Slide 1

Undergraduate Student Project

Entire Presentation should be prescriptive in nature. Never read anything, not even the mission statement.

STRATEGIC PLAN 2013-2015

1

Company OverviewMission/Vision StatementInternal AssessmentExternal AssessmentStrategy FormulationStrategy ImplementationConclusion

PRESENTATION OUTLINE

2

COMPANY OVERVIEWHEADQUARTERS:Miami, Florida, and London, England

CRUISE BRANDS:Carnival Cruise Lines (24 ships) Princess Cruises (17 ships) Holland America Line (15 ships) Costa (14 ships) P&O Cruises (7 ships) Cunard (3 ships) Seabourn (6 ships) AIDA (10 ships) P&O Cruises Australia (4 ships) Iberocruceros (3 ships)

TOTAL NUMBER OF SHIPS:102

EMPLOYEES WORLDWIDE:Approximately 90,000

STOCK EXCHANGE:NYSE and LSE (symbol: CCL)

2012 REVENUES:$15.4 billion

2012 NET INCOME:$1.5 billion

CRUISING AREAS:Alaska - Bahamas - Baltic Bermuda- Caribbean- Hawaii - Mediterranean New England - North Cape Panama Canal -South America - South Pacific and other worldwide destinations

10 Carnival brands3

4

5

6

Carnival Corporation & PLC:No current vision statement

Proposed Vision Statement:

Carnivals vision is to provide the world with the finest and safest vacation experience for our employees and guests. VISION STATEMENT

7

Our mission is to take the world on vacation and deliver exceptional experiences that appeal to a large variety of consumers, all at an outstanding value. We believe our multi-brand strategy is essential to achieving our mission and maintaining our leadership positions. Our ten unique brands with worldwide sourcing of guests and diverse itineraryoptionsallow us to expand our offerings to our past guests, while continuing to grow our business through the acquisition of new guests in established and emerging markets. Our success also depends on, among other things, our ability to exceed the expectations of our guests by providing them with a wide variety of exceptional vacation experiences. We strive to capture a greater share of consumers spending on vacations by providing extraordinary cruise products and services, all at an outstanding value.MISSION STATEMENT

8

Our mission is to provide our valued customers with the ultimate vacation experience through a variety of fabulous food and entertainment (1,2, and 7). We provide state of the art cruise ships all over the world while enhancing technology upgrades (3&4). We follow all maritime regulations to ensure the safety of our employees and passengers while at sea (5&9). We strive to provide affordable vacations for all demographics, while maximizing our shareholders profits (8). Our highest priority remains to perform in an ethical manner while serving our guests (6).

PROPOSED MISSION STATEMENT

9

Vision Statement:

Our vision is to empower and enable our employees to deliver the best vacation experience for our guests, thereby generating superior returns for our shareholders and enhancing the well-being of our communities.

ROYAL CARIBBEAN : MISSION/VISIONMission Statement:

We always provide service with a friendly greeting and a smile. We anticipate the needs of our customers. We make all efforts to exceed our customers expectations. We take ownership of any problem that is brought to our attention. We engage in conduct that enhances our corporate reputation and employee morale. We are committed to act in the highest ethical manner and respect the rights and dignity of others. We are loyal to Royal Caribbean and Celebrity and strive for continuous improvement in everything we do.

10

WEBSITE ANALYSIS

11

WEBSITE ANALYSIS

12

Social Media

13

Social Media

14

Internal Assessments

15

RATIO ANALYSISCarnival Corporation & PLCRoyal CaribbeanCurrent Ratio0.20.2Quick Ratio0.20.2Long Term Debt to Equity0.30.8Inventory Turnover39.452.7Total Assets Turnover0.40.4Accounts Receivable Turnover21.127.4Average Collection Period17.313.3Gross Profit Margin0.90.9Net Profit Margin0.10Return on Total Assets (ROA)00Return on Equity (ROE)0.10

16

Chairman of the Board/ CEO

Vice Chairman of the Board/COO

CFOCAO

Director Director Director Director Director Director Director Director Director Director Director Director

