MIAMI, June 22, 2017 /PRNewswire/ -- Carnival
Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) announced U.S.
GAAP net income of $379 million, or
$0.52 diluted EPS, for the second
quarter of 2017 compared to U.S. GAAP net income for the second
quarter of 2016 of $605 million, or
$0.80 diluted EPS. Second quarter
2017 adjusted net income of $378
million, or $0.52 adjusted
EPS, was higher than adjusted net income of $370 million, or $0.49 adjusted EPS, for the second quarter of
2016. Adjusted net income excludes unrealized gains/(losses) on
fuel derivatives and other net charges, which totaled gains of
$1 million for the second quarter
2017 and $235 million, or
$0.31 per share, for the second
quarter 2016. Revenues for the second quarter of 2017 of
$3.9 billion were higher than the
$3.7 billion in the prior year.
Carnival Corporation & plc President and Chief Executive
Officer Arnold Donald noted, "Strong
execution drove significant operational improvements, which more
than offset the substantial drag from fuel and currency, leading to
another second quarter adjusted earnings record. It was reinforcing
to see over five percent improvement in cruise ticket prices,
affirming our efforts to increase demand by building positive word
of mouth through the delivery of exceptional guest experiences as
well as our innovative marketing and public relations
programs."
Key information for the second quarter 2017 compared to the
prior year:
- Gross revenue yields (revenue per available lower berth day or
"ALBD") increased 2.7 percent. In constant currency, net revenue
yields increased 5.1 percent for 2Q 2017, better than March
guidance of up 2.5 to 3.5 percent.
- Gross cruise costs including fuel per ALBD increased 3.2
percent. In constant currency, net cruise costs excluding fuel per
ALBD increased 1.5 percent, in line with March guidance of up 1.5
to 2.5 percent.
- Changes in fuel prices (including realized fuel derivatives)
and currency exchange rates decreased earnings by $0.12 per share.
Highlights from the second quarter include the delivery of
Princess Cruises' Majestic Princess, the first ship tailored
for the China market, as well as
the addition of AIDAperla to the company's German brand,
AIDA Cruises. Also during the quarter, two additional Princess
Cruises ships, Caribbean Princess and Royal Princess,
were outfitted with the technical requirements to transition them
in early 2018 to the Ocean Platform featuring Ocean
MedallionTM. This cutting edge interactive guest
experience will debut on Regal Princess this November.
Additionally, Carnival Corporation was ranked among the 100 Best
Corporate Citizens by Corporate Responsibility magazine and was
ranked number one, globally, for the year's most engaging and
informative sustainability report in the 10th annual Corporate
Register Reporting Awards.
Outlook
At this time, cumulative bookings for the next three quarters
are higher at prices that are well ahead of the prior year. During
the quarter, booking volumes for the next three quarters have been
running in line with last year, also at prices that are well
ahead.
Looking forward, Donald commented, "We are realizing sustained
strength in booking trends across all core products. We are
delivering on our strategy to grow demand in excess of measured
capacity growth while leveraging our industry-leading scale
resulting in increased return on invested capital. We are working
hard to sustain the momentum. We have accelerated returns to
shareholders through our recent dividend increase, with annual
dividend distributions now approaching $1.2
billion, and the reauthorization of up to $1 billion in share repurchases." Donald added
that the company has completed $2.7
billion in share repurchases since late 2015.
The company expects full year 2017 net revenue yields in
constant currency to be up approximately 3.5 percent compared to
the prior year, better than March guidance of up approximately 3
percent. The company expects full year net cruise costs excluding
fuel per ALBD in constant currency to be up approximately 1.5
percent compared to March guidance of up approximately 1 percent.
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
$3.60 to $3.70 compared to March
guidance of $3.50 to $3.70 and 2016
adjusted earnings per share of $3.45.
