CARNIVAL
CORPORATION & PLC REPORTS THIRD QUARTER EARNINGS
GAAP earnings per
share down 5%, adjusted earnings per share up nearly 20%
Carnival Corporation & plc today reported its results for
the third quarter ended August 31, 2017. The results of
Carnival Corporation and Carnival plc have been consolidated and
include results on a U.S. GAAP and adjusted basis.
3Q Highlights
-
3Q U.S. GAAP net income of $1.3
billion, or $1.83 diluted EPS,
compared to $1.4 billion, or
$1.93 diluted EPS for the prior
year
-
3Q adjusted net income of $1.7
billion, or $2.29 EPS,
compared to adjusted net income of $1.4
billion, or $1.92 EPS for the
prior year (adjusted net income excludes unrealized gains and
losses on fuel derivatives and other net charges of $62 million and ships, trademark, and goodwill
impairments of $392 million for 3Q
2017 and net gains of $7 million for
3Q 2016)
-
3Q net revenue yields in constant currency increased 5.1%
compared to prior year, better than June guidance of up
approximately 4.0%
-
3Q net cruise costs excluding fuel per available lower berth day
(“ALBD”) in constant currency increased 0.2% from prior year, in
line with June guidance of approximately flat
-
Changes in fuel prices (including realized fuel derivatives) and
currency exchange rates decreased earnings by $0.03 per share
Outlook
-
At this time, cumulative bookings for the first half of next
year are well ahead of the prior year on both price and
occupancy
-
FY 2017 net revenue yields in constant currency are expected to
be up approximately 4.0% compared to the prior year, better than
June guidance of up approximately 3.5%
-
FY 2017 net cruise costs excluding fuel per ALBD in constant
currency are expected to be up approximately 2.5% compared to the
prior year, versus June guidance of up approximately 1.5%
-
FY 2017 adjusted EPS is expected to be in the range of
$3.64 to $3.70, compared to FY 2016
adjusted EPS of $3.45
-
4Q 2017 adjusted EPS is expected to be in the range of
$0.44 to $0.50, compared to
$0.67 in 4Q 2016
President and Chief Executive Officer
Arnold Donald commenting on these
results:
“We delivered another consecutive quarter of strong operational
improvement and another third quarter adjusted earnings record. Our
ongoing efforts to create demand well in excess of measured supply
growth helped to drive five percent higher cruise ticket pricing.
We have many innovative efforts to accelerate demand in 2018 and
beyond including our recently announced digital streaming channel,
OceanView, and our mobile gaming portfolio, PlayOcean, both
launching this week.”
“After the earthquakes in Mexico and a very challenging series of
hurricanes, our thoughts are with all of those impacted and we are
actively contributing to the relief and rebuilding efforts in the
Caribbean and the southern U.S.
through monetary and other support. Many people throughout these
areas have been impacted and several ports are temporarily
unavailable. Fortunately, our owned destinations including
Amber Cove, Dominican Republic; Cozumel, Mexico; Mahogany Bay, Honduras; Half Moon Cay and Princess Cays,
Bahamas, as well as more than 40
other ports, plus all those in Mexico, are fully operational and welcoming
guests.” Donald added that several temporary port closures
associated with the storms led to voyage disruptions which are
expected to result in an estimated $0.10 to
$0.12 per share reduction in earnings in the fourth quarter.
The company has resumed normal operations, with some itinerary
modifications and is continuing to deliver exceptional Caribbean cruise vacations to its guests.
“Our record results, coupled with strong booking trends, have
more than offset the anticipated earnings impact from these weather
disruptions, enabling us to raise the mid-point of our guidance and
positioning us to achieve the higher end of our previous earnings
guidance range. Our performance affirms conviction in our company’s
inherent ability to deliver sustained double digit return on
invested capital in 2018 and beyond. We remain on track to achieve
record cash from operations of $5
billion this year, and to continue to distribute cash to
shareholders through steadily increasing dividends, currently
totaling $1.2 billion annually, and
opportunistic share repurchases, which are approaching $3 billion cumulatively over the past two
years.”
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 third
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
18 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.
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.
