Carnival PLC Doc re Carnival Corp & plc Third Quarter Results

 
TIDMCCL 
 
CARNIVAL CORPORATION & PLC REPORTS RECORD THIRD QUARTER EARNINGS 
 
MIAMI, Sept. 26, 2016 -- Carnival Corporation & plc today reported its results 
for the third quarter ended August 31, 2016.  The results of Carnival 
Corporation and Carnival plc have been consolidated and include results on a 
U.S. GAAP and adjusted basis. 
 
3Q Highlights 
 
  * 3Q net revenue yields increased 2.7% in constant currency compared to prior 
    year, toward the top end of the June guidance range, up 2% to 3% 
  * 3Q net cruise costs excluding fuel per available lower berth day ("ALBD") 
    increased 5.5% in constant currency compared to prior year, better than 
    June guidance, up 6% to 7%, due to the timing of certain expenses 
  * 3Q adjusted net income was $1.4 billion, or earnings per share (diluted) of 
    $1.92, before U.S. GAAP unrealized gains on fuel derivatives and other net 
    charges totaling $7 million in gains 
 
Outlook 
 
  * At this time, cumulative advance bookings for the first half of next year 
    are ahead of the prior year at considerably higher  prices 
  * FY 2016 net revenue yields are expected to increase approximately 3.5% 
    compared to the prior year, on a constant currency basis 
  * FY 2016 net cruise costs excluding fuel per ALBD are expected to be up 
    approximately 1.5% compared to the prior year, on a constant currency basis 
  * FY 2016 adjusted earnings per share are expected to be in the range of 
    $3.33 to $3.37, compared to June guidance of $3.25 to $3.35 and $2.70 per 
    share in FY 2015 
  * 4Q 2016 adjusted earnings per share are expected to be in the range of 
    $0.55 to $0.59, compared to $0.50 in 4Q 2015 
 
President and Chief Executive Officer Arnold Donald commenting on these 
results: 
 
"We delivered the strongest quarterly earnings in our company's history 
affirming our ongoing efforts to expand consumer demand in excess of measured 
capacity increases and leverage our industry leading scale. Revenues during the 
peak summer season were bolstered by strong performances from both our North 
American and European brands and across all major deployments including the 
Caribbean, Alaska and Europe." 
 
"We are well on track to deliver nearly 25 percent earnings growth in 2016. 
With cash from operations expected to reach a record $5 billion this year, we 
continue to fund our growth and return cash to shareholders. During the third 
quarter we repurchased $700 million of Carnival Corporation shares bringing the 
cumulative total to $2.5 billion in share repurchases over the past year." 
 
"Looking forward, we are well positioned for continued earnings growth given 
the current strength of our booking and pricing trends in 2017." 
 
MEDIA CONTACT                                           INVESTOR RELATIONS 
CONTACT 
Roger Frizzell                                                    Beth Roberts 
001 305 406 7862                                             001 305 406 4832 
 
Conference Call 
 
The company has scheduled a conference call with analysts at 3:00 p.m. BST (10: 
00 a.m. EDT) today to discuss its 2016 third quarter results.  This call can be 
listened to live, and additional information can be obtained, via Carnival 
Corporation & plc's Web site at http://www.carnivalcorp.com/ and http:// 
www.carnivalplc.com/. 
 
Carnival Corporation & plc is the largest cruise company in the world, with a 
portfolio of 10 cruise brands in North America, Europe, Australia and Asia, 
comprised of Carnival Cruise Line, Fathom, Holland America Line, Princess 
Cruises, Seabourn, AIDA Cruises, Costa Cruises, Cunard, P&O Cruises (Australia) 
and P&O Cruises (UK). 
 
Together, these brands operate 101 ships totaling 225,000 lower berths with 18 
new ships scheduled to be delivered between 2016 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 S&P 500 and the FTSE 100 indices. Additional 
information can be found on http://www.carnival.com/, http://www.fathom.org/, 
http://www.hollandamerica.com/, http://www.princess.com/, http:// 
www.seabourn.com/, http://www.aida.de/, http://www.costacruise.com/, http:// 
www.cunard.com/, http://www.pocruises.com.au/, and http://www.pocruises.com/. 
 
