Carnival plc Reports Record Second Quarter Earn...
Carnival Corporation & plc Reports Record Second Quarter Earnings
Carnival Corporation & plc today reports record earnings for the second
quarter ended May 31, 2005. The earnings of Carnival Corporation and Carnival
plc have been consolidated, and this statement includes consolidated results
on a U.S. GAAP basis.
Q2 Highlights
* Revenues increased by $266m or 11.8% to $2.52bn compared to 2004 due
to both new cruise capacity and significant growth in revenue yields
* Net income (profit after tax) increased by $77m or 23.2% to $409m
(2004: net income of $332m on revenues of $2.26bn)
* Earnings per share (diluted) increased by $0.09 to $0.49
(2004: earnings per share (diluted) of $0.40)
2005 Outlook
* Q3 earnings per share (diluted) expected to be in the range of $1.33
to $1.35
* Full year 2005 earnings per share (diluted) expected to increase
approximately 21% to $2.70
* Carnival Liberty to enter service in July 2005 in Mediterranean
Commenting on these results, Chairman and Chief Executive Micky Arison
said:
"The recognition by consumers of the extraordinary value of our cruise
products helped to increase our net revenue yields by over 8 percent in the
second quarter -- the fifth straight quarter of net revenue yield increases of
7 percent or better. The strong revenue yield performance enabled us to grow
net income over 23 percent in the second quarter despite historically high
fuel costs."
"At the end of the second quarter, we achieved higher occupancy rates for
the last six months of this year than at the same time last year, with higher
average prices, which puts us in an excellent position to achieve higher
revenue yields in the second half of 2005."
MEDIA CONTACTS INVESTOR RELATIONS CONTACT
US US/UK
Carnival Corporation & plc Carnival Corporation & plc
Tim Gallagher Beth Roberts
001 305 599 2600, ext. 16000 001 305 406 4832
UK
Brunswick Group
Sophie Fitton/Sarah Tovey
020 7404 5959
Analyst conference call
Carnival has scheduled a conference call with analysts at 15.00 London
time (10 a.m. EST) today to discuss its 2005 second quarter earnings. This
call can be listened to live, and additional information can be obtained, via
Carnival Corporation & plc's Web site at http://www.carnivalcorp.com and
http://www.carnivalplc.com.
Carnival Corporation & plc
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 78 ships totaling more than 134,000 lower
berths with 12 new ships scheduled for delivery between July 2005 and April
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.
Carnival Corporation & PLC Reports Record Second Quarter Earnings
MIAMI, June 16 -- Carnival Corporation & plc (NYSE: CCL; LSE) (NYSE: CUK)
reported record net income of $409 million, or $0.49 diluted EPS, on revenues of
$2.52 billion for its second quarter ended May 31, 2005. Net income for the
second quarter of 2004 was $332 million, or $0.40 diluted EPS, on revenues of
$2.26 billion. Previously announced cancelled voyages reduced second quarter
2005 earnings by approximately $0.03 per share.
Net income for the six months ended May 31, 2005 was $753 million, or
$0.91 diluted EPS, on revenues of $4.92 billion, compared to net income of
$535 million, or $0.66 diluted EPS, on revenues of $4.24 billion for the same
period in 2004.
The increase in second quarter earnings was driven by both a 5.3 percent
increase in new cruise capacity and a significant growth in cruise net revenue
yields (revenue per available berth day), which more than offset substantially
higher fuel costs. Net revenue yields for the second quarter of 2005
increased 8.4 percent compared to the prior year, primarily due to higher
cruise ticket prices and, to a lesser extent, higher occupancy and the weak
U.S. dollar relative to the euro and sterling. Net revenue yields as measured
on a local currency basis ("constant dollar basis") increased 6.8 percent over
the same period last year. Gross revenue yields increased 5.7 percent.
Net cruise costs per available lower berth day ("ALBD") for the second
quarter of 2005 increased 7.3 percent compared to last year. On a constant
dollar basis, net cruise costs per ALBD increased 5.4 percent from the same
period last year. The increase in constant dollar costs per ALBD was
primarily due to a 35 percent increase in fuel prices, and to a lesser extent,
higher unit costs due to the aforementioned voyage cancellations and higher
dry-dock amortization expense. Gross cruise costs per ALBD increased 4.0
percent.
Carnival Corporation & plc Chairman and CEO Micky Arison said he was very
pleased with the continuing strong growth in demand for the company's cruise
products. "The recognition by consumers of the extraordinary value of our
cruise products helped to increase our net revenue yields by over 8 percent in
the second quarter -- the fifth straight quarter of net revenue yield
increases of 7 percent or better," he said. "The strong revenue yield
performance enabled us to grow net income over 23 percent in the second
quarter despite historically high fuel costs," Arison added.
Outlook for the Remainder of 2005
Regarding advance bookings, Arison stated, "We came into the second
quarter of 2005 with significantly less inventory remaining to be sold versus
the same time last year, despite an 8.5 percent increase in 2005 capacity."
