Exhibit 99.1
FOR IMMEDIATE RELEASE
CARNIVAL CORPORATION & PLC REPORTS FIRST QUARTER EARNINGS
MIAMI (March 23, 2006) - Carnival Corporation & plc (NYSE/LSE: CCL; NYSE:
CUK) reported net income of $280 million, or $0.34 diluted EPS, on revenues of
$2.46 billion for its first quarter ended February 28, 2006. First quarter 2006
earnings were reduced by approximately $0.02 per share due to a non-cruise
investment write-down and a litigation reserve. Net income for the first quarter
of 2005 was $345 million, or $0.42 diluted EPS, on revenues of $2.40 billion.
Commenting on the first quarter results, Carnival Corporation & plc
Chairman and CEO Micky Arison said that the company's performance was in line
with previous guidance. "As expected, the company experienced $82 million in
higher fuel costs due to a 63 percent increase in fuel prices," Arison said.
"Excluding these significantly higher fuel costs, the company performed well
during the quarter, with net revenue yield (net revenue per available lower
berth day) growth outpacing increases in unit operating costs."
First quarter 2006 revenues increased approximately 3 percent, in line
with the company's capacity growth during the quarter. Net revenue yields for
the first quarter of 2006 increased 1.2 percent compared to the prior year. Net
revenue yields as measured on a local currency basis ("constant dollar basis"),
which the company believes better reflects revenue performance, increased 3.3
percent over the same period last year. The strengthening of the U.S. dollar
against the euro and sterling compared to 2005 had a significant impact on
reported yields and costs because a considerable portion of the company's
business is transacted in those European currencies. Gross revenue yields
decreased 0.4 percent.
Net cruise costs per available lower berth day ("ALBD") for the first
quarter of 2006 increased 5.9 percent compared to the same period last year
primarily due to significantly higher fuel costs. On a constant dollar basis,
net cruise costs per ALBD increased 8.4 percent from the same period last year.
Excluding fuel costs, the company's 2006 first quarter net cruise costs per ALBD
increased 2.1 percent compared to last year on a constant dollar basis,
primarily due to the timing of expenditures between quarters. Gross cruise costs
per ALBD increased 2.3 percent.
During the 2006 first quarter, Holland America Line introduced into
service the 1,918-passenger Noordam, which is currently operating a program of
10- and 11-day Caribbean cruises from New York, which will be followed by a
summer program of 10-day Mediterranean cruises from Rome (Civitavecchia).
Earlier this month, the company announced that it will launch a new Asian
cruise initiative with Costa Cruises' 800-passenger Costa Allegra operating
five-day voyages from Shanghai, the People's Republic of China, marketed
exclusively to Chinese guests beginning July 3, 2006. This marks the first time
that a large international cruise company has been licensed by the Chinese
government to embark its citizens from Chinese ports. These cruises represent a
first step in the company's Asian initiative and are expected to serve as a
platform for future expansion into other areas of Asia.
Outlook for the Remainder of 2006
Discussing the forward outlook, Arison noted that the company entered this
year's wave season with advance booking levels that were ahead of the same time
in the prior year in terms of both occupancy and price. The wave season got off
to a solid start in January, with the number of bookings and pricing slightly
above comparable 2005 levels. However, since February, the number of bookings
and pricing has been slightly below prior year levels. As of March 20, 2006, the
company's cumulative advance bookings for the last nine months of 2006 are in a
solid position with both occupancy and pricing up slightly over comparable
levels last year.
"Although this year's wave season may not have been as protracted as the
2005 wave, our bookings for the year are in good shape and we expect to see
positive yield growth for the year," Arison said.
Based on current internal forecasts, the company expects net revenue
yields for the last nine months of 2006 to increase 1 to 2 percent (2 to 3
percent on a constant dollar basis), compared to last year. Net cruise costs are
expected to be flat to down slightly (flat to up slightly on a constant dollar
basis), compared to last year. The company's cost guidance for fuel is based on
recent forward prices for fuel of $336 per metric ton for the balance of the
year, which is 20 percent higher than average prices for the last nine months of
2005. Although fuel prices are expected to be higher than 2005 levels, fuel
comparisons moderate throughout the balance of 2006. Excluding fuel, the company
expects net cruise costs per ALBD to be down 2 to 3 percent on a constant dollar
basis.
Based on these estimates, the company expects that diluted earnings per
share for the full year 2006 will be approximately $2.90 to $3.00. This guidance
is based on currency exchange rates of $1.19 to the euro and $1.75 to sterling.
For the second quarter of 2006, the company expects net revenue yields to
be flat to up slightly (up 2 to 3 percent on a constant dollar basis), compared
to last year. Net cruise costs per ALBD are expected to be up 2 to 3 percent (up
4 to 5 percent on a constant dollar basis), compared to last year. The increased
costs are all attributable to the higher fuel price estimates, which, if
realized, will cost the company approximately $60 million in the second quarter,
based on recent forward prices for fuel of $331 per metric ton for the second
quarter, which is 33 percent higher than the average price for the second
quarter of 2005. Excluding fuel, the company's cost guidance for the second
quarter of 2006 is for net cruise costs per ALBD to be flat to down slightly, on
a constant dollar basis. Based on these estimates, the company expects diluted
earnings per share for the second quarter of 2006 to be approximately $0.48 to
$0.50.
Carnival has scheduled a conference call with analysts at 10 a.m. EST
(15.00 London time) today to discuss its 2006 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 80 ships totaling approximately 139,000
lower berths with 15 new ships scheduled to enter service between June 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.
