UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

þ

(Mark One)

x

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended November 30, 2007 2010

or

¨

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______________ to ________________

Commission file number: 1-9610

LOGOCommission file number: 1-15136

 

Carnival Corporation

Carnival plc

(Exact name of registrant as

(Exact name of registrant as
specified in its charter)

specified in its charter)

 

Republic of Panama

England and Wales

(State or other jurisdiction of

(State or other jurisdiction of
incorporation or organization)

incorporation or organization)

 

59-1562976

59-1562976

98-0357772

(I.R.S. Employer		(I.R.S. Employer

(I.R.S. Employer
Identification No.)

Identification No.)

 

3655 N.W. 87th Avenue

Carnival House, 5 Gainsford Street,

Miami, Florida 33178-2428

London SE1 2NE, United Kingdom

(Address of principal

(Address of principal
executive offices)
(Zipoffices and		executive offices and
zip code)

zip code)

 

(305) 599-2600

011 44 20 7940 5381

(Registrant’s telephone number,

(Registrant’s telephone number,
including area code)

including area code)

 

Securities registered pursuant

Securities registered pursuant

to Section 12(b) of the Act:

to Section 12(b) of the Act:

 

Title of each class

Title of each class

Common Stock		Ordinary Shares each represented

Common Stock
($.010.01 par value)

by American Depositary Shares
($1.66 par value), Special Voting
Share, GBP 1.00 par value and Trust
Shares of beneficial interest in the
P&O Princess Special Voting Trust

 

Name of each exchange on which registered

New York Stock Exchange, Inc.

(LOGO)

 

Commission file number: 1-15136

Carnival plc

(Exact name of registrant as
specified in its charter)

England and Wales

(State or other jurisdiction of
incorporation or organization)

98-0357772

(I.R.S. Employer
Identification No.)

Carnival House, 5 Gainsford Street,
London SE1 2NE, United Kingdom

(Address of principal
executive offices)
(Zip code)

011 44 20 7940 5381

(Registrant’s telephone number,
including area code)

Securities registered pursuant
to Section 12(b) of the Act:

Title of each class

Ordinary Shares each represented
by American Depositary Shares
($1.66 par value), Special Voting
Share, GBP 1.00 par value and Trust
Shares of beneficial interest in the
P&O Princess Special Voting Trust

Name of each exchange on which registered

New York Stock Exchange, Inc.



Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrants are well-known seasoned issuers, as defined in Rule 405 of the Securities Act.    Yesxþ    Noo¨

Indicate by check mark if the registrants are not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yeso¨    Noxþ

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.    Yesxþ    Noo¨

Indicate by check mark whether the registrants have submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files).    Yes  þ    No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrants’ knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.x¨

Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, non-accelerated filers, or non-accelerated filers.small reporting companies. See definitionthe definitions of “large accelerated filer,” “accelerated filerfiler” and large accelerated filer”“smaller reporting company” in
Rule 12b-2 of the Act). Large Accelerated Filersx     Accelerated Filerso     Non-Accelerated FilersoExchange Act.

Large Accelerated FilersþAccelerated Filers¨
Non-Accelerated Filers¨Smaller Reporting Companies¨

Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Act).    Yeso¨    Noxþ

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold was $20.13$14.5 billion as of the last business day of the registrant’s most recently completed second fiscal quarter.  The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold was $8.87$6.7 billion as of the last business day of the registrant’s most recentlyrecent completed second fiscal quarter.
At January 22, 2008,24, 2011, Carnival Corporation had outstanding 623,620,686607,840,462 shares of its Common Stock, $.01$0.01 par value.  At January 22, 2008,24, 2011, Carnival plc had outstanding 213,185,759214,412,366 Ordinary Shares $1.66 par value, one Special Voting Share, GBP 1.00 par value and 623,620,686607,840,462 Trust Shares of beneficial interest in the P&O Princess Special Voting Trust.



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DOCUMENTS INCORPORATED BY REFERENCE

The information described below and contained in the Registrants’ 20072010 annual report to shareholders to be furnished to the U.S. Securities and Exchange Commission pursuant to Rule 14a-3(b) of the Securities Exchange Act of 1934 is shown in Exhibit 13 and is incorporated by reference into this joint Annual Report on Form 10-K (“Form 10-K”).

Part and Item of the Form 10-K

Part II

Part II

Item 5(a).

Market for Registrants’ Common Equity, and Related Stockholder Matters and Issuer Purchases of Equity Securities – Securities—Market Information, Holders and Performance Graph.

Item 6.

Selected Financial Data.Data.

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.Operations.

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk.Risk.

Item 8.

Financial Statements and Supplementary Data.Data.

Portions of the Registrants’ 20082011 joint definitive proxy statement,Proxy Statement, to be filed with the U.S. Securities and Exchange Commission, are incorporated by reference into this Form 10-K under the items described below.

Part and Item of the Form 10-K

Part III

Part III

Item 10.

Directors, Executive Officers and Corporate Governance.Governance.

Item 11.

Executive Compensation.Compensation.

Item 12.

Security Ownership of Certain Beneficial Owners and Management.Management and Related Stockholder Matters.

Item 13.

Certain Relationships and Related Transactions, and Director Independence.Independence.

Item 14.

Principal AccountantAccounting Fees and Services.Services.



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PART I

Item 1.Business.

          A.General

Item 1.Business.

 

A.General

Carnival Corporation iswas incorporated in Panama in 1972, and Carnival plc iswas incorporated in England and Wales.Wales in 2000. Carnival Corporation and Carnival plc operate a dual listed company (“DLC”), whereby the businesses of Carnival Corporation and Carnival plc are combined through a number of contracts and through provisions in Carnival Corporation’s articlesArticles of incorporationIncorporation and by-lawsBy-Laws and Carnival plc’s memorandumArticles of association and articles of association.Association.

Carnival Corporation and Carnival plc are both public companies with separate stock exchange listings and their own shareholders. Although theThe two companies have retained their separate legal identities, they operate as if they are a single economic enterprise with a single executive management team and have identical Boards of Directors.Directors, but each has retained its separate legal identity. See Note 3, “DLC Structure” to our Consolidated Financial Statements in Exhibit 13 to this Form 10-K. Together with their consolidated subsidiaries Carnival Corporation and Carnival plc are referred to collectively in this Form 10-K as “Carnival Corporation & plc,” “our,” “us,”“us” and “we.”

We are the largest and financially strongest cruise company and one ofamong the largest and most profitable vacation companies in the world. We have a portfolio of widely recognized cruise brands that are sold in all the major vacation markets of the world and are a leading provider of cruises to all major vacation destinations. We believe our multi-brand strategy is essential to our cruise industry leadership position. See Part I, Item 1. Business. B. - “Cruise Operations” for additional information.

Each of our cruise brands is an operating segment that we aggregate into either the (1) North America or (2) Europe, Australia & Asia (“EAA”) reportable cruise segments based on the similarity of their economic and other characteristics. Our North America segment cruise brands include Carnival Cruise Lines, Holland America Line, Princess Cruises (“Princess”) and Seabourn. Our EAA segment cruise brands include AIDA Cruises (“AIDA”), Costa Cruises (“Costa”), Cunard, Ibero Cruises (“Ibero”), P&O Cruises (UK) and P&O Cruises (Australia). See Note 11, “Segment Information” to our Consolidated Financial Statements in Exhibit 13 to this Form 10-K.

As of January 29, 2008,31, 2011, the summary by cruise brand of our passenger capacity, the number of cruise ships we operate and the primary areas or countries in which they are marketed isare as follows:

 

 

 

 

 

 

 

 

 

 

 

Cruise
Brands

 

Passenger
Capacity(a)

 

Number of
Cruise Ships

 

Primary
Market

 

 

 

 

 

 

Carnival Cruise Lines

 

50,770

 

 

22

 

 

 

North America

 

Princess Cruises (“Princess”)

 

34,450

 

 

16

 

 

 

North America

 

Costa Cruises (“Costa”)

 

23,196

 

 

12

 

 

 

Europe

 

Holland America Line

 

18,916

 

 

13

 

 

 

North America

 

P&O Cruises

 

8,840

 

 

5

 

 

 

United Kingdom

 

Cunard Line (“Cunard”)

 

6,360

 

 

3

 

 

 

United Kingdom and North America

 

AIDA Cruises (“AIDA”)

 

5,762

 

 

4

 

 

 

Germany

 

P&O Cruises Australia

 

4,070

 

 

3

 

 

 

Australia and New Zealand

 

Ocean Village

 

3,286

 

 

2

 

 

 

United Kingdom

 

Ibero Cruises (b)

 

2,078

 

 

2

 

 

 

Spain

 

The Yachts of Seabourn (“Seabourn”)

 

624

 

 

3

 

 

 

North America

 

 

 

 

 

 

 

 

 

 

 

158,352

 

 

85

 

 

 

 

 

 

 

 

 

 

 

 

 


Cruise Brands

  Passenger
Capacity  (a)		   Number of
Cruise  Ships		   

Primary Markets

North America      

Carnival Cruise Lines

   54,480     22    North America

Princess

   37,608     17    North America

Holland America Line

   23,492     15    North America

Seabourn

   1,524     5    North America
            

North America Cruise Brands

   117,104     59    
            
Europe, Australia & Asia (“EAA”)      

Costa

   29,202     14    Italy, France and Germany

P&O Cruises (UK) (b)

   15,098     7    United Kingdom (“UK”)

AIDA

   12,054     7    Germany

Cunard

   6,676     3    UK and North America

P&O Cruises (Australia)

   6,322     4    Australia

Ibero

   5,008     4    Spain and South America
            

EAA Cruise Brands

   74,360     39    
            
   191,464     98    
            

(a)

(a)

In accordance with cruise industry practice, passenger capacity is calculated based on two passengers per cabin even though some cabins can accommodate three or more passengers.

 

(b)

In September 2007 we entered intoIncludes the 1,200-passenger capacityArtemis, which was sold in October 2009 to an unrelated entity and is being operated by P&O Cruises (UK) under a joint venturebareboat charter agreement with Orizonia Corporation, Spain’s largest travel company, to form Ibero Cruises, a Spanish cruise line (see Note 15 “Acquisition” to our Consolidated Financial Statements in Exhibit 13 to this Form 10-K).

until April 2011.

As of January 29, 2008,31, 2011, we had signed agreements with three shipyards providing for the construction of 22ten additional cruise ships scheduled to enter service between April 20082011 and June 2012.2014. These additions, net of the withdrawal of P&O Cruises (UK)’sArtemis, are expected to result in an increase in our passenger capacity of 51,338by 26,300 lower berths. However, P&O Cruises Australia’s 994-passenger capacityPacific Star and Cunard’s 1,788-passenger capacityQueen Elizabeth 2 will leave our fleet in March and November 2008, respectively. The net impact of these net additions and disposals is a 30.7%13.7% increase in passenger capacity as compared to our January 29, 200831, 2011 passenger capacity. It is possible that some of our other older ships may also be sold, chartered or retired during the next few years, thus reducing the size of our fleet over this period. Alternatively, it is also possible that we could order more ships, which could enter service in 2011 and 2012, or acquire more ships, thus increasing the size of our fleet over this period. Our North America cruise brands and our EAA cruise brands each have five ships scheduled to enter service by June 2014 and June 2013, respectively, which are expected to result in an increase in their passenger capacity of 14,950 and 12,550 lower berths, respectively. After adjusting forArtemis leaving the fleet,

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the impact on passenger capacity of these net additions is a 12.8% increase in our North America cruise brands and a 15.3% increase in our EAA cruise brands. See Part I, Item 1. Business. B. “Cruise Operations – Ships Under Contract for Construction” and Note 6, “Commitments” to our Consolidated Financial Statements in Exhibit 13 to this Form 10-K for additional information regarding our ship commitments.



In addition to our cruise brands, we have a Cruise Support segment that includes our cruise port and related facilities located in Cozumel, Mexico; Grand Turk, Turks and Caicos Islands; Long Beach, California and Roatán, Honduras, which are operated for the benefit of our cruise brands. Cruise Support also includes other corporate-wide services that are provided for the benefit of our cruise brands.

In addition to our cruise operations, we own Holland America Tours and Princess Alaska Tours, the leading cruise/tour operatorscompany in the State of Alaska and the Canadian Yukon, Territory of Canada, which primarily complement their respectivecomplements our Alaska cruise operationsoperations. This tour company currently owns and operates, among other things, 15 hotels or lodges, with 3,420 guest rooms, 395 motorcoaches and 20 domed rail cars. This tour company and the two cruise ships we own substantially all of the assets noted below. These tour companies currently market and operate:charter-out under long-term bareboat charter agreements to an unaffiliated entity comprise our Tour and Other segment.

-

16 hotels or lodges in the state of Alaska and the Yukon Territory of Canada, with 3,500 guest rooms;

-

over 560 motorcoaches used for sightseeing and charters in the states of Washington and Alaska, the Canadian Yukon Territory and the Canadian province of British Columbia;

-

24 domed rail cars, which are run on the Alaska Railroad between Anchorage and Fairbanks, Whittier and Denali, and Whittier and Talkeetna;

-

two luxury dayboats; one offering a tour to Portage Glacier in Alaska, and another offering a fully-narrated 102-mile cruise on the Yukon River between Eagle, Alaska and Dawson City in the Canadian Yukon Territory; and

-

sightseeing packages, or individual components of such packages, sold either separately or as part of our cruise/tour packages to our Alaskan cruise guests and to other vacationers.

Our Mission, Primary Financial Goal and Related Strategies

Our mission is to deliver exceptional vacation experiences through many of the world’s best-known cruise brands that cater to a variety of different lifestylesgeographic regions and budgets,lifestyles, all at an outstanding value unrivalled on land or at sea. In orderOur primary financial goal is to accomplish this mission, we believe we must profitably grow our cruise business, while maintaining a strong balance sheet, which isenhances our primary financial goal.flexibility and allows us to return free cash flow to shareholders. Our ability to generate significant operating cash flows has allowed us to internally fund the majority of our capital investment program.

          Our first strategy toTo achieve this goal is toour goals we build new and innovative ships and continuallycontinue to invest in our existing ships to strengthen the leadership position of each of our brands. Our newbuilding program is the primary platform for our brands’ growth. Secondly, weWe currently have ten cruise ships scheduled to enter service between April 2011 and June 2014, four of which will enter service in 2011. Our current intention is to have an average of two to three new cruise ships enter service annually in 2012 and beyond. We believe our strong balance sheet allows us to capitalize on the attractive newbuild prices that currently exist in the market place. Based on our current ship orders, our growth rate for our North America cruise brands, which is the most developed cruise region, is 3%, compounded annually through 2013. However, the majority of our growth over the next three years will come from our European brands, which are in an earlier stage of market development, and are expected to grow by 7%, compounded annually through 2013. We also currently intend to redeploygrow our presence in other markets, such as Australia, Asia and South America by redeploying some of our existing ships to emerging growththese markets in order to develop an increasing awareness and appetite and awareness for cruising within these markets. After establishing a viable presence in a geographic area, we may add capacity to grow the business, and then further segment the market using multiple brands that target different demographic groups to achieve maximum penetration.cruising.

Our operating structure is decentralized, with each of our major brands having its own headquarters and operating team.team, which helps create an ownership culture that is an important driver of our performance. We believe this approach results in delivering a product that is specifically tailored to identifiable geographic regions and economic markets andlifestyles, which allows us to penetrate each market more effectively penetrate these individual markets.effectively. Although we operate under this decentralized structure, we leverage our size to obtain economies of scale and synergies, which reduces costs by consolidating our purchasing power and implementing common cost-containment initiatives, such as common reservation systems, coordinated media buying, cross-selling, shared data centers and shared port facilities.

We believe the successful execution of these and other ongoing strategies havehas enabled us to become one ofamong the largest and most profitable companies in the vacation industry. This success has given usWe also believe we are well-positioned to achieve increasing returns as the abilityglobal economy recovers. Since we have slowed down the pace of our newbuilding program, we currently believe this will lead to fund our capital spending programincreasing free cash flows in 2011 and return excess cash to our shareholders through increased dividends and opportunistic share repurchases.beyond.

Health, Environment, Safety and Security Policy

          WeIn conjunction with our mission, primary financial goal and related strategies discussed above, we are committed to protectingto:

Protecting the health, safety and security of all our guests, employees and all others working on our behalf, thereby promoting an organization that is free of injuries, ill healthillness and loss.

          In addition, we are committed to protectingProtecting the environment, including the marine environment in which our vessels sail and the communities in which we operate, by minimizing adverse environmental consequences and using our resources efficiently.

          B.Cruise OperationsFully complying with or exceeding all legal and statutory requirements related to health, environment, safety and security throughout our business activities.

          I.Industry BackgroundAssigning health, environment, safety and security matters the same priority as other critical business matters.

 

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B.Cruise Operations

I.Industry Background

a.Overview

The multi-night cruise industry has grown significantly, over the past decade, but still remains a relatively small part ofcompared to the wider global vacation market, which includes a variety of land-based travel destinations around the world. For example, there are only about 215,000 cabins in the global cruise industry at November 30, 2010, which is less than the 265,000 rooms in just two North American vacation destinations -Orlando, Florida and Las Vegas, Nevada. Within the wider global vacation market, cruise companies compete for the discretionary income spent by vacationers. We estimateWithin that context, a recent Nielsen Global Confidence Survey found that after providing for savings and living expenses, the number one global spending priority is for vacations. Because of these and other favorable cruise industry characteristics, we believe that the cruise industry has opportunities for growth.



The industry’s and our net capacity serving the global cruise industry’s guests have increased at a compound annual growth rate of 5.7% and 6.8%, respectively, from 2005 to 2010. The industry’s and our compound annual net capacity growth rate is currently expected to be 4.2% and 4.5%, respectively, from 2010 to 2013 based on the assumptions discussed below. The weighted-average passenger capacities that have been or are expected to be marketed by the global cruise industry and us are as follows:

Fiscal

Year

  Global
Cruise  Industry		   Carnival
Corporation &  plc		 

2005

   321,000     134,000  

2006

   337,000     140,000  

2007

   359,000     150,000  

2008

   377,000     162,000  

2009

   397,000     174,000  

2010

   423,000     186,000  

2011 (a)

   443,000     195,000  

2012 (a)

   459,000     204,000  

2013 (a)

   479,000     212,000  

(a)Our estimates of future capacity do not include any assumptions related to unannounced ship withdrawals due to factors such as the age of ships and, accordingly, our estimates could indicate a higher growth in capacity than will actually occur.

The number of cruise passengers carried approximately 16.5 million passengers in 2007.the global cruise industry increased at a compound annual growth rate of 5.3% from 2005 to 2010. The principal regions from which cruise passengers are sourced from are North America, which has increased by an estimated compound annual growth rate of 8.5% between 2001 and 2006, and Western Europe where cruise passengers have increased byat a compound annual growth rate of approximately 9.8% between 20011.6% from 2005 to 2010, and 2006.Europe, Australia, Asia and Other where cruise passengers have increased at a compound annual growth rate of 12.1% over the same period. The number of cruise passengers carried in the global cruise industry by geographic regions from 2005 to 2010 is as follows:

Year (a)

  Global
Cruise  Industry		   North America   Europe, Australia,
Asia and Other		 

2005

   14,360,000     9,960,000     4,400,000  

2006

   15,150,000     10,380,000     4,770,000  

2007

   15,900,000     10,450,000     5,450,000  

2008

   16,240,000     10,290,000     5,950,000  

2009

   17,500,000     10,400,000 ��   7,100,000  

2010 (b)

   18,600,000     10,800,000     7,800,000  

(a)Our estimates of the total passengers carried for 2005 through 2009 were obtained from G.P. Wild (International) Limited, an independent cruise research company and are based upon where the passengers were sourced, and not the cruise brands on which they sailed.

(b)Our estimates of the total passengers carried for 2010 were based on internally developed global capacity growth rates.

We believe that the North American cruise vacation market continues to have growth potential because of its low market penetration levels and other favorable characteristics of the cruise industry, as discussed below. In Europe, cruising represents a smaller proportion of the overall vacation market than it does in North America and, accordingly, we believe the European cruise vacation market has significant growth potential. We also believe that the North American market continues to have considerable growth potential. Other areas such as Asia, the South Pacific, including Australia, and New Zealand,Asia and South America are currently a source of much lower numbers offewer cruise passengers, andbut we also believe these regions also have significant growth potential. As we continue to expand our global presence, our revenues generated

5

from passengers sourced outside the U.S. have grown to 54% in 2010, up from 52% and 50% in 2009 and 2008, respectively. See Note 11, “Segment Information” to our Consolidated Financial Statements in Exhibit 13 to this Form 10-K for financial information regarding our cruise segment.segments.

Cruising offers a broad range of products to suit vacationing guests of many ages, backgrounds and interests. Cruise brands can be broadly characterizedclassified as offering contemporary, premium and luxury cruise experiences. The contemporary experience typically includes cruises on larger ships that last seven days or less, have a more casual ambiance and are less expensive than premium or luxury cruises. The premium experience typically includes cruises on more intermediate-sized ships that last from seven to 14 days and appeal to the more experienced cruise guest who is usually more affluent and older. Premium cruises emphasize quality, comfort, style, and more destination-focused itineraries and the average pricing on these cruises is typicallynormally higher than contemporary cruises. The luxury experience is typicallyusually characterized by smallsmaller vessel size, very high standards of accommodation and service, higher prices and exotic itineraries to ports which are inaccessible to bigger ships and higher prices.larger ships. Notwithstanding these broad classifications, there generally is significant overlap and competition among all cruise products.

We are a leading provider of cruise vacations in most ofall the largest vacation markets in the world, includingwhich are comprised of North America, the UK, Germany, southern Europe, Asia/PacificAustralia, Asia and South America, with significantAmerica. We have product offerings in each of the three classifications noted above. A brief description of the principal vacation areas where we source substantially all of our guests and our brands that market primarily to these vacationers is as set outdiscussed in further detail in Sections III. “North America” and IV. “Europe, Australia & Asia” below.

b.II.Characteristics of the Cruise Industry

1.Exceptional Value Proposition

We believe that the cost to a guest for a cruise vacation represents an exceptional value in comparison to comparable land-based vacations. This is especially true when considering that a cruise provides its guests with transportation to various destinations, while also providing hotel accommodations, a generous diversity of food choices and a selection of daily entertainment options for one all-inclusive, competitive price. In order to make cruising even more cost effective and more easily accessible to our guests, we offer a number of drive-to-home ports, which enables some cruise guests to reduce their overall vacation costs by eliminating or reducing air transportation.

2.Relatively Low Market Penetration Levels

Based on industry data, the 2010 annual penetration rate, computed based on the number of annual cruise passengers as a percentage of the total population, is 3.1% for North America, 2.6% in the UK, 1.2% in continental Europe (continental Europe represents Germany, Italy, France, Spain and Portugal) and 1.8% for Australia. Based on industry data or our internal estimates, less than 20% and 10% of the U.S. and UK populations, respectively, and lower percentages of continental European and Australian populations have ever taken a cruise. In addition, the European and Australian markets have significantly more vacation days in a year than North Americans, which presents opportunities for increases in these penetration levels compared to the level in North America.

Elsewhere in the world, such as Asia and South America, cruising is at an early stage of development and has far lower penetration rates. However, there have been an increasing number of these relatively lower penetrated countries in the world where economic growth has fueled an increasing demand for vacations, including cruising.

 

3.Wide Appeal

Cruising appeals to a broad range of ages and income levels. The average age of a cruise guest in North America is 50 years old and we believe that it is a similar age for the rest of the world. However, cruising is designed to provide something for every generation, from the youth clubs for four to five year olds to the elegance, style and sophistication of a bygone era provided to our more senior guests. Cruising also offers a very broad range of ship types and sizes, as well as price points to attract guests with varying tastes from substantially all income levels. The range of pricing can vary from a three-day cruise from a local home port in an inside cabin on a contemporary line to a penthouse suite on a world cruise, on a premium or luxury brand.

4.Positive Guest Demographics

The age of populations in more developed countries is increasing, primarily as a result of the aging of the Baby-Boom generation and healthcare advancements. Therefore, between 2010 and 2020, the number of people in the cruise industry’s primary age group of 45 years and older are expected to grow by 20 million, or 15%, in the U.S. and Canada, and 17 million, or 12%, in the major Western European countries. We believe the cruise industry is well-positioned to take advantage of these favorable demographic trends impacting its major markets.

5.High Guest Satisfaction Rates

Cruise guests tend to rate their overall satisfaction with a cruise-based vacation higher than comparable land-based hotel and resort vacations. According to industry surveys, North American cruise guests have a total satisfaction rating of 95%, with nearly 45% of cruise

6

guests stating that they are extremely satisfied with the experience, which is defined in the surveys as the highest satisfaction rating of any vacation alternative they have experienced. Based on our internal surveys, our European cruise guests are also very satisfied with their cruise vacations compared to other vacation alternatives.

6.Favorable Supply Versus Demand Balance

Our current intention is to have an average of two to three new cruise ships enter service annually in 2012 and beyond, which is below our recent growth levels, and to focus our growth toward the higher returning European brands. We believe that some of our competitors will also be slowing down their future capacity growth based on their recent public comments. Furthermore, we believe the industry’s older ships will be retired from service as they near the end of their economic lives. Moreover, due to the significant amount of capital required to purchase a new cruise ship and the complexities surrounding their operation, the cruise industry has relatively high barriers of entry. Based on the above factors, among others, we expect long-term cruise industry supply growth to slow, and we expect demand to accelerate as global economies recover and emerging markets continue to develop. We believe this favorable supply versus demand balance will have positive impacts on our ability to profitably grow our business.

II.Passengers, Capacity and Occupancy

The number of cruise passengers we carried and our weighted-average passenger capacity have increased at a compound annual growth rate of 6.0% and 6.8%, respectively, from 2005 to 2010. Our cruise operations had worldwide cruise passengers, passenger capacity and occupancy as follows:

Fiscal
Year

  Cruise
Passengers (a)		  Year-End
Passenger
Capacity (b)		  Occupancy (c)

2005

  6,848,000  136,960  105.6%

2006

  7,008,000  143,676  106.0%

2007

  7,672,000  158,352  105.6%

2008

  8,183,000  169,040  105.7%

2009

  8,519,000  180,746  105.5%

2010

  9,147,000  191,464  105.6%

(a)The number of cruise passengers we carried as a percentage of the global cruise industry’s cruise passengers is estimated to have grown to 49.2% in 2010 from 47.7% in 2005.

(b)Our passenger capacity has grown from 136,960 berths at November 30, 2005 to 191,464 berths at November 30, 2010, net of disposals, primarily because of the deliveries of 24 new cruise ships during this five-year period.

(c)In accordance with cruise industry practice, occupancy is calculated using a denominator of two passengers per cabin even though some cabins can accommodate three or more passengers. Percentages in excess of 100% indicate that on average more than two passengers occupied some cabins.

The occupancy level on our ships during each quarter indicated below was as follows:

   Occupancy

Quarters Ended

  2010 2009

February 28

  103.5% 103.9%

May 31

  103.8% 103.3%

August 31

  111.1% 111.4%

November 30

  103.8% 103.2%

III.North America

Almost 70%58% of the cruise passengers in the world are sourced from North America, where cruising has developed into a mainstream alternative to land-based resort and sightseeing vacations. Approximately 10.4 million North American-sourced cruise passengers took cruise vacations for two or more consecutive nights or more in 2006,2009, and we estimate this amount increased to about 11.3that approximately 10.8 million passengers cruised in 2007. This sector2010. Historically the North American cruise vacation market has continuedgrown significantly, although recently growth in this market has been limited by the passenger capacity allocated to grow in recent years withit. We believe the introductionNorth American cruise vacation market continues to have growth potential, as previously discussed.

As of new capacity.January 31, 2010, five ships or almost 15,000 berths under construction have been designated for our North American brands through 2014. Our North American brands represent 61% of our total capacity at November 30, 2010.

The principal itinerariesmost popular location visited by North American-sourced cruise guests in 2007 were2010 was the Caribbean the Bahamas, Mexico and Alaska. In addition, North American cruise guests visited northern Europe,(including The Bahamas),

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followed by other locations, such as the Mediterranean Sea, Alaska, Northern Europe, Mexican Riviera, New England and Canada, Bermuda, Hawaii, the Panama Canal and other exotic locations, includingsuch as South and Central America, Africa, the South Pacific Islands, Australia, the Far East and India.

          At the end of 2007, 130 ships with an aggregate passenger capacity of approximately 211,000 lower berths were based primarily in North America. Based on the number of ships that are currently on order worldwide and scheduled for delivery between 2008 and 2011, we expect that the net capacity serving North America will continue to increase. Our projections indicate that by the end of 2008, 2009, 2010 and 2011, North America will be served by 132, 137, 143 and 148 ships, respectively, having an aggregate passenger capacity of approximately 218,000, 232,000, 247,000 and 258,000 lower berths, respectively. These figures include some ships that were, or are expected to be, marketed in both North America and elsewhere during different times of the year. Our estimates of capacity do not include assumptions related to unannounced ship withdrawals due to factors such as the age of ships or changes in the location from where ships’ guests are predominantly sourced and, accordingly, could indicate a higher percentage growth in North American capacity than will actually occur. Alternatively, our growth estimates for 2011 may increase because of future shipbuilding orders, which have not yet been announced. Net capacity serving North American-sourced cruise guests has increased at a compound annual growth rate of 3.5% for the past three years. The future growth rate is currently expected to be 5.5% for the next three years before reductions for withdrawals or transfers to other parts of the world and unannounced ship orders.



Within Carnival Corporation & plc, Carnival Cruise Lines, Princess, Holland America Line and Seabourn source their guests primarily from North America. Costa and Cunard sources most of its guests from the United Kingdom, North America, Germany and Australia, and Costa sourcesalso source some of itstheir guests from North America, especially during the winter season when it has two ships homeported in Fort Lauderdale, Florida.America.

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          Carnival Cruise Lines

Carnival Cruise Lines, which began operations in 1972, is our largest brand has been providing its “Fun Ship” style of cruising for over 35 years, and currently operates 22 contemporary ships, with an additional ship expected to begin serviceis a leader in each of 2008, 2009 and 2011. In April 2008, Carnival Cruise Lines’ 1,482-passenger capacityCelebration is being transferred to the Ibero Cruises fleet. Carnival Cruise Lines offers quality cruiseoffering fun, memorable vacations at affordable prices andprices. This brand is well-knownwidely recognized as the “Fun Ships,” which we believe captureswith 22 contemporary ships operating voyages generally from three to eight days. These ships call year-round in ports in the essence of the brand. In 2007, Carnival Cruise Lines announced its $250 million product enhancement initiative to its eight Fantasy Class ships under the “Evolutions of Fun” program, which is expected to be completed within the next few years. This ship refurbishment and product enhancement initiative includes upgrades to all guest accommodations and a variety of public areas, as well as introducing new children’s water parks, redesigning the mid-ship pool areaCaribbean, including The Bahamas, and the creationMexican Riviera, with the Caribbean being the principal area of “Serenity,” an adults-only deck area.sailing. Carnival Cruise Lines is continually introducing waysthe predominant year-round cruise line in the Caribbean. In addition, they sail on seasonal cruises to keepEurope, Alaska, New England and Canada, Bermuda, Hawaii and the Panama Canal. Carnival Cruise Lines will operate from 15 North American home ports in 2011. Beginning in October 2012, Carnival Cruise Lines will deploy one 2120-passenger capacity ship,Carnival Spirit, on a year-round basis for cruises departing from its cruise experience freshSydney, Australia home port. The ship will primarily visit the South Pacific Islands and exciting, including expandedAustralia offering cruises generally from eight to 12 days, and will source guests primarily from Australia.

Carnival Cruise Lines strives to reconnect guests to the fun in life and its brand promise of FUN FOR ALL. ALL FOR FUN.SM captures the authentic spontaneous fun of the Carnival Cruise Lines experience. A Carnival Cruise Lines vacation offers award-winning dining, choices, Carnival Comfort Bed sleep systems, spectacular production shows,entertainment, spacious staterooms, innovative children’s programming, revitalizing spa services and action-packedaction packed casinos. Carnival Cruise Lines continues to add new features that fit its fun, memorable positioning. For example, in 2010 it launched Punchliner Comedy Club, offering a diverse array of comedians on multiple nights and SuperStar Live Karaoke, giving guests the center stage to sing with a live band further enhancing the onboard entertainment experience. This spirit, when combined with a culture that prides itself on innovation, positions the brand well to continue to retain and grow its standing as a cruise market leader.

