Carnival Cruises 2014 Annual Report Download - page 63

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Costs and Expenses
Consolidated
Operating costs and expenses increased by $304 million, or 2.9%, to $10.6 billion in 2013 from $10.3 billion in
2012.
This increase was caused by:
– $291 million – 2.9% capacity increase in ALBDs;
– $176 million – impairment charges related to Costa Classica and Costa Voyager;
– $56 million – additional costs and expenses related to the 2013 voyage disruptions, net of third-party
insurance recoverables of $20 million;
– $46 million – 2013 net currency impact;
– $46 million – higher dry-dock and other ship repair and maintenance expenses;
– $34 million – nonrecurrence in 2013 of Costa’s insurance proceeds for a ship in excess of its net book value
(“Costa’s excess insurance proceeds”) and Cunard’s litigation settlement;
– $20 million – higher insurance premiums;
– $15 million – MNOPF special expense assessment and
– $14 million – new market development initiative costs.
These increases were partially offset by:
– $131 million – lower fuel consumption per ALBD;
– $111 million – lower fuel prices;
– $65 million – decreases in commissions, transportation and other related expenses driven by lower cruise
ticket pricing, partially offset by increases in air transportation costs related to guests who purchased their
tickets from us;
– $34 million – nonrecurrence in 2013 of the 2012 Costa Allegra ship impairment charge;
– $29 million – nonrecurrence in 2013 of the January 2012 ship incident-related expenses and
– $24 million – various other operating expenses, net.
Selling and administrative expenses increased by $159 million, or 9.2%, to $1.9 billion in 2013 from $1.7 billion
in 2012.
Depreciation and amortization expenses increased by $61 million, or 4.0%, to $1.6 billion in 2013 from $1.5
billion in 2012.
In 2013, a $13 million impairment charge was recorded for Ibero’s trademarks. In 2012, $173 million of
impairment charges were recorded for Ibero’s goodwill and trademarks. See Note 10 – “Fair Value
Measurements, Derivative Instruments and Hedging Activities” in the consolidated financial statements for
additional discussion of these impairment charges.
Our total costs and expenses as a percentage of revenues increased to 91% in 2013 from 89% in 2012.
North America Brands
Operating costs and expenses increased by $179 million, or 2.9%, to $6.3 billion in 2013 from $6.1 billion in
2012.
This increase was caused by:
– $154 million – 2.5% capacity increase in ALBDs;
– $63 million – higher dry-dock and other ship repair and maintenance expenses;
– $56 million – additional costs and expenses related to the 2013 voyage disruptions, net of third-party
insurance recoverables of $20 million;
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