UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended February 28, 2007
OR
|_| 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 Commission 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 98-0357772
(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) executive offices)
(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)
None None
(Former name, former address (Former name, former address
and former fiscal year, if and former fiscal year, if
changed since last report) changed since last report)
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. Yes |X| No |_|
Indicate by check mark whether the registrants are large accelerated
filers, accelerated filers, or non-accelerated filers. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange
Act.
Large Accelerated filers |X| Accelerated filers |_| Non-Accelerated filers |_|
Indicate by check mark whether the registrants are shell companies (as
defined in Rule 12b-2 of the Exchange Act). Yes |_| No |X|
At March 26, 2007 Carnival At March 26, 2007, Carnival plc had
Corporation had outstanding outstanding 213,130,388 Ordinary Shares
623,355,393 shares of Common $1.66 par value, one Special Voting
Stock, $.01 par value. Share, GBP 1.00 par value and 623,355,393
Trust Shares of beneficial interest in
the P&O Princess Special Voting Trust.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in millions, except per share data)
Three Months
Ended February 28,
-----------------
2007 2006
---- ----
Revenues
Cruise
Passenger tickets $ 2,050 $ 1,910
Onboard and other 626 539
Other 12 14
------- -------
2,688 2,463
------- -------
Costs and Expenses
Operating
Cruise
Commissions, transportation and other 471 408
Onboard and other 111 97
Payroll and related 311 272
Fuel 220 214
Food 175 152
Other ship operating 386 357
Other 17 16
------- -------
Total 1,691 1,516
Selling and administrative 384 366
Depreciation and amortization 260 232
------- -------
2,335 2,114
------- -------
Operating Income 353 349
------- -------
Nonoperating (Expense) Income
Interest income 10 7
Interest expense, net of capitalized interest (84) (76)
Other expense, net (15)
------- -------
(74) (84)
------- -------
Income Before Income Taxes 279 265
Income Tax Benefit (Expense), Net 4 (14)
------- -------
Net Income $ 283 $ 251
======= =======
Earnings Per Share
Basic $ 0.36 $ 0.31
======= =======
Diluted $ 0.35 $ 0.31
======= =======
Dividends Per Share $ 0.275 $ 0.25
======= =======
The accompanying notes are an integral part of these consolidated
financial statements.
2
CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except par values)
February 28, November 30,
ASSETS 2007 2006
---- ----
Current Assets
Cash and cash equivalents $ 581 $ 1,163
Short-term investments 104 21
Trade and other receivables, net 287 280
Inventories 265 263
Prepaid expenses and other 272 268
--------- ---------
Total current assets 1,509 1,995
--------- ---------
Property and Equipment, Net 23,837 23,458
Goodwill 3,315 3,313
Trademarks 1,322 1,321
Other Assets 478 465
--------- ---------
$ 30,461 $ 30,552
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 271 $ 438
Current portion of long-term debt 1,197 1,054
Accounts payable 408 438
Accrued liabilities and other 1,063 1,149
Customer deposits 2,417 2,336
--------- ---------
Total current liabilities 5,356 5,415
--------- ---------
Long-Term Debt 6,172 6,355
Other Long-Term Liabilities and Deferred Income 595 572
Contingencies (Note 3)
Shareholders' Equity
Common stock of Carnival Corporation; $.01 par
value; 1,960 shares authorized; 642 shares at 2007
and 641 shares at 2006 issued 6 6
Ordinary shares of Carnival plc; $1.66 par value;
226 shares authorized; 213 shares at 2007 and
2006 issued 354 354
Additional paid-in capital 7,527 7,479
Retained earnings 11,665 11,600
Accumulated other comprehensive income 673 661
Treasury stock; 18 shares at 2007 and 2006
of Carnival Corporation and 42 shares at 2007 and
2006 of Carnival plc, at cost (1,887) (1,890)
--------- ---------
Total shareholders' equity 18,338 18,210
--------- ---------
$ 30,461 $ 30,552
========= =========
The accompanying notes are an integral part of these consolidated
financial statements.
3
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in millions)
Three Months Ended February 28,
2007 2006
------- -------
(Note 1)
OPERATING ACTIVITIES
Net income $ 283 $ 251
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization 260 232
Share-based compensation 19 20
Non-cruise investment write-down 10
Accretion of original issue discount 2 3
Other (1) 3
Changes in operating assets and liabilities
Receivables (7) 1
Inventories (2) (16)
Prepaid expenses and other (19) 24
Accounts payable (30) (44)
Accrued and other liabilities 13 (43)
Customer deposits 79 172
------- -------
Net cash provided by operating activities 597 613
------- -------
INVESTING ACTIVITIES
Additions to property and equipment (637) (757)
Purchases of short-term investments (241) (2)
Sales of short-term investments 158
Settlement of net investment hedges (71) (1)
Other, net 1 (6)
------- -------
Net cash used in investing activities (790) (766)
------- -------
FINANCING ACTIVITIES
Principal repayments of long-term debt (395) (570)
Proceeds from issuance of long-term debt 360
Dividends paid (217) (202)
(Repayments of) proceeds from short-term borrowings, net (167) 108
Proceeds from exercise of stock options 29 31
Other (1) (1)
------- -------
Net cash used in financing activities (391) (634)
------- -------
Effect of exchange rate changes on cash and cash
equivalents 2 4
------- -------
Net decrease in cash and cash equivalents (582) (783)
Cash and cash equivalents at beginning of period 1,163 1,178
------- -------
Cash and cash equivalents at end of period $ 581 $ 395
======= =======
The accompanying notes are an integral part of these consolidated
financial statements.
4
CARNIVAL CORPORATION & PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - Basis of Presentation
Carnival Corporation is incorporated in Panama, and Carnival plc is
incorporated in England and Wales. 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 articles of incorporation and by-laws and
Carnival plc's memorandum of association and articles of association. Although
the two companies have retained their separate legal identities they operate as
if they were a single economic enterprise.
The accompanying consolidated financial statements include the accounts of
Carnival Corporation and Carnival plc and their respective subsidiaries.
Together with their consolidated subsidiaries they are referred to collectively
in these consolidated financial statements and elsewhere in this joint Quarterly
Report on Form 10-Q as "Carnival Corporation & plc," "our," "us," and "we."
The accompanying consolidated balance sheet at February 28, 2007 and the
consolidated statements of operations and cash flows for the three months ended
February 28, 2007 and 2006 are unaudited and, in the opinion of our management,
contain all adjustments, consisting of only normal recurring adjustments,
necessary for a fair presentation. Our interim consolidated financial statements
should be read in conjunction with the audited consolidated financial statements
and the related notes included in the Carnival Corporation & plc 2006 joint
Annual Report on Form 10-K. Our operations are seasonal and results for interim
periods are not necessarily indicative of the results for the entire year.
We have reclassified certain operating activity amounts in the 2006
Consolidated Statement of Cash Flow to conform them to the current period
presentation primarily as a result of our adopting a new chart of accounts in
conjunction with our implementation of a new worldwide accounting system and the
change in our method of accounting for dry-dock costs from the deferral method
to the direct expense method in the 2006 second quarter. During this
implementation, we identified certain classification differences among our
operating subsidiaries and, accordingly, we have recorded the appropriate
reclassifications in the prior period to improve comparability.
NOTE 2 - Debt
At February 28, 2007, unsecured short-term borrowings consisted of U.S.
and euro- denominated bank loans of $244 million and $27 million, respectively,
with an aggregate weighted-average interest rate of 5.3%.
In February 2007, we repaid (pound)165 million ($323 million U.S. dollars
at the February 2007 average exchange rate) of variable rate debt prior to its
March 2010 maturity date. In addition, in February 2007 we borrowed $360 million
under an unsecured term loan facility, which proceeds were used to pay a portion
of the Carnival Freedom purchase price. This facility bears interest at 4.75%
and is repayable in semi-annual installments through February 2019.
NOTE 3 - Contingencies
Litigation
On September 21, 2006, a class action complaint was filed on behalf of a
purported class of past passengers against Holland America Line ("HAL") in the
U.S. The complaint alleges that HAL (a) failed to disclose that shore excursion
vendors paid HAL to promote their services as required by an Alaska statute, and
(b) collected and retained payment from passengers for Passenger Vessel Service
Act ("PSVA") violations in certain instances when HAL 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
5
PSVA fine collected and additional damages for each PSVA fine collected where no
fine was imposed, (iv) injunctive relief and (v) attorneys' fees, costs and
interest. The ultimate outcome of this action cannot be determined at this time.
However, we believe that we have meritorious defenses to these claims and intend
to vigorously defend this matter.
In January 2006, a lawsuit was filed against Carnival Corporation and its
subsidiaries and affiliates, and other non-affiliated cruise lines in New York
on behalf of 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. In the event that an award is given in
favor of the plaintiffs, the amount of damages, if any, which Carnival
Corporation and its subsidiaries and affiliates would have to pay is not
currently determinable. The ultimate outcome of this matter cannot be determined
at this time. However, we intend to vigorously defend this matter.
In the normal course of our business, various other claims and lawsuits
have been filed or are pending against us. Most of these claims and lawsuits are
covered by insurance and, accordingly, the maximum amount of our liability, net
of any insurance recoverables, is typically limited to our self-insurance
retention levels. However, the ultimate outcome of these claims and lawsuits
which are not covered by insurance cannot be determined at this time.
Contingent Obligations
At February 28, 2007, Carnival Corporation had contingent obligations
totaling approximately $1.05 billion to participants in lease out and lease back
type transactions for three of its ships. At the inception of the leases, the
entire amount of the contingent obligations was paid by Carnival Corporation to
major financial institutions to enable them to directly pay these obligations.
Accordingly, these obligations were considered extinguished, and neither the
funds nor the contingent obligations have been included on our balance sheets.
Carnival Corporation would only be required to make any payments under these
contingent obligations in the remote event of nonperformance by these financial
institutions, all of which have long-term credit ratings of AA or higher. In
addition, Carnival Corporation obtained a direct guarantee from AA or higher
rated financial institutions for $269 million of the above noted contingent
obligations, thereby further reducing the already remote exposure to this
portion of the contingent obligations. In certain cases, if the credit ratings
of the major financial institutions who are directly paying the contingent
obligations fall below AA-, then Carnival Corporation will be required to move
those funds being held by those institutions to other financial institutions
whose credit ratings are AA- or above. If Carnival Corporation's credit rating,
which is A-, falls below BBB, it would be required to provide a standby letter
of credit for $74 million, or alternatively provide mortgages in the aggregate
amount of $74 million on two of its ships.
In the unlikely event that Carnival Corporation were to terminate the
three lease agreements early or default on its obligations, it would, as of
February 28, 2007, have to pay a total of $179 million in stipulated damages. As
of February 28, 2007, $183 million of standby letters of credit have been issued
by a major financial institution in order to provide further security for the
payment of these contingent stipulated damages. In addition, in 2004 a $170
million back-up letter of credit was issued in support of these standby letters
of credit. Between 2017 and 2022, we have the right to exercise options that
would terminate these three lease transactions at no cost to us.
Some of the debt agreements that we enter into include indemnification
provisions that obligate us to make payments to the counterparty if certain
events occur. These contingencies generally relate to changes in taxes, changes
in laws that increase lender capital costs and other similar costs. The
indemnification clauses are often standard contractual terms and were entered
into in the normal course of business. There are no stated or notional amounts
included in the indemnification clauses and we are not able to estimate the
maximum potential amount of future payments, if any, under these indemnification
clauses. We have not been required to make any material payments under such
indemnification clauses in the past and, under current circumstances, we do not
believe a request for material future indemnification payments is probable.
6
NOTE 4 - Comprehensive Income
Comprehensive income was as follows (in millions):
Three Months
Ended February 28,
-----------------
2007 2006
---- ----
Net income $283 $251
Items included in accumulated other comprehensive income
Foreign currency translation adjustment 13 10
Changes related to cash flow derivative hedges (1) 4
---- ----
Total comprehensive income $295 $265
==== ====
NOTE 5 - Segment Information
Our cruise segment includes all of our cruise brands, which have been
aggregated as a single reportable segment based on the similarity of their
economic and other characteristics, including products and services they
provide. Substantially all of our other segment represents the hotel, tour and
transportation operations of Holland America Tours and Princess Tours.