          All ofIn May 2011, Carnival Cruise Lines’ nextDream-class ship, the 3,690-passenger capacityCarnival Magic will enter service. This new ship will offer a host of guest amenities including, among others, the RedFrog Pub, a Caribbean-inspired pub at sea; Cucina del Capitano, a family-style Italian restaurant inspired by its Italian ship captains; Carnival WaterWorks aqua park featuring a gigantic, 500-gallon water “dump bucket.”Carnival Magic will also offer SportsSquare with the cruise industry’s first ropes course, where thrill-seeking guests can traverse across ropes suspended above the ship offering spectacular views to the sea nearly 150 feet below. The line has one additionalDream-class ship,Carnival Breeze, scheduled to enter service in June 2012. With these two new ships were designed and built as floating resorts. Fun Ship cruises typically range from three to seven days and sail from 20 convenient homeports.additions, Carnival Cruise Lines’ ships call year-round on ports in the Bahamas, the Caribbean and Mexico. In addition,existing capacity will grow by 13.5%. Carnival Cruise Lines ships also offer seasonal cruisescontinues to Alaska, Canada/New England, Europe, South America,invest in its current fleet, which includes upgrades to guest accommodations, new water parks, resort-style pools and the Hawaiian Islands and transatlantic voyages.addition of Serenity, an adults-only retreat area.

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          Princess

Princess, whose brand name was made famous by theLove Boat television show, recently celebrated its 40th anniversary.has been providing cruises since 1965. Princess, the world’s third largest cruise line, operates a fleet of 1617 modern ships, with antwo additional ships scheduled to enter service, one in June 2013 and one in June 2014. The new ships will each have a 3,560-passenger capacity and will continue the evolution of the Princess product. With these two new ship expectedadditions, net ofRoyal Princess transfer to begin service in 2008.P&O Cruises (UK), Princess’ existing capacity will grow by 17.0%. Princess offers over 90113 unique itineraries to more than 270319 destinations, with cruises generally offrom seven to 14 days, and atwo world cruise that exceeds 100cruises in 2011 of 104 and 107 days. Princess is a leading cruise line in international and exotic regions all over the world, including Europe, Alaska, Australia, Asia, Australia, Europe, the South PacificPanama Canal, Hawaii and South America. As part of someSome of Princess’ Caribbean cruise offerings feature a private island destination that Princess leases and operates, a private island destination, known as Princess Cays® which is located on the island of EleuthraEleuthera in theThe Bahamas. Substantially all of Princess’ ships reflect an innovative design philosophy called “Big Ship Choice, Small Ship Feel,” emphasizing a broad variety of amenities combined with the more intimate ambience found on smaller vessels. Virtually all of Princess’ ships feature the Personal Choice Dining program, offering guests flexibility, convenience and quality in an array of traditional, anytime, specialty and casual dining options. A quality service program entitled C.R.U.I.S.E. (Courtesy, Respect, Unfailing In Service Excellence) helps ensure extremely high standards of service throughout the fleet.

Princess is widely recognized among travel agents as an innovative, premium cruise line.line committed to helping its guests Escape Completely® from their daily routine and responsibilities. Designed with a warm, welcoming “comfortable elegance,” Princess’ ships provide a relaxed, rejuvenating retreat at sea, with signature amenities offered consistently across most of its fleet befitting its mission to be The introductionConsummate Host® to its guests. Its “Piazza” main atrium serves as the heart ofEmerald Princess, Crown Princess the ship, featuring its International Café andCaribbeanPrincess are specialty coffee bar, its Vines wine and seafood bar and a variety of entertainment throughout the latest in the evolving Grand Class series of vessels, with theirday and evening. Its “Movies Under theThe Stars” outdoor theaters showingrecreate the drive-in movie experience out on deck, with first-run Hollywood hits and major sporting events shown on a 330 square foot outdoorsquare-foot poolside

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LED screen. At least 57% of each ofscreen, complete with fresh-made popcorn. Its adults-only Sanctuary retreat space and unique “Ultimate Balcony Dining” course-by-course dining option were industry firsts. Princess is now introducing these Grand Class ship’s staterooms have balconies; another hallmarkamenities to other ships in its fleet. See Part I, Item 1. Business. B. “Cruise Operations – Australia” for additional discussion of Princess’ ships. Princess attracts consumers with a highly integrated brand marketing campaign, utilizing the slogan “Escape Completely” which appearsoperations in magazines, newspapers, direct mail, online, DVD and point-of-sale materials.Australia.

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          Holland America Line

Holland America Line, with more than 130137 years of cruising experience, operates a premium fleet of 13 ships, with an additional ship expected to begin service in each of 2008 and 2010.15 ships. In July 2010, Holland America Line cruises call at more than 300 portslaunched its second Signature-class ship,Nieuw Amsterdam. The 2,106-passenger capacityNieuw Amsterdam is a sister ship toEurodam, which was delivered in more than 60July 2008. Holland America Line calls on 354 destinations in 98 countries and territories on all seven continents. Ports of embarkation include New York, Boston, Fort Lauderdale, Tampa, San Diego, Seattle, Vancouver, Copenhagen, Amsterdam, Rotterdam, Rome, Rio de Janeiro, Valparaiso, Auckland, Sydney and Hong Kong. Holland America’s ships, which tend to be smaller and more intimate thancontinents, including Antarctica. While the bigger contemporary cruise ships, were designed with airy viewing lounges, wraparound teak decks and private, roomy verandahs that offer guests



the chance to experience wildlife and scenery. The majority of Holland America Line’s cruise lengthscruises are from seven to 21 days, however there areHolland America Line also offers longer, and more exotic cruises, such as the world cruise which lasts over 100Grand Voyages up to 70 days, plus an annual Grand World Voyage of 110 days. Most sailings inIn the Caribbean, most ships visit Holland America Line’s private island known asin The Bahamas, Half Moon Cay.

          As Holland America Line introduces newLine’s mission is to create once-in-a-lifetime experiences for its guests to its premium brand, theevery time they cruise. The brand continues to enjoy one of the highest rates of repeat cruisers in the cruise industry. Holland America Line’s $550 million Signature of Excellence product enhancement initiative emphasizes its dedication to all aspects of the guest experience, including elegant accommodations, sophisticated five-star dining and award-winning service. Its onboard experiencefleet of mid-sized ships is distinguished by warm, welcoming personalized service, a timeless approach to interior designdesigned for more intimate cruising and feature classically-designed interiors, wraparound teak decks and private verandas. In addition, Holland America Line ships have one of the most extensive collections of art and antiques at sea. The five areas identified as pillars

All of the Holland America guest experience are (1) spacious, elegantLines’ ships and accommodations, (2) sophisticated five-star dining, (3) gracious, unobtrusive service, (4) extensive enrichment programs and activities and (5) compelling worldwide itineraries.

          The brand’s $425 million product enhancement initiative “Signature of Excellence,” continues with ongoing refinements to service and enrichment activities onboard and ashore. Signature of Excellence includes thehave Culinary Arts Center, a state-of-the-art onboard show kitchenCenters presented byFood & Wine magazine, where visiting chefs and culinary experts provideguests enjoy cooking demonstrations, private cooking lessons, wine tastings and lifestyle seminars. The Digital Workshop in collaboration with Windows® offers complimentary photo technology classes to our guests. As part of this initiative, Holland America Line recently completed a multi-million dollar refurbishment project toand guests will find specialty coffees, an extensive library, music listening stations and internet access in thePrinsendam,whereby it, among other things, refurbished its staterooms, expanded the shopping promenade Explorations Café® in partnership with The New York Times®. The Greenhouse Spa and added a new Explorations Cafe.Salon has extensive wellness and beauty treatments, fitness classes and exercise equipment.

          SeabournLOGO

Seabourn deliversprovides ultra-luxury cruising vacations on smaller ships that focus on personalized service andservices, all-suite accommodations, superb cuisine aboard each of their three-208 passenger capacity all-suite ships. Seabourn’s crew to guest ratio of nearly 1 to 1 is amongand unique experiences and in 2010 was awarded the very highest in the industry. The line offers an ultra-luxury experience“Best-Small Ship Cruise Line” by bothTravel & Leisure and is widely considered to be one of the most ultimate travel experiences available.Condé Nast magazines. Seabourn pampers its guests with complimentary open bars and value-added extras such as Massage MomentsSM on deck and Caviar in the SurfSM, complementary on deck Massage MomentsSM and Dancing under the StarsSM are just a few of the delights on Seabourn. beach parties. Seabourn’s ships offer destinations throughout the world, including Europe, Asia, the South Pacific Islands, Australia and the Americas, with cruises generally in thefrom seven to 14 day range,days, with some cruises lasting longer. of longer length, including a 111-day world cruise.

Seabourn itineraries include many smaller, off-the-beaten-track ports that are inaccessible to larger ships. Seabourn hascurrently operates three 208-passenger capacity ships and two 450-passenger capacity ships and will continue its fleet expansion in 2011 withSeabourn Quest,another 450-passenger capacity ship. With this new ship addition, Seabourn’s existing ship capacity will grow by 29.5%. The larger 450-passenger capacity ships offer more categories of luxury suites, more dining alternatives and an 11,400-square foot spa facility that is the largest on order, which are expectedany ultra-luxury vessel. All the Seabourn ships have a service ratio of nearly one staff member per guest and the intimate, sociable atmosphere that has been the hallmark of the Seabourn lifestyle for over 22 years. During 2009 and 2010, the original three 208-passenger capacity ships each completed an interior refurbishment of public areas to begin service in 2009, 2010 and 2011.

          III.Europemore closely match the ambiance of its recently delivered ships.

 

IV.Europe, Australia & Asia (“EAA”)

a.Europe

We believe that Europe is the largest single leisure travel vacation market in the world, but to date cruising in Europe has achieved a much lower level of market penetration rate than in North America and represents a relatively small percentage of the European vacation market. Approximately 3.44.9 million European-sourced passengers took cruise vacations for two or more consecutive nights or more in 20062009 compared to approximately 10.4 million North American-sourced passengers. Additionally, we estimate that about 3.75.5 million European-sourced passengers took a cruise in 2007.2010, which was approximately the same size as the North American market in 1998. The number of European cruise passengers increased byat a compound annual growth rate of approximately 9.8% between 2001 and 2006.11.7% from 2005 to 2010, as passenger capacity has been added. We believe that the European cruise vacation market represents a significant growth opportunity for us, and we plan to introduce a number ofcontinue introducing new or existing ships into Europe over the next several years. This should enable us to further segment the European market and achieve increasing economies

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As of scale, which is one of our strategic objectives. Approximately 63%,January 31, 2011, five ships or 32,394over 12,500 berths of our passenger capacity under construction hashave been designated for our European brands.brands through 2013. Our European brands represent 31%39% of our total capacity at November 30, 2007, and we expect them to increase to 39% of our total capacity by 2011.2010.

The principal itinerariesmost popular location visited by European-sourced cruise guests in 2007 were2010 was the Mediterranean Sea, followed by other locations, such as the Caribbean, (including the Bahamas), Bermuda, northernNorthern Europe (including Scandinavia and the Baltic) andBaltic Sea), the Atlantic Isles (including the Canary Islands and Madeira)., the Arabian Gulf and Indian Ocean, the Far East, South America, New England, New York and Canada.

 At

1.United Kingdom (“UK”)

The UK provides the end of 2007, 106 ships with an aggregate passenger capacity of approximately 111,000 lower berths were based primarily in Europe. Our projections indicate that by the end of 2008, 2009, 2010 and 2011, Europe will be served by 116, 119, 124 and 126 ships, respectively, having an aggregate passenger capacity of approximately 130,000, 139,000, 151,000 and 156,000 lower berths, respectively. These figures include some ships that were, or are expected to be, marketed in both Europe and elsewhere during different times of the year. Net capacity serving European-sourced cruise guests has increased at a compound annual growth rate of 6.0% for the past three years. The future growth rate is currently expected to be 10.8% for the next three years. Our estimates of European



capacity are based on similar assumptions as discussed previously for our North American estimates, but with the additional expectation that alargest number of older ships built before 1975 will leave European service by 2010 as a result of their noncompliance with mandated maritime regulations that become effective that year.

A.United Kingdom

          The UK is the single largest country from which cruise passengers are sourced in Europe. Approximately 1.2Over 1.5 million UK passengers took cruises in 2006.2009, and we estimate that 1.6 million cruised in 2010. Cruising in the UK has becomeis an established alternative to land-based resort and sightseeing vacations. The number of UK cruise passengers increased byat a compound annual growth rate of approximately 9.0% between 2001 and 2006.8.3% from 2005 to 2010. We believe that the UK has additional growth potential for the cruise industry as the levelbecause of low market penetration is estimated at only approximately two-thirdslevels and other favorable characteristics of that of North America.the cruise industry.

P&O Cruises and Ocean Village source(UK) sources substantially all of theirits guests from the UK. Cunard sources most of its guests from the UK, North America, Germany and Australia. Our North American brands and Costa also source guests from the UK. For example, since 2005 Princess Cruises’Sea Princess, which is homeported in Southampton during the summer months and has Fort Lauderdale as its port of embarkation during the winter season, has been primarily marketed to UK vacationers who desire an American style of cruising.

          P&O CruisesLOGO

P&O Cruises (UK) is the largest cruise operator and best knownmost recognized cruise brand in the UK with fiveand takes more British cruisers on holiday than any other cruise brand in the world. With seven premium ships of differing sizes, it offers a broad range of British guests the opportunity to “Discover a Different World...” while still feeling very much at home, because the world of P&O Cruises (UK) is one which is tailored to those who enjoy today’s British tastes. Also as the trusted UK cruise experts, having established cruising over 170 years ago, P&O Cruises (UK) celebrates maritime traditions and an additional ship expectedoffers genuine service, a sense of occasion and attention to begin service in eachdetail to ensure guests enjoy the holiday of 2008 and 2010. Thesea lifetime, every time they travel.

P&O Cruises (UK)’s ships cruise to over 225visit 270 destinations in more than 90 countries, with most cruises ranging from two-day cruise breaks to world cruises of 87 to 109 days. The majority of cruise vacations in the summer are seven to 1614 days but with some cruises lasting longer, including three world cruises in each of 2008duration and 2009. P&O Cruises’ ships, which are relatively new compareddepart from Southampton, England cruising to the ships that are more typically marketed inMediterranean Sea, the UK, have enabledBaltic Sea, the Norwegian fjords or the Atlantic Isles. In the fall and winter, P&O Cruises to offer a more modern style of cruising to UK cruise guests(UK) offers cruises embarking in the Caribbean and increase their appeal to younger guestsMediterranean Sea, world cruises and families, while retaining older and more traditional British customers. TheArtemis andArcadia are child-free ships, which generally appeal to an older guest demographic, while the rest of the fleet is well-equipped for children’s activities. P&O Cruises offerslonger cruises departing from Southampton, England to the Mediterranean Sea, the Atlantic Isles the Baltic, Scandinavia and the Norwegian Fjords duringCaribbean.

Each ship offers a range of entertainment and restaurants, including classic silver service, designed to please our British guests. Two of its ships offer vacations exclusively for adults, while the summer, and primarily operates Caribbean cruises and a choiceother ships are well-suited for families. With the addition of three world voyages during the winter.

its largest ship,Azura in 2010, P&O Cruises recently announced their Elevation initiative,(UK) introduced the first fine dining Indian restaurant at sea, from an Indian born British chef awarded a Michelin star, a new wine bar concept, and the first large screen outdoor cinema on a P&O Cruises (UK) ship.

Adonia, which is their commitment to provide an even more refined and luxurious cruise holiday for their guests. The initial phase of the program includes the implementation of 67 product enhancements and refinements, part of a multi-million Sterling program thatcurrently sailing as Princess Cruises’Royal Princess, will be rolled-out across the brand’sjoining this fleet of ships. Among the many Elevation enhancements are upgradesin May 2011 to guest accommodations, a range of enhanced dining experiences, the introduction of “once in a lifetime” shore excursions, enhanced entertainment, and the launch of CruiseTone, a holistic well-being program.replaceArtemis.

LOGO

          The ships offer a welcoming atmosphere, with an emphasis on the attributes of “Britishness,” “professionalism,” and “style.” TheArcadia andOceana offer a more contemporary and innovative experience with an informal atmosphere and range of alternative dining venues, from restaurants and buffets to grills and bistros. While the elegant superlinersAurora andOriana offer a stylish and classic cruise experience with their broad decks, traditional artwork and blend of formal and informal onboard experiences. TheArtemis, the smallest ship in the P&O Cruises fleet, offers a more traditional and intimate experience, her size enabling her to visit ports not charted by larger vessels as well as fostering a real sense of camaraderie. This is of particular appeal to those who enjoy a more formal onboard experience, including P&O Cruises’ traditions such as afternoon tea and her program of Music Festivals at Sea. Each of these different ambiences appeal to a different type of British guest.

Cunard,

          The Cunard brand, which was launched in 1839, and has the Most Famous Ocean Liners In The WorldSM, operates three premium/luxury ships that evoke a golden era of luxurious cruising with an additional ship,cruising. In October 2010, Cunard took delivery of the 2,068-passenger capacityQueen Elizabeth, expected to begin service in 2010. Cunard’s flagship, thewhich combined withQueen VictoriaandQueen Mary 2, is represents the largest ocean lineryoungest fleet in the worldworld. During 2011, Cunard ships will primarily sail a variety of seasonal itineraries in Northern Europe, the Mediterranean and operates the northern transatlantic crossing routeCaribbean as well as other world-wide itineraries. TheQueen Elizabeth 2(“QE2”), which we have contractedtraditional transatlantic voyages. Most of Cunard’s voyages range from seven to sell in November 2008, will offer two final transatlantic voyages which will complete 806 transatlantic voyages in her 41-



year life. Afterward, the QE2 will begin a new life as a first-class hotel, retail and entertainment destination at The Palm Jumeirah in Dubai under new ownership. TheQueen Victoria, Cunard’s newest ship, is a marriage of heritage and innovation with a three tier grand lobby that offers a lavish taste of life onboard. TheQueen Victoria debuted in December 2007 in Northern Europe and in January 2008 began a 106 day world cruise. Cunard’s ships offer voyages to worldwide destinations, with most voyages ranging between six and 14 days but with some shorter voyagestwo world cruises of 96 and 103 days.

Cunard ships provide guests with the opportunity to give guests a chance to get a tasterelive the glory days of ocean travel featuring sophisticated five-star dining, luxurious accommodations and award-winning white-glove service. In addition, Cunard ships spotlight unique British-styled shipboard amenities, such as libraries, traditional British pubs and art galleries. Cunard ships also feature exquisite dining in grills or exclusive restaurants, lounges with 270 degree views of the ocean and cabins that are named after Cunard experience.commodores who were knighted. Together, these features further distinguish this historic brand apart from all others and have made Cunard ships the Most Famous Ocean Liners In 2008 and 2009 the Cunard world cruises range from 90 to 107 days and will give guests a chance to indulge themselves during a longer vacation.The WorldSM.

          Ocean Village

          The Ocean Village brand was launched in 2003. Ocean Village doubled its passenger capacity in April 2007 with the introduction of theOcean Village Two and, accordingly, the brand currently operates two contemporary ships serving the UK. This brand targets a young and active customer base and its cruise product emphasizes informality, along with a spirit of adventure, as experienced through its onboard activities and shore excursion offerings. The brand attracts a high proportion of guests new to cruising. The originalOcean Village ship offers one or two week cruises, together with cruise and stay holidays, and operates out of Heraklion, Crete in the Mediterranean during the summer season and from Montego Bay, Jamaica in the Caribbean during the winter season.Ocean Village Two offers one week cruises and uses Palma, Majorca as a port of embarkation during the summer season and Barbados, in the Caribbean during the winter season.

B.Southern Europe

 

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2.Continental Europe

The main countries in southerncontinental Europe for sourcing cruise passengers are Germany, Italy, FranceSpain and Spain.France. Together, these main countries generated approximately 1.22.8 million cruise passengers in 2006.2009 and we estimate that approximately 3.1 million passengers took a cruise in 2010. The German cruise market reached more than 1.2 million passengers in 2010 and is the second largest market in Europe, after the UK. Italy is the third largest cruise market in Europe with almost 880,000 passengers in 2010. Spain and France are the fourth and fifth largest cruise markets in Europe with almost 640,000 passengers and 380,000 passengers in 2010, respectively. Cruising by passengers sourced from Germany, Italy, FranceSpain and SpainFrance combined increased byat a compound annual growth rate of approximately 10.5% between 2001 and 2006.11.9% from 2005 to 2010. We believe that southerncontinental Europe has significant growth potential for the cruise industry asbecause the level of market penetration level is only estimated at approximately one-fifth of thatone-third of North America.America’s market penetration level and other favorable characteristics of the cruise industry. We intend to increase our penetration in southerncontinental Europe primarily through Costa, AIDA and Ibero. The principal sources of our guests for Costa are from Italy, France and Germany, while AIDA and Ibero source their guests principally from Germany and Spain, respectively. The operating results of our newest brand, Ibero, are being adversely impacted by the weakness of the Spanish economy, however, we believe Ibero has good long-term growth prospects. See Note 10, “Fair Value Measurements, Derivatives Instruments and Hedging Activities” to our Consolidated Financial Statements in Exhibit 13 to this Form 10-K for additional discussion. Finally, as discussed below our Costa and Ibero cruise brands also market to, and provide cruise vacations in, South America, principally during the Northern Hemisphere’s winter months.

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Costa is Italy’s and Europe’s # 1 Cruise Line based on guests carried and ship capacity and boasts over 62 years of cruising history. Costa is one of the most recognized cruise brands marketed in Europe, which also has the mostEurope. In 2010, Costa took delivery of one new cruise ships on order of any southern European cruise brand,ship,Costa Deliziosa, and our new Ibero Cruises brand.

          Costa

          Costa is Italy and Europe’s #1 Cruise Line based on guests carried and capacity of its ships, and boasts 60 years of rich history. Costanow operates 1214 contemporary ships, with two additional ships, expectedCosta FavolosaandCosta Fascinosa,scheduled to beginenter service, one in 2009July 2011 and one in May 2012. With these two new ship in each of 2010, 2011 and 2012. additions, Costa’s existing capacity will grow by 20.4%.

Costa offers guests an international and multi-lingual ambiance with an Italian touch. Costa principally serves customersCosta’s 1.4 million guests in Italy, France, Spain and Germany.2010 were sourced from 179 countries. The Costa brand offers a more traditional product catering to an older demographic in Germany and a higher-end contemporary product in Germany and Spain and thus segments these markets where we also own and operate the more mid-contemporary AIDA and Ibero Cruises brands.

          The Costa ships callcalls on 132 European and Middle Eastern250 ports around the world, with 48100 different itineraries, and sail to various other ports in the Caribbean and South America, with most cruises ranging from seven to 11 days. Costa’s ships operate in Europe from spring to fall. From fall to springIn the summer months, Costa repositions six of its ships to the Caribbean and South America, repositions two of its ships through the Arabian Gulf to its Dubai port of embarkation, and maintains a year-round presence with two ofdeploys its ships in the Mediterranean. CommencingMediterranean and Northern Europe areas. In the winter months, Costa deploys its ships in December 2007, Costa began further extending its ports of embarkation by offering cruises out of Mauritius, inthe Mediterranean Sea, South America, the Arabian Gulf, the Caribbean, the Red Sea and the Indian Ocean. See Part I, Item 1. Business. BB. “Cruise Operations - Costa– Asia” for additional discussion of Costa’s operations in Asia.

          Ibero CruisesLOGO

          In September 2007 we entered into an agreement with Orizonia Corporation, Spain’s largest travel company, to form Ibero Cruises, a Spanish cruise line, for an investment of €290 million, which we funded with €105 million of cash and €185 million in proceeds that Ibero Cruises borrowed under a portion of our revolving credit facility. Ibero Cruises operates two contemporary Spanish cruise ships, the 834-passenger capacityGrand Voyager, and the 1,244-passenger capacityGrand Mistral, built in 2000 and 1999, respectively, which represent some of the newest ships in the Spanish cruise sector. Substantially all of Ibero Cruises’ guests are sourced from Spain and, accordingly, their ships are especially tailored to the Spanish market, including Spanish speaking officers and crew and



Mediterranean and Spanish style food and entertainment. The ships’ ports of embarkation are Barcelona, Spain and Venice, Italy from March to October; from where they primarily offer seven-day Mediterranean sailings. From November to February these ships are time-chartered to an unaffiliated Brazilian tour operator pursuant to long-term agreements, which expire in March 2008 for theGrand Mistral and March 2011 for theGrand Voyager. We intend to expand this Spanish brand over the next several years through the redeployment of existing ships from our fleet, beginning with the transfer of Carnival Cruise Lines’ 1,482-passenger capacityCelebration in April, 2008. TheCelebration will be renamed theGrand Celebration and will undergo a multi-million dollar refurbishment to get her ready to commence her first Ibero Cruises sailing in June, 2008.

                    C.Germany

          Germany is the largest source market for cruise passengers in continental Europe, with approximately 0.7 million cruise passengers in 2006. Germany had a compound annual growth rate in the number of cruise passengers carried of approximately 12.4% between 2001 and 2006. We believe that Germany has significant growth potential for the cruise industry as the level of market penetration is only estimated at approximately one-fourth of that of the North America cruise industry.

          AIDA

AIDA, which began operating in 1996, sources mostsubstantially all of its guests from German speaking countries,Germany, Austria and German-speaking Switzerland, and is the leader and most recognized cruise brand in the German cruise segment.market. AIDA operates fourseven contemporary ships, with onethree additional ship expectedships scheduled to beginenter service, one in each of fiscal 2008, 2009, 2010, 2011, 2012 and 2012. The2013. With these three new ship additions, AIDA’s existing capacity will grow by 54.6%. AIDA’s current generation of vessels, including the first generationAIDAdivawhich AIDA tookit started taking delivery of in 2007, are innovative. They introduce, forFor example, AIDA introduced the ‘Theatrium’ as a central meeting place for guests that has a marketplace character and provides guests with“Theatrium,” a completely new space concept as well asthat provides guests a central meeting space and an enhanced entertainment ideas.venue. OnAIDAblu, which was delivered in February 2010 and for the next three newbuilds, the spa concept has been further developed to include 30 spa suites and veranda cabins. Additional product innovations on these new vessels will include the Brauhaus, a micro-brewery, which was introduced onAIDAblu, and new restaurants with fresh culinary concepts.

AIDA’s product is especially tailored for the German-speaking market, including German-speaking crew as well as German-style food and entertainment. AIDA offers an exceptionally relaxed, yet active, cruising experience with an emphasis on a healthy and youthful lifestyle, choice, informality, friendliness and activity. SpaIn addition, AIDA’s ships include a variety of informal and fitness areas and high quality but informalformal dining options, characterize the experience onboard the vessels.including buffets, grills and exclusive restaurants.

AIDA offers its guests cruises varying in lengthgenerally from threefive to 14 days.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 the NorthNew England and Baltic Seas, calling on approximately 70 ports, while itineraries forCanada. During the winter, include AIDA ships sail in

11

the Caribbean, Central America, the Atlantic Isles, the Western Mediterranean Sea, the Atlantic Isles,Far East, the Arabian Gulf and Trans-Suez Canal passages. Commencing inIn the fall of 2008,2010, AIDA began offering cruises to South America and up the Amazon River, and from summer 2011 AIDA will further extend its embarkation portsoffer cruises for the first time in the Black Sea.

LOGO

Ibero, which began operations in 2003 but was acquired by offeringus in 2007, operates four contemporary cruise ships, includingGrand Holiday (formally Carnival Cruise Lines’Holiday), which entered Ibero service in May 2010. Substantially all of Ibero’s guests are sourced from Spain, Brazil and Argentina. Ibero’s ships are especially tailored to the Spanish market, including Spanish-speaking crew as well as Mediterranean and Spanish-style food and entertainment. From spring until fall, all of Ibero’s ships offer seven-day Mediterranean and Northern European sailings. As discussed below, three of Ibero’s ships were repositioned to South America for the Northern Hemisphere’s fall and winter to offer cruises from North America, substantially all sourced with German guests.

          IV.Australia, New Zealandalong the Brazilian and AsiaArgentine coasts.

 

3.South America

For many years cruise vacations have been marketed in South America, principally to Brazilian and Argentinean-sourced passengers, although cruising as a vacation alternative remains in a relatively early stage of development. Brazil and Argentina have populations of approximately 200 million and 40 million, respectively, and we believe that their discretionary incomes will grow significantly in the future. More than five million Brazilian tourists traveled abroad in 2010 and we expect this to increase to approximately six million in 2011. Approximately one million Argentine tourists traveled abroad in 2010 and we expect this amount to increase slightly in 2011. Based on industry data and our internal estimates, approximately one million Brazilians and Argentineans took a cruise vacation in 2010, of which almost 25% sailed on a Carnival Corporation & plc branded vessel primarily through our Costa and Ibero brands. We believe that the South American vacation market has significant growth potential for the cruise industry because the combined Brazilian and Argentine estimated market penetration levels are less than 15% of the North American cruise vacation market’s penetration level and other favorable characteristics of the cruise industry.

Cruises from South America typically occur during the Southern Hemisphere summer months of November through March. Costa and Ibero are each operating three ships in this region from November through March. These ships depart from home ports in Brazil and Argentina.

b.Australia

Cruising in Australia continues to develop. Approximately 220,000We estimate that approximately 370,000 Australians and New Zealanders took cruise vacations in 2006.2009 and estimate that this number grew to approximately 470,000 in 2010. Cruising by passengers from these countries increased at a compound annual growth rate of approximately 19.2% from 2005 to 2010. We serve this region primarily through the contemporary P&O Cruises Australia(Australia) brand, which is the leading cruise line in Australia and New Zealand. In addition, our premium brand Princess has a very significant presence in thisthe Australian vacation market. We began to source passengers directly from Asia in 2006. We believe thisthat the Australian market has significant growth potential given its large populationfor the cruise industry because the market penetration level is estimated at approximately half of North America’s market penetration level and expanding economy.other favorable characteristics of the cruise industry.

LOGO

P&O Cruises Australia

          P&O Cruises Australia(Australia), with over 75 years of cruising experience, caters specifically to Australians and New Zealanders. Its ships,P&O Cruises (Australia) has more than doubled its fleet capacity with the transfer of two Ocean Village ships. The second ship was transferred in November 2010 and was renamedPacific DawnPearl, and has just completed a multi-million dollar refurbishment. The previous Ocean Village transfer was renamedPacific Sun andPacific StarJewel, which was transferred in November 2009.

Its four contemporary ships offer cruises generally ranging from seven to 14 day cruises embarking from Sydney and Brisbane,12 days. The ships are home ported in a number of cities in Australia and Auckland, New Zealand. These cruises enable guests to discover the islands of the South Pacific from New Caledonia to Tahiti, as well as exploring Australia’s magnificent coast line, New Zealand and Asia.

12

LOGO

Princess deploys two ships on a year-round basis on cruises departing from home ports in Australia. In 2008, P&O Cruises Australialate 2011, a third ship will introduce some longer Asian itineraries, including the 42-day Japanese cherry blossom cruise. ThePacific Star was sold in May 2007 and is being chartered back for use by P&O Cruises Australia until March 2008.

          Princess

          In November 2007, Princess time chartered theSun Princessreposition to P&O Cruises Australia. TheSun Princesswill offer year-round cruises ranging from eight to 28 days under the Princess brand name. Princess will also time charter theDawn Princess to P&O Australia for year-round service starting in October 2008.seasonal deployment. These Princess brand name ships will offer cruises from Sydney, Melbourne and Fremantle,visit the South Pacific Islands, Australia, offering Australian, New Zealand Asian and Pacific Island itineraries.Asia; and the cruises generally range from 13 to 17 days, with one world cruise of 104 days. Princess is primarily marketed in North America, so we consider it a North America cruise brand. Therefore, the operating results of the ships deployed in the Australian market are included in our North America cruise brand segment, even though these ships are primarily marketed to Australians.



c.Asia

We began sourcing passengers from China in 2006. We source most of our Chinese guests from the cities of Beijing and Shanghai and the province of Guangdong, which have a combined population of over 130 million. Tourism is one of the most rapidly growing sectors in the Chinese economy as Chinese discretionary income has increased at a compound average growth rate of 10.4% over the last five years. More than 57 million Chinese tourists traveled abroad in 2010. We believe this market has outstanding long-term growth potential for the cruise industry given its early stage of development, large population, easing of travel restrictions and expanding international tourist travel.

LOGO

Costa Asia,

          In July which began its operations in 2006, currently operates one contemporary cruise ship. Costa began homeporting theCosta Allegra out of China to caterAsia caters primarily to the Chinese market. Costaand surrounding markets and was the first international cruise line to homeporthome port a ship in China. TheCosta Asia’s ship is specifically tailored to the Chinese vacation market, is characterized by high seasonalityserving Chinese style cuisine, offering mah-jongg tables and accordingly,providing well-known luxury brands in May 2007 Costa Asia initiated a new program introducing 14-day Far East cruises for guests principally-sourced from Europe forits retail shops. During the non-peak Chinese vacation months. In the peak Chinese vacation season during part of February and May, and from July through mid-October, themonths, Costa Allegra sails from Hong Kong, Shanghai and Beijing, China, for 5-day cruises, with guests primarily sourced from China. During the remaining non-peak vacation months, theCosta Allegra will sail 14-dayAsia offers longer Far East cruises sourcing guests principally from Europe. In March 2009, Costa Cruises will deploy a second ship, the 1,302-passenger capacityCosta Classica, to Asia. This will more than double Costa’s capacity in the region.

