Carnival Cruises 2013 Annual Report Download - page 88

Table of Contents
(a) In 2013 and 2012, a portion of the North America cruise brands’ segment revenues includes revenues for the tour portion of a cruise when a land tour
package is sold along with a cruise by Holland America Line and Princess. These intersegment tour revenues, which are included in our Tour and Other
segment, are eliminated directly against the North America cruise brands’ segment revenues and operating expenses in the line “Intersegment
elimination.”
In 2011, a portion of Tour and Other segment revenues included revenues for the cruise portion of a tour when a cruise was sold along with a land tour
package by Holland America Princess Alaska Tours. These intersegment cruise revenues, which were included in our North America cruise brands’
segment, were eliminated directly against the Tour and Other segment revenues and operating expenses in the line “Intersegment elimination.”
This change in 2012 from prior years is referred to as “the change in the accounting for our North America cruise brands and Tour and Other segments”
and did not have a significant impact on either of these segments’ 2013, 2012 and 2011 operating income.
(b) Includes $13 million in 2013 and $173 million in 2012 of impairment charges related to Ibero’s goodwill and trademarks.
(c) Tour and Other segment assets primarily include hotels and lodges in the state of Alaska and the Canadian Yukon, motorcoaches used for sightseeing
and charters, glass-domed railcars, which run on the Alaska Railroad, and our owned ships that we leased out under long-term charters to an
unaffiliated entity.
Non-U.S. revenues for our cruise brands represent sales generated from outside the U.S. principally by non-U.S. travel agents and tour operators.
Substantially all of our long-lived assets are located outside of the U.S. and consist of our ships and ships under construction.
Revenues by geographic areas, which are based on where our guests are sourced and not the cruise brands on which they sailed, were as follows (in millions):
Years Ended November 30,
2013 2012 2011
North America $ 7,738 $7,952 $7,835
Europe 5,426 5,367 5,961
Australia and Asia 1,772 1,506 1,528
Others 520 557 469
$15,456 $15,382 $15,793
NOTE 12 – Compensation Plans
Equity Plans
We issue our share-based compensation awards under the Carnival Corporation and Carnival plc stock plans, which have an aggregate of 30.7 million shares
available for future grant at November 30, 2013. These plans allow us to issue time-based share (“TBS”) awards, which include restricted stock awards
(“RSAs”) and restricted stock units (“RSUs”), performance-based share (“PBS”) awards, market-based share (“MBS”) awards and stock options
(collectively “equity awards”). Equity awards are principally granted to management level employees and members of our Boards of Directors. The plans are
administered by a committee of our independent directors (the “Committee”) that determines which employees are eligible to participate, the monetary value or
number of shares for which equity awards are to be granted and the amounts that may be exercised or sold within a specified term. These plans allow us to
fulfill our equity award obligations using shares purchased in the open market or with unissued or treasury shares. Certain equity awards provide for
accelerated vesting if we have a change in control, as defined.
Our total share-based compensation expense was $42 million, $39 million and $46 million in 2013, 2012 and 2011, respectively, of which $39 million, $36
million and $42 million has been included in selling and administrative expenses in 2013, 2012 and 2011, respectively, and $3 million in both 2013 and
2012 and $4 million in 2011 in cruise payroll and related expenses.
TBS, PBS and MBS Awards
RSAs generally have the same rights as Carnival Corporation common stock, except for transfer restrictions and forfeiture provisions. RSAs have been
granted to certain officers and non-executive board members and substantially all of them vest at the end of three years. In addition, Carnival Corporation and
Carnival plc grant RSUs, substantially all of which also vest at the end of three years and accrue forfeitable dividend equivalents on each outstanding RSU,
in the form of additional RSUs, based on dividends declared. The share-based compensation expense for TBS awards is based on the quoted market price of
the Carnival Corporation or Carnival plc shares on the date of grant.
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