Exhibit 99.1
------------------Press Release, dated September 17, 2004------------------
FOR IMMEDIATE RELEASE
CARNIVAL CORPORATION & PLC REPORTS RECORD THIRD QUARTER AND
NINE MONTH EARNINGS
Quarterly Net Income Tops $1 Billion
MIAMI (September 17, 2004) -- Carnival Corporation & plc (NYSE/LSE: CCL;
NYSE: CUK) reported record net income of $1.03 billion, or $1.23 diluted EPS, on
revenues of $3.2 billion for its third quarter ended August 31, 2004 compared to
net income of $734 million, or $0.90 diluted EPS, on revenues of $2.5 billion
for the same quarter in 2003.
Net income for the nine months ended August 31, 2004 was also a record at
$1.56 billion, or $1.90 diluted EPS, on revenues of $7.5 billion, compared to
pro forma net income of $1.01 billion, or $1.25 diluted EPS, on pro forma
revenues of $5.8 billion for the same period in 2003. Reported net income and
diluted EPS for the nine months ended August 31, 2003 were $989 million and
$1.42, respectively.
Net revenue yields (net revenue per available lower berth day) for the
third quarter of 2004 increased 10.9 percent compared to net revenue yields in
the prior year, primarily due to higher cruise ticket prices and on-board
revenue and, to a lesser extent, the weak U.S. dollar relative to the euro and
sterling. Net revenue yields as measured on a local currency basis ("constant
dollar basis") increased 8.3 percent over the same period last year. Gross
revenue yields increased 10.1 percent.
Net cruise costs per available lower berth day ("ALBD") for the third
quarter of 2004 were up 3.2 percent compared to costs for the same period last
year, primarily due to the impact of the weak dollar and higher fuel costs. On a
constant dollar basis, net cruise costs per ALBD increased 0.8 percent from the
same period last year largely due to higher fuel costs. Gross cruise costs per
ALBD increased 4.4 percent compared to the prior year.
Commenting on the third quarter results, Carnival Corporation & plc
chairman and CEO Micky Arison said that he continues to be very pleased with the
company's performance. "This record-breaking quarter is a testament to the
success of the merger with P&O Princess Cruises last year. It is our best
quarter ever and the first time we have earned more than a billion dollars in a
single quarter. All of our major cruise brands in North America and Europe are
performing well, building confidence in our outlook for the combined group for
2005," Arison added.
During the third quarter, in a move to optimize asset utilization for the
group, Carnival Cruise Lines' Jubilee was transferred to P&O Cruises Australia,
more than doubling the size of the brand's operations in the region. The ship
will be renamed Pacific Sun and will be the largest cruise ship based year-round
in Australia. Pacific Sun is undergoing a major refurbishment before beginning
seven- to 14-day South Pacific cruises from Sydney.
Also during the quarter, the company began the restructuring of Cunard
Line's North American organization, which will be relocated to Santa Clarita,
Calif., where Princess Cruises is based, by December 2004. As a result, Cunard
will share administrative, finance and IT functions with Princess in an effort
to streamline operations and maximize efficiencies. This follows a similar
restructuring in the United Kingdom, where Cunard's UK operations were combined
with those of the other Carnival Corporation & plc UK brands. As previously
announced, the relocation is expected to reduce future overhead costs by
approximately $20 million on an annual basis.
Comments on Full Year and Fourth Quarter 2004
Looking forward, Arison said that he is equally pleased with the outlook
for the full year 2004. "We are on track to achieve a record increase in revenue
yields this year of approximately 9 percent, while absorbing an extraordinarily
high 17 percent capacity increase," Arison added.
For the fourth quarter of 2004, advance booking levels are higher versus
prior year's levels on a capacity adjusted basis, with pricing also ahead of
last year. As a result, the company expects that net revenue yields for the
fourth quarter of 2004 will increase approximately 7 to 9 percent (5 to 7
percent on a constant dollar basis), compared to last year's fourth quarter,
despite the negative effect of Hurricane Frances. Net cruise costs per ALBD in
the fourth quarter of 2004 are expected to be up 6 to 8 percent (4 to 6 percent
on a constant dollar basis), compared to 2003 primarily due to higher fuel
costs, costs associated with the Cunard reorganization and costs related to the
hurricane. Based on these estimates, the company expects earnings per share for
the fourth quarter of 2004 to be in the range of $0.30 to $0.32. The company's
guidance includes the estimated impact of Hurricane Frances of between $0.03 to
$0.04 per share, as well as the cost of the aforementioned Cunard relocation of
between $0.01 to $0.02 per share, both of which will primarily impact the 2004
fourth quarter. The company's current guidance is based on an exchange rate of
$1.23 to the euro and $1.82 to sterling.
