Grounding hits Carnival’s bottom line

Carnival Corporation & plc, parent company of Costa Cruises issued a financial disclosure statement today as a result of the grounding of the Costa Concordia on Jan. 13, 2012. Micky Arison, Carnival Corporation’s chairman and CEO, commented that, “At this time, our priority is the safety of our passengers and crew. We are deeply saddened by this tragic event and our hearts go out to everyone affected by the grounding of the Costa Concordia and especially to the families and loved ones of those who lost their lives. They will remain in our thoughts and prayers.” However, Costa’s parent company said that in accordance with financial disclosure requirements, the company is providing the following information: The company has insurance coverage for damage to the vessel with a deductible of approximately $30 million as well as insurance for third party personal injury liability subject to an additional deductible of approximately $10 million for this incident. The company self-insures for loss of use of the vessel. A damage assessment review of the vessel is currently being undertaken to determine how long it will be out of service. The vessel is expected to be out of service for the remainder of our current fiscal year if not longer. For the fiscal year ending November 30, the impact to 2012 earnings for loss of use is expected to be approximately $85 to $95 million or $0.11-$0.12 per share. In addition, the company anticipates other costs to the business that are not possible to determine at this time.