Carnival Cruises 2004 Annual Report Download - page 41

Management’s Discussion and Analysis of Financial Condition and Results of Operations (continued)
38 Carnival Corporation & plc
Gross and net cruise costs per ALBD were computed by dividing the gross or net cruise costs, without rounding,
by ALBDs as follows:
Years Ended November 30,
Pro Forma Reported Pro Forma Reported
2004 2003 2003 2002 2002
(in millions, except ALBDs and costs per ALBD)
Cruise operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . $ 5,247 $ 4,222 $ 3,624 $ 3,567 $ 2,222
Cruise selling and administrative expenses . . . . . . . . . . . . 1,231 1,054 896 912 577
Gross cruise costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,478 5,276 4,520 4,479 2,799
Less cruise costs included in net cruise revenues
Commissions, transportation and other . . . . . . . . . . . . . (1,572) (1,227) (1,021) (1,121) (658)
Onboard and other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (359) (279) (229) (240) (116)
Net cruise costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,547 $ 3,770 $ 3,270 $ 3,118 $ 2,025
ALBDs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,009,061 37,554,709 33,309,785 31,962,000 21,435,828
Gross cruise costs per ALBD . . . . . . . . . . . . . . . . . . . . . . . $147.20 $140.50 $135.69 $140.15 $130.54
Net cruise costs per ALBD . . . . . . . . . . . . . . . . . . . . . . . . $103.31 $100.38 $ 98.16 $ 97.55 $ 94.43
Fiscal 2004 (“2004”) Compared to
Pro Forma 2003 (“Pro Forma 2003”) and
Reported Results 2003 (“Reported 2003”)
Revenues
Net cruise revenues increased $1.67 billion, or 29%,
to $7.50 billion in 2004 from $5.83 billion in pro forma
2003. The 17.2% increase in ALBD’s between pro forma
2003 and 2004 accounted for $1.0 billion of the increase,
and the remaining $670 million was from increased net
revenue yields, which increased 9.8% in 2004 compared
to pro forma 2003 (gross revenue yields increased by
9.7%). Net revenue yields increased in 2004 primarily
from higher cruise ticket prices, a 1.9% increase in
occupancy, higher onboard revenues and the weaker
U.S. dollar relative to the euro and sterling. Net revenue
yields as measured on a constant dollar basis, where
we recompute 2004 net revenue yields at the foreign
currency exchange rates in effect for pro forma 2003,
increased 6.6% in 2004. Gross cruise revenues increased
$2.10 billion, or 29%, in 2004 to $9.43 billion from
$7.33 billion in pro forma 2003 primarily for the same
reasons as net cruise revenues.
Net cruise revenues increased $2.29 billion, or 44%,
to $7.50 billion in 2004 from $5.21 billion in reported
2003. The 32.1% increase in ALBD’s between reported
2003 and 2004, which included P&O Princess for a full
year in 2004, but only since April 17, 2003 during 2003,
accounted for $1.67 billion of the increase, and the
remaining $615 million was from increased net revenue
yields, which increased 8.9% in 2004 compared to 2003
(gross revenue yields increased by 10.5%). Net revenue
yields increased primarily for the same reasons as noted
above. Gross cruise revenues increased $2.97 billion,
or 46%, in 2004 to $9.43 billion from $6.46 billion for
primarily the same reasons as net cruise revenues.
Onboard and other revenues included concession
revenues of $261 million in 2004, $201 million in pro
forma 2003 and $192 million in reported 2003, which
increased in 2004 compared to both pro forma 2003 and
reported 2003 primarily because of the same reasons
noted above for net cruise revenues.
Other non-cruise revenues increased $48 million, or
13.7%, to $398 million in 2004 from $350 million in
pro forma 2003 (an increase of $53 million, or 15.4%
from $345 million in reported 2003) primarily due to the
increase in the number of cruise/tours sold, as well as
price increases.
Costs and Expenses
Net cruise costs increased $777 million, or 21%, to
$4.55 billion in 2004 from $3.77 billion in pro forma 2003.
The 17.2% increase in ALBD’s between pro forma 2003
and 2004 accounted for $650 million of the increase,
and the remaining $127 million was from increased net
cruise costs per ALBD, which increased 2.9% in 2004
compared to pro forma 2003 (gross cruise costs per
ALBD increased 4.8%). Net cruise costs per ALBD
increased primarily due to a 7.8% increase in 2004 fuel
prices and the weaker U.S. dollar relative to the euro
and the sterling in 2004. In addition, net cruise costs
increased as a result of the 2004 Atlantic hurricane