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, 2006 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 par 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           Name of each exchange on which
              registered                               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 if the registrants are well-known seasoned issuers,
as defined in Rule 405 of the Securities Act. Yes [x] No [ ]

      Indicate by check mark if the registrants are not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes [ ] No [x]

      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
registrants were 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. [x]

      Indicate by check mark whether the registrants are large accelerated
filers, accelerated filers, or non-accelerated filers. See definition of
"accelerated filer and large accelerated filer" in Rule 12b-2 of the Act). Large
Accelerated Filers [x] Accelerated Filers [ ] Non-Accelerated Filers [ ]

      Indicate by check mark whether the registrants are shell companies (as
defined in Rule 12b-2 of the Act). Yes [ ] No [x]

The aggregate market value of the         The aggregate market value of the
voting and non-voting common equity       voting and non-voting common equity
held by non-affiliates computed by        held by non-affiliates computed by
reference to the price at which the       reference to the price at which the
common equity was last sold was $15.98    common equity was last sold was $6.94
billion as of the last business day of    billion as of the last business day of
the registrant's most recently            the registrant's most recently
completed second fiscal quarter.          completed second fiscal quarter.

At February 5, 2007, Carnival             At February 5, 2007, Carnival plc had
Corporation had outstanding 623,106,732   outstanding 213,115,941 Ordinary
shares of its Common Stock, $.01 par      Shares $1.66 par value, one Special
value.                                    Voting Share, GBP 1.00 par value and
                                          623,106,732 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' 2006
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 joint Annual Report on Form 10-K.

Part and Item of the Form 10-K

Part II

Item 5(a) and (c).   Market for Registrants' Common Equity, Related Stockholder
                     Matters, Securities Authorized for Issuance under Equity
                     Compensation Plans 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' 2007 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 and Related Stockholder Matters.

Item 13.             Certain Relationships and Related Transactions.

Item 14.             Principal Accounting Fees and Services.

                                        2



                                      PART I

Item 1. Business.

      A. General

      Carnival Corporation is incorporated in Panama, and Carnival plc is
incorporated in England and Wales. Carnival Corporation and Carnival plc operate
as a dual listed company ("DLC"), whereby the businesses of Carnival Corporation
and Carnival plc are combined through a number of contracts and through
provisions in Carnival Corporation's articles of incorporation and by-laws and
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. Although the two companies have
retained their separate legal identities; they operate as if they were a single
economic enterprise with a single executive management team, and have identical
Boards of Directors. See Note 3, "DLC Structure" to our Consolidated Financial
Statements in Exhibit 13 to this joint Annual Report on Form 10-K. Together with
their consolidated subsidiaries Carnival Corporation and Carnival plc are
referred to collectively in this joint Annual Report on Form 10-K as "Carnival
Corporation & plc," "our," "us," and "we."

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

      As of February 12, 2007, 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                  21            47,818     North America
Princess Cruises ("Princess")          15            32,232     North America
Costa Cruises ("Costa")                11            20,218     Europe
Holland America Line                   13            18,848     North America
P&O Cruises                             5             8,840     United Kingdom
AIDA Cruises ("AIDA")                   4             5,378     Germany
Cunard Line ("Cunard")                  2             4,380     North America and United Kingdom
P&O Cruises Australia                   2             2,474     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               608     North America
                                       --           -------
                                       81           143,676
                                       ==           =======


(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 12, 2007, we had signed agreements with three shipyards
providing for the construction of 20 additional cruise ships scheduled to enter
service between March 2007 and June 2011. These additions are expected to result
in an increase in our passenger capacity of 49,308 lower berths, or 34.3%,
compared to February 12, 2007. 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. Alternatively, it is also possible that we could order
more ships, which could enter service in 2010 and 2011, or acquire more ships,
thus increasing the size of our fleet over this period. See Note 6,
"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 Holland America Tours and
Princess Tours, the leading cruise/tour operators in the State of Alaska and the
Canadian Yukon, which primarily complement their respective cruise operations
and own substantially all the assets noted below. These tour companies currently
market and operate:

-  16 hotels or lodges in Alaska and the Canadian Yukon, with over 3,500 guest
   rooms;

                                        3



-  over 560 motorcoaches used for sightseeing and charters in Washington State,
   Alaska, British Columbia, Canada and the Canadian Yukon;

-  29 domed rail cars, which are run on the Alaska Railroad between Anchorage
   and Fairbanks, Whittier and Denali, and Whittier and Talkeetna;

-  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. Cruise Operations

      I. Industry Background

      The multi-night cruise industry has grown significantly in recent years,
but still remains a relatively small part of the wider global vacation market in
which cruise companies compete for the discretionary income spent by
vacationers. We estimate that the global cruise industry carried approximately
15.7 million passengers in 2006. The principal regions cruise passengers are
sourced from are North America, which has increased by an estimated compound
annual growth rate of 7.8% between 2000 and 2005, and Western Europe where
cruise passengers have increased by a compound annual growth rate of
approximately 10.0% between 2000 and 2005. In Europe cruising represents a
smaller proportion of the overall vacation market than it does in North America
and, accordingly, we believe the European market has considerable growth
potential. Other areas such as Asia, the South Pacific, including Australia and
New Zealand, and South America are a source of much lower numbers of cruise
passengers and we also believe have significant growth potential. See Note 11,
"Segment Information" to our Consolidated Financial Statements in Exhibit 13 to
this joint Annual Report on Form 10-K for information regarding our cruise
revenues.

      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 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, including North America, the UK, Germany, Southern Europe,
South America and Asia/Pacific, with significant product offerings in each of
the three classifications noted above. 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
unrivalled on land or at sea." A brief description of the principal vacation
areas where we source substantially all of our passengers and our brands that
market primarily to these vacationers is as follows:

      II. North America

      Most 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 10.0 million North American-sourced cruise
passengers took cruise vacations for two consecutive nights or more in 2005, and
we estimate this amount increased to about 10.8 million passengers in 2006. This
sector has continued to grow in recent years as new capacity has been
introduced.

      The principal itineraries visited by North American-sourced cruise
passengers in 2006 were the Caribbean, the 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
Far East and India.

                                        4



      At the end of 2006, 127 ships with an aggregate passenger capacity of
approximately 202,000 lower berths were based primarily in North America. Based
on the number of ships that are currently on order worldwide and scheduled for
delivery between 2007 and 2010, we expect that the net capacity serving North
America will continue to increase. Our projections indicate that by the end of
2007, 2008, 2009 and 2010, North America will be served by 129, 135, 140 and 142
ships, respectively, having an aggregate passenger capacity of approximately
210,000, 225,000, 240,000 and 246,000 lower berths, respectively. 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.
Alternatively, our growth estimates for 2010 may increase because of future
shipbuilding orders, which have not yet been announced. Net capacity serving
North American-sourced cruise passengers has increased at a compound annual
growth rate of 5.3% for the past three years. The future growth rate is
currently expected to be 5.8% for the next three years before reductions for
withdrawals or transfers to other parts of the world.

      Carnival Cruise Lines, Princess, Holland America Line, Seabourn and
Windstar source their passengers primarily from North America. Cunard sources
most of its passengers from Europe and North America.

      Carnival Cruise Lines operates 21 contemporary ships, with one additional
ship expected to begin service in each of fiscal 2007, 2008, 2009 and 2011.
Carnival Cruise Lines is the largest cruise line in the world, offers quality
cruise vacations at affordable prices and is well-known as the "Fun Ships,"
which we believe captures the essence of the brand. Carnival is continually
introducing ways to keep its cruise experience fresh and exciting, including
expanded dining choices, Carnival Comfort Bed sleep systems, spectacular
production shows, innovative childrens' programming, revitalizing spa services
and action-packed casinos.

      All of Carnival Cruise Lines' ships were designed by and built for it,
including seven that are among the world's largest. During all or a portion of
the year, three of the Carnival Cruise Lines ships call on ports on the Mexican
Riviera, and substantially all of the rest of the fleet operate for most of the
year to destinations in the Bahamas or the Caribbean. In addition, Carnival
Cruise Lines ships also offer seasonal cruises to Alaska, Canada/New England,
Europe, the Hawaiian Islands, the Panama Canal and Bermuda. Most cruises range
from three to seven days.

      Princess, whose brand name was made famous by the "Love Boat" television
show, recently celebrated its 40th anniversary, and is the world's third largest
cruise line with a fleet of 15 modern ships. Princess offers over 90 unique
itineraries to more than 270 destinations and is a leading cruise line in exotic
regions all over the world (Europe, Alaska, Asia, Australia, the South Pacific
and South America). As part of some of Princess' Caribbean cruise offerings,
Princess leases and operates a private island destination, known as Princess
Cays, which is located on the island of Eleuthra in the Bahamas. Substantially
all of Princess' ships reflect an innovative design philosophy called "Big Ship
Choice, Small Ship Feel," emphasizing a broad variety of amenities combined with
the more intimate ambience found on smaller vessels. All Princess ships feature
the Personal Choice Dining program, offering guests flexibility, convenience and
quality in an array of traditional, anytime, specialty and casual dining
options. A quality service program entitled C.R.U.I.S.E. (Courtesy, Respect,
Unfailing In Service Excellence) helps ensure extremely high standards of
service throughout the fleet.

      Princess is widely recognized among travel agents as an innovative,
premium cruise line. The introduction of the Caribbean Princess and Crown
Princess are the latest in the evolving Grand Class series of vessels, with
their "Movies Under the Stars" outdoor theaters, showing first-run Hollywood
hits on a 300 square foot outdoor poolside LED screen. Further Grand Class Ships
that will be introduced include the Emerald Princess in 2007 and an additional
ship in 2008. More than 57% of each of these Grand Class ship's staterooms will
have balconies; another hallmark of Princess' ships. Princess attracts consumers
with a compelling, highly integrated brand marketing campaign, utilizing the
slogan "Escape Completely" which appears in magazines, newspapers, direct mail,
online, DVD and point-of-sale materials.

