SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 20, 2002
CARNIVAL CORPORATION
(Exact name of registrant as specified in its charter)
Republic of Panama 1-9610 59-1562976
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
3655 N.W. 87th Avenue, Miami, Florida 33178-2428
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (305) 599-2600
Item 5. Other Events.
On September 20, 2002, Carnival Corporation issued a press release
entitled "Carnival Corporation Reports Third Quarter Earnings" attached
hereto as Exhibit 99.1. The press release is incorporated herein by
reference.
Item 7. Financial Statements and Exhibits
The Exhibit 99.1 press release entitled "Carnival Corporation Reports
Third Quarter Earnings" dated September 20, 2002 is hereby incorporated by
reference.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: September 20, 2002
CARNIVAL CORPORATION
By: /s/Gerald R. Cahill
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Name: Gerald R. Cahill
Title: Senior Vice President-Finance
and Chief Financial and
Accounting Officer
Exhibit List
Exhibit Description
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99.1 Press release entitled "Carnival Corporation Reports
Third Quarter Earnings" dated September 20, 2002.
EXHIBIT 99.1
CONTACT: Tim Gallagher FOR IMMEDIATE RELEASE
CARNIVAL CORPORATION REPORTS THIRD QUARTER EARNINGS
MIAMI (09/20/02) -- Carnival Corporation (NYSE:CCL) reported net income
of $500.8 million ($0.85 Diluted EPS) on revenues of $1.44 billion for its
third quarter ended August 31, 2002, compared to net income of $495.0
million ($0.84 Diluted EPS) on revenues of $1.49 billion for the same
quarter in 2001.
Net income for the nine months ended August 31, 2002 was $824.6 million
($1.40 Diluted EPS) on revenues of $3.33 billion, compared to net income of
$809.9 million ($1.38 Diluted EPS) on revenues of $3.58 billion for the same
period in 2001.
Earnings for the third quarter of 2002 included a $34 million income
tax benefit from the company's Costa Cruise operation resulting from a new
Italian investment tax law. This was partially offset by a provision of $20
million related to a vessel write-down. In addition, there was a $13
million reduction in earnings in the third quarter of 2002 resulting from
canceled cruises during the quarter.
Cruise revenues for the third quarter of 2002 were 1.4 percent lower
than last year primarily because of a significant decline in the number of
guests purchasing air transportation from the company and lower cruise
ticket prices. This was partially offset by an increase in cruise capacity
of 2.2 percent. Net revenue yield (net revenue per available berth day
after deducting the cost of air transportation and travel agent commissions)
was down less than 1 percent compared to the previous year's third quarter.
This was considerably better than the company's earlier forecast of down 3
to 5 percent primarily due to the strengthening of the euro relative to the
U.S. dollar and stronger than expected pricing on close-to-sailing bookings
during the quarter.
Also impacting earnings for the third quarter was a 2.7 percent
increase in the company's cost per available berth day (excluding the cost
of air transportation and travel agent commissions). This increase in
cost per berth day was primarily due to the strengthening of the euro
relative to the U.S. dollar, higher fuel costs, higher advertising
expenditures, and the effect of the canceled cruises.
Commenting on the third quarter results, Carnival Corporation Chairman
and CEO Micky Arison said he was pleased that the company was continuing to
improve its performance since the events of September 11. "In spite of the
continuing economic uncertainties, political unrest and lingering effects of
September 11, we have experienced sequential yield improvement and expect
that trend to continue with net revenue yield comparisons turning positive
in the fourth quarter," Arison said. He noted that the net revenue yield
decline during the third quarter of less than 1 percent was a significant
improvement from the 5.3 percent decline reported for the second quarter of
this year.
During the third quarter of 2002, Carnival Cruise Lines announced that
it had reached an agreement with the Fincantieri shipyard for the
construction of a new 110,000-ton, 2,974-passenger "Conquest-class" vessel,
which is to be built at an approximate cost of $450-460 million for delivery
in late fall 2005. Arison noted that this was the second cruise ship order
by Carnival since September 11, which demonstrates the company's continued
belief in the long-term fundamentals of its business. In addition, he
pointed out that the company's "strong cash flows and balance sheet enable
it to continue to expand its cruise fleet, even during these uncertain
times."
In August 2002, Carnival Cruise Lines launched the new 2,124-passenger
Carnival Legend from Harwich, England, which has just completed a high-
profile European introduction. Next week, the Carnival Legend begins a
series of two-, three- and 11-day cruises from New York. After a pair of
six-day Bermuda cruises from Philadelphia and Baltimore, the ship will
launch eight-day Caribbean sailings from Fort Lauderdale, Fla., on Nov. 10.
Following these voyages, Carnival Legend will return to New York for a
unique eight-day Caribbean cruise program from May 13 to Oct. 12, 2003.