CURRENT ORGANIZATIONAL CHART

17

Board of Directors

CEO

CFOCAO

COOPresident of the Australian MarketPresident of the European MarketPresident of the Spain and Brazil MarketPresident of the North American Market

President of CarnivalPresident of PrincessPresident of HollandPresident of SeabournPresident of P&O AustraliaPresident of CostaPresident of P&OPresident of CunardPresident of AIDAPresident of IberoRECOMMENDED ORGANIZATIONAL CHART

HRM

CIO

CMO

CSO

18

MARKET POSITIONING MAP

19

COMPANY WORTH ANALYSISCarnival Corporation and PLCStockholders' Equity$19,414 Net Income x 5$6,490 (Share Price/EPS) x Net Income$24,117 Number of Shares Outstanding x Share Price$28,942 Method Average$19,741 Royal CaribbeanStockholders' Equity$7,876 Net Income x 5$92 (Share Price/EPS) x Net Income$1,999Number of Shares Outstanding x Share Price$8,157 Method Average$4,531

20

INTERNAL STRENGTHS1.Carnival Corporation and PLC is the largest cruise company in the world, having 48.4% of worldwide market share in passengers.2.Passenger Capacity has increased over the last 4 years at an average rate of 3.59%.3.Fuel consumption has been reduced 21% since 2007, with a projection to reduce fuel consumption by another 5% per unit.4.The Holland America line has the highest rate of repeat customers in the cruise industry.5. Seabourn Yachts have a service ratio of one staff member to one guest.6. P&O Cruises is the leading Australian cruise line, with 300,000 passengers annually. P&O Cruises (Australia) carried almost half of all Australia and New Zealand cruise passengers in 2012.7. In 2012, our North America brand represented 61% of our total passenger capacity.8.Carnival Corp & PLC owns 40% interest in Grand Bahamas Shipyard, LTG, which is the largest cruise ship dry- dock repair facility in the world.9.Carnival Cruise Line operates from 19 homeports in North America, which is more than our competitors.10.Carnival Cruise Lines and PLC serves 8.5 million guests a year and has 10 distinct cruise lines under ownership.

21

INTERNAL WEAKNESSES1.The net income was $1,298 in FY2012, a decrease of 6% as compared to 20112.Revenues declined $410 million in 20123.Protecting the health, safety, and security of our guests, employees and all others working on behalf of the company since Costa Concordia tragedy.4.Carnival Corporation &PLC accounts for 30% of disapperances of guests at sea since 2000. 5. Communicating with passengers and employees, if in crisis mode while sailing. (Costa Concordia tragedy)6.During 2012, $28 million was spent for ship incident- related expenses that were not covered by insurance. 7.Sales of cruises mainly booked through travel agents cost 10% of sales fees and additional commissions.8.Cash can only be used in the gaming area of the boat9.Full brand recovery from Costa Concorida tragedy will take 2-3 years, extra marketing would come in three areas: funds directed at travel agents, including cooperative advertising; social media; and possibly more TV ads. 10.Loyalty program was recently expanded to six tiers from two, downgrading some members to lower membership level and taking away perks.

22

IFE MATRIXInternal Factor Evaluation Matrix (IFE)StrengthsWeightRatingWeighted Score1.Carnival Corporation and PLC is the largest cruise company in the world, having 48.4% of worldwide market share in passengers.0.0840.322.Passenger Capacity has increased over the last 4 years at an average rate of 3.59%.0.0530.153.Fuel consumption has been reduced 21% since 2007, with a projection to reduce fuel consumption by another 5% per unit.0.0630.184.The Holland America line has the highest rate of repeat customers in the cruise industry.0.0530.155. Seabourn Yachts have a service ratio of one staff member to one guest.0.0430.126. P&O Cruises is the leading Australian cruise line, with 300,000 passengers annually. P&O Cruises (Australia) carried almost half of all Australia and New Zealand cruise passengers in 2012.0.0440.167. In 2012, our North America brand represented 61% of our total passenger capacity.0.0640.248.Carnival Corp & PLC owns 40% interest in Grand Bahamas Shipyard, LTG, which is the largest cruise ship dry- dock repair facility in the world.0.0730.219.Carnival Cruise Line operates from 19 homeports in North America, which is more than our competitors.0.0540.2010.Carnival Cruise Lines and PLC serves 8.5 million guests a year and has 10 distinct cruise lines under ownership.0.0640.24