Exhibit 99.1
Carnival
Corporation & plc Reports Third Quarter Earnings
GAAP earnings per share down 5%,
adjusted earnings per share up nearly 20%
MIAMI, Sept. 26, 2017 -- Carnival Corporation & plc
(NYSE/LSE: CCL; NYSE: CUK) announced U.S. GAAP net income of
$1.3 billion, or $1.83 diluted EPS, for the third quarter of 2017
compared to U.S. GAAP net income for the third quarter of 2016 of
$1.4 billion, or $1.93 diluted EPS. Third quarter 2017 adjusted
net income of $1.7 billion, or
$2.29 adjusted EPS, was higher than
adjusted net income of $1.4 billion,
or $1.92 adjusted EPS, for the third
quarter of 2016. Adjusted net income excludes unrealized gains on
fuel derivatives of $65 million and
impairments and other net charges of $395
million for the third quarter 2017 and net gains of
$7 million for the third quarter
2016. Revenues for the third quarter of 2017 of $5.5 billion were higher than the $5.1 billion in the prior year.
Carnival Corporation & plc President and Chief Executive
Officer Arnold Donald stated, "We
delivered another consecutive quarter of strong operational
improvement and another third quarter adjusted earnings record. Our
ongoing efforts to create demand well in excess of measured supply
growth helped to drive five percent higher cruise ticket pricing.
We have many innovative efforts to accelerate demand in 2018 and
beyond including our recently announced digital streaming channel,
OceanView, and our mobile gaming portfolio, PlayOcean, both
launching this week." The company will launch OceanView and
PlayOcean at a public relations event in New York City's Time Square on September 28th between 11
a.m. and 1 p.m.
Key information for the third quarter 2017 compared to the prior
year:
-
Gross revenue yields (revenue per available lower berth day or
"ALBD") increased 5.5 percent. In constant currency, net revenue
yields increased 5.1 percent for 3Q 2017, better than June guidance
of up approximately 4.0 percent.
-
Gross cruise costs including fuel per ALBD increased 12.4
percent (including ship impairment charges). In constant currency,
net cruise costs excluding fuel per ALBD increased 0.2 percent, in
line with June guidance of approximately flat.
-
Changes in fuel prices (including realized fuel derivatives) and
currency exchange rates decreased earnings by $0.03 per share.
-
Noncash impairment charges for ships, trademark and goodwill of
$392 million driven by the company's
decision to strategically realign its business in Australia.
Highlights from the third quarter include the official naming
ceremonies for AIDA Cruises' AIDAperla, which was christened
in Palma de Mallorca with German
model and presenter Lena Gercke
serving as godmother, and Princess Cruises' Majestic
Princess, which debuted in China with renowned basketball legend
Yao Ming and his wife Ye Li
presiding over the ceremony. We announced three additional Princess
Cruises ships, Golden Princess, Crown Princess and Ruby
Princess, will be outfitted with the technical requirements to
transition them to the Ocean Platform featuring Ocean
MedallionTM. This cutting edge interactive guest
experience will be piloted later this year on Regal
Princess. Also during the quarter, Holland America Line along
with O, The Oprah Magazine, had its inaugural Share the
Adventure cruise sailing from Seattle to Alaska with a number of distinguished guests
on board including Oprah Winfrey.
Additionally, Holland America Line received approval to operate a
series of cruises to Cuba
beginning in December 2017 and
Carnival Cruise Line received approval for five additional
Cuba cruises in 2018, following
the debut of its program in June of this year.
Outlook
Donald commented, "After the earthquakes in Mexico and a very challenging series of
hurricanes, our thoughts are with all of those impacted and we are
actively contributing to the relief and rebuilding efforts in the
Caribbean and the southern U.S.
through monetary and other support. Many people throughout these
areas have been impacted and several ports are temporarily
unavailable. Fortunately, our owned destinations including
Amber Cove, Dominican Republic; Cozumel, Mexico; Mahogany Bay, Honduras; Half Moon Cay and Princess Cays,
Bahamas, as well as more than 40
other ports, plus all those in Mexico, are fully operational and welcoming
guests." Donald added that several temporary port closures
associated with the storms led to voyage disruptions which are
expected to result in an estimated $0.10 to
$0.12 per share reduction in earnings in the fourth quarter.
The company has resumed normal operations, with some itinerary
modifications and is continuing to deliver exceptional Caribbean cruise vacations to its guests.
