2. 2
Carnival Cruise Lines is one of the largest and most successful cruise line companies in
the world. The history of Carnival Cruise Lines started in 1972. The Chairman and Chief
Executive Officer, Ted Arison, purchased an ocean liner for $6.5 million. The ocean liner was
named Mardi Gras and included in the deal was another ship called the Carnivale. In the
beginning, Carnival experienced a deficit due to fuel and ship concerns. With the design of onboard activities, entertainment, an enhanced marketing approach, and travel packages, Carnival
began seeing successes and revenue. Carnivals' prices were competitive with other travel
packages, which was a major factor in the success. Slowly, Carnival began buying out the
competition and adding more cruise ships to the company. Carnival Cruises became an industry
leader with the finalization with Princess Cruises, which allowed Carnival to become a global
cruise line.
The mission statement of Carnival Cruise is defined as deliver exceptional vacation
experiences through the world's best-known cruise brands that cater to a variety of different
lifestyle and budgets, all at an outstanding value unrivaled on land or at sea. The Carnival Cruise
product is to deliver exceptional cruise based vacation experiences. The target groups include
low, medium, and high income groups. In addition, Carnival Cruise targets vacation travelers
and various lifestyle groups.
The current performance objectives of Carnival Cruise are in reach of the company goals.
Carnival wants to expand and focus on the European and Asian markets to further increase
profits. Carnival seems positioned to differentiate themselves with destinations, shipboard
activities, and ship size. Carnival is currently expanding into both markets. The European market
is already very successful. In 2013, the Asian market was launched allowing the market to

3. 3
continue growing. With past and current success, Carnival is poised to dominate the Asian and
European markets in the very near future.
The historical corporate strategies include growth, diversification, stability and
retrenchment. The growth concentration includes vertical and horizontal integration. The vertical
integration includes internal and external examples. In the past six years, Carnival Cruise has
made internal precedent changes. In 2007, Carnival expanded the cruises with additional water
parks, adult-only areas and resort styled pools. In 2012, Carnival now has 90,000 employees.
The company has increasingly added employees to further assist customers, clients and
consumers. In 2013, Carnival further developed internal changes with safety training and
management training. The training was implemented after the Carnival Concordia ship tragedy
in Italy.
The horizontal integration is composed of external acquisitions. In 1988, Carnival Cruise
acquired Holland American Line. The deal included two Holland America subsidiaries, which
were Windstar Sail Cruises and Holland America Westours. This acquisition allowed Carnival to
develop an aggressive building campaign. In 1992, Carnival also acquired 50% of the Seabourn
cruise line. The Seabourn acquisition allowed for additional cruise operations in South America,
the Mediterranean, Southeast Asia, and the Baltic. In 1997, Carnival merged with Celebrity. The
merger resulted in 17 ships and 30,000 berths. These external acquisitions developed Carnival
Cruise into a global cruise line brand.
Carnival's diversification includes concentric and conglomerate aspects. The internal
concentric is very diversified. Carnival Cruise Lines owns luxury cruise ships and has developed
many other travel necessities for their customers. Carnival's transportation aspects include hotels,
motor homes, and rail cars. Currently, Carnival owns 12 hotels, 300 motor coaches, and 20

4. 4
domed rail cars. Many of these travel additions are used in the northern United States to assist
with traveling needs. The addition hotels, motor coaches, and rail cars, have allowed Carnival to
further the develop the travel industry.
Carnival's conglomerate diversification is described as internal risk. Carnival experienced
risk with the purchase of Riviera Towers. The hotel consisted of 692 rooms. In 1991, Carnival
reached a settlement to surrender the hotel project and settle their debt with the Bahamian
government. In the late 1980's, Carnival invested into the Airline industry to transport their
guests. In 1997, Pan Am Corp purchased Carnival Air Line as most of their revenue came from
the Carnival Cruise Corporation. By terminating these travel industry companies, Carnival
reduced their debt, which allowed for a greater focus on dominating the global cruise line
industry.
Carnival is very stable in the cruise based industry. The company is very profitable and
powerful. There are many examples of Carnival Cruises ambition for profit stability. In 1988,
Carnival acquired Holland American Line. In 1992, Carnival gained 50% of the Seabourn Cruise
Lines. In 1997, Carnival Corporation purchased Costa Cruises. Carnival Cruises continued more
acquisitions and mergers to become a global cruise line. Despite being a very successful
company, Carnival did experience retrenchment. Carnival had disinvest in the airline industry. In
1997, Carnival Corporation finalized an agreement with Pan Am Corp for their airline. The
airline did not produce high profits, which allowed for a divestment and acquisition of the
airline.
Since the inception of Carnival Cruise, the company developed historical competitive
strategies for each strategic business unit within the corporation. For cost leadership, Carnival
Cruise uses a broad market. In the 1970's, Carnival Cruise had competitive packages with other

5. 5
travel packages. Carnival targets their marketing to all income levels. When it comes to
differentiation, Carnival is a broad market. In 1972, the company attracted customers with
planned activities, a casino, discos, and other forms of entertainment. Carnival used a lot
marketing to differentiate themselves from the competition, but the market is now narrow to be
different as many cruise lines are following their ideas. In the early 1990's, Carnival Cruise
differentiated themselves by purchasing a hotel in the Bahamas. In addition, Carnival developed
an airline to improve and promote their travel packages.
Carnival's historical functional strategies have varied over the years. The nature of the
market is based on consumer involvement. The geographic coverage of Carnival covers
international presence. Carnival Cruise ships sail to the United States, Australia, Pacific Islands,
Caribbean Islands, Europe, Russia, Scandinavia, South America, and Italy. In addition, Carnival
Cruise has 22 departure ports around the world. The majority of the ports are in the United
States. The Carnival Cruise ports include Baltimore, Boston, Charleston, Fort Lauderdale,
Jacksonville, Miami, New York, Norfolk Virginia, Port Canaveral, Tampa, Galveston, New
Orleans, Seattle, Vancouver, Venice, Barcelona, Barbados, Sydney, Pacific Islands, St.
Petersburg in Russia, San Juan in Puerto Rico and Los Angeles. Carnival Cruise ships are built
with the consumer in mind. The breadth of product lines is full while the degree of customization
includes standard modifications. Many of the cruise ships are very similar, but a few of the ships
offer different amenities.
The distribution of Carnival Cruise is similar to many other cruise ship companies.
Carnival Cruise offers competitive pricing levels for cruise vacations. The company uses a
multiple number of distribution channels. The nature of multiple distribution channels is
complimentary. The distribution channels are focused on direct selling. The channels are

6. 6
developed to consumers with the use of the website, telephone, and agents. Carnival Cruise
utilizes direct selling to the end-users and direct selling to agents. The degree of selectivity of
channels is low to medium. The company does not use selection or intensive distribution.
Carnival Cruise is heavily involved in advertising. The company uses print, media, and
entertainment as key advertisement platforms. The print advertising includes magazines,
newspapers, and billboards. The company utilizes entertainment media which includes television
sports, movies, radio spots, and social media platforms. For social media platforms, Carnival
Cruise utilizes Facebook, Twitter, Instagram, and YouTube. For the cruise vacation based
market, Carnival also utilizes promotion. The promotional emphasis includes push and pull
strategies. A push promotion strategy is used when the company uses many aspects to promote
their packages to travel agencies and suppliers. Push promotion strategies are used on the
website with lowest guaranteed price. Pull promotion strategies include word-of-mouth,
advertising promotions, sales promotions, and social media.
The source of funds includes the short-term liabilities, long-term liabilities, retained
earnings, and net stocks. Short-term liabilities are a company's debts or obligations that are due
within one year. Current liabilities appear on the company's balance sheet and include short term
debt, accounts payable, accrued liabilities and other debts. Long-term liabilities are a company's
debt which is over one year. Long-term liabilities include items like debentures, loans, deferred
tax liabilities and pension obligations. Retained earnings are the percentage of net earnings not
paid out as dividends, but retained by the company. Retained earnings are used to reinvest in the
business or to pay debt. Net stocks are characterized as total equity subtracted by retained
earnings.

