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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

(Mark One)
|X| Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934

For the fiscal year ended November 30, 2004 or

|_| Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934

For the transition period from ______________ to ________________

Commission file number: 1-9610 Commission file number: 1-15136

Carnival Corporation Carnival plc
(Exact name of registrant as (Exact name of registrant as
specified in its charter) specified in its charter)

Republic of Panama England and Wales
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)

59-1562976 98-0357772
(I.R.S. Employer (I.R.S. Employer
Identification No.) Identification No.)

3655 N.W. 87th Avenue Carnival House, 5 Gainsford Street,
Miami, Florida 33178-2428 London SE1 2NE, United Kingdom
(Address of principal (Address of principal
executive offices) executive offices)
(Zip code) (Zip code)

(305) 599-2600 011 44 20 7940 5381
(Registrant's telephone number, (Registrant's telephone number,
including area code) including area code)

Securities registered pursuant Securities registered pursuant
to Section 12(b) of the Act: to Section 12(b) of the Act:

Title of each class Title of each class
Common Stock Ordinary Shares each represented
($.01 par value) by American Depositary Shares
($1.66 stated value), Special
Voting Share, GBP 1.00 par value
and Trust Shares of beneficial
interest in the P&O Princess
Special Voting Trust



Name of each exchange on which registered Name of each exchange on which registered
New York Stock Exchange, Inc. New York Stock Exchange, Inc.


Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) have been subject to such
filing requirements for the past 90 days. Yes |X| No |_|

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrants' knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K |_|.

Indicate by check mark whether the registrants are accelerated filers (as
defined in Rule 12b-2 of the Act). Yes |X| No |_|



The aggregate market value of the voting and The aggregate market value of the voting and
non-voting common equity held by non-affiliates non-voting common equity held by non-affiliates
computed by reference to the price at which the computed by reference to the price at which the
common equity was last sold was $16.0 billion common equity was last sold was $7.6 billion
as of the last business day of the registrant's as of the last business day of the registrant's
most recently completed second fiscal quarter. most recently completed second fiscal quarter.

At February 7, 2005, Carnival Corporation At February 7, 2005, Carnival plc had
had outstanding 634,724,685 shares of its outstanding 212,033,669 Ordinary Shares $1.66
Common Stock, $.01 par value. stated value, one Special Voting Share,
GBP 1.00 par value and 634,724,685 Trust
Shares of beneficial interest in the P&O Princess
Special Voting Trust.




DOCUMENTS INCORPORATED BY REFERENCE

The information described below and contained in the Registrants' 2004
annual report to shareholders to be furnished to the Commission pursuant to Rule
14a-3(b) of the Exchange Act is shown in Exhibit 13 and is incorporated by
reference into this Annual Report on Form 10-K.

Part and Item of the Form 10-K

Part II

Item 5(a) and (b). Market for Registrants' Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity
Securities - Market Information and Holders.

Item 6. Selected Financial Data.

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market
Risk.

Item 8. Financial Statements and Supplementary Data.

Portions of the Registrants' 2005 definitive proxy statement, to be filed
with the Commission, are incorporated by reference into this joint Annual Report
on Form 10-K under the items described below.

Part and Item of the Form 10-K

Part III

Item 10. Directors and Executive Officers of the Registrants.

Item 11. Executive Compensation.

Item 12. Security Ownership of Certain Beneficial Owners and
Management.

Item 13. Certain Relationships and Related Transactions.

Item 14. Principal Accountant Fees and Services.


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PART I

Item 1. Business.

A. General

Carnival Corporation is incorporated in Panama, and Carnival plc is
incorporated in England and Wales. Together with their consolidated subsidiaries
they are referred to collectively in this joint Annual Report on Form 10-K as
"Carnival Corporation & plc," "our," "us," and "we."

On April 17, 2003, Carnival Corporation and Carnival plc (formerly known
as P&O Princess Cruises plc or "P&O Princess") completed a dual listed company
("DLC") transaction, which implemented Carnival Corporation & plc's DLC
structure. The DLC transaction combined the businesses of Carnival Corporation
and Carnival plc through a number of contracts and through amendments to
Carnival Corporation's articles of incorporation and by-laws and to Carnival
plc's memorandum of association and articles of association. Carnival
Corporation and Carnival plc are both public companies, with separate stock
exchange listings and their own shareholders. The two companies have a single
executive management team and identical boards of directors, and operate as if
they were a single economic enterprise. See Note 3, "DLC Transaction" to our
Consolidated Financial Statements in Exhibit 13 to this joint Annual Report on
Form 10-K.

We are the largest cruise company and one of the largest vacation
companies in the world. We have a portfolio of 12 widely recognized cruise
brands and are a leading provider of cruises to all major vacation destinations
outside the Far East. See Part I, Item 1. Business C. "Cruise Operations" for
further information.

As of February 7, 2005, a summary of the number of cruise ships we
operate, by brand, their passenger capacity and the primary areas in which they
are marketed is as follows:



Cruise Number Passenger Primary
Brands of Cruise Ships Capacity(a) Market
------ --------------- ----------- ------

Carnival Cruise
Lines 20 44,866 North America
Princess Cruises
("Princess") 14 28,332 North America
Costa Cruises ("Costa") 11 18,272 Europe
Holland America Line 12 16,930 North America
P&O Cruises 4 7,724 United Kingdom
AIDA Cruises ("AIDA") 4 5,378 Germany
Cunard Line ("Cunard") 2 4,410 North America and United Kingdom
P&O Cruises Australia 2 2,686 Australia and New Zealand
Ocean Village 1 1,578 United Kingdom
Swan Hellenic 1 678 United Kingdom
Seabourn Cruise Line
("Seabourn") 3 624 North America
Windstar Cruises ("Windstar") 3 604 North America
-- -------
77 132,082
== =======


(a) In accordance with cruise industry practice, passenger capacity is
calculated based on two passengers per cabin even though some cabins can
accommodate three or more passengers.

As of February 7, 2005, we had signed agreements with two shipyards
providing for the construction of 13 additional cruise ships scheduled for
delivery between March 2005 and April 2009. This will increase our passenger
capacity by 34,120 lower berths, or 25.8%, compared to February 7, 2005. It is
possible that some of our older ships may be sold or retired during the next few
years, thus reducing the size of our fleet over this period. See Note 7,
"Commitments" to our Consolidated Financial Statements in Exhibit 13 to this
joint Annual Report on Form 10-K for additional information regarding our ship
commitments.

In addition to our cruise operations, we own the leading cruise/tour
operators in the State of Alaska and the Canadian Yukon, Holland America Tours
and Princess Tours, which primarily complement their respective cruise
operations and own substantially all the assets noted below. These tour
companies currently market and operate:


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- - 20 hotels or lodges in Alaska and the Canadian Yukon, with over 3,200 guest
rooms;

- - over 530 motorcoaches used for sightseeing and charters in the States of
Washington and Alaska, in British Columbia, Canada and the Canadian Yukon;

- - 22 domed rail cars, which are run on the Alaska Railroad between Anchorage and
Fairbanks;

- - two luxury dayboats offering tours to a glacier in Alaska and on the Yukon
River; and

- - sightseeing packages, or individual components of such packages, sold either
separately or as part of our cruise/tour packages to our Alaskan cruise
passengers and to other vacationers.

B. Risk Factors

You should carefully consider the specific risk factors set forth below,
as well as the other information contained or incorporated by reference in this
joint Annual Report on Form 10-K, as these are important factors, among others,
that could cause our actual results to differ from our expected or historical
results. Some of the statements in this section and elsewhere in this joint
Annual Report on Form 10-K are "forward-looking statements." For a discussion of
those statements and of other factors to consider see the "Cautionary Note
Concerning Factors That May Affect Future Results" below.

(1) We may lose business to competitors throughout the vacation market.

We face significant competition from other cruise lines, both on the basis
of cruise pricing and also in terms of the types of ships, services and
destinations we offer to cruise passengers. Our principal competitors include
the companies listed in this joint Annual Report on Form 10-K under the caption,
"Cruise Operations - Competition."

However, we operate in the vacation market, and cruising is only one of
many alternatives for people choosing a vacation. We therefore risk losing
business not only to other cruise lines, but also to other vacation operators
that provide other travel and leisure options, including hotels, resorts and
package holidays and tours.

In the event that we do not compete effectively with other cruise
companies and other vacation alternatives, our results of operations and
financial condition could be adversely affected.

(2) The international political and economic climate and other world
events affecting safety and security could adversely affect the
demand for cruises and could harm our future sales and
profitability.

Demand for cruises and other vacation options has been, and is expected to
continue to be, affected by the public's attitude towards the safety of travel,
the international political climate and the political climate of destination
countries. Events such as the terrorist attacks in the U.S. on September 11,
2001 and the threats of additional attacks in the U.S. and elsewhere, concerns
of an outbreak of additional hostilities and national government travel
advisories, together with the resulting political instability and concerns over
safety and security aspects of traveling, have had a significant adverse impact
on demand and pricing in the travel and vacation industry and may continue to do
so in the future. Demand for cruises is also likely to be increasingly dependent
on the underlying economic strength of the countries from which cruise companies
source their passengers. Economic or political changes that reduce disposable
income or consumer confidence in the countries from which we source our
passengers may affect demand for vacations, including cruise vacations, which
are a discretionary purchase. Decreases in demand could lead to price
discounting which, in turn, could reduce the profitability of our business.

(3) Overcapacity within the cruise and land-based vacation industry
could have a negative impact on net revenue yields and increase
operating costs, thus resulting in ship, goodwill and/or trademark
asset impairments, all of which could adversely affect
profitability.

Cruising capacity has grown in recent years and we expect it to continue
to increase over the next five years as all of the major cruise vacation
companies are expected to introduce new ships. In order to utilize new capacity,
the cruise vacation industry will probably need to increase its share of the
overall vacation market. The overall vacation market is also facing increases in
land-based vacation capacity, which also will impact us.


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Failure to increase our share of the overall vacation market is one of a number
of factors that could have a negative impact on our net revenue yields. In some
prior years, our net revenue yields were negatively impacted as a result of a
variety of factors, including capacity increases. Should net revenue yields be
negatively impacted, our results of operations and financial condition could be
adversely affected, including the impairment of the value of our ships, goodwill
and/or trademark assets. In addition, increased cruise capacity could impact our
ability to retain and attract qualified crew at competitive costs and,
therefore, increase our shipboard employee costs.

(4) Our future operating cash flow may not be sufficient to fund future
obligations, and we may not be able to obtain additional financing,
if necessary, at a cost that is favorable or that meets our
expectations.

Our forecasted cash flow from future operations may be adversely affected
by various factors, including, but not limited to, declines in customer demand,
increased competition, overcapacity, the deterioration in general economic and
business conditions, terrorist attacks, ship accidents and other incidents,
adverse publicity and increases in fuel prices, as well as other factors noted
under these "Risk Factors" and under the "Cautionary Note Concerning Factors
That May Affect Future Results" section below. To the extent that we are
required, or choose, to fund future cash requirements, including future
shipbuilding commitments, from sources other than cash flow from operations,
cash on hand and current external sources of liquidity, including committed
financings, we will have to secure such financing from banks or through the
offering of debt and/or equity securities in the public or private markets.

Our access to, and the cost of, financing will depend on, among other
things, the maintenance of strong long-term credit ratings. Carnival Corporation
and Carnival plc's senior, unsecured long-term debt ratings are "A3" by Moody's,
"A-" by Standard & Poor's and "A-" by Fitch Ratings. Carnival Corporation's
short-term corporate credit ratings are "Prime-2" by Moody's, "A-2" by Standard
& Poor's and "F2" by Fitch Ratings.

(5) Accidents and other incidents or adverse publicity concerning the
cruise industry or us could affect our reputation and harm our
future sales and profitability.

The operation of cruise ships involves the risk of accidents, passenger
and crew illnesses, mechanical failures and other incidents at sea or while in
port, which may bring into question passenger safety, health, security and
vacation satisfaction and thereby adversely effect future industry performance,
sales and profitability. It is possible that we could be forced to cancel a
cruise or a series of cruises due to these factors, which would have an adverse
affect on sales and profitability. In addition, adverse publicity concerning the
vacation industry in general or the cruise industry or us in particular could
affect our reputation and impact demand and, consequently, have an adverse
affect on our profitability.

(6) We are subject to many economic and political factors that are
beyond our control, which could result in increases in our
operating, financing and tax costs.

Some of our operating costs, including fuel, food, insurance, payroll and
security costs, are subject to increases because of market forces, economic or
political instability or decisions beyond our control. In addition, interest
rates, currency fluctuations and our ability to obtain debt or equity financing
are dependent on many economic and political factors. Actions by U.S. and
non-U.S. taxing jurisdictions could also cause an increase in our costs.

Recently, the State of Alaska determined that an Initiative Petition (the
"Initiative") to, among other things, impose a tax on cruise passengers sailing
in Alaskan waters had sufficient signatures to qualify for the August, 2006
statewide primary election ballot. However, this determination is being
challenged by the Northwest Cruise Ship Association. If the Initiative appears
on the ballot and is approved by the voters, it would likely take effect in
2007. The Initiative would impose a $46 per passenger tax on cruise passengers
aboard vessels with at least 250 berths, an additional fee of $4 per passenger
for an Ocean Ranger program, remove the exemption from Alaska corporate income
taxes for commercial passenger vessels and assess a 33% tax on income from
onboard gambling. The Initiative would also impose a number of other
regulations, reporting and operational requirements on cruise vessel operators.
Some or all of these provisions may be subject to legal challenges if the
Initiative is approved.

Separately, two bills have been introduced for consideration in the Alaska
Legislature. One would impose taxes of $50 per cruise passenger and the other
proposes a tax of $75 per passenger. Similar legislation has been proposed in
Alaska in the past and


5


has not been approved. Both measures raise legal questions and it is uncertain
whether either bill will be passed in its current form.

It is expected that any proposed passenger taxes, such as the proposed $46
per passenger tax above, would be directly charged to and collected from our
guests. However, if any of these taxes are enacted, it is likely that we would
consider reducing the number of our ships that offer Alaskan cruises, in order
to reduce the adverse impact of these taxes on our net income. The ultimate
outcomes of these Alaskan matters cannot be determined at this time.

Increases in operating, financing and tax costs could adversely affect our
results because we may not be able to recover these increased costs through
price increases of our cruise vacations.

(7) Environmental legislation and regulations could affect operations
and increase our operating costs.

Some environmental groups have lobbied for more stringent regulation of
cruise ships. Some groups have also generated negative publicity about the
cruise industry and its environmental impact. The U.S. Congress, the
International Maritime Organization and the U.S. Environmental Protection Agency
periodically consider new laws and regulations to manage cruise ship pollution.
In addition, various other regulatory agencies in the States of Alaska,
California, Florida, Hawaii, Maine, Washington and elsewhere, including European
regulatory organizations, have enacted or are considering new regulations or
policies, which could adversely impact the cruise industry. See Section C.
"Cruise Operations - Governmental Regulations" for additional information. See
Part 1, Item 3. "Legal Proceedings" and Note 8, "Contingencies - Litigation" to
our Consolidated Financial Statements in Exhibit 13 to this joint Annual Report
on Form 10-K.

In addition, pursuant to a settlement with the U.S. government in April
2002, Carnival Corporation pled guilty to certain environmental violations and
was fined. Carnival Corporation was also placed on probation for a term of five
years. Under the terms of the probation, any future violation of environmental
laws by Carnival Corporation may be deemed a violation of probation, which could
result in additional fines and other forms of relief.

Current and future environmental laws and regulations, or liabilities
arising from past or future releases of, or exposure to, hazardous substances or
to vessel discharges, could increase our cost of compliance or otherwise
materially adversely affect our business, results of operations and/or financial
condition.

(8) New regulations of health, safety, security and other regulatory
issues could increase our operating costs and adversely affect net
income.

We are subject to various international, national, state and local health,
safety and security laws, regulations and treaties. See Section C. "Cruise
Operations-Governmental Regulations" for a detailed discussion of these
regulatory issues.

We believe that health, safety, security and other regulatory issues will
continue to be areas of focus by relevant government authorities in the U.S.,
Europe and elsewhere. Resulting legislation or regulations, or changes in
existing legislation or regulations, could impact our operations and would
likely subject us to increasing compliance costs in the future.

(9) Delays in ship construction and problems encountered at shipyards
could reduce our profitability.

The construction of cruise ships is a complex process and involves risks
similar to those encountered in other sophisticated construction projects,
including delays in completion and delivery. In addition, industrial actions and
insolvency or financial problems of the shipyards building our ships could also
delay or prevent the delivery of our ships under construction. These events
could adversely affect our profitability. However, the impact from a delay in
delivery could be mitigated by contractual provisions and refund guarantees
obtained by us.

In addition, as of February 7, 2005, we have entered into foreign currency
swaps to fix the cost in U.S. dollars or sterling of two of our foreign currency
denominated shipbuilding contracts. If the shipyard with which we have
contracted is unable to perform under the related contract, the foreign currency
swaps related to the shipyard's shipbuilding contracts would still have to be
honored. This might require us to realize a loss on existing foreign currency
swaps without having the ability to have an offsetting


6


gain on our foreign currency denominated shipbuilding contracts, thus resulting
in an adverse effect on our financial results.

(10) The lack of attractive port destinations for our cruise ships could
reduce our net revenue yields and net income.

