Exhibit 99.1
------------------Press Release, dated March 21, 2005------------------
FOR IMMEDIATE RELEASE
CARNIVAL CORPORATION & PLC REPORTS RECORD FIRST QUARTER EARNINGS
MIAMI (March 21, 2005) - Carnival Corporation & plc (NYSE/LSE: CCL;
NYSE: CUK) reported record net income of $345 million, or $0.42 diluted EPS, on
revenues of $2.40 billion for its first quarter ended February 28, 2005. Net
income for the first quarter of 2004 was $203 million, or $0.25 diluted EPS, on
revenues of $1.98 billion.
The 21 percent increase in revenues in the 2005 first quarter was
driven by a 15 percent increase in capacity and a continuation of the
improvement in revenue yields (revenue per available lower berth day) that began
in early 2004. Net revenue yields for the first quarter of 2005 increased 7.2
percent compared to the prior year, primarily due to higher cruise ticket prices
and onboard revenues and, to a lesser extent, higher occupancy and the weak U.S.
dollar relative to the euro and sterling. Gross revenue yields increased 5.1
percent. Net revenue yields as measured on a local currency basis ("constant
dollar basis") increased 5.9 percent over the same period last year.
Despite a 10 percent increase in fuel prices, gross and net cruise
costs per available lower berth day ("ALBD") for the first quarter of 2005 were
approximately the same as the corresponding amounts in the similar period last
year. The higher fuel costs were offset by lower selling, general and
administrative costs per ALBD, partly due to the delay until later in the year
of advertising expenditures. On a constant dollar basis, net cruise costs per
ALBD decreased 1.0 percent from the same period last year.
As previously announced, as a result of the cancellation of P&O
Cruises' 2005 world cruise on the Aurora, earnings per share for the first
quarter of 2005 were reduced by $0.04 per share. Also during the first quarter
of 2005, the company recorded a $0.01 per share gain from a litigation
settlement.
Carnival Corporation & plc Chairman and CEO Micky Arison said that he
was pleased with the company's performance during the quarter. "We are delighted
with the first quarter results," Arison said. "Stronger than expected pricing
coupled with a 15 percent increase in capacity more than offset higher fuel
costs, enabling us to achieve a very healthy 70 percent increase in net income."
During the 2005 first quarter, Carnival Cruise Lines introduced the
2,974-passenger Carnival Valor, which is currently operating seven-day Caribbean
cruises from Miami. Also during the first quarter, Carnival Corporation & plc
announced an agreement to construct a new 3,000-passenger ship for Costa
Cruises, with the delivery scheduled for spring 2007.
Just yesterday, delivery ceremonies were held in Venice, Italy, for P&O
Cruises' 1,968-passenger Arcadia, which will operate a series of European
cruises from Southampton, England, beginning April 14, 2005.
As a result of the merger with P&O Princess, the company assumed a
contingent liability related to the British Merchant Navy Officers Pension Fund
("MNOPF"). The company was recently informed that the
decision on how to allocate the MNOPF's deficit among its participating
employers is expected to be issued by the court at a hearing scheduled for March
22, 2005. As more fully discussed in Note 13 to the company's 2004 annual
financial statements, the company's share of the MNOPF deficit is estimated to
be between $26 million and $113 million. Depending on the court's decision and
other factors, the company could be required to update its 2005 first quarter
results to record a one-time expense for its share of the MNOPF deficit.
Outlook for the Remainder of 2005
Looking forward, Arison said that he continued to be optimistic about
the climate for cruise vacations for the remainder of 2005. "We began this
year's wave season with significantly less inventory to sell than at this same
time last year, despite an 8.6 percent increase in 2005 capacity. With continued
strong demand during the 2005 wave season, we have achieved higher pricing than
during last year's wave season and, as a result, expect to see an increase in
revenue yields for the remainder of the year," Arison said.
