Carnival Cruises 2014 Annual Report Download - page 64

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– $23 million – increases in commissions, transportation and other related expenses driven by increases in air
transportation costs related to guests who purchased their tickets from us, partially offset by the impact of
lower cruise ticket pricing;
– $14 million – new market development initiative costs and
– $45 million – various other operating expenses, net.
These increases were partially offset by:
– $58 million – lower fuel consumption per ALBD;
– $53 million – lower fuel prices;
– $39 million – intersegment transaction, which was fully offset in our Cruise Support segment and
– $26 million – slight decrease in occupancy.
Selling and administrative expenses increased by $99 million, or 10%, to $1.0 billion in 2013 from $949 million
in 2012. The increase was caused by higher advertising spend, which accounted for $57 million, new market
development initiative costs, which accounted for $26 million, and our 2.5% capacity increase in ALBDs, which
accounted for $24 million.
Our total costs and expenses as a percentage of revenues increased to 90% in 2013 from 86% in 2012.
EAA Brands
Operating costs and expenses increased by $127 million, or 3.2%, $4.1 billion in 2013 from $4.0 billion in 2012.
This increase was caused by:
– $176 million – impairment charges related to Costa Classica and Costa Voyager;
– $136 million – 3.4% capacity increase in ALBDs;
– $46 million – 2013 net currency impact;
– $34 million – nonrecurrence in 2013 of Costa’s excess insurance proceeds and Cunard’s litigation
settlement and
– $9 million – MNOPF special expense assessment.
These increases were partially offset by:
– $100 million – decreases in commissions, transportation and other related expenses driven by lower cruise
ticket pricing and a decrease in air transportation costs related to guests who purchased their tickets from us;
– $72 million – lower fuel consumption per ALBD;
– $58 million – lower fuel prices;
– $34 million – nonrecurrence in 2013 of the 2012 Costa Allegra impairment charge and
– $29 million – nonrecurrence in 2013 of the January 2012 ship incident-related expenses.
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.
Our total costs and expenses as a percentage of revenues decreased to 92% in 2013 from 93% in 2012.
Operating Income
Our consolidated operating income decreased by $290 million, or 18%, to $1.4 billion in 2013 from $1.6 billion
in 2012. Our North America brands’ operating income decreased by $321 million, or 25%, to $956 million in
2013 from $1.3 billion in 2012, and our EAA brands’ operating income increased by $38 million, or 8.8%, to
$471 million in 2013 from $433 million in 2012. These changes were primarily due to the reasons discussed
above.
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