7. 7
Appendix 1 represents a table of short-term liabilities, long-term liabilities, retained
earnings and net stocks for Carnival Cruise from 2008 to 2012. The short-term liabilities for
Carnival Cruise were 17.3% in 2008, 13.5% in 2009, 15.4% in 2010, 15.8% in 2011, and 18.7%
in 2012. The long-term liabilities were 23.2% in 2008, 24.7% in 2009, 21.4% in 2010, 20.8% in
2011, and 18.3% in 2012. The retained earnings were 41.9% in 2008, 42.8% in 2009, 45.9% in
2010, 47.5% in 2011, and 47.2% in 2012. The net stocks were 57.2% in 2008, 59.8% in 2009,
61.4% in 2010, 61.7% in 2011, and 61.1% in 2012.
Appendix 2 represents a table of short-term liabilities, long-term liabilities, retained
earnings and net stocks for Royal Caribbean Cruises from 2008 to 2012. The short-term
liabilities for Carnival Cruise were 16.2% in 2008, 15.1% in 2009, 17.5% in 2010, 15.5% in
2011, and 20.5% in 2012. The long-term liabilities were 39.7% in 2008, 42.0% in 2009, 40.4%
in 2010, 39.7% in 2011, and 35.1% in 2012. The retained earnings were 27.9% in 2008, 26.1%
in 2009, 26.9% in 2010, 29.4% in 2011, and 29.0% in 2012. The net stocks were 41.3% in 2008,
41.1% in 2009, 40.3% in 2010, 42.5% in 2011, and 41.9% in 2012.
Appendix 3 represents a table of short-term liabilities, long-term liabilities, retained
earnings and net stocks for Norwegian Cruises from 2008 to 2012. The short-term liabilities for
Carnival Cruise were 18.7% in 2008, 10.3% in 2009, 11.7% in 2010, 14.7% in 2011, and 15.9%
in 2012. The long-term liabilities were 49.0% in 2008, 53.1% in 2009, 56.2% in 2010, 51.0% in
2011, and 46.5% in 2012. The retained earnings were 0% in 2008, 0% in 2009, 0% in 2010, 0%
in 2011, and 0% in 2012. The net stocks were 17.0% in 2008, 22.4% in 2009, 20.3% in 2010,
24.8% in 2011, and 29.0% in 2012.
Appendix 4 represents the dividend payment for Royal Caribbean, Carnival Cruise and
Norwegian Cruises from 2008 to 2012. The dividend payment is high for Carnival Cruise. The

8. 8
dividend payments for Carnival Cruise were 1.60 in 2008, 0 in 2009, 0.40 in 2010, 1.00 in 2011,
and 1.00 in 2012. The dividend payment for Royal Caribbean were 0.45 in 2008, 0 in 2009, 0 in
2010, 0.20 in 2011, and 0.44 in 2012. The dividend payment for Norwegian Cruises were zero
for 2008, 2009, 2010, 2011, and 2012.
Appendix 5 represents the inventory turnover levels for Royal Caribbean, Carnival Cruise
and Norwegian Cruises for 2008 to 2012. Carnival Cruise has grown due to internal and external
acquisitions. Carnival has medium/low inventory levels compared to the competition. The
inventory levels for Carnival Cruise are 28.70% in 2008, 25.30% in 2009, 28.40% in 2010,
27.50% in 2011, and 26.5% in 2012. The inventory levels for Royal Caribbean were 45.80% in
2008, 37.70% in 2009, 35.20% in 2010, 34.20% in 2011, and 35.30% in 2012. The inventory
levels for Norwegian Cruises were 53.50% in 2008, 44.70% in 2009, 41.10% in 2010, 40.50% in
2011, and 37.30% in 2012.
Carnival's biggest competitors are Royal Caribbean Cruises and Norwegian Cruise Lines.
The stock ticker for Carnival is CCL, the stock ticker for Norwegian is NCLH and the stock
ticket for Royal Caribbean is RCL. Stock performance is the measurement of a stock's ability to
increase or decrease the wealth of its shareholders. Performance is typically measured by its
fluctuation in price. When the stock price increases, the stock shows good performance.
Conversely, a decrease in price is a poor performance. Appendix 6 shows the stock prices for
CCL over the last 5 years. The stock market was in a recession and has slowly progressed
further. Carnival‟s stock is comparable to S&P and the leisure industry mainly because Carnival
controls about half of the cruise industry market.
Appendix 6 shows the stock price of Carnival Cruise, Royal Caribbean Cruises and
Norwegian Cruises compared to the S & P 500. The market share is the percentage of an industry

9. 9
or market's total sales that is earned by a particular company over a specified time period. Market
share is calculated by taking the company's sales over the period and dividing it by the total sales
of the industry over the same period. This metric is used to give a general idea of the size of a
company to its market and its competitors. The sales of Carnival in 2008 were $14.6 billion
divided by the sales of the cruise industry which was $27 billion, leaving a market share of 54%.
The sales for Royal Caribbean were $6.5 billion leaving the market share at 24%. The sales for
Norwegian were $2.1 billion leaving the market share at 7.7%. The graph is shown in Appendix
7.
The sales of Carnival in 2009 were $13.4 billion divided by the sales of the cruise
industry which was $26.9 billion, leaving a market share of 49.8%. The sales for Royal
Caribbean were $5.8 billion leaving the market share at 21.5%. The sales for Norwegian were
$1.8 billion leaving the market share at 6.69%. The graph is shown in Appendix 8.
The sales of Carnival in 2010 were $14.4 billion divided by the sales of the cruise
industry which were $26.8 billion, leaving a market share of 53.9%. The sales for Royal
Caribbean were $6.7 billion leaving the market share at 25%. The sales for Norwegian were $2
billion leaving the market share at 8.2%. The graph is shown in Appendix 9.
The sales of Carnival in 2011 were $15.7 billion divided by the sales of the cruise
industry which were $29.4 billion, leaving a market share of 53.7%. The sales for Royal
Caribbean were $7.5 billion leaving the market share at 25.6%. The sales for Norwegian were
$2.2 billion leaving the market share at 7.5%. The graph is shown in Appendix 10.
The sales of Carnival in 2012 were $15.3 billion divided by the sales of the cruise
industry which were $36.2 billion, leaving a market share of 42.4%. The sales for Royal

10. 10
Caribbean were $7.6 billion leaving the market share at 21.2%. The sales for Norwegian were
$2.2 billion leaving the market share at 6.2%. The graph is shown in Appendix 11.
Net income is a company's total earnings. Net income is calculated by taking revenues
and adjusting for the cost of doing business, depreciation, interest, taxes and other expenses. This
number is important measure of how profitable the company is over a period of time. In 2008,
the net income for Norwegian was a deficit of $211 million; this was due to the cancellation of a
contract to build a new cruise liner. Royal Caribbean had a profit of $573 million and Carnival
had a profit of $2.3 billion. In 2009, Norwegian had a profit of $67 million. Royal Caribbean had
a profit of $162 million. Carnival had a profit of $1.79 billion. From 2008 to 2009, Carnival‟s net
income decreased. In 2010, Norwegian had a profit of $23 million and Royal Caribbean had a
profit of $515 million. Carnival had a profit of $1.9 billion. From 2010 to 2011, Carnival had a
small decrease in profit. In 2011, Norwegian had a profit of $126 million and Royal Caribbean
had a profit of $607 million. Carnival had a profit of $1.9 billion, which was a small increase
from 2010. In 2012, Norwegian had a profit of $168 million while Royal Caribbean had a profit
of $18 million. Carnival had a profit of $1.2 billion which decreased from 2011. Appendix 12
represents the net income for Norwegian, Royal Caribbean and Carnival from 2008-2012.
Net sales is the amount of sales generated by a company after the deduction of returns,
allowances for damaged or missing goods and any discounts allowed. Over the last 5 years,
Carnival has had a stable net sales ranging over the $3-4 billion range. Norwegian and Royal
Caribbean have had increases and decreases over the last 5 years, which can be worrisome.
Appendix 13 represents the net sales for Carnival Cruises, Royal Caribbean Cruises and
Norwegian Cruise lines from 2008-2012.

11. 11
Carnival Cruise currently has over 90,000 employees to date. Every year Carnival has
been increasing the number of employees. During spring and summer months, the amounts of
employees double due to the fact that it is prime cruise season. Norwegian Cruise Line has
fluctuated the number of employees in its company over the last 5 years while Royal Caribbean
Cruise Line has increased their employees every year for the last five years. Appendix 14
represents the number of employees for Carnival Cruises, Royal Caribbean Cruises and
Norwegian Cruise Lines from 2008-2012.
Carnival Corporation currently operates 102 cruise ships. Carnival Corporation owns 8
brands. The 8 brands include Carnival Cruise Line, P & O Cruises, Holland America, Seabourn
Cruise Line, Costa Cruises, AIDA cruises and Ibero cruises. Carnival Cruise Line brand
currently operates 22 ships. There are 7 different classes which include Dream, Fantasy, Destiny,
Triumph, Conquest, Splendor and Spirit. Carnival uses names for ships that represent luxury and
imagination. The P&O brand has 7 ships. Holland America Line brand currently operates 15
ships. Princess Cruises Line brand currently operates 18 ships. Seabourn Cruises brand operates
6 ships. Costa Cruises brand operates 14 ships. AIDA Cruises brand operates 10 ships. Ibero
Cruises brand operates 3 ships. Norwegian Cruise currently operates 12 ships. Another
competitor, Royal Caribbean Cruises, currently operates 21 ships.
Profitability ratios consists of three ratios. The three rations include gross profit margin,
operating profit margin and net profit margin. The class of financial metrics are used to assess a
business's ability to generate earnings as compared to its expenses during a specific period of
time. The gross profit margin formula consists of revenue subtracted by cost of goods sold and
then divided by revenue. The operating profit margin formula consists of the operating income
divided by net sales. The net profit margin formula consists of the net income divided by sales.

