Carnival Corporation & plc Reports Record Full Year And Record Fourth Quarter Earnings
Key information for the fourth quarter 2016 compared to the prior year:
- U.S. GAAP net income for 4Q 2016 of
$609 million , or$0.83 diluted EPS, compared to$270 million , or$0.35 diluted EPS, for the prior year. On an adjusted basis, 4Q 2016 net income of$491 million , or$0.67 EPS, was higher than net income of$389 million , or$0.50 EPS, for the prior year. Adjusted net income excludes unrealized gains and losses on fuel derivatives and other items, totaling$118 million in gains for the 4Q 2016 and$119 million of losses for 4Q 2015. - Gross revenue yields (revenue per available lower berth day or "ALBD") increased 1.6 percent. In constant currency, net revenue yields increased 4.1 percent for 4Q 2016, better than September guidance of up approximately 3 percent.
- Gross cruise costs including fuel per ALBD increased 0.2 percent. In constant currency, net cruise costs excluding fuel per ALBD increased 1.0 percent, in line with September guidance of up approximately 1 percent.
- Changes in fuel prices (including realized fuel derivative losses) and currency exchange rates decreased earnings by
$0.04 per share versus the prior year.
Highlights during the fourth quarter included the U.S. debut of
During the quarter,
Three new original TV series created by
2017 Outlook
At this time, cumulative advance bookings for the first three quarters of 2017 are well ahead of the prior year at considerably higher prices. Since September, both booking volumes and prices for the first three quarters of 2017 have been running well ahead of the prior year.
Donald commented, "We enjoyed strong momentum in booking patterns throughout 2016 and therefore are in a stronger booked position entering the new year at higher prices as a result of our ongoing efforts to increase consideration and demand for our brands."
Based on current booking trends, the company expects full year 2017 net revenue yields in constant currency to be up approximately 2.5 percent compared to the prior year. The company expects full year net cruise costs excluding fuel per ALBD in constant currency to be up approximately 1.0 percent compared to the prior year.
As a result of higher fuel prices, forecasted fuel costs for the full year 2017 are expected to increase approximately
Taking the above factors into consideration, the company expects full year 2017 adjusted earnings per share to be in the range of
Donald added, "We are anticipating another solid year of operational improvement in 2017. Despite the unusual and significant impact of fuel and currency working against us simultaneously, the underlying strength in our fundamental business leaves us well positioned to achieve sustained double digit return on invested capital and to create continued value for our shareholders."
First Quarter 2017 Outlook
First quarter constant currency net revenue yields are expected to be up approximately 1.5 to 2.5 percent compared to the prior year. Net cruise costs excluding fuel per ALBD in constant currency for the first quarter of 2017 are expected to be higher by approximately 1.5 to 2.5 percent compared to the prior year. Changes in fuel prices (including realized fuel derivatives) and changes in currency exchange rates compared to prior year are expected to decrease earnings by
Selected Key Forecast Metrics |
||||||||
Full Year 2017 |
First Quarter 2017 |
|||||||
Year over year change: |
Current Dollars |
Constant Currency |
Current Dollars |
Constant Currency |
||||
Net revenue yields |
Approx flat |
Approx 2.5% |
(1.5) to (0.5)% |
1.5 to 2.5% |
||||
Net cruise costs excl. fuel / ALBD |
Approx (1.5)% |
Approx 1.0% |
(0.5) to 0.5% |
1.5 to 2.5% |
Full Year 2017 |
First Quarter 2017 |
||
Fuel price per metric ton |
$374 |
$356 |
|
Fuel consumption (metric tons in thousands) |
3,290 |
820 |
|
Currency: Euro |
$1.04 to €1 |
$1.04 to €1 |
|
Sterling |
$1.24 to £1 |
$1.24 to £1 |
|
Australian dollar |
$0.73 to A$1 |
$0.73 to A$1 |
Conference Call
The company has scheduled a conference call with analysts at
Together, these brands operate 102 ships visiting over 700 ports around the world and totaling 226,000 lower berths with 17 new ships scheduled to be delivered between 2017 and 2022. Carnival Corporation & plc also operates Holland America Princess Alaska Tours, the leading tour companies 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
Additional information can be found on www.carnival.com, www.fathom.org, www.hollandamerica.com, www.princess.com, www.seabourn.com, www.aida.de, www.costacruise.com, www.cunard.com, www.pocruises.com.au and www.pocruises.com.
