STRATEGIC PLAN 2013-2015

Undergraduate Student Project

Entire Presentation should be prescriptive in nature. Never
read anything, not even the mission statement.

PRESENTATION OUTLINE
I.

Company Overview

II. Mission/Vision Statement

III. Internal Assessment
IV. External Assessment
V. Strategy Formulation
VI. Strategy Implementation
VII.Conclusion

COMPANY OVERVIEW

HEADQUARTERS:

CRUISE BRANDS:
Carnival Cruise Lines (24 ships) Princess
Cruises (17 ships) Holland America Line (15 ships)
Costa (14 ships) P&O
Cruises (7 ships) Cunard (3
ships) Seabourn (6 ships) AIDA (10 ships) P&O
Cruises Australia (4 ships) Iberocruceros (3 ships)

TOTAL NUMBER OF SHIPS: 102

EMPLOYEES WORLDWIDE: Approximately 90,000

STOCK EXCHANGE:

2012 REVENUES:

$15.4 billion

2012 NET INCOME:

$1.5 billion

CRUISING AREAS:
Alaska - Bahamas - Baltic Bermuda- CaribbeanHawaii - Mediterranean New England - North Cape
Panama
Canal -South America - South Pacific and
other worldwide destinations

Miami, Florida, and London, England

NYSE and LSE (symbol: CCL)

VISION STATEMENT

Carnival Corporation & PLC:

No current vision statement
Proposed Vision Statement:
Carnivals vision is to provide the world with
the finest and safest vacation experience for
our employees and guests.

MISSION STATEMENT
Our mission is to take the world on vacation and deliver
exceptional experiences that appeal to a large variety of
consumers, all at an outstanding value. We believe our multibrand strategy is essential to achieving our mission and
maintaining our leadership positions. Our ten unique brands
with worldwide sourcing of guests and diverse
itineraryoptionsallow us to expand our offerings to our past
guests, while continuing to grow our business through the
acquisition of new guests in established and emerging
markets. Our success also depends on, among other things,
our ability to exceed the expectations of our guests by
providing them with a wide variety of exceptional vacation
experiences. We strive to capture a greater share of
consumers spending on vacations by providing extraordinary
cruise products and services, all at an outstanding value.

PROPOSED MISSION STATEMENT

Our mission is to provide our valued customers with the
ultimate vacation experience through a variety of
fabulous food and entertainment

(1,2, and 7).

We provide state

of the art cruise ships all over the world while enhancing
technology upgrades

(3&4).

We follow all maritime

regulations to ensure the safety of our employees and

passengers while at sea

(5&9).

We strive to provide

affordable vacations for all demographics, while

maximizing our shareholders profits

(8).

Our highest

priority remains to perform in an ethical manner while

serving our guests

(6).

ROYAL CARIBBEAN : MISSION/VISION

Vision Statement:
Our vision is to empower and enable our employees to deliver
the best vacation experience for our guests, thereby generating
superior returns for our shareholders and enhancing the wellbeing of our communities.
Mission Statement:
We always provide service with a friendly greeting and a smile. We
anticipate the needs of our customers. We make all efforts to
exceed our customers expectations. We take ownership of any
problem that is brought to our attention. We engage in conduct
that enhances our corporate reputation and employee morale. We
are committed to act in the highest ethical manner and respect the
rights and dignity of others. We are loyal to Royal Caribbean and
Celebrity and strive for continuous improvement in everything we
do.

WEBSITE ANALYSIS

WEBSITE ANALYSIS

Social Media

Social Media

Internal Assessments

RATIO ANALYSIS

Carnival Corporation &

PLC
Royal Caribbean

Current Ratio

0.2

0.2

Quick Ratio

0.2

0.2

Long Term Debt to Equity

0.3

0.8

39.4

52.7

Inventory Turnover
Total Assets Turnover
Accounts Receivable
Turnover

0.4

0.4

21.1

27.4

Average Collection Period

17.3

13.3

Gross Profit Margin

0.9

0.9

Net Profit Margin

Return on Total Assets
(ROA)

0.1

Return on Equity (ROE)

