REG-Carnival PLC: Carnival Corp & plc Second Quarter Results.
25/06/2018 14:45
Carnival Corporation & plc Reports Record Second Quarter Results
Record second quarter revenues and adjusted earnings
MIAMI, June 25, 2018 /PRNewswire/ -- Carnival Corporation & plc (NYSE/LSE:
CCL; NYSE: CUK) announced U.S. GAAP net income of $561 million, or $0.78
diluted EPS, for the second quarter of 2018, higher than U.S. GAAP net income
for the second quarter of 2017 of $379 million, or $0.52 diluted EPS. Second
quarter 2018 adjusted net income of $489 million, or $0.68 adjusted EPS, was
higher than adjusted net income of $378 million, or $0.52 adjusted EPS, for
the second quarter of 2017. Adjusted net income excludes unrealized gains and
losses on fuel derivatives and other net charges, totaling $72 million in net
gains for the second quarter of 2018 and $1 million in net gains for the
second quarter of 2017. Revenues for the second quarter of 2018 were $4.4
billion, higher than the $3.9 billion in the prior year.
Carnival Corporation & plc President and Chief Executive Officer Arnold Donald
stated, "We delivered another strong quarter, again achieving record adjusted
earnings on record revenues and exceeding the high end of our guidance range.
Strong operational execution drove a 30 percent increase in adjusted earnings
affirming the strength of our core strategy to create demand that outpaces
measured capacity growth through outstanding guest experience efforts coupled
with innovative actions to increase consideration for cruising across all
global markets."
Key information for the second quarter of 2018 compared to the second quarter
of 2017:
*
Gross revenue yields (revenue per available lower berth day or "ALBD")
increased 8.8 percent. In constant currency, net revenue yields increased 4.8
percent exceeding March guidance of up 2.5 to 3.5 percent.
*
Gross cruise costs including fuel per ALBD increased 8.2 percent. In constant
currency, net cruise costs excluding fuel per ALBD increased 3.6 percent,
better than March guidance of up 4.0 to 5.0 percent, principally due to the
timing of expenses between quarters.
*
Changes in fuel prices (including realized fuel derivatives) and currency
exchange rates increased earnings by $0.01 per share.
Highlights from the second quarter include the delivery of Carnival Cruise
Line's 26th ship in its fleet, Carnival Horizon in March 2018. Additionally,
in April 2018 Seabourn took delivery of the 5th all-suite ship in its ultra
luxury fleet, Seabourn Ovation. As a result of the strong guest response to
sailings to Cuba, Carnival Cruise Line received approval for more than 20
additional calls, bringing the total to 40 calls to Cuba in 2019, departing
from home-ports in Miami, Fort Lauderdale, Tampa, and Charleston. Also during
the quarter, Carnival Cruise Line unveiled the largest, most technologically
advanced operations center in the cruise industry. Carnival Corporation & plc
increased its quarterly dividend from $0.45 to $0.50 and replenished the share
repurchase program to $1 billion.
2018 Outlook
At this time, cumulative advanced bookings for the next three quarters are in
line with the prior year at higher prices. Since March, booking volumes for
the next three quarters have been running slightly ahead of prior year at
prices that are in line with the prior year.
Donald added, "Strong operational results coupled with sustained strength in
booking trends have mitigated the unfavorable $0.19 per share impact of fuel
and currency moving against us since our last update. We remain on track to
deliver double digit return on invested capital in 2018. In addition, we have
accelerated returns to shareholders through our recent dividend increase, with
annual dividend distributions now over $1.4 billion and the reauthorization of
up to $1 billion in share repurchases." The company invested over $375 million
in share repurchases since the beginning of the quarter, bringing the
cumulative total of repurchases to date to over $3.7 billion since late
2015.
Based on current booking trends, the company now expects full year 2018 net
revenue yields in constant currency to be up approximately 3.0 percent
compared to the prior year, better than March guidance of up approximately 2.5
percent. The company still expects full year net cruise costs excluding fuel
per ALBD in constant currency compared to the prior year to be up
approximately 1.0 percent, in line with March guidance. Changes in fuel prices
(including realized fuel derivatives) and currency exchange rates are expected
to decrease earnings by $0.19 per share compared to March guidance and $0.13
per share compared to the prior year.
