Interim Results

Carnival Corporation & plc Reports Second Quarter Earnings Carnival Corporation & plc today reports earnings for the second quarter ended 31 May 2003. This is the first time the earnings of Carnival Corporation and Carnival plc (formerly known as P&O Princess Cruises plc) have been combined, and this statement includes consolidated accounts and pro forma numbers. Financial Highlights: * Consolidated Q2 revenues increased 34.8% primarily due to the inclusion of six weeks of Carnival plc revenues and a 16.6% increase in Carnival Corporation standalone capacity * Consolidated net income (profit after tax) of $127.8m on revenues of $1.33bn (2002: $194.2m on $989.9m) * As anticipated, net and gross revenue yields were down significantly in the second quarter * Pro forma net revenue yields down 6.7% (pro forma gross revenues yields declined 6.3%) due largely to lower cruise pricing and occupancy * Earnings per share (diluted) of $0.19 (2002: $0.33) * Q2 EPS reduced by $0.02 per share due to litigation and other expenses associated with the dual listed company ("DLC") transaction Operational Highlights: * DLC with P&O Princess completed, on track to achieve synergies of $100m * Four ships launched during the period (Ocean Village, Adonia, AIDAaura and Costa Mediterranea) * Carnival Cruise Lines' 1,486-passenger Jubilee will be transferred to P&O Cruises Australia in fall 2004, doubling the size of the brand's operations in the region. Outlook: * Significant increase in bookings in the last five weeks, with booking levels during such five-week period running 54% higher than prior year's levels * Pricing showing some signs of improvement * Pro forma net revenue yields likely to be down 4-6% during the second half of 2003 * EPS expected to be $0.83 - $0.87 in Q3 and $0.24 - $0.28 in Q4 Commenting on these results, Chairman and Chief Executive Micky Arison said: "Given the concerns leading up to the war with Iraq and its eventual outbreak, along with the uncertain worldwide economy, we are satisfied with the performance of our brands in this extremely difficult environment for leisure travel. We were delighted to complete the DLC transaction with P&O Princess during the second quarter, the largest corporate transaction in our company's history. We have made significant strides in the integration of our two organizations and our integration teams have demonstrated energy and enthusiasm in achieving our integration synergy targets. "Clearly, the gap created by the dearth in bookings during the important wave period in the first and second quarters of this year will have significant impact on our third and fourth quarter results. I am encouraged, however, with the recent acceleration of bookings in both North America and Europe, which, if it continues, should help to set the stage for a stronger financial performance in 2004." Analyst conference call The company has scheduled a conference call with analysts at 15.00 London time (10 a.m. EDT) today to discuss its 2003 second quarter earnings. This call can be listened to live, and additional information can be obtained, via Carnival Corporation & plc's Web sites at www.carnivalcorp.com and www.carnivalplc.com. For additional information, including historical quarterly and annual pro forma data for Carnival Corporation & plc, please refer to the joint Current Report on Form 8-K filed on June 25, 2003, with the U.S. Securities and Exchange Commission. These documents can also be viewed on the company's Web sites at www.carnivalcorp.com and www.carnivalplc.com. A copy of the joint Current Report will be available shortly at the UKLA Document Viewing Facility of the Financial Services Authority at 25 The North Colonnade, London E14 5HS. Carnival Corporation & plc Carnival Corporation & plc is the largest cruise vacation group in the world, with a portfolio of 13 cruise brands in North America, Europe and Australia, comprised of Carnival Cruise Lines, Princess Cruises, Holland America Line, Costa Cruises, P&O Cruises, Cunard Line, Windstar Cruises, Seabourn Cruise Line, Ocean Village, Swan Hellenic, AIDA, A'ROSA, and P&O Cruises Australia. Together, these brands operate 68 ships totaling more than 105,800 lower berths with 15 new ships scheduled for delivery between now and mid-2006. Carnival Corporation & plc also operates three riverboats on Europe's Danube River and the leading tour companies in Alaska and the Canadian Yukon, Holland America Tours and Princess Tours. Traded on both the New York and London Stock Exchanges, Carnival Corporation & plc is the only group in the world to