Carnival Cruises 2014 Annual Report Download - page 65

Key Performance Non-GAAP Financial Indicators
Net cruise revenues increased slightly by $83 million to $12.4 billion in 2013 from $12.3 billion in 2012. This
was caused by our 2.9% capacity increase in ALBDs, which accounted for $352 million, and the 2013 net
currency impact, which accounted for $58 million, partially offset by a 2.6% decrease in constant dollar net
revenue yields, which accounted for $327 million. The 2.6% decrease in net revenue yields on a constant dollar
basis was caused by a 3.5% decrease in net passenger ticket revenue yields, partially offset by a slight increase in
net onboard and other revenue yields. The 3.5% decrease in net passenger ticket revenue yields was driven by
our North America brands’ 3.8% net yield decrease, which was driven by promotional pricing at Carnival Cruise
Line. In addition, our EAA brands’ net passenger ticket revenue yields decreased 2.8%, which was affected by
the ongoing challenging economic environment in Europe. Although Costa’s net passenger ticket revenue yields
increased, they were more than offset by decreases at our other European brands. Gross cruise revenues increased
slightly by $75 million and remained at $15.2 billion in both 2013 and 2012 for largely the same reasons as
discussed above.
Net cruise costs excluding fuel increased by $525 million, or 8.0%, to $7.1 billion in 2013 from $6.6 billion in
2012. The increase was caused by a 4.6% increase in constant dollar net cruise costs excluding fuel per ALBD,
which accounted for $313 million, our 2.9% capacity increase in ALBDs, which accounted for $189 million, and
the 2013 net currency impact, which accounted for $23 million.
The 4.6% increase in constant dollar net cruise costs excluding fuel per ALBD was caused by:
– $56 million – additional costs and expenses related to the 2013 voyage disruptions, net of third-party
insurance recoverables of $20 million;
– $46 million – higher dry-dock and other ship repair and maintenance expenses;
– $44 million – higher advertising spend;
– $40 million – new market development initiative costs;
– $34 million – nonrecurrence in 2013 of Costa’s excess insurance proceeds and Cunard’s litigation
settlement;
– $20 million – higher insurance premiums;
– $15 million – MNOPF special expense assessment and
– $87 million – various other operating expenses, net.
These increases were partially offset by:
– $29 million – nonrecurrence in 2013 of the January 2012 ship incident-related expenses.
Fuel costs decreased by $173 million, or 7.3%, to $2.2 billion in 2013 from $2.4 billion in 2012. This was caused
by a 5.3% decrease in fuel consumption per ALBD, which accounted for $131 million, and lower fuel prices,
which accounted for $111 million, partially offset by our 2.9% capacity increase in ALBDs, which accounted for
$68 million.
Gross cruise costs increased by $473 million, or 4.0% to $12.4 billion in 2013 from $11.9 billion in 2012 for
principally the same reasons as discussed above.
Liquidity, Financial Condition and Capital Resources
Our primary financial goals are to profitably grow our cruise business and increase our return on invested capital,
reaching double digit returns in the next three to four years, while maintaining a strong balance sheet. Our ability
to generate significant operating cash flows allows us to internally fund our capital investments. Our goal is to
return excess free cash flows to our shareholders in the form of additional dividends and/or share buybacks. In
addition, we are committed to maintaining our strong investment grade credit ratings, which are among the
highest in the leisure travel industry. Other objectives of our capital structure policy are to maintain a sufficient
level of liquidity with our available cash and cash equivalents and committed financings for immediate and
future liquidity needs, and a reasonable debt maturity profile that is spread out over a number of years.
63