Cautionary Note Concerning Factors That May Affect Future Results
Forward-looking statements include those statements that may impact our outlook including, but not limited to, the forecasting of our:
• 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 and |
• 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 in this release. 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 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, which could increase our operating, financing and other costs;
- 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 andCarnival 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 andCarnival plc's constitutional documents may prevent or discourage takeovers and business combinations that our shareholders might consider to be in their best interests and - The DLC 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 release, 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 |
Twelve Months Ended |
||||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||||
Revenues |
|||||||||||||||
Cruise |
|||||||||||||||
Passenger tickets |
$ |
2,873 |
$ |
2,709 |
$ |
12,090 |
$ |
11,601 |
|||||||
Onboard and other |
1,021 |
969 |
4,068 |
3,887 |
|||||||||||
Tour and other |
41 |
33 |
231 |
226 |
|||||||||||
3,935 |
3,711 |
16,389 |
15,714 |
||||||||||||
Operating Costs and Expenses |
|||||||||||||||
Cruise |
|||||||||||||||
Commissions, transportation and other |
517 |
490 |
2,240 |
2,161 |
|||||||||||
Onboard and other |
141 |
131 |
553 |
526 |
|||||||||||
Payroll and related |
505 |
471 |
1,993 |
1,859 |
|||||||||||
Fuel |
267 |
253 |
915 |
1,249 |
|||||||||||
Food |
250 |
244 |
1,005 |
981 |
|||||||||||
Other ship operating |
611 |
603 |
2,525 |
2,516 |
|||||||||||
Tour and other |
28 |
26 |
152 |
155 |
|||||||||||
2,319 |
2,218 |
9,383 |
9,447 |
||||||||||||
Selling and administrative |
584 |
564 |
2,197 |
2,067 |
|||||||||||
Depreciation and amortization |
435 |
419 |
1,738 |
1,626 |
|||||||||||
3,338 |
3,201 |
13,318 |
13,140 |
||||||||||||
Operating Income |
597 |
510 |
3,071 |
2,574 |
|||||||||||
Nonoperating Income (Expense) |
|||||||||||||||
Interest income |
2 |
2 |
6 |
8 |
|||||||||||
Interest expense, net of capitalized interest |
(55) |
(50) |
(223) |
(217) |
|||||||||||
Gains (losses) on fuel derivatives, net (a) |
55 |
(198) |
(47) |
(576) |
|||||||||||
Other income, net |
14 |
7 |
21 |
10 |
|||||||||||
16 |
(239) |
(243) |
(775) |
||||||||||||
Income Before Income Taxes |
613 |
271 |
2,828 |
1,799 |
|||||||||||
Income Tax Expense, Net |
(4) |
(1) |
(49) |
(42) |
|||||||||||
Net Income |
$ |
609 |
$ |
270 |
$ |
2,779 |
$ |
1,757 |
|||||||
Earnings Per Share |
|||||||||||||||
Basic |
$ |
0.84 |
$ |
0.35 |
$ |
3.73 |
$ |
2.26 |
|||||||
Diluted |
$ |
0.83 |
$ |
0.35 |
$ |
3.72 |
$ |
2.26 |
|||||||
Adjusted Earnings Per Share-Diluted (b) |
$ |
0.67 |
$ |
0.50 |
$ |
3.45 |
$ |
2.70 |
|||||||
Dividends Declared Per Share |
$ |
0.35 |
$ |
0.30 |
$ |
1.35 |
$ |
1.10 |
|||||||
Weighted-Average Shares Outstanding - Basic |
727 |
774 |
745 |
777 |
|||||||||||
Weighted-Average Shares Outstanding - Diluted |
729 |
777 |
747 |
779 |
|||||||||||
(a) During the three months ended November 30, 2016 and 2015, our gains (losses) on fuel derivatives, net include net unrealized gains |
|||||||||||||||
(b) See the U.S. GAAP net income to adjusted net income reconciliations in the Non-GAAP Financial Measures included herein. |
CARNIVAL CORPORATION & PLC |
