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 29, 2004
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 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 (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 accelerated filers (as
defined in Rule 12b-2 of the Exchange Act). Yes |X| No |_|
At April 2, 2004, Carnival Corporation At April 2, 2004, Carnival plc
had outstanding 632,678,631 shares of had outstanding 211,574,618
Common Stock, $.01 par value. Ordinary Shares $1.66 stated
value, one Special Voting,
Share, GBP 1.00 par value and
632,678,631 Trust Shares of
beneficial interest in the P&O
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 29/28,
------------------------
2004 2003
------- -------
Revenues
Cruise
Passenger tickets $ 1,527 $ 800
Onboard and other 445 232
Other 8 3
------- -------
1,980 1,035
------- -------
Costs and Expenses
Operating
Cruise
Commissions, transportation
and other 384 174
Onboard and other 81 28
Payroll and related 236 130
Food 127 69
Other ship operating 378 212
Other 10 7
------- -------
Total 1,216 620
Selling and administrative 316 177
Depreciation and amortization 188 106
------- -------
1,720 903
------- -------
Operating Income 260 132
------- -------
Nonoperating (Expense) Income
Interest income 4 4
Interest expense, net of
capitalized interest (65) (29)
Other income, net 15
------- -------
(61) (10)
------- -------
Income Before Income Taxes 199 122
Income Tax Benefit, Net 4 5
------- -------
Net Income $ 203 $ 127
======= =======
Earnings Per Share
Basic $ 0.25 $ 0.22
======= =======
Diluted $ 0.25 $ 0.22
======= =======
Dividends Per Share $ 0.125 $ 0.105
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
1
CARNIVAL CORPORATION & PLC
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in millions, except par/stated values)
February 29, November 30,
2004 2003
-------- --------
ASSETS
Current Assets
Cash and cash equivalents $ 563 $ 1,070
Accounts receivable, net 445 403
Inventories 200 171
Prepaid expenses and other 237 213
Fair value of derivative contracts 147 275
-------- --------
Total current assets 1,592 2,132
-------- --------
Property and Equipment, Net 18,928 17,522
Goodwill 3,123 3,031
Trademarks 1,357 1,324
Other Assets 506 482
-------- --------
$ 25,506 $ 24,491
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term borrowings $ 101 $ 94
Current portion of long-term debt 479 392
Accounts payable 689 645
Accrued liabilities and other 455 468
Customer deposits 1,561 1,352
Dividends payable 100 100
Fair value of hedged firm commitments 144 264
-------- --------
Total current liabilities 3,529 3,315
-------- --------
Long-Term Debt 7,247 6,918
Deferred Income and Other Long-Term Liabilities 548 465
Contingencies (Note 5)
Shareholders' Equity
Common stock of Carnival Corporation; $.01 par
value; 1,960 shares authorized; 633 shares
at 2004 and 630 shares at 2003 issued and outstanding 6 6
Ordinary shares of Carnival plc; $1.66 stated value;
226 shares authorized; 211 shares at 2004 and
210 shares at 2003 issued 352 349
Additional paid-in capital 7,254 7,163
Retained earnings 7,294 7,191
Unearned stock compensation (22) (18)
Accumulated other comprehensive income 356 160
Treasury stock, 42 shares of Carnival plc at cost (1,058) (1,058)
-------- --------
Total shareholders' equity 14,182 13,793
-------- --------
$ 25,506 $ 24,491
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
2
CARNIVAL CORPORATION & PLC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in millions)
Three Months Ended February 29/28,
----------------------------------
2004 2003
------- -----
OPERATING ACTIVITIES
Net income $ 203 $ 127
Adjustments to reconcile net income to
net cash provided by operating activities
Depreciation and amortization 188 106
Accretion of original issue discount 5 5
Other 3 (4)
Changes in operating assets and liabilities
(Increase) decrease in
Receivables (53) 2
Inventories (26) (3)
Prepaid expenses and other (8) (26)
Increase (decrease) in
Accounts payable 23 27
Accrued and other liabilities 20 (19)
Customer deposits 187 (44)
------- -----
Net cash provided by operating activities 542 171
------- -----
INVESTING ACTIVITIES
Additions to property and equipment (1,363) (112)
Proceeds from retirement of property and equipment 77 31
Other, net (1) (5)
------- -----
Net cash used in investing activities (1,287) (86)
------- -----
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 457 148
Principal repayments of long-term debt (204) (109)
Dividends paid (100) (62)
Proceeds from exercise of stock options 87 1
Other 2
------- -----
Net cash provided by (used in)
financing activities 242 (22)
------- -----
Effect of exchange rate changes on cash
and cash equivalents (4) 3
------- -----
Net(decrease) increase in cash and
cash equivalents (507) 66
Cash and cash equivalents at beginning of period 1,070 667
------- -----
Cash and cash equivalents at end of period $ 563 $ 733
======= =====
The accompanying notes are an integral part of these consolidated financial
statements.
3
CARNIVAL CORPORATION & PLC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - General
Basis of Presentation
On April 17, 2003, Carnival Corporation and Carnival plc (formerly known
as P&O Princess Cruises plc or "P&O Princess") completed a dual listed company
("DLC") transaction (the "DLC transaction"), which implemented Carnival
Corporation & plc's DLC structure. The DLC transaction combined the businesses
of Carnival Corporation and Carnival plc through a number of contracts and
amendments to Carnival Corporation's articles of incorporation and by-laws and
to Carnival plc's memorandum of association and articles of association. The two
companies have retained their separate legal identities, however, they operate
as if they were a single economic enterprise.
Carnival Corporation is a Panamanian corporation, and Carnival plc is
incorporated in England and Wales. 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." Our consolidated financial statements include the
consolidated results of Carnival Corporation for all periods presented and
Carnival plc's consolidated results of operations since April 17, 2003.
The accompanying consolidated balance sheet at February 29, 2004 and the
consolidated statements of operations and cash flows for the three months ended
February 29/28, 2004 and 2003 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 2003 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.
Commencing with the third quarter of fiscal 2003, we changed the reporting
format of our consolidated statements of operations to present our significant
revenue sources and their directly related variable costs and expenses. In
addition, we have separately identified certain ship operating expenses, such as
payroll and related expenses and food costs. Reclassifications have been made to
prior period amounts to conform to the current period presentation.