He added that pricing for bookings taken during the second quarter this year
was significantly higher than last year, while booking volumes were lower
since there was less inventory remaining to sell. Arison further stated, "At
the end of the second quarter, we achieved higher occupancy rates for the last
six months of this year than at the same time last year, with higher average
prices, which puts us in an excellent position to achieve higher revenue
yields in the second half of 2005."
Assuming a continuing strong demand for travel, the company has increased
its expectation for net revenue yields for the last six months of 2005, on a
constant dollar basis, by approximately 1 percent to an increase of 4.5 to 5.5
percent, compared to last year. The company's forward guidance is the same in
both current dollars and constant dollars as the currency exchange rates the
company has used in its forward guidance ($1.23 to the euro and $1.83 to the
sterling) is approximately the same as the actual exchange rates in effect
during the second half of 2004. The company estimates that net cruise costs
per ALBD for the remainder of 2005 are expected to increase by 3 to 4 percent,
compared to 2004. The increase in forecasted costs per ALBD versus last year
is largely due to higher fuel prices. The company's cost guidance for fuel is
based on recent forward prices for fuel for the balance of the year, which is
30 percent higher than average prices for the last half of fiscal 2004.
Excluding the higher fuel costs, the company's forecast for net cruise costs
per ALBD for the balance of 2005 is approximately the same as the prior year.
Based on these estimates, the company expects that diluted earnings per
share for the year 2005 will increase approximately 21 percent, compared to
the prior year. Diluted earnings per share for 2005 are expected to be $2.70
(versus the company's prior guidance of $2.67 per share) with higher net
revenue yield expectations partly offset by higher fuel costs and a reduced
contribution to earnings from foreign currency translation.
For the third quarter of 2005, the company expects net revenue yields to
increase 4.5 to 5.5 percent, compared to last year. Net cruise costs per ALBD
are expected to be up 6 to 7 percent, compared to last year, primarily due to
forecasted higher fuel prices, and to a lesser extent, higher dry-dock
amortization and timing of other ship operating costs. Based on these
estimates, the company expects diluted earnings per share for the third
quarter of 2005 to be in the range of $1.33 to $1.35.
The company has one ship scheduled to enter service during the third
quarter of 2005. Carnival Cruise Lines' 2,974-passenger Carnival Liberty will
launch the line's first-ever Mediterranean cruise program beginning July 20,
2005.
Carnival has scheduled a conference call with analysts at 10 a.m. EST
(15.00 London time) today to discuss its 2005 second quarter earnings. This
call can be listened to live, and additional information can be obtained, via
Carnival Corporation & plc's Web site at http://www.carnivalcorp.com and
http://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 78 ships totaling more than 134,000 lower
berths with 12 new ships scheduled for delivery between July 2005 and April
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.
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, 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; proposed legislation mandating that U.S. citizens
carry a passport for travel to or from certain countries that were previously
exempt; 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 cancellation of a cruise or a series of
cruises; changing public and consumer tastes and 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 and interest rates and fuel, food,
payroll, insurance and security costs; changes in the tax, environmental,
health, safety, security and other regulatory regimes under which Carnival
Corporation & plc operates; continued availability of attractive port
destinations; the ability to successfully implement cost improvement plans and
to integrate business acquisitions; 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.
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended May 31, Six Months Ended May 31,
2005 2004 (1) 2005 2004 (1)
(in millions, except per share data)
Revenues
Cruise
Passenger tickets $1,899 $1,691 $3,740 $3,218
Onboard and other 570 526 1,116 973
Other 50 36 59 45
------ ------ ------ ------
2,519 2,253 4,915 4,236
------ ------ ------ ------
Costs and Expenses
Operating
Cruise
Commissions,
transportation
and other 383 376 814 760
Onboard and
other 95 97 191 178
Payroll and
related 284 249 558 486
Food 151 137 305 264
Other ship
operating 515 434 972 814
Other 42 33 54 43
------ ------ ------ ------
Total 1,470 1,326 2,894 2,545
Selling and
administrative 342 322 675 638
Depreciation and
amortization 225 200 446 388
------ ------ ------ ------
2,037 1,848 4,015 3,571
------ ------ ------ ------
Operating Income 482 405 900 665
------ ------ ------ ------
Nonoperating (Expense) Income
Interest income 6 4 9 9
Interest expense,
net of capitalized
interest (82) (70) (168) (136)
Other income
(expense),net 3 (7) 10 (2) (7)
------ ------ ------ ------
(73) (73) (149) (134)
------ ------ ------ ------
Income Before Income Taxes 409 332 751 531
Income Tax Benefit, Net 2 4
------ ------ ------ ------
Net Income $409 $332 $753 $535
------ ------ ------ ------
Earnings Per Share
Basic $0.51 $0.41 $0.94 $0.67
------ ------ ------ ------
Diluted $0.49 $0.40 (3) $0.91 $0.66 (3)
------ ------ ------ ------
Dividends Per Share $0.20 $0.125 $0.35 $0.25
------ ------ ------ ------
Weighted-Average Shares
Outstanding - Basic 805 803 805 801
------ ------ ------ ------
Weighted-Average Shares
Outstanding - Diluted 854 850 (3) 855 849 (3)
------ ------ ------ ------
(1) Reclassifications have been made to certain 2004 amounts to conform
to the current period presentation.
