Carnival
Corporation & plc Reports Record Second Quarter Results
Record second quarter revenues and
adjusted earnings
MIAMI, June 25, 2018
/PRNewswire/ -- Carnival Corporation & plc (NYSE/LSE: CCL;
NYSE: CUK) announced U.S. GAAP net income of $561 million, or $0.78 diluted EPS, for the second quarter of
2018, higher than U.S. GAAP net income for the second quarter of
2017 of $379 million, or $0.52 diluted EPS. Second quarter 2018 adjusted
net income of $489 million, or
$0.68 adjusted EPS, was higher than
adjusted net income of $378 million,
or $0.52 adjusted EPS, for the second
quarter of 2017. Adjusted net income excludes unrealized gains and
losses on fuel derivatives and other net charges, totaling
$72 million in net gains for the
second quarter of 2018 and $1 million
in net gains for the second quarter of 2017. Revenues for the
second quarter of 2018 were $4.4
billion, higher than the $3.9
billion in the prior year.
Carnival Corporation & plc President and Chief Executive
Officer Arnold Donald stated, "We
delivered another strong quarter, again achieving record adjusted
earnings on record revenues and exceeding the high end of our
guidance range. Strong operational execution drove a 30 percent
increase in adjusted earnings affirming the strength of our core
strategy to create demand that outpaces measured capacity growth
through outstanding guest experience efforts coupled with
innovative actions to increase consideration for cruising across
all global markets."
Key information for the second quarter of 2018 compared to the
second quarter of 2017:
-
Gross revenue yields (revenue per available lower berth day or
"ALBD") increased 8.8 percent. In constant currency, net
revenue yields increased 4.8 percent exceeding March guidance of up
2.5 to 3.5 percent.
-
Gross cruise costs including fuel per ALBD increased 8.2
percent. In constant currency, net cruise costs excluding fuel per
ALBD increased 3.6 percent, better than March guidance of up 4.0 to
5.0 percent, principally due to the timing of expenses between
quarters.
-
Changes in fuel prices (including realized fuel derivatives) and
currency exchange rates increased earnings by $0.01 per share.
Highlights from the second quarter include the delivery of
Carnival Cruise Line's 26th ship in its fleet, Carnival
Horizon in March 2018.
Additionally, in April 2018 Seabourn
took delivery of the 5th all-suite ship in its ultra luxury fleet,
Seabourn Ovation. As a result of the strong guest response
to sailings to Cuba, Carnival
Cruise Line received approval for more than 20 additional calls,
bringing the total to 40 calls to Cuba in 2019, departing from home-ports in
Miami, Fort Lauderdale, Tampa, and Charleston. Also during the
quarter, Carnival Cruise Line unveiled the largest, most
technologically advanced operations center in the cruise industry.
Carnival Corporation & plc increased its quarterly dividend
from $0.45 to $0.50 and replenished the share repurchase
program to $1 billion.
2018 Outlook
At this time, cumulative advanced bookings for the next three
quarters are in line with the prior year at higher prices. Since
March, booking volumes for the next three quarters have been
running slightly ahead of prior year at prices that are in line
with the prior year.
Donald added, "Strong operational results coupled with sustained
strength in booking trends have mitigated the unfavorable
$0.19 per share impact of fuel and
currency moving against us since our last update. We remain on
track to deliver double digit return on invested capital in 2018.
In addition, we have accelerated returns to shareholders through
our recent dividend increase, with annual dividend distributions
now over $1.4 billion and the
reauthorization of up to $1 billion
in share repurchases." The company invested over $375 million in share repurchases since the
beginning of the quarter, bringing the cumulative total of
repurchases to date to over $3.7
billion since late 2015.
Based on current booking trends, the company now expects full
year 2018 net revenue yields in constant currency to be up
approximately 3.0 percent compared to the prior year, better than
March guidance of up approximately 2.5 percent. The company still
expects full year net cruise costs excluding fuel per ALBD in
constant currency compared to the prior year to be up approximately
1.0 percent, in line with March guidance. Changes in fuel prices
(including realized fuel derivatives) and currency exchange rates
are expected to decrease earnings by $0.19 per share compared to March guidance and
$0.13 per share compared to the prior
year.
Taking the above factors into consideration, the company expects
full year 2018 adjusted earnings per share to be in the range of
$4.15 to $4.25 compared to 2017 adjusted earnings per
share of $3.82.
