Carnival generates enough cash to fund $2.7 billion capital program

By Lisa Kerner

Charlotte, N.C., Dec. 20 - Carnival Corp. & plc's $3.8 billion of cash from operations for 2011 "provided more than ample funding" for the company's $2.7 billion capital investment program, chairman and chief executive officer Micky Arison said during Carnival's fiscal fourth-quarter earnings call on Tuesday.

Carnival's strategic growth includes the addition of two to three new ships per year.

Arison estimated that cash from operations will approach $4 billion in 2012, with a capital investment commitment of $2.6 billion.

"We expect to generate significant free cash flow in 2012 and beyond, which should provide further opportunities to return cash to shareholders," Arison said.

Fourth-quarter highlights

During the quarter, the Miami-based cruise operator implemented a fuel derivatives program, resulting in $1 million of net unrealized gains on its portfolio of fuel derivatives. The program mitigates a portion of Carnival's economic risk attributable to potentially significant fuel price increases, according to chief financial officer David Bernstein.

Carnival reported fiscal fourth-quarter net income of $217 million, or $0.28 diluted earnings per share, compared with $248 million, or $0.31 diluted earnings per share, for the prior-year period.

Fiscal fourth-quarter revenues were $3.7 billion, up from the $3.5 billion reported for the same period in 2010.

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