The company has one ship scheduled to enter service during the fourth
quarter of 2004. Costa Cruises' 2,702-passenger Costa Magica, which will be one
of the largest European passenger vessels, will operate a series of European
cruises beginning November 10, 2004.
The company has scheduled a conference call with analysts at 10 a.m. EDT
(15.00 London time) today to discuss its 2004 third quarter earnings. This call
can be listened to live and additional information can be obtained via Carnival
Corporation & plc's Web sites at www.carnivalcorp.com and www.carnivalplc.com.
Carnival Corporation and P&O Princess plc entered into a dual listed
company ("DLC") structure on April 17, 2003, which effectively made Carnival
Corporation and P&O Princess plc a single economic entity. Also on that date,
P&O Princess plc changed its name to Carnival plc. For reporting purposes,
Carnival Corporation has accounted for the DLC transaction as an acquisition of
Carnival plc as of April 17, 2003.
Carnival Corporation & plc is the largest cruise vacation group in the
world, with a portfolio of 12 cruise brands in North America, Europe and
Australia, comprised of Carnival Cruise Lines, Holland America Line, Princess
Cruises, Seabourn Cruise Line, Windstar Cruises, AIDA, Costa Cruises, Cunard
Line, Ocean Village, P&O Cruises, Swan Hellenic, and P&O Cruises Australia.
Together, these brands operate 77 ships totaling more than 128,000 lower
berths with eight new ships scheduled for delivery between November 2004 and
December 2006. Carnival Corporation & plc also operates the leading tour
companies in Alaska and the Canadian Yukon, Holland America Tours and Princess
Tours. Traded on both the New York and London Stock Exchanges, Carnival
Corporation & plc is the only group in the world to be included in both the S&P
500 and the FTSE 100 indices.
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Cautionary note concerning factors that may affect future results
Some of the statements contained in this earnings release are "forward-looking
statements" that involve risks, uncertainties and assumptions with respect to
Carnival Corporation & plc, including some statements concerning future results,
plans, outlook, goals and other events which have not yet occurred. These
statements are intended to qualify for the safe harbors from liability provided
by Section 27A of the Securities Act of 1933 and Section 27E of the Securities
Exchange Act of 1934. You can find many, but not all, of these statements by
looking for words like "will," "may," "believes," "expects," "anticipates,"
"forecast," "future," "intends," "plans," and "estimates" and for similar
expressions. Because forward-looking statements involve risks and uncertainties,
there are many factors that could cause Carnival Corporation & plc's actual
results, performance or achievements to differ materially from those expressed
or implied in this earnings release. Forward-looking statements include those
statements which may impact the forecasting of earnings per share, net revenue
yields, booking levels, pricing, occupancy, operating, financing and tax costs,
costs per available lower berth day, estimates of ship depreciable lives and
residual values, outlook or business prospects. These factors include, but are
not limited to, the following: risks associated with the DLC structure,
including the uncertainty of its tax status; general economic and business
conditions, which may impact levels of disposable income of consumers and the
net revenue yields for cruise brands of Carnival Corporation & plc; conditions
in the cruise and land-based vacation industries, including competition from
other cruise ship operators and providers of other vacation alternatives and
increases in capacity offered by cruise ship and land-based vacation
alternatives; risks associated with operating internationally; the international
political and economic climate, armed conflicts, terrorist attacks and threats
thereof, availability of air service, other world events and adverse publicity,
and their impact on the demand for cruises; accidents and other incidents
affecting the health, safety, security and vacation satisfaction of passengers;
the ability of Carnival Corporation & plc to implement its shipbuilding programs
and brand strategies and to continue to expand its business worldwide; the
ability of Carnival Corporation & plc to attract and retain qualified shipboard
crew and maintain good relations with employee unions; the ability to obtain
financing on terms that are favorable or consistent with Carnival Corporation &
plc's expectations; the impact of changes in operating and financing costs,
including changes in foreign currency and interest rates and fuel, food,
payroll, insurance and security costs; changes in the tax, environmental,
health, safety, security and other regulatory regimes under which Carnival
Corporation & plc operates; continued availability of attractive port
destinations; the ability to successfully implement cost improvement plans and
to integrate business acquisitions; continuing financial viability of Carnival
Corporation & plc's travel agent distribution system; and unusual weather
patterns or natural disasters.
