Exhibit 99.1
------------------Press Release, dated June 16, 2005------------------
FOR IMMEDIATE RELEASE
CARNIVAL CORPORATION & PLC REPORTS RECORD SECOND QUARTER EARNINGS
MIAMI (June 16, 2005) - Carnival Corporation & plc (NYSE/LSE: CCL; NYSE:
CUK) reported record net income of $409 million, or $0.49 diluted EPS, on
revenues of $2.52 billion for its second quarter ended May 31, 2005. Net income
for the second quarter of 2004 was $332 million, or $0.40 diluted EPS, on
revenues of $2.26 billion. Previously announced cancelled voyages reduced second
quarter 2005 earnings by approximately $0.03 per share.
Net income for the six months ended May 31, 2005 was $753 million, or
$0.91 diluted EPS, on revenues of $4.92 billion, compared to net income of $535
million, or $0.66 diluted EPS, on revenues of $4.24 billion for the same period
in 2004.
The increase in second quarter earnings was driven by both a 5.3 percent
increase in new cruise capacity and a significant growth in cruise net revenue
yields (revenue per available berth day), which more than offset substantially
higher fuel costs. Net revenue yields for the second quarter of 2005 increased
8.4 percent compared to the prior year, primarily due to higher cruise ticket
prices and, to a lesser extent, higher occupancy and 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 6.8 percent over the same
period last year. Gross revenue yields increased 5.7 percent.
Net cruise costs per available lower berth day ("ALBD") for the second
quarter of 2005 increased 7.3 percent compared to last year. On a constant
dollar basis, net cruise costs per ALBD increased 5.4 percent from the same
period last year. The increase in constant dollar costs per ALBD was primarily
due to a 35 percent increase in fuel prices, and to a lesser extent, higher unit
costs due to the aforementioned voyage cancellations and higher dry-dock
amortization expense. Gross cruise costs per ALBD increased 4.0 percent.
Carnival Corporation & plc Chairman and CEO Micky Arison said he was very
pleased with the continuing strong growth in demand for the company's cruise
products. "The recognition by consumers of the extraordinary value of our cruise
products helped to increase our net revenue yields by over 8 percent in the
second quarter - the fifth straight quarter of net revenue yield increases of 7
percent or better," he said. "The strong revenue yield performance enabled us to
grow net income over 23 percent in the second quarter despite historically high
fuel costs," Arison added.
Outlook for the Remainder of 2005
Regarding advance bookings, Arison stated, "We came into the second
quarter of 2005 with significantly less inventory remaining to be sold versus
the same time last year, despite an 8.5 percent increase in 2005 capacity." He
added that pricing for bookings taken during the second quarter this year was
significantly higher than last year, while booking volumes were lower since
there was less inventory remaining to sell. Arison further stated, "At the end
of the second quarter, we achieved higher occupancy rates for the last six
months of this year than at the same time last year, with higher average prices,
which puts us in an excellent position to achieve higher revenue yields in the
second half of 2005."
Assuming a continuing strong demand for travel, the company has increased
its expectation for net revenue yields for the last six months of 2005, on a
constant dollar basis, by approximately 1 percent to an increase of 4.5 to 5.5
percent, compared to last year. The company's forward guidance is the same in
both current dollars and constant dollars as the currency exchange rates the
company has used in its forward guidance ($1.23 to the euro and $1.83 to the
sterling) is approximately the same as the actual exchange rates in effect
during the second half of 2004. The company estimates that net cruise costs per
ALBD for the remainder of 2005 are expected to increase by 3 to 4 percent,
compared to 2004. The increase in forecasted costs per ALBD versus last year is
largely due to higher fuel prices. The company's cost guidance for fuel is based
on recent forward prices for fuel for the balance of the year, which is 30
percent higher than average prices for the last half of fiscal 2004. Excluding
the higher fuel costs, the company's forecast for net cruise costs per ALBD for
the balance of 2005 is approximately the same as the prior year.
