Exhibit 99.1
CARNIVAL CORPORATION & PLC REPORTS FIRST QUARTER EARNINGS
MIAMI (March 16, 2007) - Carnival Corporation & plc (NYSE/LSE: CCL; NYSE:
CUK) reported net income of $283 million, or $0.35 diluted EPS, on revenues of
$2.69 billion for its first quarter ended February 28, 2007. Net income for the
first quarter of 2006 was $251 million, or $0.31 diluted EPS, on revenues of
$2.46 billion.
First quarter revenues increased by 9.1 percent driven by a 7.4 percent
increase in cruise capacity and a 1.7 percent increase in gross cruise revenue
yields (revenue per available lower berth day). Net revenue yields for the first
quarter of 2007 increased 0.3 percent compared to the prior year. Adjusting for
the effect of movement in currency exchange rates, net revenue yields as
measured on a local currency basis ("constant dollar basis") decreased 2.1
percent compared to the same period last year.
Net cruise costs per available lower berth day ("ALBD") for the first
quarter of 2007 increased 1.3 percent compared to costs for the same period last
year. On a constant dollar basis, net cruise costs per ALBD decreased 1.3
percent from the same period last year. Gross cruise costs per ALBD increased
2.9 percent compared to the prior year.
Carnival Corporation & plc Chairman and CEO Micky Arison noted the first
quarter continued the trend seen in recent quarters of strong growth in cruise
revenue yields from the company's European cruise brands offsetting pricing
weakness in the Caribbean.
"The Caribbean remains the world's top cruising region, with excellent
year-round weather, beautiful beaches, great shopping and a welcome hospitality
- - all within easy reach of millions of North American vacationers," Arison
noted. "Despite a soft pricing environment in this segment, we'll carry a record
number of guests to the Caribbean this year," he added.
Arison further noted, "Booking trends for the Caribbean over the past few
weeks indicate that consumers are recognizing the extraordinary value of warm
water cruises." In mid-February, the company indicated that bookings since the
beginning of January through February 4 were up over last year but less than its
2007 capacity increase. Since that time, the company has noted a significant
increase in booking volumes over the prior year with the increase well above the
2007 capacity increase, especially for Carnival Cruise Lines' Caribbean
programs, although pricing is below last year's levels.
Outlook for 2007
On a cumulative basis, occupancy on a capacity adjusted basis for advance
bookings taken for the last nine months of 2007 is slightly ahead of last year.
Pricing on a cumulative basis is down slightly compared to last year (down 2
percent in constant dollars).
Based on current internal forecasts, the company continues to expect net
revenue yields for full year 2007 to be flat to up slightly (down 1 to 2 percent
on a constant dollar basis), compared to last year. Net cruise costs per
ALBD for 2007 are expected to be flat to up slightly (down 1 to 2 percent on a
constant dollar basis), compared to 2006. The company's cost guidance for fuel
is based on the current forward curve for the last nine months of 2007 of $318
per metric ton, compared to an average price of $341 per metric ton for the last
nine months of 2006. The company's guidance is also based on currency exchange
rates of $1.32 to the euro and $1.94 to sterling. The company continues to
expect earnings in 2007 to be in the range of $2.90 to $3.10 per share, compared
to $2.77 per share in 2006.
For the second quarter of 2007, the company expects net revenue yields to
be down slightly (down approximately 2 to 3 percent on a constant dollar basis),
compared to last year. Net cruise costs per ALBD in the second quarter of 2007
are expected to be approximately the same as 2006 (down 1 to 2 percent on a
constant dollar basis). Based on these estimates, the company expects that
diluted earnings per share for the second quarter of 2007 will be in the range
of $0.45 to $0.47, compared to $0.46 in the second quarter of 2006. The 2007
guidance includes the impact of the previously announced cancelled voyages,
which are expected to reduce second quarter earnings by approximately $0.02 per
share.