At this time, cumulative bookings for the first half of next
year are well ahead of the prior year on both price and occupancy.
Since June, booking volumes for the first half of next year have
been running ahead of last year at prices that are well ahead.
Donald added, "Our record results, coupled with strong booking
trends, have more than offset the anticipated earnings impact from
these weather disruptions, enabling us to raise the mid-point of
our guidance and positioning us to achieve the higher end of our
previous earnings guidance range. Our performance affirms
conviction in our company's inherent ability to deliver sustained
double digit return on invested capital in 2018 and beyond. We
remain on track to achieve record cash from operations of
$5 billion this year, and to continue
to distribute cash to shareholders through steadily increasing
dividends, currently totaling $1.2
billion annually, and opportunistic share repurchases, which
are approaching $3 billion
cumulatively over the past two years."
The company expects full year 2017 net revenue yields in
constant currency to be up approximately 4.0 percent compared to
the prior year, better than June guidance of up approximately 3.5
percent. The company expects full year net cruise costs excluding
fuel per ALBD in constant currency compared to the prior year to be
up approximately 2.5 percent versus June guidance of up
approximately 1.5 percent. The cumulative impact of the recent
weather related voyage disruptions reduced forecasted full year net
revenue yields by 0.4 percent and increased full year net cruise
cost guidance by 0.3 percent.
Changes in fuel prices (including realized fuel derivatives) and
currency exchange rates compared to the prior year are expected to
decrease earnings by $0.33 per share.
Taking the above factors into consideration, the company expects
full year 2017 adjusted earnings per share to be in the range of
$3.64 to $3.70 compared to June
guidance of $3.60 to $3.70 and 2016
adjusted earnings per share of $3.45.
Fourth Quarter 2017 Outlook
Fourth quarter constant currency net revenue yields are expected
to be up approximately 1.5 to 2.5 percent compared to the prior
year. Excluding the estimated impact from recent weather related
voyage disruptions, fourth quarter constant currency revenue yields
would have been expected to increase approximately 3.5 percent, 1.5
percent higher than the mid-point of September guidance. Net cruise
costs excluding fuel per ALBD in constant currency for the fourth
quarter of 2017 are expected to increase by approximately 6 to 7
percent compared to the prior year of which approximately 1.5
percent was due to the impact of the recent weather related voyage
disruptions and nearly 3 percent will be due to higher dry-dock
costs as previously anticipated. Changes in fuel prices (including
realized fuel derivatives) and currency exchange rates compared to
