Carnival Cruises 2003 Annual Report Download - page 30

27Carnival Corporation & plc
Defined Contribution Plans
We have several defined contribution plans available
to substantially all employees. We contribute to these
plans based on employee contributions, salary levels
and length of service. Total expense relating to these
plans was $12 million, $8 million and $8 million in fiscal
2003, 2002 and 2001, respectively.
Note 15—Earnings Per Share
Our basic and diluted earnings per share were com-
puted as follows (in millions, except per share data):
Years Ended
November 30,
2003 2002 2001
Net income . . . . . . . . . . . . . . . . . $1,194 $1,016 $ 926
Interest on dilutive
convertible notes . . . . . . . . . . . 5
Net income for diluted
earnings per share . . . . . . . . . . $1,199 $1,016 $ 926
Weighted-average common and
ordinary shares outstanding . . . 718 587 585
Dilutive effect of
convertible notes . . . . . . . . . . . 4
Dilutive effect of stock plans . . . . 212
Diluted weighted-average
shares outstanding . . . . . . . . . . 724 588 587
Basic earnings per share . . . . . . . $ 1.66 $ 1.73 $1.58
Diluted earnings per share . . . . . . $ 1.66 $ 1.73 $1.58
The weighted-average shares outstanding for the
year ended November 30, 2003 includes the pro rata
Carnival plc shares since April 17, 2003.
If Carnival Corporation’s common stock price reaches
specified trigger prices for a defined duration of time
within a completed quarter, then, under the terms of
various classes of Carnival Corporation’s convertible
debt securities (each having its own trigger prices),
such classes of debt securities will become convertible
for the next succeeding quarter, and the shares of
Carnival Corporation common stock into which those
debt securities become convertible will be considered
outstanding for the most recently completed quarter’s
diluted earnings per share computation, if dilutive.
Carnival Corporation’s Zero-Coupon Notes’ contin-
gent conversion trigger price was reached in the sec-
ond half of fiscal 2003. Accordingly, the diluted earnings
per share computation included an adjustment to
increase net income for the imputed interest expense
recorded on these Zero-Coupon Notes and the diluted
weighted-average shares outstanding for fiscal 2003
included the weighted-average of the 17.4 million
shares that could be converted at the noteholders’
options. The conversion of these notes was only dilu-
tive in the 2003 third quarter.
Our diluted earnings per share computation for fiscal
2003 did not include a maximum of 36.2 million (32.7
million in 2002 and 2001) shares of Carnival Corporation
common stock issuable upon conversion of its convert-
ible debt, as this common stock was not issuable under
the contingent conversion provisions of these debt
instruments (see Note 7).
Options to purchase 8.4 million, 6.0 million and 5.4
million shares for fiscal 2003, 2002 and 2001, respec-
tively, were excluded from our diluted earnings per
share computation since the effect of including them
was anti-dilutive.
Note 16—Supplemental Cash Flow Information
Years Ended
November 30,
(in millions) 2003 2002 2001
Cash paid for
Interest, net of
amount capitalized . . . . . . . . . . . $156 $110 $109
Income taxes, net . . . . . . . . . . . . . . $21 $4
Other noncash investing and
financing activities
Common stock received as
payment of stock option
exercise price . . . . . . . . . . . . . $ 23
Notes received upon the sale
of the Nieuw Amsterdam . . . . $ 60
Note 17—Recent Accounting Pronouncement
In January 2003, as amended, the Financial
Accounting Standards Board (“FASB”) issued Financial
Accounting Standards Board Interpretation (“FIN”) No.
46, “Consolidation of Variable Interest Entities.” FIN
No. 46 requires consolidation of variable interest enti-
ties (“VIE’s”) by the “primary beneficiary,” as defined,
if certain criteria are met. FIN No. 46 is effective imme-
diately for VIE’s created or acquired after January 31,
2003. For pre-existing VIE’s, disclosure requirements
are effective immediately and consolidation provisions
are effective for our 2004 second quarter. In accord-
ance with FIN No. 46, we have determined that we are
carrying a loan, initially made in April 2001, to a ship
repair facility that is a VIE. Although we use this facility
for some of our ship repair work, we are not a “primary
beneficiary” and, accordingly, this entity will not be
consolidated in our financial statements. At November
30, 2003, our loan to this VIE, which is also our maxi-
mum exposure to loss, was $41 million.