Carnival Cruises 2010 Annual Report Download - page 53

In June 2006, the Boards of Directors authorized the repurchase of up to an aggregate of $1 billion of Carnival
Corporation common stock and Carnival plc ordinary shares subject to certain restrictions. On September 19,
2007, the Boards of Directors increased the remaining $578 million general repurchase authorization back to $1
billion (the “Repurchase Program”). During fiscal 2010 and 2009, there were no repurchases of Carnival
Corporation common stock or Carnival plc ordinary shares under the Repurchase Program. At January 31, 2011,
the remaining availability pursuant to our Repurchase Program was $787 million. The Repurchase Program does
not have an expiration date and may be discontinued by our Boards of Directors at any time.
In addition to the Repurchase Program, the Boards of Directors have authorized the repurchase of up to
19.2 million Carnival plc ordinary shares and up to 31.5 million shares of Carnival Corporation common stock
under the “Stock Swap” programs. We use these “Stock Swap” programs in situations where we can obtain an
economic benefit because either Carnival Corporation common stock or Carnival plc ordinary shares are trading
at a price that is at a premium or discount to the price of Carnival plc ordinary shares or Carnival Corporation
common stock, as the case may be. This economic benefit is used for general corporate purposes, which could
include repurchasing treasury stock under the Repurchase Program. Carnival plc ordinary share repurchases
under both the Repurchase Program and the “Stock Swap” authorizations require annual shareholder
approval. Finally, under the “Stock Swap” programs, the sales of the Carnival Corporation common stock and
Carnival plc ordinary shares have been or will be registered under the Securities Act.
At November 30, 2010, as adjusted for the $549 million of export credit facilities for two AIDA ship financings
committed to us in December 2010, we had liquidity of $5.6 billion. Our liquidity consisted of $148 million of
cash and cash equivalents, excluding cash on hand of $281 million used for current operations, $1.8 billion
available for borrowing under our revolving credit facilities and $3.7 billion under committed financings. Of this
$3.7 billion of committed facilities, $1.4 billion, $947 million, $851 million and $535 million are scheduled to be
funded in 2011, 2012, 2013 and 2014, respectively. Almost 90% of our revolving credit facilities are scheduled
to mature in 2012, while almost 10% mature in 2011. We rely on, and have banking relationships with, numerous
large, well-established banks, which we believe will assist us in accessing multiple sources of funding in the
event that some lenders are unwilling or unable to lend to us. However, we believe that our revolving credit
facilities and committed financings will be honored as required pursuant to their contractual terms.
Substantially all of our debt agreements contain financial covenants as described in Note 5 in the accompanying
consolidated financial statements. At November 30, 2010, we believe we were in compliance with all of our debt
covenants. In addition, based on our forecasted operating results, financial condition and cash flows, we expect to be
in compliance with our debt covenants over the next several years. Generally, if an event of default under any debt
agreement occurs, then pursuant to cross default acceleration clauses, substantially all of our outstanding debt and
derivative contract payables could become due, and all debt and derivative contracts could be terminated.
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.
Quantitative and Qualitative Disclosures About Market Risk
For a discussion of our hedging strategies and market risks see the discussion below and “Note 10—Fair Value
Measurements, Derivative Instruments and Hedging Activities,” in the accompanying consolidated financial
statements.
52