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
(UNAUDITED) |
||||||||
(in millions, except par values) |
||||||||
November 30, |
||||||||
2016 |
2015 |
|||||||
ASSETS |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ |
603 |
$ |
1,395 |
||||
Trade and other receivables, net |
298 |
303 |
||||||
Inventories |
322 |
330 |
||||||
Prepaid expenses and other |
466 |
423 |
||||||
Total current assets |
1,689 |
2,451 |
||||||
Property and Equipment, Net |
32,429 |
31,818 |
(a) |
|||||
Goodwill |
2,910 |
3,010 |
||||||
Other Intangibles |
1,275 |
1,308 |
(a) |
|||||
Other Assets |
633 |
650 |
||||||
$ |
38,936 |
$ |
39,237 |
|||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||
Current Liabilities |
||||||||
Short-term borrowings |
$ |
457 |
$ |
30 |
||||
Current portion of long-term debt |
640 |
1,344 |
||||||
Accounts payable |
713 |
627 |
||||||
Accrued liabilities and other |
1,740 |
1,683 |
||||||
Customer deposits |
3,522 |
3,272 |
||||||
Total current liabilities |
7,072 |
6,956 |
||||||
Long-Term Debt |
8,357 |
7,413 |
||||||
Other Long-Term Liabilities |
910 |
1,097 |
||||||
Shareholders' Equity |
||||||||
Common stock of Carnival Corporation, $0.01 par value; 1,960 shares authorized; 654 |
7 |
7 |
||||||
Ordinary shares of Carnival plc, $1.66 par value; 217 shares at 2016 and 216 share at |
358 |
358 |
||||||
Additional paid-in capital |
8,632 |
8,562 |
||||||
Retained earnings |
21,843 |
20,060 |
||||||
Accumulated other comprehensive loss |
(2,454) |
(1,741) |
||||||
Treasury stock, 118 shares at 2016 and 70 shares at 2015 of Carnival Corporation and 27 |
(5,789) |
(3,475) |
||||||
Total shareholders' equity |
22,597 |
23,771 |
||||||
$ |
38,936 |
$ |
39,237 |
|||||
(a) On December 1, 2015, we adopted the Financial Accounting Standards Board's Service Concession Arrangements amended |
CARNIVAL CORPORATION & PLC |
|||||||||||||||
OTHER INFORMATION |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||||
STATISTICAL INFORMATION |
|||||||||||||||
ALBDs (in thousands) (a) |
20,447 |
19,622 |
80,002 |
77,307 |
|||||||||||
Occupancy percentage (b) |
103.8 |
% |
102.5 |
% |
105.9 |
% |
104.8 |
% |
|||||||
Passengers carried (in thousands) |
2,916 |
2,699 |
11,522 |
10,837 |
|||||||||||
Fuel consumption in metric tons (in thousands) |
816 |
802 |
3,233 |
3,181 |
|||||||||||
Fuel consumption in metric tons per thousand ALBDs |
39.9 |
40.9 |
40.4 |
41.2 |
|||||||||||
Fuel cost per metric ton consumed |
$ |
327 |
$ |
316 |
$ |
283 |
$ |
393 |
|||||||
Currencies |
|||||||||||||||
U.S. dollar to euro |
$ |
1.10 |
$ |
1.11 |
$ |
1.11 |
$ |
1.12 |
|||||||
U.S. dollar to sterling |
$ |
1.26 |
$ |
1.53 |
$ |
1.37 |
$ |
1.54 |
|||||||
U.S. dollar to Australian dollar |
$ |
0.76 |
$ |
0.71 |
$ |
0.74 |
$ |
0.76 |
|||||||
CASH FLOW INFORMATION (in millions) |
|||||||||||||||
Cash from operations |
$ |
1,024 |
$ |
978 |
$ |
5,134 |
$ |
4,545 |
|||||||
Capital expenditures |
$ |
646 |
$ |
590 |
$ |
3,062 |
$ |
2,294 |
|||||||
Dividends paid |
$ |
256 |
$ |
232 |
$ |
977 |
$ |
816 |
|||||||
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 |
|||||||||||||||
(b) In accordance with cruise industry practice, occupancy is calculated using a denominator of ALBDs, which assumes two passengers |
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 November 30, |
Twelve Months Ended November 30, |
||||||||||||||||||||||
2016 |
2016 |
2015 |
2016 |
2016 |
2015 |
||||||||||||||||||
Passenger ticket revenues |
$ |
2,873 |
