FOR IMMEDIATE RELEASE
CARNIVAL CORPORATION & PLC REPORTS
SECOND QUARTER RESULTS
MIAMI (June 22, 2012) – Carnival
Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) announced non-GAAP net income of $159
million, or $0.20 diluted earnings per share for the second quarter of
2012.
Reported U.S. GAAP net income, which includes unrealized losses on
fuel derivatives of $145 million, was $14 million,
or $0.02 diluted earnings
per share.
Net
income for the second quarter of 2011 was $206 million, or $0.26
diluted EPS. Revenues for the second quarter of 2012 were $3.5
billion compared to $3.6 billion for the prior year.
Carnival Corporation
& plc Chairman and CEO Micky Arison noted that non-GAAP earnings were
better than anticipated in the company’s March guidance due primarily to a
combination of higher than expected revenue yields and lower than expected
costs, partly attributed to non-recurring items, in the second quarter.
Commenting on the second
quarter, Arison said “Cruise ticket prices (excluding Costa) held firm close to
sailing which, combined with stronger than expected onboard revenues, drove
yields above prior year levels. Our North American brands performed well,
achieving a 3 percent revenue yield improvement compared to the prior year,
which more than offset slightly lower yields for our Europe, Australia and Asia
brands (excluding Costa). In addition,
continued focus on cost controls and fuel consumption helped to mitigate the
impact of higher fuel prices in the quarter.”
Key metrics for the second quarter 2012 compared to the
prior year were as follows:
·
Second
quarter results included $17 million, or $0.02 per share, of insurance proceeds
in excess of net book value which were previously expected to be received in
the third quarter, and $17 million, or $0.02 per share, received from a
litigation settlement.
·
On a constant dollar basis net
revenue yields (net revenue per available lower berth day, “ALBD”) decreased 1.4 percent
for 2Q 2012, which was better
than March guidance, down 2.5 to 3.5 percent. Excluding Costa, net revenue yields
increased 1.1 percent for 2Q 2012, which
was also higher than
March guidance of flat to down slightly. Gross revenue yields decreased 4.2 percent in current
dollars.
·
Net cruise costs per ALBD excluding fuel
and non-recurring items decreased 2.2 percent
in constant dollars, better
than March guidance of flat to down 1.0 percent. Gross
cruise costs per ALBD including fuel and non-recurring items decreased 3.6 percent in current dollars.
·
Fuel prices increased 12 percent
to $756 per metric ton for 2Q 2012 from $673 per metric ton in 2Q 2011, costing the company an additional
$71 million. Fuel prices were slightly lower than March guidance of $772 per metric ton.
·
In
March, the company entered into zero cost collars for an additional 19 percent
of its estimated fuel consumption for the second half of fiscal 2012 through
fiscal 2013, bringing the total covered to 38 percent over this period. The
company also has zero cost collars in place that cover 19 percent of its
estimated fuel consumption for fiscal 2014 and 2015. For further information on
the company’s fuel derivatives program see “Fuel Derivatives” below.
·
Three
new ships were delivered during the second quarter, Costa Fascinosa, AIDAmar
and Carnival Breeze, each featuring a variety of unique and exciting
innovations which have generated strong consumer and media interest.
2012 Outlook
Since
March, fleetwide booking volumes have continued to improve and are running well
ahead of the prior year at lower prices. For the last seven weeks, booking
volumes excluding Costa have increased 8 percent versus the prior year, while
booking volumes for Costa over the same time period are up 25 percent. For the
remainder of the year, cumulative advance bookings excluding Costa are three
occupancy points behind the prior year at slightly lower prices while
cumulative advance bookings for Costa are at lower occupancies and lower prices
compared with the prior year.
Looking forward, Carnival Corporation & plc Chairman
and CEO Micky Arison commented, “The increase in booking volumes indicates that
a progressive recovery is well underway and we are catching up following the
slowdown in bookings during wave season, our peak booking period. The
attractive pricing we have in the marketplace is clearly stimulating demand,
especially for the Costa brand. We are pleased to see the resurgence in
consumer demand for Costa, which is a testament to the brand’s long-standing
reputation for quality built over many decades.”
Excluding Costa, the company forecasts full year 2012
net revenue yields, on a constant dollar basis, to be down slightly. Including
Costa, the company expects a decline in net revenue yields of 3 to 4 percent
(constant dollars). The company has slightly reduced the mid-point of its 2012
yield guidance as the price incentives required to drive the booking volumes
needed to close the occupancy gap was more than had been previously anticipated
for the second half of the year. Full
year 2012 revenue yields for the North American brands are expected to be in
line with the prior year. Full year 2012 revenue yields for the European
brands, excluding Costa, are expected to be lower than the prior year.
Lower
net revenue yield expectations have been offset by greater than anticipated
cost reductions. The company expects net cruise costs, excluding fuel, per ALBD
for the full year 2012 to be down slightly compared with the prior year on a
constant dollar basis. In addition, lower fuel prices (net of forecasted realized
losses on fuel derivatives) partially offset by changes in currency exchange
rates are expected to increase full year 2012 earnings by $0.30 per share
compared to March guidance.
Taking
all the above factors into consideration, the company forecasts full year 2012
non-GAAP diluted earnings per share to be in the range of $1.80 to $1.90,
compared to the March guidance range of $1.40 to $1.70 per share and 2011
non-GAAP earnings of $2.42 per share.
Arison stated, “The long term
fundamentals of our business remain sound. As we look toward the future, we are
excited by the prospect for continued global expansion beyond our established markets
in North America and Western Europe. We are pursuing multiple opportunities to develop
emerging cruise markets including positioning a second Costa ship in China and through
a series of Princess cruises dedicated to the Japanese market in 2013.”
