Carnival Cruises 2009 Annual Report Download - page 38

– our ability to implement our shipbuilding programs and ship maintenance, repairs and refurbishments,
including ordering additional ships for our cruise brands from shipyards, on terms that are favorable or
consistent with our expectations;
– the continued strength of our cruise brands and our ability to implement our brand strategies;
– additional risks associated with our international operations not generally applicable to our U.S.
operations;
– the pace of development in geographic regions in which we try to expand our business;
– whether our future operating cash flow will be sufficient to fund future obligations and whether we will
be able to obtain financing, if necessary, in sufficient amounts and on terms that are favorable or
consistent with our expectations;
– our counterparties’ ability to perform;
– continuing financial viability of our travel agent distribution system, air service providers and other key
vendors and reductions in the availability of and increases in the pricing for the services and products
provided by these vendors;
– our decisions to self-insure against various risks or our inability to obtain insurance for certain risks at
reasonable rates;
– disruptions and other damages to our information technology networks and operations;
– lack of continuing availability of attractive, convenient and safe port destinations; and
– risks associated with the DLC structure.
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 listing rules, we expressly disclaim any obligation to
disseminate, after the date of this 2009 Annual Report, 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.
Executive Overview
We generated $1.8 billion of net income and $3.3 billion of cash from operations in the face of the most
challenging economic environment in our history, including significantly increased unemployment rates, the
deterioration in consumer confidence, travel restrictions to Mexico due to the flu virus and a significant reduction
in discretionary spending, which ultimately led to the largest one-year cruise pricing decline in our history. We
believe that our relatively strong performance is in part due to our guests’ understanding of the outstanding value
that a cruise vacation has to offer. Consistent with our strategy to continue to increase our penetration of
developing and emerging growth markets, we had an 8.2% increase in our European, Australian, New Zealand
and Asian passenger capacities, whereas our North American passenger capacity grew by 3.9%, resulting in a
worldwide capacity increase of 5.4% in 2009. We were particularly pleased with our European brands, who,
despite the significant capacity increase, managed to achieve a relatively moderate yield decline in this extremely
difficult year.
A significant portion of the adverse impact of our net revenue yield decreases were offset by decreased fuel
costs in 2009 driven by both lower fuel prices and lower fuel consumption as a result of fuel conservation
initiatives, as well as other cost containment programs. We are working diligently to maintain our cost efficient
ownership culture. There are a variety of actions that we are taking that are expected to continue to improve our
cost structure in 2010, including continuing to focus on reducing fuel consumption and leveraging our size to
obtain economies of scale and additional synergies.
We believe that the cruise industry is characterized by relatively low market penetration levels, among other
things and, accordingly, it has additional growth potential. In order to capture some of this growth potential, as of
January 28, 2010 we had contracts with three shipyards providing for the construction of 13 additional cruise
ships, the majority of which have been designated for our European brands (see Note 6 in the accompanying
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