12. 12
In 2008, Carnival earned $14.6 billion in revenue from producing cruise vacations and
incurred $9 billion in COGS-related expense. Carnival‟s gross profit margin would be 38%. This
means that for every dollar that Carnival earns, it really has only $0.38 at the end of the day.
Royal Caribbean had a 32.5% gross profit margin and Norwegian Cruise Line had a 25% gross
profit margin. These numbers are represented in Appendix 15.
In 2009, Carnival earned $13.4 billion in revenue from producing cruise vacations and
incurred $8.4 million in COGS-related expense. Carnival‟s gross profit margin would be 37%.
This means that for every dollar that Carnival earns, it really has only $0.37 at the end of the
day. Royal Caribbean had a 30.8% gross profit margin and Norwegian Cruise Line had a 30%
gross profit margin. These numbers are represented in Appendix 16.
In 2010, Carnival earned $14.4 billion in revenue from producing cruise vacations and
incurred $9 million in COGS-related expense. Carnival‟s gross profit margin would be 37%.
This means that for every dollar that Carnival earns, it really has only $0.37 at the end of the
day. Royal Caribbean had a 33.9% gross profit margin and Norwegian Cruise Line had a 33%
gross profit margin. These numbers are represented in Appendix 17.
In 2011, Carnival earned $15.7 billion in revenue from producing cruise vacations and
incurred $10.2 million in COGS-related expense. Carnival‟s gross profit margin would be 34%.
This means that for every dollar that Carnival earns, it really has only $0.34 at the end of the
day. Royal Caribbean had a 34.4% gross profit margin and Norwegian Cruise Line had a 33.8%
gross profit margin. These numbers are represented in Appendix 18.
In 2012, Carnival earned $15.3 billion in revenue from producing cruise vacations and
incurred $10.3 billion in COGS-related expense. Carnival‟s gross profit margin would be 37%.
This means that for every dollar that Carnival earns, it really has only $0.37 at the end of the

13. 13
day. Royal Caribbean had a 32.9% gross profit margin and Norwegian Cruise Line had a 35%
gross profit margin. Over the last 5 years, Carnival has maintained a stable gross profit margin.
These numbers are represented in Appendix 19.
Operating profit margin is a measurement of what proportion of a company's revenue is left
over after paying for variable costs of production such as wages and raw materials. A healthy
operating margin is required for a company to be able to pay for its fixed costs. The higher the
operating profit margin is the better. In 2008, Carnival had an operating profit margin of 19.6%,
this means that it made $0.19 (before interest and taxes) for every dollar of sales. In 2009,
Carnival had an operating profit margin of 21.5%, this means that it made $0.21 (before interest
and taxes) for every dollar of sales. In 2010, Carnival had an operating profit margin of 16.2%,
this means that it made $0.16 (before interest and taxes) for every dollar of sales. In 2011,
Carnival had an operating profit margin of 14.2%, this means that it made $0.14 (before interest
and taxes) for every dollar of sales. In 2012, Carnival had an operating profit margin of 10.6%,
this means that it made $0.10 (before interest and taxes) for every dollar of sales. Over the last 5
years, Carnival‟s operating profit margin has fluctuated but overall Carnival has maintained a
good operating profit margin. Appendix 20, 21, 22, 23. and 24. represent the operating profit
margins for Carnival, Norwegian and Royal Caribbean from 2008 to 2012.
In 2008, Carnival had a net income of $2.3 billion from sales of $14.6 billion, giving it a
net profit margin of 15.9%. As you can see Norwegian was down 10% (this was due to a ship
cancellation contract) and Royal Caribbean had 8.7% net profit margin. Norwegian was
increased to 3.6% and Royal Caribbean decreased to 2.7% net profit margin. In 2009, Carnival
had a net income of $1.7 billion from sales of $13.4 billion, giving it a net profit margin of
13.2%. Norwegian was increased to 3.6% and Royal Caribbean decreased to 2.7% net profit

14. 14
margin. In 2010, Carnival had a net income of $1.9 billion from sales of $14.4 billion, giving it a
net profit margin of 13.6%. Norwegian decreased to 1.1% and Royal Caribbean increased to
7.6% net profit margin. In 2010, Carnival had a net income of $1.9 billion from sales of $14.4
billion, giving it a net profit margin of 13.6%. Norwegian decreased to 1.1% and Royal
Caribbean increased to 7.6% net profit margin. In 2011, Carnival had a net income of $1.9
billion from sales of $15.7 billion, giving it a net profit margin of 12.1%. Norwegian increased to
5.7% and Royal Caribbean increased to 8% net profit margin. In 2012, Carnival had a net
income of $1.2 billion from sales of $15.3 billion, giving it a net profit margin of 8.4%.
Norwegian increased to 7.4% and Royal Caribbean decreased to .2% net profit margin. Over the
last five years, Carnival‟s sales have increased but net income has decreased. This has
diminished net profit margins over the last 5 years. Appendix 25, 26, 27, 28 and 29 represent the
operating profit margins for Carnival, Norwegian and Royal Caribbean from 2008 to 2012.
Common size income statements are statements that can be used to allow for easy
analysis between companies or between time periods of a company. Appendix 30, 31, 32, 33 and
34 are the common size income statements for Carnival from 2008-2012.
The responsibility of the Board of Directors is to exercise their business judgment to act
in what they reasonably believe to be in the best interests of Carnival and their shareholders. The
directors are authorized to operate and carry into effect the agreements. The Board of Directors
are composed of internal and external members. Internal members are affiliated with the
company in some way. External directors are not engaged with the company. Currently, Carnival
Cruise has eleven members on the Board of Directors. The company has four internal directors
and seven external directors. For Carnival Cruise Lines, the internal directors include Micky
Arison, Arnold Donald, Pier Luigi Foschi, and Howard Frank. The external members include Sir

15. 15
Jonathon Band, Richard J. Glasier, Stuart Subotnick, Debra Kelly-Ennis, Laura Weil, Sir John
Parker and Randall J. Weisenburger.
The first member of the internal directors is Micky Arison. Micky Arison is the son of
Carnival founder, Ted Arison. Currently, he is stepping down as the Chief Executive Officer for
the company. He has been the CEO from 1979-2013. He is 64 years old, Jewish and was born in
Israel. He attended the University of Miami, but dropped out of college. In addition to running
the cruise ship company, Arison is also the owner of the Miami Heat basketball team.
The second member of the internal directors is Arnold Donald. Arnold Donald is the
President and Chief Executive Officer of Carnival Corporation. He is currently 58 years old. He
has a Bachelor's Degree in Economics and a Masters Degree in Mechanical Engineering. He has
been on the Board of Directors since 2001. In addition, he was Chairman of the Board for
Merisant Company from 2000-2005.
The third member of the internal Board of Directors is Pier Luigi Foschi. He is the
Chairman and CEO of Carnival Asia. He is also the Chairman of Costa Crociere. He is 66 years
old and is of Italian decent. He has been the Chairman of Costa Crociere since 2000. He was
appointed Chairman and CEO of Carnival Asia in 2012.
The final internal Board of Director is Howard Frank. He is the VP of the Board and
CEO of Carnival Corporation. He is 72 years old and he has been the Vice Chairman of the
Board of Directors since 1993. He joined Carnival as senior VP of Finance and CEO in 1989. He
is also the Chairman of the Executive Committee of The Cruise Line International Association.
The first external member on the Board of Directors is Sir Jonathon Band. Sir Jonathon
Band is a current member of the Board of Directors. He is the First Sea Lord and the Navy's
most senior serving officer. He is 63 years old, British, and in United Kingdom. He received a

16. 16
Bachelor's Degree in Social Science from Exeter University. He is married with two daughters.
His salary from Carnival was $440,408 in 2011. As of 2013, his current stock is 27,454 shares.
The second external member on the Board of Directors is Richard J. Glasier. Richard J.
Glasier is 67 years old and American. He received a Bachelor's Degree in Economics from
Cornell College and MBA in Finance from Southern Methodist University. He is the President
and CEO Officer of Argosy. He is also a former CFO and Executive Vice President of Royal
Caribbean Cruises. He has over 20 years experience in hotels, gaming, and cruises. His Carnival
Cruise salary was $525,298 in 2011. In 2013, his stock ownership was 44,050 shares.
The third external member on the Board of Directors is Stuart Subotnick. Stuart
Subotnick has been a director since 1987. He is 71 years old. He received a Bachelor‟s Degree in
Business Administration at Baruch College, Master of Law Degree from Brooklyn Law School,
and Juris Doctorate degree from New York University. Currently, he is President and CEO of
Metromedia Company. He is also member of the board of directors of Above.net. His Carnival
Cruise salary was $518,928 in 2011. In 2013, his stock ownership was 54,408 shares.
The fourth external member on the Board of Directors is Debra Kelly-Ennis. Debra
Kelly-Ennis just joined the Carnival Cruise Board of Directors on May 15, 2013. She is 56 years
old and American. She received a Bachelor's Degree from University of Texas and MBA from
University of Houston. She completed the executive Leadership program at Harvard Business
School. She is the Former President and CEO at Diageo, Canada. She served as Chief Operating
Officer at Saab. She was General Manager of Oldsmobile.
The fifth external member on the Board of Directors is Laura Weil. Laura Weil is 55
years old and American. She has a Bachelor‟s Degree in Art History and Government from
Smith College and MBA Degree in Finance and Marketing from Columbia University.