We believe that attractive port destinations, including ports that are not
overly congested with tourists, are major reasons why our customers choose a
cruise versus an alternative vacation option. The availability of ports,
including the specific port facility at which our guests will embark and
disembark, is affected by a number of factors including, but not limited to,
existing capacity constraints, security concerns, unusual weather patterns and
natural disasters, financial limitations on port development, political
instability, exclusivity arrangements that ports may have with our competitors,
local governmental regulations and charges and local community concerns about
both port development and other adverse impacts on their communities from
additional tourists. The inability to continue to maintain and increase our
ports of call could adversely affect our net revenue yields and net income.

(11) The structure of the DLC transaction involves risks not associated
with the more common ways of combining the operations of two
companies, and these risks may have an adverse effect on the
economic performance of the companies and/or their respective share
prices.

The DLC structure is a relatively uncommon way of combining the management
and operations of two companies and it involves different issues and risks from
those associated with the other more common ways of effecting a business
combination, such as a merger or exchange offer to create a wholly owned
subsidiary. In the DLC transaction, the combination was effected primarily by
means of contracts between Carnival Corporation and Carnival plc and not by
operation of a statute or court order. The legal effect of these contractual
rights may be different from the legal effect of a merger or amalgamation under
statute or court order, and there may be difficulties in enforcing these
contractual rights. Shareholders and creditors of either company might challenge
the validity of the contracts or their lack of standing to enforce rights under
these contracts, and courts may interpret or enforce these contracts in a manner
inconsistent with the express provisions and intentions we included in such
contracts. In addition, shareholders and creditors of other companies might
successfully challenge other DLC structures and establish legal precedents that
could increase the risk of a successful challenge to the DLC transaction. We are
maintaining two separate public companies and comply with both Panamanian
corporate law and English company laws and different securities and other
regulatory and stock exchange requirements in the UK and the U.S. This structure
requires more administrative time and cost than was the case for each company
individually, which may have an adverse effect on our operating efficiency.

(12) Changes under the Internal Revenue Code, applicable U.S. income tax
treaties, and the uncertainty of the DLC structure under the
Internal Revenue Code may adversely affect the U.S. federal income
taxation of our U.S. source shipping income. In addition, changes in
the UK, Italian, German, Australian and other countries income tax
laws, regulations or treaties could also adversely affect our net
income.

We believe that substantially all of the U.S. source shipping income of
each of Carnival Corporation and Carnival plc qualifies for exemption from U.S.
federal income tax, either under:

- Section 883 of the Internal Revenue Code;

- as appropriate in the case of Carnival plc and its UK resident
subsidiaries, the U.S.-UK income tax treaty that entered into force on
April 25, 1980 and, when applicable, the new U.S.-UK Income Tax Treaty
that entered into force on March 31, 2003;

- U.S.-Italian income tax treaty; or

- other applicable U.S. income tax treaties,

and should continue to so qualify now that the DLC transaction has been
completed. There is, however, no existing U.S. federal income tax authority that
directly addresses the tax consequences of implementation of a dual listed
company structure such as our DLC structure for purposes of Section 883 or any


7


other provision of the Internal Revenue Code or any income tax treaty and,
consequently, the matters discussed above are not free from doubt. If we did not
qualify for exemption from U.S. federal income taxes we would have higher income
taxes and lower net income. Finally, changes in the income tax laws effecting
our cruise businesses in the UK, Italy, Germany, Australia and elsewhere could
result in higher income taxes being levied on our cruise operations, thus
resulting in lower net income.

See Part I, Item 1. Business, H. "Taxation" for additional information.

(13) A small group of shareholders collectively owned, as of February 7,
2005, approximately 30% of the total combined voting power of our
outstanding shares and may be able to effectively control the
outcome of shareholder voting.

A group of shareholders, consisting of some members of the Arison family,
including Micky Arison, and trusts established for their benefit, beneficially
owned approximately 38% of the outstanding common stock of Carnival Corporation,
which shares represent sufficient shares entitled to constitute a quorum at
shareholder meetings and to cast approximately 30% of the total combined voting
power of Carnival Corporation & plc. Depending upon the nature and extent of the
shareholder vote, this group of shareholders may have the power to effectively
control, or at least to influence substantially, the outcome of certain
shareholder votes and, therefore, the corporate actions requiring such votes.

(14) Carnival Corporation and Carnival plc are not U.S. corporations, and
our shareholders may be subject to the uncertainties of a foreign
legal system in protecting their interests.

Carnival Corporation's corporate affairs are governed by its third amended
and restated articles of incorporation and amended and restated by-laws and by
the corporate laws of Panama. Carnival plc is governed by its articles of
association and memorandum of association and by the corporate laws of England
and Wales. The corporate laws of Panama and England and Wales may differ in some
respects from the corporate laws in the U.S.

(15) Provisions in Carnival Corporation's and Carnival plc's
constitutional documents may prevent or discourage takeovers and
business combinations that our shareholders might consider to be in
their best interests.

Carnival Corporation's amended articles of incorporation and by-laws and
Carnival plc's articles of association contain provisions that may delay, defer,
prevent or render more difficult a takeover attempt that our shareholders
consider to be in their best interests. For instance, these provisions may
prevent our shareholders from receiving a premium to the market price of our
shares offered by a bidder in a takeover context. Even in the absence of a
takeover attempt, the existence of these provisions may adversely affect the
prevailing market price of our shares if they are viewed as discouraging
takeover attempts in the future.

Specifically, Carnival Corporation's articles of incorporation contain
provisions that prevent third parties, other than the Arison family and trusts
established for their benefit, from acquiring beneficial ownership of more than
4.9% of its outstanding shares without the consent of Carnival Corporation's
board of directors and provide for the lapse of rights, and sale, of any shares
acquired in excess of that limit. The effect of these provisions may preclude
third parties from seeking to acquire a controlling interest in us in
transactions that shareholders might consider to be in their best interests and
may prevent them from receiving a premium above market price for their shares.
For a description of the reasons for the provisions see Part I, Item 1.
Business, I. - "Taxation- Application of Section 883 of the Internal Revenue
Code."

Cautionary Note Concerning Factors That May Affect Future Results

Some of the statements contained in this joint Annual Report on Form 10-K
are "forward-looking statements" that involve risks, uncertainties and
assumptions with respect to us, including some statements concerning future
results, outlook, plans, goals and other events which have not yet occurred.
These statements are intended to qualify for the safe harbors from liability
provided by Section 27A of the U.S. Securities Act of 1933 and Section 21E of
the U.S. Securities Exchange Act of 1934. You can find many, but not all, of
these statements by looking for words like "will," "may," "believes," "expects,"
"anticipates," "forecast," "future," "intends," "plans," and "estimates" and for
similar expressions.


8


Because forward-looking statements involve risks and uncertainties, there
are many factors that could cause our actual results, performance or
achievements to differ materially from those expressed or implied in this joint
Annual Report on Form 10-K. Forward-looking statements include those statements
which may impact the forecasting of our earnings per share, net revenue yields,
booking levels, pricing, occupancy, operating, financing and/or tax costs, cost
per available lower berth day, estimates of ship depreciable lives and/or
residual values, outlook or business prospects.

Certain of our risks are identified in "Management's Discussion and
Analysis of Financial Condition and Results of Operations--Cautionary Note
Concerning Factors That May Affect Future Results" in Exhibit 13 to this joint
Annual Report on Form 10-K and in the section above entitled "Risk Factors."
These sections contain important cautionary statements and a discussion of many
of the factors that could materially affect the accuracy of our forward-looking
statements and/or adversely affect our business, results of operations and
financial position.

Forward-looking statements should not be relied upon as a prediction of
actual results. Subject to any continuing obligations under applicable law or
any relevant listing rules, we expressly disclaim any obligation to disseminate,
after the date of this joint Annual Report on Form 10-K, any updates or
revisions to any such forward-looking statements to reflect any change in
expectations or events, conditions or circumstances on which any such statements
are based.

C. Cruise Operations

The multi-night cruise industry is a small part of the overall global
vacation market. We estimate that the global cruise industry carried more than
13 million passengers in 2004. The principal sources for cruise passengers are
North America, Europe, Asia/South Pacific including Australia and New Zealand,
and South America. We source our passengers principally from North America and,
to a lesser extent, from Europe. A small percentage of our passengers are
sourced from Asia/South Pacific and South America . See Note 12, "Segment
Information" to our Consolidated Financial Statements in Exhibit 13 to this
joint Annual Report on Form 10-K for additional information regarding our cruise
and other segments and our U.S. and foreign assets and revenues.

I. Industry Background

The cruise industry is still growing and continues to remain only a
relatively small percentage of the wider global holiday market in which cruise
vacation operators compete for disposable income normally spent by consumers on
vacations. In the U.S., for example, only approximately 16% of the population
has ever taken a cruise, and only 8% have done so in the past three years. In
addition, cruise passengers in North America have increased by a compound annual
growth rate of approximately 8.6% between 1998 and 2003, increasingly drawing
consumers from other vacation alternatives. In Europe, where workers generally
enjoy two to three times more vacation days than North Americans, cruise
passengers have increased by a compound annual growth rate of approximately
10.6% between 1998 and 2003.

Outside North America, the principal sources of passengers for the cruise
industry, excluding the Far East, are the UK, Germany, Italy, France, Australia,
Spain, Switzerland, and Brazil. In all of these areas, cruising represents a
smaller proportion of the overall vacation market than it does in North America
but, based on industry data, is generally experiencing higher growth rates.

Cruising offers a broad range of products to suit vacationing customers of
many ages, backgrounds and interests. Cruise brands can be broadly characterized
as offering contemporary, premium and luxury cruise experiences. The
contemporary experience typically includes cruises that last seven days or less,
have a more casual ambiance and are less expensive than premium or luxury
cruises. The premium experience typically includes cruises that last from seven
to 14 days. Premium cruises emphasize quality, comfort, style and more
destination-focused itineraries and the average pricing on these cruises is
typically higher than contemporary cruises. The luxury experience is typically
characterized by smaller vessel size, very high standards of accommodation and
service, and generally with higher prices than premium cruises. Notwithstanding
these classifications, there generally is significant overlap and competition
among all cruise products.

We are a provider of cruise vacations in most of the largest vacation
markets in the world, with significant product offerings in each of the
classifications noted above, including North America, the UK, Germany, southern
Europe and South America. Our mission is "to deliver exceptional vacation
experiences through the world's best-known cruise brands that cater to a variety
of different lifestyles and budgets, all at an outstanding value


9


unrivalled on land or at sea." A brief description of the principal vacation
areas where we source passengers and our brands that market to these vacationers
is as follows:

II. North America

The highest number of cruise passengers in the world are sourced from
North America, where cruising has developed into a mainstream alternative to
land-based resort and sightseeing vacations. Approximately 8.2 million North
American-sourced cruise passengers took cruise vacations for two consecutive
nights or more in 2003. This sector has grown significantly in recent years as
new capacity has been introduced.

The principal itineraries visited by North American sourced cruise
passengers in 2004 were the Caribbean, Bahamas, Mexico and Alaska. In addition,
North American cruise passengers visited Europe, the Mediterranean, New England
and Canada, Bermuda, Hawaii, the Panama Canal and other exotic locations,
including South and Central America, Africa, the South Pacific, the Orient and
India.

Based on the number of ships that are currently on order worldwide and
scheduled for delivery between 2005 and 2007, we expect that the net capacity
serving North American consumers will continue to increase. Our projections
indicate that by the end of 2005, 2006 and 2007, North America will be served by
155, 158 and 161 ships, respectively, having an aggregate passenger capacity of
approximately 194,000, 204,000 and 215,000 lower berths, respectively. At the
end of 2004, North America was served by 154 ships, having an aggregate
passenger capacity of approximately 190,000 lower berths. These figures include
some ships that were, or are expected to be, marketed in both North America and
elsewhere during different times of the year. Our estimates of capacity do not
include assumptions related to unannounced ship withdrawals due to factors such
as the age of ships or changes in the location from where ships' passengers are
predominantly sourced and, accordingly, could indicate a higher percentage
growth in North American capacity than will actually occur. Nonetheless, we
expect that net capacity serving North American-sourced cruise passengers will
increase over the next several years, although at a lower growth rate than what
the cruise industry experienced in recent years.

Carnival Cruise Lines, Princess, Holland America Line, Cunard, Seabourn
and Windstar source their passengers primarily from North America.

Carnival Cruise Lines operates 20 contemporary ships, with one additional
ship expected to begin service in 2005 and another in 2007. Carnival Cruise
Lines is the number one cruise brand in North America, and is well-known as the
"Fun Ships," which we believe captures the essence of the brand. Carnival Cruise
Lines carries the largest number of North American cruise passengers and has
been offering more new homeport locations to stimulate demand. New homeport
locations enable guests to lower the price of their cruise vacation by reducing
substantially or eliminating the cost of travel to and from the port. All the
Carnival Cruise Lines ships were designed by and built for it, including six
that are among the world's largest, the Carnival Valor, Carnival Glory, the
Carnival Conquest, the Carnival Victory, the Carnival Triumph and the Carnival
Destiny. In addition, Carnival Cruise Lines' four "Spirit" class ships, the
Carnival Miracle, the Carnival Legend, the Carnival Pride and the Carnival
Spirit have 80% outside cabins, with 80% of those outside cabins having
balconies. Eighteen of the Carnival Cruise Lines ships operate to destinations
in the Bahamas or the Caribbean during all or a portion of the year, and two of
its ships call on ports on the Mexican Riviera year-round. Carnival Cruise Lines
ships also offer cruises to Alaska, Bermuda, Canada/New England, the Hawaiian
Islands and Europe, with most cruises ranging from three to seven days.

Princess, whose brand name was made famous by the "Love Boat" television
show, operates 14 premium ships, with one additional ship expected to begin
service in fiscal 2006 and another in 2007. Princess' sailing schedule visits
all seven continents. Most cruises range from seven to 15 days in length, with
some up to 30 days, and destinations include Alaska, Europe, the Caribbean, the
Panama Canal, Mexican Riviera, the South Pacific, South America, Hawaiian
Islands, Asia and Canada/New England. Princess also operates a private
destination port-of-call known as Princess Cays on the Bahamian Island of
Eleuthera, which features retail outlets, water sports, beach and sports
facilities, restaurants, bars and other amenities. Princess' fleet was designed
with numerous options and features, including intimately designed spaces,
spacious staterooms and private balconies.


10


During the spring of 2005, the 2016-passenger Adonia, which is currently
operated by P&O Cruises, will be transferred to Princess and renamed the Sea
Princess. The Sea Princess will be based most of the year in Southampton,
England, primarily to serve UK-based passengers. Also in spring 2005, the
1196-passenger Royal Princess will be transferred to P&O Cruises and renamed the
Artemis.

In 2005, Holland America Line's fleet of 12 premium ships will offer
nearly 500 sailings from 27 home ports, 17 in North America, including
departures from Norfolk, Virginia, Baltimore, Maryland, and Boston,
Massachusetts, with one additional ship expected to begin service in 2006. In
April 2004, the Westerdam, the most recent addition, joined the fleet. This
fleet also visits all seven continents in 2005, while increasing the number of
cruises to popular destinations such as Alaska, the Caribbean, Europe and
Canada/New England. Cruise lengths vary from two to 116 days. Most Holland
America Line sailings in the Caribbean visit a private island destination known
as Half Moon Cay, which is owned by Holland America Line.

Holland America Line is in the process of investing $225 million to
provide product and service enhancements to its fleet. The comprehensive
enhancements, known as the "Signature of Excellence," focus on five areas vital
to Holland America Line's guest experience-spacious, elegant ships and
accommodations, sophisticated dining, gracious, unobtrusive service, extensive
enrichment programs and activities, and compelling worldwide itineraries. In
October 2004, the Ryndam was re-launched as the first ship to showcase the full
range of enhancements of the Signature of Excellence. Similar enhancements on
the remaining fleet are expected to be completed by the end of 2006.

Windstar Cruises operates three motor-sail yachts known for their casually
elegant atmosphere. In 2005, Windstar Cruises will offer sailings in the
Caribbean, Europe and Costa Rica. Renowned for offering a luxury cruise
experience that is "180 Degrees from Ordinary," a high-percentage of return
guests attests to the appeal of Windstar's casual ambiance of resort-style
attire, innovative cuisine and wine selections, open restaurant-style seating,
attentive service, exotic destinations and complimentary water sports.

The three Seabourn ships (the "Yachts of Seabourn") focus on personalized
service and quality cuisine aboard their intimately sized all-suite ships. The
Yachts of Seabourn offer an ultra-luxury experience and are primarily marketed
in North America. These ships offer destinations around the world, including
Europe, Asia, the South Pacific and the Americas, with cruises generally in the
seven to 14 day range. The Yachts of Seabourn itineraries include many smaller,
off-the-beaten-track ports that are inaccessible to larger ships.

III. Europe

We believe that Europe is the largest single leisure travel vacation
market, but cruising in Europe has achieved a much lower penetration rate than
in North America. Approximately 2.7 million European-sourced passengers took
cruise vacations in 2003 compared to approximately 8.2 million North American
sourced-passengers. The number of European cruise passengers increased by a
compound annual growth rate of approximately 10.6% between 1998 and 2003. We
believe that cruising represents less than 1% of the European vacation market.
Therefore, we believe that the European market represents a significant growth
opportunity for us, and we expect that a number of new or existing ships will
continue to be introduced into Europe over the next several years.

