Exhibit 99.1
CARNIVAL CORPORATION & PLC REPORTS RECORD FOURTH QUARTER AND FULL YEAR EARNINGS
MIAMI (December 21, 2006) - Carnival Corporation & plc (NYSE/LSE: CCL;
NYSE: CUK) reported record net income of $416 million, or $0.51 diluted EPS, on
revenues of $2.81 billion for its fourth quarter ended November 30, 2006. Net
income for the fourth quarter of 2005 was $336 million, or $0.41 diluted EPS, on
revenues of $2.57 billion.
Net income for the year ended November 30, 2006 was a record $2.28
billion, or $2.77 diluted EPS, on revenues of $11.84 billion, compared to net
income of $2.25 billion, or $2.70 diluted EPS, on revenues of $11.1 billion for
the fiscal year ended November 30, 2005.
Fourth quarter revenues increased by 9.2 percent driven by a 5.5 percent
increase in cruise capacity and higher cruise revenue yields (revenue per
available lower berth day). Net revenue yields for the fourth quarter of 2006
increased 2.3 percent compared to the prior year. Adjusting for the effect of
movement in currencies, net revenue yields as measured on a local currency basis
("constant dollar basis") increased 0.8 percent over the same period last year.
Gross revenue yields increased 3.0 percent.
Net cruise costs per available lower berth day ("ALBD") for the fourth
quarter of 2006 increased 1.0 percent compared to costs for the same period last
year. On a constant dollar basis, net cruise costs per ALBD decreased 0.6
percent from the same period last year. Gross cruise costs per ALBD increased
2.3 percent compared to the prior year.
Commenting on fiscal 2006 performance, Carnival Corporation & plc Chairman
and CEO Micky Arison said, "Following two exceptionally strong years of earnings
growth in 2004 and 2005, we ended 2006 with a modest increase in earnings per
share as a result of a very significant increase in fuel prices." Higher fuel
prices increased operating costs by $210 million in 2006, which reduced earnings
per share by $0.25.
Arison continued, "Revenue yields (in both current and constant dollars)
increased 1.5 percent for the full year 2006. Our European cruise brands enjoyed
record yields and earnings this past year, demonstrating the benefits of our
global strategy. Our North American brands experienced strong pricing for their
European and Alaskan cruises. Pricing in the Caribbean was down, which we
attribute to hurricane fears and a challenging economic environment in North
America."
2007 Outlook
Looking forward to 2007, Arison indicated that he was optimistic that the
introduction of four new ships would drive earnings growth in 2007.
In March, Carnival Cruise Lines' 2,974-passenger Carnival Freedom and
Princess Cruises' 3,100-passenger Emerald Princess are scheduled for delivery.
AIDA's 2,050-passenger AIDAdiva will be delivered in April and Costa's
3,000-passenger Costa Serena in May. Collectively the company will have an 8.4
percent
increase in capacity in 2007, with a significant portion of that increase
planned for the company's European brands.
Looking at advance cruise bookings for fiscal 2007, Arison said that the
trends noted during the latter part of 2006 have largely continued through the
first half of 2007. Bookings for our European cruise brands continue to be
strong. Bookings for our North American cruise brands when they sail outside of
the Caribbean also continue to be strong, while pricing in the Caribbean is
still under pressure. Arison also noted that the strength of the upcoming wave
season will have a significant effect on 2007 revenue yields.
For the first quarter of 2007, the company expects net revenue yields to
be flat to up slightly (down approximately 2 percent on a constant dollar
basis), compared to last year. Net cruise costs per ALBD in the first quarter of
2007 are expected to increase between 2 to 3 percent (flat on a constant dollar
basis), compared to 2006. Based on these estimates, the company expects that
diluted earnings per share for the first quarter of 2007 will be in the range of
$0.33 to $0.35, compared to $0.31 in the first quarter of 2006.
Based on current internal forecasts, the company expects that net revenue
yields for the full year 2007 will increase approximately 1 to 2 percent (flat
to down slightly on a constant dollar basis), compared to last year. Net cruise
costs per ALBD for 2007 are expected to increase approximately 2 percent (flat
on a constant dollar basis), compared to 2006. The company's cost guidance for
fuel is based on the current forward curve for all of 2007 of $339 per metric
ton, which is slightly higher than the average price for 2006. The company's
guidance is also based on currency exchange rates of $1.33 to the euro and $1.98
to sterling versus the weighted average rates of $1.26 and $1.83 in 2006. Based
on these estimates, the company expects that diluted earnings per share in 2007
will be in the range of $2.90 to $3.10.
