Carnival Corporation & plc Reports Fourth Quarter and Full Year Earnings
The company reported net income for the full year ended
Commenting on fourth quarter results, Arison said that "achieving increased fourth quarter earnings is a significant accomplishment considering the challenging environment. Higher ticket prices for our North American brands, combined with our continued focus on managing controllable costs helped us offset
For the full year, Arison said that "even though fuel increased 55 percent, costing the company
Key metrics for the fourth quarter of 2008 compared to the prior year were as follows:
- On a constant dollar basis net revenue yields (revenue per available lower berth day) increased 2.0 percent for Q4 2008. Net revenue yield in current dollars decreased 2.1 percent due to unfavorable currency exchange rates. Gross revenue yields decreased 2.1 percent.
- Excluding fuel, net cruise cost per available lower berth day ("ALBD") for Q4 2008 was 3.9 percent lower than the prior year on a constant dollar basis.
- Including fuel, net cruise costs per ALBD increased 0.3 percent on a constant dollar basis (decreased 2.8 percent in current dollars). Gross cruise costs per ALBD decreased 2.6 percent.
- Fuel price increased 24 percent to
$538 per metric ton for Q4 2008 from$433 per metric ton in Q4 2007.
During the fourth quarter, the company successfully introduced Princess Cruises' 3,080-passenger Ruby Princess, which offers seven-day Western Caribbean cruises from
Outlook
For 2009, occupancy levels for advance bookings are running behind the prior year, with ticket prices for these bookings also at lower levels.
"As expected, 2009 is shaping up to be a challenging year in the travel industry. Over the years we have positioned the company to weather the difficult economic environment we now face. We have strong cash flows from operations, a solid balance sheet, and a secure liquidity position. In addition, we have maintained our high investment grade credit rating. These factors combined with the outstanding value proposition inherent in a cruise vacation and our low cost structure will prove to be significant assets in the current environment," Arison said. "Our brands also have the most talented and experienced management teams in the business. They will play an important role in guiding us through these trying times," he added.
On a constant dollar basis, the company expects full year net revenue yields to decrease 6 to 10 percent compared to 1 to 5 percent in the company's October guidance. The reduction in the company's yield guidance is due in large part to the recently announced fuel supplement refund for 2009 bookings combined with a further forecasted reduction in revenues due to deteriorating economic conditions. As a result of changes in currency exchange rates, the company forecasts an 11 to 15 percent decline in net revenue yields for the full year 2009 compared to 2008.
The company expects net cruise costs excluding fuel for the full year 2009 to be higher by approximately 2 percent on a constant dollar basis of which approximately 1 percent is due to one-time credits which reduced 2008 costs. The continued decline in fuel prices are forecasted to reduce fuel expense in 2009 by
The company's revised 2009 guidance is based on current spot prices for fuel of
First Quarter 2009
First quarter constant dollar net revenue yields are expected to decline in the 5 to 7 percent range (down 10 to 12 percent on a current dollar basis) due in part to the fuel supplement refund. Net cruise costs excluding fuel for the first quarter are expected to be approximately 4 percent higher on a constant dollar basis due in part to a higher number of dry-docks days in the first quarter of 2009 versus the prior year.
Based on current fuel prices and currency exchange rates, the company expects earnings for the first quarter of 2009 to be in the range of
Selected Key Forecast Metrics
Full Year 2009 First Quarter 2009
Current Constant Current Constant
Dollars Dollars Dollars Dollars
Change in:
Net revenue yields (11)to(15)% (6)to(10)% (10)to(12)% (5)to(7)%
Net cruise cost per
ALBD (13)to(15)% (9)to(11)% (9)to(11)% (5)to(7)%
Full Year 2009 First Quarter 2009
Fuel price per metric
ton $295 $295
Fuel consumption
(metric tons
in thousands) 3,271 778
Currency
Euro $1.38 to euro 1 $1.38 to euro 1
Sterling $1.53 to 1 pound Sterling $1.53 to 1 pound Sterling
The company has scheduled a conference call with analysts at
Together, these brands operate 88 ships totaling more than 169,000 lower berths with 17 new ships scheduled to be delivered between
Cautionary note concerning factors that may affect future results
Some of the statements contained in this earnings release are "forward-looking statements" that involve risks, uncertainties and assumptions with respect to
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Twelve Months Ended
November 30, November 30,
------------------ -------------------