       Carnival Corporation & plc Reports Record Third Quarter Earnings 
 
MIAMI, Sept. 26, 2016 /PRNewswire/ -- Carnival Corporation & plc (NYSE/LSE: 
CCL; NYSE: CUK) announced U.S. GAAP net income of $1.4 billion, or $1.93 
diluted EPS, for the third quarter of 2016 compared to U.S. GAAP net income for 
the third quarter of 2015 of $1.2 billion, or $1.56 diluted EPS. Third quarter 
2016 adjusted net income of $1.4 billion, or $1.92 adjusted EPS, was higher 
than adjusted net income of $1.4 billion, or $1.75 adjusted EPS, for the third 
quarter of 2015. Adjusted net income excludes unrealized gains and losses on 
fuel derivatives and other net charges, totaling $7 million in gains for the 
third quarter 2016 and $149 million of losses for the third quarter 2015. 
Revenues for the third quarter of 2016 were $5.1 billion, $0.2 billion higher 
than the $4.9 billion in the prior year. 
 
Carnival Corporation & plc President and Chief Executive Officer Arnold Donald 
noted, "We delivered the strongest quarterly earnings in our company's history 
affirming our ongoing efforts to expand consumer demand in excess of measured 
capacity increases and leverage our industry leading scale. Revenues during the 
peak summer season were bolstered by strong performances from both our North 
American and European brands and across all major deployments including the 
Caribbean, Alaska and Europe," Donald added. 
 
Key metrics for the third quarter 2016 compared to the prior year were as 
follows: 
 
  * Gross revenue yields (revenue per available lower berth day or "ALBD") 
    increased 0.6 percent. Net revenue yields on a constant currency basis 
    increased 2.7 percent for 3Q 2016, toward the top end of the June guidance 
    range of up 2 to 3 percent. 
  * Gross cruise costs including fuel per ALBD decreased 0.2 percent. Net 
    cruise costs excluding fuel per ALBD on a constant currency basis increased 
    5.5 percent, better than June guidance of up 6 to 7 percent, due to the 
    timing of certain expenses. 
  * Changes in fuel prices (including realized fuel derivatives) and changes in 
    currency exchange rates increased earnings by $0.02 per share. 
 
Highlights during the third quarter included the grand opening of the Arison 
Maritime Center in Almere, Netherlands, named for Carnival Corporation & plc 
Chairman Micky Arison and his father, the late Ted Arison, who founded the 
company.  The 110,000-square-foot purpose built facility is a major expansion 
from the existing training center that opened in 2009. The center will provide 
comprehensive safety and skills training for bridge and engineering officers. 
The facility includes four bridge and engine room simulators and is expected to 
train over 6,500 officers annually across the company's 10 brands. 
 
The company also signed a memorandum of agreement with shipbuilders Meyer Werft 
and Meyer Turku for the construction of three new 180,000-ton cruise ships. 
Two of the ships, to be built in Finland, will be added to the Carnival Cruise 
Line fleet in 2020 and 2022. The third ship, to be constructed in Germany, will 
join the P&O Cruises UK fleet in 2020.  All three vessels will be fully powered 
by Liquefied Natural Gas, the world's cleanest burning fossil fuel.  In 
conjunction with these new ship orders, the delivery dates for two previously 
contracted ships, one for AIDA Cruises and one for Costa Cruises, will shift 
from 2020 to 2021 to ensure a measured pace of capacity growth over the coming 
years. 
 
Outlook 
 
At this time, cumulative advance bookings for the first half of next year are 
ahead of the prior year at considerably higher prices. Since June, booking 
volumes for the first half of next year are lower than the prior year, as there 
is less inventory remaining for sale, at significantly higher prices. 
 
The company continues to expect full year 2016 net revenue yields to be up 
approximately 3.5 percent compared to the prior year, on a constant currency 
basis. The company continues to expect full year net cruise costs excluding 
fuel per ALBD to be up approximately 1.5 percent compared to the prior year, on 
a constant currency basis. 
 