          V.South America

          Cruise vacations have been marketed by Costa in South America, principally to Brazilian and Argentinean-sourced passengers, for many years, although cruising as a vacation alternative remains in a relatively early stage of development in the region. Cruises from South America typically occur during the Southern Hemisphere summer months of November through March. Our presence is primarily represented through the Costa brand, which will operate three vessels in 2008 in this region,Costa Magica,Costa Victoria andCosta Classica, collectively offering 5,932 lower berths, which amounts to a 43% per berth-day increase compared to Costa’s 2007 South American product offerings. These ships primarily offer seven to 11 day cruises visiting ports primarily in Brazil, Argentina, Uruguay and Chile.Europeans.



VI.Ship Information

 

13

V.Ships Under Contract for Construction

Summary information of our ships under contract for construction as of January 29, 200831, 2011 is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

BRAND AND SHIP

 

REGISTRY

 

CALENDAR
YEAR
DELIVERED

 

PASSENGER
CAPACITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carnival Cruise Lines

 

 

 

 

 

 

 

 

 

 

 

Carnival Freedom

 

 

Panama

 

2007

 

 

2,966

 

 

 

Carnival Liberty

 

 

Panama

 

2005

 

 

2,966

 

 

 

Carnival Valor

 

 

Panama

 

2004

 

 

2,966

 

 

 

Carnival Miracle

 

 

Panama

 

2004

 

 

2,118

 

 

 

Carnival Glory

 

 

Panama

 

2003

 

 

2,966

 

 

 

Carnival Conquest

 

 

Panama

 

2002

 

 

2,966

 

 

 

Carnival Legend

 

 

Panama

 

2002

 

 

2,118

 

 

 

Carnival Pride

 

 

Panama

 

2001

 

 

2,118

 

 

 

Carnival Spirit

 

 

Panama

 

2001

 

 

2,118

 

 

 

Carnival Victory

 

 

Panama

 

2000

 

 

2,750

 

 

 

Carnival Triumph

 

 

Bahamas

 

1999

 

 

2,750

 

 

 

Carnival Paradise

 

 

Panama

 

1998

 

 

2,048

 

 

 

Carnival Elation

 

 

Panama

 

1998

 

 

2,050

 

 

 

Carnival Destiny

 

 

Bahamas

 

1996

 

 

2,634

 

 

 

Carnival Inspiration

 

 

Bahamas

 

1996

 

 

2,050

 

 

 

Carnival Imagination

 

 

Bahamas

 

1995

 

 

2,050

 

 

 

Carnival Fascination

 

 

Bahamas

 

1994

 

 

2,050

 

 

 

Carnival Sensation

 

 

Bahamas

 

1993

 

 

2,050

 

 

 

Carnival Ecstasy

 

 

Panama

 

1991

 

 

2,050

 

 

 

Carnival Fantasy

 

 

Panama

 

1990

 

 

2,054

 

 

 

Celebration(a)

 

 

Panama

 

1987

 

 

1,482

 

 

 

Holiday

 

 

Bahamas

 

1985

 

 

1,450

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Carnival Cruise Lines

 

 

 

 

 

 

 

50,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Princess

 

 

 

 

 

 

 

 

 

 

 

Emerald Princess

 

 

Bermuda

 

2007

 

 

3,080

 

 

 

Crown Princess

 

 

Bermuda

 

2006

 

 

3,080

 

 

 

Sapphire Princess

 

 

Bermuda

 

2004

 

 

2,678

 

 

 

Caribbean Princess

 

 

Bermuda

 

2004

 

 

3,100

 

 

 

Diamond Princess

 

 

Bermuda

 

2004

 

 

2,678

 

 

 

Island Princess

 

 

Bermuda

 

2003

 

 

1,974

 

 

 

Coral Princess

 

 

Bermuda

 

2002

 

 

1,974

 

 

 

Star Princess

 

 

Bermuda

 

2002

 

 

2,598

 

 

 

Royal Princess

 

 

Bermuda

 

2001

 

 

710

 

 

 

Golden Princess

 

 

Bermuda

 

2001

 

 

2,598

 

 

 

Tahitian Princess

 

 

Bermuda

 

2000

 

 

676

 

 

 

Pacific Princess

 

 

Bermuda

 

1999

 

 

676

 

 

 

Sea Princess

 

 

Bermuda

 

1998

 

 

2,016

 

 

 

Grand Princess

 

 

Bermuda

 

1998

 

 

2,592

 

 

 

Dawn Princess

 

 

Bermuda

 

1997

 

 

1,998

 

 

 

Sun Princess

 

 

Bermuda

 

1995

 

 

2,022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Princess

 

 

 

 

 

 

 

34,450

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costa

 

 

 

 

 

 

 

 

 

 

 

Costa Serena

 

 

Italy

 

2007

 

 

2,978

 

 

 

Costa Concordia

 

 

Italy

 

2006

 

 

2,978

 

 

 

Costa Magica

 

 

Italy

 

2004

 

 

2,702

 

 

 

Costa Fortuna

 

 

Italy

 

2003

 

 

2,702

 

 

 

Costa Mediterranea

 

 

Italy

 

2003

 

 

2,114

 

 

 

Costa Atlantica

 

 

Italy

 

2000

 

 

2,114

 

 

 

Costa Victoria

 

 

Italy

 

1996

 

 

1,928

 

 

 

Costa Romantica

 

 

Italy

 

1993

 

 

1,344

 

 

 

Costa Allegra

 

 

Italy

 

1992

 

 

784

 

 

 

Costa Classica

 

 

Italy

 

1991

 

 

1,302

 

 

 

Costa Marina

 

 

Italy

 

1990

 

 

762

 

 

 

Costa Europa

 

 

Italy

 

1986

 

 

1,488

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Costa

 

 

 

 

 

 

 

23,196

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

BRAND AND SHIP

 

REGISTRY

 

CALENDAR
YEAR
DELIVERED

 

PASSENGER
CAPACITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Holland America Line(b)

 

 

 

 

 

 

 

 

 

 

 

Noordam

 

 

Netherlands

 

2006

 

 

1,918

 

 

 

Westerdam

 

 

Netherlands

 

2004

 

 

1,916

 

 

 

Oosterdam

 

 

Netherlands

 

2003

 

 

1,848

 

 

 

Zuiderdam

 

 

Netherlands

 

2002

 

 

1,848

 

 

 

Zaandam

 

 

Netherlands

 

2000

 

 

1,432

 

 

 

Amsterdam

 

 

Netherlands

 

2000

 

 

1,380

 

 

 

Volendam

 

 

Netherlands

 

1999

 

 

1,432

 

 

 

Rotterdam

 

 

Netherlands

 

1997

 

 

1,316

 

 

 

Veendam

 

 

Netherlands

 

1996

 

 

1,258

 

 

 

Ryndam

 

 

Netherlands

 

1994

 

 

1,260

 

 

 

Maasdam

 

 

Netherlands

 

1993

 

 

1,258

 

 

 

Statendam

 

 

Netherlands

 

1993

 

 

1,258

 

 

 

Prinsendam

 

 

Netherlands

 

1988

 

 

792

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Holland America Line

 

 

 

 

 

 

 

18,916

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

P&O Cruises

 

 

 

 

 

 

 

 

 

 

 

Arcadia

 

 

Bermuda

 

2005

 

 

1,948

 

 

 

Oceana

 

 

Bermuda

 

2000

 

 

2,016

 

 

 

Aurora

 

 

Bermuda

 

2000

 

 

1,870

 

 

 

Oriana

 

 

Bermuda

 

1995

 

 

1,818

 

 

 

Artemis

 

 

Bermuda

 

1984

 

 

1,188

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total P&O Cruises

 

 

 

 

 

 

 

8,840

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cunard

 

 

 

 

 

 

 

 

 

 

 

Queen Victoria

 

 

UK

 

2007

 

 

1,980

 

 

 

Queen Mary 2

 

 

UK

 

2003

 

 

2,592

 

 

 

QE2(c)

 

 

UK

 

1969

 

 

1,788

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Cunard

 

 

 

 

 

 

 

6,360

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AIDA

 

 

 

 

 

 

 

 

 

 

 

AIDAdiva

 

 

Italy

 

2007

 

 

2,050

 

 

 

AIDAaura

 

 

Italy

 

2003

 

 

1,266

 

 

 

AIDAvita

 

 

Italy

 

2002

 

 

1,266

 

 

 

AIDAcara

 

 

Italy

 

1996

 

 

1,180

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total AIDA

 

 

 

 

 

 

 

5,762

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

P&O Cruises Australia

 

 

 

 

 

 

 

 

 

 

 

Pacific Dawn

 

 

UK

 

1991

 

 

1,596

 

 

 

Pacific Sun

 

 

UK

 

1986

 

 

1,480

 

 

 

Pacific Star(d)

 

 

UK

 

1982

 

 

994

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total P&O Cruises Australia

 

 

 

 

 

 

 

4,070

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ocean Village

 

 

 

 

 

 

 

 

 

 

 

Ocean Village Two

 

 

UK

 

1990

 

 

1,708

 

 

 

Ocean Village

 

 

UK

 

1989

 

 

1,578

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Ocean Village

 

 

 

 

 

 

 

3,286

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ibero Cruises

 

 

 

 

 

 

 

 

 

 

 

Grand Voyager

 

 

Italy

 

2000

 

 

834

 

 

 

Grand Mistral

 

 

Italy

 

1999

 

 

1,244

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Ibero Cruises

 

 

 

 

 

 

 

2,078

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Seabourn

 

 

 

 

 

 

 

 

 

 

 

Seabourn Legend

 

 

Bahamas

 

1992

 

 

208

 

 

 

Seabourn Spirit

 

 

Bahamas

 

1989

 

 

208

 

 

 

Seabourn Pride

 

 

Bahamas

 

1988

 

 

208

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Seabourn

 

 

 

 

 

 

 

624

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

158,352

 

 

 

 

 

 

 

 

 

 

 

 

 


(a)

TheCelebration will be transferred to Ibero Cruises to commence service in June 2008 and renamed theGrand Celebration.



(b)

Since November 2004, the 1,214-passenger capacity formerNoordam is being operated by an unrelated entity under a long-term bareboat charter agreement and, accordingly, is excluded from Holland America Lines’ capacity.

(c)

TheQE2 is under contract to be sold, and will leave Cunard’s fleet in November 2008.

(d)

ThePacific Star was sold in May 2007 and is being bareboat chartered by P&O Cruises Australia until March 2008.

VII.Characteristics of the Cruise Vacation Industry

A.Strong Growth

          The cruise vacation industry has experienced significant growth over the last decade. In tandem with this growth, there have been an increasing number of countries in the world whose economies are benefiting from globalization. This global economic growth has fueled the increasing demand for vacations, including cruising. The number of new cruise ships currently on order from shipyards indicates that the growth in cruise capacity is set to continue for a number of years. In order to fill this new capacity, continued growth in demand across the industry will be required. Given the exceptional value proposition cruising offers in comparison to other competitive land-based vacation alternatives, as well as its relatively low market penetration levels in major vacation markets, including Europe and Asia, we believe that there are significant opportunities for strong growth.

B.Wide Appeal of Cruising

          Cruising appeals to a broad demographic range. Industry surveys estimate that there are approximately 127 million potential cruise guests in North America (defined as members of households with a minimum income of $40,000, that are headed by a person who is at least 25 years old). According to these surveys, more than half of these individuals have expressed an interest in taking a cruise as a vacation alternative.

          In addition based on U.S. Census Bureau predictions, between 2005 and 2015, the number of people in the cruise industry’s primary age group of 45 to 64 years old are expected to grow by 12 million, or 15%, in the U.S. and Canada, and 14 million, or 14%, in Western Europe, while the 65 year and older age group is expected to grow by 12 million, or 28%, in the U.S. and Canada and 11 million, or 15%, in Western Europe. As the age of the U.S., Canadian and European populations is increasing, which is primarily as a result of the aging of the Baby-Boom generation and the advancements in healthcare, we believe the cruise industry is well-positioned to take advantage of these favorable demographic trends impacting its major markets for years to come.

C.Relatively Low Penetration Levels

          Based upon information obtained from the Cruise Lines International Association, a leading trade group in the U.S., only approximately 17% of the U.S. population has ever taken a cruise and only 10% has done so in the past three years. Based on industry data, the 2006 annual penetration rate, computed based on the number of annual cruise passengers as a percentage of the total population, is only 3.1% for North America, 2.0% in the UK, 0.9% in Germany and 0.7% in southern Europe. Elsewhere in the world cruising is at an early stage of development and has far lower penetration rates. In addition, Europeans have significantly more vacation days in a year than North Americans. Overall, we believe that these cruise markets have low penetration levels, and thus provide the cruise industry with the opportunity to grow their businesses.

D.Satisfaction Rates

          Cruise guests tend to rate their overall satisfaction with a cruise-based vacation higher than comparable land-based hotel and resort vacations. We believe that a substantial number of cruise guests think the value of their cruise vacation experience is as good as, or better than, the value of other comparable vacation alternatives.

VIII.Passengers, Capacity and Occupancy

          Our cruise operations had worldwide cruise passengers, passenger capacity and occupancy as follows (a):



 

 

 

 

 

 

 

 

 

 

 

 

 

 

FISCAL
YEAR

 

 

CRUISE
PASSENGERS

 

PASSENGER
CAPACITY

 

OCCUPANCY (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2003

 

 

5,038,000

 

 

113,296

 

 

103.4

%

 

 

2004

 

 

6,306,000

 

 

129,108

 

 

104.5

%

 

 

2005

 

 

6,848,000

 

 

136,960

 

 

105.6

%

 

 

2006

 

 

7,008,000

 

 

143,676

 

 

106.0

%

 

 

2007

 

 

7,672,000

 

 

158,352

 

 

105.6

%

 


(a)Cruise Brands and Ships

Information presented is as of the end of our fiscal year for passenger capacity. Carnival plc’s information is only included since April 17, 2003, the period subsequent to the completion of the DLC transaction.

Expected
Service
Date(b)		Passenger
Capacity

North America Brands

(b)Carnival Cruise Lines

In accordance with cruise industry practice, occupancy is calculated using a denominator of two passengers per cabin even though some cabins can accommodate three or more passengers. Percentages in excess of 100% indicate that on average more than two passengers occupied some cabins.Carnival Magic

5/113,690

Carnival Breeze

6/123,690
7,380

Princess

Newbuild

6/133,560

Newbuild

6/143,560
7,120

Seabourn

Seabourn Quest

6/11450

North America Cruise Brands

14,950

Europe, Australia & Asia (“EAA”) Brands

AIDA

AIDAsol

4/112,194

AIDAmar

5/122,194

Newbuild

3/132,194
6,582

Costa

Costa Favolosa

7/112,984

Costa Fascinosa

5/122,984
5,968

EAA Cruise Brands

12,550
27,500

 Our passenger capacity has grown from 113,296 berths at November 30, 2003 to 158,352 berths at November 30, 2007, primarily because of the deliveries of 18 new cruise ships during this four-year period. See Part I, Item l. Business. B. - - “Cruise Operations-Ship Information” for additional information.

          The occupancy level on our ships during each quarter indicated below was as follows:

(a)

Quarters Ended

Occupancy

February 28, 2006

104.2

%

May 31, 2006

105.4

%

August 31, 2006

111.0

%

November 30, 2006

103.4

%

February 28, 2007

104.1

%

May 31, 2007

103.7

%

August 31, 2007

111.1

%

November 30, 2007

103.2

%

Our ship construction agreements cannot be cancelled by either party without cause, and such cancellation will subject the defaulting party to contractual liquidated damages. See Note 6, “Commitments” to our Consolidated Financial Statements in Exhibit 13 to this Form 10-K for additional information regarding our ship commitments.

IX.Cruise Ship Construction

(b)The expected service date is the month in which the ship is currently expected to begin its first revenue generating cruise. Our Carnival Cruise Lines, Princess and Costa ship construction contracts are with the Fincantieri shipyards in Italy. Our AIDA and Seabourn ship construction contracts are with Meyer Werft shipyard in Germany and T. Mariotti shipyard in Italy, respectively.

VI.Cruise Port and Repair Facility Development and Operations

Our cruise brands provide guests with an improved vacation experience and Cruise Port Facility Development and Operations

          As of January 29, 2008, we had signed agreements with three shipyards providing for the construction of 22 additional cruise ships scheduled to enter service between April 2008 and June 2012. See Note 6, “Commitments” to our Consolidated Financial Statements in Exhibit 13 to this Form 10-K.

          Primarily in cooperation with governmental entities, we are involved inhome ports through the development and management of their new or enhanced cruise port facilities. These facilities are expected to provide our guestsOur involvement is usually in cooperation with an improved vacation experience. Our involvementgovernmental entities and typically includes providing these entities with cruise port facility development and management expertise. Althoughexpertise and financial commitments that are limited to long-term port usage and preferential berthing agreements. However, sometimes we sometimes assist them by providingprovide direct financial support or occasionally developingdevelop the port infrastructure ourselves, most of the time our financial commitment is provided by long-term port usage agreements.ourselves.

During 2007,2010, we were involved in various stages of involvement with the development, enhancement and/or enhancementfinancing of government-owned and operated cruise port facilities in Galveston, Texas,Texas; Miami, Florida,Florida; New York City, New York, andYork; Port Everglades, Florida; San Diego, California.California; San Juan, Puerto Rico and St. Maarten, Kingdom of the Netherlands. In addition, we are in the process of,own and operate or have recently completed negotiations for, the development and/or enhancement of several other government-ownedinterests in joint ventures that own and operate port facilities to service our North American and European guests, including a facility in St. Maarten, Netherlands Antilles.

          We currently operate portrelated facilities in Barcelona, Spain, Grand Turk, TurksSpain; the Caribbean; Civitavecchia, Naples, Savona and Caicos Islands,Trieste, Italy; Hamburg, Germany; Juneau, Alaska,Alaska; Marseilles, France and Long Beach, California and Savona, Italy and are developing or co-developing port facilitiesfor the benefit of our cruise brands.

We own a 40% interest in Civitavecchia, Italy, Cozumel, Mexico, Naples, Italy and Roatan, Honduras pursuant to concession agreements.

          In October 2005, our pierGrand Bahamas Shipyard Ltd. (“GBSL”), which is the largest cruise ship dry-dock repair facility in Cozumel, Mexico was destroyed by Hurricane Wilma.the world. Royal Caribbean Cruises Ltd. (“RCCL”), one of our cruise competitors, also owns a 40% interest and the Grand Bahamas Port Authority owns 20%. This was our busiest transit portrepair facility, located in Freeport, Grand Bahamas, has three dry-docks, which can accommodate ships up to 137,000 tons. Our North American brand ships based in the worldCaribbean primarily use this facility. During 2010, RCCL and served over 1.2our brands had an aggregate of 19 ships serviced at this facility. In addition, unaffiliated cruise ships and other types of ships, such as cargo and oil and gas tankers, were serviced at this facility. GBSL generated total revenues of $98 million passengers in 2005. We have begun rebuilding this pier2010, a large portion of which were derived from work on RCCL and expect our cruise ships will resume calling on this portships.

We account for our investment in GBSL using the fourth quarterequity method, with our share of 2008.



X.Cruise Pricingincome or loss recorded as other nonoperating income or expense. Our total net investment in, including notes receivable from, GBSL was $72 million at November 30, 2010. GBSL had an aggregate of $138 million of outstanding debt to RCCL and Payment Termsus and $2 million of outstanding debt under a revolving credit facility to a

 

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third party at November 30, 2010.

VII.Cruise Pricing and Payment Terms

Each of our cruise brands publishes brochures with prices for the upcoming seasons. Brochure pricesseasons primarily through the internet. Some of our cruise brands still use printed brochures, although their use is diminishing. Prices vary by cruise line, by category of cabin, by ship, by season and by itinerary. BrochureCruise prices frequently change in a dynamic pricing environment. Some cruise prices are regularly discounted through ourspecial promotions, early booking discount programsor loyalty programs.

Historically, our advance bookings have generally been taken from several months in advance of the departure date for all contemporary brand sailings, to more than a year in advance for some of our luxury and European brand sailings. Generally, the longer the cruise itinerary the further in advance the bookings are made. This lead-time provides us with more time to manage our prices in relation to demand for available cabins through the use of advanced revenue management capabilities and other promotions. initiatives, with the strategy of filling our ships while achieving the highest possible overall net revenue yields. Some of our fares, such as Carnival Cruise Lines’ Early Saver, Costa’s Pronto Price Savings and Holland America Line’s Early Advantage and Mariner Savings fares are designed to encourage potential guests to book cruise reservations earlier. In addition, we have the ability to change ship itineraries over time to maximize our revenue yields. (See “Key Performance Non-GAAP Financial Indicators” in our Management Discussion and Analysis of Financial Condition and Results of Operations in Exhibit 13 to this Form 10-K).

If our guests do not pay a vacation protection premium for the ability to obtain a refund if they cancel their cruise within a pre-defined period before sailing, then they are subject to a cancellation fee if they subsequently cancel, which we recognize in cruise passenger ticket revenues upon cancellation. For those guests who pay a vacation protection premium for the ability to obtain a refund, they will receive all or a portion of their deposit value back in accordance with the terms of the program, while we will recognize this vacation protection premium in other revenues.

The cruise ticket price typically includes accommodations, most meals, some non-alcoholic beverages and most onboard entertainment, such as the use of, or admission to, a wide variety of activities and facilities, including a fully equipped casino, nightclubs, theatrical shows, movies, parties, a disco, a jogging track, a health club, swimming pools, sun decks, whirlpools and saunas. Our brands’ payment terms generally require that a guest pay a deposit to confirm their reservationsreservation with the balance due before the departure date, although some of our European brands provide certain of their travel agents and tour operators with credit terms even though these parties typically require the guest to pay for the entire cruise ticket price before sailing. Substantially all of our guests’ payments are received via credit cards or through other electronic banking transfers.

          IfAs a convenience to our guests, do not pay a premium forwe offer to arrange air transportation to and from the ability to obtain a refund if they cancel their cruise within a pre-defined period before sailing, then they are subject to a cancellation fee, which we recognize in passenger ticket revenues upon cancellation. For those guests who pay a premium for the ability to obtain a refund, they will receive all or a portion of their deposit back in accordance with the terms of the program, while we will recognize the premium in other revenues, at the same time that the voyage revenue is recognized.

          Historically, our advance bookings have generally been taken from several months in advance of the departure date for some contemporary brand sailings, to more than a year in advance for some of our luxury and European brand sailings. This lead-time provides us with more time to manage our prices in relation to demand for available cabins, with the goal of achieving higher overall net revenue yields - - see “Key Performance Indicators” in our Management Discussion and Analysis of Financial Condition and Results of Operations in Exhibit 13 to this Form 10-K. In addition, some of our fares such as Carnival Cruise Lines’ Supersaver fares, Costa’s Pronto Price Savings fares, Holland America Line’s Early Savings and Mariner Savings fares and Princess’s Early Booking Discounts, are designed to encourage potential guests to book cruise reservations earlier. In addition, AIDA has a “JustAIDA” booking program that allows guests to make a reservation two to three months before sailing, but the exact cruise ship and specific itinerary are not determined by AIDA until two weeks prior to sailing in order to help AIDA maximize their net revenue yields.

port. When a guest elects to purchase air transportation from us, both our revenues and expenses generally increase by approximately the same amount. Air transportation prices cantypically vary by gateway, destination and destination.other ticket restrictions. Over the last several years, we have generally experienced a lower numberapproximately 14% of our guests purchasingpurchased air transportation from us, which weus. We believe this relatively low percentage is partially a result of having opened additional embarkation points closerclose to our guests’ homes as well asand partially due to the wide availability of competitively-pricedcompetitively priced air tickets sold by third partiesparties. In addition, for some of our European brands’ cruise itineraries we charter aircraft to facilitate our guests’ travel to distant locations. We also offer transfers from and frequent flyer programs.to the airport as part of these programs, as well as to other guests who may need this transfer service.

In 2007, we introduced a new fuel supplement across substantially all of our cruise brands, which resultsresulted in an additional fee being charged to all ourthe guests on these brands, commencing for the most part with cruises departing in early 2008. This temporary fuel supplement, which is included in cruise passenger ticket revenues, was introduced to try to counteractpartially offset a portion of the very high fuel costs we havehad been experiencing, and iswas usually charged on a daily basis, with established total maximums.

XI.Onboardmaximum amounts per passenger. Currently, AIDA, Cunard and Other RevenuesP&O Cruises (UK) are charging fuel supplements. We reserve the right to reinstate our fuel supplements in our other brands and will continue to monitor our markets and review our position based upon the appropriate facts and circumstances.

 We earn onboard and other revenues from onboard activities and services not included in the cruise ticket price consisting of, but not limited to, casino gaming, bar and some beverage sales, gift shop sales, entertainment arcades, shore excursions, art auctions, photo sales, spa services, bingo games and lottery tickets, enhanced dining experiences in alternative restaurants, video diaries, golf lessons, snorkel equipment rentals, internet, cellular phone and telephone usage and onboard promotional advertising for merchants located at our ports of call.

VIII.Onboard and Other Revenues

          Our casinos, which contain slot machines and gaming tables including blackjack, and in most cases craps and roulette, are open only when our ships are at sea in international waters or when otherwise specifically permitted by law. Onboard and other activities are provided either directly by us or by independent concessionaires, from which we collectreceive either a percentage of their revenues or a fee. We earn onboard and other revenues from activities and services not included in the cruise ticket price consisting of, but not limited to, bar and some beverage sales, shore excursions, casino gaming, gift shop sales, photo sales, full service spas and internet and phone services. To maximize onboard revenues, we use various cross marketing and promotional tools and are supported by point-of-sale systems permitting “cashless” transactions for the sale of these onboard products and services. Substantially all of our onboard revenues are paid with credit cards.

Our casinos, which are operated directly by us, contain a variety of slot machines and gaming tables. The casinos are only open when our ships are at sea in international waters or when otherwise specifically permitted by law.

Sales to our guests of shore excursions at each ship’s ports of call include, among other things, general sightseeing, and adventure outings and local boat and beach parties.



We typically utilize locally-owned operators who provide shore excursions based on the local price points and with guides who speak the same languages as most of our shore excursion guests. For the Holland America Line, Princess and PrincessCarnival Cruise Lines ships and our other brands operatingsailing to destinations in Alaska, shore excursions are operated by Holland America Tours and Princess Alaska Tours, as

15

well as locally-owned operations. For shore excursions in other locations,operators. We also offer revenue-producing activities on the private islands and the Caribbean ports we typically utilize locally-owned operations.operate.

In conjunction with our cruise vacations, substantially all of our cruise brands also sell pre- andpre-and post-cruise land packages. Packagespackages of one to four nights. Vacation packages offered in conjunction with ports of callships based in the U.S. would generallyNorth America include one to four-night vacations at nearby attractions or other vacation destinations, such as Universal Studios and Walt Disney World in Orlando, Florida, Busch Gardens in Tampa, Florida, or individual/multiple city tours of Boston, Massachusetts,Massachusetts; New York City, New York,York; Seattle, Washington,Washington; San Diego, California and/orand Vancouver, British Columbia. PackagesVacation packages offered in conjunction with ships based in Europe generally include up to four-night vacations, including stays in well-known European cities such as Athens, Greece,Greece; Barcelona, Spain,Spain; Copenhagen, Denmark,Denmark; London, England,England; Paris, France and Rome and Venice, Italy.

In conjunction with our Alaska cruise vacations, principally on our Holland America Line Princess and Carnival Cruise LinesPrincess ships, we sell pre- andpre-and post-cruise land packages, utilizing, to a large extent, our hotel and transportation and hotel assets.

XII.Sales Relationships and Marketing Activities

          Weassets, which revenues are a customer service-driven company and continue to investincluded in our service organization to assist travel agentsTour and guests. We believe that our support systems and infrastructure are among the strongest in the vacation industry.Other segment.

 

IX.Sales Relationships

We sell our cruises mainly through travel agents, including wholesalers and tour operators.operators that serve our guests in their local markets. We believe our travel agent partners are an integral part of our long-term cruise distribution network. Our individual cruise brands’ relationships with their travel agents are generally independent of each of our other brands, except for certain brands sourcing UK and Australian guests as discussed below. These travel agent relationships are not exclusive and most travel agents also sell cruises and other vacations provided by our competitors. Our policy towardsWe motivate travel agents is to train and motivate them to support our products with competitive sales and pricing policies and joint marketing and advertising programs. We also useemploy a wide variety of trade marketing techniques, including websites, seminars and videos, to familiarize the agents with our cruise brands and products. Substantially all of our cruise brands offer interactive online and other continuing education courses for travel professionals who want to continue learning about the cruise industry and how to effectively sell our cruise products and services. As with our brands’ travel agent relationships, each of our brands’ trade marketing programs are generally independent of each of our other brands.other. In each of our principal markets, we have familiarized the travel agency community with our cruise brands and products.

Travel agents generally receive standard commissions of 10%, plus the potential of additional commissions based on sales volume. During fiscal 2007,2010, no controlled group of travel agencies accounted for 10% or more than 10% of our revenues.

We are a customer service-driven company and continue to invest in our service organization to assist travel agents and guests. We believe that our support systems and infrastructure are among the strongest in the vacation industry. Our investment in customer service has been focused onincludes the development of systemsemployees, processes and employees.systems. We have improvedcontinually improve our systems within the reservations and customer relationship management functions, emphasizing the continued support and training of the travel agency community, while simultaneously developing greater contact and interactivityinteraction with our high-value guest base. Each brand has its own consumer website, which provides access to information about our products to users throughout the world, and substantially all provide self-service internet booking engines to our travel partnersdistribution network and to our customers.customers to enable them to more efficiently book our cruises, air transportation, land transfers, shore excursions, pre-and post-cruise tours and, in some cases, other onboard activities. We also support trade booking capabilities through major airline computer reservationglobal distribution systems, including SABRE, Galileo, Amadeus, Travelport and Worldspan. Although the vast majoritySABRE. We estimate that almost 60% of our cruises are distributed throughbookings from travel agents we also accept telephoneare made electronically. Finally, as part of our efforts to increase efficiency and internet bookings direct from customers who choose not to utilizeimprove the servicesembarkation process for our guests, most of a travel agent.

          We have pursued comprehensive marketing campaigns to market our brands offer their guests the ability to vacationers, including direct response marketing. The principal media used are television, magazine, newspaper, radio and online advertisements, and promotional campaigns. generate their own electronic ticket documents via their websites.

To further stimulate demand, we offer closer-to-homeport locations, which enable certain guestsa number of home ports that are closer to guests’ homes as this enables them to lower the price of their cruise vacation by substantially reducing or eliminating the cost of air travel to and from the port.

In the UK and Australia, we have formed a sales alliance known as the “Complete Cruise Solution,” whereby our UK and Australian sales forces and back-office operations are ablecombine to provide their gueststravel agents with one-stop cruise shopping for a number of our brands. WeIn North America, Italy and the UK, we also offer Vacation Interchange Privileges, which is a loyalty program that provides special considerations to repeat guests aboardraise consumer and travel agent awareness through the “World’s Leading Cruise Lines” alliancealliances for our family of North American cruise brands as well as Costa and Cunard. Finally, mostthat source guests from these markets. Most of our cruise brands offer their own loyaltypast guest recognition programs, such as Carnival’s “Concierge Club”, Princess’ “Captain’s Circle”,Circle,” Costa’s “CostaClub” orand Holland America Line’s “Mariner



Society,” through which they reward repeat guests with special incentives such as discounted fares, expedited ship embarkation and disembarkation and onboard activities.

XIII.Seasonality

X.Marketing Activities

Each of our brands have comprehensive marketing and advertising campaigns to promote their brands to vacationers and their travel agent partners. They typically market and promote their brands, not their ships, as each brand strives to have a relatively consistent product, although their ships may differ. Each brand’s marketing activities are designed to reach a local market in the local language while maintaining consistency within each brand’s overall strategy and web presence. The principal media used for marketing and advertising are television, magazine, radio, outdoor, direct mail, e-mail, online websites, and other forms of social media.

We have recently expanded our use of online and social media (for example, Facebook, Twitter, YouTube, etc.) to help us cultivate guests as fans of our brands, ships, itineraries and onboard services. In January 2011, one of our North American cruise brands started accepting cruise bookings via Facebook, which has over 500 million users, and we believe Facebook will provide another source to attract cruise guests. We also have blogs that are hosted by ship captains, cruise and entertainment directors, executive pursers and special guests. We use Twitter to enhance our customer service and as part of our public relations strategies

 

16

to inform the press, popular bloggers, fans and brand advocates of new developments and breaking news stories.

Customer feedback and research is also a critically important element in the development of our overall marketing and business strategies. Accordingly, we have electronic and manual processes for measuring and understanding key drivers of customer loyalty and satisfaction from our guests that provide valuable insight about their cruise experience. We regularly initiate customer research studies among both guests and travel partners to assess the impact of various programs and to solicit feedback that we use to help make our future decisions.

