Carnival Corporation & plc Reports A 40 Percent Increase In Full Year Earnings

MIAMI –Carnival Corporation &plc (NYSE/LSE: CCL; NYSE: CUK) announcedadjusted net income for the full year 2015of $2.1 billion, or $2.70diluted EPS, compared to$1.5 billion, or $1.93 diluted EPS, for the prior year.  Full year 2015U.S. GAAP net incomewas $1.8 billion, or $2.26diluted EPS,which includedunrealized losses (non-cash) on fuel derivatives of $332 million and other net charges of $17 million. Full year 2014 U.S. GAAP net income was $1.2 billion, or $1.56diluted EPS, which includedunrealized losses (non-cash) on fuel derivatives of $268 million and other net charges of $20 million. Revenues for the full year 2015 were $15.7 billioncompared to $15.9 billion for the prior year due tothe unfavorable impact from currency exchange rates of over $800 million.

Carnival Corporation &plc President and Chief Executive Officer Arnold Donald noted, “We nearly doubled our fourth quarter resultsand ended the year with 40 percent higher earnings.Strong operational execution delivered $0.25 per share higher earnings than the mid-point ofour full year 2015 December guidance,despite a $0.10drag from the net impact of currency and fuel prices. This year we achieved a 4.3 percent improvement (constant currency) in revenue yields compared to the prior yeardue to higher onboard revenues andincreasedticket pricesas we have driven demand in excess ofcapacity growth, while our ongoing efforts to leverage ourindustry-leading scale helped to contain costs.Our strong performanceled to record operating cash flow of well over $4 billion versus $3.4 billion last year,” Donald stated.

Key metrics for the fourth quarter 2015 compared to the prior year were as follows:

·         Net revenue yields (net revenue per available lower berth day or “ALBD”)increased 4.1 percentin constant currency, which was better thanthe company’s September guidance, up3 percent. Gross revenue yields decreased2.5 percent in current dollars due to changes in currency exchange rates.

·         Net cruise costs excluding fuel per ALBDincreased3.2 percent in constant currency, which was in line with September guidance, up3 percent. Gross cruise costs including fuel per ALBD decreased10.7 percent in current dollars.                  

·         Fuel prices declined46percent to $316per metric ton for 4Q 2015 from $584 per metric ton in 4Q 2014 and were better than September guidance of $366per metric ton.

·         Changes in currency exchange rates reduced earnings by $0.08 per share.

·         Adjusted net income was $389 million, or $0.50 diluted EPS, before U.S. GAAP unrealized losses (non-cash) on fuel derivatives of $117 million, or $0.15 diluted EPS. U.S. GAAP net income was $270 million, or $0.35 diluted EPS.

·         The company repurchased approximately 8 million shares under its $1 billion stock repurchase program.

Highlights during the fourth quarter included the grand opening of Amber Cove, a new Carnival Corporation cruise facility on the northern coast of the Dominican Republic, and the launch of P&O Cruises (Australia’s)Pacific Ariaand Pacific Eden, whichhave beenimpeccably appointed to suit Australian guests.  In October, Carnival Cruise Line and AIDA Cruises announced they will each enter the China market in 2017 with a second Carnival Cruise Line ship to be positioned there in 2018. In 2016, there is already a combined fleet of six ships from the Costa Cruises and Princess Cruises brands scheduled to operate in China.Also, Princess Cruises will introduce the Majestic Princess to the Chinese market in 2017.That ship is currently under construction and will be the first vessel built specifically for Chinese guests incorporating a unique blend of international and Chinese features. Carnival Corporation also recently announced the formation of a joint venture with the China State Shipbuilding Corporation and the China Investment Corporation aimed at accelerating the development and growth of the overall cruise industry in China including the planned launch of the first world-class, multi-ship domestic cruise brand in the Chinese market.  These latest developmentsfurther strengthen the company’s leading position in China, which is expected to, over time, surpass North America as the world’s largest cruising region.