Taking the above factors into consideration, the company expects full year
2018 adjusted earnings per share to be in the range of $4.15 to $4.25 compared
to 2017 adjusted earnings per share of $3.82.
Third Quarter 2018 Outlook
Third quarter constant currency net revenue yields are expected to be up
approximately 1.5 to 2.5 percent compared to third quarter 2017. Net cruise
costs excluding fuel per ALBD in constant currency for the third quarter are
expected to increase by approximately 3.0 to 4.0 percent compared to third
quarter 2017. Changes in fuel prices (including realized derivatives) and
currency exchange rates are expected to decrease earnings by $0.06 per share
compared to the prior year. Based on the above factors, the company expects
adjusted earnings per share for the third quarter 2018 to be in the range of
$2.25 to $2.29 versus 2017 adjusted earnings per share of $2.29.
Selected Key Metrics
Full Year 2018 Third Quarter 2018
Year over year change: Current Dollars Constant Currency Current Dollars Constant Currency
Net revenue yields Approx 5.0% Approx 3.0% 2.5 to 3.5% 1.5 to 2.5%
Net cruise costs excl. fuel / ALBD Approx 3.5% Approx 1.0% 4.0 to 5.0% 3.0 to 4.0%
Full Year 2018 Third Quarter 2018
Fuel cost per metric ton consumed $479 $525
Fuel consumption (metric tons in thousands) 3,305 820
Currencies (USD to 1)
AUD $0.76 $0.74
CAD $0.77 $0.75
EUR $1.18 $1.16
GBP $1.35 $1.32
RMB $0.16 $0.15
Three Months Ended Six Months Ended
May 31, May 31,
2018 2017 2018 2017
Net income (in millions) $ 561 $ 379 $ 951 $ 730
Adjusted net income (in millions) (a) $ 489 $ 378 $ 864 $ 657
Earnings per share-diluted $ 0.78 $ 0.52 $ 1.33 $ 1.00
Adjusted earnings per share-diluted (a) $ 0.68 $ 0.52 $ 1.21 $ 0.90
(a) See the net income to adjusted net income and EPS to adjusted EPS reconciliations in the Non-GAAP Financial Measures included herein.
Conference Call
The company has scheduled a conference call with analysts at 10:00 a.m. EDT
(3:00 p.m. BST) today to discuss its 2018 second quarter results. This call
can be listened to live, and additional information can be obtained, via
Carnival Corporation & plc's website at www.carnivalcorp.com and
www.carnivalplc.com.
Carnival Corporation & plc is the world's largest leisure travel company and
among the most profitable and financially strong in the cruise and vacation
industries, with a portfolio of 10 dynamic brands that include nine of the
world's leading cruise lines. With operations in North America, Australia,
Europe and Asia, its portfolio features Carnival Cruise Line, Princess
Cruises, Holland America Line, Seabourn, P&O Cruises (Australia), Costa
Cruises, AIDA Cruises, P&O Cruises (UK) and Cunard, as well as Fathom, the
corporation's immersion and enrichment experience brand.
Together, the corporation's cruise lines operate 103 ships with 234,000 lower
berths visiting over 700 ports around the world, with 18 new ships scheduled
to be delivered between 2018 and 2023. Carnival Corporation & plc also
operates Holland America Princess Alaska Tours, the leading tour company in
Alaska and the Canadian Yukon. Traded on both the New York and London Stock
Exchanges, Carnival Corporation & plc is the only group in the world to be
included in both the S&P 500 and the FTSE 100 indices.
In 2017, Fast Company recognized Carnival Corporation as being among the "Top
10 Most Innovative Companies" in both the design and travel categories. Fast
Company specifically recognized Carnival Corporation for its work in
developing Ocean Medallion™, a high-tech wearable device that enables the
world's first interactive guest experience platform capable of transforming
vacation travel into a highly personalized and elevated level of customized
service.
Additional information can be found on www.carnival.com, www.princess.com,
www.hollandamerica.com, www.seabourn.com, www.pocruises.com.au,
www.costacruise.com, www.aida.de, www.pocruises.com, www.cunard.com, and
www.fathom.org.