23

IFE MATRIX CONTINUEDWeaknessesWeightRatingWeighted Score1.The net income was $1,298 in FY2012, a decrease of 6% as compared to 20110.0510.052.Revenues declined $410 million in 20120.0410.043.Protecting the health, safety, and security of our guests, employees and all others working on behalf of the company since Costa Concordia tragedy.0.0710.074.Carnival Corporation &PLC accounts for 30% of disapperances of guests at sea since 2000. 0.0520.105. Communicating with passengers and employees, if in crisis mode while sailing. (Costa Concordia tragedy)0.0520.106.During 2012, $28 million was spent for ship incident- related expenses that were not covered by insurance. 0.0610.067.Sales of cruises mainly booked through travel agents cost 10% of sales fees and additional commissions.0.0220.048.Cash can only be used in the gaming area of the boat0.0120.029.Full brand recovery from Costa Concorida tragedy will take 2-3 years, extra marketing would come in three areas: funds directed at travel agents, including cooperative advertising; social media; and possibly more TV ads. 0.0610.0610.Loyalty program was recently expanded to six tiers from two, downgrading some members to lower membership level and taking away perks.0.0320.06TOTALS1.002.57

24

External Assessments

25

COMPETITIVE PROFILE MATRIX

26

EXTERNAL OPPORTUNITIES1.Long term expansion in Asian Vacation Markets due to increased prosperity and size of Asian countries (2012: 8% and 2013: 10%)2.Worldwide,the cruise industry has an annual passengercompound annual growth rateof 7% from 1990 2017.3.Unveiling of nine cruise ships through March 2016. (Note, this is a Strength, not Opportunity)4. The UK Provides the largest number of cruise passengers sourced in Europe; 1.8 million are estimated to have cruised in 2012.5. Europeans and Australians have significantly more vacation days a year than North Americans (4 weeks paid vacation)6.The age group of 45 years and older is expected to grow by 13% in US and Canada and 11% in the major Western European countries by 2022.7.The global travel and tourism industry is expected to grow approximately 2.8% during 20128.Almost 60% of the cruise passengers in the world are sourced from the North American region, where Carnival Corporation has 19 US ports.9.Demand for technology growing on cruise ships; In the past five years, Internet logins on the MTN network almost doubled from approximately 15 million to 27 million per year10.Cruisingis about five percent of theoverallvacationmarketand is the fastest growing segment of the travel industry

27

EXTERNAL THREATS1.A 6.3% increase in fuel prices, since February 2013. (Fuel accounts for 20% of cruise ticket price)2.The Costa Concordia and European sovereign debt crisis impacted all cruise line revenues by about -5.1%3.Increasing cost of ship building; In 1990 it cost $250 million to build a ship, where as in 2012 it cost $740 million.4. Safety and security of travel- terrorism, drug attacks, vessel seizures5.Royal Caribbean passengers carried increased 0.3% last year6.Currency risk- the US dollar decreased 0.3% in Feb. 20137.The United States unemployment rate is currently still high at 7.40%8.Trend toward healthy eating and lifestyles; 1 in 4 Americans are currently on a diet, which is 25% of US Americans.9.Global warming is causing the oceans to absorb a great deal of extraheat(up to 90%).10.Increase of corporate tax

