01—Abstract
Summary
Summary of the 10-K filed January 30, 2017. Cited figures are marked; the original filing is the authoritative source.
Carnival Corporation & plc's 2016 Form 10-K, filed in early 2017, details its position as the world's largest cruise company, carrying 48%a of global cruise guests across a diverse portfolio of brands.
The company emphasizes its vision of delivering unmatched vacation experiences and strong shareholder returns through continuous innovation, cost optimization, and strategic investments in new, fuel-efficient ships. Key financial goals include profitable growth and increased return on invested capital, supported by robust cash flow that enables dividend increases and share repurchases. The report highlights the company's commitment to health, environment, safety, security, and sustainability as core operating principles.
02—Key points
Key Highlights
- Carnival Corporation & plc is the largest cruise company globally, accounting for 48% of all cruise guests.
- The company operates a diverse portfolio of 102 ships across multiple brands (e.g., Carnival Cruise Line, Princess Cruises, Holland America Line, Costa Cruises, AIDA Cruises).
- Strategic focus on profitable growth, increasing return on invested capital, and maintaining strong credit ratings.
- Significant investment in new, larger, and more fuel-efficient ships, with 19 newbuilds scheduled for delivery between 2017 and 2022.
- Introduction of innovative guest experience technologies, such as the Ocean Medallion™ platform, to personalize vacations.
- Commitment to health, environment, safety, security, and sustainability is a core operating principle.
- Strong financial management, including a 17% dividend increase in 2016 and significant share repurchases totaling $2.6 billion since late 2015.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, Carnival Corp kept $0.17.
- Revenue$16.39B100.0%
- Cost of revenue−$9.38B57.3%
- Gross profit$7.01B42.7%
- Operating costs−$3.94B24.0%
- Operating income$3.07B18.7%
- Interest, other & tax−$292.0M1.8%
- Net income$2.78B17.0%
Where FY2016 revenue went
$16.39B- Cost of revenue: $9.38B, 57% of revenue
- Net income: $2.78B, 17% of revenue
- SG&A: $2.20B, 13% of revenue
- Other operating costs: $1.74B, 11% of revenue
- Interest, other & tax: $292.0M, 1.8% of revenue
Kept 17% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2016filed January 30, 2017Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $16.39B$15.71B | +4.3% |
| Cost of Revenue | $9.38B$9.45B | −0.7% |
| Gross Profit | $7.01B$6.27B | +11.8% |
| SG&A Expenses | $2.20B$2.07B | +6.3% |
| Operating Expenses | $13.32B$13.14B | +1.4% |
| Operating Income | $3.07B$2.57B | +19.3% |
| Interest Expense | $223.00M$217.00M | +2.8% |
| Net Income | $2.78B$1.76B | +58.2% |
| EPS (Basic) | $3.73$2.26 | +65.0% |
| EPS (Diluted) | $3.72$2.26 | +64.6% |
| Shares Outstanding (Basic) | 745.00M777.00M | −4.1% |
| Shares Outstanding (Diluted) | 747.00M779.00M | −4.1% |
05—Questions
Frequently Asked Questions
What is Carnival's primary strategy for growth and shareholder value?
Carnival's primary strategy focuses on profitably growing its cruise business and increasing return on invested capital. This is achieved through creating demand that outpaces capacity growth, enhancing cruise products and services, optimizing cost structures, and investing in new, fuel-efficient ships. The company also aims to leverage its scale for cost containment and reinvest in innovation.
How does Carnival manage its diverse brand portfolio?
Carnival operates a portfolio of global, regional, and national cruise brands, each tailored to specific markets and guest preferences. The company emphasizes preserving the unique identity of each brand while leveraging its collective scale for operational efficiencies, purchasing power, and shared technologies. This diversified approach allows them to cater to various customer segments and geographic areas.
What are Carnival's key initiatives for enhancing the guest experience?
Carnival is heavily investing in innovation to enhance guest experience. This includes the development of new, larger ships with more amenities, and the introduction of the 'Experience Platform' featuring the Ocean Medallion™ wearable device and Ocean Compass digital concierge. These technologies aim to deliver personalized and seamless interactions for guests before, during, and after their cruise.
What are the main risks Carnival faces according to the filing?
Key risks highlighted include incidents like ship accidents or disease outbreaks impacting reputation and demand, adverse economic conditions affecting discretionary spending, changes in environmental, health, and safety regulations leading to increased compliance costs, fluctuations in fuel prices, and cybersecurity threats. Competition from both other cruise lines and land-based vacation alternatives is also a significant factor.
06—Continue