Based on these estimates, the company expects that diluted earnings per
share for the year 2005 will increase approximately 21 percent, compared to the
prior year. Diluted earnings per share for 2005 are expected to be $2.70 (versus
the company's prior guidance of $2.67 per share) with higher net revenue yield
expectations partly offset by higher fuel costs and a reduced contribution to
earnings from foreign currency translation.
For the third quarter of 2005, the company expects net revenue yields to
increase 4.5 to 5.5 percent, compared to last year. Net cruise costs per ALBD
are expected to be up 6 to 7 percent, compared to last year, primarily due to
forecasted higher fuel prices, and to a lesser extent, higher dry-dock
amortization and timing of other ship operating costs. Based on these estimates,
the company expects diluted earnings per share for the third quarter of 2005 to
be in the range of $1.33 to $1.35.
The company has one ship scheduled to enter service during the third
quarter of 2005. Carnival Cruise Lines' 2,974-passenger Carnival Liberty will
launch the line's first-ever Mediterranean cruise program beginning July 20,
2005.
Carnival has scheduled a conference call with analysts at 10 a.m. EST
(15.00 London time) today to discuss its 2005 second 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; proposed legislation mandating that U.S.
citizens carry a passport for travel to or from certain countries that were
previously exempt; 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 Second Quarter Earnings -
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended May 31, Six Months Ended May 31,
-------------------------- ------------------------
2005 2004(1) 2005 2004(1)
---- ------- ---- -------
(in millions, except per share data)
Revenues
Cruise
Passenger tickets $ 1,899 $ 1,691 $ 3,740 $ 3,218
Onboard and other 570 526 1,116 973
Other 50 36 59 45
--------- --------- --------- ---------
2,519 2,253 4,915 4,236
--------- --------- --------- ---------
Costs and Expenses
Operating
Cruise
Commissions, transportation and other 383 376 814 760
Onboard and other 95 97 191 178
Payroll and related 284 249 558 486
Food 151 137 305 264
Other ship operating 515 434 972 814
Other 42 33 54 43
--------- --------- --------- ---------
Total 1,470 1,326 2,894 2,545
Selling and administrative 342 322 675 638
Depreciation and amortization 225 200 446 388
--------- --------- --------- ---------
2,037 1,848 4,015 3,571
--------- --------- --------- ---------
Operating Income 482 405 900 665
--------- --------- --------- ---------
Nonoperating (Expense) Income
Interest income 6 4 9 9
Interest expense, net of capitalized interest (82) (70) (168) (136)
Other income (expense), net 3 (7) 10(2) (7)
--------- --------- --------- ---------
(73) (73) (149) (134)
--------- --------- --------- ---------
Income Before Income Taxes 409 332 751 531
Income Tax Benefit, Net 2 4
--------- --------- --------- ---------
Net Income $ 409 $ 332 $ 753 $ 535
========= ========= ========= =========
Earnings Per Share
Basic $ 0.51 $ 0.41 $ 0.94 $ 0.67
========= ========= ========= =========
Diluted $ 0.49 $ 0.40(3) $ 0.91 $ 0.66(3)
========= ========= ========= =========
Dividends Per Share $ 0.20 $ 0.125 $ 0.35 $ 0.25
========= ========= ========= =========
Weighted-Average Shares Outstanding - Basic 805 803 805 801
========= ========= ========= =========
Weighted-Average Shares Outstanding - Diluted 854 850(3) 855 849(3)
========= ========= ========= =========
(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.
(3) Restated for the adoption in the fourth quarter of 2004 of EITF No. 04-08.