Selected segment information for our cruise and other segments was as
follows (in millions):
Three Months Ended February 28,
--------------------------------------------------------------------
Selling Depreciation
Operating and admin- and Operating
Revenues expenses istrative amortization income (loss)
-------- --------- --------- ------------ -------------
2007
- ----
Cruise $ 2,676 $ 1,674 $ 376 $ 251 $ 375
Other 14 19 8 9 (22)
Intersegment elimination (2) (2)
-------- -------- ------ ------ ------
$ 2,688 $ 1,691 $ 384 $ 260 $ 353
======== ======== ====== ====== ======
2006
- ----
Cruise $ 2,449 $ 1,500 $ 355 $ 224 $ 370
Other 16 18 11 8 (21)
Intersegment elimination (2) (2)
-------- -------- ------ ------ ------
$ 2,463 $ 1,516 $ 366 $ 232 $ 349
======== ======== ====== ====== ======
NOTE 6 - Earnings Per Share
Our basic and diluted earnings per share were computed as follows (in
millions, except per share data):
Three Months
Ended February 28,
-----------------
2007 2006
---- ----
Net income $ 283 $ 251
Interest on dilutive convertible notes 8 6
------ ------
Net income for diluted earnings per share $ 291 $ 257
====== ======
Weighted-average common and ordinary shares outstanding 793 809
Dilutive effect of convertible notes 33 26
Dilutive effect of stock plans 3 3
----- -----
Diluted weighted-average shares outstanding 829 838
===== =====
Basic earnings per share $ 0.36 $ 0.31
====== ======
Diluted earnings per share $ 0.35 $ 0.31
====== ======
7
Options to purchase 3.6 million and 2.2 million shares for the three
months ended February 28, 2007 and 2006, respectively, were excluded from our
diluted earnings per share computation since the effect of including them was
anti-dilutive. In addition, for the three months ended February 28, 2006 our
zero-coupon convertible notes were excluded from our calculation of diluted
earnings per share since the effect of including them was anti-dilutive.
NOTE 7 - Stock Incentive Awards
In the 2007 first quarter, we granted 135,000 restricted stock awards and
369,579 restricted stock units at weighted-average grant date fair values of
$52.20 and $49.69, respectively. In addition, in February 2007 we granted
207,745 stock options at a weighted-average fair value of $12.10. These stock
incentive awards were granted pursuant to our stock incentive plans and vest at
the end of three or five years or evenly over a five year period.
NOTE 8 - Recent Accounting Pronouncement
In June 2006, the Financial Accounting Standards Board ("FASB") issued
FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN
48"). FIN 48 clarifies, among other things, the accounting for uncertain income
tax positions by prescribing a minimum probability threshold that a tax position
must meet before a financial statement income tax benefit is recognized. The
minimum threshold is defined as a tax position, that based solely on its
technical merits is more likely than not to be sustained upon examination by the
relevant taxing authority. The tax benefit to be recognized is measured as the
largest amount of benefit that is greater than fifty percent likely of being
realized upon ultimate settlement. FIN 48 must be applied to all existing tax
positions upon adoption. The cumulative effect of applying FIN 48 at adoption is
required to be reported separately as an adjustment to the opening balance of
retained earnings in the year of adoption. FIN 48 is required to be implemented
at the beginning of a fiscal year and is effective for Carnival Corporation &
plc for fiscal 2008. We have not yet determined the impact of adopting FIN 48 on
our financial statements.
8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Cautionary Note Concerning Factors That May Affect Future Results
Some of the statements contained in this "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and elsewhere in this
joint Quarterly Report on Form 10-Q are "forward-looking statements" that
involve risks, uncertainties and assumptions with respect to us, including some
statements concerning future results, outlook, 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," "believe," "expect," "anticipate," "forecast," "future," "intend,"
"plan," and "estimate" and similar expressions.
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 joint
Quarterly Report on Form 10-Q. Forward-looking statements include those
statements which may impact the forecasting of our earnings per share, net
revenue yields, booking levels, pricing, occupancy, operating, financing and/or
tax costs, fuel costs, costs per available lower berth day ("ALBD"), estimates
of ship depreciable lives and residual values, outlook or business prospects.
These factors include, but are not limited to, the following:
- general economic and business conditions, which may adversely impact
the levels of our potential vacationers' discretionary income and
this group's confidence in the U.S. economy, and thereby reduce the
net revenue yields for our cruise brands;
- the international political and economic climate, armed conflicts,
terrorist attacks and threats thereof, availability of air service
and other world events, and their impact on the demand for cruises;
- accidents, unusual weather conditions or natural disasters, such as
hurricanes and earthquakes and other incidents (including machinery
and equipment failures or improper operation thereof) which could
cause the alteration of itineraries or cancellation of a cruise or
series of cruises, and the impact of the spread of contagious
diseases, affecting the health, safety, security and vacation
satisfaction of passengers;
- adverse publicity concerning the cruise industry in general, or us
in particular, could impact the demand for our cruises;
- conditions in the cruise and land-based vacation industries,
including competition from other cruise ship operators and providers
of other vacation alternatives and increases in capacity offered by
cruise ship and land-based vacation alternatives;
- changing consumer preferences, which may, among other things,
adversely impact the demand for cruises;
- changes in and compliance with the environmental, health, safety,
security, tax and other regulatory regimes under which we operate,
including the implementation of U.S. regulations requiring U.S.
citizens to obtain passports for sea travel to or from additional
foreign destinations;
- the impact of changes in operating and financing costs, including
changes in foreign currency exchange rates and interest rates and
fuel, food, insurance, payroll and security costs;
- our ability to implement our shipbuilding programs and brand
strategies and to continue to expand our business worldwide;
- 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;
- lack of acceptance of new itineraries, products and services by our
guests;
- our ability to attract and retain qualified shipboard crew and
maintain good relations with employee unions;
- continuing financial viability of our travel agent distribution
system and air service providers;
- our decisions to self-insure against various risks or inability to
obtain insurance for certain risks;
- disruptions to our software and other information technology
systems;
- continued availability of attractive port destinations;
9
- risks associated with the DLC structure, including the uncertainty
of its tax status;
- risks associated with operating internationally;
- the impact of pending or threatened litigation; and
- our ability to successfully implement cost reduction plans.
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 listing rules, we expressly disclaim any obligation to disseminate,
after the date of this joint Quarterly Report on Form 10-Q, 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.
Key Performance Indicators and Critical Accounting Estimates
We use net cruise revenues per ALBD ("net revenue yields") and net cruise
costs per ALBD as significant non-GAAP financial measures of our cruise segment
financial performance. We believe that net revenue yields are commonly used in
the cruise industry to measure a company's cruise segment revenue performance.
This measure is also used for revenue management purposes. In calculating net
revenue yields, we use "net cruise revenues" rather than "gross cruise
revenues." We believe that net cruise revenues is a more meaningful measure in
determining revenue yield than gross cruise revenues because it reflects the
cruise revenues earned by us net of our most significant variable costs, which
are travel agent commissions, cost of air transportation and certain other
variable direct costs associated with onboard and other revenues. Substantially
all of our remaining cruise costs are largely fixed once our ship capacity
levels have been determined, except for the impact of changing prices.
Net cruise costs per ALBD is the most significant measure we use to
monitor our ability to control our cruise segment costs rather than gross cruise
costs per ALBD. In calculating net cruise costs, we exclude the same variable
costs that are included in the calculation of net cruise revenues. This is done
to avoid duplicating these variable costs in these two non-GAAP financial
measures.
In addition, because a significant portion of our operations utilize the
euro or sterling to measure their results and financial condition, the
translation of those operations to our U.S. dollar reporting currency results in
increases in reported U.S. dollar revenues and expenses if the U.S. dollar
weakens against these foreign currencies, and decreases in reported U.S. dollar
revenues and expenses if the U.S. dollar strengthens against these foreign
currencies. Accordingly, we also monitor our two non-GAAP financial measures
assuming the current period currency exchange rates have remained constant with
the prior year's comparable period rates, or on a "constant dollar basis," in
order to remove the impact of changes in exchange rates on our non-U.S. cruise
operations. We believe that this is a useful measure indicating the actual
growth of our operations in a fluctuating currency exchange rate environment.
On a constant dollar basis, net cruise revenues and net cruise costs would
be $2.04 billion and $1.43 billion for the three months ended February 28, 2007,
respectively. On a constant dollar basis, gross cruise revenues and gross cruise
costs would be $2.60 billion and $1.99 billion for the three months ended
February 28, 2007, respectively. In addition, our non-U.S. cruise operations'
depreciation and net interest expense were impacted by the changes in exchange
rates for the three months ended February 28, 2007, compared to the prior year's
comparable quarter.
For a discussion of our critical accounting estimates, see "Management's
Discussion and Analysis of Financial Condition and Results of Operations," which
is included in Carnival Corporation & plc's 2006 joint Annual Report on Form
10-K.
Outlook for Remainder of Fiscal 2007
As of March 16, 2007 we said that we expected our diluted earnings per
share for the second quarter and full year of 2007 would be in the range of
$0.45 to $0.47 and $2.90 to $3.10, respectively. Our guidance was based on the
then current forward fuel price curve of
10
$318 per metric ton for the last nine months of fiscal 2007. In addition, this
guidance was also based on currency exchange rates of $1.32 to the euro and
$1.94 to sterling.
We are not updating our March 16, 2007 guidance as we have not received
new internal forecasts from our business units. However, since our last
guidance, the forward fuel price curve has moved up to $339 per metric ton (as
of March 28, 2007) for the last nine months of fiscal 2007. Based on this
forward fuel price and current currency exchange rates of $1.33 to the euro and
$1.96 to sterling, our earnings per share for the second quarter and full year
of 2007 would decrease by $0.01 and $0.05, respectively.
Excluding any future ship orders, acquisitions or retirements, the
year-over-year percentage increase in our ALBD capacity for the second, third
and fourth quarters of 2007, resulting substantially all from new ships entering
service, is currently expected to be 9.4%, 9.6% and 5.9%, respectively.
Seasonality
Our revenues from the sale of passenger tickets are seasonal.
Historically, demand for cruises has been greatest during our third quarter,
which includes the Northern Hemisphere summer months. This higher demand during
the third quarter results in higher net revenue yields and, accordingly, the
largest share of our net income is earned during this period. The seasonality of
our results is increased due to ships being taken out of service for
maintenance, which we typically schedule during non-peak demand periods.
Substantially all of Holland America Tours' and Princess Tours' revenues and net
income are generated from May through September in conjunction with the Alaska
cruise season.
11
Selected Information and Non-GAAP Financial Measures
Selected information was as follows:
Three Months Ended February 28,
------------------------------
2007 2006
------ ------
Passengers carried (in thousands) 1,750 1,523(a)
====== ======
Occupancy percentage 104.1% 104.2%(b)
====== ======
Fuel cost per metric ton(c) $ 301 $ 319
====== ======
(a) Passengers carried in 2006 does not include any passengers for the three
ships chartered to the Military Sealift Command in connection with the
Hurricane Katrina relief efforts.
(b) Occupancy percentage in 2006 includes the three ships chartered to the MSC
at 100% occupancy.
(c) Fuel cost per metric ton is calculated by dividing the cost of our fuel by
the number of metric tons consumed.
Gross and net revenue yields were computed by dividing the gross or net
revenues, without rounding, by ALBDs as follows:
Three Months Ended February 28,
------------------------------
2007 2006
------------ ------------
(in millions, except ALBDs and yields)
Cruise revenues
Passenger tickets $ 2,050 $ 1,910
Onboard and other 626 539
------------ ------------
Gross cruise revenues 2,676 2,449
Less cruise costs
Commissions, transportation and other (471) (408)
Onboard and other (111) (97)
------------ ------------
Net cruise revenues $ 2,094 $ 1,944
============ ============
ALBDs(a) 12,818,818 11,936,438
============ ============
Gross revenue yields $ 208.72 $ 205.15
============ ============
Net revenue yields $ 163.32 $ 162.81
============ ============
Gross and net cruise costs per ALBD were computed by dividing the gross or
net cruise costs, without rounding, by ALBDs as follows:
Three Months Ended February 28,
------------------------------
2007 2006
------------ ------------
(in millions, except ALBDs and costs per ALBD)
Cruise operating expenses $ 1,674 $ 1,500
Cruise selling and administrative expenses 376 355
------------ ------------
Gross cruise costs 2,050 1,855
Less cruise costs included in net cruise revenues
Commissions, transportation and other (471) (408)
Onboard and other (111) (97)
------------ ------------
Net cruise costs $ 1,468 $ 1,350
============ ============
ALBDs(a) 12,818,818 11,936,438
============ ============
Gross cruise costs per ALBD $ 159.91 $ 155.42
============ ============
Net cruise costs per ALBD $ 114.50 $ 113.08
============ ============
(a) ALBDs is a standard measure of passenger capacity for the period. It
assumes that each cabin we offer for sale accommodates two passengers.
ALBDs are computed by multiplying passenger capacity by revenue-producing
ship operating days in the period.
