onboard and other
(254) (257) (241)
(1,434) (1,461) (1,467)
Net passenger ticket revenues 4,259 4,323 4,204
Net onboard and other revenues 1,399 1,413 1,333
Net cruise revenues $ 5,658 $ 5,736 $ 5,537
ALBDs (c) 35,092,473 35,092,473 34,089,059
Gross revenue yields $ 202.09 $ 205.08 $ 205.47
% decrease vs. 2011 (1.6)% (0.2)%
Net revenue yields $ 161.22 $ 163.44 $ 162.44
% (decrease) increase vs. 2011 (0.8)% 0.6%
Net passenger ticket revenue yields $ 121.38 $ 123.18 $ 123.33
% decrease vs. 2011
(1.6)% (0.1)%
Net onboard and other revenue yields $ 39.84 $ 40.26 $ 39.12
% increase vs. 2011 1.8% 2.9%
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES
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 May 31,
2012
Constant
2012 Dollar 2011
Cruise operating expenses $ 2,457 $ 2,501 $ 2,494
Cruise selling and administrative
expenses (d) 429 439 434
Gross cruise costs 2,886 2,940 2,928
Less cruise costs included in net
cruise revenues
Commissions, transportation and other (519) (535) (562)
Onboard and other (128) (131) (121)
Net cruise costs 2,239 2,274 2,245
Less fuel (645) (645) (579)
Net cruise costs excluding fuel $ 1,594 $ 1,629 $ 1,666
ALBDs (c) 17,783,938 17,783,938 17,402,349
Gross cruise costs per ALBD $ 162.28 $ 165.31 $ 168.28
% (decrease) increase vs. 2011 (3.6)% (1.8)%
Net cruise costs per ALBD $ 125.88 $ 127.87 $ 129.07
% (decrease) increase vs. 2011 (2.5)% (0.9)%
Net cruise costs excluding fuel per ALBD $ 89.63 $ 91.61 $ 95.75
% (decrease) increase vs. 2011
(6.4)% (4.3)%
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES
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):
Six Months Ended May 31,
2012
Constant
2012 Dollar 2011
Cruise operating expenses $ 5,137 $ 5,197 $ 4,880
Cruise selling and administrative
expenses (d) 848 861 850
Gross cruise costs 5,985 6,058 5,730
Less cruise costs included in net
cruise revenues
Commissions, transportation and other (1,180) (1,204) (1,226)
Onboard and other (254) (257) (241)
Net cruise costs 4,551 4,597 4,263
Less fuel (1,237) (1,237) (1,029)
Net cruise costs excluding fuel $ 3,314 $ 3,360 $ 3,234
ALBDs (c) 35,092,473 35,092,473 34,089,059
Gross cruise costs per ALBD $ 170.54 $ 172.61 $ 168.10
% (decrease) increase vs. 2011 1.5% 2.7%
Net cruise costs per ALBD $ 129.67 $ 130.97 $ 125.07
% (decrease) increase vs. 2011 3.7% 4.7%
Net cruise costs excluding fuel per ALBD $ 94.44 $ 95.74 $ 94.87
% (decrease) increase vs. 2011
(0.5)% 0.9%
(See next page for Notes to Non-GAAP Financial Measures.)
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)
Non-GAAP fully diluted earnings per share was computed as follows
(in millions, except per share data) (b):
Three Months Ended Six Months Ended
May 31, May 31,
2012 2011 2012 2011
Net income (loss) - diluted
U.S. GAAP net income (loss) $ 14 $ 206 $ (125) $ 358
Ibero goodwill and trademark
impairment charges (e) - - 173 -
Unrealized losses on fuel
derivatives, net (f) 145 - 124 -
Non-GAAP net income $ 159 $ 206 $ 172 $ 358
Weighted-average shares
outstanding - diluted (f) 779 793 778 793
Earnings (loss) per share - diluted
U.S. GAAP earnings (loss) per share $ 0.02 $ 0.26 $ (0.16) $ 0.45
Ibero goodwill and trademark
impairment charges (e) - - 0.22 -
Unrealized losses on fuel derivatives,
net (f) 0.18 - 0.16 -
Non-GAAP earnings per share $ 0.20 $ 0.26 $ 0.22 $ 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 segment financial performance. These measures
enable us to separate the impact of predictable capacity
changes from the more unpredictable rate changes that
affect our business. We believe these non-GAAP measures
provide useful information to investors and expanded
insight to measure our revenue and cost performance as a
supplement to our U.S. generally accepted accounting
principles ("U.S. GAAP") consolidated financial statements.