Forward-looking statements should not be relied upon as a prediction of actual
results. Subject to any continuing obligations under applicable law or any
relevant listing rules, Carnival Corporation & plc expressly disclaims any
obligation to disseminate, after the date of this release, any updates or
revisions to any such forward-looking statements to reflect any change in
expectations or events, conditions or circumstances on which any such statements
are based.
MEDIA CONTACTS INVESTOR RELATIONS CONTACT
US US/UK
Carnival Corporation & plc Carnival Corporation & plc
Tim Gallagher Beth Roberts
1 305 599 2600, ext. 16000 1 305 406 4832
UK
Brunswick
Sophie Fitton/Sarah Tovey
44 (0) 20 7404 5959
2004 Third Quarter Earnings
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended August 31, Nine Months Ended August 31,
----------------------------- ----------------------------
Reported Reported Reported Pro Forma Reported
-------- ----------- --------- ----------- -----------
2004 (1) 2003 (1)(3) 2004 (1) 2003 (2)(3) 2003 (1)(3)
-------- ----------- --------- ----------- -----------
(in millions, except per share data)
Revenues
Cruise
Passenger tickets $ 2,444 $ 1,863 $ 5,663 $ 4,364 $ 3,671
Onboard and other 579 467 1,555 1,183 1,003
Other 222 194 267 233 227
--------- --------- --------- --------- ---------
3,245 2,524 7,485 5,780 4,901
--------- --------- --------- --------- ---------
Costs and Expenses
Operating
Cruise
Commissions, transportation
and other 467 361 1,227 954 748
Onboard and other 92 83 270 205 155
Payroll and related 253 218 739 616 520
Food 149 118 412 328 276
Other ship operating 468 369 1,285 1,056 864
Other 140 129 183 170 162
--------- --------- --------- --------- ---------
Total 1,569 1,278 4,116 3,329 2,725
Selling and administrative 306 261 944 820 650
Depreciation and amortization 210 176 599 479 417
--------- --------- --------- --------- ---------
2,085 1,715 5,659 4,628 3,792
--------- --------- --------- --------- ---------
Operating Income 1,160 809 1,826 1,152 1,109
--------- --------- --------- --------- ---------
Nonoperating (Expense) Income
Interest income 3 7 12 22 20
Interest expense, net of capitalized
interest (76) (58) (212) (159) (129)
Other (expense) income, net (2) 5 (9) 12 9
--------- --------- --------- --------- ---------
(75) (46) (209) (125) (100)
--------- --------- --------- --------- ---------
Income Before Income Taxes 1,085 763 1,617 1,027 1,009
Income Tax Expense, Net (60) (29) (56) (17) (20)
--------- --------- --------- --------- ---------
Net Income $ 1,025 $ 734 $ 1,561 $ 1,010 $ 989
========= ========= ========= ========= =========
Earnings Per Share
Basic $ 1.28 $ 0.92 $ 1.95 $ 1.27 $ 1.43
========= ========= ========= ========= =========
Diluted $ 1.23 $ 0.90 $ 1.90 $ 1.25 $ 1.42
========= ========= ========= ========= =========
Dividends Per Share $ 0.125 $ 0.105 $ 0.375 $ 0.315 $ 0.315
========= ========= ========= ========= =========
Weighted-Average Shares
Outstanding - Basic 803,083 797,015 801,832 795,986 690,949
========= ========= ========= ========= =========
Weighted-Average Shares
Outstanding - Diluted 840,230 818,191 833,241 805,615 698,696
========= ========= ========= ========= =========
(1) The reported results for the three and nine months 2004 and the three
months 2003 included Carnival Corporation and Carnival plc for the entire
period. The 2003 nine month reported results only included Carnival plc
since April 17, 2003, when the DLC transaction was completed.
(2) See note (1) to the Carnival Corporation & plc "Reported and Pro Forma
GAAP Reconciling Information."
(3) Reclassifications have been made to certain 2003 amounts to conform to the
current period presentation.