28

EFE MATRIXExternal Factor Evaluation Matrix (EFE)OpportunitiesWeightRatingWeighted Score1.Long term expansion in Asian Vacation Markets due to increased prosperity and size of Asian countries (2012: 8% and 2013: 10%)0.0530.152.Worldwide,the cruise industry has an annual passengercompound annual growth rateof 7% from 1990 2017.0.0740.283.Unveiling of nine cruise ships through March 2016.0.0540.204. The UK Provides the largest number of cruise passengers sourced in Europe; 1.8 million are estimated to have cruised in 2012.0.0430.125. Europeans and Australians have significantly more vacation days a year than North Americans (4 weeks paid vacation)0.0530.156.The age group of 45 years and older is expected to grow by 13% in US and Canada and 11% in the major Western European countries by 2022.0.0530.157.The global travel and tourism industry is expected to grow approximately 2.8% during 20120.0730.218.Almost 60% of the cruise passengers in the world are sourced from the North American region, where Carnival Corporation has 19 US ports.0.0640.249.Demand for technology growing on cruise ships; In the past five years, Internet logins on the MTN network almost doubled from approximately 15 million to 27 million per year0.0420.0810.Cruisingis about five percent of theoverallvacationmarketand is the fastest growing segment of the travel industry0.0630.18

29

EFE MATRIX CONTINTUEDThreatsWeightRatingWeighted Score1.A 6.3% increase in fuel prices, since February 2013. (Fuel accounts for 20% of cruise ticket price)0.0620.122.The Costa Concordia and European sovereign debt crisis impacted all cruise line revenues by about -5.1%0.0530.153.Increasing cost of ship building; In 1990 it cost $250 million to build a ship, where as in 2012 it cost $740 million.0.0530.154. Safety and security of travel- terrorism, drug attacks, vessel seizures0.0810.085.Royal Caribbean passengers carried increased 0.3% last year0.0520.106.Currency risk- the US dollar decreased 0.3% in Feb. 20130.0630.187.The United States unemployment rate is currently still high at 7.40%0.0340.128.Trend toward healthy eating and lifestyles; 1 in 4 Americans are currently on a diet, which is 25% of US Americans.0.0430.129.Global warming is causing the oceans to absorb a great deal of extraheat(up to 90%).0.0220.0410.Increase of corporate tax0.0210.02TOTALS1.002.84

30

Strategy Formulation

31

SWOT MATRIX

32

SPACE MATRIX DATA

33

SPACE MATRIX

34

BCG MATRIX

NAEAACS

35

IE MATRIX (Note, the EFE and IFE scores possibly do not match the position of the divisions)

NAEAACS

36

GRAND STRATEGY MATRIX

37

QSPMConvert safety and security procedures on all 10 Carnival and PLC cruise lines.Expand Costa Cruise Lines(Asia) by 2 ships in 2016.OpportunitiesWeightASTASASTAS1.Long term expansion in Asian Vacation Markets due to increased prosperity and size of Asian countries (2012: 8% and 2013: 10%)0.0540.2020.102.Worldwide,the cruise industry has an annual passengercompound annual growth rateof 7% from 1990 2017.0.0720.1430.213.Unveiling of nine cruise ships through March 2016.0.0500.0000.004. The UK Provides the largest number of cruise passengers sourced in Europe; 1.8 million are estimated to have cruised in 2012.0.0420.0810.045. Europeans and Australians have significantly more vacation days a year than North Americans (4 weeks paid vacation)0.0500.0000.006.The age group of 45 years and older is expected to grow by 13% in US and Canada and 11% in the major Western European countries by 2022.0.0500.0000.007.The global travel and tourism industry is expected to grow approximately 2.8% during 20120.0730.2120.148.Almost 60% of the cruise passengers in the world are sourced from the North American region, where Carnival Corporation has 19 US ports.0.0600.0000.009.Demand for technology growing on cruise ships; In the past five years, Internet logins on the MTN network almost doubled from approximately 15 million to 27 million per year0.0440.1620.0810.Cruisingis about five percent of theoverallvacationmarketand is the fastest growing segment of the travel industry0.0630.1840.24

38

QSPM CONTINUEDThreatsWeightASTASASTAS1.A 6.3% increase in fuel prices, since February 2013. (Fuel accounts for 20% of cruise ticket price)0.0600.0000.002.The Costa Concordia and European sovereign debt crisis impacted all cruise line revenues by about -5.1%0.0540.2010.053.Increasing cost of ship building; In 1990 it cost $250 million to build a ship, where as in 2012 it cost $740 million.0.0510.0520.104. Safety and security of travel- terrorism, drug attacks, vessel seizures0.0830.2420.165.Royal Carribean passengers carried increased 0.3% last year0.0500.0000.006.Currency risk- the US dollar decreased 0.3% in Feb. 20130.0600.0000.007.The United States unemployment rate is currently still high at 7.40%0.0300.0000.008.Trend toward healthy eating and lifestyles; 1 in 4 Americans are currently on a diet, which is 25% of US Americans.0.0400.0000.009.Global warming is causing the oceans to absorb a great deal of extraheat(up to 90%).0.0200.0000.0010.Increase of corporate tax0.0200.0000.00