12
Three Months Ended February 28, 2007 ("2007") Compared to the Three Months Ended
February 28, 2006 ("2006")
Revenues
Net cruise revenues increased $150 million, or 7.7%, to $2.09 billion in
2007 from $1.94 billion in 2006. The 7.4% increase in ALBDs between 2007 and
2006 accounted for $144 million of the increase, and the remaining $6 million
was from increased net revenue yields, which increased 0.3% in 2007 compared to
2006 (gross revenue yields increased by 1.7%). Net revenue yields increased in
2007 primarily due to the weaker U.S. dollar relative to the euro and sterling
and higher onboard spending. Net revenue yields as measured on a constant dollar
basis decreased 2.1% in 2007 compared to 2006. Gross cruise revenues increased
$227 million, or 9.3%, in 2007 to $2.68 billion from $2.45 billion in 2006 for
largely the same reasons as net cruise revenues, as well as the increase in
passenger air ticket prices primarily as a result of increases in air travel
costs and changes in cruise itineraries, which required passengers to purchase
longer flights, as well as more passengers purchasing air transportation from
us.
Our 2007 cruise ticket prices for most of our North American brands'
Caribbean itineraries were less than 2006, particularly for the shorter duration
cruises, which was partially offset by price increases we achieved from our
European brands' cruises. We believe that this reduction in North
American-sourced Caribbean pricing was the result of weaker consumer demand
caused primarily from the adverse impacts of higher fuel and other costs and
lower real estate values on our mid-market customers' discretionary income. In
addition, we believe the lingering effects of the 2005 hurricane season also
adversely impacted our Caribbean cruise demand.
Onboard and other revenues included concession revenues of $166 million in
2007 and $130 million in 2006. Onboard and other revenues increased $87 million
in 2007 compared to 2006, primarily because we chartered three ships to the
Military Sealift Command in 2006, which did not generate onboard revenue in 2006
as the entire charter price was recorded in passenger ticket revenue. In
addition, onboard revenues increased due to an increase in our onboard passenger
spending, as well as the weaker U.S. dollar compared to the euro and to
sterling.
Costs and Expenses
Net cruise costs increased $118 million, or 8.7%, to $1.47 billion in 2007
from $1.35 billion in 2006. The 7.4% increase in ALBDs between 2007 and 2006
accounted for $100 million of the increase. The balance of $18 million was from
increased net cruise costs per ALBD, which increased 1.3% in 2007 compared to
2006 (gross cruise costs per ALBD increased 2.9%). Net cruise costs per ALBD
increased primarily due to a weaker U.S. dollar relative to the euro and to
sterling in 2007 and increased ship damage costs for incidents including the
Carnival Cruise Line's Fantasy, Holland America Line's Oosterdam and Princess
Cruises' Regal Princess. This increase was partially offset by lower dry-dock
costs and a $18 per metric ton decrease in fuel cost, or 5.6%, to $301 per
metric ton in 2007, which resulted in a reduction in expenses of $14 million.
Net cruise costs per ALBD as measured on a constant dollar basis decreased 1.3%
in 2007 compared to 2006. Gross cruise costs increased $195 million, or 10.5%,
in 2007 to $2.05 billion from $1.86 billion in 2006 for largely the same reasons
as net cruise costs, as well as the increase in passenger air ticket prices
primarily as a result of increases in air travel costs and changes in cruise
itineraries, which required passengers to purchase longer flights, as well as
more passengers purchasing air transportation from us.
Depreciation and amortization expense increased by $28 million, or 12.1%,
to $260 million in 2007 from $232 million in 2006 largely due to the 7.4%
increase in ALBDs through the addition of new ships, and additional ship
improvement expenditures.
Nonoperating (Expense) Income
Net interest expense, excluding capitalized interest, increased $7 million
to $85 million in 2007 from $78 million in 2006. This increase was primarily due
to a $5 million increase in interest expense from a higher level of average
borrowings and $2 million from higher average
13
interest rates on borrowings. Capitalized interest increased $3 million during
2007 compared to 2006 primarily due to higher average levels of investment in
ship construction projects.
Other expenses in 2006 included a $10 million expense for the write-down
of a non-cruise investment and a $5 million provision for a litigation reserve.
Income Taxes
Income tax expense decreased by $18 million to a benefit of $4 million in
2007 from an expense of $14 million in 2006 primarily because 2006 included
income tax expenses for the Military Sealift Command charters, which ended in
early March 2006. During both the first quarter of 2007 and 2006, we have
recorded tax benefits generated by the seasonal losses of our Alaska tour
operation.
Liquidity and Capital Resources
Sources and Uses of Cash
Our business provided $597 million of net cash from operations during the
three months ended February 28, 2007, a decrease of $16 million, or 2.6%,
compared to fiscal 2006. We continue to generate substantial cash from
operations and remain in a strong financial position, thus providing us with
substantial financial flexibility in meeting operating, investing and financing
needs.
During the three months ended February 28, 2007, our net expenditures for
capital projects were $637 million, of which $528 million was spent for our
ongoing new shipbuilding program, including $406 million for the final delivery
payment for the Carnival Freedom. In addition to our new shipbuilding program,
we had capital expenditures of $65 million for ship improvements and
refurbishments and $44 million for Alaska tour assets, cruise port facility
developments and information technology assets.
During the three months ended February 28, 2007, we borrowed $360 million
to pay part of the Carnival Freedom purchase price, and we repaid $395 million
of long-term debt, which included $323 million for the early repayment of
(pound)165 million of debt. We also repaid $167 million of our commercial paper
program and short-term bank loans during the three months ended February 28,
2007. Finally, during the first quarter of fiscal 2007 we paid cash dividends of
$217 million.
Future Commitments and Funding Sources
Our contractual cash obligations remained generally unchanged at February
28, 2007 compared to November 30, 2006, including ship construction contracts
entered into through January 2007, except for changes in our debt and the
Carnival Freedom delivery payment as noted above.
At February 28, 2007, we had liquidity of $4.91 billion, which consisted
of $685 million of cash, cash equivalents and short-term investments, $2.04
billion available for borrowing under our revolving credit facility and $2.19
billion under committed ship financing facilities. Our revolving credit facility
matures in 2011. A key to our access to liquidity is the maintenance of our
strong credit ratings.
Based primarily on our historical results, current financial condition and
future forecasts, we believe that our existing liquidity and cash flow from
future operations will be sufficient to fund most of our expected capital
projects, debt service requirements, dividend payments, working capital and
other firm commitments. In addition, based on our future forecasted operating
results and cash flows for fiscal 2007, we expect to be in compliance with our
debt covenants during the remainder of fiscal 2007. However, our forecasted cash
flow from future operations, as well as our credit ratings, may be adversely
affected by various factors including, but not limited to, those factors noted
under "Cautionary Note Concerning Factors That May Affect Future Results." To
the extent that we are required, or choose, to fund future cash requirements,
including our future shipbuilding commitments, from
14
sources other than as discussed above, we believe that we will be able to secure
such financing from banks or through the offering of debt and/or equity
securities in the public or private markets. However, we cannot be certain that
our future operating cash flow will be sufficient to fund future obligations or
that we will be able to obtain additional financing, if necessary.
Off-Balance Sheet Arrangements
We are not a party to any off-balance sheet arrangements, including
guarantee contracts, retained or contingent interests, certain derivative
instruments and variable interest entities, which either have, or are reasonably
likely to have, a current or future material effect on our financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
In December 2006, we settled, prior to its scheduled November 2007
maturity, a foreign currency swap that was designated as a hedge of our net
investment in our subsidiaries whose functional currency are euros. This foreign
currency swap effectively converted $400 million of variable rate U.S.
dollar-denominated debt into (euro)349 million of variable rate debt. At
February 28, 2007, 66%, 24% and 10% (56%, 30% and 14% at November 30, 2006) of
our long-term debt was U.S. dollar, euro and sterling-denominated, respectively,
including the effect of foreign currency swaps.
Item 4. Controls and Procedures.
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 Act 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
and Accounting Officer have evaluated our disclosure controls and procedures and
have concluded, as of February 28, 2007, that they were effective as described
above.
Changes in Internal Control over Financial Reporting
During the three months ended February 28, 2007, we continued with 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 February 28, 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.
It should be noted 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 any 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.
15
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
As previously reported in the Carnival Corporation & plc 2006 joint Annual
Report on Form 10-K, a hearing was scheduled for February 2007 in the Florida
Court to consider final approval of a Princess Cruise Lines Wage Action
settlement. The settlement was approved at this February 2007 hearing.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
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. The repurchase program does
not have an expiration date and may be discontinued by our Boards of Directors
at any time. The Carnival plc share repurchase authorization requires annual
shareholder approval. During the 2007 first quarter, there were no repurchases
of Carnival Corporation common stock or Carnival plc ordinary shares. At March
29, 2007 the remaining availability pursuant to our 2006 share repurchase
program was $773 million.
During the three months ended February 28, 2007, $3 million of our 2%
convertible notes were converted at their accreted value into 0.1 million shares
of Carnival Corporation common stock, all of which were issued from treasury
stock. The issuance was exempt from registration under Section 3(a)(9) of the
Securities Act of 1933, as amended.
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.
Item 6. Exhibits.
3.1 Third Amended and Restated Articles of Incorporation of Carnival
Corporation, incorporated by reference to Exhibit No. 3.1 to the
joint Current Report on Form 8-K of Carnival Corporation and Carnival
plc filed on April 17, 2003.
3.2 Amended and Restated By-laws of Carnival Corporation, incorporated by
reference to Exhibit No. 3.2 to the joint Current Report on Form 8-K
of Carnival Corporation and Carnival plc filed on April 17, 2003.
3.3 Articles of Association of Carnival plc, incorporated by reference to
Exhibit No. 3.3 to the joint Current Report on Form 8-K of Carnival
Corporation and Carnival plc filed on April 17, 2003.
3.4 Memorandum of Association of Carnival plc, incorporated by reference
to Exhibit No. 3.4 to the joint Current Report on Form 8-K of
Carnival Corporation and Carnival plc filed on April 17, 2003.
10.1 Amendment to the Carnival Corporation Nonqualified Retirement Plan
for Highly Compensated Employees.
10.2 Amendment to the Carnival Corporation "Fun Ship" Nonqualified Savings
Plan.
10.3 Amendment to the Carnival Corporation Supplemental Executive
Retirement Plan.
10.4 Amended and Restated Carnival Cruise Lines Management Incentive Plan.
10.5 Amendment to the P&O Princess Cruises Executive Share Option Plan.
10.6 Amendment to the P&O Princess Cruises Deferred Bonus and
Co-Investment Matching Plan.
16
10.7 Amendment to the Carnival plc 2005 Employee Share Plan.
10.8 Form of Restricted Stock Agreement for the Amended and Restated
Carnival Corporation 2002 Stock Plan.
12 Ratio of Earnings to Fixed Charges.
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.
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.
31.3 Certification of Executive Vice President and Chief Financial and
Accounting Officer of Carnival Corporation pursuant to Rule
13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
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.
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.
31.6 Certification of Executive Vice President and Chief Financial and
Accounting Officer of Carnival plc pursuant to Rule 13a-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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.
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 2002.
32.3 Certification of Executive Vice President and Chief Financial and
Accounting 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.
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.
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.
32.6 Certification of Executive Vice President and Chief Financial and
Accounting 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.
17
SIGNATURES
Pursuant to the requirements 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
By:/s/ Micky Arison By:/s/ Micky Arison
---------------- ----------------
Micky Arison Micky Arison
Chairman of the Board of Directors Chairman of the Board of Directors
and Chief Executive Officer and Chief Executive Officer
By:/s/ Howard S. Frank By:/s/ Howard S. Frank
-------------------- -------------------
Howard S. Frank Howard S. Frank
Vice Chairman of the Board of Vice Chairman of the Board of
Directors and Chief Operating Officer Directors and Chief Operating Officer
By:/s/ Gerald R. Cahill By:/s/ Gerald R. Cahill
-------------------- --------------------
Gerald R. Cahill Gerald R. Cahill
Executive Vice President Executive Vice President
and Chief Financial and and Chief Financial and
Accounting Officer Accounting Officer
Date: March 30, 2007 Date: March 30, 2007
18
EXHIBIT 10.1
AMENDMENT TO
THE CARNIVAL CORPORATION
NONQUALIFIED RETIREMENT PLAN
FOR HIGHLY COMPENSATED EMPLOYEES
- --------------------------------------------------------------------------------
Carnival Corporation Nonqualified Retirement Plan For Highly Compensated
Employees (the "Plan") is hereby amended, effective January 1, 2006, as follows
(deletions in square brackets, additions in all capital letters):
1. The Foreword is amended to read as follows:
Carnival Corporation (the "Company"), a corporation with its principal
office in Miami, Florida, established, effective January 1, 1989, an unfunded,
nonqualified plan for a select group of management or highly compensated
employees. The Plan was amended and restated, effective January 1, 1995, to
incorporate certain changes that the Company determined to be necessary. The
Plan was amended, effective December 31, 1997, to provide that benefit accruals
under the Plan will cease for those Participants who made a one-time irrevocable
election to participate in The Fun Ship Nonqualified Savings Plan. The Plan was
amended, effective January 1, 2000, such that a Participant who is rehired after
his annuity starting date shall not have his benefit payments suspended. The
Plan was amended, effective December 1, 2000 to provide that the beneficiary of
an unmarried Participant will receive a death benefit; and to allow the Company
to permit participation in the plan by new employees. The Plan was also amended,
effective January 1, 2002, to clarify the lump sum cashout provisions.