Cautionary Note Concerning Factors That May Affect Future Results
Carnival Corporation and Carnival plc and their respective subsidiaries are
referred to collectively in this document as "Carnival Corporation & plc,"
"our," "us" and "we." Some of the statements, estimates or projections
contained in this document are "forward-looking statements" that involve
risks, uncertainties and assumptions with respect to us, including some
statements concerning future results, outlooks, plans, goals and other events
which have not yet occurred. These statements are intended to qualify for the
safe harbors from liability provided by Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. All statements
other than statements of historical facts are statements that could be deemed
forward-looking. These statements are based on current expectations,
estimates, forecasts and projections about our business and the industry in
which we operate and the beliefs and assumptions of our management. We have
tried, whenever possible, to identify these statements by using words like
"will," "may," "could," "should," "would," "believe," "depends," "expect,"
"goal," "anticipate," "forecast," "project," "future," "intend," "plan,"
"estimate," "target," "indicate," "outlook," and similar expressions of future
intent or the negative of such terms.
Forward-looking statements include those statements that relate to our outlook
and financial position including, but not limited to, statements regarding:
• Net revenue yields • Net cruise costs, excluding fuel per available lower berth day
• Booking levels • Estimates of ship depreciable lives and residual values
• Pricing and occupancy • Goodwill, ship and trademark fair values
• Interest, tax and fuel expenses • Liquidity
• Currency exchange rates • Adjusted earnings per share
Because forward-looking statements involve risks and uncertainties, there are
many factors that could cause our actual results, performance or achievements
to differ materially from those expressed or implied by our forward-looking
statements. This note contains important cautionary statements of the known
factors that we consider could materially affect the accuracy of our
forward-looking statements and adversely affect our business, results of
operations and financial position. It is not possible to predict or identify
all such risks. There may be additional risks that we consider immaterial or
which are unknown. These factors include, but are not limited to, the
following:
*
The demand for cruises may decline due to adverse world events impacting the
ability or desire of people to travel, including conditions affecting the
safety and security of travel, government regulations and requirements, and
decline in consumer confidence
*
Incidents, such as ship incidents, security incidents, the spread of
contagious diseases and threats thereof, adverse weather conditions or other
natural disasters and the related adverse publicity affecting our reputation
and the health, safety, security and satisfaction of guests and crew
*
Changes in and compliance with laws and regulations relating to environment,
health, safety, security, data privacy and protection, tax and anti-corruption
under which we operate may lead to litigations, enforcement actions, fines, or
penalties
*
Disruptions and other damages to our information technology and other networks
and operations, breaches in data security, lapses in data privacy, and failure
to keep pace with developments in technology
*
Ability to recruit, develop and retain qualified shipboard personnel who live
on ships away from home for extended periods of time
*
Increases in fuel prices and availability of fuel supply
*
Fluctuations in foreign currency exchange rates
*
Overcapacity and competition in the cruise ship and land-based vacation
industry
*
Continuing financial viability of our travel agent distribution system, air
service providers and other key vendors in our supply chain, as well as
reductions in the availability of, and increases in the prices for, the
services and products provided by these vendors
*
Inability to implement our shipbuilding programs and ship repairs, maintenance
and refurbishments on terms that are favorable or consistent with our
expectations, as well as increases to our repairs and maintenance expenses and
refurbishment costs as our fleet ages
*
Geographic regions in which we try to expand our business may be slow to
develop and ultimately not develop how we expect
The ordering of the risk factors set forth above is not intended to reflect
our indication of priority or likelihood.
Forward-looking statements should not be relied upon as a prediction of actual
results. Subject to any continuing obligations under applicable law or any
relevant stock exchange rules, we expressly disclaim any obligation to
disseminate, after the date of this document, any updates or revisions to any
such forward-looking statements to reflect any change in expectations or
events, conditions or circumstances on which any such statements are based.