Taking the above factors into consideration, the company has increased its full 
year 2016 adjusted earnings per share guidance to be in the range of $3.33 to 
$3.37, compared to the June guidance range of $3.25 to $3.35 and 2015 adjusted 
earnings per share of $2.70. 
 
Donald commented, "We are well on track to deliver nearly 25 percent earnings 
growth in 2016. With cash from operations expected to reach a record $5 billion 
this year, we continue to fund our growth and return cash to shareholders. 
During the third quarter we repurchased $700 million of Carnival Corporation 
shares bringing the cumulative total to $2.5 billion in share repurchases over 
the past year." 
 
Donald added, "Looking forward, we are well positioned for continued earnings 
growth given the current strength of our booking and pricing trends in 2017." 
 
Fourth Quarter 2016 Outlook 
 
Fourth quarter constant currency net revenue yields are expected to be up 
approximately 3 percent compared to the prior year. Fourth quarter constant 
currency net cruise costs excluding fuel per ALBD are expected to be higher by 
approximately 1 percent compared to the prior year. Based on the above factors, 
the company expects adjusted earnings per share for the fourth quarter 2016 to 
be in the range of $0.55 to $0.59 versus 2015 adjusted earnings per share of 
$0.50. 
 
Selected Key Forecast Metrics 
 
                                        Full Year 2016     Fourth Quarter 2016 
 

Year over year change:                Current   Constant    Current   Constant 
                                      Dollars   Currency    Dollars   Currency 
 
Net revenue yields                    Approx     Approx     Approx     Approx 
                                       1.0%       3.5%       1.5%       3.0% 
 
Net cruise costs excl. fuel / ALBD    Approx     Approx     Approx     Approx 
                                       0.5%       1.5%       0.5%       1.0% 
 
                                        Full Year 2016     Fourth Quarter 2016 
 
Fuel price per metric ton                    $285                  $332 
 
Fuel consumption (metric tons in            3,250                  830 
thousands) 
 
Currency:    Euro                        $1.11 to EUR1           $1.11 to EUR1 
 
                     Sterling            $1.38 to GBP1           $1.30 to GBP1 
 
                     Australian          $0.74 to A$1          $0.76 to A$1 
dollar 
 
                     Canadian            $0.76 to C$1          $0.76 to C$1 
dollar 
 
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 2016 third quarter results.  This call can be 
listened to live, and additional information can be obtained, via Carnival 
Corporation & plc's Web site at http://www.carnivalcorp.com/ and http:// 
www.carnivalplc.com/. 
 
Carnival Corporation & plc is the largest leisure travel company in the world, 
and among the most profitable and financially strong in the industry.  With a 
portfolio of 10 cruise brands in North America, Europe, Australia and Asia, 
comprised of Carnival Cruise Line, Fathom, Holland America Line, Princess 
Cruises, Seabourn, AIDA Cruises, Costa Cruises, Cunard,  P&O Cruises 
(Australia) and P&O Cruises (UK). 
 
Together, these brands operate 101 ships visiting over 700 ports around the 
world and totaling 225,000 lower berths with 18 new ships scheduled to be 
delivered between 2016 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 S&P 500 and the FTSE 100 indices. 
 
Additional information can be found on http://www.carnival.com/, http:// 
www.hollandamerica.com/, http://www.princess.com/, http://www.seabourn.com/, 
http://www.aida.de/, http://www.costacruise.com/, http://www.cunard.com/, http: 
//www.pocruises.com.au/, http://www.pocruises.com/ and http://www.fathom.org/. 
 
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 release as "Carnival Corporation & plc," 
"our," "us" and "we." Some of the statements, estimates or projections 
contained in this release 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" and similar expressions of future intent or the negative 
of such terms. 
 