THE PLAN WAS AMENDED TO COMPLY WITH SECTION 409A OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED AND ANY REGULATIONS AND OTHER OFFICIAL GUIDANCE (THE
"CODE") THEREUNDER. WITH RESPECT TO AMOUNTS ACCRUED HEREUNDER THAT ARE SUBJECT
TO SECTION 409A (GENERALLY, AMOUNTS ACCRUED ON AND AFTER JANUARY 1, 2005),
APPLICABLE PROVISIONS OF THE PLAN DOCUMENT SHALL BE INTERPRETED TO PERMIT THE
ACCRUAL OF BENEFITS IN ACCORDANCE WITH CODE SECTION 409A, AND ANY PROVISION THAT
WOULD CONFLICT WITH SUCH REQUIREMENTS SHALL NOT BE VALID OR ENFORCEABLE. IN
ADDITION, WITH RESPECT TO AMOUNTS ACCRUED HEREUNDER THAT ARE NOT SUBJECT TO
SECTION 409A (GENERALLY, AMOUNTS ACCRUED BEFORE JANUARY 1, 2005 AND EARNINGS
THEREON) ("GRANDFATHERED FUNDS"), IT IS INTENDED THAT THE RULES APPLICABLE UNDER
THE PLAN AS OF DECEMBER 31, 2004, AND NOT CODE SECTION 409A AND RELATED OFFICIAL
GUIDANCE, SHALL APPLY WITH RESPECT TO SUCH GRANDFATHERED FUNDS. FOR PURPOSES OF
DETERMINING WHETHER SECTION 409A IS APPLICABLE WITH RESPECT TO AN AMOUNT, IN
ACCORDANCE WITH PROP. TREAS. REG. ss. 1.409A-6(A) (AND SUBSEQUENT RELATED
GUIDANCE), THE AMOUNT IS CONSIDERED ACCRUED BEFORE JANUARY 1, 2005 IF BEFORE
JANUARY 1, 2005 (I) THE PARTICIPANT HAD A LEGALLY BINDING RIGHT TO BE PAID THE
AMOUNT, AND (II) THE RIGHT TO THE AMOUNT WAS EARNED AND VESTED.
The Plan was restated, effective as of January 1, [2002] 2006, to
incorporate the prior amendments as follows:
2. The following defined term is inserted as Section 1.3 to read as follows and
the subsequent Sections are re-numbered accordingly:
AFFILIATED COMPANY - MEANS (A) A MEMBER WITH AN EMPLOYER OF A CONTROLLED GROUP
OF CORPORATIONS, (B) AN UNINCORPORATED TRADE OR BUSINESS WHICH IS
UNDER COMMON CONTROL WITH AN EMPLOYER AS DETERMINED IN ACCORDANCE WITH SECTION
414(C) OF THE CODE, OR (C) A MEMBER WITH AN EMPLOYER OF AN AFFILIATED SERVICE
GROUP, AS DEFINED IN SECTION 414(M) OF THE CODE. A CORPORATION OR AN
UNINCORPORATED TRADE OR BUSINESS SHALL NOT BE CONSIDERED AN AFFILIATED COMPANY
DURING ANY PERIOD IT DOES NOT SATISFY CLAUSE (A), (B), OR (C) OF THIS
DEFINITION. FOR PURPOSES OF THIS DEFINITION, A "CONTROLLED GROUP OF
CORPORATIONS" IS A CONTROLLED GROUP OF CORPORATIONS AS DEFINED IN SECTION 414(B)
OF THE CODE.
3. The following defined term is inserted as Section 1.32 to read as follows and
subsequent Sections are re-numbered accordingly:
TERMINATION OF EMPLOYMENT - A PARTICIPANT'S TERMINATION OF EMPLOYMENT WITH HIS
EMPLOYER AND ANY AFFILIATED COMPANY, WHETHER VOLUNTARY OR INVOLUNTARY, FOR ANY
REASON, INCLUDING BUT NOT LIMITED TO QUIT, DISCHARGE, RETIREMENT, DEATH OR
PERMANENT DISABILITY, AND OTHER THAN FOR PARENTAL LEAVE, PERMITTED LEAVE,
TRANSFERS FROM SHORESIDE EMPLOYMENT (OR VICE-VERSA), OR TRANSFERS BETWEEN AN
EMPLOYER AND AN AFFILIATED COMPANY OR CARNIVAL PLC.
4. The following paragraph is added to the end of Section 6.1:
WITH RESPECT TO AMOUNTS ACCRUED THAT ARE SUBJECT TO SECTION 409A (GENERALLY,
AMOUNTS ACCRUED ON AND AFTER JANUARY 1, 2005) A REQUEST FOR A CHANGE IN THE FORM
AND TIMING OF A DISTRIBUTION ELECTION MUST OCCUR AT LEAST TWELVE (12)
CONSECUTIVE MONTHS PRIOR TO THE DATE ON WHICH SUCH DISTRIBUTION WILL BE MADE OR
COMMENCE AND THE PAYMENT WITH RESPECT TO AN AMENDED DISTRIBUTION ELECTION IS
DEFERRED FOR A PERIOD OF NOT LESS THAN 5 YEARS FROM THE DATE SUCH PAYMENT WOULD
OTHERWISE HAVE BEEN PAID (OR, IN THE CASE OF INSTALLMENT PAYMENTS, 5 YEARS FROM
THE DATE THE FIRST AMOUNT WAS SCHEDULED TO BE PAID).
5. Section 6.4 is amended to read as follows:
A Participant who (a) has a termination of employment before his Normal
Retirement Date and (b) has a Vested Interest, the Actuarial Equivalent present
value of which exceeds the amount in Section 6.2 as of the Participant's Annuity
Starting Date, may elect to have distribution of his Vested Interest commence
before his Normal Retirement Date. In that event, distribution shall commence as
of the first day of any month following the election, but distribution of
benefits may not commence before a Participant's Early Retirement Date.
WITH RESPECT TO AMOUNTS ACCRUED THAT ARE SUBJECT TO SECTION 409A (GENERALLY,
AMOUNTS ACCRUED ON AND AFTER JANUARY 1, 2005) A REQUEST FOR COMMENCEMENT OF HIS
VESTED INTEREST BEFORE HIS NORMAL RETIREMENT DATE MUST OCCUR AT LEAST TWELVE
(12) CONSECUTIVE MONTHS PRIOR TO THE DATE ON WHICH SUCH DISTRIBUTION WILL BE
MADE OR COMMENCE AND THE PAYMENT WITH RESPECT TO AN AMENDED DISTRIBUTION
ELECTION IS DEFERRED FOR A PERIOD OF NOT LESS THAN 5 YEARS FROM THE DATE SUCH
PAYMENT WOULD OTHERWISE HAVE BEEN PAID (OR, IN THE CASE OF INSTALLMENT PAYMENTS,
5 YEARS FROM THE DATE THE FIRST AMOUNT WAS SCHEDULED TO BE PAID).
6. A new Section 6.12 is added to the Plan to read as follows:
DISTRIBUTION DUE TO DE MINIMIS AMOUNTS. UPON THE PARTICIPANT'S TERMINATION OF
EMPLOYMENT FROM THE COMPANY (INCLUDING TERMINATION OF EMPLOYMENT FROM CARNIVAL
PLC) , IF SUCH PARTICIPANT'S VESTED ACCRUED BENEFIT IS $10,000 OR LESS, THE
PARTICIPANT SHALL BE PAID IN A LUMP SUM PAYMENT, AS SOON AS ADMINISTRATIVELY
PRACTICABLE FOLLOWING TERMINATION OF EMPLOYMENT BUT NOT LATER THAN THE 15TH DAY
OF THE THIRD MONTH FOLLOWING THE PARTICIPANT'S TERMINATION OF EMPLOYMENT OR
DECEMBER 31 OF THE CALENDAR YEAR IN WHICH THE PARTICIPANT INCURS A TERMINATION
OF EMPLOYMENT, WHICHEVER IS LATER.
7. Section 13.1 is amended to read as follows:
Amendment/Termination. The Board OR ITS DELEGATE may amend or terminate this
Plan at any time. However, to the extent the Plan is terminated for any reason
other than as provided in section 14.10 of the Plan, all Participants will be
100 percent vested in their benefit as of the date of Plan Termination.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IN NO EVENT SHALL ANY AMENDMENT
OR MODIFICATION BE MADE IN A MANNER THAT IS INCONSISTENT WITH THE REQUIREMENTS
UNDER SECTION 409A OF THE CODE, NOR SHALL ANY AMENDMENT, MODIFICATION OR OTHER
ACT OR EXERCISE BE EFFECTIVE WHICH INVOLVES AN UNINTENTIONAL MATERIAL
MODIFICATION (WITHIN THE MEANING OF CODE SECTION 409A AND RELATED OFFICIAL
GUIDANCE) WITH RESPECT TO CODE SECTION 409A GRANDFATHERED FUNDS (GENERALLY,
AMOUNTS DEFERRED BEFORE JANUARY 1, 2005).
EXHIBIT 10.2
AMENDMENT TO
THE CARNIVAL CORPORATION FUN SHIP NONQUALIFIED SAVINGS PLAN
- --------------------------------------------------------------------------------
The Carnival Corporation Fun Ship Nonqualified Savings Plan (the "Plan")
is hereby amended, effective January 1, 2006, unless stated otherwise, as
follows (deletions in square brackets, additions in all capital letters):
1. Article 1 of the Plan shall be amended by adding the following paragraphs
to the end thereof:
WITH RESPECT TO AMOUNTS DEFERRED HEREUNDER THAT ARE SUBJECT TO SECTION
409A OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED AND ANY REGULATIONS AND
OTHER OFFICIAL GUIDANCE (THE "CODE") (GENERALLY, AMOUNTS DEFERRED ON AND AFTER
JANUARY 1, 2005 AND AMOUNTS NOT VESTED AS OF DECEMBER 31, 2004), APPLICABLE
PROVISIONS OF THE PLAN DOCUMENT SHALL BE INTERPRETED TO PERMIT THE DEFERRAL OF
COMPENSATION IN ACCORDANCE WITH CODE SECTION 409A, AND ANY PROVISION THAT WOULD
CONFLICT WITH SUCH REQUIREMENTS SHALL NOT BE VALID OR ENFORCEABLE. IN ADDITION,
WITH RESPECT TO AMOUNTS DEFERRED HEREUNDER THAT ARE NOT SUBJECT TO SECTION 409A
(GENERALLY, AMOUNTS DEFERRED AND VESTED BEFORE JANUARY 1, 2005 AND EARNINGS
THEREON) ("GRANDFATHERED FUNDS"), IT IS INTENDED THAT THE RULES APPLICABLE UNDER
THE PLAN AS OF DECEMBER 31, 2004, AND NOT CODE SECTION 409A AND RELATED OFFICIAL
GUIDANCE, SHALL APPLY WITH RESPECT TO SUCH GRANDFATHERED FUNDS. FOR PURPOSES OF
DETERMINING WHETHER SECTION 409A IS APPLICABLE WITH RESPECT TO AN AMOUNT, IN
ACCORDANCE WITH PROP. TREAS. REG. ss. 1.409A-6(A) (AND SUBSEQUENT RELATED
GUIDANCE), THE AMOUNT IS CONSIDERED DEFERRED BEFORE JANUARY 1, 2005 IF BEFORE
JANUARY 1, 2005 (I) THE PARTICIPANT HAD A LEGALLY BINDING RIGHT TO BE PAID THE
AMOUNT, AND (II) THE RIGHT TO THE AMOUNT WAS EARNED AND VESTED AND WAS CREDITED
TO THE PARTICIPANT'S ACCOUNT BALANCE.
THIS RESTATEMENT OF THE CARNIVAL CORPORATION FUN SHIP NONQUALIFIED SAVINGS
PLAN INCLUDES ALL AMENDMENTS THROUGH JANUARY 1, 2006.
2. Section 2.27 is amended, effective January 1, 2007, to read as follows:
Termination of Employment means a Participant's termination of employment
with his Employer and any Affiliated Company, whether voluntary or involuntary,
for any reason, including but not limited to quit, discharge, Retirement, death
or Permanent Disability, and other than for Parental Leave, Permitted Leave,
transfers from shoreside employment (or vice-versa), or transfers between an
Employer and an Affiliated Company OR CARNIVAL PLC.