XI.Seasonality

Our revenues from the sale of passenger tickets are seasonal. Historically, demand for cruises has been greatest during our third fiscal quarter, which includes the Northern Hemisphere summer months, and holidays.months. This higher demand during the third quarter results in higher net revenue yields and, accordingly, the largest share of our netoperating income is earned during this period. The seasonality of our results is increasedalso increases due to ships being taken out of service for maintenance, which we typically schedule during non-peak demand periods. SubstantiallyIn addition, substantially all of Holland America Princess Alaska Tours’ and Princess Tours’ revenuesrevenue and net income areis generated from May through September in conjunction with the Alaska cruise season.

XIV.Competition The seasonality of our results will continue to increase as we expand our EAA brands which tend to be more seasonal than our North America brands. Finally, our North America brands have recently been trending towards an increasing level of seasonality.

 

XII.Competition

We compete with land-based vacation alternatives throughout the world, including among others, hotels, resorts (including all-inclusives), theme parks, organized tours, land-based casino operations and vacation ownership properties located in Las Vegas, NevadaNevada; Orlando, Florida; the Caribbean (including The Bahamas); Dubai, and Orlando, Florida, various Caribbean,European, Mediterranean, Mexican, Bahamian and Hawaiian and Canary Island destinations, as well as numerous other vacation choices throughout Europe (including the Mediterranean) and the rest of the world.

Our primary cruise competitors for North American-sourced guests are Royal Caribbean Cruises Ltd. (“RCCL”),RCCL, which owns Royal Caribbean International (“RCI”), Celebrity Cruises (“Celebrity”) and Azamara Cruises,Club Cruises; Norwegian Cruise Line and NCL America, Disney Cruise Line, MSC(“NCL”), Oceania Cruises Crystal Cruises, Oceania Cruises,and Regent Seven Seas Cruises, Silverseaall three of which are controlled by affiliates of Apollo Management LP; Disney Cruise Line (“Disney”), MSC Cruises (“MSC”), Crystal Cruises and WindstarSilversea Cruises.

Our primary cruise competitors for European-sourced guests:guests in the UK they are Royal Caribbean International, IslandRCI, Celebrity, NCL, MSC, Thomson Cruises, which is 50% owned by RCCL,TUI AG (“TUI”); Fred Olsen Cruise Lines Discovery Cruises,and Saga Cruises, and Thomson Cruises; in Germany they are MSC Cruises, Hapag-Lloyd, Peter Deilmann, Phoenix Reisen and Transocean Cruises; and in southerncontinental Europe they are Celebrity, Disney, NCL, MSC, Cruises, Louis Cruise Line, Pullmantur, owned by RCCL and CDF Croisieres de France, Pullmantur and RCI, all three owned by RCCL; TUI Cruises, which is jointly owned by RCCL and TUI; Hapag-Lloyd, which is also owned by RCCL. We also compete for guests throughout Europe with other North American cruise competitors, including Celebrity Cruises, Disney Cruise LineTUI; and Norwegian Cruise Line.Phoenix Reisen.

Our primary cruise competitors for guests sourced from other parts of the world, such as Australia, New Zealand, Asia and South America, are Royal Caribbean International,RCI, Celebrity, Cruises,Pullmantur, Star Cruises, Norwegian Cruise Line,NCL, CVC Cruise MSC Cruises, Island Cruises and Pullmantur.MSC.

          Our North American, European and AustralianAll of our brands also compete to a certain extent among themselves for guests.

XV.Governmental Regulations

A.Maritime Regulations

XIII.Governmental Regulations

 

a.Maritime Regulations

1.General

Our ships are regulated by various international, national, state and local laws, regulations and treaties in force in the jurisdictions in which our ships operate. In addition, ourOur ships, which are registered in theThe Bahamas, Bermuda, Italy, Malta, the Netherlands, Panama, Portugal and the UK, and, accordingly, are regulated by these jurisdictions and byare required to comply with the international conventions that govern the safety and environmental impact of our ships, guests and crew.crew and the protection of the environment. Each country of registry conducts periodic inspections to verify compliance with these regulations as discussed more fully below. In addition, the directives and regulations of the European Union (“EU”), which apply to all our European brands, the U.S. and the many other international ports that our ships visit are applicableapply to some aspects of our ship operations.

          Specifically,Our ships are subject to periodic dry-docking requirements and class renewal surveys by ship classification societies, which verify that our ships have been maintained in accordance with the rules of the classification societies and that recommended repairs have been satisfactorily completed. They also ensure that our ships comply with international conventions adopted by the countries of registry and domestic rules and regulations. Dry-dock duration is a statutory requirement controlled under the International Convention for Safety of Life at Sea (“SOLAS”) and to some extent the International Load Lines Convention. Under these regulations, it is required that a passenger ship dry-dock twice in five years and the maximum duration between each dry-dock cannot exceed three years. The time in dry-dock can be for a period of one or more weeks depending on the amount of work performed. However, some of our ships qualify under special exemptions to dry-dock once in every three or five years.

17

Our ships are subject to inspection by the port regulatory authorities in the various countries that they visit. Such inspections include verification of compliance with the maritime safety, security, environmental, customs, immigration, health and labor regulations applicable to each port. For example, in U.S. ports these authorities include the U.S. Coast Guard and U.S. Customs and Border Protection. In EU ports, the Paris Memorandum of Understanding enforces internationally accepted conventions through Port State Control Inspections by 27 Marine Administrations. In UK ports, these authorities include the Maritime and Coastguard Agency, the Department for Transport’s Transport Security team, otherwise known as TRANSEC, and the Port Health Authority.

We believe maritime safety, security, environmental, health and labor issues will continue to be areas of focus by relevant government authorities in the U.S., the EU and elsewhere where our cruise ships operate. Legislation, regulations or treaties, or changes thereto, in these areas could impact our operations and have and will likely subject us to increasing compliance costs in the future.

Although not required by regulations, we voluntarily publish Annual Sustainability reports that address environmental, labor, human rights, society, product responsibility, economic and other sustainability-related issues and performance indicators. These reports, which can be viewed atwww.carnival.com andwww.carnivalplc.com, were developed in accordance with Sustainability Reporting Guidelines established by the Global Reporting Initiative framework, which is a global reporting standard for economic, environmental and social performance.

2.Maritime Safety Regulations

The International Maritime Organization sometimes referred to as the “IMO,” which operates under the auspices(“IMO”), a specialized agency of the United Nations, has adopted safety standards as part of the International Convention for Safety of Life at Sea, sometimes referred to as SOLAS, which is applicableapply to all of our ships. Among other things, SOLAS establishes requirements for vessel design, structural features, materials, construction, life savinglife-saving equipment, safe management and operation and security in order to help ensure guest and crew safety and security. The SOLAS requirements are periodically revised from time to time, with the most recent modifications being phased-in through 2010.for both new and existing ships.



          In 1993, SOLAS was amended to incorporateincorporates the International Safety Management Code referred to as the “ISM Code.” The (“ISM CodeCode”), which provides an international standard for the safe management and operation of ships and for pollution prevention. The ISM Code is mandatory for passenger vessel operators. All of our operations and ships have obtainedare regularly audited by national authorities and maintain the required certificates demonstratingof compliance with the ISM Code and are regularly inspected and controlled by the national authorities, as well as the internationalCode. National authorities, acting under the provisions of the international agreements related to Port State Control, the process by which a nation exercises authority over foreignregularly inspect our ships when the shipsthey are in that nation’s waters.

          In December 2004, theIMO’s Maritime Safety Committee approved for adoption amendments toamended SOLAS chapter II-I Parts A & B that relaterequirements related to the damage stability of new passenger cruise passenger vessels. These regulations, which were adopted in May 2005, and are applicableapply to thosevessels whose keels were laid after January 1, 2009. For vessels with keels laid after January 1, 2009, compliance with these standards require different designs. The Maritime Safety Committee also amended SOLAS to require new passenger cruise vessels whose keels are laid after JanuaryJuly 1, 2009. Although2010, to comply with the “safe return to port” requirements, which relate to vessel survivability standards and require the development of new standardsship designs. These two new requirements do not affect our existing fleet or our vessels currently under contract whose keels will have been laid priorexcept for the two Princess newbuilds. Compliance with both these regulations has not resulted in significant cost increases.

In 2010, a significant set of SOLAS modifications required all existing passenger ships to January 1, 2009, compliancecomply with current standards regarding fire safety. Our existing fleet is compliant with these standards for ships whose keels are subsequently laid will require the development of new designs, which will increase costs.SOLAS modifications.

 The most important convention regulating and preventing marine pollution by ships is the IMO International Convention for the Prevention of Pollution from Ships (“MARPOL”), as amended. This convention applies to all of our ships and covers accidental and operational oil pollution as well as pollution by various items including, but not limited to, sewage, garbage and air emissions.

3.Maritime Security Regulations

Our ships are subject to a program of periodic inspection by ship classification societies who conduct annual, intermediate, dry-docking and class renewal surveys. Classification societies conduct these surveys not only to ensure that our ships are in compliance with international conventions adopted by their respective country of registry and domestic rules and regulations, but also to verify that our ships have been maintained in accordance with the rules of the society and that recommended repairs have been satisfactorily completed.

          Our ships that call at U.S. ports are subject to inspection by the U.S. Coast Guard for compliance with SOLAS, by the U.S. Public Health Service for sanitary standards, and by other agencies such as U.S. Customs and Border Protection, with regard to customs and immigration. Our ships are also subject to similar inspections pursuant to the laws and regulations of various other countries our ships visit.

          Our ships are also subject to various security requirements, including the International Ship and Port Facility Security Code (“ISPS Code”), which is part of SOLAS. Among other things, the ISPS Code requires vessel owners to implement security measures, conduct vessel security assessments and develop security plans. Under these requirements, we have prepared and submitted security plans for all our ships to their respective countries of registry and International Ship Security Certificates have been issued demonstrating compliance with the ISPS Code. For ships that are registered in the

The U.S. or have operations located in the U.S. the Maritime Transportation Security Act of 2002 (“MTSA”) is the governing regulation. Theregulation for ships that operate in U.S. ports. MTSA establishes Area Maritime Security requirements for geographic port areas that provide authority for the U.S. Coast Guard to implement operational and physical security measures on a port area basis that could affect our operation in those areas.

          In 2006, the International Labour OrganizationThe U.S. Cruise Vessel Security and Safety Act (“ILO”CVSSA”) adopted a new Consolidated Maritime Labour Convention (the “Convention”). The ILOwill phase in through 2013 and is also an agency of the United Nations that develops worldwide employment standards. There have been over 60 maritime labor conventions and recommendations developed since 1920 in areas such as minimum age of seafarers, medical certificates, recruitment practices, health and welfare, hours of work, and social security. The Convention is a comprehensive instrument that consolidatesapplicable to all of the existing standards and recommendations into one instrument to reflect modern conditions and language that will govern all aspects of crew management for all ships in international commerce. While many of the practices were widely adhered to by ships registered in different countries, this consolidated Convention will place additional requirements on shipowners not previously in effect. Thirty member countries representing 33% of the world’s merchant ship tonnage will be required to ratify the Convention before it goes into effect 12 months after such ratification. We currently expect the Convention to be effective for our ships by 2010 based on an expected EU ratificationthat embark or disembark passengers in 2008 or early 2009. Accordingly, if ratified, the Convention may increase our 2010U.S. The law is designed to bring consistency and subsequent crew costs.



          Dueclarity to threatened EU infraction proceedings, there issecurity laws and regulations for the likelihood that Section 9 of the UK Race Relations Act, which permits different rates of paycruise industry and establishes a framework for different European nationalities on UK flagged ships,security equipment and systems. Compliance with CVSSA will be repealed. If this act is repealed, it would increase our UK flagged ship’s personnelnot result in significant costs.

 We believe that health, environmental, safety and security issues will continue to be an area of focus by relevant government authorities in the U.S., the EU and elsewhere. Resulting legislation, regulations or treaties, or changes thereto, could impact our operations and would likely subject us to increasing compliance costs in the future.

4.Maritime Environmental Regulations

B.Permits for Glacier Bay, Alaska

          In connection with certain of our Alaska cruise operations, Holland America Line, Princess and Carnival Cruise Lines rely on concession permits from the U.S. National Park Service to operate their cruise ships in Glacier Bay National Park and Preserve. Such permits must be periodically renewed and we cannot be certain that they will continue to be renewed or that regulations relating to the renewal of such permits, including preference or historical rights, will remain unchanged in the future.

C.Alaska Environmental Regulations

          The State of Alaska enacted legislation which prohibits certain discharges in designated Alaskan waters, ports or near shorelines and requires that certain discharges be monitored to verify compliance with the standards established by the legislation. Both the state and federal environmental regimes in Alaska are more stringent than the federal regime under the Federal Water Pollution Control Act with regard to discharge from vessels. The legislation also provides that repeat violators of the regulations could be prohibited from operating in Alaskan waters.

D.Other Environmental, Health, Safety and Security Matters

We are subject to variousnumerous international, national, state and local environmental protection and health and safety laws, regulations and treaties that govern, among other things, air emissions, employee health and safety, waste discharge, water management and disposal, and the storage, handling, use and disposal of hazardous substances, such as chemicals, solvents paints and asbestos.paints. We are committed to helping to preserve the environment, not only because of the

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existing legal requirements, but because a pristine environment is one of the key elements that bring our guests on boardonboard our ships. Our environmental efforts are focused on, among other things, reducing greenhouse gases (“GHGs”, such as carbon dioxide) and other emissions (such as sulfur oxide (“SOx”) and nitrogen oxide (“NOx”)) from the combustion of marine fuel oil consumed by our ships, which accounts for substantially all of our GHG and other emissions. Therefore, improving fuel consumption is a key business strategy. In addition to reducing fuel consumption, we actively monitor and investigate new abatement technologies for use onboard our ships or shoreside in order to reduce operating costs and GHG emissions.

If we violate or fail to comply with environmental legislation, regulations or treaties, we could be fined or otherwise sanctioned by regulators. We have made, and will continue to make, capital and other expenditures to comply with environmental legislation, regulations and treaties.

 In particular, in

i.International Regulations

The most important environmental convention governing ships is the U.S.,IMO International Convention for the Act to PreventPrevention of Pollution from Ships implementing the MARPOL(“MARPOL”). This convention provides for severe civilincludes requirements designed to prevent and criminal penalties related to ship-generatedminimize both accidental and operational pollution for incidents in U.S. waters within three nautical milesby oil, sewage, garbage and in some cases in the 200-mile exclusive economic zone.

          Furthermore, in the U.S., the Oil Pollution Act of 1990 (the “OPA”) provides for strict liability for water pollution, such as oil pollution or threatened oil pollution incidents in the 200-mile exclusive economic zone of the U.S., subject to monetary limits. These monetary limits do not apply where the discharge is caused by the gross negligence or willful misconduct, or the violation of an applicable safety, construction, or operating regulation by a responsible party. These monetary limits also do not apply where the responsible party fails or refuses to report the incident as required by law, provide all reasonable cooperation and assistance in connection with removal operations, or without sufficient cause, comply with an order issued by the federal on-scene coordinator. Pursuant to the OPA, in order for us to operate in U.S. waters, we are also required to obtain Certificates of Financial Responsibility from the U.S. Coast Guard for each of our ships operating therein. These certificates demonstrate our ability to meet the maximum amount of liability that our ship’s could be subject to for removal costs and damages related to water pollution, such as from an oil spill or a release of a hazardous substance, up to our ship’s statutory liability limit. Our financial responsibility under these certificates is supported by certain of our insurers who provide guarantees aggregating $653 million.

          In addition, most U.S. states that border navigable waterways or seacoasts have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardous substance. These laws may be more stringent than U.S. federal law and in some cases have no statutory limits of liability.



          Furthermore, manyair emissions. Many countries have ratified and adopted IMO Conventions which, among other things, impose liability for pollution damage, subject to defenses and to monetary limits, which monetary limits do not apply where the spill is caused by the owner’s actual fault or by the owner’s intentional or reckless conduct. All of our ships must carry an International Oil Pollution Prevention Certificate, an International Sewage Pollution Prevention Certificate and an International Air Pollution Prevention Certificate. These certificates are issued by the ship’s state of registry indicating that our ships are operating in compliance with the MARPOL regulations regarding oil, sewage and air pollution prevention.

In jurisdictions that have not adopted the IMO Conventions, various national, regional or local laws and regulations have been established to address oil and waste pollution.

          Limitations on the sulphur content of fuel are part of new regulations approved by the International Convention for the Prevention of Pollution from Ships Annex VI (“MARPOL Annex VI”). Ships must carry an International Air Pollution Prevention Certificate issued by its flag state indicating that it is operating in compliance with MARPOL Annex VI. These certificates are required to be issued during the three-year period ending in May 2008. Among other things, MARPOL Annex VI establishes a limit on the sulphur content of fuel oil and calls on the IMO to monitor the worldwide average sulphur content of fuel oil supplied for use aboard vessels.

          In addition, MARPOL Annex VI and EU rules also provide for special SOx, or Sulphur Oxide, Emission Control Areas (“SECAS”) to be established with more stringent limitations on sulphur emissions. There are currently two SECAS in operation, one in the Baltic and the other in the North Sea/English Channel. Compliance with these regulations increases our operating costs, due to the higher cost of purchasing low sulphur fuel.

          A further EU directive regarding the use of low sulphur fuel for passenger ships on regular service to or from EU ports was introduced in 2006, but the necessary national legislation enforcing the directives has yet to be introduced in all EU member states. The application of this legislation to cruise ships is unclear and varies among EU member states, leading to potentially higher fuel costs where it is applicable. In January 2010, a 0.1% sulphur limit on all marine fuels used in EU ports enters into force. This will require distillate fuels to be used, further increasing fuel costs.

          A major review of MARPOL Annex VI, currently underway at IMO, is scheduled to be completed in mid-2008. As a result of this review, the IMO goal is to adopt amendments to Annex VI by the end of 2008 and these amendments are expected to further limit NOx, or nitrogen oxide, emissions for both existing and new diesel engines and sulphur emissions by reducing the sulphur content requirements for fuel oil. Compliance with new standards resulting from amendments to Annex VI will increase operating costs.

          Norway required that, effective January 1, 2007, ships with propulsion machinery above 750 kW that travel between two Norwegian ports, pay a tax based upon the amount of NOx generated, calculated from fuel consumption and NOx emission factors for the engines and boilers. This has increased our operational costs for ships cruising in Norwegian waters.

          If we violate or fail to comply with environmental legislation, regulations or treaties, we could be fined or otherwise sanctioned by regulators. We have made, and will continue to make, capital and other expenditures to comply with environmental legislation and regulations.

The International Organization for Standardization (“ISO”) is an international standard-setting body which produces worldwide industrial and commercial standards. ISO 14001, is one of the series of ISO 14000an environmental management standardsstandard that werewas developed to help organizations manage their processes, products and services to minimize environmental impacts. ISO 14001impacts, presents a structured approach to setting environmental objectives and targets, andtargets. It provides a framework for any organization to apply these broad conceptual tools to their own processes. During 2006, we completed oura corporate-wide implementation and received certificationof ISO 14001. The environmental management systems of all of our cruise brands are certified in accordance with ISO 14001, Environmental Management System at all our then existing brands.

          In December 2006,with the Maritime Safety Committee,exception of Ibero, which is expected to be implemented by early 2012.

ii.U.S. Federal and State Regulations

The U.S. Act to Prevent Pollution from Ships, implementing the safety body atMARPOL convention, provides for severe civil and criminal penalties related to ship-generated pollution for incidents in U.S. waters within three nautical miles and in some cases in the IMO, approved200-mile exclusive economic zone.

The U.S. Oil Pollution Act of 1990 (“OPA 90”) provides for strict liability for water pollution, such as oil pollution or possible oil pollution incidents in the adoption200-mile exclusive economic zone of amendmentsthe U.S., subject to SOLAS Ch II-2defined monetary limits. OPA 90 requires that relatein order for us to passenger ship balconies.operate in U.S. waters, we must obtain Certificates of Financial Responsibility from the U.S. Coast Guard for each of our ships. These regulations will enter into force on July 1, 2008 and impose stricter limits on combustible materials and applycertificates demonstrate our ability to both new and existing ships. Asmeet the maximum amount of January 29, 2008 allliability that our ships including those under contractcould be subject to be built, meet these requirements.

          Several safety related amendments to SOLAS will enter into force in July 2010 including requirements for safety centers, emergency cabin lighting, local sounding audible alarmremoval costs and amendments to fire detection and firefighting systems. Many of these requirements have already been incorporated into our current newbuilds. In addition, the enhanced safe return to port requirementsdamages related to water pollution, such as from an oil spill or a release of a hazardous substance, up to each ship’s statutory liability limit. Our financial responsibility under these certificates is covered by our insurance.

The Clean Water Act of 1972 and other laws and regulations provides the developmentU.S. Environmental Protection Agency (“EPA”) with the authority to regulate commercial vessels’ incidental discharges of survivability standardsballast water, bilge water, gray water, anti-foulant paints and others during normal operations into the U.S three mile territorial sea and inland waters. The EPA requires vessels to obtain permits and comply with inspection, monitoring, recordkeeping and reporting requirements.

Most U.S. states that border navigable waterways or sea coasts have also enacted environmental regulations that impose strict liability for removal costs and damages resulting from a vessel also enter into force for keels laid after July 1, 2010,discharge of oil or a release of a hazardous substance. These laws may be more stringent than U.S. federal law and will



require developmentin some cases have no statutory limits of new designs to meet these new requirements for future ship orders. Allliability.

In connection with certain of our ships under contractAlaska cruise operations, Holland America Line, Princess and Carnival Cruise Lines rely on concession permits from the U.S. National Park Service to be built are expected to have the keels laid before July 1, 2010.

          From time to time, health, environmental, safety and security regulators consider more stringent regulations which may affect our operations and increase our compliance costs. As evidenced from certain of the preceding paragraphs, the cruise industry is affected by a substantial amount of environmental rules and regulations. We believe that the impact ofoperate their cruise ships on the global environmentin Glacier Bay National Park and Preserve. Such permits must be periodically renewed. We cannot be certain that they will continue to be an arearenewed or that regulations relating to the renewal of focussuch permits, including preference or historical rights, will remain unchanged in the future. The U.S. National Park Service renewed our permits through the 2019 Alaska cruise season.

The state of Alaska enacted legislation which prohibits certain discharges in designated Alaskan waters, ports or near shorelines and requires that certain discharges be monitored to verify compliance with the standards established by the legislation. Both the state and

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federal environmental regimes in Alaska are more stringent than the federal regime under the Federal Water Pollution Control Act with regard to discharge from vessels. The legislation also provides that repeat violators of the regulations could be prohibited from operating in Alaskan waters.

iii.EU Regulations

In the past 30 years the EU has adopted a substantial and diverse range of environmental measures aimed at improving the quality of the environment for European citizens and providing them with a high quality of life. To support the implementation and enforcement of European environmental legislation, the EU has adopted directives on environmental liability and enforcement and a recommendation providing for minimum criteria for environmental inspections.

In November 2002, the European Commission (“EC”) adopted a strategy to reduce atmospheric emissions from seagoing ships. The strategy reports on the magnitude and impact of ship emissions in the EU and sets out a number of actions to reduce ship emissions. The EU strategy seeks to implement SOx Emission Control Areas set out in MARPOL Annex VI and in addition goes beyond the IMO in that in January 2010 it introduced requirements to burn low sulfur (less than 0.1%) marine gas oil in EU ports and other areas. The EC also seeks to press for tighter NOx standards.

The EU continues to pursue an aggressive policy towards environmental protection and we can expect to see legislation being implemented in the near future related to, among other things, limiting waste water discharges in the Baltic Sea and reducing GHG emissions.

iv.Low Sulfur Fuel Regulations

Limitations on the sulfur content of fuel are part of regulations approved in EU Directives and MARPOL Annex VI. On January 1, 2010, the EU directive became effective that requires the use of 0.1% sulfur content in all marine fuels used while ships are at berth or anchored in EU ports. This requires the use of distillate fuels, such as marine gas oil, which has not significantly increased our fuel costs because we use a relatively small quantity of marine gas oil while in EU ports.

MARPOL Annex VI currently limits global sulfur fuel content to 4.5%. On January 1, 2012, the limit will be reduced to 3.5%, which will not have a significant impact on our fuel costs, as we already comply with this requirement.

As part of the 2008 MARPOL Annex VI requirements, the concept of Emission Control Areas (“ECAs”) was established with stricter limitations on sulfur emissions in these areas. Currently there are two ECAs in operation. The first ECA is in the Baltic Sea and the other is in the North Sea/English Channel. Specifically, ships that operate in these ECAs are required to use fuel with a sulfur content of no more than 1%. Compliance with these requirements in the existing ECAs did not significantly increase our fuel costs because we do not have a significant number of itineraries in these areas.

In 2010, the U.S. Maritime Pollution Prevent Act was passed, which established a North American ECA that will become effective around the U.S. and Canada out to 200 nautical miles on their east, west and gulf coasts, as well as the Hawaiian Islands, beginning on August 1, 2012. The U.S. has also submitted a proposal to the IMO to designate certain waters adjacent to the coasts of Puerto Rico and the U.S. Virgin Islands (“USVI”) as an ECA. This proposal is expected to be adopted by the IMO in 2011 and would become effective at the end of 2013. Based on current itineraries, fuel prices and technologies and our 2011 capacities and projected fuel consumption, we estimate that the implementation of the North American, Puerto Rican and USVI ECAs will increase our annual fuel costs by approximately $25 million to $35 million. Other additional ECAs may also be established in the future, such as for areas around Australia, the Mediterranean Sea and Mexico.

From January 1, 2015 and thereafter the fuel sulfur content limit in ECAs will be further reduced to 0.1%. Compliance with these requirements will further increase our fuel costs. Commencing in 2015, based on current itineraries, fuel prices and technologies and our 2011 capacities and projected fuel consumption, we estimate that the implementation of the 0.1% low sulfur content requirement in the three existing ECAs and the proposed Puerto Rico and USVI ECAs would additionally increase our annual fuel costs by approximately $185 million to $205 million.

Based on current laws, the global limit on fuel sulfur content, excluding the ECA limits that will remain at 0.1%, will be further reduced to 0.5% from 3.5% on and after January 1, 2020. The 0.5% standard will be subject to an IMO review by 2018 to determine the availability of fuel oil to comply with this standard, taking into account the global fuel oil market supply and demand, an analysis of trends in fuel oil markets, and any other relevant issues. If the IMO determines that it is not possible to comply with the 0.5% standard on and after January 1, 2020, then this requirement will become effective on January 1, 2025. We believe that compliance with the 0.5% standard in 2020, or 2025 at the latest, could significantly increase our fuel costs. However, the magnitude is not determinable at this time due to the length of time until the standard becomes effective, and the other mitigating factors discussed below.

The cost impacts from implementing progressively lower sulfur content requirements globally may be mitigated by, among other things, the favorable impact of future changes in the supply and demand balance for marine and other fuels, future developments of and investments in sulfur emission abatement and propulsion technologies, including more advanced engines, enhanced exhaust gas treatment

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systems and propeller design, the use of alternative fuels and new fuel conservation initiatives, such as new itinerary options to reduce fuel consumption.

As part of our emission abatement program, we have partnered with local port authorities and the EPA to assist in the development and construction of shore power connections in Juneau, Alaska; Long Beach, California; San Francisco, California; Seattle, Washington and Vancouver, British Columbia and have equipped 14 ships with shore power technology. We expect to partner with other port authorities in the future to implement additional shore power connections. This technology enables our ships to use power from the local electrical grid rather than running their engines while in port to power their onboard services, and thus reduce air emissions.

v.

Carbon Dioxide (“CO2”) Emissions

Our cruise brands have established objectives, targets and plans within their respective ISO 14001 environmental management systems to reduce fuel consumption, which is the most significant contributor to our carbon footprint. Our annual reduction targets for CO2 emissions intensity ranges from 0.25% to 2.5%. We have targeted a 20% reduction in the intensity of CO2 emissions (based on kilograms per available lower berth/kilometer) from our shipboard operations by 2015 compared to our 2005 baseline. The impact of any future legislation regulating the level of CO2 emissions is not determinable at this time.

5.Maritime Health Regulations

We are committed to providing a healthy environment for all of our guests and crew. We voluntarily work with public health agencies throughout the world to monitor health and accordingly, this will likely subject us to increasing compliance costssanitary conditions on all of our ships. As an example, for ships visiting U.S. ports we collaborate with the Centers for Disease Control and Prevention - Vessel Sanitation Program of the Department of Health and Human Services. The Centers for Disease Control established the Vessel Sanitation Program in the future.early 1970s as a cooperative activity with the cruise industry.

We maintain frequent communication with the appropriate public health authorities and, as required, proactively report any communicable illnesses that are of public health concern. Through our collaborative efforts we work with the authorities to develop and revise guidelines, review plans and conduct on-site inspections for all newbuilds and significant existing ship renovations. In addition, we continue to maintain our ships by meeting, and often exceeding, applicable public health guidelines and requirements, complying with inspections, and conducting regular crew training and guest education programs.

See Part 1, Item 1A. “Risk Factors.”“Maritime Labor Regulations” below for additional discussion of our environmental risks.

                    E.Consumer Regulationshealth regulations.

 

6.Maritime Labor Regulations

In 2006, the International Labor Organization (“ILO”), an agency of the United Nations that develops and oversees international labor standards, adopted a new Consolidated Maritime Labor Convention (“MLC 2006”). MLC 2006 contains a comprehensive set of global standards based on those that are already found in 68 maritime labor Conventions and Recommendations adopted by the ILO since 1920. It brings almost all of these Conventions and Recommendations together in a single new Convention. MLC 2006 includes a broad range of requirements in areas; such as a broader definition of a seafarer, minimum age of seafarers, medical certificates, recruitment practices, training, repatriation, recreational facilities, health and welfare, hours of work and rest, accommodations and wages and entitlements. While many of the practices were widely adhered to by ships registered in different countries, MLC 2006 will add requirements not previously in effect, particularly in the area of occupational safety and health. The detailed requirements of MLC 2006 directly address many seafarers’ issues and, therefore, if effectively implemented will provide worldwide standards to improve the health, safety and status of seafarers.

Thirty member countries representing 33% of the world’s merchant ship tonnage are required to ratify MLC 2006 before it goes into effect 12 months after such ratification. We currently expect ratification in May 2011, and entry into force, requiring our implementation in May 2012. We estimate that compliance with MLC 2006 will not significantly increase our annual operating expenses.

b.Consumer Regulations

Our ships that call on U.S. ports are regulated by the Federal Maritime Commission referred to as the “FMC”(“FMC”). Public Law 89-777, which is administered by the FMC, requires mostall our cruise line operatorsbrands that call on U.S. ports and embark or disembark guests in U.S. ports to establish financial responsibility for their liability to passengers for non-performance of transportation, as well as casualtyfor personal injury and personal injury.for loss of life. The FMC’s regulations require that a cruise line demonstrate its financial responsibility for non-performance of transportation through a guarantee, escrow arrangement, surety bond or insurance. Currently, the amount required must equal 110% of the cruise line’s highest amount of customer deposits over a two-year period, up to a maximum coverage level of $15 million. See Part 1, Item 1. Business. E. - “Insurance – Other Insurance”In order to comply with this requirement, we have an aggregate of $90 million of guarantees provided by some of our insurers. Our Protection and Indemnity (“P&I”) coverages are used to establish our financial responsibility for additional information.personal injury and loss of life.

 

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In the UK, in some cases we are currently required to bond and obtain licenses from and post bonds with various organizations in connection with the conduct of our business and our ability to meet liabilityour liabilities in the event of non-performance of obligations to consumers. These organizations include Abta (formerlyThe most significant requirement relates to ABTA, formally known as the Association of British Travel Agents) and the Civil Aviation Authority. See Part 1, Item 1. Business. E. - “Insurance-Other Insurance” for additional information.Agents, which requires us to maintain approximately $130 million of sterling-denominated bonds to cover our brands’ UK passenger deposit liabilities.

We are also required by German and French law to obtain a guarantee from a reputable insurance company to ensure that, in case of insolvency, our customers will be refunded any monies they have paid on account of a bookingtheir deposits and in addition, that they will be repatriated without additional cost if insolvency occurs after a cruise starts. In addition,Additionally, in Australia we are a member of the Travel Compensation Fund which provides compensation, as a last resort, to consumers who suffer losses in their dealings with travel agents. Finally, other jurisdictions including Argentina and Brazil,may require the establishment of financial responsibility for passengers from their jurisdictions.

 We believe we have all material licenses to conduct our business. From time to time, various other regulatory and legislative changes may be proposed or adopted that could have an effect on the cruise industry, in general, and our business, in particular. See Part I, Item 1A. “Risk Factors.” for a discussion of other regulations which impact us.

XIV.Financial Information

          XVI.Financial Information

For financial information about our cruise reporting segmentsegments and geographic information with respect to each of the three years in the period ended November 30, 2007,2010, see Note 11, “Segment Information” to our Consolidated Financial Statements in Exhibit 13 to this Form 10-K.