Forward-looking statements include those statements that may impact our outlook 
including, among other things, the forecasting of our net revenue yields; 
booking levels; pricing; occupancy; operating, financing and tax costs, 
including fuel expenses; currency exchange rates; net cruise costs excluding 
fuel per available lower berth day; estimates of ship depreciable lives and 
residual values; liquidity; goodwill, ship and trademark fair values and 
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; 
  * 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 and overcapacity in 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; 
  * Changes in global consumer confidence and impacts to various foreign 
    currency exchange rates as a result of the June 24, 2016 UK electorate vote 
    to withdraw from the European Union ("EU"); 
  * Friction in travel, changes to international tax treaties and changes to 
    laws and regulations that could result from the exit of the UK from the EU; 
  * 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 and 
  * The DLC arrangement involves risks not associated with the more common ways 
    of combining the operations of two companies. 
 
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  Nine Months Ended 
                                              August 31,          August 31, 
 
                                            2016      2015      2016      2015 
 
Revenues 
 
Cruise 
 
Passenger tickets                         $ 3,803   $ 3,631   $ 9,217   $ 8,891 
 
Onboard and other                           1,146     1,102     3,047     2,918 
 
Tour and other                                148       150       190       194 
 
                                            5,097     4,883    12,454    12,003 
 
Operating Costs and Expenses 
 
Cruise 
 
Commissions, transportation and other         646       603     1,723     1,671 
 
Onboard and other                             171       170       411       395 
 
Payroll and related                           494       453     1,488     1,388 
 
Fuel                                          265       345       648       996 
 
Food                                          260       255       755       737 
 
Other ship operating                          643       582     1,914     1,913 
 
Tour and other                                 84        82       125       129 
 
                                            2,563     2,490     7,064     7,229 
 
Selling and administrative                    529       484     1,613     1,504 
 
Depreciation and amortization                 443       399     1,303     1,206 
 
                                            3,535     3,373     9,980     9,939 
 
Operating Income                            1,562     1,510     2,474     2,064 
 
Nonoperating (Expense) Income 
 
Interest income                                 2         2         5         6 
 
Interest expense, net of capitalized         (61)      (53)     (168)     (167) 
interest 
 
Losses on fuel derivatives, net (a)          (36)     (197)     (102)     (378) 
 
Other (expense) income, net                   (2)      (12)         6         3 
 
                                             (97)     (260)     (259)     (536) 
 
Income Before Income Taxes                  1,465     1,250     2,215     1,528 
 
Income Tax Expense, Net                      (41)      (34)      (44)      (41) 
 
Net Income                                $ 1,424   $ 1,216   $ 2,171   $ 1,487 
 
Earnings Per Share 
 
Basic                                     $  1.93   $  1.56   $  2.89   $  1.91 
 
Diluted                                   $  1.93   $  1.56   $  2.88   $  1.91 
 
Adjusted Earnings Per Share-Diluted (b)   $  1.92   $  1.75   $  2.77   $  2.20 
 
Dividends Declared Per Share              $  0.35   $  0.30   $  1.00   $  0.80 
 
Weighted-Average Shares Outstanding -         737       778       751       778 
Basic 
 
Weighted-Average Shares Outstanding -         739       781       754       781 
Diluted 
 
 
 
(a) During the three months ended August 31, 2016 and 2015, our (losses) on 
    fuel derivatives, net include net unrealized gains (losses) of $25 million 
    and $(137) million and realized (losses) of $(61) million and $(60) 
    million, respectively. During the nine months ended August 31, 2016 and 
    2015, our (losses) on fuel derivatives, net include net unrealized gains 
    (losses) of $121 million and $(215) million and realized (losses) of $(223) 
    million and $(163) million, respectively. 
 
(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) 
 
                                                                                  August     November 
                                                                                    31,        30, 
                                                                                    2016       2015 
 
ASSETS 
 
Current Assets 
 
Cash and cash equivalents                                                        $    462    $  1,395 
 
Trade and other receivables, net                                                      321         303 
 
Insurance recoverables                                                                102         109 
 
Inventories                                                                           314         330 
 
Prepaid expenses and other                                                            355         314 
 
Total current assets                                                                1,554       2,451 
 
Property and Equipment, Net                                                        32,864      31,818  (a) 
 
Goodwill                                                                            2,964       3,010 
 
Other Intangibles                                                                   1,290       1,308  (a) 
 