3. Section 2.8(a) is amended, effective January 1, 2007, to read as follows:
Eligible Earnings shall be determined for purposes of a Participant's
Employee Deferral Contributions and the Matching Contributions and
Profit-Sharing Contributions made on the Participant's behalf as follows:
(a) For purposes of a Participant's Employee Deferral Contributions
for any payroll period, the Participant's Eligible Earnings shall consist of:
(1) the following amounts received by the Participant for such payroll period:
the Participant's regular base wages or salary, commissions, overtime, holiday
pay, retroactive pay, workers' compensation payments made by the Employer, AND
benefit hour payments, [and discretionary bonuses that are not deferred under
Section 4.4]; plus (2) the amounts deferred for such payroll period under
Section 4.1 and under any plan maintained by the Employer under Code Section 125
or 401(k). EFFECTIVE JANUARY 1, 2007, FOR PURPOSES OF A PARTICIPANT'S EMPLOYEE
DEFERRAL CONTRIBUTIONS, ELIGIBLE EARNINGS SHALL NOT INCLUDE BONUSES RECEIVED
UNDER THE CARNIVAL CORPORATION AND CARNIVAL CRUISE LINES MANAGEMENT BONUS
PROGRAMS.
(b) For purposes of any Matching Contributions made on behalf of a
Participant for any payroll period, the Participant's Eligible Earnings shall
consist of: (1) the following amounts received by the Participant for such
payroll period: the Participant's base wages or salary, commissions, overtime,
holiday pay, retroactive pay, workers' compensation payments made by the
Employer, AND benefit hour payments, [and discretionary bonuses that are not
deferred under Section 4.4]; (2) BEGINNING JANUARY 1, 2007, any discretionary
bonuses that would have been received in such payroll period but are deferred
under Section 4.4; plus (3) the amounts deferred for such payroll period under
Section 4.1 and under any plan maintained by the Employer under Code Section 125
or 401(k).
(c) For purposes of any Profit-Sharing Contributions made on behalf
of a Participant for any Plan Year, the Participant's Eligible Earnings shall
consist of: (1) the following amounts received by the Participant for such Plan
Year: the Participant's regular base wages or salary, commissions, overtime,
holiday pay, retroactive pay, workers' compensation payments made by the
Employer, benefit hour payments, and BEGINNING JANUARY 1, 2007, ANY
discretionary bonuses EARNED DURING THE PLAN YEAR (WHETHER OR NOT DEFERRED UNDER
SECTION 4.4) [actually received in such Plan Year]; plus (2) the amounts
deferred for the Plan Year under Section 4.1 and under any plan maintained by
the Employer under Code Section 125 or 401(k). FOR PLAN YEARS BEGINNING BEFORE
JANUARY 1, 2007, NOTWITHSTANDING [Notwithstanding] anything herein contained to
the contrary, amounts earned during a Plan Year but deferred to future Plan
Years shall not be included in a Participant's Eligible Earnings in the Plan
Year in which it was earned, but rather in the Plan Year in which such deferred
amount is actually paid. Solely for purposes of determining the amount of a
Participant's Profit-Sharing Contribution, Eligible Earnings in excess of the
maximum compensation rate under Code Section 401(a)(17) (determined without
regard to the reduction to $150,000 (i.e., $250,000 for 1996) as further indexed
for cost of living by reference to the annual percentage change of the CPI-U,
U.S. City Average, All Items (non-seasonally adjusted) for the period from
August to August of the preceding year (i.e., the annual change published in
September of the year prior to the year the compensation limit is in effect))
shall be disregarded. Effective December 22, 2002, the compensation limit
described in the preceding sentence will no longer apply for purposes of
determining Eligible Earnings under this Plan.
4. Section 3.2 of the Plan shall be amended to read as follows:
Each Eligible Employee shall be provided an opportunity to IRREVOCABLY
designate the percentage of his Compensation to be deferred under Section 4.1
and to irrevocably designate the percentage or dollar amount of his annual Bonus
to be deferred under Section 4.4 ("Bonus Deferral"). Any such Eligible Employee
who makes such a designation shall become a Participant on the first day of the
payroll period that coincides with or immediately follows the first day of the
calendar quarter subsequent to the Retirement Committee's determination of
Eligible Employee status under Section 3.1, provided the Eligible Employee is
employed as of such date. Effective January 1, 2001, any such Eligible Employee
who makes such a designation shall become a Participant on the first day of the
payroll period immediately subsequent to the Retirement Committee's
determination of Eligible Employee status under Section 3.1, provided the
Eligible Employee is employed as of such date. [Any such designation must be
made in the manner authorized by the Retirement Committee and must be
accompanied by:] EFFECTIVE ON AND AFTER JANUARY 1, 2005, IN THE FIRST YEAR IN
WHICH A ELIGIBLE EMPLOYEE BECOMES ELIGIBLE TO PARTICIPATE IN THE PLAN, THE
ELIGIBLE EMPLOYEE MAY MAKE A DEFERRAL ELECTION WITH RESPECT TO COMPENSATION FOR
SERVICES TO BE PERFORMED SUBSEQUENT TO THE ELECTION PROVIDED THE ELECTION IS
MADE WITHIN 30 DAYS AFTER THE DATE THE ELIGIBLE EMPLOYEE BECOMES ELIGIBLE TO
PARTICIPATE. IN THE CASE OF ALL OTHER ELIGIBLE EMPLOYEES, INCLUDING ANY NEW
ELIGIBLE EMPLOYEE WHO FAILS TO MAKE AN ELECTION WITHIN THE 30-DAY PERIOD
DESCRIBED ABOVE, DEFERRAL ELECTIONS MUST BE MADE NO LATER THAN DECEMBER 31 (OR
SUCH OTHER EARLIER DATE DESIGNATED BY THE COMPANY) OF THE YEAR BEFORE THE YEAR
THE SERVICES RELATED TO THE DEFERRAL ELECTION ARE TO BE PERFORMED.
ANY SUCH DESIGNATION UNDER THIS SECTION 3.2 must be made in the manner
authorized by the Retirement Committee and must be accompanied by:
(a) an authorization for the Eligible Employee's Employer to make
regular payroll deductions to cover the amount of such deferrals elected
pursuant to Section 4.1;
(b) an irrevocable authorization to defer receipt of a percentage or
a dollar amount of future Bonus amounts as elected under Section 4.4.
(c) an investment election with respect to any Employee Deferral
Contributions, Bonus Deferrals, Matching Contributions or vested Profit-Sharing
Contributions under Section 6.3;
(d) a designation of Beneficiary; and
(e) a designation as to the form and timing of the distribution of
the vested portion of his Participant Account.
Notwithstanding the foregoing, an Eligible Employee's failure to designate
a contribution percentage or a bonus deferral percentage or bonus deferral
amount under the first sentence of this Section 4.2 shall not affect his status
as a Participant for purposes of an allocation of a Profit-Sharing Contribution
in accordance with the requirements of Section 5.3. However, such an Eligible
Employee must make a designation under subsection (c), (d) and (e) above as a
condition of becoming a Participant for purposes of Section 5.3 and Article 7.
Further, notwithstanding the foregoing, in advance of the December 1
preceding each Plan Year, the Committee shall designate those Employees who are,
or are expected to be, participants in The Carnival Corporation Fun Ship Savings
Plan for such Plan Year who shall be an Eligible Employee under this Plan solely
for purposes of making Bonus Deferrals pursuant to Section 4.4. Any such
Eligible Employee shall not be eligible to authorize Employee Deferral
Contributions pursuant to Section 4.1 for such Plan Year and shall not be
eligible to receive an allocation of any Profit-Sharing Contribution under
Section 5.3 for such Plan Year.
5. Section 4.1 of the Plan shall be amended to read as follows:
Each Participant may authorize the Employer by which he is employed, in
the manner described in Section 3.2, to have an Employee Deferral Contribution
made on his behalf. Such election shall apply to the Participant's Eligible
Earnings attributable to services performed [subsequent to] DURING THE
DESIGNATED FUTURE PERIOD COVERED BY the election, AS PROVIDED IN SECTION 3.2.
Such Employee Deferral Contribution shall be a stated whole percentage of the
Participant's Eligible Earnings, equal to not less than 1% nor more than 100%,
as designated by the Participant. [The percentage of Eligible Earnings
designated by a Participant to measure the Employee Deferral Contributions to be
made on the Participant's behalf shall remain in effect, notwithstanding any
change in his Eligible Earnings, until he elects to change or suspend such
percentage in accordance with Section 4.2 or Section 4.3, below.] Effective
January 1, 2002, notwithstanding a Participant's designated deferral percentage,
the amount of a Participant's Employee Deferral Contribution shall not exceed
the net result of the Participant's Eligible Earnings less any amounts required
to be withheld from such Participant's Eligible Earnings including amounts
pursuant to any pre-tax elections under Code Sections 125 or 132(f) and such
other amounts as designated by the Retirement Committee or its designee. EXCEPT
AS OTHERWISE PROVIDED HEREIN AND IN ACCORDANCE WITH CODE SECTION 409A AND
RELATED OFFICIAL GUIDANCE, A PARTICIPANT'S ANNUAL SALARY DEFERRALS ELECTION
SHALL BE IRREVOCABLE FOR SUCH CALENDAR YEAR.
6. Section 4.2 of the Plan shall be amended to read as follows:
A Participant may change his contribution percentage election under
Section 4.1 at any time by applying to make such change in the manner prescribed
by the Committee. [Any] PRIOR TO JANUARY 1, 2005, ANY such change shall become
effective as of the first full payroll period that begins coincident with or
immediately following the first day of the calendar quarter following the date
the Participant applies to make such change.
Effective January 1, 2001, any change in contribution percentage election
under this Section 4.2 shall become effective as of the first day of the payroll
period immediately following the date the Participant applies to make such
change.
ON AND AFTER JANUARY 1, 2005, EXCEPT AS OTHERWISE PROVIDED HEREIN AND
PERMITTED PURSUANT TO CODE SECTION 409A AND RELATED OFFICIAL GUIDANCE, ELECTIONS
TO CHANGE AN ELIGIBLE EARNINGS DEFERRAL PERCENTAGE FOR A YEAR WHICH ARE
SUBMITTED AFTER DECEMBER 31 OF SUCH YEAR SHALL NOT BE PERMITTED.
7. Section 4.3 of the Plan shall be amended to read as follows:
EXCEPT AS PROVIDED BELOW, A Participant may suspend his Employee Deferral
Contributions at any time by applying for a suspension in the manner prescribed
by the Committee [.Any], AND ANY such suspension shall become effective as soon
as administratively practicable following the date the Participants applies for
the suspension. A Participant whose Employee Deferral Contributions have been
suspended under this subsection may resume having Employee Deferral
Contributions made on his behalf by [applying to change his contribution
percentage] SUBMITTING A DEFERRAL election in accordance with Section [4.2.]4.1.
ON AND AFTER JANUARY 1, 2005, EXCEPT AS OTHERWISE PERMITTED PURSUANT TO CODE
SECTION 409A AND RELATED OFFICIAL GUIDANCE, ANY SUCH SUSPENSION REQUEST SHALL
NOT BECOME EFFECTIVE BEFORE THE FIRST DAY OF THE YEAR FOLLOWING THE DATE THE
PARTICIPANT APPLIES FOR THE SUSPENSION.
8. Section 4.4 of the Plan shall be amended to read as follows:
By November 30 of each year, AND EXCEPT AS PROVIDED BELOW WITH RESPECT TO
PERFORMANCE-BASED BONUSES, each Participant may authorize, in the manner
authorized by the Retirement Committee, to defer a portion of his Bonus that
would otherwise be payable for services performed in the twelve-month period
beginning on the December 1 immediately following such November 30. [A
Participant's annual] IN THE CASE OF ANY BONUS THAT IS DESIGNATED BY THE
EMPLOYER AS A PERFORMANCE-BASED BONUS AND WHICH QUALIFIES AS PERFORMANCE-BASED
COMPENSATION UNDER CODE SECTION 409A AND RELATED OFFICIAL GUIDANCE, A
PARTICIPANT'S DEFERRAL ELECTION WITH RESPECT TO ALL OR A PORTION OF HIS OR HER
BONUS MUST BE MADE, IN WRITING TO THE COMPANY ON AN APPROVED FORM, NO LATER THAN
MAY 31 OF THE 12-MONTH PERIOD BEGINNING ON THE DECEMBER 1 IMMEDIATELY PRECEDING
SUCH MAY 31 OR SUCH OTHER EARLIER DATE DESIGNATED BY THE COMPANY. EXCEPT AS
OTHERWISE PROVIDED HEREIN AND IN ACCORDANCE WITH CODE SECTION 409A AND RELATED
OFFICIAL GUIDANCE, A PARTICIPANT'S election to defer a Bonus shall be
irrevocable[, except that the Retirement Committee may permit a Participant to
waive the remainder of his Bonus deferral commitment upon a finding that the
Participant has suffered a Severe Financial Hardship] FOR SUCH CALENDAR YEAR.
