CARNIVAL CORPORATION & PLC
CARNIVAL CORPORATION & PLC REPORTS RECORD THIRD QUARTER EARNINGS
MIAMI, Sept. 26, 2016 -- Carnival Corporation & plc today reported its results
for the third quarter ended August 31, 2016. The results of Carnival
Corporation and Carnival plc have been consolidated and include results on a
U.S. GAAP and adjusted basis.
3Q Highlights
* 3Q net revenue yields increased 2.7% in constant currency compared to prior
year, toward the top end of the June guidance range, up 2% to 3%
* 3Q net cruise costs excluding fuel per available lower berth day ("ALBD")
increased 5.5% in constant currency compared to prior year, better than
June guidance, up 6% to 7%, due to the timing of certain expenses
* 3Q adjusted net income was $1.4 billion, or earnings per share (diluted) of
$1.92, before U.S. GAAP unrealized gains on fuel derivatives and other net
charges totaling $7 million in gains
Outlook
* At this time, cumulative advance bookings for the first half of next year
are ahead of the prior year at considerably higher prices
* FY 2016 net revenue yields are expected to increase approximately 3.5%
compared to the prior year, on a constant currency basis
* FY 2016 net cruise costs excluding fuel per ALBD are expected to be up
approximately 1.5% compared to the prior year, on a constant currency basis
* FY 2016 adjusted earnings per share are expected to be in the range of
$3.33 to $3.37, compared to June guidance of $3.25 to $3.35 and $2.70 per
share in FY 2015
* 4Q 2016 adjusted earnings per share are expected to be in the range of
$0.55 to $0.59, compared to $0.50 in 4Q 2015
President and Chief Executive Officer Arnold Donald commenting on these
results:
"We delivered the strongest quarterly earnings in our company's history
affirming our ongoing efforts to expand consumer demand in excess of measured
capacity increases and leverage our industry leading scale. Revenues during the
peak summer season were bolstered by strong performances from both our North
American and European brands and across all major deployments including the
Caribbean, Alaska and Europe."
"We are well on track to deliver nearly 25 percent earnings growth in 2016.
With cash from operations expected to reach a record $5 billion this year, we
continue to fund our growth and return cash to shareholders. During the third
quarter we repurchased $700 million of Carnival Corporation shares bringing the
cumulative total to $2.5 billion in share repurchases over the past year."
"Looking forward, we are well positioned for continued earnings growth given
the current strength of our booking and pricing trends in 2017."
MEDIA CONTACT INVESTOR RELATIONS
CONTACT
Roger Frizzell Beth Roberts
001 305 406 7862 001 305 406 4832
Conference Call
The company has scheduled a conference call with analysts at 3:00 p.m. BST (10:
00 a.m. EDT) today to discuss its 2016 third quarter results. This call can be
listened to live, and additional information can be obtained, via Carnival
Corporation & plc's Web site at http://www.carnivalcorp.com/ and http://
www.carnivalplc.com/.
Carnival Corporation & plc is the largest cruise company in the world, 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 totaling 225,000 lower berths with 18
new ships scheduled to be delivered between 2016 and 2022. Carnival Corporation
& plc also operates Holland America Princess Alaska Tours, the leading tour
companies in Alaska and the Canadian Yukon. Traded on both the New York and
London Stock Exchanges, Carnival Corporation & plc is the only group in the
world to be included in both the S&P 500 and the FTSE 100 indices. Additional
information can be found on http://www.carnival.com/, http://www.fathom.org/,
http://www.hollandamerica.com/, http://www.princess.com/, http://
www.seabourn.com/, http://www.aida.de/, http://www.costacruise.com/, http://
www.cunard.com/, http://www.pocruises.com.au/, and http://www.pocruises.com/.