be included in both the S&P 500 and the FTSE 100 indices. Additional information can be obtained via Carnival Corporation & plc's Web sites at www.carnivalcorp.com and www.carnivalplc.com . Carnival Corporation & plc Reports Second Quarter Earnings MIAMI (06/25/03) -- Carnival Corporation & plc (NYSE: CCL; LSE) (NYSE: CUK) reported net income of $127.8 million ($0.19 Diluted EPS) on revenues of $1.33 billion for its second quarter ended May 31, 2003, compared to net income of $194.2 million ($0.33 Diluted EPS) on revenues of $989.9 million for the same quarter in 2002. Earnings per share for the second quarter of 2003 were reduced by $0.02 per share due to litigation and other charges associated with the dual listed company ("DLC") transaction with P&O Princess Cruises plc ("P&O Princess"). In addition, because of the seasonality of P&O Princess' business, the consolidation of P&O Princess' results reduced the company's second quarter 2003 earnings per share by $0.01 per share. Net income for the six months ended May 31, 2003 was $254.7 million ($0.40 Diluted EPS) on revenues of $2.37 billion, compared to net income of $323.8 million ($0.55 Diluted EPS) on revenues of $1.90 billion for the same period in 2002. Carnival Corporation and P&O Princess entered into a DLC structure on April 17, 2003, which effectively made Carnival Corporation and P&O Princess a single economic entity ("Carnival Corporation & plc" or the "company"). Also on that date, P&O Princess changed its name to Carnival plc and its year end to November 30. For reporting purposes, Carnival Corporation has accounted for the DLC transaction as an acquisition of Carnival plc. Consolidated financial results for the company for the second quarter and six months of 2003 include the results of Carnival Corporation for the entire period and the results of Carnival plc from April 17, 2003. Consolidated revenues for the second quarter 2003 increased 34.8 percent primarily due to the inclusion of six weeks of Carnival plc revenues and a 16.6 percent increase in Carnival Corporation standalone capacity, partially offset by lower gross revenue yields (gross revenues per available lower berth day). The decline in gross revenue yields was 7.2 percent in the second quarter, resulting primarily from a decline in cruise ticket prices, lower occupancy levels and reduced numbers of passengers purchasing air transportation from the company. In the cruise industry, most companies, including Carnival, consider net revenue yields as the most relevant measure of revenue performance. Net revenue yields represent gross revenues less the costs of air transportation, travel agent commissions and onboard revenues divided by the number of available lower berth days. Net revenue yields were down 8.6 percent in the second quarter of 2003, largely because of lower cruise ticket prices and occupancy levels. On a pro forma basis for the second quarter, assuming that the DLC transaction was completed and Carnival plc was consolidated for the full quarter in both years, net revenue yields declined 6.7 percent, while pro forma gross revenue yields declined 6.3 percent. For the second quarter of 2003, operating costs and selling, general and administrative expenses increased 52.5 percent compared to the second quarter of 2002. Approximately $247 million or 70 percent of the increase was due to the inclusion of Carnival plc and the remainder was primarily due to increased capacity and higher fuel costs. Gross operating costs per available lower berth day increased 5.9 percent compared to the second quarter of 2002. Gross operating costs per available lower berth day on a pro forma basis increased 5.2 percent for the combined entity. Net operating costs per available lower berth day (excluding costs of air transportation, travel agent commissions and onboard revenues, which are included in the computation of net revenue yields) increased 8.4 percent compared to the second quarter of 2002, largely because of Carnival plc's higher operating cost levels compared to Carnival Corporation and because of higher fuel costs. On a pro forma basis, net operating costs per available lower berth day increased 9.2 percent for the combined entity. The litigation charge in the second quarter of 2003 relates to the anticipated settlement of claims by Carnival plc shareholders whose tender of over 53 million Carnival plc shares in the partial share offer was wrongfully rejected by the receiving agent, Computershare Investor Services plc. The company has recorded a charge in the second quarter reflecting the full costs of reimbursing