Carnival Cruises 2011 Annual Report Download - page 41

year, after bottoming out on January 16, 2012. Costa’s booking activity is difficult to interpret because of the
significant re-booking activity stemming from the loss of the ship’s use and related re-deployments, however we
believe it to be down significantly. Despite these recent trends, we believe the incident will not have a significant
long-term impact on our business.
Since the December 20, 2011 guidance, certain events have occurred that will have a material impact on our
2012 results. For those events where the financial impacts can be reasonably estimated, we have quantified them
below. In addition, as a result of Costa Concordia’s incident, we anticipate other financial impacts to our
business, including lower net revenue yields, that are not possible to reasonably determine at this time. In March
2012, we expect to provide revised 2012 full year earnings guidance, including these financial impacts.
(Decrease) in 2012 First Quarter (Decrease) Increase in 2012 Full Year
Net Income
(in millions)
Non-GAAP Fully
Diluted EPS
Net Income
(in millions)
Non-GAAP Fully
Diluted EPS
Costa Concordia incident:
Loss of use .................... $ (8) $(0.01) $(85) to $(95) $(0.11) to $(0.12)
Insurance deductibles ............ (40) (0.05) (40) (0.05)
Other incident related costs ....... (23) (0.03) (30) to (40) (0.04) to (0.05)
(71) (0.09) (155) to (175) (0.20) to (0.22)
Fuel (a) ........................... (46) (0.06) (230) (0.30)
Currency (a) ....................... - - 10 0.01
$(117) $(0.15) $(375) to $(395) $(0.48) to $(0.51)
(a) Reflects the impact of the change in our fuel and currency assumptions used in our December 20, 2011
guidance compared to January 23, 2012, which are included in the “2012 Selected Key Forecast
Assumptions” table below.
2012 Selected Key Forecast Assumptions (a)
December 20, 2011 January 23, 2012
First quarter fuel cost per metric ton consumed ......................... $652 $705
Full year fuel cost per metric ton consumed ........................... $650 $717
Currencies
U.S. dollar to €1 ............................................. $1.30 $1.30
U.S. dollar to £1 ............................................. $1.55 $1.56
U.S. dollar to Australian dollar ................................. $0.99 $1.05
(a) The fuel and currency assumptions used in our guidance change daily and, accordingly, our forecasts change
daily based on the changes in these assumptions.
We believe it is more meaningful to evaluate our earnings performance by excluding the impact of unrealized
gains and losses on fuel derivatives from non-GAAP fully diluted EPS. Therefore, we will not include any
year-to-date impact or future estimates of unrealized gains and losses on fuel derivatives in our non-GAAP EPS
guidance. However, we will forecast realized gains and losses on fuel derivatives by applying current Brent
prices to the derivatives that settle in the forecast period. Based on this approach and current prices, we are not
forecasting any realized gains or losses for fiscal 2012 under our current fuel derivative portfolio.
The above forward-looking statements involve risks, uncertainties and assumptions with respect to us. There are
many factors that could cause our actual results to differ materially from those expressed above including, but not
limited to, general economic and business conditions, increases in fuel prices, ship incidents, spread of
contagious diseases, adverse weather conditions, geo-political events, negative publicity and other factors that
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