Filing under Rule 425 under
the Securities Act of 1933
and deemed filed under Rule 14d-2
of the Securities Exchange Act of 1934
Filing by: Carnival Corporation
Subject Company: P&O Princess Cruises plc.
SEC File No. of Princess: 001-15136
CONTACT: Tim Gallagher FOR IMMEDIATE RELEASE
---------------------
CARNIVAL CORPORATION REPORTS
FOURTH QUARTER AND FULL YEAR EARNINGS
MIAMI (12/20/01) - Carnival Corporation (NYSE:CCL) reported net income
of $116.3 million ($0.20 Diluted EPS) on revenues of $959.1 million for its
fourth quarter ended November 30, 2001, compared to net income of $193.8 million
($0.33 Diluted EPS) on revenues of $850.3 million for the same quarter in 2000.
Net income for the year ended November 30, 2001, was $926.2 million
($1.58 Diluted EPS) on revenues of $4.54 billion, compared to net income of
$965.5 million ($1.60 Diluted EPS) on revenues of $3.78 billion for the same
period in 2000.
Fourth quarter 2001 net income was reduced by $33 million, comprised of
an impairment charge of $39 million, primarily related to a write-down in the
carrying value of two ships, net of a Costa tax benefit of $6 million. Fourth
quarter 2000 included a Costa tax benefit of $27 million.
The company's fourth quarter comparable cruise results were also
adversely affected by the September 11 terrorist attacks, which impacted all
leisure travel. The significant reduction in demand for travel following the
tragic events of September 11 resulted in the company reporting lower
occupancies and prices during the 2001 fourth quarter. Comparable net revenue
yields (net revenue per available berth day) for the quarter were down by
approximately 7 percent compared to the fourth quarter of 2000.
Commenting on fourth quarter 2001 results, Carnival Corporation
Chairman and CEO Micky Arison said that "in light of the significant impact of
the September 11 events on the vacation market, the achievement of quarterly net
income of more than $116 million with occupancies of 98 percent is a testament
to the strength of our vacation products."
Looking to 2002, Arison indicated that booking levels have started to
recover from the significant slowdown in bookings experienced in the two months
following September 11. During the last five weeks, net booking levels have been
45 percent above prior year levels, although cumulative advance bookings for
2002 still remain well behind last year's levels at this time. Arison also noted
that 2002 pricing has improved but is still below last year's levels.
- more -
2001 Fourth Quarter Earnings - 2
At the present time the company's advance booking occupancy levels for
the first quarter of fiscal 2002, are approximately 92 percent, which is
approximately seven percentage points behind the levels existing at the same
time last year. Based on current pricing and booking trends, management
presently expects that net revenue yields for the first quarter of 2002 will be
down between 10 to 15 percent compared to last year.
Bookings for the second and third quarters of fiscal 2002 are also
behind last year's levels at this time with occupancy down by approximately 11
percentage points each quarter. Pricing on these bookings is also down from the
prior year. Arison indicated that, given the current booking trends, he is
optimistic that net revenue yield comparisons for the remainder of 2002 will
improve compared to the first quarter.
The company also recently changed the delivery schedule for Holland
America's Vista-class newbuilds, assigning one slot to Cunard Line and signing
an option on a fifth newbuild. The new delivery schedule for Holland America is
as follows: Zuiderdam, November 2002; Oosterdam, June 2003; Vista #3, April
2004; Vista #4, October 2005; and option ship, May 2006. The new 85,000-ton
Cunard ship is scheduled for delivery in January 2005, and will target the U.K.
vacation market.
Based on these new delivery dates, the company's shipbuilding
commitments for the fiscal years 2002 through 2005 are now estimated to be
approximately $1.75 billion, $1.5 billion, $2.0 billion and $700 million,
respectively. In addition, the year over year percentage increase in the
company's average passenger capacity resulting from the delivery of ships
currently under contract for fiscal 2002 through 2006 is expected to approximate
4.5 percent, 16.5 percent, 17.3 percent, 10.6 percent and 2.5 percent,
respectively. Carnival does not expect to reschedule any further deliveries.
Arison pointed out that the company continues to be confident that the
fundamental long-term drivers of its growth remain intact. "To enable us to
overcome challenges in these times of increased uncertainty, as well as to take
advantage of opportunities as they present themselves, it is important for us to
maintain our solid operating margins and strong balance sheet." Carnival
currently has more than $2.4 billion of cash, short-term investments and undrawn
credit lines, and also relatively low debt levels. As a result of its financial
strength and operating results, the company believes that it maintains the
highest credit ratings in the leisure industry.
