MIAMI, March 28, 2017 /PRNewswire/ -- Carnival
Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) announced U.S.
GAAP net income of $352 million, or
$0.48 diluted EPS, for the first
quarter of 2017 compared to U.S. GAAP net income for the first
quarter of 2016 of $142 million, or
$0.18 diluted EPS. First quarter 2017
adjusted net income of $279 million,
or $0.38 adjusted EPS, compared to
adjusted net income of $301 million,
or $0.39 adjusted EPS, for the first
quarter of 2016. Adjusted net income excludes unrealized gains and
losses on fuel derivatives and other net charges, totaling
$73 million in gains for the first
quarter 2017 and $159 million of
losses for the first quarter 2016. Revenues for the first quarter
of 2017 of $3.8 billion were higher
than the $3.7 billion in the prior
year.
Carnival Corporation & plc President and Chief Executive
Officer Arnold Donald noted, "We are
off to a good start delivering another quarter of operational
improvement on top of a very strong first quarter last year. Our
performance was driven by increased demand, particularly for our
core Caribbean itineraries,
leading to higher year-over-year ticket prices which enabled us to
overcome the significant negative impact of both fuel and currency
to exceed the high end of our guidance range."
Key information for the first quarter 2017 compared to the prior
year:
- Gross revenue yields (revenue per available lower berth day or
"ALBD") increased 0.1 percent. In constant currency, net revenue
yields increased 3.8 percent for 1Q 2017, better than December
guidance of up 1.5 to 2.5 percent.
- Gross cruise costs including fuel per ALBD increased 2.9
percent. In constant currency, net cruise costs excluding fuel per
ALBD increased 3.2 percent, compared to December guidance of up 1.5
to 2.5 percent, due to the timing of certain expenses.
- Changes in fuel prices (including realized fuel derivatives)
and currency exchange rates decreased earnings by $0.13 per share.
Highlights during the first quarter included the January
announcement at the Consumer Electronics Show in Las Vegas, Nevada of a potential breakthrough
guest experience innovation the Ocean Platform -- featuring Ocean
Medallion. The experience will debut on Princess Cruises' Regal
Princess in November 2017
followed by additional Princess ships in 2018.
Fleet enhancement milestones included the official debut of
Seabourn Cruises' newest ship, Seabourn Encore, with its
naming ceremony in Singapore.
International recording artist and world's best-selling soprano
Sarah Brightman presided over the
naming ceremony as godmother of the stunning new 600-guest ship.
Additionally, the company signed a memorandum of agreement
with Italian shipbuilder Fincantieri to build two new cruise
ships. The first is designated for Holland America Line to be
delivered in 2021 with the second for Princess Cruises in
2022.
Also during the quarter, following the Corporation's historic
sailings from the U.S. to Cuba
through its Fathom brand, Carnival Cruise Line received approval to
begin operating cruises to Cuba.
Carnival Paradise will be the largest cruise ship to sail to
Cuba from the U.S. when it begins
calling in Havana in June 2017.
2017 Outlook
At this time, cumulative advance bookings for the remainder of
2017 are well ahead of the prior year at considerably higher
prices. During the quarter, both booking volumes and pricing for
the remainder of 2017 have been running ahead of last year.
Donald commented, "Wave season, our peak booking period, was
strong leaving us well positioned with bookings at considerably
higher prices and with less inventory remaining for sale in 2017
compared to the prior year, resulting in increased earnings
guidance. We are clearly benefiting from our efforts to increase
cruise consideration through guest experience innovations, creative
marketing, and public relations programs. We are reaching consumers
through multiple touch points and laying the foundation for
continued earnings improvement and sustained double digit returns
on invested capital."
The company expects full year 2017 net revenue yields in
constant currency to be up approximately 3 percent compared to the
prior year, better than December guidance of up approximately 2.5
percent. The company continues to expect full year net cruise costs
excluding fuel per ALBD in constant currency to be up approximately
1 percent compared to the prior year. Changes in fuel prices
(including realized fuel derivatives) and currency exchange rates
compared to the prior year are expected to decrease earnings by
$0.35 per share.