Third Quarter 2018 Outlook
Third quarter constant currency net revenue yields are expected
to be up approximately 1.5 to 2.5 percent compared to third quarter
2017. Net cruise costs excluding fuel per ALBD in constant currency
for the third quarter are expected to increase by approximately 3.0
to 4.0 percent compared to third quarter 2017. Changes in fuel
prices (including realized derivatives) and currency exchange rates
are expected to decrease earnings by $0.06 per share compared to the prior year. Based
on the above factors, the company expects adjusted earnings per
share for the third quarter 2018 to be in the range of $2.25 to $2.29
versus 2017 adjusted earnings per share of $2.29.
Selected Key Metrics
|
|
Full Year
2018 |
|
Third Quarter
2018 |
Year over year change: |
|
Current
Dollars |
|
Constant
Currency |
|
Current
Dollars |
|
Constant
Currency |
Net revenue yields |
|
Approx 5.0% |
|
Approx 3.0% |
|
2.5 to 3.5% |
|
1.5 to 2.5% |
Net cruise costs excl. fuel / ALBD |
|
Approx 3.5% |
|
Approx 1.0% |
|
4.0 to 5.0% |
|
3.0 to 4.0% |
|
Full Year
2018 |
|
Third Quarter 2018 |
Fuel cost per metric ton consumed |
$479 |
|
$525 |
Fuel consumption (metric tons in thousands) |
3,305 |
|
820 |
Currencies (USD to 1) |
|
|
|
AUD |
$0.76 |
|
$0.74 |
CAD |
$0.77 |
|
$0.75 |
EUR |
$1.18 |
|
$1.16 |
GBP |
$1.35 |
|
$1.32 |
RMB |
$0.16 |
|
$0.15 |
|
Three Months
Ended
May 31, |
|
Six Months Ended
May 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net income (in millions) |
$ |
561 |
|
|
$ |
379 |
|
|
$ |
951 |
|
|
$ |
730 |
|
Adjusted net income (in millions) (a) |
$ |
489 |
|
|
$ |
378 |
|
|
$ |
864 |
|
|
$ |
657 |
|
Earnings per share-diluted |
$ |
0.78 |
|
|
$ |
0.52 |
|
|
$ |
1.33 |
|
|
$ |
1.00 |
|
Adjusted earnings per share-diluted (a) |
$ |
0.68 |
|
|
$ |
0.52 |
|
|
$ |
1.21 |
|
|
$ |
0.90 |
|
(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 2018 second
quarter results. This call can be listened to live, and additional
information can be obtained, via Carnival Corporation & plc's
website at www.carnivalcorp.com and www.carnivalplc.com.
Carnival Corporation & plc is the world's largest
leisure travel company and among the most profitable and
financially strong in the cruise and vacation industries, with a
portfolio of 10 dynamic brands that include nine of the world's
leading cruise lines. With operations in North
America, Australia, Europe and Asia, its portfolio features Carnival Cruise
Line, Princess Cruises, Holland America Line, Seabourn,
P&O Cruises (Australia), Costa Cruises, AIDA Cruises,
P&O Cruises (UK) and Cunard, as well as Fathom, the
corporation's immersion and enrichment experience brand.
Together, the corporation's cruise lines operate 103 ships with
234,000 lower berths visiting over 700 ports around the world, with
18 new ships scheduled to be delivered between 2018 and
2023. 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.
In 2017, Fast Company recognized Carnival Corporation as
being among the "Top 10 Most Innovative Companies" in both the
design and travel categories. Fast Company specifically
recognized Carnival Corporation for its work in developing Ocean
Medallion™, a high-tech wearable device that enables the world's
first interactive guest experience platform capable of
transforming vacation travel into a highly personalized and
elevated level of customized service.
Additional information can be found on www.carnival.com,
www.princess.com, www.hollandamerica.com, www.seabourn.com,
www.pocruises.com.au, www.costacruise.com, www.aida.de,
www.pocruises.com, www.cunard.com, and www.fathom.org.
Cautionary Note Concerning Factors
That May Affect Future Results
Carnival Corporation and Carnival plc and their respective
subsidiaries are referred to collectively in this document as
"Carnival Corporation & plc," "our," "us" and "we." Some of the
statements, estimates or projections contained in this document 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," "outlook," and similar
expressions of future intent or the negative of such terms.