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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, fuel 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 exchange rates and interest rates and fuel, food,
payroll, insurance and security costs; the impact of pending or threatened
litigation; changes in the environmental, health, safety, security, tax and
other regulatory regimes under which Carnival Corporation & plc operates;
continued availability of attractive port destinations; the ability to
successfully implement cost reduction 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
UK
Brunswick Group
Sophie Fitton/Sarah Lindgreen
44 (0) 20 7404 5959
2006 First Quarter Earnings -
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended February 28,
-------------------------------
2006 2005
---- ----
(in millions, except per share data)
Revenues
Cruise
Passenger tickets $ 1,908 $ 1,841
Onboard and other 542 546
Other 11 9
------- -------
2,461 2,396
------- -------
Costs and Expenses
Operating
Cruise
Commissions, transportation and other 412 431
Onboard and other 98 96
Payroll and related 276 274
Food 153 154
Fuel 215 133
Other ship operating 320 324
Other 13 11
------- -------
Total 1,487 1,423
Selling and administrative 365 334
Depreciation and amortization 232 221
------- -------
2,084 1,978
------- -------
Operating Income 377 418
------- -------
Nonoperating (Expense) Income
Interest income 7 3
Interest expense, net of capitalized interest (76) (86)
Other (expense) income, net (14)(1)(2) 7(3)
------- -------
(83) (76)
------- -------
Income Before Income Taxes 294 342
Income Tax (Expense) Benefit, Net (14) 3
------- -------
Net Income $ 280 $ 345
======= =======
Earnings Per Share
Basic $ 0.35 $ 0.43
======= =======
Diluted $ 0.34 $ 0.42
======= =======
Dividends Per Share $ 0.25 $ 0.15
======= =======
Weighted-Average Shares Outstanding - Basic 809 805
======= =======
Weighted-Average Shares Outstanding - Diluted 838 855
======= =======
(1) Includes a $10 million expense for a non-cruise investment write-down.
(2) Includes a $5 million expense for a litigation reserve.
(3) Includes a $7 million gain from the settlement of litigation.
2006 First Quarter Earnings -
CARNIVAL CORPORATION & PLC
SELECTED STATISTICAL AND SEGMENT INFORMATION
Three Months Ended February 28,
-------------------------------
2006 2005
---- ----
(in millions, except statistical information)
STATISTICAL INFORMATION
Passengers carried (1) 1,522,736 1,618,873
Available lower berth days (2) 11,936,438 11,586,444
Occupancy percentage (3) 104.2% 103.8%
Fuel cost per metric ton $ 319 $ 196
SEGMENT INFORMATION
Revenues
Cruise $ 2,450 $ 2,387
Other 16 12
Intersegment elimination (5) (3)
------------ ------------
$ 2,461 $ 2,396
============ ============
Operating expenses
Cruise $ 1,474 $ 1,412
Other 18 14
Intersegment elimination (5) (3)
------------ ------------
$ 1,487 $ 1,423
============ ============
Selling and administrative expenses
Cruise $ 353 $ 322
Other 12 12
------------ ------------
$ 365 $ 334
============ ============
Depreciation and amortization
Cruise $ 224 $ 213
Other 8 8
------------ ------------
$ 232 $ 221
============ ============
Operating income (loss)
Cruise $ 399 $ 440
Other (22) (22)
------------ ------------
$ 377 $ 418
============ ============
(1) Passengers carried in 2006 are less than 2005 because 2006 does not
include any passengers for the three ships chartered to the Military
Sealift Command ("MSC") in connection with the Hurricane Katrina relief
efforts.
(2) Available lower berth days is the standard measure of passenger capacity
for the period, including the three ships chartered to the MSC. It assumes
that each cabin we offer for sale accommodates two passengers. ALBDs are
computed by multiplying passenger capacity by revenue-producing ship
operating days in the period.
(3) Occupancy percentage includes the three ships chartered to the MSC at 100%
occupancy.
2006 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,
-------------------------------
2006 2005
---- ----
(in millions, except ALBDs and yields)
Cruise revenues
Passenger tickets $ 1,908 $ 1,841
Onboard and other 542 546
------------ ------------
Gross cruise revenues 2,450 2,387
Less cruise costs
Commissions, transportation and other (412) (431)
Onboard and other (98) (96)
------------ ------------
Net cruise revenues (1) $ 1,940 $ 1,860
============ ============
ALBDs 11,936,438 11,586,444
============ ============
Gross revenue yields (1) $ 205.28 $ 206.07
============ ============
Net revenue yields (1) $ 162.50 $ 160.59
============ ============
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,
-------------------------------
2006 2005
---- ----
(in millions, except ALBDs and costs per ALBD)
Cruise operating expenses $ 1,474 $ 1,412
Cruise selling and administrative expenses 353 322
------------ ------------
Gross cruise costs 1,827 1,734
Less cruise costs included in net cruise revenues
Commissions, transportation and other (412) (431)
Onboard and other (98) (96)
------------ ------------
Net cruise costs (1) $ 1,317 $ 1,207
============ ============
ALBDs 11,936,438 11,586,444
============ ============
Gross cruise costs per ALBD (1) $ 153.00 $ 149.62
============ ============
Net cruise costs per ALBD (1) $ 110.23 $ 104.13
============ ============
2006 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, except for the impact of changing prices.
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 that 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 2006
currency exchange rates have remained constant with the 2005 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. We believe that this is a useful measure indicating the actual
growth of our operations in a fluctuating exchange rate environment. On a
constant dollar basis, the net cruise revenues and net cruise costs would
be $1.98 billion and $1.35 billion for the three months ended February 28,
2006, respectively. On a constant dollar basis, the gross cruise revenues
and gross cruise costs would be $2.51 billion and 1.88 billion for the
three months ended February 28, 2006, respectively. In addition, our
non-U.S. cruise operations' depreciation and net interest expense were
impacted by changes in exchange rates for the three months ended February
28, 2006 compared to February 28, 2005.
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