17. 17
Currently, she is Chief Operating Officer of New York and Company. She is also the former
CEO of Ashley Stewart, CEO of Urban Brands, and CFO of American Eagle Outfitters. Her
Carnival Cruise salary was $488,428 in 2011. In 2013, her stock ownership was 52,738 shares.
The sixth external member on the Board of Directors is Sir John Parker. Sir John Parker
has been a Director of the Board since 2000. He is 71 years old, Irish and was born in Ireland. He
received a Doctor of Science in Engineering from Queen‟s University. In addition, he is
President of Royal Academy of Engineering and Vice President of Engineering Employers‟
Federation. He is married with two children. His Carnival Cruise salary was $482,928 in 2011.
In 2013, his stock ownership was 52,008 shares.
The seventh external member on the Board of Directors is Randall J. Weisenburger.
Randall J. Weisenburger is 54 years old and American. He received a Bachelor's Degree in
Finance and Accounting from Virginia Tech. He has a Master's degree in Business
Administration from the University of Pennsylvania's Wharton School of Business. He is the
Chief Financial Officer and Executive Vice President of Omnicom Group Inc. He is also on the
board of director for Valero Energy Corporation. His Carnival Cruise salary was $448,928 in
2011. In 2013, his stock ownership was 156,954 shares.
The purpose of the Audit Committee is to assist the Boards' oversight of the integrity of
the Companies‟ financial statements, the Companies‟ compliance with legal and regulatory
requirements, the independent auditor‟s qualifications and independence, the performance of the
Companies‟ internal audit functions and independent auditors, and relevant elements of the
Companies‟ risk management programs. The current members of the audit committee include
Richard Glasier, Laura Weil, Stuart Subotnick, and Randall Weisenburger. All of these members
are external.

18. 18
The Compensation Committee has the overall responsibility for approving and evaluating
the director and officer compensation plans, policies and programs of Carnival, including annual
base salary, annual incentives, long-term incentives, stock options, terms of employment
agreements and severance arrangements. The current members of the Compensation Committee
include Richard Glasier, Randall Weisenburger, and Laura Weil. All of these members are
external.
The Nominating and Governance Committee has the goal is to develop and recommend
to the Boards a set of Corporate Governance Guidelines applicable to the Companies. They also
assist the boards by identifying individuals qualified to become board members and to
recommend to the boards the director nominees for the next annual meeting of shareholders. The
current members of the Nominating and Governance Committee include Sir John Parker, Stuart
Subotnick, Richard Glasier, and Randall Weisenburger. All of these members are external.
The Health, Environmental, Safety and Security Committee have the purpose is to assist
the Boards in fulfilling their responsibility to supervise and monitor health, environmental, safety
and security policies, programs, initiatives at sea and onshore, and compliance with health,
environmental, safety and security legal and regulatory requirements. The current members
include Sir John Parker, Sir Jonathon Band, and Debra Kelly-Ennis. All of these members are
external.
The Board of Directors members assist with company decisions. Some of the prior board
member decisions include repurchasing of stock and declaring dividends. On November 15,
2012, the Boards of Directors declared a special dividend to holders of Carnival Corporation
common stock and Carnival plc ordinary shares of $0.50 per share. In September 2007, the

19. 19
Boards of Directors authorized the repurchase of up to an aggregate of $1 billion of Carnival
Corporation common stock and Carnival plc ordinary shares.
The inventory turnover is a ratio showing how many times a company's inventory is sold
and replaced over a period. The days in the period can then be divided by the inventory turnover
formula to calculate the days it takes to sell the inventory on hand. The inventory turnover ratio
is a ratio showing how many times a company's inventory is sold and replaced over a period. For
the last four years Norwegian Cruises has slowly decreased while Carnival Cruises and Royal
Caribbean have stayed consistent. This is represented in Appendix 35. The days of inventory is a
financial measure of a company's performance that gives investors an idea of how long it takes a
company to turn its inventory sales. Carnival has increased over the last 4 years while Royal
Caribbean and Norwegian have decreased. This is represented in Appendix 36. The total asset
turnover is the amount of sales generated for every dollar's worth of assets. It is calculated by
dividing sales in dollars by assets in dollars. All three competitors have remained consistent over
the last 4 years. Appendix 37 represents the inventory turnover ratios for Carnival Cruise, Royal
Caribbean Cruises and Norwegian from 2008-2012.
The management team for Carnival Corporation is comprised of seven individuals. The
individuals include Micky Arison, Howard Frank, Arnold Donald, David Bernstein, Richard
Ames, Arnaldo Perez, and Larry Freedman. Micky Arison is the Chairman of Board. Howard
Frank is the Vice President of Board and the Chief Operating Officer. Arnold Donald is
President and Chief Executive Officer. David Bernstein is the senior Vice President and the
Chief Financial Officer. Richard Ames is the senior Vice President of Shared Services. Arnaldo
Perez is the senior Vice President of General Counsel and Secretary. Larry Freedman is the Chief
Accounting Officer and the Vice President Controller.

20. 20
The President for AIDA is Michael Ungerer. The President and CEO for Carnival Cruise
Line is Gerald Cahill. The CEO for Carnival Australia is Ann Sherry. The CEO for Carnival UK
is David Dingle. The Chairman for Costa Crociere is Pier Luigi Foschi and the CEO is Michael
Thamm. The President and CEO for Holland America is Stein Kruse. Alan Buckelew is the
President and CEO for Princess Cruises. The President for Seabourn is Rick Meadows.
The top management involved with the Board of Directors are Micky Arison, Arnold
Donald, Pier Luigi Foschi and Howard Frank. Chairman Micky Arison is known for being less
hands on than most. He gives great independence and authority to his executive teams who
operate Carnival and Carnival brand ships. Appendix 38 represents the total compensation paid
out to the management from 2008-2012.
Carnival Cruise is one of 10 subsidiary companies owned by Carnival Corporation &
PLC. Within Carnival Cruise, an „Open Door‟ policy is advocated. Employees have the freedom
and flexibility to express their ideas in working toward solutions that benefit the company.
Carnival Cruise uses the “Promote from Within” advancement strategy. In the early 2000‟s, 95%
of sales were made through travel agents. Now, individuals can purchase tickets through online
services and the telephone. The website is carnivalcruise.com and 1-800-Carnival. The entire
ship carries onboard Wi-Fi. Also there is an electronic-access control system. The electronicaccess control system has a plastic card that allows in and out access, room key and on-board
credit card. Carnival Cruise markets their cruise-based vacation products with many different
mediums. Current Carnival Cruise slogan is “Fun for all. All for fun.” Carnival emphasizes on
the word „Fun‟. Examples of copyrighted word are Carnival, The Fun Ship, and all their ship
names.

21. 21
In 2013, Carnival launched their first ever sweepstakes contest. For a week, any customer
who booked a vacation was automatically entered into a contest to win over 1,000 prizes. For
Carnival Cruise, prices range depending on the length, destination, and amenities. Currently,
Carnival Cruise advertises on their website with “Price Guarantee”. “If you find a better Carnival
advertised deal somewhere else within two days of booking your cruise, we'll not only be very
surprised —we'll give you 110% of the difference in onboard credit.” Current Promotions and
offers from the Carnival Cruise website are represented in Appendix 39, 40, and 41.
Common size balance sheet translates data from the balance sheet into percentages. This
allows for an easier analysis between time periods or from similar companies. Appendix 42, 43,
44, 45, and 46 show the common size balance sheet for Carnival Cruise in comparison with
Royal Caribbean and Norwegian Cruise from 2008-2012.
Liquidity ratios show a company's ability to pay off its short term debt. The most
common ratios used are the current ratio, quick (acid test) ratio, Inventory to net working capital,
and the cash ratio. The current ratio is a short-term indicator of the company's ability to pay its
short-term liabilities from short-term assets. It is how much of current assets are available to
cover each dollar of current liabilities. The quick (acid test) ratio measures the company's ability
to pay off its short-term obligations from current assets, excluding inventories. Inventory to net
working capital ratio is a measure of inventory balance and measures how much inventory is
over the difference between current assets and current liabilities. Cash ratio is the ratio between
the total cash to its current liabilities. Appendix 47, 48, 49, 50 and 51 show the 2008-2012
liquidity ratio comparison between Carnival Corporation, Royal Caribbean, and Norwegian
Cruise Line.