Carnival Corporation & plc Reports Record Third Quarter Earnings
MIAMI, Sept. 26, 2016 /PRNewswire/ -- Carnival Corporation & plc (NYSE/LSE:
CCL; NYSE: CUK) announced U.S. GAAP net income of $1.4 billion, or $1.93
diluted EPS, for the third quarter of 2016 compared to U.S. GAAP net income for
the third quarter of 2015 of $1.2 billion, or $1.56 diluted EPS. Third quarter
2016 adjusted net income of $1.4 billion, or $1.92 adjusted EPS, was higher
than adjusted net income of $1.4 billion, or $1.75 adjusted EPS, for the third
quarter of 2015. Adjusted net income excludes unrealized gains and losses on
fuel derivatives and other net charges, totaling $7 million in gains for the
third quarter 2016 and $149 million of losses for the third quarter 2015.
Revenues for the third quarter of 2016 were $5.1 billion, $0.2 billion higher
than the $4.9 billion in the prior year.
Carnival Corporation & plc President and Chief Executive Officer Arnold Donald
noted, "We delivered the strongest quarterly earnings in our company's history
affirming our ongoing efforts to expand consumer demand in excess of measured
capacity increases and leverage our industry leading scale. Revenues during the
peak summer season were bolstered by strong performances from both our North
American and European brands and across all major deployments including the
Caribbean, Alaska and Europe," Donald added.
Key metrics for the third quarter 2016 compared to the prior year were as
follows:
* Gross revenue yields (revenue per available lower berth day or "ALBD")
increased 0.6 percent. Net revenue yields on a constant currency basis
increased 2.7 percent for 3Q 2016, toward the top end of the June guidance
range of up 2 to 3 percent.
* Gross cruise costs including fuel per ALBD decreased 0.2 percent. Net
cruise costs excluding fuel per ALBD on a constant currency basis increased
5.5 percent, better than June guidance of up 6 to 7 percent, due to the
timing of certain expenses.
* Changes in fuel prices (including realized fuel derivatives) and changes in
currency exchange rates increased earnings by $0.02 per share.
Highlights during the third quarter included the grand opening of the Arison
Maritime Center in Almere, Netherlands, named for Carnival Corporation & plc
Chairman Micky Arison and his father, the late Ted Arison, who founded the
company. The 110,000-square-foot purpose built facility is a major expansion
from the existing training center that opened in 2009. The center will provide
comprehensive safety and skills training for bridge and engineering officers.
The facility includes four bridge and engine room simulators and is expected to
train over 6,500 officers annually across the company's 10 brands.
The company also signed a memorandum of agreement with shipbuilders Meyer Werft
and Meyer Turku for the construction of three new 180,000-ton cruise ships.
Two of the ships, to be built in Finland, will be added to the Carnival Cruise
Line fleet in 2020 and 2022. The third ship, to be constructed in Germany, will
join the P&O Cruises UK fleet in 2020. All three vessels will be fully powered
by Liquefied Natural Gas, the world's cleanest burning fossil fuel. In
conjunction with these new ship orders, the delivery dates for two previously
contracted ships, one for AIDA Cruises and one for Costa Cruises, will shift
from 2020 to 2021 to ensure a measured pace of capacity growth over the coming
years.
Outlook
At this time, cumulative advance bookings for the first half of next year are
ahead of the prior year at considerably higher prices. Since June, booking
volumes for the first half of next year are lower than the prior year, as there
is less inventory remaining for sale, at significantly higher prices.
The company continues to expect full year 2016 net revenue yields to be up
approximately 3.5 percent compared to the prior year, on a constant currency
basis. The company continues to expect full year net cruise costs excluding
fuel per ALBD to be up approximately 1.5 percent compared to the prior year, on
a constant currency basis.
Taking the above factors into consideration, the company has increased its full
year 2016 adjusted earnings per share guidance to be in the range of $3.33 to
$3.37, compared to the June guidance range of $3.25 to $3.35 and 2015 adjusted
earnings per share of $2.70.
Donald commented, "We are well on track to deliver nearly 25 percent earnings
growth in 2016. With cash from operations expected to reach a record $5 billion
this year, we continue to fund our growth and return cash to shareholders.