In recent months Carnival has embarked on a number of initiatives to
increase its presence globally. In Spain, the company has signed a letter of
intent to form a joint venture with Iberojet, Spain's largest travel company,
which is expected to be completed in 2007. The joint venture, which will be 75
percent owned by Carnival, will operate Iberojet's current fleet of two modern
cruise ships under the Ibero Cruise brand. The joint venture plans to grow that
fleet over the next several years through the acquisition of existing tonnage
from Carnival Corporation & plc's current fleet.
The previously announced letter of intent to form a joint venture with TUI
AG, the world's largest tour operator, is expected to close during 2007. The
proposed joint venture will develop, market and operate two cruise brands -
Carnival's existing AIDA Cruises and a new TUI Cruises brand aimed at a more
mature clientele - both designed for the German-speaking holiday market.
Also, the proposed sale of the Windstar Cruises brand, a unit of Holland
America Line, to Ambassadors International Inc., is expected to close in the
second quarter of 2007 for $100 million. The sale of Windstar is a strategic
move allowing the company to focus on its core growth brands.
All of the above noted transactions are subject to regulatory approvals,
including approval by competition authorities.
Carnival has scheduled a conference call with analysts at 10:00 a.m. EDT
(14.00 London time) today to discuss its 2007 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 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 and P&O Cruises Australia.
Together, these brands operate 82 ships totaling 147,000 lower berths with
19 new ships scheduled to enter service between April 2007 and June 2011.
Carnival Corporation & plc also operates Holland America Tours and Princess
Tours, the leading tour companies in Alaska and the Canadian Yukon. 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. 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
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: general economic and
business conditions, which may adversely impact the levels of Carnival
Corporation & plc's potential vacationers' discretionary income and this group's
confidence in the U.S. economy, and thereby reduce the net revenue yields for
the cruise brands; the international political and economic climate, armed
conflicts, terrorist attacks and threats thereof, availability of air service
and other world events, 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; adverse publicity concerning the cruise industry in
general, or Carnival Corporation & plc's in particular, could impact the demand
for Carnival Corporation & plc's cruises; conditions in the cruise and
land-based vacation industries, including competition from other cruise ship
operators and providers of vacation alternatives and increases in capacity
offered by cruise ship and land-based vacation alternatives; changing consumer
preferences, which may, among other things, adversely impact the demand for
cruises; 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 sea travel to or from additional foreign
destinations; the impact of changes in operating and financing costs, including
changes in foreign currency exchange rates and interest rates and fuel, food,
insurance, payroll and security costs; 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 its expectations; lack of acceptance of
new itineraries, products and services by Carnival Corporation & plc's guests;
Carnival Corporation & plc's ability to attract and retain qualified shipboard
crew and maintain good relations with employee unions; the continuing financial
viability of Carnival Corporation & plc's travel agent distribution system and
air service providers; Carnival Corporation & plc's decisions to self-insure
against various risks or inability to obtain insurance for certain risks;
disruptions to Carnival Corporation & plc's software and other information
technology systems; continued availability of attractive port destinations;
risks associated with the DLC structure, including the uncertainty of its tax
status; risks associated with operating internationally; the impact of pending
or threatened litigation; and Carnival Corporation & plc's ability to
successfully implement cost reduction plans. 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/Sophie Brand
44 (0) 20 7404 5959
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended February 28,
-------------------------------
2007 2006(1)
---- ----
(in millions, except per share data)
Revenues
Cruise
Passenger tickets $ 2,050 $ 1,910
Onboard and other 626 539
Other 12 14
--------- ---------
2,688 2,463
--------- ---------
Costs and Expenses
Operating
Cruise
Commissions, transportation and other 471 408
Onboard and other 111 97
Payroll and related 311 272
Fuel 220 214
Food 175 152
Other ship operating 386 357(2)
Other 17 16
--------- ---------
Total 1,691 1,516
Selling and administrative 384 366
Depreciation and amortization 260 232
--------- ---------
2,335 2,114
--------- ---------
Operating Income 353 349
--------- ---------
Nonoperating (Expense) Income
Interest income 10 7
Interest expense, net of capitalized interest (84) (76)
Other expense, net (15)(3)
--------- ---------
(74) (84)
--------- ---------
Income Before Income Taxes 279 265
Income Tax Benefit (Expense), Net 4 (14)
--------- ---------
Net Income $ 283 $ 251
========= =========
Earnings Per Share
Basic $ 0.36 $ 0.31
========= =========
Diluted $ 0.35 $ 0.31
========= =========
Dividends Per Share $ 0.275 $ 0.25
========= =========
Weighted-Average Shares Outstanding - Basic 793 809
========= =========
Weighted-Average Shares Outstanding - Diluted 829 838
========= =========
(1) Reclassifications have been made to certain 2006 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) Retrospectively adjusted for the 2006 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 $29 million increase in other ship
operating costs.
