Carnival Cruises 2015 Annual Report Download - page 55

and Note 11 – “Fair Value Measurements, Derivative Instruments and Hedging Activities” in the consolidated
financial statements for additional information concerning our contingencies.
Given the inherent uncertainty related to the eventual outcome of these matters and potential insurance
recoveries, it is possible that all or some of these matters may be resolved for amounts materially different from
any provisions or disclosures that we may have made with respect to their resolution. In addition, as new
information becomes available, we may need to reassess the amount of asset or liability that needs to be accrued
related to our contingencies. All such revisions in our estimates could materially impact our results of operations
and financial position.
Results of Operations
We earn substantially all of our cruise revenues from the following:
– sales of passenger cruise tickets and, in some cases, the sale of air and other transportation to and from
airports near our ships’ home ports and cancellation fees. The cruise ticket price typically includes
accommodations, most meals, some non-alcoholic beverages and most onboard entertainment. We also
collect fees, taxes and other charges from our guests, and
– sales of goods and services primarily onboard our ships not included in the cruise ticket price including
substantially all liquor and some non-alcoholic beverage sales, casino gaming, shore excursions, gift shop
sales, photo sales, communication services, full service spas, specialty themed restaurants, cruise vacation
protection programs and pre- and post-cruise land packages. These goods and services are provided either
directly by us or by independent concessionaires, from which we receive either a percentage of their
revenues or a fee.
We incur cruise operating costs and expenses for the following:
– the costs of passenger cruise bookings, which represent costs that are directly associated with passenger
cruise ticket revenues, and include travel agent commissions, air and other transportation related costs, fees,
taxes and other charges that vary with guest head counts and related credit and debit card or direct debit
fees,
– onboard and other cruise costs, which represent costs that are directly associated with onboard and other
revenues, and include the costs of liquor and some non-alcoholic beverages, costs of tangible goods sold by
us in our gift shops and from our photo sales, communication costs, costs of cruise vacation protection
programs, costs of pre- and post-cruise land packages and related credit and debit card or direct debit
fees. Concession revenues do not have significant associated expenses because the costs and services
incurred for concession revenues are borne by our concessionaires,
– fuel costs, which include fuel delivery costs,
– payroll and related costs, which represent all costs related to our shipboard personnel, including deck and
engine crew, including officers, and hotel and administrative employees, while costs associated with our
shoreside personnel are included in selling and administrative expenses,
– food costs, which include both our guest and crew food costs and
– other ship operating expenses, which include port costs that do not vary with guest head counts, repairs and
maintenance, including minor improvements and dry-dock expenses, hotel costs, entertainment, gains and
losses on ship sales, ship impairments, freight and logistics, insurance premiums and all other ship operating
expenses.
For segment information related to our North America and EAA cruise brands’ revenues, expenses, operating
income and other financial information, see Note 12 – “Segment Information” in the consolidated financial
statements.
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