Other Assets                                                                          660         650 
 
                                                                                 $ 39,332    $ 39,237 
 
LIABILITIES AND SHAREHOLDERS' EQUITY 
 
Current Liabilities 
 
Short-term borrowings                                                            $    334    $     30 
 
Current portion of long-term debt                                                     739       1,344 
 
Accounts payable                                                                      704         627 
 
Accrued liabilities and other                                                       1,738       1,683 
 
Customer deposits                                                                   3,585       3,272 
 
Total current liabilities                                                           7,100       6,956 
 
Long-Term Debt                                                                      8,320       7,413 
 
Other Long-Term Liabilities                                                         1,012       1,097 
 
Shareholders' Equity 
 
Common stock of Carnival Corporation, $0.01 par value; 1,960 shares authorized;         7           7 
     654 shares at 2016 and 653 shares at 2015 issued 
 
Ordinary shares of Carnival plc, $1.66 par value; 216 shares at 2016 and 2015         358         358 
     issued 
 
Additional paid-in capital                                                          8,618       8,562 
 
Retained earnings                                                                  21,488      20,060 
 
Accumulated other comprehensive loss                                              (2,012)     (1,741) 
 
Treasury stock, 114 shares at 2016 and 70 shares at 2015 of Carnival              (5,559)     (3,475) 
Corporation 
     and 26 shares at 2016 and 27 shares at 2015 of Carnival plc, at cost 
 
Total shareholders' equity                                                         22,900      23,771 
 
                                                                                 $ 39,332    $ 39,237 
 
 
 
(a) On December 1, 2015, we adopted the Financial Accounting Standards Board's 
    Service Concession Arrangements amended guidance and, accordingly, 
    reclassified $70 million from Property and Equipment, Net to Other 
    Intangibles on our November 30, 2015 Consolidated Balance Sheet. 
 
 
 
                            CARNIVAL CORPORATION & PLC 
                                OTHER INFORMATION 
 
                                         Three Months Ended    Nine Months Ended 
                                             August 31,            August 31, 
 
                                          2016       2015       2016       2015 
 
STATISTICAL INFORMATION 
 
   ALBDs (in thousands) (a)              20,572     19,795     59,555     57,686 
 
   Occupancy percentage (b)               111.4 %    110.9 %    106.6 %    105.6 % 
 
   Passengers carried (in thousands)      3,265      3,068      8,606      8,138 
 
   Fuel consumption in metric tons (in      793        786      2,417      2,379 
thousands) 
 
   Fuel consumption in metric tons per     38.6       39.7       40.6       41.2 
thousand ALBDs 
 
   Fuel cost per metric ton consumed    $   335    $   439    $   268    $   418 
 
   Currencies 
 
      U.S. dollar to euro               $  1.12    $  1.11    $  1.11    $  1.13 
 
      U.S. dollar to sterling           $  1.34    $  1.56    $  1.41    $  1.54 
 
      U.S. dollar to Australian dollar  $  0.75    $  0.75    $  0.74    $  0.78 
 
      U.S. dollar to Canadian dollar    $  0.77    $  0.78    $  0.76    $  0.80 
 
CASH FLOW INFORMATION (in millions) 
 
Cash from operations                    $ 1,429    $ 1,281    $ 4,110    $ 3,567 
 
Capital expenditures                    $   450    $   324    $ 2,416    $ 1,704 
 
Dividends paid                          $   262    $   195    $   721    $   584 
 
 
 
Notes to Statistical Information 
 
(a) ALBD is a standard measure of passenger capacity for the period that we use 
    to approximate rate and capacity variances, based on consistently applied 
    formulas that we use to perform analyses to determine the main non-capacity 
    driven factors that cause our cruise revenues and expenses to vary. ALBDs 
    assume that each cabin we offer for sale accommodates two passengers and is 
    computed by multiplying passenger capacity by revenue-producing ship 
    operating days in the period. 
 
(b) In accordance with cruise industry practice, occupancy is calculated using 
    a denominator of ALBDs, which assumes two passengers per cabin even though 
    some cabins can accommodate three or more passengers. Percentages in excess 
    of 100% indicate that on average more than two passengers occupied some 
    cabins. 
 
