SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 27, 2004
Carnival Corporation Carnival plc
(Exact name of registrant (Exact name of registrant
as specified in its charter) as specified in its charter)
Republic of Panama England and Wales
(State or other jurisdiction (State or other jurisdiction
of incorporation) of incorporation)
1-9610 1-15136
(Commission File Number) (Commission File Number)
59-1562976 None
(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 executive (Address of principal executive
offices) 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 and former address, (Former name and former address,
if changed since last report) if changed since last report)
Item 5. Other Events and Regulation FD Disclosure.
Attached hereto as Exhibit 99.1 is the Carnival Corporation and Carnival
plc (formerly known as P&O Princess Cruises plc) (together, "Carnival
Corporation & plc") combined fiscal 2003 unaudited pro forma financial
information, that gives pro forma effect to the dual listed company ("DLC")
transaction, completed on April 17, 2003, between such companies, which
implemented Carnival Corporation & Carnival plc's DLC structure. This pro forma
information has been presented in accordance with Article ll of the Securities
and Exchange Commission's ("SEC") Regulation S-X, and is being filed solely in
order to comply with the SEC's pro forma financial reporting requirements.
Notice is hereby given that, as a result of a corporate reorganization
transaction completed on February 27, 2004, the P&O Princess Cruises
International Limited Deed of Guarantee, dated as of June 19, 2003 ("the
Guarantee"), was terminated pursuant to Section 5.4 (C) thereof, effective as of
February 27, 2004. The termination of the Guarantee does not have any effect on
the Carnival Corporation & plc consolidated financial statements and is being
disclosed herein solely because Section 8.3 of the Guarantee permits this notice
to be made in a Carnival Corporation and a Carnival plc Current Report on Form
8-K.
Item 7. Financial Statements, Proforma Financial Information and Exhibits.
Carnival Corporation & plc's fiscal 2003 unaudited pro forma financial
information, that gives pro forma effect to the DLC transaction, is included in
Exhibit 99.1.
Item 9. Information to be included in the Report.
Attached hereto as Exhibit 99.2 is the Carnival Corporation and Carnival
plc combined fiscal 2002 unaudited pro forma financial information, that gives
pro forma effect to the DLC transaction, which is only being furnished for
informational purposes.
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 hereunto duly authorized.
CARNIVAL CORPORATION CARNIVAL PLC
By: /s/Gerald R. Cahill By: /s/Gerald R. Cahill
------------------- -------------------
Name: Gerald R. Cahill Name: Gerald R. Cahill
Title: Executive Vice President Title: Executive Vice President
and Chief Financial and and Chief Financial and
Accounting Officer Accounting Officer
Date: March 5, 2004 Date: March 5, 2004
Exhibit List
Exhibit Description
- ------- -----------
99.1 Carnival Corporation & plc's fiscal 2003 unaudited pro forma
financial information.
99.2 Carnival Corporation & plc's fiscal 2002 unaudited pro forma
financial information.
Exhibit 99.1
UNAUDITED PRO FORMA FINANCIAL INFORMATION OF CARNIVAL CORPORATION & PLC
The following unaudited pro forma financial information gives pro forma
effect to the dual listed company ("DLC") transaction between Carnival
Corporation ("Carnival") and Carnival plc (formerly known as P&O Princess
Cruises plc) (together, "Carnival Corporation & plc"), which was completed on
April 17, 2003 and implemented Carnival and Carnival plc's DLC structure, after
giving effect to the pro forma adjustments described in the accompanying notes.
The unaudited pro forma financial information should be read in conjunction with
the fiscal 2003 consolidated financial statements, including the related notes,
of Carnival Corporation & plc that are included in Carnival Corporation & plc's
joint Annual Report on Form 10-K, dated February 24, 2004.
The DLC transaction has been accounted for using the purchase method of
accounting in accordance with Statement of Financial Accounting Standards No.
141 "Business Combinations." The pro forma adjustments include estimates of the
fair value of the identifiable assets and liabilities acquired. In accordance
with the purchase method of accounting, the Carnival plc accounting policies
have been conformed to Carnival's accounting policies and Carnival plc's year
end has been changed to November 30.