          C.Employees

C.Employees

Our shoreside operations have approximately 10,90010,200 full-time and 4,7004,000 part-time/seasonal employees. We also employ approximately 65,60075,000 crew including officers, and staff onboard our 85 shipsmembers at any one time.time, including officers, onboard the 98 ships we currently operate. Due to the highly seasonal nature of our Alaskan and Canadian operations, Holland America Princess Alaska Tours and Princess Tours increase theirincreases its work force during the late spring and summer months in connection with the Alaskan cruise season, employing additional seasonal personnel, which have been included above. We have entered into agreements with unions covering certain employees in our hotel, transportation and shipshipboard operations. We consider our employee and union relations generally to be good.

We source our shipboard officers primarily from Italy, the UK, Holland, Germany and Norway. The remaining crew positions are manned by persons from around the world. We utilize various manning agencies in many countries and regions to help secure our shipboard employees.



          D.SuppliersOur cruise brands are committed to providing appropriate marine-related training to ensure that our shipboard crew, including officers, has the knowledge and skills to perform their jobs properly. In July 2009, we built a maritime training facility near Amsterdam, Netherlands that employs state-of-the-art simulation equipment and instructional tools to provide our crew with training in fixed propeller and azipod maneuvering, bridge resource management, ship stability, emergency preparedness and other maritime skills. We are also in the process of integrating engine control room operations, education and training into the facility. In addition, we established the European Cruise Academy in Rostock, Germany in cooperation with the Wismar University of Technology and offer certified bachelor and master degree programs, as well as advanced training certificates, in the maritime sciences primarily related to the cruise industry.

 

D.Suppliers

Our largest purchases are for fuel, travel agency services, fuel, advertising, food and beverages, air transportation services, port facility utilization, repairs and maintenance, including dry-docking, advertising and marketing, hotel and restaurant products and supplies, airfare, repairs and maintenance, including dry-docking, port facility utilization, communication services and for the construction and refurbishment of our ships. Although we utilize a select number of suppliers for most of our food and beverages, communication services, air transportation services and hotel and restaurant products and supplies, most of these itemsproducts and services are available from numerousmultiple sources at competitive prices. The use of a select number of suppliers enables us to, among other things, obtain volume discounts. WeHowever, we purchase fuel and port facility services at some of our ports of call from a limited number of suppliers. In addition, weWe also perform our major dry-dock and ship improvement work at a limited number of dry-dock facilities in Australia, the Bahamas, British Columbia, Canada, the Caribbean (including The Bahamas), Europe, Singapore, and the U.S. Finally, as of January 29, 2008,31, 2011, we have agreements in place for the construction of 22ten cruise ships with three shipyards. We believe there are sufficient dry-dock and shipbuilding facilities to meet our anticipated repair, maintenance, refurbishment and newbuild requirements.

          E.Insurance

General

E.Insurance

 

I.General

We maintain insurance to cover a number of risks associated with owning and operating our vessels in international trade.and other non-ship related risks. All such insurance policies are subject to coverage limits, exclusions and deductible levels. Insurance premium increasespremiums are dependent on our own loss experience and the general premium requirements of our underwriters.insurers. We cannot be certain that affordable and viable direct and reinsurance markets will be available to us in the future. We maintain certain levels of self-insurance for some ofall the below-mentioned risks,coverages, some of which have increased in recent years, and we may increase our self insuranceself-insurance levels further in the future to mitigate premium increases. We do not carry coverage related to loss of earnings or revenues from our ships.ships or other operations.

Protection and Indemnity (“P&I”) Coverage

 

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II.Protection and Indemnity (“P&I”) Coverages

Third-party liabilities, principally for crew medical and crew and guest injury claims, in connection with our cruise activities are covered by entry inour P&I clubs, which are mutual indemnity associations owned by ship owners. Our vesselsWe are entered in three P&I clubs as follows: The Westmembers of England Ship Owners Mutual Insurancethe Standard Steamship Owners’ Protection and Indemnity Association (Luxembourg),(Europe) Ltd. and The Steamship Mutual Underwriting Association (Bermuda) Limited and the United Kingdom Mutual Steam Ship Assurance Association (Bermuda) Limited.P&I clubs. The P&I clubs in which we participate are part of a worldwide group of P&I clubs, known as the International Group of P&I Clubs (the “IG”). The IG insures directly, and through reinsurance markets, a large portion of the world��sworld’s shipping fleets. Coverage isCoverages are subject to the P&I clubs’ rules and the limitlimits of coverage isare determined by the IG. P&I coverage includes legal, statutory or pre-approved contract liabilities and other expenses related to crew, guests and other third parties. This coverage also includes shipwreck removal, pollution and damage to third party property.

Hull and Machinery Insurance

III.Hull and Machinery Insurance

We maintain insurance on the hull and machinery of each of our ships infor reasonable amounts equal to the estimated market value of each ship.as determined by management. The coverage for hull and machinery is provided by international marine insurance carriers.insurers. Most insurance underwritersinsurers make it a condition for insurance coverage that a ship be certified as “in class” by a classification society that is a member of the International Association of Classification Societies (“IACS”). All of our ships are currentlyhave been certified aswithin the last twelve months to be in class by an IACS member. These certifications have either been issued or endorsed within the last twelve months.

War Risk Insurance

 

IV.War Risk Insurance

We maintain war risk insurance coverage for liability and physical damage, subject to coverage limits, deductibles and exclusions for claims such as those arising from chemical, nuclear and biological attacks, on all of our ships covering our legal liability to crew, guests and other third parties as well as loss or damage to our vessels arising from war or war-like actions, including terrorist incidents. ThisItems excluded from this coverage are claims arising from chemical, nuclear and biological attacks. Our primary war risk insurance coverage is provided by international marine insurance carriers and Mutual War Risk Clubs. In addition,insurers, with excess war risk insurance is provided by our threetwo P&I clubs for all our ships.clubs. Under the terms of our war risk insurance coverage, which is typical for war risk policies in the marine industry, underwritersinsurers can give seven days notice to the insured that the liability and physical



damage policies can be cancelled. However, the policy can be reinstated at different premium rates. This gives underwritersinsurers the ability to increase our premiums following events that they determine have increased their risk.

Other Insurance

V.Other Insurance

          As required by the FMC, we maintain performance bonds or insurance in the aggregate amount of $105 million for ships operated by our brands which embark guests in U.S. ports to cover guest ticket liabilities in the event of a cancelled or interrupted cruise. We also maintain other performance bonds or guarantees as required by various U.S. and foreign authorities that regulate certain of our operations in their jurisdictions; the most significant of which are required by Abta and the UK Civil Aviation Authority and total approximately £81 million ($168 million U.S. dollars at November 30, 2007 exchange rate) and £52 million ($109 million U.S. dollars at the November 30, 2007 exchange rate), respectively, to cover our brands’ UK passenger and air ticket deposit liabilities.

We maintain standard property insurance covering our shoreside assets and casualty insurance policies to cover certain shoreside assets andcovering liabilities to third parties includingarising from our tour business, shoreside operations and certain port facility assets, as well as appropriate workers’facilities. We also maintain workers compensation, employee health, directors and certain healthofficers liability and other insurance policies.

The Athens Conventioncoverages.

 Current conventions generally in force applying to passenger ships are the Athens Convention relating to the Carriage of Passengers and their Luggage by Sea (1974), the 1976 Protocol to the Athens Convention and the Convention on Limitation of Liability for Maritime Claims (1976). The U.S. has not ratified any Athens Convention Protocol. However, a vessel’s flag state or the port state that has ratified it may enforce the 1976 Athens Convention Protocol with regard to vessels registered under its flag or visiting a port located in its jurisdiction.

          The IMO Diplomatic Conference agreed to a new protocol to the Athens Convention on November 1, 2002. The new protocol, which has not yet been ratified by the U.S. or any of our flag states, requires substantial levels of compulsory insurance which must be maintained by passenger ship operators and provides a direct action provision, which will allow claimants to proceed directly against insurers. This new protocol requires passenger ship operators to maintain insurance or some other form of financial security, such as a guarantee from a bank, to cover the limits of liability under the Athens Convention with regards to the death or personal injury of passengers. The timing of the ratification of this new protocol is expected in 2009. We cannot be certain that affordable and viable direct and reinsurance markets will be available to provide the level of coverage required under the new protocol. If the new protocol is ratified, we expect insurance costs will increase.

F.Trademarks and Other Intellectual Property

          F.Trademarks and Other Intellectual Property

We own and have registered or licensed, numerous trademarks and have also registered various domain names, which we believe are widely recognized throughout the world and have considerable value, which enablesvalue. These intangible assets enable us to distinguish our cruise productproducts, ships and programs from thatthose of our competitors. TheseOur trademarks include the trade names of our cruise lines,brands, each of which we believe is a widely-recognized brand name in the cruise vacation industry, as well as “World’s Leading Cruise Lines.”our ship names and a wide variety of cruise services and products. We have entered into licenses, including a license to use the P&O name, the P&O flag and other relevant trademarks and domain names in relation to cruisescruising and related activities. Finally, weWe also have a license to use the “Love BoatBoat”” name and related marks. See Note 2, “Trademarks”10, “Fair Value Measurements, Derivatives Instruments and Hedging Activities” to our Consolidated Financial Statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Estimates – Asset Impairments” in Exhibit 13 to this Form 10-K.

          G.Taxation

U.S. Federal Income Tax10-K for additional discussion of our trademarks.

 

G.Taxation

I.U.S. Federal Income Tax

We are primarily foreign corporations engaged in the business of operating passenger vessels in international transportation. We also own and operate, among other businesses, the hotel, tour and transportation and tour businessesbusiness of Holland America Tours and Princess Alaska Tours through U.S. corporations.

Our U.S. passenger vessel business and thecertain ship-owning subsidiaries are engaged in a trade or business within the U.S. Depending on the itinerary forof any particular vessel, that vessel may generate income from sources within the U.S. We believe that under Section 883



of the Internal Revenue Code and applicable income tax treaties, our U.S. source income and the income of our ship-owning subsidiaries, to the extent derived from, or incidental to, the international operation of a ship or ships, is currently exempt from U.S. federal income tax.tax for purposes of this section. Regulations under Section 883 list items that the Internal Revenue Service (“IRS”) does not consider to be incidental to ship operations. Among the items identified as not incidental are income from the sale of air transportation, transfers, shore excursions and pre-and post-cruise land packages to the extent earned from sources within the U.S.

Our domestic U.S. operations, principally the hotel, tour and transportation and tour businessesbusiness of Holland America Tours and Princess Alaska Tours, are

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subject to normal state and federal income taxation in the U.S.

Application of Section 883 of the Internal Revenue Code

a.Application of Section 883 of the Internal Revenue Code

In general, under Section 883, certain non-U.S. corporations are not subject to U.S. federal income tax or branch profits tax on U.S. source income derived from, or incidental to, the international operation of a ship or ships. Effective for our year ended November 30, 2005 and thereafter,Applicable U.S. Treasury regulations provide, in general that a foreign corporation will qualify for the benefits of Section 883 if, in relevant part, (i) the foreign country in which the foreign corporation is organized grants an equivalent exemption to corporations organized in the U.S. and (ii) the foreign corporation meets thea defined publicly-traded test. In addition, to the extent a foreign corporation’s shares arestock is owned by a direct or indirect parent corporation which itself meets the publicly-traded test, then such subsidiary will be deemed owned by individuals resident in the country of incorporation of such parent corporation and the subsidiary will satisfy the applicable stock ownership requirements in lieu of the publicly-traded test.

We believe that Panama is an equivalent exemption jurisdiction and Carnival Corporation currently qualifies as a publicly tradedpublicly-traded corporation under the regulations and substantially all of its income, with the exceptions noted above under “U.S. Federal Income Tax,” is and will continue to be exempt from U.S. federal income taxes. If, in the future, Panama no longer qualified as an equivalent exemption jurisdiction or Carnival Corporation were to fail to qualify as a publicly tradedpublicly-traded corporation, it and all of its ship-owning or operating subsidiaries that rely on Section 883 for exemptingto exempt cruise operations income would be subject to U.S. federal income tax on their U.S. source cruise operation income. In such event, the net income of Carnival Corporation’s ship-owning or operating subsidiaries would be materially reduced.

Although the above represents our interpretation of this Internal Revenue Code provision and the U.S. Treasury regulations, the IRS’s interpretation of these provisions could differ materially. In addition, the provisions of the Internal Revenue Code, including Section 883, are subject to change at any time by legislation. Moreover, changes could occur in the future with respect to the trading volume or trading frequency of Carnival Corporation shares or with respect to the identity, residence, or holdings of Carnival Corporation’s direct or indirect shareholders that could affect Carnival Corporation’s and its subsidiariessubsidiaries’ eligibility for the Section 883 exemption. Accordingly, although we believe it is unlikely, it is possible that Carnival Corporation and its ship-owning or operating subsidiaries’subsidiaries whose tax exemption is based on Section 883 could lose this exemption. If Carnival Corporation and/or its ship-owning or operating subsidiaries were not entitled to the benefit of Section 883, Carnival Corporation and/or its ship-owning or operating subsidiaries would be subject to U.S. federal income and branch taxation on a portion of its income atresulting in higher than normal tax rates.

Exemption Under Applicable Income Tax Treaties

b.Exemption Under Applicable Income Tax Treaties

We believe that the U.S. source shippingtransportation income fromearned by Carnival plc and its UK and Italian resident subsidiaries currently qualifyqualifies for exemption from U.S. federal income tax under applicable bilateral U.S. income tax treaties. There is, however, no authority that directly addresses the effect, if any, of DLC arrangements on the availability of benefits under the treaties and, consequently, the matter is not free from doubt. These treaties may be abrogatedrevoked by either applicable country, replaced or modified with new agreements that treat shipping income from international operation of ships differently than under the agreements currently in force. If any of our subsidiaries that currently claim exemption from U.S. income taxation on their U.S. source shipping income under an applicable treaty do not qualify for benefits under the existing treaties, or if the existing treaties are abrogated,revoked, replaced or materially modified in a manner adverse to our interests and, with respect to U.S. federal income tax only, if any such subsidiary does not qualify for exemption under Section 883, such ship-owning or operating subsidiary may be subject to U.S. federal income taxation on a portion of its income.



c.

Taxation in the Absence of an Exemption under Section 883 or any Applicable U.S. Income Tax Treaty

          Shipping income that is attributable to transportation of passengers which begins or ends in the U.S. is considered to be 50% derived from U.S. sources. Shipping income that is attributable to transportation of passengers which begins and ends in foreign countries without stopping in the U.S. is considered to be 100% derived from foreign sources. Shipping income that is attributable to the transportation of passengers which begins and ends in the U.S. without stopping at an intermediate foreign port is considered to be 100% derived from U.S. sources.

Shipping income that is attributable to transportation of passengers which begins or ends in the U.S. is considered to be 50% derived from U.S. sources. The legislative history of the transportation income source rules suggests that a cruise that begins and ends in a U.S. port, but that calls on more than one foreign port, will derive U.S. source income only from 50% of the first and last legs of the cruise. Because there are no regulations or other IRS interpretations of these rules, the applicability of the transportation income source rules in the aforesaid mannerto these cruises is not free from doubt.

In the absence of an exemption under Section 883 or any applicable U.S. income tax treaty, as appropriate, we and/or our subsidiaries would be subject to either the net income and branch profits tax regimes of Section 882 and Section 884 of the Internal Revenue Code (the(collectively the “net tax regime”) or the four percent of gross income tax regime of Section 887 of the Internal Revenue Code (the “four percent tax regime”).

Where the relevant foreign corporation has, or is considered to have, a fixed place of business in the U.S. that is involved in the earning of U.S. source shipping income and substantially all of this shipping income is attributable to regularly scheduled transportation, the net tax regime is applicable. If the foreign corporation does not have a fixed place of business in the U.S. or substantially all of its income is not

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derived from regularly scheduled transportation, the four percent tax regime will apply.

The net tax regime should be the tax regime applied to Carnival Corporation and its vessel owning subsidiaries based in the U.S. in the absence of an exemption under Section 883. Under the net tax regime, U.S. source shipping income, net of applicable deductions, would currently be subject to a federal corporate income tax of up to 35% and state income taxes at varying rates; and the net after-tax income would be potentially subject to a further branch tax of 30%. In addition, interest paid by the corporations, if any, would generally be subject to a branch interest tax.

The four percent tax regime should be the tax regime applicable to our vessel owning subsidiaries based outside the U.S., in the absence of an exemption under Section 883 or any applicable U.S. income tax treaty. Under the four percent tax regime, gross U.S. source shipping income would be subject to a four percent tax, without the benefit of deductions.

UK Income Tax

II.UK and Australian Income Tax

Cunard, Ocean Village, P&O Cruises (UK) and P&O Cruises Australia(Australia) have all elected to enter the UK tonnage tax regime. Companies to which the tonnage tax regime applies pay corporation tax on profit calculated by reference to the net tonnage of qualifying vessels. UK corporation tax is not chargeable under the normal UK tax rules on these brands’ relevant shipping income. Relevant shipping income includes income from the operation of qualifying ships and from shipping related activities. It also includes dividends from foreign companies, which are subject to a tax on profits in their country of residence or elsewhere and the activities of which broadly would qualify in full for the UK tonnage tax regime if they were UK resident.

For a company to be eligible for the regime, it must be subject to UK corporation tax and, among other matters, operate qualifying ships that are strategically and commercially managed in the UK. There is also a seafarer training requirement to which the UK tonnage tax companies are subject.

Our UK non-shipping activities that do not qualify under the UK tonnage tax regime, which are not currently forecastor forecasted to be significant, remain subject to normal UK corporation tax. Dividends from subsidiaries doing business outside the UK, when distributed to Carnival plc, are generally exempt from UK corporation tax.

Italian and German Income Tax

          AIDA, the German brandP&O Cruises (Australia) is a division of Carnival plc, is a subsidiary of Costa. AIDA’sand the shipping profit income from this operation is subject to ItalianUK tonnage tax as discussed above. Substantially all of this operation’s income tax and the majority of its profits areis exempt from GermanAustralian corporation taxes by virtue of the Italy/Germany doubleUK/Australian income tax treaty.



 During the 2005 third quarter,

III.Italian, German, Portuguese and Spanish Income Tax

Carnival plc’s German and Spanish brands, AIDA and Ibero, are both divisions of Costa. Effective through fiscal 2014, Costa elected to enteris entered into the Italian Tonnage Tax regime, effectivewhich was initially granted for ten years in 2004. Upon its 2005 fiscalexpiration, Costa intends to reapply for another ten year and for the following nine years.period. This regime taxes Costa’s, AIDA’s and AIDA’sIbero’s shipping profits, as defined, which is mostare substantially all of Costa’s and AIDA’s income,their incomes, calculated by reference to the net tonnage of itstheir qualifying vessels.

Most of theCosta’s and AIDA’s income not considered to be shipping profits for Italian Tonnage Tax purposes, will be taxed under the favorable Italian tax regime for CostaCosta’s and AIDA’s Italian-registered ships.

Australian Income Tax

          P&O Cruises Australia is a division of Carnival plc, and the income from this operation, is subject to UK tonnage tax as discussed above. The majority of this operation’sAIDA’s profits are exempt from AustralianGerman corporation taxes by virtue of the UK/AustralianItaly/Germany income tax treaty.

U.S. State Income TaxesAll of Ibero’s vessels are registered in Portugal. Provided certain local employment requirements are satisfied, most of Ibero’s income not considered to be shipping profits for Italian Tonnage Tax purposes will be exempt from Portuguese income tax through 2011, and thereafter will be subject to a favorable Portuguese income tax regime at a lower than normal tax rate through 2020. Ibero’s Spanish operations are minimal and, therefore, its Spanish income taxes are minimal.

 

IV.U.S. State Income Tax

In addition to the U.S. federal income and branch level taxes discussed above, Carnival Corporation &and Carnival plc and certain of its affiliates are subject to various U.S. state income taxes generally imposed on each statesstate’s portion of the U.S. source income subject to U.S. federal income taxes. However, the state of Alaska imposes an income tax on its allocated portion of the total income of our companies doing business in Alaska and certain of their affiliates.

          H.Website Access to Carnival Corporation & plc SEC Reports

H.Website Access to Carnival Corporation & plc SEC Reports

Our Form 10-K, joint Quarterly Reports on Form 10-Q, joint Current Reports on Form 8-K, joint proxy statementProxy Statement related to our annual stockholders meeting, Section 16 filings and all amendments to those reports are available, free of charge on our home pages atwww.carnivalcorp.com, andwww.carnivalplc.com and on the SEC’s home page atwww.sec.gov as soon as reasonably practicable after we have electronically filed or furnished these reports with the SEC. The content of any website referred to in this Form 10-K is not incorporated by reference into this Form 10-K unless expressly noted.

Item 1A.Risk Factors.

 

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You should consider carefully the specific risk factors set forth below and the other information contained or incorporated by reference in this Form 10-K, as these are important factors, among others, that could cause our actual results to differ from our expected or historical results. You should note that the risks described below are not the only risks we face. The risks listed below are only those risks relating to our operations that we consider material. There may be additional risks, that we currently consider not to be material, or which we are not currently aware of, that could have an adverse effect on our future results. Some of the statements in this section and elsewhere in this Form 10-K are “forward-looking statements.” For a discussion of those statements and of other factors to consider see the “Cautionary Note Concerning Factors That May Affect Future Results” section below.

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General economic and business conditions may adversely impact the levels of our potential vacationers’ discretionary income and this group’s confidence in the U.S. and other economiesconsumer demand for vacations and, consequently, reduce our cruise brands’ net revenue yields and profitability.

Demand for cruises is in part dependent on the underlying perceived or actual economic strength of the countries from which cruise companies source their guests. Adverse changes in the perceived or actual economic climate, such as higher fuel prices and healthcare costs, higher unemployment and underemployment rates, higher interest rates, increasing taxation, stock, real estate and other market declines and volatility, declines in income levels, more restrictive credit markets, and changes in governmental policies, could reduce theour potential vacationers’ discretionary incomeincomes, net worth or their consumer confidence in the countries from which we source our guests. Consequently this may negatively affect demand for vacations, including cruise vacations, which are a discretionary purchase. Decreases in demand could lead to price discounting which, in turn, could reduce the profitability of our business. Decreases in discretionary income or consumer confidence could also result in lower onboard revenues, which could also have a negative effect on our profitability.

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Fluctuations in foreign currency exchange rates could adversely affect our financial results.

We earn revenues, pay expenses, purchase and own assets, and incur liabilities in currencies other than the U.S. dollar, most importantly the euro, sterling, Australian dollar and Canadian dollar. We derived approximately 54%, 52% and 50% of our revenues from passengers sourced from countries outside of the U.S. in fiscal 2010, 2009 and 2008, respectively. Because our consolidated financial statements are presented in U.S. dollars, we must translate revenues and expenses, as well as assets and liabilities, into U.S. dollars at exchange rates in effect during or at the end of each reporting period. We also report currency transactions in the functional currencies of our reporting units. Therefore, fluctuations in foreign currency exchange rates, particularly the strengthening of the U.S. dollar against our other major currencies, will adversely affect our U.S. dollar financial results.

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The international political climate, armed conflicts, terrorist and pirate attacks, vessel seizures, and threats thereof, and other world events affecting the safety and security of travel could adversely affect the demand for cruises and could harm our future sales and profitability.

Demand for cruises and other vacation options has been and is expected to continue to be affected by the public’s attitude towards the safety and security of travel. Events such as the terrorist attacks in the U.S. on September 11, 2001 and the threats of additional attacks in the U.S. and elsewhere, drug-related violence in Mexico, pirate attacks and vessel seizures off the coast of Africa, concerns of an outbreak of additional



hostilities and national government travel advisories, together with the resulting political instability and concerns over safety and security aspects of traveling, have had a significant adverse impact on demand and pricing in the travel and vacation industry in the past, and may have an adverse impact in the future. Decreases in demand could lead to price discounting which, in turn, could reduce the profitability of our business.

•

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We may lose business to competitors throughout the vacation market.market, which could adversely affect our operations and financial condition.

We face significant competition from other cruise lines, bothbrands, on the basis of cruise pricing, and also in terms of the types and size of ships, services and destinations being offered to cruise guests. We try to differentiate ourselves from our cruise competitors by offering newa wide variety of itineraries, products and services to our guests, but the acceptance of each offering is not certain and consumers’ preferences are always subject to change. In addition, we may needchoose to enhance our older ships with current innovative amenities and improvements in order for those ships to be more competitive with other cruise ships. Our principalDuring the winter season ships that operate in the Caribbean face increased competition as our brands, as well as our competitors, includeredeploy vessels to the companies listedCaribbean, which results in this Form 10-K under Part 1, Item 1. Business. B. - “Cruise Operations – Competition.”a seasonal increase in capacity that may adversely impact our profitability.

In addition, we operate in the vacation market and cruising is only one of many alternatives for people choosing a vacation. We therefore risk losing business not only to other cruise lines, but also to other vacation operators that provide other travel and leisure options, including, but not limited to, hotels, resorts, theme parks, andorganized tours, land-based casino operators.operators and vacation ownership properties. We believe that our land-based vacation competitors’ operating costs are less affected by fuel price increases than cruise companies. Accordingly, fuel price increases may adversely impact cruise companies more than their land-based competitors.

In the event that we do not compete effectively with other cruise companies and other vacation alternatives, our results of operations and financial condition could be adversely affected.

•

•

Overcapacity in the cruise andship or land-based vacation industries could have a negative impact on our net revenue yields and increase operating costs, thus resulting in ship, goodwill and/orand trademark asset impairments, all of which could adversely affect profitability.

 

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Cruising capacity has grown in recent years and we expect it to continue to increase over the next fivethree years as allmost of the major cruise vacation companies are expected to introduce new ships. In order to fill new capacity, the cruise vacation industry will probably need to increase its share of the overall vacation market. Also, the increasingly large size of ships may adversely impact the industry’s ability to fill their ships at prices that meet their expectations. The overall vacation market ismay also facingface increases in land-based vacation capacity, which also willmay impact us.us as well. Failure to increase our share of the overall vacation market is one of a number of factors that could have a negative impact on our net revenue yields. In some prior years, our net revenue yields were negatively impacted as a result of a variety of factors, including capacity increases. Should net revenue yields be negatively impacted, our results of operations and financial condition could be adversely affected, including the impairment of the value of our ships, goodwill and/orand trademark assets. In addition, increased cruise capacity could impact our ability to retain and attract qualified crew, including officers, at competitive costs and, therefore, increase our shipboard employeeoperating costs. Furthermore, some of the same factors that impact our guests’ decisions to cruise with us may also impact our ability to employ qualified crew.

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Accidents, the spread of contagious diseases and threats thereof, adverse weather conditions or natural disasters, and other incidents affecting the health, safety, security and/or vacationand satisfaction of guests and crew could have an adverse affecteffect on our sales and profitability.

The operation of cruise ships, hotels, land tours, port facilities and shore excursions involve the risk of accidents, including those caused by the improper operation of our ships, motorcoaches and trains, guest and crew illnesses such as from the spread of contagious diseases, mechanical failures, fires, collisions, groundings, navigational errors, oil spills and other environmental mishaps, and other incidents at sea or while in port or on land, which may cause injury and death, or the alteration of itineraries or cancellation of a cruise or series of cruises or tours. Our ships have been involved in accidents and other incidents in the past. We may experience similar incidents in the future. These types of incidents may bring into question guest and crew health, safety, health, security and vacation satisfaction, and thereby adversely affect future industry performance,our sales and profitability.profitability and may also result in litigation against us and increased governmental or other regulatory oversight.

In addition,particular, our ability to effectively and efficiently operate shipboard and shoreside activities may be impacted by widespread public health issues/illnesses or health scares resulting in, among other things, reduced demand for cruises and cruise cancellations and employee absenteeism that could have an adverse affect on our sales and profitability. For example, a severe outbreak of the flu virus or some other pandemic could, among other things, disrupt our ability to embark/disembark passengers and crew, disrupt air travel to and from ports, increase costs for prevention and treatment and adversely affect our supply chain. This could also adversely impact cruise demand in areas unaffected by such an outbreak.

Our cruise ships, hotels, land tours, port facilities, shore excursions and other service providers may be impacted by adverse weather patterns or natural disasters, such as hurricanes, earthquakes, tornados and earthquakes.volcanic eruptions. These events could result in, among other things, increased port related and other costs as these third-party operators seek to charge us additional amounts in order to recover expenses caused by adverse events. For example, in 2005 Hurricane Wilma caused the temporary closing of cruise ports in South Florida and also destroyed our pier facility in Cozumel, Mexico, which is not expected to re-open until late-2008. As a result of the closure of this port certain of our costs have increased.costs. It



is possible that we could be forced to alter itineraries or cancel a cruise or a series of cruises or tours due to these or other factors, which would have an adverse affecteffect on our sales and profitability.

The frequency of extreme weather events such as hurricanes and floods, which may be caused by climate change, may not only cause disruption, alteration, or cancellation of cruises, but may also adversely impact commercial airline flights, other transport and shore excursion activities or prevent our guests from electing to cruise altogether. Such extreme weather events may also disrupt the supply of provisions, fuel and shore power and may limit our ability to safely embark and disembark guests in ports. In addition, these extreme weather conditions could result in increased wave and wind activity, which would make it more challenging to sail and dock our ships and could cause sea/motion sickness among guests and crew. These events could have an adverse impact on the safety and guest satisfaction of cruising, and could also have an adverse impact on revenues and costs, all of which would lead to lower profitability. Finally, these extreme weather conditions could cause property damage to our ships, port facilities and other assets and impact our ability to obtain insurance coverage for operations in such areas.

Furthermore, some of the same factors that impact our guests’ decisions to cruise with us may also impact our ability to employ qualified crew.

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Adverse publicity concerning the cruise industry in general, or us in particular, including any adverse impact that cruising may have on the marine environment, could impact the demand for cruises, and affect our reputation and harm our future sales and profitability.

Maintaining a good reputation is critical to our business. Reports, whether true or not, of ship accidents and other incidents at sea or while in port, including missing guests, inappropriate crew orand guest behavior, onboard crimes, crew and guest or crew illnesses such as incidents of stomach flu, parasitic outbreaks or other contagious diseases, security breaches, terrorist threats and attacks and other adverse events can result in negative publicity, and a negative perception regarding the perception that cruising is more dangerous than other vacation alternatives.safety and satisfaction of our guests. In addition, publicity regarding the adverse environmental impact of cruise ships on the environment, including marine life, could diminish our reputation. Anything that damages our reputation, (whetherwhether or not justified), including adverse publicity about the safety and guest satisfaction of cruising, or the vacation industry in general,justified, could have an adverse affect impact on demand, which could lead to price discounting and a reduction in our net income.sales and profitability.

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Environmental legislationChanges in and compliance with environmental laws and regulations could adversely affect our operations and increasethus impact our operating costs.profitability.

Some environmental groups have lobbied for more stringent regulation of cruise ships. Some groups have also generated negative publicity about the cruise industry and its environmental impact. The U.S. Congress, U.S. states, the IMO, the EPA and the U.S. Environmental Protection Agency (“EPA”) others

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periodically consider new laws and regulations to manage cruise ship discharges. In addition, various otherU.S. state regulatory agencies in the States of Alaska, California, Florida, Hawaii, Maine, Washington and elsewhere, including European regulatory organizations have enacted or are considering new regulations or policies, such as requirements to use lower sulfur content fuels and stricter emission limits to reduce greenhouse gasGHG effects, and requirements to use low sulfur fuels, which could adversely impact the cruise industry.and other industries. See Part I, Item 1. Business. B. - “Cruise Operations – Operations—Governmental Regulations—Maritime Regulations” for additional information.information regarding these risks.

The IMO has amended the MARPOL Annex VI regulations to reduce harmful emissions from ships. As described in “Maritime Environmental Regulations” as referenced above, these changes will result in reductions in ship sulfur oxide emissions by requiring progressive reductions in the sulfur content in fuel. These limits will be further reduced in designated ECAs, including ECAs that have been or could be proposed in other prime cruising areas, such as around Australia, the Mediterranean Sea, Mexico, Puerto Rico and USVI. As a result of these amendments, low sulfur fuel may be less available because of increased demand, and the cost of such fuel may increase. If utilized, new sulfur emissions abatement technologies may also increase costs. The increase in fuel prices impacts not only our fuel costs, but also some of our other expenses, such as crew and guest travel, freight, and commodity prices, and may have an adverse impact on our profitability.

Initiatives to limit greenhouse gasGHG emissions have been introduced or are being considered in several European countries. Similarly, as of January 2008, a number ofnumerous other bills related to climate change bills have been introduced in the U.S. Congress, which could adversely impact all industries. While not all are likely to become law, this is a strong indication that additional climate change related mandates will be forthcoming, in the future. In addition, the EPA has been ordered by the U.S. District Courtand that they may significantly impact our costs, including, among other things, increasing fuel prices, including new taxes on bunker fuel, establishing costly emissions trading schemes and increasing newbuild and operational costs. The impact of Northern California to rescind its long standing National Pollutant Discharge Elimination System permit exemption for ship discharges that are incidental to the normal operation of a ship. As a result, the EPA has begun an administrative process to prepare regulations ofany such discharges as of September 30, 2008. These and other unforeseen regulatory developments have the potential to affect our operations and increase our environmental compliance costs.future legislation is not determinable at this time.