the prior year are expected to decrease earnings by $0.04 per share. Based on the above factors, the
company expects adjusted earnings per share for the fourth quarter
2017 to be in the range of $0.44 to
$0.50 versus 2016 adjusted earnings per share of
$0.67.
Selected Key Metrics
|
|
Full Year
2017 |
|
Fourth Quarter
2017 |
Year over year change: |
|
Current
Dollars |
|
Constant
Currency |
|
Current
Dollars |
|
Constant
Currency |
Net revenue yields |
|
Approx 3.5% |
|
Approx 4.0% |
|
4.0 to 5.0% |
|
1.5 to 2.5% |
Net cruise costs excl. fuel / ALBD |
|
Approx 2.5% |
|
Approx 2.5% |
|
8.0 to 9.0% |
|
6.0 to 7.0% |
|
Full Year
2017 |
|
Fourth Quarter 2017 |
Fuel price per metric ton |
$378 |
|
$397 |
Fuel consumption (metric tons in
thousands) |
3,305 |
|
840 |
Currency:
Euro |
$1.13 to €1 |
|
$1.19 to €1 |
Sterling |
$1.28 to £1 |
|
$1.35 to £1 |
Australian dollar |
$0.77 to A$1 |
|
$0.80 to A$1 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
August 31, |
|
Nine Months
Ended
August 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income (in millions) |
$ |
1,329 |
|
|
$ |
1,424 |
|
|
$ |
2,060 |
|
|
$ |
2,171 |
|
Adjusted net income (in millions) (a) |
$ |
1,659 |
|
|
$ |
1,417 |
|
|
$ |
2,318 |
|
|
$ |
2,089 |
|
|
|
|
|
|
|
|
|
Earnings per share-diluted |
$ |
1.83 |
|
|
$ |
1.93 |
|
|
$ |
2.84 |
|
|
$ |
2.88 |
|
Adjusted earnings per share-diluted (a) |
$ |
2.29 |
|
|
$ |
1.92 |
|
|
$ |
3.19 |
|
|
$ |
2.77 |
|
|
(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 third
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
18 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
August 31, |
|
Nine Months
Ended
August 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenues |
|
|
|
|
|
|
|
Cruise |
|
|
|
|
|
|
|
Passenger ticket |
$ |
4,138 |
|
|
$ |
3,803 |
|
|
$ |
9,814 |
|
|
$ |
9,217 |
|
Onboard and other |
1,223 |
|
|
1,146 |
|
|
3,237 |
|
|
3,047 |
|
Tour and other |
154 |
|
|
148 |
|
|
200 |
|
|
190 |
|
|
5,515 |
|
|
5,097 |
|
|
13,251 |
|
|
12,454 |
|
Operating Costs and Expenses |
|
|
|
|
|
|
|
Cruise |
|
|
|
|
|
|
|
Commissions, transportation and other |
699 |
|
|
646 |
|
|
1,781 |
|
|
1,723 |
|
Onboard and other |
184 |
|
|
171 |
|
|
438 |
|
|
411 |
|
Payroll and related |
520 |
|
|
494 |
|
|
1,552 |
|
|
1,488 |
|
Fuel |
307 |
|
|
265 |
|
|
914 |
|
|
648 |
|
Food |
270 |
|
|
260 |
|
|
774 |
|
|
755 |
|
Other ship operating (a) |
947 |
|
|
643 |
|
|
2,293 |
|
|
1,914 |
|
Tour and other |
86 |
|
|
84 |
|
|
132 |
|
|
125 |
|
|
3,013 |
|
|
2,563 |
|
|
7,884 |
|
|
7,064 |
|
Selling and administrative |
547 |
|
|
529 |
|
|
1,649 |
|
|
1,613 |
|
Depreciation and amortization |
473 |
|
|
443 |
|
|
1,368 |
|
|
1,303 |
|
Goodwill and trademark impairment |
89 |
|
|
— |
|
|
89 |
|
|
— |
|
|
4,122 |
|
|
3,535 |
|
|
10,990 |
|
|
9,980 |
|
Operating Income |
1,393 |
|
|
1,562 |
|
|
2,261 |
|
|
2,474 |
|
Nonoperating Income (Expense) |
|
|
|
|
|
|
|
Interest income |
3 |
|
|
2 |
|
|
7 |
|
|
5 |
|
Interest expense, net of capitalized interest |