those shareholders for their losses. This litigation charge, along with other charges associated with the DLC transaction with P&O Princess, amounted to $16 million. "Given the concerns leading up to the war with Iraq and its eventual outbreak, along with the uncertain worldwide economy, we are satisfied with the performance of our brands in this extremely difficult environment for leisure travel," said Micky Arison, Carnival Corporation & plc Chairman and CEO. "We were delighted to complete the DLC transaction with P&O Princess during the second quarter, the largest corporate transaction in our company's history. We have made significant strides in the integration of our two organizations and our integration teams have demonstrated energy and enthusiasm in achieving our integration synergy targets," Arison added. The company launched several ships during the second quarter of 2003. In the United Kingdom, the 1,610-passenger Ocean Village was introduced under a new brand formed by P&O Cruises UK. The Ocean Village features an innovative "club cruising" concept, aimed at the active, younger traveler. The 2,010-passenger Adonia, a former Princess Cruises vessel, will also operate in the UK within the P&O Cruises UK fleet. In Germany, a new AIDA ship, the 1,270-passenger AIDAaura, entered service. For southern Europe, Costa Cruises' new 2,114-passenger Costa Mediterranea, which entered service just last week, will operate in the Mediterranean this summer. The company also recently rearranged the shipbuilding schedule of three cruise ships being constructed at Italy's Fincantieri shipyards to accommodate the construction of a new 116,000-ton cruise ship for Princess Cruises in North America. The 3,100-passenger Princess ship is expected to be delivered in May 2006. Earlier this week, the company announced that Carnival Cruise Lines' 1,486-passenger Jubilee will be transferred to P&O Cruises Australia in the fall of 2004, doubling the size of the brand's operations in the region. Regarding booking activity and pricing for sailings during the second half of 2003, although booking levels during the period leading up to and during the Iraqi war were approximately equal to the prior year's levels, they did not keep pace with the increase in the company's 2003 capacity. Pricing for cabins booked during this period was also well below last year's levels. From the period beginning with the end of the war through mid-May, booking levels increased over the prior year to levels approximately equal to the capacity increase in the second half of 2003, but pricing continued to be substantially below last year. However, during the five-week period between May 19 and June 22, 2003, there has been a more significant increase in booking activity, with booking levels for Carnival Corporation & plc during such period running 54 percent higher than the prior year's levels compared to a pro forma capacity increase of 19 percent in the second half of 2003. Pricing, although still below prior year levels, has also shown the first signs of improvement and the company is hopeful that this trend will continue. Because the booking curve remains very close to sailing, the forecasting of future results is less predictable than prior years. However, the company's best estimates are that net revenue yields, on a pro forma basis for the combined group, will be down between 4 percent to 6 percent for the second half of 2003. The company would expect to see sequential improvement in net revenue yields between the third and fourth quarters, if current booking trends continue. "Clearly, the gap created by the dearth in bookings during the important wave period in the first and second quarters of this year will have significant impact on our third and fourth quarter results. I am encouraged, however, with the recent acceleration of bookings in both North America and Europe, which, if it continues, should help to set the stage for a stronger financial performance in 2004," Arison said. Net operating costs per available lower berth day on a pro forma basis in the second half of 2003 are expected to be down slightly compared to the prior year. Based on these estimates, earnings per share for the third quarter are expected to be in a range of $0.83 to $0.87 and for the fourth quarter in a range of $0.24 to $0.28. Carnival has three new ships scheduled to enter service over the remainder of the year. In North America, Princess Cruises' 1,970-passenger Island Princess will enter service in Alaska on July 12, 2003, while Carnival Cruise Lines' new 2,974-passenger Carnival Glory