During the third quarter we repurchased $700 million of Carnival Corporation
shares bringing the cumulative total to $2.5 billion in share repurchases over
the past year."
Donald added, "Looking forward, we are well positioned for continued earnings
growth given the current strength of our booking and pricing trends in 2017."
Fourth Quarter 2016 Outlook
Fourth quarter constant currency net revenue yields are expected to be up
approximately 3 percent compared to the prior year. Fourth quarter constant
currency net cruise costs excluding fuel per ALBD are expected to be higher by
approximately 1 percent compared to the prior year. Based on the above factors,
the company expects adjusted earnings per share for the fourth quarter 2016 to
be in the range of $0.55 to $0.59 versus 2015 adjusted earnings per share of
$0.50.
Selected Key Forecast Metrics
Full Year 2016 Fourth Quarter 2016
Year over year change: Current Constant Current Constant
Dollars Currency Dollars Currency
Net revenue yields Approx Approx Approx Approx
1.0% 3.5% 1.5% 3.0%
Net cruise costs excl. fuel / ALBD Approx Approx Approx Approx
0.5% 1.5% 0.5% 1.0%
Full Year 2016 Fourth Quarter 2016
Fuel price per metric ton $285 $332
Fuel consumption (metric tons in 3,250 830
thousands)
Currency: Euro $1.11 to €1 $1.11 to €1
Sterling $1.38 to £1 $1.30 to £1
Australian $0.74 to A$1 $0.76 to A$1
dollar
Canadian $0.76 to C$1 $0.76 to C$1
dollar
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 third quarter results. This call can be
listened to live, and additional information can be obtained, via Carnival
Corporation & plc's Web site at http://www.carnivalcorp.com/ and http://
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 18 new ships scheduled to be
delivered between 2016 and 2022. Carnival Corporation & plc also operates
Holland America Princess Alaska Tours, the leading tour companies in Alaska and
the Canadian Yukon. Traded on both the New York and London Stock
Exchanges, Carnival Corporation & plc is the only group in the world to be
included in both the S&P 500 and the FTSE 100 indices.
Additional information can be found on http://www.carnival.com/, http://
www.hollandamerica.com/, http://www.princess.com/, http://www.seabourn.com/,
http://www.aida.de/, http://www.costacruise.com/, http://www.cunard.com/, http:
//www.pocruises.com.au/, http://www.pocruises.com/ and http://www.fathom.org/.
MEDIA CONTACT INVESTOR RELATIONS
CONTACT
Roger Frizzell Beth Roberts
1 305 406 7862 1 305 406 4832
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 June 24, 2016 UK electorate vote
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 Nine Months Ended
August 31, August 31,
2016 2015 2016 2015
Revenues
Cruise
Passenger tickets $ 3,803 $ 3,631 $ 9,217 $ 8,891
Onboard and other 1,146 1,102 3,047 2,918
Tour and other 148 150 190 194
5,097 4,883 12,454 12,003
Operating Costs and Expenses
Cruise
Commissions, transportation and other 646 603 1,723 1,671
Onboard and other 171 170 411 395
Payroll and related 494 453 1,488 1,388
Fuel 265 345 648 996
Food 260 255 755 737
Other ship operating 643 582 1,914 1,913
Tour and other 84 82 125 129
2,563 2,490 7,064 7,229
Selling and administrative 529 484 1,613 1,504
Depreciation and amortization 443 399 1,303 1,206
3,535 3,373 9,980 9,939
Operating Income 1,562 1,510 2,474 2,064
