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page฀16 | Carnival Corporation & plc
NOTES฀TO฀CONSOLIDATED฀FINANCIAL฀STATEMENTS฀(continued)
Given฀the฀DLC฀structure฀as฀described฀above,฀we฀believe฀
that฀providing฀separate฀financial฀statements฀for฀each฀of฀
Carnival฀Corporation฀and฀Carnival฀plc฀would฀not฀present฀a฀฀
true฀and฀fair฀view฀of฀the฀economic฀realities฀of฀their฀operations.฀
Accordingly,฀separate฀financial฀statements฀for฀both฀Carnival฀
Corporation฀and฀Carnival฀plc฀have฀not฀been฀presented.
Simultaneously฀with฀the฀completion฀of฀the฀DLC฀transaction,฀
a฀partial฀share฀offer฀(“PSO”)฀for฀20%฀of฀Carnival฀plc’s฀shares฀
was฀made฀and฀accepted,฀which฀enabled฀20%฀of฀Carnival฀plc฀
shares฀to฀be฀exchanged฀for฀41.7฀million฀Carnival฀Corporation฀
shares.฀The฀41.7฀million฀shares฀of฀Carnival฀plc฀held฀by฀Carnival฀
Corporation฀as฀a฀result฀of฀the฀PSO,฀which฀cost฀$1.05฀billion,฀
are฀being฀accounted฀for฀as฀treasury฀stock฀in฀the฀accompany-
ing฀balance฀sheets.
NOTE฀4—Property฀and฀Equipment
Property฀and฀equipment฀consisted฀of฀the฀following฀฀
(in฀millions):
November฀30,
2006 2005
Ships฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀. $26,054 $23,506
Ships฀under฀construction฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀. 922 540
26,976 24,046
Land,฀buildings฀and฀improvements,
฀ and฀port฀facilities฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀. 675 593
Transportation฀equipment฀and฀other ฀.฀.฀.฀.฀.฀.฀.฀. 762 692
Total฀property฀and฀equipment ฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀. 28,413 25,331
Less฀accumulated฀depreciation฀฀
฀ and฀amortization฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀.฀. (4,955) (4,019)
$23,458 $21,312
Capitalized฀interest,฀primarily฀on฀our฀ships฀under฀construc-
tion,฀amounted฀to฀$37฀million,฀$21฀million฀and฀$26฀million฀in฀
fiscal฀2006,฀2005฀and฀2004,฀respectively.฀Amounts฀related฀to฀
ships฀under฀construction฀include฀progress฀payments฀for฀the฀
construction฀of฀the฀ship,฀as฀well฀as฀design฀and฀engineering฀
fees,฀capitalized฀interest,฀construction฀oversight฀costs฀and฀
various฀owner฀supplied฀items.฀At฀November฀30,฀2006,฀seven฀
ships฀with฀an฀aggregate฀net฀book฀value฀of฀$2.62฀billion฀were฀
pledged฀as฀collateral฀pursuant฀to฀mortgages฀related฀to฀$1.23฀
billion฀of฀debt฀and฀a฀$485฀million฀contingent฀obligation฀(see฀
Notes฀5฀and฀6).
Repairs฀and฀maintenance฀and฀minor฀replacement฀expenses,฀
including฀dry-dock฀expenses฀were฀$518฀million,฀$554฀million฀
and฀$419฀million฀in฀fiscal฀2006,฀2005฀and฀2004,฀respectively.
NOTE฀5—Debt
Short-Term฀Borrowings
At฀November฀30,฀2006฀and฀2005,฀unsecured฀short-term฀
borrowings฀consisted฀of฀U.S.฀bank฀loans฀and฀U.S.฀commer-฀
cial฀paper฀of฀$381฀million฀and฀$113฀million,฀respectively,฀and฀฀
Euro฀bank฀loans฀and฀Euro฀commercial฀paper฀of฀$57฀million฀฀
and฀$187฀million,฀respectively.฀These฀short-term฀borrowings฀
had฀weighted-average฀interest฀rates฀of฀5.2%฀and฀3.1%฀at฀
November฀30,฀2006฀and฀2005,฀respectively.