CARNIVAL CORPORATION & PLC CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (in millions, except per share data)
Three Months Ended Six Months Ended
May 31, May 31,
2018 2017 2018 2017
Revenues
Cruise
Passenger ticket $ 3,193 $ 2,872 $ 6,341 $ 5,676
Onboard and other 1,122 1,036 2,192 2,014
Tour and other 42 37 55 46
4,357 3,945 8,589 7,736
Operating Costs and Expenses
Cruise
Commissions, transportation and other 577 513 1,240 1,082
Onboard and other 138 129 278 253
Payroll and related 543 513 1,101 1,032
Fuel 373 310 731 607
Food 265 253 530 504
Other ship operating 749 685 1,460 1,346
Tour and other 36 33 50 46
2,681 2,436 5,390 4,870
Selling and administrative 605 553 1,221 1,102
Depreciation and amortization 512 456 1,000 896
3,798 3,445 7,611 6,868
Operating Income 559 500 978 868
Nonoperating Income (Expense)
Interest income 3 2 6 4
Interest expense, net of capitalized interest (49) (50) (98) (101)
Gains (losses) on fuel derivatives, net (a) 41 (53) 57 (27)
Other income (expense), net 10 (15) 11 (7)
5 (116) (24) (131)
Income Before Income Taxes 564 384 955 737
Income Tax Expense, Net (3) (5) (3) (7)
Net Income $ 561 $ 379 $ 951 $ 730
Earnings Per Share
Basic $ 0.79 $ 0.52 $ 1.33 $ 1.01
Diluted $ 0.78 $ 0.52 $ 1.33 $ 1.00
Dividends Declared Per Share $ 0.50 $ 0.40 $ 0.95 $ 0.75
Weighted-Average Shares Outstanding - Basic 714 724 715 724
Weighted-Average Shares Outstanding - Diluted 715 727 717 727
(a) During the three months ended May 31, 2018 and 2017, our gains (losses) on fuel derivatives, net include net unrealized gains (losses) of $50 million and $(2) million and realized losses of $(9) million and $(51) million, respectively. During the six months ended May 31, 2018 and 2017, our gains (losses) on fuel derivatives, net include net unrealized gains of $82 million and $69 million and realized losses of $(25) million and $(96) million, respectively.
CARNIVAL CORPORATION & PLC CONSOLIDATED BALANCE SHEETS (UNAUDITED) (in millions, except par values)
May 31, November 30,
2018 2017
ASSETS
Current Assets
Cash and cash equivalents $ 1,053 $ 395
Trade and other receivables, net 342 312
Inventories 402 387
Prepaid expenses and other 481 502
Total current assets 2,278 1,596
Property and Equipment, Net 35,227 34,430
Goodwill 2,950 2,967
Other Intangibles 1,183 1,200
Other Assets 546 585
$ 42,184 $ 40,778
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 837 $ 485
Current portion of long-term debt 848 1,717
Accounts payable 745 762
Accrued liabilities and other 1,571 1,877
Customer deposits 5,308 3,958
Total current liabilities 9,308 8,800
Long-Term Debt 8,172 6,993
Other Long-Term Liabilities 771 769
Shareholders' Equity
Common stock of Carnival Corporation, $0.01 par value; 1,960 shares authorized; 656 shares at 2018 and 655 shares at 2017 issued 7 7
Ordinary shares of Carnival plc, $1.66 par value; 217 shares at 2018 and 2017 issued 358 358
Additional paid-in capital 8,721 8,690
Retained earnings 23,564 23,292
Accumulated other comprehensive loss (1,855) (1,782)
Treasury stock, 125 shares at 2018 and 122 shares at 2017 of Carnival Corporation and 37 shares at 2018 and 32 shares at 2017 of Carnival plc, at cost (6,862) (6,349)
Total shareholders' equity 23,933 24,216
$ 42,184 $ 40,778
CARNIVAL CORPORATION & PLC OTHER INFORMATION
Three Months Ended Six Months Ended
May 31, May 31,
2018 2017 2018 2017
STATISTICAL INFORMATION
ALBDs (in thousands) (a) (b) 20,690 20,397 41,151 40,421
Occupancy percentage (c) 105.7 % 104.1 % 105.2 % 104.3 %
Passengers carried (in thousands) 2,971 2,906 5,831 5,675
Fuel consumption in metric tons (in thousands) 819 830 1,640 1,649
Fuel consumption in metric tons per thousand ALBDs 39.6 40.7 39.9 40.8
Fuel cost per metric ton consumed $ 455 $ 374 $ 446 $ 368
Currencies (USD to 1)
AUD $ 0.77 $ 0.75 $ 0.77 $ 0.75
CAD $ 0.78 $ 0.74 $ 0.79 $ 0.75
EUR $ 1.21 $ 1.08 $ 1.21 $ 1.07
GBP $ 1.38 $ 1.26 $ 1.38 $ 1.25
RMB $ 0.16 $ 0.15 $ 0.16 $ 0.15
CASH FLOW INFORMATION (in millions)
Cash from operations $ 2,023 $ 1,917 $ 3,087 $ 2,849
Capital expenditures $ 1,627 $ 1,447 $ 2,201 $ 1,859
Dividends paid $ 323 $ 253 $ 646 $ 507
Notes to Statistical Information
(a) ALBD is a standard measure of passenger capacity for the period that we use to approximate rate and capacity variances and is based on consistently applied formulas that we use to perform analyses to determine the main non-capacity driven factors that cause our cruise revenues and expenses to vary. ALBDs assume that each cabin we offer for sale accommodates two passengers and is computed by multiplying passenger capacity by revenue-producing ship operating days in the period.