Convert safety and security procedures on all 10 Carnival and PLC cruise lines.Expand Costa Cruise Lines(Asia) by 2 ships in 2016.

39

QSPM CONTINUEDConvert safety and security procedures on all 10 Carnival and PLC cruise lines.Expand Costa Cruise Lines(Asia) by 2 ships in 2016.StrengthsWeightASTASASTAS1.Carnival Corporation and PLC is the largest cruise company in the world, having 48.4% of worldwide market share in passengers.0.0840.3230.242.Passenger Capacity has increased over the last 4 years at an average rate of 3.59%.0.0530.1540.203.Fuel consumption has been reduced 21% since 2007, with a projection to reduce fuel consumption by another 5% per unit.0.0600.0000.004.The Holland America line has the highest rate of repeat customers in the cruise industry.0.0500.0000.005. Seabourn Yachts have a service ratio of one staff member to one guest.0.0400.0000.006. P&O Cruises is the leading Australian cruise line, with 300,000 passengers annually. P&O Cruises (Australia) carried almost half of all Australia and New Zealand cruise passengers in 2012.0.0400.0000.007. In 2012, our North America brand represented 61% of our total passenger capacity.0.0630.1820.128.Carnival Corp & PLC owns 40% interest in Grand Bahamas Shipyard, LTG, which is the largest cruise ship dry- dock repair facility in the world.0.0700.0000.009.Carnival Cruise Line operates from 19 homeports in North America, which is more than our competitors.0.0500.0000.0010.Carnival Cruise Lines and PLC serves 8.5 million guests a year and has 10 distinct cruise lines under ownership.0.0630.1820.12

40

QSPM CONTINUEDWeaknessesWeightASTASASTAS1.The net income was $1,298 in FY2012, a decrease of 6% as compared to 20110.0530.1510.052.Revenues declined $410 million in 20120.0440.1630.123.Protecting the health, safety, and security of our guests, employees and all others working on behalf of the company since Costa Concordia tragedy.0.0700.0000.004.Carnival Corporation &PLC accounts for 30% of disapperances of guests at sea since 2000. 0.0540.2020.105. Communicating with passengers and employees, if in crisis mode while sailing. (Costa Concordia tragedy)0.0530.1520.106.During 2012, $28 million was spent for ship incident- related expenses that were not covered by insurance. 0.0640.2410.067.Sales of cruises mainly booked through travel agents cost 10% of sales fees and additional commissions.0.0200.0000.008.Cash can only be used in the gaming area of the boat0.0100.0000.009.Full brand recovery from Costa Concorida tragedy will take 2-3 years, extra marketing would come in three areas: funds directed at travel agents, including cooperative advertising; social media; and possibly more TV ads. 0.0600.0000.0010.Loyalty program was recently expanded to six tiers from two, downgrading some members to lower membership level and taking away perks.0.0300.0000.00TOTALS3.192.23

Convert safety and security procedures on all 10 Carnival and PLC cruise lines.Expand Costa Cruise Lines(Asia) by 2 ships in 2016.