will begin sailing July 14, 2003 from Port Canaveral, Fla. Holland America's 1,848-passenger Oosterdam, the second vessel of the line's new Vista-class series, will operate a series of European cruises beginning August 3, 2003. The company has scheduled a conference call with analysts at 10 a.m. EDT (15.00 London time) today to discuss its 2003 second quarter earnings. This call can be listened to live, and additional information can be obtained, via Carnival Corporation & plc's Web sites at www.carnivalcorp.com and www.carnivalplc.com. For additional information, including historical quarterly and annual pro forma data for Carnival Corporation & plc, please refer to the joint Current Report on Form 8-K filed on June 25, 2003, with the SEC. These documents can also be viewed on the company's Web sites at www.carnivalcorp.com and www.carnivalplc.com. A copy of the joint Current Report will be available shortly at the UKLA Document Viewing Facility of the Financial Services Authority at 25 The North Colonnade, London E14 5HS. Carnival Corporation & plc is the largest cruise vacation group in the world, with a portfolio of 13 cruise brands in North America, Europe and Australia, comprised of Carnival Cruise Lines, Princess Cruises, Holland America Line, Costa Cruises, P&O Cruises, Cunard Line, Windstar Cruises, Seabourn Cruise Line, Ocean Village, Swan Hellenic, AIDA, A'ROSA, and P&O Cruises Australia. Together, these brands operate 68 ships totaling more than 105,800 lower berths with 15 new ships scheduled for delivery between now and mid-2006. Carnival Corporation & plc also operates three riverboats on Europe's Danube River and the leading tour companies in Alaska and the Canadian Yukon, Holland America Tours and Princess Tours. Traded on both the New York and London Stock Exchanges, Carnival Corporation & plc is the only group in the world to be included in both the S&P 500 and the FTSE 100 indices. Cautionary note concerning factors that may affect future results Some of the statements contained in this earnings release are "forward-looking statements" that involve risks, uncertainties and assumptions with respect to Carnival Corporation, Carnival plc and Carnival Corporation & plc, including some statements concerning future results, plans, goals and other events which have not yet occurred. You can find many, but not all, of these statements by looking for words like "will," "may," "believes," "expects," "anticipates," "forecast," "future," "intends," "plans," and "estimates" and for similar expressions. Because forward-looking statements, including those which may impact the forecasting of earnings per share, net revenue yields, booking levels, pricing, occupancy, operating, financing and tax costs, costs per available lower berth day, estimates of ship depreciable lives and residual values or business prospects, involve risks and uncertainties, there are many factors that could cause Carnival Corporation's, Carnival plc's and Carnival Corporation & plc's actual results, performance or achievements to differ materially from those expressed or implied in this announcement. These factors include, but are not limited to, the following: achievement of expected benefits from the DLC transaction; risks associated with the DLC structure; liquidity and index inclusion as a result of the implementation of the DLC structure, including a possible mandatory exchange of Carnival plc shares that may occur under Carnival plc's constituent documents; risks associated with the uncertainty of the tax status of the DLC structure; general economic and business conditions, which may impact levels of disposable income of consumers and the net revenue yields for cruise brands of Carnival Corporation & plc; conditions in the cruise and land-based vacation industries, including competition from other cruise ship operators and providers of other vacation alternatives and increases in capacity offered by cruise ship and land-based vacation alternatives; the impact of operating internationally; the international political and economic climate, the recent military action in Iraq, other armed conflicts, terrorist attacks, availability of air service and other world events and adverse publicity and their impact on the demand for cruises; accidents and other incidents at sea affecting the health, safety, security and vacation satisfaction of passengers; the ability of Carnival Corporation & plc to implement its shipbuilding programs and brand strategies and to continue to expand its businesses worldwide; the ability of Carnival Corporation & plc to attract