Carnival Cruises 2015 Annual Report Download - page 49

– Competition from and overcapacity in the cruise ship and land-based vacation industry;
– Economic, market and political factors that are beyond our control, which could increase our operating,
financing and other costs;
– Litigation, enforcement actions, fines or penalties;
– Lack of continuing availability of attractive, convenient and safe port destinations on terms that are
favorable or consistent with our expectations;
– Union disputes and other employee relationship issues;
– Decisions to self-insure against various risks or the inability to obtain insurance for certain risks at
reasonable rates;
– Reliance on third-party providers of various services integral to the operations of our business;
– Business activities that involve our co-investment with third parties;
– Disruptions in the global financial markets or other events that may negatively affect the ability of our
counterparties and others to perform their obligations to us;
– Our shareholders may be subject to the uncertainties of a foreign legal system since Carnival Corporation
and Carnival plc are not U.S. corporations;
– Small group of shareholders may be able to effectively control the outcome of shareholder voting;
– Provisions in Carnival Corporation’s and Carnival plc’s constitutional documents may prevent or discourage
takeovers and business combinations that our shareholders might consider to be in their best interests and
– The DLC arrangement involves risks not associated with the more common ways of combining the
operations of two companies.
Forward-looking statements should not be relied upon as a prediction of actual results. Subject to any continuing
obligations under applicable law or any relevant stock exchange rules, we expressly disclaim any obligation to
disseminate, after the date of this 2015 Annual Report, any updates or revisions to any such forward-looking
statements to reflect any change in expectations or events, conditions or circumstances on which any such
statements are based.
2015 Executive Overview
Overall, 2015 was a great year for us as we continued to improve earnings with over 40% growth driven by
higher cruise ticket pricing and onboard spending and lower fuel prices, despite the unfavorable foreign currency
impact and macroeconomic and geopolitical challenges. We also achieved a ROIC at November 30, 2015 of
nearly 7.5%, which is up from approximately 4.5% two years ago, as we move towards our goal of double digit
ROIC in the next two to three years, while maintaining a strong balance sheet (we define ROIC as the twelve-
month adjusted earnings before interest divided by the monthly average of debt plus equity minus construction-
in-progress).
Net income for 2015 increased 44% to $1.8 billion from $1.2 billion for 2014 (diluted earnings per share was
$2.26 in 2015 compared to $1.56 in 2014). The increase in our net income for 2015 was driven primarily by the
following:
– Increases in cruise ticket pricing, driven primarily by improvements in Alaskan and Caribbean itineraries for
our North America brands and Mediterranean and North European itineraries for our EAA brands, mostly
offset by the net unfavorable foreign currency transactional impact;
– Higher onboard spending by our guests on both sides of the Atlantic and
– Lower fuel prices, partially offset from losses on fuel derivatives.
These increases to 2015 net income were partially offset by the unfavorable foreign currency translational impact
and higher dry-dock expenses resulting from a higher number of dry-dock days in 2015 compared to 2014.
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