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IAPH Mid-Term Conference Jerusalem May, 2012

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Carnival Cruise Line was founded in 1972 in Miami by Ted Arison with one converted

transatlantic ocean liner.

Unlikely Success StoryUnlikely Success Story

Carnival Corporation & PLCCarnival Corporation & PLCA Global Vacation CompanyA Global Vacation Company

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Key Operating Statistics Key Operating Statistics YearYear--end end 20112011

10 Cruise Brands8 Operating Headquarters

United States (Miami, Santa Clarita and Seattle)UK, Italy, Germany, Spain and Australia

●Shipboard employees 77,000*● Shoreside employees 14,300*● Ships 100**● Lower berths 200,500**● Passengers carried 9.6m*

•As of November 30, 2011*•As of May 15, 2012**

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Carnival Corporation & PLCCarnival Corporation & PLCKey FactsKey Facts

● The world’s largest cruise company.

● One of the 3 largest leisure companies in the world.

● Carnival is a dual listed company, its shares are listed

on the New York and London Stock Exchanges.

● The only company on both the FTSE 100 and

the S&P 500.

● The company with the highest credit rating in the leisure

industry worldwide.

Leading Global BrandsLeading Global BrandsUnited

KingdomContinental

EuropeAustralia &

AsiaNorth

America

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Brands targeted towards Specific Cultures & Demographics

Towards 2015 – opportunity and change

• Challenging economic and cost drivers• consumers under pressure• inflation• rising fuel costs• increasing regulation

• Strong cruise industry• underlying demand continues to grow• modern efficient assets• flexible business model

Port visits may change too

• Slower speeds may make it harder to visit some ‘signature’ ports

• If port quantity is to be maintained, ‘secondary’ ports may see more visits

• More infrastructure development to create new on-track ports

• Or there may be more days at sea

Cruise lines, by the nature of their business, would like to be free from long term

obligations as users of a port.

They expect reasonable market pricing for services obtained, and allow themselves the

flexibility of maximizing utilization of their assets while fulfilling the market demands

and reacting to shifting geopolitical circumstances.

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Giora , i f you ever f inance, Giora , i f you ever f inance, bu i ld o r operate a por t , bu i ld o r operate a por t ,

you fa i l ed!you fa i l ed!

A M i a m i p r o v e r bA M i a m i p r o v e r b

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Having said that….

The growth of the cruise industry, both in the number of ships and passengers propelled by the expanded appeal of cruising, have led us to enter a variety of long term agreements and port and destination developments worldwide.

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CARNIVAL CORPORATION INVESTMENTS IN PORTS

Ø Ownership* and operation: 8 ports / terminals with about $500M in direct investments

Ø Major investments via loans or guarantees in 14 ports ($10M+) for a total of about $1.2B in guarantees / loans provided

Ø Total passengers served at owned terminal and ports per year 6M

*Ownership / concession / leases

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Amber CoveAmber CoveBahia de Bahia de MaimonMaimonPuerto PlataPuerto Plata

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THE PRIVATIZATION OF (CRUISE) PORTS

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THE ISSUE

Ø Increasingly ports, terminals or berths are concessioned or otherwise privatized around the world

Ø Such activities are done as required by law, or initiated by port authorities or governments

Ø Do such activities benefit the port, the destination and the port users?

Ø Should this subject be an agenda item for the IAPH to debate and recommend?

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THE DEBATE – PROS - 1

Ø Government (Port Authorities) should not run ports

Ø Private enterprise can run ports better, more efficiently

Ø Privatization is always betterØ “Small” government are at times a

political neccesityØ Private enterprise has access to new

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THE DEBATE – PROS - 2

Ø Private enterprise can better handle labor relations

Ø Privatization is the law in some countries

Ø Governments should not subsidize private enterprise (carriers / cruise lines)

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THE DEBATE – CONS - 1

Ø Cost to users usually goes upØ Conflicts of interests between the

operator (driven by profit) and the communities (driven by the overall well being of the communities) could have negative impact on the destination

Ø Labor issues are not resolved, actually at times they get worse

Ø In most cases, privatization limits competition for services.

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THE DEBATE – CONS - 2

Ø Inability of users, at times, to finically support future expansion at the port

Ø Possible failure of private party could undermine the operation of a port

Ø Possible nationalization of a port / terminal for variety of reasons could destabilize the operations at a port

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Thank You…