Looking to the fourth quarter of 2002, Arison noted that the tone of
bookings continues to provide confidence that fourth quarter net revenue
yields will increase over last year. "The booking curve continues to be
unusually close to the sailing date as it has throughout 2002, making it
more difficult to forecast net revenue yields. However, as expected,
fourth quarter bookings during the last two months have run considerably
higher than last year's levels although pricing for the fourth quarter is
slightly below the prior year. Because of the expected higher occupancy
levels for the fourth quarter, we now forecast net revenue yields to be up
between 1 to 3 percent," Arison explained.
Also during the fourth quarter of 2002, both Carnival Cruise Lines and
Holland America will introduce new classes of vessels to their fleets.
Carnival's largest passenger ship ever constructed, the 2,974-passenger
Carnival Conquest, is scheduled to enter service from New Orleans in mid-
November 2002. In addition, Holland America will also launch the 85,000-ton
Zuiderdam, the first ship in its new Vista-class series, in December 2002
from Fort Lauderdale. This 1,848-passenger vessel represents a 28 percent
increase in passenger capacity over the 1,440-passenger Volendam, the
largest ship currently in Holland America's fleet, and offers more than 85
percent of its cabins with ocean views, of which 80 percent have balconies.
Separately, Carnival is continuing to cooperate with the Federal Trade
Commission in its ongoing investigation, now nearing completion, with regard
to Carnival's pending pre-conditional offer for P&O Cruises.
The company has scheduled a conference call with analysts at 11 a.m.
EDT today to discuss its 2002 third quarter earnings. This call can be
listened to live, and additional information can be obtained at Carnival
Corporation's Web site at www.carnivalcorp.com.
Carnival Corporation is a global vacation and leisure travel provider
that operates Carnival Cruise Lines, the world's largest cruise line based
on passengers carried, Costa Cruises, Cunard Line, Holland America Line,
Seabourn Cruise Line, Windstar Cruises and Holland America Tours. Carnival
Corporation's six cruise brands operate 44 ships in the Caribbean, Europe,
Mexican Riviera, Alaska, South America and other worldwide destinations, and
have 15 new ships scheduled for delivery during the next four years.
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Special note regarding forward-looking statements
Certain statements in this announcement constitute "forward-looking
statements" within the meaning of the U.S. Private Securities Litigation
Reform Act of 1995. Carnival Corporation has tried, wherever possible, to
identify such statements by using words such as "anticipate," "assume,"
"believe," "expect," "forecast," "future," "intend," "plan" and words and
terms of similar substance in connection with any discussion of future
operating or financial performance. These forward-looking statements,
including those which may impact the forecasting of Carnival's net revenue
yields, booking levels, pricing, occupancy or business prospects, involve
known and unknown risks, uncertainties and other factors, which may cause
Carnival's actual results, performances or achievements to be materially
different from any future results, performances or achievements expressed or
implied by such forward-looking statements. Such factors include, among
others, the following: general economic and business conditions which may
impact levels of disposable income of consumers and the net revenue yields
for Carnival's cruise products; consumer demand for cruises and other
vacation options; other vacation industry competition; effects on consumer
demand of armed conflicts, political instability, terrorism, adverse media
publicity and the availability of air service; shifts in consumer booking
patterns; increases in vacation industry capacity, including cruise
capacity; continued availability of attractive port destinations; changes in
tax laws and regulations; changes and disruptions in financial and equity
markets; Carnival's financial and contractual counterparties' ability to
perform; Carnival's ability to implement its brand strategy, Carnival's
ability to implement its shipbuilding program and to continue to expand its
business worldwide; Carnival's ability to attract and retain shipboard crew;
changes in foreign currency and interest rates and increases in security,
food, fuel, and insurance costs ; delivery of new ships on schedule and at
the contracted prices; weather patterns and natural disasters; unscheduled
ship repairs and drydocking; incidents involving cruise ships; impact of
pending or threatened litigation; Carnival's ability to successfully
implement cost improvement plans; the continuing financial viability and/or
consolidation of Carnival's travel agent distribution system; Carnival's
ability to successfully integrate business acquisitions and changes in laws
and regulations applicable to Carnival.
These risks may not be exhaustive. Carnival operates in a continually
changing business environment, and new risks emerge from time to time.
Carnival cannot predict such risks nor can it assess the impact, if any, of
such risks on its business or the extent to which any risk, or combination
of risks may cause actual results to differ from those projected in any
forward-looking statements. Accordingly, forward-looking statements should
not be relied upon as a prediction of actual results. Carnival undertakes no
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise.
Carnival plans to file a registration statement on Form S-4 and a
statement on Schedule TO with the U.S. Securities and Exchange Commission in
connection with commencement of its pre-conditional offer to acquire P&O
Princess Cruises plc. The Form S-4 will contain a prospectus and other
documents relating to the pre-conditional offer. Carnival plans to mail the
prospectus contained in the Form S-4 to shareholders of P&O Princess when
the Form S-4 is filed with the SEC. The Form S-4, the prospectus and the
Schedule TO will contain important information about Carnival, P&O Princess,
the pre-conditional offer and related matters. Investors and stockholders
should read the Form S-4, the prospectus, the Schedule TO and the other
documents filed with the SEC in connection with the pre-conditional offer
carefully before they make any decision with respect to the pre-conditional
offer. The Form S-4, the prospectus, the Schedule TO and all other documents
filed with the SEC in connection with the pre-conditional offer will be
available when filed free of charge at the SEC's web site, at www.sec.gov.