Carnival has scheduled a conference call with analysts at 10:00 a.m. EST
(15.00 London time) today to discuss its 2006 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 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 144,000 lower berths with
19 new ships scheduled to enter service between March 2007 and summer 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.
Carnival Corporation's Liquid Yield Option Notes due 2021 and Carnival
Corporation's 2% Convertible Senior Debentures due 2021 are convertible in
accordance with their terms through February 28, 2007.
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. We have tried, wherever possible, to identify these
statements by using 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 the 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 conditions 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 Jacques /Ruban Yogarajah
44 (0) 20 7404 5959
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended November 30, Twelve Months Ended November 30,
------------------------------- --------------------------------
2006 2005 (1) 2006 2005 (1)
---- ---- ---- ----
(in millions, except per share data)
Revenues
Cruise
Passenger tickets $ 2,079 $ 1,953 $ 8,903 $ 8,399
Onboard and other 666 572 2,514 2,338
Other 64 48 422 357
-------- -------- -------- --------
2,809 2,573 11,839 11,094
-------- -------- -------- --------
Costs and Expenses
Operating
Cruise
Commissions, transportation and other 398 367 1,749 1,645
Onboard and other 127 101 453 412
Payroll and related 304 (2) 278 1,158 (2) 1,122 (3)
Fuel 228 216 935 707
Food 165 149 644 613
Other ship operating 403 402 (4) 1,538 1,465 (4)
Other 55 39 314 254
-------- -------- -------- --------
Total 1,680 1,552 6,791 6,218
Selling and administrative 392 (2) 357 1,447 (2) 1,335
Depreciation and amortization 261 230 988 902
-------- -------- -------- --------
2,333 2,139 9,226 8,455
-------- -------- -------- --------
Operating Income 476 434 2,613 2,639
-------- -------- -------- --------
Nonoperating (Expense) Income
Interest income 8 10 25 29
Interest expense, net of capitalized interest (80) (80) (312) (330)
Other income (expense), net 9 2 (8) (13)
-------- -------- -------- --------
(63) (68) (295) (314)
-------- -------- -------- --------
Income Before Income Taxes 413 366 2,318 2,325
Income Tax Benefit (Expense), Net 3 (30) (39) (72)
-------- -------- -------- --------
Net Income $ 416 $ 336 $ 2,279 $ 2,253
======== ======== ======== ========
Earnings Per Share
Basic $ 0.53 $ 0.42 $ 2.85 $ 2.80
======== ======== ======== ========
Diluted $ 0.51 $ 0.41 $ 2.77 $ 2.70
======== ======== ======== ========
Dividends Per Share $ 0.275 $ 0.25 $ 1.025 $ 0.80
======== ======== ======== ========
Weighted-Average Shares Outstanding - Basic 793 806 801 806
======== ======== ======== ========
Weighted-Average Shares Outstanding - Diluted 828 849 836 853
======== ======== ======== ========
(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) Payroll and related includes $2 million and $8 million and selling and
administrative includes $14 million and $49 million of shared-based
compensation for the three and twelve months ended November 30, 2006,
respectively, as a result of our adoption of Statement of Financial
Accounting Standards No. 123(R).
(3) Includes a $23 million expense related to the British Merchant Navy
Officers Pension Fund contribution.
(4) 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 $17 million and $4 million increase in
other ship operating costs for the three and twelve months ended November
30, 2005, respectively.