Nonoperating (Expense) Income
Interest income 2 2 5 6
Interest expense, net of capitalized (61) (53) (168) (167)
interest
Losses on fuel derivatives, net (a) (36) (197) (102) (378)
Other (expense) income, net (2) (12) 6 3
(97) (260) (259) (536)
Income Before Income Taxes 1,465 1,250 2,215 1,528
Income Tax Expense, Net (41) (34) (44) (41)
Net Income $ 1,424 $ 1,216 $ 2,171 $ 1,487
Earnings Per Share
Basic $ 1.93 $ 1.56 $ 2.89 $ 1.91
Diluted $ 1.93 $ 1.56 $ 2.88 $ 1.91
Adjusted Earnings Per Share-Diluted (b) $ 1.92 $ 1.75 $ 2.77 $ 2.20
Dividends Declared Per Share $ 0.35 $ 0.30 $ 1.00 $ 0.80
Weighted-Average Shares Outstanding - 737 778 751 778
Basic
Weighted-Average Shares Outstanding - 739 781 754 781
Diluted
(a) During the three months ended August 31, 2016 and 2015, our (losses) on
fuel derivatives, net include net unrealized gains (losses) of $25 million
and $(137) million and realized (losses) of $(61) million and $(60)
million, respectively. During the nine months ended August 31, 2016 and
2015, our (losses) on fuel derivatives, net include net unrealized gains
(losses) of $121 million and $(215) million and realized (losses) of $(223)
million and $(163) 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)
August November
31, 30,
2016 2015
ASSETS
Current Assets
Cash and cash equivalents $ 462 $ 1,395
Trade and other receivables, net 321 303
Insurance recoverables 102 109
Inventories 314 330
Prepaid expenses and other 355 314
Total current assets 1,554 2,451
Property and Equipment, Net 32,864 31,818 (a)
Goodwill 2,964 3,010
Other Intangibles 1,290 1,308 (a)
Other Assets 660 650
$ 39,332 $ 39,237
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 334 $ 30
Current portion of long-term debt 739 1,344
Accounts payable 704 627
Accrued liabilities and other 1,738 1,683
Customer deposits 3,585 3,272
Total current liabilities 7,100 6,956
Long-Term Debt 8,320 7,413
Other Long-Term Liabilities 1,012 1,097
Shareholders' Equity
Common stock of Carnival Corporation, $0.01 par value; 1,960 shares authorized; 7 7
654 shares at 2016 and 653 shares at 2015 issued
Ordinary shares of Carnival plc, $1.66 par value; 216 shares at 2016 and 2015 358 358
issued
Additional paid-in capital 8,618 8,562
Retained earnings 21,488 20,060
Accumulated other comprehensive loss (2,012) (1,741)
Treasury stock, 114 shares at 2016 and 70 shares at 2015 of Carnival (5,559) (3,475)
Corporation
and 26 shares at 2016 and 27 shares at 2015 of Carnival plc, at cost
Total shareholders' equity 22,900 23,771
$ 39,332 $ 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 Nine Months Ended
August 31, August 31,
2016 2015 2016 2015
STATISTICAL INFORMATION
ALBDs (in thousands) (a) 20,572 19,795 59,555 57,686
Occupancy percentage (b) 111.4 % 110.9 % 106.6 % 105.6 %
Passengers carried (in thousands) 3,265 3,068 8,606 8,138
Fuel consumption in metric tons (in 793 786 2,417 2,379
thousands)
Fuel consumption in metric tons per 38.6 39.7 40.6 41.2
thousand ALBDs
Fuel cost per metric ton consumed $ 335 $ 439 $ 268 $ 418
Currencies
U.S. dollar to euro $ 1.12 $ 1.11 $ 1.11 $ 1.13
U.S. dollar to sterling $ 1.34 $ 1.56 $ 1.41 $ 1.54
U.S. dollar to Australian dollar $ 0.75 $ 0.75 $ 0.74 $ 0.78
U.S. dollar to Canadian dollar $ 0.77 $ 0.78 $ 0.76 $ 0.80
CASH FLOW INFORMATION (in millions)
Cash from operations $ 1,429 $ 1,281 $ 4,110 $ 3,567