4
Note 2 - Stock-Based Compensation
Pursuant to Statement of Financial Accounting Standards ("SFAS") No. 123,
"Accounting for Stock-Based Compensation," as amended, we elected to use the
intrinsic value method of accounting for our employee and director stock-based
compensation awards instead of the fair value method. Accordingly, we have not
recognized compensation expense for our noncompensatory employee and director
stock option awards. Our adjusted net income and adjusted earnings per share,
had we elected to adopt the fair value approach of SFAS No. 123, which charges
earnings for the estimated fair value of stock options, would have been as
follows (in millions, except per share amounts):
Three Months
Ended February 29/28,
---------------------
2004 2003
----- -----
Net income, as reported $ 203 $ 127
Stock-based compensation
expense included in
net income, as reported 2 1
Total stock-based compensation
expense determined under
the fair value-based method
for all awards (33)(a) (8)
----- -----
Adjusted net income for basic
earnings per share 172 120
Interest on dilutive 2% convertible
notes 4
----- -----
Adjusted net income for diluted
earnings per share $ 176 $ 120
===== =====
Earnings per share
Basic
As reported $0.25 $0.22
===== =====
Adjusted $0.22 $0.20
===== =====
Diluted
As reported $0.25 $0.22
===== =====
Adjusted $0.22 $0.20
===== =====
(a) During the three months ended February 29, 2004, we completed a corporate
reorganization. As a result of that reorganization, 2.3 million unvested
options held by employees vested immediately. This vesting occurred either
in accordance with the terms of the option plan or to avoid having these
employees and Carnival Corporation incur unduly burdensome taxes upon the
exercise of such options at a later date. As a result of this accelerated
vesting we included an additional nonrecurring amount of $23 million of
stock-based compensation expense determined under the fair value-based
method in the first quarter of 2004.
NOTE 3 - DLC Transaction
The DLC transaction has been accounted for as an acquisition of Carnival
plc by Carnival Corporation, using the purchase method of accounting. Carnival
plc's accounting policies have been conformed to Carnival Corporation's
policies. Carnival plc's reporting period has been changed to Carnival
Corporation's reporting period, and the pro forma information presented below
covers the same period of time for both companies.
The following pro forma information has been prepared as if the DLC
transaction had occurred on December 1, 2002 rather than April 17, 2003 and has
not been adjusted to reflect any net transaction benefits. In addition, the pro
forma information presented below does not purport to represent what the results
of operations actually could have been if the DLC transaction had occurred on
December 1, 2002 or what those results will be for any future periods.
Management has prepared the pro forma information based upon the companies'
reported financial information.
5
Three Months Ended February 28, 2003
------------------------------------
(in millions, except earnings per share)
Pro forma revenues $1,622
======
Pro forma net income (a)(b) $ 123
======
Pro forma earnings per share
Basic $ 0.15
======
Diluted $ 0.15
======
Pro forma weighted-average
shares outstanding
Basic 795
======
Diluted 799
======
(a) In accordance with SFAS No. 141, "Business Combinations," pro forma net
income was reduced by $24 million for Carnival plc's nonrecurring costs
related to its completion of the DLC transaction with Carnival
Corporation, which were expensed by Carnival plc prior to April 17, 2003.
(b) Pro forma net income included $19 million of income related to the receipt
of nonrecurring net insurance proceeds.
NOTE 4 - Debt
In February 2004, we borrowed $381 million to finance a portion of the
Diamond Princess purchase price, pursuant to a committed financing arrangement.
This loan has both a fixed and variable interest rate component and at February
29, 2004 had a weighted-average interest rate of 3.5%. This loan matures through
May 2016.
In March 2004, Carnival plc entered into a 600 million euro unsecured
multi-currency revolving credit facility, guaranteed by Carnival Corporation,
which currently bears interest at eurolibor plus 30 basis points ("BPS"), which
interest rate spread over the base rate will vary based on changes to Carnival
plc's senior unsecured credit rating. This facility also has a nine BPS
commitment fee on the undrawn portion and expires in March 2005, but provides
Carnival plc with the option to extend the repayment date of the then existing
outstanding borrowings to June 2006. In connection with obtaining this new
revolver, Carnival plc repaid the $93 million outstanding under the P&O Princess
Cruises International Limited ("POPCIL") $710 million revolving credit
facilities, which facilities were then terminated prior to their September 2005
maturity dates.
In connection with a corporate reorganization that was completed in late
February 2004, the POPCIL deed of guarantee dated June 19, 2003, which
guaranteed substantially all of Carnival Corporation's and Carnival plc's debt
was terminated in accordance with its terms. The deeds of guarantee between
Carnival Corporation and Carnival plc are still in effect, thus effectively
cross guaranteeing all Carnival Corporation and Carnival plc indebtedness and
other monetary obligations.
6
NOTE 5 - Contingencies
Litigation
In 2002, two actions (collectively, the "Facsimile Complaints") were filed
against Carnival Corporation on behalf of purported classes of persons who
received unsolicited advertisements via facsimile, alleging that Carnival
Corporation and other defendants distributed unsolicited advertisements via
facsimile in contravention of the U.S. Telephone Consumer Protection Act. The
plaintiffs seek to enjoin the sending of unsolicited facsimile advertisements
and statutory damages. The advertisements referred to in the Facsimile
Complaints were not sent by Carnival Corporation, but rather were distributed by
a professional faxing company at the behest of travel agencies that referenced a
Carnival Cruise Lines product. We do not advertise directly to the traveling
public through the use of facsimile transmission. The ultimate outcomes of the
Facsimile Complaints cannot be determined at this time. We believe that we have
meritorious defenses to these claims and, accordingly, we intend to vigorously
defend against these actions.
In February 2001, Holland America Line-USA, Inc. ("HAL-USA"), a
wholly-owned subsidiary, received a grand jury subpoena requesting that it
produce documents and records relating to the air emissions from Holland America
Line ships in Alaska. HAL-USA responded to the subpoena. The ultimate outcome of
this matter cannot be determined at this time.
On August 17, 2002, an incident occurred in Juneau, Alaska onboard Holland
America Line's Ryndam involving a wastewater discharge from the ship. As a
result of this incident, the Office of the U.S. Attorney in Anchorage, Alaska
initiated a grand jury proceeding. The State of Alaska is separately
investigating this incident.
On March 5, 2004, Holland America Line notified the United States and
Netherlands governmental authorities that one of its chief engineers had
admitted to improperly processing bilge water on the Noordam. A subsequent
internal investigation has determined that the improper operation may have begun
in January 2004 and may have continued sporadically through March 4, 2004.
Holland America Line and three shipboard engineers have received grand jury
subpoenas from the Office of the U.S. Attorney in Tampa, Florida.
If either the Ryndam or the Noordam investigations result in charges being
filed, a judgment could include, among other forms of relief, fines and
debarment from federal contracting, which would prohibit operations in Glacier
Bay National Park and Preserve during the period of debarment. The ultimate
outcomes of these matters cannot be determined at this time. However, if Holland
America Line were to lose its Glacier Bay permits we would not expect the impact
on our financial statements to be material to us since we believe there are
additional attractive alternative destinations in Alaska that can be substituted
for Glacier Bay.
Costa Cruises ("Costa") has instituted arbitration proceedings in Italy to
confirm the validity of its decision not to deliver its ship, the Costa
Classica, to the shipyard of Cammell Laird Holdings PLC ("Cammell Laird") under
a 79 million euro denominated contract for the conversion and lengthening of the
ship. Costa has also given notice of termination of the contract. It is now
expected that the arbitration tribunal's decision will be made in late-2004 at
the earliest. In the event that an award is given in favor of Cammell Laird, the
amount of damages, which Costa would have to pay, if any, is not currently
determinable. The ultimate outcome of this matter cannot be determined at this
time.