CARNIVAL CORPORATION & PLC
SELECTED STATISTICAL AND SEGMENT INFORMATION
Three Months Ended November 30, Twelve Months Ended November 30,
------------------------------- --------------------------------
2006 2005 (1) 2006 2005 (1)
---- ---- ---- ----
(in millions, except statistical information)
STATISTICAL INFORMATION
Passengers carried (in thousands) 1,748 1,589 7,008 6,848
Available lower berth days (2) 12,828,609 12,159,133 49,945,184 47,754,627
Occupancy percentage 103.4% 102.7% 106.0% (3) 105.6%
Fuel cost per metric ton $ 315 $ 323 $ 334 $ 259
SEGMENT INFORMATION
Revenues
Cruise $ 2,745 $ 2,525 $ 11,417 $ 10,737
Other 83 60 533 461
Intersegment elimination (19) (12) (111) (104)
--------- --------- --------- ---------
$ 2,809 $ 2,573 $ 11,839 $ 11,094
========= ========= ========= =========
Operating expenses
Cruise $ 1,625 $ 1,513 $ 6,477 $ 5,964
Other 74 51 425 358
Intersegment elimination (19) (12) (111) (104)
--------- --------- --------- ---------
$ 1,680 $ 1,552 $ 6,791 $ 6,218
========= ========= ========= =========
Selling and administrative expenses
Cruise $ 383 $ 346 $ 1,405 $ 1,289
Other 9 11 42 46
--------- --------- --------- ---------
$ 392 $ 357 $ 1,447 $ 1,335
========= ========= ========= =========
Depreciation and amortization $ 252 $ 222 $ 954 $ 873
Cruise 9 8 34 29
--------- --------- --------- ---------
Other $ 261 $ 230 $ 988 $ 902
========= ========= ========= =========
Operating income (loss)
Cruise $ 485 $ 444 $ 2,581 $ 2,611
Other (9) (10) 32 28
--------- --------- --------- ---------
$ 476 $ 434 $ 2,613 $ 2,639
========= ========= ========= =========
(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.
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 November 30, Twelve Months Ended November 30,
------------------------------- --------------------------------
2006 2005 (2) 2006 2005 (2)
---- ---- ---- ----
(in millions, except ALBDs and yields)
Cruise revenues
Passenger tickets $ 2,079 $ 1,953 $ 8,903 $ 8,399
Onboard and other 666 572 2,514 2,338
------------ ------------ ------------ ------------
Gross cruise revenues 2,745 2,525 11,417 10,737
Less cruise costs
Commissions, transportation and other (398) (367) (1,749) (1,645)
Onboard and other (127) (101) (453) (412)
------------ ------------ ------------ ------------
Net cruise revenues (1) $ 2,220 $ 2,057 $ 9,215 $ 8,680
============ ============ ============ ============
ALBDs 12,828,609 12,159,133 49,945,184 47,754,627
============ ============ ============ ============
Gross revenue yields (1) $ 213.96 $ 207.64 $ 228.58 $ 224.84
============ ============ ============ ============
Net revenue yields (1) $ 173.09 $ 169.15 $ 184.50 $ 181.77
============ ============ ============ ============
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,
------------------------------- --------------------------------
2006 2005 (2) 2006 2005 (2)
---- ---- ---- ----
(in millions, except ALBDs and costs per ALBD)
Cruise operating expenses $ 1,625 $ 1,513 $ 6,477 $ 5,964
Cruise selling and administrative expenses 383 346 1,405 1,289
------------ ------------ ------------ ------------
Gross cruise costs 2,008 1,859 7,882 7,253
Less cruise costs included in net cruise
revenues
Commissions, transportation and other (398) (367) (1,749) (1,645)
Onboard and other (127) (101) (453) (412)
------------ ------------ ------------ ------------
Net cruise costs (1) $ 1,483 $ 1,391 $ 5,680 $ 5,196
============ ============ ============ ============
ALBDs 12,828,609 12,159,133 49,945,184 47,754,627
============ ============ ============ ============
Gross cruise costs per ALBD (1) $ 156.44 $ 152.92 $ 157.81 $ 151.89
============ ============ ============ ============
Net cruise costs per ALBD (1) $ 115.57 $ 114.43 $ 113.73 $ 108.81
============ ============ ============ ============
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 $2.19
billion and $1.46 billion for the three months ended November 30, 2006,
and $9.21 billion and $5.69 billion for the twelve months ended November
30, 2006, respectively. On a constant dollar basis, gross cruise revenues
and gross cruise costs would be $2.70 billion and $1.98 billion for the
three months ended November 30, 2006 and $11.42 billion and $7.91 billion
for the twelve months ended November 30, 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 twelve months
ended November 30, 2006, compared to the same periods in 2005.
(2) Reclassifications have been made to certain 2005 amounts to conform to the
current period presentation.
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