Current and future environmental laws and regulations, or liabilities arising from past or future releases of, or exposure to, hazardous substances or to vessel discharges, including ballast water and waste disposal, could materially increase our cost of compliance or otherwise materially adversely affect our business, results of operations and/orand financial condition.

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NewChanges in and compliance with laws and regulations relating to the protection of persons with disabilities, employment, health, safety, security and other regulatory issuesregulations under which we operate could increase our operating costs or negatively affect our bookings and future net revenue yields and adversely affect net income.costs.

We are subject to various international, national, state and local laws, regulations, treaties and employee union agreements related to, among other things, persons with disabilities, employment, health, safety and security laws, regulations and treaties. Due to increasing regulatory requirements applicable to our operations, appropriate training of crewmembers has become more time-consuming and increased our operating costs. See Part I, Item 1. Business. B. - “Cruise Operations-Governmental Regulations” for a detailed discussion of some of these regulatory issues.

security. We believe that health, safety, security and other regulatory issues will continue to be areas of focus by relevant government authorities in the U.S., Europe and elsewhere. Resultingelsewhere will continue to focus on these areas. Accordingly, new legislation, regulations or treaties, or changes thereto, could impact our operations and would likely subject us to increased compliance costs in the future. In addition, due to increasing regulatory requirements applicable to our operations, appropriate training of crewmembers may become more time-consuming and may increase our operating costs.

          Pursuant to the Western Hemisphere Travel Initiative, by the earlier of June 1, 2009 or 90 days after the sanctioning of a People Access Security Service (“PASS”) card, U.S. citizens will be required to carry a passport or, if available, a PASS card, for travel by



land or sea to or from certain countries/areas that are currently exempt from passport requirements,The governing bodies, such as the Caribbean, Canada and Mexico. The StateU.S. Department of Justice, U.S. Department of Transportation and the DepartmentEU, who promulgate the laws and regulations related to persons with disabilities, such as the American with Disabilities Act and the European Union’s Passenger Rights Proposal, have each recently been considering whether the cruise industry’s existing practices and physical facilities are sufficient to meet the needs of Homeland Security are collaborating oncruise passengers with disabilities. Although we have made improvements to our practices and physical facilities to enhance the developmentonboard experience of a PASS card system. The PASS card is a secure credential that verifiesour guests with disabilities, the citizenshipadoption of new laws, regulations or compliance agreements could require further enhancements to our ships and identity of U.S. nationals who re-enterincreases in our operating expenses.

In March 2010, the Patient Protection & Affordable Care Act was signed into law in the U.S. andThe effective dates of various provisions range from the date of enactment through 2018. The most significant impact on our operations will be the requirement to provide medical coverage to U.S. citizens working onboard our foreign flag ships starting in 2014. The impact of implementing the provision of this act is seen as a less expensive alternativenot expected to a passport.be significant.

 Since many

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Changes in income tax laws and regulations and income tax treaties may adversely affect the taxation of our shipping income and our profitability.

We believe that substantially all of the income earned by Carnival Corporation and Carnival plc and each of their subsidiaries qualifies for taxation based on vessel tonnage, is exempt or is subject to minimal taxes in the jurisdictions where the entities are incorporated. If we did not qualify for tonnage tax, exemption or minimal taxes or if the laws that provide for these tax systems were changed, we would have significantly higher income tax expense. For example, the state of Alaska instituted income taxes in 2007, which directly impacted the cruise industry operating in Alaska. As budgetary constraints continue to adversely impact the jurisdictions in which we operate, increases in income tax regulations affecting our operations may be imposed.

We are subject to the continual examination of our cruise guests visitingincome tax returns by tax authorities in the jurisdictions where we operate. We regularly assess the likelihood of adverse outcomes resulting from these destinations mayexaminations to determine the adequacy of our provision for income taxes. There can be no assurance that the outcome from these examinations will not currently have passports or may not obtainadversely affect our net income.

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We continue to monitor global administrative, legislative and judicial tax related developments and evaluate a PASS cardvariety of possible courses of action based upon such developments. However, there is no assurance that such actions, if and when available, it is likely that thistaken, will have some negative effect on our bookings and future net revenue yields when the regulations take effect. There are a numbersuccessfully mitigate adverse income tax consequences.

See Part I, Item 1. Business. G. “Taxation” for additional discussion of factors that could influence the ultimate impact of these regulations, such as customer travel patterns, the cost and ease of obtaining PASS cards or passports, customer price sensitivity and the cost and effectiveness of mitigating programs we and/or others have established or will establish.tax risks.

•

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We are subject to many economic, market and political factors including changes in and compliance with numerous rules and regulations that are beyond our control, which could result in increases inincrease our operating, financing and taxother costs and could harm future sales and profitability.

Some of our operating costs, including fuel, food, insurance, payroll, port costs, security and security costs,other commodity-based items are subject to increases because of market forces, economic or political instability or decisions beyond our control. In addition, interest rates, currency exchange rate fluctuations and our ability to obtain debt or equity financing are dependent on many economic, market and political factors. Actions by taxing jurisdictionsIncreases in operating and financing costs could also cause an increase inadversely affect our costs.results because we may not be able to recover these increased costs through price increases charged to our guests and such increases may adversely impact our liquidity and credit ratings.

          For example, in 2007, 2006 and 2005 fuel costs accounted for 14.9%, 14.4% and 11.9%, respectively, of our total cruise operating expenses. Economic, market and political conditions in certain parts of the world, including fuel demand and supply disruptions and related infrastructure needs, make it difficult to predict the price and availability of fuel in the future. We have taken actions to partially offset the effects of higher fuel costs through the addition of temporary fuel supplement fees by most of our brands and fuel conservation initiatives. However, the Office of the Attorney General for the State of Florida is conducting a review of the fuel supplement program implemented by our North American brands and other cruise operators. We believe that our fuel supplement complies with applicable laws and we are cooperating with the review. Success in trying to offset higher fuel costs with ticket price increases and fuel supplements is largely influenced by competitive factors and economic conditions and can vary significantly depending on the market served. Future increases in the costglobal price of fuel globally would increase the cost of our cruise ship operations, and weoperations. We may be unable to implement additional fuel conservation initiatives and other best practices or increase ticket price and/orprices and collect fuel supplement increases,supplements, which would otherwise help to fully or partially offset these fuel costprice increases.

          In addition, the State of Alaska instituted new taxes in 2007, which has impacted the cruise industry operating in Alaska. Separately in January 2008, the UK published draft changes to its tonnage tax regime which would change effective April 1, 2008, the scope of income that is includable within the UK tonnage tax regime. If such changes were adopted in their present form our brands subject to the UK tonnage tax regime will incur a higher level of UK income taxes. It is possible that other states, countriesjurisdictions or ports of call that we regularly visit may also decide to assess new taxes or fees or change existing taxes or fees specifically targeted to the cruise industry, and its employees and/orand guests, including VATvalue added taxes on cruise tickets and onboard revenues and changes in the scope of income that is includable within tonnage tax regimes, which could increase our operating costs and/orand could decrease the demand for cruises and ultimately decrease our net revenue yields and net income.

          The U.S. Customs and Border Protection (“CBP”) has proposed an interpretive rule to the Passenger Vessel Services Act (“PVSA”), which could require that all roundtrip U.S. cruises by foreign flag vessels spend at least 48 hours in each foreign port For example, Spain recently imposed a value-added tax on the cruisesale of certain onboard goods and require that the time spent in foreign ports must be more than 50% of the time spent in all U.S. ports on the cruise. We believe the CBP issued the proposed rule to protect NCL America operations in Hawaii. However, if implemented as written, the proposed rule could also impact other non-Hawaii itineraries such as Seattle-based Alaska and some Caribbean cruises, which may no longer qualify under the PVSA. Accordingly this proposed rule could adversely affect our Hawaii and non-Hawaii cruises’ profitability.services.

 Increases in operating, financing and tax costs could adversely affect our results because we may not be able to recover these increased costs through price increases charged to our guests.

•

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Delays inOur ability to implement our shipbuilding programs and ship constructionrepairs, maintenance and repairs, problems encountered at shipyards and shipyard consolidationrefurbishments on terms that are favorable or consistent with our expectations could reduce our profitability. In addition, we may incur increases in our repairs and maintenance expenses and refurbishment costs as our fleet ages.

The construction, repair, maintenance and repairrefurbishment of cruise ships is aare complex processprocesses and involvesinvolve risks similar to those encountered in other large and sophisticated construction, repair, maintenance and repairrefurbishment projects, which could cause delays and cost overruns in completion, delivery or repair.completing such work. As our fleet ages, our repair and maintenance expenses will increase, such as the required 25 year survey which is more exhaustive and thus may require additional repair and maintenance work to be performed. In addition, work



stoppages, insolvencyinsolvencies or other financial problems ofdifficulties at the shipyards buildingand their subcontractors and suppliers who build, repair, maintain or repairingrefurbish our ships could also delay or prevent the delivery of our ships under construction and prevent or delay the completion of the refurbishment, repair and maintenance of existing ships in our fleet. These events could adversely affect our profitability. However, the impact from a delay in delivery of our newbuilds couldis expected to be partially mitigated by contractual provisions and bank guarantees obtained bythat we require shipyards to provide to us. In addition, the consolidation of the control of certain European cruise shipyards or cruise shipyard voluntary capacity reductions or insolvencies could result in higher prices for future ships given the reduced number of competing shipyards, which could also reduce our profitability. Also,less shipyard availability thus reducing competition and increasing prices. Finally, the lack of qualified shipyard repair facilities could result in the inability to repair and maintain our ships on a timely basis, andwhich could also result in reduced profitability.

Also, the European shipyards that build our ships are currently eligible to benefit from governmental subsidies that support innovation, development, employment and export credit financing through 2011. Recently, the EC launched a review of the state aid programs to the shipbuilding sector, which, if terminated, could result in, among other things, higher future construction and financing costs.

As of November 30, 2007,2010, we had entered into foreign currency swapsforwards and options to fix a portion of the cost in Sterling and U.S. dollars of onetwo of our Euro-denominatedeuro-denominated shipbuilding contracts and a portion of another shipbuilding contract.contracts. If the shipyard with which we have contracted is unable to perform under the related contracts, the foreign currency swapsforwards and options related to the shipyard’s shipbuilding contracts would still have to be honored. This might require us to realize a loss on existing foreign currency swapsforwards and options without an offsetting gain on our foreign currency denominated shipbuilding contracts, thus resulting in an adverse effect on our financial results. As all of our newbuilds are being built by European shipyards and substantially all our newbuildsnewbuild costs are priced in Euros,euros, the ability to purchase ships for our North AmericanAmerica and UK brands at favorable U.S. dollar and sterling prices, has been, and may continue to be,respectively, is adversely impacted as a result of the weaker U.S. dollar and weaker sterling compared to the Euro.euro. This can result in higher newbuild costs and reduced profitability for our North AmericanAmerica and UK brands. Finally, the prices of various commodities that are used in the construction of ships, such as steel, can be subject to volatile price changes and, accordingly, the cost of future newbuilds may increase, which could have an adverse impact on our profitability.

In connection with our shipbuilding contracts, we do not anticipate any contractual breakage or cancellations by us to occur. However, if any were to occur, it could result in, among other things, the forfeiture of our payments and the imposition of contractual liquidated damages.

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Our success depends upon the continued strength of our cruise brands and our ability to implement our brand strategies.

We believe that our cruise brands have contributed significantly to the success of our business and that maintaining and enhancing our brands is critical to expanding their customer base. In addition, the ability of our brands to successfully target different segments of the various vacation markets in which they operate enables them to continue to expand and strengthen their business. Failure to protect our brands from infringers or to grow the value of the brands could have a material adverse effect on our business and results of operations.

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Our international operations are subject to additional risks not generally applicable to our domesticU.S. operations and may result in increased costs and risks and adversely affect our financial position and results of operations.

Our international operations are subject to numerousadditional risks, including, exposurebut not limited to, local economic conditions, potential adverse changes in the diplomatic relations between foreign countries,countries’ political systems, hostility from local populations, restrictions and taxes on the withdrawal of foreign investment and earnings and other payments by subsidiaries, government policies against the cruise, business,vacation or maritime businesses, local cabotage requirements, investment restrictions or requirements, diminished ability to legally enforce our contractual rights in foreign countries, commercial instability caused by corruption, foreign exchange restrictions and fluctuations in foreign currency exchange rates withholding and other taxes on remittances and other payments by subsidiaries, and changes in and application of foreign taxation structures including value added taxes.value-added taxes, which could have an adverse impact on our profitability.

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Our future operating cash flow may not be sufficient to fund future obligations, and we may not be able to obtain financing, if necessary, on terms that are favorable or consistent with our expectations.

          Our forecasted cash flow from future operations may be adversely affected by various factors including, but not limited to, declines in guest demand, increased competition, overcapacity, the deterioration in general economic and business conditions, including the recent liquidity issues in the U.S. debt markets, terrorist attacks and the threats thereof, ship accidents and other incidents, adverse publicity and increases in fuel prices, as well as other factors noted under these “Risk Factors” and under the “Cautionary Note Concerning Factors That May Affect Future Results” section below. To the extent that we are required, or choose, to fund future cash requirements, including future shipbuilding commitments, from sources other than cash flow from operations, cash on hand and current external sources of liquidity, including committed financings, we will have to secure such financing from banks or through the offering of debt and/or equity securities in the public or private markets.

          Our access to, and the cost of, financing will depend on, among other things, the maintenance of our strong long-term credit ratings. Carnival Corporation and Carnival plc’s senior, unsecured long-term debt ratings are “A-3” by Moody’s, “A-” by Standard & Poor’s and “A-” by Fitch Ratings. Carnival Corporation’s short-term corporate credit ratings are “P-2” by Moody’s, “A-2” by Standard & Poor’s and “F2” by Fitch Ratings.



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Geographic regions in which we try to expand our business may be slow to develop, and ultimately not develop how we expect, thus resulting in the slower growth of our business.

As we expand our global presence into both existing lower-penetrated markets and new developing markets, which require,it requires, among other things, investments and start-up costs that we may not be able to recover through future revenues from these markets. In addition, we cannot be certain that these markets will ultimately develop as we expect. Accordingly, our business expansion plans may not produce the returns that we had expected. For instance, in 2006 we entered the Chinese market, and itwhich is too early to determine if it will develop asdeveloping slower than originally expected over the long-term.for a number of reasons.

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We relyWhether our future operating cash flow will be sufficient to fund future obligations and whether we will be able to obtain financing, if necessary, in sufficient amounts and on external sales distribution channels for most ofterms that are favorable or consistent with our guests’ bookings and, therefore, major changes in the costs or availability of external distribution channels could result in a reduction inexpectations may adversely impact our sales revenues and net income.financial results. In addition, our counterparties’ abilities to perform may adversely impact us.

          In 2007,Our forecasted cash flow from future operations may be adversely affected by various factors, including, but not limited to, declines in guest demand, increased competition, overcapacity, inadequate liquidity and other issues in the global debt and equity markets, terrorist and pirate attacks and the threats thereof, the impact of the spread of contagious diseases such as flu virus, ship accidents and other incidents, adverse publicity, adverse currency movements, increases in fuel prices and other factors noted under these “Risk Factors.” To the extent that we are required, or choose, to fund future cash requirements, including current and future shipbuilding commitments, from sources other than cash flow from operations, available cash and committed external sources of liquidity, including committed ship and other financings, we will have to secure such financing from export credit agencies, banks and through the offering of debt and equity securities in the public or private markets. There is no guarantee that such financings will be available in the future to fund our future obligations.

Our access to, and the cost of, financing will depend on, among other things, conditions or disruptions in the global financing markets, the availability of sufficient amounts of financing and the maintenance of our investment grade long-term credit ratings. If our long-term credit rating were to be downgraded or assigned a negative outlook, our access to, and the cost of, financing may be negatively impacted.

The ability of our counterparties, primarily associated with our cash equivalents, investments, committed financing facilities, contingent obligations, derivative instruments, insurance contracts and new ship progress payment guarantees, to perform may adversely impact us if any of their financial positions weaken materially or they suffer other financial disruptions.

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Continuing financial viability of our travel agent distribution system, air service providers and other key vendors in our supply chain is essential to allowing us to profitably operate our business. In addition, reductions in the availability of, and increases in the prices for, the services and products provided by these vendors can adversely impact our net income.

The vast majority of our guests bookedbook their cruises through independent travel agents, wholesalers and tour operators. These parties generally sell and market our cruises on a nonexclusive basis. Although we believe we offer commissioncommissions and other incentives to them for booking our cruises that are comparable to those offered by others in the cruise industry, there can be no guarantee that our competitors will not offer higher commissions and incentives in the future. In addition, significantfuture, and thus adversely impact our business. Significant disruptions, contractions or contractionsconsolidations to these businessesour travel agent distribution system, such as those caused by a reduction in travel and related commission income as a result of an economic slowdown, could have an adverse effect on our sales and related commission costs.

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We rely to a large extent on scheduled commercial airline services for guest connections and, therefore, increases in the price of, or major changes or reduction in commercial airline services, could undermine our ability to provide reasonably priced vacation packages to our guests.

Some of our guests depend on scheduled or chartered commercial airline services to transport them to or from the portsport cities where our cruises embark and disembark. Changes or disembark. Increases in the price of airfare would increase the overall vacation price to our guests and may adversely affect demand for our cruises. In addition, changesdisruptions in commercial or chartered airline services as a result of strikes, financial instability or viability, adverse weather conditions, airport delays or other events, or the lack of availability due to schedule changes or a high level of airline bookings could adversely affect our ability to deliver guests to or from our cruise ships and increase our cost of sales which would, in turn, have an adverse effect on our results of operations. In addition, increases in the prices of airfares would increase the overall vacation price to our guests and may adversely affect demand for our cruises.

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Economic downturns may impact the financial viability of other key vendors in our supply chain and the interruption in the services or goods we purchase from them could adversely impact our operations and profitability.

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The impact of self-insuringOur decisions to self-insure against various risks or the inability to obtain insurance for certain risks at reasonable rates could result in higher expenses.

We seek to maintain comprehensive insurance coverage at commercially reasonable rates. We believe that our current coverage is adequate to protect us against most of the significant risks involved in the conduct of our business, although we do elect to self-insure or use higher deductibles for varioussubstantially all the insurable risks we face in order to minimize the cost of our insurance coverage.coverages. Accordingly, we are not protected against all risks, which could result in unexpected increases in our expenses in the event of an incident.

          In addition, a new protocol to the Athens Convention is in the process of being ratified, which would require some passenger ship operations to maintain compulsory insurance or some other form of financial security, to cover the per capita limit of strict liability for losses suffered by passengers that has been set under the Athens Convention. If the protocol is ratified, we cannot be certain that affordable and viable insurance markets will be available to provide the required coverages. If the new protocol is ratified we would expect our insurance costs to increase.

We may also be subject to additional premium costs in amounts based not only on our own claim records but also on the claim records of all other members of the P&I associations through which we receive indemnity coverage for tort liability. If we or other members of our P&I associations were to sustain significant losses in the future, our ability to obtain insurance coverage or coverage at commercially reasonable rates could be materially adversely affected. Finally, if other marine insurers experience more claims thisit could result in additional premium costs for us.

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Disruptions and other impairmentsdamages to our information technology and other networks and operations and breaches in data security could result in decreases in our net income.



Our ability to increase revenues and decreasecontrol costs, as well as our ability to serve guests most effectively depends in part on the reliability of our sophisticated information technology (“IT”) and other networks. We use software, IT, communications and other IT systems to, among other things, manage our inventory of cabins held for sale and set their pricing in order to maximize our revenue yields and to optimize the effectiveness and efficiency of our shoreside and shipboard operations. Any disruptions and other impairmentsDisruptions or damage to these computer and other systems or unauthorized access to confidential customer or employee personal information could adversely impact our customer serviceguest services and guest satisfaction, employee relationships, decrease the volume of our businessreputation and guests demand and could result in increased costs.costs and lower demand and pricing for our cruises. In addition, the operation, maintenance and updating of these networks is in some cases dependent on third-party technologies, systems and services for which there is no certainty of uninterrupted availability. While we have invested and continue to invest in IT and other security initiatives and disaster recovery plans, these measures cannot completely insulate us from IT and other disruptions that could result in adverse effects on our operations and net income.profitability.

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The loss of key personnel or our ability to recruit or retain qualified personnel could adversely affect our results of operations.

We rely upon the ability, expertise, judgment, discretion, integrity and good faith of our senior management team. Our success is dependent upon our personnel and our ability to recruit and train high quality employees. We must continue to recruit, retain and motivate management and other employees sufficient to maintain our current business and support our projected growth. The loss of services of any of our key management could have a material adverse effect on our business.

The leadership of our Chairman and Chief Executive Officer, Mr. Arison, and our Vice-Chairman and Chief Operating Officer, Mr. Frank, and other executive and senior officers has been a critical element of our success. The death or disability of Mr. Arison or Mr. Frank or other extended or permanent loss of their services, or any negative market or industry perception with respect to them or arising from their loss, could have an adverse effect on our business. Our other executive and senior officers and other members of management have substantial experience and expertise in our business and have made significant contributions to our growth and success. The unexpected loss of services of one or more of these individuals could also adversely affect us. We are not protected by key man or similar life insurance covering members of our executive and senior management. We do not have employment agreements with substantially all of our officers.

 

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Union disputes and other employee relation issues could adversely affect our financial results.

Some of our employees are represented by labor unions in a number of countries under various collective bargaining agreements with varying durations and expiration dates. We may not be able to satisfactorily renegotiate these collective bargaining agreements when they expire. In addition, existing collective bargaining agreements may not prevent a strike or work stoppage on our ships in the future. We may also be subject to work stoppages unrelated to our business or collective bargaining agreements. Any such work stoppages, or potential work stoppages, could have a material adverse effect on our financial results.

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The lackLack of continuedcontinuing availability of attractive, convenient and safe port destinations for our cruise ships could reduceadversely affect our net revenue yields and net income.

We believe that attractive, convenient and safe port destinations, including ports that are not overly congested with tourists, are major reasons why our guests choose a cruise versus an alternative vacation option. The continuing availability of these types of ports,

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including the specific port facility at which our guests will embark and disembark, is affected by a number of factors including, but not limited to, existing capacity constraints, security, safety and safetyenvironmental concerns, adverse weather conditions and natural disasters, financial limitations on port development, political instability, exclusivity arrangements that ports may have with our competitors, local governmental regulations and charges and local community concerns about both port development and other adverse impacts on their communities from additional tourists. The inability to continue to utilize, maintain, rebuild, if necessary, and increase the number of ports that our ports ofships call on could adversely affect our net revenue yields and net income.

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The DLC structure involves risks not associated with the more common ways of combining the operations of two companies and these risks may have an adverse effect on the economic performance of the companies and/orand their respective share prices.

The DLC structure is a relatively uncommon way of combining the management and operations of two companies and it involves different issues and risks from those associated with the other more common ways of effectingimpacting a business combination, such as a merger or exchange offer to create a wholly owned subsidiary. In our DLC structure, the combination is effected primarily by means of contracts between Carnival Corporation and Carnival plc and not by operation of a statute or court order. The legal effect of these contractual rights may be different from the legal effect of a merger or amalgamation under statute or court order, and there may be difficulties in enforcing these contractual rights. Shareholders and creditors of either company might challenge the validity of the contracts or their lack of standing to enforce rights under these contracts, and courts may interpret or enforce these contracts in a manner inconsistent with the express provisions and intentions we included in such contracts. In addition, shareholders and creditors of other companies might successfully challenge other DLC structures and establish legal precedents that could increase the risk of a successful challenge to our DLC structure. We maintain two separate public companies and comply with both Panamanian corporate law and English company laws and different securities and other regulatory and stock exchange requirements in the UK and the U.S. This structure requires more administrative time and cost than was the case for each company individually, which has an adverse effect on our operating efficiency.

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Changes under the Internal Revenue Code, applicable U.S. income tax treaties, and the uncertainty of the DLC structure under the Internal Revenue Code may adversely affect the U.S. federal income taxation of our U.S. source shipping income. In addition, changes in the UK, Italian, German, Australian and other countries’ or states’ income or other tax laws, regulations or treaties could also adversely affect our net income.

          We believe that substantially all of the U.S. source shipping income of each of Carnival Corporation and Carnival plc qualifies for exemption from U.S. federal income tax, either under (1) Section 883 of the Internal Revenue Code; (2) U.S.-Italian income tax treaty; or (3) other applicable U.S. income tax treaties, and should continue to so qualify under the DLC structure. There is, however, no existing U.S. federal income tax authority that directly addresses the tax consequences of implementation of a DLC structure for purposes of Section 883 or any other provision of the Internal Revenue Code or any income tax treaty and, consequently, these matters are not free from doubt.



          If we did not qualify for exemption from substantially all U.S. federal income taxes or if such exemptions or laws were changed, we would have significantly higher U.S. income tax expenses. In addition, changes in the income or other tax laws affecting our cruise businesses in the UK, Italy, Germany, Australia and elsewhere could result in higher income and/or other taxes, such as value added taxes, being levied on our cruise operations, thus resulting in lower net income.

           See Part I, Item 1. Business. G. - “Taxation” for additional information.

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A small group of shareholders collectively owned, as of January 22, 2008,14, 2011, approximately 29%27% of the total combined voting power of our outstanding shares and may be able to effectively control the outcome of shareholder voting.

          AAs of January 14, 2011 a group of shareholders, consisting of some members of the Arison family, including Micky Arison, and trusts established for their benefit, beneficially owned approximately 36%35% of the outstanding common stock of Carnival Corporation, which shares represent sufficient shares entitled to constitute a quorum at shareholder meetings and to cast approximately 29%27% of the total combined voting power of Carnival Corporation & plc. Depending upon the nature and extent of the shareholder vote, this group of shareholders may have the power to effectively control, or at least to influence substantially, the outcome of certain shareholder votes and, therefore, the corporate actions requiring such votes.

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Carnival Corporation and Carnival plc are not U.S. corporations, and our shareholders may be subject to the uncertainties of a foreign legal system in protecting their interests.

Carnival Corporation’s corporate affairs are governed by its third amendedThird Amended and restated articlesRestated Articles of incorporationIncorporation (“Articles”) and second amendedThird Amended and restated by-lawsRestated By-Laws (“by-laws”By-Laws”) and by the corporate laws of Panama. Carnival plc is governed by its articlesArticles of association and memorandum of associationAssociation and by the corporate laws of England and Wales. The contracts that control the relationship between Carnival Corporation and Carnival plc under the DLC are governed by the laws of Panama, the Isle of Man and the Cayman Islands. The corporate laws of Panama, England and Wales, the Isle of Man and the Cayman Islands may differ in some respects from the corporate laws in the U.S.

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Provisions in Carnival Corporation’s and Carnival plc’s constitutional documents may prevent or discourage takeovers and business combinations that our shareholders might consider to be in their best interests.

Carnival Corporation’s Articles and by-lawsBy-Laws and Carnival plc’s articlesArticles of associationAssociation contain provisions that may delay, defer, prevent or render more difficult a takeover attempt that our shareholders consider to be in their best interests. As a result, these provisions may prevent our shareholders from receiving a premium to the market price of our shares offered by a bidder in a takeover context. Even in the absence of a takeover attempt, the existence of these provisions may adversely affect the prevailing market price of our shares if they are viewed as discouraging takeover attempts in the future.

Specifically, Carnival Corporation’s Articles contain provisions that prevent third parties, other than the Arison family and trusts established for their benefit, from acquiring beneficial ownership of more than 4.9% of its outstanding shares without the consent of Carnival Corporation’s boardBoard of directorsDirectors and provide for the lapse of rights, and sale, of any shares acquired in excess of that limit. The effect of these provisions may preclude third parties from seeking to acquire a controlling interest in us in transactions that shareholders might consider to be in their best interests and may prevent them from receiving a premium above market price for their shares.

Cautionary Note Concerning Factors That May Affect Future Results

Some of the statements, estimates or projections contained in this Form 10-K are “forward-looking statements” that involve risks, uncertainties and assumptions with respect to us, including some statements concerning future results, outlook,outlooks, plans, goals and other events which have not yet occurred. These statements are intended to qualify for the safe harbors from liability provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We have tried, whenever possible, to identify these statements by using words like “will,” “may,” “believes,“could,” “should,” “would,” “believe,” “expect,” “anticipate,” “forecast,” “future,” “intends,

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“intend,” “plan,” and “estimate” and similar expressions.expressions of future intent or the negative of such terms.



Because forward-looking statements involve risks and uncertainties, there are many factors that could cause our actual results, performance or achievements to differ materially from those expressed or implied in this Form 10-K. Forward-looking statements include those statements which may impact, among other things, the forecasting of our earnings per share, net revenue yields, booking levels, pricing, occupancy, operating, financing and/orand tax costs, fuel costs,expenses, costs per available lower berth day, estimates of ship depreciable lives and residual values, outlook or business prospects.liquidity, goodwill and trademark fair values and outlook.

Certain of the risks we are exposed to are identified in “Management’s Discussion and Analysis of Financial Condition and Results of Operations— Cautionary Note Concerning Factors That May Affect Future Results” in Exhibit 13 to this Form 10-K and in this Item 1A. “Risk Factors.” These sections containThis section contains important cautionary statements and a discussion of many of the factors that could materially affect the accuracy of our forward-looking statements and/orand adversely affect our business, results of operations and financial position.

Forward-looking statements should not be relied upon as a prediction of actual results. Subject to any continuing obligations under applicable law or any relevant listingstock exchange rules, we expressly disclaim any obligation to disseminate, after the date of this Form 10-K, any updates or revisions to any such forward-looking statements to reflect any change in expectations or events, conditions or circumstances on which any such statements are based.

Item 1B.Unresolved Staff Comments.

None.

 None.

Item 2.Properties.

Item 2.Properties.

          TheAs of January 31, 2011, the Carnival Corporation and Carnival plc corporate headquarters and our larger shoreside locations are as follows:

Entity/Brand

Location

Square Footage

Own/Lease

Carnival Corporation headquarters and Carnival Cruise Lines

Miami, FL U.S.A.

456,000/26,000

24,000

Own/Lease

Princess

Santa Clarita, CA U.S.A.

367,000

361,000

Lease

Holland America Line, Holland America Tours and Princess Alaska Tours

Seattle, WA U.S.A.

38,000/233,000

252,000

Own/Lease

Costa

Genoa, Italy

155,000/14,000

217,000/23,000

Own/Lease

P&O Cruises Ocean Village,(UK) and Cunard Carnival Corporation & plc’s Technical Services and UK sales office

Southampton, England (a)

112,000

150,000

Lease

AIDA

Rostock, Germany140,000/9,000Own/Lease

P&O Cruises (Australia)

Rostock, Germany

Sydney, New South Wales, Australia

103,000

  65,000

Lease

Carnival plc headquarters and UK sales office

London, England

8,000

Lease


(a)

Carnival plc entered into a new Southampton office lease agreement for 150,000 square feet to replace the existing Southampton lease facility, which we expect to occupy during fiscal 2009.

In addition, we own, and/lease or leasehave controlling interests in port facilities that we operate in Barcelona, Spain,Spain; Cozumel, Mexico,Mexico; Grand Turk, the Turks & Caicos Islands,Islands; Juneau, Alaska,Alaska; Long Beach, CaliforniaCalifornia; Roatán, Honduras and Savona, Italy.

Our cruise ships, headquarters, port and other shoreside facilities and Holland America Tours’ and Princess Alaska Tours’ properties, are all well maintained and in good condition. We evaluate our needs periodically and obtain additional facilities when deemed necessary. We believe that our facilities are adequate for our current needs.

Our cruise ships and Holland America Line’s and Princess’ private islands, Half Moon Cay and Princess Cays®, respectively, are briefly described in Part I, Item 1. Business. A. “General” and B. - “Cruise Operations.” The hotel properties associated withowned and operated by Holland America Princess Alaska Tours and Princess Tours operations, substantially all of which are owned, arealso briefly described in Part I, Item 1. Business. A. - “General.”



Item 3.Legal Proceedings.

 On September 21, 2006, a class action complaint was filed by J. B. Miller on behalf of a purported class of past passengers against Holland America Line in the U.S. District Court for the Western District of Washington. The complaint alleges that Holland America Line (a) failed to disclose that shore excursion vendors paid Holland America Line to promote their services as required by an Alaska statute, and (b) collected and retained payment from passengers for PVSA violations in certain instances when Holland America Line did not actually incur the fines. The complaint seeks (i) certification as a class action, (ii) statutory damages under Alaska’s consumer protection statutes, (iii) damages for each PVSA fine collected and additional damages for each PVSA fine collected where no fine was imposed, (iv) injunctive relief and (v) attorneys’ fees, costs and interest. The plaintiff voluntarily withdrew the shore excursion disclosure claim, and the court has approved a settlement of the PVSA claim that will result in the refund of fines collected but not paid, plus interest and attorneys’ fees.

Item 3.Legal Proceedings.

None.