(b) For the three months ended May 31, 2018 compared to the three months ended May 31, 2017, we had a 1.4% capacity increase in ALBDs comprised of a 2.1% capacity increase in our North America and Australia segment ("NAA") and a 0.3% capacity increase in our Europe and Asia segment ("EA").
Our NAA capacity increase was caused by:
• Partial quarter impact from one Princess Cruises 3,560-passenger capacity ship that entered into service in April 2017
• Partial quarter impact from one Carnival Cruise Line 3,970-passenger capacity ship that entered into service in April 2018
• Partial quarter impact from one Seabourn 600-passenger capacity ship that entered into service in May 2018
These increases were partially offset by the partial quarter impact from one P&O Cruises (Australia) 1,550-passenger capacity ship removed from service in April 2017.
Our EA segment's capacity increase was caused by:
• Full quarter impact from one AIDA Cruises 3,290-passenger capacity ship that entered into service in June 2017
These increases were partially offset by:
• Partial quarter impact from one P&O Cruises (UK) 700-passenger capacity ship removed from service in March 2018
• Partial quarter impact from one Costa Cruises 1,300-passenger capacity ship removed from service in April 2018
For the six months ended May 31, 2018 compared to the six months ended May 31, 2017, we had a 1.8% capacity increase in ALBDs comprised of a 1.8% capacity increase in our NAA segment and a 1.9% capacity increase in our EA segment.
Our NAA capacity increase was caused by:
• Partial period impact from one Princess Cruises 3,560-passenger capacity ship that entered into service in April 2017
• Partial period impact from one Carnival Cruise Line 3,970-passenger capacity ship that entered into service in April 2018
• Partial period impact from one Seabourn 600-passenger capacity ship that entered into service in May 2018
These increases were partially offset by the partial period impact from one P&O Cruises (Australia) 1,550-passenger capacity ship removed from service in April 2017.
Our EA segment's capacity increase was caused by:
• Full period impact from one AIDA Cruises 3,290-passenger capacity ship that entered into service in June 2017
These increases were partially offset by:
• Partial period impact from one P&O Cruises (UK) 700-passenger capacity ship removed from service in March 2018
• Partial period impact from one Costa Cruises 1,300-passenger capacity ship removed from service in April 2018
(c) In accordance with cruise industry practice, occupancy is calculated using a denominator of ALBDs, which assumes two passengers per cabin even though some cabins can accommodate three or more passengers. Percentages in excess of 100% indicate that on average more than two passengers occupied some cabins.
