Carnival Cruises 2015 Annual Report Download - page 61

our calculation of net cruise costs with and without fuel as they are not considered part of our core operating
business and, therefore, are not an indication of our future earnings performance. As such, we also believe it is
more meaningful for gains and losses on ship sales and ship impairments, net and restructuring expenses to be
excluded from our net income and earnings per share and, accordingly, we present adjusted net income and
adjusted earnings per share excluding these items.
As a result of our revision of 2014 and 2013 cruise ship operating expenses, our previously reported results
changed as follows (in millions, except per ALBD data):
Year Ended November 30, 2014 Year Ended November 30, 2013
As Previously
Reported As Revised
As Previously
Reported As Revised
Gross cruise costs per ALBD ................... $161.69 $161.93 $166.83 $167.12
Net cruise costs per ALBD ..................... $124.35 $124.59 $126.05 $126.34
Net cruise costs excluding fuel per ALBD ......... $ 97.60 $ 97.84 $ 96.23 $ 96.51
U.S. GAAP net income ........................ 1,236 1,216 1,078 1,055
Adjusted net income .......................... 1,524 1,504 1,232 1,209
In addition, our EAA cruise brands utilize the euro, sterling and Australian dollar as their functional currency, the
monetary unit of the primary economic environment in which they operate, to measure their results and financial
condition. This subjects us to foreign currency translational risk. All of our North American and EAA cruise
brands also have revenues and expenses that are in a currency other than their functional currency. This subjects
us to foreign currency transactional risk.
We report non-GAAP financial measures on a “constant dollar” and “constant currency” basis assuming the 2015
and 2014 periods’ currency exchange rates have remained constant with the 2014 and 2013 periods’ rates,
respectively. These metrics facilitate a comparative view for the changes in our business in an environment with
fluctuating exchange rates.
Constant dollar reporting is a Non-GAAP financial measure that removes only the impact of changes in
exchange rates on the translation of our EAA brands.
Constant currency reporting is a Non-GAAP financial measure that removes the impact of changes in exchange
rates on the translation of our EAA brands (as in constant dollar) plus the transactional impact of changes in
exchange rates from revenues and expenses that are denominated in a currency other than the functional currency
for both our North America and EAA brands.
Examples:
– The translation of our EAA brand operations to our U.S. dollar reporting currency results in decreases in
reported U.S. dollar revenues and expenses if the U.S. dollar strengthens against these foreign currencies
and increases in reported U.S. dollar revenues and expenses if the U.S. dollar weakens against these foreign
currencies.
– Our North America brands have a U.S. dollar functional currency but also have revenue and expense
transactions in currencies other than the U.S. dollar. If the U.S. dollar strengthens against these other
currencies, it reduces the U.S. dollar revenues and expenses. If the U.S. dollar weakens against these other
currencies, it increases the U.S. dollar revenues and expenses.
– Our EAA brands have a euro, sterling and Australian dollar functional currency but also have revenue and
expense transactions in currencies other than their functional currency. If their functional currency
strengthens against these other currencies, it reduces the functional currency revenues and expenses. If the
functional currency weakens against these other currencies, it increases the functional currency revenues
and expenses.
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