On April 23, 2003, Festival Crociere S.p.A. commenced an action against
the European Commission (the "Commission") in the Court of First Instance of the
European Communities in Luxembourg seeking to annul the Commission's antitrust
approval of the DLC transaction (the "Festival Action"). We have been granted
leave to intervene in the Festival Action and are contesting such action
vigorously. A successful third party challenge of an unconditional Commission
clearance decision would be unprecedented, and based on a review of the law and
the factual circumstances of the
7
DLC transaction, as well as the Commission's approval decision in relation to
the DLC transaction, we believe that the Festival Action will not have a
material adverse effect on the companies or the DLC transaction. However, the
ultimate outcome of this matter cannot be determined at this time.
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 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 29, 2004, Carnival Corporation had contingent obligations
totaling $1.06 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 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 AAA or AA. In
addition, Carnival Corporation obtained a direct guarantee from another AAA
rated financial institution for $284 million of the above noted contingent
obligations, thereby further reducing the already remote exposure to this
portion of the contingent obligations. If the major financial institutions'
credit ratings fall below AA-, Carnival Corporation would be required to move a
majority of the funds from these financial institutions to other highly-rated
financial institutions. If Carnival Corporation's credit rating falls below BBB,
it would be required to provide a standby letter of credit for $84 million, or
alternatively provide mortgages in the aggregate amount of $84 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 29, 2004 have to pay a total of $177 million in stipulated damages. As
of February 29, 2004, $186 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 the event Carnival
Corporation were to default under its $1.4 billion revolving credit facility, it
would be required to post cash collateral to support the stipulated damages
standby letters of credit. Between 2017 and 2022, Carnival Corporation has the
right to exercise options that would terminate these transactions at no cost to
it. As a result of these three transactions, we have $39 million and $40 million
of deferred income recorded on our balance sheets as of February 29, 2004 and
November 30, 2003, respectively, which is being amortized to nonoperating income
through 2022.
Other Contingent Obligations
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. Based upon current circumstances, we do not believe a request for
material future indemnification payments is probable.
8
NOTE 6 - Comprehensive Income
Comprehensive income for the three months ended February 29/28, 2004 and
2003 was as follows (in millions):
Three Months
Ended February 29/28,
---------------------
2004 2003
----- -----
Net income $ 203 $ 127
Foreign currency translation
adjustment 209 54
Changes related to cash flow
derivative hedges (13) (2)
Unrealized losses on
marketable securities (1)
----- -----
Total comprehensive income $ 399 $ 178
===== =====
NOTE 7 - Segment Information
Our cruise segment included all of our cruise brands, which have been
aggregated as a single reportable segment based on the similarity of their
economic and other characteristics. Our other segment represented the hotel,
tour and transportation operations of Holland America Tours and Princess Tours
and the business to business travel agency operations of P&O Travel Ltd., the
latter two since completion of the DLC transaction on April 17, 2003.
Selected segment information for the three months ended February 29/28,
2004 and 2003 for our cruise and other segments was as follows (in millions):
Selling Operating
Revenues Operating and admin- income
2004 (a) expenses istrative (loss)
-------- --------- ---------- ---------
Cruise $ 1,972 $ 1,206 $ 302 $ 281
Other 10 12 14 (21)
Intersegment elimination (2) (2)
------- ------- ------- -------
$ 1,980 $ 1,216 $ 316 $ 260
======= ======= ======= =======
2003
Cruise $ 1,032 $ 613 $ 170 $ 143
Other 5 9 7 (11)
Intersegment elimination (2) (2)
------- ------- ------- -------
$ 1,035 $ 620 $ 177 $ 132
======= ======= ======= =======
(a) Revenue amounts in 2003 have been reclassified to conform to the 2004
presentation.
9
NOTE 8 - Earnings Per Share
Our basic and diluted earnings per share were computed as follows (in
millions, except per share data):
Three Months Ended
February 29/28,
---------------
2004 2003
----- -----
Net income $ 203 $ 127
Interest on dilutive 2% convertible
notes 4
----- -----
Net income for diluted earnings
per share $ 207 $ 127
===== =====
Weighted-average common and
ordinary shares outstanding 800 587
Dilutive effect of 2% convertible
notes 15
Dilutive effect of stock plans 5 1
----- -----
Diluted weighted-average shares
outstanding 820 588
===== =====
Basic earnings per share $0.25 $0.22
===== =====
Diluted earnings per share $0.25 $0.22
===== =====
The weighted-average shares outstanding for the three months ended
February 29, 2004 included the Carnival plc shares.
Carnival Corporation's common stock price was above the defined trigger
prices for two of its convertible notes for a defined duration of time during
the three months ended February 29, 2004 and, therefore, its zero-coupon notes
and 2% convertible notes are convertible into Carnival Corporation common stock
during its 2004 second quarter at conversion prices of $31.28 and $39.14 per
share, respectively. The assumed conversion of the zero-coupon notes into a
maximum of 17.4 million shares was anti-dilutive in the first quarter of 2004
and, therefore, did not affect our earnings per share computation.
Our diluted earnings per share computation for the three months ended
February 29, 2004 did not include a maximum of 20.9 million shares (32.7 million
in 2003) of Carnival Corporation common stock issuable upon conversion of its
other convertible debt, as this common stock was not issuable under the
contingent conversion provisions of these debt instruments. In addition, options
to purchase 5.0 million and 9.5 million shares for the three months ended
February 29/28, 2004 and 2003, respectively, were excluded from our diluted
earnings per share computation since the effect of including them was
anti-dilutive.
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, plans, outlook, 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. You can find many,
but not all, of these statements by looking for words like "will," "may,"
"believes," "expects," "anticipates," "forecast," "future," "intends," "plans,"
and "estimates" and for similar expressions.
10
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 tax
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:
- - achievement of expected benefits from the DLC transaction;
- - risks associated with the DLC structure;
- - risks associated with the uncertainty of the tax status of the DLC
structure;
- - general economic and business conditions, which may impact levels of
disposable income of consumers and net revenue yields for our cruise
brands;
- - 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;
- - risks associated with operating internationally;
- - the international political and economic climate, armed conflicts,
terrorist attacks and threats thereof, including the risk of attack at the
2004 Summer Olympics in Athens, Greece, for which we have chartered four
of our ships to third parties, availability of air service, other world
events and adverse publicity, and their impact on the demand for cruises;
- - accidents and other incidents affecting the health, safety, security and
vacation satisfaction of passengers;
- - our ability to implement our shipbuilding programs and brand strategies
and to continue to expand our business worldwide;
- - our ability to attract and retain qualified shipboard crew and maintain
good relations with employee unions;
- - our ability to obtain financing on terms that are favorable or consistent
with our expectations;
- - the impact of changes in operating and financing costs, including changes
in foreign currency and interest rates and fuel, food, payroll, insurance
and security costs;
- - changes in the tax, environmental, health, safety, security and other
regulatory regimes under which we operate;
- - continued availability of attractive port destinations;
- - our ability to successfully implement cost improvement plans and to
integrate business acquisitions;
- - continuing financial viability of our travel agent distribution system;
and
- - weather patterns or natural disasters.