Forward-looking statements include those statements that relate
to our outlook and financial position including, but not limited
to, statements regarding:
• 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 by our forward-looking statements. 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:
-
The demand for cruises may decline due to adverse world events
impacting the ability or desire of people to travel, including
conditions affecting the safety and security of travel,
government regulations and requirements, and decline in consumer
confidence
-
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
-
Changes in and compliance with laws and regulations relating to
environment, health, safety, security, data privacy and protection,
tax and anti-corruption under which we operate may lead to
litigations, enforcement actions, fines, or penalties
-
Disruptions and other damages to our information technology and
other networks and operations, breaches in data security, lapses in
data privacy, and failure to keep pace with developments in
technology
-
Ability to recruit, develop and retain qualified shipboard
personnel who live on ships away from home for extended periods of
time
-
Increases in fuel prices and availability of fuel supply
-
Fluctuations in foreign currency exchange rates
-
Overcapacity and competition in the cruise ship and land-based
vacation industry
-
Continuing financial viability of our travel agent distribution
system, air service providers and other key vendors in our supply
chain, as well as 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, as well as increases to our
repairs and maintenance expenses and refurbishment costs as our
fleet ages
-
Geographic regions in which we try to expand our business may be
slow to develop and ultimately not develop how we expect
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 document, 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
May 31, |
|
Six Months Ended
May 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenues |
|
|
|
|
|
|
|
Cruise |
|
|
|
|
|
|
|
Passenger ticket |
$ |
3,193 |
|
|
$ |
2,872 |
|
|
$ |
6,341 |
|
|
$ |
5,676 |
|
Onboard and other |
1,122 |
|
|
1,036 |
|
|
2,192 |
|
|
2,014 |
|
Tour and other |
42 |
|
|
37 |
|
|
55 |
|
|
46 |
|
|
4,357 |
|
|
3,945 |
|
|
8,589 |
|
|
7,736 |
|
Operating Costs and Expenses |
|
|
|
|
|
|
|
Cruise |
|
|
|
|
|
|
|
Commissions, transportation and other |
577 |
|
|
513 |
|
|
1,240 |
|
|
1,082 |
|
Onboard and other |
138 |
|
|
129 |
|
|
278 |
|
|
253 |
|
Payroll and related |
543 |
|
|
513 |
|
|
1,101 |
|
|
1,032 |
|
Fuel |
373 |
|
|
310 |
|
|
731 |
|
|
607 |
|
Food |
265 |
|
|
253 |
|
|
530 |
|
|
504 |
|
Other ship operating |
749 |
|
|
685 |
|
|
1,460 |
|
|
1,346 |
|
Tour and other |
36 |
|
|
33 |
|
|
50 |
|
|
46 |
|
|
2,681 |
|
|
2,436 |
|
|
5,390 |
|
|
4,870 |
|
Selling and administrative |
605 |
|
|
553 |
|
|
1,221 |
|
|
1,102 |
|
Depreciation and amortization |
512 |
|
|
456 |
|
|
1,000 |
|
|
896 |
|
|
3,798 |
|
|
3,445 |
|
|
7,611 |
|
|
6,868 |
|
Operating Income |
559 |
|
|
500 |
|
|
978 |
|
|
868 |
|
Nonoperating Income (Expense) |
|
|
|
|
|
|
|
Interest income |
3 |
|
|
2 |
|
|
6 |
|
|
4 |
|
Interest expense, net of capitalized interest |
(49) |
|
|
(50) |
|
|
(98) |
|
|
(101) |
|
Gains (losses) on fuel derivatives, net (a) |
41 |
|
|
(53) |
|
|
57 |
|
|
(27) |
|
Other income (expense), net |
10 |
|
|
(15) |
|
|
11 |
|
|
(7) |
|
|
5 |
|
|
(116) |
|
|
(24) |
|
|
(131) |
|
Income Before Income Taxes |
564 |
|
|
384 |
|
|
955 |
|
|
737 |
|
Income Tax Expense, Net |
(3) |
|
|
(5) |
|
|
(3) |
|
|
(7) |
|
Net Income |
$ |
561 |
|
|
$ |
379 |
|
|
$ |
951 |
|
|
$ |
730 |
|
Earnings Per Share |
|
|
|
|
|
|
|
Basic |
$ |
0.79 |
|
|
$ |
0.52 |
|
|
$ |
1.33 |
|
|
$ |
1.01 |
|
Diluted |
$ |
0.78 |
|
|
$ |
0.52 |
|
|
$ |
1.33 |
|
|
$ |
1.00 |
|
|
|
|
|
|
|
|
|
Dividends Declared Per Share |
$ |
0.50 |
|
|
$ |
0.40 |
|
|
$ |
0.95 |
|
|
$ |
0.75 |
|
Weighted-Average Shares Outstanding -
Basic |
714 |
|
|
724 |
|
|
715 |
|
|
724 |
|
Weighted-Average Shares Outstanding -
Diluted |
715 |
|
|
727 |
|
|
717 |
|
|
727 |
|
(a) |
During the three months ended May 31, 2018 and
2017, our gains (losses) on fuel derivatives, net include net
unrealized gains (losses) of $50 million and $(2) million and
realized losses of $(9) million and $(51) million, respectively.