22. 22
Leverage ratios determine the company's methods of financing or to measure their
capability of meeting financial obligations. Four ratios were used in determining the leverage
ratios for Carnival: debt to asset ratio, debt to equity ratio, long-term debt to capital structure,
and current liabilities to equity. The debt to asset ratio measures the extent to which borrowed
funds have been used to finance the company's asset. The debt to equity ratio measures the funds
provided by creditors versus the funds provided by owners. The long-term debt to capital
structure ratio measures the long-term component of capital structure. The current liabilities to
equity ratio measures the short-term financing portion versus that provided by owners. Appendix
52, 53, 54, 55, and 56 show the 2008-2012 leverage ratio comparison between Carnival
Corporation, Royal Caribbean, and Norwegian Cruise.
Carnival has a shipboard human resources department. The human resources department
is divided into two tiers which include staff administration and training. The department is
responsible for employee relations, employee communication, training and development, staff
administration, coaching and counseling, quality of life and leadership training. The crew
training centers have over 400 learning resources including e-learning courses, books, tapes,
DVD‟s, management courses and language resources. This team also conducts fun and
informative training programs including regulatory/ safety training, team carnival orientation,
English classes, hospitality training, sales training and other department-specific training. This
department is also responsible for overseeing the star employee of the month program, the
service award program and the crew recreation committee which is responsible for all crew
activities and fun on board.
The short-term threats and opportunities for Carnival Cruise include competition,
potential barriers to entry, substitute products and services, customer bargaining power, and

23. 23
supplier bargaining power. The long-term threats and opportunities include socio-cultural forces,
political and legal forces, technological forces, and economic forces.
Competition is a huge threat to Carnival Cruise. Carnival Cruise Lines has competition in
North America, Europe, land-based travel vacations, and the luxury cruise industry. Carnival
Cruises is the largest company in the cruise vacation industry with 50% of the cruising market.
The main competitors for Carnival in North America are Royal Caribbean, Disney Cruise Line,
and Norwegian Cruise Line. The European market consisted of the United Kingdom, Germany
and Southern Europe. In the United Kingdom, Carnival's competitors are My Travel's Sun
Cruises, Fred Olsen, Saga and Thomson. In Germany, the competitors are Festival Cruises,
Hapag-Lloyd, Peter Deilmann, Phoenix Reisen, and Tranocean. In Southern Europe, Carnival's
competitors are the Mediterranean Shipping Cruises, Louis Cruise Line, Festival Cruises, and
Spanish Cruise Line. Carnival has a few competitors in the luxury cruise segment with Crystal
Cruises, Radisson Seven Seas Cruise Line, and Silversea Cruises. In addition, Carnival also
competed with land-based travel vacations such as resorts, hotels, theme parks, and ownership
properties. The European market seems to be their toughest competition as many cruise lines
operate in and around the continent. Carnival has a large emphasis in North America and many
other parts of the world.
Potential entrants are a short-term concern for Carnival Cruise. The cruise ship industry is
very diverse and competitive with important factors for entry. One of the most prevalent
concerns is the competition. Many cruise ships have a large market share in the industry thus
limiting the market. A new cruise based company can compete with existing cruise companies,
which can also cause problems. The larger and more established companies can easily buy out or
obtain customers from the newer companies. Another major concern to enter is the ability to use

24. 24
ports and facilities. Cruise ships must have ports and facilities at their destinations. These ports
and facilities limit or charge access for competing companies. In addition, another barrier to
entry is the reputation and establishment of other companies. Many consumers have trustworthy,
reliable companies for their travel needs. Most companies have worked years to build their
reputation as a great cruise-based company, which makes it difficult for new companies to
become their providers. The last concern is the costs. Cruise ships are not cheap and low-cost.
Many cruise ships take anywhere from 3-5 years to build. This causes high debt early in the
company's business and a long time frame before the business can start. New companies could
buy an existing ship from a competitor, which could save money and time.
With the many available substitute product and services, Carnival Cruise faces short-term
threats from many other companies. Customers have many options when selecting their travel
vacations. If someone wants to go on vacation they can go to Las Vegas, fly on an airplane, take
a train ride, and the list continues. Carnival does not own anything in the air travel or land-based
transportation, which allows customers to plan different and competing industries for their travel
needs. Carnival tries to promote and market to customers with their amenities and potential
experiences. Another substitute product is other cruise ships. The cruise industry has added many
features such as live music, shows, movie theaters, art galleries, nightclubs, sporting activities
and pools to name a few. More and more cruise ships are offering land-based activities to further
develop the experience of cruises. Products and services on cruises will continue to develop with
more time, money and technology.
In terms of customer bargaining power, Carnival Cruise faces little or no threat in the
industry. Buying power is not very effective for the cruise industry due to competition. Many
customers use travel agents and the website for their booking vacations, which allows for

25. 25
competitive and fixed prices. In addition, Carnival Cruise and Royal Caribbean Cruises are the
two most popular cruise-based vacation packages in North America. With these cruise ships
having a large market share in the United States, they are able to control travel prices for
customers.
The supplier bargaining power is fairly low as most companies are competitive with each
other. Due to large purchases, Carnival receives a high discount for volume purchases. Carnival
utilized a select number of suppliers for food/beverages, hotel/restaurant supplies at competitive
prices throughout the world. Carnival Cruise has many purchases for their cruise ships. The
company's largest purchases were travel agency services, fuel, advertising, food/beverages,
hotel/restaurants supplies, airfare, repairs/maintenance, dry-docking, port facility utilization, and
communication services. Carnival uses a limited number of suppliers for their fuel and port
facility services.
The long-term threat and opportunities of the socio-cultural forces facing the cruise
industry are age and attitudes. The age for most cruises are towards an older demographic. Many
retired consumers go on cruises for enjoyment while younger demographics use substitute
products/services for vacations. Attitude is another socio-cultural force facing the cruise
industry. Many consumers believe that cruises are very expensive due to their luxury reputation.
Consumers also have the idea that cruises will make them sea sick, which could not be further
from the truth. Carnival adds land-based activities to their cruise ships to dissipate this potential
problem. Attitudes are a social force as they have a pertaining reputation and understanding
towards consumers.
The long-term political and legal forces are expanding and will continue to face the cruise
industry. An important legal force facing the cruise industry is pollution and energy guidelines.

26. 26
Pollution and energy guidelines are a dangerous and expensive legal force in the transportation
industries. Many cruise companies have been fined for illegal dumping and oil spills in the
oceans. In the past 20 years, many rules and regulations have been issued to keep the oceans
clean. The forecasts and trends have issued many strategic plans to have all countries
contributing to safety and cleanliness in the oceans. Many cruise ships are built to be ecofriendly and partially solar generated. In 2010, a Vancouver based cruise company issued itself
to travel eco-friendly. In addition, many ports are installing plug-ins for ships which stops the
burning of fuels and emissions. These are just some of the ways the pollution and energy
guidelines have changed in the past few years. The trends and forecast will continue pushing for
stricter guidelines. Another political force facing the cruise industry are safety concerns. The
safety concerns relate to terrorist involved events, wars with other countries, and society with
another country. The most recent terrorist attack for the United States was 9-11, which effected
the travel and cruise industry due to safety and well-being concerns. The potential of another
attack could cause the same feelings and actions. In 2013, the talks continue with Syria about a
possible war due to the poisoning of their citizens. Potential events like these could have a
profound effect on tourism especially if the cruise travel route is by those countries. Terrorist
attacks and wars are becoming more prevalent in many countries due to social aspects.
Carnival Cruise faces long-term technological forces in the next 10 years. The greatest
technological force facing the cruise ship industry is the use of mobile cell phones and the
internet. The use of cell phones and the internet affect many global travel industries. With the
design of smart phones, many consumers cannot withstand to be away from their phones for a
long period of time. Smart phones have the ability to communicate with others as well as go on
the internet. In the past, many cruise ships did not have wireless connection. In 2009, many

27. 27
cruise ships started adding wireless connection which has further developed communication for
passengers. In 2013, Carnival Cruise has a designated cafe just for internet use. With the
advancements in technology, cruise ships will continue to evolve in communication techniques.
Carnival Cruise faces long-term economic forces in the next 10 years. Two economic
forces facing cruise ships in the next 10 years are fuel price concerns and interest rates risks. In
general, fuel prices averaged around $2 to $3 over the past 10 years in the United States. Fuel
prices affect all the different transportation industries. When the stock market crashed in 2008,
fuel prices peaked to over $4 a gallon. In 2009, the prices dipped to $2 a gallon. In the past 5
years, the fuel prices have steadily stayed around $3- $4. In general, fuel prices have risen over a
$1 per gallon in 5 years. If the trends and forecasts continue, the fuel prices most likely will rise
another $1 in the next 5 years to come. These forecasts relate to the United States, which leads to
more concerns in other countries. In European and overseas countries, gas prices are very
expensive. The trends and forecasts will continue to rise in those countries too, which will affect
all traveling transportation companies. The second force facing Carnival Cruises is interest rate
risks. Interest rates affect many companies, especially industries with large long-term
investments. The travel and transportation industries are greatly affected by interest rates. Cruise
ship companies spend large amounts of their money on building cruise ships. These long-term
investments are faced with debt and interest rates. Before the financial crisis, the interest rates
were around 8%. Over the past 5 years, interest rates have decreased to around 4% on long-term
loans. These low interest rates are beneficial for future investments as the interest will be
cheaper. The trends and forecasts show that rates dropped and will most likely rise again when
the market grows.