(49) |
|
|
(61) |
|
|
(150) |
|
|
(168) |
|
Gains (losses) on fuel derivatives, net (b) |
7 |
|
|
(36) |
|
|
(19) |
|
|
(102) |
|
Other income (expense), net |
14 |
|
|
(2) |
|
|
7 |
|
|
6 |
|
|
(25) |
|
|
(97) |
|
|
(155) |
|
|
(259) |
|
Income Before Income Taxes |
1,368 |
|
|
1,465 |
|
|
2,106 |
|
|
2,215 |
|
Income Tax Expense, Net |
(39) |
|
|
(41) |
|
|
(46) |
|
|
(44) |
|
Net Income |
$ |
1,329 |
|
|
$ |
1,424 |
|
|
$ |
2,060 |
|
|
$ |
2,171 |
|
Earnings Per Share |
|
|
|
|
|
|
|
Basic |
$ |
1.84 |
|
|
$ |
1.93 |
|
|
$ |
2.85 |
|
|
$ |
2.89 |
|
Diluted |
$ |
1.83 |
|
|
$ |
1.93 |
|
|
$ |
2.84 |
|
|
$ |
2.88 |
|
|
|
|
|
|
|
|
|
Dividends Declared Per Share |
$ |
0.40 |
|
|
$ |
0.35 |
|
|
$ |
1.15 |
|
|
$ |
1.00 |
|
Weighted-Average Shares Outstanding -
Basic |
723 |
|
|
737 |
|
724 |
|
|
751 |
|
Weighted-Average Shares Outstanding -
Diluted |
726 |
|
|
739 |
|
727 |
|
|
754 |
|
|
(a) Includes $304 million
of ship impairment charges in the three and nine months ended
August 31, 2017. |
(b) During the three
months ended August 31, 2017 and 2016, our gains (losses) on fuel
derivatives, net include net unrealized gains of $65 million and
$25 million and realized (losses) of $(57) million and $(61)
million, respectively. During the nine months ended August 31, 2017
and 2016, our gains (losses) on fuel derivatives, net include net
unrealized gains of $134 million and $121 million and realized
(losses) of $(153) million and $(223) million, respectively. |
CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except par values) |
|
|
August 31,
2017 |
|
November 30,
2016 |
|
ASSETS |
|
|
|
|
Current Assets |
|
|
|
|
Cash and cash equivalents |
$ |
489 |
|
|
$ |
603 |
|
|
Trade and other receivables, net |
324 |
|
|
298 |
|
|
Inventories |
357 |
|
|
322 |
|
|
Prepaid expenses and other |
491 |
|
|
466 |
|
|
Total current assets |
1,661 |
|
|
1,689 |
|
|
Property and Equipment,
Net |
34,172 |
|
|
32,429 |
|
|
Goodwill |
2,957 |
|
|
2,910 |
|
|
Other Intangibles |
1,247 |
|
|
1,275 |
|
|
Other Assets |
606 |
|
|
578 |
|
(a) |
|
$ |
40,643 |
|
|
$ |
38,881 |
|
|
LIABILITIES AND SHAREHOLDERS'
EQUITY |
|
|
|
|
Current Liabilities |
|
|
|
|
Short-term borrowings |
$ |
182 |
|
|
$ |
457 |
|
|
Current portion of long-term debt |
1,265 |
|
|
640 |
|
|
Accounts payable |
639 |
|
|
713 |
|
|
Accrued liabilities and other |
1,845 |
|
|
1,740 |
|
|
Customer deposits |
4,038 |
|
|
3,522 |
|
|
Total current liabilities |
7,969 |
|
|
7,072 |
|
|
Long-Term Debt |
7,723 |
|
|
8,302 |
|
(a) |
Other Long-Term
Liabilities |
779 |
|
|
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 |
8,690 |
|
|
8,632 |
|
|
Retained earnings |
23,066 |
|
|
21,843 |
|
|
Accumulated other comprehensive
loss |
(1,845) |
|
|
(2,454) |
|
|
Treasury stock, 121
shares at 2017 and 118 shares at 2016 of Carnival Corporation
and
30 shares at 2017 and 27 shares at 2016 of
Carnival plc, at cost |
(6,104) |
|
|
(5,789) |
|
|
Total shareholders' equity |
