REG-Carnival PLC: 1st Quarter Results
26/03/2019 13:20
Carnival Corporation & plc Reports First Quarter Earnings
MIAMI, March 26, 2019 /PRNewswire/ -- Carnival Corporation & plc (NYSE/LSE:
CCL; NYSE: CUK) announced U.S. GAAP net income of $336 million, or $0.48
diluted EPS, for the first quarter of 2019, compared to U.S. GAAP net income
for the first quarter of 2018 of $391 million, or $0.54 diluted EPS. First
quarter 2019 adjusted net income of $338 million, or $0.49 adjusted EPS,
compared to adjusted net income of $375 million, or $0.52 adjusted EPS, for
the first quarter of 2018. Adjusted net income excludes net charges of $2
million for the first quarter of 2019 and net gains of $16 million for the
first quarter of 2018 relating to unrealized gains on fuel derivatives net of
other charges. Revenues for the first quarter of 2019 were $4.7 billion,
higher than the $4.2 billion in the prior year.
Carnival Corporation & plc President and Chief Executive Officer Arnold Donald
stated, "First quarter earnings included revenue growth from higher capacity
and improved onboard spending, offset by the timing of cost increases and a
drag from fuel price and currency compared to the prior year. First quarter
adjusted earnings were better than the mid-point of December guidance by $0.07
per share."
Donald added, "For the full year, our earnings guidance now reflects $155
million, or $0.22 per share, from fuel price and currency moving against us.
Operationally, we continue to expect revenues and adjusted earnings per share
improvements in line with our December guidance. We expect adjusted earnings
per share to be higher than the prior year, despite a $45 million, or $0.06
per share, year over year drag from currency and the price of fuel."
Key information for the first quarter of 2019 compared to the first quarter of
2018:
* Gross cruise revenues of $4.6 billion compared to $4.2 billion for the prior
year. In constant currency, net cruise revenues of $3.6 billion compared to
$3.4 billion, an increase of 4.7 percent.
* Gross revenue yields (revenue per available lower berth day or "ALBD")
increased 5.8 percent. In constant currency, net revenue yields increased 0.5
percent, better than December guidance of approximately flat.
* Gross cruise costs including fuel per ALBD increased 8.6 percent. In
constant currency, net cruise costs excluding fuel per ALBD increased 0.9
percent, better than December guidance of up approximately 2.0 percent, mainly
due to the timing of expenses between quarters.
* Changes in fuel prices and currency exchange rates decreased earnings by
$0.03 per share.
Highlights from the first quarter included the delivery of AIDAnova, the first
cruise ship in the industry powered at sea by liquefied natural gas and the
delivery of Costa Venezia, the first Costa ship designed for the Chinese
market. Princess Cruises expanded its MedallionClass™ experience onboard
Regal Princess, with three additional ships to follow in 2019.
OceanMedallion™, the wearable device that powers the breakthrough guest
experience platform behind MedallionClass vacations, was awarded the 2019 IoT
Wearables Innovation of the Year. Additionally, Carnival Cruise Line was named
the Best Ocean Cruise Line in the annual USA Today 10Best Readers' Choice
Awards and Carnival Corporation was named by Forbes as one of America's best
employers for diversity for its outstanding commitment to diversity and
inclusion.
2019 Outlook
At this time, cumulative advanced bookings for the remainder of 2019 are ahead
of the prior year at prices that are in line with the prior year on a
comparable basis. Pricing on bookings taken since January have been running in
line on a comparable basis to the prior year while booking volumes are ahead
compared to the prior year. As a result, even with higher capacity, there is
less inventory remaining for sale than at the same time last year.
Donald added, "Booking trends achieved during wave season rivaled last years'
historical highs and were consistent with the demand trends we experienced
going into the year, building further confidence in our full year guidance.
For our North America and Australia brands, our booked position is ahead of
the prior year at higher prices while our Europe and Asia brands are well
ahead of the prior year at lower prices. Our brands are strong and growing,
including Continental Europe, where we continue to expect revenue growth
driven by double-digit capacity increases."
Based on current booking trends, the company continues to expect full year
2019 constant currency net cruise revenues to be up approximately 5.5 percent,
with capacity growth of 4.6 percent, and net revenue yields in constant
currency expected to be up approximately 1.0 percent compared to the prior
year driven by our NAA brands. The company continues to expect full year net
cruise costs excluding fuel per ALBD in constant currency to be up
approximately 0.5 percent compared to the prior year.
Taking the above factors into consideration, the company expects full year
2019 adjusted earnings per share to be in the range of $4.35 to $4.55,
compared to December guidance of $4.50 to $4.80, due to changes in fuel price
and currency exchange rates and 2018 adjusted earnings per share of $4.26.