      Holland America Line operates a premium fleet of 13 ships, with an
additional ship expected to begin service in 2008. Holland America Line will
offer nearly 500 sailings to all major cruising areas on all seven continents.
Major homeports include New York, Boston,

                                        5



Ft. Lauderdale, Tampa, San Diego, Seattle, Vancouver, Copenhagen, Amsterdam,
Rotterdam, Rome, Rio de Janeiro, Valparaiso, Auckland, Sydney and Hong Kong.
Holland America's ships, which tend to be smaller and more intimate, were
designed with airy viewing lounges, wraparound teak decks and private, roomy
verandahs that offer guests the chance to experience wildlife and scenery.
Cruise lengths vary from two to 114 days with most being seven days or longer.
The majority of Holland America Line's sailings in the Caribbean visit a private
island destination known as Half Moon Cay, which is owned by Holland America
Line.

      In 2006, Holland America Line completed its fleet-wide product and service
enhancement program. These comprehensive enhancements, known as the "Signature
of Excellence," focus on five areas vital to Holland America Line's guest
experience as follows: (1) spacious, elegant ships and accommodations, (2)
sophisticated dining, (3) gracious, unobtrusive service, (4) extensive
enrichment programs and activities and (5) compelling worldwide itineraries.

      Windstar operates three motor-sail yachts known for their casually elegant
atmosphere. In 2007, Windstar will offer sailings in the Caribbean, Europe, the
Americas and the Greek Isles. 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, exquisite
cuisine and an extensive wine selection, open restaurant-style seating,
attentive service, exotic destinations and complimentary water sports. A major
fleet wide enhancement program, known as the "Degrees of Difference," began in
fall 2006 and is expected to be completed in 2007.

      The three Seabourn ships (the "Yachts of Seabourn") deliver personalized
service and superb cuisine aboard each of their 208 passenger capacity all-suite
ships. The Yachts of Seabourn offer an ultra-luxury experience and are
considered the ultimate in cruise travel. These ships offer destinations
throughout 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. Seabourn recently ordered two new 450 passenger
capacity ships, which are expected to begin service in 2009 and 2010.

      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 and is a relatively small percentage of the European vacation
market. Approximately 3.2 million European-sourced passengers took cruise
vacations in 2005 compared to approximately 10.0 million North American-sourced
passengers. Additionally, we estimate that about 3.5 million European-sourced
passengers took a cruise in 2006. The number of European cruise passengers
increased by a compound annual growth rate of approximately 10.0% between 2000
and 2005. We believe that the European market represents a significant growth
opportunity for us, and we plan to introduce a number of new or existing ships
into Europe over the next several years. Approximately 55%, or 26,886 berths, of
our ships under construction have been designated for our European brands.

      At the end of 2006, 104 ships with an aggregate passenger capacity of
approximately 104,000 lower berths were based primarily in Europe. Our
projections indicate that by the end of 2007, 2008, 2009 and 2010, Europe will
be served by 108, 113, 117 and 120 ships, respectively, having an aggregate
passenger capacity of approximately 114,000, 126,000, 136,000 and 144,000 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. Net capacity serving European-sourced cruise passengers has increased
at a compound annual growth rate of 6.5% for the past three years. The future
growth rate is currently expected to be 9.5% for the next three years. Our
estimates of European capacity are based on similar assumptions as discussed
previously for our North American estimates.

            A. United Kingdom

      The UK is the single largest country from which cruise passengers are
sourced in Europe. Approximately 1.1 million UK passengers took cruises in 2005.
Cruising was relatively underdeveloped as a vacation option for the UK consumers
until the mid-1990s, but since then cruising in the UK has grown significantly.
The number of UK cruise passengers increased by a compound annual growth rate of
approximately 7.0% between 2000 and 2005. 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.

                                       6



      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. For example, Princess Cruises' Sea Princess
which is homeported in Southampton during the summer months and Fort Lauderdale
during the winter season has been primarily marketed to UK vacationers since
2005. Cunard sources customers from the UK, North America, Germany, Australia
and the rest of the world.

      P&O Cruises is the largest cruise operator and best known cruise brand in
the UK, with five premium ships, and one additional ship expected to begin
service in each of fiscal 2008 and 2010. These ships cruise to over 200
destinations in more than 90 countries, with most cruises ranging from seven to
14 days, but with some cruises lasting longer, including three world cruises in
each of 2007 and 2008. These ships, which are relatively new compared to the
ships that are more typically marketed in the UK, have enabled P&O Cruises 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 Artemis and Arcadia are child-free ships,
which generally appeal to an older guest demographic, while the rest of the
fleet is well-equipped for children's activities. 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."

      Both Arcadia and Oceana offer a more contemporary and innovative
experience with an informal atmosphere and range of alternative dining venues,
from restaurants and buffets to grills and bistros and the elegant superliners
Aurora and Oriana offer a stylish and classic cruise experience with their broad
decks, traditional artwork and blend of formal and informal onboard experiences.
The Artemis, the smallest ship in the P&O Cruises fleet, offers a more
traditional and intimate experience, her size enabling her to visit ports not
charted by larger vessels as well as fostering a real sense of camaraderie, of
particular appeal to those who enjoy a more formal onboard experience, including
P&O Cruises traditions such as afternoon tea and her program of Music Festivals
at Sea. Each of these different ambiences appeal to a different type of British
passenger. P&O Cruises offers cruises from Southampton, England to the
Mediterranean, the Atlantic Islands, the Baltic, Scandinavia and the Norwegian
Fjords during the summer, and primarily operates Caribbean cruises and a choice
of three world voyages during the winter.

      Under the Cunard brand, which is one of the most widely recognized brands
in the UK, we operate two premium/luxury ships. Cunard's flagship, the Queen
Mary 2, is the largest ocean liner in the world and operates the northern
transatlantic crossing route as well as other itineraries around the world. The
Queen Elizabeth 2, Cunard's former flagship, primarily serves UK-based
passengers from Southampton, England and has offered a world cruise since 1975.
Cunard expects its next ship, the Queen Victoria, to begin service 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
voyages to give passengers a chance to get a taste of the Cunard experience and
the 122-day world cruise, which gives passengers a chance to indulge themselves
during a longer vacation.

      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 Heraklion, Crete in the Mediterranean during the
summer season and from Barbados in the Caribbean during the winter season.

      In spring 2007, the 1,666 passenger capacity AIDAblu, which is currently
operated by AIDA, will transfer to Ocean Village as the Ocean Village Two. The
Ocean Village Two will have Palma, Majorca as a homeport during the summer
season and will have Barbados as a homeport during the winter season, replacing
the Ocean Village which will move its winter homeport to Jamaica.

      Swan Hellenic's 678 passenger capacity Minerva II operates a program of
premium discovery cruises, principally for UK sourced passengers, however, in
April 2007 Swan Hellenic will sail its last cruise and the Minerva II will be
transferred to Princess and renamed the Royal Princess.

                                       7



            B. Southern Europe

      The main countries in southern Europe for sourcing cruise passengers are
Italy, France and Spain. Together, these countries generated approximately 1.1
million cruise passengers in 2005. Cruising by passengers from Italy, France and
Spain had a compound annual growth rate in the number of passengers carried of
approximately 12.8% between 2000 and 2005. We believe that Southern Europe is
also relatively underdeveloped for the cruise industry. We intend to increase
our penetration in southern Europe through Costa, one of the most recognized
cruise brands marketed in Europe.

      Costa operates 11 contemporary ships, with an additional ship expected to
begin service in fiscal 2007, two ships in fiscal 2009 and one ship in 2010.
Costa's ships operate in Europe from spring to fall. From fall to spring Costa
repositions five of its ships to the Caribbean and South America, while also
maintaining a year-round presence with three of its ships in the Mediterranean
region. 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. Headquartered in Italy, Costa offers guests an
international and multi-lingual ambiance with an Italian touch. The Costa ships
call on 114 European and Middle Eastern ports, with 83 different itineraries,
and sail to various other ports in the Caribbean and South America, with most
cruises ranging from seven to 11 days.

      In February 2007, we entered into a letter of intent with Orizonia
Corporation, Spain's largest travel company, which operates its own cruise fleet
under its Iberojet division, to form a joint venture to operate and expand the
existing Iberojet Cruceros brand in Spain. Iberojet Cruceros currently operates
two cruise ships, the 834-passenger Grand Voyager, built in 2000, and the
1,196-passenger Grand Mistral, constructed in 1999, which represent the newest
ships in the contemporary Spanish cruise segment. Under the proposed agreement,
the two existing vessels would be transferred by Iberojet to the joint venture.
The intention is to grow that fleet over the next several years through the
acquisition of existing tonnage from our current fleet. The Iberojet cruise
business being contributed will be valued at E320 million, with E180 million in
debt, representing a net equity value of E140 million. We will pay Iberojet E105
million for our 75% ownership interest in the joint venture and Iberojet will
own the remaining 25%. We cannot be certain that this transaction will
ultimately be completed on these or any other terms.

            C. Germany

      Germany is the largest source for cruise passengers in continental Europe,
with approximately 0.6 million cruise passengers in 2005. Germany had a compound
annual growth rate in the number of cruise passengers carried of approximately
11.0% between 2000 and 2005. 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, the Atlantic
Islands and the Arabian Gulf.

      AIDA, which sources substantially all of its passengers from German
speaking countries, is the clear leader in the German cruise segment. AIDA
operates four contemporary ships, with one additional ship expected to begin
service in each of fiscal 2007, 2008, 2009 and 2010. Each of these new ships has
a passenger capacity 22% larger than the largest ship in AIDA's current fleet.
The new vessels are innovative and high quality, introducing for example the
'Theatrium' as a central meeting place; with a market character that provides a
completely new space concept and new entertainment ideas. Partially offsetting
this capacity increase, the AIDAblu will be transferred to the Ocean Village
brand in spring 2007.

      AIDA's product is especially tailored for the German-speaking market and
offers an exceptionally relaxed, yet active cruising experience with 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 ships primarily offer seven day trips that allow guests to easily
book back-to-back cruise vacations. AIDA allows for an easy selling and booking
experience by offering relatively few cabin categories and two seasons. During
the summer, the AIDA ships sail in the Mediterranean and the North and Baltic
Seas, calling on approximately 50 ports, while itineraries for the winter
include the Caribbean, Central America, the Western Mediterranean, the Atlantic
Islands, the Arabian Gulf and Trans-Suez Canal passages.

