Carnival Cruises 2011 Annual Report Download - page 48

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In addition, because our EAA cruise brands utilize the euro, sterling and Australian dollar 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 these non-GAAP financial measures assuming
the 2011 and 2010 periods’ currency exchange rates have remained constant with the 2010 and 2009 periods’
rates, respectively, 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.
Under U.S. GAAP, the realized and unrealized gains and losses on fuel derivatives not qualifying as fuel hedges
are immediately recognized in earnings. We believe that unrealized gains and losses on fuel derivatives are not
an indication of our future earnings performance since they may not ultimately be realized in our future
earnings. Therefore, we believe it is more meaningful for the unrealized gains and losses on fuel derivatives to be
excluded from our net income and EPS and, accordingly, we present a non-GAAP net income and non-GAAP
EPS excluding these unrealized gains and losses.
Our consolidated financial statements are prepared in accordance with U.S. GAAP. The presentation of our
non-GAAP financial information is not intended to be considered in isolation or as substitute for, or superior to,
the financial information prepared in accordance with U.S. GAAP. There are no specific rules for determining
our non-GAAP current and constant dollar financial measures and, accordingly, they are susceptible to varying
calculations, and it is possible that they may not be exactly comparable to the like-kind information presented by
other companies, which is a potential risk associated with using these measures to compare us to other
companies.
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