Third Quarter 2017 Outlook
Third quarter constant currency net revenue yields are expected
to be up approximately 4 percent compared to the prior year. Net
cruise costs excluding fuel per ALBD in constant currency for the
third quarter of 2017 are expected to be in line with 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 $0.05 per
share. Based on the above factors, the company expects adjusted
earnings per share for the third quarter 2017 to be in the range of
$2.16 to $2.20 versus 2016 adjusted
earnings per share of $1.92.
Selected Key Metrics
|
|
Full Year
2017
|
|
Third Quarter
2017
|
Year over year
change:
|
|
Current
Dollars
|
|
Constant
Currency
|
|
Current
Dollars
|
|
Constant
Currency
|
Net revenue
yields
|
|
Approx
2.5%
|
|
Approx
3.5%
|
|
Approx
3.5%
|
|
Approx
4.0%
|
Net cruise costs
excl. fuel / ALBD
|
|
Approx
1.0%
|
|
Approx
1.5%
|
|
Approx
(0.5%)
|
|
Approx
flat
|
|
Full Year
2017
|
|
Third Quarter
2017
|
Fuel price per metric
ton
|
$367
|
|
$372
|
Fuel consumption
(metric tons in thousands)
|
3,300
|
|
815
|
Currency:
Euro
|
$1.10 to
€1
|
|
$1.12 to
€1
|
Sterling
|
$1.26 to
£1
|
|
$1.27 to
£1
|
Australian dollar
|
$0.75 to
A$1
|
|
$0.75 to
A$1
|
|
Three Months
Ended
May 31,
|
|
Six Months
Ended
May 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net income (in
millions)
|
$
|
379
|
|
|
$
|
605
|
|
|
$
|
730
|
|
|
$
|
747
|
|
Adjusted net income
(in millions) (a)
|
$
|
378
|
|
|
$
|
370
|
|
|
$
|
657
|
|
|
$
|
672
|
|
|
|
|
|
|
|
|
|
Earnings per
share-diluted
|
$
|
0.52
|
|
|
$
|
0.80
|
|
|
$
|
1.00
|
|
|
$
|
0.98
|
|
Adjusted earnings per
share-diluted (a)
|
$
|
0.52
|
|
|
$
|
0.49
|
|
|
$
|
0.90
|
|
|
$
|
0.88
|
|
|
(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 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, Europe, Australia and Asia, its portfolio features Carnival Cruise
Line, Holland America Line, Princess Cruises,
Seabourn, AIDA Cruises, Costa Cruises,
Cunard, P&O Cruises (Australia) and P&O Cruises (UK),
as well as Fathom, the corporation's immersion and enrichment
experience brand.
Together, the corporation's cruise lines operate 103 ships with
231,000 lower berths visiting over 700 ports around the world, with
17 new ships scheduled to be delivered between 2018 and
2022. 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.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 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:
- 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
the 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 dual listed company 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 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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Revenues
