01—Abstract
Summary
Summary of the 10-K filed January 29, 2016. Cited figures are marked; the original filing is the authoritative source.
Carnival Corporation & plc's 2015 Form 10-K highlights its position as the world's largest leisure travel company, operating 99 cruise ships across ten brands and serving 47%a of global cruise guests.
The company emphasizes its vision to deliver exceptional vacation experiences and strong shareholder returns, supported by strategic goals of profitable growth, increased return on invested capital (targeting double-digit returns within 2-3 years), and maintaining a strong balance sheet. Significant investments are being made in data analytics to understand guest decision-making and optimize revenue management and deployment strategies. The company is strategically expanding in high-growth markets like China, leveraging its extensive global infrastructure and brand portfolio.
Carnival Corporation & plc is also investing in new, larger, and more fuel-efficient ships, with 17 new vessels scheduled for delivery between 2016 and 2020. Sustainability remains a core principle, with clear goals set for reducing environmental impact and enhancing safety and security across operations. The company's financial strategy includes returning free cash flows to shareholders through dividends and share buybacks, having increased its quarterly dividend by 20% in 2015 and repurchasing $276 millionb of its shares.
02—Key points
Key Highlights
- Carnival Corporation & plc is the world's largest cruise operator with 99 ships across 10 brands, serving 47% of global cruise guests.
- The company aims for double-digit return on invested capital within 2-3 years, supported by revenue growth and cost optimization initiatives.
- Significant investment in new ships (17 scheduled by 2020) focused on size, efficiency, and enhanced guest amenities.
- Strategic focus on expanding in the high-growth Chinese market, leveraging extensive local experience and infrastructure investment.
- Commitment to sustainability with specific goals for environmental impact reduction (e.g., CO2e emissions, water usage) by 2020.
- Active capital return to shareholders, including a 20% increase in quarterly dividend and substantial share repurchases ($276 million in 2015).
- Utilizing data analytics and a state-of-the-art revenue management system to optimize pricing, inventory, and guest experiences.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Carnival Corp kept $0.11.
- Revenue$15.71B100.0%
- Cost of revenue−$9.45B60.1%
- Gross profit$6.27B39.9%
- Operating costs−$3.69B23.5%
- Operating income$2.57B16.4%
- Interest, other & tax−$817.0M5.2%
- Net income$1.76B11.2%
Where FY2015 revenue went
$15.71B- Cost of revenue: $9.45B, 60% of revenue
- SG&A: $2.07B, 13% of revenue
- Net income: $1.76B, 11% of revenue
- Other operating costs: $1.63B, 10% of revenue
- Interest, other & tax: $817.0M, 5.2% of revenue
Kept 11% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed January 29, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $15.71B$15.88B | −1.1% |
| Cost of Revenue | $9.45B$10.42B | −9.3% |
| Gross Profit | $6.27B$5.46B | +14.7% |
| SG&A Expenses | $2.07B$2.05B | +0.6% |
| Operating Expenses | $13.14B$14.11B | −6.9% |
| Operating Income | $2.57B$1.77B | +45.3% |
| Interest Expense | $217.00M$288.00M | −24.7% |
| Net Income | $1.76B$1.22B | +44.5% |
| EPS (Basic) | $2.26$1.57 | +43.9% |
| EPS (Diluted) | $2.26$1.56 | +44.9% |
| Shares Outstanding (Basic) | 777.00M776.00M | +0.1% |
| Shares Outstanding (Diluted) | 779.00M778.00M | +0.1% |
05—Questions
Frequently Asked Questions
What is Carnival Corporation & plc's primary strategy for profitable growth?
Carnival Corporation & plc's strategy for profitable growth centers on creating additional demand for its brands, leading to higher revenue yields through measured capacity growth. This is supported by enhancing cruise products and services, optimizing cost structures, and leveraging data analytics to understand guest behavior and personalize offerings. The company also focuses on efficient global deployment and robust revenue management systems.
How is Carnival Corporation & plc addressing environmental concerns and sustainability?
Sustainability is a core principle for Carnival Corporation & plc. The company has set specific 2020 sustainability goals aimed at reducing its environmental footprint, including targets for decreasing CO2e emissions, improving air quality, increasing wastewater purification, and reducing waste. They are investing in technologies like Exhaust Gas Cleaning Systems (EGCS) and exploring alternative fuels such as LNG for new ships.
What is the company's approach to returning capital to shareholders?
Carnival Corporation & plc is committed to returning free cash flows to shareholders. In 2015, they increased their quarterly dividend by 20% and repurchased $276 million of their shares. The company also has ongoing share repurchase programs authorized by its board.
What are the key risks highlighted in the filing that could affect future performance?
Key risks identified include potential impacts from incidents like ship accidents or disease outbreaks, adverse economic conditions affecting travel demand, increasing environmental and safety regulations, competition from both cruise lines and land-based vacation providers, fluctuations in fuel prices, and challenges in implementing shipbuilding programs. Geopolitical events and currency exchange rate fluctuations are also noted as potential risks.
06—Continue