EXHIBIT 99.1
CARNIVAL CORPORATION & PLC REPORTS
SECOND QUARTER EARNINGS
MIAMI (June 19, 2007) - Carnival Corporation & plc (NYSE/LSE: CCL;
NYSE: CUK) reported net income for its second quarter ended May 31, 2007
of $390 million, or $0.48 diluted EPS, compared to net income for the
second quarter of 2006 of $380 million, or $0.46 diluted EPS. Revenues for
the second quarter 2007 increased to $2.90 billion from $2.66 billion in
the second quarter of 2006.
Net income for the six months ended May 31, 2007, was $673 million,
or $0.83 diluted EPS, on revenues of $5.59 billion, compared to net income
of $631 million, or $0.77 diluted EPS, on revenues of $5.13 billion for
the same period in 2006.
Carnival Corporation & plc Chairman and CEO Micky Arison said that
second quarter results came in largely in line with expectations.
"Revenues for our North American and European cruise brands were
both in line with our expectations. The Caribbean, which still had a
relatively high percentage of our capacity during the second quarter,
continued to experience price pressure. However, increases in revenue
yields from our European brands together with the strengthening Euro and
Sterling produced significant revenue yield growth outside of North
America," Arison said. "The decision to expand our European cruise
business is working, with the strength of our European brands offsetting
some cyclical weakness in the contemporary segment of North America,"
Arison noted.
Arison also pointed out that fuel costs came in higher than
forecasted, which impacted earnings by approximately $0.02 per share.
Key metrics for the second quarter of 2007 were as follows:
o Net revenue yields (net revenue per available lower berth day)
for Q2 2007 increased 0.2 percent (down 2.6 percent on a
constant dollar basis) compared to the prior year. Gross
revenue yields were approximately equal to the prior year.
o Net cruise costs per available lower berth day ("ALBD") for Q2
2007 increased 1.3 percent (down 1.5 percent on a constant
dollar basis) compared to the prior year. Gross cruise costs
per ALBD increased 0.7 percent compared to the prior year.
o Excluding fuel, net cruise cost per ALBD on a constant dollar
basis was equal to the prior year.
o Fuel price increased 7 percent to $333 per metric ton compared
to our previous guidance of $310 per metric ton. Fuel price
per metric ton in the second quarter of 2006 was $354.
Recently, the company also took steps towards the ongoing
modernization of its fleet by selling P&O Australia's Pacific Star and
announcing the sale of Cunard's Queen Elizabeth 2, which are expected to
leave the fleet in March and November of 2008, respectively. In addition,
the company took delivery of three highly acclaimed new ships in the
second quarter - Princess Cruises' 3,100-passenger Emerald Princess, AIDA
Cruises' 2,050-passenger AIDAdiva, and Costa Cruises' 3,000-passenger
Costa Serena, all of which are enjoying very successful inaugural seasons
in Europe this summer.
The company also noted that it continues to work towards the
completion of the previously announced joint ventures with Iberojet in
Spain and TUI in Germany. The company continues to expect both joint
ventures to be completed in the second half of the year. Both transactions
may be subject to regulatory review.
Outlook for the Remainder of 2007
On a cumulative basis, occupancy for advance bookings taken for the
second half of 2007 are nicely ahead of last year with pricing on a
current dollar basis down slightly compared to last year.
As the company moves into the second half of the year it has more
deployments in Europe and less capacity devoted to the Caribbean. "Our
North American brands are enjoying strong European and Alaskan programs
and our European brands are performing well against strong comparisons
last year," Arison said. He also noted that pricing for Caribbean sailings
in the second half of 2007 appears to have stabilized, which he attributed
to consumer recognition of the tremendous value proposition of these
cruise vacations. Since the beginning of the year, booking volumes for
Carnival Cruise Lines, which has the vast majority of its sailings in the
Caribbean, are up approximately 18 percent year over year. This compares
to a 5.5 percent capacity increase for the full year.
The company's 2007 full year revenue yield expectations on a
constant dollar basis remain on track with the guidance given last March.
Excluding fuel, cost guidance for the year also remains unchanged on a
constant dollar basis. However, fuel prices have increased significantly
since our previous guidance, which has reduced earnings
estimates by approximately $0.12 per share for the full year. Based on the
above, the company expects full year 2007 earnings per share to be in a
range of $2.85 to $2.95, compared to $2.77 per share in 2006. For the
third quarter of 2007, the company expects earnings per share to be in the
range of $1.60 to $1.62 per share, compared to $1.49 per share in 2006.
Selected Key Forecast Metrics:
Full Year 2007 Third Quarter 2007
Current Constant Current Constant
Dollars Dollars Dollars Dollars
Change in:
Net revenue yields 1% -1 to -2% 1 to 2% 0 to -1%
Net cruise cost per ALBD 2 to 3% 0 to 1% 2 to 3% 1%
Full Year 2007 Third Quarter 2007
Fuel price per metric ton $346 $375
Fuel consumption (metric tons in thousands) 3,000 755
Currency
Euro $1.33 to 1 $1.33 to 1
Sterling $1.97 to 1 $1.97 to 1
The company has scheduled a conference call with analysts at 10:00
a.m. EDT (15.00 London time) today to discuss its 2007 second 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, AIDA Cruises, Costa Cruises,
Cunard Line, Ocean Village, P&O Cruises and P&O Cruises Australia.