|
|
|
|
|
|
|
|
Cruise
|
|
|
|
|
|
|
|
Passenger
tickets
|
$
|
2,872
|
|
|
$
|
2,696
|
|
|
$
|
5,676
|
|
|
$
|
5,414
|
|
Onboard and
other
|
1,036
|
|
|
978
|
|
|
2,014
|
|
|
1,901
|
|
Tour and
other
|
37
|
|
|
31
|
|
|
46
|
|
|
42
|
|
|
3,945
|
|
|
3,705
|
|
|
7,736
|
|
|
7,357
|
|
Operating Costs
and Expenses
|
|
|
|
|
|
|
|
Cruise
|
|
|
|
|
|
|
|
Commissions,
transportation and other
|
513
|
|
|
495
|
|
|
1,082
|
|
|
1,077
|
|
Onboard and
other
|
129
|
|
|
123
|
|
|
253
|
|
|
240
|
|
Payroll and
related
|
513
|
|
|
502
|
|
|
1,032
|
|
|
994
|
|
Fuel
|
310
|
|
|
196
|
|
|
607
|
|
|
383
|
|
Food
|
253
|
|
|
248
|
|
|
504
|
|
|
495
|
|
Other ship
operating
|
685
|
|
|
667
|
|
|
1,346
|
|
|
1,271
|
|
Tour and
other
|
33
|
|
|
27
|
|
|
46
|
|
|
41
|
|
|
2,436
|
|
|
2,258
|
|
|
4,870
|
|
|
4,501
|
|
Selling and
administrative
|
553
|
|
|
532
|
|
|
1,102
|
|
|
1,083
|
|
Depreciation and
amortization
|
456
|
|
|
437
|
|
|
896
|
|
|
861
|
|
|
3,445
|
|
|
3,227
|
|
|
6,868
|
|
|
6,445
|
|
Operating
Income
|
500
|
|
|
478
|
|
|
868
|
|
|
912
|
|
Nonoperating
Income (Expense)
|
|
|
|
|
|
|
|
Interest
income
|
2
|
|
|
2
|
|
|
4
|
|
|
3
|
|
Interest expense, net
of capitalized interest
|
(50)
|
|
|
(57)
|
|
|
(101)
|
|
|
(108)
|
|
(Losses) gains on
fuel derivatives, net (a)
|
(53)
|
|
|
171
|
|
|
(27)
|
|
|
(65)
|
|
Other (expense)
income, net
|
(15)
|
|
|
13
|
|
|
(7)
|
|
|
8
|
|
|
(116)
|
|
|
129
|
|
|
(131)
|
|
|
(162)
|
|
Income Before
Income Taxes
|
384
|
|
|
607
|
|
|
737
|
|
|
750
|
|
Income Tax
Expense, Net
|
(5)
|
|
|
(2)
|
|
|
(7)
|
|
|
(3)
|
|
Net
Income
|
$
|
379
|
|
|
$
|
605
|
|
|
$
|
730
|
|
|
$
|
747
|
|
Earnings Per
Share
|
|
|
|
|
|
|
|
Basic
|
$
|
0.52
|
|
|
$
|
0.81
|
|
|
$
|
1.01
|
|
|
$
|
0.99
|
|
Diluted
|
$
|
0.52
|
|
|
$
|
0.80
|
|
|
$
|
1.00
|
|
|
$
|
0.98
|
|
|
|
|
|
|
|
|
|
Dividends Declared
Per Share
|
$
|
0.40
|
|
|
$
|
0.35
|
|
|
$
|
0.75
|
|
|
$
|
0.65
|
|
Weighted-Average
Shares Outstanding - Basic
|
724
|
|
|
751
|
|
|
724
|
|
|
758
|
|
Weighted-Average
Shares Outstanding - Diluted
|
727
|
|
|
753
|
|
|
727
|
|
|
761
|
|
|
(a) During the three
months ended May 31, 2017 and 2016, our (losses) gains on fuel
derivatives, net include net unrealized (losses) gains of $(2)
million and $242 million and realized (losses) of $(51) million and
$(71) million, respectively. During the six months ended
May 31, 2017 and 2016, our gains (losses) on fuel derivatives,
net include net unrealized gains of $69 million and $96 million and
realized (losses) of $(96) million and $(161) million,
respectively.