Our projections indicate that by the end of 2005, 2006 and 2007, Europe
will be served by 122, 124 and 128 ships, respectively, having an aggregate
passenger capacity of approximately 100,000, 106,000 and 115,000 lower berths,
respectively. These figures include some ships that were, or are expected to be,
marketed in both Europe and elsewhere during different times of the year. At the
end of 2004, Europe was served by 116 ships, having an aggregate passenger
capacity of approximately 93,000 lower berths.

We have contracted for two new cruise ships that we have not yet assigned
to either our European brands or our North American brands. We expect these two
ships to enter service in 2008, and that we will decide on which brand they are
to join by September 30, 2005. At current exchange rates, it is most likely that
these two contracts will be assigned to one of our cruise brands whose
functional currency is the euro or sterling.

A. United Kingdom

The UK is the single largest country from which cruise passengers are
sourced in Europe. Approximately 1.0 million UK passengers took cruises in 2003.
Cruising was relatively underdeveloped as a vacation option for the UK consumers
until the mid-1990s, but since then the UK has been one of the fastest growing
regions in


11


the world. The number of UK cruise passengers increased by a compound annual
growth rate of approximately 8.8% between 1998 and 2003. The main destination
for UK cruise passengers is the Mediterranean. Other popular destinations for UK
cruise passengers include the Caribbean, the Atlantic Islands, including the
Canary Islands and the Azores, and Scandinavia.

P&O Cruises, Ocean Village, and Swan Hellenic source substantially all of
their passengers from the UK. In addition, our North American brands and Costa
also source passengers from the UK. Finally, Cunard sources customers from North
America, Europe and the rest of the world.

P&O Cruises is the largest cruise operator and best known cruise brand in
the UK, with four premium ships, with an average age of six years at November
30, 2004 and one new ship, the Arcadia, expected to begin service in 2005. These
ships cruise to over 180 destinations in more than 75 countries, with most
cruises ranging from 12 to 16 days, but with some cruises lasting longer. These
ships, which are relatively new compared to the ships that are more typically
marketed in the UK, have enabled P&O Cruises to continue to offer a more modern
style of cruising to UK cruise passengers and increase their appeal to younger
passengers and families, while retaining older and more traditional British
customers. The ships have a wide choice of dining and entertainment options and
offer a welcoming atmosphere, with an emphasis on the attributes of
"Britishness," "professionalism," and "style." P&O Cruises offers cruises to the
Mediterranean, the Atlantic Islands, the Baltic, the Norwegian Fjords and the
Caribbean and around the world voyages.

Under the Cunard brand, which is one of the most widely recognized brands
in the UK, we operate two premium/luxury ships. They are primarily marketed in
the UK, North America, Germany and Australia. Cunard's new flagship, the Queen
Mary 2, was delivered in December 2003 and is the largest ocean liner in the
world. She has taken over the northern transatlantic crossing route, which was
previously operated by the Queen Elizabeth 2 ("QE2"), Cunard's former flagship.
The QE2 primarily serves UK-based passengers from Southampton, England and still
offers a world cruise, which has been offered since 1975. Cunard expects to take
delivery of its next new ship, the Queen Victoria, in December 2007. Cunard's
ships offer voyages to worldwide destinations, with many of the voyages ranging
generally between six and 31 days, but with some three day "taster" voyages and
the 122-day world cruise.

The Ocean Village brand was launched in spring 2003 and consists of one
contemporary ship serving the UK. This brand targets a young and active customer
base and its cruise product emphasizes informality, health and well-being. The
brand attracts a high proportion of passengers new to cruising. The Ocean
Village ship offers one or two week cruises, together with cruise and stay
holidays, and operates out of Palma, Majorca in the Mediterranean during the
summer season and from Barbados in the Caribbean during the winter season.

Swan Hellenic's Minerva II operates a program of premium discovery
cruises. The product is intended to appeal to passengers seeking to discover
more about the destinations they are visiting. In the summer season, the
itineraries are focused in the Mediterranean, the Black Sea, the Baltic and
around Great Britain. Winter cruise destinations alternate between Central and
South America and the Far East.

B. Southern Europe

The main countries in southern Europe for sourcing cruise passengers are
Italy, France and Spain. Together, these countries generated approximately 0.9
million cruise passengers in 2003. Cruising in Italy, France and Spain exhibited
a compound annual growth rate in the number of passengers carried of
approximately 12.6% between 1998 and 2003. We believe that southern Europe is
also relatively underdeveloped for the cruise industry. We intend to increase
our penetration in southern Europe through Costa, the largest and one of the
most recognized cruise brands marketed in Europe.

Costa's 11 contemporary ships operate in Europe during the spring to fall.
During the fall to spring, Costa repositions the majority of its ships to the
Caribbean and South America, while also maintaining a year-round presence with
the rest of its fleet in the Mediterranean and the Atlantic Islands. Costa is
the number one cruise line in continental Europe based on passengers carried and
capacity of its ships, principally serving customers in Italy, France, Germany
and Spain. The Costa ships call on 120 European ports, with 49 different
itineraries, and sail to various other ports in the Caribbean and South America,
with most cruises ranging from seven to 11 days. Costa expects to take delivery
of one new


12


ship in 2006 and another in 2007. In addition, Costa expects to transfer the
1022-passenger Costa Tropicale to P&O Cruises Australia in October 2005, which
will be renamed the Pacific Star.

C. Germany

Germany is one of the largest sources for cruise passengers in continental
Europe with approximately 0.5 million cruise passengers in 2003. Germany
exhibited a compound annual growth rate in the number of cruise passengers
carried of approximately 11.5% between 1998 and 2003. We believe that Germany is
also a relatively underdeveloped region for the cruise industry. The main
destinations visited by German cruise passengers are the Mediterranean and the
Caribbean. Other popular destinations for German cruise passengers include
Scandinavia and the Atlantic Islands.

AIDA sources substantially all its passengers from Germany. In addition,
since 2002 Costa has dedicated one ship, the Costa Marina, to German- sourced
passengers.

AIDA is the best-known cruise brand in the fast-growing German cruise
industry, and offers a "club cruising" style that has an emphasis on lifestyle,
informality, friendliness and activity. Spa and fitness areas and high quality
but informal dining options characterize the experience onboard the vessels.
AIDA's four contemporary ships primarily offer seven day trips that allow guests
to easily book back-to-back cruise vacations. AIDA expects to take delivery of
one new ship in April 2007 and another in April 2009. Each of these new ships
has a 22% larger passenger capacity than the largest ship in AIDA's current
fleet. During the summer the AIDA ships sail in the Mediterranean and the North
and Baltic Seas, calling on approximately 70 ports, while itineraries for the
winter include the Caribbean, Central America, the Western Mediterranean and the
Atlantic Islands. In 2004, itineraries also included the Persian Gulf and
Southeast Asia.

IV. Australia and New Zealand

Cruising in Australia is relatively well established but is still
developing. We estimate that approximately 155,000 Australians took cruise
vacations in 2003. We expect to serve this region primarily through P&O Cruises
Australia, which is the leading cruise line in Australia.

P&O Cruises Australia is a cruise brand that caters specifically to
Australians and New Zealanders. Its contemporary ships, the Pacific Sun and the
Pacific Sky, offer seven to 14 day cruises from Sydney to Vanuatu, New
Caledonia, Fiji, and New Zealand and for a portion of the year offers a premium
cruise product from Sydney to French New Caledonia and other destinations in the
South Pacific on the Pacific Princess.

V. South America

Cruise vacations have been marketed in South America for many years,
although cruising as a vacation alternative remains in an early stage of
development in the region. Cruises from South America typically occur during the
southern hemisphere summer months of November through March, and are primarily
seven to nine days in duration. Our presence is primarily represented through
the Costa brand, which currently operates two vessels in this region, Costa
Victoria and Costa Tropicale, collectively offering approximately 2,950 lower
berths.


13


VI. Ship Information

Summary information of our ships as of February 7, 2005 is as
follows:

CALENDAR
YEAR PASSENGER
BRAND AND SHIP REGISTRY DELIVERED CAPACITY
-------------- -------- --------- --------

Carnival Cruise Lines
Carnival Valor Panama 2004 2,974
Carnival Miracle Panama 2004 2,120
Carnival Glory Panama 2003 2,968
Carnival Conquest Panama 2002 2,966
Carnival Legend Panama 2002 2,122
Carnival Pride Panama 2001 2,120
Carnival Spirit Panama 2001 2,122
Carnival Victory Panama 2000 2,750
Carnival Triumph Bahamas 1999 2,752
Paradise Panama 1998 2,050
Elation Panama 1998 2,050
Carnival Destiny Bahamas 1996 2,634
Inspiration Bahamas 1996 2,050
Imagination Bahamas 1995 2,050
Fascination Bahamas 1994 2,050
Sensation Bahamas 1993 2,050
Ecstasy Panama 1991 2,050
Fantasy Panama 1990 2,054
Celebration Panama 1987 1,484
Holiday Bahamas 1985 1,450
------
Total Carnival Cruise Lines 44,866
------

Princess
Sapphire Princess Bermuda 2004 2,674
Caribbean Princess Bermuda 2004 3,100
Diamond Princess Bermuda 2004 2,674
Island Princess Bermuda 2003 1,974
Coral Princess Bermuda 2002 1,974
Star Princess Bermuda 2002 2,598
Golden Princess Bermuda 2001 2,598
Tahitian Princess Gibraltar 2000 668
Pacific Princess(1) Gibraltar 1999 668
Grand Princess Bermuda 1998 2,592
Dawn Princess Bermuda 1997 1,998
Sun Princess Bermuda 1995 2,022
Regal Princess Bermuda 1991 1,596
Royal Princess(2) Bermuda 1984 1,196
------
Total Princess 28,332
------

Costa
Costa Magica Italy 2004 2,702
Costa Fortuna Italy 2003 2,702
Costa Mediterranea Italy 2003 2,114
Costa Atlantica Italy 2000 2,114
Costa Victoria Italy 1996 1,928
Costa Romantica Italy 1993 1,344
Costa Allegra Italy 1992 806
Costa Classica Italy 1991 1,302
Costa Marina Italy 1990 762
Costa Europa Italy 1986 1,476
Costa Tropicale(3) Italy 1982 1,022
------
Total Costa 18,272
------


14


CALENDAR
YEAR PASSENGER
BRAND AND SHIP REGISTRY DELIVERED CAPACITY
-------------- -------- --------- --------

Holland America Line(4)
Westerdam Netherlands 2004 1,848
Oosterdam Netherlands 2003 1,848
Zuiderdam Netherlands 2002 1,848
Zaandam Netherlands 2000 1,432
Amsterdam Netherlands 2000 1,380
Volendam Netherlands 1999 1,432
Rotterdam Netherlands 1997 1,316
Veendam Bahamas 1996 1,258
Ryndam Netherlands 1994 1,258
Maasdam Netherlands 1993 1,258
Statendam Netherlands 1993 1,258
Prinsendam Netherlands 1988 794
------
Total Holland America Line 16,930
------

P&O Cruises
Oceana UK 2000 2,016
Aurora UK 2000 1,870
Adonia(5) UK 1998 2,016
Oriana UK 1995 1,822
------
Total P&O Cruises 7,724
------

AIDA
AIDAaura Italy 2003 1,266
AIDAvita Italy 2002 1,266
AIDAcara Italy 1996 1,180
AIDAblu(6) Italy 1990 1,666
------
Total AIDA 5,378
------

Cunard
Queen Mary 2 UK 2003 2,620
QE2 UK 1969 1,790
------
Total Cunard 4,410
------

P&O Cruises Australia
Pacific Sun(7) Bahamas 1986 1,486
Pacific Sky UK 1984 1,200
------
Total P&O Cruises Australia 2,686
------

Ocean Village
Ocean Village UK 1989 1,578

Swan Hellenic
Minerva II(8) Marshall Island 2001 678

Seabourn
Seabourn Legend Bahamas 1992 208
Seabourn Spirit Bahamas 1989 208
Seabourn Pride Bahamas 1988 208
------
Total Seabourn 624
------

Windstar
Wind Surf Bahamas 1990 308
Wind Spirit Bahamas 1988 148
Wind Star Bahamas 1986 148
------
Total Windstar 604
------

Total 132,082
=======

(1) The Pacific Princess is only included in Princess' capacity, although it
also is based out of Australia for one-half of the year.

(2) The Royal Princess is expected to be transferred to P&O Cruises in the
spring of 2005 and be renamed the Artemis.

(3) The Costa Tropicale is expected to be transferred to P&O Cruises Australia
in October 2005 and be renamed the Pacific Star.


15



(4) In November 2004, the 1,214 passenger Noordam left the Holland America
Line fleet pursuant to a long-term bareboat charter agreement.

(5) The Adonia is expected to be transferred to Princess in the spring of 2005
and be renamed the Sea Princess.

(6) The AIDAblu was formerly the A'ROSA Blu and was renamed in the spring of
2004. (7) The Jubilee was transferred from Carnival Cruise Lines to P&O
Cruises Australia in the summer of 2004 and was renamed the Pacific Sun.

(8) The Minerva II is operated by Swan Hellenic pursuant to a bareboat charter
agreement that expires in spring 2007.

VII. Characteristics of the Cruise Vacation Industry

A. Strong Growth

Cruise vacations have experienced significant growth in recent years. The
number of new cruise ships currently on order from shipyards indicates that the
growth in cruise capacity is set to continue for a number of years. In order to
fill up this new capacity, continued growth in demand across the industry will
be required. Given the historical growth rate of cruising and the relative low
penetration levels in major vacation regions, we believe that there are
significant areas for growth.

In the few years prior to 2004, the cruise industry experienced
significant pressure on cruise pricing, which we believe was ultimately the
result of, among other things, various adverse international geopolitical and
economic conditions and events, such as terrorism, higher unemployment, the
Iraqi war, and the risk of other armed conflicts, adverse publicity, increases
in new cruise ship capacity, ship incidents, and competition from cruise ship
and other vacation alternatives. Factors such as these could adversely impact
future growth if they or similar events or conditions were to occur or exist in
the future.

B. Wide Appeal of Cruising

Cruising appeals to a broad demographic range. Industry surveys estimate
that there are approximately 128 million potential passengers for cruising in
North America (defined as members of households with a minimum income of
$40,000, that are headed by a person who is at least 25 years old). According to
these surveys, about half of these individuals have expressed an interest in
taking a cruise as a vacation alternative, and over 60% of worldwide cruise
passengers are over the age of 40. The growth of the North American population
between ages 45 and 74 is expected to increase 21% between 2005 and 2015. We
believe the cruise industry is well-positioned to take advantage of these
favorable demographic trends, which are impacting its markets.

C. Relatively Low Penetration Levels

North America has the highest cruising penetration rates per capita.
Nevertheless, the Cruise Lines International Association, or CLIA, a leading
trade group, estimates that only approximately 16% of the U.S. population has
ever taken a cruise. In the UK, where there has been significant expansion in
the number of cruise passengers carried over the last five years, cruising
penetration levels per capita are only approximately three-fifths of those of
North America. In the principal vacation regions in continental Europe, cruising
penetration levels per capita are approximately one-fifth of those in North
America. Elsewhere in the world cruising is at an early stage of development and
has far lower penetration rates.

D. Satisfaction Rates

Cruise passengers tend to rate their overall satisfaction with a
cruise-based vacation higher than comparable land-based hotel and resort
vacations. We believe that a substantial number of cruise passengers think the
value of their cruise vacation experience is as good as, or better than, the
value of other comparable vacation alternatives.

VIII. Passengers, Capacity and Occupancy

Our cruise operations had worldwide cruise passengers, passenger capacity
and occupancy as follows (1):


16


FISCAL CRUISE PASSENGER
YEAR PASSENGERS CAPACITY OCCUPANCY(2)
---- ---------- --------- ---------

2000 2,669,000 48,196 105.4%
2001 3,385,000 58,346 104.7%
2002 3,549,000 67,282 105.2%
2003 5,038,000 113,296 103.4%
2004 6,306,000 129,108 104.5%

(1) Information presented is as of the end of our fiscal year for passenger
capacity. Costa's information is only included subsequent to 2000 and
Carnival plc's information is only included since April 17, 2003, the
period subsequent to the completion of the DLC transaction.

(2) In accordance with cruise industry practice, occupancy is calculated using
a denominator of two passengers per cabin even though some cabins can
accommodate three or more passengers. The percentages in excess of 100%
indicate that on average more than two passengers occupied some cabins.

Our passenger capacity has grown from 48,196 berths at November 30, 2000
to 129,108 berths at November 30, 2004, primarily because of the acquisition and
consolidation of Costa's 9,200 berths during 2001, the 34,428 berths from the
DLC transaction with P&O Princess during 2003 and the deliveries of 17 new
cruise ships during this four-year period. See Part I, Item l. Business, C.
"Cruise Operations-Ship Information" for additional information. Subsequent to
November 30, 2004, we took delivery of the Carnival Valor, which added 2,974
berths to our capacity.

The occupancy level on our ships during each quarter indicated below was
as follows (1):

Quarters Ended Occupancy
-------------- ---------

February 28, 2003 102.8%
May 31, 2003 98.5%
August 31, 2003 109.8%
November 30, 2003 101.1%
February 29, 2004 102.0%
May 31, 2004 102.8%
August 31, 2004 110.2%
November 30, 2004 102.5%

(1) Carnival plc occupancy is only included since April 17, 2003.