                          CARNIVAL CORPORATION & PLC 
                          NON-GAAP FINANCIAL MEASURES 
 

Consolidated gross and net revenue yields were computed by dividing the gross 
and net cruise revenues by ALBDs as follows (dollars in millions, except 
yields) (a) (b): 
 
                      Three Months Ended August 31,            Nine Months Ended August 31, 
 
                     2016          2016         2015          2016          2016         2015 
                                 Constant                                 Constant 
                                  Dollar                                   Dollar 
 
Passenger ticket   $  3,803      $  3,866      $  3,631     $  9,217      $  9,362      $  8,891 
revenues 
 
Onboard and           1,146         1,158         1,102        3,047         3,080         2,918 
other revenues 
 
Gross cruise          4,949         5,024         4,733       12,264        12,442        11,809 
revenues 
 
Less cruise 
costs 
 
                      (646)         (654)         (603)      (1,723)       (1,751)       (1,671) 
Commissions, 
transportation 
          and 
other 
 
     Onboard and      (171)         (173)         (170)        (411)         (416)         (395) 
other 
 
                      (817)         (827)         (773)      (2,134)       (2,167)       (2,066) 
 
Net passenger         3,157         3,212         3,028        7,494         7,611         7,220 
ticket revenues 
 
Net onboard and         975           985           932        2,636         2,664         2,523 
other revenues 
 
Net cruise         $  4,132      $  4,197      $  3,960     $ 10,130      $ 10,275      $  9,743 
revenues 
 
ALBDs            20,572,112    20,572,112    19,794,882   59,555,384    59,555,384    57,685,594 
 
Gross revenue      $ 240.60      $ 244.22      $ 239.10     $ 205.94      $ 208.91      $ 204.72 
yields 
 
% increase vs.          0.6 %         2.1 %                      0.6 %         2.0 % 
2015 
 
   Net revenue     $ 200.87      $ 204.03      $ 200.04     $ 170.10      $ 172.52      $ 168.91 
yields 
 
   % increase           0.4 %         2.0 %                      0.7 %         2.1 % 
vs. 2015 
 
   Net passenger   $ 153.47      $ 156.14      $ 152.96     $ 125.84      $ 127.80      $ 125.17 
ticket revenue 
        yields 
 
   % increase           0.3 %         2.1 %                      0.5 %         2.1 % 
vs. 2015 
 
Net onboard and    $  47.39      $  47.89      $  47.09     $  44.26      $  44.72      $  43.74 
other revenue 
    yields 
 
   % increase           0.7 %         1.7 %                      1.2 %         2.2 % 
vs. 2015 
 
                      Three Months Ended August 31,            Nine Months Ended August 31, 
 
                     2016          2016         2015          2016          2016         2015 
                                 Constant                                 Constant 
                                 Currency                                 Currency 
 
Net passenger      $  3,157      $  3,246      $  3,028     $  7,494      $  7,778      $  7,220 
ticket revenues 
 
Net onboard and         975           981           932        2,636         2,672         2,523 
other revenues 
 
Net cruise         $  4,132      $  4,227      $  3,960     $ 10,130      $ 10,450      $  9,743 
revenues 
 
ALBDs            20,572,112    20,572,112    19,794,882   59,555,384    59,555,384    57,685,594 
 
   Net revenue     $ 200.87      $ 205.46      $ 200.04     $ 170.10      $ 175.46      $ 168.91 
yields 
 
   % increase           0.4 %         2.7 %                      0.7 %         3.9 % 
vs. 2015 
 
   Net passenger   $ 153.47      $ 157.76      $ 152.96     $ 125.84      $ 130.60      $ 125.17 
ticket revenue 
        yields 
 
   % increase           0.3 %         3.1 %                      0.5 %         4.3 % 
vs. 2015 
 
   Net onboard     $  47.39      $  47.69      $  47.09     $  44.26      $  44.86      $  43.74 
and other 
revenue 
        yields 
 