Net revenue yields are commonly used in the cruise business
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 card
fees. Substantially all of our remaining cruise costs are
largely fixed, except for the impact of changing prices,
once our ship capacity levels have been determined.
Net passenger ticket revenues reflect gross cruise
revenues, net of (1) onboard and other revenues, (2)
commissions, transportation and other costs and (3) onboard
and other cruise costs. Net onboard and other revenues
reflect gross cruise revenues, net of (1) passenger ticket
revenues, (2) commissions, transportation and other costs
and (3) onboard and other cruise costs. Net passenger
ticket revenue yields and net onboard and other revenue
yields are computed by dividing net passenger ticket
revenues and net onboard and other revenues by ALBDs.
Net cruise costs per ALBD and net cruise costs excluding
fuel per ALBD are the most significant measures we use to
monitor our ability to control our cruise segment costs
rather than gross cruise costs per ALBD. We exclude the
same variable costs that are included in the calculation of
net cruise revenues to calculate net cruise costs with and
without fuel to avoid duplicating these variable costs in
our non-GAAP financial measures.
We have not provided estimates of future gross revenue
yields or future gross cruise costs per ALBD because the
quantitative reconciliations of forecasted gross cruise
revenues to forecasted net cruise revenues or forecasted
gross cruise costs to forecasted net cruise costs would
include a significant amount of uncertainty in projecting
the costs deducted to arrive at this measure. As such,
management does not believe that this reconciling
information would be meaningful.
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)
In addition, because our Europe, Australia & Asia cruise
brands utilize the euro, sterling and Australian dollar to
measure their results and financial condition, the
translation of those operations to our U.S. dollar
reporting currency results in decreases in reported U.S.
dollar revenues and expenses if the U.S. dollar strengthens
against these foreign currencies, and increases in reported
U.S. dollar revenues and expenses if the U.S. dollar
weakens against these foreign currencies. Accordingly, we
also monitor and report these non-GAAP financial measures
assuming the 2012 periods' currency exchange rates have
remained constant with the 2011 periods' rates, or on a
"constant dollar basis," in order to remove the impact of
changes in exchange rates on our non-U.S. dollar cruise
operations. We believe that this is a useful measure since
it facilitates a comparative view of the growth of our
business in a fluctuating currency exchange rate
environment.
(b) Our consolidated financial statements are prepared in
accordance with U.S. GAAP. The presentation of our non-GAAP
financial information is not intended to be considered in
isolation or as substitute for, or superior to, the
financial information prepared in accordance with U.S.
GAAP. There are no specific rules for determining our
non-GAAP current and constant dollar financial measures
and, accordingly, they are susceptible to varying
calculations, and it is possible that they may not be
exactly comparable to the like-kind information presented
by other companies, which is a potential risk associated
with using these measures to compare us to other companies.
(c) 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 six months ended May 31, 2012 and
2011, selling and administrative expenses were $431 million
($440 million in 2011) and $852 million ($862 million in
2011), respectively. For the three and six months ended May
31, 2012 and 2011, selling and administrative expenses were
comprised of cruise selling and administrative expenses of
$429 million ($434 million in 2011) and $848 million ($850
million in 2011) and Tour and Other selling and
administrative expenses of $2 million ($6 million in 2011)
and $4 million ($12 million in 2011), respectively.
(e) We believe that the impairment charges recognized in the
six months ended May 31, 2012 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 income (loss) and earnings (loss)
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 fuel derivatives not qualifying as fuel hedges
are immediately recognized in earnings. We believe that
unrealized gains and losses on fuel derivatives are not an
indication of our future 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 (loss) and
earnings (loss) per share and, accordingly, we present
non-GAAP net income and non-GAAP EPS excluding these
unrealized gains and losses. For the three and six months
ended May 31, 2012, non-GAAP diluted weighted-average
shares outstanding were 779 million, which includes the
dilutive effect of equity plans.
We have not included in our earnings guidance the impact of
unrealized gains and losses on fuel derivatives because
these unrealized amounts involve a significant amount of
uncertainty and we do not believe they are an indication of
our future earnings performance. Accordingly, our earnings
guidance is presented on a non-GAAP basis only. As a
result, we did not present a reconciliation between
forecasted non-GAAP diluted EPS guidance and forecasted
U.S. GAAP diluted EPS guidance, since we do not believe
that the reconciliation information would be meaningful.
SOURCE Carnival Plc
CONTACT: MEDIA CONTACT: Jennifer De La Cruz, +1-305-599-2600, ext. 16000;
INVESTOR RELATIONS CONTACT: Beth Roberts, +1-305-406-4832
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