|
CARNIVAL
CORPORATION & PLC CONSOLIDATED BALANCE
SHEETS (UNAUDITED) (in millions, except par
values)
|
|
|
May 31,
2017
|
|
November 30,
2016
|
|
ASSETS
|
|
|
|
|
Current
Assets
|
|
|
|
|
Cash and cash
equivalents
|
$
|
597
|
|
|
$
|
603
|
|
|
Trade and other
receivables, net
|
319
|
|
|
298
|
|
|
Inventories
|
351
|
|
|
322
|
|
|
Prepaid expenses and
other
|
507
|
|
|
466
|
|
|
Total current
assets
|
1,774
|
|
|
1,689
|
|
|
Property and
Equipment, Net
|
33,823
|
|
|
32,429
|
|
|
Goodwill
|
2,953
|
|
|
2,910
|
|
|
Other
Intangibles
|
1,286
|
|
|
1,275
|
|
|
Other
Assets
|
615
|
|
|
578
|
|
(a)
|
|
$
|
40,451
|
|
|
$
|
38,881
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
Short-term
borrowings
|
$
|
675
|
|
|
$
|
457
|
|
|
Current portion of
long-term debt
|
1,108
|
|
|
640
|
|
|
Accounts
payable
|
690
|
|
|
713
|
|
|
Accrued liabilities
and other
|
1,807
|
|
|
1,740
|
|
|
Customer
deposits
|
4,778
|
|
|
3,522
|
|
|
Total current
liabilities
|
9,058
|
|
|
7,072
|
|
|
Long-Term
Debt
|
7,635
|
|
|
8,302
|
|
(a)
|
Other Long-Term
Liabilities
|
794
|
|
|
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
|
8,673
|
|
|
8,632
|
|
|
Retained
earnings
|
22,026
|
|
|
21,843
|
|
|
Accumulated other
comprehensive loss
|
(2,154)
|
|
|
(2,454)
|
|
|
Treasury stock, 118
shares at 2017 and 2016 of Carnival Corporation and 30 shares
at
2017 and 27 shares at 2016 of Carnival plc, at
cost
|
(5,946)
|
|
|
(5,789)
|
|
|
Total shareholders'
equity
|
22,964
|
|
|
22,597
|
|
|
|
$
|
40,451
|
|
|
$
|
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
May 31,
|
|
Six Months
Ended
May 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
STATISTICAL
INFORMATION
|
|
|
|
|
|
|
|
ALBDs
(in thousands) (a)
|
20,397
|
|
|
19,693
|
|
|
40,421
|
|
|
38,983
|
|
Occupancy percentage (b)
|
104.1
|
%
|
|
104.1
|
%
|
|
104.3
|
%
|
|
104.1
|
%
|
Passengers carried (in thousands)
|
2,906
|
|
|
2,781
|
|
|
5,675
|
|
|
5,340
|
|
Fuel
consumption in metric tons (in thousands)
|
830
|
|
|
808
|
|
|
1,649
|
|
|
1,623
|
|
Fuel
consumption in metric tons per thousand ALBDs
|
40.7
|
|
|
41.0
|
|
|
40.8
|
|
|
41.6
|
|
Fuel
cost per metric ton consumed
|
$
|
374
|
|
|
$
|
243
|
|
|
$
|
368
|
|
|
$
|
236
|
|
Currencies
|
|
|
|
|
|
|
|
U.S. dollar to
euro
|
$
|
1.08
|
|
|
$
|
1.13
|
|
|
$
|
1.07
|
|
|
$
|
1.11
|
|
U.S. dollar to
sterling
|
$
|
1.26
|
|
|
$
|
1.44
|
|
|
$
|
1.25
|
|
|
$
|
1.44
|
|
U.S. dollar to