CARNIVAL CORPORATION & PLC NON-GAAP FINANCIAL MEASURES
Consolidated gross and net revenue yields were computed by dividing the gross and net cruise revenues by ALBDs as follows:
Three Months Ended May 31, Six Months Ended May 31,
(dollars in millions, except yields) 2018 2018 2017 2018 2018 2017
Constant Constant
Dollar Dollar
Passenger ticket revenues $ 3,193 $ 3,072 $ 2,872 $ 6,341 $ 6,072 $ 5,676
Onboard and other revenues 1,122 1,094 1,036 2,192 2,132 2,014
Gross cruise revenues 4,315 4,167 3,908 8,534 8,204 7,690
Less cruise costs
Commissions, transportation and other (577) (551) (513) (1,240) (1,173) (1,082)
Onboard and other (138) (134) (129) (278) (269) (253)
(716) (685) (642) (1,518) (1,441) (1,335)
Net passenger ticket revenues 2,616 2,521 2,359 5,101 4,899 4,594
Net onboard and other revenues 984 961 907 1,914 1,863 1,761
Net cruise revenues $ 3,599 $ 3,482 $ 3,266 $ 7,015 $ 6,762 $ 6,355
ALBDs 20,689,903 20,689,903 20,396,773 41,151,485 41,151,485 40,420,819
Gross revenue yields $ 208.55 $ 201.39 $ 191.59 $ 207.38 $ 199.35 $ 190.25
% increase 8.8 % 5.1 % 9.0 % 4.8 %
Net revenue yields $ 173.96 $ 168.28 $ 160.15 $ 170.48 $ 164.32 $ 157.21
% increase 8.6 % 5.1 % 8.4 % 4.5 %
Net passenger ticket revenue $ 126.43 $ 121.85 $ 115.66 $ 123.96 $ 119.05 $ 113.65
yields
% increase 9.3 % 5.4 % 9.1 % 4.7 %
Net onboard and other $ 47.54 $ 46.43 $ 44.49 $ 46.52 $ 45.28 $ 43.56
revenue yields
% increase 6.9 % 4.4 % 6.8 % 3.9 %
Three Months Ended May 31, Six Months Ended May 31,
(dollars in millions, except yields) 2018 2018 2017 2018 2018 2017
Constant Constant
Currency Currency
Net passenger ticket revenues $ 2,616 $ 2,508 $ 2,359 $ 5,101 $ 4,882 $ 4,594
Net onboard and other revenues 984 965 907 1,914 1,871 1,761
Net cruise revenues $ 3,599 $ 3,473 $ 3,266 $ 7,015 $ 6,753 $ 6,355
ALBDs 20,689,903 20,689,903 20,396,773 41,151,485 41,151,485 40,420,819
Net revenue yields $ 173.96 $ 167.84 $ 160.15 $ 170.48 $ 164.10 $ 157.21
% increase 8.6 % 4.8 % 8.4 % 4.4 %
Net passenger ticket revenue $ 126.43 $ 121.22 $ 115.66 $ 123.96 $ 118.64 $ 113.65
yields
% increase 9.3 % 4.8 % 9.1 % 4.4 %
Net onboard and other $ 47.54 $ 46.62 $ 44.49 $ 46.52 $ 45.45 $ 43.56
revenue yields
% increase 6.9 % 4.8 % 6.8 % 4.3 %
(See Explanations of Non-GAAP Financial Measures.)
CARNIVAL CORPORATION & PLC NON-GAAP FINANCIAL MEASURES (CONTINUED)
Consolidated gross and net cruise costs and net cruise costs excluding fuel per ALBD were computed by dividing the gross and net cruise costs and net cruise costs excluding fuel by ALBDs as follows:
Three Months Ended May 31, Six Months Ended May 31,
(dollars in millions, except costs per ALBD) 2018 2018 2017 2018 2018 2017
Constant Constant
Dollar Dollar
Cruise operating expenses $ 2,645 $ 2,563 $ 2,403 $ 5,340 $ 5,151 $ 4,824
Cruise selling and administrative expenses 594 574 548 1,203 1,161 1,094
Gross cruise costs 3,239 3,137 2,951 6,544 6,312 5,918
Less cruise costs included above
Commissions, transportation and other (577) (551) (513) (1,240) (1,173) (1,082)
Onboard and other (138) (134) (129) (278) (269) (253)
Gains (losses) on ship sales and impairments 28 25 4 12 8 4
Restructuring expenses — — — — — —
Other (1) (1) (1) (1) (1) —
Net cruise costs 2,551 2,476 2,312 5,037 4,877 4,587
Less fuel (373) (373) (310) (731) (731) (607)
Net cruise costs excluding fuel $ 2,178 $ 2,103 $ 2,002 $ 4,305 $ 4,146 $ 3,980
ALBDs 20,689,903 20,689,903 20,396,773 41,151,485 41,151,485 40,420,819
Gross cruise costs per ALBD $ 156.55 $ 151.63 $ 144.63 $ 159.02 $ 153.38 $ 146.42
% increase 8.2 % 4.8 % 8.6 % 4.8 %
Net cruise costs excluding fuel per ALBD $ 105.27 $ 101.65 $ 98.11 $ 104.60 $ 100.75 $ 98.46
% increase 7.3 % 3.6 % 6.2 % 2.3 %
Three Months Ended May 31, Six Months Ended May 31,
(dollars in millions, except costs per ALBD) 2018 2018 2017 2018 2018 2017
Constant Constant
Currency Currency
Net cruise costs excluding fuel $ 2,178 $ 2,103 $ 2,002 $ 4,305 $ 4,144 $ 3,980
ALBDs 20,689,903 20,689,903 20,396,773 41,151,485 41,151,485 40,420,819
Net cruise costs excluding fuel per ALBD $ 105.27 $ 101.66 $ 98.11 $ 104.60 $ 100.71 $ 98.46
% increase 7.3 % 3.6 % 6.2 % 2.3 %
(See Explanations of Non-GAAP Financial Measures.)