IX. Cruise Ship Construction and Cruise Port Facility Development and
Operations

As of February 7, 2005, we had signed agreements with two shipyards
providing for the construction of 13 additional cruise ships scheduled for
delivery between March 2005 and April 2009. See Note 7, "Commitments" to our
Consolidated Financial Statements in Exhibit 13 to this joint Annual Report on
Form 10-K.

Primarily in cooperation with private or public entities, we are engaged
in the development of new or enhanced cruise port facilities. These facilities
are expected to provide our passengers with an improved vacation experience. Our
involvement typically includes providing cruise port facility development and
management expertise. We sometimes assist by providing direct financial support
for port development projects. However, most of the time, our financial
commitment is provided by agreeing to long-term port usage commitments. During
2004, we were primarily involved in the development of cruise port facilities in
Galveston, Texas, Juneau, Alaska and San Juan, Puerto Rico, all of which opened
in 2004, Miami, Florida, New York, New York, the Turks & Caicos Islands, Belize
City, Belize and Naples, Italy. In addition, we are in the process of or
recently completed negotiating for the development of several other port
facilities to service our North American and European guests, including, but not
limited to, facilities in Barcelona, Spain and Civitavecchia, Italy. No
assurance can be given that any of these cruise port facilities that are still
being developed will be completed.

Finally, we currently operate port facilities in Cozumel, Mexico, Long
Beach, California and Savona, Italy pursuant to concession agreements with the
governmental authorities and other third parties. Puerta Maya, our Cozumel port,
is one of the busiest transit ports in the world, with over 1.5 million of our
passengers having visited in 2004.


17


Our Long Beach terminal is the home port for Carnival Cruise Lines' U.S. West
Coast sailings to Mexico, as well as a transit port for other of our brands.
Finally, the Savona terminal is the home port for a number of Costa's ships,
which sail in the Mediterranean Sea.

X. Cruise Pricing and Payment Terms

Each of our cruise brands publishes brochures with prices for the upcoming
seasons. Brochure prices vary by cruise line, by category of cabin, by ship, by
season and by itinerary. Brochure prices are regularly discounted through our
early booking discount programs and other promotions. The cruise ticket price
typically includes accommodations, meals, some beverages, and most onboard
entertainment, such as the use of, or admission to, a wide variety of activities
and facilities, including a fully equipped casino, nightclubs, theatrical shows,
movies, parties, a disco, a jogging track, a health club, swimming pools, sun
decks, whirlpools and saunas. Our North American brands' payment terms require
that a passenger pay a deposit to confirm their reservations with the balance
due well before the departure date, while some of our European brands provide
certain of their travel agents and tour operators with credit terms, even though
these parties typically require the passenger to pay for the entire cruise
before sailing.

Historically, some of our advance bookings were taken from several months
in advance of the sailing date, for contemporary brands, to more than a year in
advance of sailing, for our luxury brands. This lead-time provided us with more
time to manage our prices, in relation to demand for available cabins, with the
goal of achieving higher overall net revenue yields. In addition, some of our
fares, such as Carnival Cruise Lines' Supersaver fares, Princess's Loveboat
Savers plan and Holland America Line's Early Savings and Mariner Savings fares,
are designed to encourage potential passengers to book cruise reservations
earlier.

Commencing after September 11, 2001, our brands, as well as others in the
travel and leisure industry, generally experienced a closer-to-vacation booking
pattern than was experienced prior to September 11, 2001. Generally, this
pattern continued during 2003, but commencing in late 2003 and throughout 2004,
this trend reversed itself, and bookings have been occurring further in advance,
on average, approaching more normal patterns. However, it is possible that
booking trends could revert to closer to sailing patterns in the future.

When a passenger elects to purchase air transportation from us, both our
cruise revenues and operating expenses generally increase by approximately the
same amount. Air transportation prices can vary by gateway and destination. Over
the last several years, we have generally experienced a lower number of guests
purchasing air transportation from us, which we believe is partially a result of
having opened additional embarkation points closer to our guests homes, as well
as the availability of frequent flyer programs and lower priced air tickets.

XI. Onboard and Other Revenues

We derive revenues from other onboard activities and services not included
in the cruise ticket price including, but not limited to, casino gaming, bar and
some beverage sales, gift shop sales, entertainment arcades, shore excursions,
art auctions, photo sales, spa services, bingo games and lottery tickets, video
diaries, snorkel equipment rentals, internet and telephone usage, vacation
protection programs and promotional advertising by merchants located in our
ports of call.

Our casinos, which contain slot machines and gaming tables including
blackjack, and in most cases craps and roulette, are generally open only when
our ships are at sea in international waters. Onboard activities are either
performed directly by us or by independent concessionaires, from which we
collect a percentage of their revenues or a fee.

We receive additional revenues from the sale to our passengers of shore
excursions at each ship's ports of call. These excursions include, among other
things, general sightseeing and adventure outings and local boat and beach
parties. For the Princess and Holland America Line ships and other of our brands
operating to destinations in Alaska, shore excursions are operated by Princess
Tours and Holland America Tours, as well as locally-owned operations. For shore
excursions in other locations, we typically utilize locally-owned operations.

In conjunction with our cruise vacations, all of our cruise brands also
sell pre- and post-cruise land packages. Packages offered in conjunction with
ports of call in the U.S.


18


would generally include one to four-night vacations at nearby attractions or
other vacation destinations, such as Universal Studios and Walt Disney World in
Orlando, Florida, Busch Gardens in Tampa, Florida, or individual/multiple city
tours of Boston, Massachusetts, New York City, New York, Washington, D.C. and/or
Las Vegas, Nevada. Packages offered in Europe generally include up to four-night
vacations, including stays in well-known European cities, such as Athens,
Greece, Copenhagen, Denmark, London, England, Paris, France and Rome, Italy.

In conjunction with our Alaska cruise vacations, principally on our
Princess, Holland America Line and Carnival Cruise Lines ships, we sell pre- and
post-cruise land packages, utilizing, to a large extent, our transportation and
hotel assets.

XII. Sales Relationships and Marketing Activities

We are a customer service-driven company and continue to invest in our
service organization to assist travel agents and guests. We believe that our
support systems and infrastructure are among the strongest in the vacation
industry.

We sell our cruises mainly through travel agents. Our individual cruise
brands' relationships with their travel agents are generally independent of each
of our other brands. These travel agent relationships are not exclusive and most
travel agents also sell cruises and other vacations provided by our competitors.
Our policy towards travel agents is to train and motivate them to support our
products with competitive sales and pricing policies and joint marketing
programs. We also use a wide variety of marketing techniques, including
websites, seminars and videos, to familiarize the agents with our cruise brands
and products. As with our brands' travel agent relationships, each of our
brands' marketing programs are generally independent of each of our other
brands. In each of our principal markets, we have familiarized the travel agency
community with our cruise brands and products.

Travel agents generally receive standard commissions of 10%, plus the
potential of additional commissions based on sales volume. During fiscal 2004,
no controlled group of travel agencies accounted for more than 10% of our
revenues.

Our investment in customer service has been focused on the development of
systems and employees. We have improved our systems within the reservations,
quality assurance, and customer relationship management functions, emphasizing
the continued support of the travel agency community, while simultaneously
developing greater contact and interactivity with our customer base. We have
individual websites for each of our brands, which provide access to information
about our products to internet users throughout the world, and substantially all
provide booking engines to our travel partners and to our customers. We also
support booking capabilities through major airline computer reservation systems,
including SABRE, Galileo, Amadeus and Worldspan. Although the vast majority of
our cruises are distributed through travel agents, we also take telephone and
internet bookings direct from customers who choose not to utilize the services
of a travel agent.

We have pursued comprehensive marketing campaigns to market our brands to
vacationers, including direct response marketing. The principal media used are
magazine and newspaper advertisements and promotional campaigns. Certain of our
brands also use significant amounts of television advertising.

Finally, we have established the World's Leading Cruise Lines ("WLCL")
marketing alliance for our family of North American cruise brands and Costa in
order both to educate the consumer about the overall breadth of our cruise
brands, as well as to increase the effectiveness and efficiency of marketing our
brands. As part of this alliance, we offer Vacation Interchange Privileges,
which is a loyalty program that provides special considerations to repeat guests
aboard the WLCL brands.

XIII. Seasonality

Our revenue from the sale of passenger tickets is seasonal, with our third
quarter being the strongest. Historically, demand for cruises has been greatest
during our third fiscal quarter, which includes the Northern Hemisphere summer
months. The consolidation of the P&O Princess brands has caused our quarterly
results to be more seasonal than we had previously experienced, as their
business is more seasonal. This higher demand during the third quarter results
in higher net revenue yields and, accordingly, the largest share of our net
income is earned during this period.


19


XIV. Competition

We compete with land-based vacation alternatives throughout the world,
including, among others, hotels, resorts, theme parks and vacation ownership
properties located in Las Vegas, Nevada, Orlando, Florida, various Caribbean,
Mexican, Bahamian and Hawaiian Island destination resorts and numerous other
vacation destinations throughout Europe and the rest of the world.

The primary cruise competitors for our Carnival Cruise Lines, Costa,
Cunard, Holland America Line and Princess brands for North American sourced
passengers are Royal Caribbean Cruises Ltd., which owns Royal Caribbean
International and Celebrity Cruises, Star Cruises plc, which owns Norwegian
Cruise Line and Orient Lines, Disney Cruise Line and Mediterranean Shipping
Company, which owns MSC Cruises.

Our primary cruise competitors for European-sourced passengers are Island
Cruises, Fred Olsen, Star Cruises, Discovery Cruises, Saga, and Thomson Cruises
in the UK; MSC Cruises, Hapag-Lloyd, Peter Deilmann, Phoenix Reisen and
Transocean Cruises in Germany; and MSC Cruises, Louis Cruise Line, Globalia,
Pullmantur and Spanish Cruise Line in southern Europe. We also compete for
passengers throughout Europe with Norwegian Cruise Line, Orient Lines, Royal
Caribbean International and Celebrity Cruises.

Our primary competitors for our Seabourn and Windstar luxury brands
include Crystal Cruises, Radisson Seven Seas Cruise Line and Silversea Cruises.

Our North American, European and Australian brands also compete among
themselves for passengers.

XV. Governmental Regulations

A. Maritime Regulations

Our ships are regulated by various international, national, state and
local laws, regulations and treaties in force in the jurisdictions in which our
ships operate. In addition, our ships are registered in the Bahamas, Bermuda,
Gibraltar, Italy, the Marshall Islands, the Netherlands, Panama and the UK, as
more fully described under Part I, Item 1. Business, C. -"Cruise Operations -
Ship Information" and, accordingly, are regulated by these jurisdictions and by
the international conventions governing the safety of our ships and guests that
these jurisdictions have ratified or to which they adhere. Each country of
registry conducts periodic inspections to verify compliance with these
regulations as discussed more fully below. In addition, the directives and
regulations of the European Union are applicable to some aspects of our ship
operations.

Specifically, the International Maritime Organization, sometimes referred
to as the "IMO", which operates under the auspices of the United Nations, has
adopted safety standards as part of the International Convention for Safety of
Life at Sea, sometimes referred to as SOLAS, which is applicable to all of our
ships. Among other things, SOLAS establishes vessel design, structural features,
materials, construction, life saving equipment, safe management and operation
and security requirements to improve passenger safety and security. The SOLAS
requirements are revised from time to time, with the most recent modifications
being phased-in through 2010.

In 1993, SOLAS was amended to incorporate the International Safety
Management Code, referred to as the "ISM Code." The ISM Code provides an
international standard for the safe management and operation of ships and for
pollution prevention. The ISM Code is mandatory for passenger vessel operators.
All of our operations and ships have obtained the required certificates
demonstrating compliance with the ISM Code and are regularly inspected and
controlled by the national authorities, as well as the international authorities
acting under the provisions of the international agreements related to Port
State Control, the process by which a nation exercises authority over foreign
ships when the ships are in the waters subject to its jurisdiction.

The Stability Load Line and Fishing Vessel Sub-committee of the IMO has
been investigating the introduction of harmonized probabilistic damage stability
regulations over the last several years. In December 2004, the Maritime Safety
Committee ("MSC") approved for adoption amendments to SOLAS chapter II-I that
relate to the damage stability of new cruise passenger vessels. These proposed
regulations are expected to be adopted by the MSC in May 2005, and would be
applicable to those vessels whose keels are laid after January 1, 2007. Although
such new standards, as currently proposed, would not affect our


20


existing fleet or our vessels currently under contract whose keels will have
been laid prior to January 1, 2007, compliance with those proposed standards
would increase the construction cost of future newbuild orders.

Our ships are subject to a program of periodic inspection by ship
classification societies who conduct annual, intermediate, dry-docking and class
renewal surveys. Classification societies conduct these surveys not only to
ensure that our ships are in compliance with international conventions adopted
by their respective country of registry and domestic rules and regulations, but
also to verify that our ships have been maintained in accordance with the rules
of the society and that recommended repairs have been satisfactorily completed.

Our ships that call on U.S. ports are subject to inspection by the U.S.
Coast Guard for compliance with SOLAS, by the U.S. Public Health Service for
sanitary standards, and by other agencies such as the U.S. Customs and Border
Patrol, with regard to customs and immigration. Our ships are also subject to
similar inspections pursuant to the laws and regulations of various other
countries our ships visit.

Finally, our ships that call on U.S. ports are also subject to new
security requirements implementing The Maritime Transportation Security Act of
2002, referred to as "MTSA," and new security requirements under SOLAS. SOLAS
amendments were adopted in 2002 aimed at enhancing maritime security on board
ships and at ship/port interface areas. Among other things, these amendments
create a new SOLAS chapter dealing specifically with maritime security, which in
turn contains the mandatory requirement for passenger vessel operators, such as
ourselves, to comply with the new International Ship and Port Facility Security
Code, sometimes referred to as the "ISPS Code," effective July 1, 2004. The U.S.
Coast Guard issued a series of final rules on October 22, 2003, implementing
U.S. requirements under both the MTSA and ISPS Code. Among other things, the
regulations require certain vessel owners to implement security measures,
conduct vessel security assessments, and develop security plans. Under these
requirements, we have prepared and submitted security plans for all our ships to
their respective country of registry, and International Ship Security
Certificates ("ISSC") have been issued demonstrating compliance with the ISPS
Code. Since July 1, 2004, the ISSC and our ships' security measures have been
reviewed by the U.S. Coast Guard during the Port State Control examinations. In
addition, the MTSA regulations establish Area Maritime Security requirements for
geographic port areas that provide authority for the U.S. Coast Guard to
implement operational and physical security measures on a port area basis that
could affect our operation in those areas.

We believe that health, safety and security issues will continue to be an
area of focus by relevant government authorities in the U.S., the European Union
and elsewhere. Resulting legislation or regulations, or changes in existing
legislation or regulations, could impact our operations and would likely subject
us to increasing compliance costs in the future.

B. Permits for Glacier Bay, Alaska

In connection with certain of our Alaska cruise operations, Holland
America Line, Princess Cruises and Carnival Cruise Lines rely on concession
permits from the U.S. National Park Service to operate their cruise ships in
Glacier Bay National Park and Preserve ("Glacier Bay"). Such permits must be
periodically renewed and there can be no assurance that they will continue to be
renewed or that regulations relating to the renewal of such permits, including
preference or historical rights, will remain unchanged in the future. See Part
1, Item 3. "Legal Proceedings" and Note 8, "Contingencies-Litigation" to our
Consolidated Financial Statements in Exhibit 13 to this joint Annual Report on
Form 10-K.

Any loss of rights or reduction of permits is not expected to have a
material impact on our financial statements since we believe there are
additional attractive alternative destinations in Alaska and elsewhere that can
be substituted for Glacier Bay.

C. Alaska Environmental Regulations

The State of Alaska enacted legislation which prohibits certain discharges
in designated Alaska waters, ports or near shorelines and requires that certain
discharges be monitored to verify compliance with the standards established by
the legislation. Both the state and federal environmental regime in Alaska is
more stringent than the federal regime under the Federal Water Pollution Control
Act with regard to discharge from vessels. The legislation also provides that
repeat violators of the regulations could be prohibited from


21


operating in Alaskan waters.

D. Other Environmental, Health and Safety Matters

We are subject to various international, national, state and local
environmental protection and health and safety laws, regulations and treaties
that govern, among other things, air emissions, employee health and safety,
waste discharge, water management and disposal, and storage, handling, use and
disposal of hazardous substances, such as chemicals, solvents, paints and
asbestos. We are committed to helping to conserve the natural environment, not
only because of the existing regulations, but because a pristine environment is
one of the key elements that bring our guests on board our ships.

In particular, in the U.S., the Act to Prevent Pollution from Ships,
implementing the International Convention for the Prevention of Pollution from
Ships, provides for severe civil and criminal penalties related to
ship-generated pollution for incidents in U.S. waters within three nautical
miles and in some cases in the 200-mile exclusive economic zone.

