Carnival Cruises 2011 Annual Report Download - page 23

The operation of our port facility in Mexico is subject to the tax regime applicable to Mexican resident businesses.
Other
We recognize income tax benefits for uncertain tax positions, based solely on their technical merits, when it is
more likely than not to be sustained upon examination by the relevant tax authority. The tax benefit to be
recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon
ultimate resolution. All interest expense related to income tax liabilities is included in income tax expense. Based
on all known facts and circumstances and current tax law, we believe that the total amount of our uncertain
income tax position liabilities and related accrued interest are not material to our financial position.
We do not expect to incur income taxes on future distributions of undistributed earnings of foreign subsidiaries
and, accordingly, no deferred income taxes have been provided for the distribution of these earnings. In addition
to or in place of income taxes, virtually all jurisdictions where our ships call impose taxes and/or fees based on
guest counts, ship tonnage, passenger capacity or some other measure, and these taxes and/or fees are included in
other ship operating expenses.
NOTE 9 – Shareholders’ Equity
Carnival Corporation’s Articles of Incorporation authorize its Board of Directors, at its discretion, to issue up to
40 million shares of preferred stock. At November 30, 2011 and 2010, no Carnival Corporation preferred stock
had been issued and only a nominal amount of Carnival plc preference shares had been issued.
In September 2007, our Boards of Directors authorized the repurchase of up to an aggregate of $1 billion of
Carnival Corporation common stock and Carnival plc ordinary shares subject to certain restrictions (the
“Repurchase Program”). The Repurchase Program does not have an expiration date and may be discontinued by
our Boards of Directors at any time.
During fiscal 2011, we repurchased 13.5 million shares of Carnival Corporation common stock for $413 million
under the Repurchase Program. In addition, during 2011 Carnival Investments Limited, a subsidiary of Carnival
Corporation, also repurchased 1.3 million ordinary shares of Carnival plc for $41 million under the Repurchase
Program. During 2010 and 2009, there were no repurchases of Carnival Corporation common stock or Carnival
plc ordinary shares under the Repurchase Program. At November 30, 2011, the remaining availability under the
Repurchase Program was $334 million. There were no repurchases under the Repurchase Program from
December 1, 2011 through January 23, 2012.
In addition to the Repurchase Program, the Boards of Directors have authorized the repurchase of up to
19.2 million Carnival plc ordinary shares and up to 31.5 million shares of Carnival Corporation common stock
under the “Stock Swap” programs described below. We use the “Stock Swap” programs in situations where we
can obtain an economic benefit because either Carnival Corporation common stock or Carnival plc ordinary
shares are trading at a price that is at a premium or discount to the price of Carnival plc ordinary shares or
Carnival Corporation common stock, as the case may be. This economic benefit is used for general corporate
purposes, which could include repurchasing additional stock under the Repurchase Program. During 2011, no
Carnival Corporation common stock or Carnival plc ordinary shares were sold or repurchased under the “Stock
Swap” programs. All Carnival plc share repurchases under both the Repurchase Program and the “Stock Swap”
authorizations require annual shareholder approval.
In fiscal 2010 and 2009, we sold 14.8 million shares and 5.8 million shares of Carnival plc ordinary shares held
as treasury stock for $545 million and $187 million of net proceeds, respectively. In fiscal 2010 and 2009,
substantially all of these net proceeds were used to fund the repurchase of 14.8 million shares and 5.8 million
shares of Carnival Corporation common stock, respectively. We sold Carnival plc ordinary shares held in
treasury, only to the extent we were able to purchase shares of Carnival Corporation in the U.S. on at least an
equivalent basis under the “Stock Swap” program.
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