      In December 2006, we entered into a letter of intent with TUI AG, Europe's
biggest tour operator, to form a joint venture to develop, market and operate
two cruise brands for

                                       8



the German-speaking holiday market. Under the proposed agreement, AIDA Cruises
will be contributed by us to the joint venture in which TUI will buy an
interest. In addition, a new TUI Cruises brand will be created that will target
a different segment of the German cruise market from AIDA Cruises. AIDA's
business was valued at 1.9 billion euros ($2.51 billion based on the November
30, 2006 exchange rate) for inclusion in the joint venture, which will be formed
with 600 million euros ($792 million based on the November 30, 2006 exchange
rate) of indebtedness. The letter of intent provides for TUI to initially
purchase 5% of the joint venture in 2007, and it is expected that they will
purchase another 20% in 2010. The purchase price will be paid to us in cash at
the closing of each transaction based on a net equity value of 1.3 billion euros
($1.72 billion based on the November 30, 2006 exchange rate). If the initial 5%
purchase closes in 2007, Carnival would expect to record a pretax gain of
approximately $80 million. Another gain would be recorded at the time of closing
of the subsequent 20% purchase in 2010. Apart from those gains, we believe that
the transaction will be neutral to earnings for the 12-month period following
the transaction closing, which is expected in the first half of 2007, pending
approval of both companies and regulators. We cannot be certain that this
transaction will ultimately be completed on these or any other terms.

      IV. Australia, New Zealand and China

      Cruising in Australia continues to develop. Approximately 195,000
Australians took cruise vacations in 2005. We serve this region primarily
through P&O Cruises Australia, which is the leading cruise line in Australia and
New Zealand.

      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 Star, offer seven to 14 day cruises from Sydney, Brisbane and Auckland
to Fiji, New Caledonia, Queensland and Vanuatu. In late 2007, the Regal Princess
will be transferred from Princess to P&O Cruises Australia and will sail as the
Pacific Dawn. In addition, Princess homeports the Pacific Princess in Sydney,
Australia for a part of the year where it offers cruises to New Zealand.

      In July 2006 Costa began homeporting the Costa Allegra out of Shanghai,
China to cater primarily to the Chinese market. China is a new and untested
market and Costa is the first international cruise line to homeport a ship there
and source its passengers primarily from China. The ship operates five-day
cruises from Shanghai, China to Nagasaki, Japan and Cheju, South Korea in the
summer and it began operating five-day cruises from Hong Kong, China to Hainan
Island, China and Halong Bay, Vietnam for its 2006 winter season. We cannot be
certain that China or other markets will develop as expected.

      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 will operate two vessels in 2007 in this region, Costa
Fortuna and Costa Romantica, collectively offering 4,046 lower berths.

                                       9



VI. Ship Information

Summary information of our ships as of February 12, 2007 is as follows:

                                                  CALENDAR
                                                     YEAR        PASSENGER
     BRAND AND SHIP                 REGISTRY      DELIVERED       CAPACITY
     --------------                 --------      ---------      ---------
     Carnival Cruise Lines
     Carnival Liberty                Panama          2005           2,966
     Carnival Valor                  Panama          2004           2,966
     Carnival Miracle                Panama          2004           2,120
     Carnival Glory                  Panama          2003           2,968
     Carnival Conquest               Panama          2002           2,966
     Carnival Legend                 Panama          2002           2,120
     Carnival Pride                  Panama          2001           2,120
     Carnival Spirit                 Panama          2001           2,122
     Carnival Victory                Panama          2000           2,750
     Carnival Triumph                Bahamas         1999           2,750
     Paradise                        Panama          1998           2,048
     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                                 47,818
                                                                   ------

     Princess
     Crown Princess                  Bermuda         2006           3,080
     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               Bermuda         2000             668
     Pacific Princess                Bermuda         1999             668
     Sea Princess                    Bermuda         1998           2,016
     Grand Princess                  Bermuda         1998           2,592
     Dawn Princess                   Bermuda         1997           1,998
     Sun Princess                    Bermuda         1995           2,022
     Regal Princess(a)               Bermuda         1991           1,596
                                                                   ------
       Total Princess                                              32,232
                                                                   ------

     Costa
     Costa Concordia                 Italy           2006           2,978
     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(b)                Italy           1992             784
     Costa Classica                  Italy           1991           1,302
     Costa Marina                    Italy           1990             762
     Costa Europa                    Italy           1986           1,488
                                                                   ------
       Total Costa                                                 20,218
                                                                   ------

                                       10



                                                  CALENDAR
                                                    YEAR         PASSENGER
     BRAND AND SHIP                  REGISTRY     DELIVERED       CAPACITY
     --------------                  --------     ---------      ---------
     Holland America Line(c)
     Noordam                        Netherlands      2006           1,918
     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                        Netherlands      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                                  18,848
                                                                   ------

     P&O Cruises
     Arcadia                        Bermuda          2005           1,948
     Oceana                         Bermuda          2000           2,016
     Aurora                         UK               2000           1,870
     Oriana                         Bermuda          1995           1,818
     Artemis                        Bermuda          1984           1,188
                                                                   ------
       Total P&O Cruises                                            8,840
                                                                   ------

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

     Cunard
     Queen Mary 2                   UK               2003           2,592
     QE2                            UK               1969           1,788
                                                                   ------
       Total Cunard                                                 4,380
                                                                   ------

     P&O Cruises Australia
     Pacific Sun                    UK               1986           1,480
     Pacific Star                   UK               1982             994
                                                                   ------
       Total P&O Cruises Australia                                  2,474
                                                                   ------

     Ocean Village
     Ocean Village                  UK               1989           1,578

     Swan Hellenic
     Minerva II(e)            Marshall Islands       2001             678

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

     Windstar
     Wind Surf                      Netherlands      1990             312
     Wind Spirit                    Bahamas          1988             148
     Wind Star                      Bahamas          1986             148
                                                                  -------
       Total Windstar                                                 608
                                                                  -------
       Total                                                      143,676
                                                                  =======

(a)   The Regal Princess will be transferred to P&O Cruises Australia in October
      2007 and renamed the Pacific Dawn.

                                       11



(b)   The Costa Allegra has been marketed primarily to Chinese-sourced
      passengers since the summer of 2006.

(c)   Since November 2004, the 1,214 passenger former Noordam is being operated
      by an unrelated entity under a long-term bareboat charter agreement and,
      accordingly, is excluded from Holland America Lines' capacity.

(d)   The AIDAblu will be transferred to Ocean Village in the spring of 2007 and
      renamed the Ocean Village Two.

(e)   The Minerva II will be transferred to Princess in April 2007 and renamed
      the Royal Princess.

      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 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 opportunities 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, the war in Iraq, 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. During 2004 and 2005 the cruise industry had very robust years,
which saw significant increases in both capacity and net revenue yields. During
2006, the cruise industry continued to experience solid growth for its
non-Caribbean product offerings, however, there were a number of factors, such
as a weaker U.S. economy, including the impact of higher fuel costs and higher
U.S. interest rates, and the after effects of the devastating 2005 hurricane
season, which we believe had adverse effects on vacationers' discretionary
income and this group's confidence in the U.S. economy. These factors
contributed to a reduction in North American demand for Caribbean cruises and,
accordingly, resulted in lower pricing for most of our Caribbean cruise
itineraries, especially our shorter duration cruises. Factors such as these or
others could adversely impact future cruise industry growth if they were to
occur or continue to exist in the future.

            B. Wide Appeal of Cruising

      Cruising appeals to a broad demographic range. Industry surveys estimate
that there are approximately 127 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 size of the North American population
between ages 45 and 74 is expected to increase 17% between 2007 and 2017. 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 higher cruising penetration rates than do cruise markets
in Europe and Asia. Nevertheless, based upon information obtained from the
Cruise Lines International Association, or CLIA, a leading trade group in the
U.S., only approximately 17% of the U.S. population has ever taken a cruise and
only 10% has done so in the past three years. 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 estimated to be
less than 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.

                                       12



      VIII. Passengers, Capacity and Occupancy

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

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

                   2002      3,549,000     67,282      105.2%
                   2003      5,038,000    113,296      103.4%
                   2004      6,306,000    129,108      104.5%
                   2005      6,848,000    136,960      105.6%
                   2006      7,008,000    143,676      106.0%

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

(b)   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 67,282 berths at November 30, 2002
to 143,676 berths at November 30, 2006, primarily because of the deliveries of
18 new cruise ships during this four-year period and the 34,428 berths added as
a result of the DLC transaction with P&O Princess during 2003. See Part I, Item
l. Business, B. - "Cruise Operations-Ship Information" for additional
information.

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

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

                  February 28, 2005            103.8%
                  May 31, 2005                 104.8%
                  August 31, 2005              110.9%
                  November 30, 2005            102.7%
                  February 28, 2006            104.2%
                  May 31, 2006                 105.4%
                  August 31, 2006              111.0%
                  November 30, 2006            103.4%

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

      As of February 12, 2007, we had signed agreements with three shipyards
providing for the construction of 20 additional cruise ships scheduled to enter
service between March 2007 and June 2011. See Note 6, "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 long-term port usage agreements. During 2006, we were
involved in the development and enhancement of cruise port facilities in
Barcelona, Spain, New York City, New York, Miami, Florida and Naples, Italy. In
addition, we are in the process of, or have recently completed negotiations for,
the development of several other port facilities to service our North American
and European guests, including, but not limited to, facilities in Civitavecchia,
Italy, Roatan, Honduras and San Diego, California. In October 2005, our pier
facility in Cozumel, Mexico was destroyed by Hurricane Wilma. This was one of
our busiest transit ports in the world and served over 1.2 million passengers in
2005. We have begun rebuilding this pier and expect to complete construction in
late-2008.

      Finally, we currently operate other port facilities in Long Beach,
California, Grand Turk, Turk and Caicos Islands, Juneau, Alaska and Savona,
Italy pursuant to concession agreements with governmental authorities and other
third parties. Our Long Beach terminal is one of the home ports for Carnival
Cruise Lines' U.S. West Coast sailings to Mexico, as well as a transit port for
some of our other brands. Finally, the Savona terminal is the home port for a
number of Costa's ships, which sail in the Mediterranean Sea.