 In January 2006, a lawsuit was filed against Carnival Corporation and its subsidiaries and affiliates, and other non-affiliated cruise lines in the U.S. District Court for the Southern District of New York on behalf of James Jacobs and a purported class of owners of intellectual property rights to musical plays and other works performed in the U.S. The plaintiffs claim infringement of copyrights to Broadway, off Broadway and other plays. The suit seeks payment of (i) damages, (ii) disgorgement of alleged profits and (iii) an injunction against future infringement.

Item 4.Submission of Matters to a Vote of Security Holders.

Item 4.Submission of Matters to a Vote of Security Holders.

None.

Executive Officers of the Registrants

Pursuant to General Instruction G(3), the information regarding our executive officers called for by Item 401(b) of Regulation S-K is hereby included in Part I of this Form 10-K.

 

33

The table below sets forth the name, age, years of service and title of each of our executive officers. Titles listed relate to positions within Carnival Corporation and Carnival plc unless otherwise noted. All the Carnival plc positions were effective as of April 17, 2003 except as noted below.

Name

    

Age

     

Years of
Service(a)

    

Title

Micky Arison     61      39    Chairman of the Board of Directors and Chief Executive Officer
David Bernstein     53      12    Senior Vice President and Chief Financial Officer
Alan B. Buckelew     62      33    President and Chief Executive Officer of Princess
Gerald R. Cahill     59      16    President and Chief Executive Officer of Carnival Cruise Lines
David Dingle     53      32    Chief Executive Officer of Carnival UK
Pier Luigi Foschi     64      13    Chairman and Chief Executive Officer of Costa Crociere, S.p.A. and Director
Howard S. Frank     69      21    Vice Chairman of the Board of Directors and Chief Operating Officer
Larry Freedman     59      12    Chief Accounting Officer and Vice President-Controller
Stein Kruse     52      11    President and Chief Executive Officer of Holland America Line
Arnaldo Perez     50      18    Senior Vice President, General Counsel and Secretary

(a)

    NAME

AGE

POSITION

Micky Arison

58

ChairmanYears of the Board of Directors and Chief Executive Officer

David Bernstein

50

Senior Vice President and Chief Financial Officer

Alan B. Buckelew

59

President and Chief Executive Officer of Princess Cruises

Gerald R. Cahill

56

President and Chief Executive Officer ofservice with us or Carnival Cruise Lines

David K. Dingle

50

Chief Executive Officer of Carnival UK

Pier Luigi Foschi

61

Chairman and Chief Executive Officer of Costa Crociere, S.p.A. and Director

Howard S. Frank

66

Vice Chairman of the Board of Directors and Chief Operating Officer

Larry Freedman

56

Chief Accounting Officer and Vice President-Controller

Stein Kruse

49

President and Chief Executive Officer of Holland America Line Inc.

Arnaldo Perez

47

Senior Vice President, General Counsel and Secretary

Peter G. Ratcliffe

59

Chief Executive Officer of P&O Princess Cruises International and Director

plc predecessor companies.

Business Experience of Executive Officers

Micky Arison has been Chairman of the Board of Directors since October 1990 and a director since June 1987. He has been Chief Executive Officer since 1979. Mr. Arison has been employed by us for 36 years.

David Bernstein has been Senior Vice President and Chief Financial Officer since July 2007. From July 2003 to July 2007, he was Vice President and Treasurer. From June 1998 to



July 2003, he was Chief Financial Officer of Cunard and Seabourn. Mr. Bernstein has been employed by us for nine years.

Alan B. Buckelew has been Chief Executive Officer of Princess Cruises since June 2007. He has been President of Princess from February 2004. From October 2004 to June 2007, he was Chief Operating Officer of Cunard. From October 2000 to January 2004, he was Executive Vice President and Chief Financial Officer of Princess. Mr. Buckelew has been employed by us or Carnival plc predecessor companies for 30 years.

Gerald R. Cahill has been President and Chief Executive Officer of Carnival Cruise Lines since July 2007. From December 2003 to June 2007, he was Executive Vice President and Chief Financial and Accounting Officer of Carnival Corporation & plc.Officer. From January 1998 to November 2003, he was Senior Vice President Finance, Chief Financial and Accounting Officer. Mr. Cahill has been employed by us for 13 years.

David K. Dingle has been Chief Executive Officer of Carnival UK, whose brands include P&O Cruises Ocean Village(UK) and Cunard, since June 2007. In addition, he has also been Chairman of the Carnival plc Management Committee with responsibility for Carnival AustraliaP&O Cruises (Australia) since June 2007. From April 2003 to June 2007, he was Managing Director of Carnival UK and P&O Cruises.Cruises (UK). From June 2000 to April 2003, he was Managing Director of P&O Cruises UK. Mr. Dingle has been employed by us or Carnival plc predecessor companies for 29 years.(UK).

Pier Luigi Foschi has been a director since April 2003. He has been Chief Executive Officer of Costa Crociere, S.p.A. since October 1997 and Chairman of its Board since January 2000. In this capacity, Mr. Foschi has been employed by ushad responsibility for 10 years.AIDA since April 2003 and Ibero since September 2007.

Howard S. Frank has been Vice Chairman of the Board of Directors since October 1993, Chief Operating Officer since January 1998 and a director since April 1992. Mr. Frank has been employed by us for 18 years.

Larry Freedman has been Chief Accounting Officer since July 2007 and Vice President-Controller since April 1998. From April 1998 to June 2007, Mr. Freedman was also Vice President – Finance. Mr. Freedman has been employed by us for nine years.President-Finance.

 

34

Stein Kruse has been the President and Chief Executive Officer of Holland America Line since December 2004. From November 2003 to November 2004, he was the President and Chief Operating Officer of Holland America Line. From SeptemberOctober 1999 to October 2003, he was Senior Vice President, Fleet Operations for Holland America Line. Mr. Kruse has been employed by us for eight years.

Arnaldo Perez has been Senior Vice President, General Counsel and Secretary since March 2002. From August 1995 to February 2002 he was Vice President, General Counsel and Secretary. Mr. Perez has been employed by us for 15 years.

          Peter G. Ratcliffe has been a director since April 2003 and a director of Carnival plc since October 2000. He is Chief Executive Officer of P&O Princess Cruises International, which had primary responsibility for the operations of Cunard, Ocean Village, P&O Cruises, P&O Cruises Australia and Princess through June 2007. We announced in June 2007 that Mr. Ratcliffe will be retiring as an executive officer of Carnival Corporation and Carnival plc on March 6, 2008. He was Carnival plc’s Chief Executive Officer until April 2003. He was previously an executive director of The Peninsular and Oriental Steam Navigation Company and head of its cruise division, having served as President of Princess since 1993 and its Chief Operating Officer since 1989. Mr. Ratcliffe has been employed by us or Carnival plc’s predecessor companies for 34 years.

PART II

Item 5.Market for Registrants’ Common Equity and Related Stockholder Matters and Issuer Purchasesof Equity Securities.

A.Market Information

Item 5.Market for Registrants’ Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

 

A.Market Information

The information required by Item 201(a) of Regulation S-K, Market Information, is shown in Exhibit 13 and is incorporated by reference into this Form 10-K.

          B.Holders

B.Holders

The information required by Item 201(b) of Regulation S-K, Holders, is shown in Exhibit 13 and is incorporated by reference into this Form 10-K.



C.Dividends

 

C.Dividends

Carnival Corporation and Carnival plc declared quarterly cash dividends on all of their common stock and ordinary shares respectively,as follows (no dividends were declared in the amount of:fiscal 2009):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarters Ended

 

 

 

 

 

 

February 28/29

 

May 31

 

August 31

 

November 30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2008

 

 

$

0.40

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2007

 

 

$

0.275

 

 

 

$

0.35

 

 

 

$

0.35

 

 

 

$

0.40

 

 

2006

 

 

$

0.25

 

 

 

$

0.25

 

 

 

$

0.25

 

 

 

$

0.275

 

 

 

    Quarters Ended 
   February 28   May 31   August 31   November 30 

2011

  $0.25        

2010

  $0.10    $0.10    $0.10    $0.10  

All dividends for both Carnival Corporation and Carnival plc are declared in U.S. dollars. HoldersIf declared, holders of Carnival Corporation common stock and Carnival plc American Depository Shares receive a dividend payable in U.S. dollars. The dividends payable for Carnival plc ordinary shares are payable in Sterling,sterling unless the shareholders elect to receive the dividenddividends in U.S. dollars. Dividends payable in Sterlingsterling will be converted from U.S. dollars into Sterlingsterling at the dollar/SterlingU.S. dollar to sterling exchange rate quoted by the Bank of England in London at 12:00 p.m. on the next combined U.S. and UK business day that follows the quarter end.

          PaymentMaintenance of future dividends on Carnival Corporation common stocka strong balance sheet enhances our financial flexibility and Carnival plc ordinary shares will depend upon, among other factors,allows us to return free cash flow to shareholders. We believe preserving liquidity is a prudent step to take both during certain and uncertain times to achieve this objective. Accordingly in October 2008 at the height of the financial crisis, the Boards of Directors voted to suspend our earnings, financial condition and capital requirements. quarterly dividend beginning March 2009. However, at the January 2010 Boards of Directors meetings it was decided to reinstate our March 2010 quarterly dividend at $0.10 per share. At the January 2011 Boards of Directors meetings it was decided to increase the March 2011 quarterly dividend to $0.25 per share.

The payment and amount of any future dividend is within the discretion of the Boards of Directors,Directors. Our dividends were and it is possible thatwill be based on a number of factors, including our earnings, liquidity position, financial condition, tone of business, capital requirements, credit ratings and the timingavailability and amountcost of any dividend may vary from the levels discussed above.obtaining new debt. We cannot be certain that Carnival Corporation and Carnival plc will continue their dividend in the future, and if so, the amount and timing of such future dividends are not determinable and may be different than the levels and have a different timing than are disclosed above. However, as previously discussed, since we have slowed down the pace of our newbuilding program, we currently believe this will lead to have per share dividend increases, as were declaredincreasing free cash flows in recent years, or maintain their current levels.

D.Performance Graph2011 and beyond.

 

D.Securities Authorized for Issuance under Equity Compensation Plans

The information required by Item 201(d) of Regulation S-K is incorporated by reference to Part III, Item 12 of this Form 10-K.

E.Performance Graph

The information required by Item 201(e) of Regulation S-K, Performance Graph, is shown in Exhibit 13 and is incorporated by reference into this Form 10-K.

E.Recent Sales

F.Issuer Purchases of Equity Securities; Use of Proceeds from Registered Securities

35

I.Repurchase Authorizations

In June 2006, the Boards of Unregistered SecuritiesDirectors authorized the repurchase of up to an aggregate of $1 billion of Carnival Corporation common stock and Carnival plc ordinary shares subject to certain restrictions. On September 19, 2007, the Boards of Directors increased the remaining $578 million general repurchase authorization back to $1 billion (the “Repurchase Program”). The Repurchase Program does not have an expiration date and may be discontinued by our Boards of Directors at any time. During 2010 and 2009, there were no repurchases of Carnival Corporation common stock or Carnival plc ordinary shares under the Repurchase Program.

In addition to the Repurchase Program, the Boards of Directors have authorized the repurchase of up to 19.2 million Carnival plc ordinary shares and up to 31.5 million shares of Carnival Corporation common stock under the “Stock Swap” programs described below.

At January 31, 2011, the remaining availability under the Repurchase Program was $787 million and the remaining availability under the “Stock Swap” program repurchase authorizations were 18.1 million Carnival plc ordinary shares and 31.5 million Carnival Corporation shares. Carnival plc ordinary share repurchases under both the Repurchase Program and the “Stock Swap” authorizations require annual shareholder approval. The existing shareholder approval is limited to a maximum of 21.3 million ordinary shares and is valid until the earlier of the conclusion of the Carnival plc 2011 annual general meeting, or October 12, 2011.

 

II.“Stock Swap” Programs

We use the “Stock Swap” programs in situations where we can obtain an economic benefit because either Carnival Corporation common stock or Carnival plc ordinary shares are trading at a price that is at a premium or discount to the price of Carnival plc ordinary shares or Carnival Corporation common stock, as the case may be. This economic benefit is used for general corporate purposes, which could include repurchasing additional treasury stock under the Repurchase Program.

In the event Carnival Corporation common stock trades at a premium to Carnival plc ordinary shares, we may elect to issue and sell Carnival Corporation common stock through a sales agent, and use the sale proceeds to repurchase Carnival plc ordinary shares in the UK market on at least an equivalent basis. In such an offering, Carnival Corporation may issue and sell up to 19.2 million of its common stock in the U.S. market, which shares are to be sold from time to time at prevailing market prices in ordinary brokers’ transactions by a sales agent. Any sales of Carnival Corporation shares have been or will be registered under the Securities Act.

In the event Carnival Corporation common stock trades at a discount to Carnival plc ordinary shares, we may elect to sell existing ordinary shares of Carnival plc, with such sales made by Carnival Corporation or Carnival Investments Limited, a subsidiary of Carnival Corporation, and with a sales agent, from time to time in “at the market” transactions, and use the sale proceeds to repurchase Carnival Corporation common stock in the U.S. market on at least an equivalent basis. In the offering, Carnival Corporation or Carnival Investments Limited may sell up to 31.5 million Carnival plc ordinary shares in the UK market, which shares are to be sold from time to time at prevailing market prices in ordinary brokers’ transactions by a sales agent. Any sales of Carnival plc shares have been or will be registered under the Securities Act.

Under the “Stock Swap” program, from December 1, 2009 through November 30, 2010 Carnival Investments Limited sold 14.8 million shares of Carnival plc ordinary shares, at an average price of $37.22 per share for gross proceeds of $549 million and paid a sales agent fees of $4 million and paid other expenses of $275 thousand for total net proceeds of $545 million. Substantially all of the net proceeds of these sales were used to purchase 14.8 million shares of Carnival Corporation common stock. During the year ended November 30, 2010, no Carnival Corporation common stock was sold and no Carnival plc ordinary shares were repurchased under the “Stock Swap” program.

The purchases of Carnival Corporation common stock during the three months ended November 30, 2007, $16,000 and $5,000 of our 2% notes and zero coupon notes were converted at their accreted value into 407 shares and 82 shares of Carnival Corporation common stock, respectively, all of which were issued from newly issued common stock from registration under Section 3(a)(9) of the Securities Act of 1933.

          Each share of Carnival Corporation common stock issued is paired with a trust share of beneficial interest in the P&O Princess Special Voting Trust, which holds a Special Voting Share issued by Carnival plc in connection with the DLC transaction.

F.Issuer Purchases of Equity Securities

          During the quarter ended November 30, 2007, purchases by Carnival Corporation of Carnival Corporation’s equity securities that are registered by it2010 pursuant to Section 12 of the Securities Exchange Act of 1934“Stock Swap” program were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period

 

Total Number of
Shares Purchased in
Fourth Quarter

 

Average
Price Paid
per Share

 

Maximum Dollar Value of Shares
That May Yet Be Purchased
Under the Plans or Programs (a)

 

 

 

 

 

 

 

 

 

 

 

 

(in millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 1, 2007 through September 30, 2007

 

 

 

 

 

 

 

 

 

 

 

 

$

996

 

 

October 1, 2007 through October 31, 2007

 

 

 

 

 

 

 

 

 

 

 

 

$

996

 

 

November 1, 2007 through November 30, 2007

 

 

 

200,000

 

 

 

$

44.58

 

 

 

$

871

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

200,000

 

 

 

$

44.58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Period

  Total Number  of
Carnival
Corporation Common
Stock Purchased		   Average Price Paid
per Share of
Carnival Corporation
Common Stock		   Maximum Number of
Carnival Corporation
Common Stock That May
Yet Be Purchased Under
the Carnival Corporation
Stock Swap Program		 

September 1, 2010 through September 30, 2010

   325,000    $31.04     4,445,000  

October 1, 2010 through October 31, 2010

   —     —     31,491,194  

November 1, 2010 through November 30, 2010

   —     —     31,491,194  
            
   325,000    $31.04    
            

36

Item 6.

(a)

In June 2006, the Boards of Directors authorized the repurchase of up to an aggregate of $1 billion of Carnival Corporation common stock and/or Carnival plc ordinary shares subject to certain restrictions. On September 19, 2007, the Boards of Directors increased the remaining $578 million authorization back to $1 billion. The repurchase program does not have an expiration date and may be discontinued by our Boards of



Directors at any time. All shares in the above table were repurchased pursuant to this program. From December 1, 2007 through January 28, 2008, we purchased 0.6 million shares of Carnival Corporation common stock at an average share price of $44.63. The Carnival plc share repurchase authorization requires annual shareholder approval and is subject to a maximum of 10.7 million ordinary shares until April 2008, of which 8.6 million have been purchased through January 28, 2008. During the 2007 fourth quarter and from December 1, 2007 through January 28, 2008 we purchased 4.8 million and 1.3 million ordinary shares of Carnival plc, which are not registered under Section 12 of the Securities Exchange Act of 1934 at an average price of $43.28 and $43.77, respectively. Carnival plc ordinary shares are listed on the London Stock Exchange. At January 28, 2008 the remaining availability pursuant to our repurchase program was $788 million.

Selected Financial Data.

Item 6.Selected Financial Data.

The information required by Item 6. Selected Financial Data, is shown in Exhibit 13 and is incorporated by reference into this Form 10-K.

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The information required by Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, is shown in Exhibit 13 and is incorporated by reference into this Form 10-K.

Item 7A.Quantitative and Qualitative Disclosures About Market Risk.

Item 7A.Quantitative and Qualitative Disclosures About Market Risk.

The information required by Item 7A. Quantitative and Qualitative Disclosures About Market Risk, is shown in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Exhibit 13 and is incorporated by reference into this Form 10-K.

Item 8.Financial Statements and Supplementary Data.

Item 8.Financial Statements and Supplementary Data.

The financial statements, together with the report thereon of PricewaterhouseCoopers LLP dated January 28, 2008,31, 2011, and the Selected Quarterly Financial Data (Unaudited), are shown in Exhibit 13 and are incorporated by reference into this Form 10-K.

Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

 None.

Item 9A.Controls and Procedures.

Item 9A.Controls and Procedures.

A.Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit, is recorded, processed, summarized and reported, within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in our reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer have evaluated our disclosure controls and procedures and have concluded, as of November 30, 2007,2010, that they are effective as described above.

Changes in Internal Control over Financial Reporting

          During the three months ended November 30, 2007, we have substantially completed our implementation of a new worldwide accounting system. As a result, there have been changes in our internal control over financial reporting during the quarter ended November 30, 2007 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting. As part of the system implementation, we have reviewed the controls affected by the new accounting system and have made the necessary internal control changes.



B.Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the Securities Exchange Act of 1934 Rule 13a-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control – Control—Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO Framework”). Based on our evaluation under the COSO Framework, our management concluded that our internal control over financial reporting was effective as of November 30, 2007.2010.

PricewaterhouseCoopers LLP, the independent registered certified public accounting firm that audited our consolidated financial statements incorporated in this Form 10-K, has also audited the effectiveness of our internal control over financial reporting as of November 30, 20072010 as stated in their report which is shown in Exhibit 13 and is incorporated by reference into this Form 10-K.

C.Inherent Limitations of Disclosure Controls and Procedures andChanges in Internal Control Overover Financial Reporting

          It should be notedThere have been no changes in our internal control over financial reporting during the quarter ended November 30, 2010 that any system of controls, however well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the system will be met. In addition, the design of anyhave materially affected or are reasonably likely to materially affect our internal control system is based in part upon certain assumptions about the likelihood of future events. Because of these and other inherent limitations of control systems, there is only reasonable assurance that our controls will succeed in achieving their goals under all potential future conditions.

Item 9B.Other Information.over financial reporting.

 

Item 9B.Other Information.

None.

PART III

Item 10.Directors, Executive Officers and Corporate Governance.

37

We have adopted a code of ethics that applies to our chief executive officer, chief operating officer and senior financial officers, including the chief financial officer, chief accounting officer and controller and other persons performing similar functions. Our code of ethics applies to all our other employees as well. This code of ethics is posted on our website, which is located atwww.carnivalcorp.com andwww.carnivalplc.com. We intend to satisfy the disclosure requirement under Item 10 of Form 8-K regarding an amendment to, or waiver from, a provision of this code of ethics by posting such information on our website, at the addresses specified above. Information contained in our website, whether currently posted or posted in the future, is not part of this document or the documents incorporated by reference in this document.

The additional information required by Item 10 is incorporated herein by reference to the Carnival Corporation and Carnival plc joint definitive proxy statementProxy Statement to be filed with the U.S. Securities and Exchange Commission not later than 120 days after the close of the 2010 fiscal year, except that the information concerning the Carnival Corporation and Carnival plc executive officers called for by Item 401(b) of Regulation S-K is included in Part I of this Form 10-K.

Item 11.Executive Compensation.

Item 11.Executive Compensation.

The information required by Item 11 is incorporated herein by reference to the Carnival Corporation and Carnival plc joint definitive proxy statementProxy Statement to be filed with the U.S. Securities and Exchange Commission not later than 120 days after the close of the 2010 fiscal year.



Item 12.Security Ownership of Certain Beneficial Owners and Management.

Securities Authorized for Issuance under Equity Compensation Plans

Carnival Corporation

 

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

A.Securities Authorized for Issuance under Equity Compensation Plans

I.Carnival Corporation

Set forth below is a table that summarizes compensation plans (including individual compensation arrangements) under which Carnival Corporation equity securities are authorized for issuance as of November 30, 2007.2010.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plan category

 

Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a)

 

Weighted-average
exercise price of
outstanding
options, warrants
and rights

 

Number of securities remaining
available for future issuance
under equity compensation plans
(excluding securities reflected
in column (a))

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity compensation plans approved by security holders

 

 

 

14,868,481

(1)

 

 

$

42.40

 

 

 

 

28,442,001

(2)(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity compensation plans not approved by security holders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

14,868,481

 

 

 

$

42.40

 

 

 

 

28,442,001

 

 

 

 

 

 

 

 

 

 

 

 

 


Plan category

  Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights		  Weighted-average
exercise price of
outstanding
options, warrants
and rights		   Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in column (1))		 
   (1)        

Equity compensation plans approved by security holders

   12,135,802(a)  $44.51     26,206,955(b)(c) 

Equity compensation plans not approved by security holders

   —      —       —    
              
   12,135,802   $44.51     26,206,955  
              

(a)

(1)

Includes outstanding options to purchase Carnival Corporation common stock under the Carnival Cruise Lines, Inc. 1987 Stock Option Plan, Carnival Corporation 1992 Stock Option Plan, Carnival Corporation 2002 Stock Plan, Carnival Corporation 1993 Outside Directors’ Stock Option Plan and Carnival Corporation 2001 Outside Director Stock Plan. Also includes 371,0391,902,108 restricted share units outstanding under the Carnival Corporation 2002 Stock Plan and 13,50025,779 restricted share units outstanding under the Carnival Corporation 2001 Outside Director Stock Plan.

 

(b)

(2)

Includes Carnival Corporation common stock available for issuance as of November 30, 20072010 as follows: 2,624,7572,471,568 under the Carnival Corporation Employee Stock Purchase Plan, 25,010,211which includes 20,139 shares subject to purchase during the current purchase period, 23,192,761 under the Carnival Corporation 2002 Stock Plan and 422,494542,626 under Thethe Carnival Corporation 2001 Outside Director Stock Plan.

 

(c)

(3)

In addition to options, the Carnival Corporation 2002 Stock Plan and the Carnival Corporation 2001 Outside Director Stock Plan provide for the award of restricted shares and restricted share units without limitation on the number of shares than can be awarded in either form.

Carnival plc

II.Carnival plc

Set forth below is a table that summarizes compensation plans (including individual compensation arrangements) under which Carnival plc equity securities are authorized for issuance as of November 30, 2007.2010.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plan category

 

Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a)

 

Weighted-average
exercise price of
outstanding
options, warrants
and rights (1)

 

Number of securities remaining
available for future issuance
under equity compensation plans
(excluding securities reflected
in column (a))

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity compensation plans approved by security holders

 

 

 

3,445,606

(2)

 

 

$

52.37

 

 

 

 

12,766,979

(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity compensation plans not approved by security holders

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

3,445,606

 

 

 

$

52.37

 

 

 

 

12,766,979

 

 

 

 

 

 

 

 

 

 

 

 

 



38

Plan category

  Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights		  Weighted-average
exercise price of
outstanding
options, warrants
and rights (a)		   Number of securities remaining
available for future issuance
under equity compensation
plans (excluding securities
reflected in column (1))		 
   (1)        

Equity compensation plans approved by security holders

   3,410,847(b)  $41.46     15,191,613(c) 

Equity compensation plans not approved by security holders

   —      —       —    
              
   3,410,847   $41.46     15,191,613  
              

(a)

(1)

Converted from Sterling,sterling, if applicable, using the November 30, 20072010 exchange rate of $2.08:$1.56:£1.

 

(b)

(2)

Includes outstanding options to purchase Carnival plc ordinary shares under the Carnival plc Executive Share Option Plan and Carnival plc 2005 Employee Share Plan. Also includes 212,656898,914 restricted share units outstanding under the Carnival plc 2005 Employee Share Plan.

 

(c)

(3)

In addition to options, the Carnival plc 2005 Employee Share Plan provides for the award of restricted shares and restricted share units without limitation on the number of shares that can be awarded in either form.

The additional information required by Item 12 is incorporated herein by reference to the Carnival Corporation and Carnival plc joint definitive proxy statementProxy Statement to be filed with the U.S. Securities and Exchange Commission not later than 120 days after the close of the 2010 fiscal year.

Items 13 and 14.Certain Relationships and Related Transactions, and Director Independence and Principal Accountant Fees and Services.

Items 13 and 14.Certain Relationships and Related Transactions, and Director Independence and Principal Accounting Fees and Services.

The information required by Items 13 and 14 is incorporated herein by reference to the Carnival Corporation and Carnival plc joint definitive proxy statementProxy Statement to be filed with the U.S. Securities and Exchange Commission not later than 120 days after the close of the 2010 fiscal year.

PART IV

Item 15.Exhibits, Financial Statement Schedules.

Item 15.Exhibits, Financial Statement Schedules.

(a)    (1)Financial Statements

The financial statements shown in Exhibit 13 are incorporated herein by reference into this Form 10-K.

(2)Financial Statement Schedules

(2)Financial Statement Schedules

All schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instruction or are inapplicable and, therefore, have been omitted.

(3)Exhibits

(3)Exhibits

The exhibits listed on the accompanying Index to Exhibits are filed or incorporated by reference as part of this Form 10-K and such Index to Exhibits is hereby incorporated herein by reference.



39

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CARNIVAL CORPORATION

CARNIVAL PLC

/s/ Micky Arison

/s/ Micky Arison

Micky Arison

Micky Arison

Chairman of the Board of Directors

and Chief Executive Officer

Chairman of the Board of Directors

Directors and Chief Executive Officer

Directors and Chief Executive Officer

January 29, 2008

January 29, 2008

January 31, 2011

January 31, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of each of the registrants and in the capacities and on the dates indicated.

CARNIVAL CORPORATION

CARNIVAL PLC

/s/ Micky Arison

/s/ Micky Arison

Micky Arison

Micky Arison

Chairman of the Board of Directors

and Chief Executive Officer

Chairman of the Board of Directors

Directors and Chief Executive Officer

Directors and Chief Executive Officer

January 29, 2008

January 29, 2008


January 31, 2011

January 31, 2011
/s/ Howard S. Frank

/s/ Howard S. Frank

Howard S. Frank

��

Howard S. Frank

Vice Chairman of the Board of

Directors and Chief Operating Officer

Vice Chairman of the Board of

Directors and Chief Operating Officer

Directors and Chief Operating Officer

January 29, 2008

January 29, 2008


January 31, 2011

January 31, 2011
/s/ David Bernstein

/s/ David Bernstein

David Bernstein

David Bernstein

David Bernstein

David Bernstein

Chief Financial Officer

Chief Financial Officer

January 29, 2008

January 29, 2008


January 31, 2011

January 31, 2011
/s/ Larry Freedman

/s/ Larry Freedman

Larry Freedman

Larry Freedman

Larry Freedman

Larry Freedman

Chief Accounting Officer

Chief Accounting Officer

January 29, 2008

January 29, 2008


/s/ *Richard G. Capen, Jr.

January 31, 2011

/s/ *Richard G. Capen, Jr.

January 31, 2011

Richard G. Capen, Jr.

/s/*Sir Jonathon Band

Richard G. Capen, Jr.

/s/*Sir Jonathon Band

Director

Sir Jonathon Band

Director

Sir Jonathon Band

January 29, 2008

Director

January 29, 2008


Director

/s/ *Robert H. Dickinson

/s/ *Robert H. Dickinson

January 31, 2011

January 31, 2011

/s/*Robert H. Dickinson

/s/*Robert H. Dickinson

Director

Robert H. Dickinson

Director

Robert H. Dickinson

January 29, 2008

Director

January 29, 2008


Director

/s/ *Arnold W. Donald

/s/ *Arnold W. Donald

January 31, 2011

January 31, 2011

/s/*Arnold W. Donald

/s/*Arnold W. Donald

Director

Arnold W. Donald

Director

Arnold W. Donald

January 29, 2008

Director

January 29, 2008


Director

/s/ *Pier Luigi Foschi

/s/ *Pier Luigi Foschi

January 31, 2011

January 31, 2011

/s/*Pier Luigi Foschi

/s/*Pier Luigi Foschi

Director

Pier Luigi Foschi

Director

Pier Luigi Foschi

January 29, 2008

Director

January 29, 2008


Director

/s/ *Richard J. Glasier

/s/ *Richard J. Glasier

January 31, 2011

January 31, 2011

 

40

/s/*Richard J. Glasier

/s/*Richard J. Glasier

Director

Richard J. Glasier

Director

Richard J. Glasier

January 29, 2008

Director

January 29, 2008



Director

/s/ *Baroness Sarah Hogg

/s/ *Baroness Sarah Hogg

January 31, 2011

January 31, 2011

Baroness Sarah Hogg

Baroness Sarah Hogg

Director

Director

January 29, 2008

January 29, 2008


/s/ *Modesto A. Maidique

/s/ *Modesto A. Maidique

*Modesto A. Maidique

/s/*Modesto A. Maidique

Director

Modesto A. Maidique

Director

Modesto A. Maidique

January 29, 2008

Director

January 29, 2008


Director

/s/ *Sir John Parker

/s/ *Sir John Parker

January 31, 2011

January 31, 2011

/s/*Sir John Parker

/s/*Sir John Parker

Director

Sir John Parker

Director

Sir John Parker

January 29, 2008

Director

January 29, 2008


Director

/s/ *Peter G. Ratcliffe

/s/ *Peter G. Ratcliffe

January 31, 2011

January 31, 2011

/s/*Peter G. Ratcliffe

/s/*Peter G. Ratcliffe

Director

Peter G. Ratcliffe

Director

Peter G. Ratcliffe

January 29, 2008

Director

January 29, 2008


Director

/s/ *Stuart Subotnick

/s/ *Stuart Subotnick

January 31, 2011

January 31, 2011

Stuart Subotnick

Stuart Subotnick

Director

/s/*Stuart Subotnick

Director

/s/*Stuart Subotnick

January 29, 2008

Stuart Subotnick

January 29, 2008


Stuart Subotnick

/s/ *Laura Weil

Director

/s/ *Laura Weil

Director

Laura Weil

January 31, 2011

Laura Weil

January 31, 2011

Director

Director

January 29, 2008

/s/*Laura Weil

January 29, 2008


/s/*Laura Weil

/s/ *Uzi Zucker

Laura Weil

/s/ *Uzi Zucker

Laura Weil
Director

Director

Uzi Zucker

Uzi Zucker

Director

January 31, 2011

Director

January 31, 2011

January 29, 2008

January 29, 2008


/s/*Randall J. Weisenburger

/s/*Randall J. Weisenburger
Randall J. WeisenburgerRandall J. Weisenburger
DirectorDirector
January 31, 2011January 31, 2011
/s/*Uzi Zucker/s/*Uzi Zucker
Uzi ZuckerUzi Zucker
DirectorDirector
January 31, 2011January 31, 2011
*By: /s/ Arnaldo Perez

*By: /s/ Arnaldo Perez

Arnaldo Perez

Arnaldo Perez

(Arnaldo Perez

(Attorney-in-fact)

(Arnaldo Perez

(Attorney-in-fact)

Attorney-in-fact)

Attorney-in-fact)

January 29, 200831, 2011

January 31, 2011

41

INDEX TO EXHIBITS

      

Incorporated by Reference

    

Exhibit
Number

  

Exhibit Description

  

      Form      

  Exhibit   Filing
      Date      		   

Filed
Herewith

Underwriting agreements

  

    

    1.1

  ATM Equity OfferingSM Sales Agreement, dated as of October 31, 2008, between Carnival Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated.  8-K   99.2     10/31/08    

    1.2

  Form of Selling Agreement among Carnival Investments Limited, Carnival Corporation, Carnival plc and Merrill Lynch International.  S-3   1.1     7/2/09    

Articles of incorporation and by-laws

  

    

    3.1

  Third Amended and Restated Articles of Incorporation of Carnival Corporation.  8-K   3.1     4/17/03    

    3.2

  Third Amended and Restated By-Laws of Carnival Corporation.  8-K   3.1     4/20/09    

    3.3

  Articles of Association of Carnival plc.  8-K   3.3     4/20/09    

    3.4

  Memorandum of Association of Carnival plc.  8-K   3.4     4/20/09    

Instruments defining the rights of security holders, including indenture

  

    

    4.1

  Agreement of Carnival Corporation and Carnival plc, dated January 21, 2011 to furnish certain debt instruments to the Securities and Exchange Commission.        X

    4.2

  Carnival Corporation Deed, dated April 17, 2003, between Carnival Corporation and P&O Princess Cruises plc for the benefit of the P&O Princess Shareholders.  10-Q   4.1     8/31/03    

    4.3

  Equalization and Governance Agreement, dated April 17, 2003, between Carnival Corporation and P&O Princess Cruises plc.  10-Q   4.2     8/31/03    

    4.4

  Carnival Corporation Deed of Guarantee, dated as of April 17, 2003, between Carnival Corporation and Carnival plc.  S-4   4.3     5/30/03    

    4.5

  Carnival plc Deed of Guarantee, dated as of April 17, 2003, between Carnival Corporation and Carnival plc.  S-3 & F-3   4.10     6/19/03    

    4.6

  Specimen Common Stock Certificate.  S-3 & F-3   4.16     6/19/03    

    4.7

  Pairing Agreement, dated as of April 17, 2003, between Carnival Corporation, The Law Debenture Trust Corporation (Cayman) Limited, as trustee, and Computershare Investor Services (formerly SunTrust Bank), as transfer agent.  8-K   4.1     4/17/03    

42

INDEX TO EXHIBITS

      

Incorporated by Reference

    

Exhibit
Number

  

Exhibit Description

  

      Form      

  Exhibit  Filing
      Date      		   

Filed
Herewith

    4.8

  Voting Trust Deed, dated as of April 17, 2003, between Carnival Corporation and The Law Debenture Trust Corporation (Cayman) Limited, as trustee.  8-K  4.2   4/17/03    

    4.9

  SVE Special Voting Deed, dated as of April 17, 2003, between Carnival Corporation, DLS SVC Limited, P&O Princess Cruises plc, The Law Debenture Trust Corporation (Cayman) Limited, as trustee, and The Law Debenture Trust Corporation, P.L.C.  8-K  4.3   4/17/03    

    4.10

  Form of Amended and Restated Deposit Agreement and holders from time to time of receipts issued thereunder.  