2008 2007 2008 2007
---- ---- ---- ----
(in millions, except per share data)
Revenues
Cruise
Passenger tickets $2,526 $2,355 $11,210 $9,792
Onboard and other 735 726 3,044 2,846
Other 41 43 392 395
------ ------ ------ ------
3,302 3,124 14,646 13,033
------ ------ ------ ------
Costs and Expenses
Operating
Cruise
Commissions,
transportation
and other 489 448 2,232 1,941
Onboard and other 121 129 501 495
Fuel 428 334 1,774 1,096
Payroll and related 364 360 1,470 1,336
Food 208 191 856 747
Other ship operating 485(a) 488 1,913(a) 1,717
Other 37 35 293 296
------ ------ ------ ------
Total 2,132 1,985 9,039 7,628
Selling and administrative 407 426 1,629 1,579
Depreciation and
amortization 313 290 1,249 1,101
------ ------ ------ ------
2,852 2,701 11,917 10,308
------ ------ ------ ------
Operating Income 450 423 2,729 2,725
------ ------ ------ ------
Nonoperating (Expense) Income
Interest income 5 20 35 67
Interest expense, net of
capitalized interest (106) (94) (414) (367)
Other income, net 21 (1) 27 (1)
------ ------ ------ ------
(80) (75) (352) (301)
------ ------ ------ ------
Income Before Income Taxes 370 348 2,377 2,424
Income Tax Benefit (Expense), Net 1 10 (47) (16)
------ ------ ------ ------
Net Income $371 $358 $2,330 $2,408
Earnings Per Share
Basic $0.47 $0.45 $2.96 $3.04
====== ====== ====== ======
Diluted $0.47 $0.44 $2.90 $2.95
====== ====== ====== ======
Dividends Per Share $0.40 $0.40 $1.60 $1.375
====== ====== ====== ======
Weighted-Average Shares
Outstanding - Basic 787 790 786 793
====== ====== ====== ======
Weighted-Average Shares
Outstanding - Diluted 806 825 816 828
====== ====== ====== ======
(a) Includes a
CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
November 30,
------------------
2008 2007
---- ----
(in millions, except par values)
ASSETS
Current Assets
Cash and cash equivalents $650 $943
Trade and other receivables, net 418 436
Inventories 315 331
Prepaid expenses and other 267 266
------ ------
Total current assets 1,650 1,976
------ ------
Property and Equipment, Net 26,457 26,639
Goodwill 3,266 3,610
Trademarks 1,294 1,393
Other Assets 733 563
------ ------
$33,400 $34,181
====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $256 $115
Current portion of long-term debt 1,081 1,028
Convertible debt subject to current put
options 271 1,396
Accounts payable 512 561
Accrued liabilities and other 1,142 1,353
Customer deposits 2,519 2,807
------ ------
Total current liabilities 5,781 7,260
------ ------
Long-Term Debt 7,735 6,313
Other Long-Term Liabilities and Deferred
Income 786 645
Shareholders' Equity
Common stock of Carnival Corporation ;
$0.01 par value; 1,960 shares authorized;
643 shares at 2008 and 2007 issued 6 6
Ordinary shares of Carnival plc ; $1.66
par value; 226 shares authorized;
213 shares at 2008 and 2007 issued 354 354
Additional paid-in capital 7,677 7,599
Retained earnings 13,980 12,921
Accumulated other comprehensive (loss)
income (623) 1,296
Treasury stock; 19 shares at 2008 and
2007 of Carnival Corporation and 52
shares at 2008 and 50 shares at 2007
of Carnival plc, at cost (2,296) (2,213)
------ ------
Total shareholders' equity 19,098 19,963
------ ------
$33,400 $34,181
====== ======
CARNIVAL CORPORATION & PLC
SELECTED INFORMATION
Three Months Ended Twelve Months Ended
November 30, November 30,
------------------ -------------------
2008 2007 2008 2007
---- ---- ---- ----
(in millions, except statistical information)
STATISTICAL INFORMATION
Passengers carried
(in thousands) 1,966 1,888 8,183 7,672
Occupancy percentage 102.6 % 103.2 % 105.7 % 105.6 %
Fuel consumption
(metric tons in
thousands) 795 773 3,179 3,033
Fuel cost per metric
ton (a) $538 $433 $558 $361
Currency
Euro $1.36 to $1.42 to $1.49 to $1.36 to
euro 1 euro 1 euro 1 euro 1
Sterling $1.70 to $2.04 to $1.90 to $2.00 to
1 pound 1 pound 1 pound 1 pound
CASH FLOW INFORMATION
Cash from operations $512 $857 $3,391 $4,069
Capital expenditures $630 $936 $3,353 $3,312
Dividends paid $316 $277 $1,261 $990
SEGMENT INFORMATION
Revenues
Cruise $3,261 $3,081 $14,254 $12,638
Other 83 85 561 553
Intersegment
elimination (42) (42) (169) (158)
------ ------ ------ ------
$3,302 $3,124 $14,646 $13,033
====== ====== ====== ======
Operating expenses
Cruise $2,095 $1,950 $8,746 $7,332
Other 79 77 462 454
Intersegment
elimination (42) (42) (169) (158)
$2,132 $1,985 $9,039 $7,628
====== ====== ====== ======
Selling and
administrative expenses
Cruise $397 $418 $1,594 $1,547
Other 10 8 35 32
------ ------ ------ ------
$407 $426 $1,629 $1,579
====== ====== ====== ======
Depreciation and
amortization
Cruise $304 $280 $1,213 $1,065
Other 9 10 36 36
------ ------ ------ ------
$313 $290 $1,249 $1,101
====== ====== ====== ======
Operating income
Cruise $465 $433 $2,701 $2,694
Other (15) (10) 28 31
------ ------ ------ ------
$450 $423 $2,729 $2,725
====== ====== ====== ======
(a) Fuel cost per metric ton is calculated by dividing the cost of our fuel by the number of metric tons consumed.