                                       13



      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 brands' payment terms generally require that a
passenger pay a deposit to confirm their reservations with the balance due
before the departure date, although 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, our advance bookings have generally been 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 provides 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 - see "Key
Performance Indicators" in our Management Discussion and Analysis of Financial
Condition and Results of Operations in Exhibit 13 to this joint Annual Report on
Form 10-K. In addition, some of our fares such as Carnival Cruise Lines'
Supersaver fares, Costa's Pronto Price Savings fares, Holland America Line's
Early Savings and Mariner Savings fares and Princess's Loveboat Savers plan, are
designed to encourage potential passengers to book cruise reservations earlier.
In addition, AIDA has a "JustAIDA" booking program that allows guests to make a
reservation two to three months before sailing, but the exact cruise ship and
specific itinerary are not determined by AIDA until two weeks prior to sailing
in order to help AIDA maximize their net revenue yields.

      When a passenger elects to purchase air transportation from us, both our
cruise revenues and cruise 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
competitively-priced air tickets sold by third parties.

      XI. Onboard and Other Revenues

      We earn onboard and other revenues from onboard activities and services
not included in the cruise ticket price consisting of, 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, enhanced dining experiences in alternative restaurants,
video diaries, golf lessons, snorkel equipment rentals, internet and telephone
usage and onboard promotional advertising for merchants located at our ports of
call.

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

      Sales to our passengers of shore excursions at each ship's ports of call
include, among other things, general sightseeing and adventure outings and local
boat and beach parties. For the Holland America Line and Princess ships and our
other brands operating to destinations in Alaska, shore excursions are operated
by Holland America Tours and Princess 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. 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, and/or San Diego, California. Packages offered in Europe generally include
up to four-night vacations, including stays in well-known European cities such
as Athens, Greece, Barcelona, Spain, Copenhagen, Denmark, London, England,
Paris, France and Rome, Italy.

                                       14



      In conjunction with our Alaska cruise vacations, principally on our
Holland America Line, Princess 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, including wholesalers
and tour operators. Our individual cruise brands' relationships with their
travel agents are generally independent of each of our other brands, except for
certain brands sourcing UK and Australian passengers as discussed below. 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 2006,
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 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. Each brand has its own website, which
provides access to information about our products to 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
television, magazine, newspaper and radio advertisements and promotional
campaigns. To stimulate demand we have also been offering more home port
locations, which enable certain guests to lower the price of their cruise
vacation by substantially reducing or eliminating the cost of air travel to and
from the port.

      In addition, in both the UK and Australia we have formed a sales alliance
known as the "Complete Cruise Solution," whereby our UK and Australian sales
forces and back-office operations are able to provide their customers with
one-stop cruise shopping for a number of our brands. Finally, we have
established the World's Leading Cruise Lines ("WLCL") 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 revenues from the sale of passenger tickets are seasonal.
Historically, demand for cruises has been greatest during our third fiscal
quarter, which includes the Northern Hemisphere summer months. 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.
The seasonality of our results is also increased due to ships being taken out of
service for maintenance, which we typically schedule during non-peak demand
periods. In addition, substantially all of Holland America Tours' and Princess
Tours' revenues and net income are generated from May through September in
conjunction with the Alaska cruise season.

                                       15



      XIV. Competition

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

      Our primary cruise competitors for contemporary and premium North
American-sourced passengers are Royal Caribbean Cruises Ltd., which owns Royal
Caribbean International and Celebrity Cruises, Star Cruises Limited, which owns
NCL Corporation Ltd., which is comprised of Norwegian Cruise Line, NCL America
and Orient Lines, Disney Cruise Line, Mediterranean Shipping Company, which owns
MSC Cruises, and Crystal Cruises.

      Our primary cruise competitors for European-sourced passengers in the UK
are Royal Caribbean International, Island Cruises, Fred Olsen Cruise Lines,
Discovery Cruises, Saga Cruises, and Thomson Cruises, which is owned by TUI; in
Germany they are MSC Cruises, Hapag-Lloyd, which is owned by TUI, Peter
Deilmann, Phoenix Reisen and Transocean Cruises; and in Southern Europe they are
MSC Cruises, Louis Cruise Line, Pullmantur, which is owned by Royal Caribbean
Cruises Ltd., and Iberojet. We also compete for passengers throughout Europe
with Celebrity Cruises, Norwegian Cruise Line and Orient Lines.

      Our primary cruise competitors for our Seabourn and Windstar luxury brands
include Regent Seven Seas Cruises, Seadream Yacht Club 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,
Italy, the Marshall Islands, the Netherlands, Panama and the UK and,
accordingly, are regulated by these jurisdictions and by the international
conventions that govern the safety and environmental impact of our ships, guests
and crew members. 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 and the many
other international ports that our ships visit 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 requirements for vessel design,
structural features, materials, construction, life saving equipment, safe
management and operation and security in order to help ensure passenger and crew
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 that nation's waters.

      In December 2004, the Maritime Safety Committee approved for adoption
amendments to SOLAS chapter II-I Parts A & B that relate to the damage stability
of new cruise passenger vessels. These regulations were adopted in May 2005, and
are applicable to those vessels whose keels are laid after January 1, 2009.
Although the new standards do not affect our existing fleet or our vessels
currently under contract whose keels will have been laid prior to January 1,
2009, compliance with these standards for ships whose keels are subsequently
laid will require the development of new designs, which will increase costs.

                                       16



      The most important convention regulating and preventing marine pollution
by ships is the IMO International Convention for the Prevention of Pollution
from Ships ("MARPOL"), as amended. This convention applies to all of our ships
and covers accidental and operational oil pollution as well as pollution by
various items including, but not limited to, sewage, garbage and air emissions.

      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 at 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 U.S. Customs and Border
Protection, 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 are also subject to various security requirements,
primarily including the International Ship and Port Facility Security Code
("ISPS Code"), which is part of SOLAS. Among other things, the ISPS Code
requires 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 have been
issued demonstrating compliance with the ISPS Code. For ships that are
registered in the U.S. or have operations located in the U.S. the Maritime
Transportation Security Act of 2002 ("MTSA") is the governing regulation. The
MTSA establishes 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.

      In 2006, the International Labour Organization ("ILO"), adopted a new
Consolidated Maritime Labour Convention (the "Convention"). The ILO is also an
agency of the United Nations that develops worldwide employment standards. There
have been over 60 maritime labor conventions and recommendations developed since
1920 in areas such as minimum age of seafarers, medical certificates,
recruitment practices, health and welfare, hours of work, and social security.
The Convention is a comprehensive instrument that consolidates all of the
existing standards and recommendations into one instrument to reflect modern
conditions and language that will govern all aspects of crew management for all
ships in international commerce. While many of the practices, were widely
adhered to by ships registered in different countries, this consolidated
Convention will place additional requirements on shipowners not previously in
effect. Thirty member countries representing 33% of the world's merchant ship
tonnage will be required to ratify the Convention before it goes into effect 12
months after such ratification. We currently expect the Convention to be
effective for our ships in 2010 based on an expected European Unions ("EU")
ratification in 2008 or early 2009. Accordingly, if ratified, the Convention may
increase our 2010 and subsequent crew costs.

      We believe that health, environmental, 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. Such permits must be periodically
renewed and we cannot be certain 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.

                                       17



            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 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 MARPOL convention, 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 operating therein. 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 waterways or
seacoasts 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"). 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. These certificates are required to
be issued during the three-year period ending in May 2008. 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 MARPOL and other European Union ("EU")
regulations may increase our operating costs, including the cost of fuel,
beginning in November 2007 for ships operating in the North Sea and the English
Channel. Further EU regulations regarding the use of low sulphur fuel on
passenger ships on regular service to or from EU ports has recently been
introduced. Our current understanding is that these EU regulations do not apply
to cruise ships, however, we cannot be certain that our understanding is
correct.

                                       18



      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.

      The International Organization for Standardization ("ISO") is an
international standard-setting body, which produces worldwide industrial and
commercial standards. ISO 14001 is one of the series of ISO 14000 environmental
management standards that were developed to help organizations manage their
processes, products and services to minimize environmental impacts. ISO 14001
presents a structured approach to setting environmental objectives and targets,
and provides a framework for any organization to apply these broad conceptual
tools to their own processes. During 2006, we completed our corporate-wide
implementation and received certification of our ISO 14001 Environmental
Management System at all our ship operating companies.

      In December 2006 the Maritime Safety Committee, which is the safety body
at the IMO, approved the adoption of amendments to SOLAS Ch II-2 that relate to
passenger ship balconies. These regulations will enter into force on July 1,
2008 and impose stricter limits on combustible materials and apply to both new
and existing ships. As of February 12, 2007, we anticipate that all our ships
including recent newbuild contracts, those currently under construction and our
existing ships will meet these requirements.

      In addition, there are a number of safety related amendments that will
enter into force in July 2010 many of which are already being incorporated into
our current newbuilds. These include requirements for safety centers, emergency
cabin lighting, local sounding audible alarms, and amendments to fire detection
systems. Finally, the enhanced safe return to port requirements also enter into
force for keels laid after July 2010. Our current newbuilds meet existing
requirements, and do not need to comply with these new standards, but future new
designs are being developed that will meet these new requirements.

      From time to time, environmental, health and safety regulators consider
more stringent regulations which may affect our operations and increase our
compliance costs. As evidenced from certain of 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 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 1A. "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. See Part 1, Item 1. Business, E. -
"Insurance - Other Insurance" 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, E. - "Insurance-Other
Insurance" for additional discussion.

      We are also required by German and French 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.

                                       19



      We believe we have all material 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 1A. "Risk Factors" for a discussion of
other regulations which impact us.

      XVI. Financial Information

      For financial information about our cruise reporting segment and
geographic information with respect to each of the three years in the period
ended November 30, 2006, see Note 11, "Segment Information" to our Consolidated
Financial Statements in Exhibit 13 to this joint Annual Report on Form 10-K.

      C. Employees

      Our shoreside operations have approximately 10,100 full-time and 4,600
part-time/seasonal employees. We also employ approximately 60,000 officers, crew
and staff onboard our 81 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, transportation
and ship operations. We consider our employee and union relations generally to
be good.

      We source our shipboard officers primarily from Italy, the UK, Holland,
Germany and Norway. 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.