Taking the above factors into consideration, the company expects
full year 2017 adjusted earnings per share to be in the range of
$3.50 to $3.70 compared to December
guidance of $3.30 to $3.60 and 2016
adjusted earnings per share of $3.45.
Second Quarter 2017 Outlook
Second quarter constant currency net revenue yields are expected
to be up approximately 2.5 to 3.5 percent compared to the prior
year. Net cruise costs excluding fuel per ALBD in constant currency
for the second quarter of 2017 are expected to be higher by
approximately 1.5 to 2.5 percent compared to the prior year.
Changes in fuel prices (including realized fuel derivatives) and
currency exchange rates compared to the prior year are expected to
decrease earnings by $0.12 per share.
Based on the above factors, the company expects adjusted earnings
per share for the second quarter 2017 to be in the range of
$0.43 to $0.47 versus 2016 adjusted
earnings per share of $0.49.
Selected Key
Metrics
|
|
|
|
Full Year
2017
|
|
Second Quarter
2017
|
Year over year
change:
|
|
Current
Dollars
|
|
Constant
Currency
|
|
Current
Dollars
|
|
Constant
Currency
|
Net revenue
yields
|
|
Approx
1.5%
|
|
Approx
3.0%
|
|
0.5 to
1.5%
|
|
2.5 to
3.5%
|
Net cruise costs
excl. fuel / ALBD
|
|
Approx
flat
|
|
Approx
1.0%
|
|
(0.5) to
0.5%
|
|
1.5 to
2.5%
|
|
Full Year 2017
|
|
Second Quarter
2017
|
Fuel price per metric
ton
|
$362
|
|
$359
|
Fuel consumption
(metric tons in thousands)
|
3,310
|
|
840
|
Currency: Euro
|
$1.07 to
€1
|
|
$1.08 to
€1
|
Sterling
|
$1.25 to
£1
|
|
$1.25 to
£1
|
Australian dollar
|
$0.76 to
A$1
|
|
$0.76 to
A$1
|
|
Three Months
Ended
February 28/29,
|
|
|
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
Net income (in
millions)
|
$
|
352
|
|
|
$
|
142
|
|
|
|
|
|
|
Adjusted net income
(in millions) (a)
|
$
|
279
|
|
|
$
|
301
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share-diluted
|
$
|
0.48
|
|
|
$
|
0.18
|
|
|
|
|
|
|
Adjusted earnings per
share-diluted (a)
|
$
|
0.38
|
|
|
$
|
0.39
|
|
|
|
|
|
|
(a)
|
See the net income to
adjusted net income and EPS to adjusted EPS reconciliations in the
Non-GAAP Financial Measures included herein.
|
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 2017 first
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 among the largest, most
profitable and financially strong leisure travel companies 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 102 ships visiting over 700 ports
around the world and totaling 226,000 lower berths with 19 new
ships scheduled to be delivered between 2017 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 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, but not limited to, the forecasting
of our:
• Net revenue
yields
|
• Net cruise costs,
excluding fuel per available lower berth day
|
• Booking
levels
|
• Estimates of ship
depreciable lives and residual values
|
• Pricing and
occupancy
|
• Goodwill, ship and
trademark fair values
|
• Interest, tax and
fuel expenses
|
• Liquidity
|
• Currency exchange
rates
|
• 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
- Overcapacity in the cruise ship and land-based vacation
industry
- 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 the cruise ship and land-based vacation
industry
- Economic, market and political factors that are beyond our
control
- 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
- The DLC arrangement involves risks not associated with the more
common ways of combining the operations of two companies
The ordering of the risk factors set forth above is not intended
to reflect our indication of priority or likelihood.