Third Quarter 2012 Outlook
Third
quarter constant dollar net revenue yields excluding Costa, are expected to decrease
3 to 4 percent (including Costa, expected to decrease 6 to 7 percent) compared
to the prior year. Net cruise costs excluding fuel per ALBD for the third
quarter are expected to be down slightly on a constant dollar basis compared to
the prior year. In addition, changes in currency
exchange rates partially offset by lower fuel prices (net of forecasted realized
losses on fuel derivatives) are expected to reduce third quarter earnings by
$0.03 per share compared to the prior year.
Based on the above factors, the
company expects non-GAAP diluted earnings for the third quarter 2012 to
be in the range of $1.42
to $1.46 per share versus 2011 non-GAAP
earnings of $1.69 per share.
Selected Key Forecast Metrics
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Full
Year 2012
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Third Quarter 2012
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Year over year change:
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Current
Dollars
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Constant Dollars
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Current
Dollars
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Constant Dollars
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Net revenue yields
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(5)
to (6)%
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(3)
to (4) %
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(9.5) to
(10.5)%
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(6) to
(7)%
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Net cruise costs excl. fuel / ALBD
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(2.5) to (3.5)%
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(0.5) to (1.5)%
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(4) to (5)%
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(0.5) to (1.5)%
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Full Year 2012
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Third Quarter 2012
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Fuel price per metric ton
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$677
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$620
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Fuel consumption (metric tons in thousands)
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3,379
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834
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Currency: Euro
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$1.29 to
€1
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$1.27 to €1
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Sterling
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$1.58 to
£1
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$1.57 to £1
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Conference Call
The company has scheduled a conference call
with analysts at 10:00 a.m. EDT (3:00 p.m. BST) today to discuss its 2012
second quarter results. 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 company in the world, with a portfolio of cruise brands in North
America, Europe, Australia and Asia, comprised of Carnival Cruise Lines,
Holland America Line, Princess Cruises, Seabourn, AIDA Cruises, Costa Cruises,
Cunard, Ibero Cruises, P&O Cruises (Australia) and P&O Cruises (UK).
Together, these brands operate 101 ships totaling 204,000
lower berths with seven new ships scheduled to be delivered between March 2013
and March 2016. Carnival Corporation & plc also operates Holland
America Princess Alaska Tours, the leading tour company 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
Carnival Corporation and Carnival plc and their
respective subsidiaries are referred to collectively in this release as
“Carnival Corporation & plc,” “our,” “us,” and “we.” Some of the
statements, estimates or projections contained in this release are
“forward-looking statements” that involve risks, uncertainties and assumptions
with respect to us, including some statements concerning future results, outlooks,
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, whenever possible, to identify these statements by using
words like “will,” “may,” “could,” “should,” “would,” “believe,” “depends,”
“expect,” “anticipate,” “forecast,” “future,” “intend,” “plan,” “estimate,”
“target,” “indicate” and similar expressions of future intent or the negative
of such terms. Because forward-looking
statements involve risks and uncertainties, there are many factors that could
cause our actual results, performance or achievements to differ materially from
those expressed or implied in this release.
Forward-looking statements include those statements that may impact,
among other things, the forecasting of our non-GAAP earnings per share (“EPS”);
net revenue yields; booking levels; pricing; occupancy; operating, financing
and tax costs, including fuel expenses; costs per available lower berth day;
estimates of ship depreciable lives and residual values; liquidity; goodwill
and trademark fair values and outlook. These factors include, but are not
limited to, the following: general economic and business conditions; increases
in fuel prices; accidents, the spread of contagious diseases and threats
thereof, adverse weather conditions or natural disasters and other incidents
affecting the health, safety, security and satisfaction of guests and crew; the
international political climate, armed conflicts, terrorist and pirate attacks,
vessel seizures, and threats thereof, and other world events affecting the
safety and security of travel; negative publicity concerning the cruise business
in general or us in particular, including any adverse environmental impacts of
cruising; litigation, enforcement actions, fines or penalties, including those
relating to the Costa Concordia
accident; economic, market and political factors that are beyond our control,
which could increase our operating, financing and other costs; changes in and
compliance with laws and regulations relating to the protection of persons with
disabilities, employment, environment, health, safety, security, tax and other
regulations under which we operate; our ability to implement our shipbuilding
programs and ship repairs, maintenance and refurbishments on terms that are
favorable or consistent with our expectations; increases to our repairs and
maintenance expenses and refurbishment costs as our fleet ages; lack of
continuing availability of attractive, convenient and safe port destinations;
continuing financial viability of our travel agent distribution system, air
service providers and other key vendors in our supply chain and reductions in
the availability of, and increases in the pricing for, the services and
products provided by these vendors;
disruptions and other damages to our information technology and other networks
and operations, and breaches in data security; competition from and
overcapacity in the cruise ship or land-based vacation industry; loss of key
personnel or our ability to recruit or retain qualified personnel; union
disputes and other employee relation issues; disruptions
in the global financial markets or other events may negatively affect the
ability of our counterparties and others to perform their obligations to us;
the continued strength of our cruise brands and our ability to implement our
brand strategies; our international operations are subject to additional risks
not generally applicable to our U.S. operations; geographic regions in which we
try to expand our business may be slow to develop and ultimately not develop
how we expect; our decisions to self-insure against various risks or our inability
to obtain insurance for certain risks at reasonable rates; fluctuations in
foreign currency exchange rates; whether our future operating cash flow will be
sufficient to fund future obligations and whether we will be able to obtain
financing, if necessary, in sufficient amounts and on terms that are favorable
or consistent with our expectations; risks associated with the dual listed
company arrangement and uncertainties of a foreign legal system as we are not
incorporated in the U.S. 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 stock
exchange rules, we expressly disclaim 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.
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