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, Pro Forma Information 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 revenue performance. This measure is
11
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 its most significant variable costs (travel agent commissions, cost of
air transportation and certain other variable direct costs associated with
onboard revenues). Substantially all of our remaining cruise costs are largely
fixed once our ship capacity levels have been determined.
Net cruise costs per ALBD is the most significant measure we use to
monitor our ability to control costs. In calculating this measure, we exclude
the same variable
12
costs as described above, which are included in the calculation of net cruise
revenues. This is done to avoid duplicating these variable costs in the two
non-GAAP financial measures described above.
We have not provided estimates of future gross revenue yields or future
gross cruise costs per ALBD because the reconciliations of forecasted net cruise
revenues to forecasted gross cruise revenues or forecasted net cruise costs to
forecasted cruise operating expenses would require us to forecast, with
reasonable accuracy, the amount of air and other transportation costs that our
forecasted cruise passengers would elect to purchase from us (the "air/sea
mix"). Since the forecasting of future air/sea mix involves several significant
variables that are relatively difficult to forecast and the revenues from the
sale of air and other transportation approximate the costs of providing that
transportation, management focuses primarily on forecasts of net cruise revenues
and costs rather than gross cruise revenues and costs. This does not impact, in
any material respect, our ability to forecast our future results, as any
variation in the air/sea mix has no material impact on our forecasted net cruise
revenues or forecasted net cruise costs. As such, management does not believe
that this reconciling information would be meaningful.
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 key indicators assuming the 2004
exchange rates have remained constant with the prior year's comparable rates, or
on a "constant dollar basis," in order to remove the impact of changes in
exchange rates. We believe that this is a useful measure indicating the actual
growth of our operations.
Our reported results for 2004 included Carnival Corporation and Carnival
plc, and our 2003 reported results only included Carnival Corporation.
Consequently, we believe that the most meaningful comparison of our financial
results and operating metrics is to the comparable pro forma results and metrics
which reflect the operations of both Carnival Corporation and the former P&O
Princess acquired operations' 2003 first quarter as if the companies had been
consolidated for that period. Accordingly, we have disclosed pro forma
information, as well as the required reported information, in the discussion of
our results of operations.
The 2003 pro forma information was computed by adding the former P&O
Princess acquired operations' 2003 results, adjusted for acquisition adjustments
(reductions of $4 million of depreciation expense and $2 million of interest
expense) and excluding $24 million of nonrecurring DLC transaction costs, to the
2003 Carnival Corporation reported results. For additional information related
to the pro forma results of operations see Note 3 in the accompanying financial
statements.
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 2003 joint Annual Report on Form
10-K.
Outlook For Remainder of Fiscal 2004
We expect that second quarter 2004 net revenue yields will increase 10% to
12% (7% to 9% on a constant dollar basis), compared to last year's pro forma
second quarter, which was the period most significantly impacted by the Iraq
war. Net cruise costs per ALBD are expected to increase approximately 1% to 3%
(flat to down 2% on a constant dollar basis), compared to pro forma 2003. Based
on these estimates, we expect second quarter 2004 earnings per share to be in
the range of $0.34 to $0.36.
Net revenue yields for the last nine months of 2004 are expected to
increase in the range of 6% to 8% (3% to 5% on a constant dollar basis),
compared to pro forma 2003. Net cruise costs per ALBD for the remainder of 2004
are expected to be flat to up 2% (down 1% to 3% on a constant dollar basis),
compared to pro forma 2003. Based on these estimates, we expect full year 2004
earnings to be in the range of $2.05 to $2.15
13
per share. Our current guidance is based on an exchange rate of $1.23 to the
euro and $1.81 to the sterling.
Assuming that the DLC transaction was completed and the former P&O
Princess' acquired operations were consolidated for the full period in 2003, our
ALBD capacity is currently expected to increase 22.3%, 17.9% and 13.5% in the
second, third and fourth quarters of fiscal 2004, as compared to pro forma ALBD
for the same period of fiscal 2003.
Seasonality
Historically, demand for cruises has been greatest during our third fiscal
quarter, which includes the northern hemisphere summer months. The consolidation
of the former P&O Princess brands has caused our quarterly results to be more
seasonal than we had previously experienced, as their business is more seasonal.
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. Revenues from Holland America Tours and Princess Tours are highly
seasonal, with a vast majority of those revenues generated during the late
spring and summer months in conjunction with the Alaska cruise season.
Three Months Ended February 29, 2004 ("2004") Compared to Pro Forma Three Months
Ended February 28, 2003 ("pro forma 2003") and Reported Results for the Three
Months Ended February 28, 2003 ("2003")
Our reported and pro forma results of operations and selected statistical
information were as follows:
Three Months Ended February 29/28, 2004 vs.
--------------------------------------- ----------------------
Pro Forma Pro Forma
--------- ---------
2004 2003 2003 2003 2003
------- ------- ------- ------- -------
(dollars in millions)
Revenues
Cruise
Passenger tickets $ 1,527 $ 1,263 $ 800 $ 264 $ 727
Onboard and other 445 352 232 93 213
Other 8 7 3 1 5
------- ------- ------- ------- -------
1,980 1,622 1,035 358 945
------- ------- ------- ------- -------
Costs and Expenses
Operating
Cruise
Commissions, transportation
and other 384 312 174 72 210
Onboard and other 81 62 28 19 53
Payroll and related 236 192 130 44 106
Food 127 105 69 22 58
Other ship operating 378 335 212 43 166
Other 10 10 7 3
------- ------- ------- ------- -------
Total 1,216 1,016 620 200 596
------- ------- ------- ------- -------
Selling and administrative 316 283 177 33 139
Depreciation and amortization 188 151 106 37 82
------- ------- ------- ------- -------
Operating Income 260 172 132 88 128
Nonoperating Expense, Net (61) (30) (10) (31) (51)
------- ------- ------- ------- -------
Income Before Income Taxes 199 142 122 57 77
Income Tax Benefit, Net 4 5 5 (1) (1)
------- ------- ------- ------- -------
Net Income $ 203 $ 147 $ 127 $ 56 $ 76
======= ======= ======= ======= =======
Selected Statistical Information
Passengers carried
(in thousands) 1,362 1,206 923 156 439
======= ======= ======= ======= =======
Occupancy percentage 102.0% 100.4% 102.8% 1.6 pts. (0.8) pts.
