Exhibit 99.1
------------------Press Release, dated December 16, 2005------------------
FOR IMMEDIATE RELEASE
CARNIVAL CORPORATION & PLC REPORTS RECORD FOURTH QUARTER AND FULL YEAR
EARNINGS
Full Year Net Income Reaches $2.3 Billion; Revenues Exceed $11 Billion
MIAMI (December 16, 2005) - Carnival Corporation & plc (NYSE/LSE: CCL;
NYSE: CUK) reported record net income of $353 million, or $0.43 diluted EPS, on
revenues of $2.6 billion for its fourth quarter ended November 30, 2005. Net
income for the fourth quarter of 2004 was $294 million, or $0.36 diluted EPS, on
revenues of $2.2 billion.
Net income for the year ended November 30, 2005 was $2.3 billion, or $2.70
diluted EPS, on revenues of $11.1 billion, compared to net income of $1.9
billion, or $2.24 diluted EPS, on revenues of $9.7 billion for the same period
in 2004.
Fourth quarter revenues increased by 14.4 percent driven by both a 9.1
percent increase in cruise capacity and a significant increase in cruise revenue
yields (revenue per available lower berth day), partially offset by a stronger
U.S. dollar relative to the euro and sterling. Net revenue yields for the fourth
quarter of 2005 increased 5.9 percent compared to the prior year. Net revenue
yields as measured on a local currency basis ("constant dollar basis") increased
6.8 percent over the same period last year, primarily due to higher cruise
ticket prices and onboard revenues. Gross revenue yields increased 4.5 percent.
For the 2005 year, net revenue yields increased 6.5 percent (6.1 percent
on a constant dollar basis). Gross revenue yields increased 4.9 percent.
Net cruise costs per available lower berth day ("ALBD") for the fourth
quarter of 2005 were up 3.8 percent compared to costs for the same period last
year. On a constant dollar basis, net cruise costs per ALBD increased 4.9
percent from the same period last year primarily due to an approximate 50
percent increase in fuel prices. Excluding higher fuel costs, the company's 2005
fourth quarter net cruise costs per ALBD were approximately equal to the same
period last year on a constant dollar basis. Gross cruise costs per ALBD
increased 2.5 percent compared to the prior year.
Carnival Corporation & plc Chairman and CEO Micky Arison said that he was
pleased with the company's performance during the period. "It is a testament to
the resilience of our cruise business that despite an approximate 50 percent
increase in fuel costs for the quarter and the worst hurricane season in our
history, we were still able to grow earnings by 20 percent to achieve record
fourth quarter results," Arison said.
For the full year, Arison said that increased pricing and a continued
sharp focus on cost controls more than offset a $180 million year-over-year rise
in fuel costs. He further stated, "All facets of our business, from contemporary
to luxury, performed well overall during the past year, with guests booking in
record numbers."
2006 Outlook
Looking forward to 2006, Arison said, "We expect continued revenue yield
growth in 2006 although probably not at the levels experienced during the last
two years. As it stands today, advance booking levels for 2006 are ahead of the
prior year on a capacity adjusted basis, with average pricing also higher than
last year."
The company's 2006 guidance is based on exchange rates of $1.17 to the
euro and $1.73 to the sterling versus weighted average rates of $1.25 and $1.83
in 2005. Given the strengthening of the U.S. dollar relative to the euro and
sterling, constant dollar information is likely to give a more accurate picture
of the performance of the company's cruise operations in 2006.
Based on bookings taken to date, the company expects that net revenue
yields for 2006 will increase approximately 1 to 3 percent (2 to 4 percent on a
constant dollar basis), compared to last year.
Net cruise costs per ALBD for 2006 are expected to be flat to up 2 percent
(up 1 to 3 percent on a constant dollar basis), compared to 2005. The company's
cost guidance for fuel is based on the current forward curve for all of 2006 of
$322 per metric ton, which is approximately $175 million, or $0.21 per share,
higher than the average prices for 2005. Excluding fuel, the company expects net
cruise costs per ALBD to be flat to down 2 percent on a constant dollar basis.
The company's 2006 outlook for net cruise costs includes the impact of two
accounting matters. Commencing with the first quarter of 2006, the company will
adopt the new stock-based compensation accounting standard and begin expensing
stock options, which is expected to increase 2006 full year expenses by $58
million. Also, commencing with the first quarter of 2006, the company will
change the amortization period for dry-dock costs from one to two years, to two
to three years. This change in estimate reflects the lengthening of the time
between dry-docks, resulting from regulatory changes and technological
enhancements to the company's ships. In 2006, this change is expected to reduce
dry-dock amortization by approximately $40 million compared to normal levels of
dry-dock amortization.