Capital expenditures $ 450 $ 324 $ 2,416 $ 1,704
Dividends paid $ 262 $ 195 $ 721 $ 584
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 August 31, Nine Months Ended August 31,
2016 2016 2015 2016 2016 2015
Constant Constant
Dollar Dollar
Passenger ticket $ 3,803 $ 3,866 $ 3,631 $ 9,217 $ 9,362 $ 8,891
revenues
Onboard and 1,146 1,158 1,102 3,047 3,080 2,918
other revenues
Gross cruise 4,949 5,024 4,733 12,264 12,442 11,809
revenues
Less cruise
costs
(646) (654) (603) (1,723) (1,751) (1,671)
Commissions,
transportation
and
other
Onboard and (171) (173) (170) (411) (416) (395)
other
(817) (827) (773) (2,134) (2,167) (2,066)
Net passenger 3,157 3,212 3,028 7,494 7,611 7,220
ticket revenues
Net onboard and 975 985 932 2,636 2,664 2,523
other revenues
Net cruise $ 4,132 $ 4,197 $ 3,960 $ 10,130 $ 10,275 $ 9,743
revenues
ALBDs 20,572,112 20,572,112 19,794,882 59,555,384 59,555,384 57,685,594
Gross revenue $ 240.60 $ 244.22 $ 239.10 $ 205.94 $ 208.91 $ 204.72
yields
% increase vs. 0.6 % 2.1 % 0.6 % 2.0 %
2015
Net revenue $ 200.87 $ 204.03 $ 200.04 $ 170.10 $ 172.52 $ 168.91
yields
% increase 0.4 % 2.0 % 0.7 % 2.1 %
vs. 2015
Net passenger $ 153.47 $ 156.14 $ 152.96 $ 125.84 $ 127.80 $ 125.17
ticket revenue
yields
% increase 0.3 % 2.1 % 0.5 % 2.1 %
vs. 2015
Net onboard and $ 47.39 $ 47.89 $ 47.09 $ 44.26 $ 44.72 $ 43.74
other revenue
yields
% increase 0.7 % 1.7 % 1.2 % 2.2 %
vs. 2015
Three Months Ended August 31, Nine Months Ended August 31,
2016 2016 2015 2016 2016 2015
Constant Constant
Currency Currency
Net passenger $ 3,157 $ 3,246 $ 3,028 $ 7,494 $ 7,778 $ 7,220
ticket revenues
Net onboard and 975 981 932 2,636 2,672 2,523
other revenues
Net cruise $ 4,132 $ 4,227 $ 3,960 $ 10,130 $ 10,450 $ 9,743
revenues
ALBDs 20,572,112 20,572,112 19,794,882 59,555,384 59,555,384 57,685,594
Net revenue $ 200.87 $ 205.46 $ 200.04 $ 170.10 $ 175.46 $ 168.91
yields
% increase 0.4 % 2.7 % 0.7 % 3.9 %
vs. 2015
Net passenger $ 153.47 $ 157.76 $ 152.96 $ 125.84 $ 130.60 $ 125.17
ticket revenue
yields
% increase 0.3 % 3.1 % 0.5 % 4.3 %
vs. 2015
Net onboard $ 47.39 $ 47.69 $ 47.09 $ 44.26 $ 44.86 $ 43.74
and other
revenue
yields
% increase 0.7 % 1.3 % 1.2 % 2.6 %
vs. 2015
(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 August 31, Nine Months Ended August 31,
2016 2016 2015 2016 2016 2015
Constant Constant
Dollar Dollar
Cruise $ 2,479 $ 2,513 $ 2,408 $ 6,939 $ 7,034 $ 7,100
operating
expenses
Cruise selling 527 534 482 1,606 1,626 1,497
and
administrative
expenses
Gross cruise 3,006 3,047 2,890 8,545 8,660 8,597
costs
Less cruise
costs included
above
(646) (654) (603) (1,723) (1,751) (1,671)
Commissions,
transportation
and
other
Onboard (171) (173) (170) (411) (416) (395)
and other
Gain on - - 2 2 2 6
ship sale
- - (14) (2) (2) (21)
Restructuring
expenses
Other (c) (18) (18) - (39) (39) -
Net cruise 2,171 2,202 2,105 6,372 6,454 6,516
costs
Less fuel (265) (265) (345) (648) (648) (996)
Net cruise $ 1,906 $ 1,937 $ 1,760 $ 5,724 $ 5,806 $ 5,520
costs
excluding fuel
ALBDs 20,572,112 20,572,112 19,794,882 59,555,384 59,555,384 57,685,594
Gross cruise $ 146.18 $ 148.11 $ 145.95 $ 143.50 $ 145.42 $ 149.03
costs per ALBD
% increase vs. 0.2 % 1.5 % (3.7)% (2.4)%
2015
Net cruise $ 105.54 $ 107.00 $ 106.28 $ 106.99 $ 108.37 $ 112.96
costs per ALBD
% (0.7)% 0.7 % (5.3)% (4.1)%
(decrease)
increase vs.