Australian dollar
|
$
|
0.75
|
|
|
$
|
0.75
|
|
|
$
|
0.75
|
|
|
$
|
0.73
|
|
|
|
|
|
|
|
|
|
CASH FLOW
INFORMATION (in millions)
|
|
|
|
|
|
|
|
Cash from
operations
|
$
|
1,917
|
|
|
$
|
1,883
|
|
|
$
|
2,849
|
|
|
$
|
2,681
|
|
Capital
expenditures
|
$
|
1,447
|
|
|
$
|
1,636
|
|
|
$
|
1,859
|
|
|
$
|
1,966
|
|
Dividends
paid
|
$
|
253
|
|
|
$
|
227
|
|
|
$
|
507
|
|
|
$
|
459
|
|
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
May 31,
|
|
Six Months Ended
May 31,
|
|
2017
|
|
2017
Constant
Dollar
|
|
2016
|
|
2017
|
|
2017
Constant
Dollar
|
|
2016
|
Passenger ticket
revenues
|
$
|
2,872
|
|
|
$
|
2,944
|
|
|
$
|
2,696
|
|
|
$
|
5,676
|
|
|
$
|
5,825
|
|
|
$
|
5,414
|
|
Onboard and other
revenues
|
1,036
|
|
|
1,051
|
|
|
978
|
|
|
2,014
|
|
|
2,044
|
|
|
1,901
|
|
Gross cruise
revenues
|
3,908
|
|
|
3,995
|
|
|
3,674
|
|
|
7,690
|
|
|
7,869
|
|
|
7,315
|
|
Less cruise
costs
|
|
|
|
|
|
|
|
|
|
|
|
Commissions,
transportation and
other
|
(513)
|
|
|
(526)
|
|
|
(495)
|
|
|
(1,082)
|
|
|
(1,114)
|
|
|
(1,077)
|
|
Onboard and
other
|
(129)
|
|
|
(131)
|
|
|
(123)
|
|
|
(253)
|
|
|
(258)
|
|
|
(240)
|
|
|
(642)
|
|
|
(657)
|
|
|
(618)
|
|
|
(1,335)
|
|
|
(1,372)
|
|
|
(1,317)
|
|
Net passenger ticket
revenues
|
2,359
|
|
|
2,418
|
|
|
2,201
|
|
|
4,594
|
|
|
4,711
|
|
|
4,337
|
|
Net onboard and other
revenues
|
907
|
|
|
920
|
|
|
855
|
|
|
1,761
|
|
|
1,786
|
|
|
1,661
|
|
Net cruise
revenues
|
$
|
3,266
|
|
|
$
|
3,338
|
|
|
$
|
3,056
|
|
|
$
|
6,355
|
|
|
$
|
6,497
|
|
|
$
|
5,998
|
|
ALBDs
|
20,396,773
|
|
|
20,396,773
|
|
|
19,693,362
|
|
|
40,420,819
|
|
|
40,420,819
|
|
|
38,983,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross revenue
yields
|
$
|
191.59
|
|
|
$
|
195.89
|
|
|
$
|
186.55
|
|
|
$
|
190.25
|
|
|
$
|
194.68
|
|
|
$
|
187.65
|
|
% increase vs.
2016
|
2.7
|
%
|
|
5.0
|
%
|
|
|
|
1.4
|
%
|
|
3.7
|
%
|
|
|
Net revenue
yields
|
$
|
160.15
|
|
|
$
|
163.67
|
|
|
$
|
155.21
|
|
|
$
|
157.21
|
|
|
$
|
160.74
|
|
|
$
|
153.87
|
|
% increase vs.
2016
|
3.2
|
%
|
|
5.5
|
%
|
|
|
|
2.2
|
%
|
|
4.5
|
%
|
|
|
Net passenger
ticket revenue
yields
|
$
|
115.66
|
|
|
$
|
118.55
|
|
|
$
|
111.78
|
|
|
$
|
113.65
|
|
|
$
|
116.56
|
|
|
$
|
111.25
|
|
% increase vs.
2016
|
3.5
|
%
|
|
6.1
|
%
|
|
|
|
2.2
|
%
|
|
4.8
|
%
|
|
|
Net onboard and
other revenue
yields
|
$
|
44.49
|
|
|
$
|
45.12
|
|
|
$
|
43.43
|
|
|
$
|
43.56
|
|
|
$
|
44.18
|
|
|
$
|
42.61
|
|
% increase vs.