CARNIVAL CORPORATION & PLC NON-GAAP FINANCIAL MEASURES (CONTINUED)
Three Months Ended Six Months Ended
May 31, May 31,
(in millions, except per share data) 2018 2017 2018 2017
Net income
U.S. GAAP net income $ 561 $ 379 $ 951 $ 730
Unrealized (gains) losses on fuel derivatives, net (50) 2 (82) (69)
(Gains) losses on ship sales and impairments (28) (4) (12) (4)
Restructuring expenses — — — —
Other 6 1 6 —
Adjusted net income $ 489 $ 378 $ 864 $ 657
Weighted-average shares outstanding 715 727 717 727
Earnings per share
U.S. GAAP earnings per share $ 0.78 $ 0.52 $ 1.33 $ 1.00
Unrealized (gains) losses on fuel derivatives, net (0.07) — (0.11) (0.10)
(Gains) losses on ship sales and impairments (0.04) — (0.02) —
Restructuring expenses — — — —
Other 0.01 — 0.01 —
Adjusted earnings per share $ 0.68 $ 0.52 $ 1.21 $ 0.90
Explanations of Non-GAAP Financial Measures
Non-GAAP Financial Measures
We use net cruise revenues per ALBD ("net revenue yields"), net cruise costs
excluding fuel per ALBD, adjusted net income and adjusted earnings per share
as non-GAAP financial measures of our cruise segments' and the company's
financial performance. These non-GAAP financial measures are provided along
with U.S. GAAP gross cruise revenues per ALBD ("gross revenue yields"), gross
cruise costs per ALBD and U.S. GAAP net income and U.S. GAAP earnings per
share.
Net revenue yields and net cruise costs excluding fuel per ALBD enable us to
separate the impact of predictable capacity or ALBD changes from price and
other changes that affect our business. We believe these non-GAAP measures
provide useful information to investors and expanded insight to measure our
revenue and cost performance as a supplement to our U.S. GAAP consolidated
financial statements.
Under U.S. GAAP, the realized and unrealized gains and losses on fuel
derivatives not qualifying as fuel hedges are recognized currently in
earnings. We believe that unrealized gains and losses on fuel derivatives are
not an indication of our earnings performance since they relate to future
periods and may not ultimately be realized in our future earnings. Therefore,
we believe it is more meaningful for the unrealized gains and losses on fuel
derivatives to be excluded from our net income and earnings per share and,
accordingly, we present adjusted net income and adjusted earnings per share
excluding these unrealized gains and losses.
We believe that gains and losses on ship sales, impairment charges,
restructuring and other expenses are not part of our core operating business
and are not an indication of our future earnings performance. Therefore, we
believe it is more meaningful for gains and losses on ship sales, impairment
charges, and restructuring and other non-core gains and charges to be excluded
from our net income and earnings per share and, accordingly, we present
adjusted net income and adjusted earnings per share excluding these items.