24,172 |
|
|
22,597 |
|
|
|
$ |
40,643 |
|
|
$ |
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
August 31, |
|
Nine Months
Ended
August 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
STATISTICAL INFORMATION |
|
|
|
|
|
|
|
ALBDs (in thousands) (a) |
$ |
21,120 |
|
|
20,572 |
|
|
$ |
61,541 |
|
|
59,555 |
|
Occupancy percentage (b) |
111.3 |
% |
|
111.4 |
% |
|
106.7 |
% |
|
106.6 |
% |
Passengers carried (in
thousands) |
3,441 |
|
|
3,265 |
|
|
9,116 |
|
|
8,606 |
|
Fuel consumption in metric tons (in
thousands) |
814 |
|
|
793 |
|
|
2,463 |
|
|
2,417 |
|
Fuel consumption in metric tons per
thousand ALBDs |
38.5 |
|
|
38.6 |
|
|
40.0 |
|
|
40.6 |
|
Fuel cost per metric ton
consumed |
$ |
378 |
|
|
$ |
335 |
|
|
$ |
371 |
|
|
$ |
268 |
|
Currencies |
|
|
|
|
|
|
|
U.S. dollar to
euro |
$ |
1.15 |
|
|
$ |
1.12 |
|
|
$ |
1.11 |
|
|
$ |
1.11 |
|
U.S. dollar to
sterling |
$ |
1.29 |
|
|
$ |
1.34 |
|
|
$ |
1.27 |
|
|
$ |
1.41 |
|
U.S. dollar to
Australian dollar |
$ |
0.78 |
|
|
$ |
0.75 |
|
|
$ |
0.76 |
|
|
$ |
0.74 |
|
|
|
|
|
|
|
|
|
CASH FLOW INFORMATION (in millions) |
|
|
|
|
|
|
|
Cash from operations |
$ |
1,449 |
|
|
$ |
1,429 |
|
|
$ |
4,298 |
|
|
$ |
4,110 |
|
Capital expenditures |
$ |
437 |
|
|
$ |
450 |
|
|
$ |
2,296 |
|
|
$ |
2,416 |
|
Dividends paid |
$ |
290 |
|
|
$ |
262 |
|
|
$ |
797 |
|
|
$ |
721 |
|
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
August 31, |
|
Nine Months Ended
August 31, |
|
2017 |
|
2017
Constant
Dollar |
|
2016 |
|
2017 |
|
2017
Constant
Dollar |
|
2016 |
Passenger ticket revenues |
$ |
4,138 |
|
|
$ |
4,117 |
|
|
$ |
3,803 |
|
|
$ |
9,814 |
|
|
$ |
9,942 |
|
|
$ |
9,217 |
|
Onboard and other revenues |
1,223 |
|
|
1,218 |
|
|
1,146 |
|
|
3,237 |
|
|
3,262 |
|
|
3,047 |
|
Gross cruise revenues |
5,361 |
|
|
5,335 |
|
|
4,949 |
|
|
13,051 |
|
|
13,204 |
|
|
12,264 |
|
Less cruise costs |
|
|
|
|
|
|
|
|
|
|
|
Commissions, transportation and
other |
(699) |
|
|
(695) |
|
|
(646) |
|
|
(1,781) |
|
|
(1,809) |
|
|
(1,723) |
|
Onboard and other |
(184) |
|
|
(184) |
|
|
(171) |
|
|
(438) |
|
|
(442) |
|
|
(411) |
|
|
(883) |
|
|
(879) |
|
|
(817) |
|
|
(2,219) |
|
|
(2,251) |
|
|
(2,134) |
|
Net passenger ticket revenues |
3,439 |
|
|
3,422 |
|
|
3,157 |
|
|
8,033 |
|
|
8,133 |
|
|
7,494 |
|
Net onboard and other revenues |
1,039 |
|
|
1,034 |
|
|
975 |
|
|
2,799 |
|
|
2,820 |
|
|
2,636 |
|
Net cruise revenues |
$ |
4,478 |
|
|
$ |
4,456 |
|
|
$ |
4,132 |
|
|
$ |
10,832 |
|
|
$ |
10,953 |
|
|
$ |
10,130 |
|
ALBDs |
21,120,155 |
|
|
21,120,155 |
|
|
20,572,112 |
|
|
61,540,974 |
|
|
61,540,974 |
|
|
59,555,384 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross revenue yields |
$ |
253.82 |
|
|
$ |
252.63 |
|
|
$ |
240.60 |
|
|
$ |
212.07 |
|
|
$ |
214.57 |
|
|
$ |
205.94 |
|
% increase vs. 2016 |
5.5 |
% |
|
5.0 |
% |
|
|
|
3.0 |
% |
|
4.2 |
% |
|
|
Net revenue yields |
$ |
211.99 |
|
|
$ |
211.02 |
|
|
$ |
200.87 |
|
|
$ |
176.01 |
|
|
$ |