On December 16, 2001, the company announced its pre-conditional offer
to acquire P&O Princess Cruises plc for approximately $4.6 billion in cash and
Carnival common stock. [Note 2] [Note 3]
- more -
2001 Fourth Quarter Earnings - 3
Carnival has scheduled a conference call with analysts at 10 a.m. EST
(3 p.m. UK time) today to discuss its fourth quarter and full year earnings.
This call can be listened to live at the company's Web site at
WWW.CARNIVALCORP.COM.
Carnival Corporation is comprised of Carnival Cruise Lines, the world's
largest cruise line based on passengers carried, Holland America Line, Costa
Cruises, Cunard Line, Seabourn Cruise Line and Windstar Cruises. Carnival
Corporation's various brands operate 43 ships in the Caribbean, Alaska, Europe,
Mexican Riviera, South America and other worldwide destinations.
Additional information can be obtained via Carnival Corporation's Web
site at WWW.CARNIVALCORP.COM.
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NOTE 1: Statements in this press release relating to matters that are not
historical facts are forward-looking statements. All forward-looking statements,
including those which may impact the forecasting of Carnival Corporation's net
revenue yields, booking levels, price, occupancy or business prospects, involve
known and unknown risks, uncertainties and other factors, which may cause the
actual results, performances or achievements of Carnival Corporation to be
materially different from any future results, performances or achievements
expressed or implied by such forward-looking statements. Such factors include
general economic and business conditions; increases in cruise industry and
vacation industry capacity; other vacation industry competition; the ability of
the company to implement its shipbuilding program and to continue to expand its
business outside the North American market; consumer demand for cruises and
other vacation options; the effects on consumer demand of armed conflicts,
political instability, terrorism, the availability of air service and adverse
media publicity; incidents involving cruise ships; continued availability of
attractive port destinations; impact of pending or threatened litigation;
changes in tax and other laws and regulations affecting Carnival and other
factors which are described in further detail in Carnival's filings with the
Securities and Exchange Commission.
For investor inquiries, please contact Beth Roberts, Tel: (011) 44 771 0945 361.
For press 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.
NOTE 2: Carnival Corporation plans to file a registration statement on Form S-4
and a statement on Schedule TO with the SEC in connection with its
pre-conditional offer to acquire P&O Princess Cruises plc. Carnival Corporation
plans to mail the prospectus contained in the Form S-4 to stockholders of P&O
Princess Cruises plc 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
Corporation, P&O Princess Cruises plc, the 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 offer carefully
before they make any decision with respect to the offer. The Form S-4, the
prospectus, the Schedule TO and all other documents filed with the SEC in
connection with the 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 offer will be made available
to investors free of charge by writing to: Carnival Corporation, Investor
Relations, Carnival Place, 3655 N.W. 87 Avenue, Miami, Florida 33178-2428.
In addition to the Form S-4, prospectus, the Schedule TO and the other documents
filed with the SEC in connection with the offer, Carnival is obligated to file
annual, quarterly and special reports, proxy statements and other information
with the SEC. You 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.
NOTE 3: Any person who, alone or acting together with any other person(s)
pursuant to an agreement or understanding (whether formal or informal) to
acquire or control securities of P&O Princess or Carnival, owns or controls, or
becomes the owner or controller, directly or indirectly, of one per cent or more
of any class of securities of P&O Princess or Carnival is generally required
under the provision of Rule 8 of the City Code to notify the London Stock
Exchange and the Panel of every dealing in such securities during the period
from December 16, 2001, until the first closing date of the Offer or, if later,
the date on which the Offer becomes, or is declared, unconditional as to
acceptances or lapses. Disclosure should be made on an appropriate form before
12 noon (London time) on the business day following the date of the dealing
transaction. These disclosures should be sent to the Company Announcements
Office of the London Stock Exchange (fax number: + 44 20 7588 6057) and to the
Panel (fax number: + 44 20 7256 9386).