The unaudited pro forma statement of operations for the year ended
November 30, 2003 has been prepared as if the DLC transaction had occurred on
December 1, 2002 rather than April 17, 2003. The following unaudited pro forma
financial information:
o is presented for illustrative purposes only and, because of its
nature, may not give a true picture of the results of operations of
Carnival Corporation & plc;
o does not purport to represent what the results of operations
actually would have been if the DLC transaction had occurred on
December 1, 2002 or what those results will be for any future
periods. The pro forma adjustments are based upon currently
available information;
o does not reflect the results of business operations or trading since
November 30, 2003; and
o has not been adjusted to reflect any net transaction benefits.
Unaudited Pro Forma Statement of Operations
For the Year Ended November 30, 2003
(In millions, except per share data)
Carnival Carnival plc Pro forma
Corporation (December 1, Carnival
& plc 2002 through Pro forma Corporation
(as reported) April 17,2003) adjustments & plc
------------- -------------- ----------- -----
Revenues
Cruise
Passenger tickets $ 5,039 $ 693 $ 5,732
Onboard and other 1,420 180 1,600
Other 259 5 264
------- ------- -------
6,718 878 7,596
------- ------- -------
Costs and Expenses
Operating
Cruise
Passenger tickets 1,021 207 1,228
Onboard and other 229 50 279
Payroll and related 744 97 841
Food 393 54 447
Other ship operating 1,237 191 1,428
Other 194 9 203
------- ------- -------
Total 3,818 608 4,426
Selling and administrative 932 216 $ (51)(a) 1,097
Depreciation and amortization 585 75 (6)(b) 654
------- ------- ------- -------
5,335 899 (57) 6,177
------- ------- ------- -------
Operating Income (Loss) 1,383 (21) 57 1,419
Nonoperating (Expense) Income
Interest income 27 1 28
Interest expense, net of
capitalized interest (195) (33) 4(c) (224)
Other income, net 8 4 12
------- ------- ------- -------
(160) (28) 4 (184)
------- ------- ------- -------
Income (Loss) Before Income Taxes 1,223 (49) 61 1,235
Income Tax (Expense) Benefit, Net (29) 8 (4)(d) (25)
------- ------- ------- -------
Net Income (Loss) $ 1,194 $ (41) $ 57 $ 1,210
======= ======= ======= =======
Earnings Per Share(e)
Basic $ 1.66 $ 1.52
Diluted $ 1.66 $ 1.51
See accompanying notes to unaudited pro forma financial information of Carnival
Corporation & plc.
Notes to the unaudited pro forma financial information of Carnival
Corporation & plc
1. Basis of Presentation
The unaudited pro forma financial information has been prepared on the
basis that the DLC transaction has been accounted for using the purchase method
of accounting with Carnival as the acquirer. The pro forma financial information
is based upon the accounting policies of Carnival and should be read in
conjunction with Carnival Corporation & plc's consolidated financial statements
included in Exhibit 13 to their joint Annual Report on Form 10-K, dated February
24, 2004.
2. Pro forma Adjustments
(a) In 2003, Carnival plc incurred and expensed costs of $51 million related
to the completion of the DLC transaction with Carnival. An adjustment has
been made to reverse this $51 million in the 2003 pro forma statement of
operations since Carnival Corporation & plc believes that these costs are
nonrecurring charges directly attributable in all material respects to the
DLC transaction.
(b) An adjustment of $689 million has been made to reduce the carrying values
of 15 Carnival plc ships, including three ships under construction at the
April 17, 2003 acquisition date. This balance sheet adjustment was based
on a valuation study performed by an appraisal firm engaged to assist in
establishing the estimated fair values of Carnival plc's cruise ships and
non-amortizable and amortizable intangible assets as of the acquisition
date. Accordingly, a $6 million adjustment was made in the 2003 pro forma
statement of operations to reduce depreciation expense as a result of this
revaluation in ship carrying values.