======= ======= ======= ======= =======
14
Revenues
Approximately $745 million of our reported cruise revenue increase was due
to the consolidation of the former P&O Princess acquired brands. The remaining
increase of $195 million (an 18.9% increase over 2003) resulted primarily from a
16.8% increase in Carnival Corporation's standalone ALBD capacity in 2004
compared to 2003 and higher revenue yields (revenue per ALBD). Onboard and other
revenues included concession revenues of $56 million in 2004 and $40 million in
2003.
We use net revenue yields to measure our cruise segment revenue
performance. Gross and net revenue yields were computed by dividing the gross or
net revenues, without rounding, by ALBDs as follows:
Three Months Ended February 29/28,
----------------------------------
2004 Pro Forma 2003 2003
------------ -------------- ------------
(in millions, except ALBDs and yields)
Cruise revenues
Passenger tickets $ 1,527 $ 1,263 $ 800
Onboard and other 445 352 232
------------ ------------ ------------
Gross cruise revenues 1,972 1,615 1,032
Less cruise costs
Commissions, transportation
and other (384) (312) (174)
Onboard and other (81) (62) (28)
------------ ------------ ------------
Net cruise revenues $ 1,507 $ 1,241 $ 830
============ ============ ============
ALBDs 10,062,655 8,618,229 5,804,759
============ ============ ============
Gross revenue yields $ 196.04 $ 187.31 $ 177.67
============ ============ ============
Net revenue yields $ 149.86 $ 143.94 $ 142.85
============ ============ ============
Net revenue yields in 2004 increased 4.1 percent (4.7 percent gross)
compared to pro forma 2003 net revenue yields largely due to the weak U.S.
dollar relative to the euro and sterling. Net revenue yields as measured on a
constant dollar basis were in line with the same period last year.
Net revenue yields in 2004 increased 4.9 percent (10.3 percent gross)
compared to 2003 primarily due to the weaker U.S. dollar and, to a lesser
extent, higher net revenue yields from the former P&O Princess brands. Gross
revenue yields increased more than net revenue yields because of the higher
proportion of customers of the former P&O Princess brands who purchased air
transportation from us.
15
Costs and Expenses
Approximately $578 million of the increase in our 2004 cruise operating
and selling and administrative expenses compared to 2003 was due to the
consolidation of the former P&O Princess brands. The remaining increase of $147
million (a 18.8% increase over 2003) resulted primarily from the 16.8% increase
in Carnival Corporation standalone capacity in 2004 compared to 2003 and the
weaker U.S. dollar relative to the euro and sterling. Finally, the increase in
each of the individual cruise operating expense line items was primarily the
result of the same factors as discussed within this section.
We use net cruise costs per ALBD to monitor our ability to control our
cruise segment costs. 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 29/28,
----------------------------------
2004 Pro Forma 2003 2003
------------ -------------- ------------
(in millions, except ALBDs and costs per ALBD)
Cruise operating expenses $ 1,206 $ 1,006 $ 613
Cruise selling and
administrative expenses 302 269 170
------------ ------------ ------------
Gross cruise costs 1,508 1,275 783
Less cruise costs included in net
cruise revenues
Commissions, transportation
and other (384) (312) (174)
Onboard and other (81) (62) (28)
------------ ------------ ------------
Net cruise costs $ 1,043 $ 901 $ 581
============ ============ ============
ALBDs 10,062,655 8,618,229 5,804,759
============ ============ ============
Gross cruise costs per ALBD $ 149.93 $ 147.87 $ 134.85
============ ============ ============
Net cruise costs per ALBD $ 103.75 $ 104.50 $ 100.03
============ ============ ============
Net cruise costs per ALBD in 2004 were 0.7 percent less than pro forma
2003 net cruise costs. This decrease was achieved despite the impact of the weak
dollar, which has the effect of significantly increasing cruise costs per ALBD.
On a constant dollar basis, net cruise costs per ALBD declined 5.1 percent from
the pro forma 2003 primarily due to the timing of advertising and other
expenditures which are expected to be incurred later in the 2004 fiscal year,
benefits of scale associated with a larger fleet of ships and synergy savings
from the DLC transaction. Gross cruise costs per ALBD in 2004 increased 1.4
percent compared to pro forma 2003.
Net cruise costs per ALBD in 2004 increased 3.7 percent (11.2 percent
gross) compared to 2003 primarily because of the impact of the weak U.S. dollar
and higher operating costs of the former P&O Princess brands. Gross cruise costs
per ALBD increased more than net cruise costs per ALBD because of the higher
proportion of the former P&O Princess brands' customers who purchased air
transportation from us.
Depreciation and amortization expense increased by $37 million, or 24.5%,
to $188 million in 2004 from $151 million in pro forma 2003 largely due to the
expansion of the combined fleet and ship improvement expenditures, as well as
the impact of a weaker U.S. dollar. Depreciation and amortization increased by
$82 million, or 77.4%, to $188 million in 2004 from $106 million in 2003.
Approximately $54 million of this increase was from the consolidation of the
former P&O Princess acquired operations. The majority of the remaining increase
was a result of the expansion of the Carnival Corporation fleet and ship
improvement expenditures.
16
Nonoperating (Expense) Income
Interest expense, net of interest income and excluding capitalized
interest, increased to $71 million in 2004 from $34 million in 2003, or $37
million, which increase was comprised primarily of a $53 million increase in
interest expense from our increased level of average borrowings and a weaker
U.S. dollar, partially offset by a $16 million decrease in interest expense due
to lower average borrowing rates. The higher average debt balances were
primarily a result of our consolidation of the former P&O Princess debt and new
ship deliveries. Net interest expense, excluding capitalized interest, increased
by $7 million, or 10.9%, to $71 million in 2004 from $64 million in pro forma
2003. This increase was primarily due to the increased level of average
borrowings and the weaker U.S. dollar.
Other nonoperating income was $15 million in 2003, which included $19
million from net insurance proceeds, $10 million as a result of Windstar
Cruise's Wind Song casualty loss and $9 million as a reimbursement of expenses
incurred in prior years.
Liquidity and Capital Resources
Sources and Uses of Cash
Our business provided $542 million of net cash from operations during the
three months ended February 29, 2004, an increase of $371 million, or 217%,
compared to 2003, due primarily to the consolidation of the former P&O Princess
operations and higher cash flows from our existing Carnival Corporation
operations. We continue to generate substantial cash from operations and remain
in a strong financial position.
During the first quarter of 2004, our expenditures for capital projects
were $1.36 billion, of which $1.30 billion was spent for our ongoing new
shipbuilding program, including the final delivery payments for the Queen Mary
2, Carnival Miracle and the Diamond Princess. The remaining capital expenditures
consisted primarily of $41 million for ship improvements and refurbishments, and
$22 million for Alaska tour assets, cruise port facility developments and
information technology assets.
During the three months ended February 29, 2004, we borrowed net proceeds
of $253 million, which was used to finance a portion of the Diamond Princess
purchase price and was net of debt repayments. We also paid cash dividends of
$100 million in the first quarter of 2004.