Donald commented, "We believe we are on a path that includes delivering, over
time, double-digit earnings growth and improving return on invested capital
through a consistent strategy of creating demand in excess of measured
capacity growth while leveraging our industry leading scale." The company
invested more than $250 million in share repurchases during the quarter,
bringing the cumulative total to nearly $5 billion since late 2015.
Second Quarter 2019 Outlook
Second quarter constant currency net revenue yields are expected to be in line
with the prior year. Net cruise costs excluding fuel per ALBD in constant
currency for the second quarter are expected to be up approximately 1.0
percent compared to the prior year. Changes in fuel prices and currency
exchange rates are expected to decrease earnings by $0.08 per share compared
to the prior year. Based on the above factors, the company expects adjusted
earnings per share for the second quarter 2019 to be in the range of $0.56 to
$0.60 versus 2018 adjusted earnings per share of $0.68.
Selected Key Forecast Metrics
Full Year 2019 Second Quarter 2019
Year over year change: Current Dollars Constant Currency Current Dollars Constant Currency
Net revenue yields Approx (1.0%) Approx 1.0% Approx (2.5%) Approx Flat
Net cruise costs excl. fuel / ALBD Approx (1.0%) Approx 0.5% Approx (1.5%) Approx 1.0%
Full Year 2019 Second Quarter 2019
Fuel cost per metric ton consumed $494 $502
Fuel consumption (metric tons in thousands) 3,320 840
Currencies (USD to 1)
AUD $0.71 $0.71
CAD $0.75 $0.75
EUR $1.14 $1.14
GBP $1.31 $1.32
RMB $0.15 $0.15
Three Months Ended
February 28,
2019 2018
Net income (in millions) $ 336 $ 391
Adjusted net income (in millions) (a) $ 338 $ 375
Earnings per share-diluted $ 0.48 $ 0.54
Adjusted earnings per share-diluted (a) $ 0.49 $ 0.52
(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
(2:00 p.m. GMT) today to discuss its 2019 first 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 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.
Together, the corporation's cruise lines operate 105 ships with 245,000 lower
berths visiting over 700 ports around the world, with 19 new ships scheduled
to be delivered through 2025. 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.
With a long history of innovation and providing guests with extraordinary
vacation experiences, Carnival Corporation has received thousands of industry
awards - including recognition by the Consumer Technology Association™ as a
CES(®) 2019 Innovation Awards Honoree for Ocean Medallion™. A revolutionary
wearable device that contains a proprietary blend of communication
technologies. Ocean Medallion enables the world's first interactive guest
experience platform transforming vacation travel on a large scale into a
highly personalized level of customized service. The prestigious CES
Innovation Awards honor outstanding design and engineering in consumer
technology products.
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 and www.cunard.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:
* Adverse world events impacting the ability or desire of people to travel may
lead to a decline in demand for cruises
* Incidents concerning our ships, guests or the cruise vacation industry as
well as adverse weather conditions and other natural disasters may impact the
satisfaction of our guests and crew and lead to reputational damage
* Changes in and non-compliance with laws and regulations under which we
operate, such as those relating to health, environment, safety and security,
data privacy and protection, anti-corruption, economic sanctions, trade
protection and tax may lead to litigation, enforcement actions, fines,
penalties and reputational damage
* Breaches in data security and lapses in data privacy as well as disruptions
and other damages to our principal offices, information technology operations
and system networks and failure to keep pace with developments in technology
may adversely impact our business operations, the satisfaction of our guests
and crew and lead to reputational damage
* Ability to recruit, develop and retain qualified shipboard personnel who
live away from home for extended periods of time may adversely impact our
business operations, guest services and satisfaction
* Increases in fuel prices and availability of fuel supply may adversely
impact our scheduled itineraries and costs
* Fluctuations in foreign currency exchange rates may adversely impact our
financial results
* Overcapacity and competition in the cruise and land-based vacation industry
may lead to a decline in our cruise sales and pricing
* Geographic regions in which we try to expand our business may be slow to
develop or ultimately not develop how we expect
* Inability to implement our shipbuilding programs and ship repairs,
maintenance and refurbishments may adversely impact our business operations
and the satisfaction of our guests
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
February 28,
2019 2018
Revenues
Cruise
Passenger ticket $ 3,199 $ 3,148
Onboard and other (a) 1,446 1,071
Tour and other 29 13
4,673 4,232
Operating Costs and Expenses
Cruise
Commissions, transportation and other 709 663
Onboard and other (a) 467 140
Payroll and related 557 558
Fuel 381 359
Food 268 264
Other ship operating 731 711
Tour and other 29 14
3,142 2,709
Selling and administrative 629 616
Depreciation and amortization 516 488
4,287 3,813
Operating Income 386 419
Nonoperating Income (Expense)
Interest income 4 3
Interest expense, net of capitalized interest (51) (48)
Gains on fuel derivatives, net (b) — 16
Other (expense) income, net (2) 1
(49) (28)
Income Before Income Taxes 338 390
Income Tax Expense, Net (2) —
Net Income $ 336 $ 391
Earnings Per Share
Basic $ 0.48 $ 0.54
Diluted $ 0.48 $ 0.54
Dividends Declared Per Share $ 0.50 $ 0.45
Weighted-Average Shares Outstanding - Basic 693 717
Weighted-Average Shares Outstanding - Diluted 695 719
(a) Includes the effect of the adoption of new accounting guidance of $323 million for the three months ended February 28, 2019.
