Royal Caribbean Cruise Lines 2013 Annual Report Download - page 47
Download and view the complete annual report
Please find page 47 of the 2013 Royal Caribbean Cruise Lines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.45
PART II
Onboard and other revenues also include revenues we
receive from independent third-party concessionaires
that pay us a percentage of their revenues in exchange
for the right to provide selected goods and/or services
onboard our ships.
Cruise Operating Expenses
Our cruise operating expenses are comprised of the
following:
đƫƫCommissions, transportation and other expenses,
which consist of those costs directly associated with
passenger ticket revenues, including travel agent
commissions, air and other transportation expenses,
port costs that vary with passenger head counts
and related credit card fees;
đƫƫOnboard and other expenses, which consist of the
direct costs associated with onboard and other rev-
enues, including the costs of products sold onboard
our ships, vacation protection insurance premiums,
costs associated with pre- and post-cruise tours and
related credit card fees as well as the minimal costs
associated with concession revenues, as the costs
are mostly incurred by third-party concessionaires;
đƫƫPayroll and related expenses, which consist of costs
for shipboard personnel (costs associated with our
shoreside personnel are included in marketing, sell-
ing and administrative expenses);
đƫƫFood expenses, which include food costs for both
guests and crew;
đƫƫFuel expenses, which include fuel and related deliv-
ery and storage costs, including the financial impact
of fuel swap agreements; and
đƫƫOther operating expenses, which consist primarily
of operating costs such as repairs and maintenance,
port costs that do not vary with passenger head
counts, vessel operating lease costs, costs associated
with Pullmantur’s travel agency network, land-based
tours and air charter business to third parties, vessel
related insurance and entertainment.
We do not allocate payroll and related expenses, food
expenses, fuel expenses or other operating expenses
to the expense categories attributable to passenger
ticket revenues or onboard and other revenues since
they are incurred to provide the total cruise vacation
experience.
SELECTED OPERATIONAL AND FINANCIAL METRICS
We utilize a variety of operational and financial metrics
which are defined below to evaluate our performance
and financial condition. As discussed in more detail
herein, certain of these metrics are non-GAAP financial
measures, which we believe provide useful informa-
tion to investors as a supplement to our consolidated
financial statements, which are prepared and pre-
sented in accordance with GAAP. The presentation
of non-GAAP financial information is not intended
to be considered in isolation or as a substitute for, or
superior to, the financial information prepared and
presented in accordance with GAAP.
Adjusted Earnings per Share represents Adjusted
Net Income divided by weighted average shares
outstanding or by diluted weighted average shares
outstanding, as applicable. We believe that this non-
GAAP measure is meaningful when assessing our
performance on a comparative basis.
Adjusted Net Income represents net income excluding
certain items that we believe adjusting for is meaning-
ful when assessing our performance on a comparative
basis. In 2013 and 2012, these items include restructur-
ing and related impairment charges and impairment
of Pullmantur related assets, respectively. For com-
parability purposes, starting in 2014, we will exclude
results of the divested Pullmantur non-core businesses
from our Adjusted Net Income. In anticipation of the
2014 change, we have presented Adjusted Net Income
excluding the estimated impact of the divested
Pullmantur non-core businesses in the financial tables
under Results of Operations. The estimated impact
of the divested Pullmantur non-core businesses was
arrived at by adjusting the net income (loss) of these
businesses for the ownership percentage we will retain
as well as for intercompany transactions that will no
longer be eliminated in our consolidated statements
of comprehensive income (loss).
Available Passenger Cruise Days (“APCD”) is our
measurement of capacity and represents double
occupancy per cabin multiplied by the number of
cruise days for the period. We use this measure to
perform capacity and rate analysis to identify our
main non-capacity drivers that cause our cruise
revenue and expenses to vary.
Gross Cruise Costs represent the sum of total cruise
operating expenses plus marketing, selling and
administrative expenses.