Furthermore, in the U.S., the Oil Pollution Act of 1990 (the "OPA")
provides for strict liability for water pollution, such as oil pollution or
threatened oil pollution incidents in the 200-mile exclusive economic zone of
the U.S., subject to monetary limits. These monetary limits do not apply,
however, where the discharge is proximately caused by the gross negligence or
willful misconduct or the violation of an applicable safety, construction, or
operating regulation by a responsible party; or the responsible party fails or
refuses to: report the incident as required by law, provide all reasonable
cooperation and assistance in connection with removal operations, or without
sufficient cause, comply with an order issued by the federal on-scene
coordinator. Pursuant to the OPA, in order for us to operate in U.S. waters, we
are also required to obtain Certificates of Financial Responsibility from the
U.S. Coast Guard for each of our ships. These certificates demonstrate our
ability to meet removal costs and damages related to water pollution, such as
for an oil spill or a release of a hazardous substance, up to our ship's
statutory liability limit.

In addition, most U.S. states that border a navigable waterway or seacoast
have enacted environmental pollution laws that impose strict liability on a
person for removal costs and damages resulting from a discharge of oil or a
release of a hazardous substance. These laws may be more stringent than U.S.
federal law and in some cases have no statutory limits of liability.

Furthermore, many countries have ratified and adopted IMO Conventions
which, among other things, impose liability for pollution damage, subject to
defenses and to monetary limits, which monetary limits do not apply where the
spill is caused by the owner's actual fault or by the owner's intentional or
reckless conduct. In jurisdictions that have not adopted the IMO Conventions,
various national, regional or local laws and regulations have been established
to address oil pollution.

Limitations on the sulphur content of fuel are part of new regulations
approved by the International Convention for the Prevention of Pollution from
Ships Annex VI ("MARPOL Annex VI"). It applies to vessels of 400 gross tons or
above engaged in international voyages. Ships must carry an International Air
Pollution Prevention Certificate issued by its flag state indicating that it is
operating in compliance with MARPOL Annex VI. Among other things, MARPOL Annex
VI establishes a limit on the sulphur content of fuel oil and calls on the IMO
to monitor the worldwide average sulphur content of fuel oil supplied for use
aboard vessels. In addition, MARPOL Annex VI provides for special "Sox Emission
Control Areas" to be established with more stringent limitations on sulphur
emissions. Compliance with these regulations may increase our operating costs,
including the cost of fuel, beginning in May 2006 for ships operating in the
Baltic Sea and November 2007 for ships operating in the North Sea and the
English Channel.

If we violate or fail to comply with environmental laws, regulations or
treaties, we could be fined or otherwise sanctioned by regulators. We have made,
and will continue to make, capital and other expenditures to comply with
environmental laws and regulations. See Note 8, "Contingencies - Litigation" to
our Consolidated Financial Statements in Exhibit 13 to this joint Annual Report
on Form 10-K for additional information related to Holland America Line's
environmental contingencies.

From time to time, environmental and other regulators consider more
stringent regulations which may affect our operations and increase our
compliance costs. As evidenced from the preceding paragraphs, the cruise
industry is affected by a substantial amount of environmental rules and
regulations. We believe that the impact of cruise ships


22


on the global environment will continue to be an area of focus by the relevant
authorities throughout the world and, accordingly, this will likely subject us
to increasing compliance costs in the future.

See Part 1, Item 1. Business, B. "Risk Factors" for additional discussion
of our environmental risks.

E. Consumer Regulations

Our ships that call on U.S. ports are regulated by the Federal Maritime
Commission referred to as the "FMC". Public Law 89-777, which is administered by
the FMC, requires most cruise line operators to establish financial
responsibility for their liability to passengers for non-performance of
transportation, as well as casualty and personal injury. The FMC's regulations
require that a cruise line demonstrate its financial responsibility for
non-performance of transportation through a guarantee, escrow arrangement,
surety bond or insurance. Currently, the amount required must equal 110% of the
cruise line's highest amount of customer deposits over a two-year period, up to
a maximum coverage level of $15 million. The FMC has proposed various changes to
the financial responsibility regulations for non-performance of transportation,
including a proposal to increase significantly the amount of financial
responsibility required to be maintained by cruise lines, which would increase
our compliance costs. See Part 1, Item 1. Business, F. "Insurance - Other
Insurance" below for additional discussion.

In the UK, we are required to bond and obtain licenses from various
organizations in connection with the conduct of our business and our ability to
meet liability in the event of non-performance of obligations to consumers.
These organizations include the Passenger Shipping Association and the Civil
Aviation Authority. See Part 1, Item 1. Business, F. "Insurance-Other Insurance"
below for additional discussion.

We are also required by German law to obtain a guarantee from a reputable
insurance company to ensure that, in case of insolvency, our customers will be
refunded any monies they have paid on account of a booking and, in addition,
that they will be repatriated without additional cost if insolvency occurs after
a cruise starts. In addition, in Australia, we are a member of the Travel
Compensation Fund which provides compensation, as a last resort, to consumers
who suffer losses in their dealings with travel agents. Finally, other
jurisdictions, including Argentina and Brazil, require the establishment of
financial responsibility for passengers from their jurisdictions.

We believe we have all the necessary licenses to conduct our business.
From time to time, various other regulatory and legislative changes may be
proposed or adopted that could have an effect on the cruise industry, in
general, and our business, in particular. See Part I, Item 1. Business, B. "Risk
Factors" for a discussion of other regulations which impact us.

XVI. Financial Information

For financial information about our cruise reporting segment with respect
to each of the three years in the period ended November 30, 2004, see Note 12,
"Segment Information" to our Consolidated Financial Statements in Exhibit 13 to
this joint Annual Report on Form 10-K.

D. Employees

Our shoreside operations have approximately 9,500 full-time and 4,000
part-time/ seasonal employees. We also employ approximately 56,000 officers,
crew and staff onboard our 77 ships at any one time. Due to the highly seasonal
nature of our Alaskan and Canadian operations, Holland America Tours and
Princess Tours increase their work force during the late spring and summer
months in connection with the Alaskan cruise season, employing additional
seasonal personnel, which have been included above. We have entered into
agreements with unions covering certain employees in our hotel, motorcoach and
ship operations. We consider our employee and union relations generally to be
good.

We source our shipboard officers primarily from Italy, Holland, the UK,
Norway and Germany. The remaining crew positions are manned by persons from
around the world. We utilize various manning agencies in many countries and
regions to help secure our shipboard employees.


23


E. Suppliers

Our largest purchases are for travel agency services, fuel, advertising,
food and beverages, hotel and restaurant supplies and products, airfare, repairs
and maintenance and dry-docking, port facility utilization, communication
services and for the construction of our ships. Although we utilize a limited
number of suppliers for most of our food and beverages and hotel and restaurant
supplies and products, most of these purchases are available from numerous
sources at competitive prices. The use of a limited number of suppliers enables
us to, among other things, obtain volume discounts. We purchase fuel and port
facility services at some of our ports of call from a limited number of
suppliers. In addition, we perform our major dry-dock and ship improvement work
at dry-dock facilities in the Bahamas, British Columbia, Canada, the Caribbean,
Europe and the U.S. Finally, as of February 7, 2005, we have agreements in place
for the construction of 13 cruise ships by two shipyards. We believe there are
sufficient dry-dock and shipbuilding facilities to meet our anticipated
requirements.

F. Insurance

General

We maintain insurance to cover a number of risks associated with owning
and operating vessels in international trade. All such insurance policies are
subject to coverage limits, exclusions and deductible levels. Insurance premium
increases are dependent on our own loss experience and the general premium
requirements of our underwriters. No assurance can be given that affordable and
viable direct and reinsurance markets will be available to us in the future. We
maintain certain levels of self-insurance for the below-mentioned risks through
the use of substantial deductibles, which may increase in the future to mitigate
premium increases. We do not carry coverage related to loss of earnings or
revenues for our ships.

Protection and Indemnity ("P&I") Coverage

Third-party liabilities in connection with our cruise activities are
covered by entry in P&I clubs, which are mutual indemnity associations owned by
ship owners. Our vessels are entered in three P&I clubs as follows: The West of
England Ship Owners Mutual Insurance Association (Luxembourg), The Steamship
Mutual Underwriting Association (Bermuda) Limited and the United Kingdom Mutual
Steam Ship Assurance Association (Bermuda) Limited. The P&I clubs in which we
participate are part of a worldwide group of P&I clubs, known as the
International Group of P&I Clubs (the "IG"). The IG insures directly, and
through reinsurance markets, a large portion of the world's shipping fleets.
Coverage is subject to the P&I clubs' rules and the limit of coverage is
determined by the IG. P&I coverage includes legal, statutory or pre-approved
contract liabilities and other expenses related to crew, passengers and other
third parties. This coverage also includes shipwreck removal, pollution and
damage to third party property.

Hull and Machinery Insurance

We maintain insurance on the hull and machinery of each of our ships in
amounts equal to the estimated market value of each ship. The coverage for hull
and machinery is provided by international marine insurance carriers. Most
insurance underwriters make it a condition for insurance coverage that a ship be
certified as "in class" by a classification society that is a member of the
International Association of Classification Societies ("IACS"). All of our ships
are currently certified as in class with an IACS member. These certifications
have either been issued or endorsed within the last twelve months.

War Risk Insurance

Subject to coverage limits and exclusions, such as claims excluded arising
from chemical and biological attacks, we maintain war risk insurance on all of
our ships covering our legal liability to crew, passengers and other third
parties arising from war or war-like actions, including terrorist risks. This
coverage is provided by international marine insurance carriers. Due primarily
to its high cost, we only carry war risk insurance coverage for physical damage
to our ships, which includes terrorist risks, for 30 of our ships. Under the
terms of the policy, which is typical for war risk policies in the marine
industry, underwriters can give seven days notice to the insured that the
liability and physical damage policies can be cancelled. In addition, the policy
can be reinstated at different premium rates. This gives underwriters the
ability to increase our premiums following events that they determine have
increased their risk. As a result of the September 11, 2001 and other events,
our war risk insurance premiums have increased


24


substantially. No assurance can be given that affordable and viable direct and
reinsurance markets will be available to us in the future for war risk
insurance.

Other Insurance

As required by the FMC, we maintain performance bonds or bank guarantees
in the aggregate amount of $105 million for ships operated by our brands which
embark passengers in U.S. ports, to cover passenger ticket liabilities in the
event of a cancelled or interrupted cruise. We also maintain other performance
bonds or guarantees as required by various U.S. and foreign authorities that
regulate certain of our operations in their jurisdictions; the most significant
of which are required by the UK Passenger Shipping Association and the UK Civil
Aviation Authority and total approximately $190 million and $70 million,
respectively, to cover our brands' UK passenger and air ticket deposit
liabilities.

We maintain standard property and casualty insurance policies to cover
shoreside assets and liabilities to third parties, including our tour business
assets, as well as appropriate workers' compensation policies. We also maintain
business interruption insurance for Holland America Tour and Princess Tour hotel
properties, which are also subject to deductibles.

The Athens Convention

Current conventions generally in force applying to passenger ships are the
Athens Convention relating to the Carriage of Passengers and their Luggage by
Sea (1974), the 1976 Protocol to the Athens Convention and the Convention on
Limitation of Liability for Maritime Claims (1976). The U.S. has not ratified
any Athens Convention Protocol. However, vessels flying the flag of a country
that has ratified it may contractually enforce the 1976 Athens Convention
Protocol for cruises that do not call at a U.S. port.

The IMO Diplomatic Conference agreed to a new protocol to the Athens
Convention on November 1, 2002. The new protocol, which has not yet been
ratified, substantially increases the minimum level of compulsory insurance
which must be maintained by passenger ship operators and provides a direct
action provision, which will allow claimants to proceed directly against
insurers. This new protocol requires passenger ship operators to maintain
insurance or some other form of financial security, such as a guarantee from a
bank, to cover the limits of strict liability under the Athens Convention with
regards to the death or personal injury of passengers. The timing of the
ratification of this new protocol, if obtained at all, is unknown. No assurance
can be given that affordable and viable direct and reinsurance markets will be
available to provide the level of coverage required under the new protocol. If
the new protocol is ratified, we expect insurance costs could increase.

G. Trademarks and Other Intellectual Property

We own and have registered numerous trademarks and have also registered
various domain names, which we believe are widely recognized throughout the
world and have considerable value. These trademarks include the names of our
cruise lines, each of which we believe is a widely-recognized brand name in the
cruise vacation industry, as well as "World's Leading Cruise Lines." We have a
license to use the P&O name, the P&O flag and other relevant trademarks and
domain names in relation to cruises and related activities. Finally, we also
have a license to use the "Love Boat" name and related marks. See Note 2
"Trademarks" and Note 3 "DLC Transaction" to our Consolidated Financial
Statements in Exhibit 13 to this joint Annual Report on Form 10-K.

H. Taxation

U.S. Federal Income Tax

We are a foreign corporation engaged in a trade or business in the U.S.,
and our ship-owning subsidiaries are foreign corporations that, in many cases,
depending upon the itineraries of their ships, receive income from sources
within the U.S. for U.S. federal income tax purposes. To the best of our
knowledge, we believe that, under Section 883 of the Internal Revenue Code and
applicable income tax treaties, our income and the income of our ship-owning
subsidiaries, in each case derived from or incidental to the international
operation of a ship or ships, is currently exempt from U.S. federal income tax.
This exempt income does not include our U.S. source income, principally from the
transportation, hotel and tour businesses of Holland America Tours and Princess
Tours, and, beginning with


25


the year ending November 30, 2005, the items listed in the regulations under
Section 883 that the Internal Revenue Service does not consider to be incidental
to ship operations. Among the items that are identified in the final regulations
as not incidental to ship operations are income from the sale of air
transportation, shore excursions and pre- and post cruise land packages.

The following summary of the application of the principal U.S. federal
income tax laws to us is based upon existing U.S. federal income tax law,
including the Internal Revenue Code, proposed, temporary and final U.S. Treasury
regulations, certain current income tax treaties, administrative pronouncements
and judicial decisions, as currently in effect, all of which are subject to
change, possibly with retroactive effect.

Application of Section 883 of the Internal Revenue Code

In general, under Section 883, certain non-U.S. corporations are not
subject to U.S. federal income tax or branch profits tax on certain U.S. source
income derived from the international operation of a ship or ships. In 2003, the
U.S. Treasury Department issued final regulations under Section 883 relating to
income derived by foreign corporations from the international operation of ships
and aircraft. These regulations will be effective commencing for our year ending
November 30, 2005. As related to us, the final regulations provide, in general,
that a foreign corporation will qualify for the benefits of Section 883 if, in
relevant part, (i) the foreign country in which the foreign corporation is
organized grants an equivalent exemption to corporations organized in the U.S.
and (ii) the foreign corporation meets the publicly-traded test described below.
In addition, to the extent a foreign corporation's shares are owned by a direct
or indirect parent corporation which itself meets the publicly-traded test, then
in analyzing the stock ownership test with respect to such subsidiary, stock
owned directly or indirectly by such parent corporation will be deemed owned by
individuals resident in the country of incorporation of such parent corporation.

A company whose shares are considered to be "primarily and regularly
traded on an established securities market" in the U.S. or another qualifying
jurisdiction will meet the publicly-traded test (the "publicly-traded test").
Pursuant to the final U.S. Treasury regulations issued under Section 883, stock
will be considered "primarily traded" on one or more established securities
markets if, with respect to each class of stock of the particular corporation,
the number of shares in each such class that are traded during a taxable year on
any such market exceeds the number of shares in each such class traded during
that year on any other established securities market. Stock of a corporation
will generally be considered "regularly traded" on one or more established
securities markets under the proposed regulations if (i) one or more classes of
stock of the corporation that, in the aggregate, represent more than 50% of the
total combined voting power of all classes of stock of such corporation entitled
to vote and of the total value of the stock of such corporation are listed on
such market; and (ii) with respect to each class relied on to meet the more than
50% requirement in (i) above, (x) trades in each such class are effected, other
than in de minimis quantities, on such market on at least 60 days during the
taxable year, and (y) the aggregate number of shares in each such class of the
stock that are traded on such market during the taxable year is at least 10% of
the average number of shares of the stock outstanding in that class during the
taxable year. A class of stock that otherwise meets the requirements outlined in
the preceding sentence is not treated as meeting such requirements for a taxable
year if, at any time during the taxable year, one or more persons who own,
actually or constructively, at least 5% of the vote and value of the outstanding
shares of the class of stock, own, in the aggregate, 50% or more of the vote and
value of the outstanding shares of the class of stock (the "5% Override Rule").
However, the 5% Override Rule does not apply (a) where the foreign corporation
establishes that Qualified Shareholders own sufficient shares of the
closely-held block of stock to preclude non-Qualified Shareholders of the
closely-held block of stock from owning 50% or more of the total value of the
class of stock for more than half of the taxable year; or (b) to certain
investment companies provided that no person owns, directly or through
attribution, both 5% or more of the value of the outstanding interests in such
investment company and 5% or more of the value of the shares of the class of
stock of the foreign corporation.

We believe that Carnival Corporation currently qualifies as a publicly
traded corporation under the final regulations and substantially all of its
income, with the exceptions noted above, will continue to be exempt from U.S.
federal income taxes. However, because various members of the Arison family and
trusts established for their benefit currently own approximately 38% of Carnival
Corporation shares, there is the potential that additional shareholders could
acquire 5% or more of its shares, which could result in Carnival Corporation
being considered closely held, and thus jeopardize its qualification as a
publicly traded corporation. If, in


26


the future, Carnival Corporation were to fail to qualify as a publicly traded
corporation, it and all of its ship-owning or operating subsidiaries would be
subject to U.S. federal income tax on their income associated with their cruise
operations in the U.S. In such event, the net income of Carnival Corporation's
ship-owning or operating subsidiaries would be materially reduced.