During the six months ended May 31, 2018 and 2017, our gains
(losses) on fuel derivatives, net include net unrealized gains of
$82 million and $69 million and realized losses of $(25) million
and $(96) million, respectively. |
CARNIVAL CORPORATION
& PLC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except par values) |
|
|
May 31,
2018 |
|
November 30,
2017 |
ASSETS |
|
|
|
Current Assets |
|
|
|
Cash and cash equivalents |
$ |
1,053 |
|
|
$ |
395 |
|
Trade and other receivables, net |
342 |
|
|
312 |
|
Inventories |
402 |
|
|
387 |
|
Prepaid expenses and other |
481 |
|
|
502 |
|
Total current assets |
2,278 |
|
|
1,596 |
|
Property and Equipment, Net |
35,227 |
|
|
34,430 |
|
Goodwill |
2,950 |
|
|
2,967 |
|
Other Intangibles |
1,183 |
|
|
1,200 |
|
Other Assets |
546 |
|
|
585 |
|
|
$ |
42,184 |
|
|
$ |
40,778 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
Current Liabilities |
|
|
|
Short-term borrowings |
$ |
837 |
|
|
$ |
485 |
|
Current portion of long-term debt |
848 |
|
|
1,717 |
|
Accounts payable |
745 |
|
|
762 |
|
Accrued liabilities and other |
1,571 |
|
|
1,877 |
|
Customer deposits |
5,308 |
|
|
3,958 |
|
Total current liabilities |
9,308 |
|
|
8,800 |
|
Long-Term Debt |
8,172 |
|
|
6,993 |
|
Other Long-Term Liabilities |
771 |
|
|
769 |
|
|
|
|
|
Shareholders' Equity |
|
|
|
Common stock of Carnival Corporation, $0.01 par
value; 1,960 shares authorized; 656
shares at 2018 and 655 shares at 2017
issued |
7 |
|
|
7 |
|
Ordinary shares of Carnival plc, $1.66 par value;
217 shares at 2018 and 2017 issued |
358 |
|
|
358 |
|
Additional paid-in capital |
8,721 |
|
|
8,690 |
|
Retained earnings |
23,564 |
|
|
23,292 |
|
Accumulated other comprehensive loss |
(1,855) |
|
|
(1,782) |
|
Treasury stock, 125 shares at 2018 and 122 shares
at 2017 of Carnival Corporation and 37
shares at 2018 and 32 shares at 2017 of Carnival
plc, at cost |
(6,862) |
|
|
(6,349) |
|
Total shareholders' equity |
23,933 |
|
|
24,216 |
|
|
$ |
42,184 |
|
|
$ |
40,778 |
|
CARNIVAL
CORPORATION & PLC
OTHER INFORMATION |
|
|
Three Months
Ended
May 31, |
|
Six Months Ended
May 31, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
STATISTICAL INFORMATION |
|
|
|
|
|
|
|
ALBDs (in thousands) (a) (b) |
20,690 |
|
|
20,397 |
|
|
41,151 |
|
|
40,421 |
|
Occupancy percentage (c) |
105.7 |
% |
|
104.1 |
% |
|
105.2 |
% |
|
104.3 |
% |
Passengers carried (in thousands) |
2,971 |
|
|
2,906 |
|
|
5,831 |
|
|
5,675 |
|
Fuel consumption in metric tons (in
thousands) |
819 |
|
|
830 |
|
|
1,640 |
|
|
1,649 |
|
Fuel consumption in metric tons per thousand
ALBDs |
39.6 |
|
|
40.7 |
|
|
39.9 |
|
|
40.8 |
|
Fuel cost per metric ton consumed |
$ |
455 |
|
|
$ |
374 |
|
|
$ |
446 |
|
|
$ |
368 |
|
Currencies (USD to 1) |
|
|
|
|
|
|
|
AUD |
$ |
0.77 |
|
|
$ |
0.75 |
|
|
$ |
0.77 |
|
|
$ |
0.75 |
|
CAD |
$ |
0.78 |
|
|
$ |
0.74 |
|
|
$ |
0.79 |
|
|
$ |
0.75 |
|
EUR |
$ |
1.21 |
|
|
$ |
1.08 |
|
|
$ |
1.21 |
|
|
$ |
1.07 |
|
GBP |
$ |
1.38 |
|
|
$ |
1.26 |
|
|
$ |
1.38 |
|
|
$ |
1.25 |
|
RMB |
$ |
0.16 |
|
|
$ |
0.15 |
|
|
$ |
0.16 |
|
|
$ |
0.15 |