28. 28
Carnival Cruise has numerous strengths in the organization. The strengths include being
the largest cruise line in the world. Carnival Cruise has higher market shares than their
competitors. Carnival Cruise is a very strong company as they have acquired several companies
in the cruise line industry. In addition, Carnival Cruise has a global and international presence.
Currently, Carnival Cruise has a strong consumer demand in Europe, which is strength for the
company. Carnival Cruise offers many amenities on their ships. The company places a high
value on entertainment and customer satisfaction. Due to cost advantages, Carnival Cruise
implements many activities and features on their ships. Carnival Cruise has cost advantages over
most of their competitors. With affordable vacation packages for families, Carnival Cruise is
continuing to strengthen their brands. Finally, Carnival Cruise last strength is the amount of
repeat customers. According to the Wall Street Journal, Repeat cruisers make up 65% of
Carnival's customers, and the industry's previous safety record is strong, with fewer than 0.1
fatality per million passengers, three times better than that of airlines.
Even though Carnival Cruise is a very successful organization, the company still faces a
few weaknesses. The weaknesses of Carnival Cruises include poor safety record, bad publicity,
expense issues and advertising low prices. In last few years, Carnival Cruise has experienced a
few tragedies on their cruise ships. Due to the unfortunate accidents, Carnival Cruise has
received a poor safety record in the past few years. These tragedies also sparked bad publicity for
the cruise line. Another weakness is that many people believe cruises are too expensive. When
consumers think of vacations, they automatically think it will be expensive. In reality, Carnival
Cruises are actually cheaper than planning trips to destinations in the United States.
The opportunities of Carnival Cruise range from prices to different destinations. Carnival
could advertise low "average" prices on their website and advertising efforts. Consumers need to

29. 29
know that cruises can be inexpensive compared to other destination vacations. Another
opportunity is the appeal to all demographics. Many consumers believe that cruises are only for
older individuals. By advertising to families, young adults, marrying adults, and middle aged
individuals, Carnival Cruise will appeal to a large demographic. Another opportunity is to offer
new destinations each season or every year. Many of the cruises have the same destination,
which could not attract repeat consumers. In addition, Carnival Cruise could further market
themselves in the Asian and African markets. Lastly, Carnival Cruise can increase advertising
efforts. The cruise company can utilize different mediums.
The threats of Carnival Cruise are similar to other vacation based companies. The main
threats include competition, gas prices, the environment, diseases and the weather. Diseases in
other countries pose a threat to potential and future customers. In the travel industry, weather is
always a factor for success. Vacation packages must be aligned with good weather to promote
the vacation. In addition, tight competition with other cruise companies is another threat. As
mentioned before, there are over 20 cruise ship companies in the United States and European.
Environmental regulations also pose a threat in the cruise industry. Carnival Cruise needs to
always be aware of potential changes and continue developing ways to become efficient.
Another threat facing Carnival Cruise is the increase price of fuel. Over the past several years,
fuel prices have risen astronomically. Carnival Cruise needs to be conscious of the best ways and
features to overcome expensive fuel prices. Lastly, Carnival Cruise has threats with competition
of cheaper vacation packages. Customers also have a variety of travel options with hotels, airline
travel, and car driving. Travel vacationers have many options and selections when determining
travel choices.

30. 30
The objective for the plan of action is to attract customers by having promotional
campaigns. Carnival also needs to make it aware to customers how a cruise vacation is
affordable in a time where money can be scarce. The environmental strategy is Carnival should
donate one thousandth of one percent of net income to the "Save the Ocean" campaign. This
would make them stand out as a socially responsible company. It would also help to appease the
environmental groups that are currently against cruise lines. Carnival can also look into different
fuel technology to not only decrease the costs of fuel consumption but fuel that is not harmful to
the environment. Carnival has demonstrated that they are aware of their environment by
announcing the first smoke-free cruise ship. These two strategies would help implement
Carnival‟s strategy on helping the environment.
For future strategies Carnival needs to offer special discounts to repeat customers. These
discounts can be on activities, like spa treatments and drinks, as a way to say thank you for
choosing Carnival. Carnival needs to continue to build relationships with travel booking
companies, especially online companies. Carnival also needs to expand on social media because
that is the least expensive and most influential type of marketing. Carnival should also send
promotional emails for when it is a birthday or an anniversary of a guest who went on a cruise
and offered them a special vacation package. Carnival should also add more entertainment
activities on the ship to attract different ages of potential customers. Carnival can benefit from
offering more destination spots to attract customers who want to travel to countries where it can
be too expensive to book a hotel, rental car and airplane flights. Carnival needs to create a
referral program. Carnival can begin a program where, if you recommend your friend(s) and/or
family, you will receive discount. This will benefit Carnival by increasing the number of return

31. 31
cruisers and will combat the image of a first time cruise company. Carnival also needs to create
an alliance with an airline company.
Carnival needs to make programs to increase cruise line dependability by making
enhancements to emergency power capabilities, additional emergency generators and new fire
safety technology so incidents like the fire in the engine room on the Triumph, that left the ship
powerless for 5 days and forced passengers to live in unsanitary conditions, do not occur.
Carnival needs to bring the trust back to these Carnival passengers. Carnival also needs to
communicate quicker to let passengers know what is happening. For example, when the Costa
Concordia struck a reef after the captain deviated from the planned course, he didn‟t contact
officials or let passengers know until one after the incident occurred. Thirty two people lost their
lives. In order to provide a richer understanding of the customers, Carnival Cruise should
promote feedback. Carnival should send customers who went on a cruise an email survey rating
their satisfaction and experience. As a reward, give them a free drink ticket for any future
cruises. Currently, Carnival does not give rewards to customers who take their survey. Carnival
needs to look into how to make guests who are dissatisfied become satisfied guests. These
programs will allow Carnival Cruise to become an even stronger and successful company.

32. 32
Appendix
Appendix 1. The following represents a table and graph of short-term liabilities, long-term
liabilities, retained earnings and net stocks for Carnival Cruise from 2008 to 2012.
2008
2009
2010
2011
2012
Short Term Liabilities
17.3%
13.5%
15.4%
15.8%
18.7%
Long Term Liabilities
23.2%
24.7%
21.4%
20.8%
18.3%
Retained Earnings
41.9%
42.8%
45.9%
47.5%
47.2%
Net Stocks
57.2%
59.8%
61.4%
61.7%
61.1%
Carnival Cruise
80.0%
60.0%
40.0%
20.0%
0.0%
Short Term Liabilities
Long Term Liabilities
Retained Earnings
2008
2009
2010
2011
2012
Net Stocks
Appendix 2. The following represents a table and graph of the short-term liabilities, long-term
liabilities, retained earnings and net stocks for Royal Caribbean Cruise from 2008-2012.
2008
2009
2010
2011
2012
Short Term Liabilities
16.2%
15.1%
17.5%
15.5%
20.5%
Long Term Liabilities
39.7%
42.0%
40.4%
39.7%
35.1%
Retained Earnings
27.9%
26.1%
26.9%
29.4%
29.0%
Net Stocks
41.3%
41.1%
40.3%
42.5%
41.9%

33. 33
Royal Caribbean Cruises
60.0%
Short Term Liabilities
40.0%
Long Term Liabilities
20.0%
Retained Earnings
0.0%
2008
2009
2010
2011
Net Stocks
2012
Appendix 3. This following represents the table of the short-term liabilities, long-term liabilities,
retained earnings and net stocks for Norwegian Cruises from 2008-2012.
2008
2009
2010
2011
2012
Short Term Liabilities
18.7%
10.3%
11.7%
14.7%
15.9%
Long Term Liabilities
49.0%
53.1%
56.2%
51.0%
46.5%
Retained Earnings
0.0%
0.0%
0.0%
0.0%
0.0%
Net Stocks
17.0%
22.4%
20.3%
24.8%
29.0%
Norwegian Cruises
60.0%
Short Term Liabilities
40.0%
Long Term Liabilities
20.0%
Retained Earnings
0.0%
2008
2009
2010
2011
2012
Net Stocks
Appendix 4. The following table represents the dividend payment for Royal Caribbean, Carnival
Cruise and Norwegian Cruises from 2008 to 2012. The dividend payment of Carnival Cruise is
high compared to their competitors.

