Carnival Cruises 2008 Annual Report Download - page 93

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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.
In addition, because a significant portion of our operations utilize the euro or sterling
to measure their results and financial condition, the translation of those operations to our
U.S. dollar reporting currency results in increases in reported U.S. dollar revenues and
expenses if the U.S. dollar weakens against these foreign currencies and decreases in reported
U.S. dollar revenues and expenses if the U.S. dollar strengthens against these foreign
currencies. Accordingly, we also monitor and report our two non-GAAP financial measures
assuming the current period currency exchange rates have remained constant with the prior
year's comparable period rates, or on a "constant dollar basis," in order to remove the impact
of changes in exchange rates on our non-U.S. dollar cruise operations. We believe that this
is a useful measure since it facilitates a comparative view of the growth of our business in a
fluctuating currency exchange rate environment.
Gross and net revenue yields were computed by dividing the gross or net revenues, without
rounding, by ALBDs as follows:
Years Ended November 30,
2008 2008 2007 2007 2006
Constant Constant
Dollar Dollar
(in millions, except ALBDs and yields)
Cruise revenues
Passenger tickets $11,210 $11,064 $ 9,792 $ 9,487 $ 8,903
Onboard and other 3,044 3,016 2,846 2,786 2,514
Gross cruise revenues 14,254 14,080 12,638 12,273 11,417
Less cruise costs
Commissions, transportation
and other (2,232) (2,201) (1,941) (1,872) (1,749)
Onboard and other (501) (498) (495) (485) (453)
Net cruise revenues $11,521 $11,381 $10,202 $ 9,916 $ 9,215
ALBDs 58,942,864 58,942,864 54,132,927 54,132,927 49,945,184
Gross revenue yields $241.83 $238.88 $233.47 $ 226.72 $228.58
Net revenue yields $195.46 $193.08 $188.48 $ 183.18 $184.50