Exhibit 99.1
CARNIVAL CORPORATION & PLC REPORTS
THIRD QUARTER EARNINGS
MIAMI (September 21, 2006) - Carnival Corporation & plc (NYSE/LSE: CCL;
NYSE: CUK) reported net income of $1.23 billion, or $1.49 diluted EPS, on
revenues of $3.91 billion for its third quarter ended August 31, 2006. Net
income for the third quarter of 2005 was $1.18 billion, or $1.40 diluted EPS, on
revenues of $3.61 billion.
Net income for the nine months ended August 31, 2006 was $1.86 billion, or
$2.25 diluted EPS, on revenues of $9.03 billion, compared to net income of $1.92
billion, or $2.29 diluted EPS, on revenues of $8.52 billion for the same period
in 2005.
Third quarter 2006 revenues increased 8.3 percent, primarily driven by a
5.2 percent increase in capacity and an increase in revenue yields (revenue per
available lower berth day). Net revenue yields in current dollars for the third
quarter of 2006 increased 1.0 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 underlying revenue performance, were in
line with the same period last year. Gross revenue yields increased 2.1 percent.
Net cruise costs per available lower berth day ("ALBD") for the third
quarter of 2006 increased 4.8 percent compared to the same period last year. On
a constant dollar basis, net cruise costs per ALBD increased 3.8 percent from
the same period last year. The increase in costs per ALBD was primarily due to a
29 percent increase in fuel prices. Excluding the increased fuel prices, the
company's 2006 third quarter net cruise costs per ALBD were in line with last
year on a constant dollar basis. Gross cruise costs per ALBD increased 5.4
percent.
Carnival Corporation & plc Chairman and CEO Micky Arison said, "Despite
rising fuel costs and softness in Caribbean business, we still managed to grow
earnings by over six percent in a difficult environment. The successful
introduction of three new ships along with strong European and Alaska cruise
seasons helped us overcome $55 million in higher fuel costs and weakness in
Caribbean demand," he explained. "Both our European and North American brands
have enjoyed a very strong summer in Europe and the North American brands
operating in Alaska also performed very well during the quarter."
Forward Outlook
For the fourth quarter, advance booking levels are slightly behind last
year at this time on a capacity adjusted basis, with average pricing slightly
above last year in current dollars. As a result, the company expects that net
revenue yields for the fourth quarter of 2006 will increase slightly (flat to
down slightly in constant dollars) compared to last year's fourth quarter.
Net cruise costs per ALBD in the fourth quarter of 2006 are expected to be
flat to up slightly (flat to down slightly in constant dollars) compared to
2005. The company's cost guidance for fuel is based on recent forward prices for
the balance of the year which are in line with the average prices for the fourth
quarter of 2005.
Based on these estimates, the company expects diluted earnings per share
for the fourth quarter of 2006 to be in the range of $0.46 to $0.48. This
guidance is based on currency exchange rates of $1.27 to the euro and $1.87 to
sterling.
Arison also noted that for the full year the company is currently on track
to post earnings per share of $2.71 to $2.73. This is slightly higher than last
year despite significant challenges in 2006, not the least of which was a $210
million or $0.25 per share increase in fuel costs.
Looking to early 2007, Arison said that overall booking levels on a
capacity adjusted basis, for the first quarter of 2007 are modestly down
compared to the same time last year. The sluggish demand for the Caribbean is
continuing into the first quarter of 2007 causing North American booking levels
to be behind last year, while business for the company's European brands for
that period is running ahead of last year's pace.
New Ship Delivery
During the third quarter, the company's Costa Cruises' brand took delivery
of the new 3,000-passenger Costa Concordia, which launched seven-day
Mediterranean cruises from Civitavecchia (Rome) on July 23, 2006.
Also in the third quarter, the company launched its first Asian-based
cruise initiative, Costa Asia, with the newly refurbished Costa Allegra
operating five-day voyages from Shanghai, the People's Republic of China, which
began July 3, 2006.
Carnival has scheduled a conference call with analysts at 10 a.m. EST
(15.00 London time) today to discuss its 2006 third 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 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 81 ships totaling approximately 144,000
lower berths with 15 new ships scheduled to enter service between March 2007 and
spring 2010. 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, fuel 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 thereby impact 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, unusual weather patterns or natural disasters, such as
hurricanes and earthquakes, and other incidents, (including machinery and
equipment failures or improper operation thereof), which could cause the
alteration of itineraries or cancellation of a cruise or series of cruises and
the impact of the spread of contagious diseases, affecting the health, safety,
security and vacation satisfaction of passengers; 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; Carnival
Corporation & plc's future operating cash flow may not be sufficient to fund
future obligations and Carnival Corporation & plc may not be able to obtain
financing, if necessary, on terms that are favorable or consistent with Carnival
Corporation & plc's expectations; Carnival Corporation & plc's ability to
attract and retain qualified shipboard crew and maintain good relations with
employee unions; 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 and compliance with the environmental, health, safety,
security, tax and other regulatory regimes under which Carnival Corporation &
plc operates, including the implementation of U.S. regulations requiring U.S.