Future Commitments and Funding Sources
Our contractual cash obligations, with initial and remaining terms in
excess of one year, and contingent liabilities remained generally unchanged at
February 29, 2004 compared to November 30, 2003, except for the following:
- - Final contractual payments to shipyards for three new ship deliveries
during the 2004 first quarter.
- - In March 2004, Costa exercised its letter of intent and entered into a
ship construction contract for a 3,004-passenger ship with Fincantieri for
a summer 2006 delivery date at an estimated total cost of 450 million
euros.
- - In March 2004, we entered into a ship construction contract for a
1,850-passenger ship with Fincantieri for a December 2006 delivery date
at an estimated total cost of 390 million euros.
- - Changes to our debt and contingent obligations are discussed in Notes 4
and 5 in the accompanying financial statements.
As of February 29, 2004, as adjusted for the March 2004 replacement of the
POPCIL revolving credit facilities with a new Carnival plc 600 million euro
facility, we had liquidity of $3.14 billion, which consisted of $563 million of
cash and cash equivalents, $2.22 billion available for borrowing under our $2.47
billion revolving credit facilities, and $355 million under a committed ship
financing arrangement. Our revolving credit facilities mature in May and June
2006, except for our new Carnival plc 600 million euro facility, which expires
in March 2005 (see Note 4 in the accompanying financial statements). A key to
our access to liquidity is the maintenance of our strong credit ratings.
17
We believe that our existing liquidity and cash flow from future
operations will be sufficient to fund our committed capital projects, debt
service requirements, dividend payments, working capital and other firm
commitments. 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 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. No assurance can be
given 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, that either have, or are reasonably
likely to have, a current or future material effect on our financial statements.
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 Securities and Exchange Commission's rules and forms.
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 29, 2004, that they are effective as described
above.
Changes in Internal Controls
There were no significant changes in our internal controls or other
factors that could significantly affect these controls during the 2004 first
quarter and there were no corrective actions with regard to significant
deficiencies or material weaknesses.
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.
PART II OTHER INFORMATION
Item 1. Legal Proceedings.
Two actions referred to as the Facsimile Complaints were previously
reported in the Carnival Corporation and Carnival plc joint Annual Report on
Form 10-K for the fiscal year ended November 30, 2003. A hearing on class
certification issues in one of these actions has been rescheduled for August 18,
2004.
On March 5, 2004, Holland America Line notified the United States and
Netherlands governmental authorities that one of its chief engineers had
admitted to improperly processing bilge water on the Noordam. A subsequent
internal investigation has determined that the improper operation may have begun
in January 2004 and may have continued sporadically through March 4, 2004.
Holland America Line and three shipboard engineers have received grand jury
subpoenas from the Office of the U.S. Attorney in Tampa, Florida.
18
Item 2. Changes in Securities and Use of Proceeds.
On December 1, 2003, as a part of a corporate reorganization of Carnival
Corporation & plc, Carnival Corporation assumed Carnival plc's obligations under
its 7.30% Notes due 2007 and 7.875% Debentures due 2027. Simultaneously,
Carnival plc agreed to guarantee those Carnival Corporation obligations. On
February 2, 2004, Carnival plc extended its April 17, 2003 deed of guarantee
(the "plc Guarantee") to substantially all of Carnival Corporation's outstanding
debt obligations other than those obligations to which the plc Guarantee already
applied, including the various series of Carnival Corporation debt securities
that were either issued in transactions registered under the Securities Act of
1933 or registered for resale under such Act, prior to the completion of the DLC
transaction on April 17, 2003. As previously reported in our joint Current
Report on Form 8-K filed on March 5, 2004, on February 27, 2004, POPCIL's deed
of guarantee dated June 19, 2003 was terminated. That guarantee had previously
been extended to all of Carnival Corporation's public debt.
Item 5. Other.
Set forth below is a related party transaction that was originally
disclosed in Item 13. "Certain Relationships and Related Transactions" in the
Carnival Corporation and Carnival plc joint Annual Report on Form 10-K for the
fiscal year ended November 30, 2003 as incorporated by reference from the 2004
definitive joint proxy statement of Carnival Corporation and Carnival plc. This
revised disclosure is being included in this joint Quarterly Report on Form 10-Q
to correct a factual mistake regarding the total amounts paid by us to Cruise
Specialists, Inc.
Transactions with Cruise Specialists, Inc. Janet Olczak Lanterman, the
wife of A. Kirk Lanterman, one of our executive officers and a director, is the
owner of a travel agency located in Seattle, Washington, named Cruise
Specialists, Inc. Under the laws of the State of Washington, Ms. Lanterman's
ownership interest in Cruise Specialists is her separate property and,
accordingly, Mr. Lanterman does not have any ownership interest in the agency.
Cruise Specialists sells cruises and other similar products for various travel
providers, including us, under arrangements that are common throughout the
travel industry, whereby Cruise Specialists receives compensation based on sales
generated. In fiscal 2003, Cruise Specialists generated approximately $14.9
million of gross revenues for Carnival Corporation & plc. In connection with
such revenues, Cruise Specialists received from Carnival Corporation & plc
approximately $3.3 million in commissions and other marketing incentive
payments. Carnival Corporation & plc believe that the terms and conditions of
the agreement with Cruise Specialists are no less favorable to Carnival
Corporation & plc than terms and conditions available for comparable
transactions with unaffiliated persons.
19
Item 6. Exhibits and Reports on Form 8-K.
(a) 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.
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.
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.
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.
10.1 Amendment to the Carnival Corporation Supplemental Executive
Retirement Plan.
10.2 Amendment to the Carnival Corporation Nonqualified Retirement Plan
for Highly Compensated Employees.
10.3 Amendment to the Carnival Corporation "Fun Ship" Nonqualified
Savings 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
20
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.
(b) Reports on Form 8-K
None
21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have 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
Dated: April 8, 2004 Dated: April 8, 2004
22
Exhibit 10.1
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, 2003:
(1) Section 1.7 of the Plan is amended to read as follows:
1.7 Compensation means an Eligible Employee's compensation from the Company
that is paid, made available or earned for any Plan Year by the Company
for an Eligible Employee for such Eligible Employee's services, including
salary, bonus (including deferred bonus amounts earned but not received
during the Plan Year), workers' compensation payments made by the
Employer, amounts deferred under the Carnival Corporation "Fun Ship"
Nonqualified Savings Plan, and any incentive pay without regard to
limitations under Section 401(a)(17) of the Internal Revenue Code.
Compensation shall not include income attributable to taxable or
nontaxable fringe benefits or any income that arises in connection with
any equity based compensation program offered by the Company.
(2) Section 5.1(A) of the Plan is amended to read as follows:
5.1 Payment of Benefit. Subject to the approval of the Company, each
Participant shall elect the form and timing of their distribution.