2015
Net cruise $ 92.63 $ 94.10 $ 88.84 $ 96.10 $ 97.48 $ 95.70
costs
excluding fuel
per
ALBD
% increase 4.3 % 5.9 % 0.4 % 1.9 %
vs. 2015
Three Months Ended August 31, Nine Months Ended August 31,
2016 2016 2015 2016 2016 2015
Constant Constant
Currency Currency
Net cruise $ 1,906 $ 1,929 $ 1,760 $ 5,724 $ 5,793 $ 5,520
costs
excluding fuel
ALBDs 20,572,112 20,572,112 19,794,882 59,555,384 59,555,384 57,685,594
Net cruise $ 92.63 $ 93.77 $ 88.84 $ 96.10 $ 97.27 $ 95.70
costs
excluding fuel
per
ALBD
% increase vs. 4.3 % 5.5 % 0.4 % 1.6 %
2015
(See 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 Nine Months Ended
August 31, August 31,
2016 2015 2016 2015
Net income
U.S. GAAP net income $ 1,424 $ 1,216 $ 2,171 $ 1,487
Unrealized (gains) losses on fuel (25) 137 (121) 215
derivatives, net (d)
Gain on ship sale (e) - (2) (2) (6)
Restructuring expenses (e) - 14 2 21
Other (c) (e) 18 - 39 -
Adjusted net income $ 1,417 $ 1,365 $ 2,089 $ 1,717
Weighted-average shares outstanding 739 781 754 781
Earnings per share
U.S. GAAP earnings per share $ 1.93 $ 1.56 $ 2.88 $ 1.91
Unrealized (gains) losses on fuel (0.03) 0.17 (0.16) 0.27
derivatives, net (d)
Gain on ship sale (e) - - - (0.01)
Restructuring expenses (e) - 0.02 - 0.03
Other (c) (e) 0.02 - 0.05 -
Adjusted earnings per share $ 1.92 $ 1.75 $ 2.77 $ 2.20
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. We
believe that gains and losses on ship sales and ship impairments, net and
restructuring expenses and other expenses are not part of our core
operating business and, therefore, are not an indication of our future
earnings performance. As such, we exclude these items from our calculation
of net cruise costs with and without fuel.
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. Our
North America, EAA and Cruise Support segment operations also have revenues
and expenses that are in a currency other than their functional currency.
This subjects us to foreign currency transactional risk.
We report non-GAAP financial measures on a "constant dollar" and "constant
currency" basis assuming the 2016 periods' currency exchange rates have
remained constant with the 2015 periods' 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 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. We are unable to predict, without
unreasonable effort, the future movement of foreign exchange rates or the
future impact of gains or losses on ship sales, restructuring expenses or
other non-core gains and charges. 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 gains and losses on ship sales and ship impairments, net
and restructuring expenses and other expenses are not part of our core
operating business and, therefore, are not an indication of our future
earnings performance. We also believe it is more meaningful for gains and
losses on ship sales and ship impairments, net and 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.
CARNIVAL : Doc re Carnival Corp & plc Third Quarter Results
September 26, 2016 at 09:16 am EDT
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