34. 34
2008
2009
2010
2011
2012
Royal
0.45
_
_
0.20
0.44
Carnival Cruises
1.60
_
0.40
1.00
1.00
0
0
0
0
0
Norwegian Cruises
Dividends Per Share
2.00
Royal
1.00
Carnival Cruises
0.00
Norwegian Cruises
2008 2009 2010 2011 2012
Appendix 5. The following table and graph illustrate the inventory levels for the three
competitors. Carnival has medium/low inventory levels compared to the competition.
2008
2009
2010
2011
2012
Royal
45.8
37.70
35.20
34.2
35.3
Carnival Cruises
28.70
25.3
28.4
27.50
26.5
Norwegian Cruises
53.5
44.7
41.1
40.5
37.3
Inventory Turnover
60
40
Royal
20
Carnival Cruises
Norwegian Cruises
0
2008
2009
2010
2011
2012

35. 35
Appendix 6. This graph represents the stock price of Carnival Cruise, Norwegian Cruises,
Royal Caribbean Cruises, S & P 500, and Leisure.
Appendix 7. The following graph shows the market share for Carnival Cruise, Norwegian
Cruise Lines, and Royal Caribbean Cruises for 2008
Market Share in 2008
24%
Carnival
Norwegian
7.70%
54%
Royal Caribbean
Appendix 8. The following graph shows the market share for Carnival Cruise, Norwegian
Cruise Lines, and Royal Caribbean Cruises for 2009.

36. 36
Market Share in 2009
21.50%
Carnival
Norwegian
Royal Caribbean
6.69%
49.8%
Appendix 9. The following graph shows the market share for Carnival Cruises, Royal Caribbean
Cruises and Norwegian Cruise Lines for 2010.
Market Share in 2010
25.00%
Carnival
Norwegian
Royal Caribbean
8.20%
53.9%
Appendix 10. The following graph shows the market share for Carnival Cruises, Royal
Caribbean Cruises and Norwegian Cruise Lines for 2011.
Market Share in 2011
25.60%
Carnival
Norwegian
Royal Caribbean
7.50%
53.7%

37. 37
Appendix 11. The following graph shows the market share for Carnival Cruises, Royal
Caribbean Cruises and Norwegian Cruise Lines for 2012.
Market Share in 2012
21.20%
Carnival
Norwegian
Royal Caribbean
6.20%
42.4%
Appendix 12. The following graph represents the net income for Carnival Cruise, Royal
Caribbean Cruises, and Norwegian Cruise Lines from 2008 to 2012.
$2,500,000,000.00
$2,000,000,000.00
$1,500,000,000.00
Norwegian
$1,000,000,000.00
Royal Caribbean
$500,000,000.00
Carnival
$$(500,000,000.00)
2008
2009
2010
2011
2012
Net Income
Figure 13. The following graph represents the net sales for Norwegian, Royal Caribbean and
Carnival from 2008-2012.

38. 38
$5,000,000,000.00
$4,000,000,000.00
2008
$3,000,000,000.00
2009
$2,000,000,000.00
2010
2011
$1,000,000,000.00
2012
$Norwegian
Carnival
Royal Caribbean
$(1,000,000,000.00)
Figure 14. The following graph represents the number of employees for Norwegian, Royal
Caribbean and Carnival from 2008-2012.
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
2008
2009
2010
2011
2012
Norwegian
Carnival
Royal Caribbean
Appendix 15. The following graph represents the gross profit margin for Carnival Cruises,
Royal Caribbean Cruises and Norwegian Cruise lines from 2008.

39. 39
Gross Profit Margin 2008
50.00%
40.00%
30.00%
20.00%
2008
10.00%
0.00%
Carnival
Norwegian
Royal Caribbean
Appendix 16. The following graph represents the gross profit margin for Carnival Cruises,
Royal Caribbean Cruises and Norwegian Cruise lines from 2009.
Gross Profit Margin 2009
40.00%
30.00%
20.00%
2009
10.00%
0.00%
Carnival
Norwegian
Royal Caribbean
Appendix 17. The following graph represents the gross profit margin for Carnival Cruises,
Royal Caribbean Cruises and Norwegian Cruise lines from 2010.

40. 40
Gross Profit Margin 2010
38.00%
37.00%
36.00%
35.00%
34.00%
33.00%
32.00%
31.00%
30.00%
2010
Carnival
Norwegian
Royal Caribbean
Appendix 18. The following graph represents the gross profit margin for Carnival Cruises,
Royal Caribbean Cruises and Norwegian Cruise lines from 2011.
Gross Profit Margin 2011
34.60%
34.40%
34.20%
34.00%
33.80%
33.60%
33.40%
2011
Carnival
Norwegian
Royal Caribbean
Appendix 19. The following graph represents the gross profit margin for Carnival Cruises,
Royal Caribbean Cruises and Norwegian Cruise lines from 2008.

41. 41
Gross Profit Margin 2012
36.00%
35.00%
34.00%
33.00%
2012
32.00%
31.00%
30.00%
Carnival
Norwegian
Royal Caribbean
Appendix 20. The following graph represents the operating profit margin for Carnival Cruises,
Royal Caribbean Cruises and Norwegian Cruise Lines from 2008.
Operating Profit Margin 2008
25.00%
20.00%
15.00%
10.00%
2008
5.00%
0.00%
-5.00%
Carnival
Norwegian
Royal Caribbean
Appendix 21. The following graph represents the operating profit margin for Carnival Cruises,
Royal Caribbean Cruises and Norwegian Cruise Lines from 2009.

42. 42
Operating Profit Margin 2009
25.00%
20.00%
15.00%
2009
10.00%
5.00%
0.00%
Carnival
Norwegian
Royal Caribbean
Appendix 22. The following graph represents the operating profit margin for Carnival Cruises,
Royal Caribbean Cruises and Norwegian Cruise Lines from 2010.
Operating Profit Margin 2010
20.00%
15.00%
10.00%
2010
5.00%
0.00%
Carnival
Norwegian
Royal Caribbean
Appendix 23. The following graph represents the operating profit margin for Carnival Cruises,
Royal Caribbean Cruises and Norwegian Cruise Lines from 2011.

43. 43
Operating Profit Margin 2011
14.50%
14.00%
13.50%
13.00%
12.50%
2011
12.00%
11.50%
11.00%
Carnival
Norwegian
Royal Caribbean
Appendix 24. The following graph represents the operating profit margin for Carnival Cruises,
Royal Caribbean Cruises and Norwegian Cruise Lines from 2012.
Operating Profit Margin 2012
20.00%
15.00%
10.00%
2012
5.00%
0.00%
Carnival
Norwegian
Royal Caribbean
Appendix 25. The following graph represents the net profit margin for Carnival Cruises,
Norwegian Cruise Lines and Royal Caribbean Cruises from 2008.

44. 44
Net Profit Margin 2008
20.00%
15.00%
10.00%
5.00%
2008
0.00%
-5.00%
Carnival
Norwegian
Royal Caribbean
-10.00%
-15.00%
Appendix 26. The following graph represents the net profit margin for Carnival Cruises,
Norwegian Cruise Lines and Royal Caribbean Cruises from 2009.
Net Profit Margin 2009
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2009
Carnival
Norwegian
Royal Caribbean
Appendix 27. The following graph represents the net profit margin for Carnival Cruises,
Norwegian Cruise Lines and Royal Caribbean Cruises from 2010.

45. 45
Net Profit Margin 2010
15.00%
10.00%
2010
5.00%
0.00%
Carnival
Norwegian
Royal Caribbean
Appendix 28. The following graph represents the net profit margin for Carnival Cruises,
Norwegian Cruise Lines and Royal Caribbean Cruises from 2011.
Net Profit Margin 2011
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2011
Carnival
Norwegian
Royal Caribbean
Appendix 29. The following graph represents the net profit margin for Carnival Cruises,
Norwegian Cruise Lines and Royal Caribbean Cruises from 2012.