   % increase           0.7 %         1.3 %                      1.2 %         2.6 % 
vs. 2015 
 
(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) (b): 
 
                    Three Months Ended August 31,            Nine Months Ended August 31, 
 
                   2016          2016         2015          2016          2016         2015 
                               Constant                                 Constant 
                                Dollar                                   Dollar 
 
Cruise           $  2,479      $  2,513      $  2,408     $  6,939      $  7,034      $  7,100 
operating 
expenses 
 
Cruise selling        527           534           482        1,606         1,626         1,497 
and 
administrative 
     expenses 
 
Gross cruise        3,006         3,047         2,890        8,545         8,660         8,597 
costs 
 
Less cruise 
costs included 
above 
 
                    (646)         (654)         (603)      (1,723)       (1,751)       (1,671) 
Commissions, 
transportation 
          and 
other 
 
     Onboard        (171)         (173)         (170)        (411)         (416)         (395) 
and other 
 
     Gain on            -             -             2            2             2             6 
ship sale 
 
                        -             -          (14)          (2)           (2)          (21) 
Restructuring 
expenses 
 
     Other (c)       (18)          (18)             -         (39)          (39)             - 
 
Net cruise          2,171         2,202         2,105        6,372         6,454         6,516 
costs 
 
Less fuel           (265)         (265)         (345)        (648)         (648)         (996) 
 
Net cruise       $  1,906      $  1,937      $  1,760     $  5,724      $  5,806      $  5,520 
costs 
excluding fuel 
 
ALBDs          20,572,112    20,572,112    19,794,882   59,555,384    59,555,384    57,685,594 
 
Gross cruise     $ 146.18      $ 148.11      $ 145.95     $ 143.50      $ 145.42      $ 149.03 
costs per ALBD 
 
% increase vs.        0.2 %         1.5 %                   (3.7)%        (2.4)% 
2015 
 
   Net cruise    $ 105.54      $ 107.00      $ 106.28     $ 106.99      $ 108.37      $ 112.96 
costs per ALBD 
 
   %               (0.7)%           0.7 %                   (5.3)%        (4.1)% 
(decrease) 
increase vs. 
2015 
 
   Net cruise    $  92.63      $  94.10      $  88.84     $  96.10      $  97.48      $  95.70 
costs 
excluding fuel 
        per 
ALBD 
 
   % increase         4.3 %         5.9 %                      0.4 %         1.9 % 
vs. 2015 
 
                    Three Months Ended August 31,            Nine Months Ended August 31, 
 
                   2016          2016         2015          2016          2016         2015 
                               Constant                                 Constant 
                               Currency                                 Currency 
 
Net cruise       $  1,906      $  1,929      $  1,760     $  5,724      $  5,793      $  5,520 
costs 
excluding fuel 
 
ALBDs          20,572,112    20,572,112    19,794,882   59,555,384    59,555,384    57,685,594 
 
Net cruise       $  92.63      $  93.77      $  88.84     $  96.10      $  97.27      $  95.70 
costs 
excluding fuel 
per 
     ALBD 
 
% increase vs.        4.3 %         5.5 %                      0.4 %         1.6 % 
2015 
 
(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) (b): 
 
                                            Three Months Ended  Nine Months Ended 
                                                August 31,          August 31, 
 
                                              2016      2015      2016      2015 
 
Net income 
 
     U.S. GAAP net income                   $ 1,424   $ 1,216   $ 2,171   $ 1,487 
 
     Unrealized (gains) losses on fuel         (25)       137     (121)       215 
derivatives, net (d) 
 
     Gain on ship sale (e)                        -       (2)       (2)       (6) 
 
     Restructuring expenses (e)                   -        14         2        21 
 
     Other (c) (e)                               18         -        39         - 
 
     Adjusted net income                    $ 1,417   $ 1,365   $ 2,089   $ 1,717 
 
Weighted-average shares outstanding             739       781       754       781 
 
Earnings per share 
 
     U.S. GAAP earnings per share           $  1.93   $  1.56   $  2.88   $  1.91 
 
     Unrealized (gains) losses on fuel       (0.03)      0.17    (0.16)      0.27 
derivatives, net (d) 
 
