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Company Profile of Carnival Corporation & plc
Company Profile of Carnival Corporation & plc - May 3rd, 2011
Carnival Corporation & plc (NYSE: CCL, LSE: CCL, and NYSE: CUK), is a British-American-Panamanian corporation, and the world's largest cruise ship operator. It is a dual listed company, with headquarters at Carnival Place in the Doral suburb of Miami, Florida, USA and at Carnival House in Southampton, England, UK. Carnival Corporation and Carnival plc are separate listed companies and have different shareholder bodies, but they jointly own all the operating companies in the group. Carnival Corporation owns the majority stake, however as a condition of the merger between Carnival Corporation and P&O Princess Cruises PLC in 2002, it was agreed that P&O Princess would be relisted as Carnival plc in London, remaining as a separate company with a predominantly British shareholder body and largely retaining the P&O Princess executive team. Carnival Corporation and Carnival plc stocks are currently traded on the London Stock Exchange (LSE: CCL) and the New York Stock Exchange (NYSE: CUK and NYSE: CCL)
Carnival Corporation, incorporated in 1972, is a cruise and vacation company. The Company has a portfolio of cruise brands and is a provider of cruises to vacation destinations. The Company has two cruise segments: North America, and Europe, Australia & Asia (EAA). Its North America segment cruise brands include Carnival Cruise Lines, Holland America Line, Princess Cruises (Princess) and Seabourn. Its EAA segment cruise brands include AIDA Cruises (AIDA), Costa Cruises (Costa), Cunard, Ibero Cruises (Ibero), P&O Cruises (UK) and P&O Cruises (Australia). In addition to its cruise brands, the Company has a Cruise Support segment that includes its cruise port and related facilities located in Cozumel, Mexico; Grand Turk, Turks and Caicos Islands; Long Beach, California, and Roatan, Honduras. Cruise Support also includes other corporate-wide services. In addition to its cruise operations, the Company owns Holland America Princess Alaska Tours, which is a tour company in Alaska and the Canadian Yukon, which primarily complements its Alaska cruise operations. As of November 30, 2010, the tour company owned and operated, among other things, 15 hotels or lodges, with 3,420 guest rooms, 395 motorcoaches and 20 domed rail cars. As of November 30, 2010, the Company owned a 40% interest in Grand Bahamas Shipyard Ltd. (GBSL).
Carnival Cruise Lines
Carnival Cruise Lines brand is called Fun Ships, with 22 contemporary ships operating voyages generally from 3 to 8 days. These ships call year-round in ports in the Caribbean, including The Bahamas, and the Mexican Riviera, with the Caribbean being the principal area of sailing. In addition, it sails on seasonal cruises to Europe, Alaska, New England and Canada, Bermuda, Hawaii and the Panama Canal. In 2010, it launched Punchliner Comedy Club.
Princess operates a fleet of 17 modern ships. As of November 30, 2010, it offered 113 itineraries to 319 destinations, with cruises generally from 7 to 14 days. Princess is a cruise line operating in regions worldwide, including Europe, Alaska, Australia, Asia, Panama Canal, Hawaii and South America. Some of Princess’ Caribbean cruise offerings feature a private island destination that Princess leases and operates, known as Princess Cays, which is located on the island of Eleuthera in The Bahamas. Princess deploys two ships on a year-round basis on cruises departing from home ports in Australia.
Holland America Line
Holland America Line operated a fleet of 15 ships as of November 30, 2010. In July 2010, Holland America Line launched its second Signature-class ship, Nieuw Amsterdam. The 2,106-passenger capacity Nieuw Amsterdam is a sister ship to Eurodam, which was delivered in July 2008. Holland America Line calls on 354 destinations in 98 countries and territories on all seven continents, including Antarctica. While the majority of cruises are from 7 to 21 days, Holland America Line also offers longer, exotic Grand Voyages up to 70 days, plus an annual Grand World Voyage of 110 days. In the Caribbean, ships visit Holland America Line’s private island in The Bahamas, Half Moon Cay.
Seabourn provides cruising vacations on small-ship that focus on personalized services, accommodations, cuisine and experiences. Seabourn’s ships offer destinations worldwide, including Europe, Asia, the South Pacific Islands, Australia and the Americas, with cruises generally from 7 to 14 days, with some of longer length, including a 111-day world cruise. As of November 30, 2010, Seabourn operated three 208-passenger capacity ships and two 450-passenger capacity ships.