(3) Includes a $10 million expense for a non-cruise investment write-down and
$5 million for a litigation reserve.
CARNIVAL CORPORATION & PLC
SELECTED STATISTICAL AND SEGMENT INFORMATION
Three Months Ended February 28,
-------------------------------
2007 2006
---- ----
(in millions, except statistical information)
STATISTICAL INFORMATION
Passengers carried (in thousands) 1,750 1,523(1)
Available lower berth days(2) 12,818,818 11,936,438
Occupancy percentage 104.1% 104.2%(3)
Fuel cost per metric ton(4) $ 301 $ 319
SEGMENT INFORMATION
Revenues
Cruise $ 2,676 $ 2,449
Other 14 16
Intersegment elimination (2) (2)
------------ ------------
$ 2,688 $ 2,463
============ ============
Operating expenses
Cruise $ 1,674 $ 1,500
Other 19 18
Intersegment elimination (2) (2)
------------ ------------
$ 1,691 $ 1,516
============ ============
Selling and administrative expenses
Cruise $ 376 $ 355
Other 8 11
------------ ------------
$ 384 $ 366
============ ============
Depreciation and amortization $ 251 $ 224
Cruise 9 8
------------ ------------
Other $ 260 $ 232
============ ============
Operating income (loss)
Cruise $ 375 $ 370
Other (22) (21)
------------ ------------
$ 353 $ 349
============ ============
(1) Passengers carried in 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 a standard measure of passenger 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 in 2006 includes the three ships chartered to the MSC
at 100% occupancy.
(4) Fuel cost per metric ton is calculated by dividing the cost of our fuel by
the number of metric tons consumed.
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 February 28,
-------------------------------
2007 2006
---- ----
(in millions, except ALBDs and yields)
Cruise revenues
Passenger tickets $ 2,050 $ 1,910
Onboard and other 626 539
------------ ------------
Gross cruise revenues 2,676 2,449
Less cruise costs
Commissions, transportation and other (471) (408)
Onboard and other (111) (97)
------------ ------------
Net cruise revenues (1) $ 2,094 $ 1,944
============ ============
ALBDs 12,818,818 11,936,438
============ ============
Gross revenue yields (1) $ 208.72 $ 205.15
============ ============
Net revenue yields (1) $ 163.32 $ 162.81
============ ============
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,
-------------------------------
2007 2006
---- ----
(in millions, except ALBDs and costs per ALBD)
Cruise operating expenses $ 1,674 $ 1,500
Cruise selling and administrative expenses 376 355
------------ ------------
Gross cruise costs 2,050 1,855
Less cruise costs included in net cruise revenues
Commissions, transportation and other (471) (408)
Onboard and other (111) (97)
------------ ------------
Net cruise costs (1) $ 1,468 $ 1,350
============ ============
ALBDs 12,818,818 11,936,438
============ ============
Gross cruise costs per ALBD (1) $ 159.91 $ 155.42
============ ============
Net cruise costs per ALBD (1) $ 114.50 $ 113.08
============ ============
NOTE 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 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 2007
currency exchange rates have remained constant with the 2006 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 currency exchange rate
environment. On a constant dollar basis, net cruise revenues and net
cruise costs would be $2.04 billion and $1.43 billion for the three months
ended February 28, 2007, respectively. On a constant dollar basis, gross
cruise revenues and gross cruise costs would be $2.60 billion and $1.99
billion for the three months ended February 28, 2007, 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, 2007, compared to the same period in 2006.