Together, these brands operate 82 ships totaling 154,000 lower
berths with 17 new ships scheduled to enter service between December 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," "believe," "expect," "anticipate,"
"forecast," "future," "intend," "plan," and "estimate" 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 Carnival Corporation &
plc's 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; 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;
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/or 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; lack of acceptance of new itineraries,
products and services by Carnival Corporation & plc's guests; 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 operate, 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
operate and expand its business internationally; 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; 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 information technology systems; continued
availability of attractive port destinations; risks associated with the DLC
structure, including the uncertainty of its tax status; 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 May 31, Six Months Ended May 31,
-------------------------- ------------------------
2007 2006 2007 2006
---- ---- ---- ----
(in millions, except per share data)
Revenues
Cruise
Passenger tickets $ 2,181 $ 2,020 $ 4,231 $ 3,930
Onboard and other 678 600 1,304 1,139
Other 41 42 53 56
-------- -------- -------- --------
2,900 2,662 5,588 5,125
-------- -------- -------- --------
Costs and Expenses
Operating
Cruise
Commissions, transportation and other 439 405 910 813
Onboard and other 109 101 220 198
Payroll and related 321 288 632 560
Fuel 254 247 474 461
Food 181 159 356 311
Other ship operating 416 383 802 740
Other 43 37 60 53
-------- -------- -------- --------
Total 1,763 1,620 3,454 3,136
Selling and administrative 406 354 790 720
Depreciation and amortization 272 240 532 472
-------- -------- -------- --------
2,441 2,214 4,776 4,328
-------- -------- -------- --------
Operating Income 459 448 812 797
-------- -------- -------- --------
Nonoperating (Expense) Income
Interest income 17 5 27 12
Interest expense, net of capitalized interest (94) (75) (178) (151)
Other expense, net (1) (1) (1) (16)(1)
-------- -------- -------- --------
(78) (71) (152) (155)
-------- -------- -------- --------
Income Before Income Taxes 381 377 660 642
Income Tax Benefit (Expense), Net 9 3 13 (11)
-------- -------- -------- --------
Net Income $ 390 $ 380 $ 673 $ 631
======== ======== ======== ========
Earnings Per Share
Basic $ 0.49 $ 0.47 $ 0.85 $ 0.78
======== ======== ======== ========
Diluted $ 0.48 $ 0.46 $ 0.83 $ 0.77
======== ======== ======== ========
Dividends Per Share $ 0.35 $ 0.25 $ 0.625 $ 0.50
======== ======== ======== ========
Weighted-Average Shares Outstanding - Basic 794 805 794 807
======== ======== ======== ========
Weighted-Average Shares Outstanding - Diluted 829 840 829 843
======== ======== ======== ========
(1) Includes a $10 million expense for a non-cruise investment write-down and $5
million for a litigation reserve.
CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
May 31, November 30, May 31,
2007 2006 2006
---- ---- ----
(in millions, except par values)
ASSETS
Current Assets
Cash and cash equivalents $ 1,859 $ 1,163 $ 570
Short-term investments 214 21 13
Trade and other receivables, net 401 280 405
Inventories 282 263 278
Prepaid expenses and other 263 268 240
-------- -------- --------
Total current assets 3,019 1,995 1,506
-------- -------- --------
Property and Equipment, Net 25,019 23,458 22,772
Goodwill 3,331 3,313 3,290
Trademarks 1,328 1,321 1,308
Other Assets 490 465 428
-------- -------- --------
$ 33,187 $ 30,552 $ 29,304
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 1,075 $ 438 $ 767
Current portion of long-term debt 1,457 1,054 217
Convertible debt subject to current put options 1,170 218
Accounts payable 498 438 411
Accrued liabilities and other 1,209 1,149 946
Customer deposits 3,200 2,336 2,953
-------- -------- --------
Total current liabilities 8,609 5,415 5,512
-------- -------- --------
Long-Term Debt 5,425 6,355 6,045
Other Long-Term Liabilities and Deferred Income 574 572 652
Shareholders' Equity
Common stock of Carnival Corporation; $0.01 par value;
1,960 shares authorized; 642 shares at 2007, 641
shares at November 2006 and 640 shares at May 2006
issued 6 6 6
Ordinary shares of Carnival plc; $1.66 par value; 226
shares authorized; 213 shares at 2007 and 2006 issued 354 354 353
Additional paid-in capital 7,556 7,479 7,418
Retained earnings 11,778 11,600 10,369
Accumulated other comprehensive income 772 661 473
Treasury stock; 18 shares at 2007 and November 2006 and
10 shares at May 2006 of Carnival Corporation and 42