and retain shipboard crew and maintain good relations with employee unions; the ability to obtain financing on terms that are favorable or consistent with Carnival Corporation & plc's expectations; the impact of changes in operating and financing costs, including changes in foreign currency and interest rates and fuel, food, insurance and security costs; changes in the tax, environmental, health, safety, security and other regulatory regimes under which Carnival Corporation & plc operates; continued availability of attractive port destinations; the ability to successfully implement cost improvement plans and to integrate business acquisitions; continuing financial viability of Carnival Corporation & plc's travel agent distribution system; weather patterns or natural disasters; and the ability of a small group of shareholders effectively to control the outcome of shareholder voting. Forward-looking statements should not be relied upon as a prediction of actual results. Subject to any continuing obligations under applicable law or any relevant listing rules, Carnival Corporation & plc expressly disclaims any obligation to disseminate, after the date of this announcement, any updates or revisions to any such forward-looking statements to reflect any change in expectations or events, conditions or circumstances on which any such statements are based. CARNIVAL CORPORATION & PLC CONSOLIDATED STATEMENTS OF OPERATIONS THREE MONTHS ENDED SIX MONTHS ENDED MAY 31, MAY 31, 2003 2002 2003 2002 (in thousands, except earnings per share) Revenues $1,334,616 $ 989,899 $2,365,721 $1,896,430 Costs and Expenses Operating 819,981 534,777 1,435,175 1,054,340 Selling and administrative 212,068 142,122 389,186 293,524 Depreciation and amortization 134,725 92,589 241,208 182,343 1,166,774 769,488 2,065,569 1,530,207 Operating Income 167,842 220,411 300,152 366,223 Nonoperating (Expense) Income Interest income 9,096 7,752 13,325 14,415 Interest expense, net of capitalized interest (41,514) (28,011) (70,906) (57,467) Other (expense) income, net (11,156)(1) (12,087)(2) 3,572 (7,129) (43,574) (32,346) (54,009) (50,181) Income Before Income Taxes 124,268 188,065 246,143 316,042 Income Tax Benefit 3,527 6,136 8,531 7,799 Net Income $127,795 $194,201 $254,674 $323,841 Earnings Per Share Basic $0.19 $0.33 $0.40 $0.55 Diluted $0.19 $0.33 $0.40 $0.55 Weighted Average Shares Outstanding - Basic 688,937 586,520 637,916 586,395 Weighted Average Shares Outstanding - Diluted 690,118 588,779 638,949 588,194 (1) Includes $16 million of expenses related to litigation and other charges associated with the DLC transaction with P&O Princess. (2) Includes $9 million of losses, including related expenses, resulting from the sale of Holland America's former Nieuw Amsterdam, and $4 million of direct costs associated with cancelled cruises. Note: Commencing on April 17, 2003, the company's statements of operations include the consolidation of Carnival plc's results of operations. CARNIVAL CORPORATION & PLC SELECTED STATISTICAL AND SEGMENT INFORMATION THREE MONTHS ENDED SIX MONTHS ENDED MAY 31, MAY 31, 2003 2002 2003 2002 (in thousands) (in thousands) STATISTICAL INFORMATION Passengers carried 1,218 831 2,140 1,603 Available lower berth days 7,661 5,258 13,465 10,319 Occupancy percentage 98.5% 101.9% 100.3% 102.3% SEGMENT INFORMATION Revenues Cruise $1,309,057 $ 968,096 $2,336,532 $1,869,358 All other (1) 36,464 27,788 41,983 33,495 Intersegment revenues (10,905) (5,985) (12,794) (6,423) $1,334,616 $989,899 $2,365,721 $1,896,430 Operating expenses Cruise $795,848 $513,079 $1,405,258 $1,025,315 All other (1) 35,038 27,683 42,711 35,448 Intersegment expenses (10,905) (5,985) (12,794) (6,423) $819,981 $534,777 $1,435,175 $1,054,340 Selling and administrative expenses Cruise $203,872 $135,077 $373,372 $278,853 All other (1) 8,196 7,045 15,814 14,671 $212,068 $142,122 $389,186 $293,524 Operating income (loss) Cruise $177,832 $229,619 $321,389 $386,602 All other (9,990) (9,208) (21,237) (20,379) $167,842 $220,411 $300,152 $366,223 (1) All other includes the company's tour operations (Holland America Tours and Princess Tours) and its business travel agency (P&O Travel Ltd.). Note: Commencing on April 17, 2003, the company's statistical and segment information include Carnival plc's data. CARNIVAL CORPORATION & PLC HISTORICAL REGULATION G INFORMATION Gross and net revenue yields and gross and net revenue per diems were computed as follows (1): Three Months Ended Six Months Ended May 31, May 31, 2003 2002 2003 2002 (in thousands, except yields and per diems) Cruise revenues $1,309,057 $ 968,096 $2,336,532 $1,869,358 Less commissions, air transportation and other (256,290) (177,399) (458,388) (360,587) Net cruise revenues $1,052,767 $ 790,697 $1,878,144 $1,508,771 Available lower berth days ("ALBD's") 7,661 5,258 13,465 10,319 Gross revenue yields (2) $170.87 $184.12 $173.53 $181.16 Net revenue yields (3) $137.42 $150.38 $139.48 $146.21 Passenger cruise days ("PCD's") (4) 7,544 5,359 13,512 10,559 Gross revenue per diems (5) $173.52 $180.65 $172.92 $177.04 Net revenue per diems (6) $139.55 $147.55 $139.00 $142.89 Gross and net operating costs per ALBD were computed as follows (1): Three Months Ended Six Months Ended May 31, May 31, 2003 2002 2003 2002 (in thousands, except yields and per diems) Cruise operating expenses $795,848 $ 513,079 $1,405,258 $1,025,315 Less commissions, air transportation and other (256,290) (177,399) (458,388) (360,587) Cruise selling and administrative expenses 203,872 135,077 373,372 278,853 Net cruise costs $743,430 $ 470,757 $1,320,242 $943,581 ALBD's 7,661 5,258 13,465 10,319 Gross operating costs per ALBD (7) $130.49 $123.27 $132.09 $126.39 Net operating costs per ALBD (8) $97.04 $89.53 $98.05 $91.44 CARNIVAL CORPORATION & PLC PRO FORMA REGULATION G INFORMATION Pro forma gross and net revenue yields and gross and net revenue per diems were computed as follows (1) (10): Three Months Ended May 31, 2003 2002 (in thousands, except yields and per diems) Cruise revenues $1,592,937 $1,473,071 Less commissions, air transportation and other (335,293) (304,310) Net cruise revenues $1,257,644 $1,168,761 ALBD's 9,087 7,877 Gross revenue yields (2) $175.30 $187.01 Net revenue yields (3) $138.40 $148.38 PCD's (4) 8,925 7,985 Gross revenue per diems (5) $178.48 $184.48 Net revenue per diems (6) $140.91 $146.37 Pro forma gross and net operating costs per ALBD were computed as follows (1) (10): Three Months Ended May 31, 2003 2002 (in thousands, except yields and per diems) Cruise operating expenses $993,484 $824,350 Less commissions, air transportation and other (335,293) (304,310) Cruise selling and administrative expenses 262,969 211,213 Net cruise costs $921,160 $731,253 ALBD's 9,087 7,877 Gross operating costs per ALBD (7) $138.27 $131.47 Net operating costs per ALBD (8) $101.37 $92.83 NOTES TO HISTORICAL AND PRO FORMA REGULATION G INFORMATION (1) Carnival Corporation & plc uses net cruise revenue per available lower berth day ("net revenue yields"), net cruise revenue per passenger cruise day ("net revenue per diems") and net cruise costs per available lower berth day as significant financial measures of its cruise segment financial performance. Carnival Corporation & plc believes that net revenue yields and net revenue per diems are commonly used in the cruise industry to measure a company's pricing performance. These measures are also used for revenue management purposes and to compare the operating performance of the company with its competitors. In calculating net revenue yields and net revenue per diems, the company uses net cruise revenues rather than gross cruise revenues. Carnival Corporation & plc believes that "net cruise revenues" is a more meaningful measure in determining revenue yield than gross cruise revenues because it reflects the cruise revenues received by the company net of its most significant variable costs (travel agent commissions, cost of air transportation and certain other variable direct costs associated with onboard revenues). Substantially all of the remaining cruise costs are largely fixed once the company's ship capacity levels have been determined. Net operating cost per available lower berth day is the most significant measure used by the company to monitor its ability to control costs. In calculating this measure, the company deducts the same variable costs as described above, which are included in the calculation of net revenues. This is done to avoid duplicating these variable costs in the non-GAAP financial measures described above because these variable costs are directly associated with the revenues earned by the company. (2) Represent gross cruise revenues divided by ALBD's. (3) Represent net cruise revenues divided by ALBD's. (4) PCD's represent the number of cruise passengers multiplied by the number of revenue-producing ship operating days. (5) Represent gross cruise revenues divided by PCD's. (6) Represent net cruise revenues divided by PCD's. (7) Represent gross operating expenses divided by ALBD's. (8) Represent net cruise costs divided by ALBD's. (9) In this earnings release, Carnival Corporation & plc has not provided future gross revenue yields or gross