(b) During the three months ended February 28, 2018, our gains on fuel derivatives, net include net unrealized gains of $32 million and realized (losses) of $(16) million.
CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except par values)
February 28, November 30,
2019 2018
ASSETS
Current Assets
Cash and cash equivalents $ 649 $ 982
Trade and other receivables, net 406 358
Inventories 444 450
Prepaid expenses and other (a) 603 436
Total current assets 2,101 2,225
Property and Equipment, Net 37,005 35,336
Goodwill 2,943 2,925
Other Intangibles 1,181 1,176
Other Assets 700 738
$ 43,930 $ 42,401
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 768 $ 848
Current portion of long-term debt 1,684 1,578
Accounts payable 798 730
Accrued liabilities and other 1,637 1,654
Customer deposits (a) 4,755 4,395
Total current liabilities 9,642 9,204
Long-Term Debt 9,134 7,897
Other Long-Term Liabilities 912 856
Shareholders' Equity
Common stock of Carnival Corporation, $0.01 par value; 1,960 shares authorized; 657 shares at 2019 and 656 shares at 2018 issued 7 7
Ordinary shares of Carnival plc, $1.66 par value; 217 shares at 2019 and 2018 issued 358 358
Additional paid-in capital 8,776 8,756
Retained earnings 25,033 25,066
Accumulated other comprehensive loss (1,869) (1,949)
Treasury stock, 130 shares at 2019 and 129 shares at 2018 of Carnival Corporation and 53 shares at 2019 and 48 shares at 2018 of Carnival plc, at cost (8,063) (7,795)
Total shareholders' equity 24,241 24,443
$ 43,930 $ 42,401
(a) Includes the effect of the adoption of new accounting guidance of $142 million as of February 28, 2019.
CARNIVAL CORPORATION & PLC
OTHER INFORMATION
Three Months Ended
February 28,
2019 2018
STATISTICAL INFORMATION
ALBDs (in thousands) (a) (b) 21,299 20,462
Occupancy percentage (c) 104.8 % 104.7 %
Passengers carried (in thousands) 2,937 2,860
Fuel consumption in metric tons (in thousands) 830 821
Fuel consumption in metric tons per thousand ALBDs 38.9 40.1
Fuel cost per metric ton consumed $ 459 $ 437
Currencies (USD to 1)
AUD $ 0.72 $ 0.78
CAD $ 0.75 $ 0.79
EUR $ 1.14 $ 1.21
GBP $ 1.28 $ 1.37
RMB $ 0.15 $ 0.15
CASH FLOW INFORMATION (in millions)
Cash from operations $ 1,116 $ 1,064
Capital expenditures $ 2,129 $ 574
Dividends paid $ 348 $ 323
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) For the three months ended February 28, 2019 compared to the three months ended February 28, 2018, we had a 4.1% capacity increase in ALBDs comprised of a 5.0% capacity increase in our North America and Australia ("NAA") segment and a 2.5% capacity increase in our Europe and Asia ("EA") segment.
Our NAA segment's capacity increase was caused by:
* Full quarter impact from one Carnival Cruise Line 3,960-passenger capacity ship that entered into service in April 2018
* Full quarter impact from one Seabourn 600-passenger capacity ship that entered into service in May 2018
* Partial period impact from one Holland America Line 2,670-passenger capacity ship that entered into service in December 2018
Our EA segment's capacity increase was caused by:
* Partial period impact from one AIDA 5,230-passenger capacity ship that entered into service in December 2018
The increase in our EA segment's capacity was partially offset by:
* Full quarter impact from one P&O Cruises (UK) 700-passenger capacity ship removed from service in March 2018
* Full quarter 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 February 28,
(dollars in millions, except yields) 2019 2019 2018
Constant
Dollar
Passenger ticket revenues $ 3,199 $ 3,289 $ 3,148
Onboard and other revenues (a) 1,446 1,472 1,071
Gross cruise revenues 4,645 4,760 4,219
Less cruise costs
Commissions, transportation and other (709) (734) (663)
Onboard and other (a) (467) (475) (140)
(1,177) (1,209) (803)
Net passenger ticket revenues 2,490 2,555 2,485
Net onboard and other revenues 978 996 931
Net cruise revenues $ 3,468 $ 3,551 $ 3,416
ALBDs 21,299,196 21,299,196 20,461,582
Gross revenue yields $ 218.06 $ 223.51 $ 206.20
% increase 5.8 % 8.4 %
Net revenue yields $ 162.82 $ 166.73 $ 166.95
% decrease (2.5) % (0.1) %
Net passenger ticket revenue yields $ 116.90 $ 119.95 $ 121.46
% decrease (3.8) % (1.2) %
Net onboard and other revenue yields $ 45.92 $ 46.78 $ 45.50
% increase 0.9 % 2.8 %
(a) Includes the effect of the adoption of new accounting guidance of $323 million ($328 million in constant dollar) for the three months ended February 28, 2019.
