Carnival Cruises 2010 Annual Report Download - page 16

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NOTE 4 – Property and Equipment
Property and equipment consisted of the following (in millions):
November 30,
2010 2009
Ships ..................................................................... $37,348 $35,187
Ships under construction ...................................................... 696 770
38,044 35,957
Land, buildings and improvements, including leasehold improvements and port facilities . . . 858 864
Computer hardware and software, transportation equipment and other .................. 934 913
Total property and equipment .................................................. 39,836 37,734
Less accumulated depreciation and amortization ................................... (8,869) (7,864)
$30,967 $29,870
Capitalized interest, primarily on our ships under construction, amounted to $26 million, $37 million and $52
million in fiscal 2010, 2009 and 2008, respectively. Ships under construction include progress payments for the
construction of new ships, as well as design and engineering fees, capitalized interest, construction oversight
costs and various owner supplied items. At November 30, 2010, two ships with an aggregate net book value of
$802 million were pledged as collateral pursuant to mortgages related to $328 million of debt. See Note 5.
Repairs and maintenance expenses, including minor improvement costs and dry-dock expenses, were $797
million, $749 million and $661 million in fiscal 2010, 2009 and 2008, respectively, and are substantially all
included in other ship operating expenses in the accompanying Consolidated Statements of Income.
In 2010, we recognized a $44 million gain on the sale of P&O Cruises (UK)’s Artemis as a reduction of other
ship operating expenses in the accompanying Consolidated Statements of Income. We are operating Artemis
under a bareboat charter agreement until April 2011.
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