9. Section 5.4 is amended to read as follows:
Vesting of Profit-Sharing Contributions. Profit-Sharing Contributions made on
behalf of a Participant and the earnings thereon shall be fully vested and
nonforfeitable upon the Participant's Termination of Employment solely by reason
of his Retirement, death or Permanent Disability. In the absence of any of the
preceding events, the
Profit-Sharing Contributions made on behalf of the Participant, and earnings
thereon, shall vest in accordance with the schedules set forth below:
[Years of Service] [Percent Vested]
------------------ ----------------
[Less than 5] [0%]
[5 or more] [100%]
- --------------------------------------------------------------------------------
YEARS OF SERVICE PERCENT VESTED
---------------- --------------
- --------------------------------------------------------------------------------
LESS THAN 2 0%
- --------------------------------------------------------------------------------
2 25%
- --------------------------------------------------------------------------------
3 50%
- --------------------------------------------------------------------------------
4 75%
- --------------------------------------------------------------------------------
5 100%
- --------------------------------------------------------------------------------
10. Section 7.1(a) is amended to read as follows:
Form of Payment: The Participant's election shall indicate the form of
distribution of the entire vested portion of his Participant Account in a lump
sum or monthly installments over 5, [or] 10, 20 OR 30 years.
11. The third and fourth paragraph of Section 7.1 of the Plan are amended to
read as follows:
Notwithstanding the foregoing, subject to the approval of the Retirement
Committee, a Participant may change his form and timing election applicable to
his Participant Account once every five years, provided that such request to
change is made at least twelve (12) consecutive months prior to the date on
which such distribution would otherwise have been made or commenced AND SOLELY
WITH RESPECT TO AMOUNTS DEFERRED UNDER THE PLAN WHICH ARE SUBJECT TO CODE
SECTION 409A (GENERALLY, AMOUNTS DEFERRED ON AND AFTER JANUARY 1, 2005) THE
REQUEST FOR CHANGE IS AT LEAST TWELVE (12) CONSECUTIVE MONTHS PRIOR TO THE DATE
ON WHICH SUCH DISTRIBUTION WILL BE MADE OR COMMENCE AND THE PAYMENT WITH RESPECT
TO AN AMENDED DISTRIBUTION ELECTION IS DEFERRED FOR A PERIOD OF NOT LESS THAN 5
YEARS FROM THE DATE SUCH PAYMENT WOULD OTHERWISE HAVE BEEN PAID (OR, IN THE CASE
OF INSTALLMENT PAYMENTS, 5 YEARS FROM THE DATE THE FIRST AMOUNT WAS SCHEDULED TO
BE PAID).
Notwithstanding the foregoing, AND SOLELY WITH RESPECT TO AMOUNTS DEFERRED
UNDER THE PLAN WHICH ARE NOT SUBJECT TO CODE SECTION 409A (GENERALLY, AMOUNTS
DEFERRED BEFORE JANUARY 1, 2005), if the value the vested portion of a
Participant's Account is $5,000 or less as of the Participant's Termination of
Employment, the Participant shall be the paid the entire vested portion of his
Account as a lump sum as soon as administratively practicable following the
Participant's Termination of Employment.
12. Section 7.4 of the Plan is amended by adding the following paragraph at
the end thereof:
WITH RESPECT TO AMOUNTS DEFERRED HEREUNDER WHICH ARE SUBJECT TO CODE
SECTION 409A (GENERALLY, AMOUNTS DEFERRED ON AND AFTER JANUARY 1, 2005),
DISTRIBUTIONS DUE TO SEVERE FINANCIAL HARDSHIP SHALL BE MADE SOLELY IN
ACCORDANCE WITH THE PROVISIONS OF CODE SECTION 409A AND RELATED OFFICIAL
GUIDANCE.
13. A new Section 7.5 is added to the Plan to read as follows:
DISTRIBUTION DUE TO DE MINIMIS AMOUNTS. UPON THE PARTICIPANT'S TERMINATION
OF EMPLOYMENT, IF SUCH PARTICIPANT'S ACCOUNT BALANCE TOTAL (INCLUDING ALL
SUBACCOUNTS) IS $10,000 OR LESS, THE PARTICIPANT SHALL BE PAID IN A LUMP SUM
PAYMENT, AS SOON AS ADMINISTRATIVELY PRACTICABLE FOLLOWING TERMINATION OF
EMPLOYMENT BUT NOT LATER THAN THE 15TH DAY OF THE THIRD MONTH FOLLOWING THE
PARTICIPANT'S TERMINATION OF EMPLOYMENT OR DECEMBER 31 OF THE CALENDAR YEAR IN
WHICH THE PARTICIPANT INCURS A TERMINATION OF EMPLOYMENT, WHICHEVER IS LATER.
14. Article 9 of the Plan is amended by adding the following paragraphs to the
end thereof:
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IN NO EVENT SHALL ANY
AMENDMENT OR MODIFICATION BE MADE IN A MANNER THAT IS INCONSISTENT WITH THE
REQUIREMENTS UNDER SECTION 409A OF THE CODE, NOR SHALL ANY AMENDMENT,
MODIFICATION OR OTHER ACT OR EXERCISE BE EFFECTIVE WHICH INVOLVES AN
UNINTENTIONAL MATERIAL MODIFICATION (WITHIN THE MEANING OF CODE SECTION 409A AND
RELATED OFFICIAL GUIDANCE) WITH RESPECT TO CODE SECTION 409A GRANDFATHERED FUNDS
(GENERALLY, AMOUNTS DEFERRED BEFORE JANUARY 1, 2005).
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IN NO EVENT SHALL ANY
TERMINATION BE MADE IN A MANNER THAT IS INCONSISTENT WITH THE REQUIREMENTS UNDER
SECTION 409A OF THE CODE.
15. The first paragraph of Article 9 is amended to read as follows:
It is the intention of the Company to continue this Plan indefinitely.
Nevertheless, subject to the provisions hereinafter set forth, the Board OR ITS
DELEGATE may, at any time or from time to time, by written resolution modify or
discontinue the Plan in whole or in part and reduce, suspend or discontinue
contributions hereunder; provided, however, that no action may be taken which,
by reason thereof, will discontinue or reduce the amount of payments (except as
may be required pursuant to any plan arising from insolvency or bankruptcy
proceedings) to any Participant who has had a Termination of Employment or
incurred a Permanent Disability and no action may be taken which, by reason
thereof, will reduce the vested amount in any Participant Account. Any
modification or amendment of the Plan may be made retroactive if it does not
violate the preceding sentence or if, notwithstanding such preceding sentence,
the modification or amendment is necessary or appropriate to conform the Plan
to, or to satisfy the conditions of, ERISA, the Code, or any other law,
governmental regulation or ruling.
16. Section 10.6 of the Plan shall be amended to read as follows:
[There] SUBJECT TO THE REQUIREMENTS OF CODE SECTION 409A AND RELATED OFFICIAL
GUIDANCE, THERE shall be deducted from all payments under this Plan the amount
of any taxes required to be withheld by any Federal, state or local government.
The Participants and their beneficiaries, distributees, and personal
representatives will bear any and all Federal, foreign, state, local or other
income or other taxes imposed on amounts paid under this Plan.
EXHIBIT 10.3
AMENDMENT TO
THE CARNIVAL CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
- --------------------------------------------------------------------------------
Carnival Corporation Supplemental Executive Retirement Plan (the "Plan")
is hereby amended as follows effective, January 1, 2006 (deletions in square
brackets, additions in all capital letters):
1. The last paragraph of Section 5.1(B) is amended to read as follows:
Notwithstanding the foregoing, if a Participant elects his distribution to be
made or commenced in accordance with paragraph (3) above, and such date falls
before the Participant's Termination of Employment, the Participant's
distribution shall be made or commenced in accordance with paragraph (1) above.
Notwithstanding the foregoing, subject to the approval of the Company, a
Participant may change his form and timing election applicable to his benefit,
provided that such request to change is made at least twelve (12) consecutive
months prior to the date on which such distribution would have otherwise been
made on or commenced. SOLELY WITH RESPECT TO AMOUNTS ACCRUED UNDER THE PLAN
WHICH ARE SUBJECT TO CODE SECTION 409A (GENERALLY, AMOUNTS ACCRUED ON AND AFTER
JANUARY 1, 2005) THE REQUEST FOR CHANGE IN TIMING OF THE PAYMENT SHALL BE
DEFERRED FOR A PERIOD OF NOT LESS THAN 5 YEARS FROM THE DATE SUCH PAYMENT WOULD
OTHERWISE HAVE BEEN PAID (OR, IN THE CASE OF INSTALLMENT PAYMENTS, 5 YEARS FROM
THE DATE THE FIRST AMOUNT WAS SCHEDULED TO BE PAID). If a Participant dies
before commencement of distribution of Participant's Benefits under the Plan,
such Benefits shall be paid in a lump sum to the Participant's Beneficiary,
using the same actuarial assumptions as in the Retirement Plan. If a Participant
dies after commencement of distribution of his or her Benefits under the Plan,
the Participant's Benefits shall be paid to the Participant's Beneficiary in
accordance with the Participant's election.
2. Section 5.3 of the Plan is amended to read as follows:
Tax Withholding. SUBJECT TO THE REQUIREMENTS OF CODE SECTION 409A AND RELATED
OFFICIAL GUIDANCE AND [To] TO the extent required by the law in effect at the
time benefits are distributed pursuant to this Section 5, the Company shall
withhold any taxes required by the federal or any state or local government from
payments made hereunder.
3. Section 8.1 of the Plan is amended to read as follows:
Plan Amendment. The Plan may be amended or otherwise modified by the Board OR
ITS DELEGATE, in whole or in part, provided that no amendment or modification
shall divest any Participant of any amount previously earned under Section 3.1.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, IN NO EVENT SHALL ANY AMENDMENT
OR MODIFICATION BE MADE IN A MANNER THAT IS INCONSISTENT WITH THE REQUIREMENTS
UNDER SECTION 409A OF THE CODE, NOR SHALL ANY AMENDMENT, MODIFICATION OR OTHER
ACT OR EXERCISE BE EFFECTIVE WHICH INVOLVES AN UNINTENTIONAL MATERIAL
MODIFICATION (WITHIN THE MEANING OF CODE SECTION 409A AND RELATED OFFICIAL
GUIDANCE) WITH RESPECT TO CODE SECTION 409A GRANDFATHERED FUNDS (GENERALLY,
AMOUNTS DEFERRED BEFORE JANUARY 1, 2005).
EXHIBIT 10.4
CARNIVAL CRUISE LINES
MANAGEMENT INCENTIVE PLAN
OBJECTIVE
The Management Incentive Plan (the "Plan") is designed to focus the attention of
Carnival Cruise Lines ("CCL") management on achieving outstanding performance
results as reflected in profitability and other key measures. The Plan provides
a framework within which the participants share in the incremental earnings of
CCL achieved from applicable business operations on a fiscal year-to-year basis.
PLAN ADMINISTRATION
The administrator of the Plan is the Compensation Committee of the Board of
Directors of Carnival Corporation (the "Committee"). The Committee shall have
sole discretion in resolving any questions regarding the administration or terms
of the Plan not addressed in this document as well as in resolving any
ambiguities that may exist in this document. At its discretion, the Committee
may delegate its administrative responsibilities for this Plan.
PLAN YEAR
The "Plan Year" shall be the 12-month period ending November 30 of each year.
PARTICIPATION
Participation in the Plan shall be determined on an annual basis by the
Committee, based on recommendations from the President of CCL, the CEO of
Carnival Corporation and/or the COO of Carnival Corporation. The President of
CCL, Senior Vice Presidents and Vice Presidents of CCL shall be eligible to
participate in the Plan. No employee will have the automatic right to be
selected as a participant for any year nor will being selected as a participant
for one year mean that participation is automatically extended to following
years.
Only persons who are employed by CCL or one of its divisions on the first day of
the Plan Year are eligible to participate in the Plan except that persons who
commence employment or are promoted following the beginning of the Plan Year
may, with the approval of the Committee, be allowed to participate in the Plan.
Such potential late-entry participants will be awarded Points (as defined below)
pro-rated to the time of their entry into the Plan, subject to the approval of
the Committee.