      D. Suppliers

      Our largest purchases are for travel agency services, fuel, advertising,
food and beverages, hotel and restaurant supplies and products, airfare, repairs
and maintenance, including dry-docking, port facility utilization, communication
services and for the construction of our ships. Although we utilize a select
number of suppliers for most of our food and beverages and hotel and restaurant
supplies and products, most of these items are available from numerous sources
at competitive prices. The use of a select 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 Australia, the Bahamas, British Columbia, Canada, the Caribbean,
Europe and the U.S. Finally, as of February 12, 2007, we have agreements in
place for the construction of 20 cruise ships by three shipyards. We believe
there are sufficient dry-dock and shipbuilding facilities to meet our
anticipated repair, maintenance, refurbishment and newbuild requirements.

      E. 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. We cannot be certain 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, some of
which have increased in recent years, and we may increase our self insurance
levels further 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

                                       20



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

      We maintain war risk insurance coverage for liability and physical damage,
subject to coverage limits and exclusions for claims such as those arising from
chemical, nuclear and biological attacks, on all of our ships covering our legal
liability to crew, passengers and other third parties as well as loss or damage
to our vessels arising from war or war-like actions, including terrorist risks.
This coverage is provided by international marine insurance carriers. Under the
terms of our war risk insurance coverage, 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.

      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 L104 million ($203 million U.S.
dollars at November 30, 2006 exchange rate) and L52 million ($103 million U.S.
dollars at the November 30, 2006 exchange rate), 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
and certain port facility assets, as well as appropriate workers' compensation
policies.

      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, a vessel's flag state or the port state
that has ratified it may enforce the 1976 Athens Convention Protocol with regard
to vessels registered under its flag or visiting a port located in its
jurisdiction.

      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 by the U.S. or any of our flag states, requires substantial levels 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 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
uncertain. We cannot be certain 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 would increase.

                                       21



      F. Trademarks and Other Intellectual Property

      We own and have registered, or licensed, 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" to our Consolidated Financial Statements in Exhibit 13
to this joint Annual Report on Form 10-K.

      G. 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, to the extent 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 the year ended 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 regulations as not incidental to ship operations are income
from the sale of air transportation, shore excursions and pre- and post cruise
land packages deemed to be from sources within the United States. In addition,
during the last quarter of 2005 and the first quarter of 2006, we chartered
three vessels to the Military Sealift Command in connection with the Hurricane
Katrina relief effort. Income from these charters is not considered to be income
from the international operation of our ships and, accordingly, income taxes
have been provided on the net earnings of these charters.

      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 U.S. source income
derived from, or incidental to, the international operation of a ship or ships.
Effective for our year ended November 30, 2005 and thereafter, 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").
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 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

                                       22



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 shares of stock
owned by an investment company registered under the Investment Company Act of
1940.

      We believe that Carnival Corporation currently qualifies as a publicly
traded corporation under the 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 37% 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 the future, Carnival Corporation were to
fail to qualify as a publicly traded corporation, it and all of its ship-owning
or operating subsidiaries that rely on Section 883 for exempting cruise
operations income would be subject to U.S. federal income tax on their U.S.
source cruise operation income. 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 would continue to qualify as a
publicly traded corporation under these regulations when they were originally
proposed. As applied to Carnival Corporation, the final regulations are
substantially the same as the proposed 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, without the consent of Carnival Corporation's Board of
Directors. Unless Board consent is provided, 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 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 U.S. source shipping income from Carnival plc and its
UK and Italian resident subsidiaries currently qualify for exemption from U.S.
federal income tax

                                       23



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
exemption under Section 883, 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. 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.

      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 federal 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 Income Tax

      Cunard, Ocean Village, P&O Cruises, P&O Cruises Australia and Swan
Hellenic have all 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 the normal UK tax rules on these brands' operating relevant
shipping income. Relevant shipping income includes income from the operation of
qualifying ships and 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.

                                       24



      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.

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

      Italian and German Income Tax

      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. The majority of the profits earned by our German brands are
exempt from German corporation taxes by virtue of the Italy/Germany double tax
treaty.

      During the 2005 third quarter, Costa elected to enter into the Italian
Tonnage Tax regime, effective for its 2005 fiscal year and for the following
nine years. This regime taxes Costa's and AIDA's shipping profits, as defined,
which is most of Costa's and AIDA's income, calculated by reference to the net
tonnage of its qualifying vessels. However, most of the income not considered to
be shipping profits for Italian Tonnage Tax purposes will be taxed under the
Italian tax regime for Costa and AIDA's Italian-registered ships.

      Australian Income Tax

      P&O Cruises Australia is a division of Carnival plc, and the income from
this operation, is subject to UK tonnage tax as discussed above. The majority of
this operation's profits are exempt from Australian corporation taxes by virtue
of the UK/Australian tax treaty.

      State Taxes

      In addition to the U.S. federal income and branch level taxes discussed
above, Carnival Corporation & plc and certain of its affiliates are subject to
various U.S. state income taxes generally imposed on each states portion of the
U.S. source income subject to federal income taxes.

      In addition, in August, 2006 the State of Alaska passed Ballot Initiative
2 (the "Initiative") which, among other things, imposes a tax on cruise
passengers sailing in Alaskan waters. The Initiative took effect at the
beginning of 2007 and imposes 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, expands the amount of commercial passenger vessel
income that is subject to Alaska corporate state income taxes and assesses a 33%
tax on income from onboard gambling. The Initiative also imposes a number of
other regulations, reporting and operational requirements on cruise vessel
operators.

      H. 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 pages at www.carnivalcorp.com and
www.carnivalplc.com.

Item 1A. Risk Factors.

      You should consider carefully the specific risk factors set forth below
and 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. You should note that the risks described below are not the only risks
we face. The risks listed below are only those risks relating to our operations
that we consider material. There may be additional risks, that we currently
consider not to be material, or which we are not currently aware of, that could
have an adverse effect on our future 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" section below.

                                       25



o           General economic and business conditions may adversely impact the
            levels of our potential vacationers' discretionary income and this
            group's confidence in the U.S. economy and, consequently, reduce our
            brands' net revenue yields and profitability.

      Demand for cruises is dependent on the underlying economic strength of the
countries from which cruise companies source their passengers. Adverse changes
in the economic climate, such as higher fuel prices, higher interest rates and
changes in governmental policies could reduce the discretionary income or
consumer confidence in the countries from which we source our guests.
Consequently this may negatively 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.

o           International political 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 and
security of travel. 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. Decreases in demand could lead
to price discounting which, in turn, could reduce the profitability of our
business.

o           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. In addition, we may need to enhance
our older ships with current amenities in order for those ships to be more
competitive with other cruise ships. Our principal competitors include the
companies listed in this joint Annual Report on Form 10-K under Part 1, Item 1.
Business, B. - "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.

o           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. 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.

o           Accidents, unusual weather conditions or natural disasters and other
            incidents affecting the health, safety, security and vacation
            satisfaction of passengers could have an adverse affect on our sales
            and profitability.

                                       26



      The operation of cruise ships involves the risk of accidents, including
those caused by the improper operation of our ships, passenger and crew
illnesses such as the spread of contagious diseases, mechanical failures, fires,
collisions 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.
In addition, our cruises and port facilities may be impacted by unusual weather
patterns or natural disasters, such as hurricanes and earthquakes. For example,
in 2005 Hurricane Wilma caused the temporary closing of cruise ports in South
Florida and also destroyed our pier facility in Cozumel, Mexico, which is not
expected to re-open until late-2008. It is possible that we could be forced to
alter itineraries or cancel a cruise or a series of cruises due to these or
other factors, which would have an adverse affect on sales and profitability.

o           Adverse publicity concerning the cruise industry in general, or us
            in particular, could affect our reputation and harm our future sales
            and profitability.

      Maintaining a good reputation is critical to our business. Reports,
whether true or not, of ship accidents and other incidents at sea or while in
port, missing passengers, inappropriate crew or passenger behavior, passenger or
crew illnesses such as incidents of stomach flu or other contagious diseases,
security breaches, terrorist threats and attacks and other adverse events can
result in negative publicity. Anything that damages our reputation (whether or
not justified), including adverse publicity about the safety and passenger
satisfaction of cruising, or the vacation industry in general, could have an
adverse affect impact on demand, which could lead to price discounting and a
reduction in our net income.

o           We are subject to many economic and political factors, including
            changes in and compliance with numerous rules and regulations that
            are beyond our control, which could result in increases in our
            operating, financing and tax costs and could harm future sales and
            profitability.

      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.

      For example, in 2006, 2005 and 2004 fuel costs accounted for 14.4%, 11.9%
and 9.3%, respectively, of our total cruise operating expenses. Economic and
political conditions in certain parts of the world make it difficult to predict
the price of fuel in the future. Future increases in the cost of fuel globally
would increase the cost of our cruise ship operations.

      In addition, the State of Alaska recently instituted new state taxes which
will impact the cruise industry operating in Alaska, and could result in a
reduction in demand for Alaska cruises. It is possible that other states,
countries or ports of call that we regularly visit may decide to also assess new
taxes specifically targeted to the cruise industry, which could increase our
operating costs and/or could decrease the demand for cruises and ultimately
decrease our net revenue yields.

      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 charged to our passengers.

o           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 IMO 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 Part I, Item 1. Business, B. - "Cruise
Operations - Governmental Regulations" for additional information.

                                       27



      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.

o           New regulations of health, safety, security and other regulatory
            issues could increase our operating costs or negatively effect our
            bookings and future net revenue yields and adversely affect net
            income.

      We are subject to various international, national, state and local health,
safety and security laws, regulations and treaties. See Part I, Item 1.
Business, B. - "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.

      Pursuant to the Western Hemisphere Travel Initiative, by the earlier of
June 1, 2009 or 90 days after the sanctioning of a People Access Security
Service ("PASS") card, U.S. citizens will be required to carry a passport or, if
available, a PASS card, for travel by land or sea to or from certain
countries/areas that are currently exempt from passport requirements, such as
the Caribbean, Canada and Mexico. The State Department and the Department of
Homeland Security are collaborating on the development of a PASS card system.
The PASS card is a secure credential that verifies the citizenship and identity
of U.S. nationals who re-enter the United States and is seen as a less expensive
alternative to a passport.