As a precautionary matter, Carnival Corporation amended its articles of
incorporation in fiscal 2000 to ensure that it will continue to qualify as a
publicly traded corporation under these final regulations. This amendment
provides that no one person or group of related persons, other than certain
members of the Arison family and trusts established for their benefit, may own
or be deemed to own by virtue of the attribution provisions of the Internal
Revenue Code more than 4.9% of Carnival Corporation shares, whether measured by
vote, value or number of shares. Any Carnival Corporation shares acquired in
violation of this provision will be transferred to a trust and, at the direction
of its board of directors, sold to a person whose shareholding does not violate
that provision. No profit for the purported transferee may be realized from any
such sale. In addition, under specified circumstances, the trust may transfer
the common stock at a loss to the purported transferee. Because certain of
Carnival Corporation notes are convertible into its shares, the transfer of
these notes are subject to similar restrictions. These transfer restrictions may
also have the effect of delaying or preventing a change in control or other
transactions in which the shareholders might receive a premium for Carnival
Corporation shares over the then prevailing market price or which the
shareholders might believe to be otherwise in their best interest.

Although the above represents our interpretation of this Internal Revenue
Code provision and the final U.S. Treasury regulations, the Internal Revenue
Service's interpretation of these provisions could differ materially. In
addition, the provisions of Section 883 are subject to change at any time by
legislation. Moreover, changes could occur in the future with respect to the
trading volume or trading frequency of Carnival Corporation shares or with
respect to the identity, residence, or holdings of Carnival Corporation's direct
or indirect shareholders that could affect Carnival Corporation's and its
subsidiaries eligibility for the Section 883 exemption. Accordingly, although we
believe it is unlikely, it is possible that Carnival Corporation and its
ship-owning or operating subsidiaries' whose tax exemption is based on Section
883 could lose this exemption. If Carnival Corporation and/or its ship-owning or
operating subsidiaries were not entitled to the benefit of Section 883, Carnival
Corporation and/or its ship-owning or operating subsidiaries would be subject to
U.S. federal income taxation on a portion of our income.

Exemption Under Applicable Income Tax Treaties

We believe that the income of some of Carnival Corporation's ship-owning
subsidiaries and the U.S. source shipping income from Carnival plc and its UK
resident subsidiaries currently qualifies for exemption from U.S. federal income
tax under applicable bilateral U.S. income tax treaties. There is, however, no
authority that directly addresses the effect, if any, of DLC arrangements on the
availability of benefits under the treaties and, consequently, the matter is not
free from doubt. These treaties may be abrogated by either applicable country,
replaced or modified with new agreements that treat shipping income differently
than under the agreements currently in force. If any of our subsidiaries that
currently claim exemption from U.S. income taxation on their U.S. source
shipping income under an applicable treaty do not qualify for benefits under the
existing treaties, or if the existing treaties are abrogated, replaced or
materially modified in a manner adverse to our interests and, with respect to
U.S. federal income tax only, if any such subsidiary does not qualify for
Section 883 exemption, such ship-owning or operating subsidiary may be subject
to U.S. federal income taxation on a portion of its income, which would reduce
our net income.

Taxation in the Absence of an Exemption under Section 883 or any
Applicable U.S. Income Tax Treaty

Shipping income that is attributable to transportation of passengers which
begins or ends in the U.S. is considered to be 50% derived from U.S. sources.
Shipping income that is attributable to transportation of passengers which
begins and ends in foreign countries is considered 100% derived from foreign
sources and not subject to U.S. federal income tax. Shipping income that is
attributable to the transportation of passengers which begins and ends in the
U.S. without stopping at an intermediate foreign port is considered to be 100%
derived from U.S. sources.


27


The legislative history of the transportation income source rules suggests
that a cruise that begins and ends in a U.S. port, but that calls on more than
one foreign port, will derive U.S. source income only from the first and last
legs of the cruise. Because there are no regulations or other Internal Revenue
Service interpretations of these rules, the applicability of the transportation
income source rules in the aforesaid manner is not free from doubt.

In the absence of an exemption under Section 883 or any applicable U.S.
income tax treaty, as appropriate, we and/or our subsidiaries would be subject
to either the net income and branch profits tax regimes of Section 882 and
Section 884 of the Internal Revenue Code (the "net tax regime") or the four
percent of gross income tax regime of Section 887 of the Internal Revenue Code
(the "four percent tax regime").

Where the relevant foreign corporation has, or is considered to have, a
fixed place of business in the U.S. that is involved in the earning of U.S.
source shipping income and substantially all of this shipping income is
attributable to regularly scheduled transportation, the net tax regime is
applicable. If the foreign corporation does not have a fixed place of business
in the U.S. or substantially all of its income is not derived from regularly
scheduled transportation, the four percent tax regime will apply.

The net tax regime should be the tax regime applied to Carnival
Corporation in the absence of an exemption under Section 883. Under the net tax
regime, U.S. source shipping income, net of applicable deductions, would be
subject to a corporate tax of up to 35% and the net after-tax income would be
potentially subject to a further branch tax of 30%. In addition, interest paid
by the corporations, if any, would generally be subject to a branch interest
tax.

The four percent tax regime should be the tax regime applicable to our
vessel owning subsidiaries based outside the United States, in the absence of an
exemption under Section 883 or any applicable U.S. income tax treaty. Under the
four percent tax regime, gross U.S. source shipping income would be subject to a
four percent tax, without the benefit of deductions.

UK Tonnage Tax

AIDA, through October 2004, Cunard, Ocean Village, P&O Cruises, P&O
Cruises Australia and Swan Hellenic are all strategically and commercially
managed in the UK and have elected to enter the UK tonnage tax regime. Companies
to which the tonnage tax regime applies pay corporation tax on profit calculated
by reference to the net tonnage of qualifying vessels. UK corporation tax is not
chargeable under normal UK tax rules on such companies' relevant shipping
profits. An election for the tonnage tax regime to apply takes effect for ten
years and can be renewed on a rolling basis. For a company to be eligible for
the regime, it must be subject to UK corporation tax and, among other matters,
operate qualifying ships that are strategically and commercially managed in the
UK. There is also a seafarer training requirement to which the tonnage tax
companies are subject.

Relevant shipping profits which are excluded from normal corporation tax
include income which is defined as relevant shipping income. Relevant shipping
income includes income from the operation of qualifying ships and broadly from
shipping related activities. It also includes dividends from foreign companies,
which are subject to a tax on profits in their country of residence or elsewhere
and the activities of which broadly would qualify in full for the UK tonnage tax
regime if they were UK resident. In addition, more than 50 percent of the voting
power in the foreign company must be held by one or more companies resident in a
European Union ("EU") member state.

Our UK non-shipping activities that do not qualify under the UK tonnage
tax regime, which are not forecast to be significant, remain subject to normal
UK corporation tax.

Italian Income Tax

Our Costa cruise operations are subject to Italian income tax. However, as
a result of income tax exemptions allowed Italian registered vessels, Costa's
Italian cruise operations are subject to an effective tax rate of approximately
6%. In 2003, the Italian government passed a law permitting the establishment of
an elective new tonnage tax regime similar, in all material respects, to the UK
regime described above. This law was approved by the EU in 2004. Rules providing
some of the final implementation details in the planned system are expected to
be issued in early 2005. Upon issuance of these final rules, we will complete
our analysis of the impact of this elective tax regime, and decide whether or
not Costa should enter.


28


In November 2004, the German brand of Carnival plc, AIDA, became a
division of Costa. From the date of this change, AIDA's income is subject to
Italian income tax as discussed above. The majority of the profits earned by our
German brands are exempt from German corporation taxes by virtue of the
Italy/German double tax treaty.

German and Australian Income Tax

For substantially all of 2004, both AIDA and P&O Cruises Australia were
divisions of Carnival plc. As noted above, beginning in November 2004, AIDA
became a division of Costa and was subject to the Italian income tax as
described above. P&O Cruises Australia has remained a division of Carnival plc
throughout 2004. The income from these operations, while branches of Carnival
plc, were subject to UK tonnage tax as discussed above. The majority of these
operations' profits are exempt from German and Australian corporation taxes by
virtue of the UK/Germany and UK/Australian double tax treaties.

I. Website Access to Carnival Corporation & plc SEC Reports

We make available, free of charge, access to our joint Annual Report on
Form 10-K, joint Quarterly Reports on Form 10-Q, joint Current Reports on Form
8-K, Section 16 filings and all amendments to those reports as soon as
reasonably practicable after such reports are electronically filed with or
furnished to the SEC through our home page at www.carnivalcorp.com and
www.carnivalplc.com.

Item 2. Properties.

The Carnival Corporation and Carnival plc corporate headquarters and our
operating units' principal shoreside operations and headquarters are as follows:



Entity/Brand Location Square Footage Own/Lease
------------ -------- -------------- ---------

Carnival Corporation and
Carnival Cruise Lines Miami, FL U.S.A. 456,000/20,000 Own/Lease
Princess and Cunard Santa Clarita, CA U.S.A. 282,000 Lease
Holland America Line, Holland
America Tours, Princess Tours
and Windstar Seattle, WA U.S.A. 186,000/24,000 Lease/Own
Costa Genoa, Italy 159,000 Own
Art framing and warehouse and
Princess warehouse facilities Dania Beach and
Ft. Lauderdale,
Florida U.S.A. 125,000 Lease
P&O Cruises, Ocean Village,
Swan Hellenic, Cunard,
Carnival Corporation & plc's
Technical Services and UK
sales office Southampton, England 112,000 Lease
AIDA Rostock and Frankfurt,
Germany 65,000 Lease
Carnival Cruise Lines
sales office Miramar, Florida U.S.A. 63,000 Lease
P&O Cruises Australia Sydney, Australia 35,000 Lease
Costa U.S. sales office Hollywood, Florida U.S.A. 29,000 Lease
Carnival plc and UK sales
offices London, England 8,000 Lease



In addition, we also lease 27,000 square feet of office space in Colorado
Springs, Colorado and own 22,000 square feet of office space in Williston, North
Dakota for additional Carnival Cruise Lines and Holland America Line reservation
centers, respectively. Finally, we own or lease port facilities in Cozumel,
Mexico, Long Beach, California and Savona, Italy.

Our cruise ships, shoreside operations, headquarter facilities and Holland
America Tours' and Princess Tours' properties, are all well maintained and in
good condition. We evaluate our needs periodically and obtain additional
facilities when deemed necessary. We believe that our facilities are adequate
for our current needs.

Our cruise ships and Holland America Line's and Princess' private islands,
Half Moon


29


Cay and Princess Cays, respectively, are briefly described in Part I, Item 1.
Business, C. "Cruise Segment." The hotel properties associated with Holland
America Tours and Princess Tours operations, substantially all of which are
owned, are briefly described in Part I, Item 1. Business, A. "General."

Item 3. Legal Proceedings.

Several actions (collectively, the "ADA Complaints") were filed against
Costa, Holland America Tours and Cunard alleging that they violated the
Americans with Disabilities Act by failing to make certain cruise ships
accessible to individuals with disabilities. The plaintiffs sought injunctive
relief to require modifications to certain vessels to increase accessibility to
disabled passengers and fees and costs. The status of each ADA Complaint is as
follows:

On August 28, 2000, Access Now, Inc. and Edward S. Resnick filed ADA
Complaints in the U.S. District Court for the Southern District of
Florida against Costa and Holland America Tours. These complaints
sought modifications to vessels to increase accessibility to disabled
passengers. In October 2004, the Court approved settlement agreements
pursuant to which Costa will make certain modifications to four of its
ships, with an option to include other ships into the settlement
agreement and Holland America Line will make certain modifications to
eleven of its ships, with an option to include other ships into the
settlement agreement.

On August 29, 2000, an ADA Complaint also was filed against Cunard by
Access Now, Inc. and Edward S. Resnick in the U.S. District Court for
the Southern District of Florida. Cunard filed an answer to the
complaint on November 10, 2000. Given the settlement reached in a
similar case against CCL, the plaintiff has agreed to dismiss the ADA
Complaint against Cunard without prejudice pending settlement
negotiations which are ongoing.

On November 22, 2000, Costa instituted arbitration proceedings in Italy to
confirm the validity of its decision not to deliver its ship, the Costa
Classica, to the shipyard of Cammell Laird Holdings PLC ("Cammell Laird") under
a 79 million euro denominated contract for the conversion and lengthening of the
ship. Cammell Laird joined the arbitration proceeding on January 9, 2001 to
present its counter demands. On January 9, 2001, Costa gave Cammell Laird notice
of termination of the contract and Cammell Laird replied with its notice of
termination of the contract on February 2, 2001. In October 2004 the arbitration
tribunal decided to increase the scope of work of the technical experts by
introducing new demands for reply in the experts' report. It is expected that
the arbitration tribunal's decision will be made in the second half of 2005 at
the earliest.

Two actions (collectively, the "Facsimile Complaints") were filed against
Carnival Corporation on behalf of purported classes of persons who received
unsolicited advertisements via facsimile, alleging that Carnival Corporation and
other defendants distributed unsolicited advertisements via facsimile in
contravention of the U.S. Telephone Consumer Protection Act. The plaintiffs seek
to enjoin the sending of unsolicited facsimile advertisements and statutory
damages in the amount of $500 per facsimile, or in the alternative, $1,500 per
facsimile if the conduct was willful or knowing. The advertisements referred to
in the Facsimile Complaints that reference a Carnival Cruise Lines product were
not sent by Carnival Corporation, but rather were distributed by a professional
faxing company at the behest of travel agencies. We do not advertise directly to
the traveling public through the use of facsimile transmission. The status of
each Facsimile Complaint is as follows:

On April 15, 2002, a Facsimile Complaint was filed against us in the
Circuit Court of Greene County, Alabama by Mary Pelt. We filed an
answer on June 3, 2002. A hearing on class certification issues took
place on August 18, 2004. The plaintiffs requested and were granted an
extension of time to request class certification and conduct
discovery. However, the plaintiffs agreed not to depose any Carnival
Corporation personnel in the matter. Carnival Corporation has filed a
motion for summary judgment.

On May 14, 2002, a Facsimile Complaint was filed against Carnival
Corporation and other defendants (including Club Resort International
d/b/a Vacation Getaway Travel, Inc., Dollar Thrifty Automotive Group,
Inc., Thrifty, Inc. and Thrifty Rent-A-Car Systems, Inc., Choicepoint,
Inc., First Western Bank, and Bankcard USA Merchant Services, Inc.) in
the Circuit Court of Jefferson County, Alabama, Bessemer Division by
Clem & Kornis, L.L.C., The Firm of Compassion, P.C., Collins


30


Chiropractic Center, Forstmann & Cutchen, L.L.P. and others. On July
26, 2002, Carnival Corporation filed a motion to dismiss or, in the
alternative, to separate Carnival Corporation as a defendant. This
action has been stayed pending a resolution of the Greene County
action referred to above.

On August 17, 2002, an incident occurred in Juneau, Alaska onboard Holland
America Line's Ryndam involving a wastewater discharge from the ship. As a
result of this incident, on December 13, 2004, HAL Maritime Ltd. ("HAL
Maritime") pled guilty to a single misdemeanor for violating Section 1(a)(4) of
Public Law 106-554 (December 21, 2000) pursuant to a plea agreement with the
U.S. Government. HAL Maritime paid a $0.2 million criminal fine, a $0.5 million
community service payment, and agreed to commit $1.3 million toward the
implementation of a Focused Environmental Compliance Plan. The agreement also
provides for a three-year probationary term, with the ability to request early
termination of probation after two years. HAL Maritime also paid a civil fine of
$65,000 to the State of Alaska as a result of the same event. Possible
consequences of the plea include debarment from federal contracting, which would
prohibit operations in Glacier Bay during the period of debarment.

On February 23, 2001, Holland America Line-USA, Inc. ("HAL-USA"), a
wholly-owned subsidiary, received a subpoena from a grand jury sitting in the
U.S. District Court for the District of Alaska. The subpoena requests that
HAL-USA produce documents and records relating to the air emissions from Holland
America Line ships in Alaska. HAL-USA responded to the subpoena.

On March 5, 2004, Holland America Line notified the U.S. and Netherlands
governmental authorities that one of its chief engineers had admitted to
improperly processing bilge water on the Noordam. A subsequent internal
investigation has determined that the improper operation may have begun in
January 2004 and may have continued sporadically through March 4, 2004. Holland
America Line and three shipboard engineers received grand jury subpoenas from
the Office of the U.S. Attorney in Tampa, Florida. If the Noordam investigation
results in charges being filed, a judgment could include, among other forms of
relief, fines and debarment from federal contracting, which would prohibit
operations in Glacier Bay during the period of debarment.

In August 2004, Holland America Line was notified by the National Park
Service ("NPS") that the Volendam and Statendam may have violated opacity
standards while operating in Glacier Bay. On November 10, 2004, NPS notified
Holland America Line in separate letters that a Violation of Record would be
entered in the permanent park files for each ship. This is the first such
violation for either ship. Holland America Line intends to vigorously oppose the
decision in each case. If the Violation of Record is not reversed and either
ship receives a second such violation within three years, that ship may be
barred from entry into Glacier Bay.