0.1

CURRENT ORGANIZATIONAL CHART

Chairman of the Board/ CEO
Vice Chairman of the Board/COO

CFO

Director

Director

Director

Director Director

Director Director

Director

CAO

Director Director

Director Director

RECOMMENDED ORGANIZATIONAL CHART

Board of Directors
CEO

CIO

HRM

President
of the
North
American
Market

President
of
Carnival

President
of
Princess

CFO

COO

President
of the
Australian
Market

President
of
Holland

President
of
Seabourn

President
of P&O
Australia

CAO

CMO

CSO

President
of the
Spain and
Brazil
Market

President
of the
European
Market

President
of Costa

President
of P&O

President
of Cunard

President
of AIDA

President
of Ibero

MARKET POSITIONING MAP

COMPANY WORTH ANALYSIS

Carnival Corporation and PLC

Stockholders' Equity
Net Income x 5
(Share Price/EPS) x Net Income
Number of Shares Outstanding x Share Price
Method Average

Royal Caribbean

Stockholders' Equity
Net Income x 5
(Share Price/EPS) x Net Income
Number of Shares Outstanding x Share Price
Method Average

$19,414
$6,490
$24,117
$28,942
$19,741

$7,876
$92
$1,999
$8,157
$4,531

INTERNAL STRENGTHS
Carnival Corporation and PLC is the largest cruise company in the world, having 48.4% of
1. worldwide market share in passengers.
2. Passenger Capacity has increased over the last 4 years at an average rate of 3.59%.
Fuel consumption has been reduced 21% since 2007, with a projection to reduce fuel
3. consumption by another 5% per unit.
4. The Holland America line has the highest rate of repeat customers in the cruise industry.
5.

Seabourn Yachts have a service ratio of one staff member to one guest.

P&O Cruises is the leading Australian cruise line, with 300,000 passengers annually. P&O
Cruises (Australia) carried almost half of all Australia and New Zealand cruise passengers in
6. 2012.
7.

In 2012, our North America brand represented 61% of our total passenger capacity.

Carnival Corp & PLC owns 40% interest in Grand Bahamas Shipyard, LTG, which is the
8. largest cruise ship dry- dock repair facility in the world.
Carnival Cruise Line operates from 19 homeports in North America, which is more than our
9. competitors.
Carnival Cruise Lines and PLC serves 8.5 million guests a year and has 10 distinct cruise
10. lines under ownership.

INTERNAL WEAKNESSES
1.

The net income was $1,298 in FY2012, a decrease of 6% as compared to 2011

2.

Revenues declined $410 million in 2012

3.

Protecting the health, safety, and security of our guests, employees and all others working on
behalf of the company since Costa Concordia tragedy.

4.

Carnival Corporation &PLC accounts for 30% of disapperances of guests at sea since 2000.

5.

Communicating with passengers and employees, if in crisis mode while sailing. (Costa
Concordia tragedy)

6.

During 2012, $28 million was spent for ship incident- related expenses that were not covered
by insurance.

7.

Sales of cruises mainly booked through travel agents cost 10% of sales fees and additional
commissions.

8.
9.

Cash can only be used in the gaming area of the boat

Full brand recovery from Costa Concorida tragedy will take 2-3 years, extra marketing would
come in three areas: funds directed at travel agents, including cooperative advertising; social
media; and possibly more TV ads.

Loyalty program was recently expanded to six tiers from two, downgrading some members to
10. lower membership level and taking away perks.

IFE MATRIX
InternalFactorEvaluationMatrix(IFE)
Strengths
1. CarnivalCorporationandPLCisthelargestcruisecompanyintheworld,having
48.4%ofworldwidemarketshareinpassengers.

Weight Rating WeightedScore

0.08

0.32

0.05

0.15

0.18

0.15

0.12

0.04

0.16

0.06

0.24

8. CarnivalCorp&PLCowns40%interestinGrandBahamasShipyard,LTG,which
isthelargestcruiseshipdrydockrepairfacilityintheworld.