|
|
|
|
|
|
|
|
|
CASH FLOW INFORMATION (in millions) |
|
|
|
|
|
|
|
Cash from operations |
$ |
2,023 |
|
|
$ |
1,917 |
|
|
$ |
3,087 |
|
|
$ |
2,849 |
|
Capital expenditures |
$ |
1,627 |
|
|
$ |
1,447 |
|
|
$ |
2,201 |
|
|
$ |
1,859 |
|
Dividends paid |
$ |
323 |
|
|
$ |
253 |
|
|
$ |
646 |
|
|
$ |
507 |
|
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 and is 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) |
For the three months ended May 31, 2018 compared
to the three months ended May 31, 2017, we had a 1.4% capacity
increase in ALBDs comprised of a 2.1% capacity increase in our
North America and Australia segment ("NAA") and a 0.3% capacity
increase in our Europe and Asia segment ("EA"). |
|
|
|
Our NAA capacity increase was caused by: |
|
• Partial quarter impact from one
Princess Cruises 3,560-passenger capacity ship that entered into
service in April 2017 |
|
• Partial quarter impact from one
Carnival Cruise Line 3,970-passenger capacity ship that entered
into service in April 2018 |
|
• Partial quarter impact from one
Seabourn 600-passenger capacity ship that entered into service in
May 2018 |
|
|
|
These increases were partially offset by the
partial quarter impact from one P&O Cruises (Australia)
1,550-passenger capacity ship removed from service in April
2017. |
|
|
|
Our EA segment's capacity increase was caused
by: |
|
• Full quarter impact from one AIDA
Cruises 3,290-passenger capacity ship that entered into service in
June 2017 |
|
|
|
These increases were partially offset
by: |
|
• Partial quarter impact from one
P&O Cruises (UK) 700-passenger capacity ship removed from
service in March 2018 |
|
• Partial quarter impact from one
Costa Cruises 1,300-passenger capacity ship removed from service in
April 2018 |
|
|
|
For the six months ended May 31, 2018 compared to
the six months ended May 31, 2017, we had a 1.8% capacity increase
in ALBDs comprised of a 1.8% capacity increase in our NAA segment
and a 1.9% capacity increase in our EA segment. |
|
|
|
Our NAA capacity increase was caused by: |
|
• Partial period impact from one
Princess Cruises 3,560-passenger capacity ship that entered into
service in April 2017 |
|
• Partial period impact from one
Carnival Cruise Line 3,970-passenger capacity ship that entered
into service in April 2018 |
|
•
Partial period impact from one Seabourn 600-passenger capacity ship
that entered into service in May 2018 |
|
|
|
These increases were partially offset by the
partial period impact from one P&O Cruises (Australia)
1,550-passenger capacity ship removed from service in April
2017. |
|
|
|
Our EA segment's capacity increase was caused
by: |
|
• Full period impact from one AIDA
Cruises 3,290-passenger capacity ship that entered into service in
June 2017 |
|
|
|
These increases were partially offset
by: |
|
• Partial period impact from one
P&O Cruises (UK) 700-passenger capacity ship removed from
service in March 2018 |
|
• Partial period impact from one Costa
Cruises 1,300-passenger capacity ship removed from service in April
2018 |
|
|
(c) |