For the last nine months of 2005, advance booking levels are well ahead
of the prior year's levels on a capacity adjusted basis, with pricing higher
than last year. Assuming a continuing strong demand for travel, the company has
raised its guidance for net revenue yields for the last nine months of 2005 from
an increase of 4 to 6 percent to an increase of 5 to 6 percent (3.5 to 4.5
percent on a constant dollar basis), compared to last year. Capacity is expected
to increase 6.7 percent over the balance of 2005. In recent weeks, fuel prices
have spiked up significantly. The company's cost guidance for fuel is based on
recent forward prices for fuel for the balance of the year, which is 23 percent
higher than average prices for the last three quarters of fiscal 2004. As a
result, the company now estimates that net cruise costs per ALBD for the
remainder of 2005 are expected to increase by 4 to 5 percent (2.5 to 3.5 percent
on a constant dollar basis), compared to 2004. On a constant dollar basis, and
excluding the higher fuel costs, the company's forecast for net cruise costs per
ALBD for the balance of 2005 is approximately flat with the prior year.
Based on these estimates, the company continues to expect that diluted
earnings per share for the year 2005 will be approximately $2.70. This guidance
is based on currency exchange rates of $1.30 to the euro and $1.88 to the
sterling.
For the second quarter of 2005, the company expects net revenue yields
to increase 6 to 7 percent (4.5 to 5.5 percent on a constant dollar basis),
compared to last year. Net cruise costs per ALBD are expected to be up 6 to 7
percent (up 4.5 to 5.5 percent on a constant dollar basis), compared to last
year. The increased costs are mostly attributable to the higher fuel price
estimates. Also affecting second quarter 2005 cost estimates are higher dry-dock
amortization expense and the timing of expenditures between quarters. Based on
these estimates, the company expects diluted earnings per share for the second
quarter of 2005 to be in the range of $0.45 to $0.47. This guidance, as well as
the company's guidance for the year, includes a previously announced reduction
in second quarter 2005 earnings per share of $0.02 for the impact of the
cancellation of the Aurora's 2005 world cruise.
Carnival has scheduled a conference call with analysts at 10 a.m. EST
(15.00 London time) today to discuss its 2005 first quarter earnings. This call
can be listened to live, and additional information can be obtained, via
Carnival Corporation & plc's Web site at www.carnivalcorp.com and
www.carnivalplc.com.
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 Cruises, Costa Cruises,
Cunard Line, Ocean Village, P&O Cruises, Swan Hellenic, and P&O Cruises
Australia.
Together, these brands operate 78 ships totaling more than 134,000
lower berths with 12 new ships scheduled for delivery between July 2005 and
April 2009. 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,
outlook, plans, 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 21E 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/or tax
costs, costs per ALBD, 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, including machinery and
equipment failures, which could cause the cancellation of a cruise or a series
of cruises; changing public and consumer tastes and preferences, which may,
among other things, adversely impact the demand for cruises; 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 air service providers; and unusual weather
patterns or natural disasters, such as hurricanes and earthquakes.
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 Group
Sophie Fitton/Sarah Tovey
44 (0) 20 7404 5959
2005 First Quarter Earnings -
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended February 28/29,
---------------------------------
2005 2004 (1)
---- ----
(in millions, except per share data)
Revenues
Cruise
Passenger tickets $ 1,841 $ 1,527
Onboard and other 546 446
Other 9 8
------- -------
2,396 1,981
------- -------
Costs and Expenses
Operating
Cruise
Commissions, transportation and other 431 384
Onboard and other 96 81
Payroll and related 274 237
Food 154 127
Other ship operating 457 378
Other 11 10
------- -------
Total 1,423 1,217
Selling and administrative 334 316
Depreciation and amortization 221 188
------- -------
1,978 1,721
------- -------
Operating Income 418 260
------- -------
Nonoperating (Expense) Income
Interest income 3 4
Interest expense, net of capitalized interest (86) (65)
Other income, net 7 (2)
------- -------
(76) (61)
------- -------
Income Before Income Taxes 342 199
Income Tax Benefit, Net 3 4
------- -------
Net Income $ 345 $ 203
======= =======
Earnings Per Share
Basic $ 0.43 $ 0.25
======= =======
Diluted $ 0.42 $ 0.25
======= =======
Dividends Per Share $ 0.150 $ 0.125
======= =======
Weighted-Average Shares Outstanding - Basic 805 800
======= =======
Weighted-Average Shares Outstanding - Diluted 855 820
======= =======
(1) Reclassifications have been made to certain 2004 amounts to conform to the
current period presentation.
(2) Includes a $7 million gain from the settlement of litigation.
