Carnival Cruises 2010 Annual Report Download - page 43

EAA Brands
Approximately 83% of 2010 total revenues are comprised of cruise passenger ticket revenues. Cruise passenger
ticket revenues increased $338 million, or 7.7%, to $4.8 billion in 2010 from $4.4 billion in 2009. This increase
was caused by our 14.0% capacity increase in ALBDs, which accounted for $622 million. This increase was
partially offset by the impact of the stronger U.S. dollar against the euro and sterling compared to 2009, which
accounted for $111 million, the impact of lower air transportation revenues from fewer guests purchasing their
air travel through us and a decrease in cruise ticket pricing primarily caused by the challenging winter season in
the Brazilian market, which had significant increases in industry capacity.
The remaining 17% of 2010 total revenues is comprised of onboard and other cruise revenues, which increased
$112 million, or 13.1%, to $965 million in 2010 from $853 million in 2009. This increase was caused by our
14.0% capacity increase in ALBDs, which accounted for $120 million. Onboard and other revenues included
concession revenues of $330 million in 2010 and $291 million in 2009.
Costs and Expenses
Consolidated
Operating costs and expenses increased $685 million, or 8.1%, to $9.1 billion in 2010 from $8.4 billion in 2009.
This increase was caused by our 7.1% capacity increase in ALBDs, which accounted for $584 million and higher
fuel prices, which accounted for $417 million. These increases were partially offset by the benefits from cost
reduction programs and economies of scale, lower air transportation costs due to fewer guests purchasing their
air travel through us and $61 million of gains recognized from the sale of P&O Cruises (UK)’s Artemis and
Cunard’s litigation settlement with Converteam related to Queen Mary 2’s pod propulsion system (“Cunard’s
litigation settlement”).
Selling and administrative expenses of $1.6 billion were flat in 2010 compared to 2009 despite our 7.1% capacity
increase in ALBDs. The impact from the increase in capacity, which accounted for $111 million, was offset by
the benefits from cost reduction programs and economies of scale.
Depreciation and amortization expense increased $107 million, or 8.2%, to $1.4 billion in 2010 from $1.3 billion
in 2009 caused by $91 million from our 7.1% capacity increase in ALBDs through the addition of new ships, and
additional ship and other improvement expenditures, net of disposals.
Our total costs and expenses as a percentage of revenues decreased slightly to 83.8% in 2010 from 84.0% in
2009.
North America Brands
Operating costs and expenses increased $350 million, or 7.1%, to $5.3 billion in 2010 from $4.9 billion in
2009. This increase was caused by higher fuel prices, which accounted for $260 million and our 3.4% capacity
increase in ALBDs, which accounted for $167 million. These increases were partially offset by the benefits from
cost reduction programs and economies of scale and lower air transportation costs due to fewer guests purchasing
air travel through us.
Selling and administrative expenses of $902 million were flat in 2010 compared to 2009 despite our 3.4%
capacity increase in ALBDs. The impact from the increase in capacity, which accounted for $30 million, was
offset by the benefits from cost reduction programs and economies of scale.
Depreciation and amortization expense increased $52 million, or 6.6%, to $843 million in 2010 from $791
million in 2009, caused by $27 million from our 3.4% capacity increase in ALBDs through the addition of new
ships, and additional ship and other improvement expenditures.
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