operating costs per available lower berth day because it is unable to provide reconciliations of forecasted net cruise revenues to forecasted gross cruise revenues or forecasted net cruise costs to forecasted cruise operating expenses without unreasonable effort. The reconciliations would require Carnival Corporation & plc to forecast, with reasonable accuracy, the amount of air and other transportation costs that its forecasted cruise passengers would elect to purchase from the company (the "air/sea mix"). Since the forecasting of future air/sea mix involves several significant variables and the revenues from the sale of air and other transportation approximate the costs of providing that transportation, management focuses primarily on forecasts of net cruise revenues and costs rather than gross cruise revenues and costs. This does not impact, in any material respects, the company's ability to forecast its future results, as any variation in the air/sea mix has no material impact on the company's forecasted net cruise revenues or forecasted net cruise costs. (10) The pro forma information gives pro forma effect to the DLC transaction between Carnival Corporation and Carnival plc, which was completed on April 17, 2003. Management has prepared the pro forma information based upon the companies' historical financial information and, accordingly, the above information should be read in conjunction with the companies' historical financial statements, as well as pro forma information included in the companies' joint Current Reports on Form 8-K, dated May 29, 2003 and June 25, 2003. The DLC transaction has been accounted for as an acquisition of Carnival plc by Carnival Corporation, using the purchase method of accounting. The Carnival plc accounting policies have been conformed to Carnival Corporation's policies. Carnival plc's reporting period has been changed to the Carnival Corporation reporting period and the information presented above covers the same periods of time for both companies. The Carnival plc pro forma results for the three months ended May 31, 2003 include a reduction of approximately $13 million due to the major promotion and other expenses incurred by P&O Cruises UK's introduction into service of four vessels: the Oceana, Minerva II, Ocean Village and Adonia. Pursuant to Carnival plc's UK GAAP accounting policies, which were used prior to the completion of the DLC transaction, these expenses would have been initially deferred and then amortized to expense in future periods, instead of being expensed as incurred in order to conform the Carnival plc UK GAAP accounting policies to those U.S. GAAP accounting policies used by Carnival Corporation. In addition, Carnival plc is expected to receive insurance company and/or shipyard payments related to the Diamond Princess fire and the Island Princess delayed delivery. The present value of these payments, which approximates $99 million, has been recorded on the balance sheet of Carnival Corporation & plc as a Carnival plc fair value acquisition adjustment. Accordingly, the income originally expected to be recognized by Carnival plc of $6.8 million, $40.1 million, $30.6 million, $18.2 million and $3.2 million in the three months ended May 31, 2003, August 31, 2003, November 30, 2003, February 28, 2004 and May 31, 2004, respectively, will not be recognized in Carnival Corporation & plc's results, but will be accounted for as a collection of this receivable by the combined entity. The above pro forma information has been prepared as if the DLC transaction had occurred on December 1, 2001 and has not been adjusted to reflect any net transaction benefits. In addition, it excludes the costs related to the terminated Royal Caribbean transaction and the completion of the DLC transaction with Carnival Corporation, which were expensed by Carnival plc prior to April 17, 2003. Finally, the pro forma information does not purport to represent what the results of operations actually could have been if the DLC transaction had occurred on December 1, 2001 or what those results will be for any future periods. SOURCE Carnival Corporation -0- 06/25/2003 /CONTACT: Media: US - Tim Gallagher of Carnival Corporation & plc, +1-305-599-2600, ext. 16000, or UK - Sophie Fitton or Sarah Tovey, both of Brunswick Group, +44-0-20-7404-5959; or Investor Relations: US\UK - Beth Roberts of Carnival Corporation & plc, +44-0-79-5643-6104, or UK - Bronwen Griffiths, +44-0-23-8052-5231/ /Web site: http://www.carnivalcorp.com http://www.carnivalplc.com / (CCL CUK)

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