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
February 28/29,
|
|
2017
|
|
2016
|
Revenues
|
|
|
|
Cruise
|
|
|
|
Passenger
tickets
|
$
|
2,804
|
|
|
$
|
2,718
|
|
Onboard and
other
|
978
|
|
|
923
|
|
Tour and
other
|
9
|
|
|
10
|
|
|
3,791
|
|
|
3,651
|
|
Operating Costs
and Expenses
|
|
|
|
Cruise
|
|
|
|
Commissions,
transportation and other
|
569
|
|
|
582
|
|
Onboard and
other
|
125
|
|
|
117
|
|
Payroll and
related
|
519
|
|
|
492
|
|
Fuel
|
297
|
|
|
187
|
|
Food
|
251
|
|
|
247
|
|
Other ship
operating
|
661
|
|
|
604
|
|
Tour and
other
|
13
|
|
|
14
|
|
|
2,435
|
|
|
2,243
|
|
Selling and
administrative
|
549
|
|
|
551
|
|
Depreciation and
amortization
|
439
|
|
|
423
|
|
|
3,423
|
|
|
3,217
|
|
Operating
Income
|
368
|
|
|
434
|
|
Nonoperating
Income (Expense)
|
|
|
|
Interest
income
|
2
|
|
|
2
|
|
Interest expense, net
of capitalized interest
|
(51)
|
|
|
(52)
|
|
Gains (losses) on
fuel derivatives, net (a)
|
27
|
|
|
(236)
|
|
Other income
(expense), net
|
8
|
|
|
(5)
|
|
|
(14)
|
|
|
(291)
|
|
Income Before
Income Taxes
|
354
|
|
|
143
|
|
Income Tax
Expense, Net
|
(2)
|
|
|
(1)
|
|
Net
Income
|
$
|
352
|
|
|
$
|
142
|
|
Earnings Per
Share
|
|
|
|
Basic
|
$
|
0.48
|
|
|
$
|
0.18
|
|
Diluted
|
$
|
0.48
|
|
|
$
|
0.18
|
|
|
|
|
|
Dividends Declared
Per Share
|
$
|
0.35
|
|
|
$
|
0.30
|
|
Weighted-Average
Shares Outstanding - Basic
|
725
|
|
|
766
|
|
Weighted-Average
Shares Outstanding - Diluted
|
728
|
|
|
769
|
|
(a)
|
During the three
months ended February 28/29, 2017 and 2016, our gains (losses) on
fuel derivatives, net include net unrealized gains (losses) of $72
million and $(145) million and realized (losses) of $(45) million
and $(91) million, respectively.
|
CARNIVAL
CORPORATION & PLC CONSOLIDATED BALANCE
SHEETS (UNAUDITED)
(in millions, except
par values)
|
|
|
February 28,
2017
|
|
November 30,
2016
|
|
ASSETS
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
437
|
|
|
$
|
603
|
|
|
Trade and other
receivables, net
|
307
|
|
|
298
|
|
|
Inventories
|
361
|
|
|
322
|
|
|
Prepaid expenses and
other
|
492
|
|
|
466
|
|
|
Total current
assets
|
1,597
|
|
|
1,689
|
|
|
Property and
Equipment, Net
|
32,328
|
|
|
32,429
|
|
|
Goodwill
|
2,911
|
|
|
2,910
|
|
|
Other
Intangibles
|
1,279
|
|
|
1,275
|
|
|
Other
Assets
|
588
|
|
|
578
|
|
(a)
|
|
$
|
38,703
|
|
|
$
|
38,881
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
Short-term
borrowings
|
$
|
169
|
|
|
$
|
457
|
|
|
Current portion of
long-term debt
|
1,127
|
|
|
640
|
|
|
Accounts
payable
|
669
|
|
|
713
|
|
|
Accrued liabilities
and other
|
1,766
|
|
|
1,740
|
|
|
Customer
deposits
|
3,734
|
|
|
3,522
|
|
|
Total current
liabilities
|
7,465
|
|
|
7,072
|
|
|
Long-Term
Debt
|
7,796
|
|
|
8,302
|
|
(a)
|
Other Long-Term
Liabilities
|
782
|
|
|
910
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
|
Common stock of
Carnival Corporation, $0.01 par value; 1,960 shares authorized; 655
shares at 2017 and 654 shares at 2016 issued
|
7
|
|
|
7
|
|
|
Ordinary shares of
Carnival plc, $1.66 par value; 217 shares at 2017 and 2016
issued
|
358
|
|
|
358
|
|
|
Additional paid-in
capital
|
8,660
|
|
|
8,632
|
|
|
Retained
earnings
|
21,939
|
|
|
21,843
|
|
|
Accumulated other
comprehensive loss
|
(2,440)
|
|
|
(2,454)
|
|
|
Treasury stock, 118
shares at 2017 and 2016 of Carnival Corporation and 28 shares at
2017 and 27 shares at 2016 of Carnival plc, at cost
|
(5,864)
|
|
|
(5,789)
|
|
|
Total shareholders'
equity
|
22,660
|
|
|
22,597
|
|
|
|
$
|
38,703
|
|
|
$
|
38,881
|
|
|
(a)
|
On December 1, 2016,
we adopted the Financial Accounting Standards Board's Interest -
Imputation of Interest and reclassified $55 million from Other
Assets to Long-Term Debt on our November 30, 2016 Consolidated
Balance Sheet.