177.99 |
|
|
$ |
170.10 |
|
% increase vs. 2016 |
5.5 |
% |
|
5.1 |
% |
|
|
|
3.5 |
% |
|
4.6 |
% |
|
|
Net passenger ticket revenue
yields |
$ |
162.82 |
|
|
$ |
162.05 |
|
|
$ |
153.47 |
|
|
$ |
130.52 |
|
|
$ |
132.17 |
|
|
$ |
125.84 |
|
% increase vs. 2016 |
6.1 |
% |
|
5.6 |
% |
|
|
|
3.7 |
% |
|
5.0 |
% |
|
|
Net onboard and other revenue
yields |
$ |
49.17 |
|
|
$ |
48.97 |
|
|
$ |
47.39 |
|
|
$ |
45.49 |
|
|
$ |
45.83 |
|
|
$ |
44.26 |
|
% increase vs. 2016 |
3.8 |
% |
|
3.3 |
% |
|
|
|
2.8 |
% |
|
3.5 |
% |
|
|
|
|
|
Three Months Ended
August 31, |
|
Nine Months Ended
August 31, |
|
2017 |
|
2017
Constant
Currency |
|
2016 |
|
2017 |
|
2017
Constant
Currency |
|
2016 |
Net passenger ticket revenues |
$ |
3,439 |
|
|
$ |
3,424 |
|
|
$ |
3,157 |
|
|
$ |
8,033 |
|
|
$ |
8,140 |
|
|
$ |
7,494 |
|
Net onboard and other revenues |
1,039 |
|
|
1,033 |
|
|
975 |
|
|
2,799 |
|
|
2,811 |
|
|
2,636 |
|
Net cruise revenues |
$ |
4,478 |
|
|
$ |
4,457 |
|
|
$ |
4,132 |
|
|
$ |
10,832 |
|
|
$ |
10,951 |
|
|
$ |
10,130 |
|
ALBDs |
21,120,155 |
|
|
21,120,155 |
|
|
20,572,112 |
|
|
61,540,974 |
|
|
61,540,974 |
|
|
59,555,384 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue yields |
$ |
211.99 |
|
|
$ |
211.05 |
|
|
$ |
200.87 |
|
|
$ |
176.01 |
|
|
$ |
177.95 |
|
|
$ |
170.10 |
|
% increase vs. 2016 |
5.5 |
% |
|
5.1 |
% |
|
|
|
3.5 |
% |
|
4.6 |
% |
|
|
Net passenger ticket revenue
yields |
$ |
162.82 |
|
|
$ |
162.13 |
|
|
$ |
153.47 |
|
|
$ |
130.52 |
|
|
$ |
132.28 |
|
|
$ |
125.84 |
|
% increase vs. 2016 |
6.1 |
% |
|
5.6 |
% |
|
|
|
3.7 |
% |
|
5.1 |
% |
|
|
Net onboard and other revenue
yields |
$ |
49.17 |
|
|
$ |
48.92 |
|
|
$ |
47.39 |
|
|
$ |
45.49 |
|
|
$ |
45.67 |
|
|
$ |
44.26 |
|
% increase vs. 2016 |
3.8 |
% |
|
3.2 |
% |
|
|
|
2.8 |
% |
|
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
August 31, |
|
Nine Months Ended
August 31, |
|
2017 |
|
2017
Constant
Dollar |
|
2016 |
|
2017 |
|
2017
Constant
Dollar |
|
2016 |
Cruise operating expenses |
$ |
2,927 |
|
|
$ |
2,908 |
|
|
$ |
2,479 |
|
|
$ |
7,752 |
|
|
$ |
7,837 |
|
|
$ |
6,939 |
|
Cruise selling and administrative
expenses |
543 |
|
|
542 |
|
|
527 |
|
|
1,637 |
|
|
1,658 |
|
|
1,606 |
|
Gross cruise costs |
3,470 |
|
|
3,450 |
|
|
3,006 |
|
|
9,389 |
|
|
9,495 |
|
|
8,545 |
|
Less cruise costs included above |
|
|
|
|
|
|
|
|
|
|
|
Commissions,
transportation and
other |
(699) |
|
|
(695) |
|
|
(646) |
|
|
(1,781) |
|
|
(1,809) |
|
|
|
|
Onboard and other |
(184) |
|
|
(184) |
|
|
(171) |
|
|
(438) |
|
|
(442) |
|
|
(411) |
|
(Losses)
gains on ship sales
and impairments
(c) |
(304) |
|
|
(294) |
|
|
— |
|
|
(300) |
|
|
(290) |
|
|
2 |
|
Restructuring expenses
(c) |
(3) |
|
|
(3) |
|
|
— |
|
|
(3) |
|
|
(3) |
|
|
(2) |
|
Other (c) |
— |
|
|
— |
|
|
(18) |
|
|
— |
|
|
— |
|
|
(39) |
|
Net cruise costs |
2,280 |
|
|
2,274 |
|
|
2,171 |
|
|
6,867 |
|
|
6,951 |
|
|
6,372 |
|
Less fuel |
(307) |
|
|
(307) |
|
|
(265) |
|
|
(914) |
|
|