P&O Cruises (UK)
P&O Cruises (UK) is a cruise operator in the United Kingdom, with seven ships of different sizes. P&O Cruises (UK)’s ships visit 270 destinations in 90 countries, with cruises ranging from two-day cruise breaks to world cruises of 87 to 109 days. The majority of cruise vacations in the summer are 7 to 14 days in duration and depart from Southampton, England cruising to the Mediterranean Sea, the Baltic Sea, the Norwegian fjords or the Atlantic Isles. In the fall and winter, P&O Cruises (UK) offers cruises embarking in the Caribbean and Mediterranean Sea, world cruises and longer cruises departing from Southampton, England to the Mediterranean Sea, the Atlantic Isles and the Caribbean.
Cunard operated three ships as of November 30, 2010. In October 2010, Cunard took delivery of the 2,068-passenger capacity Queen Elizabeth, which combined with Queen Victoria and Queen Mary 2. Cunard’s voyages range from 7 to 14 days with two world cruises of 96 and 103 days.
Costa is Italy’s and Europe’s Cruise Line based on guests carried and ship capacity.
Costa is one of the cruise brands marketed in Europe. In 2010, Costa took delivery of one cruise ship, Costa Deliziosa, and operated 14 contemporary ships as of November 30, 2010. Costa also owns and operates the AIDA and Ibero brands. Costa calls on 250 ports worldwide, with 100 different itineraries, most from 7 to 11 days. In the summer months, Costa deploys its ships in the Mediterranean and Northern Europe areas. In the winter months, Costa deploys its ships in the Mediterranean Sea, South America, the Arabian Gulf, the Caribbean, the Red Sea and the Indian Ocean.
AIDA is one of the cruise brands in the German cruise market. As of November 30, 2010, AIDA operated seven contemporary ships. AIDA offers its guests cruises generally from 5 to 14 days, while calling on approximately 170 ports. During the summer, the AIDA ships sail in the North Sea, the Baltic Sea, the Mediterranean Sea and New England and Canada. During the winter, AIDA ships sail in the Caribbean, Central America, the Atlantic Isles, the Western Mediterranean Sea, the Far East, the Arabian Gulf and Trans-Suez Canal passages. AIDA also offers cruises to South America and up the Amazon River.
As of November 30, 2010, Ibero operated four contemporary cruise ships, including Grand Holiday, which entered Ibero service in May 2010. Ibero’s guests are sourced from Spain, Brazil and Argentina. From spring until fall, all of Ibero’s ships offer seven-day Mediterranean and Northern European sailings.
P&O Cruises (Australia)
P&O Cruises (Australia) caters to the Australians and New Zealanders. Its four contemporary ships offer cruises generally ranging from 7 to 12 days. The ships are home ported in a number of cities in Australia and New Zealand.
Costa Asia operated one contemporary cruise ship as of November 30, 2010. Costa Asia caters primarily to the Chinese and surrounding markets. During the non-peak Chinese vacation months, Costa Asia offers longer Far East cruises principally to Europeans.
The Company competes with Royal Caribbean Cruises Ltd., Apollo Management LP, Disney Cruise Line (Disney), MSC Cruises (MSC), Crystal Cruises, Silversea Cruises, Thomson Cruises, TUI AG, Fred Olsen Cruise Lines, Saga Cruises and Phoenix Reisen.
The following year Ted Arison, at the age of 66, stepped down as chairperson of Carnival and was succeeded by his son Micky. Shortly thereafter, the industry's boom of the previous decade began to taper off. The war in the Persian Gulf brought higher fuel and airline costs and deterred tourists. The effects were reflected in Carnival's stock price, which slid from 25 points in June of 1990 to 13 points late in the year. At the same time, it became apparent that the Crystal Palace would be an unprofitable venture. At the end of fiscal year 1990, Carnival incurred a $25.5 million loss from the resort and casino operation and not long after began attempting to sell the Crystal Palace. In 1991, with no prospective buyers, Carnival agreed to turn over a large portion of the resort to the Bahamian government, in exchange for cancellation of some of the debt incurred during construction. Carnival took a $135 million write-down on the Crystal Palace for that year.
Still, in 1991 Carnival enjoyed a 26 percent share of the passengers in the $5 billion cruise-ship market, with revenues of $1.4 billion. Its average occupancy level stood at 103 percent, well above the industry's average of 90 percent. In April of 1991 Carnival signed a $300 million contract for a ship, the Sensation, to be delivered in 1993. In September of the same year the Fascination, to be ready in late 1994, was ordered at a cost of $315 million. In an effort to gain more working capital, Carnival offered 7.85 million Class A common shares for sale in 1991.