citizens to obtain passports for travel to or from additional foreign
destinations; continued availability of attractive port destinations; Carnival
Corporation & plc's ability to successfully implement cost reduction plans and
the continuing financial viability of Carnival Corporation & plc's travel agent
distribution system and air service providers. 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
Richard Jaques/Ruban Yogarajah
44 (0) 20 7404 5959
2006 Third Quarter Earnings -
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended August 31, Nine Months Ended August 31,
----------------------------- ----------------------------
2006 2005 (1) 2006 2005 (1)
---- ---- ---- ----
(in millions, except per share data)
Revenues
Cruise
Passenger tickets $ 2,894 $ 2,700 $ 6,825 $ 6,446
Onboard and other 709 656 1,847 1,766
Other 302 251 357 309
------- ------- ------- -------
3,905 3,607 9,029 8,521
------- ------- ------- -------
Costs and Expenses
Operating
Cruise
Commissions, transportation and other 538 475 1,351 1,278
Onboard and other 128 118 326 311
Payroll and related 294 297(2) 854 844(2)
Fuel 243 189 707 491
Food 168 160 479 464
Other ship operating 398 359(3) 1,135 1,063(3)
Other 206 162 259 215
------- ------- ------- -------
Total 1,975 1,760 5,111 4,666
Selling and administrative 335 300 1,054 978
Depreciation and amortization 255 226 727 672
------- ------- ------- -------
2,565 2,286 6,892 6,316
------- ------- ------- -------
Operating Income 1,340 1,321 2,137 2,205
------- ------- ------- -------
Nonoperating (Expense) Income
Interest income 5 10 17 19
Interest expense, net of capitalized interest (81) (82) (232) (250)
Other expense, net (1) (23)(4) (17)(5) (15)(4)(6)
------- ------- ------- -------
(77) (95) (232) (246)
------- ------- ------- -------
Income Before Income Taxes 1,263 1,226 1,905 1,959
Income Tax Expense, Net (31) (45) (42) (42)
------- ------- ------- -------
Net Income $ 1,232 $ 1,181 $ 1,863 $ 1,917
======= ======= ======= =======
Earnings Per Share
Basic $ 1.55 $ 1.46 $ 2.32 $ 2.38
======= ======= ======= =======
Diluted $ 1.49 $ 1.40 $ 2.25 $ 2.29
======= ======= ======= =======
Dividends Per Share $ 0.25 $ 0.20 $ 0.75 $ 0.55
======= ======= ======= =======
Weighted-Average Shares Outstanding - Basic 797 806 804 805
======= ======= ======= =======
Weighted-Average Shares Outstanding - Diluted 831 854 839 854
======= ======= ======= =======
(1) Reclassifications have been made to certain 2005 amounts to conform to the
current period presentation as a result of adopting a new chart of
accounts in connection with the initial implementation of a new worldwide
accounting system.
(2) Includes $23 million expense related to the British Merchant Navy Officers
Pension Fund contribution.
(3) Retrospectively adjusted for the change in the company's method of
accounting for dry-dock costs from the deferral method to the direct
expense method, which resulted in a $30 million and $13 million decrease
in other ship operating costs for the three and nine months ended August
31, 2005, respectively.
(4) Includes a $22 million expense for a non-cruise investment write-down.
(5) Includes a $10 million expense for a non-cruise investment write-down
partially offset by a $4 million gain on sale of this investment, and a $5
million expense for a litigation reserve.
(6) Includes a $7 million gain from the settlement of litigation.