46. 46
Net Profit Margin 2012
10.00%
8.00%
6.00%
4.00%
2012
2.00%
0.00%
Carnival
Norwegian
Royal Caribbean
Appendix 30. The following table illustrates the common sized income statements from 2008.
Carnival
Royal
Norwegian
Caribbean
Common Size Income Statement 2008
Cruise
Total Revenue
100%
100%
100%
Cost of Revenue
67%
76%
80%
Gross Profit
32%
32%
28%
Selling & Admin Exp.
9%
3%
2%
Depreciation Exp.
9%
8%
15%
Operating Expenses
22%
27%
32%
Operating Income
10%
16%
18%
Net Interest
0%
0%
0%
Other Income
0%
2%
0%
Pretax Income
8%
14%
15%
Net Income
8%
10%
3%

47. 47
Appendix 31. The following table illustrates the common sized income statements from 2009.
Carnival
Royal
Norwegian
Caribbean
Common Size Income Statement 2009
Cruise
Total Revenue
100%
100%
100%
Cost of Revenue
65%
72%
76%
Gross Profit
34%
28%
24%
Selling & Admin Exp.
11%
15%
12%
Depreciation Exp.
9%
14%
18%
Operating Expenses
20%
27%
36%
Operating Income
14%
15%
19%
Net Interest
0%
0%
0%
Other Income
0%
1%
0%
Pretax Income
12%
14%
19%
Net Income
12%
13%
5%

48. 48
Appendix 32. The following table illustrates the common sized income statements from 2010.
Carnival
Royal
Norwegian
Caribbean
Common Size Income Statement 2010
Cruise
Total Revenue
100%
100%
100%
Cost of Revenue
62%
76%
80%
Gross Profit
37%
32%
28%
Selling & Admin Exp.
11%
3%
2%
Depreciation Exp.
9%
8%
15%
Operating Expenses
20%
27%
32%
Operating Income
16%
16%
18%
Net Interest
0%
0%
0%
Other Income
0%
2%
0%
Pretax Income
13%
14%
15%
Net Income
13%
10%
3%

49. 49
Appendix 33. The following table illustrates the common sized income statements from 2011.
Carnival
Royal
Norwegian
Caribbean
Common Size Income Statement 2011
Cruise
Total Revenue
100%
100%
100%
Cost of Revenue
62%
76%
80%
Gross Profit
37%
32%
28%
Selling & Admin Exp.
11%
3%
2%
Depreciation Exp.
9%
8%
15%
Operating Expenses
21%
27%
32%
Operating Income
16%
16%
18%
Net Interest
0%
0%
0%
Other Income
0%
2%
0%
Pretax Income
13%
14%
15%
Net Income
13%
10%
15%

50. 50
Appendix 34. The following table illustrates the common sized income statements from 2012.
Carnival
Royal
Norwegian
Caribbean
Common Size Income Statement 2012
Cruise
Total Revenue
100%
100%
100%
Cost of Revenue
62%
84%
82%
Gross Profit
38%
32%
28%
Selling & Admin Exp.
6%
5%
2%
Depreciation Exp.
8%
10%
15%
Operating Expenses
19%
20%
24%
Operating Income
18%
16%
20%
Net Interest
0%
2%
4%
Other Income
0%
2%
1%
Pretax Income
16%
15%
12%
Net Income
15%
10%
6%
Appendix 35. The following graph represents the inventory turnover ratio for Carnival Cruise,
Royal Caribbean, and Norwegian Cruise Line from 2008-2012.

51. 51
Inventory Turnover
60
40
Royal
Carnival Cruises
20
Norwegian Cruises
0
2008
2009
2010
2011
2012
Appendix 36. The following graph represents the days of inventory ratio for Carnival Cruise,
Royal Caribbean, and Norwegian Cruise Line from 2008-2012.
Days of Inventory
20.0
15.0
Royal
10.0
Carnival Cruises
5.0
Norwegian Cruises
0.0
2008
2009
2010
2011
2012
Appendix 37. The following graph represents the total assets inventory ratio for Carnival Cruise,
Royal Caribbean, and Norwegian Cruise Line from 2008-2012.

52. 52
Total Assets Turnover
0.50
0.40
0.30
Royal
0.20
Carnival Cruises
Norwegian Cruises
0.10
0.00
2008
2009
2010
2011
2012
Appendix 38. The following table shows the compensation salary for the top management.
Appendix 39. The following picture illustrates the special offers for Carnival Cruise from
the Carnival Cruise website.
Appendix 40. The following picture shows the Carnival Cruise "Lowest Price Guarantee"
for booking cruises.

53. 53
Appendix 41. The following picture shows the example of Carnival Cruise billboard
advertisement.

54. 54
Appendix 42. The following table illustrates the Common Size Balance Sheet for 2008.
Common Size Balance Sheet 2008
Carnival Royal
Caribbean
Norwegian
Cruise
Total Current Asset
5%
6%
5%
Property and Equipment, Net
79%
84%
82%
Goodwill
10%
5%
12%
Other Assets
6%
5%
1%
Total Assets
100%
100%
100%
Current Liabilities
17%
16%
20%
Long-Term Debt
23%
40%
49%
Other long-term liabilities
2%
3%
1%
Shareholder's Equity
57%
41%
31%
100%
100%
100%
Total Liabilities and Shareholder's Equity

55. 55
Appendix 43. The following table illustrates the Common Size Balance Sheet for 2009.
Common Size Balance Sheet 2009
Carnival Royal
Caribbean
Norwegian
Cruise
Total Current Asset
4%
6%
3%
Property and Equipment, Net
81%
84%
80%
Goodwill
9%
4%
13%
Other Assets
6%
6%
5%
Total Assets
100%
100%
100%
Current Liabilities
13%
15%
10%
Long-Term Debt
25%
42%
53%
Other long-term liabilities
2%
2%
1%
Shareholder's Equity
60%
41%
35%
100%
100%
100%
Total Liabilities and Shareholder's Equity

56. 56
Appendix 44. The following table illustrates the Common Size Balance Sheet for 2010.
Common Size Balance Sheet 2010
Carnival Royal
Caribbean
Norwegian
Cruise
Total Current Asset
3%
5%
2%
Property and Equipment, Net
83%
85%
83%
Goodwill
9%
4%
11%
Other Assets
6%
6%
3%
Total Assets
100%
100%
100%
Current Liabilities
15%
17%
12%
Long-Term Debt
21%
40%
56%
Other long-term liabilities
2%
2%
1%
Shareholder's Equity
61%
40%
31%
100%
100%
100%
Total Liabilities and Shareholder's Equity

57. 57
Appendix 45. The following table illustrates the Common Size Balance Sheet for 2011.
Common Size Balance Sheet 2011
Carnival Royal
Caribbean
Norwegian
Cruise
Total Current Asset
3%
5%
3%
Property and Equipment, Net
83%
86%
83%
Goodwill
9%
4%
11%
Other Assets
5%
6%
3%
Total Assets
100%
100%
100%
Current Liabilities
16%
15%
15%
Long-Term Debt
21%
40%
51%
Other long-term liabilities
2%
2%
1%
Shareholder's Equity
62%
42%
33%
100%
100%
100%
Total Liabilities and Shareholder's Equity

58. 58
Appendix 46. The following table illustrates the Common Size Balance Sheet for 2012.
Common Size Balance Sheet 2012
Carnival Royal
Caribbean
Norwegian
Cruise
Total Current Asset
5%
4%
3%
Property and Equipment, Net
82%
88%
84%
Goodwill
8%
2%
10%
Other Assets
5%
5%
3%
Total Assets
100%
100%
100%
Current Liabilities
19%
21%
16%
Long-Term Debt
18%
35%
47%
Other long-term liabilities
2%
2%
3%
Shareholder's Equity
61%
42%
34%
100%
100%
100%
Total Liabilities and Shareholder's Equity

59. 59
Appendix 47. The following graph illustrates the Liquidity Ratio for Carnival Cruise from 2008.
Appendix 48. The following graph illustrates the Liquidity Ratio for Carnival Cruise from 2009.
Appendix 49. The following graph illustrates the Liquidity Ratio for Carnival Cruise from 2010.

60. 60
Appendix 50. The following graph illustrates the Liquidity Ratio for Carnival Cruise from 2011.

61. 61
Appendix 51. The following graph illustrates the Liquidity Ratio for Carnival Cruise from 2012.
Appendix 52. The following graph illustrates the Leverage Ratios for Carnival Cruise in 2008.

62. 62
Appendix 53. The following graph illustrates the Leverage Ratios for Carnival Cruise in 2009.
Appendix 54. The following graph illustrates the Leverage Ratios for Carnival Cruise in 2010.

63. 63
Appendix 55. The following graph illustrates the Leverage Ratios for Carnival Cruise in 2011.
Appendix 56. The following graph illustrates the Leverage Ratios for Carnival Cruise in 2012.

64. 64
Works Cited
Annual Reports. Carnival Corporation, 5 Feb. 2012. Web. 20 Nov. 2013. <http://phx.corporate-
ir.net/phoenix.zhtml?c=140690&p=irol-reportsAnnual>. "Carnival Cruise
Lines." Carnival.com. N.p., n.d. Web. 20 Nov. 2013. <http://www.carnival.com/>.
Nudd, Tim. "Carnival Cruise Lines Makes a Splash With Clever Out-of-Home Ads |
Adweek." AdWeek.com. Adweek, 1 June 2012. Web. 02 Dec. 2013.
<http://www.adweek.com/adfreak/carnival-cruise-lines-makes-splash-clever-out-home-
ads-140873>.