The company also entered into an agreement in 1991 to acquire Premier Cruise Lines for $372 million. Though smaller than Carnival, Premier had a lucrative contract with Walt Disney Co. to be the official cruise line for Walt Disney World in Orlando, Florida. The deal fell through, however, when a final agreement could not be reached on the price.
In 1992 Carnival agreed to acquire a percentage of Seabourn Cruise Lines. Seabourn, operated in partnership with Atle Byrnestad, served the ultra-luxury market, running tours to such locations as South America, the Baltics, the Mediterranean, and Southeast Asia. The company also signed a contract for a $330 million ship, the Imagination, to be delivered in the fall of 1995. Perhaps the most impressive ship introduced in the modern era was the Carnival Destiny, the largest passenger ship afloat at 101,000 tons and room for 2,640 people. Its maiden voyage was in 1996.
In 1997 Carnival purchased a 50 percent interest in Costa Cruise Lines, in partnership with Airtours, a travel company. These acquisitions strengthened the company's presence around the world, but especially in the Caribbean. Yet the company's most important acquisition came in 1998 when it purchased a controlling interest in Cunard White Star Line. Cunard's five ships, including the QE2, the Vistafjord, the Royal Viking Sun, and Sea Goddess I and II catapulted Carnival into the super-luxury cruise line business.
By 1998 the company had changed its legal name to Carnival Corporation, to emphasize the growing diversity within its cruise lines. Yet when every indicator seemed to point the way toward uninterrupted and uneventful prosperity for the company, disaster struck. In July of 1998, the cruise ship Ecstasy caught fire after leaving the port in Miami, Florida bound for Newport News with 2,575 passengers on board. Although no one was injured during the fire and evacuation, the ship suffered extensive damage to more than 100 cabins, while heat and smoke damaged adjacent sections of the ship. The precise cause of the fire remains unknown, but the Ecstasy was examined meticulously and refitted in drydock; it re-entered cruising service not long afterward.
Carnival did not suffer financially or from a public relations standpoint because of the fire on the Ecstasy, and it continues to look forward to further growth, building on its name recognition, which is presently the highest in the industry. Since studies show that only five percent of the 70 million Americans who can afford cruises choose that type of vacation, Carnival seemed to have plenty of room for expansion.
Principal Subsidiaries: Carnival Cruise Lines; Holland America Line; Windstar Cruises; Holland America Westours; Cunard White Star Line (68%); Seabourn Cruise Line (68%); Costa Crociere S.p.A. (63%); Airtours' Sun Cruises (26%).
Market Cap (Mil.): $30,512.50
Shares Outstanding (Mil.): 791.47
Annual Dividend: 1.00
Yield (%): 2.63
CCL Industry Sector
P/E (TTM): 15.68 30.12 8.93
EPS (TTM): 13.69 -- --
ROI: 6.20 0.67 0.90
ROE: 8.72 1.19 1.56
Sales: $2.4 billion
Stock Exchanges: New York
Ticker Symbol: CCL
SICs: 4481 Deep Sea Transportation of Passengers, Except by Ferry; 4482 Ferries; 4489 Water Transportation of Passengers, Not Elsewhere Classified
Name Age Since Current Position
Arison, Micky 61 1990 Chairman of the Board, Chief Executive Officer
Frank, Howard 69 1998 Vice Chairman of the Board, Chief Operating Officer
Bernstein, David 53 2007 Senior Vice President, Chief Financial Officer
Foschi, Pier 64 2003 Chairman and Chief Executive Officer of Costa Crociere, S.p.A, Director
Cahill, Gerald 59 2007 President and Chief Executive Officer - Carnival Cruise Lines
Buckelew, Alan 62 2007 President and Chief Executive Officer - Princess Cruises
Kruse, Stein 52 2004 President and Chief Executive Officer of Holland America Line Inc.
Dingle, David 53 2007 Chief Executive Officer, Carnival U.K.
Perez, Arnaldo 50 2002 Senior Vice President, General Counsel, Secretary
Freedman, Larry 59 2007 Vice President, Chief Accounting Officer, Controller
Dickinson, Robert 68 2007 Director
Ratcliffe, Peter 63 2008 Director
Maidique, Modesto 70 1994 Independent Director
Subotnick, Stuart 69 1987 Independent Director
Zucker, Uzi 75 1987 Independent Director
Donald, Arnold 56 2001 Independent Director
Parker, John 68 2003 Independent Director
Glasier, Richard 65 2004 Independent Director
Weil, Laura 54 2007 Independent Director
Weisenburger, Randall 52 2009 Independent Director
Band, Jonathon 61 2010 Independent Director
3655 N.W. 87th Avenue
Miami FL 33178
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