2016
|
2.4
|
%
|
|
3.9
|
%
|
|
|
|
2.2
|
%
|
|
3.7
|
%
|
|
|
|
Three Months Ended
May 31,
|
|
Six Months Ended
May 31,
|
|
2017
|
|
2017
Constant
Currency
|
|
2016
|
|
2017
|
|
2017
Constant
Currency
|
|
2016
|
Net passenger ticket
revenues
|
$
|
2,359
|
|
|
$
|
2,409
|
|
|
$
|
2,201
|
|
|
$
|
4,594
|
|
|
$
|
4,716
|
|
|
$
|
4,337
|
|
Net onboard and other
revenues
|
907
|
|
|
917
|
|
|
855
|
|
|
1,761
|
|
|
1,778
|
|
|
1,661
|
|
Net cruise
revenues
|
$
|
3,266
|
|
|
$
|
3,326
|
|
|
$
|
3,056
|
|
|
$
|
6,355
|
|
|
$
|
6,494
|
|
|
$
|
5,998
|
|
ALBDs
|
20,396,773
|
|
|
20,396,773
|
|
|
19,693,362
|
|
|
40,420,819
|
|
|
40,420,819
|
|
|
38,983,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
yields
|
$
|
160.15
|
|
|
$
|
163.05
|
|
|
$
|
155.21
|
|
|
$
|
157.21
|
|
|
$
|
160.65
|
|
|
$
|
153.87
|
|
% increase vs.
2016
|
3.2
|
%
|
|
5.1
|
%
|
|
|
|
2.2
|
%
|
|
4.4
|
%
|
|
|
Net passenger
ticket revenue
yields
|
$
|
115.66
|
|
|
$
|
118.10
|
|
|
$
|
111.78
|
|
|
$
|
113.65
|
|
|
$
|
116.68
|
|
|
$
|
111.25
|
|
% increase vs.
2016
|
3.5
|
%
|
|
5.7
|
%
|
|
|
|
2.2
|
%
|
|
4.9
|
%
|
|
|
Net onboard and
other revenue
yields
|
$
|
44.49
|
|
|
$
|
44.94
|
|
|
$
|
43.43
|
|
|
$
|
43.56
|
|
|
$
|
43.98
|
|
|
$
|
42.61
|
|
% increase vs.
2016
|
2.4
|
%
|
|
3.5
|
%
|
|
|
|
2.2
|
%
|
|
3.2
|
%
|
|
|
|
(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
May 31,
|
|
Six Months Ended
May 31,
|
|
2017
|
|
2017
Constant
Dollar
|
|
2016
|
|
2017
|
|
2017
Constant
Dollar
|
|
2016
|
Cruise operating
expenses
|
$
|
2,403
|
|
|
$
|
2,451
|
|
|
$
|
2,231
|
|
|
$
|
4,824
|
|
|
$
|
4,929
|
|
|
$
|
4,460
|
|
Cruise selling and
administrative
expenses
|
548
|
|
|
559
|
|
|
530
|
|
|
1,094
|
|
|
1,117
|
|
|
1,079
|
|
Gross cruise
costs
|
2,951
|
|
|
3,010
|
|
|
2,761
|
|
|
5,918
|
|
|
6,046
|
|
|
5,539
|
|
Less cruise costs
included above
|
|
|
|
|
|
|
|
|
|
|
|
Commissions,
transportation and
other
|
(513)
|
|
|
(526)
|
|
|
(495)
|
|
|
(1,082)
|
|
|
(1,114)
|
|
|
(1,077)
|
|
Onboard and other
|
(129)
|
|
|
(131)
|
|
|
(123)
|
|
|
(253)
|
|
|
(258)
|
|
|
(240)
|
|
Gain on ship sale
(c)
|
4
|
|
|
4
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
2
|
|
Restructuring expenses
(c)
|
—
|
|
|
—
|
|
|
(2)
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
Other (c)
|
(1)
|
|
|
(1)
|
|
|
(5)
|
|
|
—
|
|
|
—
|
|
|
(21)
|
|
Net cruise
costs
|
2,312
|
|
|
2,356
|
|
|
2,136
|
|
|
4,587
|
|
|
4,678
|
|
|
4,201
|
|
Less fuel
|
(310)
|
|
|
(310)
|
|
|
(196)
|
|
|
(607)
|
|
|
(607)
|
|
|
(383)
|
|
Net cruise costs
excluding fuel
|
$
|
2,002
|
|
|
$
|
2,046
|
|
|
$
|
1,940
|
|
|
$
|
3,980
|
|
|
$
|
4,071
|
|
|
$
|
3,818
|
|
ALBDs
|
20,396,773
|
|
|
20,396,773
|
|
|
19,693,362
|
|
|
40,420,819
|
|
|
40,420,819
|
|
|
38,983,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross cruise costs
per ALBD
|
$
|
144.63
|
|
|
$
|
147.58
|
|
|
$
|
140.18
|
|
|
$
|
146.42
|
|
|
$
|
149.57
|
|
|
$
|
142.08
|
|
% increase vs.