2005 First Quarter Earnings -
CARNIVAL CORPORATION & PLC
SELECTED STATISTICAL AND SEGMENT INFORMATION
Three Months Ended February 28/29,
---------------------------------
2005 2004 (1)
---- ----
(in millions, except statistical information)
STATISTICAL INFORMATION
Passengers carried 1,618,873 1,346,964
Available lower berth days (2) 11,586,444 10,062,655
Occupancy percentage 103.8% 102.0%
SEGMENT INFORMATION
Revenues
Cruise $ 2,387 $ 1,973
Other 12 10
Intersegment elimination (3) (2)
------- -------
$ 2,396 $ 1,981
======= =======
Operating expenses
Cruise $ 1,412 $ 1,207
Other 14 12
Intersegment elimination (3) (2)
------- -------
$ 1,423 $ 1,217
======= =======
Selling and administrative expenses
Cruise $ 322 $ 302
Other 12 14
------- -------
$ 334 $ 316
======= =======
Operating income (loss)
Cruise $ 440 $ 281
Other (22) (21)
------- -------
$ 418 $ 260
======= =======
(1) Reclassifications have been made to certain 2004 amounts to conform to the
current period presentation.
(2) Available lower berth days 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.
2005 First Quarter Earnings -
CARNIVAL CORPORATION & PLC
GAAP TO NON-GAAP RECONCILING INFORMATION
Gross and net revenue yields were computed by dividing the gross or net
revenues, without rounding, by ALBDs as follows:
Three Months Ended February 28/29,
----------------------------------
2005 2004
---- ----
(in millions, except ALBDs and yields)
Cruise revenues
Passenger tickets $ 1,841 $ 1,527
Onboard and other 546 446
------------ ------------
Gross cruise revenues 2,387 1,973
Less cruise costs
Commissions, transportation and other (431) (384)
Onboard and other (96) (81)
------------ ------------
Net cruise revenues (1) $ 1,860 $ 1,508
============ ============
ALBDs 11,586,444 10,062,655
============ ============
Gross revenue yields (1) $ 206.07 $ 196.02
============ ============
Net revenue yields (1) $ 160.59 $ 149.84
============ ============
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 February 28/29,
----------------------------------
2005 2004
---- ----
(in millions, except ALBDs and costs per ALBD)
Cruise operating expenses $ 1,412 $ 1,207
Cruise selling and administrative expenses 322 302
------------ ------------
Gross cruise costs 1,734 1,509
Less cruise costs included in net cruise revenues
Commissions, transportation and other (431) (384)
Onboard and other (96) (81)
------------ ------------
Net cruise costs (1) $ 1,207 $ 1,044
============ ============
ALBDs 11,586,444 10,062,655
============ ============
Gross cruise costs per ALBD (1) $ 149.62 $ 149.91
============ ============
Net cruise costs per ALBD (1) $ 104.13 $ 103.73
============ ============
2005 First Quarter Earnings -
NOTE TO GAAP TO NON-GAAP RECONCILING INFORMATION
(1) We use net cruise revenues per ALBD ("net revenue yields") and net cruise
costs per ALBD as significant non-GAAP financial measures of our cruise
segment financial performance. We believe that net revenue yields are
commonly used in the cruise industry to measure a company's cruise segment
revenue performance. This measure is also used for revenue management
purposes. In calculating net revenue yields, we use "net cruise revenues"
rather than "gross cruise revenues." We believe that net cruise revenues
is a more meaningful measure in determining revenue yield than gross
cruise revenues because it reflects the cruise revenues earned by us net
of our most significant variable costs, which are travel agent
commissions, cost of air transportation and certain other variable direct
costs associated with onboard revenues. Substantially all of our remaining
cruise costs are largely fixed once our ship capacity levels have been
determined.
Net cruise costs per ALBD is the most significant measure we use to
monitor our ability to control our cruise segment costs rather than gross
cruise costs per ALBD. In calculating net cruise costs, we exclude the
same variable costs as described above, which are included in the
calculation of net cruise revenues. This is done to avoid duplicating
these variable costs in these two non-GAAP financial measures.
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.
We also monitor these two non-GAAP financial measures assuming the 2005
exchange rates have remained constant with the 2004 comparable period
rates, or on a "constant dollar basis," in order to remove the impact of
changes in exchange rates on our non-U.S. dollar cruise operations. On a
constant dollar basis, the 2005 net cruise revenues and net cruise costs
would be $1.839 billion and $1.190 billion, respectively.
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