A. Form of Payment Except as provided in Section 3.2, a Participant or
his or her Beneficiary may elect that the payment of Benefits to
which a Participant or his or her Beneficiary shall be entitled
under this Plan shall be made in the following forms:
1. Life with 5-Year Certain Benefit -- an annuity for the life of
the Participant, but if the Participant dies within 5 years of
the date distribution of Benefits began, the annuity is
payable to the Participant's Beneficiary for the remainder of
that 5-year period;
2. Life with 10-Year Certain Benefit -- an annuity for the life
of the Participant, but if the Participant dies within 10
years of the date distribution of Benefits began, the annuity
is payable to the Participant's Beneficiary for the remainder
of that 10-year period;
3. Life with 20-Year Certain Benefit -- an annuity for the life
of the Participant, but if the Participant dies within 20
years of the date distribution of Benefits began,
the annuity is payable to the Participant's Beneficiary for
the remainder of that 20-year period;
4. Life with 30-Year Certain Benefit -- an annuity for the life
of the Participant, but if the Participant dies within 30
years of the date distribution of Benefits began, the annuity
is payable to the Participant's Beneficiary for the remainder
of that 30-year period;
5. Qualified Joint and Survivor Annuity -- an annuity for the
life of the Participant with a survivor annuity for the life
of the Participant's spouse, where the survivor annuity is
either 50% or 100% of the amount payable during the joint
lives of the Participant and the Participant's spouse;
6. Single cash distribution of the full amount payable - the
actuarial equivalent present value of the Participant's Vested
Interest payable at his Normal Retirement Date.
The value of such Benefit shall be determined using the same actuarial
factors as provided for in the Retirement Plan.
A Participant may elect that payment of Benefit shall be made in one of
the aforementioned forms or may elect that a portion of his Benefit be paid in
one form and the remaining portion of his Benefit be paid in another.
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 in any twelve (12) month period, 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.
Exhibit 10.2
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, 2003, as follows:
(1) Section 1.9 of the Plan is amended to read as follows:
1.9 Compensation - all cash remuneration paid or made available for any
Plan Year by an Employer to an Employee for the Employee's services
as salary, wages, commissions and including (a) bonuses (including
deferred bonus amounts earned but not received during the Plan
Year), (b) pay at premium rates (holiday, overtime or other), (c)
workers' compensation payments made by the Employer, (d) any amounts
contributed on behalf of the Employee to a cafeteria plan or cash or
deferred arrangement and not includible in income under Section 125
or 402(g) of the Internal Revenue Code and (e) and amounts
(including bonuses) deferred under The Carnival Corporation "Fun
ShipSM" Qualified and Nonqualified Savings Plans, but excluding (1)
any other amounts paid for that Plan Year on account of the Employee
under this Plan or under any other employee pension benefit plan (as
defined in Section 3(2) of ERISA), (2) any other amounts which are
not includible in the Employee's income for federal income tax
purposes and (3) any income attributable to the Company's stock
programs or other fringe benefit programs. Employee's Compensation
shall not exceed the maximum compensation rate under section
401(a)(17) of the Code (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). Effective for Eligible Employees
(other than Eligible Employees who are participating in The Carnival
Corporation "Fun ShipSM" Nonqualified Savings Plan and receiving
Company contributions under that plan) who are actively employed by
an Employer (which solely for this purpose shall include Eligible
Employees employed within the controlled group of the Company as
determined under Sections 414(b), (c) or (m) of the Internal Revenue
Code) on or after December 20, 2002, an Eligible Employee's
Compensation for periods on and after January 1, 1989 shall not be
limited by the preceding sentence.
(2) Section 6.1 of the Plan is amended to read as follows:
6.1 Election of Form of Distribution.Error! Bookmark not
defined. Subject to Section 6.4, a Participant shall be entitled to
elect, subject to Section 6.7, to receive distribution of his Vested
Interest in one of the following methods:
(a) Life with 5-Year Certain Benefit -- an annuity for
the life of the Participant, but if the Participant dies within 5
years of his Annuity Starting Date, the annuity is payable to the
Participant's Beneficiary for the remainder of that 5-year period;
(b) Life with 10-Year Certain Benefit -- an annuity for
the life of the Participant, but if the Participant dies within 10
years of his Annuity Starting Date, the annuity is payable to the
Participant's Beneficiary for the remainder of that 10-year period;
(c) Qualified Joint and Survivor Annuity -- an annuity
for the life of the Participant with a survivor annuity for the life
of the Participant's spouse, where the survivor annuity is either
50% or 100% of the amount payable during the joint lives of the
Participant and the Participant's spouse;
(d) Single cash distribution of the full amount payable
- the Actuarial Equivalent present value of the Participant's Vested
Interest payable at his Normal Retirement Date. This method will
become available only after January 1, 1994 for any Participant or
Beneficiary entitled to but not yet receiving monthly payments.
Subject to the approval of the Retirement Committee or
their designee, a Participant may change his form and timing
election applicable to his Participant Account once in any twelve
(12) month period, 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.
In the absence of an effective election under this
Section 6.1, subject to Section 6.7, a Participant shall be deemed
to have elected a distribution in the form of 50% Qualified Joint
and Survivor Benefit if Participant is married at time benefits are
to begin or the Life with 5-Year Certain Benefit if Participant is
not married at time benefits are to begin. A Participant may change
his or her election after the Participant's Early Retirement Date
only if such change is effective more than one year after the date
of the change and only if the Retirement Committee, in its
discretion, decides to honor the Participant's election. The
Retirement Committee may in any event honor a Participant's election
or may choose any other form or timing of distribution.
Exhibit 10.3
AMENDMENT TO
THE CARNIVAL CORPORATION
"FUN SHIP(sm)" NONQUALIFIED SAVINGS PLAN
- --------------------------------------------------------------------------------
The Carnival Corporation "Fun Ship(sm)" Nonqualified Savings Plan (the
"Plan") is hereby amended, effective January 1, 2003, as follows
(1) Section 2.8 is amended to read as follows:
2.8 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, 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).
(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, benefit hour payments, and discretionary
bonuses that are not deferred under Section 4.4; (2) 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 discretionary
bonuses 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). 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.
Notwithstanding the foregoing, the term "Eligible Earnings" for any purpose
under the Plan shall not include any fringe benefits (such as stock option
exercise, car allowances and relocation reimbursements). Further, the term
"Eligible Earnings" for any purpose under the Plan shall not include any
payments made pursuant to any long term disability plan or arrangement.
(2) Section 2.14 is amended to read as follow:
2.14 Hour of Service means an hour for which an Employee directly or
indirectly receives, or is entitled to receive, remuneration from an
Employer or an Affiliated Company in relation to his employment, including
hours credited for vacation, holiday, sickness or disability (which shall
be credited to the Employee with respect to the period for which
remuneration is paid) and hours for which back pay has been paid, awarded
or agreed to (irrespective of mitigation of damages) by the Employer or
Affiliated Company, which shall be credited to the Employee for the period
to which the award or agreement pertains rather than the period in which
the award or agreement is made. Notwithstanding the foregoing, the
following special rules shall apply in determining an Employee's Hours of
Service:
(a) An Employee who is classified as "exempt" or "salaried" by
his Employer shall be credited with 90 Hours of Service for each
bi-weekly period in which the Employee is credited with at least one
Hour of Service, and an Employee who is classified as "non-exempt"
or "hourly" by his Employer shall be credited with the actual number
of Hours of Service credited under this Section 2.14.