Based on the foregoing, the company believes that 2006 earnings per share
will be between $3.00 and $3.10.
For the first quarter of 2006, the company expects net revenue yields to
increase 1 to 2 percent (3 to 4 percent on a constant dollar basis), compared to
last year. Net cruise costs per ALBD in the first quarter of 2006 are expected
to increase between 6 to 7 percent (9 to 10 percent on a constant dollar basis),
compared to 2005, primarily because of higher fuel costs. The company's cost
guidance for fuel is based on recent forward prices for the first quarter of
2006 at $312 per metric ton, which is approximately $80 million, or $0.09 per
share, higher than the average prices for the first quarter of 2005. Excluding
fuel, the company's cost guidance for the first quarter of 2006 is for net
cruise costs per ALBD to be up 3 to 4 percent, on a constant dollar basis,
primarily due to the timing of advertising and other expenses. Based on these
estimates, the company expects diluted earnings per share for the first quarter
of 2006 to be in the range of $0.34 to $0.36.
The company has three ships scheduled for delivery in 2006 - Holland
America Line's 1,918-passenger Noordam in January, Princess Cruises'
3,100-passenger Crown Princess in May and Costa Cruises' 3,000-passenger Costa
Concordia in June - which represent a 5.5 percent increase in capacity. Earlier
this week, the company announced an agreement with Italian shipbuilder
Fincantieri for the construction of four new cruise ships - two of which are
scheduled to be delivered in 2008 and two in 2009. Including these new ships,
the company's capacity growth is expected to increase 8.0 percent in 2007, 8.2
percent in 2008 and 6.4 percent in 2009.
Carnival has scheduled a conference call with analysts at 10 a.m. EST
(15.00 London time) today to discuss its 2005 fourth quarter and full year
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 79 ships totaling 137,000 lower berths with
16 new ships scheduled to enter service between February 2006 and fall 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.
*****************************************************************
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 implementation of U.S. regulations requiring
U.S. citizens to obtain passports for travel to or from additional foreign
destinations; 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 alteration of itineraries or cancellation of a cruise or a
series of cruises and the impact of the spread of contagious diseases; changing
consumer 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; 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
44 7956 436 104
UK
Brunswick Group
Sophie Fitton/Sarah Tovey
44 (0) 20 7404 5959
2005 Fourth Quarter Earnings -
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Twelve Months
Ended November 30, Ended November 30,
---------------------- -------------------------
2005 2004 2005 2004
-------- -------- -------- --------
(in millions, except per share data)
Revenues
Cruise
Passenger tickets $ 1,946 $ 1,694 $ 8,379 $ 7,357
Onboard and other 574 516 2,356 2,070
Other 47 33 352 300
-------- -------- -------- --------
2,567 2,243 11,087 9,727
-------- -------- -------- --------
Costs and Expenses
Operating
Cruise
Commissions, transportation and other 368 345 1,665 1,572
Onboard and other 101 89 408 359
Payroll and related 284 265 1,145(1) 1,003
Food 150 138 615 550
Other ship operating 592 478 2,134 1,763
Other 38 27 250 210
-------- -------- -------- --------
Total 1,533 1,342 6,217 5,457
Selling and administrative 356 341 1,329 1,285
Depreciation and amortization 230 213 902 812
-------- -------- -------- --------
2,119 1,896 8,448 7,554
-------- -------- -------- --------
Operating Income 448 347 2,639 2,173
-------- -------- -------- --------
Nonoperating (Expense) Income
Interest income 9 5 28 17
Interest expense, net of capitalized interest (80) (72) (330) (284)
Other income (expense), net 6 4 (7)(2) (5)
-------- -------- -------- --------
(65) (63) (309) (272)
-------- -------- -------- --------
Income Before Income Taxes 383 284 2,330 1,901
Income Tax (Expense) Benefit, Net (30) 10 (73) (47)
-------- -------- -------- --------
Net Income $ 353 $ 294 $ 2,257 $ 1,854
======== ======== ======== ========
Earnings Per Share
Basic $ 0.44 $ 0.37 $ 2.80 $ 2.31
======== ======== ======== ========
Diluted $ 0.43 $ 0.36 $ 2.70 $ 2.24
======== ======== ======== ========
Dividends Per Share $ 0.25 $ 0.15 $ 0.80 $ 0.525
======== ======== ======== ========
Weighted-Average Shares Outstanding - Basic 806 804 806 802
======== ======== ======== ========
Weighted-Average Shares Outstanding - Diluted 849 853 853 851
======== ======== ======== ========
(1) Includes a $23 million expense related to the British Merchant Navy
Officers Pension Fund contribution.
