Carnival Cruises 2009 Annual Report Download - page 47

Key Performance Non-GAAP Financial Indicators
Net cruise revenues increased $1.3 billion, or 12.9%, to $11.5 billion in 2008 from $10.2 billion in
2007. The 8.9% increase in ALBDs between 2008 and 2007 accounted for $907 million of the increase, and the
remaining $412 million was from increased net revenue yields, which increased 3.7% in 2008 compared to 2007
(gross revenue yields increased by 3.6%). Net revenue yields increased in 2008 primarily due to higher North
American ticket prices and the weaker U.S. dollar relative to the euro, partially offset by lower ticket pricing in
Europe. Net revenue yields as measured on a constant dollar basis increased 2.4% in 2008 compared to 2007,
which was comprised of a 3.7% increase in passenger ticket yields, partially offset by a 1.6% decrease in onboard
and other revenue yields. The decrease in onboard and other revenue yields was the result of the significant
increase in our European brands’ capacity, as they typically have lower onboard and other revenue yields, and
lower onboard spending by our guests. Gross cruise revenues increased $1.6 billion, or 12.8%, to $14.3 billion in
2008 from $12.6 billion in 2007 for largely the same reasons as discussed above for net cruise revenues.
Net cruise costs increased $1.2 billion, or 18.1%, to $7.6 billion in 2008 from $6.4 billion in 2007. The 8.9%
increase in ALBDs between 2008 and 2007 accounted for $573 million of the increase. The balance of $591
million was from increased net cruise costs per ALBD, which increased 8.4% in 2008 compared to 2007 (gross
cruise costs per ALBD increased 7.0%). This 8.4% increase was driven by a 54.6% per metric ton increase in
fuel price to $558 per metric ton in 2008, which resulted in an increase in fuel expense of $626 million compared
to 2007. This increase was partially offset by a $31 million gain from Cunard’s sale of the Queen Elizabeth 2
(“QE2”), a $26 million gain from a hurricane insurance settlement for damages to our Cozumel, Mexico port
facility in 2005 and lower selling and administrative expenses achieved primarily through economies of scale and
tight cost controls. Net cruise costs per ALBD as measured on a constant dollar basis increased 7.5% in 2008
compared to 2007. On a constant dollar basis, net cruise costs per ALBD excluding fuel were flat. Gross cruise
costs increased $1.5 billion, or 16.5%, in 2008 to $10.3 billion from $8.9 billion in 2007 for largely the same
reasons as discussed above for net cruise costs.
Liquidity and Capital Resources
Maintenance of a strong balance sheet, which enhances our financial flexibility, has always been and
continues to be the primary objective of our capital structure policy. We believe preserving cash and liquidity is a
prudent step to take during uncertain times to achieve this objective. Accordingly in October 2008 at the height
of the financial crisis, the Boards of Directors voted to suspend our quarterly dividend beginning March
2009. However, at the January 2010 Boards of Directors meetings it was decided to reinstate our March 2010
quarterly dividend at $0.10 per share.
Our overall strategy is to maintain an acceptable level of liquidity with our available cash and cash
equivalents and committed financings for immediate and future liquidity needs, and a reasonable debt maturity
profile that is spread out over a number of years. During 2009, we put into place $6.4 billion of committed
financings at attractive interest rates, which considerably improved our liquidity to the levels discussed below.
Our cash from operations and committed financings along with our available cash and cash equivalent
balances are forecasted to be sufficient to fund our expected 2010 cash requirements and result in an acceptable
level of liquidity throughout 2010. Although we do not believe we will be required to obtain additional new
financings during 2010, we may choose to do so if favorable opportunities arise.
Sources and Uses of Cash
Our business provided $3.3 billion of net cash from operations during fiscal 2009, a decrease of $49 million,
or 1.4%, compared to fiscal 2008. This decrease was caused by less net cash being generated from operations
primarily as a result of lower cruise ticket prices and onboard revenues, partially offset by net cash generated
from changes in our working capital position compared to fiscal 2008.
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