In order to actually receive an Incentive Award (as defined below) under the
Plan, a participant must be employed by CCL or one of its divisions on the last
day of the Plan Year; provided, however, that if a participant is on a leave of
absence that does not meet the requirements of The Family and Medical Leave Act
of 1993 on the last day of the Plan Year, such Incentive Award shall not be
payable until the participant returns to active duty. The only exceptions to
this requirement are for participants whose employment is terminated prior to
the last day of the Plan Year as the result of death, disability or Retirement
("Early Termination Employees") or for other circumstances approved by the
Committee on a case-by-cases basis. If employment is terminated by reason of
death, disability or Retirement, a participant or his/her estate will receive a
pro-rata incentive award based on the portion of the Plan Year the participant
was employed. For purposes of this section, "Retirement" means a termination of
employment by a participant on or after the earlier of (i) age 65 with at least
five years of employment (either shipboard or shoreside) with Carnival
Corporation, Carnival plc or any successor thereto and/or their affiliates or
(ii) age 55 with at least 15 years of employment (either shipboard or shoreside)
with Carnival Corporation, Carnival plc or any successor thereto and/or their
affiliates.
BONUS POOL
The total amount payable under the Plan for each Plan Year (the "Bonus Pool")
shall be calculated as follows: (Earnings minus the Capital Charge) multiplied
by the Bonus Funding Percentage.
"Earnings" shall mean net income excluding net interest expense and any accrued
expense related to the Plan generated within each Plan Year by CCL and its
divisions calculated in accordance with U.S. generally accepted accounting
principles consistently applied.
"Capital Charge" shall mean 10 percent (10%) of CCL's Average Invested Capital.
"Invested Capital" shall mean shareholder equity plus external and intercompany
debt after subtracting goodwill and construction in progress. "Average Invested
Capital" shall be calculated as follows: the sum of the Invested Capital balance
as of November 30th of the immediately preceding Plan Year and the Invested
Capital balance as of the end of each calendar month during the Plan Year,
divided by 13.
"Bonus Funding Percentage" shall mean 1.75 percent (1.75%).
At the Committee's sole discretion, the potential Bonus Pool funding for a Plan
Year may be increased by up to 20 percent based on performance in other areas as
determined by the Committee (the "Funding Modifiers").
Any changes to the Bonus Funding Percentage and Capital Charge for a Plan Year
as well as any Funding Modifier will be determined by the Committee within 90
days of the commencement of each such Plan Year.
METHOD OF CALCULATING INCENTIVE AWARDS
The Committee shall, in its discretion and after consideration of the
recommendations of the President of CCL and the CEO and COO of Carnival
Corporation, assign a specific number of points (the "Points") to each
participant. The Points awarded to each participant will be communicated to the
participant within ninety (90) days of the employee being initially selected to
become a participant in the Plan and if and when there is a change in the number
of Points assigned to the participant. Such decisions may be revised during a
Plan Year by the Committee due to major changes in position responsibilities
occurring during the Plan Year.
The Committee, in its sole discretion and after consideration of the
recommendations of the President of CCL and the CEO and COO of Carnival
Corporation, may adjust the Points assigned to each participant by multiplying
such participant's Points by a percentage within the range set forth below
corresponding to such participant's evaluated performance for such year (the
"Weighted Points"):
o EXCELLENT PERFORMANCE 90 - 100%
o GOOD PERFORMANCE 75 - 89%
o FAIR PERFORMANCE 60 - 74%
o LESS THAN FAIR PERFORMANCE 0 - 59%
In addition, the Committee may adjust the Weighted Points assigned to a
participant for any unpaid leaves of absence regardless of the nature of the
leave. Each participant shall receive an Incentive Award equal to the product of
his or her Weighted Points multiplied by the "Point Value." The Point Value
shall be equal to (i) the amount of the Bonus Pool, divided by (ii) the
aggregate Points (before adjustments) awarded to participants for each Plan
Year.
Any amounts remaining in the Bonus Pool following the calculation of the
Incentive Awards pursuant to the preceding paragraph shall be available for
discretionary distribution by the Committee to participants or may be retained
by CCL.
PAYMENT OF INCENTIVE AWARDS
Except as otherwise provided in the section entitled "Participation," Incentive
Awards shall be paid on a date determined by the Committee which is on or prior
to December 31st following each Plan Year. At the discretion of the Committee,
advance partial payment of Incentive Awards may be made based on anticipated
performance results. At the discretion of the Committee, special arrangements
may be made for earlier payment to Early Termination Employees. All Incentive
Awards payable to "officers" of Carnival Corporation as defined by Rule 16a-1 of
the Securities Exchange Act must be reviewed and approved by the Committee prior
to payment.
At the discretion of the Committee, participants may elect to defer payment of
all or a portion of their Incentive Awards in accordance with and under the
terms of the Carnival Corporation "Fun Ship" Nonqualified Savings Plan or any
successor plan pursuant to Section 409(a) of the Internal Revenue Code.
DURATION OF PLAN
The Plan will be effective until terminated by the Committee, with the Committee
reserving the right to modify how the Bonus Pool is calculated.
AMENDMENT OF PLAN
The Committee may amend the Plan from time to time in such respects as the
Committee may deem advisable.
GOVERNMENTAL AND OTHER REGULATIONS
The Plan shall be subject to all applicable federal and state laws, rules and
regulations and such approvals by any governmental or regulatory agency or
national securities exchange, as may be required.
Approved by the Compensation Committee: July 5, 2005; and amended January 16,
2007
EXHIBIT 10.5
AMENDMENT TO THE P&O PRINCESS CRUISES
EXECUTIVE SHARE OPTION PLAN
The first paragraph of Clause 11. (ADJUSTMENT OF OPTIONS) (ii) of the P&O
Princess Cruises Executive Share Option Plan was stricken and replaced
with the following:
"(ii) the implementation by the Company of a demerger or the payment
by the Company of a dividend in specie, super-dividend or other
transaction which in the opinion of the Board would materially
affect the value of an Option the Exercise Price, the definition of
Shares and the number of Shares comprised in an Option shall be
adjusted in such manner as the Board may determine is equitable
provided that:"
EXHIBIT 10.6
AMENDMENT TO THE CARNIVAL PLC DEFERRED BONUS
AND CO-INVESTMENT MATCHING PLAN
Clause 15.1 (b) of the Carnival plc Deferred Bonus and Co-Investment Matching
Plan was stricken and replaced with the following:
"(b) The number of Shares the subject of a Participant's Share Award,
Deferred Share Bonus Award, LTIP Award, Matching Award or LTIP Matching
Award and in which he has no beneficial interest shall be adjusted in such
manner as the Trustee, in its absolute discretion with the recommendation
of the Committee, thinks equitable."
EXHIBIT 10.7
AMENDMENT TO THE AMENDED AND RESTATED
CARNIVAL PLC 2005 EMPLOYEE SHARE PLAN
The paragraph between Clause 12.1 (c) and Clause 12.1 (c)(i) of the Amended and
Restated Carnival plc 2005 Employee Share Plan was stricken and replaced with
the following:
"the number or type of shares subject to an Award and the Option Price per
Share shall be adjusted or the Awards may be subject to substitution in
such manner as the Committee may determine is fair and reasonable,
PROVIDED THAT:"
EXHIBIT 10.8
FORM OF
RESTRICTED STOCK AGREEMENT
FOR THE AMENDED AND RESTATED CARNIVAL CORPORATION
2002 STOCK PLAN
THIS AGREEMENT (the "Agreement") is made effective as of _________
(hereinafter the "Grant Date") between Carnival Corporation, a corporation
organized under the laws of the Republic of Panama (the "Company"), and
__________ (the "Executive").
R E C I T A L S:
WHEREAS, the Company has adopted the amended and restated Carnival
Corporation 2002 Stock Plan (the "Plan"), pursuant to which awards of restricted
Shares may be granted; and
WHEREAS, the Company desires to grant Executive an award of restricted
Shares pursuant to the terms of this Agreement and the Plan.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties hereto agree as follows:
1. Grant of Restricted Stock.
Subject to the terms and conditions set forth in the Plan and in
this Agreement, the Company hereby grants to Executive a Restricted Stock Award
consisting of _______ Shares (the "Restricted Stock"). The Restricted Stock is
subject to the restrictions described herein, including forfeiture under the
circumstances described in Section 5 hereof (the "Restrictions"). The
Restrictions shall lapse and the Restricted Stock shall become nonforfeitable in
accordance with Section 3 hereof.
2. Incorporation by Reference, Etc.
The provisions of the Plan are hereby incorporated herein by
reference. Except as otherwise expressly set forth herein, this Agreement shall
be construed in accordance with the provisions of the Plan and any capitalized
terms not otherwise defined in this Agreement shall have the definitions set
forth in the Plan. The Committee shall have final authority to interpret and
construe the Plan and this Agreement and to make any and all determinations
under them, and its decision shall be binding and conclusive upon Executive and
his legal representative in respect of any questions arising under the Plan or
this Agreement.
3. Lapse of Restriction.
Except as otherwise provided in Section 5 hereof, and contingent
upon Executive's continued employment with a member of the Combined Group or an
Affiliate, the Restrictions with respect to the Restricted Stock shall lapse on
the fifth anniversary of the Grant Date. Notwithstanding the foregoing, the
Committee shall have the authority to remove the Restrictions on the Restricted
Stock whenever it may determine that, by reason of changes in applicable laws or
other changes in circumstances arising after the Grant Date, such action is
appropriate.
Any shares of Restricted Stock for which the Restrictions have lapsed or
been removed shall be referred to hereunder as "released Restricted Stock."
4. Certificates.
Certificates evidencing the Restricted Stock shall be issued by the
Company and shall be registered in Executive 's name on the stock transfer books
of the Company promptly after the shareholder approves the Plan. Subject to
Section 6 hereof, the certificates evidencing the Restricted Stock shall remain
in
the physical custody of Executive or Executive's legal representative at all
times prior to the date such Restricted Stock becomes released Restricted Stock.
5. Effect of Termination of Employment.
(a) Upon the termination of Executive's employment with the Combined
Group or an Affiliate due to death, Disability or Retirement, the Restrictions
on the unreleased Restricted Stock shall be released according to the following:
(i) In the event the Executive terminates by reason of death
or Disability, the Restrictions on the Restricted Stock shall lapse on the date
of Executive's death or Disability and the Restricted Stock shall become
Released Restricted Stock.
(ii) In the event the Executive terminates by reason of
Retirement, the Restrictions on the Restricted Stock shall lapse in accordance
with Section 3 of this Restricted Stock Agreement, without regard to the
requirement that the Executive remain employed with a member of the Combined
Group or an Affiliate, unless and until the Executive engages in competition in
violation of Section 10 hereof or violates the nondisclosure provisions set
forth in Section 11 hereof.
(iii) In the event the Executive voluntarily terminates
employment as a direct result of the Executive being diagnosed with a terminal
medical condition, the Restrictions on the Restricted Stock shall lapse on the
earlier of Executive's death or the lapse date set forth in Section 3 of this
Restricted Stock Agreement, unless and until the Executive engages in
competition in violation of Section 10 hereof or violates the nondisclosure
provisions set forth in Section 11 hereof.
(iv) In the event a member of the Combined Group or an
Affiliate terminates the Executive's employment with such company for a reason
other than for cause, as defined in Section 5(b)(i) below, the Restrictions on
the Restricted Stock shall lapse in accordance with Section 3 of this Restricted
Stock Agreement, without regard to the requirement that the Executive remain
employed with a member of the Combined Group or an Affiliate, unless and until
the Executive engages in competition in violation of Section 10 hereof or
violates the nondisclosure provisions set forth in Section 11 hereof
(b) Notwithstanding anything herein to the contrary, but subject to
Section 5(a) above, no release of Restricted Stock shall be made, and all
unreleased Restricted Stock issued hereunder and all rights under this Agreement
shall be forfeited, if any of the following events shall occur:
(i) The Executive's employment with the Combined Group or an
Affiliate is terminated for cause. For purposes of this Agreement, "for cause"
shall be defined as any action or inaction by the Executive, which constitutes
fraud, embezzlement, misappropriation, dishonesty, breach of trust, a felony or
moral turpitude, as determined by its Board of Directors;
(ii) The Executive voluntarily terminates employment with the
Combined Group or an Affiliate prior to Retirement unless such voluntary
termination is directly related to death, Disability or the Executive being
diagnosed with a terminal medical condition;
(iii) The Executive shall engage in competition, as more
particularly described in Section 10 hereof, either (A) during the term of his
employment with the Combined Group or an Affiliate; (B) following the
Executive's voluntary termination of his employment with the Combined Group or
an Affiliate; or (C) following the employing company's termination of the
Executive's employment for any reason; or
(iv) The Executive violates the nondisclosure provisions set
forth in Section 11 hereof.
6. Rights as a Shareholder.
Executive shall be the record owner of the Restricted Stock unless
and until such shares are forfeited pursuant to Section 5 hereof, and as record
owner shall be entitled to all rights of a common shareholder of the Company;
provided that the Restricted Stock shall be subject to the limitations on
transfer and encumbrance set forth in this Agreement. As soon as practicable
following the lapse or removal of Restrictions on any Restricted Stock,
Executive shall return the certificate representing such released Restricted
Stock to the Company and the Company shall deliver to Executive or Executive's
legal representative a replacement certificate for such released Restricted
Stock with the restrictive legend removed. In the event the Restricted Stock is
forfeited pursuant to Section 5 hereof, Executive shall immediately return the
certificate evidencing such forfeited unreleased Restricted Stock to the Company
and Executive's name shall be removed from the stock transfer books of the
Company.