41

Strategy Implementation

42

RECOMMENDATIONSRecommendationsAmount1Appoint a "Chief Safety Officer" in each Carnival & PLC Cruise Brand $ 3,000,000 2Unveil six ships (North American, EAA, UK, Costa) $ 2,843,000,000 3Reconcile Concorida legal litigation $ 585,000,000 4World-wide advertising campaign on safety $ 100,000,000 5Employee procedures and training programs $ 1,200,000 6Donate to Coral Reef Alliance $ 1,000,000 7Install security devices throughout on all vessels $ 10,100,000 8Offer additional support to guests and travel agents via telephone and email $ 250,000 9Install scrubber technology $ 180,000,000 10Build a smartphone application for passengers- "Carnival In-touch" $ 125,000 Total $ 3,723,675,000

See Appendix I for explanation

43

EPS/EPIT ANALYSIS

44

EPS/EPIT GRAPH

45

INCOME STATEMENTS

See Appendix II for explanation

46

PROJECT BALANCE SHEETS

See Appendix III for explanation

47

PROJECTED RATIOS2012201320142015Current Ratio0.250.370.410.43Quick Ratio0.190.270.300.32Long Term Debt to Equity0.300.340.390.44Inventory Turnover39.4421.4719.0818.46Total Assets Turnover0.390.370.380.38Accounts Receivable Turnover21.0718.4917.6117.42Average Collection Period17.3219.7420.7220.95Gross Profit Margin0.890.900.900.90Net Profit Margin0.080.070.070.06Return on Total Assets (ROA)0.030.030.030.02Return on Equity (ROE)0.050.050.050.04

48

CONCLUSIONAs Carnival Corporation and PLC continues to improve the safety and security among our cruise brands throughout the world, we hope our consumers will regain the trust of the cruise industry by cruising with us. The corporation needs to focus on the internal and external factors in an effort to further improve its operation and ultimately the return to the shareholders of the company.

49

APPENDIXI. Recommendation Notes

1- 10 cruise brands/ 10 new safety officers at $100K salary per year for 3 years 2- Due to increasing passengers carried in cruise industry market we believe that unveiling six news ships will help meet the demand of passengers wanting to travel (North American, EAA, UK, Costa)3- Legal fees/ reimbursing guests costs from Costa Concordia Tragedy4- Create this marketing campaign similar to BP the marketing campaign after the oil spill; to reassure our consumers of the safety/security measures we are taking on our cruise ships (Quote is from Chernoff/Newman Advertising Agency in Columbia, SC)5- We are going to offer our employees an online training certificate program in safety and security measures for our ships; offered for one week; you have to take an online test at the end of session to receive certificate6- Due to the Costa tragedy we will donate $1Million to the Coral Reef Alliance to help our public images and social responsibility. 7- Install safety security devices throughout on all vessels -101 ships at 20 buttons per ship at $5,000 each -Cruise ships are designed and operated in compliance with international and federal regulations specifically designed to maximize the safety of passengers and crew. 101 ships x20= 2020 8- Hiring consultants for customer service, send out brochures, postcards etc. to offer additional support to our guests.9- Install exhaust gas cleaning technology on 32 ships, making it the first company to use this scrubber technology in restricted spaces on existing ships. 10- Smart Phone App to keep passengers in the loop while traveling with our company; such as what activities are going on and specific times; which our rival firm implemented this a few years ago.

II. Notes for Projected Income Statement

Total Revenue Decrease: Decrease is 2013 due to customer skeptic of cruising because of recent events within the cruise industry (i.e.- cruise wrecks, fires, drowning's, etc.)Cost of Revenue: 67% of revenueResearch and Development:Worldwide Advertising Campaign for 3 years @ $100MSelling and GA: Includes CSO, Legal Fees, Guest Support, Smart AppNon- Recurring:Donation to Coral Reef AllianceOthers: Employee Training (1.2M)Total Other income/ Expense: Decrease in 2013 due to revenue decrease; increase 14, 15 due to increase revenueInterest Expense: Interest Expense from EPS at 112Net Income: Reason for decreasing net income, is due to the implementation of recommendations/ strategies for the safety/security of our passengers and employees of Carnival PLC ; advertising campaign; Costa Concordia Debt; New shipsHopefully through our positive feedback and reinforcement from our recommendations, we will see NI begin to increase in 2016

