Carnival Corp. Boosts Dividend, Discusses Growth Plans

Carnival Corp. & plc held its annual shareholders meeting in Southampton, U.K., Monday and announced a 27 percent increase in its regular quarterly dividend from 27.5 cents per share to 35 cents. The announcement was made by Carnival Vice Chairman and COO Howard Frank, who noted that since the company's merger with P&O Princess Cruises in April 2003, Carnival Corp. has more than tripled its dividend with the latest increase.

"This dividend increase reflects our management's confidence in the future of our business," Frank said. "Carnival Corp. & plc is in the uniquely enviable position of being able to aggressively pursue our growth strategies-both through our $11 billion newbuilding program and developing new markets in Europe and Asia-while still generating the cash flow to return more added value to our shareholders in the form of increased quarterly dividends and our share buy-back program."

Since 2005, Carnival has repurchased $1.2 billion of its shares. "Carnival remains committed to its previously stated policy of returning excess cash to shareholders by increasing dividends as our earnings grow, as well as continuing our stock repurchase program opportunistically," Frank said. "We have approximately $770 million remaining under our previously authorized stock repurchase program."

Frank also discussed the company's growth plans which are focused on its newbuilding program but also include a number of initiatives aimed at growing existing markets and expanding internationally. Carnival's five core business regions -- U.S., UK, Germany, Italy and Spain -- "all offer tremendous growth potential because of their favorable demographics and low penetration levels," Frank said.

In 2006, North America accounted for 70 percent of Carnival Corp. & plc's passenger base with Europeans and the rest of the world accounting for the remaining 30 percent. Frank said that by 2010, this ratio is expected to shift to 60 percent North Americans and 40 percent Europeans and the rest of the world as the company continues to expand operations beyond North America. "In North America we plan to add eight ships from 2007 through 2010," he said. "While North America remains our largest market, we have intensified our efforts at growing our European business, both through strategic alliances with existing travel companies in the region, as well as an aggressive newbuilding program that will introduce 12 new ships for our European brands through 2010."

Other growth initiatives include a planned new cruise joint venture in Germany with TUI AG, the world's largest tour company, to develop, market and operate two cruise brands -- Carnival's existing AIDA Cruises and a new TUI Cruises brand -- both designed for the German-speaking holiday market. Carnival also has a planned joint venture in Spain with Orizonia Corporación, Spain's largest travel company which operates its own cruise fleet under its Iberojet division, to operate and expand the existing Iberojet Cruceros brand in Spain. The joint venture will grow that fleet over the next several years through the acquisition of existing tonnage from Carnival's current fleet.

Since the company's merger with P&O Princess Cruises in 2003, annual cash flow from operations has nearly doubled from $1.9 billion to $3.6 billion. Over the past four years, the company has funded $9 billion in new ship construction all through its own cash flow, according to Frank. Frank also recapped the line's 2006 performance during which Carnival Corp. & plc achieved record earnings of $2.3 billion on record revenues of $11.8 billion. The boards of directors approved a record date for the dividend of May 18, 2007, and a payment date of June 8, 2007. Holders of Carnival Corp. common stock and Carnival plc ADSs will receive the dividend payable in U.S. dollars. The dividend for Carnival plc ordinary shares will be payable in U.S. dollars or sterling. As a dual-listed company, traded on both the New York and London stock exchanges, Carnival alternates the site of its annual shareholder meeting each year between venues in the U.S. and U.K. For more information, visit www.carnivalcorp.com.

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