2016
|
3.2
|
%
|
|
5.3
|
%
|
|
|
|
3.1
|
%
|
|
5.3
|
%
|
|
|
Net cruise costs
excluding fuel per
ALBD
|
$
|
98.11
|
|
|
$
|
100.29
|
|
|
$
|
98.49
|
|
|
$
|
98.46
|
|
|
$
|
100.71
|
|
|
$
|
97.93
|
|
% (decrease) increase
vs. 2016
|
(0.4)%
|
|
|
1.8
|
%
|
|
|
|
0.5
|
%
|
|
2.8
|
%
|
|
|
|
Three Months Ended
May 31,
|
|
Six Months Ended
May 31,
|
|
2017
|
|
2017
Constant
Currency
|
|
2016
|
|
2017
|
|
2017
Constant
Currency
|
|
2016
|
Net cruise costs
excluding fuel
|
$
|
2,002
|
|
|
$
|
2,039
|
|
|
$
|
1,940
|
|
|
$
|
3,980
|
|
|
$
|
4,051
|
|
|
$
|
3,818
|
|
ALBDs
|
20,396,773
|
|
|
20,396,773
|
|
|
19,693,362
|
|
|
40,420,819
|
|
|
40,420,819
|
|
|
38,983,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cruise costs
excluding fuel per
ALBD
|
$
|
98.11
|
|
|
$
|
99.99
|
|
|
$
|
98.49
|
|
|
$
|
98.46
|
|
|
$
|
100.23
|
|
|
$
|
97.93
|
|
% (decrease) increase
vs. 2016
|
(0.4)%
|
|
|
1.5
|
%
|
|
|
|
0.5
|
%
|
|
2.3
|
%
|
|
|
|
(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
May 31,
|
|
Six Months
Ended
May 31,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Net
income
|
|
|
|
|
|
|
|
U.S. GAAP net
income
|
$
|
379
|
|
|
$
|
605
|
|
|
$
|
730
|
|
|
$
|
747
|
|
Unrealized losses (gains) on
fuel derivatives, net (b)
|
2
|
|
|
(242)
|
|
|
(69)
|
|
|
(96)
|
|
(Gain) on ship sale
(c)
|
(4)
|
|
|
—
|
|
|
(4)
|
|
|
(2)
|
|
Restructuring expenses
(c)
|
—
|
|
|
2
|
|
|
—
|
|
|
2
|
|
Other (c)
|
1
|
|
|
5
|
|
|
—
|
|
|
21
|
|
Adjusted net
income
|
$
|
378
|
|
|
$
|
370
|
|
|
$
|
657
|
|
|
$
|
672
|
|
Weighted-average
shares outstanding
|
727
|
|
|
753
|
|
|
727
|
|
|
761
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
U.S. GAAP earnings per
share
|
$
|
0.52
|
|
|
$
|
0.80
|
|
|
$
|
1.00
|
|
|
$
|
0.98
|
|
Unrealized losses (gains) on
fuel derivatives, net (b)
|
—
|
|
|
(0.32)
|
|
|
(0.10)
|
|
|
(0.13)
|
|
(Gain) on ship sale (c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Restructuring expenses
(c)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Other (c)
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.03
|
|
Adjusted earnings per
share
|
$
|
0.52
|
|
|
$
|
0.49
|
|
|
$
|
0.90
|
|
|
$
|
0.88
|
|
|
|
|
|
|
|
|
|
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 a 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