III. Notes for Projected Balance Sheet

Property Plant Equipment: New Ships, Security Device, Scrubber ($5.625M per 32 ships)Intangibles: Increase because of trademarks on six new ships ($84M - 6x$14M trademark cost)Accounts Payable:Due to increase in ships and proceduresShort Term Debt:3% increaseOther Current Liabilities:2% increaseLong Term Debt:Increase debt 1,241 per year to cover recommendations 100% debtOther Liabilities:2% increase unforeseen problems with new ships/programsAdditional Paid in Capital:Using all debt, but could change depending on cash flowTreasury Stock:Not buying back as much due to trying to implement recommendations

50

Balance Sheet. Income StatementIncome Statement (in millions)2012201320142015NotesTotal Revenue15,38215,35016,20316,987(Do you want % increase?) Decrease is 2013 due to customer skeptism of crusing because of recent events within the cruise industry (ie- cruise wrecks, fires, drowning, etc)Cost of Revenue10,32010,28510,85611,38167% of revenueGross Profit5,0625,0665,3475,606Operating ExpensesSelling/Admin Research and Development- 033.333.333.3Worldwide Advertising Campaign for 3 years @ $100M585,000,000 Selling and General Administrative1,7201,9172,1132,309Includes CSO, Legal Fees, Guest Support, Smart App3,000,000 Non-recurring1731- 0- 0Donation to Coral Reef Alliance250,000 Others1,5271,527.41,527.81,528.2Employee Training (1.2M)725,000Total Operating Expenses1,6421,5871,6731,7351,720,000,0002013 Total Other Income/Expenses Net(4)(6)23Decrease in 2013 due to revenue decrease; increase 14, 15 due to increase revenue2014 Earnings Before Interest and Taxes1,6381,5931,6711,7322015 Interest Expense336448560672Interest Expense from EPS at 112 Income Before Tax1,3021,1451,1111,060 Income Tax Expense43.53.33.2Net Income1,2981,1411,1081,057Reason for decreasing net income, is due to the implemenation of strategies for the safety/security of our passengers and employees of Carnival PLC

Dividends 1,1681,1681,1681,168Retained Earnings130(27)(60)(111)

Balance Sheet (millions)2012201320142015AssetsCurrent Assets Cash and Cash Eqauivalents465860890945 Short Term Investments- 0- 0- 0- 0 Net Receivables730830920975 Inventory390715849920 Other Current Assets236420536597Total Current Assets1,8212,8253,1953,4372,843,000,000.00Long Term Investments- 0- 0- 0- 010,100,000.00Property Plant and Equipment32,13733,14834,15935,170New Ships, Secuirty Device, Scrubber ($5.625M per 32 ships)180,000,000.00Goodwill3,1743,1743,1743,1743,033,100,000.00Intangible Assets1,3141,3421,4891,620Increase because of trademarks on six new ships ($84M - 6x$14M trademark cost)1,011,033,333.33Other Assets7157328358751,011.03Total Assets39,16141,22142,85244,27628LiabilitiesCurrent Liabilties Accounts Payable1,9772,2002,2152,243Due to increase in ships and procedures Short/Current Long Term Debt1,7341,7861,8401,8953% increase Other Current Liabilities3,6293,7023,7763,8512% increaseTotal Current Liabilites7,3407,6887,8307,989Long Term Debt7,1688,4099,65010,891Increase debt 1,241 per year to cover recommendations - 100% debtOther Liabilties7247387537682% increase unforeseen problems with new ships/programsTotal Liabilities15,23216,83518,23319,648

Stockholders' EquityCommon Stock363363363363Additional Paid In Capital8,2528,2528,2528,252using all debt, but could change depending on cash flowRetained Earnings18,47918,45218,39218,281Treasury Stock(2,958)(2,483)(2,213)(2,101)Not buying back as much due to trying to implement recommendationsOther Stockholder Equity-207-198-175-167Total Stockholder Equity23,92924,38624,61924,628Total Stockholders' Equity and Liabilities39,16141,22142,85244,276

EPS.EBITCommon Stock FinancingDebt FinancingRecessionNormalBoomRecessionNormalBoomEBIT$3,000$3,400$3,800$3,000$3,400$3,800Interest 000112112112EBT3,0003,4003,8002,8883,2883,688Taxes9101191011EAT2,9913,3903,7892,8803,2783,677# Shares911911911807807807EPS3.283.724.163.574.064.56