      Since many cruise customers visiting these destinations may not currently
have passports or may not obtain a PASS card if and when available, it is likely
that this will have some negative effect on our bookings and future net revenue
yields when the regulations take effect. There are a number of factors that
could influence the ultimate impact of these regulations, such as customer
travel patterns, the cost and ease of obtaining PASS cards, customer price
sensitivity and the cost and effectiveness of mitigating programs we and others
have established or will establish.

o           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,
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 partially mitigated by contractual provisions and refund
guarantees obtained by us. In addition, the consolidation of the European cruise
shipyards in recent years could result in higher prices for future new ship
orders, which could reduce our profitability.

      Finally, as of November 30, 2006, we had entered into foreign currency
swaps to fix the cost in sterling of two of our euro denominated shipbuilding
contracts. If the shipyard with which we have contracted is unable to perform
under the related contracts, 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 gain on our foreign currency denominated
shipbuilding contracts, thus resulting in an adverse effect on our financial
results.

o           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, on terms that are favorable or consistent with 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

                                       28



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.

o           Geographic regions in which we try to expand our business may be
            slow to develop, and ultimately not develop how we expect, thus
            resulting in the slower growth of our business.

      As we expand our global presence, we enter into new developing markets,
which require, among other things, certain start-up costs that we may not be
able to recover through future revenues that these new markets will generate. In
addition, we cannot be certain that these markets will ultimately develop as we
expect. Accordingly, our business expansion plans may not produce the returns
that we had expected. For instance, we recently entered the Chinese market, and
it is currently too early to determine if it will develop as expected.

o           We rely to a large extent on scheduled commercial airline services
            for guest connections and, therefore, increases in the price of, or
            major changes or reduction in commercial airline services, could
            undermine our ability to provide reasonably priced vacation packages
            to our guests.

      Some of our guests depend on scheduled commercial airline services to
transport them to or from the ports where our cruises embark or disembark.
Increases in the price of airfare would increase the overall vacation price to
our guests and may adversely affect demand for our cruises. In addition, changes
in commercial airline services as a result of strikes, weather or other events,
or the lack of availability due to schedule changes or a high level of airline
bookings could adversely affect our ability to deliver guests to or from our
cruise ships and increase our cost of sales which would, in turn, have an
adverse effect on our results of operations.

o           We rely on external sales distribution channels for most of our
            guests bookings and, therefore, major changes in the costs or
            availability of external distribution channels could result in a
            reduction in our sales revenues and net income.

      In 2006, the vast majority of our guests booked their cruises through
independent travel agents, wholesalers and tour operators. These parties
generally sell and market our cruises on a nonexclusive basis. Although we offer
commission and other incentives to them for booking our cruises that are
comparable to those offered by others in the cruise industry, there can be no
guarantee that our competitors will not offer higher commissions and incentives
in the future. In addition, significant disruptions or contractions to these
businesses could have an adverse effect on our sales and related commission
costs.

o           The decision to self-insure against various risks or the inability
            to obtain insurance for certain risks at reasonable rates could
            result in higher expenses.

      We seek to maintain comprehensive insurance coverage at commercially
reasonable rates. We believe that our current coverage is adequate to protect us
against most of the significant risks involved in the conduct of our business,
although we do elect to self-insure or use higher deductibles for various risks
to minimize the cost of our insurance coverage. Accordingly, we are not
protected against all risks, which could result in unexpected increases in our
expenses in the event of an incident.

      In addition, a new protocol to the Athens Convention is in the process of
being ratified, which would require some passenger ship operations to maintain
insurance or some other form of financial security, to cover the limits of
liability under the Athens Convention. If the protocol is ratified, we cannot be
certain that affordable and viable insurance markets will be available to
provide the required coverages. If the new protocol is ratified we expect our
insurance costs to increase.

                                       29



      Finally, we may also be subject to additional premium costs, in amounts
based not only on our own claim records, but also on the claim records of all
other members of the protection and indemnity associations through which we
receive indemnity coverage for tort liability. If we, or other members of our
P&I associations, were to sustain significant losses in the future, our ability
to obtain insurance coverage or coverage at commercially reasonable rates could
be materially adversely affected.

o           Disruptions to our information technology networks could result in
            decreases in our net income.

      Our ability to increase revenues and decrease costs, as well as our
ability to serve passengers most effectively, depends in part on the reliability
of our information technology ("IT") networks. We use software and other IT
systems to, among other things, manage our inventory of cabins held for sale and
set their pricing in order to maximize our revenues, and to optimize the
effectiveness and efficiency of our shoreside and shipboard operations. Any
disruption to these computer systems could adversely impact our customer
service, decrease the volume of our business and result in increased costs.
While we have invested and continue to invest in IT security initiatives and
disaster recovery plans, these measures cannot insulate us from IT disruptions
that could result in adverse effects on our operations and net income.

o           The continued availability 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 guests 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, rebuild and increase our ports of call could
adversely affect our net revenue yields and net income.

o           The DLC structure 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 our DLC structure, the combination is 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 our DLC structure. 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 has an adverse effect on our operating efficiency.

o           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' or states'
            income tax laws, regulations or treaties could also adversely affect
            our net income.

                                       30



      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 (1) Section 883 of the Internal Revenue Code;
(2) U.S.-Italian income tax treaty; or (3) other applicable U.S. income tax
treaties, and should continue to so qualify under the DLC structure. 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 for
purposes of Section 883 or any other provision of the Internal Revenue Code or
any income tax treaty and, consequently, these matters are not free from doubt.

      As discussed above, 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 affecting 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, G. - "Taxation" for additional information.

o           A small group of shareholders collectively owned, as of January 31,
            2007, approximately 29% 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 37% 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 29% 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.

o           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.

o           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. As a result, 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, G. - "Taxation- Application of Section 883 of the Internal Revenue
Code."

                                       31



      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 Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. We have tried, wherever possible, to identify
these statements by using words like "will," "may," "believes," "expects,"
"anticipates," "forecast," "future," "intends," "plans," and "estimates" and for
similar expressions.

      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, fuel
costs, cost per available lower berth day, estimates of ship depreciable lives
and/or residual values, outlook or business prospects.

      Certain of the risks we are exposed to 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 this Item 1A. "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.

Item 1B. Unresolved Staff Comments.

      None.

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.       283,000         Lease
Holland America Line, Holland
   America Tours, Princess Tours
   and Windstar                    Seattle, WA U.S.A.          233,000/38,000   Lease/Own
Costa                              Genoa, Italy                155,000/8,000    Own/Lease
Art framing and warehouse and
   Princess warehouse facilities   Dania Beach and
                                   Ft. Lauderdale,
                                   Florida U.S.A.                 152,000         Lease
P&O Cruises, Ocean Village,
   Swan Hellenic, Cunard,
   Carnival Corporation & plc's
   Technical Services and UK
   sales office                    Southampton, England (a)       112,000         Lease
AIDA                               Rostock, Germany               110,000         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


                                       32



(a)   P&O Cruises recently entered into a new Southampton office lease agreement
      for 150,000 square feet to eventually replace their existing Southampton
      lease facility, which they expect to move into during fiscal 2009.

      In addition, we also lease 27,000 square feet of office space in Colorado
Springs, Colorado and 10,000 square feet in Fort Pierce, Florida for additional
Carnival Cruise Lines reservation centers and 20,000 square feet in Los Angeles,
California for Princess' entertainment department. In Williston, North Dakota,
Holland America Line owns 22,000 square feet of office space that is also a
reservation center. Finally, we own or lease port facilities in Cozumel, Mexico,
Juneau, Alaska, Long Beach, California, Savona, Italy and Grand Turk, the Turks
& Caicos Islands.

      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 Cay and Princess Cays, respectively, are briefly described in Part I,
Item 1. Business, B. - "Cruise Operations." 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.

      On September 21, 2006, a class action complaint was filed by J. B. Miller
on behalf of a purported class of past passengers against Holland America Line
("HAL") in the U.S. District Court for the Western District of Washington. The
complaint alleges that HAL (a) failed to disclose that shore excursion vendors
paid HAL to promote their services as required by an Alaska statute, and (b)
collected and retained payment from passengers for Passenger Vessel Service Act
("PSVA") violations in certain instances when HAL did not actually incur the
fines. The complaint seeks (i) certification as a class action, (ii) statutory
damages under Alaska's consumer protection statutes, (iii) damages for each PSVA
fine collected and additional damages for each PSVA fine collected where no fine
was imposed, (iv) injunctive relief and (v) attorneys' fees, costs and interest.
We believe that we have meritorious defenses to these claims and intend to
vigorously defend this matter.

      In January 2006, a lawsuit was filed against Carnival Corporation and its
subsidiaries and affiliates, and other non-affiliated cruise lines in the U.S.
District Court for the Southern District of New York on behalf of James Jacobs
and a purported class of owners of intellectual property rights to musical plays
and other works performed in the U.S. The plaintiffs claim infringement of
copyrights to Broadway, off Broadway and other plays. The suit seeks payment of
(i) damages, (ii) disgorgement of alleged profits and (iii) an injunction
against future infringement. We intend to vigorously defend this matter.

      As of February 2007, three separate actions had been filed against each of
Carnival Corporation and Princess Cruise Lines, Ltd. in either the U.S. District
Court for the Southern District of Florida ("Florida Court") or the U.S.
District Court for the Central District of California ("California Court") on
behalf of some current and former crew members alleging that Carnival Cruise
Lines and Princess Cruises failed to timely pay the plaintiffs for overtime and
other wages due (the "Wage Actions"). These six actions generally seek payment
of (i) damages for breach of contract or restitution for back wages, (ii)
damages under the Seaman's Wage Act and (iii) interest.

      Carnival:

      In November 2005 and in March 2005, two lawsuits were filed against
      Carnival Corporation in the Florida Court. In May 2006, Carnival
      Corporation entered into a settlement agreement for these combined
      lawsuits. The settlement received final court approval in 2006 resulting
      in the dismissal of the cases. The settlement agreement required Carnival
      Corporation to establish a settlement fund, the ultimate net amount of
      which was estimated and recorded as an expense in 2006. In February 2006 a
      lawsuit was filed against Carnival Corporation in the California Court,
      which was dismissed in November 2006 with prejudice.