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: |
|
|
Three Months Ended
May 31, |
|
Six Months Ended
May 31, |
(dollars in millions, except yields) |
2018 |
|
2018
Constant
Dollar |
|
2017 |
|
2018 |
|
2018
Constant
Dollar |
|
2017 |
Passenger ticket revenues |
$ |
3,193 |
|
|
$ |
3,072 |
|
|
$ |
2,872 |
|
|
$ |
6,341 |
|
|
$ |
6,072 |
|
|
$ |
5,676 |
|
Onboard and other revenues |
1,122 |
|
|
1,094 |
|
|
1,036 |
|
|
2,192 |
|
|
2,132 |
|
|
2,014 |
|
Gross cruise revenues |
4,315 |
|
|
4,167 |
|
|
3,908 |
|
|
8,534 |
|
|
8,204 |
|
|
7,690 |
|
Less cruise costs |
|
|
|
|
|
|
|
|
|
|
|
Commissions, transportation
and other |
(577) |
|
|
(551) |
|
|
(513) |
|
|
(1,240) |
|
|
(1,173) |
|
|
(1,082) |
|
Onboard and other |
(138) |
|
|
(134) |
|
|
(129) |
|
|
(278) |
|
|
(269) |
|
|
(253) |
|
|
(716) |
|
|
(685) |
|
|
(642) |
|
|
(1,518) |
|
|
(1,441) |
|
|
(1,335) |
|
Net passenger ticket revenues |
2,616 |
|
|
2,521 |
|
|
2,359 |
|
|
5,101 |
|
|
4,899 |
|
|
4,594 |
|
Net onboard and other revenues |
984 |
|
|
961 |
|
|
907 |
|
|
1,914 |
|
|
1,863 |
|
|
1,761 |
|
Net cruise revenues |
$ |
3,599 |
|
|
$ |
3,482 |
|
|
$ |
3,266 |
|
|
$ |
7,015 |
|
|
$ |
6,762 |
|
|
$ |
6,355 |
|
ALBDs |
20,689,903 |
|
|
20,689,903 |
|
|
20,396,773 |
|
|
41,151,485 |
|
|
41,151,485 |
|
|
40,420,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross revenue yields |
$ |
208.55 |
|
|
$ |
201.39 |
|
|
$ |
191.59 |
|
|
$ |
207.38 |
|
|
$ |
199.35 |
|
|
$ |
190.25 |
|
% increase |
8.8 |
% |
|
5.1 |
% |
|
|
|
9.0 |
% |
|
4.8 |
% |
|
|
Net revenue yields |
$ |
173.96 |
|
|
$ |
168.28 |
|
|
$ |
160.15 |
|
|
$ |
170.48 |
|
|
$ |
164.32 |
|
|
$ |
157.21 |
|
% increase |
8.6 |
% |
|
5.1 |
% |
|
|
|
8.4 |
% |
|
4.5 |
% |
|
|
Net passenger ticket revenue
yields |
$ |
126.43 |
|
|
$ |
121.85 |
|
|
$ |
115.66 |
|
|
$ |
123.96 |
|
|
$ |
119.05 |
|
|
$ |
113.65 |
|
% increase |
9.3 |
% |
|
5.4 |
% |
|
|
|
9.1 |
% |
|
4.7 |
% |
|
|
Net onboard and other
revenue yields |
$ |
47.54 |
|
|
$ |
46.43 |
|
|
$ |
44.49 |
|
|
$ |
46.52 |
|
|
$ |
45.28 |
|
|
$ |
43.56 |
|
% increase |
6.9 |
% |
|
4.4 |
% |
|
|
|
6.8 |
% |
|
3.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
May 31, |
|
Six Months Ended
May 31, |
(dollars in millions, except yields) |
2018 |
|
2018
Constant
Currency |
|
2017 |
|
2018 |
|
2018
Constant
Currency |
|
2017 |
Net passenger ticket revenues |
$ |
2,616 |
|
|
$ |
2,508 |
|
|
$ |
2,359 |
|
|
$ |
5,101 |
|
|
$ |
4,882 |
|
|
$ |
4,594 |
|
Net onboard and other revenues |
984 |
|
|
965 |
|
|
907 |
|
|
1,914 |
|
|
1,871 |
|
|
1,761 |
|
Net cruise revenues |
$ |
3,599 |
|
|
$ |
3,473 |
|
|
$ |
3,266 |
|
|
$ |
7,015 |
|
|
$ |
6,753 |
|
|
$ |
6,355 |
|
ALBDs |
20,689,903 |
|
|
20,689,903 |
|
|
20,396,773 |
|
|
41,151,485 |
|
|
41,151,485 |
|
|
40,420,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue yields |
$ |
173.96 |
|
|
$ |
167.84 |
|
|
$ |
160.15 |
|
|
$ |
170.48 |
|
|
$ |
164.10 |
|
|
$ |
157.21 |
|
% increase |
8.6 |
% |
|
4.8 |
% |
|
|
|
8.4 |
% |
|
4.4 |
% |
|
|
Net passenger ticket revenue
yields |
$ |
126.43 |
|
|
$ |
121.22 |
|
|
$ |