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES
Gross and net revenue yields were computed by dividing the gross or net revenues, without rounding, by ALBDs as follows:
Three Months Ended Twelve Months Ended
November 30, November 30,
------------------ -------------------
2008 2007 2008 2007
---- ---- ---- ----
(in millions, except ALBDs and yields)
Cruise revenues
Passenger tickets $2,526 $2,355 $11,210 $9,792
Onboard and other 735 726 3,044 2,846
---------- ---------- ---------- ----------
Gross cruise revenues 3,261 3,081 14,254 12,638
Less cruise costs
Commissions, transportation
and other (489) (448) (2,232) (1,941)
Onboard and other (121) (129) (501) (495)
---------- ---------- ---------- ----------
Net cruise revenues (a) $2,651 $2,504 $11,521 $10,202
========== ========== ========== ==========
ALBDs (b) 14,908,624 13,794,846 58,942,864 54,132,927
========== ========== ========== ==========
Gross revenue yields (a) $218.72 $223.42 $241.83 $233.47
========== ========== ========== ==========
Net revenue yields (a) $177.78 $181.61 $195.46 $188.48
========== ========== ========== ==========
Gross and net cruise costs per ALBD were computed by dividing the gross or net cruise costs, without rounding, by ALBDs as follows:
Three Months Ended Twelve Months Ended
November 30, November 30,
------------------ -------------------
2008 2007 2008 2007
---- ---- ---- ----
(in millions, except ALBDs and costs per ALBD)
Cruise operating expenses $2,095 $1,950 $8,746 $7,332
Cruise selling and
administrative expenses 397 418 1,594 1,547
---------- ---------- ---------- ----------
Gross cruise costs 2,492 2,368 10,340 8,879
Less cruise costs included in
net cruise revenues
Commissions, transportation
and other (489) (448) (2,232) (1,941)
Onboard and other (121) (129) (501) (495)
---------- ---------- ---------- ----------
Net cruise costs (a) $1,882 $1,791 $7,607 $6,443
========== ========== ========== ==========
ALBDs (b) 14,908,624 13,794,846 58,942,864 54,132,927
========== ========== ========== ==========
Gross cruise costs per
ALBD (a) $167.14 $171.69 $175.43 $164.02
========== ========== ========== ==========
Net cruise costs per
ALBD (a) $126.20 $129.88 $129.06 $119.03
========== ========== ========== ==========
NOTES TO NON-GAAP FINANCIAL MEASURES
(a) We use net cruise revenues per ALBD ("net revenue yields") and net cruise costs per ALBD as significant non-GAAP financial measures of our cruise segment financial performance. These measures enable us to separate the impact of predictable capacity changes from the more unpredictable rate changes that affect our business. We believe these non -GAAP measures provide a better gauge to measure our revenue and cost performance instead of the standard U.S. GAAP-based financial measures. There are no specific rules for determining our non-GAAP financial measures and, accordingly, it is possible that they may not be exactly comparable to the like-kind information presented by other cruise companies, which is a potential risk associated with using them to compare us to other cruise 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 transportation and certain other variable direct costs associated with onboard and other revenues. Substantially all of our remaining cruise costs are largely fixed, except for the impact of changing prices, once our ship capacity levels have been determined.
Net cruise costs per ALBD is the most significant measure we use to monitor our ability to control our cruise segment 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 to avoid duplicating these variable costs in these two non-GAAP financial measures.
We have not provided estimates of future gross revenue yields or future gross cruise costs per ALBD because the reconciliations of forecasted net cruise revenues to forecasted gross cruise revenues or forecasted net cruise costs to forecasted cruise operating expenses would require us to forecast, with reasonable accuracy, the amount of air and other transportation costs that our forecasted cruise passengers would elect to purchase from us (the "air/sea mix"). Since the forecasting of future air/sea mix involves several significant variables that are relatively difficult to forecast and the revenues from the sale of air and other transportation approximate the costs of providing that transportation, management focuses primarily on forecasts of net cruise revenues and costs rather than gross cruise revenues and costs. This does not impact, in any material respect, our ability to forecast our future results, as any variation in the air/sea mix has no material impact on our forecasted net cruise revenues or forecasted net cruise costs. As such, management does not believe that this reconciling information would be meaningful.
In addition, because a significant portion of
On a constant dollar basis, net cruise revenues and net cruise costs would be
(b) ALBDs is a standard measure of passenger capacity for the period, which we use to perform rate and capacity variance analyses to determine what are 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.
SOURCE
CONTACT: Media, US,
Web site: http://www.carnivalcorp.com/
(CCL CUK)