2004 Third Quarter Earnings
CARNIVAL CORPORATION & PLC
SELECTED STATISTICAL AND SEGMENT INFORMATION
Three Months Ended August 31, Nine Months Ended August 31,
----------------------------- ----------------------------
Reported Reported Reported Pro Forma Reported
-------- ----------- ---------- ----------- -----------
2004 (1) 2003 (1)(3) 2004 (1) 2003 (2)(3) 2003 (1)(3)
-------- ----------- ---------- ----------- -----------
(in millions, except statistical information)
STATISTICAL INFORMATION
Passengers carried 1,849,447 1,595,694 4,762,315 4,056,383 3,671,480
Available lower berth days (4) 11,684,117 9,915,347 32,867,217 27,625,601 23,380,677
Occupancy percentage 110.2% 109.8% 105.2% 103.1% 104.4%
SEGMENT INFORMATION
Revenues
Cruise $ 3,023 $ 2,330 $ 7,218 $ 5,547 $ 4,674
Other 301 257 355 309 303
Intersegment elimination (79) (63) (88) (76) (76)
------------ ----------- ------------ ------------ ------------
$ 3,245 $ 2,524 $ 7,485 $ 5,780 $ 4,901
============ =========== ============ ============ ============
Operating expenses
Cruise $ 1,429 $ 1,149 $ 3,933 $ 3,159 $ 2,563
Other 219 192 271 246 238
Intersegment elimination (79) (63) (88) (76) (76)
------------ ----------- ------------ ------------ ------------
$ 1,569 $ 1,278 $ 4,116 $ 3,329 $ 2,725
============ =========== ============ ============ ============
Selling and administrative expenses
Cruise $ 292 $ 249 $ 902 $ 783 $ 622
Other 14 12 42 37 28
------------ ----------- ------------ ------------ ------------
$ 306 $ 261 $ 944 $ 820 $ 650
============ =========== ============ ============ ============
Operating income
Cruise $ 1,098 $ 764 $ 1,800 $ 1,143 $ 1,085
Other 62 45 26 9 24
------------ ----------- ------------ ------------ ------------
$ 1,160 $ 809 $ 1,826 $ 1,152 $ 1,109
============ =========== ============ ============ ============
(1) The reported information for the three and nine months 2004 and the three
months 2003 included Carnival Corporation and Carnival plc for the entire
period. The 2003 nine month reported results only included Carnival plc
since April 17, 2003.
(2) See note (1) to the Carnival Corporation & plc "Reported and Pro Forma
GAAP Reconciling Information."
(3) Reclassifications have been made to certain 2003 amounts to conform to the
current period presentation.
(4) Available lower berth days ("ALBDs") is the total passenger capacity for
the period, assuming two passengers per cabin, that we offer for sale,
which is computed by multiplying passenger capacity by revenue-producing
ship operating days in the period.
2004 Third Quarter Earnings
CARNIVAL CORPORATION & PLC
REPORTED AND PRO FORMA GAAP RECONCILING INFORMATION
We use net revenue yields to measure our cruise segment revenue performance.
Gross and net revenue yields were computed by dividing the gross or net cruise
revenues, without rounding, by ALBDs as follows:
Three Months Ended August 31, Nine Months Ended August 31,
----------------------------- ----------------------------
Reported Reported Reported Pro Forma Reported
-------- -------- -------- --------- --------
2004 2003 2004 2003 (1) 2003
---- ---- ---- -------- ----
(in millions, except ALBDs and yields)
Cruise revenues
Passenger tickets $ 2,444 $ 1,863 $ 5,663 $ 4,364 $ 3,671
Onboard and other 579 467 1,555 1,183 1,003
------------ ----------- ------------ ------------ ------------
Gross cruise revenues 3,023 2,330 7,218 5,547 4,674
Less cruise costs
Commissions, transportation and other (467) (361) (1,227) (954) (748)
Onboard and other (92) (83) (270) (205) (155)
------------ ----------- ------------ ------------ ------------
Net cruise revenues $ 2,464 $ 1,886 $ 5,721 $ 4,388 $ 3,771
============ =========== ============ ============ ============
ALBDs 11,684,117 9,915,347 32,867,217 27,625,601 23,380,677
============ =========== ============ ============ ============
Gross revenue yields (2) $ 258.75 $ 234.95 $ 219.61 $ 200.79 $ 199.92
============ =========== ============ ============ ============
Net revenue yields (2) $ 210.87 $ 190.20 $ 174.05 $ 158.85 $ 161.32
============ =========== ============ ============ ============
We use net cruise costs per ALBD to monitor our ability to control our cruise
segment costs. Gross and net cruise costs per ALBD were computed by dividing the
gross or net cruise costs, without rounding, by ALBDs as follows:
Three Months Ended August 31, Nine Months Ended August 31,
----------------------------- ----------------------------
Reported Reported Reported Pro Forma Reported
-------- -------- -------- --------- --------
2004 2003 2004 2003 (1) 2003
---- ---- ---- -------- ----
(in millions, except ALBDs and costs per ALBD)