|
CARNIVAL
CORPORATION & PLC OTHER INFORMATION
|
|
|
Three Months
Ended
February 28/29,
|
|
2017
|
|
2016
|
STATISTICAL
INFORMATION
|
|
|
|
ALBDs
(in thousands) (a)
|
20,024
|
|
|
19,290
|
|
Occupancy percentage (b)
|
104.6
|
%
|
|
104.0
|
%
|
Passengers carried (in thousands)
|
2,769
|
|
|
2,559
|
|
Fuel
consumption in metric tons (in thousands)
|
818
|
|
|
816
|
|
Fuel
consumption in metric tons per thousand ALBDs
|
40.9
|
|
|
42.3
|
|
Fuel
cost per metric ton consumed
|
$
|
362
|
|
|
$
|
229
|
|
Currencies
|
|
|
|
U.S. dollar to
euro
|
$
|
1.06
|
|
|
$
|
1.10
|
|
U.S. dollar to
sterling
|
$
|
1.24
|
|
|
$
|
1.45
|
|
U.S. dollar to
Australian dollar
|
$
|
0.75
|
|
|
$
|
0.71
|
|
|
|
|
|
CASH FLOW
INFORMATION (in millions)
|
|
|
|
Cash from
operations
|
$
|
932
|
|
|
$
|
798
|
|
Capital
expenditures
|
$
|
412
|
|
|
$
|
330
|
|
Dividends
paid
|
$
|
254
|
|
|
$
|
232
|
|
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):
|
|
|
Three Months Ended
February 28/29,
|
|
2017
|
|
2017
Constant
Dollar
|
|
2016
|
Passenger ticket
revenues
|
$
|
2,804
|
|
|
$
|
2,881
|
|
|
$
|
2,718
|
|
Onboard and other
revenues
|
978
|
|
|
993
|
|
|
923
|
|
Gross cruise
revenues
|
3,782
|
|
|
3,874
|
|
|
3,641
|
|
Less cruise
costs
|
|
|
|
|
|
Commissions, transportation
and other
|
(569)
|
|
|
(587)
|
|
|
(582)
|
|
Onboard and other
|
(125)
|
|
|
(127)
|
|
|
(117)
|
|
|
(694)
|
|
|
(714)
|
|
|
(699)
|
|
Net passenger ticket
revenues
|
2,235
|
|
|
2,294
|
|
|
2,136
|
|
Net onboard and other
revenues
|
853
|
|
|
866
|
|
|
806
|
|
Net cruise
revenues
|
$
|
3,088
|
|
|
$
|
3,160
|
|
|
$
|
2,942
|
|
ALBDs
|
20,024,045
|
|
|
20,024,045
|
|
|
19,289,910
|
|
|
|
|
|
|
|
Gross revenue
yields
|
$
|
188.87
|
|
|
$
|
193.44
|
|
|
$
|
188.77
|
|
% increase vs.
2016
|
0.1
|
%
|
|
2.5
|
%
|
|
|
Net revenue
yields
|
$
|
154.22
|
|
|
$
|
157.75
|
|
|
$
|
152.50
|
|
% increase vs.
2016
|
1.1
|
%
|
|
3.4
|
%
|
|
|
Net passenger ticket revenue yields
|
$
|
111.60
|
|
|
$
|
114.53
|
|
|
$
|
110.71
|
|
% increase vs.