(914) |
|
|
(648) |
|
Net cruise costs excluding fuel |
$ |
1,973 |
|
|
$ |
1,967 |
|
|
$ |
1,906 |
|
|
$ |
5,953 |
|
|
$ |
6,037 |
|
|
$ |
5,724 |
|
ALBDs |
21,120,155 |
|
|
21,120,155 |
|
|
20,572,112 |
|
|
61,540,974 |
|
|
61,540,974 |
|
|
59,555,384 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross cruise costs per ALBD |
$ |
164.32 |
|
|
$ |
163.32 |
|
|
$ |
146.18 |
|
|
$ |
152.56 |
|
|
$ |
154.29 |
|
|
$ |
143.50 |
|
% increase vs. 2016 |
12.4 |
% |
|
11.7 |
% |
|
|
|
6.3 |
% |
|
7.5 |
% |
|
|
Net cruise costs excluding fuel per
ALBD |
$ |
93.39 |
|
|
$ |
93.08 |
|
|
$ |
92.63 |
|
|
$ |
96.72 |
|
|
$ |
98.09 |
|
|
$ |
96.10 |
|
% increase vs. 2016 |
0.8 |
% |
|
0.5 |
% |
|
|
|
0.6 |
% |
|
2.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
August 31, |
|
Nine Months Ended
August 31, |
|
2017 |
|
2017
Constant
Currency |
|
2016 |
|
2017 |
|
2017
Constant
Currency |
|
2016 |
Net cruise costs excluding fuel |
$ |
1,973 |
|
|
$ |
1,960 |
|
|
$ |
1,906 |
|
|
$ |
5,953 |
|
|
$ |
6,011 |
|
|
$ |
5,724 |
|
ALBDs |
21,120,155 |
|
|
21,120,155 |
|
|
20,572,112 |
|
|
61,540,974 |
|
|
61,540,974 |
|
|
59,555,384 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cruise costs excluding fuel
per ALBD |
$ |
93.39 |
|
|
$ |
92.78 |
|
|
$ |
92.63 |
|
|
$ |
96.72 |
|
|
$ |
97.67 |
|
|
$ |
96.10 |
|
% increase vs. 2016 |
0.8 |
% |
|
0.2 |
% |
|
|
|
0.6 |
% |
|
1.6 |
% |
|
|
|
(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
August 31, |
|
Nine Months
Ended
August 31, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income |
|
|
|
|
|
|
|
U.S. GAAP net
income |
$ |
1,329 |
|
|
$ |
1,424 |
|
|
$ |
2,060 |
|
|
$ |
2,171 |
|
Unrealized (gains) losses
on fuel derivatives, net (b) |
(65) |
|
|
(25) |
|
|
(134) |
|
|
(121) |
|
Losses (Gains) on ship
sales and impairments (c) |
392 |
|
|
— |
|
|
389 |
|
|
(2) |
|
Restructuring expenses
(c) |
3 |
|
|
— |
|
|
3 |
|
|
2 |
|
Other (c) |
— |
|
|
18 |
|
|
— |
|
|
39 |
|
Adjusted net
income |
$ |
1,659 |
|
|
$ |
1,417 |
|
|
$ |
2,318 |
|
|
$ |
2,089 |
|
Weighted-average shares outstanding |
726 |
|
|
739 |
|
|
727 |
|
|
754 |
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
U.S. GAAP earnings per
share |
$ |
1.83 |
|
|
$ |
1.93 |
|
|
$ |
2.84 |
|
|
$ |
2.88 |
|
Unrealized (gains) losses
on fuel derivatives, net (b) |
(0.09) |
|
|
(0.03) |
|
|
(0.18) |
|
|
(0.16) |
|
Losses (Gains) on ship
sales and impairments (c) |
0.55 |
|
|
— |
|
|
0.53 |
|
|
— |
|
Restructuring expenses
(c) |
— |
|
|
— |
|
|
— |
|
|
— |
|
Other (c) |
— |
|
|
0.02 |
|
|
— |
|
|
0.05 |
|
Adjusted earnings per
share |
$ |
2.29 |
|
|
$ |
1.92 |
|
|
$ |
3.19 |
|
|
$ |
2.77 |
|
|
|
|
|
|
|
|
|
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, impairment
charges 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, 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.
CONTACT: MEDIA CONTACT - Roger
Frizzell, +1 (305) 406 7862; INVESTOR RELATIONS CONTACT -
Beth Roberts, +1 (305) 406 4832