(2) Includes a $22 million expense for a non-cruise investment write-down and
a $7 million gain from the settlement of litigation.
2005 Fourth Quarter Earnings -
CARNIVAL CORPORATION & PLC
SELECTED STATISTICAL AND SEGMENT INFORMATION
Three Months Ended November 30, Twelve Months Ended November 30,
---------------------------------- ----------------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
(in millions, except statistical information)
STATISTICAL INFORMATION
Passengers carried 1,588,561 1,543,853 6,848,386 6,306,168
Available lower berth days (1) 12,159,133 11,141,844 47,754,627 44,009,061
Occupancy percentage 102.7% 102.5% 105.6% 104.5%
SEGMENT INFORMATION
Revenues
Cruise $ 2,520 $ 2,210 $ 10,735 $ 9,427
Other 60 43 467 398
Intersegment elimination (13) (10) (115) (98)
------------ ------------ ------------ ------------
$ 2,567 $ 2,243 $ 11,087 $ 9,727
============ ============ ============ ============
Operating expenses
Cruise $ 1,495 $ 1,315 $ 5,967 $ 5,247
Other 51 37 365 308
Intersegment elimination (13) (10) (115) (98)
------------ ------------ ------------ ------------
$ 1,533 $ 1,342 $ 6,217 $ 5,457
============ ============ ============ ============
Selling and administrative expenses
Cruise $ 343 $ 329 $ 1,276 $ 1,231
Other 13 12 53 54
------------ ------------ ------------ ------------
$ 356 $ 341 $ 1,329 $ 1,285
============ ============ ============ ============
Depreciation and amortization
Cruise $ 222 $ 208 $ 873 $ 791
Other 8 5 29 21
------------ ------------ ------------ ------------
$ 230 $ 213 $ 902 $ 812
============ ============ ============ ============
Operating income (loss)
Cruise $ 460 $ 358 $ 2,619 $ 2,158
Other (12) (11) 20 15
------------ ------------ ------------ ------------
$ 448 $ 347 $ 2,639 $ 2,173
============ ============ ============ ============
(1) 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 Fourth 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 November 30, Twelve Months Ended November 30,
--------------------------------- ---------------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
(in millions, except ALBDs and yields)
Cruise revenues
Passenger tickets $ 1,946 $ 1,694 $ 8,379 $ 7,357
Onboard and other 574 516 2,356 2,070
------------ ------------ ------------ ------------
Gross cruise revenues 2,520 2,210 10,735 9,427
Less cruise costs
Commissions, transportation and other (368) (345) (1,665) (1,572)
Onboard and other (101) (89) (408) (359)
------------ ------------ ------------ ------------
Net cruise revenues (1) $ 2,051 $ 1,776 $ 8,662 $ 7,496
============ ============ ============ ============
ALBDs 12,159,133 11,141,844 47,754,627 44,009,061
============ ============ ============ ============
Gross revenue yields (1) $ 207.29 $ 198.28 $ 224.80 $ 214.21
============ ============ ============ ============
Net revenue yields (1) $ 168.71 $ 159.31 $ 181.39 $ 170.32
============ ============ ============ ============
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 November 30, Twelve Months Ended November 30,
--------------------------------- ---------------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
(in millions, except ALBDs and costs per ALBD)
Cruise operating expenses $ 1,495 $ 1,315 $ 5,967 $ 5,247
Cruise selling and administrative expenses 343 329 1,276 1,231
------------ ------------ ------------ ------------
Gross cruise costs 1,838 1,644 7,243 6,478
Less cruise costs included in net cruise revenues
Commissions, transportation and other (368) (345) (1,665) (1,572)
Onboard and other (101) (89) (408) (359)
------------ ------------ ------------ ------------
Net cruise costs (1) $ 1,369 $ 1,210 $ 5,170 $ 4,547
============ ============ ============ ============
ALBDs 12,159,133 11,141,844 47,754,627 44,009,061
============ ============ ============ ============
Gross cruise costs per ALBD (1) $ 151.18 $ 147.44 $ 151.67 $ 147.20
============ ============ ============ ============
Net cruise costs per ALBD (1) $ 112.60 $ 108.47 $ 108.25 $ 103.31
============ ============ ============ ============
2005 Fourth 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 current
year exchange rates have remained constant with the prior year 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 $2.07 billion and $1.38 billion for the three month period
ended November 30, 2005, and $8.63 billion and $5.15 billion for the
twelve month period ended November 30, 2005, respectively.
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