0.07

0.21

9. CarnivalCruiseLineoperatesfrom19homeportsinNorthAmerica,whichismore
thanourcompetitors.

0.05

0.20

10. CarnivalCruiseLinesandPLCserves8.5millionguestsayearandhas10distinct
cruiselinesunderownership.

0.06

0.24

2. PassengerCapacityhasincreasedoverthelast4yearsatanaveragerateof3.59%.

3. Fuelconsumptionhasbeenreduced21%since2007,withaprojectiontoreducefuel
0.06
consumptionbyanother5%perunit.
4. TheHollandAmericalinehasthehighestrateofrepeatcustomersinthecruise
0.05
industry.
5. SeabournYachtshaveaserviceratioofonestaffmembertooneguest.
0.04
6. P&OCruisesistheleadingAustraliancruiseline,with300,000passengers
annually.P&OCruises(Australia)carriedalmosthalfofallAustraliaandNew
Zealandcruisepassengersin2012.
7. In2012,ourNorthAmericabrandrepresented61%ofourtotalpassengercapacity.

IFE MATRIX CONTINUED

Weaknesses

Weight Rating

Weighted
Score

1. Thenetincomewas$1,298inFY2012,adecreaseof6%ascomparedto2011

0.05

0.05

2. Revenuesdeclined$410millionin2012
3. Protectingthehealth,safety,andsecurityofourguests,employeesandallothers
workingonbehalfofthecompanysinceCostaConcordiatragedy.

0.04

0.04

0.07

0.07

0.05

0.10

0.05

0.10

0.06

0.06

0.02

0.04

0.01

0.02

0.06

0.06

0.03

0.06

4. CarnivalCorporation&PLCaccountsfor30%ofdisapperancesofguestsatsea
since2000.
5. Communicatingwithpassengersandemployees,ifincrisismodewhilesailing.
(CostaConcordiatragedy)
6. During2012,$28millionwasspentforshipincidentrelatedexpensesthatwere
notcoveredbyinsurance.
7. Salesofcruisesmainlybookedthroughtravelagentscost10%ofsalesfeesand
additionalcommissions.
8. Cashcanonlybeusedinthegamingareaoftheboat
9. FullbrandrecoveryfromCostaConcoridatragedywilltake23years,extra
marketingwouldcomeinthreeareas:fundsdirectedattravelagents,including
cooperativeadvertising;socialmedia;andpossiblymoreTVads.
10. Loyaltyprogramwasrecentlyexpandedtosixtiersfromtwo,downgradingsome
memberstolowermembershiplevelandtakingawayperks.

TOTALS

1.00

2.57

External Assessments

COMPETITIVE PROFILE
MATRIX

EXTERNAL OPPORTUNITIES
1.

Long term expansion in Asian Vacation Markets due to increased prosperity and size of Asian
countries (2012: 8% and 2013: 10%)

2.

Worldwide,the cruise industry has an annual passengercompound annual growth rateof 7%

from 1990 2017.

3.

Unveiling of nine cruise ships through March 2016. (Note, this is a Strength, not Opportunity)

4.

The UK Provides the largest number of cruise passengers sourced in Europe; 1.8 million are
estimated to have cruised in 2012.

5.

Europeans and Australians have significantly more vacation days a year than North
Americans (4 weeks paid vacation)

6.

The age group of 45 years and older is expected to grow by 13% in US and Canada and 11%
in the major Western European countries by 2022.

7.

The global travel and tourism industry is expected to grow approximately 2.8% during 2012

8.

Almost 60% of the cruise passengers in the world are sourced from the North American
region, where Carnival Corporation has 19 US ports.

9.

Demand for technology growing on cruise ships; In the past five years, Internet logins on the
MTN network almost doubled from approximately 15 million to 27 million per year

Cruisingis about five percent of theoverallvacationmarketand is the fastest growing

10. segment of the travel industry

EXTERNAL
THREATS
2.

A 6.3% increase in fuel prices, since February 2013. (Fuel accounts for 20% of cruise ticket
price)
The Costa Concordia and European sovereign debt crisis impacted all cruise line revenues by
about -5.1%

3.

Increasing cost of ship building; In 1990 it cost $250 million to build a ship, where as in 2012 it
cost $740 million.