                                                                                                                                                          

2016 Outlook 

At this time, cumulative advance bookings for the first three quarters of 2016are well ahead of the prior year at slightly higher constant currencyprices. Since September, booking volumes for the first three quarters of 2016 are in line with last year’s levels at higherprices.

Donald noted, “As we had anticipated, with less inventory remaining for sale, we have begun to sell at higher prices than the same time last year, particularly close to departure, affirming our expectation of continued yield improvement in 2016.”

Based on current booking trends, the company forecasts full year 2016 net revenue yields in constant currencyto be upapproximately 3 percent compared to the prior year, of which approximately 1 percent is due to an accounting reclassification for the Europe, Australia and Asia segment. The companyexpects net cruise costs excluding fuel per ALBDin constant currencyfor full year 2016 to be up approximately 2 percent,of which approximately 1.5 percent is also due to the reclassification. The reclassification has no impact on operating income.

Current currency exchange rates and fuel prices, net of fuel derivatives, are $0.22 per sharefavorablecompared to the prior year. Taking the above factors into consideration, the company forecasts full year 2016 adjusted earnings per share to be in the range of $3.10 to $3.40, compared to 2015adjustedearnings of $2.70 per share.

Looking forward, Donald stated, “We have accelerated progress toward and remain well positioned to achieve our double digit return on invested capital threshold in the next two to three years. Over time, we expect to continue to return excess cash to shareholders as demonstrated by our recent 20 percent increase in quarterly dividends and more than$400 million in share repurchases.”

Donald also noted that four new ships are scheduled to enter service for Carnival Corporation brands in 2016.  Holland America Line’s Koningsdam and AIDAprima will debut in April, Carnival Vista will enter service in May, and Seabourn Encore in December. Each vessel has a wide variety of exciting and innovative new features that will generate consumer buzz for those brands.

First Quarter 2016 Outlook 

First quarter constant currency net revenue yieldsare expected to be up 3.5 to 4.5 percent compared to the prior year. Net cruise costs excluding fuel per ALBD for the first quarter are expected to be2.5 to 3.5 percent higher in constant currency compared to the prior year.Based on the above factors, the company expects adjustedearnings for the first quarter 2016to be in the range of $0.28 to $0.32 per share,compared to 2015adjusted earnings of $0.20 per share.

Selected Key Forecast Metrics

Full Year 2016

First Quarter 2016

Year over year change:

Current Dollars

Constant Currency

Current Dollars

Constant Currency

Net revenue yields

Flat - up slightly

Approx. 3%

(0.5) to (1.5)%

3.5 to 4.5%

Net cruise costs excl. fuel / ALBD

Approx. 1%

Approx. 2%

0.0to1.0 %

2.5 to 3.5%

		Full Year 2016		First Quarter 2016
Fuel price per metric ton		$246		$239
Fuel consumption (metric tons in thousands)		3,260		800
Currency:   Euro		$1.10 to €1		$1.10to €1
Sterling		$1.51 to £1		$1.51 to £1
Australian dollar		$0.73 to A$1		$0.73 to A$1
Canadian dollar		$0.73to C$1		$0.73to C$1

Conference Call

The company has scheduled a conference call with analysts at 10:00 a.m. EST (3:00 p.m. GMT) today to discuss its 2015fourth quarter and full year 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 10 cruise brands in North America, Europe, Australia and Asia, comprised of Carnival Cruise Line, Fathom, Holland America Line, Princess Cruises, Seabourn, AIDA Cruises, Costa Cruises, Cunard, P&O Cruises (Australia) and P&O Cruises (UK).

Together, these brands operate 99 ships totaling216,000 lower berths with 18 new ships scheduled to be delivered between 2016 and 2022. Carnival Corporation &plc also operates Holland America Princess Alaska Tours, the leading tour companies in Alaska and the Canadian Yukon. Traded on both the New York and London Stock Exchanges, Carnival Corporation &plcis the only group in the world to be included in both the S&P500 and the FTSE 100 indices.