$ |
2,943 |
$ |
2,709 |
$ |
12,090 |
$ |
12,305 |
$ |
11,601 |
|||||||||||
Onboard and other revenues |
1,021 |
1,035 |
969 |
4,068 |
4,114 |
3,887 |
|||||||||||||||||
Gross cruise revenues |
3,894 |
3,978 |
3,678 |
16,158 |
16,419 |
15,488 |
|||||||||||||||||
Less cruise costs |
|||||||||||||||||||||||
Commissions, transportation and other |
(517) |
(529) |
(490) |
(2,240) |
(2,280) |
(2,161) |
|||||||||||||||||
Onboard and other |
(141) |
(144) |
(131) |
(553) |
(560) |
(526) |
|||||||||||||||||
(658) |
(673) |
(621) |
(2,793) |
(2,840) |
(2,687) |
||||||||||||||||||
Net passenger ticket revenues |
2,356 |
2,414 |
2,219 |
9,850 |
10,025 |
9,440 |
|||||||||||||||||
Net onboard and other revenues |
880 |
891 |
838 |
3,515 |
3,554 |
3,361 |
|||||||||||||||||
Net cruise revenues |
$ |
3,236 |
$ |
3,305 |
$ |
3,057 |
$ |
13,365 |
$ |
13,579 |
$ |
12,801 |
|||||||||||
ALBDs |
20,446,708 |
20,446,708 |
19,621,729 |
80,002,092 |
80,002,092 |
77,307,323 |
|||||||||||||||||
Gross revenue yields |
$ |
190.42 |
$ |
194.52 |
$ |
187.46 |
$ |
201.97 |
$ |
205.23 |
$ |
200.34 |
|||||||||||
% increase vs. 2015 |
1.6 |
% |
3.8 |
% |
0.8 |
% |
2.4 |
% |
|||||||||||||||
Net revenue yields |
$ |
158.21 |
$ |
161.63 |
$ |
155.80 |
$ |
167.06 |
$ |
169.74 |
$ |
165.58 |
|||||||||||
% increase vs. 2015 |
1.6 |
% |
3.7 |
% |
0.9 |
% |
2.5 |
% |
|||||||||||||||
Net passenger ticket revenue |
$ |
115.18 |
$ |
118.05 |
$ |
113.09 |
$ |
123.11 |
$ |
125.31 |
$ |
122.11 |
|||||||||||
% increase vs. 2015 |
1.8 |
% |
4.4 |
% |
0.8 |
% |
2.6 |
% |
|||||||||||||||
Net onboard and other revenue |
$ |
43.03 |
$ |
43.59 |
$ |
42.70 |
$ |
43.95 |
$ |
44.43 |
$ |
43.48 |
|||||||||||
% increase vs. 2015 |
0.8 |
% |
2.1 |
% |
1.1 |
% |
2.2 |
% |
Three Months Ended November 30, |
Twelve Months Ended November 30, |
||||||||||||||||||||||
2016 |
2016 |
2015 |
2016 |
2016 |
2015 |
||||||||||||||||||
Net passenger ticket revenues |
$ |
2,356 |
$ |
2,433 |
$ |
2,219 |
$ |
9,850 |
$ |
10,210 |
$ |
9,440 |
|||||||||||
Net onboard and other revenues |
880 |
885 |
838 |
3,515 |
3,557 |
3,361 |
|||||||||||||||||
Net cruise revenues |
$ |
3,236 |
$ |
3,318 |
$ |
3,057 |
$ |
13,365 |
$ |
13,767 |
$ |
12,801 |
|||||||||||
ALBDs |
20,446,708 |
20,446,708 |
19,621,729 |
80,002,092 |
80,002,092 |
77,307,323 |
|||||||||||||||||
Net revenue yields |
$ |
158.21 |
$ |
162.25 |
$ |
155.80 |
$ |
167.06 |
$ |
172.08 |
$ |
165.58 |
|||||||||||
% increase vs. 2015 |
1.6 |
% |
4.1 |
% |
0.9 |
% |
3.9 |
% |
|||||||||||||||
Net passenger ticket revenue |
$ |
115.18 |
$ |
118.98 |
$ |
113.09 |
$ |
123.11 |
$ |
127.62 |
$ |
122.11 |
|||||||||||
% increase vs. 2015 |
1.8 |
% |
5.2 |
% |
0.8 |
% |
4.5 |
% |
|||||||||||||||
Net onboard and other revenue |
$ |
43.03 |
$ |
43.28 |
$ |
42.70 |
$ |
43.95 |
$ |
44.46 |
$ |
43.48 |
|||||||||||
% increase vs. 2015 |
0.8 |
% |
1.3 |
% |
1.1 |
% |
2.3 |
% |
|||||||||||||||
(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 November 30, |
Twelve Months Ended November 30, |
||||||||||||||||||||||
2016 |
2016 |
2015 |
2016 |
2016 |
2015 |
||||||||||||||||||
Cruise operating expenses |
$ |
2,291 |
$ |
2,332 |
$ |
2,192 |
$ |
9,231 |
$ |
9,366 |
$ |
9,292 |
|||||||||||
Cruise selling and administrative |
582 |
590 |
561 |
2,188 |
2,216 |
2,058 |
|||||||||||||||||
Gross cruise costs |
2,873 |
2,922 |
2,753 |
11,419 |
11,582 |
11,350 |
|||||||||||||||||
Less cruise costs included above |
|||||||||||||||||||||||
Commissions, transportation and |