                                       33



      Princess:

      In November 2005, a lawsuit was filed against Princess in the Florida
      Court. In September 2006, Princess entered into a settlement agreement,
      which is subject to final court approval. The settlement agreement
      required Princess to establish a settlement fund, the ultimate net amount
      of which was estimated and recorded as an expense in 2006. We cannot be
      certain that such approval will be obtained. However, the Florida Court
      has granted preliminary approval of the settlement. A hearing is scheduled
      for February 2007.

      Also in September 2006, Princess settled the third class action filed
      against it in the California Court. In December 2006, preliminary approval
      of the settlement was issued by the California Court. As part of the
      settlement, plaintiff's appeal of summary judgment granted to Princess in
      the remaining Wage Action will be dismissed. We cannot be certain that
      final approval of the settlement will be granted.

      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 in November 2000. 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
2006 the arbitrator ruled in Costa's favor and, accordingly, confirmed Costa's
decision not to deliver the Costa Classica to Cammell Laird. Unless the Cammell
Laird administrators appeal the Tribunal's decision by December 2007, this
matter is concluded.

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

      None.

      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
               ----           ---                     --------

        Micky Arison           57   Chairman of the Board of Directors and
                                       Chief Executive Officer
        Gerald R. Cahill       55   Executive Vice President and Chief Financial
                                       and Accounting Officer
        Robert H. Dickinson    64   President and Chief Executive Officer of
                                       Carnival Cruise Lines and Director
        Pier Luigi Foschi      60   Chairman and Chief Executive Officer of
                                       Costa Crociere, S.p.A. and Director
        Howard S. Frank        65   Vice Chairman of the Board of Directors and
                                       Chief Operating Officer
        Stein Kruse            48   President and Chief Executive Officer of
                                       Holland America Line Inc. ("HAL")
        Arnaldo Perez          46   Senior Vice President, General Counsel
                                       and Secretary
        Peter G. Ratcliffe     58   Chief Executive Officer of P&O Princess
                                       Cruises International and Director

      Business Experience of Executive Officers

      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. Mr. Arison has been employed by us for 35 years.

                                       34



      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. Mr.
Cahill has been employed by us for 12 years.

      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. Mr. Dickinson has been employed by us for 35 years.

      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. Mr. Foschi has been employed by us for nine years.

      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. Mr. Frank has been employed by us for 17 years.

      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. Mr. Kruse has been employed by us for seven years.

      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. Mr. Perez has been employed by us for
14 years.

      Peter G. Ratcliffe has been a director since April 2003 and a director of
Carnival plc since October 2000. 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 Carnival plc's Chief Executive Officer until April 2003. 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. Mr. Ratcliffe has been
employed by us or Carnival plc predecessor companies for 33 years.

                                     PART II

Item 5. Market for Registrants' 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 and Carnival plc declared cash dividends on all of
their common stock and ordinary shares, respectively, in the amount of:

                                       Quarters Ended
                    -------------------------------------------------------
                    February 28       May 31     August 31      November 30
                    -----------       ------     ---------      -----------

2007                   $0.275
2006                   $ 0.25         $0.25        $0.25          $0.275
2005                   $ 0.15         $0.20        $0.20          $ 0.25

                                       35



      All dividends for both Carnival Corporation and Carnival plc are declared
in U.S. dollars. Holders of Carnival Corporation common stock or Carnival plc
American Depository Shares receive a dividend payable in U.S. dollars. The
dividends payable for Carnival plc ordinary shares are payable in sterling,
unless the shareholders elect to receive the dividend in U.S. dollars. Dividends
payable in sterling will be converted from U.S. dollars into sterling at the
dollar/sterling exchange rate quoted by the Bank of England in London at the
12:00 p.m. foreign exchange rate on the next business day that follows the
quarter end.

      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. 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. We cannot be certain that Carnival Corporation and Carnival plc
will continue to have per share dividend increases as were declared in 2006 and
2005 or maintain their current levels.

      D. Securities Authorized for Issuance under Equity Compensation Plans

      The information required by Item 201(d) of Regulation S-K is incorporated
by reference to Part III of this joint Annual Report on Form 10-K.

      E. Issuer Purchases of Equity Securities

      During the quarter ended November 30, 2006, purchases by Carnival
Corporation of Carnival Corporation's equity securities that are registered by
it pursuant to Section 12 of the Exchange Act were as follows:



                                  Total Number of       Average    Maximum Dollar Value of Shares
                                Shares Purchased in   Price Paid     That May Yet Be Purchased
           Period                  Fourth Quarter      per Share   Under the Plans or Programs(a)
           ------               -------------------   ----------   ------------------------------
                                                                           (in millions)
                                                          
September 1, 2006 through
   September 30, 2006                1,143,200        $    42.44             $   773
October 1, 2006 through
   October 31, 2006                                                          $   773
November 1, 2006 through
   November 30, 2006                                                         $   773
                                     ---------
Total                                1,143,200        $    42.44
                                     =========


(a)   During 2004 the Boards of Directors authorized the repurchase of up to an
      aggregate of $1 billion of Carnival Corporation common stock and/or
      Carnival plc ordinary shares subject to certain repurchase restrictions on
      the Carnival plc shares. We completed this $1 billion repurchase program
      on June 29, 2006. A second $1 billion authorization was approved by the
      Boards of Directors in June 2006 subject to certain restrictions ("2006
      Purchase Program"). This 2006 Purchase Program may be discontinued by our
      Boards of Directors at any time and does not have an expiration date.
      The Carnival plc share repurchase authorization requires annual
      shareholder approval. All shares in the above table were repurchased
      pursuant to this 2006 Purchase Program. At February 9, 2007 the remaining
      availability pursuant to our 2006 Purchase Program was $773 million.

      During the year ended November 30, 2006, $69 million of our Zero-Coupon
Notes were converted at their accreted value into 2.1 million shares of Carnival
Corporation common stock, of which 1.9 million were issued from treasury stock.
The issuance was exempt from registration under Section 3(a)(9) of the
Securities Act of 1933, as amended.

      Each share of Carnival Corporation common stock issued is paired with a
trust share of beneficial interest in the P&O Princess Special Voting Trust,
which holds a Special Voting Share issued by Carnival plc in connection with the
DLC transaction.

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.

                                       36



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 Management's Discussion and Analysis
of Financial Condition and Results of Operations 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 12, 2007, 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.

      None.

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. Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed by
us in our reports that we file or submit under the Act is accumulated and
communicated to our management, including our principal executive and principal
financial officers, or persons performing similar functions, as appropriate to
allow timely decisions regarding required disclosure.

      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, 2006, 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, 2006.

      Our management's assessment of the effectiveness of our internal control
over financial reporting as of November 30, 2006 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

      During the three months ended November 30, 2006, we continued with our
implementation of a new worldwide accounting system.

                                       37



      As a result, there have been changes in our internal control over
financial reporting during the quarter ended November 30, 2006 that have
materially affected or are reasonably likely to materially affect our internal
control over financial reporting.

      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 and Related Stockholder Matters,
      Certain Relationships and Related Transactions, and Principal
      Accounting 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, 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 Schedules

      All schedules for which provision is made in the applicable
accounting regulations of the SEC are not required under the related
instruction or are inapplicable and, therefore, have been omitted.

          (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.

                                    38



                                SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, each of the registrants has 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 12, 2007                          February 12, 2007

      Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
each 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 12, 2007                          February 12, 2007

/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 12, 2007                          February 12, 2007

/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 12, 2007                          February 12, 2007

/s/ *Richard G. Capen, Jr.                 /s/ *Richard G. Capen, Jr.
--------------------------                 --------------------------
Richard G. Capen, Jr.                      Richard G. Capen, Jr.
Director                                   Director
February 12, 2007                          February 12, 2007

/s/ *Robert H. Dickinson                   /s/ *Robert H. Dickinson
------------------------                   ------------------------
Robert H. Dickinson                        Robert H. Dickinson
Director                                   Director
February 12, 2007                          February 12, 2007

/s/ *Arnold W. Donald                      /s/ *Arnold W. Donald
---------------------                      ---------------------
Arnold W. Donald                           Arnold W. Donald
Director                                   Director
February 12, 2007                          February 12, 2007

/s/ *Pier Luigi Foschi                     /s/ *Pier Luigi Foschi
----------------------                     ----------------------
Pier Luigi Foschi                          Pier Luigi Foschi
Director                                   Director
February 12, 2007                          February 12, 2007

/s/ *Richard J. Glasier                    /s/ *Richard J. Glasier
-----------------------                    -----------------------
Richard J. Glasier                         Richard J. Glasier
Director                                   Director
February 12, 2007                          February 12, 2007

                                       39



/s/ *Baroness Sarah Hogg                   /s/ *Baroness Sarah Hogg
------------------------                   ------------------------
Baroness Hogg                              Baroness Hogg
Director                                   Director
February 12, 2007                          February 12, 2007

/s/ *A. Kirk Lanterman                     /s/ *A. Kirk Lanterman
----------------------                     ----------------------
A. Kirk Lanterman                          A. Kirk Lanterman
Director                                   Director
February 12, 2007                          February 12, 2007

/s/ *Modesto A. Maidique                   /s/ *Modesto A. Maidique
------------------------                   ------------------------
Modesto A. Maidique                        Modesto A. Maidique
Director                                   Director
February 12, 2007                          February 12, 2007

/s/ *Sir John Parker                       /s/ *Sir John Parker
--------------------                       --------------------
Sir John Parker                            Sir John Parker
Director                                   Director
February 12, 2007                          February 12, 2007

/s/ *Peter G. Ratcliffe                    /s/ *Peter G. Ratcliffe
-----------------------                    -----------------------
Peter G. Ratcliffe                         Peter G. Ratcliffe
Director                                   Director
February 12, 2007                          February 12, 2007

/s/ *Stuart Subotnick                      /s/ *Stuart Subotnick
---------------------                      ---------------------
Stuart Subotnick                           Stuart Subotnick
Director                                   Director
February 12, 2007                          February 12, 2007

/s/ *Laura Weil                            /s/ *Laura Weil
---------------                            ---------------
Laura Weil                                 Laura Weil
Director                                   Director
February 12, 2007                          February 12, 2007

/s/ *Uzi Zucker                            /s/ *Uzi Zucker
---------------                            ---------------
Uzi Zucker                                 Uzi Zucker
Director                                   Director
February 12, 2007                          February 12, 2007

*By: /s/ Arnaldo Perez                     *By: /s/ Arnaldo Perez
----------------------                     ----------------------
(Arnaldo Perez                             (Arnaldo Perez
Attorney-in-fact)                          Attorney-in-fact)
February 12, 2007                          February 12, 2007

                                    40



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, 2007
 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 No.
 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 No. 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 No.
 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 Computershare Investor Services (formerly 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' Cruises registration statement on Form 20-F.

