Carnival Cruises 2009 Annual Report Download - page 39

consolidated financial statements). These new ships, together with the continuing investments we make in our
existing fleet, should help us maintain our leadership position in the world-wide cruise industry.
The year-over-year percentage increase in our ALBD capacity for fiscal 2010, 2011 and 2012 is currently
expected to be 7.7%, 5.1% and 4.6%, respectively. The above percentage increases result primarily from
contracted new ships entering service and exclude any unannounced future ship orders, acquisitions, retirements,
charters or sales. Accordingly, the scheduled withdrawal from service of Costa Europa in April 2010 and P&O
Cruises’ Artemis in April 2011 have been reflected in these percentages.
Outlook For Fiscal 2010
As of December 18, 2009, we said that we expected our fully diluted earnings per share for the 2010 full
year and first quarter would be in the ranges of $2.10 to $2.30 and $0.08 to $0.12, respectively. Our guidance
was based on the assumptions in the table below.
As of January 25, 2010, updated only for the current assumptions in the table below and the $0.05 per share
gain we recognized on the sale of Artemis in the 2010 first quarter (see Note 4 in the accompanying consolidated
financial statements for additional discussion), our fully diluted earnings per share for the 2010 full year would
decrease by $0.10 and our fully diluted earnings per share for the 2010 first quarter would increase by $0.02.
2010 Assumptions
December 18, 2009 January 25, 2010
First quarter fuel cost per metric ton ................................. $474 $502
Full year fuel cost per metric ton ................................... $472 $499
Currencies
U.S. dollar to €1 .............................................. $1.45 $1.42
U.S. dollar to £1 .............................................. $1.63 $1.62
The above forward-looking statements involve risks and uncertainties. Various factors could cause our
actual results to differ materially from those expressed above including, but not limited to, economic and
business conditions, foreign currency exchange rates, fuel prices, adverse weather conditions, spread of
contagious diseases, regulatory changes, geopolitical and other factors that could adversely impact our revenues,
costs and expenses. You should read the above forward-looking statement together with the discussion of these
and other risks under “Cautionary Note Concerning Factors That May Affect Future Results.”
Critical Accounting Estimates
Our critical accounting estimates are those which we believe require our most significant judgments about
the effect of matters that are inherently uncertain. A discussion of our critical accounting estimates, the
underlying judgments and uncertainties used to make them and the likelihood that materially different estimates
would be reported under different conditions or using different assumptions is as follows:
Ship Accounting
Our most significant assets are our ships and ships under construction, which represent 78% of our total
assets. We make several critical accounting estimates dealing with our ship accounting. First, we compute our
ships’ depreciation expense, which represented 11% of our cruise costs and expenses in fiscal 2009 and which
requires us to estimate the average useful life of each of our ships as well as their residual values. Secondly, we
account for ship improvement costs by capitalizing those costs which we believe will add value to our ships and
depreciate those improvements over their or the ships’ estimated remaining useful life, whichever is shorter,
while expensing repairs and maintenance and minor improvement costs as they are incurred. Finally, when we
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