Tax Rate: .003Interest Rate: .03Amount Needed : $3,724 (Billon)Number of oustanding shares: 80720Percent Stock80Percent StockRecessionNormalBoomRecessionNormalBoomEBIT$3,000$3,400$3,800$3,000$3,400$3,800Interest 898989222222EBT2,9113,3113,7112,9783,3783,778Taxes9101191011EAT2,9023,3013,6992,9693,3683,766# Shares828828828890890890EPS3.513.994.473.343.784.23

RecommendationsRecommendationsAmountInternal Notes1Appoint a "Chief Safety Officer" in each Carnival & PLC Cruise Brand$ 3,000,000.0010 cruise brands at $100K salary per year2Unveil six ships (North American, EAA, UK, Costa)$ 2,843,000,000.00Cost ranging from $310-539M, over 2013, 14, 15; 3Reconcile Concorida legal litigation$ 585,000,000.00Legal fees/ reimbursing guest4World-wide advertising campaign on safety$ 100,000,000.00*Chernoff/Newman Recommendation5Employee procedures and training programs$ 1,200,000.00Online traning certificate program; offered for one week; you have to take a quiz at the end of session to receive certificate6Donate to Coral Reef Alliance$ 1,000,000.007Install security devices throughout on all vessels$ 10,100,000.00Cruise ships are designed and operated in compliance with international and federal regulations specifically designed to maximize the safety of passengers and crew. 101 ships x20= 20208Offer additional support to guests and travel agendts via telephone and email$ 250,000.00Hiring consultants, brochures, postcards etc9Install scrubber technology$ 180,000,000.00 Install exhaust gas cleaning technology on 32 ships, making it the first company to use this scrubber technology in restricted spaces on existing ships. (Carnival Cruise Lines, Holland American Lines, Princess Cruise Lines and Cunard (North American Emission Control Area)10Build a smartphone application for passengers- "Carnival In-touch"$ 125,000.00Total$ 3,723,675,000.00

New Cruise ShipsRoyal Princess (2)- North America1,046AIDA (2)- Germany750P& O Cruises - UK (1)539Costa (1)- Italy France Germany5082,843

Sheet1RecommendationsAmount1Appoint a "Chief Safety Officer" in each Carnival & PLC Cruise Brand$ 3,000,0002Unveil six ships (North American, EAA, UK, Costa)$ 2,843,000,0003Reconcile Concorida legal litigation$ 585,000,0004World-wide advertising campaign on safety$ 100,000,0005Employee procedures and training programs$ 1,200,0006Donate to Coral Reef Alliance$ 1,000,0007Install security devices throughout on all vessels$ 10,100,0008Offer additional support to guests and travel agendts via telephone and email$ 250,0009Install scrubber technology$ 180,000,00010Build a smartphone application for passengers- "Carnival In-touch"$ 125,000Total$ 3,723,675,000

Ratios2012201320142015Current Ratio0.250.370.410.43Quick Ratio0.190.270.300.32Long Term Debt to Equity0.300.340.390.44Inventory Turnover39.4421.4719.0818.46Total Assets Turnover0.390.370.380.38Accounts Receivable Turnover21.0718.4917.6117.42Average Collection Period17.3219.7420.7220.95Gross Profit Margin0.890.900.900.90Net Profit Margin0.080.070.070.06Return on Total Assets (ROA)0.030.030.030.02Return on Equity (ROE)0.050.050.050.04

Sheet3

Carnival Royal CaribbeanDisney CruisesCritical Success FactorsWeightRating ScoreRating ScoreRatingScoreAdvertising0.1140.4430.3320.22Market Penetration0.0730.2120.1440.28Customer Service0.0930.2720.1840.36Store Locations0.0940.3630.2710.09R&D0.0730.2120.1440.28Employee Dedication0.0620.1210.0640.24Financial Profit0.0940.3620.1830.27Customer Loyalty0.0820.1630.2440.32Market Share0.1040.4030.3010.10Product Quality0.0820.1630.2440.32Top Management0.0630.1820.1240.24Price Competitiveness0.1040.1030.3010.10Total12.972.502.82