2016
|
0.8
|
%
|
|
3.4
|
%
|
|
|
Net onboard and other
revenue yields
|
$
|
42.62
|
|
|
$
|
43.22
|
|
|
$
|
41.78
|
|
% increase vs.
2016
|
2.0
|
%
|
|
3.4
|
%
|
|
|
|
|
|
Three Months Ended
February 28/29,
|
|
2017
|
|
2017
Constant
Currency
|
|
2016
|
Net passenger ticket
revenues
|
$
|
2,235
|
|
|
$
|
2,308
|
|
|
$
|
2,136
|
|
Net onboard and other
revenues
|
853
|
|
|
861
|
|
|
806
|
|
Net cruise
revenues
|
$
|
3,088
|
|
|
$
|
3,169
|
|
|
$
|
2,942
|
|
ALBDs
|
20,024,045
|
|
|
20,024,045
|
|
|
19,289,910
|
|
|
|
|
|
|
|
Net revenue
yields
|
$
|
154.22
|
|
|
$
|
158.25
|
|
|
$
|
152.50
|
|
% increase vs.
2016
|
1.1
|
%
|
|
3.8
|
%
|
|
|
Net passenger ticket revenue yields
|
$
|
111.60
|
|
|
$
|
115.26
|
|
|
$
|
110.71
|
|
%
increase vs. 2016
|
0.8
|
%
|
|
4.1
|
%
|
|
|
Net onboard and other revenue yields
|
$
|
42.62
|
|
|
$
|
42.99
|
|
|
$
|
41.78
|
|
%
increase vs. 2016
|
2.0
|
%
|
|
2.9
|
%
|
|
|
|
(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):
|
|
|
Three Months Ended
February 28/29,
|
|
2017
|
|
2017
Constant
Dollar
|
|
2016
|
Cruise operating
expenses
|
$
|
2,422
|
|
|
$
|
2,478
|
|
|
$
|
2,229
|
|
Cruise selling and
administrative expenses
|
546
|
|
|
558
|
|
|
549
|
|
Gross cruise
costs
|
2,968
|
|
|
3,036
|
|
|
2,778
|
|
Less cruise costs
included above
|
|
|
|
|
|
Commissions, transportation
and other
|
(569)
|
|
|
(587)
|
|
|
(582)
|
|
Onboard and other
|
(125)
|
|
|
(127)
|
|
|
(117)
|
|
Gain on ship sale
(c)
|
—
|
|
|
—
|
|
|
2
|
|
Restructuring expenses
(c)
|
—
|
|
|
—
|
|
|
—
|
|
Other (c)
|
1
|
|
|
1
|
|
|
(16)
|
|
Net cruise
costs
|
2,275
|
|
|
2,323
|
|
|
2,065
|
|
Less fuel
|
(297)
|
|
|
(297)
|
|
|
(187)
|
|
Net cruise costs
excluding fuel
|
$
|
1,978
|
|
|
$
|
2,026
|
|
|
$
|
1,878
|
|
ALBDs
|
20,024,045
|
|
|
20,024,045
|
|
|
19,289,910
|
|
|
|
|
|
|
|
Gross cruise costs
per ALBD
|
$
|
148.24
|
|
|
$
|
151.60
|
|
|
$
|
144.02
|
|
% increase vs.
2016
|
2.9
|
%
|
|
5.3
|
%
|
|
|
Net cruise costs
excluding fuel per ALBD
|
$
|
98.81
|
|
|
$
|
101.13
|
|
|
$
|
97.35
|
|
% increase vs.
2016
|
1.5
|
%
|
|
3.9
|
%
|
|
|
|
Three Months Ended
February 28/29,
|
|
2017
|
|
2017
Constant
Currency
|
|
2016
|
Net cruise costs
excluding fuel
|
$
|
1,978
|
|
|
$
|
2,012
|
|
|
$
|
1,878
|
|
ALBDs
|
20,024,045
|
|
|
20,024,045
|
|
|
19,289,910
|
|
|
|
|
|
|
|
Net cruise costs
excluding fuel per ALBD
|
$
|
98.81
|
|
|
$
|
100.47
|
|
|
$
|
97.35
|
|
% increase vs.