(c) An adjustment of $53 million has been made to increase the carrying value
of Carnival plc's long-term debt to reflect current interest rates at the
acquisition date. The fair value of this debt was based upon quoted market
prices or the discounted present value of future amounts payable on the
debt. The fair value adjustment is being amortized over the remaining
terms of the debt, which results in an adjustment of $4 million to
decrease interest expense in the 2003 pro forma statement of operations.
(d) An adjustment of $4 million has been made to increase income tax expense
in the 2003 pro forma statement of operations to record the tax effect of
the pro forma adjustments.
(e) The pro forma weighted-average number of shares has been calculated as if
the DLC transaction had occurred on December 1, 2002 rather than April 17,
2003, and after adjusting for the Carnival plc share reorganization of
3.3289 existing Carnival plc shares for one new Carnival plc share. Our
2003 basic and diluted earnings per share were computed as follows
(amounts in millions, except per share data):
Carnival Pro forma
Corporation & plc Carnival
(as reported) Corporation & plc
------------- -----------------
Net income $1,194 $1,210
Interest on dilutive
convertible notes 5 5
------ ------
Net income for diluted
earnings per share $1,199 $1,215
====== ======
Weighted-average common and
ordinary shares outstanding 718 797
Dilutive effect of
convertible notes 4 4
Dilutive effect of stock option
plans 2 4
------ ------
Diluted weighted-average shares
outstanding 724 805
====== ======
Basic earnings per share $ 1.66 $ 1.52
====== ======
Diluted earnings per share $ 1.66 $ 1.51
====== ======
The net income for diluted earnings per share included an adjustment to
increase net income by $5 million representing the imputed interest expense
recorded on Carnival's Zero-coupon notes. The diluted weighted-average shares
outstanding included 4 million shares that could be converted at these
noteholders' options. The conversion of these Zero-coupon notes was only
dilutive in the 2003 third quarter.
Exhibit 99.2
UNAUDITED PRO FORMA FINANCIAL INFORMATION OF CARNIVAL CORPORATION & PLC
The following unaudited pro forma financial information gives pro forma
effect to the dual listed company ("DLC") transaction between Carnival
Corporation ("Carnival") and Carnival plc (formerly known as P&O Princess
Cruises plc) (together, "Carnival Corporation & plc"), which was completed on
April 17, 2003 and implemented Carnival and Carnival plc's DLC structure, after
giving effect to the pro forma adjustments described in the accompanying notes.
The unaudited pro forma financial information should be read in conjunction with
the fiscal 2003 consolidated financial statements, including the related notes,
of Carnival Corporation & plc that are included in Carnival Corporation & plc's
joint Annual Report on Form 10-K, dated February 24, 2004.
The DLC transaction has been accounted for using the purchase method of
accounting in accordance with Statement of Financial Accounting Standards No.
141 "Business Combinations." The pro forma adjustments include estimates of the
fair value of the identifiable assets and liabilities acquired. In accordance
with the purchase method of accounting, the Carnival plc accounting policies
have been conformed to Carnival's accounting policies and Carnival plc's year
end has been changed to November 30.
The unaudited pro forma statement of operations for the year ended
November 30, 2002 has been prepared as if the DLC transaction had occurred on
December 1, 2001 rather than April 17, 2003. The following unaudited pro forma
financial information:
o is presented for illustrative purposes only and, because of its
nature, may not give a true picture of the results of operations of
Carnival Corporation & plc;
o does not purport to represent what the results of operations
actually would have been if the DLC transaction had occurred on
December 1, 2001 or what those results will be for any future
periods. The pro forma adjustments are based upon currently
available information;
o does not reflect the results of business operations or trading since
November 30, 2002; and
o has not been adjusted to reflect any net transaction benefits.