In addition, the prospectus and all other documents filed with the SEC in
connection with the pre-conditional offer will be made available to
investors free of charge by writing to Tim Gallagher at Carnival
Corporation, Carnival Place, 3655 N.W. 87 Avenue, Miami, Florida, 33178-
2428.
In addition to the Form S-4, the prospectus, the Schedule TO and the
other documents filed with the SEC in connection with the pre-conditional
offer, Carnival is obligated to file annual, quarterly and current reports,
proxy statements and other information with the SEC. Persons may read and
copy any reports, statements and other information filed with the SEC at the
SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-732-0330 for further information on the
public reference room. Filings with the SEC also are available to the public
from commercial document-retrieval services and at the web site maintained
by the SEC at www.sec.gov.
Contact information:
For investor relations, please contact Beth Roberts, Tel: 1-305-599-
2600, ext. 19066, and for media inquiries, please contact Tim Gallagher,
Tel: 1-305-599-2600, ext. 16000, Carnival Corporation, Carnival Place, 3655
N.W. 87 Avenue, Miami, Florida 33178-2428.
CARNIVAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED NINE MONTHS ENDED
AUGUST 31, AUGUST 31,
2002 2001 2002 2001
(in thousands, except earnings per share)
Revenues $1,437,655 $1,489,918 $3,332,588 $3,576,649
Costs and Expenses
Operating 682,243 719,378 1,733,863 1,920,832
Selling and administrative 147,900 146,797 442,647 457,252
Depreciation and amortization 99,088 97,008(a) 281,431 280,958(a)
Impairment charge 20,000 101,389 20,000 101,389
949,231 1,064,572 2,477,941 2,760,431
Operating Income Before Loss
From Affiliated Operations 488,424 425,346 854,647 816,218
Loss From Affiliated
Operations, Net (44,024)
Operating Income 488,424 425,346 854,647 772,194
Nonoperating Income (Expense )
Interest income 10,762 12,972 25,177 22,750
Interest expense,
net of capitalized interest (28,974) (30,100) (86,440) (92,210)
Other income (expense), net 1,879 93,133(b) (5,251) 105,459(b)
Income tax benefit (expense) 28,673(c) (6,376) 36,472(c) 1,695
12,340 69,629 (30,042) 37,694
Net Income $500,764 $494,975 $824,605 $809,888
Earnings Per Share
Basic $0.85 $0.84 $1.41 $1.39
Diluted $0.85 $0.84 $1.40 $1.38
Weighted Average Shares
Outstanding Basic 586,672 586,078 586,496 584,698
Weighted Average Shares
Outstanding Diluted 587,917 587,510 588,117 586,744
(a) On December 1, 2001, the company adopted SFAS No. 142, "Goodwill and
Other Intangible Assets," which required the company to cease amortizing
its goodwill. Goodwill amortization was $5 million and $15 million in
the three and nine months ended Aug. 31, 2001, respectively.
(b) Other income included a gain of approximately $100 million from the
sale of the company's minority interest in Airtours, net of a charge of
$7 million for litigation expenses.
(c) Includes a $34 million income tax benefit from Costa Cruises
resulting from a new Italian investment tax law.
CARNIVAL CORPORATION
SELECTED STATISTICAL AND SEGMENT INFORMATION
THREE MONTHS ENDED NINE MONTHS ENDED
AUGUST 31, AUGUST 31,
2002 2001 2002 2001
(in thousands) (in thousands)
STATISTICAL NFORMATION
Passengers carried 1,036 994 2,640 2,596
Available lower berth days 5,524 5,405 15,842 15,500
Occupancy percentage 113.7% 113.0% 106.3% 107.0%
SEGMENT INFORMATION
Revenues
Cruise $1,339,181 $1,357,606 $3,207,042 $3,412,197
Tour 125,407 173,600 158,902 212,358
Intersegment elimination (26,933) (41,288) (33,356) (47,906)
$1,437,655 $1,489,918 $3,332,588 $3,576,649
Operating expenses
Cruise $614,738 $627,528 $1,637,333 $1,797,491
Tour 94,438 133,138 129,886 171,247
Intersegment elimination (26,933) (41,288) (33,356) (47,906)
$682,243 $719,378 $1,733,863 $1,920,832
Operating income (loss)
Cruise, excluding
impairment charge $493,002 $504,598 $885,346 $920,190
Cruise - impairment charge (20,000) (101,389) (20,000) (101,389)
Tour 18,558 24,847 (1,821) 6,686
Affiliated operations (44,024)
Corporate (3,136) (2,710) (8,878) (9,269)
$488,424 $425,346 $854,647 $772,194