The presentation of our non-GAAP financial information is not intended to be
considered in isolation from, as substitute for, or superior to the financial
information prepared in accordance with U.S. GAAP. It is possible that our
non-GAAP financial measures may not be exactly comparable to the like-kind
information presented by other companies, which is a potential risk associated
with using these measures to compare us to other companies.
Net revenue yields are commonly used in the cruise industry to measure a
company's cruise segment revenue performance and for revenue management
purposes. We use "net cruise revenues" rather than "gross cruise revenues" to
calculate net revenue yields. We believe that net cruise revenues is a more
meaningful measure in determining revenue yield than gross cruise revenues
because it reflects the cruise revenues earned net of our most significant
variable costs, which are travel agent commissions, cost of air and other
transportation, certain other costs that are directly associated with onboard
and other revenues and credit and debit card fees.
Net passenger ticket revenues reflect gross passenger ticket revenues, net of
commissions, transportation and other costs.
Net onboard and other revenues reflect gross onboard and other revenues, net
of onboard and other cruise costs.
Net cruise costs excluding fuel per ALBD is the measure we use to monitor our
ability to control our cruise segments' costs rather than gross cruise costs
per ALBD. We exclude the same variable costs that are included in the
calculation of net cruise revenues as well as fuel expense to calculate net
cruise costs without fuel to avoid duplicating these variable costs in our
non-GAAP financial measures. Substantially all of our net cruise costs
excluding fuel are largely fixed, except for the impact of changing prices,
once the number of ALBDs has been determined.
Reconciliation of Forecasted Data
We have not provided a reconciliation of forecasted gross cruise revenues to
forecasted net cruise revenues or forecasted gross cruise costs to forecasted
net cruise costs without fuel or forecasted U.S. GAAP net income to forecasted
adjusted net income or forecasted U.S. GAAP earnings per share to forecasted
adjusted earnings per share because preparation of meaningful U.S. GAAP
forecasts of gross cruise revenues, gross cruise costs, net income and
earnings per share would require unreasonable effort. We are unable to
predict, without unreasonable effort, the future movement of foreign exchange
rates and fuel prices. While we forecast realized gains and losses on fuel
derivatives by applying current Brent prices to the derivatives that settle in
the forecast period, we do not forecast the impact of unrealized gains and
losses on fuel derivatives because we do not believe they are an indication of
our future earnings performance. We are unable to determine the future impact
of gains or losses on ships sales, restructuring expenses and other non-core
gains and charges.
Constant Dollar and Constant Currency
Our operations primarily utilize the U.S. dollar, Australian dollar, euro and
sterling as functional currencies to measure results and financial condition.
Functional currencies other than the U.S. dollar subject us to foreign
currency translational risk. Our operations also have revenues and expenses
that are in currencies other than their functional currency, which subject us
to foreign currency transactional risk.
We report net revenue yields, net passenger revenue yields, net onboard and
other revenue yields and net cruise costs excluding fuel per ALBD on a
"constant dollar" and "constant currency" basis assuming the 2018 periods'
currency exchange rates have remained constant with the 2017 periods' rates.
These metrics facilitate a comparative view for the changes in our business in
an environment with fluctuating exchange rates.
Constant dollar reporting removes only the impact of changes in exchange
rates on the translation of our operations.
Constant currency reporting removes the impact of changes in exchange rates
on the translation of our operations (as in constant dollar) plus the
transactional impact of changes in exchange rates from revenues and expenses
that are denominated in a currency other than the functional currency.
Examples:
*
The translation of our operations with functional currencies other than U.S.
dollar to our U.S. dollar reporting currency results in decreases in reported
U.S. dollar revenues and expenses if the U.S. dollar strengthens against these
foreign currencies and increases in reported U.S. dollar revenues and expenses
if the U.S. dollar weakens against these foreign currencies.
*
Our operations have revenue and expense transactions in currencies other than
their functional currency. If their functional currency strengthens against
these other currencies, it reduces the functional currency revenues and
expenses. If the functional currency weakens against these other currencies,
it increases the functional currency revenues and expenses.
CONTACT: MEDIA CONTACT, Roger Frizzell, +1 (305) 406 7862 or INVESTOR
RELATIONS CONTACT, Beth Roberts, +1 (305) 406 4832
Copyright (c) 2018 PR Newswire Association,LLC. All Rights ReservedRecent news on Carnival
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