1.

4.

Safety and security of travel- terrorism, drug attacks, vessel seizures

5.

Royal Caribbean passengers carried increased 0.3% last year

6.

Currency risk- the US dollar decreased 0.3% in Feb. 2013

7.
8.

The United States unemployment rate is currently still high at 7.40%

Trend toward healthy eating and lifestyles; 1 in 4 Americans are currently on a diet, which is
25% of US Americans.

9.

Global warming is causing the oceans to absorb a great deal of extraheat(up to 90%).

10. Increase of corporate tax

EFE MATRIX

ExternalFactorEvaluationMatrix(EFE)

Weight Rating WeightedScore

Opportunities
1. LongtermexpansioninAsianVacationMarketsduetoincreasedprosperityandsizeof 0.05
3
0.15
Asiancountries(2012:8%and2013:10%)
2. Worldwide,thecruiseindustryhasanannualpassengercompoundannualgrowthrateof 0.07
4
0.28
7%from19902017.
3. UnveilingofninecruiseshipsthroughMarch2016.
0.05
4
0.20
4. TheUKProvidesthelargestnumberofcruisepassengerssourcedinEurope;1.8
0.04
3
0.12
millionareestimatedtohavecruisedin2012.
5. EuropeansandAustralianshavesignificantlymorevacationdaysayearthanNorth
0.05
3
0.15
Americans(4weekspaidvacation)
6. Theagegroupof45yearsandolderisexpectedtogrowby13%inUSandCanadaand 0.05
3
0.15
11%inthemajorWesternEuropeancountriesby2022.
7. Theglobaltravelandtourismindustryisexpectedtogrowapproximately2.8%during
2012
8. Almost60%ofthecruisepassengersintheworldaresourcedfromtheNorthAmerican
region,whereCarnivalCorporationhas19USports.

0.07

0.21

0.06

0.24

9. Demandfortechnologygrowingoncruiseships;Inthepastfiveyears,Internetlogins
ontheMTNnetworkalmostdoubledfromapproximately15millionto27millionper
year
10. Cruisingisaboutfivepercentoftheoverallvacationmarketandisthefastestgrowing
segmentofthetravelindustry

0.04

0.08

0.06

0.18

EFE MATRIX CONTINTUED

Weight Rating
Threats
1. A6.3%increaseinfuelprices,sinceFebruary2013.(Fuelaccountsfor20%ofcruise
0.06
2
ticketprice)
2. TheCostaConcordiaandEuropeansovereigndebtcrisisimpactedallcruiseline
0.05
3
revenuesbyabout5.1%
3. Increasingcostofshipbuilding;In1990itcost$250milliontobuildaship,whereasin
0.05
3
2012itcost$740million.
4. Safetyandsecurityoftravelterrorism,drugattacks,vesselseizures
0.08
1

Weighted
Score
0.12
0.15
0.15
0.08

5. RoyalCaribbeanpassengerscarriedincreased0.3%lastyear

0.05

0.10

6. CurrencyrisktheUSdollardecreased0.3%inFeb.2013

0.06

0.18

0.03

0.12

0.04

0.12

0.02

0.04

0.02

0.02

7.

TheUnitedStatesunemploymentrateiscurrentlystillhighat7.40%

8. Trendtowardhealthyeatingandlifestyles;1in4Americansarecurrentlyonadiet,
whichis25%ofUSAmericans.
9. Globalwarmingiscausingtheoceanstoabsorbagreatdealofextraheat(upto90%).
10. Increaseofcorporatetax

TOTALS

1.00

2.84

Strategy Formulation

SWOT MATRIX

SPACE MATRIX
DATA

SPACE MATRIX

BCG MATRIX

NA

EAA

CS

IE MATRIX

(Note, the EFE and

IFE scores possibly do not match the
position of the divisions)

