Carnival Cruises 2011 Annual Report Download - page 15

those of Carnival Corporation’s. In addition, Carnival Corporation and Carnival plc have each extended their
respective deeds of guarantee to the other’s pre-DLC indebtedness and certain other monetary obligations, or
alternatively have provided standalone guarantees in lieu of utilization of these deeds of guarantee, thus
effectively cross guaranteeing all Carnival Corporation and Carnival plc indebtedness and certain other monetary
obligations. Each deed of guarantee provides that the creditors to whom the obligations are owed are intended
third party beneficiaries of such deed of guarantee.
The deeds of guarantee are governed and construed in accordance with the laws of the Isle of Man. Subject to the
terms of the deeds of guarantee, the holders of indebtedness and other obligations that are subject to the deeds of
guarantee will have recourse to both Carnival plc and Carnival Corporation, though a Carnival plc creditor must
first make written demand on Carnival plc and a Carnival Corporation creditor on Carnival Corporation. Once
the written demand is made by letter or other form of notice, the holders of indebtedness or other obligations may
immediately commence an action against the relevant guarantor. Accordingly, there is no requirement under the
deeds of guarantee to obtain a judgment, take other enforcement actions or wait any period of time prior to taking
steps against the relevant guarantor. All actions or proceedings arising out of or in connection with the deeds of
guarantee must be exclusively brought in courts in England.
Under the terms of the DLC transaction documents, Carnival Corporation and Carnival plc are permitted to
transfer assets between the companies, make loans to or investments in each other and otherwise enter into
intercompany transactions. The companies have entered into some of these types of transactions and may enter
into additional transactions in the future to take advantage of the flexibility provided by the DLC arrangement,
and to operate both companies as a single unified economic enterprise in the most effective manner. In addition,
under the terms of the Equalization and Governance Agreement and the deeds of guarantee, the cash flow and
assets of one company are required to be used to pay the obligations of the other company, if necessary.
Given our DLC arrangement, 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.
NOTE 4 – Property and Equipment
Property and equipment consisted of the following (in millions):
November 30,
2011 2010
Ships, including ship improvements ......................................... $39,764 $37,348
Ships under construction .................................................. 526 696
40,290 38,044
Land, buildings and improvements, including leasehold improvements and port
facilities ............................................................. 898 858
Computer hardware and software, transportation equipment and other .............. 1,016 934
Total property and equipment .............................................. 42,204 39,836
Less accumulated depreciation and amortization ............................... (10,150) (8,869)
$ 32,054 (a) $30,967 (a)
(a) At November 30, 2011 and 2010, the net carrying values of ships and ships under construction for our North
America, EAA, Cruise Support and Tour and Other segments were $17.9 billion, $12.8 billion, $0.2 billion
and $0.1 billion and $17.5 billion, $12.1 billion, $0.2 billion and $0.2 billion, respectively.
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