August 24, 2006
Carnival comments on Alaska cruise tax
Carnival Corporation & plc (NYSE/LSE: CCL) (NYSE:CUK) today commented on the potential impact of Alaska's Ballot Initiative 2 which has been approved by the state's voters and is expected to be implemented in 2007.
Although still subject to final certification by the state, the new taxes include a $50 per passenger head tax which will increase the government taxes and fees paid by passengers embarking on Alaskan cruises. At this time, the company cannot estimate the impact these additional passenger taxes may have on its Alaskan cruise business.
In addition to the head tax, the initiative includes a gaming tax on any gambling conducted within state waters as well as a state corporate income tax for cruise lines operating ships in Alaska. Carnival estimates that the gaming and income taxes may reduce 2007 earnings per share by approximately $0.03.
The initiative also calls for cruise lines to reveal profits on shore excursions and any advertising revenues earned from shoreside businesses.
Carnival Corporation & plc brands currently carry approximately 560,000 passengers annually in Alaska aboard 16 cruise ships--eight from Holland America Line, seven from Princess Cruises and one from Carnival Cruise Lines.
"We are disappointed that the Ballot Initiative 2 has passed as we believe this will inhibit the future growth and expansion of Alaska's tourism business," said Micky Arison, Carnival Corporation & plc chairman and CEO. "The estimates of the impact of these taxes are being made prior to our finalizing deployment, legal and other business decisions that will need to be considered as a result of this initiative," he added.