01—Abstract
Summary
Summary of the 10-K filed January 28, 2019. Cited figures are marked; the original filing is the authoritative source.
Carnival Corporation & plc, the world's largest leisure travel company, reported its 2018 fiscal year results in this Form 10-K filing.
The company operates a diverse portfolio of 104 cruise ships across multiple brands, serving global destinations. Carnival emphasizes its commitment to exceeding guest expectations and delivering strong shareholder returns, underpinned by a strategic focus on health, environment, safety, security (HESS), guest experience, employee development, and stakeholder value. Financially, the company aims for profitable growth and increased return on invested capital.
It has been actively returning capital to shareholders through dividends and share repurchases. Carnival is investing in new, larger, and more fuel-efficient ships, with 21 scheduled for delivery through 2025, including a significant expansion into the Asian market, particularly China.
The company highlights the favorable characteristics of the cruise industry, including high guest satisfaction, positive demand trends driven by demographics like Baby Boomers and Millennials, and an exceptional value proposition compared to land-based vacations. Carnival is also focused on innovation, particularly in digital guest experiences and fleet modernization, including the adoption of LNG-powered ships.
02—Key points
Key Highlights
- Carnival Corporation & plc is the world's largest cruise and vacation company, operating 104 ships across multiple global brands and serving all major cruise destinations.
- The company is committed to profitable growth, increasing return on invested capital, and maintaining strong credit ratings, with a strategic focus on innovation and fleet modernization.
- Carnival has a robust newbuild program with 21 ships scheduled for delivery through 2025, including a growing number of LNG-powered vessels, enhancing efficiency and environmental performance.
- Significant investment is being made in digital innovation, including the 'Experience Platform' with OceanMedallion™ and xiOTM, to enhance personalized guest experiences.
- The company actively returns capital to shareholders, having increased its quarterly dividend and continuing its stock repurchase program.
- Carnival is strategically expanding its presence in developing markets, particularly in Asia (China), recognizing its significant long-term growth potential.
- The company emphasizes its commitment to Health, Environment, Safety, Security (HESS) and sustainability, with specific 2020 goals to reduce its environmental footprint.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2018, Carnival Corp kept $0.17.
- Revenue$18.88B100.0%
- Cost of revenue−$11.09B58.7%
- Gross profit$7.79B41.3%
- Operating costs−$4.47B23.7%
- Operating income$3.33B17.6%
- Interest, other & tax−$173.0M0.9%
- Net income$3.15B16.7%
Where FY2018 revenue went
$18.88B- Cost of revenue: $11.09B, 59% of revenue
- Net income: $3.15B, 17% of revenue
- SG&A: $2.45B, 13% of revenue
- Other operating costs: $2.02B, 11% of revenue
- Interest, other & tax: $173.0M, 0.9% of revenue
Kept 17% as net incomeInterest, other & tax $173.0M · 0.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2018filed January 28, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $18.88B$17.51B | +7.8% |
| Cost of Revenue | $11.09B$10.50B | +5.6% |
| Gross Profit | $7.79B$7.01B | +11.2% |
| SG&A Expenses | $2.45B$2.27B | +8.2% |
| Operating Expenses | $15.56B$14.70B | +5.8% |
| Operating Income | $3.33B$2.81B | +18.4% |
| Interest Expense | $194.00M$198.00M | −2.0% |
| Net Income | $3.15B$2.61B | +21.0% |
| EPS (Basic) | $4.45$3.61 | +23.3% |
| EPS (Diluted) | $4.44$3.59 | +23.7% |
| Shares Outstanding (Basic) | 709.00M722.00M | −1.8% |
| Shares Outstanding (Diluted) | 710.00M725.00M | −2.1% |
05—Questions
Frequently Asked Questions
What are Carnival's primary financial goals as stated in the report?
Carnival's primary financial goals are to profitably grow its cruise business and increase its return on invested capital, while maintaining strong investment grade credit ratings and a robust balance sheet.
How is Carnival investing in its fleet for the future?
Carnival is investing in new, innovative, purpose-built ships that are larger, more fuel-efficient, and offer an improved mix of guest accommodations and onboard amenities. As of November 30, 2018, 21 cruise ships were scheduled for delivery through 2025, with a notable trend towards LNG-powered vessels to reduce environmental impact.
What is Carnival's strategy for market expansion?
Carnival is focusing on growing its presence in established markets and increasing penetration in developing markets, with a particular emphasis on Asia, especially China, due to its large and growing middle-class population and government support for the cruise industry.
How does Carnival manage its environmental impact?
Carnival is committed to sustainability and has set 2020 goals to reduce its environmental footprint. This includes reducing CO2e emissions, improving air quality, increasing the use of ship-to-shore power, enhancing wastewater treatment, reducing waste, and expanding the use of low-carbon fuels like LNG in its new ships.
06—Continue