2006 Third Quarter Earnings -
CARNIVAL CORPORATION & PLC
SELECTED STATISTICAL AND SEGMENT INFORMATION
Three Months Ended August 31, Nine Months Ended August 31,
----------------------------- ----------------------------
2006 2005 (1) 2006 2005 (1)
---- ---- ---- ----
(in millions, except statistical information)
STATISTICAL INFORMATION
Passengers carried (in thousands) 2,012 1,953 5,237 5,260
Available lower berth days (2) 12,937,155 12,297,220 37,116,575 35,595,494
Occupancy percentage 111.0% 110.9% 107.0%(3) 106.6%
Fuel cost per metric ton $ 350 $ 271 $ 341 $ 239
SEGMENT INFORMATION
Revenues
Cruise $ 3,603 $ 3,356 $ 8,672 $ 8,212
Other 380 329 449 401
Intersegment elimination (78) (78) (92) (92)
------------ ------------ ------------ ------------
$ 3,905 $ 3,607 $ 9,029 $ 8,521
============ ============ ============ ============
Operating expenses
Cruise $ 1,769 $ 1,598 $ 4,852 $ 4,451
Other 284 240 351 307
Intersegment elimination (78) (78) (92) (92)
------------ ------------ ------------ ------------
$ 1,975 $ 1,760 $ 5,111 $ 4,666
============ ============ ============ ============
Selling and administrative expenses
Cruise $ 324 $ 289 $ 1,023 $ 943
Other 11 11 31 35
------------ ------------ ------------ ------------
$ 335 $ 300 $ 1,054 $ 978
============ ============ ============ ============
Depreciation and amortization $ 246 $ 219 $ 702 $ 651
Cruise 9 7 25 21
------------ ------------ ------------ ------------
Other $ 255 $ 226 $ 727 $ 672
============ ============ ============ ============
Operating income
Cruise $ 1,264 $ 1,250 $ 2,095 $ 2,167
Other 76 71 42 38
------------ ------------ ------------ ------------
$ 1,340 $ 1,321 $ 2,137 $ 2,205
============ ============ ============ ============
(1) Reclassifications have been made to certain 2005 amounts to conform to the
current period presentation.
(2) Available lower berth days is the standard measure of capacity for the
period. 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 Military
Sealift Command in connection with Hurricane Katrina relief efforts at
100% occupancy.
2006 Third Quarter Earnings -
CARNIVAL CORPORATION & PLC
NON-GAAP FINANCIAL MEASURES
Gross and net revenue yields were computed by dividing the gross or net
revenues, without rounding, by ALBDs as follows:
Three Months Ended August 31, Nine Months Ended August 31,
----------------------------- ----------------------------
2006 2005 (2) 2006 2005 (2)
---- ---- ---- ----
(in millions, except ALBDs and yields)
Cruise revenues
Passenger tickets $ 2,894 $ 2,700 $ 6,825 $ 6,446
Onboard and other 709 656 1,847 1,766
------------ ------------ ------------ ------------
Gross cruise revenues 3,603 3,356 8,672 8,212
Less cruise costs
Commissions, transportation and other (538) (475) (1,351) (1,278)
Onboard and other (128) (118) (326) (311)
------------ ------------ ------------ ------------
Net cruise revenues (1) $ 2,937 $ 2,763 $ 6,995 $ 6,623
============ ============ ============ ============
ALBDs 12,937,155 12,297,220 37,116,575 35,595,494
============ ============ ============ ============
Gross revenue yields (1) $ 278.50 $ 272.90 $ 233.64 $ 230.72
============ ============ ============ ============
Net revenue yields (1) $ 227.06 $ 224.72 $ 188.44 $ 186.07
============ ============ ============ ============
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,
----------------------------- ----------------------------
2006 2005 (2) 2006 2005 (2)
---- ---- ---- ----
(in millions, except ALBDs and costs per ALBD)
Cruise operating expenses $ 1,769 $ 1,598 $ 4,852 $ 4,451
Cruise selling and administrative expenses 324 289 1,023 943
------------ ------------ ------------ ------------
Gross cruise costs 2,093 1,887 5,875 5,394
Less cruise costs included in net cruise
revenues Commissions, transportation
and other (538) (475) (1,351) (1,278)
Onboard and other (128) (118) (326) (311)
------------ ------------ ------------ ------------
Net cruise costs (1) $ 1,427 $ 1,294 $ 4,198 $ 3,805
============ ============ ============ ============
ALBDs 12,937,155 12,297,220 37,116,575 35,595,494
============ ============ ============ ============
Gross cruise costs per ALBD (1) $ 161.83 $ 153.49 $ 158.29 $ 151.54
============ ============ ============ ============
Net cruise costs per ALBD (1) $ 110.38 $ 105.31 $ 113.09 $ 106.89
============ ============ ============ ============
2006 Third Quarter Earnings -
NOTES TO NON-GAAP FINANCIAL MEASURES
(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 rate environment. On a constant
dollar basis, net cruise revenues and net cruise costs would be $2.90
billion and $1.41 billion for the three months ended August 31, 2006, and
$7.03 billion and $4.23 billion for the nine months ended August 31, 2006,
respectively. On a constant dollar basis, gross cruise revenues and gross
cruise costs would be $3.56 billion and $2.07 billion for the three months
ended August 31, 2006 and $8.72 and $5.93 billion for the nine months
ended August 31, 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 and nine months ended August 31, 2006,
compared to August 31, 2005.
(2) Reclassifications have been made to certain 2005 amounts to conform to the
current period presentation.