During 2004, seven of Holland America Line's ships offered Alaska cruises
during May through September. Of those cruises, 69% included Glacier Bay on
their itinerary. If the Ryndam plea or Noordam investigations results in
debarment, or if a second Violation of Record caused the Statendam or Volendam
to be prohibited from entering Glacier Bay, we would not expect the impact on
our financial statements to be material to us since we believe there are
additional attractive alternative destinations in Alaska and elsewhere that can
be substituted for Glacier Bay.

On April 23, 2003, Festival Crociere S.p.A. ("Festival") commenced an
action against the European Commission (the "Commission") in the Court of First
Instance of the European Communities in Luxembourg seeking to annul the
Commission's antitrust approval of the DLC transaction (the "Festival Action").
We have been granted leave to intervene in the Festival Action and filed a
Statement in Intervention with the Court. Festival was declared bankrupt on May
27, 2004 and Festival did not submit observations on our Statement in
Intervention. A date for an oral hearing will be set in due course, unless
Festival withdraws its action. A successful third party challenge of an
unconditional Commission clearance decision would be unprecedented, and based on
a review of the law and the factual circumstances of the DLC transaction, as
well as the Commission's approval decision in relation to the DLC transaction,
we believe that the Festival Action will not have a material adverse effect on
the companies or the DLC transaction.

Item 4. Submission of Matters to a Vote of Security Holders.

None.


31


Executive Officers of the Registrants

Pursuant to General Instruction G(3), the information regarding our
executive officers called for by Item 401(b) of Regulation S-K is hereby
included in Part I of this joint Annual Report on Form 10-K.

The following table sets forth the name, age and title of each of our
executive officers. Titles listed relate to positions within Carnival
Corporation and Carnival plc unless otherwise noted. All the Carnival plc
positions were effective as of April 17, 2003, except as noted below.



NAME AGE POSITION
---- --- --------

Richard D. Ames 57 Senior Vice President Management Advisory Services

Micky Arison 55 Chairman of the Board of Directors and Chief
Executive Officer

Alan B. Buckelew 56 President of Princess and Chief Operating Officer of
Cunard

Gerald R. Cahill 53 Executive Vice President and Chief Financial and
Accounting Officer

Pamela C. Conover 48 Senior Vice President Shared Services

Robert H. Dickinson 62 President and Chief Executive Officer of Carnival
Cruise Lines and Director

Kenneth D. Dubbin 51 Vice President Corporate Development

Pier Luigi Foschi 58 Chairman and Chief Executive Officer of Costa
Crociere, S.p.A. and Director

Howard S. Frank 63 Vice Chairman of the Board of Directors and Chief
Operating Officer

Ian J. Gaunt 53 Senior Vice President International

Stein Kruse 46 President and Chief Executive Officer of Holland
America Line Inc. ("HAL")

Arnaldo Perez 44 Senior Vice President, General Counsel and Secretary

Peter G. Ratcliffe 56 Chief Executive Officer of P&O Princess Cruises
International and Director


Business Experience of Executive Officers

Richard D. Ames has been Senior Vice President Management Advisory
Services ("MAS") since March 2002. From January 1992 to February 2002 he was
Vice President Audit Services, now known as MAS.

Micky Arison has been Chairman of the Board of Directors since October
1990 and a director since June 1987. He has been Chief Executive Officer since
1979.

Alan B. Buckelew has been President and Chief Financial Officer of
Princess since February 2004 and Chief Operating Officer of Cunard since October
2004. From October 2000 to January 2004, he was Executive Vice President and
Chief Financial Officer of Princess. He was Senior Vice President, Corporate
Services of Princess from September 1998 to September 2000.

Gerald R. Cahill has been Executive Vice President and Chief Financial and
Accounting Officer since December 2003. From January 1998 to November 2003 he
was Senior Vice President Finance, Chief Financial and Accounting Officer.

Pamela C. Conover has been Senior Vice President Shared Services since
October 2004. From February 2001 to September 2004 she was President and Chief
Operating Officer of Cunard Line Limited. Ms. Conover was Chief Operating
Officer of Cunard Line Limited from June 1998 to January 2001.

Robert H. Dickinson has been a director since June 1987. Mr. Dickinson has
been President and Chief Executive Officer of Carnival Cruise Lines since May
2003. He was President and Chief Operating Officer of Carnival Cruise Lines from
May 1993 to May 2003.

Kenneth D. Dubbin has been Vice President Corporate Development since May
1999. From 1990 to 1999, he was Vice President and Treasurer of Royal Caribbean
Cruises Ltd.

Pier Luigi Foschi has been a director since April 2003. He has been Chief
Executive Officer of Costa Crociere, S.p.A. since October 1997 and Chairman of
its Board since January 2000.


32


Howard S. Frank has been Vice Chairman of the Board of Directors since
October 1993, Chief Operating Officer since January 1998 and a director since
April 1992.

Ian J. Gaunt is an English Solicitor and has been Senior Vice President
International since May 1999. He was a partner of the London-based international
law firm of Sinclair, Roche & Temperley from 1982 through April 1999 where he
represented Carnival Corporation as special external legal counsel since 1981.

Stein Kruse has been the President and Chief Executive Officer of HAL
since December 2004. From November 2003 to November 2004, he was the President
and Chief Operating Officer of HAL. From September 1999 to October 2003, he was
Senior Vice President, Fleet Operations for HAL. From June 1997 to August 1999
he was Senior Vice President and Chief Financial Officer for "K" Line America,
Inc.

Arnaldo Perez has been Senior Vice President, General Counsel and
Secretary since March 2002. From August 1995 to February 2002 he was Vice
President, General Counsel and Secretary.

Peter G. Ratcliffe has been a director since April 2003 and a director of
Carnival plc since October 2000. He was Carnival plc's Chief Executive Officer
until April 2003. He is Chief Executive Officer of P&O Princess Cruises
International, and is primarily responsible for the operations of Cunard, Ocean
Village, P&O Cruises, P&O Cruises Australia, Princess and Swan Hellenic. He was
previously an executive director of The Peninsular and Oriental Steam Navigation
Company and head of its cruise division, having served as President of Princess
since 1993 and its Chief Operating Officer since 1989.

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities.

A. Market Information

The information required by Item 201(a) of Regulation S-K, Market
Information, is shown in Exhibit 13 and is incorporated by reference into this
joint Annual Report on Form 10-K.

B. Holders

The information required by Item 201(b) of Regulation S-K, Holders of
Common Stock, is shown in Exhibit 13 and is incorporated by reference into this
joint Annual Report on Form 10-K.

C. Dividends

Carnival Corporation declared cash dividends on all of its common stock in
the amount of $0.15 per share in the last quarter of fiscal 2004 and in the
first quarter of fiscal 2005, a 20% per share increase compared to the prior
dividend per share. Previously, Carnival Corporation declared cash dividends of
$0.125 per share in each of the first three quarters of fiscal 2004 and the last
quarter of fiscal 2003, a 19% per share increase compared to the prior dividend
per share. Carnival Corporation's cash dividends were $0.105 per share in each
of the first three quarters of fiscal 2003. Carnival plc paid cash dividends on
all its ordinary shares in the amount of $0.10 per share, as adjusted for the
..3004 equalization ratio, for the first quarter in calendar 2003. Carnival plc
dividends were for the same amount per share as Carnival Corporation's dividends
for all quarters beginning in the second quarter of fiscal 2003.

Payment of future dividends on Carnival Corporation common stock and
Carnival plc ordinary shares will depend upon, among other factors, our
earnings, financial condition and capital requirements. Each company may also
declare special dividends to all stockholders in the event that members of the
Arison family and trusts established for their benefit are required to pay
additional income taxes by reason of their ownership of Carnival Corporation's
common stock because of a Carnival Corporation income tax audit. The payment and
amount of any dividend is within the discretion of the Boards of Directors, and
it is possible that the timing and amount of any dividend may vary from the
levels discussed above. No assurance can be given that Carnival Corporation and
Carnival plc will continue to have per share dividend increases as were declared
in late 2004 and 2003 or maintain their current levels.


33


Item 6. Selected Financial Data.

The information required by Item 6, Selected Financial Data, is shown in
Exhibit 13 and is incorporated by reference into this joint Annual Report on
Form 10-K.

Item 7. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

The information required by Item 7, Management's Discussion and Analysis
of Financial Condition and Results of Operations, is shown in Exhibit 13 and is
incorporated by reference into this joint Annual Report on Form 10-K.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

The information required by Item 7A, Quantitative and Qualitative
Disclosures About Market Risk, is shown in Exhibit 13 and is incorporated by
reference into this joint Annual Report on Form 10-K.

Item 8. Financial Statements and Supplementary Data.

The financial statements, together with the report thereon of
PricewaterhouseCoopers LLP dated February 11, 2005, and the Selected Quarterly
Financial Data (Unaudited), are shown in Exhibit 13 and are incorporated by
reference into this joint Annual Report on Form 10-K.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.

Not applicable.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to provide reasonable
assurance that information required to be disclosed by us in the reports that we
file or submit, is recorded, processed, summarized and reported, within the time
periods specified in the U.S. Securities and Exchange Commission's rules and
forms.

Our Chief Executive Officer, Chief Operating Officer and Chief Financial
and Accounting Officer have evaluated our disclosure controls and procedures and
have concluded, as of November 30, 2004, that they are effective as described
above.

Management's Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate
internal control over financial reporting, as such term is defined in Exchange
Act Rule 13a-15(f). Under the supervision and with the participation of our
management, including our Chief Executive Officer, Chief Operating Officer and
Chief Financial and Accounting Officer, we conducted an evaluation of the
effectiveness of our internal control over financial reporting based on the
framework in Internal Control - Integrated Framework, issued by the Committee of
Sponsoring Organizations of the Treadway Commission ("COSO Framework"). Based on
our evaluation under the COSO Framework, our management concluded that our
internal control over financial reporting was effective as of November 30, 2004.

Our management's assessment of the effectiveness of our internal control
over financial reporting as of November 30, 2004 has been audited by
PricewaterhouseCoopers LLP, an independent registered certified public
accounting firm, as stated in their report which is shown in Exhibit 13 and is
incorporated by reference into this joint Annual Report on Form 10-K.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial
reporting during the quarter ended November 30, 2004 that have materially
affected or are reasonably likely to materially affect our internal control over
financial reporting.


34


It should be noted that any system of controls, however well designed and
operated, can provide only reasonable, and not absolute, assurance that the
objectives of the system will be met. In addition, the design of any control
system is based in part upon certain assumptions about the likelihood of future
events. Because of these and other inherent limitations of control systems,
there is only reasonable assurance that our controls will succeed in achieving
their goals under all potential future conditions.

Item 9B. Other Information.

None

PART III

Items 10, 11, 12, 13 and 14. Directors and Executive Officers of the
Registrants, Executive Compensation, Security Ownership of Certain
Beneficial Owners and Management, Certain Relationships and Related
Transactions and Principal Accountant Fees and Services.

The information required by Items 10, 11, 12, 13 and 14 is incorporated
herein by reference to the Carnival Corporation and Carnival plc joint
definitive proxy statement to be filed with the U.S. Securities and Exchange
Commission not later than 120 days after the close of the fiscal year, except
that the information concerning the Carnival Corporation and Carnival plc
executive officers called for by Item 401(b) of Regulation S-K is included in
Part I of this joint Annual Report on Form 10-K.

We have adopted a code of ethics that applies to our chief executive
officer, chief operating officer and senior financial officers, including the
principal financial and accounting officer, controller and other persons
performing similar functions. This code of ethics is posted on our website,
which is located at www.carnivalcorp.com and www.carnivalplc.com. We intend to
satisfy the disclosure requirement under Item 10 of Form 8-K regarding an
amendment to, or waiver from, a provision of this code of ethics by posting such
information on our website, at the addresses specified above. Information
contained in our website, whether currently posted or posted in the future, is
not part of this document or the documents incorporated by reference in this
document.

PART IV

Item 15. Exhibits and Financial Statement Schedules.

(a) (1) Financial Statements

The financial statements shown in Exhibit 13 are incorporated herein by
reference into this joint Annual Report on Form 10-K.

(2) Financial Statement Schedule

None

(3) Exhibits

The exhibits listed on the accompanying Index to Exhibits are filed or
incorporated by reference as part of this joint Annual Report on Form 10-K and
such Index to Exhibits is hereby incorporated herein by reference.


35


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrants have duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

CARNIVAL CORPORATION CARNIVAL PLC

/s/ Micky Arison /s/ Micky Arison
- ---------------- ----------------
Micky Arison Micky Arison
Chairman of the Board of Chairman of the Board of
Directors and Chief Executive Officer Directors and Chief Executive Officer
February 14, 2005 February 14, 2005

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrants and in the capacities and on the dates indicated.

CARNIVAL CORPORATION CARNIVAL PLC

/s/ Micky Arison /s/ Micky Arison
- ---------------- ----------------
Micky Arison Micky Arison
Chairman of the Board of Chairman of the Board of
Directors and Chief Executive Officer Directors and Chief Executive Officer
February 14, 2005 February 14, 2005

/s/ Howard S. Frank /s/ Howard S. Frank
- ------------------- --------------------
Howard S. Frank Howard S. Frank
Vice Chairman of the Board of Vice Chairman of the Board of
Directors and Chief Operating Officer Directors and Chief Operating Officer
February 14, 2005 February 14, 2005

/s/ Gerald R. Cahill /s/ Gerald R. Cahill
- --------------------- --------------------
Gerald R. Cahill Gerald R. Cahill
Executive Vice President Executive Vice President
and Chief Financial and and Chief Financial and
Accounting Officer Accounting Officer
February 14, 2005 February 14, 2005

/s/ Richard G. Capen, Jr. /s/ Richard G. Capen, Jr.
- ------------------------- -------------------------
Richard G. Capen, Jr. Richard G. Capen, Jr.
Director Director
February 14, 2005 February 14, 2005

/s/ Robert H. Dickinson /s/ Robert H. Dickinson
- ------------------------ -----------------------
Robert H. Dickinson Robert H. Dickinson
Director Director
February 14, 2005 February 14, 2005

/s/ Arnold W. Donald /s/ Arnold W. Donald
- --------------------- --------------------
Arnold W. Donald Arnold W. Donald
Director Director
February 14, 2005 February 14, 2005

/s/ Pier Luigi Foschi /s/ Pier Luigi Foschi
- --------------------- ---------------------
Pier Luigi Foschi Pier Luigi Foschi
Director Director
February 14, 2005 February 14, 2005

/s/ Richard J. Glasier /s/ Richard J. Glasier
- ---------------------- ----------------------
Richard J. Glasier Richard J. Glasier
Director Director
February 14, 2005 February 14, 2005

/s/ Baroness Hogg /s/ Baroness Hogg
- ----------------- -----------------
Baroness Hogg Baroness Hogg
Director Director
February 14, 2005 February 14, 2005


36


/s/ A. Kirk Lanterman /s/ A. Kirk Lanterman
- ---------------------- ---------------------
A. Kirk Lanterman A. Kirk Lanterman
Director Director
February 14, 2005 February 14, 2005

/s/ Modesto A. Maidique /s/ Modesto A. Maidique
- ------------------------ -----------------------
Modesto A. Maidique Modesto A. Maidique
Director Director
February 14, 2005 February 14, 2005

/s/ John P. McNulty /s/ John P. McNulty
- -------------------- -------------------
John P. McNulty John P. McNulty
Director Director
February 14, 2005 February 14, 2005

/s/ Sir John Parker /s/ Sir John Parker
- ------------------- -------------------
Sir John Parker Sir John Parker
Director Director
February 14, 2005 February 14, 2005

/s/ Peter G. Ratcliffe /s/ Peter G. Ratcliffe
- ----------------------- ----------------------
Peter G. Ratcliffe Peter G. Ratcliffe
Director Director
February 14, 2005 February 14, 2005

/s/ Stuart Subotnick /s/ Stuart Subotnick
- -------------------- --------------------
Stuart Subotnick Stuart Subotnick
Director Director
February 14, 2005 February 14, 2005

/s/ Uzi Zucker /s/ Uzi Zucker
- -------------- --------------
Uzi Zucker Uzi Zucker
Director Director
February 14, 2005 February 14, 2005


37


INDEX TO EXHIBITS
- -----------------
Page No. in
Sequential
Numbering
System
- ------
Exhibits
- --------

3.1-Third Amended and Restated Articles of Incorporation of Carnival
Corporation, incorporated by reference to Exhibit No. 3.1 to the joint Current
Report on Form 8-K of Carnival Corporation and Carnival plc filed on April 17,
2003.

3.2-Amended and Restated By-laws of Carnival Corporation, incorporated by
reference to Exhibit No. 3.2 to the joint Current Report on Form 8-K of Carnival
Corporation and Carnival plc filed on April 17, 2003.

3.3-Articles of Association of Carnival plc, incorporated by reference to
Exhibit No. 3.3 to the joint Current Report on Form 8-K of Carnival Corporation
and Carnival plc filed on April 17, 2003.

3.4-Memorandum of Association of Carnival plc, incorporated by reference to
Exhibit No. 3.4 to the joint Current Report on Form 8-K of Carnival Corporation
and Carnival plc filed on April 17, 2003.

4.1-Agreement of Carnival Corporation and Carnival plc, dated February 7, 2005,
to furnish certain debt instruments to the Securities and Exchange Commission.