(2) Includes a $7 million gain from the settlement of litigation.
(3) Restated for the adoption in the fourth quarter of 2004 of EITF
No. 04-08.
CARNIVAL CORPORATION & PLC
SELECTED STATISTICAL AND SEGMENT INFORMATION
Three Months Ended May 31, Six Months Ended May 31,
2005 2004 (1) 2005 2004 (1)
(in millions, except statistical information)
STATISTICAL INFORMATION
Passengers
carried 1,687,459 1,565,903 3,306,332 2,912,868
Available lower
berth days (2) 11,711,830 11,120,445 23,298,274 21,183,100
Occupancy
percentage 104.8 % 102.8 % 104.3 % 102.4 %
SEGMENT INFORMATION
Revenues
Cruise $2,469 $2,217 $4,856 $4,191
Other 61 43 74 54
Intersegment
elimination (11) (7) (15) (9)
------- ------- ------ -------
$2,519 $2,253 $4,915 $4,236
------- ------- ------ -------
Operating expenses
Cruise $1,428 $1,293 $2,840 $2,502
Other 53 40 69 52
Intersegment
elimination (11) (7) (15) (9)
------- ------- ------ -------
$1,470 $1,326 $2,894 $2,545
------- ------- ------ -------
Selling and administrative
expenses
Cruise $325 $308 $647 $610
Other 17 14 28 28
------- ------- ------ -------
$342 $322 $675 $638
------- ------- ------ -------
Operating income (loss)
Cruise $499 $421 $939 $702
Other (17) (16) (39) (37)
------- ------- ------ -------
$482 $405 $900 $665
------- ------- ------ -------
(1) Reclassifications have been made to certain 2004 amounts to conform
to the current period presentation.
(2) Available lower berth days is the total passenger capacity for the
period, assuming two passengers per cabin, that we offer for sale,
which is computed by multiplying passenger capacity by revenue-
producing ship operating days in the period.
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 May 31, Six Months Ended May 31,
2005 2004 2005 2004
(in millions, except ALBDs and yields)
Cruise revenues
Passenger
tickets $1,899 $1,691 $3,740 $3,218
Onboard and
other 570 526 1,116 973
------ ------ ------ ------
Gross cruise
revenues 2,469 2,217 4,856 4,191
Less cruise costs
Commissions,
transportation
and other (383) (376) (814) (760)
Onboard and other (95) (97) (191) (178)
------ ------ ------ ------
Net cruise
revenues (1) $1,991 $1,744 $3,851 $3,253
------ ------ ------ ------
ALBDs 11,711,830 11,120,445 23,298,274 21,183,100
---------- ---------- ---------- ----------
Gross revenue
yields (1) $210.82 $199.37 $208.45 $197.88
------ ------ ------ ------
Net revenue
yields (1) $170.01 $156.81 $165.32 $153.60
------ ------ ------ ------
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,
2005 2004 2005 2004
(in millions, except ALBDs and costs per ALBD)
Cruise operating
expenses $1,428 $1,293 $2,840 $2,502
Cruise selling and
administrative
expenses 325 308 647 610
-------------------------- --------------------
Gross cruise costs 1,753 1,601 3,487 3,112
Less cruise costs
included in
net cruise revenues
Commissions,
transportation
and other (383) (376) (814) (760)
Onboard and other (95) (97) (191) (178)
----- ------ ------ -------
Net cruise
costs (1) $1,275 $1,128 $2,482 $2,174
------ ------ ------ ------
ALBDs 11,711,830 11,120,445 23,298,274 21,183,100
---------- ---------- ---------- ----------
Gross cruise
costs per
ALBD (1) $149.73 $144.03 $149.67 $146.92
-------- ------- ------- -------
Net cruise
costs per
ALBD (1) $108.92 $101.47 $106.54 $102.64
------- ------- ------- -------
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.
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 as described above,
which 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
2005 exchange rates have remained constant with the 2004
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. On a constant dollar basis, net cruise
revenues and net cruise costs would be $1.96 billion and
$1.25 billion for the three month period ended May 31, 2005, and
$3.80 billion and $2.44 billion for the six month period ended
May 31, 2005, respectively.
SOURCE Carnival plc
-0- 06/16/2005
/CONTACT: MEDIA - US: Tim Gallagher of Carnival Corporation & plc,
+1-305-599-2600, ext. 16000; or UK: Sophie Fitton, or Sarah Tovey, both of
Brunswick Group, +44-20-7404-5959; or INVESTOR RELATIONS - US\UK: Beth
Roberts of Carnival Corporation & plc, +1-305-406-4832/
/Web site: http://www.carnivalcorp.com
http://www.carnivalplc.com /
(CUK CCL)
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