EAA
NA

CS

GRAND STRATEGY MATRIX

QSPM
Convertsafetyand
ExpandCostaCruise
securityprocedures
Lines(Asia)by2
onall10Carnival
shipsin2016.
andPLCcruiselines.
Opportunities
Weight
1. LongtermexpansioninAsianVacationMarketsduetoincreasedprosperityand
0.05
sizeofAsiancountries(2012:8%and2013:10%)
2. Worldwide,thecruiseindustryhasanannualpassengercompoundannualgrowth
0.07
rateof7%from19902017.
3. UnveilingofninecruiseshipsthroughMarch2016.
0.05
4. TheUKProvidesthelargestnumberofcruisepassengerssourcedinEurope;1.8
0.04
millionareestimatedtohavecruisedin2012.
5. EuropeansandAustralianshavesignificantlymorevacationdaysayearthan
0.05
NorthAmericans(4weekspaidvacation)
6. Theagegroupof45yearsandolderisexpectedtogrowby13%inUSand
0.05
Canadaand11%inthemajorWesternEuropeancountriesby2022.
7. Theglobaltravelandtourismindustryisexpectedtogrowapproximately2.8%
0.07
during2012
8. Almost60%ofthecruisepassengersintheworldaresourcedfromtheNorth
0.06
Americanregion,whereCarnivalCorporationhas19USports.
9. Demandfortechnologygrowingoncruiseships;Inthepastfiveyears,Internet
loginsontheMTNnetworkalmostdoubledfromapproximately15millionto27 0.04
millionperyear
10. Cruisingisaboutfivepercentoftheoverallvacationmarketandisthefastest
0.06
growingsegmentofthetravelindustry

AS

TAS

AS

TAS

0.20

0.10

0.14

0.21

0.00

0.00

0.08

0.04

0.00

0.00

0.00

0.00

0.21

0.14

0.00

0.00

0.16

0.08

0.18

0.24

QSPM CONTINUED
Convertsafetyand
ExpandCostaCruise
securityprocedureson
Lines(Asia)by2ships
all10Carnivaland
in2016.
PLCcruiselines.

Weight
Threats
1. A6.3%increaseinfuelprices,sinceFebruary2013.(Fuelaccountsfor20%of
0.06
cruiseticketprice)
2. TheCostaConcordiaandEuropeansovereigndebtcrisisimpactedallcruiseline
0.05
revenuesbyabout5.1%
3. Increasingcostofshipbuilding;In1990itcost$250milliontobuildaship,
0.05
whereasin2012itcost$740million.
4. Safetyandsecurityoftravelterrorism,drugattacks,vesselseizures
0.08
5. RoyalCarribeanpassengerscarriedincreased0.3%lastyear
6. CurrencyrisktheUSdollardecreased0.3%inFeb.2013
7. TheUnitedStatesunemploymentrateiscurrentlystillhighat7.40%
8. Trendtowardhealthyeatingandlifestyles;1in4Americansarecurrentlyona
diet,whichis25%ofUSAmericans.
9. Globalwarmingiscausingtheoceanstoabsorbagreatdealofextraheat(upto
90%).
10. Increaseofcorporatetax

AS

TAS

AS

TAS

0.00

0.00

0.20

0.05

0.05

0.10

0.24

0.16

0.05

0.00

0.00

0.06

0.00

0.00

0.03

0.00

0.00

0.04

0.00

0.00

0.02

0.00

0.00

0.02

0.00

0.00

QSPM CONTINUED
Convertsafetyand
ExpandCostaCruise
securityprocedureson
Lines(Asia)by2ships
all10Carnivaland
in2016.
PLCcruiselines.

Strengths
1. CarnivalCorporationandPLCisthelargestcruisecompanyintheworld,having
48.4%ofworldwidemarketshareinpassengers.
2. PassengerCapacityhasincreasedoverthelast4yearsatanaveragerateof3.59%.
3. Fuelconsumptionhasbeenreduced21%since2007,withaprojectiontoreducefuel
consumptionbyanother5%perunit.
4. TheHollandAmericalinehasthehighestrateofrepeatcustomersinthecruise
industry.
5. SeabournYachtshaveaserviceratioofonestaffmembertooneguest.
6. P&OCruisesistheleadingAustraliancruiseline,with300,000passengers
annually.P&OCruises(Australia)carriedalmosthalfofallAustraliaandNew
Zealandcruisepassengersin2012.
7. In2012,ourNorthAmericabrandrepresented61%ofourtotalpassengercapacity.
8. CarnivalCorp&PLCowns40%interestinGrandBahamasShipyard,LTG,which
isthelargestcruiseshipdrydockrepairfacilityintheworld.
9. CarnivalCruiseLineoperatesfrom19homeportsinNorthAmerica,whichismore
thanourcompetitors.
10. CarnivalCruiseLinesandPLCserves8.5millionguestsayearandhas10distinct
cruiselinesunderownership.