4.2-Carnival Corporation Deed, dated April 17, 2003, between Carnival
Corporation and P&O Princess Cruises plc for the benefit of the P&O Princess
Shareholders, incorporated by reference to Exhibit No. 4.1 to our joint
Quarterly Report on Form 10-Q for the quarter ended August 31, 2003.

4.3-Equalization and Governance Agreement, dated April 17, 2003, between
Carnival Corporation and P&O Princess Cruises plc, incorporated by reference to
Exhibit No. 4.2 to our joint Quarterly Report on Form 10-Q of Carnival
Corporation and Carnival plc for the quarter ended August 31, 2003.

4.4-Carnival Corporation Deed of Guarantee, dated as of April 17, 2003, between
Carnival Corporation and Carnival plc, incorporated by reference to Exhibit 4.3
to the joint registration statement on Form S-4 of Carnival Corporation and
Carnival plc.

4.5-Carnival plc (formerly P&O Princess Cruises plc) Deed of Guarantee, dated as
of April 17, 2003, between Carnival Corporation and Carnival plc, incorporated
by reference to Exhibit 4.10 to the joint registration statement on Form S-3 and
F-3 of Carnival Corporation, Carnival plc and P&O Princess Cruises International
Ltd. ("POPCIL").

4.6-Specimen Common Stock Certificate, incorporated by reference to Exhibit 4.16
to the joint registration statement on Form S-3 and F-3 of Carnival Corporation,
Carnival plc and POPCIL.

4.7-Pairing Agreement, dated as of April 17, 2003, between Carnival Corporation,
The Law Debenture Trust Corporation (Cayman) Limited, as trustee, and SunTrust
Bank, as transfer agent, incorporated by reference to the joint Current Report
on Form 8-K of Carnival Corporation and Carnival plc filed on April 17, 2003.

4.8-Voting Trust Deed, dated as of April 17, 2003, between Carnival Corporation
and The Law Debenture Trust Corporation (Cayman) Limited, as trustee,
incorporated by reference to the joint Current Report on Form 8-K of Carnival
Corporation and Carnival plc filed on April 17, 2003.

4.9-SVE Special Voting Deed, dated as of April 17, 2003, between Carnival
Corporation, DLS SVC Limited, P&O Princess Cruises plc, The Law Debenture Trust
Corporation (Cayman) Limited, as trustee, and The Law Debenture Trust
Corporation, P.L.C., incorporated by reference to the joint Current Report on
Form 8-K of Carnival Corporation and Carnival plc filed on April 17, 2003.

4.10-Form of deposit agreement among P&O Princess Cruises plc, Morgan Guaranty
Trust Company of New York, as depositary, and holders and beneficial owners from
time to time of ADRs issued thereunder, incorporated by reference to P&O
Princess' registration statement on Form 20-F.


38


4.11-Indenture, dated as of April 25, 2001, between Carnival Corporation and
U.S. Bank Trust National Association, as trustee, relating to unsecured and
unsubordinated debt securities, incorporated by reference to Exhibit No. 4.5 to
Carnival Corporation registration statement on Form S-3.

4.12-Form of Indenture, dated March 1, 1993, between Carnival Cruise Lines, Inc.
and First Trust National Association, as Trustee, relating to the Debt
Securities, including form of Debt Security, incorporated by reference to
Exhibit No. 4 to Carnival Corporation registration statement on Form S-3.

4.13-Second Supplemental Indenture, dated December 1, 2003, between Carnival plc
and Carnival Corporation to The Bank of New York, as Trustee, relating to 7.30%
Notes due 2007 and 7.875% debentures due 2027 incorporated by reference to
Exhibit No. 4.14 to our joint Annual Report on Form 10-K for the year ended
November 30, 2003.

10.1-Retirement and Consulting Agreement, dated November 28, 2003, between Alton
Kirk Lanterman, Carnival Corporation, Holland America Line Inc., and others,
incorporated by reference to Exhibit 10.1 to our joint Annual Report on Form
10-K for the year ended November 30, 2003.

10.2-Amendment to the Amended and Restated Carnival Corporation 1992 Stock
Option Plan, incorporated by reference to Exhibit No. 10.2 to our joint Annual
Report on Form 10-K for the year ended November 30, 2003.

10.3-Amendment and Restatement Agreement, dated November 17, 2003, by and among
Carnival Corporation, Carnival plc, JPMorgan Chase Bank as successor to The
Chase Manhattan Bank, and various other lenders, incorporated by reference to
Exhibit No. 10.3 to our joint Annual Report on Form 10-K for the year ended
November 30, 2003.

10.4-Amended and Restated Carnival Corporation 1992 Stock Option Plan,
incorporated by reference to Exhibit No. 10.4 to our Annual Report on Form 10-K
for the year ended November 30, 1997.

10.5-Carnival Cruise Lines, Inc. 1993 Restricted Stock Plan adopted on January
15, 1993 and as amended January 5, 1998 and December 21, 1998, incorporated by
reference to Exhibit No. 10.5 to our Annual Report on Form 10-K for the year
ended November 30, 1998.

10.6-Carnival Corporation "Fun Ship" Nonqualified Savings Plan, incorporated by
reference to Exhibit No. 10.6 to our Annual Report on Form 10-K for the year
ended November 30, 1997.

10.7-Amendments to The Carnival Corporation Nonqualified Retirement Plan for
Highly Compensated Employees, incorporated by reference to Exhibit No. 10.7 to
our Annual Report on Form 10-K for the year ended November 30, 1997.

10.8-Carnival Cruise Lines, Inc. Non-Qualified Retirement Plan, incorporated by
reference to Exhibit No. 10.4 to our Annual Report on Form 10-K for the year
ended November 30, 1990.

10.9-Executive Long-term Compensation Agreement, dated as of January 16, 1998,
between Robert H. Dickinson and Carnival Corporation, incorporated by reference
to Exhibit No. 10.2 to our Annual Report on Form 10-K for the year ended
November 30, 1997.

10.10-Consulting Agreement/Registration Rights Agreement, dated June 14, 1991,
between Carnival Corporation and Ted Arison, incorporated by reference to
Exhibit No. 4.3 to post-effective amendment no. 1 on Form S-3 to Carnival
Corporation's registration statement on Form S-1.

10.11-First Amendment to Consulting Agreement/Registration Rights Agreement,
incorporated by reference to Exhibit No. 10.40 to Carnival Corporation's Annual
Report on Form 10-K for the year ended November 30, 1992.

10.12-Director Appointment letter between Peter G. Ratcliffe and Carnival plc,
incorporated by reference to Exhibit No. 10.23 to our joint Quarterly Report on
Form 10-Q for the quarter ended May 31, 2003.

10.13-Director Appointment letter, dated August 19, 2004, between Baroness Sarah
Hogg and each of Carnival Corporation and Carnival plc.

10.14-Director's Appointment letter, dated August 19, 2004, between Richard J.
Glasier and


39


each of Carnival Corporation and Carnival plc.

10.15-Director's Appointment letter, dated August 19, 2004, between Sir John
Parker and each of Carnival Corporation and Carnival plc.

10.16-Director Appointment letter, dated August 19, 2004, between John McNulty
and each of Carnival Corporation and Carnival plc.

10.17-Executive Long-term Compensation Agreement, dated January 11, 1999,
between Carnival Corporation and Micky Arison, incorporated by reference to
Exhibit No. 10.36 to Carnival Corporation's Annual Report on Form 10-K for the
year ended November 30, 1998.

10.18-Executive Long-term Compensation Agreement, dated January 11, 1999,
between Carnival Corporation and Howard S. Frank, incorporated by reference to
Exhibit No. 10.37 to Carnival Corporation's Annual Report on Form 10-K for the
year ended November 30, 1998.

10.19-Carnival Corporation Supplemental Executive Retirement Plan, incorporated
by reference to Exhibit No. 10.32 to Carnival Corporation's Annual Report on
Form 10-K for the year ended November 30, 1999.

10.20-Amendment to the Carnival Corporation Supplemental Executive Retirement
Plan, incorporated by reference to Exhibit No. 10.31 to Carnival Corporation's
Annual Report on Form 10-K for the year ended November 30, 2000.

10.21-Amendment to the Carnival Corporation "Fun Ship" Nonqualified Savings
Plan, incorporated by reference to Exhibit No. 10.33 to Carnival Corporation's
Annual Report on Form 10-K for the year ended November 30, 1999.

10.22-Amendment to the Carnival Corporation Nonqualified Retirement Plan for
Highly Compensated Employees, incorporated by reference to Exhibit No. 10.33 to
Carnival Corporation's Annual Report on Form 10-K for the year ended November
30, 2000.

10.23-Amendment to the Carnival Corporation "Fun Ship" Nonqualified Savings
Plan, incorporated by reference to Exhibit No. 10.34 to Carnival Corporation's
Annual Report on Form 10-K for the year ended November 30, 2000.

10.24-Amendment to the Carnival Corporation "Fun Ship" Nonqualified Savings
Plan, incorporated by reference to Exhibit No. 10.37 to Carnival Corporation's
Annual Report on Form 10-K for the year ended November 30, 2001.

10.25-Amendment to the Carnival Corporation Nonqualified Retirement Plan for
Highly Compensated Employees, incorporated by reference to Exhibit No. 10.38 to
Carnival Corporation's Annual Report on Form 10-K for the year ended November
30, 2001.

10.26-2001 Outside Director Stock Option Plan, incorporated by reference to
Exhibit No. 10.9 to Carnival Corporation's Annual Report on Form 10-K for the
year ended November 30, 2001.

10.27-Amended and Restated Carnival Corporation 2002 Stock Plan, incorporated by
reference to Exhibit 10.1 to the joint Quarterly Report on Form 10-Q for the
quarter ended May 31, 2003.

10.28-Service Agreement letter, dated May 28, 2002, between Costa Crociere,
S.p.A. and Pier Luigi Foschi, incorporated by reference to Exhibit No. 10.2 to
Carnival Corporation's Quarterly Report on Form 10-Q for the quarter ended May
31, 2002.

10.29-Succession Agreement to Registration Rights Agreement, dated June 14,
1991, between Carnival Corporation and Ted Arison, incorporated by reference to
Exhibit No. 10.3 to Carnival Corporation's Quarterly Report on Form 10-Q for the
quarter ended May 31, 2002.

10.30-Employment Agreement, dated as of April 17, 2003, by and between P&O
Princess Cruises International, Ltd. and Peter Ratcliffe, incorporated by
reference to Exhibit 10.2 to the joint Quarterly Report on Form 10-Q for the
quarter ended May 31, 2003.

10.31-Registration Rights Agreement, dated as of April 29, 2003, by and among
Carnival Corporation, Carnival plc and Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, incorporated by reference to Exhibit 4.14
to the joint registration statement on Form S-3 and F-3 of Carnival Corporation,
Carnival plc and POPCIL.


40


10.32-Indemnification Agreement, dated April 17, 2003, between Micky M. Arison
and Carnival Corporation, incorporated by reference to Exhibit 10.5 to the joint
Quarterly Report on Form 10-Q for the quarter ended May 31, 2003.

10.33-Consulting Agreement, dated November 30, 2004, between A. Kirk Lanterman,
Holland America Line Inc. and others, incorporated by reference to the joint
Current Report on Form 8-K, dated December 6, 2004.

10.34-Indemnification Agreement, dated April 17, 2003, between Robert H.
Dickinson and Carnival Corporation, incorporated by reference to Exhibit 10.9 to
the joint Quarterly Report on Form 10-Q for the quarter ended May 31, 2003.

10.35-Employment Agreement, dated December 1, 2004, between A. Kirk Lanterman
and Holland America Line Inc.

10.36-Indemnification Agreement, dated April 17, 2003, between Pier Luigi Foschi
and Carnival Corporation, incorporated by reference to Exhibit 10.13 to the
joint Quarterly Report on Form 10-Q for the quarter ended May 31, 2003.

10.37-Indemnification Agreement, dated April 17, 2003, between Howard S. Frank
and Carnival Corporation, incorporated by reference to Exhibit 10.15 to the
joint Quarterly Report on Form 10-Q for the quarter ended May 31, 2003.

10.38-Director Appointment letter, dated December 1, 2004, between A. Kirk
Lanterman and each of Carnival Corporation and Carnival plc.

10.39-Indemnification Agreement, dated April 17, 2003, between Peter G.
Ratcliffe and Carnival Corporation, incorporated by reference to Exhibit 10.24
to the joint Quarterly Report on Form 10-Q for the quarter ended May 31, 2003.

10.40-Director Appointment letter, dated April 14, 2003, between Micky M. Arison
and Carnival plc, incorporated by reference to Exhibit 10.4 to the joint
Quarterly Report on Form 10-Q for the quarter ended May 31, 2003.

10.41-Director Appointment letter, dated August 19, 2004, between Richard G.
Capen and each of Carnival Corporation and Carnival plc.

10.42-Director Appointment letter, dated April 14, 2003, between Robert H.
Dickinson and Carnival plc, incorporated by reference to Exhibit 10.8 to the
joint Quarterly Report on Form 10-Q for the quarter ended May 31, 2003.

10.43-Director Appointment letter, dated August 19, 2004, between Arnold W.
Donald and each of Carnival Corporation and Carnival plc.

10.44-Director Appointment letter between Pier Luigi Foschi and Carnival plc,
incorporated by reference to Exhibit No. 10.12 to our joint Quarterly Report on
Form 10-Q for the quarter ended May 31, 2003.

10.45-Director Appointment letter, dated April 14, 2003, between Howard S. Frank
and Carnival plc, incorporated by reference to Exhibit 10.14 to the joint
Quarterly Report on Form 10-Q for the quarter ended May 31, 2003.

10.46-Director Appointment letter, dated August 19, 2004, between Modesto A.
Maidique and each of Carnival Corporation and Carnival plc.

10.47-Amendment No. 1 to the Employment Agreement, dated as of July 19, 2004, by
and between P&O Princess International Ltd. and Peter Ratcliffe incorporated by
reference to Exhibit No. 10.1 to our joint Quarterly Report on Form 10-Q for the
quarter ended August 31, 2004.

10.48-Director Appointment letter, dated August 19, 2004, between Stuart
Subotnick and each of Carnival Corporation and Carnival plc.

10.49-Director Appointment letter, dated August 19, 2004, between Uzi Zucker and
each of Carnival Corporation and Carnival plc.

10.50-Amendment of the Carnival Corporation "Fun Ship" Nonqualified Savings
Plan, incorporated by reference to Exhibit No. 10.1 to our Quarterly Report on
Form 10-Q for the quarter ended February 28, 2003.


41


10.51-Amendment of the Carnival Corporation Nonqualified Retirement Plan For
Highly Compensated Employees, incorporated by reference to Exhibit No. 10.2 to
our Quarterly Report on Form 10-Q for the quarter ended February 28, 2003.

10.52-The P&O Princess Cruises Executive Share Option Plan, incorporated by
reference to Exhibit 4.9 to P&O Princess' Annual Report on Form 20-F for the
year ended December 30, 2001.

10.53-The P&O Princess Cruises Deferred Bonus and Co-Investment Matching Plan,
incorporated by reference to Exhibit 4.10 to P&O Princess' Annual Report on Form
20-F for the year ended December 30, 2001.

10.54-1994 Carnival Cruise Lines Key Management Incentive Plan as amended on
July 17, 2000, incorporated by reference to Exhibit No. 10.1 to our Quarterly
Report on Form 10-Q for the quarter ended August 31, 2000.

10.55-Amendment to the Carnival Corporation Executive Retirement Plan,
incorporated by reference to Exhibit 10.1 to our joint Quarterly Report on Form
10-Q for the quarter ended February 29, 2004.

10.56-Amendment to the Carnival Corporation Nonqualified Retirement Plan for
Highly Compensated Employees, incorporated by reference to our joint Quarterly
Report on Form 10-Q for the quarter ended February 29, 2004.

10.57-Amendment to the Carnival Corporation "Fun Ship" Nonqualified Savings
Plan, incorporated by reference to our joint Quarterly Report on Form 10-Q for
the quarter ended February 29, 2004.

12-Ratio of Earnings to Fixed Charges.

13-Portions of 2004 Annual Report incorporated by reference into 2004 joint
Annual Report on Form 10-K.

21-Significant Subsidiaries of Carnival Corporation and Carnival plc.

23-Consent of PricewaterhouseCoopers LLP.

31.1-Certification of Chief Executive Officer of Carnival Corporation pursuant
to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.

31.2-Certification of Chief Operating Officer of Carnival Corporation pursuant
to Rule 13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.

31.3-Certification of Executive Vice President and Chief Financial and
Accounting Officer of Carnival Corporation pursuant to Rule 13a-14(a), as
adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.4-Certification of Chief Executive Officer of Carnival plc pursuant to Rule
13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.5-Certification of Chief Operating Officer of Carnival plc pursuant to Rule
13a-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.6-Certification of Executive Vice President and Chief Financial and
Accounting Officer of Carnival plc pursuant to Rule 13a-14(a), as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1-Certification of Chief Executive Officer of Carnival Corporation pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

32.2-Certification of Chief Operating Officer of Carnival Corporation pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.

32.3-Certification of Executive Vice President and Chief Financial and
Accounting Officer of Carnival Corporation pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.4-Certification of Chief Executive Officer of Carnival plc pursuant to 18
U.S.C. Section


42


1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.5-Certification of Chief Operating Officer of Carnival plc pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.

32.6-Certification of Executive Vice President and Chief Financial and
Accounting Officer of Carnival plc pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


43