(517) |
(529) |
(490) |
(2,240) |
(2,280) |
(2,161) |
|||||||||||||||||
Onboard and other |
(141) |
(144) |
(131) |
(553) |
(560) |
(526) |
|||||||||||||||||
Restructuring expenses |
— |
— |
(4) |
(2) |
(2) |
(25) |
|||||||||||||||||
Gain on ship sale |
— |
— |
2 |
2 |
2 |
8 |
|||||||||||||||||
Other |
(1) |
(1) |
— |
(41) |
(41) |
— |
|||||||||||||||||
Net cruise costs |
2,214 |
2,248 |
2,130 |
8,585 |
8,701 |
8,646 |
|||||||||||||||||
Less fuel |
(267) |
(267) |
(253) |
(915) |
(915) |
(1,249) |
|||||||||||||||||
Net cruise costs excluding fuel |
$ |
1,947 |
$ |
1,981 |
$ |
1,877 |
$ |
7,670 |
$ |
7,786 |
$ |
7,397 |
|||||||||||
ALBDs |
20,446,708 |
20,446,708 |
19,621,729 |
80,002,092 |
80,002,092 |
77,307,323 |
|||||||||||||||||
Gross cruise costs per ALBD |
$ |
140.51 |
$ |
142.90 |
$ |
140.30 |
$ |
142.73 |
$ |
144.78 |
$ |
146.81 |
|||||||||||
% increase (decrease) vs. 2015 |
0.2 |
% |
1.9 |
% |
(2.8) |
% |
(1.4) |
% |
|||||||||||||||
Net cruise costs excluding fuel per |
$ |
95.22 |
$ |
96.93 |
$ |
95.62 |
$ |
95.87 |
$ |
97.34 |
$ |
95.68 |
|||||||||||
% (decrease) increase vs. 2015 |
(0.4) |
% |
1.4 |
% |
0.2 |
% |
1.7 |
% |
Three Months Ended November 30, |
Twelve Months Ended November 30, |
||||||||||||||||||||||
2016 |
2016 |
2015 |
2016 |
2016 |
2015 |
||||||||||||||||||
Net cruise costs excluding fuel |
$ |
1,947 |
$ |
1,975 |
$ |
1,877 |
$ |
7,670 |
$ |
7,777 |
$ |
7,397 |
|||||||||||
ALBDs |
20,446,708 |
20,446,708 |
19,621,729 |
80,002,092 |
80,002,092 |
77,307,323 |
|||||||||||||||||
Net cruise costs excluding fuel per |
$ |
95.22 |
$ |
96.58 |
$ |
95.62 |
$ |
95.87 |
$ |
97.21 |
$ |
95.68 |
|||||||||||
% (decrease) increase vs. 2015 |
(0.4) |
% |
1.0 |
% |
0.2 |
% |
1.6 |
% |
|||||||||||||||
(See Notes to Non-GAAP Financial Measures.) |
CARNIVAL CORPORATION & PLC |
|||||||||||||||
NON-GAAP FINANCIAL MEASURES (CONTINUED) |
|||||||||||||||
Adjusted fully diluted earnings per share was computed as follows (in millions, except per share data) (a): |
|||||||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||||||
2016 |
2015 |
2016 |
2015 |
||||||||||||
Net income |
|||||||||||||||
U.S. GAAP net income |
$ |
609 |
$ |
270 |
$ |
2,779 |
$ |
1,757 |
|||||||
Unrealized (gains) losses on fuel derivatives, net (b) |
(115) |
117 |
(236) |
332 |
|||||||||||
Restructuring expenses (c) |
— |
4 |
2 |
25 |
|||||||||||
Gain on ship sale (c) |
— |
(2) |
(2) |
(8) |
|||||||||||
Other (c) |
(3) |
— |
37 |
— |
|||||||||||
Adjusted net income |
$ |
491 |
$ |
389 |
$ 2,580 |
$ |
2,106 |
||||||||
Weighted-average shares outstanding |
729 |
777 |
747 |
779 |
|||||||||||
Earnings per share |
|||||||||||||||
U.S. GAAP earnings per share |
$ |
0.83 |
$ |
0.35 |
$ |
3.72 |
$ |
2.26 |
|||||||
Unrealized (gains) losses on fuel derivatives, net (b) |
(0.16) |
0.15 |
(0.32) |
0.42 |
|||||||||||
Restructuring expenses (c) |
— |
— |
— |
0.03 |
|||||||||||
Gain on ship sale (c) |
— |
— |
— |
(0.01) |
|||||||||||
Other (c) |
— |
— |
0.05 |
— |
|||||||||||
Adjusted earnings per share |
$ |
0.67 |
$ |
0.50 |
$ |
3.45 |
$ |
2.70 |
|||||||
Notes to Non-GAAP Financial Measures |
|
(a) |
Non-GAAP Financial Measures |
We use net cruise revenues per ALBD ("net revenue yields"), net cruise costs excluding fuel per ALBD, adjusted net income and adjusted earnings per share as non-GAAP financial measures of our cruise segments' and the company's financial performance. These non-GAAP financial measures are provided along with U.S. GAAP gross cruise revenues per ALBD ("gross revenue yields"), gross cruise costs per ALBD and U.S. GAAP net income and U.S. GAAP earnings per share. |