Weight

AS

TAS

AS

TAS

0.08

0.32

0.24

0.05

0.15

0.20

0.06

0.00

0.00

0.05

0.00

0.00

0.04

0.00

0.00

0.04

0.00

0.00

0.06

0.18

0.12

0.07

0.00

0.00

0.05

0.00

0.00

0.06

0.18

0.12

QSPM CONTINUED

Convertsafetyand
ExpandCostaCruise
securityprocedureson
Lines(Asia)by2
all10Carnivaland
shipsin2016.
PLCcruiselines.

AS

TAS

AS

TAS

0.05

0.15

0.05

0.04

0.16

0.12

0.07

0.00

0.00

0.05

0.20

0.10

0.05

0.15

0.10

0.06

0.24

0.06

0.02

0.00

0.00

0.01

0.00

0.00

0.06

0.00

0.00

10. Loyaltyprogramwasrecentlyexpandedtosixtiersfromtwo,downgradingsome
0.03
memberstolowermembershiplevelandtakingawayperks.

0.00

0.00

Weaknesses
1. Thenetincomewas$1,298inFY2012,adecreaseof6%ascomparedto2011
2. Revenuesdeclined$410millionin2012
3. Protectingthehealth,safety,andsecurityofourguests,employeesandallothers
workingonbehalfofthecompanysinceCostaConcordiatragedy.
4. CarnivalCorporation&PLCaccountsfor30%ofdisapperancesofguestsatsea
since2000.
5. Communicatingwithpassengersandemployees,ifincrisismodewhilesailing.
(CostaConcordiatragedy)
6. During2012,$28millionwasspentforshipincidentrelatedexpensesthatwere
notcoveredbyinsurance.
7. Salesofcruisesmainlybookedthroughtravelagentscost10%ofsalesfeesand
additionalcommissions.
8. Cashcanonlybeusedinthegamingareaoftheboat
9. FullbrandrecoveryfromCostaConcoridatragedywilltake23years,extra
marketingwouldcomeinthreeareas:fundsdirectedattravelagents,including
cooperativeadvertising;socialmedia;andpossiblymoreTVads.

TOTALS

Weight

3.19

2.23

Strategy Implementation

RECOMMENDATION
S
Recommendations

Amount

Appointa"ChiefSafetyOfficer"ineachCarnival&PLCCruiseBrand

$3,000,000

Unveilsixships(NorthAmerican,EAA,UK,Costa)

$2,843,000,000

ReconcileConcoridalegallitigation

$585,000,000

World-wideadvertisingcampaignonsafety

$100,000,000

Employeeproceduresandtrainingprograms

$1,200,000

DonatetoCoralReefAlliance

$1,000,000

Installsecuritydevicesthroughoutonallvessels

$10,100,000

Offeradditionalsupporttoguestsandtravelagentsviatelephoneandemail

Installscrubbertechnology

$180,000,000

10

Buildasmartphoneapplicationforpassengers-"CarnivalIn-touch"

$125,000

Total

See Appendix I for explanation

$250,000

3,723,675,000

EPS/EPIT ANALYSIS

EPS/EPIT GRAPH

EPS-EBIT Graph
5.00
4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
3000

3400
Common Stock Financing

3800
Debt Financing

INCOME STATEMENTS

See Appendix II for explanation

PROJECT BALANCE SHEETS

See Appendix III

for explanation

PROJECTED RATIOS
Current Ratio
Quick Ratio
Long Term Debt to Equity
Inventory Turnover
Total Assets Turnover
Accounts Receivable Turnover
Average Collection Period
Gross Profit Margin
Net Profit Margin
Return on Total Assets (ROA)

