REG-Carnival PLC: Carnival Corp & plc Second Quarter Results <Origin Href="QuoteRef">CCL.L</Origin> - Part 1
22/06/2017 14:20
CARNIVAL CORPORATION & PLC REPORTS SECOND QUARTER EARNINGS
Carnival Corporation & plc today reported its results for the second quarter
ended May 31, 2017. The results of Carnival Corporation and Carnival plc
have been consolidated and include results on a U.S. GAAP and adjusted basis.
2Q Highlights
• 2Q U.S. GAAP net income of $379 million, or $0.52 diluted EPS, compared to
$605 million, or $0.80 diluted EPS for the prior year
• 2Q adjusted net income of $378 million, or $0.52 EPS, compared to adjusted
net income of $370 million, or $0.49 EPS for the prior year (adjusted net
income excludes unrealized gains and losses on fuel derivatives and other net
charges, a total gain of $1 million for 2Q 2017 and $235 million, or $0.31 per
share, for 2Q 2016)
• 2Q net revenue yields in constant currency increased 5.1% compared to
prior year, better than March guidance of up 2.5 to 3.5%
• 2Q net cruise costs excluding fuel per available lower berth day
(“ALBD”) in constant currency increased 1.5% from prior year, in line with
March guidance of up 1.5 to 2.5%
• Changes in fuel prices (including realized fuel derivatives) and currency
exchange rates decreased earnings by $0.12 per share
Outlook
• At this time, cumulative bookings for the next three quarters are higher
at prices that are well ahead of the prior year
• FY 2017 net revenue yields in constant currency are expected to be up
approximately 3.5% compared to the prior year, better than March guidance of
up approximately 3%
• FY 2017 net cruise costs excluding fuel per ALBD in constant currency are
expected to be up approximately 1.5% compared to the prior year, versus March
guidance of up approximately 1%
• FY 2017 adjusted EPS is expected to be in the range of $3.60 to $3.70,
compared to FY 2016 adjusted EPS of $3.45
• 3Q 2017 adjusted EPS is expected to be in the range of $2.16 to $2.20,
compared to $1.92 in 3Q 2016
President and Chief Executive Officer Arnold Donald commenting on these
results:
“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.”
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.
MEDIA CONTACT INVESTOR RELATIONS CONTACT
Roger Frizzell Beth Roberts
+1 (305) 406 7862 +1 (305) 406 4832
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.
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.
FOR IMMEDIATE RELEASE
CARNIVAL CORPORATION & PLC REPORTS SECOND QUARTER EARNINGS
MIAMI (June 22, 2017) - 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 Medallion(TM). 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 Six Months Ended
May 31, 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.
MEDIA CONTACT INVESTOR RELATIONS CONTACT
Roger Frizzell Beth Roberts
+1 (305) 406 7862 +1 (305) 406 4832
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 Six Months Ended
May 31, 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
1. 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, November 30,
2017 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 Six Months Ended
May 31, 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
1. 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.
2. 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 2016 2017 2017 2016
Constant Constant
Dollar Dollar
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 2016 2017 2017 2016
Constant Constant
Currency Currency
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 2016 2017 2017 2016
Constant Constant
Dollar Dollar
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 2016 2017 2017 2016
Constant Constant
Currency Currency
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 Six Months Ended
May 31, 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
1. 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
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