Carnival Cruises 2014 Annual Report Download - page 26

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 significant 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, fees and other charges
based on guest counts, ship tonnage, passenger capacity or some other measure, and these taxes, fees and other
charges are included in commissions, transportation and other costs and 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, 2014 and 2013, no Carnival Corporation preferred stock
had been issued and only a nominal amount of Carnival plc preference shares had been issued. Our Boards of
Directors have authorized, subject to certain restrictions, the repurchase of up to an aggregate of $1 billion of
Carnival Corporation common stock and/or Carnival plc ordinary shares (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 2014, there were no repurchases of Carnival Corporation common stock under the Repurchase Program.
In 2013 and 2012, we repurchased 2.8 million and 2.6 million shares of Carnival Corporation common stock for
$103 million and $90 million, respectively, under the Repurchase Program. During 2014, 2013 and 2012, there
were no repurchases of Carnival plc ordinary shares under the Repurchase Program. Since March 2013, the
remaining availability under the Repurchase Program has been $975 million.
In addition to the Repurchase Program, the Boards of Directors authorized, in October 2008, the repurchase of up
to 19.2 million Carnival plc ordinary shares and, in January 2013, the repurchase of up to 32.8 million shares of
Carnival Corporation common stock under the Stock Swap programs described below. Depending on market
conditions and other factors, we may repurchase shares of Carnival Corporation common stock and/or Carnival
plc ordinary shares under the Repurchase Program and the Stock Swap programs concurrently. 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. Any realized
economic benefit under the Stock Swap programs is used for general corporate purposes, which could include
repurchasing additional stock under the Repurchase Program. Carnival plc ordinary share repurchases under both
the Repurchase Program and the Stock Swap programs require annual shareholder approval. The existing
shareholder approval is limited to a maximum of 21.5 million ordinary shares and is valid until the earlier of the
conclusion of the Carnival plc 2015 annual general meeting or October 16, 2015. At January 22, 2015, the
remaining availability under the Stock Swap programs was 18.1 million Carnival plc ordinary shares and
32.0 million shares of Carnival Corporation common stock.
During 2014 and 2012, no Carnival Corporation common stock or Carnival plc ordinary shares were sold or
repurchased under the Stock Swap programs. During 2013, Carnival Investments Limited, a wholly owned
subsidiary of Carnival Corporation, sold 0.9 million of Carnival plc ordinary shares for net proceeds of $35
million. Substantially all of the net proceeds from these sales were used to repurchase 0.9 million shares of
Carnival Corporation common stock. Pursuant to our Stock Swap programs, Carnival Corporation sold these
Carnival plc ordinary shares owned by Carnival Investments Limited only to the extent it was able to repurchase
shares of Carnival Corporation common stock in the U.S. market on at least an equivalent basis. During 2013, no
Carnival Corporation common stock was sold or Carnival plc ordinary shares were repurchased under the Stock
Swap programs.
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