(b) In no event shall more than 501 Hours of Service be
credited to an Employee on account of any single period (other than
any period of paid Permitted Leave) during which the Employee
performs no duties.
(c) In no event shall an Employee be credited with any Hours
of Service for which the Employee directly or indirectly receives,
or is entitled to receive, remuneration from any entity before it
becomes an Affiliated Company.
(d) Hours of Service shall be credited to an Employee in
accordance with the records of the Employee's Employer and
Department of Labor Regulations Section 2530.200b-2.
(e) Only that shipboard or shoreside service with the Employer
on or after November 14, 1974, shall constitute an Hour of Service.
(f) If a Participant transfers directly from an Affiliated
Company to any company in which the Company holds an equity interest
(but that is not an Affiliated Company), service with such company
shall be counted solely for purposes of determining a Participant's
vested interest in Matching and Profit-Sharing Contributions under
Article 5 of the Plan. Service with such company shall not be
credited if it occurs prior to the date the individual became a
Participant in the Plan or after the Participant works at any entity
in which the Company does not hold an equity interest.
(g) Effective January 1, 2003, notwithstanding anything herein
contained to the contrary, shipboard and shoreside service completed
by a Participant for the benefit of an Affiliated Company that has
not adopted this Plan pursuant to Section 10.2 hereof that was
performed prior to the date the individual became a Participant in
the Plan shall be counted for all purposes under this Plan.
(3) Section 7.1 is amended to read as follows:
7.1 Form and Timing of Distribution: Each Participant shall elect the form
and timing of the distribution with respect to the entire vested portion of his
Participant Account at such time and in the manner authorized by the Retirement
Committee. Any distribution election made under this Plan shall supersede any
form and timing distribution election made under the Carnival Corporation
Nonqualified Deferred Compensation Plan.
(a) 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,
10, 20 or 30 years.
(b) Time of Payment: The Participant's election shall indicate
that payment shall be made (in the case of a lump sum election) or
shall commence (in the case of an installment election):
(1) as soon as administratively practicable following the
Participant's Termination of Employment;
(2) as soon as administratively practicable following the
calendar year of the Participant's Termination of Employment;
(3) in the month following the earlier of (A) the
Participant's attainment of age 55 and 15 Years of Service, or (B)
the Participant's attainment of age 65, provided that the
Participant is no longer employed as of such date; or
(4) in a specific month and year.
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.
Further, if a Participant elects his distribution to be made or commenced in
accordance with paragraph (4) above, and such date falls before the
Participant's Termination of Employment, the Participant must complete new
designations and authorizations pursuant to Section 3.2 in order to continue
making Employee Deferral Contributions and/or Bonus Deferrals, and to continue
receiving Matching Contributions and/or Profit-Sharing Contributions on his
behalf.
Notwithstanding the foregoing, subject to the approval of the Retirement
Committee or their designee, a Participant may change his form and timing
election applicable to his Participant Account once in any twelve (12) month
period, 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.
Notwithstanding the foregoing, if the value of 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.
Exhibit 12
CARNIVAL CORPORATION & PLC
Ratio of Earnings to Fixed Charges
(in millions, except ratios)
Three Months
Ended February 29/28,
---------------------
2004 2003
----- -----
Net income $ 203 $ 127
Income tax benefit, net (4) (5)
----- -----
Income before income taxes 199 122
----- -----
Fixed charges
Interest expense, net 65 29
Interest portion of rent
expense(1) 5 2
Capitalized interest 10 9
----- -----
Total fixed charges 80 40
----- -----
Fixed charges not affecting
earnings
Capitalized interest (10) (9)
----- -----
Earnings before fixed
charges $ 269 $ 153
===== =====
Ratio of earnings to
fixed charges 3.4x 3.8x
===== =====
(1) Represents one-third of rent expense, which we believe to be
representative of the interest portion of rent expense.
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 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) 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
(c) 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;
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 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: April 8, 2004
By:/s/ Micky Arison
- -------------------------------------
Micky Arison
Chairman of the Board of Directors
and Chief Executive Officer
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 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) 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
(c) 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;
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 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: April 8, 2004
By:/s/ Howard S. Frank
- -------------------------------------
Howard S. Frank
Vice Chairman of the Board of
Directors and Chief Operating Officer
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 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) 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
(c) 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;
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 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: April 8, 2004
By:/s/ Gerald R. Cahill
- -------------------------------------
Gerald R. Cahill
Executive Vice President and Chief
Financial and Accounting Officer
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 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) 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
(c) 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;
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 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: April 8, 2004
By:/s/ Micky Arison
- -------------------------------------
Micky Arison
Chairman of the Board of Directors
and Chief Executive Officer
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 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) 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
(c) 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;
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 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: April 8, 2004
By:/s/ Howard S. Frank
- -------------------------------------
Howard S. Frank
Vice Chairman of the Board of
Directors and Chief Operating Officer
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 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) 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
(c) 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;
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 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: April 8, 2004
By:/s/ Gerald R. Cahill
- -------------------------------------
Gerald R. Cahill
Executive Vice President and Chief
Financial and Accounting Officer
Exhibit 32.1
In connection with the Quarterly Report on Form 10-Q for the quarter ended
February 29, 2004 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: April 8, 2004
By:/s/ Micky Arison
-------------------
Micky Arison
Chairman of the Board of Directors
and Chief Executive Officer
Exhibit 32.2
In connection with the Quarterly Report on Form 10-Q for the quarter ended
February 29, 2004 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: April 8, 2004
By:/s/ Howard S. Frank
----------------------
Howard S. Frank
Vice Chairman of the Board of Directors
and Chief Operating Officer
Exhibit 32.3
In connection with the Quarterly Report on Form 10-Q for the quarter ended
February 29, 2004 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: April 8, 2004
By:/s/ Gerald R. Cahill
-----------------------
Gerald R. Cahill
Executive Vice President and Chief
Financial and Accounting Officer
Exhibit 32.4
In connection with the Quarterly Report on Form 10-Q for the quarter ended
February 29, 2004 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: April 8, 2004
By:/s/ Micky Arison
-------------------
Micky Arison
Chairman of the Board of Directors
and Chief Executive Officer
Exhibit 32.5
In connection with the Quarterly Report on Form 10-Q for the quarter ended
February 29, 2004 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: April 8, 2004
By:/s/ Howard S. Frank
----------------------
Howard S. Frank
Vice Chairman of the Board of Directors
and Chief Operating Officer
Exhibit 32.6
In connection with the Quarterly Report on Form 10-Q for the quarter ended
February 29, 2004 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: April 8, 2004
By:/s/ Gerald R. Cahill
-----------------------
Gerald R. Cahill
Executive Vice President and Chief
Financial and Accounting Officer