     Gain on ship sale (e)                        -         -         -    (0.01) 
 
     Restructuring expenses (e)                   -      0.02         -      0.03 
 
     Other (c) (e)                             0.02         -      0.05         - 
 
     Adjusted earnings per share            $  1.92   $  1.75   $  2.77   $  2.20 
 
 
 
 
Notes to Non-GAAP Financial Measures 
 
(a) We use net cruise revenues per ALBD ("net revenue yields"), net cruise 
    costs per ALBD and net cruise costs excluding fuel per ALBD as significant 
    non-GAAP financial measures of our cruise segments' financial 
    performance. These measures enable us to separate the impact of predictable 
    capacity changes from the more unpredictable rate changes that affect our 
    business; gains and losses on ship sales and ship impairments, net; and 
    restructuring and other expenses that are not part of our core operating 
    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. 
 
    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. 
    Substantially all of our remaining cruise costs are largely fixed, except 
    for the impact of changing prices and food expenses, once our ship capacity 
    levels have been determined. 
 
    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 passenger ticket revenue yields and net onboard and other 
    revenue yields are computed by dividing net passenger ticket revenues and 
    net onboard and other revenues by ALBDs. 
 
    Net cruise costs per ALBD and net cruise costs excluding fuel per ALBD are 
    the most significant measures 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 to calculate net cruise costs with and without fuel to avoid 
    duplicating these variable costs in our non-GAAP financial measures. We 
    believe that gains and losses on ship sales and ship impairments, net and 
    restructuring expenses and 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 our calculation 
    of net cruise costs with and without fuel. 
 
    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 because it would be too difficult to prepare 
    reliable U.S. GAAP forecasts of gross cruise revenues and gross cruise 
    costs without unreasonable effort. 
 
    In addition, 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 non-GAAP financial measures 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: 
 
      * The translation of our EAA segment operations to our U.S. dollar 
        reporting currency results in decreases in reported U.S. dollar 
        revenues and expenses if the U.S. dollar strengthens against these 
        foreign currencies and increases in reported U.S. dollar revenues and 
        expenses if the U.S. dollar weakens against these foreign currencies. 
      * Our North America segment operations have a U.S. dollar functional 
        currency but also have revenue and expense transactions in currencies 
        other than the U.S. dollar. If the U.S. dollar strengthens against 
        these other currencies, it reduces the U.S. dollar revenues and 
        expenses. If the U.S. dollar weakens against these other currencies, it 
        increases the U.S. dollar revenues and expenses. 
      * Our EAA segment operations have euro, sterling and Australian dollar 
        functional currencies but also have revenue and expense transactions in 
        currencies other than their functional currency. If their functional 
        currency strengthens against these other currencies, it reduces the 
        functional currency revenues and expenses. If the functional currency 
        weakens against these other currencies, it increases the functional 
        currency revenues and expenses. 
 
 
 
(b) Our consolidated financial statements are prepared in accordance with U.S. 
    GAAP. We have not provided a reconciliation between forecasted adjusted 
    earnings per share guidance and forecasted U.S. GAAP earnings per share 
    guidance because it would be too difficult to prepare reliable U.S. GAAP 
    guidance without unreasonable effort. We are unable to predict, without 
    unreasonable effort, the future movement of foreign exchange rates or the 
    future impact of gains or losses on ship sales, restructuring expenses or 
    other non-core gains and charges. 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. 
 
(c) Insignificant costs were included in the income statement in previous 
    periods. 
 
(d) 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. 
 
(e) We believe that gains and losses on ship sales and ship impairments, net 
    and restructuring expenses and other expenses are not part of our core 
    operating business and, therefore, are not an indication of our future 
    earnings performance. We also believe it is more meaningful for gains and 
    losses on ship sales and ship impairments, net and restructuring and other 
    expenses 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. 
 
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. Accordingly, our earnings guidance is presented on an adjusted 
basis only. 
 
 
 
END 
 

(END) Dow Jones Newswires

September 26, 2016 09:15 ET (13:15 GMT)