Post

Amend-

ment to

Form F-6

  

99-a

  

 

4/15/03

  

  

    4.11

  Indenture, dated as of April 25, 2001, between Carnival Corporation and U.S. Bank Trust National Association, as trustee, relating to unsecured and unsubordinated debt securities.  S-3  4.5   6/13/01    

    4.12

  Form of Indenture, dated March 1, 1993, between Carnival Cruise Lines, Inc. and First Trust National Association, as Trustee, relating to the Debt Securities, including form of Debt Security.  S-3  4   3/2/93    

    4.13

  Second Supplemental Indenture, dated December 1, 2003, between Carnival plc and Carnival Corporation to The Bank of New York, as Trustee, relating to 7.875% debentures due 2027.  10-K  4.14   11/30/03    

Material contracts

    

  10.1*

  Carnival Corporation Nonqualified Retirement Plan for Highly Compensated Employees.  10-Q  10.1   8/31/07    

  10.2*

  Amendment to the Amended and Restated Carnival Corporation 1992 Stock Option Plan.  10-K  10.2   11/30/03    

  10.3

  Facilities Agreement dated October 21, 2005, between Carnival Corporation, Carnival plc, and certain of Carnival Corporation and Carnival plc subsidiaries, The Royal Bank of Scotland as facilities agent and a syndicate of financial institutions.  10-K  10.3   11/30/05    

  10.4*

  Amended and Restated Carnival Corporation 1992 Stock Option Plan.  10-K  10.4   11/30/97    

43

INDEX TO EXHIBITS

Incorporated by Reference

January 29, 2008



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INDEX TO EXHIBITS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Incorporated by Reference

 

 

 

 

 

 

 

 

 

 

Exhibit
Number

 

Exhibit Description

 

Form

 

Exhibit

 

Filing
Date

 

Filed
Herewith

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Articles of incorporation and by-laws

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.1

 

 

Third Amended and Restated Articles of Incorporation of Carnival Corporation.

 

8-K

 

3.1

 

 

4/17/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.2

 

 

Second Amended and Restated By-Laws of Carnival Corporation.

 

8-K

 

3.1

 

 

10/19/07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.3

 

 

Articles of Association of Carnival plc.

 

8-K

 

3.3

 

 

4/17/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.4

 

 

Memorandum of Association of Carnival plc.

 

8-K

 

3.4

 

 

4/17/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Instruments defining the rights of security holders, including indentures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.1

 

 

Agreement of Carnival Corporation and Carnival plc, dated January 11, 2008 to furnish certain debt instruments to the Securities and Exchange Commission.

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.2

 

 

Carnival Corporation Deed, dated April 17, 2003, between Carnival Corporation and P&O Princess Cruises plc for the benefit of the P&O Princess Shareholders.

 

10-Q

 

4.1

 

 

08/31/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.3

 

 

Equalization and Governance Agreement, dated April 17, 2003, between Carnival Corporation and P&O Princess Cruises plc.

 

10-Q

 

4.2

 

 

08/31/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.4

 

 

Carnival Corporation Deed of Guarantee, dated as of April 17, 2003, between Carnival Corporation and Carnival plc.

 

S-4

 

4.3

 

 

5/30/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.5

 

 

Carnival plc (formerly P&O Princess Cruises plc) Deed of Guarantee, dated as of April 17, 2003, between Carnival Corporation and Carnival plc.

 

S-3 & F-3

 

4.10

 

 

6/19/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.6

 

 

Specimen Common Stock Certificate.

 

S-3 & F-3

 

4.16

 

 

6/19/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.7

 

 

Pairing Agreement, dated as of April 17, 2003, between Carnival Corporation, The Law Debenture Trust Corporation (Cayman) Limited, as trustee, and Computershare Investor Services (formerly SunTrust Bank), as transfer agent.

 

8-K

 

4.1

 

 

4/17/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.8

 

 

Voting Trust Deed, dated as of April 17, 2003, between Carnival Corporation and The Law Debenture Trust Corporation (Cayman) Limited, as trustee.

 

8-K

 

4.2

 

 

4/17/03

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit
Number

 

Exhibit Description

 

Form

 

Exhibit

 

Filing
Date

 

Filed
Herewith

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.9

 

 

SVE Special Voting Deed, dated as of April 17, 2003, between Carnival Corporation, DLS SVC Limited, P&O Princess Cruises plc, The Law Debenture Trust Corporation (Cayman) Limited, as trustee, and The Law Debenture Trust Corporation, P.L.C.

 

8-K

 

4.3

 

 

4/17/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.10

 

 

Form of Amended and Restated Deposit Agreement and holders from time to time of receipts issued thereunder.

 

Post Amendment
to Form
F-6

 

99-a

 

 

4/15/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.11

 

 

Indenture, dated as of April 25, 2001, between Carnival Corporation and U.S. Bank Trust National Association, as trustee, relating to unsecured and unsubordinated debt securities.

 

S-3

 

4.5

 

 

6/13/01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.12

 

 

Form of Indenture, dated March 1, 1993, between Carnival Cruise Lines, Inc. and First Trust National Association, as Trustee, relating to the Debt Securities, including form of Debt Security.

 

S-3

 

4

 

 

3/2/93

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4.13

 

 

Second Supplemental Indenture, dated December 1, 2003, between Carnival plc and Carnival Corporation to The Bank of New York, as Trustee, relating to 7.875% debentures due 2027.

 

10-K

 

4.14

 

 

11/30/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Material Contracts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.1

*

 

Carnival Corporation Nonqualified Retirement Plan for Highly Compensated Employees.

 

10-Q

 

10.1

 

 

8/31/07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.2

*

 

Amendment to the Amended and Restated Carnival Corporation 1992 Stock Option Plan.

 

10-K

 

10.2

 

 

11/30/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.3

 

 

Facilities Agreement dated October 21, 2005, between Carnival Corporation, Carnival plc, and certain of Carnival Corporation and Carnival plc subsidiaries, The Royal Bank of Scotland as facilities agent and a syndicate of financial institutions.

 

10-K

 

10.3

 

 

11/30/05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.4

*

 

Amended and Restated Carnival Corporation 1992 Stock Option Plan.

 

10-K

 

10.4

 

 

11/30/97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.5

*

 

Carnival Cruise Lines, Inc. 1993 Restricted Stock Plan adopted on January 15, 1993 and as amended January 5, 1998 and December 21, 1998.

 

10-K

 

10.5

 

 

11/30/98

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit
Number

 

Exhibit Description

 

Form

 

Exhibit

 

Filing
Date

 

Filed
Herewith

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.6

*

 

Carnival Corporation “Fun Ship” Nonqualified Savings Plan.

 

10-K

 

10.6

 

 

11/30/97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.7

*

 

Amendment to the Carnival Corporation Nonqualified Retirement Plan for Highly Compensated Employees.

 

10-Q

 

10.1

 

 

2/28/07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.8

*

 

Carnival Cruise Lines, Inc. Non-Qualified Retirement Plan.

 

10-K

 

10.4

 

 

11/30/90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.9

*

 

Executive Long-term Compensation Agreement, dated as of January 16, 1998, between Robert H. Dickinson and Carnival Corporation.

 

10-K

 

10.2

 

 

11/30/97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.10

*

 

Consulting Agreement/Registration Rights Agreement, dated June 14, 1991, between Carnival Corporation and Ted Arison.

 

S-3A

 

4.3

 

 

7/16/91

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.11

*

 

First Amendment to Consulting Agreement/Registration Rights Agreement between Carnival Corporation and Ted Arison.

 

10-K

 

10.40

 

 

11/30/92

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.12

*

 

Director Appointment Letter between Peter G. Ratcliffe and Carnival plc.

 

10-Q

 

10.23

 

 

5/31/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.13

*

 

Director Appointment Letter, dated August 19, 2004, between Baroness Sarah Hogg and each of Carnival Corporation and Carnival plc.

 

10-K

 

10.13

 

 

11/30/04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.14

*

 

Director’s Appointment Letter, dated August 19, 2004, between Richard J. Glasier and each of Carnival Corporation and Carnival plc.

 

10-K

 

10.14

 

 

11/30/04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.15

*

 

Director Appointment Letter, dated August 19, 2004, between Sir John Parker and each of Carnival Corporation and Carnival plc.

 

10-K

 

10.15

 

 

11/30/04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.16

*

 

Amended and Restated Carnival plc 2005 Employee Share Plan.

 

10-Q

 

10.2

 

 

8/31/05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.17

*

 

Executive Long-term Compensation Agreement, dated January 11, 1999, between Carnival Corporation and Micky Arison.

 

10-K

 

10.36

 

 

11/30/98

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.18

*

 

Executive Long-term Compensation Agreement, dated January 11, 1999, between Carnival Corporation and Howard S. Frank.

 

10-K

 

10.37

 

 

11/30/98

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.19

*

 

Carnival Corporation Supplemental Executive Retirement Plan.

 

10-K

 

10.32

 

 

11/30/99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.20

*

 

Amendment to the Carnival Corporation Supplemental Executive Retirement Plan.

 

10-K

 

10.31

 

 

11/30/00

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit
Number

 

Exhibit Description

 

Form

 

Exhibit

 

Filing
Date

 

Filed
Herewith

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.21*

 

Amendment to the Carnival Corporation “Fun Ship” Nonqualified Savings Plan.

 

10-K

 

10.33

 

11/30/99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.22*

 

Amendment to the Carnival Corporation “Fun Ship” Nonqualified Savings Plan.

 

10-Q

 

10.2

 

2/28/07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.23*

 

Amendment to the Carnival Corporation “Fun Ship” Nonqualified Savings Plan.

 

10-K

 

10.34

 

11/30/00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.24*

 

Amendment to the Carnival Corporation “Fun Ship” Nonqualified Savings Plan.

 

10-K

 

10.37

 

11/30/01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.25*

 

Amendment to the Carnival Corporation Supplemental Executive Retirement Plan.

 

10-Q

 

10.3

 

2/28/07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.26*

 

Amended and Restated Carnival Corporation 2001 Outside Director Stock Plan.

 

10-Q

 

10.1

 

5/31/05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.27*

 

Amended and Restated Carnival Corporation 2002 Stock Plan.

 

10-Q

 

10.1

 

5/31/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.28*

 

Agreement with Pier Luigi Foschi.

 

10-Q

 

10.4

 

8/31/05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

       10.29

 

Succession Agreement, dated as of May 28, 2002, to Registration Rights Agreement, dated June 14, 1991, between Carnival Corporation and Ted Arison.

 

10-Q

 

10.2

 

5/31/02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.30*

 

Employment Agreement, dated as of April 17, 2003, by and between POPCIL and Peter Ratcliffe.

 

10-Q

 

10.2

 

5/31/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.31*

 

Carnival Corporation & plc Non-Executive Board of Director Cruise Benefit Policy.

 

10-Q

 

10.1

 

8/31/05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.32*

 

Indemnification Agreement, dated April 17, 2003, between Micky M. Arison and Carnival Corporation.

 

10-Q

 

10.5

 

5/31/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.33*

 

Consulting Agreement, dated November 30, 2004, between A. Kirk Lanterman, Holland America Line Inc. and others.

 

10-K

 

10.33

 

2/14/05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.34*

 

Indemnification Agreement, dated April 17, 2003, between Robert H. Dickinson and Carnival Corporation.

 

10-Q

 

10.9

 

5/31/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.35*

 

Amendment to the Carnival Corporation Nonqualified Retirement Plan For Highly Compensated Employees.

 

10-Q

 

10.1

 

2/28/06

 

 

 



Exhibit
Number

Exhibit Description

Form

Exhibit

Filing
Date

Filed
Herewith

  10.5*

Carnival Cruise Lines, Inc. 1993 Restricted Stock Plan adopted on January 15, 1993 and as amended January 5, 1998 and December 21, 1998.

10-K

10.5

11/30/98

10.36*

Indemnification Agreement, dated April 17, 2003, between Pier Luigi Foschi and Carnival Corporation.

10-Q

10.13

5/31/03

  10.6*

Carnival Corporation “Fun Ship” Nonqualified Savings Plan.

10-K

10.6

11/30/97

10.37*

Indemnification Agreement, dated April 17, 2003, between Howard S. Frank and Carnival Corporation.

10-Q

10.15

5/31/03

  10.7*

Amendment to the Carnival Corporation Nonqualified Retirement Plan for Highly Compensated Employees.

10-Q

10.1

2/28/07

10.38*

Director Appointment Letter, dated December 1, 2004, between A. Kirk Lanterman and each of Carnival Corporation and Carnival plc.

10-K

10.38

11/30/04

  10.8*

Carnival Cruise Lines, Inc. Non-Qualified Retirement Plan.

10-K

10.4

11/30/90

10.39*

Indemnification Agreement, dated April 17, 2003, between Peter G. Ratcliffe and Carnival Corporation.

10-Q

10.24

5/31/03

  10.9*

10.40*

Director Appointment Letter,Executive Long-term Compensation Agreement, dated April 14, 2003, between Micky M. Arison and Carnival plc.

10-Q

10.4

5/31/03

10.41*

Director Appointment Letter, dated August 19, 2004, between Richard G. Capen and eachas of Carnival Corporation and Carnival plc.

10-K

10.41

11/30/04

10.42*

Director Appointment Letter, dated April 14, 2003,January 16, 1998, between Robert H. Dickinson and Carnival plc.

Corporation.

10-Q

10-K

10.8

10.2

5/31/03

11/30/97

  10.10*

10.43*

Director Appointment Letter,Consulting Agreement/ Registration Rights Agreement, dated August 19, 2004,June 14, 1991, between Arnold W. Donald and each of Carnival Corporation and Carnival plc.

Ted Arison.

10-K

S-3A

10.43

4.3

11/30/04

7/16/91

  10.11*

First Amendment to Consulting Agreement/ Registration Rights Agreement between Carnival Corporation and Ted Arison.

10-K

10.40

11/30/92

10.44*

Director Appointment Letter between Pier Luigi Foschi and Carnival plc.

10-Q

10.12

5/31/03

  10.12*

Form of Appointment Letter for Non-Executive Directors.

10-Q

10.1

5/31/08

10.45*

Director Appointment Letter, dated April 14, 2003, between Howard S. Frank and Carnival plc.

10-Q

10.14

5/31/03

  10.13*

Form of Appointment Letter for Executive Directors.

10-Q

10.2

5/31/08

10.46*

Director Appointment Letter, dated August 19, 2004, between Modesto A. Maidique and each of Carnival Corporation and Carnival plc.

10-K

10.46

11/30/04

  10.14*

Amended and Restated Carnival plc 2005 Employee Share Plan.

10-Q

10.1

2/28/09

10.47*

Amendment No. 1 to the Employment Agreement, dated as of July 19, 2004, by and between P&O Princess International Ltd. and Peter Ratcliffe.

10-Q

10.1

8/31/04

  10.15*

Carnival Corporation Supplemental Executive Retirement Plan.

10-K

10.32

11/30/99

10.48*

Director Appointment Letter, dated August 19, 2004, between Stuart Subotnick and each of Carnival Corporation and Carnival plc.

10-K

10.48

11/30/04

  10.16*

Amendment to the Carnival Corporation Supplemental Executive Retirement Plan.

10-K

10.31

11/30/00

10.49*  10.17*

Director Appointment Letter, dated August 19, 2004, between Uzi Zucker and each ofAmendment to the Carnival Corporation and Carnival plc.

“Fun Ship” Nonqualified Savings Plan.

10-K

10.49

10.33

11/30/04

99



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit
Number

 

Exhibit Description

 

Form

 

Exhibit

 

Filing
Date

 

Filed
Herewith

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.50*

 

Amendment of the Carnival Corporation “Fun Ship” Nonqualified Savings Plan.

 

10-Q

 

10.1

 

 

2/28/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.51*

 

Amendment of the Carnival Corporation Nonqualified Retirement Plan For Highly Compensated Employees.

 

10-Q

 

10.2

 

 

2/28/03

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.52*

 

The P&O Princess Cruises Executive Share Option Plan.

 

20-F

 

4.9

 

 

12/30/01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.53*

 

The P&O Princess Cruises Deferred Bonus and Co-Investment Matching Plan.

 

20-F

 

4.10

 

 

12/30/01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.54*

 

Amended and Restated Carnival Cruise Lines Management Incentive Plan.

 

10-Q

 

10.4

 

 

2/28/07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.55*

 

Amendment to the Carnival Corporation Supplemental Executive Retirement Plan.

 

10-Q

 

10.1

 

 

2/29/04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.56*

 

Amendment to the Carnival Corporation Nonqualified Retirement Plan for Highly Compensated Employees.

 

10-Q

 

10.2

 

 

2/29/04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.57*

 

Amendment to the Carnival Corporation “Fun Ship” Nonqualified Savings Plan.

 

10-Q

 

10.3

 

 

2/29/04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.58*

 

Amendment to the Carnival Corporation “Fun Ship” Nonqualified Savings Plan.

 

10-Q

 

10.1

 

 

2/28/05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.59*

 

Form of Nonqualified Stock Option Agreement for the Amended and Restated Carnival Corporation 2001 Outside Director Stock Plan.

 

10-Q

 

10.5

 

 

8/31/05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.60*

 

Form of Restricted Stock Award Agreement for the Amended and Restated Carnival Corporation 2001 Outside Director Stock Plan.

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.61*

 

Form of Restricted Stock Unit Award Agreement for the Amended and Restated Carnival Corporation 2001 Outside Director Stock Plan.

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.62*

 

Form of Share Option Certificate for the Amended and Restated Carnival plc 2005 Employee Share Plan.

 

10-Q

 

10.8

 

 

8/31/05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

       10.63

 

Deed of Guarantee, dated October21, 2005, between Carnival Corporation as guarantor and the Royal Bank of Scotland plc as facilities agent.

 

10-K

 

10.63

 

 

11/30/05

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exhibit
Number

 

Exhibit Description

 

Form

 

Exhibit

 

Filing
Date

 

Filed
Herewith

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

       10.64

 

Deed of Guarantee, dated October 21, 2005, between Carnival plc as guarantor and the Royal Bank of Scotland plc as facilities agent.

 

10-K

 

10.64

 

 

11/30/05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.65*

 

Corporate Aviation Administrative Policy Statement for the use of Carnival Corporation & plc aircraft.

 

10-Q

 

10.2

 

 

2/28/06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.66*

 

Form of Restricted Share Unit Award Certificate for the Amended and Restated Carnival plc 2005 Employee Share Plan.

 

10-Q

 

10.3

 

 

2/28/06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.67*

 

Form of Restricted Stock Unit Agreement for the Amended and Restated Carnival Corporation 2002 Stock Plan.

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.68*

 

Princes Cruises Chief Executive Officer Supplemental Retirement Plan for Peter Ratcliffe.

 

8-K

 

10.1

 

 

10/20/06

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.69*

 

Amendment to the P&O Princess Cruises Executive Share Option Plan.

 

10-Q

 

10.5

 

 

2/28/07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.70*

 

Amendment to the P&O Princess Cruises Deferred Bonus and Co- Investment Matching Plan.

 

10-Q

 

10.6

 

 

2/28/07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.71*

 

Amendment to the Carnival plc 2005 Employee Share Plan.

 

10-Q

 

10.7

 

 

2/28/07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.72*

 

Form of Executive Restricted Stock Agreement for the Amended and Restated Carnival Corporation 2002 Stock Plan.

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

       10.73

 

Amendment Agreement, dated July 21, 2007, to the Facilities Agreement dated October 21, 2005, by and among Carnival Corporation, Carnival plc, and certain of Carnival Corporation and Carnival plc subsidiaries, The Royal Bank of Scotland, as Facilities Agent, and a syndicate of financial institutions.

 

10-Q

 

10.2

 

 

8/31/07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.74*

 

Amendment to the Carnival Corporation Supplemental Executive Retirement Plan.

 

8-K

 

10.1

 

 

10/19/07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.75*

 

Amendment to the Carnival Corporation 2001 Outside Director Stock Plan.

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.76*

 

Retirement Agreement between Robert H. Dickinson and Carnival Corporation.

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.77*

 

Form of Executive Restricted Stock Award Agreement with Executive Long-Term Compensation Agreements.

 

 

 

 

 

 

 

 

X

 



  10.18*

Amendment to the Carnival Corporation “Fun Ship” Nonqualified Savings Plan.10-Q10.22/28/07

  10.19*

Amendment to the Carnival Corporation “Fun Ship” Nonqualified Savings Plan.10-K10.3411/30/00

  10.20*

Amendment to the Carnival Corporation “Fun Ship” Nonqualified Savings Plan.10-K10.3711/30/01

  10.21*

Amendment to the Carnival Corporation Supplemental Executive Retirement Plan.10-Q10.32/28/07

44

INDEX TO EXHIBITS

      

Incorporated by Reference

    

Exhibit
Number

  

Exhibit Description

  

      Form      

  Exhibit  Filing
      Date      		   

Filed
Herewith

  10.22*

  Amended and Restated Carnival Corporation 2001 Outside Director Stock Plan.  10-Q  10.1   5/31/09    

  10.23*

  Amended and Restated Carnival Corporation 2002 Stock Plan.  10-Q  10.3   2/28/09    

  10.24*

  Agreement with Pier Luigi Foschi.  8-K  10.1   9/1/09    

  10.25

  Succession Agreement, dated as of May 28, 2002, to Registration Rights Agreement, dated June 14, 1991, between Carnival Corporation and Ted Arison.  10-Q  10.2   5/31/02    

  10.26*

  Carnival Corporation & plc Non-Executive Board of Director Cruise Benefit Policy.  10-Q  10.1   8/31/05    

  10.27*

  Amendment to the Carnival Corporation Nonqualified Retirement Plan For Highly Compensated Employees.  10-Q  10.1   2/28/06    

  10.28*

  Amendment of the Carnival Corporation “Fun Ship” Nonqualified Savings Plan.  10-Q  10.1   2/28/03    

  10.29*

  Amendment of the Carnival Corporation Nonqualified Retirement Plan For Highly Compensated Employees.  10-Q  10.2   2/28/03    

  10.30*

  The P&O Princess Cruises Executive Share Option Plan.  20-F  4.9   12/30/01    

  10.31*

  The P&O Princess Cruises Deferred Bonus and Co-Investment Matching Plan.  20-F  4.10   12/30/01    

  10.32*

  Carnival Cruise Lines Management Incentive Plan.  10-Q  10.1   8/31/08    

  10.33*

  Amendment to the Carnival Corporation Supplemental Executive Retirement Plan.  10-Q  10.1   2/29/04    

  10.34*

  Amendment to the Carnival Corporation Nonqualified Retirement Plan for Highly Compensated Employees.  10-Q  10.2   2/29/04    

  10.35*

  Amendment to the Carnival Corporation “Fun Ship” Nonqualified Savings Plan.  10-Q  10.3   2/29/04    

  10.36*

  Amendment to the Carnival Corporation “Fun Ship” Nonqualified Savings Plan.  10-Q  10.1   2/28/05    

  10.37*

  Form of Nonqualified Stock Option Agreement for the Amended and Restated Carnival Corporation 2001 Outside Director Stock Plan.  10-Q  10.5   8/31/05    

45

INDEX TO EXHIBITS

      

Incorporated by Reference

    

Exhibit
Number

  

Exhibit Description

  

      Form      

  Exhibit  Filing
      Date      		   

Filed
Herewith

  10.38*

  Form of Restricted Stock Award Agreement for the Amended and Restated Carnival Corporation 2001 Outside Director Stock Plan.  10-K  10.60   11/30/07    

  10.39*

  Form of Restricted Stock Unit Award Agreement for the Amended and Restated Carnival Corporation 2001 Outside Director Stock Plan.  10-K  10.61   11/30/07    

  10.40*

  Form of Share Option Certificate for the Amended and Restated Carnival plc 2005 Employee Share Plan.  10-Q  10.8   8/31/05    

  10.41

  Deed of Guarantee, dated October 21, 2005, between Carnival Corporation as guarantor and the Royal Bank of Scotland plc as facilities agent.  10-K  10.63   11/30/05    

  10.42

  Deed of Guarantee, dated October 21, 2005, between Carnival plc as guarantor and the Royal Bank of Scotland plc as facilities agent.  10-K  10.64   11/30/05    

  10.43*

  Corporate Aviation Administrative Policy Statement for the use of Carnival Corporation & plc aircraft.  10-Q  10.2   2/28/06    

  10.44*

  Form of Restricted Share Unit Award Certificate for the Amended and Restated Carnival plc 2005 Employee Share Plan.  10-Q  10.3   2/28/06    

  10.45*

  Form of Restricted Stock Unit Agreement for the Amended and Restated Carnival Corporation 2002 Stock Plan.  10-K  10.67   11/30/07    

  10.46*

  Princess Cruises Chief Executive Officer Supplemental Retirement Plan – 2008 restatement.  10-Q  10.1   2/28/09    

  10.47*

  Amendment to the P&O Princess Cruises Executive Share Option Plan.  10-Q  10.5   2/28/07    

  10.48*

  Amendment to the P&O Princess Cruises Deferred Bonus and Co-Investment Matching Plan.  10-Q  10.6   2/28/07    

  10.49*

  Form of Executive Restricted Stock Agreement for the Amended and Restated Carnival Corporation 2002 Stock Plan.  10-Q  10.4   2/28/09    

  10.50

  Amendment Agreement, dated July 21, 2007, to the Facilities Agreement dated October 21, 2005, by and among Carnival Corporation, Carnival plc, and certain of Carnival Corporation and Carnival plc subsidiaries, The Royal Bank of Scotland, as Facilities Agent, and a syndicate of financial institutions.  10-Q  10.2   8/31/07    

46

INDEX TO EXHIBITS

 

Incorporated by Reference

Exhibit
Number

Exhibit Description

Form

Exhibit

Filing
Date

Filed
Herewith

  10.51*

Amendment to the Carnival Corporation Supplemental Executive Retirement Plan.8-K10.110/19/07

  10.52*

Form of Executive Restricted Stock Agreement for Executives with Long-term Compensation Agreements.10-Q10.52/28/09

  10.53*

Amended and Restated Carnival Corporation & plc Management Incentive Plan for Executive Officers.10-K10.5311/30/09

  10.54*

Amended and Restated Executive Long-term Compensation Agreement, dated January 15, 2008, between Carnival Corporation and Micky Arison.10-Q10.22/29/08

  10.55*

Amended and Restated Executive Long-term Compensation Agreement dated January 15, 2008, between Carnival Corporation and Howard S. Frank.10-Q10.32/29/08

  10.56*

Amendment to the Carnival Corporation Nonqualified Retirement Plan for Highly Compensated Employees.10-Q10.72/28/09

  10.57*

Amendment to the Carnival Corporation Fun Ship Nonqualified Savings Plan.10-Q10.82/28/09

  10.58*

Amendment to the Carnival Corporation Supplemental Executive Retirement Plan.10-Q10.92/28/09

  10.59*

Amendment to the Carnival Corporation “Fun Ship” Nonqualified Savings Plan.10-Q10.12/28/10

  10.60*

Carnival Corporation & plc Stock Ownership Policy for Section 16 Officers.10-Q10.22/28/10

  10.61*

Amendment to the Carnival Corporation “Fun Ship” Nonqualified Savings Plan.10-Q10.32/28/10

  10.62*

Amendment to the Carnival Corporation “Fun Ship” Nonqualified Savings Plan.10-Q10.15/31/10

Statements re computationregarding computations of ratios

  12

12

Ratio of Earnings to Fixed Charges

X

Annual report to security holders

  13

Portions of 2010 Annual Report.

X

13

Portions of 2007 Annual Report

X

Subsidiaries of the registrants

  21

21

Significant Subsidiaries of Carnival Corporation and Carnival plc

plc.

X

Consents of experts and counsel

  23

23

Consent of Independent Registered Certified Public Accounting FirmFirm.

X

47

INDEX TO EXHIBITS

Incorporated by Reference

Exhibit
Number

Exhibit Description

      Form      

ExhibitFiling
      Date      

Filed
Herewith

Power of attorney

X

  24

Power of attorney

24

Powers of Attorney given by certain Directors of Carnival Corporation and Carnival plc to Micky Arison, Howard S. Frank, David Bernstein and Arnaldo Perez authorizing such persons to sign this 20072010 joint Annual Report on Form 10-K and any future amendments on their behalfbehalf.

X

Rule 13a-14(a)/15d-14(a) certifications

X

  31.1

Rule 13a-14(a)/15d-14(a) Certifications

31.1

Certification of Chief Executive Officer of Carnival Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

2002.

X

  31.2

31.2

Certification of Chief Operating Officer of Carnival Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

2002.

X

  31.3

31.3

Certification of Senior Vice President and Chief Financial Officer of Carnival Corporation pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

2002.

X

  31.4

31.4

Certification of Chief Executive Officer of Carnival plc pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

2002.

X

  31.5

31.5

Certification of Chief Operating Officer of Carnival plc pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

2002.

X



X

Exhibit
Number

Exhibit Description

Form

Exhibit

Filing
Date

Filed/Furnished
Herewith

  31.6

31.6

Certification of Senior Vice President and Chief Financial Officer of Carnival plc pursuant to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 20022002.

X

Section 1350 certifications

X

  32.1**

Section 1350 Certifications

32.1**

Certification of Chief Executive Officer of Carnival Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

2002.

X

  32.2**

32.2**

Certification of Chief Operating Officer of Carnival Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 20022002.

X

48

INDEX TO EXHIBITS

Incorporated by Reference

Exhibit
Number

Exhibit Description

      Form      

ExhibitFiling
      Date      

Filed
Herewith

X

  32.3**

32.3**

Certification of Senior Vice President and Chief Financial Officer of Carnival Corporation pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

2002.

X

  32.4**

32.4**

Certification of Chief Executive Officer of Carnival plc pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

2002.

X

  32.5**

32.5**

Certification of Chief Operating Officer of Carnival plc pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

2002.

X

  32.6**

32.6**

Certification of Senior Vice President and Chief Financial Officer of Carnival plc pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 20022002.

X

Interactive data file

101**

The financial statements from Carnival Corporation & plc’s joint Annual Report on Form 10-K for the year ended November 30, 2010, as filed with the SEC on January 31, 2011 formatted in XBRL, as follows:

 

(i) the Consolidated Statements of Income for the years ended November 30, 2010, 2009 and 2008;

 

(ii) the Consolidated Balance Sheets at November 30, 2010 and 2009;

 

(iii) the Consolidated Statements of Cash Flows for the years ended November 30, 2010, 2009 and 2008;

 

(iv) the Consolidated Statements of Shareholders’ Equity for the years ended November 30, 2010, 2009 and 2008;

 

and

 

(v) the notes to the consolidated financial statements, tagged in summary and detail.

X

*

*Indicates a management contract or compensation plan or arrangement.
**These items are furnished and not filed.

** These items are furnished and not filed.49

53