|
We believe that gains and losses on ship sales and ship impairments and restructuring and certain other expenses are not part of our core operating business and, therefore, are not an indication of our future earnings performance. As such, we exclude these items from non-GAAP measures. Net revenue yields and net cruise costs excluding fuel per ALBD enable us to separate the impact of predictable capacity or ALBD changes from price and other changes that affect our business. We believe these non-GAAP measures provide useful information to investors and expanded insight to measure our revenue and cost performance as a supplement to our U.S. GAAP consolidated financial statements. |
|
The presentation of our non-GAAP financial information is not intended to be considered in isolation from, as substitute for, or superior to the financial information prepared in accordance with U.S. GAAP. It is possible that our non-GAAP financial measures may not be exactly comparable to the like-kind information presented by other companies, which is a potential risk associated with using these measures to compare us to other companies. |
|
Net revenue yields are commonly used in the cruise industry to measure a company's cruise segment revenue performance and for revenue management purposes. We use "net cruise revenues" rather than "gross cruise revenues" to calculate net revenue yields. We believe that net cruise revenues is a more meaningful measure in determining revenue yield than gross cruise revenues because it reflects the cruise revenues earned net of our most significant variable costs, which are travel agent commissions, cost of air and other transportation, certain other costs that are directly associated with onboard and other revenues and credit and debit card fees. |
|
Net passenger ticket revenues reflect gross passenger ticket revenues, net of commissions, transportation and other costs. Net onboard and other revenues reflect gross onboard and other revenues, net of onboard and other cruise costs. |
|
Net cruise costs excluding fuel per ALBD is the measure we use to monitor our ability to control our cruise segments' costs rather than gross cruise costs per ALBD. We exclude the same variable costs that are included in the calculation of net cruise revenues as well as fuel expense to calculate net cruise costs without fuel to avoid duplicating these variable costs in our non-GAAP financial measures. Substantially all of our net cruise costs excluding fuel are largely fixed, except for the impact of changing prices once the number of ALBDs has been determined. |
|
We have not provided a reconciliation of forecasted gross cruise revenues to forecasted net cruise revenues or forecasted gross cruise costs to forecasted net cruise costs without fuel or forecasted U.S. GAAP net income to forecasted adjusted net income or forecasted U.S. GAAP earnings per share to forecasted adjusted earnings per share because preparation of meaningful U.S. GAAP forecasts of gross cruise revenues, gross cruise costs, net income and earnings per share would require unreasonable effort. We are unable to predict, without unreasonable effort, the future movement of foreign exchange rates and fuel prices. While we forecast realized gains and losses on fuel derivatives by applying current Brent prices to the derivatives that settle in the forecast period, we do not forecast the impact of unrealized gains and losses on fuel derivatives because we do not believe they are an indication of our future earnings performance. We are unable to determine the future impact of gains or losses on ships sales, restructuring expenses and other non-core gains and charges. |