                                       41



 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 No. 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-Facilities Agreement dated October 21, 2005, between Carnival Corporation,
 Carnival plc, and certain of Carnival Corporation and Carnival plc
 subsidiaries, The Royal Bank of Scotland as facilities agent and a syndicate of
 financial institutions incorporated by reference to Exhibit 10.3 to our joint
 Annual Report on Form 10-K for the year ended November 30, 2005.

*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
 between Carnival Corporation and Ted Arison, 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.

                                       42



*10.13-Director Appointment Letter, dated August 19, 2004, between Baroness
 Sarah Hogg and each of Carnival Corporation and Carnival plc, incorporated by
 reference to Exhibit No. 10.13 to our joint Annual Report on Form 10-K for the
 year ended November 30, 2004.

*10.14-Director's Appointment Letter, dated August 19, 2004, between Richard J.
 Glasier and each of Carnival Corporation and Carnival plc, incorporated by
 reference to Exhibit No. 10.14 to our joint Annual Report on Form 10-K for the
 year ended November 30, 2004.

*10.15-Director Appointment Letter, dated August 19, 2004, between Sir John
 Parker and each of Carnival Corporation and Carnival plc, incorporated by
 reference to Exhibit No. 10.15 to our joint Annual Report on Form 10-K for the
 year ended November 30, 2004.

*10.16-Amended and Restated Carnival plc 2005 Employee Share Plan, incorporated
 by reference to Exhibit No. 10.2 to our joint Quarterly Report on Form 10-Q for
 the quarter ended August 31, 2005.

*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-Amended and Restated Carnival Corporation 2001 Outside Director Stock
 Plan, incorporated by reference to Exhibit No. 10.1 to our joint Quarterly
 Report on Form 10-Q for the quarter ended May 31, 2005.

*10.27-Amended and Restated Carnival Corporation 2002 Stock Plan, incorporated
 by reference to Exhibit No. 10.1 to our joint Quarterly Report on Form 10-Q for
 the quarter ended May 31, 2003.

*10.28-Agreement with Pier Luigi Foschi, incorporated by reference to Exhibit
 No. 10.4 to our joint Quarterly Report on Form 10-Q for the quarter ended
 August 31, 2005.

 10.29-Succession Agreement, dated as of May 28, 2002, 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.

                                       43



*10.30-Employment Agreement, dated as of April 17, 2003, by and between POPCIL
 and Peter Ratcliffe, incorporated by reference to Exhibit No. 10.2 to our joint
 Quarterly Report on Form 10-Q for the quarter ended May 31, 2003.

*10.31-Carnival Corporation & plc Non-Executive Board of Director Cruise Benefit
 Policy, incorporated by reference to Exhibit No. 10.1 to our joint Quarterly
 Report on Form 10-Q for the quarter ended August 31, 2005.

*10.32-Indemnification Agreement, dated April 17, 2003, between Micky M. Arison
 and Carnival Corporation, incorporated by reference to Exhibit No. 10.5 to our
 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 our 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 No.
 10.9 to our joint Quarterly Report on Form 10-Q for the quarter ended May 31,
 2003.

*10.35-Amendment to the Carnival Corporation Nonqualified Retirement Plan For
 Highly Compensated Employees, incorporated by reference to Exhibit No. 10.1 to
 our joint Quarterly Report on Form 10-Q for the quarter ended February 28,
 2006.

*10.36-Indemnification Agreement, dated April 17, 2003, between Pier Luigi
 Foschi and Carnival Corporation, incorporated by reference to Exhibit No. 10.13
 to our 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 No. 10.15 to our
 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, incorporated by
 reference to Exhibit No. 10.38 to our joint Annual Report on Form 10-K for the
 year ended November 30, 2004.

*10.39-Indemnification Agreement, dated April 17, 2003, between Peter G.
 Ratcliffe and Carnival Corporation, incorporated by reference to Exhibit No.
 10.24 to our 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 No. 10.4 to our
 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, incorporated by
 reference to Exhibit No. 10.41 to our joint Annual Report on Form 10-K for the
 year ended November 30, 2004.

*10.42-Director Appointment Letter, dated April 14, 2003, between Robert H.
 Dickinson and Carnival plc, incorporated by reference to Exhibit No. 10.8 to
 our 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, incorporated by
 reference to Exhibit No. 10.43 to our joint Annual Report on Form 10-K for the
 year ended November 30, 2004.

*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 No. 10.14 to our
 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, incorporated by
 reference to Exhibit No. 10.46 to our joint Annual Report on Form 10-K for the
 year ended November 30, 2004.

                                       44



*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, incorporated by
 reference to Exhibit No. 10.48 to our joint Annual Report on Form 10-K for the
 year ended November 30, 2004.

*10.49-Director Appointment Letter, dated August 19, 2004, between Uzi Zucker
 and each of Carnival Corporation and Carnival plc, incorporated by reference to
 Exhibit No. 10.49 to our joint Annual Report on Form 10-K for the year ended
 November 30, 2004.

*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.

*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 No. 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 No. 4.10 to P&O Princess' Annual Report on
 Form 20-F for the year ended December 30, 2001.

*10.54-Carnival Cruise Lines Management Incentive Plan, incorporated by
 reference to Exhibit No. 10.3 to our joint Quarterly Report on Form 10-Q for
 the quarter ended August 31, 2005.

*10.55-Amendment to the Carnival Corporation Supplemental Executive Retirement
 Plan, incorporated by reference to Exhibit No. 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 Exhibit No. 10.1 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 Exhibit No. 10.2 to our joint Quarterly
 Report on Form 10-Q for the quarter ended February 29, 2004.

*10.58-Amendment to the Carnival Corporation "Fun Ship" Nonqualified Savings
 Plan, incorporated by reference to Exhibit No. 10.1 to our joint Quarterly
 Report on Form 10-Q for the quarter ended February 28, 2005.

*10.59-Form of Nonqualified Stock Option Agreement for the Amended and Restated
 Carnival Corporation 2001 Outside Director Stock Plan, incorporated by
 reference to Exhibit No. 10.5 to our joint Quarterly Report on Form 10-Q for
 the quarter ended August 31, 2005.

*10.60-Form of Restricted Stock Award Agreement for the Amended and Restated
 Carnival Corporation 2001 Outside Director Stock Plan, incorporated by
 reference to Exhibit No. 10.6 to our joint Quarterly Report on Form 10-Q for
 the quarter ended August 31, 2005.

*10.61-Form of Restricted Stock Unit Award Agreement for the Amended and
 Restated Carnival Corporation 2001 Outside Director Stock Plan, incorporated by
 reference to Exhibit No. 10.7 to our joint Quarterly Report on Form 10-Q for
 the quarter ended August 31, 2005.

*10.62-Form of Share Option Certificate for the Amended and Restated Carnival
 plc 2005 Employee Share Plan, incorporated by reference to Exhibit No. 10.8 to
 our joint Quarterly Report on Form 10-Q for the quarter ended August 31, 2005.

 10.63-Deed of Guarantee, dated October 21, 2005, between Carnival Corporation
 as guarantor and the Royal Bank of Scotland plc as facilities agent,
 incorporated by reference to Exhibit No. 10.63 to our joint Annual Report on
 Form 10-K for the year ended November 30, 2005.

                                       45



 10.64-Deed of Guarantee, dated October 21, 2005, between Carnival plc as
 guarantor and the Royal Bank of Scotland plc as facilities agent, incorporated
 by reference to Exhibit No. 10.64 to our joint Annual Report on Form 10-K for
 the year ended November 30, 2005.

*10.65-Corporate Aviation Administrative Policy Statement for the use of
 Carnival Corporation & plc aircraft, incorporated by reference to Exhibit No.
 10.2 to our joint Quarterly Report on Form 10-Q for the quarter ended February
 28, 2006.

*10.66-Form of Restricted Share Unit Award Certificate for the Amended and
 Restated Carnival plc 2005 Employee Share Plan, incorporated by reference to
 Exhibit No. 10.3 to our joint Quarterly Report on Form 10-Q for the quarter
 ended February 28, 2006.

*10.67-Form of Restricted Stock Unit Agreement for the Amended and Restated
 Carnival Corporation 2002 Stock Plan, incorporated by reference to Exhibit No.
 10.4 to our joint Quarterly Report on Form 10-Q for the quarter ended February
 28, 2006.

*10.68-Princes Cruises Chief Executive Officer Supplemental Retirement Plan for
 Peter Ratcliffe, incorporated by reference to the joint Current Report on Form
 8-K filed on October 20, 2006.

 12-Ratio of Earnings to Fixed Charges.

 13-Portions of 2006 Annual Report incorporated by reference into 2006 joint
 Annual Report on Form 10-K.

 21-Significant Subsidiaries of Carnival Corporation and Carnival plc.

 23-Consent of Independent Registered Certified Public Accounting Firm.

 24.1-Powers of Attorney given by certain Directors of Carnival Corporation and
 Carnival plc to Micky Arison, Howard S. Frank, Gerald R. Cahill and Arnaldo
 Perez authorizing such persons to sign this 2006 joint Annual Report on Form
 10-K and any future amendments on their behalf.

 24.2-Power of Attorney given by Laura Weil, a Director of Carnival Corporation
 and Carnival plc to Micky Arison, Howard S. Frank, Gerald R. Cahill and Arnaldo
 Perez authorizing such persons to sign this 2006 joint Annual Report on Form
 10-K and any future amendments on their behalf.

 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.

                                       46



 32.4-Certification of Chief Executive 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.

 32.5-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.

*Indicates a management contract or compensation plan or arrangement.

                                       47