Cruise operating expenses $ 1,429 $ 1,149 $ 3,933 $ 3,159 $ 2,563
Cruise selling and administrative expenses 292 249 902 783 622
------------ ----------- ------------ ------------ ------------
Gross cruise costs 1,721 1,398 4,835 3,942 3,185
Less cruise costs included in net cruise
revenues
Commissions, transportation and other (467) (361) (1,227) (954) (748)
Onboard and other (92) (83) (270) (205) (155)
------------ ----------- ------------ ------------ ------------
Net cruise costs $ 1,162 $ 954 $ 3,338 $ 2,783 $ 2,282
============ =========== ============ ============ ============
ALBDs 11,684,117 9,915,347 32,867,217 27,625,601 23,380,677
============ =========== ============ ============ ============
Gross cruise costs per ALBD (2) $ 147.25 $ 141.04 $ 147.12 $ 142.66 $ 136.22
============ =========== ============ ============ ============
Net cruise costs per ALBD (2) $ 99.36 $ 96.28 $ 101.56 $ 100.72 $ 97.62
============ =========== ============ ============ ============
2004 Third Quarter Earnings
NOTES TO REPORTED AND PRO FORMA GAAP RECONCILING INFORMATION
(1) The pro forma information gives pro forma effect to the DLC transaction
between Carnival Corporation and Carnival plc, which was completed on
April 17, 2003, as if the DLC transaction had occurred on December 1,
2002. Management has prepared the pro forma information based upon the
companies' reported financial information and, accordingly, the above
information should be read in conjunction with the companies' financial
statements, as well as pro forma information included in the companies'
joint Current Report on Form 8-K filed on March 5, 2004.
The DLC transaction has been accounted for as an acquisition of Carnival
plc by Carnival Corporation, using the purchase method of accounting. The
Carnival plc accounting policies have been conformed to Carnival
Corporation's policies. Carnival plc's reporting period has been changed
to the Carnival Corporation reporting period and the pro forma information
covers the same periods of time for both companies.
The pro forma information has not been adjusted to reflect any net
transaction benefits from the DLC transaction. In addition, it excludes
$51 million for the nine months ended August 31, 2003 of nonrecurring DLC
transaction costs, which were expensed by Carnival plc prior to April 17,
2003. The exclusion of these nonrecurring costs is consistent with the
requirements of Article 11 of Regulation S-X. The 2003 pro forma
information was computed by adding Carnival plc's 2003 results, adjusted
for acquisition adjustments (reductions of $12 million of depreciation
expense and $3 million of interest expense for the nine months ended
August 31, 2003) to the 2003 Carnival Corporation reported results.
Finally, the pro forma information does not purport to represent what the
results of operations actually could have been if the DLC transaction had
occurred on December 1, 2002 or what those results will be for any future
periods.
(2) In the cruise industry, most companies, including Carnival Corporation &
plc, generally consider net cruise revenues, which is used in the
computation of net revenue yields, to be a commonly used indicator of
revenue performance rather than gross cruise revenues. Also, net cruise
costs, which is used in the computation of net cruise costs per ALBD, is
considered to be the most significant measure used to monitor our ability
to control costs rather than gross cruise costs.
We have not provided estimates of future gross revenue yields or future
gross cruise costs per ALBD because the reconciliations of forecasted net
cruise revenues to forecasted gross cruise revenues or forecasted net
cruise costs to forecasted cruise operating expenses would require us to
forecast, with reasonable accuracy, the amount of air and other
transportation costs that our forecasted cruise passengers would elect to
purchase from us (the "air/sea mix"). Since the forecasting of future
air/sea mix involves several significant variables that are relatively
difficult to forecast and the revenues from the sale of air and other
transportation approximate the costs of providing that transportation,
management focuses primarily on forecasts of net cruise revenues and costs
rather than gross cruise revenues and costs. This does not impact, in any
material respect, our ability to forecast our future results, as any
variation in the air/sea mix has no material impact on our forecasted net
cruise revenues or forecasted net cruise costs. As such, management does
not believe that this reconciling information would be meaningful.
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