Unaudited Pro Forma Statement of Operations
For the Year Ended November 30, 2002
(In millions, except per share data)
Pro forma
Carnival
Pro forma Corporation
Carnival Carnival plc adjustments & plc
-------- ------------ ----------- -----
Revenues
Cruise
Passenger tickets $ 3,346 $ 1,782 $ 5,128
Onboard and other 898 458 1,356
Other 139 145 284
------- ------- -------
4,383 2,385 6,768
------- ------- -------
Costs and Expenses
Operating
Cruise
Passenger tickets 658 464 1,122
Onboard and other 116 124 240
Payroll and related 458 218 676
Food 256 125 381
Other ship operating 734 415 1,149
Other 108 103 211
------- ------- -------
Total 2,330 1,449 3,779
Selling and administrative 609 454 $ (104)(a) 959
Depreciation and amortization 382 166 (14)(b) 534
Impairment charge 20 20
------- ------- ------- -------
3,341 2,069 (118) 5,292
------- ------- ------- -------
Operating Income 1,042 316 118 1,476
Nonoperating (Expense) Income
Interest income 32 13 45
Interest expense, net of
capitalized interest (111) (86) 7(c) (190)
Other (expense) income, net (4) 1 (3)
------- ------- ------- -------
(83) (72) 7 (148)
------- ------- ------- -------
Income Before Income Taxes 959 244 125 1,328
Income Tax Benefit (Expense), Net 57 (3) (7)(d) 47
------- ------- ------- -------
Net Income $ 1,016 $ 241 $ 118 $ 1,375
======= ======= ======= =======
Earnings Per Share(e)
Basic $ 1.73 $ 1.73
Diluted $ 1.73 $ 1.72
See accompanying notes to unaudited pro forma financial information of Carnival
Corporation & plc.
Notes to the unaudited pro forma financial information of Carnival
Corporation & plc
1. Basis of Presentation
The unaudited pro forma financial information has been prepared on the
basis that the DLC transaction has been accounted for using the purchase method
of accounting with Carnival as the acquirer. The pro forma financial information
is based upon the accounting policies of Carnival and should be read in
conjunction with Carnival Corporation & plc's consolidated financial statements
included in Exhibit 13 to their joint Annual Report on Form 10-K, dated February
24, 2004.
2. Pro forma Adjustments
(a) In 2002, Carnival plc incurred and expensed costs of $104 million related
to its terminated Royal Caribbean dual listed company transaction and the
completion of the DLC transaction with Carnival. An adjustment has been
made to reverse this $104 million in the 2002 pro forma statement of
operations since Carnival Corporation & plc believes that these costs are
nonrecurring charges directly attributable in all material respects to the
DLC transactions.
(b) An adjustment of $689 million has been made to reduce the carrying values
of 15 Carnival plc ships, including three ships under construction at the
April 17, 2003 acquisition date. This balance sheet adjustment was based
on a valuation study performed by an appraisal firm engaged to assist in
establishing the estimated fair values of Carnival plc's cruise ships and
non-amortizable and amortizable intangible assets as of the acquisition
date. Accordingly, a $14 million adjustment was made in the 2002 pro forma
statement of operations to reduce depreciation expense as a result of this
revaluation in ship carrying values.
(c) An adjustment of $53 million has been made to increase the carrying value
of Carnival plc's long-term debt to reflect current interest rates at the
acquisition date. The fair value of this debt was based upon quoted market
prices or the discounted present value of future amounts payable on the
debt. The fair value adjustment is being amortized over the remaining
terms of the debt, which results in an adjustment of $7 million to
decrease interest expense in the 2002 pro forma statement of operations.
(d) An adjustment of $7 million has been made to increase income tax expense
in the 2002 pro forma statement of operations to record the tax effect of
the pro forma adjustments.
(e) The pro forma weighted-average number of shares has been calculated as if
the DLC transaction had occurred on December 1, 2001 rather than April 17,
2003, and after adjusting for the Carnival plc share reorganization of
3.3289 existing Carnival plc shares for one new Carnival plc share. Our
2002 basic and diluted earnings per share were computed as follows
(amounts in millions, except per share data):
Carnival Pro forma
Corporation Carnival
(as reported) Corporation & plc
------------- -----------------
Net income $1,016 $1,375
====== ======
Weighted-average common and
ordinary shares outstanding 587 795
Dilutive effect of stock option
plans 1 5
------ ------
Diluted weighted-average shares
outstanding 588 800
====== ======
Basic earnings per share $ 1.73 $ 1.73
====== ======
Diluted earnings per share $ 1.73 $ 1.72
====== ======