2016
|
1.5
|
%
|
|
3.2
|
%
|
|
|
|
(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) (a):
|
|
|
Three Months
Ended
February 28/29,
|
|
2017
|
|
2016
|
Net
income
|
|
|
|
U.S. GAAP net
income
|
$
|
352
|
|
|
$
|
142
|
|
Unrealized (gains) losses on
fuel derivatives, net (b)
|
(72)
|
|
|
145
|
|
Gain on ship sale
(c)
|
—
|
|
|
(2)
|
|
Restructuring expenses
(c)
|
—
|
|
|
—
|
|
Other (c)
|
(1)
|
|
|
16
|
|
Adjusted net
income
|
$
|
279
|
|
|
$
|
301
|
|
Weighted-average
shares outstanding
|
728
|
|
|
769
|
|
|
|
|
|
Earnings per
share
|
|
|
|
U.S. GAAP earnings per
share
|
$
|
0.48
|
|
|
$
|
0.18
|
|
Unrealized (gains) losses on
fuel derivatives, net (b)
|
(0.10)
|
|
|
0.19
|
|
Gain on ship sale
(c)
|
—
|
|
|
—
|
|
Restructuring expenses
(c)
|
—
|
|
|
—
|
|
Other (c)
|
—
|
|
|
0.02
|
|
Adjusted earnings per
share
|
$
|
0.38
|
|
|
$
|
0.39
|
|
|
|
|
|
Notes to
Non-GAAP Financial Measures
|
|
|
(a)
|
Non-GAAP Financial
Measures
|
|
|
|
We use net cruise
revenues per ALBD ("net revenue yields"), net cruise costs
excluding fuel per ALBD, adjusted net income and adjusted earnings
per share as non-GAAP financial measures of our cruise segments'
and the company's financial performance. These non-GAAP
financial measures are provided along with U.S. GAAP gross cruise
revenues per ALBD ("gross revenue yields"), gross cruise costs per
ALBD and U.S. GAAP net income and U.S. GAAP earnings per
share.
|
|
|
|
We believe that gains
and losses on ship sales and ship impairments and restructuring and
certain 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 non-GAAP
measures. Net revenue yields and net cruise costs excluding fuel
per ALBD enable us to separate the impact of predictable capacity
or ALBD changes from price and other 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. GAAP
consolidated financial statements.
|
|
|
|
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.
|
|
|
|
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.
|
|
|
|
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 cruise costs
excluding fuel per ALBD is the measure 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 as well as
fuel expense to calculate net cruise costs without fuel to avoid
duplicating these variable costs in our non-GAAP financial
measures. Substantially all of our net cruise costs excluding fuel
are largely fixed, except for the impact of changing prices once
the number of ALBDs has been determined.
|
|
|
|
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 without fuel or forecasted U.S. GAAP net income to
forecasted adjusted net income or forecasted U.S. GAAP earnings per
share to forecasted adjusted earnings per share because preparation
of meaningful U.S. GAAP forecasts of gross cruise revenues, gross
cruise costs, net income and earnings per share would require
unreasonable effort. We are unable to predict, without unreasonable
effort, the future movement of foreign exchange rates and fuel
prices. 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. We are unable to determine the future impact of gains
or losses on ships sales, restructuring expenses and other non-core
gains and charges.
|
|
|
|
Constant Dollar
and Constant Currency
|
|
|
|
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 net revenue
yields, net passenger revenue yields, net onboard and other revenue
yields and net cruise costs excluding fuel per ALBD on a "constant
dollar" and "constant currency" basis assuming the 2017 periods'
currency exchange rates have remained constant with the 2016
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 American 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)
|
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.
|
|
|
(c)
|
We believe that gains
and losses on ship sales and ship impairments and restructuring and
other expenses are not part of our core operating business and are
not an indication of our future earnings performance. Therefore, we
believe it is more meaningful for gains and losses on ship sales
and ship impairments and restructuring and other non-core gains and
charges 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.
|
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SOURCE Carnival Corporation & plc