8-KOther Events

CARNIVAL CORP 8-K Report (Dec 18, 2003)

Filed December 18, 2003For Securities:CCL

Summary

Carnival Corporation & plc reported fourth quarter and full-year 2003 earnings in line with previous guidance, as detailed in their December 18, 2003, 8-K filing. The company posted net income of $205 million ($0.26 Diluted EPS) on revenues of $1.82 billion for the fourth quarter, and $1.19 billion ($1.66 Diluted EPS) on $6.72 billion in revenue for the full year. These results reflect the consolidation of P&O Princess following the dual listed company (DLC) transaction on April 17, 2003, which created a significantly larger and more integrated global vacation company. The report highlights strong operational performance despite a challenging leisure industry environment, underscored by the successful integration of P&O Princess and the delivery of seven new ships in 2003. The company also announced a 19% increase in its regular quarterly dividend to $0.125 per share. Looking ahead to 2004, Carnival expressed optimism, anticipating a "transforming year" driven by new ship deliveries across key brands and projecting pro forma net revenue yields to increase by 2-4%, with expected synergies from the merger contributing positively to cost management.

Key Highlights

  • 1Fourth quarter 2003 net income was $205 million, or $0.26 Diluted EPS, meeting company guidance.
  • 2Full-year 2003 net income was $1.19 billion, or $1.66 Diluted EPS, on revenues of $6.72 billion.
  • 3The Dual Listed Company (DLC) transaction with P&O Princess, effective April 17, 2003, significantly expanded the company's scale and scope.
  • 4Seven new ships were launched in 2003, a company record, enhancing capacity and brand presence.
  • 5The regular quarterly dividend was increased by 19% to $0.125 per share.
  • 6For 2004, the company forecasts pro forma net revenue yields to increase by 2-4%, driven by new ship deliveries and strengthened booking trends.
  • 7Anticipated annual synergies of $100 million from the P&O Princess combination are expected to be realized in full-year 2004.

Frequently Asked Questions

The merger with P&O Princess, effective April 17, 2003, created a Dual Listed Company (DLC) structure. For reporting purposes, Carnival Corporation accounted for this as an acquisition. Consequently, consolidated financial results for the fourth quarter of 2003 include the full quarter's results for both entities. The twelve-month results include Carnival Corporation for the entire period and Carnival plc from April 17, 2003. This significantly increased reported revenues and operating costs compared to 2002.

Carnival Corporation & plc expressed strong optimism for 2004, projecting it to be a 'transforming year.' They anticipate pro forma net revenue yields to increase by 2-4%, supported by the delivery of new ships across five strong brands, including the highly anticipated Queen Mary 2. Booking levels have shown significant improvement, and pricing is stable to slightly ahead of last year. The company expects to achieve $100 million in synergies from the P&O Princess merger.

On a pro forma basis, net revenue yields declined 4.1% in Q4 2003 compared to the prior year, primarily due to lower cruise ticket prices. However, pro forma net cruise costs per available lower berth day decreased by 3.5%, reflecting synergy and scale benefits. Looking to 2004, the company anticipates pro forma net revenue yields to increase 2-4%, while costs per available lower berth day are expected to be flat compared to pro forma 2003 costs, despite factors like a weaker U.S. dollar and higher ship introduction costs.

The company noted several factors that could affect future results, including general economic and business conditions impacting consumer disposable income, competition within the cruise and vacation industries, international political and economic climate, terrorist attacks, accidents at sea, their ability to implement shipbuilding and expansion plans, labor relations, financing availability, fluctuating operating and financing costs (fuel, currency, interest rates), regulatory changes, and weather patterns or natural disasters.