shares at 2007 and 2006 of Carnival plc, at cost (1,887) (1,890) (1,524)
-------- -------- --------
Total shareholders' equity 18,579 18,210 17,095
-------- -------- --------
$ 33,187 $ 30,552 $ 29,304
======== ======== ========
CARNIVAL CORPORATION & PLC
SELECTED INFORMATION
Three Months Ended May 31, Six Months Ended May 31,
-------------------------- ------------------------
2007 2006 2007 2006
---- ---- ---- ----
(in millions, except statistical information)
STATISTICAL INFORMATION
Passengers carried (in thousands) 1,832 1,708 3,581 3,225 (1)
Occupancy percentage 103.7% 105.4% 103.9% 104.8%(2)
Fuel cost per metric ton (3) $ 333 $ 354 $ 317 $ 336
OTHER INFORMATION
Cash from operations $ 1,494 $ 1,272 $ 2,091 $ 1,885
Capital expenditures $ 1,493 $ 726 $ 2,130 $ 1,483
SEGMENT INFORMATION
Revenues
Cruise $ 2,859 $ 2,620 $ 5,535 $ 5,069
Other 55 54 69 70
Intersegment elimination (14) (12) (16) (14)
------- ------- ------- -------
$ 2,900 $ 2,662 $ 5,588 $ 5,125
======= ======= ======= =======
Operating expenses
Cruise $ 1,720 $ 1,583 $ 3,394 $ 3,083
Other 57 49 76 67
Intersegment elimination (14) (12) (16) (14)
------- ------- ------- -------
$ 1,763 $ 1,620 $ 3,454 $ 3,136
======= ======= ======= =======
Selling and administrative expenses
Cruise $ 398 $ 343 $ 774 $ 698
Other 8 11 16 22
------- ------- ------- -------
$ 406 $ 354 $ 790 $ 720
======= ======= ======= =======
Depreciation and amortization
Cruise $ 263 $ 232 $ 514 $ 456
Other 9 8 18 16
------- ------- ------- -------
$ 272 $ 240 $ 532 $ 472
======= ======= ======= =======
Operating income (loss)
Cruise $ 478 $ 462 $ 853 $ 832
Other (19) (14) (41) (35)
------- ------- ------- -------
$ 459 $ 448 $ 812 $ 797
======= ======= ======= =======
(1) Passengers carried in first quarter of 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) Occupancy percentage in first quarter of 2006 includes the three ships
chartered to the MSC at 100% occupancy.
(3) 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 May 31, Six Months Ended May 31,
2007 2006 2007 2006
---- ---- ---- ----
(in millions, except ALBDs and yields)
Cruise revenues
Passenger tickets $ 2,181 $ 2,020 $ 4,231 $ 3,930
Onboard and other 678 600 1,304 1,139
------------ ------------ ------------ ------------
Gross cruise revenues 2,859 2,620 5,535 5,069
Less cruise costs
Commissions, transportation and other (439) (405) (910) (813)
Onboard and other (109) (101) (220) (198)
------------ ------------ ------------ ------------
Net cruise revenues (1) $ 2,311 $ 2,114 $ 4,405 $ 4,058
============ ============ ============ ============
ALBDs (2) 13,369,111 12,242,982 26,187,929 24,179,420
============ ============ ============ ============
Gross revenue yields (1) $ 213.87 $ 214.00 $ 211.35 $ 209.63
============ ============ ============ ============
Net revenue yields (1) $ 172.90 $ 172.63 $ 168.21 $ 167.78
============ ============ ============ ============
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 May 31, Six Months Ended May 31,
2007 2006 2007 2006
---- ---- ---- ----
(in millions, except ALBDs and costs per ALBD)
Cruise operating expenses $ 1,720 $ 1,583 $ 3,394 $ 3,083
Cruise selling and administrative expenses 398 343 774 698
------------ ------------ ------------ ------------
Gross cruise costs 2,118 1,926 4,168 3,781
Less cruise costs included in net cruise revenues
Commissions, transportation and other (439) (405) (910) (813)
Onboard and other (109) (101) (220) (198)
------------ ------------ ------------ ------------
Net cruise costs (1) $ 1,570 $ 1,420 $ 3,038 $ 2,770
============ ============ ============ ============
ALBDs (2) 13,369,111 12,242,982 26,187,929 24,179,420
============ ============ ============ ============
Gross cruise costs per ALBD (1) $ 158.46 $ 157.35 $ 159.17 $ 156.40
============ ============ ============ ============
Net cruise costs per ALBD (1) $ 117.50 $ 115.98 $ 116.03 $ 114.54
============ ============ ============ ============
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 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
$2.25 billion and $1.53 billion for the three months ended May 31, 2007
and $4.29 billion and $2.96 billion for the six months ended May 31, 2007,
respectively. On a constant dollar basis, gross cruise revenues and gross
cruise costs would be $2.78 billion and $2.06 billion for the three months
ended May 31, 2007 and $5.38 billion and $4.05 billion for the six months
ended May 31, 2007, respectively. In addition, our non-U.S. dollar cruise
operations' depreciation and net interest expense were impacted by changes
in exchange rates for the three and six months ended May 31, 2007,
compared to the prior year's comparable periods.
(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.
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