Carnival Cruises 2011 Annual Report Download - page 52

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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%
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.
Our total costs and expenses as a percentage of total revenues decreased to 84.0% in 2010 from 84.8% in 2009.
EAA Brands
Operating costs and expenses increased $357 million, or 11.1%, to $3.6 billion in 2010 from $3.2 billion in
2009. This increase was caused by our 14.0% capacity increase in ALBDs, which accounted for $451 million,
and higher fuel prices, which accounted for $157 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 aggregate gains recognized from the sale of P&O
Cruises (UK)’s Artemis and Cunard’s litigation settlement.
Selling and administrative expenses of $584 million were flat in 2010 compared to 2009 despite our 14.0%
capacity increase in ALBDs. The impact from the increase in capacity, which accounted for $80 million, was
offset by the benefits from cost reductions programs and economies of scale.
Depreciation and amortization expense increased $47 million, or 10.3%, to $505 million in 2010 from $458
million in 2009, caused by $64 million from our 14.0% 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 total revenues increased to 81.3% in 2010 from 80.4% in 2009.
Operating Income
Our consolidated operating income increased $193 million, or 9.0%, to $2.3 billion in 2010 from $2.2 billion in
2009. Our North America brands’ operating income increased $156 million, or 13.2%, to $1.3 billion in 2010
from $1.2 billion in 2009, and our EAA brands’ operating income increased $35 million, or 3.4%, to $1.1 billion
in 2010 from $1.0 billion in 2009. These increases were primarily due to the reasons discussed above.
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