2012
0.25
0.19
0.30
39.44
0.39
21.07
17.32
0.89
0.08
0.03

2013
0.37
0.27
0.34
21.47
0.37
18.49
19.74
0.90
0.07
0.03

2014
0.41
0.30
0.39
19.08
0.38
17.61
20.72
0.90
0.07
0.03

2015
0.43
0.32
0.44
18.46
0.38
17.42
20.95
0.90
0.06
0.02

Return on Equity (ROE)

0.05

0.05

0.05

0.04

CONCLUSION
As Carnival Corporation and PLC continues to
improve the safety and security among our
cruise brands throughout the world, we hope
our consumers will regain the trust of the
cruise industry by cruising with us. The
corporation needs to focus on the internal and
external factors in an effort to further improve
its operation and ultimately the return to the
shareholders of the company.

APPENDIX
I. Recommendation Notes
1- 10 cruise brands/ 10 new safety officers at $100K salary per year for 3 years
2- Due to increasing passengers carried in cruise industry market we believe that unveiling six news ships will help meet the demand of passengers
wanting to travel (North American, EAA, UK, Costa)
3- Legal fees/ reimbursing guests costs from Costa Concordia Tragedy
4- Create this marketing campaign similar to BP the marketing campaign after the oil spill; to reassure our consumers of the safety/security measures we
are taking on our cruise ships (Quote is from Chernoff/Newman Advertising Agency in Columbia, SC)
5- We are going to offer our employees an online training certificate program in safety and security measures for our ships; offered for one week; you have
to take an online test at the end of session to receive certificate
6- Due to the Costa tragedy we will donate $1Million to the Coral Reef Alliance to help our public images and social responsibility.
7- Install safety security devices throughout on all vessels -101 ships at 20 buttons per ship at $5,000 each -Cruise ships are designed and operated in
compliance with international and federal regulations specifically designed to maximize the safety of passengers and crew. 101 ships x20= 2020
8- Hiring consultants for customer service, send out brochures, postcards etc. to offer additional support to our guests.
9- Install exhaust gas cleaning technology on 32 ships, making it the first company to use this scrubber technology in restricted spaces on existing ships.
10- Smart Phone App to keep passengers in the loop while traveling with our company; such as what activities are going on and specific times; which our
rival firm implemented this a few years ago.
II. Notes for Projected Income Statement
Total Revenue Decrease: Decrease is 2013 due to customer skeptic of cruising because of recent events within the cruise industry (i.e.- cruise
wrecks, fires, drowning's, etc.)
Cost of Revenue: 67% of revenue
Research and Development:
Worldwide Advertising Campaign for 3 years @ $100M
Selling and GA:
Includes CSO, Legal Fees, Guest Support, Smart App
Non- Recurring:
Donation to Coral Reef Alliance
Others:
Employee Training (1.2M)
Total Other income/ Expense:
Decrease in 2013 due to revenue decrease; increase 14, 15 due to increase revenue
Interest Expense:
Interest Expense from EPS at 112
Net Income:
Reason for decreasing net income, is due to the implementation of recommendations/ strategies for the safety/security
of our passengers and employees of Carnival PLC ; advertising campaign; Costa Concordia Debt; New ships
Hopefully through our positive feedback and reinforcement from our recommendations, we will see NI begin to
increase in
2016
III. Notes for Projected Balance Sheet
Property Plant Equipment:
Intangibles:
Accounts Payable:
Short Term Debt:
Other Current Liabilities:
Long Term Debt:
Other Liabilities:
Additional Paid in Capital:
Treasury Stock:

New Ships, Security Device, Scrubber ($5.625M per 32 ships)

Increase because of trademarks on six new ships ($84M - 6x$14M trademark cost)
Due to increase in ships and procedures
3% increase
2% increase
Increase debt 1,241 per year to cover recommendations 100% debt
2% increase unforeseen problems with new ships/programs
Using all debt, but could change depending on cash flow
Not buying back as much due to trying to implement recommendations