2001 Fourth Quarter Earnings - 4
CARNIVAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED TWELVE MONTHS ENDED
NOVEMBER 30, NOVEMBER 30,
------------- ------------
2001 2000 2001 2000
---- ---- ---- ----
(in thousands, except earnings per share) (in thousands, except earnings per share)
REVENUES $ 959,102 $ 850,326 $ 4,535,751 $ 3,778,542
COSTS AND EXPENSES:
Operating expenses 547,898 481,057 2,468,730 2,058,342
Selling and administrative 161,412 126,368 618,664 487,403
Depreciation and amortization 91,266 76,527 372,224 287,667
Impairment charge 38,989 140,378
---------- ---------- ----------- -----------
839,565 683,952 3,599,996 2,833,412
---------- ---------- ----------- -----------
OPERATING INCOME BEFORE
INCOME (LOSS) FROM
AFFILIATED OPERATIONS 119,537 166,374 935,755 945,130
INCOME (LOSS) FROM AFFILIATED
OPERATIONS, NET 42,189 (44,024) 37,828
---------- ---------- ----------- -----------
OPERATING INCOME 119,537 (1) 208,563 891,731 (1) 982,958
NONOPERATING (EXPENSE) INCOME:
Interest income 11,505 2,455 34,255 16,506
Interest expense, net (28,482) (16,174) (120,692) (41,372)
Other income (expense), net 3,190 (3,781) 108,649 (2) 8,460
Income tax benefit (expense) 10,562 2,732 12,257 (1,094)
---------- ---------- ----------- -----------
(3,225) (14,768) 34,469 (17,500)
---------- ---------- ----------- -----------
NET INCOME $ 116,312 $ 193,795 $ 926,200 $ 965,458
========== ========== =========== ===========
EARNINGS PER SHARE:
Basic $ 0.20 $ 0.33 $ 1.58 $ 1.61
========== ========== =========== ===========
Diluted $ 0.20 $ 0.33 $ 1.58 $ 1.60
========== ========== =========== ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC 586,165 584,474 585,064 599,665
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED 587,080 586,350 586,862 601,912
(1) EXCLUDING THE $39 MILLION AND $140 MILLION IMPAIRMENT CHARGE, OPERATING
INCOME WOULD BE $159 MILLION AND $1.03 BILLION FOR THE THREE AND TWELVE
MONTHS ENDED NOVEMBER 30, 2001, RESPECTIVELY.
(2) INCLUDES A GAIN OF APPROXIMATELY $100 MILLION FROM THE SALE OF THE
COMPANY'S MINORITY INTEREST IN AIRTOURS PLC.
NOTE: COMMENCING IN FISCAL 2001, THE COMPANY'S STATEMENTS OF OPERATIONS INCLUDED
THE CONSOLIDATION OF COSTA'S RESULTS OF OPERATIONS. IN FISCAL 2000, THE
COMPANY'S 50 PERCENT INTEREST IN COSTA WAS INCLUDED IN AFFILIATED OPERATIONS.
2001 Fourth Quarter Earnings - 5
CARNIVAL CORPORATION
SELECTED STATISTICAL AND SEGMENT INFORMATION
THREE MONTHS ENDED TWELVE MONTHS ENDED
NOVEMBER 30, NOVEMBER 30,
------------- ------------
2001 2000 2001 2000
---- ---- ---- ----
(in thousands) (in thousands)
STATISTICAL INFORMATION:
Passengers carried 790 674 3,385 2,669
Available lower berth days 5,185 4,080 20,685 15,888
Occupancy percentage 97.9% 103.4% 104.7% 105.4%
SEGMENT INFORMATION:
Revenues:
Cruise $ 945,745 $ 831,857 $ 4,357,942 $ 3,578,372
Tour 17,125 22,643 229,483 259,662
Intersegment (3,768) (4,174) (51,674) (59,492)
---------- ---------- ----------- -----------
$ 959,102 $ 850,326 $ 4,535,751 $ 3,778,542
========== ========== =========== ===========
Operating expenses:
Cruise $ 536,011 $ 465,495 $ 2,333,502 $ 1,910,371
Tour 15,655 19,736 186,902 207,463
Intersegment (3,768) (4,174) (51,674) (59,492)
---------- ---------- ----------- -----------
$ 547,898 $ 481,057 $ 2,468,730 $ 2,058,342
========== ========== =========== ===========
Operating income (loss):
Cruise, excluding
impairment charge $ 172,530 $ 182,628 $ 1,092,720 $ 957,226
Tour, excluding
impairment charge (11,112) (6,967) (4,426) 7,664
Impairment charge (38,989) (140,378)
Affiliated Operations 42,189 (44,024) 37,828
Corporate (2,892) (9,287) (12,161) (19,760)
---------- ---------- ----------- -----------
$ 119,537 $ 208,563 $ 891,731 $ 982,958
========== ========== =========== ===========
NOTE: COMMENCING IN FISCAL 2001, THE COMPANY'S STATEMENTS OF OPERATIONS AND
SELECTED STATISTICAL INFORMATION INCLUDED THE CONSOLIDATION OF COSTA'S RESULTS
OF OPERATIONS. IN FISCAL 2000, COSTA'S RESULTS OF OPERATIONS WERE INCLUDED IN
AFFILIATED OPERATIONS AND WERE NOT INCLUDED IN THE 2000 STATISTICAL INFORMATION.
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