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Marine Log

September 20, 2007

Carnival reports record income

Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) reported record net income for its third quarter ended August 31, 2007 of $1.38 billion, or $1.67 diluted EPS, compared to net income for the third quarter of 2006 of $1.23 billion, or $1.49 diluted EPS. Revenues for the third quarter 2007 increased to $4.32 billion from $3.91 billion in the third quarter of 2006.

Net income for the nine months ended August 31, 2007 was also a record at $2.05 billion, or $2.51 diluted EPS, on revenues of $9.91 billion, compared to net income of $1.86 billion, or $2.25 diluted EPS, on revenues of $9.03 billion for the same period in 2006.

Carnival Corporation & plc Chairman and CEO Micky Arison said that third quarter results came in better than expected primarily due to stronger pricing on bookings taken closer to departure.

"Our earnings were up 12 percent driven largely by the successful introduction of new ships for both our North American and European brands in time for our peak summer season. Our North American brands enjoyed another strong European season, a solid Alaska season, and a modest year over year improvement in revenue yields in the Caribbean. The recovery in the Caribbean has continued as the demand for Caribbean cruises remains strong," Arison said.

The company's European brands benefited from strong improvements in operating results with increased revenue yields on a dollar basis due to stronger Euro and Sterling currencies. Local currency revenue yields were down against very strong comparisons with the previous year.

Outlook

On a cumulative basis, occupancy for advance bookings taken for the fourth quarter of 2007 and the first half of 2008 are ahead of last year with pricing on a current dollar basis up slightly compared to last year.

"For the balance of 2007 and into the first half of next year, bookings are well ahead of last year," Arison said.

He cited the company's pricing strategy of early discounts on Caribbean cruises stimulating strong booking volumes early in the year-- a strategy now driving revenue yield improvement into the fourth quarter.

"We've already seen Caribbean pricing improvement in the back half of this year, and we are optimistic that it will continue into the first half of 2008," Arison noted.

Carnival says net revenue yields for its North American brands should see continued improvement in the fourth quarter based on the positive trends in the Caribbean business. The European brands are also expected to perform well continuing to benefit from the strong Euro and Sterling.

For the fourth quarter of 2007, the company expects earnings to be in the range of $0.42 to $0.44 per share, down from $0.51 per share in 2006 primarily as a result of significantly higher fuel prices and timing of dry-dock expenses.

For the 2007 full year, compared to its prior June 2007 guidance, the company anticipates a slight improvement in its net revenue yield expectations. Excluding fuel, cost guidance for the full year remains unchanged on a constant dollar basis.

Despite increases in fuel prices the company expects full year 2007 earnings per share to be in the range of $2.92 to $2.94, toward the higher end of the company's previous guidance range of $2.85 to $2.95.

On September 14, Carnival began the operations of its 75 percent owned joint venture with Orizonia Corporation for a multi-ship Spanish cruise line, Iberocruceros. The new brand is operating the 1,244-passenger Grand Mistral and the 834-passenger Grand Voyager. In June 2008, Carnival Cruise Lines' 1,486-passenger Celebration will join the Iberocruceros fleet. The results of Iberocruceros will be consolidated into the company's financial statements beginning with the 2007 fourth quarter and have been incorporated into the company's fourth quarter and full year guidance.

At the end of the fourth quarter Cunard Line's 90,000-ton Queen Victoria, is expected to join its sisters, Queen Elizabeth 2 and Queen Mary 2 which will mark the first time ever that Cunard has had three Queens in service.

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