Three Months Ended February 28,
(dollars in millions, except yields) 2019 2019 2018
Constant
Currency
Net passenger ticket revenues $ 2,490 $ 2,576 $ 2,485
Net onboard and other revenues 978 999 931
Net cruise revenues $ 3,468 $ 3,575 $ 3,416
ALBDs 21,299,196 21,299,196 20,461,582
Net revenue yields $ 162.82 $ 167.86 $ 166.95
% (decrease) increase (2.5) % 0.5 %
Net passenger ticket revenue yields $ 116.90 $ 120.96 $ 121.46
% decrease (3.8) % (0.4) %
Net onboard and other revenue yields $ 45.92 $ 46.90 $ 45.50
% increase 0.9 % 3.1 %
(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 February 28,
(dollars in millions, except costs per ALBD) 2019 2019 2018
Constant
Dollar
Cruise operating expenses (a) $ 3,113 $ 3,185 $ 2,695
Cruise selling and administrative expenses 623 638 610
Gross cruise costs 3,736 3,822 3,305
Less cruise costs included above
Commissions, transportation and other (709) (734) (663)
Onboard and other (a) (467) (475) (140)
Gains (losses) on ship sales and impairments (2) (2) (16)
Restructuring expenses — — —
Other — — —
Net cruise costs 2,558 2,611 2,485
Less fuel (381) (381) (359)
Net cruise costs excluding fuel $ 2,177 $ 2,231 $ 2,127
ALBDs 21,299,196 21,299,196 20,461,582
Gross cruise costs per ALBD $ 175.40 $ 179.46 $ 161.51
% increase 8.6 % 11.1 %
Net cruise costs excluding fuel per ALBD $ 102.21 $ 104.73 $ 103.92
% (decrease) increase (1.6) % 0.8 %
(a) Includes the effect of the adoption of new accounting guidance of $323 million ($328 million in constant dollar) for the three months ended February 28, 2019.
Three Months Ended February 28,
(dollars in millions, except costs per ALBD) 2019 2019 2018
Constant
Currency
Net cruise costs excluding fuel $ 2,177 $ 2,233 $ 2,127
ALBDs 21,299,196 21,299,196 20,461,582
Net cruise costs excluding fuel per ALBD $ 102.21 $ 104.84 $ 103.92
% (decrease) increase (1.6) % 0.9 %
(See Explanations of Non-GAAP Financial Measures.)
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES (CONTINUED)
Three Months Ended
February 28,
(in millions, except per share data) 2019 2018
Net income
U.S. GAAP net income $ 336 $ 391
Unrealized (gains) losses on fuel derivatives, net — (32)
(Gains) losses on ship sales and impairments 2 16
Restructuring expenses — —
Other — —
Adjusted net income $ 338 $ 375
Weighted-average shares outstanding 695 719
Earnings per share
U.S. GAAP earnings per share $ 0.48 $ 0.54
Unrealized (gains) losses on fuel derivatives, net — (0.05)
(Gains) losses on ship sales and impairments — 0.02
Restructuring expenses — —
Other — —
Adjusted earnings per share $ 0.49 $ 0.52
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. 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 2019 periods'
currency exchange rates have remained constant with the 2018 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.
* 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; INVESTOR RELATIONS
CONTACT: Beth Roberts, +1 305 406 4832
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See all newsREG-Carnival PLC: Carnival Corporation 4Q 2025 Earnings
AnnouncementREG-Carnival PLC: CARNIVAL CORPORATION & PLC TO HOLD CONFERENCE CALL ON FOURTH QUARTER EARNINGS
AnnouncementREG-Carnival PLC: CARNIVAL PLC - VOTING RIGHTS AND CAPITAL
AnnouncementREG-Carnival PLC: Notification of Transactions of Directors/PDMRs
AnnouncementREG-Carnival PLC: External Directorship Notification
Announcement