7. Restrictive Legend.
All certificates representing Restricted Stock shall have affixed
thereto a legend in substantially the following form, in addition to any other
legends that may be required under federal or state securities laws:
TRANSFER OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY IS RESTRICTED
PURSUANT TO THE TERMS OF THE CARNIVAL CORPORATION 2002 STOCK PLAN, AS AMENDED
FROM TIME TO TIME, AND A RESTRICTED STOCK AGREEMENT, DATED AS OF
____________, BETWEEN CARNIVAL CORPORATION AND ___________. COPIES OF SUCH
PLAN AND AGREEMENT ARE ON FILE AT THE OFFICES OF CARNIVAL CORPORATION.
8. Transferability.
The Restricted Stock may not, at any time prior to becoming released
Restricted Stock, be assigned, alienated, pledged, attached, sold or otherwise
transferred or encumbered by Executive, and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company; provided, that, the designation of a
beneficiary shall not constitute an assignment, alienation, pledge, attachment,
sale, transfer or encumbrance. Notwithstanding the foregoing, unreleased
Restricted Stock may be transferred by the Executive, without consideration, to
a Permitted Transferee in accordance with Section 9(h) of the Plan.
9. Withholding; Section 83(b) Election.
Executive agrees to make appropriate arrangements with the Company
for satisfaction of any applicable federal, state or local income tax
withholding requirements or like requirements, including the payment to the
Company upon the lapse or removal of Restrictions on any Restricted Stock (or
such later or earlier date as may be applicable under Section 83 of the Code),
or other settlement in respect of, the Restricted Stock of all such taxes and
requirements and the Company shall be authorized to take such action as it deems
necessary (including, without limitation, requiring the Executive to return the
released Restricted Stock to the Company and/or withholding amounts from any
compensation or other amount owing from the Company or its Affiliates to
Executive) to satisfy all obligations for the payment of such taxes. Executive
may make an election pursuant to Section 83(b) of the Code in respect of the
Restricted Stock and, if he does so, he shall timely notify the Company of such
election and send the Company a copy thereof. Executive shall be solely
responsible for properly and timely completing and filing any such election.
10. Competition.
The services of the Executive are unique, extraordinary and
essential to the business of the Combined Group or its Affiliate, particularly
in view of the Executive's access to the Combined Group or its Affiliates'
confidential information and trade secrets. Accordingly, in consideration of the
Restricted Stock awarded hereunder, the Executive agrees that he will not,
without the prior written approval of the Board of Directors, at anytime during
the term of his employment with the Combined Group or its Affiliate and (except
as provided below) for five (5) years following the date on which the
Executive's employment with the Combined Group or its Affiliate terminates,
directly or indirectly, within the United States or its territories, engage in
any business activity directly or indirectly competitive with the business of
the Combined Group or its Affiliate, or serve as an officer, director, owner,
consultant, or employee of any organization then in competition with the
Combined Group or its Affiliate. In addition, the Executive agrees that during
such five (5) year period following his employment with the Combined Group or
its Affiliate, he will not solicit, either directly or indirectly, any employee
of the Combined Group or its Affiliate, its subsidiaries or division, who was
such at the time of the Executive's separation from employment hereunder. In the
event that the provisions of this Section 10 should ever be adjudicated to
exceed the time, geographic or other limitations permitted by applicable law in
any jurisdiction, then such provisions shall be deemed reformed in such
jurisdiction to the maximum time, geographic or other limitations permitted by
applicable law.
11. Nondisclosure.
The Executive expressly agrees and understands that Combined Group
or its Affiliates own and/or control information and material which is not
generally available to third parties and which Combined Group or its Affiliates
consider confidential, including, without limitation, methods, products,
processes, customer lists, trade secrets and other information applicable to its
business and that it may from time to time acquire, improve or produce
additional methods, products, processes, customers lists, trade secrets and
other information (collectively, the "Confidential Information"). The Executive
hereby acknowledges that each element of the Confidential Information
constitutes a unique and valuable asset of Combined Group or its Affiliates, and
that certain items of the Confidential Information have been acquired from third
parties upon the express condition that such items would not be disclosed to
Combined Group or its Affiliates and its officers and agents other than in the
ordinary course of business. The Executive hereby acknowledges that disclosure
of Combined Group or its Affiliates' Confidential Information to and/or use by
anyone other than in Combined Group or its Affiliates' ordinary course of
business would result in irreparable and continuing damage to Combined Group or
its Affiliates. Accordingly, the Executive agrees to hold the Confidential
Information in the strictest secrecy, and covenants that, during the term of his
employment with Combined Group or its Affiliates (or any member of the Combined
Group or its Affiliates) or at any time thereafter, he will not, without the
prior written consent of the Board of Directors, directly or indirectly, allow
any element of the Confidential Information to be disclosed, published or used,
nor permit the Confidential Information to be discussed, published or used,
either by himself or by any third parties, except in effecting Executive's
duties for Combined Group or its Affiliates in the ordinary course of business.
The Executive agrees to keep all such records in connection with the Executive's
employment as Combined Group or its Affiliates may direct, and all such records
shall be the sole and absolute property of Combined Group or its Affiliates. The
Executive further agrees that, within five (5) days of Combined Group or its
Affiliates' request, he shall surrender to Combined Group or its Affiliates any
and all documents, memoranda, books, papers, letters, price lists, notebooks,
reports, logbooks, code books, salesmen records, customer lists, activity
reports, video or audio recordings, computer programs and any and all other data
and information and any and all copies thereof relating to Combined Group or its
Affiliates' business or any Confidential Information.
12. Miscellaneous.
(a) Notices. Any and all notices, designations, consents, offers,
acceptances and any other communications provided for herein shall be given in
writing and shall be delivered either personally or by registered or certified
mail, postage prepaid, which shall be addressed as follows:
If to Executive: at the address specified in the Company's
records.
If to the Company to: Carnival Corporation
3655 N.W. 87th Avenue
Miami, Florida 33178-2428
Attn.: General Counsel
(b) No Right to Continued Employment. Nothing in the Plan or in this
Agreement shall confer upon Executive any right to continue in the employ of the
Company or shall interfere with or restrict in any way the right of the Company,
which are hereby expressly reserved, to remove, terminate or discharge Executive
at any time for any reason whatsoever, with or without, Cause.
(c) Bound by Plan. By signing this Agreement, Executive acknowledges
that he has received a copy of the Plan and has had an opportunity to review the
Plan and agrees to be bound by all the terms and provisions of the Plan.
(d) Successors. The terms of this Agreement shall be binding upon
and inure to the benefit of the Company, its successors and assigns, and on
Executive and the beneficiaries, executors, administrators, heirs and successors
of Executive.
(e) Invalid Provision. The invalidity or unenforceability of any
particular provision hereof shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provision had been omitted.
(f) Modifications. No change, modification or waiver of any
provision of this Agreement shall be valid unless the same be in writing and
signed by the parties hereto.
(g) Entire Agreement. This Agreement and the Plan contain the entire
agreement and understanding of the parties hereto with respect to the subject
matter contained herein and therein and supersede all prior communications,
representations and negotiations in respect thereto.
(h) Governing Law. This Agreement and the rights of Executive
hereunder shall be construed and determined in accordance with the laws of the
State of Florida.
(i) Headings. The headings of the Sections hereof are provided for
convenience only and are not to serve as a basis for interpretation or
construction, and shall not constitute a part, of this Agreement.
(j) Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first written above.
Carnival Corporation Executive
- ---------------------------------- ----------------------------------
By:
----------------
Title:
Exhibit 12
CARNIVAL CORPORATION & PLC
Ratio of Earnings to Fixed Charges
(in millions, except ratios)
Three Months
Ended February 28,
-----------------
2007 2006
---- ----
Net income $283 $251
Income tax (benefit) expense, net (4) 14
---- ----
Income before income taxes 279 265
---- ----
Fixed charges
Interest expense, net 84 76
Interest portion of rent expense(a) 4 4
Capitalized interest 11 8
---- ----
Total fixed charges 99 88
---- ----
Fixed charges not affecting earnings
Capitalized interest (11) (8)
---- ----
Earnings before fixed charges $367 $345
==== ====
Ratio of earnings to fixed charges 3.7x 3.9x
==== ====
(a) Represents one-third of rent expense, which we believe to be
representative of the interest portion of rent expense.
19
Exhibit 31.1
I, Micky Arison, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Carnival Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors:
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: March 30, 2007
By:/s/ Micky Arison
----------------
Micky Arison
Chairman of the Board of Directors
and Chief Executive Officer
20
Exhibit 31.2
I, Howard S. Frank, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Carnival Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors:
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: March 30, 2007
By:/s/ Howard S. Frank
-------------------
Howard S. Frank
Vice Chairman of the Board of
Directors and Chief Operating Officer
21
Exhibit 31.3
I, Gerald R. Cahill, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Carnival Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors:
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: March 30, 2007
By:/s/ Gerald R. Cahill
--------------------
Gerald R. Cahill
Executive Vice President and Chief
Financial and Accounting Officer
22
Exhibit 31.4
I, Micky Arison, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Carnival plc;
2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors:
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: March 30, 2007
By:/s/ Micky Arison
----------------
Micky Arison
Chairman of the Board of Directors
and Chief Executive Officer
23
Exhibit 31.5
I, Howard S. Frank, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Carnival plc;
2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors:
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: March 30, 2007
By:/s/ Howard S. Frank
-------------------
Howard S. Frank
Vice Chairman of the Board of
Directors and Chief Operating Officer
24
Exhibit 31.6
I, Gerald R. Cahill, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Carnival plc;
2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the
registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our supervision,
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and
procedures and presented in this report our conclusions about the effectiveness
of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control
over financial reporting that occurred during the registrant's most recent
fiscal quarter that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting;
and
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of the registrant's board of
directors:
(a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are reasonably
likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control over
financial reporting.
Date: March 30, 2007
By:/s/ Gerald R. Cahill
--------------------
Gerald R. Cahill
Executive Vice President and Chief
Financial and Accounting Officer
25
Exhibit 32.1
In connection with the Quarterly Report on Form 10-Q for the quarter ended
February 28, 2007 as filed by Carnival Corporation with the Securities and
Exchange Commission on the date hereof (the "Report"), I certify pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of Carnival
Corporation.
Date: March 30, 2007
By:/s/ Micky Arison
----------------
Micky Arison
Chairman of the Board of Directors
and Chief Executive Officer
26
Exhibit 32.2
In connection with the Quarterly Report on Form 10-Q for the quarter ended
February 28, 2007 as filed by Carnival Corporation with the Securities and
Exchange Commission on the date hereof (the "Report"), I certify pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of Carnival
Corporation.
Date: March 30, 2007
By:/s/ Howard S. Frank
-------------------
Howard S. Frank
Vice Chairman of the Board of Directors
and Chief Operating Officer
27
Exhibit 32.3
In connection with the Quarterly Report on Form 10-Q for the quarter ended
February 28, 2007 as filed by Carnival Corporation with the Securities and
Exchange Commission on the date hereof (the "Report"), I certify pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of Carnival
Corporation.
Date: March 30, 2007
By:/s/ Gerald R. Cahill
--------------------
Gerald R. Cahill
Executive Vice President and Chief
Financial and Accounting Officer
28
Exhibit 32.4
In connection with the Quarterly Report on Form 10-Q for the quarter ended
February 28, 2007 as filed by Carnival plc with the Securities and Exchange
Commission on the date hereof (the "Report"), I certify pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of Carnival
plc.
Date: March 30, 2007
By:/s/ Micky Arison
----------------
Micky Arison
Chairman of the Board of Directors
and Chief Executive Officer
29
Exhibit 32.5
In connection with the Quarterly Report on Form 10-Q for the quarter ended
February 28, 2007 as filed by Carnival plc with the Securities and Exchange
Commission on the date hereof (the "Report"), I certify pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of Carnival
plc.
Date: March 30, 2007
By:/s/ Howard S. Frank
-------------------
Howard S. Frank
Vice Chairman of the Board of Directors
and Chief Operating Officer
30
Exhibit 32.6
In connection with the Quarterly Report on Form 10-Q for the quarter ended
February 28, 2007 as filed by Carnival plc with the Securities and Exchange
Commission on the date hereof (the "Report"), I certify pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of Carnival
plc.
Date: March 30, 2007
By:/s/ Gerald R. Cahill
--------------------
Gerald R. Cahill
Executive Vice President and Chief
Financial and Accounting Officer
31