2005 Second Quarter Earnings -
CARNIVAL CORPORATION & PLC
SELECTED STATISTICAL AND SEGMENT INFORMATION
Three Months Ended May 31, Six Months Ended May 31,
-------------------------- ------------------------
2005 2004(1) 2005 2004(1)
---- ------- ---- -------
(in millions, except statistical information)
STATISTICAL INFORMATION
Passengers carried 1,687,459 1,565,903 3,306,332 2,912,868
Available lower berth days (2) 11,711,830 11,120,445 23,298,274 21,183,100
Occupancy percentage 104.8% 102.8% 104.3% 102.4%
SEGMENT INFORMATION
Revenues
Cruise $ 2,469 $ 2,217 $ 4,856 $ 4,191
Other 61 43 74 54
Intersegment elimination (11) (7) (15) (9)
------------ ------------ ------------ ------------
$ 2,519 $ 2,253 $ 4,915 $ 4,236
============ ============ ============ ============
Operating expenses
Cruise $ 1,428 $ 1,293 $ 2,840 $ 2,502
Other 53 40 69 52
Intersegment elimination (11) (7) (15) (9)
------------ ------------ ------------ ------------
$ 1,470 $ 1,326 $ 2,894 $ 2,545
============ ============ ============ ============
Selling and administrative expenses
Cruise $ 325 $ 308 $ 647 $ 610
Other 17 14 28 28
------------ ------------ ------------ ------------
$ 342 $ 322 $ 675 $ 638
============ ============ ============ ============
Operating income (loss)
Cruise $ 499 $ 421 $ 939 $ 702
Other (17) (16) (39) (37)
------------ ------------ ------------ ------------
$ 482 $ 405 $ 900 $ 665
============ ============ ============ ============
(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 Second 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 May 31, Six Months Ended May 31,
-------------------------- ------------------------
2005 2004 2005 2004
---- ---- ---- ----
(in millions, except ALBDs and yields)
Cruise revenues
Passenger tickets $ 1,899 $ 1,691 $ 3,740 $ 3,218
Onboard and other 570 526 1,116 973
------------ ------------ ------------ ------------
Gross cruise revenues 2,469 2,217 4,856 4,191
Less cruise costs
Commissions, transportation and other (383) (376) (814) (760)
Onboard and other (95) (97) (191) (178)
-- ------------ ------------ ------------ ------------
Net cruise revenues (1) $ 1,991 $ 1,744 $ 3,851 $ 3,253
============ ============ ============ ============
ALBDs 11,711,830 11,120,445 23,298,274 21,183,100
============ ============ ============ ============
Gross revenue yields (1) $ 210.82 $ 199.37 $ 208.45 $ 197.88
============ ============ ============ ============
Net revenue yields (1) $ 170.01 $ 156.81 $ 165.32 $ 153.60
============ ============ ============ ============
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 May 31, Six Months Ended May 31,
-------------------------- ------------------------
2005 2004 2005 2004
---- ---- ---- ----
(in millions, except ALBDs and costs per ALBD)
Cruise operating expenses $ 1,428 $ 1,293 $ 2,840 $ 2,502
Cruise selling and administrative expenses 325 308 647 610
------------ ------------ ------------ ------------
Gross cruise costs 1,753 1,601 3,487 3,112
Less cruise costs included in net cruise revenues
Commissions, transportation and other (383) (376) (814) (760)
Onboard and other (95) (97) (191) (178)
------------ ------------ ------------ ------------
Net cruise costs (1) $ 1,275 $ 1,128 $ 2,482 $ 2,174
============ ============ ============ ============
ALBDs 11,711,830 11,120,445 23,298,274 21,183,100
============ ============ ============ ============
Gross cruise costs per ALBD (1) $ 149.73 $ 144.03 $ 149.67 $ 146.92
============ ============ ============ ============
Net cruise costs per ALBD (1) $ 108.92 $ 101.47 $ 106.54 $ 102.64
============ ============ ============ ============
2005 Second 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, net cruise revenues and net cruise costs would be
$1.96 billion and $1.25 billion for the three month period ended May 31,
2005, and $3.80 billion and $2.44 billion for the six month period ended
May 31, 2005, respectively.