Carnival Cruises 2004 Annual Report Download - page 44

Carnival Corporation & plc 41
During 2004, the Board of Directors authorized the
repurchase of up to $1 billion of Carnival Corporation
or Carnival plc shares commencing in 2005, subject to
certain repurchase restrictions on Carnival plc shares.
At November 30, 2004, we had liquidity of $3.20 bil-
lion, which consisted of $660 million of cash and cash
equivalents and short-term investments and $2.54 billion
available for borrowing under our revolving credit facili-
ties. Our revolving credit facilities mature in May and
June 2006, except for Carnival plc’s 600 million euro
facility, which expires in March 2005, and is currently
expected to be renewed for an additional year. No assur-
ance can be given that we will be successful in extend-
ing this facility. A key to our access to liquidity is the
maintenance of our strong credit ratings.
Based primarily on our historical results, current finan-
cial condition and future forecasts, we believe that our
existing liquidity and cash flow from future operations
will be sufficient to fund most of our expected capital
projects, debt service requirements, dividend payments,
working capital and other firm commitments. In addi-
tion, based on our future forecasted operating results
and cash flows for fiscal 2005, we expect to be in com-
pliance with our debt covenants during 2005. However,
our forecasted cash flow from future operations, as well
as our credit ratings, may be adversely affected by vari-
ous 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.
Future Commitments and Funding Sources
At November 30, 2004, our contractual cash obligations, and the effects such obligations are expected to have on
our liquidity and cash flow in future periods were as follows (in millions):
Payments Due by Fiscal Year
Contractual Cash Obligations Total 2005 2006 2007 2008 2009 Thereafter
Long-term debt(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,572 $1,281 $1,686 $1,058 $1,435 $141 $1,971
Short-term borrowings(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . 381 381
Fixed-rate interest payments(a) . . . . . . . . . . . . . . . . . . . . . . 1,675 211 162 146 210 103 843
Shipbuilding(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,227 1,540 1,400 1,330 1,600 357
Port facilities and other(a) . . . . . . . . . . . . . . . . . . . . . . . . . . 806 135 92 73 72 66 368
Operating leases(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231 51 37 25 21 18 79
Purchase obligations(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465 438 14 9 4
Other long-term liabilities reflected
on the balance sheet(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 284 29 18 18 20 19 180
Total contractual cash obligations(d) . . . . . . . . . . . . . . . . . . . $17,641 $4,066 $3,409 $2,659 $3,362 $704 $3,441
(a) See Notes 6 and 7 in the accompanying financial statements for additional information regarding these contractual cash obligations.
Fixed-rate interest payments represent cash outflows for fixed interest payments, including interest swapped from a variable-rate
to a fixed-rate, but does not include interest payments on variable-rate debt or interest swapped from a fixed-rate to a variable-
rate, because these amounts cannot be reasonably estimated.
(b) Represents legally-binding commitments to purchase inventory and other goods and services made in the normal course of business
to meet operational requirements. Many of our contracts contain clauses that allow us to terminate the contract with notice, and
with or without a termination penalty. Termination penalties are generally an amount less than the original obligation. Historically,
we have not had any significant defaults of our contractual obligations or incurred significant penalties for termination of our
contractual obligations.
(c) Represents cash outflows for certain of our long-term liabilities that could be reasonably estimated. The primary outflows are for
estimates of our employee benefit plan obligations, certain deferred income taxes and other long-term liabilities. Other long-term
liabilities, such as deferred income, derivative contracts payable, which convert fixed rate debt to variable rate debt, fair value of
hedged commitments and certain deferred income taxes, have been excluded from the table as they do not require cash settle-
ment in the future or the timing of the cash outflow cannot be reasonably estimated.
(d) Foreign currency payments are based on the November 30, 2004 exchange rates.