115.66 |
|
|
$ |
123.96 |
|
|
$ |
118.64 |
|
|
$ |
113.65 |
|
% increase |
9.3 |
% |
|
4.8 |
% |
|
|
|
9.1 |
% |
|
4.4 |
% |
|
|
Net onboard and other
revenue yields |
$ |
47.54 |
|
|
$ |
46.62 |
|
|
$ |
44.49 |
|
|
$ |
46.52 |
|
|
$ |
45.45 |
|
|
$ |
43.56 |
|
% increase |
6.9 |
% |
|
4.8 |
% |
|
|
|
6.8 |
% |
|
4.3 |
% |
|
|
|
(See Explanations of 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: |
|
|
Three Months Ended
May 31, |
|
Six Months Ended
May 31, |
(dollars in millions, except costs per
ALBD) |
2018 |
|
2018
Constant
Dollar |
|
2017 |
|
2018 |
|
2018
Constant
Dollar |
|
2017 |
Cruise operating expenses |
$ |
2,645 |
|
|
$ |
2,563 |
|
|
$ |
2,403 |
|
|
$ |
5,340 |
|
|
$ |
5,151 |
|
|
$ |
4,824 |
|
Cruise selling and administrative
expenses |
594 |
|
|
574 |
|
|
548 |
|
|
1,203 |
|
|
1,161 |
|
|
1,094 |
|
Gross cruise costs |
3,239 |
|
|
3,137 |
|
|
2,951 |
|
|
6,544 |
|
|
6,312 |
|
|
5,918 |
|
Less cruise costs included above |
|
|
|
|
|
|
|
|
|
|
|
Commissions, transportation and other |
(577) |
|
|
(551) |
|
|
(513) |
|
|
(1,240) |
|
|
(1,173) |
|
|
(1,082) |
|
Onboard and other |
(138) |
|
|
(134) |
|
|
(129) |
|
|
(278) |
|
|
(269) |
|
|
(253) |
|
Gains (losses) on ship sales and impairments |
28 |
|
|
25 |
|
|
4 |
|
|
12 |
|
|
8 |
|
|
4 |
|
Restructuring
expenses |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Other |
(1) |
|
|
(1) |
|
|
(1) |
|
|
(1) |
|
|
(1) |
|
|
— |
|
Net cruise costs |
2,551 |
|
|
2,476 |
|
|
2,312 |
|
|
5,037 |
|
|
4,877 |
|
|
4,587 |
|
Less fuel |
(373) |
|
|
(373) |
|
|
(310) |
|
|
(731) |
|
|
(731) |
|
|
(607) |
|
Net cruise costs excluding fuel |
$ |
2,178 |
|
|
$ |
2,103 |
|
|
$ |
2,002 |
|
|
$ |
4,305 |
|
|
$ |
4,146 |
|
|
$ |
3,980 |
|
ALBDs |
20,689,903 |
|
|
20,689,903 |
|
|
20,396,773 |
|
|
41,151,485 |
|
|
41,151,485 |
|
|
40,420,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross cruise costs per ALBD |
$ |
156.55 |
|
|
$ |
151.63 |
|
|
$ |
144.63 |
|
|
$ |
159.02 |
|
|
$ |
153.38 |
|
|
$ |
146.42 |
|
% increase |
8.2 |
% |
|
4.8 |
% |
|
|
|
8.6 |
% |
|
4.8 |
% |
|
|
Net cruise costs excluding fuel per
ALBD |
$ |
105.27 |
|
|
$ |
101.65 |
|
|
$ |
98.11 |
|
|
$ |
104.60 |
|
|
$ |
100.75 |
|
|
$ |
98.46 |
|
% increase |
7.3 |
% |
|
3.6 |
% |
|
|
|
6.2 |
% |
|
2.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
May 31, |
|
Six Months Ended
May 31, |
(dollars in millions, except costs per
ALBD) |
2018 |
|
2018
Constant
Currency |
|
2017 |
|
2018 |
|
2018
Constant
Currency |
|
2017 |
Net cruise costs excluding fuel |
$ |
2,178 |
|
|
$ |
2,103 |
|
|
$ |
2,002 |
|
|
$ |
4,305 |
|
|
$ |
4,144 |
|
|
$ |
3,980 |
|
ALBDs |
20,689,903 |
|
|
20,689,903 |
|
|
20,396,773 |
|
|
41,151,485 |
|
|
41,151,485 |
|
|
40,420,819 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cruise costs excluding fuel per
ALBD |
$ |
105.27 |
|
|
$ |
101.66 |
|
|
$ |
98.11 |
|
|
$ |
104.60 |
|
|
$ |
100.71 |
|
|
$ |
98.46 |
|
% increase |
7.3 |
% |
|
3.6 |
% |
|
|
|
6.2 |
% |
|
2.3 |
% |
|
|
|
(See Explanations of Non-GAAP
Financial Measures.) |
CARNIVAL
CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED) |
|
|
Three Months
Ended
May 31, |
|
Six Months Ended
May 31, |
(in millions, except per share data) |
2018 |
|
2017 |
|
2018 |
|
2017 |
Net income |
|
|
|
|
|
|
|
U.S. GAAP net
income |
$ |
561 |
|
|
$ |
379 |
|
|
$ |
951 |
|
|
$ |
730 |
|
Unrealized (gains) losses
on fuel derivatives, net |
(50) |
|
|
2 |
|
|
(82) |
|
|
(69) |
|
(Gains) losses on ship
sales and impairments |
(28) |
|
|
(4) |
|
|
(12) |
|
|
(4) |
|
Restructuring
expenses |
— |
|
|
— |
|
|
— |
|
|
— |
|
Other |
6 |
|
|
1 |
|
|
6 |
|
|
— |
|
Adjusted net
income |
$ |
489 |
|
|
$ |
378 |
|
|
$ |
864 |
|
|
$ |
657 |
|
Weighted-average shares outstanding |
715 |
|
|
727 |
|
|
717 |
|
|
727 |
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
U.S. GAAP earnings per
share |
$ |
0.78 |
|
|
$ |
0.52 |
|
|
$ |
1.33 |
|
|
$ |
1.00 |
|
Unrealized (gains) losses
on fuel derivatives, net |
(0.07) |
|
|
— |
|
|
(0.11) |
|
|
(0.10) |
|
(Gains) losses on ship
sales and impairments |
(0.04) |
|
|
— |
|
|
(0.02) |
|
|
— |
|
Restructuring
expenses |
— |
|
|
— |
|
|
— |
|
|
— |
|
Other |
0.01 |
|
|
— |
|
|
0.01 |
|
|
— |
|
Adjusted earnings per
share |
$ |
0.68 |
|
|
$ |
0.52 |
|
|
$ |
1.21 |
|
|
$ |
0.90 |
|
|
Explanations of
Non-GAAP Financial Measures
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.
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.
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.
We believe that gains and losses on ship sales, impairment
charges, 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, impairment charges, 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.
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.
Reconciliation of Forecasted Data
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 operations primarily utilize the U.S. dollar, Australian
dollar, euro and sterling as functional currencies to measure
results and financial condition. Functional currencies other than
the U.S. dollar subject us to foreign currency translational risk.
Our operations also have revenues and expenses that are in
currencies other than their functional currency, which subject 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 2018 periods' currency exchange rates have remained
constant with the 2017 periods' rates. These metrics facilitate a
comparative view for the changes in our business in an environment
with fluctuating exchange rates.
Constant dollar reporting removes only the impact of
changes in exchange rates on the translation of our operations.
Constant currency reporting removes the impact of changes
in exchange rates on the translation of our 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.
Examples:
-
The translation of our operations with functional currencies
other than U.S. dollar 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.
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Our operations 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.
CONTACT: MEDIA CONTACT, Roger
Frizzell, +1 (305) 406 7862 or INVESTOR RELATIONS CONTACT,
Beth Roberts, +1 (305) 406 4832