|
Constant Dollar and Constant Currency |
|
Our Europe, Australia & Asia ("EAA") segment and Cruise Support segment operations utilize the euro, sterling and Australian dollar as their functional currencies to measure their results and financial condition. This subjects us to foreign currency translational risk. Our North America, EAA and Cruise Support segment operations also have revenues and expenses that are in a currency other than their functional currency. This subjects us to foreign currency transactional risk. |
|
We report net revenue yields, net passenger revenue yields, net onboard and other revenue yields and net cruise costs excluding fuel per ALBD on a "constant dollar" and "constant currency" basis assuming the 2016 periods' currency exchange rates have remained constant with the 2015 periods' rates. These metrics facilitate a comparative view for the changes in our business in an environment with fluctuating exchange rates. |
|
Constant dollar reporting is a non-GAAP financial measure that removes only the impact of changes in exchange rates on the translation of our EAA segment and Cruise Support segment operations. |
|
Constant currency reporting is a non-GAAP financial measure that removes the impact of changes in exchange rates on the translation of our EAA segment and Cruise Support segment operations (as in constant dollar) plus the transactional impact of changes in exchange rates from revenues and expenses that are denominated in a currency other than the functional currency for our North America, EAA and Cruise Support segments. |
|
Examples: |
|
|
|
|
|
|
|
(b) |
Under U.S. GAAP, the realized and unrealized gains and losses on fuel derivatives not qualifying as fuel hedges are recognized currently in earnings. We believe that unrealized gains and losses on fuel derivatives are not an indication of our earnings performance since they relate to future periods and may not ultimately be realized in our future earnings. Therefore, we believe it is more meaningful for the unrealized gains and losses on fuel derivatives to be excluded from our net income and earnings per share and, accordingly, we present adjusted net income and adjusted earnings per share excluding these unrealized gains and losses. |
(c) |
We believe that gains and losses on ship sales and ship impairments and restructuring and other expenses are not part of our core operating business and are not an indication of our future earnings performance. Therefore, we believe it is more meaningful for gains and losses on ship sales and ship impairments and restructuring and other non-core gains and charges to be excluded from our net income and earnings per share and, accordingly, we present adjusted net income and adjusted earnings per share excluding these items. |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/carnival-corporation--plc-reports-record-full-year-and-record-fourth-quarter-earnings-300381732.html
SOURCE
MEDIA CONTACT, Roger Frizzell, 1 305 406 7862, or, INVESTOR RELATIONS CONTACT, Beth Roberts, 1 305 406 4832